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Friday, April 29, 2011

Gold World News Flash

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Gold World News Flash

GoldSeek.com Poll: Will silver continue to outperform gold in 2011?

Posted: 29 Apr 2011 04:11 AM PDT

GoldSeek.com Poll: - Will silver continue to outperform gold in 2011?


The Goldsmiths, Part CXCI

Posted: 28 Apr 2011 07:22 PM PDT

While it is true that Americans and Europeans are buying gold and silver, there has been a bigger push among Asians. In particular, the Chinese government has had an outright program to encourage its people to buy gold and silver for their own benefit and protection in future days (in the West, our corrupt, sorry governments under Rothschild ownership would never undertake such a stance). But I would suggest in this Goldsmiths that this situation in Asia is about ready to transition up to a new level.


Gold Hits Fresh Record, "Consistent" with Rising US Inflation

Posted: 28 Apr 2011 06:39 PM PDT

Bullion Vault


Gallup Poll Shows that More Americans Believe the U.S. is in a Depression than is Growing … Are They Right?

Posted: 28 Apr 2011 06:00 PM PDT


→ Washington’s Blog

Consumer confidence is, well … in somewhat of a depression.

Reuters reports today:

The April 20-23 Gallup survey of 1,013 U.S. adults found that only 27 percent said the economy is growing. Twenty-nine percent said the economy is in a depression and 26 percent said it is in a recession, with another 16 percent saying it is “slowing down,” Gallup said.

Tyler Durden notes:

That means that more Americans think the country is in a Depression, let alone recession, than growing.

How can so many Americans believe that we’re in a depression, when the stock market and commodity prices have been booming?

As I noted last week:

Instead of directly helping the American people, the government threw trillions at the giant banks (including foreign banks; and see this) . The big banks have – in turn – used a lot of that money to speculate in commodities, including food and other items which are now driving up the price of consumer necessities [as well as stocks]. Instead of using the money to hire Americans, they’re hiring abroad (and getting tax refunds from the government).

But don’t rising stock prices help create wealth?

Not really. As I pointed out in January:

 

A rising stock market doesn’t help the average American as much as you might assume.

For example, Robert Shiller noted in 2001:

We have examined the wealth effect with a cross-sectional time-series data sets that are more comprehensive than any applied to the wealth effect before and with a number of different econometric specifications. The statistical results are variable depending on econometric specification, and so any conclusion must be tentative. Nevertheless, the evidence of a stock market wealth effect is weak; the common presumption that there is strong evidence for the wealth effect is not supported in our results. However, we do find strong evidence that variations in housing market wealth have important effects upon consumption. This evidence arises consistently using panels of U.S. states and individual countries and is robust to differences in model specification. The housing market appears to be more important than the stock market in influencing consumption in developed countries.

I pointed out in March:

Even Alan Greenspan recently called the recovery “extremely unbalanced,” driven largely by high earners benefiting from recovering stock markets and large corporations.

 

***

 

As economics professor and former Secretary of Labor Robert Reich writes today in an outstanding piece:

Some cheerleaders say rising stock prices make consumers feel wealthier and therefore readier to spend. But to the extent most Americans have any assets at all their net worth is mostly in their homes, and those homes are still worth less than they were in 2007. The “wealth effect” is relevant mainly to the richest 10 percent of Americans, most of whose net worth is in stocks and bonds.

I noted in May:

As of 2007, the bottom 50% of the U.S. population owned only one-half of one percent of all stocks, bonds and mutual funds in the U.S. On the other hand, the top 1% owned owned 50.9%.

 

***

 

(Of course, the divergence between the wealthiest and the rest has only increased since 2007.)

And last month Professor G. William Domhoff updated his “Who Rules America” study, showing that the richest 10% own 98.5% of all financial securities, and that:

The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

Indeed, most stocks are held for only a couple of moments – and aren’t held by mom and pop investors.

How Bad?

How bad are things for the little guy?

Well, as I noted in January, the housing slump is worse than during the Great Depression.

As CNN Money points out today:

Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.

 

“We’re seeing core consumers under a lot of pressure,” Duke said at an event in New York. “There’s no doubt that rising fuel prices are having an impact.”

 

Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.

 

Lately, they’re “running out of money” at a faster clip, he said.

 

“Purchases are really dropping off by the end of the month even more than last year,” Duke said. “This end-of-month [purchases] cycle is growing to be a concern.

And – in case you still think that the 29% of Americans who think we’re in a depression are unduly pessimistic – take a look at what I wrote last December:

The following experts have – at some point during the last 2 years – said that the economic crisis could be worse than the Great Depression:

***

 

States and Cities In Worst Shape Since the Great Depression

 

States and cities are in dire financial straits, and many may default in 2011.

 

California is issuing IOUs for only the second time since the Great Depression.

 

Things haven’t been this bad for state and local governments since the 30s.

 

Loan Loss Rate Higher than During the Great Depression

 

In October 2009, I reported:

In May, analyst Mike Mayo predicted that the bank loan loss rate would be higher than during the Great Depression.

 

In a new report, Moody’s has just confirmed (as summarized by Zero Hedge):

The most recent rate of bank charge offs, which hit $45 billion in the past quarter, and have now reached a total of $116 billion, is at 3.4%, which is substantially higher than the 2.25% hit in 1932, before peaking at at 3.4% rate by 1934.

And see this.

 

Here’s a chart summarizing the findings:

 

(click here for full chart).

Indeed, top economists such as Anna Schwartz, James Galbraith, Nouriel Roubini and others have pointed out that while banks faced a liquidity crisis during the Great Depression, today they are wholly insolvent. See this, this, this and this. Insolvency is much more severe than a shortage of liquidity.

 

Unemployment at or Near Depression Levels

 

USA Today reports today:

So many Americans have been jobless for so long that the government is changing how it records long-term unemployment.

 

Citing what it calls “an unprecedented rise” in long-term unemployment, the federal Bureau of Labor Statistics (BLS), beginning Saturday, will raise from two years to five years the upper limit on how long someone can be listed as having been jobless.

 

***

 

The change is a sign that bureau officials “are afraid that a cap of two years may be ‘understating the true average duration’ — but they won’t know by how much until they raise the upper limit,” says Linda Barrington, an economist who directs the Institute for Compensation Studies at Cornell University’s School of Industrial and Labor Relations.

 

***

 

“The BLS doesn’t make such changes lightly,” Barrington says. Stacey Standish, a bureau assistant press officer, says the two-year limit has been used for 33 years.

 

***

 

Although “this feels like something we’ve not experienced” since the Great Depression, she says, economists need more information to be sure.

The following chart from Calculated Risk shows that this is not a normal spike in unemployment:

 

As does this chart from Clusterstock:

 


As I noted in October:

It is difficult to compare current unemployment with that during the Great Depression. In the Depression, unemployment numbers weren’t tracked very consistently, and the U-3 and U-6 statistics we use today weren’t used back then. And statistical “adjustments” such as the “birth-death model” are being used today that weren’t used in the 1930s.

 

But let’s discuss the facts we do know.

 

The Wall Street Journal noted in July 2009:

The average length of unemployment is higher than it’s been since government began tracking the data in 1948.

 

***

 

The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.

The Christian Science Monitor wrote an article in June entitled, “Length of unemployment reaches Great Depression levels“.

 

60 Minutes – in a must-watch segment – notes that our current situation tops the Great Depression in one respect: never have we had a recession this deep with a recovery this flat. 60 Minutes points out that unemployment has been at 9.5% or above for 14 months:

 

Pulitzer Prize-winning historian David M. Kennedy notes in Freedom From Fear: The American People in Depression and War, 1929-1945 (Oxford, 1999) that – during Herbert Hoover’s presidency, more than 13 million Americans lost their jobs. Of those, 62% found themselves out of work for longer than a year; 44% longer than two years; 24% longer than three years; and 11% longer than four years.

 

Blytic calculates that the current average duration of unemployment is some 32 weeks, the median duration is around 20 weeks, and there are approximately 6 million people unemployed for 27 weeks or longer.

 

Moreover, employers are discriminating against job applicants who are currently unemployed, which will almost certainly prolong the duration of joblessness.

 

As I noted in January 2009:

In 1930, there were

How Silver is Mined

Posted: 28 Apr 2011 05:45 PM PDT

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Gold, Gresham's Law & the Dong

Posted: 28 Apr 2011 05:24 PM PDT

by Ben Traynor BullionVault Thursday, 28 April 2011 What happens when people actively shun their official currency...? GOVERNMENTS are often tempted to live beyond their means. Today, that means national debts and quantitative easing. But a few hundred years ago, it meant debasing coinage. Silver and gold coins would be 'clipped' – with a tiny quantity of their metal shaved off the edge every time they passed through government hands – or they would be minted with a lower precious metal content than their face value stated. This would enable the monetary authorities to produce more coins for the same amount of bullion, increasing the government's spending power in the marketplace. The net result was that coins with identical face values did not necessarily hold the same commodity value. And this often led to a rather interesting phenomenon. When people knew there were both 'good' and 'bad' coins floating around, they tended to spend the bad and hang onto th...


Adjusted for inflation, dollar hits fiat-era low

Posted: 28 Apr 2011 03:29 PM PDT

By John Melloy
Executive Producer, "Fast Money"
CNBC, New York
Thursday, April 28, 2011

http://www.cnbc.com/id/42809381

A trade-weighted measure of the U.S. dollar against a broad basket of currencies that includes the yen, euro, and China's yuan is at a post-gold-standard low when adjusted for inflation, according to calculations by Deutsche Bank's economic team. The milestone could be viewed as a failure of the country's monetary and fiscal policies upon which all paper -- or fiat -- currencies are based.

The Broad Trade-Weighted Dollar Index, which was created by the Federal Reserve, differs from the more popular "Dollar Index" because it includes a larger group of currencies and is weighted based on foreign trade. The stellar economics team at Deutsche Bank, led by Joe Lavorgna, then adjusts this measure for inflation to get what they believe to be the true measure of the dollar's value in the world.

"In our risk scenario, little progress on the fiscal front raises the probability of a fiscal crisis and the odds that the Fed becomes the buyer of the last resort," said David Woo, currency strategist for Bank of America Merrill Lynch, in a note to clients today. "This would accelerate the process of the U.S. dollar's demise as the global reserve currency and cause it to decline in a disorderly manner."

... Dispatch continues below ...


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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

http://prophecyresource.com/news_2011_jan18.php


The dollar hit new 2011 lows versus the euro and the British pound Thursday as traders increasingly viewed Federal Reserve Chairman Ben Bernanke's monetary policy press conference a day before as dovish on inflation.

The Fed's statement described the economy as recovering at a "moderate pace," a dovish downgrade from the "firmer" recovery it stated before. The Fed also kept the language that it would remain accommodative for an "extended" period. In his first monetary policy press conference, Bernanke made no hints that his ongoing purchases of $600 billion in Treasury securities would be ended earlier than their June expiration date.

"QE2 has artificially reduced the risk premium of U.S. government bonds to below the level necessary to compensate investors for the worsened U.S. fiscal position," Woo added.

Gold settled at a record for a 12th time this month on Thursday and is now up 31 percent from a year ago on concern that Bernanke has lost control over inflation. Silver is inches away from its 1980 record and is up 150 percent in the last 12 months.

"The recent parabolic spike in silver and to a lesser degree gold shows that the market considers a 'disorderly decline' of the U.S. dollar an increasing possibility," said Jim Iuorio, managing director at TJM Institutional Services. "Devaluing your currency has always been a risky proposition and its success is dependant on knowing how to exit gracefully from monetary stimulus."

The dollar was convertible into gold until the early 1970s, when President Nixon ended that agreement. Soon after, as the major currencies went from fixed rates to floating, the U.S. dollar established itself as the world's reserve currency because of its economy's size and relative strength. Floating, paper currencies are worth only what others deem them to be, and central banks can print as much, or as little, of them as they want.

To be sure, the dollar's salve would be a pick-up in the economy as Bernanke's zero interest rate policy forces more risk-taking, more lending, more investment, and more hiring. That theory took a bit of a hit Thursday as first-quarter GDP data was released showing a 1.8 percent increase in economic growth, down from a 3.1 percent increase in the fourth quarter.

"If the economy is on a recovery path, as Ben Bernanke suggests, albeit slower than we would like, then we should anticipate that tax receipts and revenues should improve," said John Person, president of Nationalfutures.com and co-author of the Commodity Trader's Almanac. "If that happens, then the U.S. dollar should gain some strength, or at the least cease the rapid descent. Right now it is very hard to find one dollar bull."

A showdown in Congress is brewing as the U.S. Treasury is poised to hit its debt ceiling in next month. Following a tough battle over the budget this month, traders selling the dollar are bracing for another partisan battle over the debt ceiling vote and possible austerity measures that could be attached to a lifting of this debt limit. Standard & Poor's changed the outlook on U.S. debt to "negative" last week based on the possibility of a stalemate in enacting any kind of meaningful fiscal policy by this divided government.

"Since the S&P downgrade last Monday it has become abundantly clear to policy makers, if it wasn't already, that the Fed will print whatever it takes to avoid default and debase the buck to a point where it will be very unlikely to remain the world's reserve currency," said Dan Nathan, creator of RiskReversal.com.

* * *

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


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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

Fed's secrecy is deceitful and corrupt, Texas professor Auerbach says on Bloomberg TV

Posted: 28 Apr 2011 03:05 PM PDT

11p ET Thursday, April 28, 2011

Dear Friend of GATA and Gold:

Interviewed Tuesday by Bloomberg Television, University of Texas Professor Robert Auerbach, formerly an economist for the Federal Reserve and an aide to the late House Banking Committee Chairman Henry Gonzalez, D-Texas, recalls how the Fed has a long, corrupt history of hiding and then destroying its records to keep the public ignorant of what it is really doing. Congress should legislate to make the Fed more accountable, Auerbach says. It's something to keep in mind in regard to GATA's recent lawsuit against the Fed to obtain gold-related documents. The interview is not quite eight minutes long and you can watch it at Bloomberg TV here:

http://www.bloomberg.com/video/69042262/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Wall Street Journal Publishes Lewis Lehrman's Call for the Gold Standard

In its April 26 edition The Wall Street Journal published an important essay by the Lehrman Institute's chairman, Lewis E. Lehrman, explaining why a gold-convertible dollar is critical to eliminating the shocking federal deficit.

"Experience and the operations of the Federal Reserve System compel me to predict that U.S. Rep. Paul Ryan's heroic efforts to balance the budget by 2015 without raising taxes will not end in success -- even with a Republican majority in both Houses and a Republican president in 2012. ...

"What persistent debtor could resist permanent credit financing? For a government, an individual, or an enterprise, 'a deficit without tears' leads to the corrupt euphoria of limitless spending. For example, with new credit the Fed will have bought $600 billion of U.S. Treasuries between November 2010 and June 2011, a rate of purchase that approximates the annualized budget deficit. Commodity, equity, and emerging-market inflation are only a few of the volatile consequences of this Fed credit policy."

To read more, and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit:

http://www.thegoldstandardnow.org/gata


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


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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/.

Downside Targets for Silver

Posted: 28 Apr 2011 02:02 PM PDT

Silver is in a structural bull market and will see significantly higher prices in the coming years. However, now is not the time to be buying. The market has spiked and a retracement is coming. Sentimentrader.com’s public opinion as of last week was over 90% bulls. The daily sentiment index as of last week was 96% bulls. A correction is coming. We have two charts to help decipher a potential bottom. Here is our first chart: On top we plot Silver’s distance from its 200-day MA. Note that following previous spikes, the market always tested its 200-day MA and it didn’t take long for it to happen. We also compare the current spike to the spikes in 2004 and 2006. Those spikes retraced a little bit more than 62%. The 62% retracement of this spike is nearly $30. Here is the second chart: We see two areas of strong support. The first is $34-$37 and the second is $30-$31. We also sketch the potential path of the 300-day MA. We think it hits $30 i...


Spot gold for climbs to record $1,540.45 in Asia

Posted: 28 Apr 2011 01:08 PM PDT

By Kyoungwha Kim
Apr 28, 2011 (Bloomberg) — Gold for immediate delivery advanced as much as 0.3 percent to an all-time high of $1,540.45 an ounce in Singapore today.

[source]

Compendium And Pocketbook Of Gold Orders

Posted: 28 Apr 2011 01:08 PM PDT

Dear CIGAs,

After a lot of requests, we have had a small number of Compendiums reprinted and a number of Pocketbooks Of Gold available. If you have not yet purchased your copy of either, here is your chance.

We release Compendiums every couple years to help cover the operating costs of running a site like JSMineset. Over the years we have gotten quite large and these costs have grown substantially. If you like what we do here please purchase a copy – not only will you be giving someone a very unique and useful gift, you will be supporting a good cause and allow us to continue providing this service free of charge.

**PLEASE NOTE YOU DO NOT NEED A PAYPAL ACCOUNT TO PURCHASE ANY OF THE COMPENDIUM SETS OR A POCKETBOOK OF GOLD. ORDERS SHOULD ARRIVE WITHIN 2-4 WEEKS DEPENDING ON YOUR LOCATION**

What you will receive with each set:

Compendium Version 3 ($80 USD):

Included in this two DVD set is a DVD Rom (accessible by computer DVD drive only) that is a searchable database of nearly two thousand articles over the last two years from Jim Sinclair, Trader Dan, Monty Guild and a collection of other JSMineset contributors. This is one of the largest collections of articles related to the Gold market available today on DVD and includes all charts we have posted over the last year and a half.

The second DVD is the much anticipated CIGA Meeting in Toronto from February 2010. This DVD includes over 3 hours of discussions with Jim Sinclair himself and is playable in any DVD player.

Compendium Version 1-3 Package ($210 USD):

This package includes Compendium 1 and 2 listed below and the new Compendium 3 above.

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Compendium Version 2 includes all articles posted from December 2005 to the end of October 2008. All articles are categorized and presented in HTML format and are PC and Mac compatible. Several thousand articles are again included in this archive disc which makes up literally thousands of pages of market commentary from Jim himself. Compendium Version 2 also includes an hour long DVD video commentary on financial markets by Jim Sinclair. This disc is playable in any DVD player and any computer that supports DVD playback.

Compendium Version 1 ($50 USD):

Compendium Version 1 includes all articles posted from the inception of JSMineset in 2002 to December 2005. It comes packaged as a searchable PDF database and includes several thousand articles on Gold and financial markets. As a bonus, a separate Technical Analysis video disc by Jim Sinclair is included in the package. This video is viewable on a computer only and is both PC and Mac compatible.

Compendium Version 1 and 2 Package ($130 USD):

This package includes both compendium 1 and 2 which are shown above.

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With the assistance of a good friend and contributor to JSMineset, Mr. Peter Carlin, Jim has co-authored a book on everything you need to know about Gold.

"A Pocketbook of Gold gives you, in one easy handbook, the reasons why you should own Gold, the timing of when you should own Gold, and the types of Gold you should (and shouldn't!) own. A Pocketbook of Gold also explains the true role of Gold in every individual's financial planning as well as Gold's place in the world monetary system. It is an all-in-one Pocketbook that answers your questions and guides you through the world of Gold as a personal form of investment and financial insurance in today's increasingly uncertain financial outlook. A Pocketbook of Gold is a survival manual for monetary mayhem."

For questions about Compendium orders, please email jsmineset@gmail.com
For questions about Pocketbook orders, please email sales@apocketbookofgold.com

All prices are in US dollars and include shipping and handling. Thank you all for your continued support!

Dan Duval
JSMineset Editor

In The News Today

Posted: 28 Apr 2011 12:59 PM PDT

Thought For The Evening

You see what a weakening US economy does to the US dollar. This is proof of damned if you and damned if you don't regarding dollar weakness and QE's future.

The dollar is headed below USDX .7200, and may well touch .5600.

Jim Sinclair's Commentary

The weather caused the GDP to be disappointing and that is nothing to be concerned about?

Economy in U.S. Grew 1.8% in First Quarter, Less Than Forecast
By Timothy R. Homan – Apr 28, 2011 7:53 AM MT

The U.S. economy grew at a slower pace than forecast in the first quarter as government spending declined by the most since 1983.

Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the last three months of 2010, the Commerce Department said today in Washington. Economists projected 2 percent growth, according to the median estimate in a Bloomberg News survey.

To keep spurring the expansion, Federal Reserve policy makers said yesterday they'll complete their $600 billion round of stimulus through June. While slower than the previous three months, a reflection of higher gasoline prices, consumer spending climbed more than projected in the first quarter.

"We've sputtered a bit here, especially coming off a relatively strong fourth quarter," said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who accurately forecast first-quarter growth. Even with the higher costs for fuel and food, "consumers are going to continue to spend. Growth should pick up toward the 3 percent level" later this year, he said.

GDP estimates from 80 economists surveyed by Bloomberg ranged from 0.5 percent to 3.5 percent. The first-quarter pace was the slowest since April through June of last year. For all of 2010, the world's largest economy expanded 2.9 percent, the most in five years, after shrinking 2.6 percent in 2009.

More…

Jobless Claims in U.S. Unexpectedly Rise to Three-Month High
By Bob Willis – Apr 28, 2011 6:57 AM MT

New applications for unemployment benefits in the U.S. unexpectedly rose last week to the highest level in three months, a sign progress in the labor market may be stalling.

Jobless claims increased by 25,000 to 429,000 in the week ended April 23, the most since late January, Labor Department figures showed today in Washington. The government anticipates a drop in unadjusted applications during the Good Friday holiday week, something that didn't happen this year, a Labor Department spokesman said.

The report also showed the number of people on unemployment benefit rolls and those receiving extended payments dropped, a sign the jobless rate may fall in coming months. Companies have been cautious about ramping up hiring until they see further signs the recovery is self-sustaining, one reason why Federal Reserve policy makers yesterday pledged to complete their asset- purchase plan by June and keep borrowing costs near zero.

"It's clearly disappointing," said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. "It may be that the pace of improvement is slowing."

The economy grew at a 1.8 percent annual rate in the first three months of the year, down from a 3.1 percent pace in the fourth quarter, as government spending dropped by the most in 28 years, a report from the Commerce Department also showed today.

More…

 

Jim Sinclair's Commentary

I thought when a rating agency did this it was only a warning! Did this not occur to the US dollar a week ago and was defined as a light warning?

S&P cuts Japan rating outlook to negative
By Lisa Twaronite, MarketWatch
April 27, 2011, 7:48 a.m. EDT

TOKYO (MarketWatch) — Standard & Poor's cut its outlook on Japan's sovereign rating to negative from stable Wednesday to reflect the potential for a downgrade if the country's fiscal situation deteriorates more than expected in the wake of last month's disaster.

S&P said it expects costs related to the March 11 earthquake, tsunami and nuclear crisis to increase Japan's fiscal deficits above prior estimates by a cumulative 3.7% of gross domestic product through 2013.

"We revised the outlook on the long-term rating on Japan to negative to reflect the potential for a downgrade if fiscal deterioration materially exceeds these estimates in the absence of greater fiscal consolidation," the rating agency said in a statement.

Three months ago, before the disaster, S&P cut Japan's rating for the first time in nine years by one notch, to AA-minus. That's its fourth-highest rating, and is one notch below Moody's Investors Service's Japan debt rating of Aa2. Moody's also has a negative outlook on Japan's rating.

Much depends on Japan's political leadership and its ability to forge consensus on how to offset fiscal measures in the future, S&P said Wednesday.

"As long as there are no revenue-enhancing measures such as tax increases, we currently project that reconstruction costs could range from 20 trillion yen ($245 billion) to ¥50 trillion, with ¥30 trillion being our central forecast," S&P said.

More…

Student Loan Debt Hell: 21 Statistics That Will Make You Think Twice About Going To College

Posted: 28 Apr 2011 12:23 PM PDT


Courtesy of Michael Snyder at Economic Collapse

Is going to college a worthwhile investment?  Is the education that our young people are receiving at our colleges and universities really worth all of the time, money and effort that is required?  Decades ago, a college education was quite inexpensive and it was almost an automatic ticket to the middle class.  But today all of that has changed. 

At this point, college education is a big business.  There are currently more than 18 million students enrolled at the nearly 5,000 colleges and universities currently in operation throughout the United States.  There are quite a few "institutions of higher learning" that now charge $40,000 or even $50,000 a year for tuition.  That does not even count room and board and other living expenses.  Meanwhile, as you will see from the statistics posted below, the quality of education at our colleges and universities has deteriorated badly.  When graduation finally arrives, many of our college students have actually learned very little, they find themselves unable to get good jobs and yet they end up trapped in student loan debt hell for essentially the rest of their lives.

Across America today, "guidance counselors" are pushing millions of high school students to go to the very best colleges that they can get into, but they rarely warn them about how much it is going to cost or about the sad reality that they could end up being burdened by massive debt loads for decades to come.

Yes, college is a ton of fun and it is a really unique experience.  If you can get someone else to pay for it then you should definitely consider going.

There are also many careers which absolutely require a college degree.  Depending on your career goals, you may not have much of a choice of whether to go to college or not.

But that doesn't mean that you have to go to student loan debt hell.

You don't have to go to the most expensive school that you can get into.

You don't have to take out huge student loans.

There is no shame in picking a school based on affordability.

The truth is that pretty much wherever you go to school the quality of the education is going to be rather pathetic.  A highly trained cat could pass most college courses in the United States today.

Personally, I have had the chance to spend quite a number of years on college campuses.  I enjoyed my time and I have some pretty pieces of parchment to put up on the wall.  I have seen with my own eyes what goes on at our institutions of higher learning.  In a previous article, I described what life is like for most "average students" enrolled in our colleges and universities today....

The vast majority of college students in America spend two to four hours a day in the classroom and maybe an hour or two outside the classroom studying. The remainder of the time these "students" are out drinking beer, partying, chasing after sex partners, going to sporting events, playing video games, hanging out with friends, chatting on Facebook or getting into trouble. When they say that college is the most fun that most people will ever have in their lives they mean it. It is basically one huge party.

If you are a parent and you are shelling out tens of thousands of dollars every year to pay for college you need to know the truth.

You are being ripped off.

Sadly, a college education just is not that good of an investment anymore.  Tuition costs have absolutely skyrocketed even as the quality of education has plummeted.

A college education is not worth getting locked into crippling student loan payments for the next 30 years.

Even many university professors are now acknowledging that student loan debt has become a horrific societal problem. Just check out what one professor was quoted as saying in a recent article in The Huffington Post....

“Thirty years ago, college was a wise, modest investment,” says Fabio Rojas, a professor of sociology at Indiana University. He studies the politics of higher education. “Now, it’s a lifetime lock-in, an albatross you can’t escape.”

Anyone that is thinking of going to college needs to do a cost/benefit analysis.

Is it really going to be worth it?

For some people the answer will be "yes" and for some people the answer will be "no".

But sadly, hardly anyone that goes to college these days gets a "good" education.

To get an idea of just how "dumbed down" we have become as a nation, just check out this Harvard entrance exam from 1869.

I wouldn't have a prayer of passing that exam.

What about you?

We really do need to rethink our approach to higher education in this country.

Posted below are 21 statistics about college tuition, student loan debt and the quality of college education in the United States....

#1 Since 1978, the cost of college tuition in the United States has gone up by over 900 percent.

#2 In 2010, the average college graduate had accumulated approximately $25,000 in student loan debt by graduation day.

#3 Approximately two-thirds of all college students graduate with student loans.

#4 Americans have accumulated well over $900 billion in student loan debt. That figure is higher than the total amount of credit card debt in the United States.

#5 The typical U.S. college student spends less than 30 hours a week on academics.

#6 According to very extensive research detailed in a new book entitled "Academically Adrift: Limited Learning on College Campuses", 45 percent of U.S. college students exhibit "no significant gains in learning" after two years in college.

#7 Today, college students spend approximately 50% less time studying than U.S. college students did just a few decades ago.

#8 35% of U.S. college students spend 5 hours or less studying per week.

#9 50% of U.S. college students have never taken a class where they had to write more than 20 pages.

#10 32% of U.S. college students have never taken a class where they had to read more than 40 pages in a week.

#11 U.S. college students spend 24% of their time sleeping, 51% of their time socializing and 7% of their time studying.

#12 Federal statistics reveal that only 36 percent of the full-time students who began college in 2001 received a bachelor's degree within four years.

#13 Nearly half of all the graduate science students enrolled at colleges and universities in the United States are foreigners.

#14 According to the Economic Policy Institute, the unemployment rate for college graduates younger than 25 years old was 9.3 percent in 2010.

#15 One-third of all college graduates end up taking jobs that don't even require college degrees.

#16 In the United States today, over 18,000 parking lot attendants have college degrees.

#17 In the United States today, 317,000 waiters and waitresses have college degrees.

#18 In the United States today, approximately 365,000 cashiers have college degrees.

#19 In the United States today, 24.5 percent of all retail salespersons have a college degree.

#20 Once they get out into the "real world", 70% of college graduates wish that they had spent more time preparing for the "real world" while they were still in school.

#21 Approximately 14 percent of all students that graduate with student loan debt end up defaulting within 3 years of making their first student loan payment.

There are millions of young college graduates running around out there that are wondering where all of the "good jobs" are.  All of their lives they were promised that if they worked really hard and got good grades that the system would reward them.

Sometimes when you do everything right you still can't get a job. A while back The Huffington Post featured the story of Kyle Daley - a highly qualified UCLA graduate who had been unemployed for 19 months at the time....

I spent my time at UCLA preparing for the outside world. I had internships in congressional offices, political action committees, non-profits and even as a personal intern to a successful venture capitalist. These weren't the run-of-the-mill office internships; I worked in marketing, press relations, research and analysis. Additionally, the mayor and city council of my hometown appointed me to serve on two citywide governing bodies, the planning commission and the open government commission. I used to think that given my experience, finding work after graduation would be easy.

At this point, however, looking for a job is my job. I recently counted the number of job applications I have sent out over the past year -- it amounts to several hundred. I have tried to find part-time work at local stores or restaurants, only to be turned away. Apparently, having a college degree implies that I might bail out quickly when a better opportunity comes along.

The sad truth is that a college degree is not an automatic ticket to the middle class any longer.

But for millions of young Americans a college degree is an automatic ticket to student loan debt hell.

Student loan debt is one of the most insidious forms of debt.  You can't get away from student loan debt no matter what you do.  Federal bankruptcy law makes it nearly impossible to discharge student loan debts, and many recent grads end up with loan payments that absolutely devastate them financially at a time when they are struggling to get on their feet and make something of themselves.

So are you still sure that you want to go to college?

Another open secret is that most of our colleges and universities are little more than indoctrination centers.  Most people would be absolutely shocked at how much unfiltered propaganda is being pounded into the heads of our young people.

At most colleges and universities, when it comes to the "big questions" there is a "right answer" and there is virtually no discussion of any other alternatives.

In most fields there is an "orthodoxy" that you had better adhere to if you want to get good grades.

Let's just say that "independent thought" and "critical thinking" are not really encouraged at most of our institutions of higher learning.

Am I bitter because I didn't do well?  No, I actually did extremely well in school.  I have seen the system from the inside.  I know how it works.

It is a giant fraud.

If you want to go to college because you want to have a good time or because it will help you get your career started then by all means go for it.

Just realize what you are signing up for.

Second Silver Margin Hike In One Week... Is Now Priced In

Posted: 28 Apr 2011 12:06 PM PDT


As vaguely rumored earlier, and largely anticipated, the CME instituted another margin hike, presumably for a broad swath of commodities but apparently focusing on one particularly: silver, this time 10%. This is on top of the 9% margin hike from Monday. If anyone was wondering the reason for silver's swoon earlier (and subsequent jump) was, now it's clear. By now it is becoming rather clear that all the CME does is provide ever better reasons to BTFD. As always, we continue to hold our breath until there is a comparable maring hike for the ES. We may soon run out of oxygen.

cme 4.28


Caution Light on For Silver and Gold Prices

Posted: 28 Apr 2011 11:34 AM PDT

Gold Price Close Today : 1530.80
Change : 14.20 or 0.9%

Silver Price Close Today : 47.520
Change : 1.562 or 3.4%

Gold Silver Ratio Today : 32.21
Change : -0.786 or -2.4%

Silver Gold Ratio Today : 0.03104
Change : 0.000739 or 2.4%

Platinum Price Close Today : 1841.20
Change : 18.20 or 1.0%

Palladium Price Close Today : 776.50
Change : 11.50 or 1.5%

S&P 500 : 1,375.13
Change : 1.47 or 0.1%

Dow In GOLD$ : $171.84
Change : $ (1.12) or -0.6%

Dow in GOLD oz : 8.313
Change : -0.054 or -0.6%

Dow in SILVER oz : 267.79
Change : -8.35 or -3.0%

Dow Industrial : 12,725.40
Change : 34.44 or 0.3%

US Dollar Index : 73.12
Change : -0.404 or -0.5%

Don't miss my special offer below.

Sorry I sent no commentary yesterday, but I was finishing my monthly Moneychanger newsletter for paid subscribers, who can log in to www.the-moneychanger.com and pick up the April issue.

Listening to Ben Bernanke today quoted from his press conference yesterday, I was amazed how incompetent he sounded, stuttering like someone telling an uncertain lie. If he's the best the central bankers have, their gunwales are deeper under water than I even I suspected.

He announced yesterday that his imagination has been surgically removed. At least, that is MY turn on his idiotically continuing the Keynesian nostrums that have so long and with such historical uniformity failed. Poor boy doesn't have imagination enough to think of anything else. What a punishment, to be subjected to a goof like that!

The US DOLLAR, taking its cue from Bernanke's announcement yesterday that he would surely keep interest rates low and thereby assuring he would keep on inflating, sank like a lump in a churn. Y'all remember that more than any other factor, interest rates determine currency exchange rates. Euro managers raise euro interest rates, Bernancubus suppresses dollar interest rates, and surprise, surprise, the scrofulous buck sinks against the scabrous euro. It's the Clash of the Midgets, seeing who can slither down the drain first.

Whooo. That felt good. Now, back to the buck.

Today the US dollar index sank another 40.4 basis points (0.52%) on top of the 53 basis points it threw away yesterday. Trading now at 73.115 on its way to 40 [sic]. Get this: Bernard O'Bama and the Bernanculus are gutting your dollars to please their masters and keep the parasitism dribbling along a while longer. If that don't make you howling mad, you have no mad gland.

Euro rose like your mama's house guest sitting on a whoopee cushion (I bet you got one memorable whipping for that!). New high for the move at 1.4817 Yen rose 0.8% to Y81.54/$ (122.64c/Y100).

Let me put this stock thing in perspective for y'all. Stocks are now maybe 20% above December 2010, yet against gold they have actually dropped. Against silver they have dropped a lot, down to 90% of their June 2003 peak value. Y'all see now? I don't want your stocks, because they are like those smoke bombs they sell for July 4th -- all smoke and noise, no bang. In fact, stocks remain the government-approved, OSHA-safe imitation cherry bomb in Tennessee Bob's Wholesale Fireworks Investment Store. And will remain.

Today the Dow rose 34.44 to 12,725.40, hand in hand with the S&P500 which didn't exactly rise, but, well, barely lifted itself up on the ball of its foot 1.47 points to 1,357.13. Oddly -- he always says that when he sniffs blood somewhere -- all the other indices fell. That's confusion, and confusion doesn't make for strong markets.

I know some of y'all are going to get madder than a wet wasp, but I have to flip the switch on the caution light on SILVER and GOLD PRICES. After the Bernancubus glued the accelerator pedal to the floor yesterday, silver and gold prices took off wildly. But bear in mind that it is not unusual for the SILVER PRICE to top one day, then the GOLD PRICE to top a few days later. Key is that the Gold/Silver ratio, after a new low 25 April at 31.996, shot up to 33.36 the next day. In all silver and gold's recent upside downs, that hasn't happened. But maybe I am only nervously anticipating when I ought to be contentedly enjoying. Still, a live dog is better than a dead lion.

Today the gold price made a new intraday high at $1,538.30 and a new closing high (all-time since the beginning of the cosmos) at $1,530.80, up $14.20 on Comex. Low came at $1,524.10. In the aftermarket gold's playing footsie with $1,536.

Only target I have to work off is that upside down head and shoulders gold broke out of. That points to $1,525 - $1,557. The gold price would have to close below $1,505 to invalidate this rally.

Ohhh, I HATE parabolas, and silver's chart clearly shows one. They are rally killers, and on this drive the silver price will need every sinew and ounce of strength to burst through that historic brick wall at 5000c per ounce. If it does, it will run straight skyward.

Yet -- O, absolve me, Silver Bugs! -- I had rather capture my silver profits now by swapping silver for gold and miss part of that move, than see the reaction take them all away. Swapping for gold, I will at least get to swap back for MORE silver when the ratio rises. Not swapping, I will only get to cherish the warm, fuzzy memory of reading all those Internet gurus who convinced me the silver price will reach $100 by next Friday.

The SILVER PRICE has a threatening double top, reached Monday and today, at 4982c and 4950c. The silver price must clear 5000c immediately and not fall below 4725c, or succumb to the Kryptonite of fifty bucks. This situation is as full of tension as your cheeks when you suck on to a firehose. Here it shall not remain, but must advance or fall back.

SPECIAL OFFER

Because the last Special Offer sold out so fast, I promised y'all I'd come up with another soon, so here 'tis.

Gold Coins Under US$100:

Offer # 1. Mexican two pesos. Contains 0.0482 troy oz. gold, about 1/20 oz. At a 5.6% premium I can sell 30 ea. Mex 2 p @ US$78.20 ea = $2,346.00 + $25 shipping = $2,371.00 total per lot.

Offer # 2. Mexican 2-1/2 pesos. About 1/16 ounce with exactly 0.0603 oz gold. Also at 5.6% premium, so 30 ea. Mex 2-1/2 p @ 97.80 = $2,934.00 plus $25 shipping = $2,959.00 total per lot.

More Imperial German 20 Marks.

Offer # 3. German 20 Marks. Minted nearly 100 years ago, before 1915, 0.2304 troy oz. At 4.36% premium, order 10 ea. German 20 M @ $369.50 ea., or $3,695.00 + $25 shipping = $3,720 per lot.

Offer # 4. South African Two Rands. Same size as the British sovereign, 0.2354 troy oz, but lower premium at 3.6% over gold. 10 ea. S.A. 2 Rands @ $374.90 = $3,749.00 + $25 shipping = $3,774.00 total per lot.

A very few more US $5 and $10 Commemoratives.

Offer # 5. U.S. $5 and $10 modern commemoratives. I found only 36 ea of the $5 (contains 0.2418 oz gold) at $386.15 and 4 ea of the $10 (0.4838) at $772.30. Premium over gold content for these is 3.9%.

I will sell lots of Eight (8) each $5 gold commems for $3,089.20 + $25 shipping = $3,114.20 per lot. A $10 gold counts as two $5 golds, so you can order one $10 and six $5s and that equals Eight $5s.

For this item only, limit one (1) lot per customer.

Offer # 6. Mixed Peace and Morgan silver dollars. I have two lots only of mixed VG+ Peace and Morgan silver dollars at a 10.9% or $40.50 (0.765 oz silver each) One lot is 120 ea at $40.50 ea or $4,860 + $35 shipping = $4,895 per lot. Note that these are the circulated US silver dollars minted before 1936 in VERY GOOD or better condition, so all will show some wear, some much wear, but all will be FULL VG with no rim dings, nicks, etc.

Conditions:

Orders by e-mail only. Please do not call.

We will not take orders for less than the minimums shown above. You may order more than one lot for everything but the US commems, but not in increments of less than one lot. That is, you may order 30 Mexican two pesos or 60 or 90, but not 36 or 45.

First come, first served, and no re-orders at these prices. I will write orders based on the time I receive your e-mail.

Spot gold basis for all prices above is $1,536.60.

Friendly advice: When you order, list the alternative lots you will accept, in case what you order has already been spoken for. That way your timely response will at least be rewarded with something., ORDERING INSTRUCTIONS:

1. You may order by e-mail only to . No phone orders, please.

Your email must include your complete name, address, and phone number. We cannot ship to you without your address. Sorry, we cannot ship outside the United States or to Tennessee. Please mention you saw this special offer on goldprice.org.

Repeat, you must include your complete name, address, and phone number. Our clairvoyant quit without warning last week and we can no longer read your mind.

2. Orders are on a first-come, first-served basis until supply is exhausted.

3. "First come, first-served" means that we will enter the orders in the order that we receive them by e-mail.

4. If your order is filled, we will e-mail you a confirmation. If you do not receive a confirmation, your order was not filled.

5. You will need to send payment by personal check or bank wire (either one is fine) within 48 hours. It just needs to be in the mail, not in our hands, in 48 hours.

6. We allow fourteen (14) days for personal checks to clear before we ship. If your hurry is greater than that, you can send a bank wire. Once we ship, the post office takes four to fourteen days to get the registered mail package to you. All in all, you'll see your order in about one month.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com


© 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

CMEGroup hiking Silver margins for the second time in a week

Posted: 28 Apr 2011 11:12 AM PDT

[url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] The CMEGroup announced that as of the close of trading this Friday, margin requirements are yet again going up in silver. For speculators, initial margin is increased to $14,513 per full sized silver contract, up from this week's earlier hike to $12,825. Maintenance margin is moving up to $10,750 from $9,500. Hedgers margin and maintenance is rising to $10,750 and $9,500 respectively....


Economic Collapse: McDonalds Turns Away Almost One Million Applicants

Posted: 28 Apr 2011 10:51 AM PDT

McDonald's Corp. (MCD), the world's biggest restaurant chain, said it hired 24 percent more people than planned during an employment event this month.
McDonald's and its franchisees hired 62,000 people in the U.S. after receiving more than one million applications, the Oak Brook, Illinois-based company said today in an e-mailed statement. Previously, it said it planned to hire 50,000.
The April 19 national hiring day was the company's first, said Danya Proud, a McDonald's spokeswoman. She declined to disclose how many of the jobs were full- versus part-time. McDonald's employed 400,000 workers worldwide at company-owned stores at the end of 2010, according to a company filing.
More Here..


U.S. Gets C Credit Rating, Lower Than Mexico 

Climbing Mountains

Posted: 28 Apr 2011 10:40 AM PDT

syndicate: 1 Author: Vedran Vuk Synopsis: Vedran Vuk muses about Bernanke's press briefing, and offers thoughts on regulating risk. Kevin Brekke discusses the looming mortgage reset mountain, and our Energy Team summarizes the mountain of work ahead at the Fukushima Daiichi nuclear plant. Dear Reader, Yesterday was a rough day for the dollar. Prior to the Fed's interest-rate announcement, the dollar had regained some ground at the $1.465/€ to $1.47/€ range. As soon as the press release came out, the euro started to climb upward, and then rested prior to Bernanke's press briefing. During the briefing, the dollar moved sideways until the very end. As soon as Bernanke left the room, the euro began shooting upward until the ratio reached a peak of nearly $1.49/€ late last night. That was a lot of currency act...


Boomerang Inflation

Posted: 28 Apr 2011 10:32 AM PDT

During the recession we were told that unemployment was the biggest threat, but now it's becoming clear to hard working Americans that with the Fed's soft dollar, they won't be able to buy a tank of gas to drive to work. The central bank itself is now becoming the biggest threat to the average American.


Silver Can’t Stop to Breathe

Posted: 28 Apr 2011 10:10 AM PDT

Investors don't know what to do with commodities. Traders are asking, "is it too late?" and "have we gone too high?" The question, of course, isn't easy to answer, but the simple reality is that there won't be too high of prices until the dollar becomes too low. In light of recent events around the world, the Fed has remained incredibly lax in its policy to push interest rates and the dollar to zero. Most every central bank has tightened, is expected to tighten, or must tighten (think China) to keep their currencies from plunging to zero. But we have a very interconnected world commodities market, and unfortunately for investors in the United States, that commodity market is mostly priced in the currency that is falling the fastest: the US dollar. Each Foreign Rate Hike is Dollar's Loss From a hot air balloon view of the world financial markets, it is quite easy to see the macro picture that low rates, enforced by inflationary policies, ultimately bring lower cur...


Capital Context Update: Observations and Other Greeks

Posted: 28 Apr 2011 10:09 AM PDT


From Capital Context

S&P futures appeared to be in a world of their own today relative to other assets though credit in general did follow suit.

While stocks seemed in a world of their own today relative to Treasuries, FX carry, PMs, oil, and even the USD, they managed to make solid gains amid above average volume (which admittedly came in large chunks and more during the selloffs) following a series of dismal macro prints this morning. A last hour burst in S&P futures, which seemed entirely without news or co-integrated synchronicity on huge volume surprised many but quickly rolled over after taking out overnight highs and making new multi-year highs leaving the S&P futures at yesterday's day session highs and overnight peak volume price.

All of this is interesting but for the first time in well over a week, credit outperformed stocks in IG and while HY was tighter close-to-close, it notably underperformed IG (on a beta-adjusted basis) and was pretty much in sync with stocks (again beta-adjusted). This up-in-quality theme is starting to really take hold and while we have talked about stocks being notably overpriced relative to credit for a while now, it is the velocity of moves in IG over the last three days that makes us wonder if there is a little more to this than simple fundamental safety preferences (though once again we note TSYs saw a bull steepening again today in the face of equity strength).

We have been discussing the somewhat unusual behavior in credit and equity markets with clients for a few days and rather than add lengthy prose to what is already a relatively complex topic, we point to a couple of charts and observations that are indicative of something we think is playing out in credit derivative land. This is a little complex but worth the trip we promise.

IG Credit Options are pricing implied relative realized vol near recent channel lows - suggesting some covering is underway.

First of all, the up-in-quality trade is here , no doubt about it and while several higher spread and higher beta names did outperform today, secondary bonds and CDS markets showed another day of huge relative volume net buying IG relative to HY today.

Second, when spreads and vol in general (realized and implied) drop to very low levels (and HY all-in yields) we see sell-siders start to push 'other' instruments . In the case of credit we typically see a plethora of tranche or options strategies that either add carry or provide levered exposure to a view or at the margin are hedge vehicles (though expensive at currrent levels).

The skew in IG Credit options volatility just spiked off relative high levels and further suggests some covering of downside protection at expensive levels.

The point is that investors shift from seeking yield via levered firms (so-called high yield credits) to seeking yield via levered instruments - make sense so far? Instead of reaching down the quality spectrum for return/yield, investors are drawn to relative safety but lever that relative safety. This might be a dealer willing to margin a cash-CDS basis trade at 50-to-1 or more simply, an end-user with a positive view on IG credit using options to position that view as opposed to outright credit.

The increase in tranche/options activity, in what is admittedly a liquid but really not incredibly liquid market, adds some notable hedge risk to the equation for dealers and end-users alike. If you are still with us, then here is the money-shot, the velocity of the moves in IG recently (and gappiness) suggest a significant amount of gamma in the system. We have seen this before and its impacts - exaggerating swing trades - i.e. the need to sell more protection as spreads tighten and vice versa to remain delat hedged.

IG Credit pulled back to its 50-day average for the first time in six weeks.

The reason we think this is relevant is that we have reached some empirically interesting levels in terms of volatility carry (the gap between realized and implied vol) as well as the credit option skew (much like in stocks the downside to upside skew is steep in credit). IG and HY credit are back to early March levels of spread and the S&P is 50pts higher and VIX 5pts lower in the same context as credit!

While we remain a strong supporter of the up-in-quality trade, we suspect that the gamma impact of the rise in credit options/tranche exposures (the latter seeing more tail risk hedging and correlation bets recently) may have exhausted the index-level shifts for nw (especially in IG) as it compressed its skew to its fair-value very dramatically today.

HY Credit also pulled back for the first time in six weeks below its 50-day average after finding resistance at the May10 tights.

IG and HY both broke through (marginally) their 50-day average spreads today for the first time in over six weeks and as you can see from the charts adjacent, typically it has acted as support/resistance rather than a trend extension in recent months.

Today saw single-name credits positive but breadth was not crazy good at around two tighteners to each widener and the skew compression (the index tightened wellover 2bps while the underlying compnent-based index value less than 0.7bps) was the largest since series 16 of IG started trading - again suggesting index technicals (the gamma stuff we mentioned above) as opposed to broad strength.

Curves were almost perfectly balanced with flatteners slightly outnumbering steepeners in single-names and again the technicals that we suspect are impacting the most liquid 5Y points of HY and IG caused the index to flatten in 3s5s also. To add some further spice to this comment, the off-the-run indices that are most dominated by tranche trades (IG9 and HY9) outperformed quite notably also. The bottom line from all of this is that the trend of credit compression has been exaggerated in recent days via what we think was a heavy gamma hedging need, we would caution of reading much into HY compression here since single-names did not live up to expectations and its move was far less than we would have expected given IG's move. IG, on the other hand, is very tight here and while we believe HY-IG decompression still works we would be much more selective in our up-in-quality trades (i.e. focus on idiosyncracies and not systemic bets for now). OK, now you can breathe and relax ahead of Bill-and-Kate's Big Day Out.

Away from stocks and credit, TSYs behaved how we would have expected given the low growth print - yields dropped and it seems like we saw some USD repatriation (certainly the Brazilians were buying USD) into safety. VIX slid in line with the rise in stocks but the skew steepened and implied correlation rose intraday but was off its highs by the close (this measures the demand for index protection over single-name protection).

Based on our equity, credit, vol contextual framework, we see Fins and Transports underperforming in credit and Cyclicals and Healthcare outperforming today.

Contextually , 29% of our broad credot universe was wider on the day, almost in line with the 33% of stocks lower and a notably lower 67% of vols higher on the day. Low beta stocks saw CDS outperform relative to high beta (again up -in-quality rotation), and low beta stocks also outperformed on average in stocks relative to high beta today. Low beta vols rose more than high beta - which we reiterate seems as much about protecting solid companies as it is about selling high-flyers (month-end perhaps?).

Financials and Transports outperformed in stocks over credit today (relatively speaking from our contextual framework) and the former admittedly was a surprise given our recent comments but one day does not a trend make. Consumer Cyclicals and Utilities (and Energy) saw the best relative credit performance on the day in the context of equity and vol performance.

All-in-all, a high volume day in credit with up-in-quality continuing. Stocks seemingly bullet-proof but HY risk-on sensibilities not buying into that. IG compression may stall here since the derivative-driven exaggeration of trend may have peaked, though we still see HY-IG decompression (systemically and idiosyncratically) as the play here. Was the financials rush in stocks today, month-end window dressing driven - it remains cheap in stock to credit but we believe concern is warranted in equity relative to credit here.

Europe

Overnight saw the EUR touch 1.4882 before rolling over (and a sub-73 DXY). More compression in SovX, now very notably tight to its fair-value, narrowed the link between itself, FINLs, and Main as w enote modest compression in Spain, Ireland, and Portugal while Greece limped wider (as the cash-CDS basis we mentioned yesterday was wide enough for players to step back in and compress it by 123bps on the day).

Financials considerably outperformed non-financials on the day but remain wide of their differential from just a week ago still at around 42bps. Senior-Sub financials differential fell below 100bps for the first time in a week also.

Asia

Japanese corporates underperformed AXJ today by around 1.5bps as the latter (Asia Ex-Japan) compressed and recovered its loss from Wednesday. AsiaPac sovereigns compressed also as did Japan but Australia outperformed of all the indices - rallying 1.5bps or so on the day helped by the banks (yes against our position).
Index/Intrinsics Changes

CDX16 IG -2.26bps to 89.49 ($0.09 to $100.39) (FV -0.62bps to 88.85) (33 wider - 78 tighter <> 55 steeper - 68 flatter) - No Trend.
CDX16 HVOL -2bps to 150 (FV -1.58bps to 146.14) (13 wider - 15 tighter <> 10 steeper - 20 flatter) - No Trend.
CDX16 ExHVOL -2.34bps to 70.38 (FV -0.44bps to 71.47) (21 wider - 75 tighter <> 50 steeper - 46 flatter).
CDX16 HY (30% recovery) Px $+0.25 to $103.095 / -6bps to 424.4 (FV -2.34bps to 415.22) (31 wider - 63 tighter <> 60 steeper - 40 flatter) - Trend Tighter.
LCDX15 (70% recovery) Px $-0.06 to $101.375 / +1.53bps to 229.22 - Trend Tighter.
MCDX15 +0.13bps to 139.125bps. - Trend Tighter.
ITRX15 Main -1.41bps to 96.53bps (FV-1.92bps to 99.24bps).
ITRX15 HiVol -1.78bps to 135.72bps (FV-2.18bps to 132.78bps).
ITRX15 Xover -8.26bps to 353.24bps (FV-4.8bps to 345.71bps).
ITRX15 FINLs -4.38bps to 130bps (FV-4.63bps to 132.12bps).
DXY weakened 0.56% to 73.11.
Oil is unchanged at $112.76.
Gold rose $8.4 to $1535.75.
VIX fell 0.73pts to 14.62%.
10Y US Treasury yields fell 4.5bps to 3.31%.
S&P500 Futures gained 0.28% to 1354.8.

Spreads were tighter in the US as all the indices improved. IG trades 2.6bps tight (rich) to its 50d moving average, which is a Z-Score of -1s.d.. At 89.49bps, IG has closed tighter on only 35 days in the last 598 trading days (JAN09). The last five days have seen IG flat to its 50d moving average. HY trades 17.3bps wide (cheap) to its 50d moving average, which is a Z-Score of -0.2s.d. and at 424.43bps, HY has closed tighter on only 27 days in the last 598 trading days (JAN09). Indices generally outperformed intrinsics with skews mostly narrower.

Comparing the relative HY and IG moves to their 50-day rolling beta, we see that HY underperformed by around 6.9bps (or 115%). Interestingly, based on short-run empirical betas between IG, HY, and the S&P, stocks underperformed HY by an equivalent 0.4bps (~ 7%), and stocks underperformed IG by an equivalent 1bps (~ 47%) - (implying IG underperformed HY (on an equity-adjusted basis)).

Among the IG names in the US, the worst performing names (on a DV01-adjusted basis) were CenturyLink, Inc. (+11.21bps) [+0.09bps], RR Donnelley & Sons Company (+3.24bps) [+0.02bps], and Vornado Realty LP (+1.68bps) [+0.01bps], and the best performing names were Constellation Energy Group Inc. (-41.5bps) [-0.33bps], FirstEnergy Corp (-9.16bps) [-0.07bps], and Viacom Inc. (-4.75bps) [-0.04bps] // (absolute spread chg) [HY index impact].

Among the HY names in the US, the worst performing names (on a DV01-adjusted basis) were Eastman Kodak Co. (+109.1bps) [+0.84bps], Liz Claiborne Inc. (+34.9bps) [+0.32bps], and McClatchy Co./The (+23.46bps) [+0.2bps], and the best performing names were Dynegy Holdings Inc. (-66.95bps) [-0.56bps], iStar Financial Inc. (-54.5bps) [-0.52bps], and GenOn Energy, Inc. (-25.99bps) [-0.25bps] // (absolute spread chg) [HY index impact].

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