Gold World News Flash |
- Asia stocks fall, dollar rises as risky positions cut
- Portugal bailout agreed but political support needed
- Peter Daniels Talks On "Gold"
- Greatest Profit Potential of the Last Decade
- Gold production in the Red Lake District
- GATA consultants Turk and Vieira to speak May 12 at CMRE in New York
- Silver becoming a proxy for the entire commodity complex
- Gold Seeker Closing Report: Gold and Silver Fall With Stocks
- Crude Oil, Gold Decline as Traders Begin to Position for the Expiry of QE2
- Catherine on Gold and Silver, January 2011
- WSJ Reports Soros, Burbank Selling Gold, Silver, While Paulson Sees Gold Hitting $4,000 In Three Years
- Ralph Benko: Fort Knox vs. Fort Fed
- Bill Frezza: Bernanke's only positive legacy will be a return to gold
- SILVER LIBERATION ARMY – by Jesse Dyen
- Thom Calandra reports on Doug Casey's Research Summit
- Sprott tells King World News he has more silver than ever
- Will the Dollar Oil price fall, taking Gold with it?
- This Is A Must-Read Interview
- ARE YOU SHITTING YOUR PANTS OVER SILVER?
- Silver Liberation Army Invades Jamie Dimon’s San Jose Outpost
- Despite Recent Events Gold Prices Remain a Dollar Play
- 'Three Peaks and the Domed House' Pattern Suggests Gold Going to $1,290!
- Relax, It Has Always Been This Way
- In The News Today
- Silver Price Targeting $34 and Gold Price Targeting 1445 - 1382
- And Now For Today's Mini Silver Flash Crash: Same Time, Same Place
- Capital Context Update: Short and Sweet
- CNBC – Peter Schiff on Silver – comes in at 6:20
- The wacky world of the Comex: demand increases while supply and PRICE decreases.
- Unstoppable Bull Market
| Asia stocks fall, dollar rises as risky positions cut Posted: 03 May 2011 06:02 PM PDT By Raju Gopalakrishnan
SINGAPORE (Reuters) – Asian shares fell and the U.S. dollar rose on Wednesday, with falling commodity prices spooking investors and causing a broad pullback in risk taking. SINGAPORE (Reuters) – Asian shares fell and the U.S. dollar rose on Wednesday, with falling commodity prices spooking investors and causing a broad pullback in risk taking. This week's 14 percent plunge in silver prices and a lower-than-forecast manufacturing growth reading in China have made investors nervous about holding big bets ahead of the European Central Bank meeting on Thursday and the April U.S. payrolls report due on Friday. Sentiment was also turning negative after the U.S. S&P 500 stocks index .SPX closed lower for a second day after hitting a 3-year high on Monday, hurt by fears corporate earnings would not live up to high expectations. "Risky assets are having a respite, having advanced rather quickly in more recent weeks," said Andy Ji, a currency strategist and economist with Commonwealth Bank of Australia in Singapore. "I continue to see fundamental support either waning or fully priced in many risky assets, including currencies that are more risk-sensitive." The dollar gained 0.12 percent against a basket of currencies .DXY as there was some unwinding of stretched short positions maintained by hedge funds betting on a rise in Asian currencies. Deutsche Bank's internal gauge of market positioning that tracks moves among hedge funds had shown that long positions in some of the Asian currencies had been close to a record high as of last Thursday, said Mirza Baig, the bank's senior currency strategist in Singapore. "In general it feels really, mostly like a position reduction kind of a move," he said, referring to the dollar's broad rise against emerging Asian currencies." Positioning was definitely quite stretched." Ji said the likelihood of further unwinding was making some Asian assets less attractive. "While I still think the general USD weakness would linger and provide a lift to risky assets, the trade-off in chasing aggressively the strength in these assets has turned less attractive or is dependent primarily on the extent of USD weakness in the coming months," he said. In Australia, the benchmark S&P/ASX 200 index .AXJO was down 48 points or 1.0 percent at 4,7337 as of 0347 GMT (11:47 p.m. ET on Tuesday), adding to a 0.8 percent fall on Tuesday. The Australian and New Zealand dollars also lost ground as a reluctance to take risk prompted investors to book profits on hefty gains made last month. Stock markets in Hong Kong, Singapore, Korea and New Zealand also fell. The Hang Seng index .HSI was off nearly 1.3 percent. Japan's financial markets were closed for the Golden Week holiday. MSCI's broadest index of Asia-Pacific shares excluding Japan .MIAPJ0000PUS, which also has a strong correlation to silver prices, fell more than 1.4 percent. Silver suffered its biggest two-day loss since October 2008, dragging down gold and other commodities. After hitting an all-time high within a whisker of $50 an ounce last Thursday, spot prices were at $41.2 on Wednesday. Gold was also down about 0.6 percent. Oil prices were dragged down after data showed U.S. crude stocks rose sharply last week, adding to concerns about demand and gains in the dollar that helped spark a technical sell-off. ICE Brent crude for June fell 70 cents to $121.75 a barrel by 0205 GMT, near Monday's low of $121.67 and its third straight session of losses. In currency markets, euro/sterling was at 0.89830, within striking distance of a 13-mth high of 0.90065 hit on Tuesday. The pair climbed one percent on Tuesday after disappointing UK PMI data signaled that a rate hike may be further away than expected. In contrast, the European Central Bank is expected to signal its readiness to raise interest rates after its policy meeting on Thursday, and may prepare the market for a June hike. (Additional reporting by Masayuki Kitano and Jongwoo Cheon; Editing by Richard Borsuk)
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| Portugal bailout agreed but political support needed Posted: 03 May 2011 06:02 PM PDT LISBON (Reuters) – Portugal reached a deal with the European Union and the IMF Tuesday on a 78 billion euro 3-year bailout, the third euro zone member to do so after Greece and Ireland, caretaker Prime Minister Jose Socrates said. LISBON (Reuters) – Portugal reached a deal with the European Union and the IMF Tuesday on a 78 billion euro 3-year bailout, the third euro zone member to do so after Greece and Ireland, caretaker Prime Minister Jose Socrates said. The deal will need broad cross-party support because the collapse of Socrates' government last month — pushing up borrowing rates and forcing Lisbon to seek a bailout — means the winner of a June 5 snap general election will implement it. Opposition Social Democrat leader Pedro Passos Coelho said he was ready to meet the lenders. Any of the bailout terms that need parliamentary approval will have to be passed after the election. "The government has obtained a good deal. This is a deal that defends Portugal," said Socrates, who had resisted asking for a bailout for months. The terms would be less onerous than those set for Greece and Ireland, he added. He said the deadline for meeting budget deficit goals will be extended, with this year's target raised to 5.9 percent of gross domestic product from 4.6 percent previously. The deficit must be cut to 4.5 percent of GDP in 2012 and 3 percent in 2013. In a reminder of the challenges Portugal faces in selling debt, it will hold a treasury bill auction Wednesday to issue up to 1 billion euros of 3-month bills. "We don't expect a buyers' strike at this T-bill auction, which should target the same risk-tolerant investors who bought T-bills last month, already after the bailout request," said David Schnautz, a debt strategist at Commerzbank in London. The interest rate on Portugal's bailout loan is expected to be set at a meeting of eurozone finance ministers in mid-May. Portuguese agreement to the loan terms is needed by June 15, when Lisbon needs to redeem 4.9 billion euros of bonds. "We have said from the beginning that it is important that any program should have broad cross-party support and will continue our engagement with the opposition parties to establish that this is the case," European Commission spokesman Amadeu Altafaj said in a statement. Officials from the European Commission, the International Monetary Fund and the European Central Bank have been in Lisbon for almost a month to hammer out the agreement. The general election campaign that will now get under way is likely to focus on who is to blame for the country's economic crisis. (Reporting by Axel Bugge, editing by Tim Pearce)
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| Posted: 03 May 2011 06:00 PM PDT Anglo Far East
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| Greatest Profit Potential of the Last Decade Posted: 03 May 2011 05:58 PM PDT Gold Scents
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| Gold production in the Red Lake District Posted: 03 May 2011 05:30 PM PDT Mndm
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| GATA consultants Turk and Vieira to speak May 12 at CMRE in New York Posted: 03 May 2011 05:03 PM PDT 1a ET Wednesday, May 4, 2011 Dear Friend of GATA and Gold: GATA consultants James Turk, founder of GoldMoney, and monetary historian and lawyer Edwin Vieira will be among the speakers at the spring dinner meeting of the Committee for Monetary Research and Education on Thursday, May 12, at the beautiful Union League Club on East 37th Street in New York City, a short walk south on Park Avenue from Grand Central Station. The theme of the meeting will be "Confusion, Conflicts, Collapses -- The Terminal Phase of the Dollar Crisis." Other speakers will be James Grant of Grant's Interest Rate Observer; Daniel Oliver Jr. of Myrmikan Capital; renowned trader Victor Sperandeo of Enhanced Alpha Technologies; Leonard Liggio of Atlas Research; and Bob Hoye of Institutional Advisers. Cocktails will be served at 4 p.m. and the proceedings will begin at 4:30 p.m., with dinner served around 6. Admission will be $175 for CMRE members and their spouses, $185 for others. A reservation form can be found here: http://www.gata.org/files/CMRE-05-12-2011-ReservationForm.doc For more information, contact CMRE President Elizabeth Currier at cmre@bellsouth.net. Your secretary/treasurer plans to be there and will be glad if there are a few GATA supporters in the audience. CHRIS POWELL, Secretary/Treasurer 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 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 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
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| Silver becoming a proxy for the entire commodity complex Posted: 03 May 2011 04:30 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Note the following chart comparing the price action in Silver against the price action of the broad commodity complex as a whole as illustrated by the Continuous Commodity Index. The parallel is remarkable. What appears to be happening is that silver is becoming a type of proxy for the complex as a whole and in particular, for risk trades. When risk trades are in vogue, silver is rocketing higher alongside of the rest of the commodity complex. When traders are avoiding risk and jettisoning the risk trades in favor of bonds or cash, the entire commodity complex seems to be following the exact same path as silver, namely down. As mentioned in my earlier post, until the risk trades come back on, the silver market is going to languish. I am not sure what pill the hedge funds will have to swallow to bring them back to another frame of mind but the fact is we need the money flows that only the hedg...
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| Gold Seeker Closing Report: Gold and Silver Fall With Stocks Posted: 03 May 2011 04:00 PM PDT Gold dropped down to $1532.49 by late morning in New York before it bounced back higher midday, but it still ended with a loss of 0.33%. Silver slumped throughout most of the day and ended near its late session low of $42.375 with a loss of 2.93%. Both metals are falling further in after hours access trade as well.
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| Crude Oil, Gold Decline as Traders Begin to Position for the Expiry of QE2 Posted: 03 May 2011 03:30 PM PDT courtesy of DailyFX.com May 03, 2011 07:24 PM Crude oil, gold and silver prices pushed lower as traders seemingly began to reposition for a world without QE2, weighing on inflation bets and sapping risk appetite. Commodities – Energy Crude Oil Follows S&P 500 Lower WTI Crude Oil (NY Close): $111.05 // -2.47 // -2.18% Prices took out support at the bottom of a rising channel set from mid-March, finding interim support just above the $110 figure (the April 15 high). A corrective bounce from here sees resistance at $113.65, while continued selling aims to challenge $105.53. Oil prices fell despite an API report showing crude inventories declined last week, with the WTI contract following shares lower as the S&P 500 fell for a second day amid what was chalked up to profit-taking. We expected the risk rally to continue as traders rush to borrow Dollars on the cheap to purchase higher-yielding assets ahead of June’s expiry of QE2 (as confirmed by the Fe...
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| Catherine on Gold and Silver, January 2011 Posted: 03 May 2011 03:29 PM PDT Continue reading the article . . .
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| Posted: 03 May 2011 03:13 PM PDT
The rumormill around who is buying and selling precious metals is getting more ridiculous than daily Radioshack LBO speculation. The latest comes from the WSJ which informs that based on "people close to the matter" Soros and Burbank are now dumping their gold and silver: "George Soros's big hedge fund, a firm operated by high-profile investor John Burbank and some other leading firms have been selling gold and silver, according to people close to the matter, after furiously accumulating precious metals for much of the past two years." Greg Zuckerman's conclusion, assuming a multi billion hedge fund will actually let its competitors know what it is doing concurrently as it is doing it, is merited: "Their selling suggested the sharp, nine-month run-up for precious metals could be entering more dangerous territory." Of course, something tells us that just like Goldman, whose prop desk has a nagging tendency to buy as its sellside "analysts" say sell, we would rather hold off until we see respective 13Fs on the matter. In the meantime, we fail to see where over the past week the central (pardon the pun) thesis has changed: namely that central banks will not print more linen/cotton when the time comes. And if the market is indeed starting to price in QEasing's end, then the deflationary scare will certainly see the RUT plunge and undo months of carefully executed (by NYU interns) POMO operations. For a Fed which equates the economy with the RUT, this is simply unacceptable. More from the WSJ:
The other side of the story, that of repeated margin hikes, is well known to ZH readers:
But back to the original story:
Yes, this is the same Soros who bastardized Hayek a week ago, even as he admitted that the current monetary system is on the precipice. As for the only guy who matters, and whose every move is studied under a microscope, he is not budging. In fact, he see gold at $4,000 in 3 years.
Also, Wexford, run by Robert Rubin's right hand man from the Goldman arb desk days, and Mike Steinhardt protege, Chuck Davidson, doesn't appear to be going anywhere in a hurry either.
Either way, a two day 20% correction, and everyone crawls out of the woodwork screaming bloody murder, even as silver has retraced to a price... from two weeks ago. And once again we ask: will the Chairsatan stop printing? And what happens when the economy tumbles in Q2, as it will once the full hit from the Japanese economic collapse is felt, and Bernanke has no choice but to do in 2011 what he did in 2010? So yes, let silver drop to $30. Let it plunge to $20. The lower the better. Day traders on margin are advised to stay out. Everyone else, who has a personal vendetta with Bernanke however will find each incremental drop an even better opportunity to slam the stake in the heart of a failed monetary regime which is now in its last days. Everything else is minute charts and irrelevant candles.
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| Ralph Benko: Fort Knox vs. Fort Fed Posted: 03 May 2011 02:02 PM PDT 10:03p ET Tuesday, May 3, 2011 Dear Friend of GATA and Gold: In addition to Bill Frezza's essay just dispatched to you, there's something else brilliant at the Forbes blog tonight: An essay by Ralph Benko, senior economic adviser to the American Principles Project, about the many efforts under way to get the United States to return to or at least consider returning to a gold standard. GATA is a free and transparent currency market organization, not a gold standard organization. Some of us figure that a gold standard necessarily invokes excessive government interference with the currency markets and that a free market in the monetary metals may be all that's necessary to get central banks under control. After all, central banks sure act as if free gold and silver markets are doom to them. But gold standard advocacy powerfully calls attention to GATA's issue, and Benko's essay shows that it's becoming more respectable to recognize gold not just as money but also as the best sort of money, far better than "fiat" money. Benko frames the struggle as one of "Fort Knox vs. Fort Fed." You've got to read the essay at the Forbes blog, rather than here, because it carries so many important Internet links. Benko's essay is headlined "Dear Liberals: It's Your Fed's Paper Money that's Thwarting Full Employment" and you can find it here: http://blogs.forbes.com/ralphbenko/2011/04/25/fed-paper-money-thwarting-... CHRIS POWELL, Secretrary/Treasurer 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 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 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
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| Bill Frezza: Bernanke's only positive legacy will be a return to gold Posted: 03 May 2011 01:23 PM PDT Ben Bernanke's Lone Positive Legacy: A Return To The Gold Standard By Bill Frezza http://blogs.forbes.com/billfrezza/2011/05/03/ben-bernankes-lone-positiv... I'll make two predictions with utter confidence. The first is that one day Federal Reserve Chairman Ben Bernanke will be ridden out of town on a rail, joining Arthur Burns in that special circle of hell reserved for monetary debauchers. The second is that in the aftermath of our pending inflationary disaster we will see the gold standard return. The Federal Reserve long ago lost control of inflation, now ravaging several sectors of our economy. This is obvious to every economist not a member of Bernanke's Greek chorus, singing lyrics provided by the gnomes in the Bureau of Labor Statistics. Their modern re-interpretation of the dance of the seven veils uses statistical "adjustments" instead of scarves, but these keep the evidence of inflation as hidden as Salome's charms. My favorite fudge has to be the "hedonic quality adjustment." What are you going to believe -- the government's regression coefficient estimates or your own lying eyes? ... Dispatch continues below ... 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 What Bernanke made clear now that he launched his own reality TV show is that his primary mission is no longer ensuring a stable currency, or even pursuing the illusory goal of full employment. Rather, Helicopter Ben will make his last stand managing inflationary expectations. As long as he maintains the illusion of monetary stability, the Fed's printing presses can run flat-out. What could please his masters more, who get to spend this fresh dough before it floods into the economy to dilute ours? Reading from the playbook of successful defense attorneys the game is on to deny, deny, deny. All evidence of inflation is explained as transitory. High food prices? It's the weather. Gasoline? Blame speculators or oil industry profits. Ben knows he can get away with this dodge for at least two or three more quarters. After that? Don't you worry; if inflation ever raises its ugly head, Ben the Beneficent will rise up and smite it immediately! Do you have a friend who is a high-function alcoholic? "Back off, I can handle it! I'm doing fine at work. Things at home have never been better. What's the big deal? It's just a few traffic tickets. If my drinking becomes a problem, I can stop any time." After he wraps his car around a tree, loses his job, and his wife leaves him, you'll be there to check him into rehab. But his life will never be the same. Nor will our economy after the triple whammy of double-digit unemployment, double-digit inflation, and an uncontrollable budget deficit comes down on our heads. That's why I think the gold standard will make a comeback. It's too bad the country has to be dragged through so much avoidable misery, but perhaps that's the only way we can put a stake through the heart of fiat currency. Don't be melodramatic; we survived the 1970s without restoring the gold standard, didn't we? Sure. But the last time Washington went on an inflationary binge, the world was a simpler place, and we sat firmly atop it. There was no euro. China was the world's largest penal colony barely able to feed itself, not a manufacturing giant and our biggest creditor. The Evil Empire threatened. Fax machines were the latest thing in international communications. World financial markets were neither integrated nor interconnected by broadband. And citizens got their news from three government-regulated TV networks. Paul Volcker had a far more manageable problem dumped in his lap than will Bernanke's successor, who will be confronted by genuine challenges to the U.S. dollar as the world's reserve currency. And therein lies the opportunity for gold. As the United States is faced with the alternative of ceding monetary supremacy to the Chinese, the gold standard will be the only politically palatable option. In addition, all those gold cranks the liberal media spent decades portraying as fools are going to look pretty smart when gold hits $2,000 an ounce. With enough think tanks in Washington rehabilitating gold as a respectable monetary anchor and ratings agencies threatening to reduce T-bills to junk-bond status, hard money will have its day in court. And it will win because the gold standard makes but one promise, and that is to stabilize the value of money. At that task it has never failed, unlike every fiat currency in history. Gold makes no false promises to cure unemployment, direct credit to the unworthy, juice a slack economy, boost exports, deliver stealth tax hikes, erode unfunded liabilities, or all the other things that fiat currency advocates promise. A gold peg merely sets immutable ground rules for exchange and leaves us alone to work out the rest. By taking the distorting levers away from Washington elites, a hard-money standard grounds the economy on our own productive efforts and not the whims of bureaucrats. And productivity is a playing field on which America has always done its best. Laugh at the gold standard if you'd like, but don't count on laughing last. When Bernanke's funny money takes its inevitable fall, gold will still beckon. ----- Bill Frezza is a writer and venture capitalist living in Boston. He can be reached at bill@vereverus.com. 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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| SILVER LIBERATION ARMY – by Jesse Dyen Posted: 03 May 2011 01:21 PM PDT Share this:
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| Thom Calandra reports on Doug Casey's Research Summit Posted: 03 May 2011 01:12 PM PDT 9:05p ET Tuesday, May 3, 2011 Dear Friend of GATA and Gold (and Silver): Thom Calandra of the Ticker Trax letter reports extensively on comments made at the Doug Casey Research Summit conference in Boca Raton, Florida, where a Johns Hopkins University professor remarked that at least half the rise in commodity prices since 2002 has been caused by the U.S. dollar's fall and that in four or five years gold may reach $4,000 or $5,000. (That sounds like Big Macs at $20, maybe without the special sauce.) Calandra's report is headlined "Doug Casey Crowd Rallies $5,000 gold, First 10-Bagger" and you can find it at Stockhouse here: 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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| Sprott tells King World News he has more silver than ever Posted: 03 May 2011 01:02 PM PDT 9p ET Tuesday, May 3, 2011 Dear Friend of GATA and Gold (and Silver): There's been some controversy over Canadian fund manager Eric Sprott's sale of some shares of his company's spectacularly successful physical silver fund, PSLV. In an interview today with Eric King of King World News, Sprott remarked that the sale was small, that the proceeds were entirely reinvested in silver-related assets, that he continues to expect silver's price to return to a 16-1 ratio to gold's price, and that he now owns more silver than ever. An excerpt from the interview, headlined "Sprott Has More Physical Silver Now Than Ever," can be found at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/3_Eri... CHRIS POWELL, Secretary/Treasurer 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 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 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
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| Will the Dollar Oil price fall, taking Gold with it? Posted: 03 May 2011 01:00 PM PDT U.S. demand for gas at the pump is starting to react to the rising prices. No wonder. U.S. consumers are seeing a 30% jump in oil prices over the past few months. U.S. motor fuel prices have become a heated political issue after pushing towards $4 a gallon. Gasoline futures hit 33-month highs on Tuesday. The rising prices at the pump are fueling voter discontent with Obama's leadership and could harm his re-election chances in 2012.
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| Posted: 03 May 2011 12:26 PM PDT with John Williams. I was too busy catching up on research and trading this glorious volatility in the metals and mining stocks today to put together a cogent post. I made some nice trading profits in AGQ for the fund, added to the ECU position and put on some at-the-money puts on ZSL (think about that one for a second) for myself. One thing I did notice was that the volumn in both SLV and ZSL was extraordinary, potentially capitulative. In particular, the volumn in ZSL was double its 10-day average and 10x its 90-day average. Sounds to me like excessive short term bearishness...we shall see, but I did put my money where my mouth is with the ZSL puts... Onto the matter at hand. Please read this interview carefully with John Williams. A lot of it is a rehash of concepts most of you already understand, but I really like the way he discusses the intrinsic value of the dollar vs. other currencies. He also does a particularly articulate job of translating that dynamic into how it is leading to hyperinflation in this country, perhaps sooner than he has been forecasting: [Large holders of dollars] will sell their dollar-denominated assets. They will convert dollars to other currencies. They will buy gold. Generally, they will dump whatever they hold in dollars and sell the dollar-denominated assets they don't want. There's a market for them; it's just a matter of pricing. As the pressure mounts to get out of the USD, the pricing of dollar-denominated assets will fall, which in turn would intensify that selling. The dollar selling will intensify domestic U.S. inflation, which is one factor that picks up and feeds off itself and will help to trigger the hyperinflation.Here's the LINK Enjoy and keep your chin up, this metals manipulation to the downside will end soon and will be seen, looking back, as being instrumental in setting up the next leg higher. 
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| ARE YOU SHITTING YOUR PANTS OVER SILVER? Posted: 03 May 2011 12:22 PM PDT
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| Silver Liberation Army Invades Jamie Dimon’s San Jose Outpost Posted: 03 May 2011 12:20 PM PDT Share this:
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| Despite Recent Events Gold Prices Remain a Dollar Play Posted: 03 May 2011 11:42 AM PDT The dash from $1425/oz to $1563/oz came to a halt today on news that is perceived to be good for the USD. The technical indicators are firmly in the overbought zone so a breather was on the cards. Note that the RSI had peaked well above ... Read More...
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| 'Three Peaks and the Domed House' Pattern Suggests Gold Going to $1,290! Posted: 03 May 2011 11:22 AM PDT There are a number of different ways to look at what has been happening with the price of gold and silver of late and to anticipate what is next in store for this precious metal. One of the most unique ways of assessing past, present and ... Read More...
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| Relax, It Has Always Been This Way Posted: 03 May 2011 11:22 AM PDT View the original post at jsmineset.com... May 03, 2011 11:50 AM Dear CIGAs, Silver helps and silver hurts. Silver did its normal silver thing. As poor man's gold, silver always gets over speculated on minimal financing among the believers. Then, as today, believers get sold out by the short play to follow. There is no top in gold at this time, nor in all probability in silver. In truth, the action is beneficial to the ability of gold to scale the heights 2011-2015 defined by Alf Fields and Martin Armstrong. 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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| Posted: 03 May 2011 11:22 AM PDT View the original post at jsmineset.com... May 03, 2011 11:48 AM John Williams: Weak Dollar Behind Inflationary Oil Prices Source: Karen Roche of The Energy Report (5/3/11) In this exclusive Energy Report interview, government economic reporting specialist and ShadowStats Editor John Williams shows why the nation is in the midst of a multiple-dip recession and headed for hyperinflation. The Energy 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) basis indicates total federal debt and obligations of about $75 trillion. That’s 15 times the gross domestic produ...
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| Silver Price Targeting $34 and Gold Price Targeting 1445 - 1382 Posted: 03 May 2011 11:04 AM PDT Gold Price Close Today : 1540.10 Change : (16.60) or -1.1% Silver Price Close Today : 42.576 Change : (3.502) or -7.6% Gold Silver Ratio Today : 36.17 Change : 2.389 or 7.1% Silver Gold Ratio Today : 0.02764 Change : -0.001955 or -6.6% Platinum Price Close Today : 1846.70 Change : 23.70 or 1.3% Palladium Price Close Today : 766.04 Change : 1.04 or 0.1% S&P 500 : 1,356.52 Change : -4.60 or -0.3% Dow In GOLD$ : $171.91 Change : $ 1.85 or 1.1% Dow in GOLD oz : 8.316 Change : 0.090 or 1.1% Dow in SILVER oz : 300.82 Change : 22.87 or 8.2% Dow Industrial : 12,807.51 Change : 0.15 or 0.0% US Dollar Index : 73.15 Change : 0.104 or 0.1% Moneychanger's trip was rained on and it's no fun hiking to waterfalls in the drizzle.  For SILVER today saw another waterfall. Today's close takes the SILVER PRICE down 725c in 2 days. Yesterday's reversal was confirmed. The SILVER PRICE is targeting 3400c unless it closes above 49.75.  The GOLD PRICE has not yet broken it's 20 moving average ($1,489.78). Continued drop and lower close today confirms yesterday's key reversal downward in the gold price. Target somewhere from $1,445-$1,382. Dollar Index rose to 73.145 up 10.4 basis points. It is completing the right shoulder of an upside down head and shoulders with neckline at 73.30. Once it Clears that it will rise at least to 73.90. Probabably though, from a longer view, completing this upside down head and shoulders will mark the beginning of a much longer dollar rally. Stocks are rolling over downside. Silly NGM manipulation jacked dow up to unchanged at closing. Might as well be King Canute commanding the tide to go out. Stocks will fall. 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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| And Now For Today's Mini Silver Flash Crash: Same Time, Same Place Posted: 03 May 2011 10:42 AM PDT
Just like yesterday and the day before, 6:30pm is now the official precious metal "bang the afterhours" launch time. As we predicted minutes ago, silver just got taken to the cleaners on what is now an apparent attempt to push silver around in the no volume part of after hours trading, in the 6-7 pm no man's land. We expect an imminent rebound after this latest attempt to trigger stop losses, probably those around $40, fails. If it succeeds in pushing silver below $40 it is very possible that the metal can promptly trade down to the mid $30s as a result. And while banging the close has been investigated by the CFTC for years (resulting in some modest smacks on the wrist recently for the ex-Moore trader who did this with impunity), we are confident it won't be before 2015 that the CFTC's commissioners investigate this particularly odd behavior in silver and gold. By then it, of course, won't matter.
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| Capital Context Update: Short and Sweet Posted: 03 May 2011 10:35 AM PDT
From Capital Context  Gold has been considerably more stable in the last few days as silver and now oil gap down. Stock and credit markets closed weaker today as Europe came back to the party from their long weekend. Equities underperformed credit (beta-adjusted) and HY underperformed IG and while we didn't see the same picture in secondary bond trading as we have recently (up-in-quality and rotation from financials), it was evident that broader sentiment was negative and breadth was considerably weak in credit. Oil joined Silver in its 'crash-worthiness' today as we see in the upper chart, but Gold remains slow and steady. We do not put ourselves out there as experts in precious metals and given where prices are, it is tough for anyone to justify anything fundamentally except for the devaluation hedge but we feel the need to comment - oil has desynced from gold and resynced almost tick for tick with silver ever since silver managed to get back up to unch yesterday. Fundamentals of the silver trade do not seem to have changed but for the good of our blood pressure, we are remaining long gold (for its uncertainty hedge factor) and avoiding silver (not short silver note!). Along these lines we did wonder what kind of account can handle this kind of downswing without considerable liquidation needs and we would suggest that one of the reasons that gold has not 'crashed' akin to silver and oil is its holdings within central banks (no need for MtM pain on physicals there or collateral posting for synthetic positions).
The margin hikes and the sheer velocity of some of the moves in both oil and silver the last few days must surely have broken a few accounts and we saw some odd trading behavior after-hours in Gold (much more choppy than is normal) which we wondered whether was more margin accounts being forced to liquidate. Of course this is the jinx but it appears to us that while gold has remained solid as the safe-haven anti-fiat trade (which we agree fundamentally applies - thouigh modestly less so - to Silver and Oil), other USD-denominated hard assets are struggling from speculative fever (are ahead of themselves but fundamentally in the right direction from a preserve capital perspective in a devaluation regime). The reason we are nervous of the more speculative shifts we have seen in many of these USD-denominated assets is manifold. We have discussed all of the peripheral shifts we are seeing, whether in equity rotation, equity vols (hi vs lo beta), vol skews, credit up-in-quality rotation, cash underperforming, Muni outperformance (more safety bid - weill worth a read as there was some serious action here yesterday), credit term structure flattening, and now TSY outperformance (10Y TSY traded back below Bunds today for the first time since Jun09). Critically, while hard assets do make some sense in a devaluation regime, the same is tough to say for US equities given the highly reflexive relationship between global demand aggregates and USD devaluation. Our expertise is in the relationships between debt and equity markets and the changing cycles of credit, business, and market. Along those lines, the chart opposite shows one of our longer-term cycle charts indicating stocks at a very elevated level relative to HY OAS, volatility, and vol skews (based on our non-linear cyclical capital structure framework).  The S&P500 is its most expensive relative to the rest of its capital structure since the OCT07 peaks. We have outlined in recent weeks how our trading models are catching up in IG but not in HY and the underperformance of HY and while we often see people discuss how low yields are in HY and how the HY ETFs show little sign of weakness, we remind readers (aggressively) that these are all yield measures and judging relative risk from HY is all about credit risk compensation (and liquidity) as opposed to IG (which is more spread volatility and modest risk premium over time). The point of all this is that our longer-term model indicates the S&P 500 is its most expensive relative to the rest of its 'capital structure' since the peaks in Oct07 . We strongly suggest that our up-in-quality theme be adhered to and if investors dabbble into the US equity market, we would prefer a modest underweight in any balanced portfolio. This is not armageddon calling but we also note some other interesting occurrences (both above and described below) that indicate to us that all is not well under the surface.  Skews have dropped quite notably in SPY in the last two weeks - we think providing room for small declines to be extended once again. We casually discussed the highly complex topic of delta and gamma hedging impacts last week and received 100s of emails on the topic with regard to the velocity and gappiness of moves. Luckily most people we spoke with agreed with our perspective and the charrt below shows an interesting shift in SPY skews that has been occurring for a few weeks. The skew has been dropping - in two weeks the ratio of put vol to call vol (simplified explanation of the skew) has dropped quite significantly. This might seem 'bullish' - and in fact is somewhat - as the 'demand' for OTM put protection has seemingly dropped relative to calls but we see this as a potential indicator of room to fall. The key thought being that all-the-while investors have major downside protection they will not be panicced into dumping their holdings into a sell-off - this is why we have not seen extended declines when small declines occur (well one of the reasons at least - ignoring Johnny 5 and his VWAP reversion algos for one moment). With the skew dropping , it seems investors are getting more 'confident' and in our humble opinion this allows any downside shift now to be extended by weaker hands covering and selling into weakness . Yes, its a stretch, but the climactic shifts in credit last week seemed to exemplify the kind of gamma hedging exaggeration we get (and have seen before) and this shift in equity skews could help explain the ability for stocks to rally in the face of declining macro fundamentals (remember we showed the Citi Economic Surprise Index last week has diverged massively recently from US equities). We suspect we will see some interest in rebuying the skew given the -2 std deviations we now stand at but a sustained drop in the skew from here will havve our heckles up should we see a serious down day in US equities (think Friday's NFP number?). Away from all this doomsaying, moves in credit land were rather modest today - though mostly biased to the widening (or riskier side). IG and HY were wider with HY relatively underperforming. If we consider the US as a large capital structure, it was another clear shift up in the capital structure today as equities underperformed HY which underperformed LCDX which underperformed IG. Financials underperformed non-financials in the US and breadth was a dreary 5-to-1 in favor of wideners as term structures were generally mixed, slightly in favor of steepeners. Even though today's shift in HY was small, close-to-close it was the largest widening in almost two weeks inching HY back closer to its 50DMA. HY 5Y remains notably cheap (wide) of fair-value while HY 3Y remains rich (tight) suggesting indices being technically driven for the flattening trade which we like - perhaps it is time to extend that thesis into name-by-name analysis (we will dust off our curve screen soon to qualify this). Contextually, equity and credit were relatively well balanced with a slight bias to credit underperformance on a beta-adjusted basis averaged at the sector level. Low beta names underperformed in CDS (plenty of financials in here to drag that down) but we note that high beta equities handily underperformed low beta today. The latter point will tend to support why we saw Financials, Capital Goods, and Utilities all outperforming in equity relative to credit and Energy the worst hit relative to credit's outperformance on the day (along with Tech). Credit tended to outperform equity (beta-adjusted) in the lower IG quality names (A to BBB-) and was a major underperformer in the lowest quality names and less so but still weak in the best quality. A modest reach for yield perhaps? We think yes but dispersion continues to rise and even so in IG as discrimination continus to gather pace. Names that stood out as considerable equity outperformers relative to credit-driven expectations were FE, LZ, AVP, T, and IBM (a mix of low leverage releveragers and releveraging targets) while at the other end of the scale we saw CSC, FST, CYH, CLX, and COP as major credit outperformers relative to equity-driven expectations. Consumer Non-Cyclicals were the best performers today in credit while Tech was the worst and low beta vols continue to rise more day to day relative to high beta. All-in-all, a relatively quiet day of orderly weakness in risk assets - no panic except in oil and silver (which surprises us given the interconnectedness) but we are waving the orange caution flag here. Unless we see notably compression in HY spreads, we believe equities are due for a correction and skews/protection shifts are starting to allow that to happen. Our A-List portfolio continues to outperform and we remain fully hedged - which helps its somewhat option-like behavior or protected downside but solid upside. Our ETF Arb is nicely in the money, surviving today's volatility at around $17.5 (from our short entry yesterday at $18.5-$19 at yesterday's open) - stay with the trade as we discussed above equity is overdone relative to credit here. Europe With traders back from a royal binge-fest, European markets were actually not as chaotic after yesterday's US action as we suspected. Sovs were mostly wider but nothing crashtastic - though we do note Spain underperforming considerably (unemployment data).
 Sovereign bonds in the PIIGS nations tended to outperform, dragging the basis (the differential to CDS) notably narrower which may explain the move in Spain's CDS as its CDS are now wider relative to Germany than its bonds). On that note, it is perhaps worth pointing out that for the first time since Jun09, Bunds close higher in yield than US Treasuries. Whether this is a reflection on US-EU growth, a renewed view of Europe as safe-haven, a currency play, a deflation perspective on the US, or simply a momentum chase is hard to say but one thing is for sure, this is a change from the channel of the last year or two and leaves a lot to the downside. Remember we mentioned a suspicion that banks would step in to buy TSYs post QE2 ending to generate some NIM and carry (flatteners) without the GC-IOER trade and FX vol too high for carry there - perhaps this is some front-running on that flattener idea? XOver outperformed Main today but this driven by the underperformance of FINLs to Ex-FINLs. More specifically, Main Ex-FINs rallied around 1bps, while FINs widened 2.5bps - this differential is sill notably below the empirically satsfying level given the width of SovX but we suspect this more reflective of the realization of more discrimination across Europe and less fear of contagion (good luck with that). Asia Notable underperformance for Asian and Australian credit overnight with the largest decompression in a few weeks. ITRX AUS widened 3.5bps with banks underperforming but it was Asian banks in general that showed weakness (Bank of China wider by 5.5% for example) as AXJ widened almst 3bps. This decompression helped our Japan vs Asia-Ex-Japan trade as it compressed to 15bps (as Japan was unch/outperforming). We think this trade is worth sticking with for now though we want to keep an eye on Japan itself which widened 3bps overnight. Index/Intrinsics Changes CDX16 IG +0.5bps to 89 ($-0.02 to $100.41) (FV +0.78bps to 87.86) (97 wider - 20 tighter <> 55 steeper - 67 flatter) - No Trend. Spreads were broadly wider in the US as all the indices deteriorated. IG trades 3.1bps tight (rich) to its 50d moving average, which is a Z-Score of -1.2s.d.. At 89bps, IG has closed tighter on only 32 days in the last 601 trading days (JAN09). The last five days have seen IG flat to its 50d moving average. HY trades 14.8bps wide (cheap) to its 50d moving average, which is a Z-Score of -0.3s.d. and at 425.29bps, HY has closed tighter on only 31 days in the last 601 trading days (JAN09). Indices generally outperformed intrinsics with skews widening in general. Comparing the relative HY and IG moves to their 50-day rolling beta, we see that HY underperformed by around 2.1bps. Interestingly, based on short-run empirical betas between IG, HY, and the S&P, stocks underperformed HY by an equivalent 2.1bps, and stocks underperformed IG by an equivalent 0.9bps - (implying IG outperformed HY (on an equity-adjusted basis)). Of the European IG names, the worst performing names (on a DV01-adjusted basis) were Banca Monte dei Paschi di Siena SpA (+3.76bps) [+0.03bps], Edison SPA (+2.96bps) [+0.02bps], and Lanxess AG (+2.24bps) [+0.02bps], and the best performing names were Portugal Telecom International Finance B.V. (-4.82bps) [-0.04bps], Volvo AB (-3.73bps) [-0.03bps], and ArcelorMittal (-3.85bps) [-0.03bps] // (absolute spread chg) [HY index impact]. Among the IG names in the US, the worst performing names (on a DV01-adjusted basis) were Whirlpool Corp. (+4.75bps) [+0.04bps], Expedia, Inc. (+4.36bps) [+0.03bps], and SLM Corp (+4.2bps) [+0.03bps], and the best performing names were Alcoa Inc. (-7.87bps) [-0.06bps], FirstEnergy Corp (-3bps) [-0.02bps], and Campbell Soup Company (-2.2bps) [-0.02bps] // (absolute spread chg) [HY index impact]. Among the HY names in the US, the worst performing names (on a DV01-adjusted basis) were K Hovnanian Enterprises, Inc. (+45.97bps) [+0.36bps], MBIA Insurance Corporation (+39.01bps) [+0.27bps], and Supervalu Inc. (+20.22bps) [+0.19bps], and the best performing names were Community Health Systems Inc (-24.62bps) [-0.24bps], Boyd Gaming Corporation (-14.82bps) [-0.14bps], and Unisys Corp
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| CNBC – Peter Schiff on Silver – comes in at 6:20 Posted: 03 May 2011 10:26 AM PDT Peter’s been 100% right on PM’s for virtually this entire 10 year move. By the way, do any of you “Wall St. Unspun” listeners from 2008 remember the stocks Peter’s clients were calling into the show – and complaining about … Continue reading
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| The wacky world of the Comex: demand increases while supply and PRICE decreases. Posted: 03 May 2011 09:53 AM PDT Another Decline In Registered Silver Brings Total Comex Physical To Multi-Year Lows Share this:
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| Posted: 03 May 2011 09:51 AM PDT The 5 min. Forecast May 03, 2011 11:52 AM Addison Wiggin – May 3, 2011 [LIST] [*]Two rare commodities that quadrupled in 2010 double again in 2011… three reasons they're just getting started… [*]"Commodities" as a whole beat stocks and bonds for fifth straight month… why even more like that is in store [*]Behind silver's slide… One easy way to follow the precious metal's shrewdest investor… [*]David Walker on a bigger danger than some "person hiding in a cave": then… and now [*]Demand for food stamps keeps pace, demand for home mortgages slumps, demand for fryer grease off the charts… a reader demands explanation for cost-of-living adjustments (COLAs)… and gets one… [/LIST] In the midst of the longest commodity boom since 1997 (see below), the hottest commodities right now are, alas, without a corresponding ETF. Nor can sophisticated investors trade it in the futures market. But the...
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