Gold World News Flash |
- It’s All About The Dollar – Revisited
- Aussie Dollar and Gold Stocks
- Silver Insurance
- Technical Correction Under Way in Silver, Gold
- Use the Silver Dip to Convert Paper Silver into Physical Silver
- Ben Davies: Silver criticality -- why silver might crash
- Only central bank intervention makes precious metals volatile, Turk tells King
- Why Do You Need a Non-Leveraged Core Position in Precious Metals?
- CME Announces Third Margin Increase For Silver in a Week - Karma? Ain't It a Bitch.
- In The News Today
- Hourly Action In Gold From Trader Dan
- NUTS to all of you ‘top pickers!’
- So Much For The Sprott Silver Scare: "Every Dollar From PSLV Sales Was Reinvested In Silver Equities"
- Notes from the Summit: What’s Coming and How to Prepare
- The Rising Tide of Resource Nationalism
- Waterfalls Showed up in Silver and Gold Prices Today
- John Williams: Hyperinflation and Double-Dip Recession Ahead
- CME Group hikes margin requirements for Silver - AGAIN
- 14 Signs That The Collapse Of Our Modern World Has Already Begun
- Is The Comex Getting Desperate To Prevent Longs From Taking Delivery?
- Golden Flash Crash
- Silver settles 5.2% lower as trading cost rises
- Capital Context Update: Risk Reversal
- Consider this massive dip in silver prices as an opportunity to convert your PAPER silver into PHYSICAL silver
- Most Successful Speculation Ever
- Notes from the Summit: What’s Coming and How to Prepare
- To Hell with the CME, 9/11 crybabies, and paper bugs – BTFD!!!
- “Once again, we may be about to find out what happens when regulators are asleep at the switch.”
- And Scene: CME Hikes Silver Margin For Third Time In 7 Days, Raises Initial, Maintenance Margins By 12%
- Is it time for the U.S. to disengage the world from the dollar?
| It’s All About The Dollar – Revisited Posted: 02 May 2011 05:59 PM PDT And eventually this will grow into a panic. You should know and understand this as planning your portfolios effectively moving forward will depend on proper perspective, where although corrections will take place, deflation is not in the cards, which will surprise some pretty heavy thinkers. No, if anything stagflation will at a minimum worsen; and then conditions could possibly advance into shades of hyperinflation if a real panic out of the $ occurs. Therein, maybe prices will not be increasing 50% per month, which is the conventional definition of hyperinflation, but that won't matter because most people would be financially destroyed at 10% given present debt levels and what such an outcome would do to the cost of money.
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| Posted: 02 May 2011 05:54 PM PDT The rising Aussie dollar is limiting the gold stocks at present in addition to hurting about half of the Australian economy. Exporters (manufacturing) are suffering, so are tourism & education. This article examines the recent history of the AUD gold price and gold stock valuations and profitability in this context.
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| Posted: 02 May 2011 05:54 PM PDT Biwii
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| Technical Correction Under Way in Silver, Gold Posted: 02 May 2011 05:38 PM PDT Whatever happens in the days and weeks ahead, we seriously doubt that the long-term bull-market in precious metals is in jeopardy, since none of the fundamental factors that have been driving bullion quotes higher have changed. In particular, we expect Fed easing to continue until the dollar collapses, taking the financial system with it.
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| Use the Silver Dip to Convert Paper Silver into Physical Silver Posted: 02 May 2011 05:16 PM PDT For those of you still holding on to your paper silver and paper gold for inexplicable reasons, consider this massive dip in silver prices in Asia that occurred this morning as an opportunity to convert your PAPER silver into PHYSICAL silver. And if silver keeps dipping this week, though it has already rebounded by 6% from its low of $42.17 in Asia this morning as I write this article, then use the extended opportunity to convert even more of your PAPER silver into PHYSICAL silver. Currently, gold has hardly dipped at all, down less than 1% from Friday's close, but if the bankers successfully orchestrate a further take down in silver futures in New York today and for a few subsequent days, then the price of gold futures will likely follow it down as well. Want to send the bankers a message and serve up the biggest nightmare possible to bankers? Use the massive dip that they thought would scare all silver holders out of their position as an opportunity to finally extr...
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| Ben Davies: Silver criticality -- why silver might crash Posted: 02 May 2011 03:31 PM PDT 11:23p ET Monday, May 2, 2011 Dear Friend of GATA and Gold (and Silver): In commentary written for King World News, Hinde Capital CEO Ben Davies applies some deep thinking to the silver market and finds reason to think that a big shake-out downward is imminent even as silver's likely long-term price is far higher than most analysts imagine. Davies' commentary is headlined "Silver Criticality: Why Silver Might Crash" and you can find it at King World News here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/2_Ben... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Join GATA here: World Resource Investment Conference Gold Rush 2011 https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, 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
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| Only central bank intervention makes precious metals volatile, Turk tells King Posted: 02 May 2011 03:21 PM PDT 11:19p ET Monday, May 2, 2011 Dear Friend of GATA and Gold (and Silver): Interviewed today by King World News, GoldMoney founder and GATA consultant James Turk remarks that the precious metals really aren't naturally volatile in markets but are made so by frequent and surreptitious central bank intervention. In any case Turk discerns a bullish flag pattern developing in the silver price chart. From Turk's lips to the Great Market Manipulator's ear -- and we don't mean Bernanke. An excerpt from the interview with Turk is headlined "Silver Forming Another Bullish Flag Formation" and you can find it at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/2_Jam... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT 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: World Resource Investment Conference Gold Rush 2011 https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Canuc Resources Pursues Ecuador and Nova Scotia Gold Projects Canuc Resources Corp. (TSX: CDA) has confirmed high-grade gold and the potential for large-tonnage, low-grade copper and gold mineralization at its primary asset, property in the historic Nambija gold mining district in southeastern Ecuador. Last November Canuc took an option on the Mill Village gold property in southwestern Nova Scotia, which includes two past-producing mines. Canuc plans to begin surface and underground exploration at Mill Village in the next several weeks, financed by $2 million recently raised through a private placement. To generate immediate income, Canuc is acquiring MidTex Oil and Gas Co., owner of a producing gas well and a lease on 320 acres in Stephens County, Texas. Canuc's CEO, Gary Lohman, has more than 30 years of experience in the mining industry, primarily as a geologist, and the company's officers include similarly experienced people. For more information about Canuc, please visit http://www.canucresources.ca/.
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| Why Do You Need a Non-Leveraged Core Position in Precious Metals? Posted: 02 May 2011 01:03 PM PDT
 The answer to this rhetorical question is found in the market manipulation seen last night in silver. Those in the paper pits using leverage and short-term instruments to play the metals game can get wiped out in a flash. Trust me, I've got first hand experience. Read this post by Dave In Denver at the Golden Truth to get the gist of the most recent blatant "take down" in silver during thin overnight electronic market trading while many overseas markets were closed. This is not tin foil hat conspiracy, this is how the casino works. The house has to always win, on balance. And when they don't, the government steps in and bails the house out with your purchasing power. It's sick and it's wrong and yet it's how the world works (and has for centuries). And no, it's not limited to the precious metals markets, but these are politically important to the status quo. "Gold is the enemy," at least according to Paul Volker and Alan Greenspan back before he became an integral part of the machine. The point is that no one can shake that physical metal out of your hands by playing tricks with the paper price. I am not saying don't engage in trading (now THAT would be a case of the pot calling the kettle black!). Many of us are speculators because we live in a fiat world gone mad and there are few options left to protect purchasing power in this environment. Speculation always runs rampant in societies caught in the throes of a dying fiat currency. The decline of the American Empire is not unique or even special in this regard. Excessive debt associated with military imperialism - nothing new in that recipe! Does anyone actually believe that we will now reduce the number of troops in Afghanistan now that we have supposedly killed the Mythical Boogeyman? At least I think Osama bin Laden was the reason we started an undeclared war in Afghanistan (in true Orwellian fashion, it's getting harder and harder to remember exactly why Eurasia went to war with Oceania). Anyhoo, make sure you have a solid core position in physical metal before you start throwing chips onto the electronic trading casino table. My metal of choice is Gold, but I own a little silver and I respect those who prefer silver, platinum and/or palladium. To me, Gold is the no-brainer, safe investment for the next several years. It has lower risk than other precious metals, but this means it has a lower potential reward. For most mortals, holding physical metal will yield greater gains than speculating on short-term price fluctuations in metals or metal stocks. Much like Las Vegas, the stories of those few who won big keep the moths coming back to the flame (including this not-humble-enough moth). A series of significant margin hikes in silver coupled with an intentional smack down in its price during thin trading turned lucrative profits into margin calls for several retail traders last night. Wash. Rinse. Repeat. Don't play with dynamite unless you're ready to get blown up. In the long run, last night's shenanigans will be nothing but a nearly imperceptible blip on a long-term chart of the bull market in silver. Those who got burned will look back and curse themselves for being so aggressive at such an overextended price point. Like the tortoise and the hare, 95% of the speculators (the hares) will be surpassed by physical metal owners (the tortoises) who are happy to just ride the bull at its own pace. And those who own paper metal as their core holding are also playing with a form of fire, as the rules of ETFs and ETNs are subject to change without notice and their counter party risk is increasing exponentially as this secular general equity and real estate bear market for the ages continues to grind onwards. I still play poker with the sharks using a portion of my savings, but with a jaundiced eye and an itchy trigger finger that has learned to take losses quickly. I now watch the paper shenanigans with a mix of amusement and sadness. As a [temporary?] Goldbug, I know I have to be careful what I wish for in this environment. There are no easy ways out of the mess America and other "advanced" economies have created for themselves. Life will go on and people will survive, thrive and have fun in the mean time. Doomsday scenarios have no place in a serious investor's vision of the future, as investing is a waste of time if the "end" is near. I'm all for survival skills and being prepared for temporary chaos, but this to me is not investing (i.e. not really a financial topic). Own physical metal if you are interested in the precious metals space. Once you have accumulated a comfortable "nest egg" in physical metal, whatever that means to you, then go ahead and speculate if that's your thing - whether it be via leverage, short-term paper trading and/or dabbling in junior metals stocks. There is plenty of money left to be made in the current secular Gold bull market, which promises to be one for the ages. Don't be the hog that gets slaughtered when it's so risk-free to be the bull that makes money. Having said all this, I'm buying the freakin' dip tomorrow if silver goes down any further using the AGQ double bull paper silver ETF in my speculative account for a short-term trade... ;]  ![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif) 
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| CME Announces Third Margin Increase For Silver in a Week - Karma? Ain't It a Bitch. Posted: 02 May 2011 12:04 PM PDT |
| Posted: 02 May 2011 11:52 AM PDT Jim Sinclair's Commentary Before silver is finished margins will be raised to cash. Volatility, thy name is silver. CME Group Hiking Silver-Futures Margins By Another 11.6% CME Group is hiking silver margins by another 11.6% after already hiking them twice last week, the exchange announced Monday afternoon. The "initial" margin to open new speculative positions in the main 5,000-ounce silver-futures contract will rise to $16,200 from $14,513, according to a notice released by the exchange. The "maintenance" margin for exiting speculative positions, as well as both initial and maintenance margins for hedger positions, will rise to $12,000 from $10,750. The changes will be effective after the close of business on Tuesday. Margins are also rising for Comex MiNY silver futures and E-mini silver futures. The notice from CME Group, which operates the Comex division of the New York Mercantile Exchange, said the change is a part of the "normal review of market volatility to ensure adequate collateral coverage."
Jim Sinclair's Commentary Without QE who will buy Treasury instruments in the amounts required due to the deficit? U.S. Treasury: China Has Decreased Its Holdings of U.S. Debt (CNSNews.com) – Mainland China has decreased its holdings of U.S. Treasury securities since last October, according to a report updated today by the U.S. Treasury Department. Since September 2008, when they eclipsed Japan, entities in mainland China have been the largest foreign owners of U.S. government debt. But, as indicated by the Treasury Department chart linked here, Chinese ownership of U.S. Treasury securities peaked in October 2010 and has declined in each of the four most recent months reported by the Treasury Department. At the end of October 2010, China owned 1.1753 trillion in U.S. Treasury securities. That dropped to $1.1641 trillion by the end of November, $1.1601 trillion by the end of December, $1.1547 trillion by the end of January, and $1.1541 trillion by the end of February 2011. February is the latest month for which the Treasury has estimated foreign holdings of U.S. debt. Back in February 2001, according to historical data reported by the Treasury, the mainland Chinese owned only $63.7 billion in U.S. debt. In the ensuing decade, the Chinese massively increased their holdings of U.S. Treasury securities, and especially in the past five years. In February 2006, China owned $318.4 billion in U.S. debt and Japan owned $656.4 billion.
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| Hourly Action In Gold From Trader Dan Posted: 02 May 2011 11:49 AM PDT Dear CIGAs, Click chart to enlarge in PDF format with commentary from Trader Dan Norcini For further market analysis and commentary, please see Trader Dan's website at www.traderdan.net
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| NUTS to all of you ‘top pickers!’ Posted: 02 May 2011 11:32 AM PDT “What is the meaning of a gold standard and a redeemable currency? It represents integrity. It insures the people’s control over the government’s use of the public purse. It is the best guarantee against the socialization of a nation. It enables a people to keep the government and banks in check. It prevents currency expansion from getting ever farther out of bounds until it becomes worthless. It tends to force standards of honesty on government and bank officials. It is the symbol of a free society and an honorable government. It is a necessary prerequisite to economic health. It is the first economic bulwark of free men”. W. E. Spahr. On a daily basis I receive Emails that consist of a lament, citing analysts who are predicting a major top in the metals, to occur almost imminently. They quote a man who runs a financial website and who a few weeks ago, drew a line in the sand for silver at $37.00. They also mention Robert Prechter as ...
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| Posted: 02 May 2011 11:09 AM PDT
Earlier we reported that Sprott had sold $35 million worth of PSLV, which caused many to panic that the precious metals guru had indicated the market top in the market. Well, as it turns out and as he just told the Globe and Mail “We haven’t lost our enthusiasm for silver.” Quite the opposite...
Sprott is not the first to observe the harsh push on silver equities. As we noted some time ago, metals are outperforming equities by a ridiculous margin, which is why anyone who has to have a connection with capital markets (like an advisor) would be foolish not to take advantage of this relative mispricing. Which by the way is massive. As the chart below shows, while SILV is up 42% YTD, the SIL ETF is actually negative for the year! All Sprott is doing is taking profits from the upper line and reinvesting them in the lower one, once again proving that relative value compressiona/divergence trades are the only ones that make any remote sense under a centrally planned regime.
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| Notes from the Summit: What’s Coming and How to Prepare Posted: 02 May 2011 11:00 AM PDT syndicate: 1 Author: Vedran Vuk Synopsis: Contributing writer Roy Furr shares his impressions from the just-concluded Casey Summit, "The Next Few Years." Also in this edition: Vedran Vuk on Osama bin Laden and the future of the "War on Terror," and, Osama and the dollar. Dear Reader, Today is one of the more important days in our national history. And it's not because Osama bin Laden has been killed. His death will not change the political situation in the Middle East. Rather, once again, we stand at a crossroads. From here, the United States could travel down a road of perpetual warfare, or this event could finally bring closure to the "War on Terror." For a moment after September 11, Americans had the same opportunity to reexamine our role in the world. Why were we attacked? Why would som...
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| The Rising Tide of Resource Nationalism Posted: 02 May 2011 11:00 AM PDT You know the old film The Treasure of the Sierra Madre? Three men set off into the hinterlands of Mexico to strike gold. They find it, but then greed sets in and they start to mistrust each other. Things go badly from there. I am really simplifying a great movie, but I couldn't help but think of the film after reading the papers. The confluence of headlines and stories pointed to the dangers of setting off to find great deposits in relatively unexplored parts of the world. It is already inherently fraught with risk. And then there are many more stories of promising ventures that went nowhere than there are of successes. But should you actually find something valuable, you have new risks, more like the ones faced by the three men of the film. The danger is that you might actually find gold. You might even go through all the hard work of delineating it and even building it…but can you keep it? Increasingly, miners face risks that they won't be able to reap the full benefit of...
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| Waterfalls Showed up in Silver and Gold Prices Today Posted: 02 May 2011 10:54 AM PDT Gold Price Close Today : 1556.70 Change : 0.70 or 0.0% Silver Price Close Today : 46.078 Change : (2.500) cents or -5.1% Gold Silver Ratio Today : 33.78 Change : 1.753 or 5.5% Silver Gold Ratio Today : 0.02960 Change : -0.001620 or -5.2% Platinum Price Close Today : 1861.00 Change : 38.00 or 2.1% Palladium Price Close Today : 773.50 Change : 8.50 or 1.1% S&P 500 : 1,361.22 Change : -2.39 or -0.2% Dow In GOLD$ : $170.07 Change : $ (0.10) or -0.1% Dow in GOLD oz : 8.227 Change : -0.005 or -0.1% Dow in SILVER oz : 277.95 Change : 14.24 or 5.4% Dow Industrial : 12,807.36 Change : -3.18 or 0.0% US Dollar Index : 73.06 Change : -0.029 or 0.0% Must make this fast as tornado spawning storms are headed in from the west and my wife is kidnapping me for two days to go look at waterfalls. Speaking of waterfalls, they showed up in SILVER and GOLD PRICES today. It appears to be the break we have been awaiting. May have been some catalyst, but I saw no news story. At tops, any old catalyst will do. On Comex GOLD closed 70 cents higher at $1,556.70 but that tells no story, and surely not today's. From a high of $1,578.05 the gold price fell as low as $1,523.50. Now trading at $1,545.30 in the aftermarket, that $15 lower than the close. Remember the key reversal pattern: break into new high ground with a lower close on the day, confirmed by another lower close the next day. Both halves make the whole.  Gold's 5 day chart shows a double peak about $1,575 over the weekend, with another matching peak today. The gold price climbed from $1,550 at the open to $1,575, then steadily lost ground all day. When it hit $1,555, waterfall gushed over the precipice. Only thing holding it up is $1,540. If that ledge holdeth not, and probably won't, look for $1,505 in short order. Silver chart differs from gold's wholly. The SILVER PRICE was trading on a plateau supported at 4800c. In early trading between Sunday and today, in Europe I reckon, waterfall ran over the cliff at 4800c and didn't splash until it hit 4400c, an 8.3% drop. Yet from midnight Eastern time to NY open, the silver price had recovered to 4550c, then kept on climbing to 4736c. But water runs downhill. From that high about 11:30 a.m. the silver price ran downhill to 4350c at its lowest. Now at 4394.5c. Comex closed down 250c at 4607.80, but the silver price lost another 200c in the aftermarket. Truth be told, this acts like a very overbought market breaking. The Gold Silver Ratio geysered today to 33.784, and now at 35.164. That offers the surest sign of a break. Key reversal must put second piece in place tomorrow by closing lower. If so, you have your reversal and the correction has begun. Interestingly, both the Dow and S&P500 posted the first half of key reversals today, not the enthusiastic kind but the lethargic kind. There, nonetheless. What pushed all the water off the escarpment? Not the US dollar. Dollar index close 73.064, down 2.9 basis points and not threatening anybody. Euro closed up again, yen not much changed. Dollar could turn around at any moment, though. Or maybe the catalyst was the alleged killing of Obama ben Ladin, errr, make that Osama Ben Laden. I can't tell one enemy of America from another. Anyhow, maybe the threat of peace and all the damage that would do to the Warfare/Welfare state's economy broke stocks. Who knows any more? Remember that if silver or gold close above previous highs, that invalidates any reversal. On the other hand, gold has a safety net about $1,445, although $1,505 might catch it for a small kiss. Beyond that lieth $1,380.  Silver's longer term chart shows a magnificent waterfall, falling clean from 4800c thru the 20 DMA at 43.16, and closing a bit above the 20dma. Damage is done. First support after 4400c appears at 4200, but 'tis faint. Stronger lurks at 3800c, then 3360c, latter being most likely target.Don't bother throwing any tantrums or scorching emails my way. I call 'em as I see 'em, whether you like it or I like it or any of those fuzzy-brained internet gurus like it. Res ipsa loquitur. Have to run -- my wife is taking me to the waterfall. Sorry, no commentaries for the next two days. 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. 
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| John Williams: Hyperinflation and Double-Dip Recession Ahead Posted: 02 May 2011 10:41 AM PDT Source: Karen Roche of The Gold Report (5/2/11) Economic recovery? What economic recovery? Contrary to popular media reports, government economic reporting specialist and ShadowStats Editor John Williams reads between the government-economic-data lines. "The U.S. is really in the worst condition of any major economy or country in the world," he says. In this exclusive interview with The Gold Report, John concludes the nation is in the midst of a multiple-dip recession and headed for hyperinflation. The Gold Report: Standard & Poor's (S&P) has given a warning to the U.S. government that it may downgrade its rating by 2013 if nothing is done to address the debt and deficit. What's the real impact of this announcement? John Williams: S&P is noting the U.S. government's long-range fiscal problems. Generally, you'll find that the accounting for unfunded liabilities for Social Security, Medicare and other programs on a net-present-value (NPV)...
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| CME Group hikes margin requirements for Silver - AGAIN Posted: 02 May 2011 10:41 AM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] For the third time in a week, the exchange has hiked margin requirements for trading silver futures contracts. New margin requirement rises to $16,200 from $14,513. Maintenance margin moves up to $12,000 from $10,750. Hedgers pay the maintenance margin as their initial margin requirements. It looks as if the exchange is extremely worried after seeing a nearly $10 plunge in silver prices overnight. It will make it more and more difficult for small specs to participate and as I have said previously here, will tend to magnify downward moves in price as margin calls escalate rapidly. Small specs - be extremely careful in this market right now. There is an attempt going on here to rid the general public of its positions leaving only the big boys to play. That will also aggravate the volatility even more and open interest drops off and liquidity begins to shrink....
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| 14 Signs That The Collapse Of Our Modern World Has Already Begun Posted: 02 May 2011 10:41 AM PDT A lot of people believe the world as we know it is going to end on December 23, 2012. Nonsense, I say. The far more honest answer is that the end of the world as we know it has already begun. And it doesn't mean the end of the world; it means the closing of one era and the birth of a new one. It is a transition between the ages. This particular transition, however, promises to be the most tumultuous and costly transition humankind has ever seen. But don't wait around for December 2012 to look for the signs. Here are 14 signs that the world as we know it is unraveling right now. We are living through the end of one era and the birth of a new one. In the future, they'll look back and call this all one moment in history, but when you're living through it, it seems to move forward at almost a snail's pace. But make no mistake: We are living through the opening chapters of the end of the world as we know it, and on the other side of all this will emerge a new world that's very different from the one we know today. #1 - Tornadoes, hurricanes, earthquakes and tsunamis - At first it seemed like a fluke; but now it's a pattern. The weather is becoming increasingly extreme. Over 120 tornadoes recently struck the U.S. Midwest. Texas is on fire and suffering through an extreme drought. And where there aren't fires and droughts, there are floods. This is only the beginning... watch for more freak weather over the next 18 months. #2 - The silence of the bees - Colony Collapse Disorder continues to accelerate across North America. We already know it's being caused in part by chemical pesticides (and possibly worsened by GMOs), but the chemical industry is engaged in a full-on cover-up to deny this truth while the pollinators of our world suffer a devastating population collapse. (http://www.naturalnews.com/028218_p...) #3 - The failure of nuclear science - The Fukushima catastrophe proves one thing: Scientists are dangerously arrogant in their planning of large-scale projects, and they fail to account for the awesome power of Mother Nature. Nuclear science promised us clean, green energy -- but now it has delivered a silent, invisible poison that's infecting our planet. 
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| Is The Comex Getting Desperate To Prevent Longs From Taking Delivery? Posted: 02 May 2011 10:31 AM PDT To coin a famous line from the classic movie "Apocalypse Now:" "I love smell from Comex silver margin hikes in morning - it smells like, DESPERATION!"...The CME has announced the THIRD margin increase in silver futures since last Monday. This is truly unbelievable and it explains the way silver was smashed for $1.90 in 20 minutes around 3:20 p.m. NY time, the least liquid part of electronic trading during the week. Why would someone all of a sudden decide that they need to unload enough silver futures to drive the price down this much two hours AFTER the close of Comex trading, when they had all morning to sell those contracts at higher prices during Comex pit hours? LOL. Here's the margin increase LINK 
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| Posted: 02 May 2011 10:21 AM PDT
Gold just plunged by $20 for no reason whatsoever. So let's take a guess at what happened here: some ETF caused the NYSE to hit LRP thresholds, causing numerous stocks to "break", and the result is an immediate algorithmic margin call satisfied by gold selling? Or not, at his point does anyone really care. Point is obvious: scare all holders into submission. Can the royal "they" just confiscate everything not in paper form (and thus out of Fed control) already and end this charade?
Update: and gold is now back to pre crash levels. Thank you Johnny 5.
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| Silver settles 5.2% lower as trading cost rises Posted: 02 May 2011 10:11 AM PDT By Claudia Assis and Kate Gibson Gold, which started floor trading in the red after hitting a record intraday high in electronic trading, turned positive as the dollar weakened and settled modestly higher. Silver for July delivery fell $2.52, or 5.2%, to $46.08 an ounce on the Comex division of the New York Mercantile Exchange. That was silver's largest one-day percentage drop since early January. Gold for June delivery advanced 70 cents to $1,557.10 an ounce. The metal traded as high as $1,577.40 an ounce earlier, an intraday record. It got support from a weaker dollar, and some modest safe-haven bidding on fears of attacks in retaliation to Osama bin Laden's death. Silver gathered most of the attention on Monday trading , however, as it plunged as much as 13% to $42.20 an ounce earlier. Monday was the first full session after the increase in margin requirements. Initial margin requirements for silver increased to $14,513 per silver futures contract, from $12,852. Maintenance margins increased to $10,750 from $9,500. [source]
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| Capital Context Update: Risk Reversal Posted: 02 May 2011 09:52 AM PDT
From Capital Context  Volume was relatively light but secondary bonds saw considerable net-selling from the buy-side, focused on Financials and Consumer Noncyclicals. Stocks and spreads lost ground today following an ebullient pre-open and relatively stable start as the themes we laid out in this morning's Midday Movers continued but were exaggerated by some significant unwinds across the Silver complex. Breadth in credit was positive but low beta considerably outperformed high beta and there was notable net selling in the secondary corporate bond market especially in the Financials and Consumer NonCyclical sectors. By the time, US equities had opened (and remember that UK was shut was we saw a large segment of the FX and credit markets closed today), they had erased much of the OBL-spike and while Silver (and oil but less so Gold) were still down pretty good, we saw a devaluation-trade rally in PMs and S&P futures out of the gate (well everyone knows you buy the stock market in the first day of the month and never lose right?). Silver managed to get back to unch almost while Gold and Oil well above Friday's highs, but that was as good as it got today for risk assets as we saw a sell-off gaining speed all afternoon helped by some more tom-foolery from Geithner and his emergency 'actions' to delay the debt ceiling debate (and their projections are simply mind-blowing as far as how little they suspect they will need to issue - US austerity? ask Richard Koo how this will end).
Better lucky than good, our suggested ETF Arb trade went into the money rather quickly this morning though stocks remain notably rich still and entry is still available at $17.5 or above. Though somewhat less than perfectly fungible, this relationship has held well over the past six months and as we comment, as long as we do not see the structural cyclical shift into intentional releveraging then mean-reversion in this relationship should prevail (and we will watch this very closely). In the context of capital structure perspectives , we note that Consumer Staples (XLP specifically) looks notably overpriced relative to Financials (XLF) at current levels of credit spread, vol, and skew relative to the ETF. Beta would suggest a 1.5x position between the two in the ETFs short Staples and Long Financials (which we don't totally like fundamentally) but relative to credit and vol for each sector we are seeing a different story and this is for a trade, not a lifetime. The weakness in financials secondary bonds today (well selling pressure that is seemingly being soaked up by the dealers with little need to rerack) will perhaps reduce the relative cheapness of financials' equities but this has been a consistent theme and one has to wonder what is going on. My suspicion is that we are seeing front-end flattening as liquidity pressures are priced into financials broadly and forward TSY curves drop suggesting lower NIMs (which along with rising interest expense from refinancing all that TLGP debt will eat into EPS). Financials were the underperformers among the most liquid IG names though today but moves were small at worst - though we note somewhat full of Schadenfreude given the flip-floppery we saw this weekend that BRK was the worst performer in IG credit names (though only +2bps to 107bps so don't get too excited). It would appear, though we always hedge when we count our chickens like this, that our explanation of last week's flush in credit (and less so in equities) was due to the gamma build up and it seems we settled a little here and returned to more normalcy in the days since. Though IG and HY were wider close to close (from Friday), they basically retraced half the gains from Friday (while we note that equities basically closed at Friday's low of session), IG swung 1.5bps from open to close (after opening 0.5bps tight to Friday's close). IG trading was very consistent today also - not as gappy as we saw on the way down.
 HY also opened considerably above Friday's high/close ($0.25 or so) but just like IG, drifted wider (lower in price) all day, ending closer to Friday's wides (low price) than IG (more in line with equities' relative performance). HY widened around 8bps from open to close, though only 3bps close-to-close. While there are many factors of note, we thought it useful for some context to consider the relative levels of IG and HY credit to the implied values that stocks, vol, and skews suggest is appropriate. We create these implied levels from the top-down, for a more actionable tactical asset allocation perspective (and easier to execute) as well as bottom-up (more accurate and fungible - though a little more noisy when aggregated). The main point is that we have seen IG credit and its equity/vol/skew implied valuation converge in the last few days (rise in vol, drop in stock, steepen in skew) while the relative differential in HY remains high. The convergence in IG is critical since if the divergence we had been seeing was more structural (i.e. due to relative performance attributes of a re-leveraging management option taking advantage of steep WACC curves) then we would expect the higher quality (more leverageable) names to be mispriced systemically - which they are not. From our perspective , which admittedly has its more bearish tilt (for the many reasons fundamental and flow that we have laid out in recent weeks), we suspect the relative cheapness (wider spreads or more risk aversion) that we see in HY credit is in fact a truer picture of attitudes currently and given the lack of USD-numeraire in 'spread-land' relative to 'US-equity-land', we would be less than positive at BTFD around here in the S&P500 - no matter how many times you are told how cheap equity valuations are empirically or how great earnings surprises are. The up-in-quality trade in credit remains (both cash and synthetic), our comments this morning on vol and equity performance still stand also as substantially confirming this. The reason we are growing a little more cautious recently is we are seeing gradual shifts in some of the tail risk hedges we watch - we mean the cost of these hedges is dropping. Whether it is credit vol levels or skews, equity vol skews and term structures, HY-IG relative value, HY term structures or equity and credit implied correlations, we are seeing some lift in pressure on these - far from being a good thing, we suspect this is weak hands throwing in as this last rip (our gamma comments earlier) were perhaps too much. With so many pros holding tail hedges, there is little to extend any day to day dips into sustainable unwinds - we keep a close eye in a topsy-turvy way on these levels and suspect that small drops in the premia for these catastrophe hedges will be enough to enable any dip in risk assets to drop further should they occur again. Our insights into low and high beta vol relative moves does provide some color on this - that low beta vol is more bid that high beta and high beta is underperforming (even on up days) - suggests traders/managers are willing to protect their low beta (think more sustainable quality firms perhaps) while they are unwinding the higher beta positions outright (as opposed to overlaying protection). Bottom-line , while Silver tanked today (thank you Geithner, margins, and OBL), gold fell nothing like as much (nor as much as its recent beta would suggest). DXY managed to creep back above 73 by the close but remains precariously low and Treasuries were bid all day, rallying more on the back of Geithner's reduced supply outlook (not sure on that truthiness). Credit is telling a different story and the up-in-quality, rise-in-dispersion trade that we are seeing play out (lower implied correlations) suggests a regime shift from 'extreme' value high beta BTFD to a more reasoned protect capital scenario. Especially in credit, we strongly suggest rotation to IG non-financials, financials 3s5s flatteners (bit of a hedge if FINs rally or if things hit the fan in liquidity), and utlization of core carry strategies in IG (and select crossover names) while grabbing low cost long vol positions for some downside protection. We strongly believe that between bottom-up releveraging cycle concerns, top-down macro developments, and global liquidity flows, that the need to discriminate more effectively in credit and equity portfolios is as high as it has been since 2007. Getting started for individual investors is not as daunting as it may seem (even if some of our commentary can be somewhat archaic). We have extensive relative value ideas for equity and credit positions that can help in creation of actively managed balanced portfolios and for institutional investors , we offer a more sophisticated access to our model and research platform. Europe was largely closed and what trades did get executed were low liquidity. Most of the action was in the short-dated sovereigns (PORTUG of note) but CDS was very quiet and financials were unmoved. Asia and Australian spreads were in but again holidays were a major part of the lower than normal activity. We do note that Japan corps tightened almost 3bps relative to AXJ (in favor of our compression trade and back under 20bps once again) and ITRX AUS outperformed AXJ also having shifted from cheap to rich relative to the broader index in the last week. Index/Intrinsics Changes CDX16 IG +0.75bps to 88.5 ($-0.02 to $100.43) (FV -0.9bps to 87.07) (19 wider - 101 tighter <> 59 steeper - 66 flatter) - Trend Tighter. Spreads were mixed in the US with IG worse, HVOL improving, ExHVOL weaker, and HY selling off. IG trades 3.6bps tight (rich) to its 50d moving average, which is a Z-Score of -1.4s.d.. At 88.5bps, IG has closed tighter on only 28 days in the last 600 trading days (JAN09). The last five days have seen IG flat to its 50d moving average. HY trades 15.9bps wide (cheap) to its 50d moving average, which is a Z-Score of -0.6s.d. and at 420.71bps, HY has closed tighter on only 24 days in the last 600 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 outperformed by around 0.8bps (or 25%). Interestingly, based on short-run empirical betas between IG, HY, and the S&P, stocks outperformed HY by an equivalent 0.4bps (~ 12%), and stocks outperformed IG by an equivalent 0.2bps (~ 22%) - (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 Berkshire Hathaway Inc (+2.83bps) [+0.02bps], SLM Corp (+2bps) [+0.01bps], and Hartford Financial Services Group (+1.5bps) [+0.01bps], and the best performing names were Arrow Electronics Inc. (-6.42bps) [-0.05bps], CA, Inc. (-4.25bps) [-0.03bps], and RR Donnelley & Sons Company (-4.24bps) [-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 Dynegy Holdings Inc. (+20.98bps) [+0.17bps], American Axle & Manufacturing Inc (+17.33bps) [+0.17bps], and MBIA Insurance Corporation (+19.84bps) [+0.14bps], and the best performing names were Boyd Gaming Corporation (-23.69bps) [-0.22bps], DISH DBS Corporation (-19.68bps) [-0.21bps], and First Data Corp (-17.52bps) [-0.16bps] // (absolute spread chg) [HY index impact].
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| Posted: 02 May 2011 09:09 AM PDT Use the Silver Dip to Convert Paper Silver into Physical Silver Want to send the bankers a message and serve up the biggest nightmare possible to bankers? Use the massive dip that they thought would scare all silver holders out … Continue reading
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| Most Successful Speculation Ever Posted: 02 May 2011 08:51 AM PDT The 5 min. Forecast May 02, 2011 11:52 AM by Addison Wiggin – May 2, 2011 [LIST] [*]"Bleeding America to the point of bankruptcy": Bin Laden dead, but the world's most successful leveraged bet lives on [*]Dollar's bin Laden bounce doesn't last long… Abe Cofnas on the next big event to move currency markets [*]"There are no investments anymore"… Doug Casey on how we're all being forced into speculation [*]Mad grab for local tax revenue sparks revival of the "granny flat" [*]"Wow, can I do that too?" readers react to a drug-and-bank corruption thread [/LIST] The man who executed the most brilliant leveraged bet in history is dead. "We, alongside the mujahedeen," Osama bin Laden was reported to have said in a speech delivered a few days before the 2004 presidential election, "bled Russia for 10 years until it went bankrupt and was forced to withdraw [from Afghanistan] in defeat… "So we are continuing this policy in bleeding America...
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| Notes from the Summit: What’s Coming and How to Prepare Posted: 02 May 2011 08:45 AM PDT syndicate: 1 Synopsis: Contributing writer Roy Furr shares his impressions from the just-concluded Casey Summit, "The Next Few Years." Also in this edition: Vedran Vuk on Osama bin Laden and the future of the "War on Terror," and, Osama and the dollar. Dear Reader, Today is one of the more important days in our national history. And it's not because Osama bin Laden has been killed. His death will not change the political situation in the Middle East. Rather, once again, we stand at a crossroads. From here, the United States could travel down a road of perpetual warfare, or this event could finally bring closure to the "War on Terror." For a moment after September 11, Americans had the same opportunity to reexamine our role in the world. Why were we attacked? Why would someone do this to any country? A million questions were asked. And in some ways, we accepted the easy answers. Well, of course they hate us for our freedom, right? Getting the answer wrong has led us down a road of more grief, more fiscal disaster, and more lives lost. But there is another path. It is less likely but still possible in the days ahead. We could see bin Laden's death as a closing chapter of the wars. This event allows us an opportunity to reevaluate our role in the Middle East. Yes, Al-Qaeda is still out there, and it will continue to operate despite bin Laden's death. But even bin Laden's death shows the inherent problem with conflict. The vast majority of Al-Qaeda's members prior to 2001 are dead. U.S. troops don't fight on a daily basis with veteran operatives. Instead, they are new recruits in the war against America. And our presence in the Middle East keeps Al-Qaeda in no short supply of more cannon fodder and suicide bombers. We're essentially creating terrorists quicker than we can kill them. We may have killed those responsible for 9/11, but in the process, America has stirred a hornets' nest. Today, the United States is less safe than before 9/11. Furthermore, the revolutions in the Middle East have shown us the impossibility of our goals in Afghanistan and Iraq. Stability in the Middle East has become an oxymoron. Does anyone realistically expect Afghanistan and Iraq to ever become stable countries obeying our every bidding? I highly doubt it. Despite the recession, the wars are again in the spotlight. Today, we have a unique opportunity to change course in the Middle East while saving face and American lives. But with Osama bin Laden's death, we also hold in our hands the key to a door that will lead to unimaginable suffering and horrors. This door could lead us to an America filled with darkness where the wars will never stop and will never be questioned again. If we cross the threshold of this door, it will not be closed until our nation lies in complete ruins. I dearly hope that we do not open this door. For the rest of the issue, Roy Furr, a contributing writer, shares his notes on our summit that took place over the last weekend. Then, I'll comment on Osama's death and its effect on the EUR/USD pair. Notes from the Summit: What's Coming and How to PrepareBy Roy Furr, Contributing Writer To be forewarned is to be forearmed.I'm writing today after spending the last three days in Boca Raton, Florida, attending The Next Few Years: A Casey Research Summit. If you're not already familiar, the purpose of this summit was to bring together many of the world's top economic and investing minds to share with us where they believe we're headed in the months and years ahead. The cast of speakers was impressive, to say the least. They brought a variety of view points, an almost overwhelming amount of data and analysis, and a perspective on what the current world means for investors that would be hard to build on. Yet, with all this variety of thought and perspective, one central theme seemed to emerge. If you're able to see the annihilation of your currency coming down the pike, and you take the right steps to protect your wealth, you can come out on the other side largely unscathed. Given the right investment strategy, you may even be able to grow your wealth significantly during this time. While I knew this on some level coming into this event – I've been reading Casey Research's work for just a few months now, and this was the first of their events I've attended – I was given pause by Casey CEO Olivier Garret's welcoming remarks. "While no one can predict the future with complete certainty," he said, "it should give you comfort to know that the faculty for this summit have in common that they correctly anticipated the trends now dominating the global landscape." When you bring together 35 experts who each correctly predicted what's happened in recent years – while the mainstream media and those who followed it were thrust clueless into "the worst economic crisis since the Great Depression" – you have to think that if these 35 experts are in agreement about what lies ahead... it's worth listening. Even if what they're saying has painful implications. So what's the consensus? What will The Next Few Years bring? Well, hold on to your hat. The Worst Is Yet to Come I'd like to share an important point Casey Research's Chief Economist Bud Conrad made to me as the summit was wrapping up. Bud said that when Casey Research editors are among the most optimistic in the group, you have to wonder how serious the situation is getting. After all, the Casey Research team is known for predicting well in advance the liquidity crisis that would play out in 2007 through 2009 and the continuing economic troubles that have resulted. They'd laid out the path of the previous crisis far prior to most folks ever hearing the word "subprime." They've long been talking about the decline of the dollar and even "the Greater Depression." Yet Bud said this conference was perhaps the first he's aware of in which the guest experts were more pessimistic about our situation than Casey's resident experts. I'll explain... As the summit was wrapping up, a number of panelists were brought on stage to answer attendees' questions. One question in particular was, "On a scale of 1 to 10 – with 1 being, it all gets better from here, and 10 being the unthinkable – how bad do you think it can get?" A number of attendees gave their votes and thoughts. And it was clear – the consensus was that our current situation of enormous sovereign debt and the associated race to debase the globe's currencies would get worse. Not to mention civil unrest in the Middle East and North Africa, and even Wisconsin. Or the fact that oil production seems to have peaked and is declining, even before production being taken offline due to the current conflicts. The most optimistic of the experts on stage suggested we'd experience about a 5 – not too good, but also not too bad. But what took attendees aback was when folks like professional economist, truth-digger and founder of Shadow Government Statistics John Williams predicted that we were approaching the top of the scale rapidly, and that the lid was about ready to blow on a pressure cooker of economic manipulation and deteriorating fundamentals. The outlook was similarly negative from James G. Rickards, direct participant in many of the most significant financial events of the past 30 years, as well as the current senior managing director for market intelligence at Omnis. And perhaps the most frightening picture was painted by John Robb, expert on guerilla warfare tactics and the new "open source" warfare – who not only concurred with the dire outlook but who also was quick to explain that should worse come to worst, we could actually see severe degradation of civilization as we know it. And this was just what came after nearly three days of hard data, detailed explanation and vigorous debate revealed these scenarios as reasonable assessments of the situation. The Fall of Fiat? So what is it that's pushing us to the edge of disaster? To echo the sentiment with which Bud Conrad started his presentation Saturday morning, I wish I had a better story for you today. For one, we're well on our way to a sovereign debt crisis. From the summit's first presenter to the last, there was nearly complete agreement that our current debt and deficit spending situation is flat-out unsustainable. And while some speakers believe hard-line austerity may be a way out of this without default or massive inflation, this is not a solution that will get any politician reelected, and thus it simply will not happen. So deficits will continue and debts will grow. But as was suggested by Johns Hopkins University Professor of Applied Economic Steve H. Hanke, among others, our low interest rates cannot continue forever. And as our current, historically low interest rates move to a more normal level, our debt load becomes crippling. So the Fed must remain in the market as the buyer of last resort on Treasuries, to ensure that even if they're not the actual buyer, their bid keeps bond yields within what they see as an acceptable range. And because this means more QE under one name or another – through the rollover of the existing balance sheet of the Fed, or political pressure applied to banks and friendly nations – the effect is eventual rampant inflation (in other words, continued and even accelerated destruction of the purchasing power of the fiat dollar, and the takedown of dollar-based savings with it). John Williams' estimate has recently evolved from years to a matter of months before this inflation will accelerate dramatically. But it won't be a straight line from here, many speakers believed. In the near term, there's largely an agreement on increased volatility. For example, Greg Weldon, Editor of Metal Monitor, suggests we may see bond yields fall and the dollar rise short-term as the Fed brings QE2 to its expected conclusion, as it has announced. This, he suggested, could be seen by many as a vote of confidence from the Fed regarding the economy. The only problem is, just about the only thing that appears to provide support to the stock market right now is QE, and so if equities begin to fall in the absence of QE, consumer confidence drops off. And that, in turn, leads to lower earnings and GDP. Which the Fed can't have, and so the printing presses start again. The result: continued monetary inflation, followed by price inflation. David Galland repeated his well-received assertion that the Fed, in the absence of severe spending cuts from Washington, is finding itself wedged firmly between a rock and a hard place. Even if in the near term the dollar shows some strength, a reentry into the markets by the Fed is likely to push the dollar to new lows... And at that point, the waterfall decline of the dollar as prudent investors seek tangible value will not only be imminent, but will be happening around us. Doug Casey, in his usual tell-it-like-he-sees-it style, called the destruction of the dollar what it is – corruption – and suggested that this corruption is not confined to the U.S. In fact, we could be facing a world-changing shift that occurs in line with the destruction of multiple dominant fiat currencies... And while the end result may be a dramatic improvement, what happens between here and there could be very painful. Just as an example, Porter Stansberry and Chris Whalen both called for a shakeout in the banking sector – so needless to say, if you're looking at record earnings and considering buying bank stocks, you may want to hold off. The Good News I apologize for sounding so dire. Truly, I do. But the experts who are certainly more qualified than I to make these bold assertions – and who have a track record to back up this qualification – are in complete agreement that things are going to get worse before they get better at the macro-economic level. But is the news all bad? Not at all. In fact, for those prepared, the crisis that continues to unfold, largely unnoticed by the mainstream media once again, harbors tremendous opportunity. As everything I've laid out above occurs, the massive wealth transfer to those who hold tangible assets will continue. This has been largely behind the rise in precious metals and commodities in recent months and years, including gold's 10-year winning streak. And this transfer is likely to accelerate, by most estimates. The possible prices for gold and silver bandied about are frankly too high to be believable coming from me. But as a currency depreciates, of course, the numbers become worthless. Gold maintains its purchasing power – it is the dollar whose value changes, downward, and rapidly when the world wakes up to its continued and accelerated weakness. Michael Maloney, author of the "Rich Dad" Guide to Investing in Gold and Silver, suggested to attendees (presenting swaths of data to back his claim up) that silver will do even better than gold relative to the dollar, even after its recent historic run-up. Further, legendary speculator Rick Rule, along with Casey Chief Energy Investment Strategist Marin Katusa and Chief Metals Investment Strategist Louis James, presented some of their current favorite picks in the junior resource sector – a sector where the best few companies are set to outperform significantly on the rise of commodity prices and strong demand. Also, Casey Research invited representatives of some of their top company picks from this sector to present their latest projects and news. There are opportunities in gold, silver, oil, gas, geothermal, and even today's "black sheep" uranium that may present enormous profit opportunities over the next few years. Plus Alex Daley, senior technology editor, presented his favorite investable tech trends... Doug Casey, among others, expressed the opinion that if anything ensures we get to the end of the coming crisis and create a better life for ourselves on the other side, it will be tech. And the technologies Alex shared are just the types of investments that should continue to grow in value both independent of and alongside inflation, and that are likely to be in demand even in the severest of scenarios. And of course, you don't learn how to avoid serious inflation – or the overreaching arm of a desperate and broke government – without learning how to take your assets offshore. Olivier Garret, Terry Coxon and Jeff Schneider shared the best legal ways – including alternative IRA trustee models and offshore trusts – for ensuring your wealth will be protected through whatever storm may come our way. There was far more information presented at the summit than I could possibly cover in one short article – from how we got here, to where we actually are now and where we may be going, all the way through to the specific investment implications. But the takeaway was clear and precise. The global economy is still suffering from the massive accumulation of debt that has been building for the past few decades – the same debt responsible for the 2008 crash, which has yet to be addressed in any meaningful way. Despite the dire predictions of the faculty, I left the summit hopeful. There are simple and effective ways to protect myself from what's to come. And, despite turbulent markets ahead, there are plenty of opportunities for profit as well – great companies in well-positioned sectors that will benefit investors like me in spite of the potential crisis looming. And, most importantly, if we find ourselves in the much agreed-upon looming next leg down anytime soon, I'll be prepared to act and turn that crisis into an opportunity. The Next Few Years: A Casey Research Summit sold out in just 27 days – faster than any previous Casey Research summit. If you were unable to join us, you still have a chance to listen in on all the faculty and corporate presentations plus Q&A sessions... Including the specific, actionable investment recommendations from the 35 world-class investing minds on our faculty. Click here for details. The Dollar and OsamaBy Vedran Vuk As soon as the news of bin Laden's death hit the airwaves, I immediately opened up my EUR/USD charts. So, what happened? Unfortunately, not much. The pair fell from the $1.4820 range to the low $1.4760 range. However, the low range did not hold long, and the euro started to climb again. By the time of Obama's speech, the dollar was already trading around $1.4790. And nothing he said pushed the dollar up or down – likely because the speech didn't reveal any new policy direction. As of this writing, the effect seems to have completely disappeared. The dollar even touched as high as $1.4903 today.At first, the dollar strengthening makes sense. If Osama bin Laden's death results in the U.S. pulling out of the Middle East sooner rather than later, that means less spending and in turn less money printing. As a result, the dollar should get stronger. But unfortunately, the markets didn't see this as a possibility. Many pundits will comment on the event's significance, but the market has already spoken. And it doesn't see much. However, I'm surprised that the U.S. dollar didn't weaken from the news. Killing bin Laden gives Obama quite a political edge. The Republicans are always presented as the better party for national security. The polls consistently reflect this opinion. But now Obama has taken that edge by killing bin Laden. Perhaps it was mere circumstance, but nonetheless Obama got him. As a result, I see Obama's reelection chances skyrocketing since yesterday. Plus, this news could reinvigorate the American public's support for the wars. Spending-wise, these are both poor signs for the dollar.
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| To Hell with the CME, 9/11 crybabies, and paper bugs – BTFD!!! Posted: 02 May 2011 08:43 AM PDT And Scene: CME Hikes Silver Margin For Third Time In 7 Days, Raises Initial, Maintenance Margins By 12% Share this:
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| Posted: 02 May 2011 08:28 AM PDT Is The SLV Wired To Blow? Share this:
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| Posted: 02 May 2011 08:27 AM PDT
Last week two hikes of 9% and 10% did nothing, which is why this week's first hike (of many more) by 12% to the maintenance and initial margins was to be completely expected. We believe that nothing short of 100% margin (coupled with not one single ES margin hike by the Globex) will eventually placate the ardent Comex risk managers who are terrified their models may end up being wrong about "stuff." One thing is certain: the panic is palpable and the administration will stop at nothing to prevent the $50 limit order from triggering silver's surge to triple digits. We wish them all the best in this endeavor and are grateful for all BTFD opportunity. Silver Margin Hike 5.2
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| Is it time for the U.S. to disengage the world from the dollar? Posted: 02 May 2011 08:24 AM PDT by Michael Pettis
… Reserve currency status is a global public good that comes with a cost, and people often forget that cost. Just as importantly as a public good it requires a number of characteristics. At a minimum these include ample liquidity, central bank credibility, flexible domestic financial markets, minimal government or political intervention, and very deep and open domestic bond markets. …… And no other country, not even Europe, will be willing to pay the cost. If there is any chance that the dollar's status declines in the future, it will require that Washington itself take the lead in forcing the world gradually to disengage from the dollar. Ironically, this is exactly what Washington should be doing….. the global use of the dollar has become bad for the US economy, and because of the global imbalances it permits, bad for the world. … In practice, dollar liquidity, limited Washington intervention, and the size and flexibility of US financial markets ensure that these [other] countries always stockpiled dollars. There is no real alternative to the dollar, and most other governments would anyway actively discourage massive purchases of their own currencies because of the adverse trade impacts. If foreigners accumulate euros or yen at anywhere near the rate they accumulate dollars, they would force Europe and Japan into massive current account deficits, and neither Europe nor Japan has any interest in seeing this happen. … The massive imbalances that this system has permitted are destabilizing for the world because they permit large and unstable debt buildups both in countries that over-produce, like China and Japan, and those that over-consume, like the US. If the world were forced to give up the dollar, there is no doubt that there would be a cost – it would reduce global trade somewhat and it would probably spell the end of the Asian growth model – but it would also lower long-term economic costs for the US and reduce dangerous global imbalances. … The cost of maintaining sole reserve currency status has simply become too high in the past three decades and is leading inexorably to rising American debt and worrying global imbalances. [source] RS View: While this commentary on the whole is usefully sound, I would hasten to take exception with the remark, "There is no real alternative to the dollar…" In the context of this commentary and all surrounding discussion, it isn't the CURRENCY (invoicing&yment) aspect of the dollar's international function that is under scrutiny (because that is merely incidental,) but rather it is the RESERVE aspect that is on the chopping block. And to be sure, there is — quite literally — a very REAL alternative to the dollar in the international monetary capacity as a reserve asset. Gold. As such, gold uniquely would endure an inexorable rise, floating independently higher against all national currencies such that countries need no longer play 'hot potato' with the burden of any given national currency bearing the special forces of international reserve usage. Physical (underivatized) gold alone can take the elevating heat and pressure and with it shine all the more as a reliable public and private good in providing that specialized monetary utility. This path becomes ever more discernible with the march of progress. For the sake of your future wealth and well-being, get yourself intellectually and financially firmly on that road.
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May 2, 2011 (MarketWatch) — Silver prices fell more than 5% Monday after the main U.S. metals futures exchange increased for the second time in a week the amount of cash needed to hold speculative positions in the metal.
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