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Sunday, April 10, 2011

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In search of the Gold of the Payan King

Posted: 10 Apr 2011 05:35 AM PDT

BC alter

why silver will tarnish

Posted: 10 Apr 2011 05:34 AM PDT

this is a beauty :wub:

http://online.barrons.com/article/SB...mod=BOL_twm_mw

Silver hit a major milestone on Friday, breaking through $40 an ounce for the first time since 1980. But the metal's powerful rally may soon be coming to an end.

It's been leaving gold in the dust. Silver prices have doubled since August, while gold is up 20% in the same span. Over just the past three months, silver has shot up 50% compared with 11% for gold.

Both metals are attractive to investors because they're known to be "safe havens"—assets that historically have retained their value in tumultuous times. Investors so covet safe havens right now that they've been more than willing to try silver, long considered gold's poorer cousin. Result: Silver prices have seemed headed toward the all-time highs achieved in January 1980, when the larger-than-life Hunt brothers of Texas tried to corner the market.

DON'T BET ON NEW HIGH. While the Hunts put the squeeze on supplies, it's demand that's driving the metal higher this time around. But demand for silver is more fickle than demand for gold in a couple of ways, and that is what makes further strides in price a tenuous bet, at best.

First, there's what's known as investment demand. That's a category that encompasses hedge funds, institutional investors and individuals who buy gold coins. Investment demand for gold has been rising steadily for a number of years and totaled $63.7 billion in 2010, according to GFMS, a London-based consultancy. By contrast, world investment in silver rose by 40% last year, resulting in a near doubling of net flows to $5.6 billion, according to GFMS.

That's largely been driven by individual investors who've been priced out of gold, now approaching $1,500 an ounce. Unlike institutional investors, the little guy is less likely to hold silver over the long run. Analysts say individuals may well trade out of precious metals and into higher-yielding assets once interest rates start to rise, as the tightening of monetary policy gains traction around the world.

Second, silver is more widely used in industrial applications than gold, which means it's more closely tied to the overall health of the economy. Given the relatively small size of the market for silver, it's unlikely that any increase in investment demand would compensate for the decline in consumption by manufacturers and silverware makers in the event of another slowdown.

That's a troubling prospect, because while silver prices typically have outpaced gold on the way up, they've fallen harder on the way down. In 2008, during the worst of the financial crisis, silver prices plunged 54% between July and October, while gold fell 24% over the same period.

AND LET'S NOT FORGET that while silver is indeed a precious metal, it's not as rare as gold, so miners will more quickly respond to higher prices with sharply increased supplies of a metal that's more readily available.

"Silver fundamentals look especially soft," analysts at Barclays Capital wrote in a report.

The bank points out that the physical market remains in surplus, and stockpiles held at warehouses licensed by the Comex division of the New York Mercantile Exchange are on the rise.

That should be enough to dim the glint in the eyes of silver buyers.

China Trade-Deficit = Zero Treasuries-Buyers

Posted: 10 Apr 2011 04:46 AM PDT

It really is time for Ben Bernanke and the Federal Reserve to abandon the absurd myth that someone other than Ben Bernanke is still buying U.S. Treasuries.

In a recent commentary, I pointed out the obvious implications to the U.S. Treasuries market (as well as for the other sovereign deadbeat-debtors) of the catastrophe in Japan, and the enormous amount of domestic wealth which would need to be repatriated to fund reconstruction. Not only does this take Japan completely out of the market as a buyer of U.S. Treasuries, but they will undoubtedly be forced to liquidate much of their holdings in U.S. debt (assuming they can find anyone foolish enough to buy it).

Now we have China disappearing from the list of "potential buyers" of those bonds as well. Despite the fact that China's economy had ceased to be export-dependent at least as far back as 2008, we continued to see media talking-heads parroting the myth that not only was China's economy "dependent" on U.S. consumption, but that China was "forced" to plow most of its "vast trade surpluses" into Treasuries – as the only means of preventing the appreciation of the renminbi.

Over the weekend, China's government announced its first quarterly trade deficit in seven years. With that single announcement, both of those preceding myths have now been permanently dispelled. Despite its trade-deficit, China's economic growth leaves all other nations in its dust. So much for being "export-dependent".

Similarly, how many Treasuries is China "forced" to buy with a zero trade-surplus? Obviously zero. Thanks to the runaway-inflation caused by the reckless money-printing of Ben Bernanke and the Federal Reserve, there are no longer any nations in the world with both large trade- and budget-surpluses, meaning there are no more potential "big buyers" for U.S. Treasuries. Thus while the supply of U.S. Treasuries continues to be ramped-up to new records on a quarterly basis, there is no demand. Period.

This makes the Federal Reserve's 2011 "April Fool's" joke that it was about to stop buying Treasuries even less-funny than its 2010 "April Fool's" joke that it had stopped buying Treasuries. Try to be original at least!

All that happened in 2010 after the Federal Reserve pretended to stop buying Treasuries in 2010 is that it had to illegally counterfeit the money to continue monetizing U.S. debt (which explains why it is fighting with all its might to avoid any meaningful "audit"). Thus, if we get a similar announcement in the weeks ahead, all that it will signify is that the Federal Reserve has again gone from its legal-counterfeiting operations back to its illegitimate money-printing.

C. Martenson interviews Paul Tustain (Bullion Vault)

Posted: 10 Apr 2011 02:00 AM PDT

http://www.chrismartenson.com/blog/p...e-danger/56181

Simple discussion of Unallocated vs Allocated. As well as other topics related to gold and how it is being handled by the Men behind the Curtains.

Dollar Collapsing?

Posted: 10 Apr 2011 12:31 AM PDT

If you are wondering why Gold has did so well last week, look no further than the plunge in the dollar: The above chart represents the last three days of last week, April 6 through April 8. While the above does not qualify as a "collapse" in the sense that I believe we will have, [...]

Is There Gold in Fort Knox?

Posted: 10 Apr 2011 12:17 AM PDT

CBS

Short-Term, High-Probability Mean-Reversion Strategy: Adding SLV

Posted: 09 Apr 2011 11:56 PM PDT

Undervalued Cameco: Potentially the Best Uranium Buy

Posted: 09 Apr 2011 11:43 PM PDT

Rani Chopra submits:

The magnitude of the earthquake and tsunami in Japan that triggered the explosion in the Fukushima nuclear power plant forced the world to sit up and take notice of the horrifying catastrophe that radiation can subject an entire nation to. The 8.9 magnitude earthquake that rocked the nation caused "loss of power" to the nuclear reactors thus causing a meltdown of the fuel rods and subsequent release of toxic radiation. Japan has now raised its nuclear alert level to five and large scale evacuation efforts are in progress. Thursday's aftershock that had a 7.1 magnitude caused the S&P500 to fall by .15%.

News of the March quake did not affect the S&P500 at first, but concerns over the nuclear crisis worsening sent the index to its lowest level since December. The S&P500 slumped by about 3.6% in three days and Japanese stocks were in the red. Japan's Nikkei index tanked


Complete Story »

Major Market Movers: April 11-15

Posted: 09 Apr 2011 11:11 PM PDT

The dollar was slashed in the past week, losing big time to almost every currency, apart from the yen. Will these major breakouts hold? We have important data in Britain and Germany, a rate decision in Canada and key inflation figures among other major market movers this week. Here's an outlook for the key events to watch out for.

The European rate hike drew a lot of attention in the past week, but it was quickly replaced by the scary headlines of a US government shutdown. Together with higher oil prices, the dollar found itself face down in the mud. Apart from the regular events, we have G7 meetings on Thursday and G20 on Friday. No deal is on the agenda, but comments from senior officials can sure move currencies. Stay tuned. OK, let's start:

  1. British CPI: Tuesday, 8:30. Inflation in Britain is above target for a very long time,

Complete Story »

Do We Crash Or Get a Long Slow Sink Into The Mud?

Posted: 09 Apr 2011 10:26 PM PDT

While anything can happen at any time in markets, we agree with Carl Swenlin the chances of a huge over-night drop are not probable. However, with stock exchange circuit breakers in place and these markets so beaten-up with numerous problems, we could see some serial selling events bouncing on wider support and resistance prices that would, in all probability, scare the wits out of most investors and traders. Cooler pro traders watch this stuff with normal heart rates working steadily to figure a way to make money from big scary messes. -Ed.

Carl Swenlin DecisionPoint On Crashes: "As a practical matter there is always the potential for a market crash, but the causes and magnitude will be different. For example, the Flash Crash and the 1987 Crash were, in my opinion, caused primarily by structural weaknesses in the exchange trading systems. The 1929 Crash was only a decline of about -14.5%, but it was part of an already in progress bear market that eventually reduced the Dow by about –90%. The 1929-1932 Bear Market was caused by problems in the economy, as is the case with most bear markets, the most recent being 2000-2002 and 2007-2009 Bear Markets."

"There were "crash-type" events in those bear markets, but they occurred well after the bear markets had begun, which was why I said in my 3/18/11 article that we would probably have ample technical warning to avoid most of the downside. However, sometimes there will be unexpected external events, which will provide no warning of a technical nature that could trigger a market crash. A recent example is, of course, the major earthquake and tsunami in Japan, which caused a crash in Japan's stock market."

Tokyo Had A Very Bad Spell On Their Earthquake. Fast Traders Made Money Going Both Ways.

"In my opinion, the global debt crisis is going to result in another major bear market in stocks. It is not a matter of "if", but "when." Just like the stock bubble and real estate bubble, the debt bubble will eventually collapse. The question is whether it will begin gradually deflating, thus creating technical evidence upon which we can act or, will there be a sudden major failure of confidence caused by something like an important sovereign default, or banking system failure? A sudden loss of confidence would surely cause a crash." -CS


This posting includes an audio/video/photo media file: Download Now

Super Force Signals - article

Posted: 09 Apr 2011 01:30 PM PDT

http://www.goldismoney2.com/cms/inde...d=2&Itemid=101

Author giving a warning for the members who trade. Very good charts, comments worth considering given the new highs in the PMs.

The constant 'wall of worry'. Anyone who has been around awhile will remember the gut wrenching drops the author refers to in Ag.

GLTA

What does your local dealer pay for 100 oz silver bars?

Posted: 09 Apr 2011 11:50 AM PDT

Around here it is 90% of spot on weekends. And 95% of spot when the market is open.

So what's your price prediction for Sunday night/Monday?

Posted: 09 Apr 2011 07:06 AM PDT

With the government shutdown averted, I'm guessing we'll see a respectable pullback. Maybe as much as $15 or $20. Thoughts?

New Videe: How a gold mine works

Posted: 09 Apr 2011 06:36 AM PDT

You'll have to forgive Sante Fe Gold, the authors of the video, for plugging their own operations throughout. (I don't own it, but I've put it on my radar).

But well worth a view.

Gold: "This is the Perfect Storm"

Posted: 08 Apr 2011 11:43 PM PDT

Gold: "This is the Perfect Storm"

Here's a money.cnn.com story from yesterday that was sent to me by reader Scott Pluschau.

Gold prices have hit a series of record highs this week, as a combination of inflation worries, a weaker U.S. dollar and geopolitical turmoil have weighed on investor confidence.  The link is here...and the embedded chart is the worth the trip all by itself.
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