saveyourassetsfirst3 |
- Gold & Silver: Full Spectrum Dominance
- Trade Winds Begins 20,000 Metre Drill Program on Block A
- Prep for Dollar Tree's and Sears' Q2 Earnings Reports Thursday
- Wells Fargo: Gold Market Is ‘Bubble Poised to Burst’
- Would It Really Matter If China Stopped Buying U.S. Bonds?
- Gold is Antidote for Treasury Trap
- Swiss National Bank Weighs Swiss Franc Peg or Price Target
- China’s Big Red Invisible Hand
- Top in Gold?
- Astounding chart shows a frightening future for U.S. stocks
- Why gold could easily triple from here
- If you don't believe inflation is soaring, take a look at this
- The case for $20,000 Gold-Mike Maloney's Debt Collapse
- Aug 16th- Bears yell fire in empty theater
- Brace for a Global ‘Reboot' and a War
- Gold or Common Stocks From Here?
- Venezuela May Try to Get its Gold Back
- Jim Grant is Right...A "Bonfire of the Currencies" it is: Bill Fleckenstein
- Relentless Rise in Gold to Continue: Peter Schiff
- Gold & Silver Market Morning, August 17, 2011
- Swiss join the currency war
- Frank Holmes: Gold Is for Fighting Deflation, Not Inflation
- Important Technical Signals in Gold and Silver Mining Stocks
- Newcrest Mining riding the gold bull
- ECB: gold and gold receivables remain unchanged
- 11615 (08/15/1971). R. Nixon. Closing the Gold Window (EO providing for stabilization of prices....)
- Gold Stocks Now vs Dow: The No Brainer
- Keeping our Eyes Peeled for the Silver and Gold Basis
- You Can't Eat Asset Allocation Either
- Recent Gold Hedging Activity – a Warning Sign?
| Gold & Silver: Full Spectrum Dominance Posted: 17 Aug 2011 04:43 AM PDT Gold and Silver have emerged in the last 12 months as the dominant asset group. They led the entire 2000 decade, still gathering disrespect. They do not require respect from the Wall Street and London crowd. They serve as effective protection during the slow motion crumbling process to the global monetary system. The sovereign bond crisis has circled the peripheral nations, rendered its wreckage, and is working toward the center where the USTBond and UKGilt reside (worried). Italy and Spain are squarely in the crosshairs for financial assaults, but France and the United States lie closer to the core of Western nation sacred debt territory, soon to become sacred burial grounds. That must sound drastic and melodramatic, but just wait. Other calls of an insolvent US banking system, calls of a chronic housing bear market also once sounded extreme. They came true. So did $1000 gold and Canadian Dollar parity calls made in 2005. Again they came true. Dismissal of Green Shoots, Jobless Recovery, Exit Strategy, and No QE sounded bombastic and pedagogical, but they were also correct calls. In fact, very easy calls. The ruin of the USTreasury Bond debt security is a long drawn out process like a cancer victim. Weakness is followed by emaciation, then organ damage, circulatory problems, finally a bedridden state, and lastly the inevitable death. Analogies to each can be made with USTBonds nowadays, like the foreign central banks withdrawing from the process evident in low Indirect Bids, like dependence upon debt monetization.
INTEREST RATE SWAP DEVICE A preamble is necessary. The Wall Street market makers (manipulators) have succeeded in leading the investment community to believe that the long maturity USTreasury market has contradicted the Standard & Poors rating downgrade of USGovt debt. The bond rally with accompanying fall in the TNX bond yield to near 2.15% as a low led a gaggle of analysts and news anchors to conclude the S&P downgrade can be ignored, as the swimming pool water is safe. Keep in mind the powerful effect of the Interest Rate Swap mechanism. After contemplating some of its traits, you decide if the bond rally is legitimate. The Interest Rate Swap accomplishes the following:
The net effect of the intensive Interest Rate Swap activity is to destroy capital, to drain capital from the USEconomy, and to crowd out the corporate bond market. The United States is becoming 1990 Japan, but without the trade surplus. With ignorance, the financial media has been displaying the "Turning Japanese" rock music song by The Vapors from the 1980s. Little do they realize that the expression means coming to climax during the sexual experience, with a facial expression straining to resemble the Asian countenance. How strange!! Ironically, the effect of the IRSwap usage has kept interest rates artificially low. That is the sentinel signal for the Gold Bull Market, powered by cheap money, in the quest for true safe haven in the strong storm and deep distortions. The prevailing interest rate is far below the rate of price inflation. So the Gold market will remain steadily stuck in powerful bull market mode.
GOLD & SILVER DOMINANT The banker index is finally under stress. They have benefited greatly from the fantasy of phony accounting practices. They have also benefited from a staged controlled USTreasury Carry Trade. But their losses continue to mount in great volume. Their exposure to Europe sovereign debt, the US housing market, and mortgage bond investor lawsuits combine to make renewed risk. These insolvent zombies are due for a death experience, if only the markets were fair. METALS BEATS PAPER Mining stocks are not keeping pace with the bullion metal. The ultimate problem is paper securities and the trust held in them. Persistent stories about well supplied hedge funds shorting mining stocks, stories of naked shorting of small mining stocks (see Alpha Group), and other sponsored spread trades to support bullion metal over the mining stocks have all contributed to the decline in shares. The distrust in all things paper, as in financial securities, at a time when trust in sovereign debt is on the wane, when financial sector insolvency is argued, when bond fraud has gone unprosecuted, has created a hostile climate for investments. The shortage of credit and capital to anything except USTreasury debt has exacerbated the condition. The HUI index of mining stocks has not done well versus the basic precious metal, the gold bullion, since the spring months. The threat of USEconomic recession will only make the situation worse, certain to lead to more whacks to the equity markets. Gold bullion has no counter-party risk, no paper dependence. Stay clear of the fraudulent custodians and their GLD & SLV fraud-strewn funds for lazy investors who do no research. They will be separated from their metal claims, handed cash in redemption, and sent away. One point of fraud proof is that GLD & SLV have a discount to the metal, while legitimate funds like the Sprott Trust and Central Exchange Fund include a premium price to the metal. That is because the big cartel banks, as custodians, are shorting shares of GLD & SLV, sending the metal inventory to the COMEX to satisfy delivery needs. SILVER STILL STANDS OUT Independent analyst Dan Norcini does stellar outstanding work. Once gain, he exposed an excellent factor, this regarding Silver. He points out how the Continuous Commodity Index (CCI) has averaged one big drop per month for the past five months. Silver has done well relative to the commodities, as he highlights. In fact, the Silver price is due to rebound. The process has begun, with Silver back above $40/oz. Each CCI drop has lasted from 4 to 7 trading days and has been followed by a rather significant rally. In the past couple weeks, the current decline seems to have run its course. The next 2 to 4 week rally in all of the commodities is underway, like a cycle. To be sure, copper, crude and the grains are going to rally. Norcini surmised (correctly) that Silver was not going much lower, if at all. He posted a reasonable target for Silver at $44 with timing before Labor Day in early September. Adding to the ammunition are the promising Open Interest numbers in silver futures contracts. Even the Large Commercials are covering their shorts in Gold, a good sign generally for precious metals. See the Norcini weblog where he argues how the USDollar will be sacrificed for the greater good (CLICK HERE). SILVER MORE THAN INDUSTRIAL METAL The consolidation phase for Silver has given compromised critics and lousy analysts an opportunity to denigrate the white metal, claiming it is exposed for its vulnerability as an industrial metal. While some significant portion of Silver demand comes from industrial processes, it is not replaceable. Besides, its investment demand has been equal in US$ volume as Gold demand, a remarkable fact pointed out by sector leaders Eric Sprott and James Turk. They argue that the Silver price will move higher and reduce the Gold / Silver ratio in the process naturally. The true industrial metal indicator is copper, not silver. Copper has earned the title of having a PhD in Economics. Notice how silver has outpaced the copper price in the last 18 months. Even post-May when the COMEX ambush occurred with successive margin requirement hikes, the Silver / Copper ratio has risen steadily. Sorry, the industrial argument is a weak angle that does not bear weight or scrutiny. The Silver investment demand is due to a big important recognition that Silver is in the process of resuming and reclaiming its monetary role. The Chinese lead in that parade, adding silver to their reserves in management of their $3.2 trillion reserves booty. The gold market breakout has made history, exceeding the $1800 level before the usual games were played. The higher COMEX margin requirement is a tired card at a tilted table. Look for gold profits to move toward silver positions, lifting its price toward $50 in the coming several weeks. Lastly, one must wonder why the USTreasury Bond futures contract does not have to endure margin requirement increases. It is clearly the biggest asset bubble in existence. However, it is the standard bearer of the fiat paper charade. Its low yield is proof positive of being broken, just like Greece with its high yield. The USTreasury Bond complex would be in big trouble if not for the Interest Rate Swap and the US$ Printing Press both. Prepare to protect your personal wealth during the grandest transfer of wealth in modern history, from toxic paper to reliable hard metal with no counter-party risk. Money is in the process of being invalidated and redefined. The Paradigm Shift continues at work.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS. From subscribers and readers: At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.
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| Trade Winds Begins 20,000 Metre Drill Program on Block A Posted: 17 Aug 2011 04:40 AM PDT Trade Winds Ventures Inc. (TSX-V: TWD, FSE: TVR) is pleased to announce the start of the second-half drill program of 2011 on Block A (2H 2011), located adjacent to Detour Gold's Detour Lake gold project in northeastern Ontario. The Joint Venture partners (50% Trade Winds / 50% Detour Gold) have approved a 20,000 metre (70 holes) drilling program designed to continue increasing the confidence level of the resource estimate and testing areas outside the Block A pit shell with the objective of expanding the known mineral resources. Trade Winds is the operator of the Joint Venture exploration program. There are two objectives for this program. Much like the previous 2010 (12,000 metres) and the 1H 2011 (30,000 metres) drill programs, the 2H 2011 program is planned to expand detailed infill drilling and exploration drilling. Two diamond drill rigs will be utilized from mid-August 2011 to December 2011 to accomplish this. A portion of the deposit located between grid lines 15,420E and 15,740E will be drilled on 40 metre by 40 metre centres to increase the confidence level of the mineral resource. A total of 54 drill holes, approximately 77% of the drill program, is planned for this infill drilling, some of which are in previously untested areas within the current pit shell. On Block A, drill spacing of closer than 80 metres is required for the category of inferred resources and closer than 40 metres for indicated resources. As part of a continuing program to explore Block A, a total of 16 drill holes, approximately 23% of the drill program, is planned to test areas outside the current pit shell. This exploration drilling will focus on the area west of the North Walter Lake zone. The objective is to test for mineralization up to 320 metres to the west and extend the pit shell of the North Walter Lake zone westward. This area is largely untested and will be drilled on 80 metre by 80 metre centres. In addition to the drilling program and incorporated as part of the 2H 2011 Joint Venture budget of approximately $6 million, infill sampling of previously drilled but unsampled core will continue in 2H 2011. It is anticipated that up to 10,000 metres of previously unsampled drill core from within the pit shell will be sampled and included, together with the results from the 1H 2011 and 2H 2011 drilling, in the next block model and resource estimate update at the end of the 2H 2011 program. The material in this news release has been prepared and reviewed by Stephen Wallace, P. Geo, VP Exploration, a Qualified Person as defined in NI 43-101. FOR FURTHER INFORMATION PLEASE CONTACT: Terry McGee, Investor Relations Toll Free (866) 698-9187 ext 228 or (604) 648-6228 Email: info@tradewindsventures.com Visit our Website at www.tradewindsventures.com Forward Looking Information Certain information included in this news release constitutes "forward-looking statements". The words "expect", "will", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to, risks associated with the mining industry such as government regulation, environmental and reclamation risks, title disputes or claims, success of mining activities, future commodity prices, costs of production, possible variation in mineral reserves, mineral resources, grade or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, the timing of estimated future production, capital expenditures, financial market fluctuations, requirements for additional capital, conclusions of economic evaluations, limitations on insurance coverage, risks associated with using third-party contractors and inflation. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS PRESS RELEASE.
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| Prep for Dollar Tree's and Sears' Q2 Earnings Reports Thursday Posted: 17 Aug 2011 04:03 AM PDT By Robert Weinstein: Dollar Tree, Inc. (DLTR) is due to report earnings before the opening bell on Thursday, August 18. Overview Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. The company was founded in 1986 and is based in Chesapeake, Virginia. Recent Price: $67.54 On average, 20 analysts are expecting $0.75 per share, a drop of $-0.07 in earnings per share compared to last quarter's results of $0.82. Investors will be looking to see a number north of $0.75 per share, based on the earnings estimates Complete Story » |
| Wells Fargo: Gold Market Is ‘Bubble Poised to Burst’ Posted: 17 Aug 2011 03:13 AM PDT Funny, they never warned about the housng bubble.  Wells Fargo: Gold Market Is 'Bubble Poised to Burst' Wednesday, 17 Aug 2011 10:11 AM Speculative demand from investors has pushed the gold market into a "bubble that is poised to burst" after prices surged to a record this year, Wells Fargo & Co. said. "We have seen the economic damage" of past bubbles and "feel compelled to ring the warning bells," Wells Fargo analysts led by Dean Junkans said in a report dated Monday and emailed Tuesday. Gold futures have advanced 26 percent this year, following 10 straight annual gains. The price reached a record $1,817.60 an ounce on Aug. 11 on demand for an investment haven as European and U.S. sovereign-debt woes escalated. "There could be substantial risk to gold once the fear that the world is coming to an end subsides," Junkans said in a telephone interview from Minneapolis. "We are worried about the downward risk." Holdings in exchange-traded products backed by gold rose to a record 2,217 tons on Aug. 8, Bloomberg data show. CME Group Inc. said volume in Comex gold futures and options rose on Aug. 9 to a record 504,368 contracts. That topped the previous all- time high of 469,689 contracts on July 28, 2010. Gold futures for December delivery rose $27, or 1.5 percent, to close Tuesday at $1,785, the highest settlement ever, on the Comex in New York. Last week, the metal jumped 5.5 percent, the most since February 2009 and the sixth straight gain. Soros, Paulson George Soros and Eric Mindich cut their holdings in the SPDR Gold Trust, an exchange-traded fund, in the second quarter as prices rallied, while billionaire John Paulson maintained the largest stake, a filing with the U.S. Securities and Exchange Commission showed yesterday. Thailand, South Korea and Kazakhstan added gold valued at about $2.56 billion to their reserves in July, joining Mexico and Russia in increasing holdings this year as central bankers hedge against depreciating foreign-currency reserves. About 60 percent of clients surveyed by UBS AG expect gold to be trading above $1,800 by the end of this year. The survey was conducted in the first two weeks of August, the bank said. © Copyright 2011 Bloomberg News. All rights reserved. Read more: Wells Fargo: Gold Market Is 'Bubble Poised to Burst' Important: Can you afford to Retire? Shocking Poll Results |
| Would It Really Matter If China Stopped Buying U.S. Bonds? Posted: 17 Aug 2011 02:45 AM PDT By Michael Pettis: Is the PBoC going to stop buying USG bonds? Once again we are hearing very worried noises from various sectors about the possibility of a reduction in Chinese purchases of USG bonds. Here is what an article the South China Morning Post said:
Complete Story » |
| Gold is Antidote for Treasury Trap Posted: 17 Aug 2011 02:33 AM PDT From my perspective, a currency collapse looming, and a chronically persistent low interest rate regime, gold looks positively cheap. |
| Swiss National Bank Weighs Swiss Franc Peg or Price Target Posted: 17 Aug 2011 02:30 AM PDT By Forexyard: By Russell Glaser The Swiss franc has come off of its lows versus the euro and the US dollar as Swiss interest rates have turned negative and the Swiss National Bank threatens a potential currency peg to the euro or a specific price target. This will be another attempt to stem the tide of a strengthening Swiss franc and potentially an opportunity to enter back into the EUR/CHF downtrend at better levels. Two weeks ago the SNB unveiled a program to weaken the surging Swiss franc which it considers "massively overvalued." The SNB is targeting a three-month Libor of 0.00-0.25% from 0.00-0.75%, effectively implementing a negative interest rate. The measures are designed to stem the flow of real money inflows and speculators betting on a rise in the value CHF. Negative interest rates are used to deter money managers seeking safe haven assets and short term deposits as a refuge. Complete Story » |
| China’s Big Red Invisible Hand Posted: 17 Aug 2011 02:14 AM PDT
One of the wild cards here is China, a big factor in both markets. In his recent interview with Spiegel, George Soros expressed the opinion that China is backing the euro — and could possibly be the "mysterious buyer:" SPIEGEL: As an investor, would you still bet on the euro? Soros: I certainly would not short the euro because China has an interest in having an alternative to the dollar. You can count on China to back the efforts of the European authorities to maintain the euro. SPIEGEL: Is that the reason why the euro is still so strong compared to the dollar? Soros: Yes. There is a mysterious buyer that keeps propping up the euro. SPIEGEL: And it is not you. Soros: It is not me (laughs). Interview With a Trading Legend 30-Year audited track record with 41.6% compounded annual returns. How did he do it?? Get your FREE download of the interview here. In similar vein, a recent WSJ "heard on the street" note suggested that China may be intervening at home:
And last month, former Morgan Stanley economist Andy Xie suggested China should buy U.S. equities over treasuries:
In this high uncertainty environment, government intervention (of the central bank kind) has been a persistent factor. Under the right circumstance, could equity intervention be so far-fetched? We know that Hong Kong did it in 1998. What's to prevent another showing? Just more food for thought in this intervention prone, permanent ZIRP world… JS  |
| Posted: 17 Aug 2011 01:00 AM PDT SunshineProfits |
| Astounding chart shows a frightening future for U.S. stocks Posted: 17 Aug 2011 12:17 AM PDT From The Big Picture: From Bloomberg UK: This year's tumble in U.S. stocks mirrors the Japanese selloff that began 11 years ago, an indication to hedge fund TTN AG that American equities may have further to fall. The CHART OF THE DAY shows the pattern of gains and losses in the MSCI USA Index has followed the dollar-denominated MSCI Japan Index with an 11-year lag since 1990. While the U.S. gauge has retreated about 15% from this year's high in April, the Japanese measure sank more than 50% during the slide that started in April 2000, data compiled by Bloomberg show. "We may see a Japan 2.0 scenario," Trung-Tin Nguyen, founder of Zurich-based TTN, said in an interview. "If U.S. markets continue to fall, we might... Read full article (with chart)... More on stocks: One of the world's "smartest" markets says stocks could have much further to fall One of the biggest drivers of higher stock prices could soon be history Top strategist Saut: A Dow Theory "sell signal" has been confirmed |
| Why gold could easily triple from here Posted: 17 Aug 2011 12:16 AM PDT From SHTFplan: In January 1980, gold hit an all-time historical high of $850. As the bubble popped, it subsequently fell to nearly $250 by the end of the 1980s and continued in this price range for the next decade. As the U.S. government took on more debt, printed more dollars, and began to lose the confidence of the global investing public, the price of gold began a meteoric rise, topping out at $1,801 per ounce in August 2011. Analysts and financial pundits the world over have suggested that gold is in a bubble and a crash is imminent... Read full article (with chart)... More on gold: Top investor Zulauf: Own gold and cash… Get out of stocks Why the biggest gold rallies in history are yet to come The stars could be aligning for a spectacular gold rally |
| If you don't believe inflation is soaring, take a look at this Posted: 17 Aug 2011 12:15 AM PDT From Zero Hedge: Somehow, even as all that deflation in home prices continues, like perfectly joined communicating vessels, countervailing inflation continues seeping into pretty much every other aspect of society. But don't take our word for it, (or even gold's, which is just under all-time record notional highs): According to Rasmussen, "Americans nationwide continue to lose faith in the Federal Reserve Board to keep inflation under control, with the number who say they are paying more for groceries now at an all-time high." Specifically, "93% of adults report... Read full article... More on inflation: Why the Federal Reserve's inflation is even worse than you know "Unexpected" jump in housing data could mean runaway inflation is starting The disturbing reason credit card use is exploding again |
| The case for $20,000 Gold-Mike Maloney's Debt Collapse Posted: 16 Aug 2011 11:51 PM PDT  |
| Aug 16th- Bears yell fire in empty theater Posted: 16 Aug 2011 10:41 PM PDT Bears yelling fire in empty theater Let's clarify the SP 500 situation here: (Sent to my paying subscribers on August 16th) Consider subscribing so that you will be consistently informed, have 24/7 Email access to me with questions, and also get Gold and Silver forecasts on a regular basis. Subscribe now with a 33% discount coupon ahead of our rate increase. www.markettrendforecast.com for details. The lows at 1101 were a convergence of fibonacci weeks, months, sentiment bottoms and VIX extremes along with major insider buying all at the same time. We rallied up in 5 waves from 666 to 1370 Bin Laden highs. At that level we had re-traced 78.6% of the entire 2007 highs to 2009 lows, a common turning point. Since then, we have had a 3 wave decline, also common for correcting a 5 wave move to the upside. The decline halted at 1101, an exact 38% fibonacci retracement of the 666 lows to 1370 highs. This is what I call a "fibonacci intersection". The same thing happened in July 2010 at 1010 on the SP 500, where a huge bottom formed. The rally since 1101 was a 5 wave rally, this is an early BULL SIGN. A correction of this 103 point 5 wave rally would be normal, but the lighter the correction the more Bullish. So far the correction is only 23% of the 104 point rally with a gap fill at 1180. Let's review: 13 fibonacci month's from the July 2010 bottom to August 2011 bottoms 7 Times in history we had the SP 500 double ina short period of time, and in every case it retraced 27-40% of the price movement from lows to highs. We just retraced 40% of our SP 500 double, historically very high retracement. At 1101 we had 38% fibonacci ABC correction of the Bull leg from 666 to 1370 In 1974-77 we had the SAME pattern, which I outlined for everyone last week. 13 Fibonacci weeks correction from the Bin Laden 1370 highs to 1101 lows. 1370 was a 78% fib of the 07 highs and 09 lows. 1101 is a 38% fib of the 666 lows and 1370 highs. Thats what I call a Fibonacci intersection. The same thing happened in July 2010 at 1010 lows. Insiders with massive buying, corporate buybacks announced. VIX at extreme levels Fear gauges at extreme levels. 5 wave impulsive rally from 1101 to 1204 ensued… now a pullback is due. Same thing happened last summer 1010 to 1130, pullback to1040 in 3 waves, then another 5 waves up. What am I telling everyone? Stop yelling fire in an empty theater…. This is options expiration week, trading this week is notoriously difficult… The Bear case is crowded, the Bull case is not. I'm leaning bullish as long as I keep seeing this type of confirming price action. I'm watching 1165 on SP 500 as a pivot low worst case, but as long as we see price action above that I like the set up for awhile yet on the long side. (But Dave, the textook for Elliott Waves doesn't agree with you… good, that's why I use other indicators)
Consider subscribing so that you will be consistently informed, have 24/7 Email access to me with questions, and also get Gold and Silver forecasts on a regular basis. Subscribe now with a 33% discount coupon ahead of our rate increase. www.markettrendforecast.com for details. |
| Brace for a Global ‘Reboot' and a War Posted: 16 Aug 2011 09:49 PM PDT Marc Faber: Brace for a Global 'Reboot' and a War." -CNBC 8-5-11 "Markets could rebound after Thursday's global market sell-off, but investors should see any bounce as a selling opportunity, as the world economy rolls towards total collapse, Mark Faber, editor and publisher of the Boom, Doom and Gloom Report, told CNBC Friday." "A mooted third round of quantitative easing (QE3) in the U.S. and more money printing elsewhere is merely deferring a crisis that will be bigger and could end in war, Faber said. The Dow Jones Industrial Average suffered its worst losses in three years Thursday, shedding more than 500 points." "My view is that the market has experienced everywhere huge technical damage," Faber said. "As of today, all markets are extremely oversold, so a rebound is going to happen (Friday) or on Monday, but the damage technically is so great that the rebound, no matter whether QE3 happens right here, it's unlikely to lift markets above the May 2 high of the (S&P 500) -8.58 at 1370." Faber thinks that by the end of the fall, the S&P 500 will have slid to around 1150, and investors will be hoping a further round of monetary easing will stabilize markets." "In general, I would be using rebounds as a selling opportunity," Faber said. Buying treasuries as a safe haven is no longer a smart play, he added." "I think Treasuries are perceived still as a safe haven because everybody knows the U.S. has an endless ability to print money. The interest will be paid," he said. "The trouble is that governments can default in two ways. Either they just stop paying the interest and there is a debt restructuring, like Argentina went through; or they just pay the interest and the principle eventually, in a worthless currency. That's the way the U.S. will likely do it." "Gold 1661.00 and silver have been overbought, and may see a correction in the coming weeks, but Faber believes that should be seen as a buying opportunity as investors begin to shun paper assets. Gold miners are hit very hard and the gold price went up. People don't trust paper anymore. That is one of the problems," he said. However, temporary upturns and the artificial boost to markets given by printing money only disguise the coming threat to the world economy, Faber warned." "You have a computer. Occasionally the computer will crash and you have to reboot it. That will happen to the global economy. Before this happens there will be much more money printing because basically the central banks are willing to do that," he said. "By printing money, problems are not solved, but they can be postponed, and they become larger. It's like the recession in 2001. Had there not been massive money printing, it would have been steeper than what we had, but equally, we would have avoided probably the financial crash in 2008." The next crisis will be far bigger, according to Faber." "The next time we have a global economic crisis, it will be much worse than 2008. Before this happens there will be money printing and there will be war. The whole system will collapse," he said. "That's why I'm advising people that they have to think it through. In a total collapse you don't want to own government bonds and cash." He added: "Equities—they don't perform well, but at least you have the ownership of companies. Precious metals in that environment do relatively well. And of course, oil would do well if there was a war."
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| Gold or Common Stocks From Here? Posted: 16 Aug 2011 09:41 PM PDT For stock and/gold oriented trader/investors, there is an article contrasting past performance of the two vehicles entitled Paperbugs Won't Get It Until It's Too Late. The author's immediate view is as follows: A brutal cyclical common equity bear market within this secular bear market for common stocks has already begun. Meanwhile, the parabolic phase in [...] |
| Venezuela May Try to Get its Gold Back Posted: 16 Aug 2011 09:01 PM PDT ¤ Yesterday in Gold and SilverGold didn't do much in Far East trading, but once London opened, a rally barely worthy of the name got underway...and by the close of electronic trading in New York at 5:15 p.m. yesterday afternoon, the gold price was up a hair over twenty bucks. Volume was quite a bit heavier than Monday's.
Silver ran into selling right from the Far East open...and the bottom was in around the London silver fix at noon British [Summer] Time in London. From there, silver really caught a bid before the rally got cut off at the knees once it blasted through $40 spot minutes before 10:30 a.m. in New York. Then every rally attempt that got above the $40 price after that, got sold off...and silver closed the New York Access Market trading session down a penny from Monday's close. Volume was very light.
The dollar's trading activity was no factor in Tuesday's gold and silver price action. The dollar closed up about 10 basis points on the day.
Despite the fact that gold was up over a percent on the day, the gold stocks spent most of the day in the red. They must have sold off because of the poor performance of the general equity markets, because it certainly had nothing to do with what the gold price was doing. The HUI finished down 1.22% on the day.
A lot of the silver producers got hit pretty hard yesterday as well...and Nick Laird's Silver Sentiment Index was down 2.78%
(Click on image to enlarge) The CME Daily Delivery Report was pretty exciting. It showed that 384 gold, along with 99 silver contracts, were posted for delivery on Thursday. In gold, the big short/issuer was Barclays with 378 contracts. The longs/stoppers were JPMorgan, Goldman Sachs...and HSBC. In silver, it was Jefferies once again on the short side. This time they delivered/issued 98 contracts. They were also the big stoppers with 66 contracts received. JPMorgan stopped 29 contracts. The activity in both metals is worth the look...and the link is here. The GLD ETF reported taking in 87,637 ounce of gold...and there were no reported changes over at SLV once again. The U.S. Mint had a smallish sales report yesterday. They sold 3,500 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 25,000 silver eagles. The Comex-approved depositories received no silver on Monday, but shipped a very chunky 1,025,431 troy ounces of the stuff out the door...virtually all of it out of HSBC, USA. The link to that action is here. Yesterday I posted a gold chart compared to the S&P and Dow going back to the year 2000. Here's the one for silver. The gold chart was impressive...and the silver one is even more so. Once again I thank Nick Laird over at sharelynx.com for this.
(Click on image to enlarge) Yesterday I was up to my eyeballs in stories. Today I have only a handful, which suits me just fine...and probably you as well. As usual, it's mostly what happens during the New York trading session that matters...and I expect that to be the case again today. Relentless Rise in Gold to Continue: Peter Schiff. Jim Grant is Right...A "Bonfire of the Currencies" it is: Bill Fleckenstein. Switzerland mobilizes for race to the bottom of the currency heap. ¤ Critical ReadsSubscribeJon Stewart Discusses Ron Paul BlackoutIf I hadn't seen this, I wouldn't have believed it. Of course I always knew that the 'fix was in' when it came to the main stream media in the U.S.A...but this is totally off the charts. I hate to use the word 'conspiracy of silence'...but, if the shoes fits.... Of course Jon Stewart over at The Daily Show had a field day with it...and rightly so. I thank reader James Davis for sharing this very hilarious [and very sad] must watch video clip with us. It's a posting over at dailymotion.com...and the link is here.  UK consumer price inflation rises to 4.4 percentHere's an AP story that was picked up by The Sacramento Bee yesterday. Reader Scott Pluschau pointed out the paragraph that mentioned "volatile bread and cereal prices." And yes, you read that right. You just can't make this stuff up. It's a handful of short paragraphs...and will take less than a minute of your time. The link is here.  Switzerland mobilizes for race to the bottom of the currency heapSwitzerland, the nation that hasn't gone to war with a foreign power since Napoleon, is reluctantly debating a generational taboo: ceding monetary independence to win a battle over its runaway currency. Swiss National Bank Vice President Thomas Jordan said the central bank is assessing "a whole range of options" to prevent the franc, which reached a record against the euro this month, from making Swiss goods prohibitively expensive. Even a cup of coffee at Cafe St. Gotthard in Zurich costs $8.30, with one Swiss franc buying $1.2816 at today's exchange rate. "The franc is catastrophically overvalued," said Blocher, a former justice minister for the People's Party, Switzerland's largest. "It's almost like economic warfare -- to wage a war, you must use all measures at your disposal, and you must win." It's a Bloomberg story that I ripped from a GATA release yesterday...and the link is here.  Relentless Rise in Gold to Continue: Peter SchiffHere's a short blog that Eric King sent me yesterday...and the title pretty much say it all. It's posted over at the KWN website...and the link is here.  Jim Grant is Right...A "Bonfire of the Currencies" it is: Bill FleckensteinEric sent me two blogs yesterday...and this is the second one. I met Bill about five years ago at a gold conference in New Orleans...and I've always been impressed with the level of his thinking...and his writing skills. This KWN blog is also very short...and the link is here.  James Turk Audio Interview: King World NewsThe blog of this audio interview was available on Monday...but I had no room for it in my Tuesday column. I wasn't overly concerned about posting the blog, as I knew the full audio interview would turn up eventually, which it did yesterday. I've actually had the time to listen to this...and it's worth your while as well. James spends some time talking about the underperformance of the mining shares. It runs about ten minutes...and the link is here.  Venezuela may try to get its gold backVenezuela may transfer billions of dollars in cash and gold reserves held in U.S. and European banks to financial institutions in "allied" countries, opposition lawmaker Julio Montoya said today. Montoya, speaking on the Globovision network from the National Assembly, said the Finance Ministry wants to transfer more than $6 billion of cash reserves to countries including China, Russia, and Brazil. Of Venezuela's $18 billion in gold reserves, $11 billion is held abroad and could be transported back to Venezuela, Montoya said, citing a document he said he obtained from the ministry. This Bloomberg article, filed from Caracas yesterday, was another one that I stole from a GATA release. It's a must read...and the link is here.  ¤ The WrapGold volume was a lot heavier on Tuesday than it was on Monday...around 165,000 contracts net of what few roll-overs there were. The preliminary open interest number showed an increase of 10,239 contracts. For such a small increase in the gold price, I was not at all happy to see a number this large. I'm sure some of that will disappear when the final o.i. number is posted later this a.m...but not all of it. Silver's net volume was a tiny 23,000 contracts, which wasn't much higher than Monday's volume. The preliminary open interest number showed an increase of only 1,169 contracts...and I'm sure all of that, plus more, will disappear when the CME publishes the final report. The final open interest number for Monday's trading day showed a decline of 2,860 contracts in gold...and only a decline of 313 contracts in silver. I was expecting more, but I guess I should be grateful for the what we got. Whatever the final open interest numbers are this morning for Tuesday's trading day...good or bad...will be in Friday's Commitment of Traders Report. Not much happened to the gold price during the thinly-traded Far East market earlier today. London is now open...and the price is basically unchanged from Tuesday's close. But since I wrote those previous two |
| Jim Grant is Right...A "Bonfire of the Currencies" it is: Bill Fleckenstein Posted: 16 Aug 2011 09:01 PM PDT  Eric sent me two blogs yesterday...and this is the second one. I met Bill about five years ago at a gold conference in New Orleans...and I've always been impressed with the level of his thinking...and his writing skills. This KWN blog is also very short...and the link is here. |
| Relentless Rise in Gold to Continue: Peter Schiff Posted: 16 Aug 2011 09:01 PM PDT  Here's a short blog that Eric King sent me yesterday...and the title pretty much say it all. It's posted over at the KWN website...and the link is here. |
| Gold & Silver Market Morning, August 17, 2011 Posted: 16 Aug 2011 09:00 PM PDT |
| Posted: 16 Aug 2011 08:45 PM PDT The gold price continues to recover the ground lost in the correction late last week, and is closing in on $1,800 per ounce once again, while the silver price is once again flirting with the $40 per ... |
| Frank Holmes: Gold Is for Fighting Deflation, Not Inflation Posted: 16 Aug 2011 07:00 PM PDT Whether out of fear or love, everyone is running to gold, says Frank Holmes, head of investment firm U.S. Global Investors. The lengthy Congressional battle to raise the debt ceiling left many... Visit the aureport.com for more information and for a free newsletter |
| Important Technical Signals in Gold and Silver Mining Stocks Posted: 16 Aug 2011 05:36 PM PDT |
| Newcrest Mining riding the gold bull Posted: 16 Aug 2011 05:32 PM PDT |
| ECB: gold and gold receivables remain unchanged Posted: 16 Aug 2011 05:24 PM PDT |
| 11615 (08/15/1971). R. Nixon. Closing the Gold Window (EO providing for stabilization of prices....) Posted: 16 Aug 2011 05:00 PM PDT Am. Presidency |
| Gold Stocks Now vs Dow: The No Brainer Posted: 16 Aug 2011 04:29 PM PDT |
| Keeping our Eyes Peeled for the Silver and Gold Basis Posted: 16 Aug 2011 04:00 PM PDT |
| You Can't Eat Asset Allocation Either Posted: 16 Aug 2011 03:59 PM PDT --Alas, poor Europe has not yet embraced its common debt future. The French and the Germans met overnight to talk about collectivising Europe's liabilities. The deal was not consummated. Markets were lethargic. --What is the price action telling you? To answer that, we refer you to the latest YouTube update from Slipstream Trader, Murray Dawes. Murray records a market overview on Wednesdays to give non-Slipstream subscribers a peek at how his analysis works. The individual recommendations that follow from his analysis of the price action are reserved for paid-up subscribers. --Murray makes sense. And he thinks clearly. That's what we like about him. Let us balance his good analysis with some awful analysis of gold, courtesy of Wells Fargo Bank. Perhaps channelling their inner Michael Pascoe, the bank's analysts told clients, "Interest in gold investing has reached the level of a speculative bubble." --Having thus be-clowned themselves, they went on to elaborate: gold prices are volatile, gold doesn't pay a yield, it depends on a "greater fool" for capital gains, central banks are net sellers, it doesn't beat inflation, Warren Buffett hates (and does not understand) it, and you can't eat it. --Oh dear. The gold price in dollars is volatile because the US dollar is volatile. An ounce of gold has almost always bought you a nice suit at any time in history. The volatility in the gold/dollar exchange rate is all on the dollar's end. And that's because the supply of dollars is always increasing. Also, the futures exchanges have been pretty active boosting margin requirements on gold contracts. That's made for some larger-than-normal price moves. But the value? Rock steady over time, baby. --And that's the point. Gold isn't really an investment. It's money. And it's money that holds value well over time. You only worry about capital gains if you're investing in gold. If you're buying money, you're more focused on preserving purchasing power. --Gold doesn't have a yield? Someone should tell the boys at Wells Fargo that 10-year US Treasury yields went negative in real terms this week (see chart below). Investors are so terrified of the debt super volcano upon which asset prices are built, they are paying rent to Uncle Sam in order to park their money in bonds.
--By the way, this willingness to lose some of your capital in exchange for the illusion of safety and liquidity, in the short term, is probably going to be the catalyst for a violent stock market rally. All that money will come out of bonds and into stocks. After all, you have to beat inflation somehow, don't you? This is how artificially low interest rates destroy savings (negative real yields) and encourage speculation in equities. --The claim that central banks have been net sellers "in recent years" isn't backed up by any facts. But in any case, the Bank of England sold all its gold in May of 1999, near the bottom of a 20-year bear market in gold. Peter Costello, who was Australian Treasurer at the time, beat Brown to the punch when he sold two-thirds of Australia's gold reserves in 1997 for the handsome price of $306.60 an ounce. --This was at the height of political efforts to eliminate gold's role in the financial system. Costello said as much. He said gold, "no longer plays a significant role in the international financial system." --You'd expect politicians to say that. You'd expect them to want it to be true. A gold standard was the only check on the permanent expansion of government debt in the early 20th century. That's why it was abandoned. With a gold standard, the Warfare State and the Welfare State are not possible. Get rid of the gold standard and discredit gold as money and you can expand the role of the State to your heart's delight. --Central banks are the largest holders of gold bullion in the world. Politicians sold gold because they're stupid, ignorant of monetary history, and think only in terms of election cycles. Most central bankers, Ben Bernanke notwithstanding, recognise that gold is money. Its role in the world's financial system is growing, not shrinking. --Warren Buffett doesn't like gold? So what. Buffett is an investor. Gold is money. --You can't eat gold? Is that so? Well, you can't eat dollar bills either. You can always sell gold and silver for local currency and buy food, which you can eat. Being a medium of exchange is only one property of money. Just because you can't yet use gold coins to buy a Big Mac doesn't mean gold isn't money or isn't useful. Claims to the contrary are ignorant. --We asked Diggers and Drillers editor Dr. Alex Cowie what he thought of the Wells Fargo report. He wrote back:
--The Wells report concludes that:
--It's clear Wells thinks gold is an investment speculation. That's why they think it's in a bubble. If the Wells' bankers treated gold like money, not a financial asset, perhaps they'd allocate a lot more of their cash to it. But oh well. ---On the subject of asset allocation, we return to yesterday's question of whether the Australian funds management fraternity is prepared for an era of lower Chinese growth. The answer is a resounding "No!", according to what we've found so far. But you decide for yourself. --Our premise is that there are two big drivers of share market returns. The expansion of the global credit bubble – which has driven capital to the Aussie investment market. And China – the source of real earnings growth for the bulk of the non-financial companies on the ASX. The equity market grows when credit expands and China grows. (China's rise itself also being a by-product, in a roundabout way, of global credit growth.) --Australians are probably over-invested in growth assets. But you wouldn't have seen a problem with that in the last two years. According to a recent study of global assets under management by the Boston Consulting Group (BCG), global assets under management (AuM) by financial firms have grown by $9 trillion since the end of 2008 to hit $121.8 trillion. --BCG concluded that:
--Ah yes. In 2007 and 2008 investors fled to cash. But once the smoke cleared from the rubble of the Lehman Brothers collapse, investors did about the only thing they could with interest rates low, they bought stocks and risky investments. --Australia did okay because of this. But not as well as you might expect. "Total wealth grew in Australia at a slower pace than anywhere else except Western Europe last year but the number of millionaire households surged", according to an article in the Australian, which quotes the BCG study.
--Ah yes! The high exposure to growth assets via super. The trouble, as near as we can gather, is that the default super fund option has a very high allocation of assets to shares, both Australian and global. We'd argue that this is a general bias toward growth in the default asset allocation of most Australians that exposes them to a big decline in growth. And a big credit depression in Europe in America coupled with much slower growth in China is the "big decline" we're talking about. --A chart courtesy of Australian Super will illustrate the point nicely. This is how assets are allocated the default "balanced growth" fund most Australians are automatically put in. It allows for some variability depending on the reading of other factors. But for the most part, it's heavily biased toward shares, and shares are quite naturally heavily biased toward growth.
Source: Australian Super --Our point is that there's nothing really balanced about this, given the current global conditions. Another pie chart from an ASX article on the subject makes the point even more dramatically. In the example below, shares make up 47% of a "balanced" portfolio while "fixed interest and high yield income" make up 30%.
Source: www.asx.com --Now, portfolios and asset allocation strategies are highly personalised affairs. They vary depending upon your age, your income, your objectives, your tolerance for risk, and many other factors. But surely one of those factors would be the macro-economic environment. Wouldn't it? --We're working on a model assets allocation strategy that correlates with our despairing world view. It will probably have a much higher allocation to cash and precious metals. It won't get rid of an allocation to aggressive growth stocks (especially precious metals and energy stocks). But we wouldn't call it balanced. --In fact, that's part of the problem. The idea that you can build wealth in a balanced way through a uniform asset allocation strategy is crazy. A sound portfolio would rebalance assets annually. That's a nod to the fact that none of us can predict the future and you don't want to have all of your wealth concentrated in one asset class, or in one risk. --But what assets should you really have in your portfolio if we're entering a credit depression? Will stocks generate the same returns over the next 20 years as they have for the last 20 years? You'd think not, given that global credit is due to contract in the years ahead, not expand like it did for the last 20. Stay tuned... Regards, Dan Denning |
| Recent Gold Hedging Activity – a Warning Sign? Posted: 16 Aug 2011 02:30 PM PDT |
Waiting for the euro is like waiting for Godot — or maybe like waiting for U.S. treasury bonds to break. There are powerful macro cases for both short euros and short t-bonds — yet similarly powerful forces opposing.
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