Gold World News Flash |
- If GLD’s gold was just sitting around doing nothing but backing the shares issued against it, why the need for the escape clause of cash settlement?
- You know something’s wrong with fiat money when you can’t even give it away…
- We warned back in 2007, PFI schemes would collapse and leave the public holding the bag
- Threats to the U.S. Dollar, Illusion Of Stable Currency Vortex
- Silver Poised to Move Higher
- Some Observations On Bob Pisani's Visit To GLD's Vault – LOL
- Dollar’s On the Verge of a Relief Rally Look Out!
- Some Observations On Bob Pisani's Visit To GLD's Vault
- Some Observations On Bob Pisani's Visit To GLD's Vault
- Rick Rule - Expect More QE to Send Gold Prices Soaring
- Bernard Von NotHaus: Labeled A “Domestic Terrorist” by The FBI For Minting Gold & Silver Coins
- Gold Seeker Closing Report: Gold and Silver End Slightly Higher
- Why Have SPDR Gold Trust (GLD) Holdings Dropped As Gold Soars?
- Ron Paul on the Gold Rush
- Silver Is "Go For Launch"
- Gold Isn’t Buying the QE 3 Hype
- Swiss franc jumps as economy minister dismisses intervention
- Gold Closes Higher But Silver's Performance Stellar / Over 15 Million Oz Of Silver Standing
- How exchange-traded fund GLD lets you pretend to own gold
- Markets will Probably Move Sideways Until After Monday - Then Silver and Gold Prices Could Really Jump
- Emerging market central banks boost gold holdings in July
- The Gold Rush Has Just Begun
- Mergers And Acquisitions In Mining Stocks Heat Up
- Emerging central banks boost gold holdings in July
- Gold Has Its Best Month Since November 2009
- The Broken Window Fallacy
- Is It Time For The Financial World To Panic? 25 Reasons Why The Answer May Be Yes
- In The News Today
- Are Falling Oil Prices a Good Sign?
- Monthly Gold Charts - August 2011
| Posted: 31 Aug 2011 07:05 PM PDT How exchange-traded fund GLD lets you pretend to own gold
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| You know something’s wrong with fiat money when you can’t even give it away… Posted: 31 Aug 2011 06:59 PM PDT Pop art fail crashes dollar parity party
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| We warned back in 2007, PFI schemes would collapse and leave the public holding the bag Posted: 31 Aug 2011 06:53 PM PDT PFI Waste Continues, Public Accounts Committee Warns
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| Threats to the U.S. Dollar, Illusion Of Stable Currency Vortex Posted: 31 Aug 2011 06:29 PM PDT The Jackson Hole Conference was a dud. To the astute student observer, something happened never seen before. The US central bank chief admitted failure, if only people could properly interpret and translate his words of helplessness and disappointment. A more apt description was that USFed Chairman Bernanke used the forum to announce on stage that the central bank failed and is powerless to react to the current lapse into recession. Many watchers no longer believe that a Quantitative Easing chapter #3 will be announced. Surely it will come sooner or later. Watch the USTreasury auctions for the best clue. The QE2 program was about prevention of auction failure, not economic stimulus. A quick review of monetary policy and its effect is horrifying for its utter complete failure.
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| Posted: 31 Aug 2011 06:24 PM PDT Although the action in spot silver is a bit uneventful, the near-term technical picture and set-up remain relatively positive, and argue strongly that spot silver is poised to move higher into the 42.80-43.20 target zone. This bodes well for traders of the iShares Silver Trust ETF (SLV).
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| Some Observations On Bob Pisani's Visit To GLD's Vault – LOL Posted: 31 Aug 2011 05:46 PM PDT from Zero Hedge
Earlier today, we were delighted to see that after years of ridicule and provocations, the SPDR GLD ETF finally cracked and decided to do a wholesale PR campaign to comfort the investing public it actually does own its gold, by inviting none other than Bob Pisani in its secret warehouse which allegedly contains 40 million ounces of gold, of which HSBC is custodian and the Bank of England (the same Bank of England which will soon be about 99 tons lighter in gold content once it satisfies Hugo Chavez' physical delivery request) and London Bullion Market Association ("LBMA") are subcustodians. While the 4 minute PR campaign is enjoyable and we invite readers to watch it, what is amusing is that it is sure to set off another set of conspiracy theories. Here's the reason: amusingly the very gold bar that Pisani demonstrates so eagerly for the camera, Rand Refineries ZJ6752, is somehow, at last check, missing from the full barlist as posted daily by the GLD.Whose is it? Where did it go? When was this clip shot? Inquiring minds want to know…
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| Dollar’s On the Verge of a Relief Rally Look Out! Posted: 31 Aug 2011 05:36 PM PDT Let’s talk about the dollar for a moment… The US Dollar has been stuck in a very large trading range during the past 4 months. But when the dollar actually breaks out of this pattern in either direction we should see some big price movements across the board in stocks and commodities. Dollar Index Chart Gold Chart: Looking at the gold chart I see potential for another sharp drop to the low $1600’s. While I like the look of this chart for lower prices there is still a wild card which is the Euro-Land issues… I’m not willing to bet on lower prices because we could wake up any day to some poor news which instantly sends gold higher. Rather I am waiting for things to unfold then look to buy again for another 10-20% gain on the next rally. Crude Oil Chart: This chart is straight forward… The trend is down and at this time all bounces are to be looked at as shorting opportunities. Mid-Week Trend Trading Conclusion: In short, I...
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| Some Observations On Bob Pisani's Visit To GLD's Vault Posted: 31 Aug 2011 05:07 PM PDT Earlier today, we were delighted to see that after years of ridicule and provocations, the SPDR GLD ETF finally cracked and decided to do a wholesale PR campaign to comfort the investing public it actually does own its gold, by inviting none other than Bob Pisani in its secret warehouse which allegedly contains 40 million ounces of gold, of which HSBC is custodian and the Bank of England (the same Bank of England which will soon be about 99 tons lighter in gold content once it satisfies Hugo Chavez' physical delivery request) and London Bullion Market Association ("LBMA") are subcustodians. While the 4 minute PR campaign is enjoyable and we invite readers to watch it, what is amusing is that it is sure to set off another set of conspiracy theories. Here's the reason: amusingly the very gold bar that Pisani demonstrates so eagerly for the camera, Rand Refineries ZJ6752, is somehow, at last check, missing from the full barlist as posted daily by the GLD.Whose is it? Where did it go? When was this clip shot? Inquiring minds want to know...
As the table below shows, the full list of ZJ serial numbers goes from 6700 to 6734 (go ahead, do your own search - link here). ZJ6700 RAND REFINERY 404.775 402.994 9956 ... and ends there. but this is where the conspiracy starts. Today is September 1. We assume Pisani shot the segment some time in the past week: between August 23 and August 30. Over this period the actual GLD tonnage as disclosed by GLD remained flat (fluctuated by +/- 1.51 tonnes from 1232.31 to 1230.8), so it is unlikely that any gold bars, and especially the one demonstrated by Pisani actually left the warehouse. Of course, Pisani may have well shot the documentary some three weeks ago, when gold peaked at 1310 tons, although we assume he would have then said 1300 tons held by the warehouse, not 1200 as he did. If that is the case, there is a small chance based purely on statistics that ZJ6752 was promptly moved out of the warehouse upon a redemption event. The chance is about 1 in 10k or so, but still... So, as a follow up, we would kindly ask Mr Pisani to answer: when did he shoot the documentary? Does he know the fate of the bar he was holding? Did he take it with him? Is the bar currently on its way to Chavez? Or worse yet, did GLD actually lease it to someone? And so on... And so on... Unfortunately, Bob, as you will soon learn first hand, when it comes to such things as secret bank vaults containing the world's only remaining hard currency, which can only be seen by reporters with clearance after being driven with a blindfold through the streets of London, who have to relinquish their cell phones and "GPS devices" to confirm their existence, it, unfortunately, does not build much credibility, and it is inevitable that conspiracy theories will and do start. And unfortunately, any PR campaign always tends to backfire. Our advice: please tell your client HSBC to open up its vault to general observation and assay: at that point, we are confident all conspiracies will end. Until then, be prepared to be retained by HSBC on a frequent basis as more and more ask themselves: what is really in that vault? h/t Ponzi Finance
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| Some Observations On Bob Pisani's Visit To GLD's Vault Posted: 31 Aug 2011 05:07 PM PDT
Earlier today, we were delighted to see that after years of ridicule and provocations, the SPDR GLD ETF finally cracked and decided to do a wholesale PR campaign to comfort the investing public it actually does own its gold, by inviting none other than Bob Pisani in its secret warehouse which allegedly contains 40 million ounces of gold, of which HSBC is custodian and the Bank of England (the same Bank of England which will soon be about 99 tons lighter in gold content once it satisfies Hugo Chavez' physical delivery request) and London Bullion Market Association ("LBMA") are subcustodians. While the 4 minute PR campaign is enjoyable and we invite readers to watch it, what is amusing is that it is sure to set off another set of conspiracy theories. Here's the reason: amusingly the very gold bar that Pisani demonstrates so eagerly for the camera, Rand Refineries ZJ6752, is somehow, at last check, missing from the full barlist as posted daily by the GLD.Whose is it? Where did it go? When was this clip shot? Inquiring minds want to know...
As the table below shows, the full list of ZJ serial numbers goes from 6700 to 6734 (go ahead, do your own search - link here). ZJ6700 RAND REFINERY 404.775 402.994 9956 ... and ends there. but this is where the conspiracy starts. Today is September 1. We assume Pisani shot the segment some time in the past week: between August 23 and August 30. Over this period the actual GLD tonnage as disclosed by GLD remained flat (fluctuated by +/- 1.51 tonnes from 1232.31 to 1230.8), so it is unlikely that any gold bars, and especially the one demonstrated by Pisani actually left the warehouse. Of course, Pisani may have well shot the documentary some three weeks ago, when gold peaked at 1310 tons, although we assume he would have then said 1300 tons held by the warehouse, not 1200 as he did. If that is the case, there is a small chance based purely on statistics that ZJ6752 was promptly moved out of the warehouse upon a redemption event. The chance is about 1 in 10k or so, but still... So, as a follow up, we would kindly ask Mr Pisani to answer: when did he shoot the documentary? Does he know the fate of the bar he was holding? Did he take it with him? Is the bar currently on its way to Chavez? Or worse yet, did GLD actually lease it to someone? And so on... And so on... Unfortunately, Bob, as you will soon learn first hand, when it comes to such things as secret bank vaults containing the world's only remaining hard currency, which can only be seen by reporters with clearance after being driven with a blindfold through the streets of London, who have to relinquish their cell phones and "GPS devices" to confirm their existence, it, unfortunately, does not build much credibility, and it is inevitable that conspiracy theories will and do start. And unfortunately, any PR campaign always tends to backfire. Our advice: please tell your client HSBC to open up its vault to general observation and assay: at that point, we are confident all conspiracies will end. Until then, be prepared to be retained by HSBC on a frequent basis as more and more ask themselves: what is really in that vault? h/t Ponzi Finance
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| Rick Rule - Expect More QE to Send Gold Prices Soaring Posted: 31 Aug 2011 04:35 PM PDT  With gold closing the month of August solidly above the $1,800 level, today King World News interviewed one of the most street smart pros in the resource sector, Rick Rule, Founder of Global Resource Investments, which is now part of the $10 billion strong Sprott Asset Management. When asked about the action in gold Rule responded, "Well the positive part is pretty obvious, it looks like in both Europe and North America the trend is towards more quantitive easing. More purchase of bogus securities by the central banks through the issuance of phony paper. What they call quantitive easing Eric, you and I would call counterfeiting."
This posting includes an audio/video/photo media file: Download Now |
| Posted: 31 Aug 2011 04:02 PM PDT |
| Gold Seeker Closing Report: Gold and Silver End Slightly Higher Posted: 31 Aug 2011 04:00 PM PDT Gold fell almost 1% to as low as $1811.69 by about 10AM EST before it climbed to as high as $1839.44 and then fell back off a bit in afternoon trade, but it still ended with a gain of 0.18%. Silver climbed to as high as $42.015 in early afternoon New York trade and ended with a gain of 0.82%.
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| Why Have SPDR Gold Trust (GLD) Holdings Dropped As Gold Soars? Posted: 31 Aug 2011 03:17 PM PDT The SPDR Gold Shares Trust (GLD) reported that holdings of gold bullion remained unchanged from the previous week, after dropping by 39.67 tonnes for the week ending August 24th. On a year to date basis, GLD gold holdings have declined by 48.41 tonnes as the price of gold has increased by $425 (30.6%) from the [...]
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| Posted: 31 Aug 2011 02:35 PM PDT |
| Posted: 31 Aug 2011 02:27 PM PDT I recently suggested that Silver would be the beneficiary of the recent CME margin increases in Gold on the CRIMEX. We may find out very soon if this is to be true. The September CRIMEX Silver contract goes into delivery tomorrow. Our criminal Banking Cartel finds themselves with their backs up against the wall heading into delivery. I will let Harvey Organ give you the details: The total number of notices that wish to be served for silver metal stands tonight at 3194 or15,970,000 oz. The total number of notices served on first day notice was only a tiny 173 for 865,000 oz. The total number of notices to be served remains extremely high at 3021 or 15,105,000. It seems that Blythe will have her hands full trying to satisfy all of our longs. Thus the total number of silver standing this delivery month of September is 865,000 (oz served) + 15,105,000 (oz to be served) = 15,970,000. Also remember that we have close to 4 million oz of silver from last month's option expiry. Thus almost 20 million oz must be eventually served and settled upon. Total registered (dealer) inventory is 32.146 million oz. The Banking Cartel has this small pile of Silver to meet delivery demand with. The month of September should be filled with volatility as the Banking Cartel seeks to meet delivery demands. Recall that registered Silver is available for meeting delivery demands, but the banks being served delivery notices my not own a sufficient portion of the pie to meet demands on them. This will result in a short squeeze unless contract holders can be convinced to settle for a cash premium instead of physical Silver bullion. In the just completed CRIMEX August Gold delivery, 12,124 contract holders representing 1.212 million ounces of Gold stood for delivery at First Notice. By the end of August, ONLY 8220 contracts representing 822,000 ounces of Gold were actually given physical bullion. 3904 August Gold contract holders accepted cash premiums to fore go delivery of physical Gold in August. The short squeeze in August, because of a lack of physical bullion to members of the Banking Cartel, was massive. Gold rose $300 from August first to August 23. Could a similar fate be awaiting the CRIMEX Banking Cartel this September Silver delivery month that began today? From Zero Hedge Gold has stolen the limelight from silver in recent weeks with gold reaching a series of new record nominal highs. But silver has been quietly consolidating after the sharp falls seen at the end of April and in early May when many claimed the silver 'bubble' had burst. Media coverage of silver remains nearly nonexistent which is bullish from a contrarian perspective. Technically silver is looking better by the day and is now trading not far above its 50 and 100 day moving averages (see chart above). Today the 50 day moving average is trading at $38.70/oz and the 100 day moving average is trading at $38.74/oz. The 50 DMA is rising after recent price gains and looks set to cross the 100 DMA in the coming days. This will be a bullish technical signal. Silver's sell off was very sharp but volatility and a correction was expected and warned of once silver reached the nominal inflation adjusted high of $50 per ounce. There are many factors that strongly suggest that silver remains a prudent buy and diversification today. But there are three key metrics which strongly suggest that silver remains far from a bubble if not undervalued. The first is silver's real price today adjusted for the inflation of the last 31 years. Silver's real high in 1980 was $130 per ounce – more than double the price today. The second is the gold silver ratio which has averaged 15 to 1 throughout history due to geology and the fact that there are 15 parts of silver to every 1 part of gold in the earth's crust. Silver, unlike gold, is an industrial metal and a very significant amount of all the silver that has even been mined has been consumed, like oil, since the dawn of the industrial revolution in the 19th century. Most analysts with a long term view believe that the ratio is likely to revert to the mean of 15 to 1 in the coming years. The third metric is comparing silver's current bull market to that of the 1970's. Silver has risen by a factor of 10 in the last 9 years – from near $4 in 2001 to over $41 today. In its bull market from 1971 to 1980, silver rose by over 3,199% or by a factor of more than 32 in just 9 years culminating in the blow off top in 1979. Today, the physical supply of silver bullion is much less than in the 1970's. Also there is the 'Asian factor' and 3 billion people with growing incomes, many of whom see silver as a store of value against currency depreciation. Demand for silver in Asia has been increasing and in China alone silver demand is increasing from a near zero base. The demand was not present in the 1970's. Were silver to replicate the performance of the 1970's it would have to rise 32 times or to $130/oz (32 X $4.05). Interestingly, $130/oz is also silver's real high from 1980. The charts below show a Silver price consolidating following the May assault by the CME and the CRIMEX Banking Cartel. In the future this will be looked back upon as the banking Cartel's "Last Hurrah" in the suppression of Silver and their defense of today's crumbling global fiat monetary system. Silver has been marking time, and fueling up for a major thrust higher. A large Ascending Triangle has formed below the $43.58 opening price of the May 1, 2011 drive by shooting of Silver. This top on the Ascending Triangle is the launch trigger for Silver to lift off to new ALL-Time highs above $50. The fuse on this Silver Rocket will be lit on a close above 42. It is not too late to begin accumulating physical Silver bullion. As each day now passes, it is becoming less likely that the opportunity to purchase Silver below $40 an ounce will present itself. With the MACD on the weekly Silver chart now Bullish, it is highly recommended that all dips in the price of Silver be bought going forward into the Fall.    
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| Gold Isn’t Buying the QE 3 Hype Posted: 31 Aug 2011 01:51 PM PDT Since the whole world believes QE 3 is just around the corner, I thought it a good idea to see what the markets really thinks of the likelihood of QE 3 coming anytime soon.
For starters let's take a look at Gold. gold caught QE lite and QE 2 a full month before stocks did in 2010:
As you can see, Gold caught a bid and didn't look back starting in late July 2010. By way of comparison, stocks corrected hard and didn't start to rally in earnest until late August/ early September.
So Gold lead the markets to the upside in anticipation of QE lite and QE 2. So what's Gold say about the prospects of QE 3 today?
This is hardly what I'd call a bullish chart. Gold actually looks to have peaked in mid-August and is now correcting. Indeed, if it doesn't rally hard now, this pattern could see prices down to $1650 in short order.
Meanwhile stocks are exploding higher yet again on no volume as traders game the market on next to no volume. And the whole reason is because QE 3 is coming? The credit markets, bond markets, and Gold certainly don't think so.
Indeed, I fully believe we are about to enter into the next leg down for this Crisis. The financial system is on DEFCON Red Alert (no matter what stocks are doing). And smart investors are taking steps to prepare themselves and their portfolios NOW while the markets are still holing up.
If you have yet to prepare yourself for what's coming, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.
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| Swiss franc jumps as economy minister dismisses intervention Posted: 31 Aug 2011 01:41 PM PDT By Nick Olivari and Julie Haviv http://www.reuters.com/article/2011/08/31/markets-forex-idUSN1E77U1E3201... NEW YORK -- The Swiss franc jumped against the euro and the dollar on Wednesday after a top Swiss government official said the nation would have to live with a strong currency and the Swiss National Bank (SNB) stayed away from intervention. The SNB has been conspicuously absent from the currency forwards market since last week. It did not take any new measures after making an announcement on three of the last four Wednesdays in August. Switzerland's economy minister detailed plans to offset the currency's impact on the economy but not to directly counter its strength. "We'll have to keep living with the strong franc for some time. It must be a combination of measures that will lead us into the future," said Economy Minister Johann Schneider-Ammann. ... Dispatch continues below ... ADVERTISEMENT Golden Phoenix Q2 2011 Conference Call Posted at Company Internet Site The second quarter 2011 conference call of Golden Phoenix Minerals Inc. (GPXM) has been posted at the company Internet site for immediate playback. The call includes updates on the start of gold production at the company's Mineral Ridge gold project in Nevada, the letter of intent to acquire the Santa Rosa gold mine in Panama, and the company's due-diligence efforts to secure a senior stock exchange listing. The conference call is 18 minutes long and you download an mp3 of it here: http://www.goldenphoenix.us/audio/GPXMCC071211.mp3 Or play back the call here: http://goldenphoenix.us/conferencecalls/ Golden Phoenix is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company's business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here: The scaling back of currency intervention speculation pushed the euro down 2.6 percent to 1.15341 francs on electronic trading platform EBS EURCHF=EBS, while the dollar slumped 2.2 percent to 0.8026 francs on EBS. "The franc is massively overvalued," Schneider-Ammann said. It was the biggest daily loss in the dollar against the Swiss franc since Aug. 9, when the dollar fell to a record low of 0.70676 Swiss francs. The euro also saw its biggest one-day decline since Aug. 9, when it fell to a record low of 1.0075 Swiss francs. The SNB's intervention in the swaps market and moves to flood the Swiss banking system with francs and cut interest rates to near zero had brought the Swiss franc back from peaks. The low-yielding Swiss franc may recoup more losses from earlier this month as the government lets markets decide its fate, with policymakers expecting the currency to remain strong, according to David Song, analyst at DailyFX in New York. "The rebound in the franc may gather pace in the days ahead, and the Swissie may continue to outperform its major counterparts as market participants diversify away from the U.S. dollar," Song said. Analysts said the the Swiss franc looked oversold on daily charts, having hit its lowest level since early July on Monday. Mounting concerns about European sovereign debt and hopes of new U.S. Federal Reserve stimulus drove investors back into the safety of the Swiss franc, according to Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "While the threat of SNB intervention may slow the franc's rise, it is unlikely to meaningfully deter investors from the safe harbor offered by the franc," Esiner said. For the month, the dollar has climbed 1.3 percent against the Swiss franc, the first monthly gain since January 2011. The euro has climbed 1.934 percent against the Swiss franc, the first monthly gain since March. Traders also awaited Friday's key U.S. Labor Department report on August unemployment and payrolls amid renewed expectations the Fed would act again to boost the economy. The dollar was down 0.3 percent at 76.534 yen. With the yen hovering near a record high of 75.941 against the dollar earlier in August on trading platform EBS, traders remained wary of the potential for Japanese authorities to intervene to sell the yen. The dollar slumped for the third straight month against the yen. Against the dollar, the euro was last down 0.5 percent at $1.4375 on EBS EUR=EBS. Traders said month-end demand for dollars from investors rebalancing stock and bonds portfolio weighed on the euro. Join GATA here: Toronto Resource Investment Conference http://cambridgehouse.com/conference-details/toronto-resource-investment... The Silver Summit http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference http://www.neworleansconference.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: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Drills 49.5 Meters Grading 1.27 g/t PGM+Au at Yukon Wellgreen Project Company Press Release Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces results from its 2011 drilling program for its first completed hole on the Wellgreen Project in the Yukon Territory, Canada. Borehole WS11-184 encountered 472.6 meters of mineralization grading 0.43% The geology transitioned from blebby disseminated to net-textured to massive sulphide approaching the footwall contact grading 6.3% nickel, 1.7% copper, 2.7 grams per ton platinum, 1.6 grams per ton palladium, 0.17 grams per ton gold, and 3.4 grams per ton silver. The drilling zones and results are tabulated here, with more information: http://www.prophecyplat.com/news_2011_aug22_prophecy_platinum_wellgreen_...
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| Gold Closes Higher But Silver's Performance Stellar / Over 15 Million Oz Of Silver Standing Posted: 31 Aug 2011 01:18 PM PDT by Harvey Organ: Good evening Ladies and Gentlemen: Sorry for being late but I had a late visit in the dentist's chair. The price of gold rose by closing comex time to $1828.50 up $1.80 on the day. Silver refused to buckle under the weight of banker cartel selling, advancing by 30 cents to $41.70. Let us head straight to the comex and assess trading and amounts of silver standing. The total gold comex OI rose almost 9000 contracts to 509,325 as the bankers decided to retreat to a higher level and set up their defenses around 1837 dollar gold. Every time gold hits this level we see a huge seller emerge (bankers). The previous total yesterday was 500,884. The options expiry month of September saw its OI again climb by a few contracts to 1807 from 1794 yesterday. The front delivery month of October saw the OI remain relatively constant at 35,477. The big December contract saw its OI rise from 332,638 to 340,477 as it was here that the bankers dug into their defensive wall and the longs just piled on. The estimated volume today was very good at 171,681. The confirmed volume yesterday was excellent at 197,614. Read More @ HarveyOrgan.Blogspot.com
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| How exchange-traded fund GLD lets you pretend to own gold Posted: 31 Aug 2011 01:04 PM PDT 9:21p ET Wednesday, August 31, 2011 Dear Friend of GATA and Gold: Doug Hornig of Casey Research yesterday did a pretty good job of confirming the old doubts about the major gold exchange-traded fund, the SPDR Gold Trust's GLD, whose operations long have been questioned by GATA, most expertly by our consultant, GoldMoney founder and Free Gold Money Report publisher James Turk: http://www.fgmr.com/fractional-reserve-aspects-of-gold-etfs.html http://www.fgmr.com/where-is-the-etfs-gold.html And by our former board member, Catherine Austin Fitts, and her lawyer, Carolyn Betts: Having recently had extensive conversations with the trust's officials, Hornig writes: "Beyond the basics, we don't know much. You will not be allowed to see the vault, whether or not you are a GLD shareholder and no matter how many shares you own. In fact, a high trust official in New York told me that even he isn't allowed inside there. ... "Now theoretically it is true that you can convert your GLD shares to physical gold and take delivery of it. But practically, you can't. For one thing, you have to be approved to do so (generally meaning you're either a broker or a market maker), and then you have to redeem a minimum of 100,000 shares. And even if you meet those qualifications, buried in the firm's prospectus -- a very tough read, by the way, but you can get a copy at their website if you want to try your luck -- is a provision stating that they have the option of redeeming such shares in cash equivalent rather than bullion." ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf If GLD's gold was just sitting around doing nothing but backing the shares issued against it, why the need for the escape clause of cash settlement? Thus it becomes even easier to imagine that the fabled gnomes of Zurich have nothing on the gnomes of GLD, as they scurry about an HSBC gold vault somewhere, a vault secret even from GLD's supposed managers, plugging GLD-designated gold bars (there are supposed to be nearly 1,300 tonnes of them) into the ever-growing number of holes in the Western fractional reserve gold banking system, a system in which, as CPM Group Managing Director Jeff Christian told the U.S. Commodity Futures Trading Commission at a hearing in Washington a year and a half ago, dozens of claims may be sold to any particular gold bar. Christian had candidly explained this fractional-reserve system in detail in an essay published 10 years earlier: http://www.gata.org/files/CPMGroup-BullionBankingExplained.pdf This is the primary mechanism of the Western financial system's gold price suppression scheme, the creation of so much imaginary gold, and its acceptance by deluded investors, as to prevent gold from signalling inflation and indeed from even keeping up with official measures of inflation, which themselves are horribly suppressed. Hornig's conclusion about GLD is terribly polite and subtle: "None of this is to disparage GLD. For ordinary investors, the ETF represents a way to (indirectly) participate in gold 'ownership' without the hassle of actually taking physical delivery and finding a suitable place to vault your metal. Plus, there are no storage fees, bid/ask spreads, threats of theft, or dealer markups to worry about." Yes, there are no hassles at all in pretending to own gold. And why should you have to pay anything for pretending when someone else thinks he owns your gold? Let him pay. Hornig's report on GLD is headlined "Tracking Gold" and follows a preface by Casey Research Senior Analyst Vedran Vuk. You can find it at the Casey Research Internet site here: http://www.caseyresearch.com/cdd/behind-scenes-gld CHRIS POWELL, Secretary/Treasurer Join GATA here: Toronto Resource Investment Conference http://cambridgehouse.com/conference-details/toronto-resource-investment... The Silver Summit http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference http://www.neworleansconference.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: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Lewis E. Lehrman on How to Solve the U.S. Debt Problem Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program. Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust. Lehrman says: "Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy. We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals, and working people 0 percent at the bank, you are not going to encourage them to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust." To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: http://www.thegoldstandardnow.org/gata
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| Posted: 31 Aug 2011 12:23 PM PDT Gold Price Close Today : 1828.50 Change : 1.80 or 0.1% Silver Price Close Today : 41.699 Change : 0.301 or 0.7% Gold Silver Ratio Today : 43.85 Change : -0.275 or -0.6% Silver Gold Ratio Today : 0.02281 Change : 0.000142 or 0.6% Platinum Price Close Today : 1847.40 Change : -8.10 or -0.4% Palladium Price Close Today : 782.90 Change : 0.00 or 0.0% S&P 500 : 1,218.89 Change : 5.97 or 0.5% Dow In GOLD$ : $131.30 Change : $ 0.49 or 0.4% Dow in GOLD oz : 6.351 Change : 0.024 or 0.4% Dow in SILVER oz : 278.51 Change : -0.73 or -0.3% Dow Industrial : 11,613.53 Change : 53.58 or 0.5% US Dollar Index : 73.98 Change : 0.256 or 0.3% Glanced over at Platinum and Palladium to see how they're doing. Palladium has been very strong and looks something like silver. Now above all moving averages and inertia is higher. Platinum looks more like gold in the past two weeks (only), and is blocked by $1,850 resistance. If it can clear that, 'twill jump. Let me refine what I said yesterday: the GOLD PRICE is pounding on the $1,840 ceiling, not $1,850. For the day it rose $1.80 to $1,828.50 on Comex, but the 5 day chart pictures a market stalled at $1,840, floating and bumping against the ceiling like a kid's helium balloon. Today's low touched $1,811.35, adding more strength to $1,810 support. So the GOLD PRICE has a range of $1,810 - $1,840, more narrowly $1,820 - $1,840. Market has gone indecisive here, perhaps in the lead-up to the Labor Day holiday. My wholesalers tell me retail dealers yesterday were on balance selling GOLD to them, which is a bit negative. Normally you would accord great weight to what market insiders -- like retail dealers -- do, but an awful lot of retail gold dealers are scared money, and don't do as well as the public. The premium on SILVER US 90% silver coin, on the other hand, usually offers a reliable hint about silver's direction. When that premium is dropping slightly, it's neutral or negative. When the premium climbs suddenly, silver is about to turn up. Right now the "premium" is actually a discount to the silver value, and a historically large discount at 125c an ounce. Yet the SILVER PRICE 5 day chart shows silver in an uptrend since last Friday. Today it rose another 30.1c to close Comex at 4169.9c, battering on the 4200c gate. The SILVER PRICE still must confirm its rise by closing successively higher, first over 4200c then 4400c.  From a longer view, silver has been trending upward from an intraday low of 3230c on 14 May. With the last two days' progress, silver must now guard support at 4100c. A close below that casts doubt on silver's intentions. Markets will probably move sideways until after Monday. Then silver and gold could really jump. The mighty US DOLLAR index on its shaky legs managed to creep through 74 today and closed up 21.5 basis points (0.28%). It remains in the same old trading range of 73.40 - 75.50, and hasn't even conquered its 20 dma (74.23) yet, but it strengthens morale for it to climb above 74. Eventually, in the next few months, the dollar will rally -- given it falleth not below 72.70. The euro (I strive not to gloat) after gapping down yesterday closed lower today, down 0.48% to 1.4377 and nearly on its 20 dma (1.4352). In spite of all the Nice Government Men and all the genius central bankers huffing, puffing, and blowing together with all their itty-might, the euro will do well not to fall to the center of the earth. Unless it can clear 1.4550 followed quickly by 1.4700, it will visit 1.2000. With the yen the Japanese NGM must feel like they are trying to hold a basketball underwater. Rose again today to 130.54c/Y100 (Y76.60/$). Surely they must act soon to bring it down. Stocks rose again today. Dow clumb 53.58 (0.46%) to 11,613.53 while the S&P500 paced alongside, up 5.97 (0.49%) at 1,218.89. Stocks have now risen for the last four days after Key Reversing last Friday. We are not amused, impressed, or tempted to buy stocks. We wonder also why the yield is rising on the US 10 year Treasury note and the 30 year bond. The Fed's interest rate manipulations, after all, are applied to the Federal Funds rate, the overnight rate it charges banks for borrowing. But the Fed setteth not interest rates; in the final analysis, the MARKET setteth those rates. And when the market decides that US debt paper is too expensive,they pay less and the interest rate rises. Last I heard, rising interest rates are popularly (but wrongly) perceived as death to the stock market. BWDIK -- But What Do I Know? Stocks -- they are the strains of the Charleston wafting through the Museum of Investment Music. Martin Armstrong made an interesting comment in his last newsletter that made a sort of kink in my mind. From the yankee government's Greenback Act of 1862 forward, the banking cartel was allowed to count US government bonds as reserves. But bonds are -- debt! And how can debt be a reserve against cash that you owe depositors, in the same class with gold coin? Just never had seen it quite this way before. This was an earlier form of pyramiding, where they borrowed money into existence with government debt, then pyramided on that by making it the backing for more bank credit issues. Wow. It's like sitting in a tub, then pulling yourself up into the sky by tugging on the handles. Ain't banking great? On 31 August 1521 Cortes captured the city of Tenochtitlan, the Aztec capital, and burned it. I understand that a multitude of bleeding hearts today condemn Cortes, without ever bothering to ask how a couple of thousand Spaniards could overthrow a military empire of eleven million. Simple: they had native allies. The nations subject to the Aztecs fought with the Spanish to throw off their yoke. The yoke consisted of having to furnish thousands of human sacrifices yearly for the Aztec temples. At one temple a Spaniard counted over 100,000 skulls in a skull rack. The Aztec priests threw the victim onto an altar face up, sliced open the chest with an obsidian knife then cut out the still beating heart. Bodies were kicked down the pyramid and beheaded. Often the victims were skinned and the priests wore the skins and ate the victims. Now me, if I had been one of those subject peoples, I would have joined with the Spaniards or anybody else short of the devil himself to get rid of the Aztecs, and I wouldn't have mourned 'em when they were gone. 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. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. 
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| Emerging market central banks boost gold holdings in July Posted: 31 Aug 2011 12:05 PM PDT By Amanda Cooper http://www.reuters.com/article/2011/08/31/gold-cenbanks-idUSL5E7JV18N201... LONDON -- Colombia joined the ranks of official-sector gold buyers in July for the first time in 13 years, along with Russia, mirroring the trend among emerging central banks to diversify their currency portfolios. International Monetary Fund data released on Wednesday showed that Russia, which is already the world's eighth largest official holder of bullion, raised its reserves by 4.42 tonnes in July to 841.131 tonnes, while Colombia added 2.3 tonnes to bring its reserves to 9.14 tonnes, its first increase since March 1998. The gold price, which on Wednesday was last down 0.6 percent at $1,826.49 an ounce at 1145 GMT, has risen by nearly 30 percent this year, fuelled by a sagging dollar, waning confidence in the resilience of the global economy, and purchases by central banks, particularly in emerging market countries, over the past few years. ... Dispatch continues below ... ADVERTISEMENT Prophecy Platinum Drills 49.5 Meters Grading 1.27 g/t PGM+Au at Yukon Wellgreen Project Company Press Release Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces results from its 2011 drilling program for its first completed hole on the Wellgreen Project in the Yukon Territory, Canada. Borehole WS11-184 encountered 472.6 meters of mineralization grading 0.43% nickel equivalent from surface to the footwall contact. Within this larger swath of mineralization the hole encountered 49.5 meters of 1.27 grams per ton platinum group metals plus gold, 0.71% nickel, and 0.45% copper (or 1.11% nickel equivalent). The geology transitioned from blebby disseminated to net-textured to massive sulphide approaching the footwall contact grading 6.3% nickel, 1.7% copper, 2.7 grams per ton platinum, 1.6 grams per ton palladium, 0.17 grams per ton gold, and 3.4 grams per ton silver. The drilling zones and results are tabulated here, with more information: http://www.prophecyplat.com/news_2011_aug22_prophecy_platinum_wellgreen_... "Not all of this is new net buying ... but it is a powerful source of demand for gold coming through from the central bank community and sends a number of messages, one of them is dollar holdings of EM countries are too high and they need to rebalance those and gold is the big beneficiary of that," said Deutsche Bank analyst Michael Lewis. "This is still a very weak dollar environment where people do want to diversify." While the dollar has fallen by over 6 percent this year against a basket of currencies, global equities have lost nearly 7 percent, while hedge funds have fallen by a similar amount in 2011, according to the HFRX Global Fund Index. Russia alone has added more than 51 tonnes to its reserves this year and has doubled the size of its holdings in the last four years. Other major buyers this year include Mexico with more than 100 tonnes, Thailand with 28 tonnes, and South Korea with around 25 tonnes. The data showed Kazakhstan cut its holdings by 3.11 tonnes to 67.323 tonnes, while Tajikistan reduced by 1.19 tonnes to 1.841 tonnes and Mexico by 0.19 tonnes to 105.690 tonnes, meaning that net purchases by central banks amounted 2.24 tonnes in July, worth about $132 million at current prices. The largest official buyers of gold since 2007 have been China, which boosted its holdings by over 450 tonnes, Russia, with some 400 tonnes, and India with 200 tonnes. Join GATA here: Toronto Resource Investment Conference http://cambridgehouse.com/conference-details/toronto-resource-investment... The Silver Summit http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference http://www.neworleansconference.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: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Golden Phoenix Q2 2011 Conference Call Posted at Company Internet Site The second quarter 2011 conference call of Golden Phoenix Minerals Inc. (GPXM) has been posted at the company Internet site for immediate playback. The call includes updates on the start of gold production at the company's Mineral Ridge gold project in Nevada, the letter of intent to acquire the Santa Rosa gold mine in Panama, and the company's due-diligence efforts to secure a senior stock exchange listing. The conference call is 18 minutes long and you download an mp3 of it here: http://www.goldenphoenix.us/audio/GPXMCC071211.mp3 Or play back the call here: http://goldenphoenix.us/conferencecalls/ Golden Phoenix is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company's business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here:
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| Posted: 31 Aug 2011 11:09 AM PDT by Chris Horlacher, MapleLeafMetals.ca:
In my free guide, The Power of Gold, I show why gold is money and provide many historical examples of economies functioning successfully over long periods when using gold as a medium of exchange. The recessions of the pre-central banking era were caused by meddling in the monetary system by government authorities who granted special permissions to banks to break their contractual promises to redeem their banknotes for gold coin. Usually during a war, the United States and other countries temporarily suspended the redeemability of banknotes and subsequently spent the country deep in to debt. The resulting expansion of the currency supply feeds an asset boom that eventually falls apart. This is textbook Austrian business cycle theory (ABCT) and it has been able to explain every major documented economic crisis. Since the theory was developed, economists using ABCT were able to predict not only the crash of 1929 but also the stagflationary recession of the 1970′s. It was this stunning record of success, and the development of such an elegant theory, that led to the Nobel Prize being awarded to one of the Austrian School's greatest proponents, F.A. Hayek, for his work developing ABCT. Read More @ MapleLeafMetals.ca
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| Mergers And Acquisitions In Mining Stocks Heat Up Posted: 31 Aug 2011 09:18 AM PDT The brouhaha over the debt ceiling has generated upward moves, particularly in gold bullion. This is a primary example of a news driven market skewing orthodox technical measurements. Now it is entirely possible that the scare headlines are generating a caffeinated move to surpass resistance areas, especially in gold. The debt farce can end precipitously and so may the risk trade. What the market giveth exogenously is what the market taketh away with the resolution of the underlying media hype. The risk off trade may boost mergers and acquisition activity in the mining sector. Six weeks ago, I became aware of a major divergence between the miners and the underlying metal. This juncture represented a buying opportunity. On July 13, 2011 Barron's wrote that my firm was a solitary voice in indicating that miners would outperform gold bullion, saying "…One contrarian to that view is Jeb Handwerger, editor of Gold Stock Trades. He points to technicals that favor miners, although he remains bullish on prospects for both types of precious metals ETFs." Subsequently, miners did bottom in mid June. In fact, we have witnessed parabolic moves in the gold sector, completely overlooking some undervalued miners such as Goldcorp (GG),Barrick (ABX), and Newmont (NEM). These are some of the fastest growing stocks in the market with increasing profits and margins. It is precisely gold's linear bull trend as opposed to a geometric blowoff which indicates the longevity of this millennial move in gold. As the metal surpasses resistance we anticipate and welcome the customary healthy pullbacks on this rising arc. The risk off trade will transfer capital from the extended gold price to the undervalued mining equities.
Meanwhile, the debt debates serve to provide fuel for these sectors as the "Washington Square Dance" was resolved by a nip and tuck procedure when major surgery is really required. My firm senses we are on the road to additional economic stimulants by whatever guises necessary, probably in the next few weeks. They may surface under different names but the basic principle should be the de facto desirability of accumulating wealth in the ground assets of precious metals, uranium, and rare earths. The Market Vectors Gold Miners ETF (GDX) recently advanced above its 200 day moving average and is not nearly as overbought as its underlying metal. A bullish golden cross of the 50 dma above the 200 dma is occurring now. Up to now the crises over both European and American monetary problems have marked bullion as a safe haven. It appears that the metal has become overextended relative to the miners.It's time for the miners to come to the ball. We are seeing some major, cash loaded miners diversifying into copper and now into significantly discounted uranium miners. My firm has long been focusing on this trend. For example:
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| Emerging central banks boost gold holdings in July Posted: 31 Aug 2011 09:04 AM PDT August 31 (Reuters) — Colombia joined the ranks of official sector gold buyers in July for the first time in 13 years, along with Russia, mirroring the trend among emerging central banks to diversify their currency portfolios. International Monetary Fund data released on Wednesday showed Russia, which is already the world's eighth largest official holder of bullion, raised its reserves by 4.42 tonnes in July to 841.131 tonnes, while Colombia added 2.3 tonnes to bring its reserves to 9.14 tonnes, its first increase since March 1998. [source]
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| Gold Has Its Best Month Since November 2009 Posted: 31 Aug 2011 08:53 AM PDT By Mark Gongloff The Barbarous Relic gained $200.20 this month, or 12.3%, to finish at $1828.50. That's the biggest percentage gain since November 2009. It's up nearly 29% for the year and 47% from a year ago. It's just 3% away from its record high. In accepting this award, gold would like to thank Europe for continuing to not get its act together and the Federal Reserve for keeping interest rates low until the sun goes supernova. [source]
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| Posted: 31 Aug 2011 08:50 AM PDT So hurricane Irene is over with, but it didn't take long for economic commentators to make fools of themselves. David Kotok is the chairman and chief investment officer of Cumberland Advisors. He was on the radio with Larry Kudlow, who asked him about the economic impact of Irene. Kudlow noted how Irene tracked over 1/10th of the nation's economic output. Here is Kotok writing about it to his investors afterward about Cumberland's response: "We are now upping our estimate of fourth-quarter GDP in the US economy. Billions will be spent on rebuilding and recovery. That will put some people back to work, at least temporarily. We speculate that Washington may set aside the usual destructive and divisive partisan political wrangling and act in the interest of the nation. That means there will be a flow of federal financial assistance to the disaster areas." This is horrible, horrible reasoning. It is the old broken window fallacy, which we see trotted out by otherwise intelligent people anytime there is a natural disaster. These people say that destruction is an economic boost, as we busily rebuild what was lost. It's a shame people continue to repeat this. The great economist Frederic Bastiat killed this idea decisively in an 1850 essay, "That Which Is Seen and That Which Is Unseen." It remains a classic essay on economic reasoning. In his usual witty manner, Bastiat wrote a parable about a boy who breaks a window. The "seen" is the glassmakers who have new business they didn't have before. That's what people like Kotok focus on. But as Bastiat wrote: "It is not seen that as our shopkeeper has spent 6 francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his 6 francs in some way, which this accident has prevented." Kotok's point about federal assistance is particularly depressing, because he seems unable to recognize that this is simply money taken from someone else. Please don't fall for the broken window fallacy. And please correct anyone you hear using it. It seems the first step in basic economic literacy. Hurricane Irene was a dead loss for the economy. Period. By the way, Frederic Bastiat is an old favorite of mine and was influential in shaping my economic views early on. I have a handsome two-volume collection of his works, put out by the Ludwig von Mises Institute. I highly recommend the set for anyone looking for sound logic applied to economic questions. Bastiat is enjoyable to read and not like any economist you've ever read. For those not inclined to read that much, I recommend Henry Hazlitt's Economics in One Lesson. Hazlitt devotes a whole chapter to the broken window fallacy. His book is my No. 1 recommendation for anyone looking to learn the key ideas of economics. It's a classic. Now, let's turn our attention to the volatile stock market… The market is rallying off its recent lows. This rebound is surprising if you focus on the bad economic news and the potential for another recession. But it's not surprising if you look at stocks compared with what else you might do with your money. A couple of weeks ago, I wrote about how "relative to Treasuries, stocks haven't been this attractive in more than 30 years." Shortly after the panic, lots of money came out of the market and went to Treasuries. It was a tidal wave of money, which pushed the short-term T-bill negative for a brief moment. But it would be irrational to stay there for long, given where stocks are. James Bianco, of Bianco Research, added to that thesis in a report to clients. His chart shows price-earnings ratios for the last half-century, along with his projection of 2011 earnings. Take a look:
"Low rates benefit p/e (price-earnings ratios) more" than slowing economic growth hurts them, Bianco maintains. Based on the 10-year Treasury rate of 2.2%, he thinks fair value for the S&P 500 would be at least 14 times earnings. That's 1,358 on the S&P, which would mean a 13.5% rise from here. Of course, you could poke holes in this a few different ways. Interest rates could rise. And earnings could fall. So far, neither has happened. Corporate profits for the first half of the year have been strong, for example. I find the above interesting, but I don't really care all that much either way. In my investment letters, Capital & Crisis and Mayer's Special Situations, I never recommend "buying the stock market." I recommend buying specific stocks. Specific businesses. And I look to hold onto them and not trade them. I will use the market to add to or sell when prices suit me. But otherwise, I let the market do what it will do. Still, it can be helpful sometimes to have a sense for the backdrop on the overall market. In the late 1990s, it helped to understand the market was frothy. By 2000, it made no sense at all, with even ho-hum companies like Coca-Cola commanding a price-earnings ratio of 50 times. It helped to know in the late 2000s that there was a housing bubble. It meant you skated around banks, real estate and housing stocks. Today, though, there are no such extremes in the stock market as a whole. I think the market is in some gray middle area — neither cheap nor dear. Regards, Chris Mayer, The Broken Window Fallacy originally appeared in the Daily Reckoning. The Daily Reckoning provides 400,000+ readers economic news, market analysis, and contrarian investment ideas. The 5 Best Ways to Invest in Gold was previously featured in the Daily Reckoning.
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| Is It Time For The Financial World To Panic? 25 Reasons Why The Answer May Be Yes Posted: 31 Aug 2011 08:49 AM PDT
Every now and then it is easy to forget that the one or two "better than expected" data points blasted by flashing headlines do nothing that merely mask what is an otherwise quite deplorable and deteriorating reality. For the disconnect between America and the rest of the world look no further than this chart showing the dramatic divergence between the DJIA, which has just gone positive for the year, and every other major global stock market. Yet for those who require a narrative to go with their numbers, here is The Economic Collapse with the latest of their traditionally comprehensive bulletins, this time summarizing the "25 signs that the financial world is about to hit the big red panic button." From The Economic Collapse:
And the conclusion which is, as usual, spot on:
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| Posted: 31 Aug 2011 08:46 AM PDT Jim Sinclair's Commentary This is here and continuing in gold. It will be a characteristic of the gold's exponential phase north of $1764.
Jim Sinclair's Commentary The financial problem is the entire Western World. UK plunges into debt danger zone after Labour's 10-year borrowing binge, says finance watchdog By Hugo Duncan Last Continue reading In The News Today
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| Are Falling Oil Prices a Good Sign? Posted: 31 Aug 2011 08:30 AM PDT Author: Vedran Vuk Synopsis: Many economists and investors are concerned about recent oil price trends. And while there may be some justification for it, the Casey Research energy team argues the worry may be overblown. Dear Reader, It seems as if we're back in the waiting room. For what feels like decades, the eurozone has been on the verge of a major meltdown. Every few months, we approach the cliff's edge, only to back off. However, each time, the situation does not improve. Rather, time only passes until a fresh crisis brings us back to the edge. At this point, I'm wondering whether it's just best to get the European crisis over with and out of way. Things aren't going to get fixed over there. Every bailout only delays the inevitable and creates more uncertainty in the market. Personally, I just can't get excited about equities right now. Any investment decisi...
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| Monthly Gold Charts - August 2011 Posted: 31 Aug 2011 08:30 AM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] What an impressive performance by Ol' Yeller for the month of August! Note that Gold has bettered the all time high CLOSING price on an inflation adjusted basis. ...
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You often hear from major media outlets and the investment advisors they offer a pulpit to that gold is peaking, that there's a bubble in gold, that gold is a worthless investment and so on. They could not be further from the truth. A simple look at the history of the stock market when priced in gold reveals that we still have a long way to go in this commodities bull-run. A lot of confusion seems to arise from the majority of the investment community looking at gold because they consider it as just another investment that competes against stocks, bonds and real estate. This is a mistake because gold is money, not an investment.
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