Gold World News Flash

---

• The Relatively Poor Performance of Gold Stocks, 1976-1980 and Now
• Bearish on Gold, but Bullish on Select Juniors
• It’s Too Soon to Trust Bullion’s Encouraging Bounce
• Asian Metals Market Update
• Outlook 2011: Three Dominant Factors Will Impact Precious Metals in 2011
• Chinese To Collapse The US Dollar?
• Somewhere a Village is Missing its Idiot
• MUST READ: Anatomy of Silver Manipulation
• About That Speculative, And Undisputed, Silver Bubble…
• First Fear, Then Anger
• The Silver Crash of 2011?
• Gold Seeker Closing Report: Gold and Silver Gain Almost 1% and 5%
• Pension Gap Creating Tension?
• COMEX Drops Napalm Bomb on Silver, What Next for the Precious Metals?
• Charting JPM's Historical Holdings Of SLV
• Avery Goodman: Anatomy of a silver manipulation
• The Silver Price Rallied off Friday's $33.15 Low as High as $38.00
• Commodity rally gives respite, masks deeper worries
• LinkedIn IPO price hints at social media caution
• Oil rebounds, Brent jump 2nd biggest day ever
• Monetary debasement, not speculation, driving precious metals, Davies tells CNBC
• If China overtakes the U.S. in 2016 then what will the global Gold market look like in 2020?
• Elliott Wave Analyst Suggests Silver to See $52.58 by Mid -June
• Martin Armstrong Asks: Will Silver Crash in 2011?
• Things That Make You Go Hmmmm - Where There's Smoke There's Fire
• Gold Resource Corporation Q1 Conference Call
• Silver will be a currency too, Sprott tells NY Hard Assets Conference
• So About That Speculative, And Undisputed, Silver Bubble...
• So Much For Pimco Buying Bonds: Duration Weighted Treasury Exposure Hits Whopping -23% Short, Cash Surges To Unprecedented $89 Billion
• A Policy-Driven Silver Crash

The Relatively Poor Performance of Gold Stocks, 1976-1980 and Now Posted: 09 May 2011 06:09 PM PDT Below is a chart comparison of the Barrons Gold Mining Index (BGMI) and the US$ gold price covering the period from 1974 through to 1984. In other words, this chart captures the final 6 years of the secular bull market that ended in 1980 and the first few years of the secular bear market that would ultimately continue until 1999-2001. Note that the BGMI portion of the chart has a linear scale whereas the gold portion of the chart has a log scale.

Bearish on Gold, but Bullish on Select Juniors Posted: 09 May 2011 06:05 PM PDT Get in cheap while companies are relatively unknown and then pick up doubles, triples, or better when they hit the big time—that is AlphaNorth Asset Management Founder Steve Palmer's investment strategy. In this exclusive interview with The Gold Report, Steve shares some ideas for spotting big growth potential.

It’s Too Soon to Trust Bullion’s Encouraging Bounce Posted: 09 May 2011 06:01 PM PDT Gold and Silver have caught a nice bounce from last weeks lows – up 7.8% and 14.9% respectively — but we'd suggest postponing the celebration until the rally has had a week or two to develop legs, assuming it does. Although our initial reaction was that the correction would be over quickly, there are some reasons to be very cautious nonetheless.

Asian Metals Market Update Posted: 09 May 2011 06:00 PM PDT The sovereign debt crisis once again has lent support to safe havens as credit rating agencies downgraded Greece debt. S&P downgraded Greece's credit rating further into junk territory to B, just one notch above Pakistan's, hitting Greek bank stocks as investors sought safety in German bonds. Moody's Investor Service threatened to downgrade Greece by several notches, placing Athens' B1 sovereign rating on review due to increased worries that it might seek to impose losses on private bondholders. Technically gold, silver, copper and crude oil are looking bullish if they are able to hold on to the current prices.

Outlook 2011: Three Dominant Factors Will Impact Precious Metals in 2011 Posted: 09 May 2011 05:58 PM PDT Bullion Management Services

Chinese To Collapse The US Dollar? Posted: 09 May 2011 05:57 PM PDT The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation. Blog - Dollar to collapse? Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies. Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels. More Here..

Somewhere a Village is Missing its Idiot Posted: 09 May 2011 05:29 PM PDT by Stefan B. Some people need to throw their computer into a lake, and never write again. It really is that simple when it comes to John Carney and this epic piece of garbage he wrote for CNBC. To write for CNBC, and be this clueless, is really special… Or, as I suspect, the mainstream media is purposely misleading people with scumsuckers like this clownfish. From http://www.cnbc.com/id/42958273: Nearly all my instincts tell me to side with the gold bulls. We've had a record global expansion of money. There's no end in sight to artificially low interest rates. Both European and American central bankers still face sluggish economies, putting pressure on them to resist raising rates even when signs of inflation start showing up. Surely, I think, it's time to hedge against inflation by buying gold. You know, John, you could have quit typing right there. You could have signed your name, said "By John Carney", hit "publish", people would have read it, agreed with you, and moved on. It would have been short, and readers would have come away thinking that you were actually intelligent. Unfortunately, you kept right on typing. Sigh. And yet. And yet… I find myself replying to this nonsense. The gold trade has been too popular for too long. And it is popular for some pretty bad reasons. Unlike fiat paper dollars. Fiat paper dollars are just becoming popular now! Get in early! Everyone from central banks, to hedge funds, to regular investors are investing in fiat paper dollars as we speak. It is not too late for you to invest in fiat paper dollars, John… In fact, they were "Investment of the Week" on SGTreport.com this past Saturday. Seriously John, 30 year bonds, 10 year notes, and Japanese Yen are equally good investments. Stay away from silver. It is tanking… big time. And all these kooky conspiracy theorists on the interweb are giving me a headache. Many believe gold will rise because inflation will certainly get out of control, because central bankers are "debasing" the currency. That, however, is not analysis. That's moralizing. What's worse, it's flawed moralizing. John, did you drink a lot of glue as a child, or do you just not own a dictionary? Central banks are debasing the currency, by creating ridiculous amounts of it to keep our ponzi-sheme debt pyramid of an economy going just a little bit longer. This is not moralizing. This is analyzing. It would be moralizing to comment that only sick & evil people would create this sort of system in the first place. You need to learn to what those words mean, buddy. Or, as I suggest, just…. Stop. Just stop. Quit… Writing. Quit writing, please. Stop, for humanity. To begin with, it is based on a misunderstanding of inflation. Inflation, properly speaking, is not equivalent to rising prices. It is really just the artificial growth of the money supply. Its most dangerous effect is not rising prices, I simply LOVE the fact that John knows the REAL definition of inflation. I was starting to think that me and Peter Schiff were the only ones who knew. but economic distortions that result in asset bubbles. These are very dangerous for central bankers to detect, much less ameliorate. And they can be economically devastating. Really? Printing currency leads to asset bubbles? Do you mean asset bubbles like… …the current real estate bubble? …the current stock market bubble? …the current bond market bubble? WOW! It is almost as if these bubbles are massive, and are about to pop, and so we are forced to either let them pop, or keep all these bubbles artificially inflated, by debasing the currency. Rising prices, on the other hand, are not as big of a problem. Of course they are not a problem. Who can not afford to pay more for EVERYTHING? They punish savers, but we have precious few of those in the United States lately. Well, if all this currency is being created, and nobody is saving it, where exactly does it all go, John? Is it off somewhere, relaxing with the pixies of bubblegum forest, beside candy mountain? If there are "precious few" savers, where does all that currency go after it is borrowed into existence? It is either being "saved" by someone, or you are trying to claim that it simply vanishes like a fart in the wind. Now, I am not an expert on windy fart economics, so I have to assume that real economics still apply here, and that someone, somewhere is, in fact, saving this currency. That "someone", in large part, happens to be China, and we have to assume that they are not going to keep accepting our dollars, if we are going to cause those dollars to depreciate, by creating billions and billions of them out of thin air. Now, since everything in Wal-Mart says "MADE IN CHINA" on the bottom of it, what happens to prices in America when the Chinese do not want to take our devalued dollars anymore? Why is China buying so much gold and silver? And what happens to prices, John, if China becomes a net seller of US debt? Huh, John? What then? In fact, what if China does NOT sell? What if they just quit buying new US debt? What then, John? What's more, rising prices, unlike asset bubbles, are easily detected by central bankers and can be halted by stopping the growth of the money supply. The prices are already rising, and all the Fed is doing about it is under-reporting the CPI figures. If they are not going to properly calculate the depreciation, they are certainly not going to act to stop it. It is ALREADY happening, and they are ALREADY ignoring it. So-called "hyper-inflation"—which is really just out-of-control price inflation—is not even a realistic possibility in the United States. It would require the political will to wipe out the value of the dollar and dollar-denominated debt. See, this guy does not even know the difference between inflation and hyperinflation. One is economic. The other is political. The only prerequisite to hyperinflation is a loss of confidence that the currency will retain purchasing power. When that confidence is lost, the whole godless house of cards comes down. Think about that the next time someone says we're headed for hyper-inflation. Does this analysis make sense? Are our monetary policy makers really going to try to wipe out dollar denominated debt? Yes. It makes perfect sense. See John thinks that the people who print dollars are good people, nice people, and moral people. That is why John will never be allowed to write for SGTreport.com… Scroll down to the bottom of this page, and read the legal disclaimer to find out who WE think are printing all the dollars. See, It is all just a matter of perspective. If you get the perspective right, you have a better shot at figuring the world out. Of course not. Just look at who would benefit and who would lose. Winners: * Homeowners who would see their mortgage debt quickly shrink in relation to their wages; rapid price increases would float the boats of homeowners holding underwater mortgages. * Politicians worried about the debt burden our budget deficits impose on future generations. Seriously? Did you just suggest that "homeowners" would be "winners" in a hyperinflation? COME ON! John, on behalf of the entire working middle-class, you are an a$$h*le. Were German homeowners "winners" during the Weimar hyperinflation? Were Yugoslavian homeowners "winners" in their hyperinflation? Were Zimbabwean homeowners "winners" in their hyperinflation? What kind of person would suggest that homeowners are the big winners of hyperinflation? Seriously, how far up your own ass do you have to be? Hyperinflation DESTROYS the middle-class. The other "winner": Politicians. That is just genius. After the hyperinflation in Germany ended in 1923, I can think of one politician that "won". His name was Adolf Hitler. Come to think of it, after the hyperinflation in Yugoslavia, Slobodan Milošević came to power. Also, it was a hyperinflation in China that led to Mao's rise to power. Hyperinflation gave us the communist Soviet union. Clearly the big winners in hyperinflation are the politicians. History backs that up completely. Losers: * The banks that own most of the financial assets in the United States, including huge amounts of mortgage debt. * The minority of Americans who have been saving more than they have been spending. * Foreign holders of US bonds. The banks lose? No, the banks never lose, unless we go into a real monetary deflation, and people can not make their loan payments. Even in such a deflation, the banks can foreclose, and take title of real property. During inflation, banks create the currency out of thin air. They put up no capital, so they have no capital to lose. The bank NEVER loses. After the hyperinflation, the banks will simply start giving out new mortgages, in the new currency, because banks create currency out of thin air. The nature of bank credit does not change even when base money is backed by a hard asset. Loser number two: Hear that? Only a "minority of Americans" will be losers in a hyperinflation. Genius. just like a minority of Germans were affected by their hyperinflation, and a minority of Yugoslavians were affected by their hyperinflation, and a minority of Zimbabweans were affected by their hyperinflation. This is beyond stupid; it is offensive. Loser three: Foreign holders of US bonds… Yeah, not to mention all the domestic holders of US bonds. Now ask yourself, who is in charge of monetary policy? Depending on who you ask: either China, or the Bernank. The Chinese are buying silver, and the Bernank has literally talked about dropping fiat currency from helicopters. I am not making that up. That is how he got the name "Helicopter Ben." Does the Federal Reserve seem principally concerned with the plight of underwater homeowners? Well, they better be concerned with the plight of underwater homeowners, since they own several billion dollars worth of toxic Freddie Mac and Fanny Mae assets. It is called "reading the news", John. Try it sometime… http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/2793189/Federal-Reserve-bails-out-Fannie-Mae-and-Freddie-Mac.html Or is the Fed focused on the banks? Have politicians been resolute in their concern for the debt burden being imposed on future generations? Has the political elite of the United States turned against foreign power brokers, or do they see their interests and future goals as aligned? Yes, if there is one thing we can count on our politicians to do, it is plan ahead for future generations. Now I am convinced. Bravo. Exactly. So, throw hyper-inflation out the window. Maybe it will land on the lawn, beside John Carney's brains. Even non-hyper but very high inflation is probably not in the cards. It's simply not in the interests of the financial elites in the United States. Yeah, they bought all that gold to make pretty decorations with it. And hyperinflation will only affect a "minority" of Americans, anyways. So I'm wary about following my instincts when it comes to gold. Dude, if creatures like you followed their instincts, entire species would walk over a cliff, and into extinction. You should follow my instincts. They have always been remarkably profitable. My analysis tells me that much of the thinking behind the gold trade is wrong. My analysis tells me that John Carney might not know his earhole from his a$$h*le. Best Regards, Stefan B.

MUST READ: Anatomy of Silver Manipulation Posted: 09 May 2011 04:51 PM PDT by Avery Goodman As we warned our readers on May 1, 2011, when silver had clawed its way back to about $48 per ounce: "We expect another massive price attack in the next few days." We came to this conclusion based upon a number of factors, including the impending opening of the Hong Kong Merchantile Exchange, which will be controlled by many of the same international players who control NYMEX. Like clockwork, a vicious attack, perhaps the most ferocious one ever mounted in the history of precious metals, began on Monday, May 2, 2011. We knew it was coming, but to be honest, we didn't expect the level of ferocity. Following our own suggestions, when silver had tanked by about 18%, we entered into a small speculative long position, using the SIVR silver trust. The price punched right through the minor support level we had chosen, and continued down. Had we realized the depth of the silver short seller despair, we would have played the game a bit differently. We would have waited longer, bought a lot more later on, and created a much longer term position. As it is, we have lost nearly nothing, and will do it anyway. Nevertheless, as irrational as this kind of thinking is, and as much as we warn people against it, human beings are human beings and we are not happy about putting on a little bet, no matter how small, that fails to catch the bottom of a dip. The level of despair among short sellers, which is motivating this attack, is growing. Anything could happen at this point. They could give up entirely, or the attack could become more ferocious. We don't know. What we do know is that the short sellers' predicament has just grown worse. They will eventually become even more desperate than they are now as weeks and months pass by. We will explain why shortly. New and ever larger performance bond deposit requirements are being announced by the NYMEX so-called "clearing house risk committee" (performance bond committee) almost every other day. On top of these substantial increases, the individual clearing members are often making even bigger demands and hiking up performance bond requirements even higher. We cannot help but wonder if some of these clearing members are themselves short silver, or if they are deathly afraid that other clearing members will default, leaving them footing the bill? Or are they trying to help attack their own customers? To the extent that a clearing member is raising performance bonds above the level of the exchange, customers should say goodbye and never do business with them again. According the official spokesperson for CME Group, which owns NYMEX, the performance bond increases are designed to address "increased risk". If this were so, however, such changes would apply only to short sellers and new long buyers who purchased up in the higher price ranges. Most of the older long buyers were sitting on huge profits from the upward movement of silver, when the new bond requirements were imposed in the $49 range. They posed no greater risk at all than they did back when they made their purchases at $18, $20, $25 per ounce, etc. But the exchange and its dealers don't play the game that way. Instead, they apply these changes to everyone, even people who may have bought when silver was down near $18 per ounce, even though these older position holders pose no greater risk of defaulting than before. The exchange committee members are quite expert at all this, and are well aware that the net effect of what they were doing would be to throw people involuntarily out of positions. The effect is carefully calculated and thought out, and is part of the overall process used to artificially control silver prices. Coupled with the sudden increased performance in bonds, there has been an all-out media effort to convince people that a "bubble is bursting" even though, as we will shortly explain, anyone who is worth his salt as an analyst knows it isn't true. There has NEVER been any bubble in silver in 2011, and therefore, it cannot possibly "burst". There has simply been an unwinding of a grossly underpriced asset that has been subject to a multi-year price suppression effort. Click Here for the rest of the article at Seeking Alpha.

About That Speculative, And Undisputed, Silver Bubble… Posted: 09 May 2011 04:44 PM PDT by Tyler Durden Lately, everyone and their grandmother speaks with 100% conviction that over the past week what happened in the silver market was nothing but a speculative bubble popping. After all, 5 consecutive margin hikes would mean that uber-levered terrorist speculators must have been scrambling with the urgency of an E-trade baby checking his voicemail and getting 99 margin call messages. So certain seems to be conventional wisdom in this allegation that nobody appears to have even checked the facts. Well, we did. For that we went to the usual place that provides a definitive breakdown of speculative indications: the CFTC's Commitment of Traders report, and specifically the non-commercial specs which after netting shorts from longs would be expected to be at some parabolically unseen level ever in the history of the CFTC. Much to our surprise we found this… Yes: according to the CFTC, the level of non-commercial net longs in silver is, in the week ending May 3, at the lowest since July 28, 2009. So while one could speculate that silver may have been in some pseudo-bubble back in October 2010, when net specs hit over 50,000 contracts, the most recent reading of 23,354, which is merely the latest in a downward sloping trend starting in February, alas throws a lot of very cold water over the whole silver bubble popping thesis. Click Here for the full article at Zero Hedge.

First Fear, Then Anger Posted: 09 May 2011 04:37 PM PDT The historic decline this week in silver creates strong emotion. Watching great amounts of wealth disappear, quite literally in minutes amid disorderly trading conditions is a genuine fear for any investor. Worse is seeing no obvious legitimate reason to explain the carnage. If that doesn't scare you, nothing will. Especially if you already harbored unease about how the whole silver market operated. But fear is an emotion that burns out fairly quickly. A human being can't stay in an intense state of fear of financial catastrophe without selling out at some point or mentally adjusting to the new level of price. Then the conditions that led to the fear in the first place are replaced by some other emotion. If evidence exists that the sudden financial loss could and should have been prevented, the new emotion becomes one of anger.  Anger at who or what might have caused the loss and who should have prevented it. I think there is compelling evidence pointing to who and what caused this silver crash as well as who should have prevented it. The first thing we must recognize is that this was an unusually intense price smash. Silver fell 30% for the week, its biggest price loss in 31 years. The decline was highlighted by record trading volume on the COMEX and in shares of SLV. From any objective measure, the trading was disorderly, indicating little true liquidity despite the record volume. That's because much of the trading was conducted by high frequency trading (HFT) computer bots whose clear purpose seems to be to cause disruptions to prices. These are the same disruptive traders that caused the flash crash in the stock market last year. I believe it was these traders who started the price decline with the $6 hit in 12 minutes on last Sunday evening. Their primary reason for existence seems to be causing prices to collapse. More Here..

The Silver Crash of 2011? Posted: 09 May 2011 04:24 PM PDT Please click on the link below: [url]http://www.martinarmstrong.org/files/The%20Silver%20Crash%20of%202011%2005-06-2011.pdf[/url]...

Gold Seeker Closing Report: Gold and Silver Gain Almost 1% and 5% Posted: 09 May 2011 04:00 PM PDT Gold climbed to $1510.34 in Asia before it fell back to $1498.65 in London, but it then rose to a new session high of $1511.46 in New York and ended with a gain of 0.76%. Silver climbed to as high as $37.955 at about 7AM EST before it pared its gains a bit, but it still ended with a gain of 4.97%.

Pension Gap Creating Tension? Posted: 09 May 2011 03:45 PM PDT Via Pension Pulse. Before discussing my latest topic, I want to bring something to your attention. Frederic Bettan, Managing Partner & CEO of Swing Capital contacted me to include their fund in my post on Quebec's Absolute Return Fund. Along with his partner, Michel Nahmany, they run one of the largest F/X programs in Quebec (and maybe Canada). I edited my comment and will add more funds that I missed (just contact me). There is a lot of alpha talent in Quebec but the problem is capital is scarce and forget seeding funds. We need more families like the Bass family in the US to come up here and take a gamble on our alpha talent. I would put some of our guys with the best and brightest in New York and London. Why are they living in Montreal instead of these big financial cities? Because the quality of life is better here, not to mention that we have some of the prettiest women in North America (you notice them right away when the weather warms up!). Today I had lunch with one of the best Canadian convertible arbitrage managers in Canada, Marc Amirault, President and CIO of Crystalline Management Inc., a fund that has delivered high risk-adjusted returns. What I like about Marc is that what you see is what you get. He lost weight, quit smoking (excellent decision!), and looked a lot better than the last time I saw him. He's a very experienced manager who doesn't bullshit his clients and takes care of his clients. I respect a guy like Marc who has made it in Quebec a lot more than anyone of those hotshot hedge fund managers in New York or London. If you can make it in Montreal, you can literally make it anywhere. What I like about him is his background. He worked many years at the Caisse de Dépôt, so he understands the ins and outs of pension funds. He had to claw his way to success when he ventured off on his own. Nobody handed him a big fat cheque with no strings attached. And when it comes to convertible arbitrage in the Canadian market, very few managers have his experience or track record. He told me all about 2008, "a tough year," and how crazy the US contagion got up here. "At one point there was no market for Canadian corporate bonds. Barrick Gold bonds -- A rated -- were trading 15% above US Treasuries" (crazy!) . Some of his fund of funds clients redeemed but his pension fund clients stuck by him, and his fund recovered nicely. I told him if I were a hedge fund, I would try to avoid fund of funds as much as possible, especially the hot money out of Switzerland and Middle East, and stick with patient capital like pension funds. Most fund of funds redeem at the first sign of trouble. And unlike the US, a fund in Quebec can't just put up a gate to stop redemptions (that's kiss of death up here). I also told him that some of the best hedge funds in the world got whacked hard in 2008, including Citadel. Back many investors were redeeming from Citadel and I told people on my blog to jump on the opportunity to get into that elite hedge fund (those who took my advice made great returns). Crystalline Management Inc. has some capacity left. The fund is small and Marc will cap the convertible arbitrage strategy at a certain size. As he told me, "I'm not into the asset gathering game and I don't like how a lot of the pension consultants operate, full of conflicts of interest"(tell me about it!). If you're a small or large pension fund, I urge you to contact Marc directly (mamirault@arbitrage-canada.com) and meet with him and his team. An investment in a fund like his can pay off in many ways because you won't just be getting high risk-adjusted returns, you'll be investing in an experienced manager in a niche strategy who understands the importance of process over performance (not all convertible arbitrage funds are the same, some use a lot more leverage than others!). Just the knowledge leverage he and his team can offer you is worth the investment and he's thinking of branching out to more liquid strategies so he can become a top performing multi-strategy fund. Now, let me get to my latest topic. Bill Tufts of Fair Pensions For All brought to my attention a recent Stats Canada study. He wrote an op-ed in Digital Journal, Pension gap creating tension between haves and have-nots: Statscan released a report today on the status of pension plans in Canada. Most Canadians do not have a pension plan while government workers do. Now more government workers have pension plans that private sector employees. #000000;"> #000000;">In its report Statscan shows that pension plan membership in the private sector is falling and that most public sector employee have access to gold-plated plans. Membership fell 2.1% in the private sector as more employees were dropped from plans and the public sector on a hiring spree increased the number of employees on it's plans. The recent troubles in the economy have forced more and more companies to reevaluate the viability of pension plans. Many companies have either changed plans to defined contribution, frozen plans to new members or closed their pension plans completely. A defined benefit pension plans is one where the company or taxpayer guarantees an income for the employee in retirement. This contrasts with the defined contribution plan where the employees can only draw income against the funds that have accumulated inside the pension plan. The Labour Force Survey done by Statscan shows employment numbers at the end of 2009. The pension plan membership numbers were also as of the end of 2009. At that time there were 3.4 million public sector employees and 10.6 million private sector employees. Those with defined benefit pension plans included 2.8 million public sector employees (82%) and 1.7 million private sector employees (16%). The private sector has suffered hardship over the past three years but the public sector has remained unscathed. There has not been much discussion around the disparity between public sector employees with gold-plated pension and private sector with much lower coverage. Earlier this year the LA Times wrote an article called The pension haves vs. the have-nots. The article asked "Can the substantial disparity between public and private sector retirement benefits be sustained much longer? We think that it probably cannot". It cannot be sustained financially or politically. There is the implicit promise in defined benefit pensions that the employer or taxpayer will make good for any pension shortfalls and will be responsible for guaranteeing the income stream promised to the employees in retirement. Governments at all levels are starting to face serious challenges from pension shortfalls. Although the public sector pensions have been trying to suggest that the fall in stock markets was the main reason for the pension shortfalls, this is only a small part of the problem. The number one determinant of rising pension costs is skyrocketing wages. We saw this when Ontario Teacher's Pension Plan reported it's performance for 2010, a record year for investment performance, yet the pension shortfall grew even bigger. The same story is happening across Canada in municipalities, universities and other government organizations. An irritant for taxpayers is the fact that government are depositing ever increasing amounts of tax dollars into the public sector plans in order to shore them up. The report from Statscan shows the numbers. Total employer and employee contributions to RPPs in 2009 amounted to a record high of $53.4 billion. Employers contributed 71% of the total, up from 67% in 2008. About 33% of the employer contributions, roughly $12.6 billion, were for unfunded liabilities, more than twice the amount in 2008. Statscan does not show if the shortfalls were paid into public sector plans or private sector ones. We do know the $12.6 million for shortfalls was paid into defined benefit plans because defined contribution plans cannot have an unfunded liability. This means that just the unfunded liability contributions averaged over $2,700 per employee. On top of that there was the additional $40.8 billion paid into these plans, the major portion of it by the employer. Last year over 60% of Canadians did not make a contribution into their RRSP account, the largest majority stated a lack of funds was the major reason for not making a contribution. That did not stop them however, from contributing heftily to the pension plans of their neighbors in the public sector. Ever increasing portions of taxes are going into these plans. In 2009 the total RRSP contributions for all Canadians were $33.0 billion down from $33.3 in 2008. I thank Bill for sharing his thoughts with me but I take issue with some of his points above. First and foremost, the number one determinant of rising pension costs is not skyrocketing wages but historically low interest rates (read my comment on Ontario Teachers' 2010 results). Second, the main reason that Canadians aren't tucking away more savings is that household debt is hitting record highs as the Canada bubble inflates fueled by Canada's mortgage monster. But I do agree with Bill that pensions apartheid between the public and private sector is going to be a major political issue of the future. I think the Conservatives should increase the retirement age to 67 and scrap early retirement altogether. They should also introduce an increase in the contribution rate and cuts in benefits. If federal government employees don't like it, tough luck! I'm currently working on contract for a federal government department and have no benefits whatsoever. Moreover, there is a stupid rule that the unions implemented that limits contracts to 90 days per calendar year, so even if I wanted to work longer, I can't. Apparently this is done to protect workers and prevent abuse from the federal government but the bottom line is that it prevents people like me who like working on contracts from working longer than 90 days per calendar year. Finally, last Friday I discussed the $30 billion pension surplus fight continues. Please go back to that comment and see the addendum which includes feedback from Bernard Dussault, the former Chief Actuary of Canada and Jim Murta of Murta's actuarial blog.

COMEX Drops Napalm Bomb on Silver, What Next for the Precious Metals? Posted: 09 May 2011 03:29 PM PDT Silver has tripped on itself for now, and Gold will probably move a tad smoother over the near term, but look for Silver to regain it's sprinting abilities this summer-fall and re-take the baton from Gold ... Read More...

Charting JPM's Historical Holdings Of SLV Posted: 09 May 2011 03:01 PM PDT As an attempt to refute the previously disclosed plunge in speculative positions, some have made the claim that it is really retail holders causing the spike in silver via such synthetic CDOs as SLV. While this argument is beyond laughable (although there is some credibility to the claim that there is a feedback loop to ETF buys leading to underlying gains and vice versa, although we expect SLV's silver holdings disclosed tomorrow to once again gain thus ending the selling cycle) and we look forward to debunking it thoroughly when the latest 13F is released sometime on Friday, we did want to point out something just as amusing: the holdings of JPM compared to the price of SLV (incidentally, JPM is the third largest holder of SLV with 5.1 million shares, just behind BofA with 6.8 million shares and Morgan Stanley with 7.2 million). Which begs the question: retail or really institutional buying was the primary force behind the move in SLV? And if so, why...

Avery Goodman: Anatomy of a silver manipulation Posted: 09 May 2011 02:50 PM PDT By Avery Goodman for Seeking Alpha Monday, May 9, 2011 http://seekingalpha.com/article/268691-anatomy-of-silver-manipulation-ho... As we warned our readers on May 1, 2011, when silver had clawed its way back to about $48 per ounce: "We expect another massive price attack in the next few days." We came to this conclusion based upon a number of factors, including the impending opening of the Hong Kong Merchantile Exchange, which will be controlled by many of the same international players who control NYMEX. Like clockwork, a vicious attack, perhaps the most ferocious one ever mounted in the history of precious metals, began on Monday, May 2, 2011. We knew it was coming, but we didn't expect the ferocity. Following our own suggestions, when silver had tanked by about 18%, we entered into a small speculative long position, using the SIVR silver trust. The price punched right through the minor support level we had chosen, and continued down. Had we realized the depth of the silver short seller despair, we would have played the game a bit differently. We would have waited longer, bought a lot more later on, and created a much longer term position. As it is, we have lost nearly nothing, and will do it anyway. Nevertheless, as irrational as this kind of thinking is, and as much as we warn people against it, human beings are human beings and we are not happy about putting on a little bet, no matter how small, that fails to catch the bottom of a dip. ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf The despair among short sellers, which is motivating this attack, is growing. Anything could happen at this point. They could give up entirely, or the attack could become more ferocious. We don't know. What we do know is that the short sellers' predicament has just grown worse. They will eventually become even more desperate than they are now as weeks and months pass by. We will explain why shortly. New and ever larger performance bond deposit requirements are being announced by the NYMEX so-called "clearing house risk committee" (performance bond committee) almost every other day. On top of these substantial increases, the individual clearing members are often making even bigger demands and hiking up performance bond requirements even higher. We cannot help but wonder if some of these clearing members are themselves short silver, or if they are deathly afraid that other clearing members will default, leaving them footing the bill? Or are they trying to help attack their own customers? To the extent that a clearing member is raising performance bonds above the level of the exchange, customers should say goodbye and never do business with them again. According the official spokesperson for CME Group, which owns NYMEX, the performance bond increases are designed to address "increased risk." If this were so, however, such changes would apply only to short sellers and new long buyers who purchased up in the higher price ranges. Most of the older long buyers were sitting on huge profits from the upward movement of silver, when the new bond requirements were imposed in the $49 range. They posed no greater risk at all than they did back when they made their purchases at $18, $20, $25 per ounce, etc. But the exchange and its dealers don't play the game that way. Instead, they apply these changes to everyone, even people who may have bought when silver was down near $18 per ounce, even though these older position holders pose no greater risk of defaulting than before. The exchange committee members are quite expert at all this, and are well aware that the net effect of what they were doing would be to throw people involuntarily out of positions. The effect is carefully calculated and thought out, and is part of the overall process used to artificially control silver prices. Coupled with the sudden increased performance in bonds, there has been an all-out media effort to convince people that a "bubble is bursting" even though, as we will shortly explain, anyone who is worth his salt as an analyst knows it isn't true. There has NEVER been any bubble in silver in 2011, and therefore, it cannot possibly "burst." There has simply been an unwinding of a grossly underpriced asset that has been subject to a multi-year price suppression effort. Be that as it may, this downturn provides, for the first time in a long time, more than mere gambling opportunities. Highly leveraged and undercapitalized speculators have been kicked out of their positions, and they had pushed the price of silver up very fast. It would have gone to the same levels, anyway, and beyond, but the process would have been slower and steadier if the market had been limited to cash buyers and well-capitalized investors. We have been carefully observing the methods used in this attack and have reached some conclusions. The attack is not sophisticated. It is NOT rocket science. The method is so simple that it is astounding that so few people see it for what it is. Regulators could put an end to it any time they want to. They simply don't want to. That means, of course, that they are essentially complicit. There are genuine folks over at CFTC, like Commissioner Bart Chilton, but they are operating at an agency which is structurally corrupted, with a revolving door swapping employees to and from the regulator and those who are supposed to be regulated. The current price attack involves an overwhelming creation of transient short positions that last less than one day. This is expensive to do in terms of upfront cash. But it isn't quite as expensive as it may seem at first glance. Each day, except on Friday, May 6, more than 10,000 short positions appeared to be transiently created, closed and recreated during the trading day. This must have required posting at least $180 million in performance bonds. However, to give credit to the ingenuity of the manipulators, most cash is recouped by the end of the trading day. With access to Federal Reserve loan windows, putting up an infinite amount of upfront fiat cash in the morning of a trading day is no deterrent. From what we can see, this is what they are doing, in a highly coordinated fashion: 1) Either using control over the exchange committee system to induce sudden hikes in performance bond requirements, or opportunistically using such hikes. The hikes soften up the market by causing an initial destabilization of accounts of overleveraged long position holders. Some of the big clearing members of NYMEX have enhanced this effect by raising their own requirements higher than the exchange committee, and thereby softening up their own customers more substantially. 2) Using analysts to make extensive commentary to the mass media to the effect that the "silver bubble has burst" in the hope of inducing fear in the marketplace, further softening it up, in preparation for Step 3. 3) Using trading "bots" to transiently create thousands and, sometimes, tens of thousands of intra-day short positions, designed to soak up opportunistic buying by better-capitalized long side oriented investors. The flooding of the market with this paper supply of imaginary "silver" prevents futures-based prices from rising and triggers stop-loss orders among leveraged customers. 4) Closing most intra-day positions into the mass of involuntary liquidations. Sometimes "artillery" is left on the battlefield by the close of the day. This happens when transient short positions cannot be fully unloaded. In other words, the bots are competing with heavy buying from well-capitalized buyers who now want to pay the "bargain" prices created by the bots, and taking over those positions before the bots have the opportunity to buy them back. This shows up as a net increase in the "open interest" in silver, even as the price is falling. That aberrant result is impossible if a bubble were really "bursting," because we would have run out of such buyers by now. 5) Rinsing and repeating the same process the next day, and on various days after that, allowing for a few "up" days centered around points of natural technical support, in order to preserve plausible deniability. Again, CME officials claim that the sudden margin changes are motivated by "high volatility" and that their actions are not a cause for the recent crash of silver prices. That is disingenuous at best. The changes are not "motivated" by high volatility -- they are the initial cause of the volatility. They knowingly destabilized the accounts of highly leveraged buyers. Those buyers were highly leveraged because the exchange previously encouraged high leverage by marking down performance bond requirements. Sudden upward adjustment of performance bonds creates an opening for trading "bots" to move in, and helps make the manipulation less costly. If performance bonds were never set in the first place, at ridiculous ultra-low levels, then suddenly raised, then suddenly lowered, over and over again -- which is exactly what the exchange has done for years -- prices would be stable. Substantial performance bonds, kept the same at all times, would mean no "pie in the sky" undercapitalized long buyers drawn into the market. The ability of the manipulators to flush them out, collect their performance bonds, and periodically crash commodity prices would end. In that scenario, silver and gold would transform back to their 10,000-year-old role as the most stable stores of value, and conservative investors would convert their fiat cash, stocks, and bonds into precious metals. That is a nightmare scenario for Western central bankers, because it is a severe threat to the long-term profits of the commercial casino-banks they service, whose tight control over the world economy facilitates the sale of derivatives and control over the contingencies that trigger such derivatives. This tight control cannot exist in an honest-money gold/silver base monetary system, and it is based primarily upon control of paper and electronic money printing presses. But in spite of the incredible power of the central banks standing behind them, short sellers are losing this war. Their success is an illusion. Instead of escaping from liability, their liability is growing. In spite of the propaganda machine, the attack by clearing members against their own customers, and the trading bots, buying interest has remained incredibly high. This is exemplified by the fact that not all of the tens of thousands of transient intra-day short contracts have been closed by the end of the trading day. That is not a sign of a bursting bubble but, rather, of just the opposite. In a normal market, the cost of a relatively fixed supply of goods will always result in rising prices when the number of purchase contracts rises. This is because demand has increased while supply has stayed roughly the same. But not in our corrupted futures markets. On Tuesday, May 3, 2011, CME Group records show, the silver bars underlying 23 contracts were delivered. That should have reduced "open interest" contracts by 23. Instead, there was a net increase that day of "same-month" positions by 10 contracts. In other words, short sellers will now need to deliver 165,000 additional ounces of silver this month. On Friday, May 6, 2011, the short sellers must have been proud of themselves. They were able to deliver 243 contracts, or 1.2 million ounces of silver, which is a huge amount. But the open interest for May delivery declined by only 13 contracts, which means that the artificially cheap prices attracted 230 new long contract buyers who paid cash. The new contracts will need to be delivered this month. As hard as it must have been to find the silver for May 6 delivery, they are now forced to find another 1.15 million ounces somewhere. The so-called "spot" price is now largely irrelevant, but short sellers have still not acknowledged that fact to themselves. Intense physical silver demand continues. This is amply illustrated by continued backwardation. Dealers at COMEX and the LBMA may create fake prices at will, but the cash market is their Achilles' heel. Short sellers have put paper silver on a fire sale at the futures exchanges. Yet they have not improved their position by doing so. Instead they have insured a worse problem. Cash buyers put the fear of God into the hearts of silver manipulators. Cash buyers can put them into bankruptcy, destroy their power over the market, and discredit the futures markets, LBMA, and the central bankers by inducing multiple defaults. New "urban" myths about mysterious Eastern billionaires buying up silver have spread quickly. On April 28, 2011, silver was selling for a high of $49 per ounce. The open interest had fallen to as low as 129,711 as short sellers slowly capitulated, and serious cash buyers took the bait. Allowing higher and higher fiat prices was effective in allowing open short positions to be closed, which is what short sellers must do before it is too late. On one day, for example, in early Asian trading, prices rose temporarily by more than 10%. Asian short sellers were breaking ranks and buying back positions at any price. Then the bull-headed spirit of their European and American comrades awoke, and the current attack on silver prices began. The market is not becoming dispirited or shell-shocked, as would have once been the case under similar conditions. Instead, we are seeing heavy buying by well-capitalized long buyers who have probably read Andrew McGuire's emails. They now know the score. They know that this is simply a manipulation event. As of May 5, 2011, the open interest had already risen to 134,804. The "evil empire" is facing 5,093 new long positions. Two hundred sixty six of those are "same-month" positions, bought with 100% cash, and need to be delivered this month. Tens of thousands of other positions have changed hands. The trading "bots" managed to close most of their intra-day shorts into margin calls and stop-loss orders, but have not accomplished much in terms of the level of open interest. Tens of thousands of existing contracts plus 5,093 additional hard long positions were unintentionally created by the trading bots, and all of these are now transferred from undercapitalized longs who would never have taken delivery into much stronger hands. The percentage of contracts, going forward, that will be forced into delivery as the months pass will rise as a result of the transfer from weak to strong hands, and the silver short sellers' problem is now bigger. New buyers have streamed in and bought at lower prices. That is the natural response of any bull market to a major manipulation event like this one. Silver is in a secular bull market. That has not changed as a result of a manipulation event. In fact, nothing has changed, except the unfavorable position of the silver short-side manipulators, who are facing a much worse picture now than they did before they started this manipulation. They have collected performance bond "candy" from undercapitalized investment "babies." But they need much more. Short sellers need to create the type of dispirited shell-shocked market they managed to create in late 2008. The effort, back then, made use of the demise of Lehman Brothers to offload hundreds of billions of dollars worth of short positions in all the precious metals in the OTC derivatives market. So far, however, this manipulation event isn't working very well. The only way to bring the number of positions down is to allow the price to rise substantially. If they abandon the effort now, as Friday's action implies they might, it will be impossible for them to shift their short-term price reduction into a longer-term situation of altered market perceptions, which is their goal. The Federal Reserve can give them as much cash as they need to mount as many paper-based attacks as they want, but it can't give them physical silver. Short sellers will need to put up or shut up. They need to pay the price for their misconduct over many years. Short sellers have proven to be so bull-headed that one has to doubt whether they will do the smart thing. The next move might be to flood physical markets with newly "cashed-out" baskets of silver bars from the SLV silver trust stockpile. That might dampen pressure from increasing demand, and might even meet the immediate need for physical delivery in the OTC cash markets. But over the long run, assuming that the price remains discounted, the bars will quickly disappear and as they raid the stockpile, others will buy SLV shares and raid the stockpile too. SLV may end up stripped of its silver. Does SLV really have the full amount of silver claimed? It does have a solid-seeming inspection report that says it does. If it doesn't, we may be finding out soon enough. If those who have been dismissed as paranoid people end up being right, and there is not enough silver in the stockpile to cover claims, jail cells will be waiting. The CME Group clearinghouse risk committee can raise performance bonds to 100 percent of the amount that long buyers paid for their positions in silver. They can even raise it higher than that, but only at the risk of jail cells, and/or triple damages that cannot be discharged in bankruptcy for the clearninghouse's individual members. Meanwhile, manipulators can continue to flood the market with bidding-bots and intra-day transient short positions. They can theoretically absorb all the buying pressure if they are stubborn enough. They can continue to raid the SLV stockpile to make deliveries, and spin those withdrawals to the media as the "public getting out of silver." But this is not 1980. No one remotely similar to Nelson Bunker Hunt is relying on bank financing to corner the silver market using leveraged positioning. Price pressure is from the cash physical market, not derivatives. COMEX is relatively irrelevant. Nothing the manipulators can do in derivatives markets will relieve the physical market pressure. Short sellers have replaced weak hands with strong ones who are much more likely to take delivery. This manipulation episode will dramatically unwind, just as it dramatically began, when silver short sellers capitulate, as they must. Prices will shoot far beyond the recent high levels. So "bottom picking" may be nice but it isn't necessary. The prospective price appreciation over the next few months or years should overwhelm any differences in price right now. It won't matter whether you bought at $50, $40, $35, $20 etc. In a few months the price will likely be back up, and, in a few years the price will be many multiples of all those numbers. Technical support levels still have meaning because manipulators want it to be so. Cash-fueled trading "bots," filled to the brim with Federal Reserve funny money, can be programmed to open as many transient intra-day short positions as needed to punch right through any support levels. But manipulators must preserve an illusion of natural market movement. We can expect loose adherence to chart patterns, allowing bounces where appropriate, and then punch-throughs. The only way a psychologically depressed market could now be achieved is by crash prices beneath the long-term trend line, which is around $22.50 per ounce. This would require hundreds of millions of additional trading bot dollars to do. They might try it at some point, but more likely they will give up for the moment and return to a slow capitulation. Even if they do push prices down below $22.50, we doubt it would work for very long. Such a battering would cause heavy technical damage, but, as noted, this market is not being driven by technical trends. If they don't achieve the sub-$22.50 level, even most technical analysts relied upon by the big non-manipulation-involved hedge funds and other big players will assume that the silver bull market is still running and that this is merely a deep correction. They will buy back in and run the price back up. In other words, if the manipulators do not achieve a sustainable self-perpetuating shell-shocked market, as was achieved in late 2008, the manipulators will not be able to close short positions without great losses. It may be possible to use technical analysis to make intra-day, or multi-day gambles on bounces. We would not feel comfortable, however, with recommending that this be done with substantial capital, because the manipulators could suddenly attack again at any time. If they decide to punch through the strong technical support level at $33-34, they will do so with everything they've got. They will need to take down the price very quickly because they need to get it done before so much of the month has passed that they will be impaired in their ability to gather silver to make delivery in the OTC market. You must think long-term now before entering this silver market, because you may well get stuck with a silver position for a longer term than you may expect. But if the manipulators do press the price down below the $22.50 level, you should buy with every dollar you have available, because even though things will look bleak by then, with every media outlet heralding the "bursting of the silver bubble," a few months later the price will be back to way above $50. Prefacing the big fall will probably be a huge technical rally in the U.S. dollar and a big fall in the stock market. These events may not happen until the end of QE2 in late June. On the other hand, if you don't buy now, and, instead rely on the forlorn hope that manipulators will push hard enough to take prices into $20-22 level, you may well lose the excellent opportunities that now exist. There is no way to know, in a

The Silver Price Rallied off Friday's $33.15 Low as High as $38.00 Posted: 09 May 2011 02:19 PM PDT Gold Price Close Today : 1502.90 Change : 11.70 or 0.8% Silver Price Close Today : 37.110 Change : $ 1.827 or 5.2% Gold Silver Ratio Today : 40.50 Change : -1.765 or -4.2% Silver Gold Ratio Today : 0.02469 Change : 0.001031 or 4.4% Platinum Price Close Today : 1794.00 Change : 17.00 or 1.0% Palladium Price Close Today : 730.50 Change : 24.40 or 3.5% S&P 500 : 1,346.29 Change : 6.09 or 0.5% Dow In GOLD$ : $174.47 Change : $ (0.71) or -0.4% Dow in GOLD oz : 8.440 Change : -0.035 or -0.4% Dow in SILVER oz : 341.81 Change : -16.40 or -4.6% Dow Industrial : 12,684.68 Change : 45.94 or 0.4% US Dollar Index : 74.68 Change : 0.028 or 0.0% Looking at my charts and past data this morning, it's difficult to avoid the conclusion that the SILVER PRICE has more downside in store. The GOLD PRICE might have made all the correction it intends to make, but that, too, is uncertain. Earlier corrections after Gold/Silver Ratio lows have taken gold down from 4% to 12%. The first we have seen already, and 12% would take us to $1,370. These are possibilities, not predictions. The Silver Price rallied off Friday's $33.15 low as high as $38.00, but couldn't pierce that barrier. On Comex silver added $1.827 to close at $37.11, up a gigantic 5.2% but in the aftermarket it added another 81c to reach a price 7.5% higher than Friday's. Sharp rises are followed by sharp falls, and often then by sharp but truncated rises in turn. Here we must balance jumping in too soon against missing our chance, a prickly mess. For now my eyes are turned longingly toward the 200 day moving average (now $28.48), so often the target of silver's corrections in this bull market. Before we see that, however, we might see a rally that jumps as high as $42.00, and it might consume quite a bit of time. I don't believe silver is ready to take the bit in its teeth and run away upside quite yet. Give it time. GOLD on Comex re-captured $11.70 to close at $1,502.90. Clearly lots of folks were looking to visit the bargain basement gold sale, but in the aftermarket, after a $10+ rise, gold stalled around $1,513 and fell back a couple of bucks. $1,510 forms the resistance that is bogging gold down, and above that $1,520 will suck at gold's feet like quicksand. Clearly, then, a close above $1,520 would send gold higher. Downside remember that $1,462 low. If the gold price breaks that then it will have to do more penance, maybe on its knees. Keep calm, it is only a correction in an on-going bull market (primary trend) with another three to ten years to run. As you ought not to have succumbed to the hysteria on the upside, you must not succumb to the despair on the downside. Wait. Compose yourself in patience. Today taught a lesson to all those who arrogantly believe parsing markets is easy. The US DOLLAR INDEX hit a high today at 75.16, but that was one step too far for a fiat currency that had already run so hard. That completed the move and the rest of the day the dollar backed off and ended at 74.68, up a meager 2.8 basis points from yesterday. It's a correction, folks, ricocheting in its upward flight off the 50 DMA. Least target for rally reaches 77.40. Buttressing that conclusion is the Euro, collapsing like the Tsarist army at Tannenberg. Yen is sprightlier, but looks like it has played out its upmove as well. What happened about 11:45? Something to send stocks, which had languished till then, a-soaring. McHugh of www.technicalindex.com, whom I respect, expects one more leg up before the bear resumes his doomed and dreaded mauling. Dow gained 45.94 to 12,684, S&P500 added 6.09 to end at 1,346.29. This is cloud-cuckoo land, for tis a bear market (primary downtrend lasting 15 - 20 years that began in 2000) and no economic reason appears to imply improving conditions in an economy gutted by central banks, banks, speculation, debt, and exported industry and agriculture. But y'all hold on to your stocks -- they'll make interesting keepsakes for your grandchildren, and who knows, by that time they may have begun recovering. I have thirteen grandchildren: twelve boys and a single girl, Caroline, Justin and Ellen's daughter. Five months after she was born (July 2007) her illness revealed a malformed heart. After three miraculous surgeries at Vanderbilt in Nashville, where children's heart surgery was pioneered beginning in the 1940s, she has a rebuilt and efficient heart. She plumped up and is as active as any four year old. But today she was out shopping with her mother and grandmother and fainted. Why, no one can say, but her doctors at Vanderbilt wanted to see her, so Justin and Ellen have taken her up there tonight. Would y'all please pray for Caroline's complete recovery? I know she is spectacularly beloved because we've seen so many miracles in her life already. On this day in 1913 the 17th amendment to the US constitution was ratified. It provided for electing senators by popular vote rather than by state legislatures, thus depriving states of their representation and converting a federated republic into a democracy. Yes, it did indeed mean that much. 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.

Commodity rally gives respite, masks deeper worries Posted: 09 May 2011 02:00 PM PDT Mon May 9, 2011 5:38am EDT (Reuters) – Stock index futures pointed to a higher open on Wall Street on Monday , with futures for the S&P 500 up 0.4 percent, Dow Jones futures up 0.32 percent and Nasdaq 100 futures up 0.56 percent at 0917 GMT. (Reuters) – Stock index futures pointed to a higher open on Wall Street on Monday , with futures for the S&P 500 up 0.4 percent, Dow Jones futures up 0.32 percent and Nasdaq 100 futures up 0.56 percent at 0917 GMT. On the earnings front, investors awaited results from AES Corp (AES.N), Sempra Energy (SRE.N), SYSCO Corp (SYY.N) and Tyson Foods (TSN.N). Oil futures rose 3 percent to above $100 a barrel, helped by bargain hunting from traders and investors after last week's sharp drop. European stocks were down in morning trade as the return of fears over the region's debt crisis sparked a sell-off in the euro zone peripheral stock markets such as Madrid's IBEX .IBEX, down 1.8 percent. .EU Investors were rattled by rumors that debt-stricken Greece could leave the euro zone, rumors denied on Saturday by Greek Prime Minister George Papandreou. The euro bounced back against the dollar as some sovereign investors viewed its selloff late last week on concerns about Greek debt as overdone given still favorable interest rate differentials, although technical indicators suggest gains could be temporary. Tokyo stocks fell for a second straight session on Monday, dragged down by a plunge in Chubu Electric (9502.T) after Prime Minister Naoto Kan called for the closure of its nuclear plant due to worries that a large earthquake could trigger another nuclear crisis. .T Apple (AAPL.O) has overtaken Google (GOOG.O) as the world's most valuable brand, ending a four-year reign by the Internet search leader, according to a new study by global brands agency Millward Brown. An unexpectedly strong report on U.S. payrolls helped equities bounce back on Friday from four days of losses, tempering worries that stocks could suffer the sharp declines seen this week in commodities. The Dow Jones industrial average .DJI gained 54.64 points, or 0.43 percent, to 12,638.81. The Standard & Poor's 500 .SPX added 5.10 points, or 0.38 percent, to 1,340.20. The Nasdaq Composite .IXIC rose 12.84 points, or 0.46 percent, to 2,827.56. For the week the Dow lost 1.3 percent, the S&P fell 1.7 percent and the Nasdaq Composite dropped 1.6 percent. (Reporting by Blaise Robinson; Editing by Hans Peters)

LinkedIn IPO price hints at social media caution Posted: 09 May 2011 02:00 PM PDT NEW YORK | Mon May 9, 2011 10:49am EDT NEW YORK (Reuters) – LinkedIn Corp, the social site for business professionals, is hoping to cash in with investors eager to gobble up shares in social networking companies such as Facebook, with a public debut valuing the company at more than $3 billion. NEW YORK (Reuters) – LinkedIn Corp, the social site for business professionals, is hoping to cash in with investors eager to gobble up shares in social networking companies such as Facebook, with a public debut valuing the company at more than $3 billion. LinkedIn Corp said on Monday it would offer 7.84 million shares in its initial public offering. LinkedIn, which attracts professionals and job seekers with 100 million worldwide members, priced its IPO at between $32 and $35 a share. It is generating significant interest as one of the first social networking companies to start the process of being publicly traded — ahead of the much-anticipated Facebook IPO. Social media companies including Twitter, Groupon and Zynga have generated significant interest and are seeing multibillion dollar valuations of their shares trading on the secondary markets. Last week, Renren Inc, one of the biggest social networking companies in China, made its trading debut after a successful IPO — another indicator of investor interest in the hot social media companies space. Renren's stock surged 28.6 percent in its May 4 debut. LinkedIn is offering 4.8 million shares, and the rest will be sold by some of its stockholders. Shares owned by co-founder and LinkedIn board Chairman Reid Hoffman, who is among those stockholders selling shares in the IPO, would represent about 21.7 percent of voting power after the offering. Other key stakeholders offering shares include Goldman Sachs, McGraw-Hill Companies Inc and Bain Capital Venture Integral Investors LLC. Major investors Sequoia Capital, Greylock Partners and Bessemer Venture Partners, which together own about two-fifths of the company, will not be participating in the IPO. In January, LinkedIn had filed with U.S. regulators for an IPO to raise up to $175 million. The company expects to receive net proceeds of about $146.6 million from the shares it is offering in the IPO, based on an assumed offer price of $33.50 apiece. It has applied to list its shares on the New York Stock Exchange under the symbol "LNKD." LinkedIn earned $15.4 million in 2010 on net revenue of $243 million. (Reporting by Jennifer Saba in New York and Brenton Cordeiro in Bangalore; Editing by Maju Samuel and Maureen Bavdek)

Oil rebounds, Brent jump 2nd biggest day ever Posted: 09 May 2011 02:00 PM PDT By Claire Milhench LONDON | Mon May 9, 2011 4:53am EDT LONDON (Reuters) – Oil rebounded on Monday, up over $3 helped by a weaker dollar, rising Asian equity markets and bargain hunting by traders and investors after Brent crude lost over $16 last week. LONDON (Reuters) – Oil rebounded on Monday, up over $3 helped by a weaker dollar, rising Asian equity markets and bargain hunting by traders and investors after Brent crude lost over $16 last week. At 0838 GMT Brent crude for June was up by $3.07 to $112.20 a barrel. U.S. crude rose by $2.57 to $99.75, after hitting an intraday high of $99.99 a barrel. "It's a combination of a slightly weaker U.S. dollar, rising equity markets in Asia and bargain-hunting," said Carsten Fritsch, an analyst at Commerzbank in Frankfurt. "Some market participants consider the lower price levels after the sharp drop on Thursday a good buying opportunity." The Reuters-Jefferies CRB index, a global benchmark for commodities prices, last week staged its biggest weekly drop since late 2008, down 9 percent. The dollar was down 0.50 percent against a basket of currencies at 0741 GMT on Monday, with the euro bouncing back in early Asian trade as traders scooped it up after a steep drop last week. MSCI's index of Asia Pacific shares outside Japan was also up 2.86 percent by 0803 GMT, after falling nearly 3 percent last week. But Fritsch was cautious about the rebound. "I can't imagine we will rise back to the levels we saw before the sharp drop any time soon," he said. "I see some consolidation in the coming days before we start to rise again. And in the interim we may test the lows from Friday. Technical levels have been broken and it will take some time for the markets to recover." According to technical charts, Brent futures are expected to revisit Friday's low of $105.15 per barrel, while U.S. crude could head back down to $94.63, said Reuters market analyst Wang Tao. Edward Meir, a senior commodity analyst at MF Global, was also cautious, believing U.S. crude could be forced down to $95, and possibly $90, over the course of May. "There has been a record amount length built up by non-commercial speculative money in crude, and we suspect that more of these long positions will be flushed out over the course of the month," he said in a note. After the massive losses for oil on Thursday, banks Morgan Stanley and JP Morgan were predicting increases for crude because of tight supplies. "Importantly, supply disruptions are still present and despite higher prices, global oil demand remains robust," U.S. investment bank Morgan Stanley said in a research note on Monday, echoing earlier calls by J.P. Morgan and Goldman Sachs. DEMAND DESTRUCTION? This week the market will be looking to see if high price levels have had an impact on oil demand, with Chinese import data for April due on Tuesday and the monthly outlooks from OPEC and the IEA on Wednesday and Thursday respectively. "Possibly we will see a slight downward revision to oil demand growth forecasts for this year and that could also cap price rallies this week," said Fritsch. Iran's OPEC governor Mohammad Ali Khatibi told Reuters on Sunday he expected the price of oil to pick up again during the start of the summer season, but said the market was well supplied. OPEC is due to meet in June, and if supply remains at the current levels there will be no need to boost output, Khatibi added. The market is also eyeing key Chinese inflation data expected this week. A higher than expected reading might revive expectations of more policy tightening from Beijing, dealing a further blow to beaten-down commodities. (Additional reporting by Francis Kan in Singapore; editing by Jason Neely)

Monetary debasement, not speculation, driving precious metals, Davies tells CNBC Posted: 09 May 2011 01:23 PM PDT 9:22p ET Monday, May 9, 2011 Dear Friend of GATA and Gold (and Silver): Interviewed today on CNBC, Hinde Capital CEO Ben Davies, who will speak at GATA's Gold Rush 2011 conference in London in August (http://www.gatagoldrush.com), remarks that monetary debasement, not speculation, is the primary driver of gold and silver prices and so their direction will continue to be up. The inteview is a bit less than 4 minutes long and you can watch it at the CNBC archive here: http://video.cnbc.com/gallery/?video=1914958227 CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Sunday-Monday, June 5-6, 2011 Vancouver Convention Centre East Vancouver, British Columbia, Canada http://cambridgehouse.com/conference-details/world-resource-investment-c... Gold Rush 2011 GATA's London Conference Thursday-Saturday, August 4-6, 2011 Savoy Hotel, London, England http://www.gatagoldrush.com Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: World-Class PGM Deposit in Yukon Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php

If China overtakes the U.S. in 2016 then what will the global Gold market look like in 2020? Posted: 09 May 2011 01:00 PM PDT We heard that China's economy was going to be the same size as the U.S. economy by 2016. This is considerably faster than U.S. economists thought would be the case just two years ago. At the speed China is growing it will dwarf the U.S. by 2020. The encouragement the Chinese government has given to the development of the gold market in China and the direct incitement from them to buy gold tells us that this is a long-term policy. It also tells us that they would not favor a significant rise in the exchange rate of the Yuan, particularly against the dollar, because this would lower the gold price in the Yuan. So what will the Chinese gold market look like in 2020?

Elliott Wave Analyst Suggests Silver to See $52.58 by Mid -June Posted: 09 May 2011 12:50 PM PDT [B]Longer-Term Silver Price Forecast to Trend to $82.91 [/B] With everyone and their grandmother calling a blow-off top in Silver we thought it prudent to present an alternate perspective [which strongly suggests that we could well see $52.58 silver by mid-June of this year. Let me explain.] Words:* So*says*Joseph Russo, Chief Publisher and Technical Analyst of*[url]www.elliottwavetechnology.com[/url]*in*an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted*and edited [...] below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.)*Russo*goes on to say: Long-term Silver Chart Below*is a continuation chart of Silver dating back prior to the Hunt Brother top at $50.36 in January of 1980.* Though at first glance the parabolic rise into the 1980 high looks similar to our current advance in 2011, they are by no means the same. The big ba...

Martin Armstrong Asks: Will Silver Crash in 2011? Posted: 09 May 2011 12:50 PM PDT [B][B]Silver has come crashing down right in line with the usual 11 year high. This has come also on a Pi cycle from the October 2008 low (31.4 months). Yet despite the blood and the carnage that is typical in this market [which is] prone to high volatility, whether this proves to be a long-term high of a major shake-out will be revealed in the weeks ahead. Words:[B]*702[/B][/B][/B] So*says*Martin A. Armstrong*([url]http://armstrongeconomics.files.wordpress.com[/url])*in*an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted*and edited [...] below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.)*Armstrong*goes on to say: We have two primary possibilities for a low shaping up on the horizon. We could create that spike low and bottom precisely on June 13th/14th in a few weeks, and this would tend to suggest we may be more likely than n...

Things That Make You Go Hmmmm - Where There's Smoke There's Fire Posted: 09 May 2011 12:33 PM PDT From Grant Williams Any time you see smoke amidst a whole stack of paper, it’s likely a fire is about to break out and that certainly happened this past week as the paper futures market led a drubbing in prices for the silver contracts that, even by silver’s standards, was pretty spectacular. But as the fall in the COMEX contract price captivated the world and headlines in print media, on TV and across the blogosphere seemed to delight in the pummeling being dished out to the former favourite, a curious thing was happening in the physical market. Sadly for anyone trying to drive the price of silver lower through the futures market, the temperature at which silver melts down is 961.93oC - and THAT is the kind of heat you aren’t going to get by setting fire to a bunch of paper. As you can see from the picture (above) the price of physical silver simply traded on huge premiums to the spot price throughout the collapse on the COMEX (this snapshot was taken on Friday AFTER silver’s bounce, but, as you can see from the column marked ‘Yesterday’s Price’, prices at the nadir were still in the mid- to high-$40s). This dichotomy in silver must come to a head at some point soon. Stocks of physical silver are declining rapidly, bids for physical silver are through the roof and yet the paper price of a futures contract can fall 30% in a matter of days. A look at the backwardation in silver futures only makes the smoke start to billow harder as Atlantic Capital point out in this article: In January and February 2011, leasing rates jumped as the SIFO curve fell all the way into the negative. These moves were in anticipation of a difficult delivery month of March, where approximately 1,800 contracts actually stood for physical delivery. Although it only represented about 9 million ounces, on an exchange that advertised over 100 million ounces in its vaults and 50 million ready for actual delivery, it took the entire month to service all the contracts. It even went all the way down to the last weekend before all the contracts settled. ...as we approached the first notice date for the May delivery month...[t]he open interest “problem” reappeared with an increased vigor above even March. The COMEX data shows almost 2,200 contracts standing for delivery, about 20% more than March. Hmmm..... I smell smoke. Full letter Hmmm May 08 2011

Gold Resource Corporation Q1 Conference Call Posted: 09 May 2011 12:30 PM PDT Gold Resource Corporation (GORO) (AMEX:GORO) today announced the timing of its Q1 CEO conference call scheduled May 11, 2011. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico.

Silver will be a currency too, Sprott tells NY Hard Assets Conference Posted: 09 May 2011 12:24 PM PDT Silver-Backer Sprott Still Believes -- Deeply By Carolyn Cui The Wall Street Journal Monday, May 9, 2011 http://blogs.wsj.com/marketbeat/2011/05/09/silver-backer-sprott-still-be... After silver suffered its worst one-week drubbing in three decades, one of the biggest silver bulls gave a pep talk to hundreds of followers on Monday. "Silver will be a currency just like gold. It's logical to expect silver prices to go much higher," said Eric Sprott, chief executive officer of Sprott Asset Management LP, which oversees a $1-billion silver fund that was $327 million larger at the beginning of last week. As for the recent plunge, Mr. Sprott pointed at speculative short-sellers as the prime culprit, eliciting applause from the crowd of nervous believers. Silver skidded 27% last week, but poor man's gold leaped 5.2% today, underscoring its rodeo-like allure. Mr. Sprott, a big advocate for precious metals, trotted out familiar themes to back up his points: the Federal Reserve's loose monetary policies, relentless bank failures, and the fragile housing market. ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Instead of U.S. dollars and other currencies, which are "questionable currencies backed with nothing," people should buy precious metals, he said in a speech at the Hard Assets Investment Conference at the New York Marriott. Silver kicked off its nasty week by falling $6 an ounce in 13 minutes last Sunday night, when both U.K. and Chinese markets were closed for national holidays. "But I was awake, throwing my guts up," he said. It's been quite a week for silver -- and for Mr. Sprott's fund. Its value stood at $1.3 billion on April 20, slid to $922 million on May 6, and climbed back above $1 billion today as silver rebounded. "If this was not the script for somebody wanting silver down, I don't know what is," he said, stressing his short-seller meme and alluding to the big moves on light volume at the start of the week. Trading activities in silver's futures market and exchange-traded funds have well exceeded the amount of silver in the physical market, he added. Mr. Sprott also addressed one of the most contentious questions between bulls and bears in the silver market: How much above-ground silver is there? Many bulls think all the silver being produced has been consumed and disappeared. Therefore, silver is facing a shortage. However, mainstream commodities analysts think that some of the silver used in photographic films or batteries has been recycled and come back into the market as "secondary supply." In other words, there's more silver than bulls argue. Globally, total bullion stocks should at least be 1.5 billion ounces, including silver held by exchange-traded funds and private holdings in the form of coins and bars, according to GFMS Ltd. a London-based metals consultancy. "Why shouldn't silver appreciate more than gold if there's less silver around?," asked someone in the audience. "Do you want to come up to the stage?" Mr. Sprott quipped. "If gold goes to $3,200, silver should be at $200." With gold at $1500 and silver at $37, that would mean a bit more than a double for gold and more than a quintuple for silver. * * * Company Press Release via CNW Group, Toronto Monday, May 9, 2011 Sprott Asset Management Expands its Industry-Leading Family of Precious Metals Funds with First Silver Bullion Mutual Fund in Canada http://www.newswire.ca/en/releases/archive/May2011/09/c2575.html TORONTO -- Sprott Asset Management LP is pleased to announce that it has expanded its industry-leading family of precious metals funds with the addition of the Sprott Silver Bullion Fund. Sprott now offers five precious metals funds including Sprott Gold & Precious Minerals Fund, Sprott Gold Bullion Fund, and Sprott Silver Bullion Fund, as well as the exchange-traded Sprott Physical Gold Trust and Sprott Physical Silver Trust. "We have been very early and active investors in precious metals and we strongly believe that all investors should have an allocation to precious metals in their portfolios. With our newest fund, investors will have greater choice as to how they choose to gain exposure to this asset class." says James Fox, president of Sprott Asset Management. The Sprott Silver Bullion Fund is an innovative offering, being the first mutual fund in Canada to invest primarily in unencumbered, fully allocated silver bullion. The fund's objective is to seek to provide a secure and liquid investment for investors seeking exposure to silver bullion without the inconvenience associated with direct investment. Sprott Asset Management LP (www.sprott.com), a wholly owned subsidiary of Sprott Inc. (www.sprottinc.com), is a fund company dedicated to achieving superior returns for its investors over time. Sprott Asset Management LP manages assets primarily for institutions, endowments, and high-net-worth individuals and is the investment manager of the Sprott Funds. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual Funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors should consult their financial adviser to determine if these funds may be sold in their jurisdiction. * * * Join GATA here: World Resource Investment Conference Sunday-Monday, June 5-6, 2011 Vancouver Convention Centre East Vancouver, British Columbia, Canada http://cambridgehouse.com/conference-details/world-resource-investment-c... Gold Rush 2011 GATA's London Conference Thursday-Saturday, August 4-6, 2011 Savoy Hotel, London, England http://www.gatagoldrush.com Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: http://www.goldrush21.com/ Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ... Dispatch continues below ... 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

So About That Speculative, And Undisputed, Silver Bubble... Posted: 09 May 2011 11:54 AM PDT Lately, everyone and their grandmother speaks with 100% conviction that over the past week what happened in the silver market was nothing but a speculative bubble popping. After all, 5 consecutive margin hikes would mean that uber-levered terrorist speculators must have been scrambling with the urgency of an E-trade baby checking his voicemail and getting 99 margin call messages. So certain seems to be conventional wisdom in this allegation that nobody appears to have even checked the facts. Well, we did. For that we went to the usual place that provides a definitive breakdown of speculative indications: the CFTC's Commitment of Traders report, and specifically the non-commercial specs which after netting shorts from longs would be expected to be at some parabolically unseen level ever in the history of the CFTC. Much to our surprise we found this... Yes: according to the CFTC, the level of non-speculative net longs in silver is, in the week ending May 3, at the lowest since July 28, 2009. So while one could speculate that silver may have been in some pseudo-bubble back in October 2010, when net specs hit over 50,000 contracts, the most recent reading of 23,354, which is merely the latest in a downward sloping trend starting in February, alas throws a lot of very cold water over the whole silver bubble popping thesis. And yes, going forward we urge readers to always check with primary sources such flamboyant claims as those uttered every single day by the CNBC peanut gallery about record this and bubble that. Oddly enough, nobody on CNBC will ever mention that the one true bubble continues to be in stocks, where the net speculative leverage on the NYSE as expressed by surging margin debt total and declining positive investor net  worth, is at the second lowest ever, meaning investors are more levered into the beta rally than just one time in history: the very peak of the credit/housing bubble in 2007!

So Much For Pimco Buying Bonds: Duration Weighted Treasury Exposure Hits Whopping -23% Short, Cash Surges To Unprecedented $89 Billion Posted: 09 May 2011 10:55 AM PDT So much for all the conspiracy theories that Bill Gross was capitulating in his short position against US debt even as he continued to bash US fiscal and monetary policy. According to just released April data for the flagship Pimco $240 billion Total Return Fund (which saw a $4.2 billion increase in AUM in the month), Bill Gross actually added to his short position against US government debt, bringing total market value exposure to 4% of AUM or ($10) billion. More amazing is that on a Duration Weighted Exposure basis, the firm's Treasury short is 23%, read that again, 23%! So much for that change in outlook. Additionally, Gross also sold another $8.3 billion in mortgage securities, bringing the April total to a nominal $57.8 billion. Spring cleaning at casa de Bill continued across all fixed corporate income as well, dropping the firm's exposure to IG by $1.6 billion and to HY by $2.1 billion. The only two securities which saw a token increase was in Non-US developed markets and Emerging Markets, to $14.4 billion and $26.5 billion, respectively. Yet the biggest shocker of all, is that Gross has now brought his cash position to an all time unprecedented high of $89.1 billion! That's right, PIMCO is charging a substantial asset management fee when 37% of all assets are in cash. One would think the mattress would cost far less. Either Gross is expecting a huge collapse in the bond market (so contrary to prevailing though), or this could well be the bet that buries the Allianz subsidiary. Looking at the maturity exposure there are no surprises: in keeping with the firm's move to almost an all cash fund, Effective Duration dropped to the second lowest in history, or 3.42 years. As the chart below shows, Gross' exposure to debt with a maturity under 5 years is a whopping 83%. Which begs the question: just how terrified is Gross of inflation to be cutting virtually any and all 5 year + exposure. And yes, if the firm was expecting a deflationary collapse, the duration exposure would be flipped upside down.

A Policy-Driven Silver Crash Posted: 09 May 2011 10:49 AM PDT Silver has once again stolen the investment market spotlight. Margin requirements for silver trading rose 84 percent last week, which prompted a major sell-off. Silver posted its worst four-day drop since 1980 and was down more than 25% after the CME Group raised the costs for investors to trade the metal four consecutive times within a week. The impact of these rather drastic increases in margin requirements was decidedly negative on trader psychology. Last weekend when the latest margin increase was announced, one analyst observed, "Many commodities traders in the US cannot trade on the weekend, and when Chicago opens many will instantly be hit with margin calls because of the immediate rise in margin requirements." The selling pressure was immediately felt on Monday, May 2, at the commencement of trading with selling pressure spilling over into the subsequent trading sessions. The weakness in silver spilled over into other commodities, including crude oil, which declined almost 10% on Thursday, May 5. Among the many issues the sell-off has provoked, the idea that inflation has made its return is being questioned. The silver sell-off was by no means a "normal" correction; it could be called a policy-driven crash and it did significant damage to the silver uptrend. While a bottom can occur at any time – the market is certainly "oversold" enough from an immediate-term technical standpoint – it's questionable that a full retracement of the recent crash will occur quickly. Even if CME Group reverses its policy decision and significantly lowers margins in the coming days (not likely), the psychological damage to silver isn't likely to be healed so quickly. Traders and investors are spooked and they have good reason for questioning the soundness of the exchange group's policy decisions as well as its motives. Some questions should be asked of the CME Group in the wake of last week's happenings. If CME Group was truly concerned with a silver bubble, why then did it not raise margin requirements on the metal shortly after the commencement of the Fed's second quantitative easing program (QE2) when it was obvious that the increased monetary liquidity would lead to increased commodity speculation? Why wait until after silver has had a meteoric and is at an all-time high before delivering the hammer blow of not one, but four consecutive margin requirements increases? The CME Group surely knew what the outcome of their decision would be on the silver price. It's hard to argue with the basic logic behind CME Group's decision to raise margins, though. There can be no denying that speculative bubbles are impossible without the significant use of leverage, which is normally accompanied by low margin requirements. This makes it easier for speculators to load up on a commodity trading position with a smaller outlay of capital. What's questionable in this case is the timing of CME's decision to raise silver margins. Suffice it to say the CME's policy decision would have been timely had it been executed a few weeks ago. What made the recent CME policy debacle even more intriguing is the myriad of demands for a margin requirement increase from financial commentators in the days immediately preceding the event. In an article appearing in the BusinessInsider.com web site datelined May 1, the writer argued that CME should raise margin requirements by 30%, otherwise silver would be setting up for a "record-setting crash, which could impact many other markets in the process of correcting, especially other commodities like Gold and Crude Oil." The writer went on to say, "We are not talking about a 5% correction setting up at these levels for silver, we are talking in terms of a 20% down day that poses a contagion effect to markets in general." It gets better. He further wrote, "As the very real possibility of a 20% two-day correction is moving towards becoming a very real probability, it could bring down a lot of other markets in the process. Remember, we had the flash crash around this time last year? Well, if the Silver market isn't cooled off [by raising margin requirements], it could potentially be one of the catalysts for another broad flash crash this year." How prophetic! Unfortunately, the author didn't foresee that the very policy he was advocating would in fact lead to the outcome he feared the most, namely a commodities crash. Sometimes, the "cure" is worse than the disease. Meanwhile the iShares Silver ETF (SLV), our silver proxy, ended up closing at its 90-day moving average on Thursday, May 5. In "normal" market conditions we could expect the SLV to react to the 90-day MA, which we use to identify the market's dominant interim bias. Often the 90-day MA will act as a strong support and can even reverse a decline. Ultimately, though, the only cure for a sell-off of this magnitude is for the fear of market participants to exhaust itself. This fear appears to have been exhausted on a short-term basis and if silver can establish support above the 90-day MA in the next couple of days we'll have a good indication of a market bottom. There are two major lessons that can be learned from the recent silver crash. One is that policy, no matter how well intentioned, can have profound negative consequences on the market. The other lesson is that markets are hyper-sensitive to abrupt changes in policy given where we are in the long-term deflationary cycle. The Federal Reserve has had a relatively easy going in rejuvenating the financial market with its loose money policy in the last year due partly to the fact that the last of the long-term cycles, namely the 6-year cycle, is still up. The 6-year cycle is due to peak this October, after which time the Fed will likely have its work cut out for it in terms of artificially sustaining the inflationary trend in both stock and commodity prices. Once the 6-year cycle has peaked there will be no long-term cycle of consequence (beyond the 4-year cycle) up until after 2014. Viewed from the standpoint of the yearly cycles, the "flash crash" of last May and the late silver crash could be viewed as a "shot across the bow" warning for the coming arrival of deflation once the final long-term cycle peaks. The ranks of the deflationist camp have bee noticeably thinned in recent months as commodity prices soared and most commentators resigned themselves to the belief that hyper-inflation would be the dominant them in the coming years. Before we arrive at that path, however, deflation must finish its work before the 120-year cycle bottoms in 2014. The early stages of the final deflationary (or de-leveraging) process commenced in 2007-08 with the credit crisis. We should see signs of the re-emergence of deflation in 2012 with the years 2013 and 2014 being severely deflationary. The next few months should be used by individuals to de-leverage in advance of the Kress Cycle Tsunami. Gold & Gold Stock Trading Simplified With the long-term bull market in gold and mining stocks in full swing, there exist several fantastic opportunities for capturing profits and maximizing gains in the precious metals arena. Yet a common complaint is that small-to-medium sized traders have a hard time knowing when to buy and when to take profits. It doesn't matter when so many pundits dispense conflicting advice in the financial media. This amounts to "analysis into paralysis" and results in the typical investor being unable to "pull the trigger" on a trade when the right time comes to buy. Not surprisingly, many traders and investors are looking for a reliable and easy-to-follow system for participating in the precious metals bull market. They want a system that allows them to enter without guesswork and one that gets them out at the appropriate time and without any undue risks. They also want a system that automatically takes profits at precise points along the way while adjusting the stop loss continuously so as to lock in gains and minimize potential losses from whipsaws. In my latest book, "Gold & Gold Stock Trading Simplified," I remove the mystique behind gold and gold stock trading and reveal a completely simple and reliable system that allows the small-to-mid-size trader to profit from both up and down moves in the mining stock market. It's the same system that I use each day in the Gold & Silver Stock Report – the same system which has consistently generated profits for my subscribers and has kept them on the correct side of the gold and mining stock market for years. You won't find a more straight forward and easy-to-follow system that actually works than the one explained in "Gold & Gold Stock Trading Simplified." The technical trading system revealed in "Gold & Gold Stock Trading Simplified" by itself is worth its weight in gold. Additionally, the book reveals several useful indicators that will increase your chances of scoring big profits in the mining stock sector. You'll learn when to use reliable leading indicators for predicting when the mining stocks are about o break out. After all, nothing beats being on the right side of a market move before the move gets underway. The methods revealed in "Gold & Gold Stock Trading Simplified" are the product of several year's worth of writing, research and real time market trading/testing. It also contains the benefit of my 14 years worth of experience as a professional in the precious metals and PM mining share sector. The trading techniques discussed in the book have been carefully calibrated to match today's fast moving and volatile market environment. You won't find a more timely and useful book than this for capturing profits in today's gold and gold stock market. The book is now available for sale at: http://www.clifdroke.com/books/trading_simplified.html Order today to receive your autographed copy and a FREE 1-month trial subscription to the Gold & Silver Stock Report newsletter. Published twice each week, the newsletter uses the method described in this book for making profitable trades among the actively traded gold mining shares. Click Here for the original source. http://news.silverseek.com/SilverSeek/1304961753.php

You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610