Gold World News Flash |
- MIDAS SPECIAL - WikiLeaks/US Embassy In Beijing Price Suppression Cable/China/GATA On The Move In Hong Kong And London
- Governments Buying Gold
- Goldrunner: The “GOLDEN PARABOLA” & “SILVER ROCKET” Update
- International Forecaster September 2011 (#1) - Gold, Silver, Economy + More
- It’s All About the Jobs… and Gold
- “Gold, It's Just Tradition” – The Bernank
- Michael Pento - Here is Why Gold Exploded on Friday
- Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree
- Murphy's 'Midas' commentary notes GATA's long emphasis on China
- Guest Post: Why The Full Faith And Credit Of Governments Is Inferior To Real Assets And How We Can Fix It Once And For All
- The Only Thing We Have To Fear Is Fear Itself... And Governments Telling Us What To Fear: Why The Beginning Of The End Started With FDR's Confiscation Of Gold
- The Only Thing We Have To Fear Is Fear Itself... And Governments Telling Us What To Fear: Why The Beginning Of The End Started With FDR's Confiscation Of Gold
- Rocky Banks
- A National Debt Of $14 Trillion? Try $211 Trillion
- S&P Futures Down 9, As Gold Kneejerks Over $1890
- Hugo Salinas Price's presentation to GATA's London conference
- ABN Amro Complains About Interbank Liquidity Crunch, As CEO Says End Of Euro Would Make 1930s Seem Like "A Trifle"
- ABN Amro Complains About Interbank Liquidity Crunch, As CEO Says End Of Euro Would Make 1930s Seem Like "A Trifle"
- Antal Fekete outlines the gold-suppression, bond-support scheme
- A Full-blown International Bond & Currency Crisis is Approaching ? Fast! Here?s Why
- Silver Update: Silver Vs Stocks
- Gaddafi gold-for-oil, dollar-doom plans behind Libya ‘mission’?
- WikiLeaks – US, France Knew In 2007 Financial Collapse Was Imminent Due To Wall Street Fraud
- More on Government Motors
- Things Look So Bad They Can Only Get Better
- Guest Post: Where Is Our Oil Price Collapse?
- Is GATA suddenly becoming almost respectable?
| Posted: 05 Sep 2011 04:30 PM PDT So much that can be covered here, but first and foremost, GATA's credibility and proof of our understanding of the real gold market (one not reported on by the mainstream gold world, Planet Wall Street, and the financial media) just took another giant leap forward. We have been all over the Chinese buying gold story for MANY years, having reported them buying secretly via intermediaries from our STALKER source.
| ||||||||||||||||||||||||||||||||||||||||||
| Posted: 05 Sep 2011 04:00 PM PDT Venezuelan gold mining companies had until recently been forced to sell 50% their gold production to the government for their reserves. This was increased last month to 100%. It accompanied President Chavez's nationalization of the mining industry. This lays the country open to the seizure of foreign-based assets belonging to Venezuela, including all its gold. To guard against this Chavez has ordered that all the country's gold held in foreign vaults be repatriated back to the country.
| ||||||||||||||||||||||||||||||||||||||||||
| Goldrunner: The “GOLDEN PARABOLA” & “SILVER ROCKET” Update Posted: 05 Sep 2011 02:00 AM PDT Gold has been rocketing up to, and through, the price levels that we laid out many months ago (although a couple of months later than we had expected). This is the equivalent move for Gold that we have recently seen Silver making. As Gold starts to rise more parabolic on the log chart, it creates a very important consequence for the Precious Metals (PM) stock indices since they are heavily weighted in Gold Producers. Suddenly, the price of Gold is rocketing up through, and above, the mining costs of the Gold Producers and triggering heavy leverage for the earnings of those Gold Miners.
| ||||||||||||||||||||||||||||||||||||||||||
| International Forecaster September 2011 (#1) - Gold, Silver, Economy + More Posted: 05 Sep 2011 12:05 AM PDT We find it amusing that Mr. Bernanke in his press conference after the FOMC last week said, US bank exposure to Greece was minimal. We guess he forgot part of that $16.1 trillion and the credit default swaps from NYC banks to the tune of $150 billion. In addition we do not see the US and England escaping the fallout from Europe. From the very beginning 1-1/2 years ago we told Greece to default and that it was inevitable. Of course, the Greek government did not do that, because they wanted to hand their Illuminist friends Greek assets on a silver platter - that is public and private assets.
| ||||||||||||||||||||||||||||||||||||||||||
| It’s All About the Jobs… and Gold Posted: 05 Sep 2011 12:00 AM PDT This week we briefly look at yesterday morning's dismal unemployment report, then drop back and survey some other very eye-opening data on employment. Some groups are (surprise) doing better than others. What would it take to get us back to "normal," whatever that is? I give you a link to some webinars I will be involved in and finish with the answer to the question I am asked most often, "What do you think about gold?" I tell all. There are lots of topics to cover, so let's get started with no "but firsts."
| ||||||||||||||||||||||||||||||||||||||||||
| “Gold, It's Just Tradition” – The Bernank Posted: 04 Sep 2011 06:16 PM PDT by 1913Gold
Gold is a chemical element with the symbol Au (from Latin: aurum "gold") and an atomic number of 79. "Many have forgotten the extent to which property rights are linked to freedom. It may also prove the case that commodity money (i.e., gold) is linked to freedom, insofar as the abandonment of the gold standard leaves property rights open to attack." – JR Nyquist See More Great Design @ 1913Gold.com
| ||||||||||||||||||||||||||||||||||||||||||
| Michael Pento - Here is Why Gold Exploded on Friday Posted: 04 Sep 2011 05:48 PM PDT  Gold's explosive rally on Friday caught many shorts in the Comex and London markets off guard. Today King World News interviewed Michael Pento, the man who days ago indicated that those positioned short in the gold market were already worried. When asked about the reasons for the tremendous rally on Friday and what he sees going forward Pento responded, "As I indicated would be the case back in early 2010, the only "V" shaped recovery the economy would experience is inflation. GDP growth estimates are tumbling fast after the zilch Non-farm payroll number released on Friday."
This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||
| Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree Posted: 04 Sep 2011 03:26 PM PDT Courtesy of Zero Hedge Wondering why gold at $1850 is cheap, or why gold at double that price will also be cheap, or frankly at any price? Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar's reserve status. Putting that into dollar [...] 
This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||
| Murphy's 'Midas' commentary notes GATA's long emphasis on China Posted: 04 Sep 2011 01:50 PM PDT 9:46p ET Sunday, September 4, 2011 Dear Friend of GATA and Gold: GATA Chairman Bill Murphy's special "Midas" commentary at LeMetropoleCafe.com, headlined "WikiLeaks/US Embassy In Beijing Price Suppression Cable/China/GATA on the Move in Hong Kong and London," has been posted in the clear at GoldSeek. Among other things, it notes how GATA for years has been stressing China's determination to build its gold reserves and how this determination was underpinning the gold market. You can find Murphy's commentary here: http://news.goldseek.com/LemetropoleCafe/1315283400.php CHRIS POWELL, Secretary/Treasurer 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 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 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
| ||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Sep 2011 01:26 PM PDT Submitted by Robert Paulson Title: How the USA got to where it finds itself, why the full faith and credit of governments is inferior to real assets and how we can fix it once and for all I used to think like a statist, and I used to agree with them. It's appealing to redistribute wealth, especially when it's not fairly achieved. But what I've realized is that the solution to creating distortions in the market is not to create more distortions by attacking the symptoms. What ends up happening when you do that is that you create a hugely complex set of rules and regulations that hinder the market, make it inefficient and most importantly makes it ripe for abuse via regulation in favor of those who make the right campaign donations to the right politicians. This is the situation we find ourselves in now: A very broken market setup to benefit those who've made the right political moves. On the other hand, you can simply end the sole cause of the problem to begin with. That sole problem is bad monetary policy. You might say that we should replace everyone in charge of the Federal Reserve with the "right" people. But even if you were able to do that, it's really a temporary fix. The issue isn't just having the wrong people in charge, but having so few people in charge of controlling the levers to begin with. Not only does it create a situation ripe for corruption and collusion, but it puts the value of money in the hands of people who are thereby expected to perform satisfactorily. They execute insane policies at the behest of a government and people who cry "DO SOMETHING!" It is because of this monetary system that our government and the public at large have been able to amass such humongous debts. Because our system is based upon continual growth, its very lifeblood and continued existence hinges upon consistent expansion of GDP and inflationary monetary policy. The continually bad policy experienced off and on since the Nixon administration has a reason: It was masking declining economic factors. The stagflation the US experienced in the 70s came about for two reasons: The final end to the gold standard and ensuing monetary policy attempting to stimulate the economy in lieu of actual economic activity. The badly implemented normalization of relations with China by Nixon began the trend of sending manufacturing jobs overseas. All of this combined with the explosion of consumer credit and the financial industry. People were being squeezed by real declines in jobs and wages. With credit, they could afford to get by "until things got better." This paradigm shift from saving to spending created the consumer culture, yuppies and the decade of greed that was the 80s. As a people, we bought into this idea that we could spend our way into prosperity, and it worked for a while. Actually, up until 2007. Stagflation was ended in the early 1980s when we finally put someone responsible in charge of the Federal Reserve: Paul Volker. He jacked interest rates up to the high teens until he tamed inflation, but an inevitable and deep recession ensued as a result. In the process, bad businesses (and some good ones) went out of business, many people lost their jobs, but in the end that creative destruction brought us back to reality and put the market in position to spring back forward, especially combined with heavy use of consumer credit as well as deep government deficits and increasing debt. Throughout the 90s, monetary policy was relatively restrained but ever too loose near the end. It ended up assisting the dot-com bubble by allowing it to blow up far further than it ever could've by itself, ending in an unavoidable recession that was a long time coming. Further, during this time period, China began to become a bigger and bigger factor in supplying inexpensive goods to the market at the cost of American jobs and paid for partially with debt. This time, however, the debt explosion was in the private sector as government spending was restrained and the budget balanced by the end of the decade. In effect, the stagnant income and rising costs of the American people were being masked by continually growing private debt. So what did the Fed do in the early 00s? In the wake up the dot-com bust and resultant recession, the Fed opened the monetary floodgates wide and never looked back. When the recession ended, it didn't tighten policy as it should've, and did so for two reasons. First, housing was becoming the new hot sector and they didn't want to stop the gravy train in the middle of war time. Second, the government had not only implemented hundreds of billions in war spending and failed to pay for it, but it also cut taxes and held them there. These massive deficits and and increasing debt could only be maintained with low interest rates. Basically, the Fed and the government made a bet that the deficits and debt wouldn't matter because they would be matched by a growing economy and inflation. Unfortunately, the housing market couldn't keep growing with just loose monetary policy. That could only do so much. So what did they do? They deregulated the mortgage market and allowed lenders to go hog wild with cheap money and low lending standards. In a free market, this wouldn't have been such a problem. However, through a combination of fraud and ineptness, the banks were able to make terrible loans, package them up into securities and falsely rate them as AAA when they were really junk. This is the key factor that allowed them to continually make horrible loans with cheap money and reap massive profits in the process. They were able to build a ticking time bomb of epic proportions because there was no one able or willing to stop them. No one wanted to be the party pooper. The ratings agencies failed or were complicit specifically because their continued existence was not dependent upon performance but by the fact that they were deemed by the government as the agencies of choice. They had government endorsements and had zero incentive to rate much of anything properly. As you can plainly see, all 3 of the official ratings agencies are still the official ratings agencies despite their horrendous performance. Why would we expect such a system to work in our favor? Meanwhile, the American people were high. There were two wars on they didn't want to think about. Their houses were increasingly growing in value. They bought new and bigger houses with cheap loans. The "flipping" phenomenon went into full swing. People took out huge loans against their already paid down or paid off homes to pay for consumer goods. Jobs were growing on trees. Everyone was living the high life on borrowed prosperity. It was doomed to fail and began doing so in 2007, culminating with the credit crisis in the Fall of 2008 in the midst of a terrible recession. All the way along, the government and the people became as indebted as they'd ever been (the government's exception being during WW2, though that debt was largely held by the American people). As things got worse, the debt levels only increased in the face of declining housing values. Even worse, due to bankruptcy reforms made in the mid-00s at the behest of the major banks, many people became essentially trapped in their debt with no way out. The most important factor that so few people understand is that this approximately 40-year long process of consumerism based on expanding consumer and government debt hid a very big problem: Decline of true wealth production and rising real energy costs. The overall loose economic policies during those 4 decades fostered the rise of consumerism and the financial industry's increasing share of the market. In a normal economic environment with sound money, the efficient market allocates wealth towards activities which create wealth. This includes manufacturing, mining and energy production. Instead, because the market was distorted by easy credit, we began a 40-year long bubble of consumption and the financial services to make it possible. For 40 years, our monetary policy enabled our ignorance of a very real and pressing problem: Other countries were catching up to us in technology and we were no longer in the front of the pack by a mile. Instead of doubling down on education and allowing the market to guide the future, we passed the buck. We decided that a continually rising standard of living without interruption was preferable to tightening our belt and delaying gratification. Now we find ourselves saddled with ginormous debts and no economic infrastructure with which to grow our way out. We are a late-stage kidney failure patient on dialysis, and we are in terrible need of a transplant. So how do we fix this? Sound money, debt forgiveness and a truly free market that isn't guided by the hand of the government and is instead determined by what the aggregate investor pool thinks is the right direction. Gordon Gecko was wrong overall, but he was right that greed is good. The profit motive is the key to good decisions and long-term thinking. That doesn't mean we need to be miserly dickheads who only care about ourselves, but self-enrichment and the unfettered ability to be as successful as possible is the only route to a truly higher standard of living. You might think gold is a barbarous relic, and I would agree that money based upon a single asset is a terrible idea. Putting all the eggs in one basket is too high a risk. However, a currency based on a multitude of assets, especially complimented by commodities that are the lifeblood of wealth creation (oil for instance, and perhaps corn in America's case), is a superior system in comparison to fiat currency backed by full faith and credit of the government. By using multiple assets, we can even out the distortions that will occur from time to time, essentially making our currency as stable as a rock. Those who produce the assets backing the currency will be induced to find the equilibrium which maximizes profit without over-extending. When we have that foundation, we can move forward with a market free of excessive and cronyism-based regulations and maintain a focus on only those regulations which are necessary to prevent harm that we find unacceptable. In other words, instead of using regulation to guide the economy in a specific direction, we can use regulation to make certain things off limits. It's the difference between steering towards something and steering away. It's far preferable to steer a ship away from an iceberg than to presume that you can steer it through the iceberg. Most importantly of all, we need to take money out of politics. None of this will matter unless we prevent our politicians from being beholden to campaign contributors. Our current system engenders corruption of even our best, brightest and well-intentioned representatives. They begrudgingly accept the standard which says they must compromise their principles in order to get reelected. My solution is a constitutional amendment which requires all electoral campaigns to be paid for with public funds and prohibits any advocacy of a candidate which extends further than displays of support by private individuals, and a requirement that all such displays be transparent by way of indicating who is responsible for them. I humbly give you these words and suggestions in the hopes that together we can build an America which is stronger, better and freer. I believe that only through freedom can we accomplish what our hearts desire. Thank you for reading this.
| ||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Sep 2011 12:34 PM PDT As is well-known by now, following America's collapse in the first Great Depression back in 1929, one of the first decisions undertaken by president FDR, not even a month following the first of four inaugural speeches (in which he notably said that "the only thing we have to fear is fear itself") was to respond to the rolling bank runs and shutdowns, by doing something unprecedented: confiscating the gold of American citizens. And then he logically followed up by doing the only thing that insolvent governments know how to do: he debased the US Dollar overnight by 40% by changing the official exchange ratio of the USD to gold from $20.67 per ounce to $35.00 per troy ounce. Alas, since exchanging such gold would be impossible until 40 years later, nobody could take advantage of this generous offer. It is this point in history that to William Buckler of the famous Privateer newsletter marks the transition of American government from republican (on behalf of the people) to being authoritarian (in control of the people). It also begs the question: what did FDR offer in return for gold confiscation - after all if gold confiscation is not "something to be feared" then there is a quid pro quo. Why he gave us Social Security and the Welfare state. The same "welfare" state whose unfunded obligations amount to roughly $80 trillion, and whose increasingly tangible insolvency is precisely the reason why ever more capital is shifting right back to, you guessed it, gold. Perhaps FDR should have added that in addition to fear itself, the one other thing everyone should fear is governments believing they they know what they are doing when transitioning to central planning an an authoritarian regime based on nothing but faith. From the latest Privateer newsletter:
Segment courtesy of Bill Buckler and his prior permission.
| ||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Sep 2011 12:34 PM PDT
As is well-known by now, following America's collapse in the first Great Depression back in 1929, one of the first decisions undertaken by president FDR, not even a month following the first of four inaugural speeches (in which he notably said that "the only thing we have to fear is fear itself") was to respond to the rolling bank runs and shutdowns, by doing something unprecedented: confiscating the gold of American citizens. And then he logically followed up by doing the only thing that insolvent governments know how to do: he debased the US Dollar overnight by 40% by changing the official exchange ratio of the USD to gold from $20.67 per ounce to $35.00 per troy ounce. Alas, since exchanging such gold would be impossible until 40 years later, nobody could take advantage of this generous offer. It is this point in history that to William Buckler of the famous Privateer newsletter marks the transition of American government from republican (on behalf of the people) to being authoritarian (in control of the people). It also begs the question: what did FDR offer in return for gold confiscation - after all if gold confiscation is not "something to be feared" then there is a quid pro quo. Why he gave us Social Security and the Welfare state. The same "welfare" state whose unfunded obligations amount to roughly $80 trillion, and whose increasingly tangible insolvency is precisely the reason why ever more capital is shifting right back to, you guessed it, gold. Perhaps FDR should have added that in addition to fear itself, the one other thing everyone should fear is governments believing they they know what they are doing when transitioning to central planning an an authoritarian regime based on nothing but faith. From the latest Privateer newsletter:
Segment courtesy of Bill Buckler and his prior permission.
| ||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Sep 2011 12:12 PM PDT by Alasdair Macleod, GoldMoney.com:
There is a contrarian adage that when no one expects an event, it might happen, and when an event is commonly expected it might not happen. This could apply to the much-heralded banking collapse. But since the Bear Sterns and Lehman crisis the banks themselves have been busy rebuilding their core capital and adjusting their business activities in line with the new Basle III regulations and the Dodd-Frank Act in the US. In Britain, regulation of the banks has moved back from the FSA to the Bank of England, where it belongs. Both the banks and their regulators, having had a very nasty shock three years ago, have taken big steps to avoid a second crisis.
| ||||||||||||||||||||||||||||||||||||||||||
| A National Debt Of $14 Trillion? Try $211 Trillion Posted: 04 Sep 2011 10:46 AM PDT When Standard & Poor's reduced the nation's credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit. The downgrade, S&P said, "reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics." It's those medium- and long-term debt problems that also worry economics professor Laurence J. Kotlikoff, who served as a senior economist on President Reagan's Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $14 trillion, is just the tip of the iceberg. "We have all these unofficial debts that are massive compared to the official debt," Kotlikoff tells David Greene, guest host of weekends on All Things Considered. "We're focused just on the official debt, so we're trying to balance the wrong books." Kotlikoff explains that America's "unofficial" payment obligations — like Social Security, Medicare and Medicaid benefits — jack up the debt figure substantially. "If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That's the fiscal gap," he says. "That's our true indebtedness." We don't hear more about this enormous number, Kotlikoff says, because politicians have chosen their language carefully to keep most of the problem off the books. "Why are these guys thinking about balancing the budget?" he says. "They should try and think about our long-term fiscal problems." According to Kotlikoff, one of the biggest fiscal problems Congress should focus on is America's obligation to make Social Security payments to future generations of the elderly. "We've got 78 million baby boomers who are poised to collect, in about 15 to 20 years, about $40,000 per person. Multiply 78 million by $40,000 — you're talking about more than $3 trillion a year just to give to a portion of the population," he says. "That's an enormous bill that's overhanging our heads, and Congress isn't focused on it." "We've consistently done too little too late, looked too short-term, said the future would take care of itself, we'll deal with that tomorrow," he says. "Well, guess what? You can't keep putting off these problems." To eliminate the fiscal gap, Kotlikoff says, the U.S. would have to have tax increases and spending reductions far beyond what's being negotiated right now in Washington. "What you have to do is either immediately and permanently raise taxes by about two-thirds, or immediately and permanently cut every dollar of spending by 40 percent forever. The [Congressional Budget Office's] numbers say we have an absolutely enormous problem facing us." Source: NPR
| ||||||||||||||||||||||||||||||||||||||||||
| S&P Futures Down 9, As Gold Kneejerks Over $1890 Posted: 04 Sep 2011 10:23 AM PDT Nothing surprising in the premarket action with ES open for trading despite Labor Day, down about 9 points at its worst, following weekend concerns of yet another European apocalypse. Elsewhere, gold is enjoying the fact that the only bearish downside is potentially a technically overbought formation and is surging right off the bat passing $1890 on the kneejerk then reconfirming slowly. As a reminder, a nervous Japan arrives on the scene in 2 hours, followed by an insolvent Europe, and no US-based HFT available to rescue the world tomorrow. ES:
Gold:
Charts via Bloomberg
| ||||||||||||||||||||||||||||||||||||||||||
| Hugo Salinas Price's presentation to GATA's London conference Posted: 04 Sep 2011 09:20 AM PDT 5:22p ET Sunday, September 4, 2011 Dear Friend of GATA and Gold (and Silver): The address to GATA's Gold Rush 2011 conference in London last month by Hugo Salinas Price, president of the Mexican Civic Association for Silver, titled "Dorothy's Silver Shoes, or the Re-Monetization of the Silver Currency of the United States of America," has been posted at the association's Internet site here: http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=1... The appendix to Salinas Price's address, a brochure distributed at the conference, has been posted at the association's Internet site here: http://www.plata.com.mx/mplata/articulos/images/Hugo%20Salinas%20Price%2... CHRIS POWELL, Secretary/Treasurer 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: 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% 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_...
| ||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Sep 2011 08:58 AM PDT As we have been writing for a while now, it is not in the arcania of shadow banking that one needs to look to find increasing signs of the collapse in interbank lending. No: something as simple as Libor, especially its USD variant, which is so crucial to USD-crunched European banks, is more than sufficient to determine that not just Greece, or the PIIGS, but now the entire Eurozone is becoming completely dependent on the dollar generosity of the ECB, and the various other regional central banks. This by implication means that the Fed will once again be forced to step in, "in size" and bail out the world, only this time it is far more debatable if the world believes that even the Fed alone is sufficient to prevent a rising global insolvency tsunami. And confirming how bad it is, we now have none other than ABN AMRO's CEO on the tape, complaining loudly about liquidity: this is and always has been a move of total desperation as the last thing a bank wants to do is give any indication of funding weakness. Furthermore, since ABN Amro is not a USD LIBOR reporting bank, we can safely say that the dollar liquidity crunch has spread far and wide from the 18 BBA member banks, where it is hardly any easier to procure the former reserve currency. As a reminder this is what USD funding costs look like: as Dennis Gartman would say: it starts in the lower left and proceeds to the upper right.
From Bloomberg:
And an additional bonus is the realization that the end of the Euro, which now everyone is openly talking about, would destroy the Dutch economy:
He said. Not us.
| ||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Sep 2011 08:58 AM PDT
As we have been writing for a while now, it is not in the arcania of shadow banking that one needs to look to find increasing signs of the collapse in interbank lending. No: something as simple as Libor, especially its USD variant, which is so crucial to USD-crunched European banks, is more than sufficient to determine that not just Greece, or the PIIGS, but now the entire Eurozone is becoming completely dependent on the dollar generosity of the ECB, and the various other regional central banks. This by implication means that the Fed will once again be forced to step in, "in size" and bail out the world, only this time it is far more debatable if the world believes that even the Fed alone is sufficient to prevent a rising global insolvency tsunami. And confirming how bad it is, we now have none other than ABN AMRO's CEO on the tape, complaining loudly about liquidity: this is and always has been a move of total desperation as the last thing a bank wants to do is give any indication of funding weakness. Furthermore, since ABN Amro is not a USD LIBOR reporting bank, we can safely say that the dollar liquidity crunch has spread far and wide from the 18 BBA member banks, where it is hardly any easier to procure the former reserve currency. As a reminder this is what USD funding costs look like: as Dennis Gartman would say: it starts in the lower left and proceeds to the upper right.
From Bloomberg:
And an additional bonus is the realization that the end of the Euro, which now everyone is openly talking about, would destroy the Dutch economy:
He said. Not us.
| ||||||||||||||||||||||||||||||||||||||||||
| Antal Fekete outlines the gold-suppression, bond-support scheme Posted: 04 Sep 2011 08:47 AM PDT 4:40p ET Sunday, September 4, 2011 Dear Friend of GATA and Gold: In a two-part essay posted at 24hGold, the economist Antal Fekete provides a compelling interpretation of the gold price suppression scheme, which is also a scheme for the support of U.S. government bonds. Fekete writes: "The government has the following desiderata: "1) To have a floor below the bond price. "2) To have a ceiling above the gold price. "Indeed, without such a floor and ceiling, the bluffing epitomized by check-kiting could be called, and the international monetary system would unravel. "To promote these desiderata, the bond and the gold markets are manipulated. It is true that the Treasury and the Federal Reserve prefer not to play a direct role in it. Speculators are induced to do it for them through the lure of risk-free profits. "Simply put, the role of the derivatives market is to make phantom bonds available to buy, and phantom gold available to sell, for the benefit of speculators. It is no problem to make speculators want to buy phantom bonds. They have the incentives. They know that the Federal Reserve is going to buy, rain or shine. This offers a risk-free opportunity for profits. All the speculators have to do is to pre-empt Federal Reserve purchases -- that is, to buy beforehand. So let them. "The tricky part is how to make speculators want to sell phantom gold. This problem is solved by setting up a gold mine as a front, beefing it up as the world's largest gold-mining concern, and letting it introduce a phony hedge plan." 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 Fekete adds: "Clandestine government policy to manipulate the bond and gold markets is revealed by statistics on the number of outstanding contracts in derivatives, showing an inordinate open interest in bonds on the long side and in gold on the short side. Neither has any rhyme or reason to exist, in view of the underlying economic reality. What is more, the long interest in bond and short interest in gold derivatives are increasing exponentially, far outpacing the amount of bonds in existence and the amount of gold available for delivery. Moreover, there is an extreme concentration of derivatives in the hands of three or four firms -- namely, concentration of long bond and short gold positions." Part I is headlined "When Atlas Shrugged: The Lure and Lore of Risk-Free Profits" and it is at 24hGold here: http://www.24hgold.com/english/contributor.aspx?contributor=Antal+E%2E+F... Part II is headlined "When Atlas Shrugged: Gibson's Paradox and the Gold Price" and it is at 24hGold here: http://www.24hgold.com/english/news-gold-silver-when-atlas-shrugged-part... 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
| ||||||||||||||||||||||||||||||||||||||||||
| A Full-blown International Bond & Currency Crisis is Approaching ? Fast! Here?s Why Posted: 04 Sep 2011 08:43 AM PDT Over the past two months stock markets have crashed around the world and gold prices have soared as global investors decided that the U.S. has lost its race against time. A new recession is upon us before we even half-closed the output gap left open from the last recession.*It means even larger deficits and an even weaker dollar. The price of gold and Treasury bonds is telling us that a full-blown international bond and currency crisis is approaching.* There is no international policy mechanism available to stop the panic short of re-opening the gold window that the U.S. closed unilaterally and "temporarily" in 1971.*[Let me explain.] Words: 3025 So says Eric Jansen ([url]www.itulip.com)**[/url]in an article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited ([* ]), abridged (…) and*reformatted*below**for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-post...
| ||||||||||||||||||||||||||||||||||||||||||
| Silver Update: Silver Vs Stocks Posted: 04 Sep 2011 07:54 AM PDT From BrotherJohnF Filed under: austerity, BrotherJohnF, bullion traders, Buy Gold, Buy Silver, commodity futures contracts, commodity futures trading, commodity trades, consumer confidence, currency systems, european market turmoil, federal reserve chairman ben bernanke, federal reserve system, futures market, gold bullion, gold currency, gold price, jp morgan chase, market confidence, market crash, market manipulation, price of gold, [...] 
This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||
| Gaddafi gold-for-oil, dollar-doom plans behind Libya ‘mission’? Posted: 04 Sep 2011 07:16 AM PDT
| ||||||||||||||||||||||||||||||||||||||||||
| WikiLeaks – US, France Knew In 2007 Financial Collapse Was Imminent Due To Wall Street Fraud Posted: 04 Sep 2011 07:01 AM PDT In 2007 top US and France officials knew rampant fraud being committed by regulators, rating agencies and Wall Street Banks would soon cause a global financial collapse. By Alexander Higgins While investors and nations around the world were happily giving trillions of dollars away to crooked Wall Street bankers top officials in the United [...] 
This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Sep 2011 06:36 AM PDT Gary Jason Earlier this year, President Obama went on one of his gloating tours, touting the wisdom of his nationalization of General Motors and Chrysler. Theirs was a corrupt bankruptcy that strongly rewarded the UAW, one of Obama's major financial contributors. The new GM then posted a few months of improved sales, leading to much crowing by all the corrupt cocks. But lately, the road for what is derisively termed "Government Motors" has become rather bumpy, as illustrated in a recent story. And of course, back in March of 2009, as GM headed toward bankruptcy, Obama promised that in any action he took to "save" GM, consumers would have their warranties honored. As he trumpeted at the time, "Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like [sic] always. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty!" Another Obama lie, of course. He stood behind GM warranties about as much as he has stood behind the American dollar . . . Meanwhile, shares of the New GM hit a new low of $22 a share. 
| ||||||||||||||||||||||||||||||||||||||||||
| Things Look So Bad They Can Only Get Better Posted: 04 Sep 2011 06:16 AM PDT Calafia Beach Pundit To judge by the level of Treasury yields, the outlook for the U.S. economy has never been so bad. At 0.2% and 0.9%, respectively, 2- and 5-yr Treasury yields are lower today than they have been at any time during my lifetime. Far lower. Lower even than they were at the end of 2008, when the market was priced to years of deflation, a global depression, the default of as many as half the companies in the country within the next 5 years, and a global financial collapse. Wow. With his popularity plunging, and the economy on the ropes, Obama is being forced to change. I can't imagine that he will not adapt further, eventually supporting pro-growth, pro-business policies. The electorate doesn't like what's been happening. Keynesian stimulus policies have been proven not to work, and next week he simply can't reiterate his calls for more stimulus spending and more unemployment benefits. I've never seen so much political, economic and financial tension in the markets. This is not a long-run equilibrium situation; something has to change for the better, and it can't wait until next year's elections. 
| ||||||||||||||||||||||||||||||||||||||||||
| Guest Post: Where Is Our Oil Price Collapse? Posted: 04 Sep 2011 05:19 AM PDT
From Jim Quinn of The Burning Platform Where Is Our Oil Price Collapse?
Make no mistake about it, without plentiful, cheap, and easy to access oil, the United States of America would descend into chaos and collapse. The fantasies painted by "green" energy dreamers only serve to divert the attention of the non critical thinking masses from the fact our sprawling suburban hyper technological society would come to a grinding halt in a matter of days without the 18 to 19 million barrels per day needed to run this ridiculous reality show. Delusional Americans think the steaks, hot dogs and pomegranates in their grocery stores magically appear on the shelves, the thirty electronic gadgets that rule their lives are created out of thin air by elves and the gasoline they pump into their mammoth SUVs is their God given right. The situation was already critical in 2005 when the Hirsch Report concluded: "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking." In the six years since this report there has been unprecedented oil price volatility as the world has reached the undulating plateau of peak cheap oil. The viable mitigation options on the demand and supply side were not pursued. The head in the sand hope for the best option was chosen. The government mandated options, ethanol and solar, have been absolute and utter disasters as billions of taxpayer dollars have been squandered and company after company goes bankrupt. The added benefit has been sky high corn prices, dwindling supplies and revolutions around the world due to soaring food prices. The last time the country went into recession in 2008, the price of oil plunged from $140 a barrel to $30 a barrel in the space of six months. I'd classify that as volatility. We've clearly entered a second recession in the last six months. So we should be getting the benefit of collapsing oil prices. But, a funny thing happened on the way to another oil price collapse. It didn't happen. WTI Crude is trading for $87 a barrel, up 23% since January 1. Unleaded gas prices are up 54% in the last year and 43% since January 1. Worldwide oil pricing is not based on WTI crude but Brent crude, selling for $113 per barrel, only down 10% from its April high of $125. The U.S. and Europe consume 40% of all the oil in the world on a daily basis. Multiple European countries have been in recession for the last nine months. The U.S. economy has been in free fall for six months. Some short term factors will continue to support higher oil prices. The Chinese continue to fill their strategic petroleum reserve, Japan is still relying on diesel generators for electricity post-tsunami, and the Middle East is developing a love affair with the air conditioner. But, it's the long term factors that will lead to much higher oil prices for myopic oblivious Americans.
John Hussman describes the situation on the ground today based upon six economic conditions presently in effect: There are certainly a great number of opinions about the prospect of recession, but the evidence we observe at present has 100% sensitivity (these conditions have always been observed during or just prior to each U.S. recession) and 100% specificity (the only time we observe the full set of these conditions is during or just prior to U.S. recessions). With 40% of the world in or near recession, how come oil prices are still so high and much higher than last year, when the economies in Europe and the U.S. were expanding? The number of vehicle miles driven in the U.S. is still below the level reached 43 months ago and at the same level as early 2005. The price of a barrel of oil in early 2005 was $42. The U.S. is using the same amount of oil, but the price is up 112%. It seems the U.S. isn't calling the shots when it comes to the worldwide supply/demand equation.
It would probably be a surprise to most people that U.S. oil consumption today is at the same level it was in 1997 and is 10% lower than the peak reached in 2005. This is not a reflection of increased efficiency or Americans gravitating towards smaller vehicles with better mileage. Americans are still addicted to their SUVs and gas guzzling luxury automobiles. It's a reflection of a U.S. economy that has been in a downward spiral since 2005.
If the U.S. isn't driving oil demand in the world, then why are prices going up? There are three main factors:
Surging Developing World DemandThe Energy Information Administration issued their latest forecast and it does not bode well for lower prices: Despite continued concerns over the pace of the global economic recovery, particularly in developed countries, the US Energy Information Administration expects worldwide oil consumption to increase this year and next spurred by demand in developing countries. US oil consumption, however, is forecast to contract from a year ago. Worldwide oil demand, led by China, will increase by 1.4 million b/d in 2011 to average 88.19 million b/d and by 1.6 million b/d in 2012, outpacing average global demand growth of 1.3 million b/d from 1998-2007, before the onset of the global economic downturn. China is now consuming over 9 million barrels per day. This is up from an average of 7 million barrels per day in 2006. Platts, a global energy analyst, put China's 2010 figures at 8.5 million barrels per day, up 11.43% from the previous year. The forecast for China's crude throughput in 2011 is an average of 9.24 million barrels per day up 8.5% from 2010. In the first seven months of this year, total crude throughput stood at average of 8.95 million barrels per day.
Standard Chartered Bank predicts that, by the year 2020, China will overtake all of Europe as the second largest consumer of oil in the world, and should catch up to the U.S. by the year 2030 as China's demand continues to rise while U.S. demand is expected to be flat. Chinese crude imports grew 17.5% in 2010 to 4.79 million barrels per day. China is importing 55% of its oil today versus 40% in 2004. China's oil consumption per capita has increased over 350% since the early 1980s to an estimated 2.7 barrels per year in 2011. Consumption per capita has risen nearly 100% in just the past decade. Oil consumption per capita in the U.S. currently ranks among the top industrialized nations in the world at 25 barrels per year. However, today's consumption levels are approximately 20% lower than they were in 1979. The chart below paints a picture of woe for the United States and the world. China overtook the United States in auto sales in 2009. They now sell approximately 15 million new vehicles per year. India sells approximately 2 million new vehicles per year. The U.S. sells just over 12 million new vehicles per year. In China and India there are approximately 6 car owners per 100 people. In the U.S. there are 85 car owners per 100 people.
They call China, India and the rest of the developing world - Developing – because they will be rapidly expanding their consumption of goods, services and food. There will certainly be bumps along the way, as China is experiencing now, but the consumption of oil by the developing world will plow relentlessly higher. China isn't the only emerging country to show big increases in per capita consumption. The growth in consumption for several other countries far outpaces China. Consumption per capita in Malaysia has nearly quadrupled since the mid-1960s. Consumption in Thailand and Brazil has more than doubled to roughly 5.7 barrels and 4.8 barrels per year, respectively. Developed countries, especially those in Western Europe, have experienced substantial declines in oil consumption. Today's per capita consumption in Sweden is roughly 12 barrels per year, down from 25 barrels per year in the mid-1970s. France, Japan, Norway and U.K. all use less oil on a per capita basis than they did in the 1970s. These countries have been able to drive down the consumption of oil by taxing gasoline at an excessive level.
Americans pay 43 cents in taxes out of the $3.70 they pay at the pump for a gallon of gasoline. A driver in the UK is paying $4 per gallon in taxes out of the $9 per gallon cost. Gasoline costs between $8 and $9 per gallon across Europe today. The extreme level of gas taxes certainly reduces car sizes, consumption and traffic. Too bad the mad socialists across Europe spent the taxes on expanding their welfare states and promising even more to their populations. Maybe a $6 per gallon tax will do the trick. Forcing Americans to drive less by doubling the gas tax is a quaint idea, but it is too late in the game. Europe is still made up of small towns and cities with the populations still fairly consolidated. Biking, walking and small rail travel is easy and feasible. The sprawling suburban enclaves that proliferate across the American countryside, dotted by thousands of malls and McMansion communities, accessible only by automobiles, make it impossible to implement a rational energy efficient model for moving forward. We cannot reverse 60 years of irrationality. Even without higher gas taxes, the price of gasoline will move relentlessly higher due to the stealth tax of currency debasement. A Plunging US DollarThe US dollar has fallen 15% versus a basket of worldwide currencies (DXY) since February 2009. This is amazing considering that 57% of the index weighting is the Euro. If you haven't noticed, Europe is a basket case on the verge of economic disintegration. The US imports a net 9.4 million barrels of oil per day, or 49% of our daily consumption. Our largest suppliers are:
These eight countries account for over 70% of our daily oil imports. You hear the "experts" on CNBC declare that our oil supply situation is secure because close to 60% of our daily usage is sourced from North America. The presumption is that Canada and Mexico are somehow under our control. There is one problem with this storyline. US oil production peaked in 1971 and relentlessly declines as M. King Hubbert predicted it would. Mexico will cease to be a supplier to the U.S. by 2015 as their Cantarell oil field is in collapse. Most of the oil supplied from Canada is from their tar sands. Expansion of these fields is difficult as it takes tremendous amounts of natural gas and water to extract the oil. The rest of the countries on the list dislike us, hate us, or are in constant danger of implosion. When the Neo-Cons on Fox News try to convince you that Iraq has been a huge success and certainly worth the $3 trillion of national wealth expended, along with 4,500 dead and 32,000 wounded soldiers, you might want to keep in mind that Iraq was exporting 795,000 barrels of oil per day to the U.S. in 2001 when the evil dictator was in charge. Today, we are getting 415,000 barrels per day. Dick Cheney was never good at long term strategic planning. We better plant more corn, as our supply situation is far from stable. Maybe we can install solar panels from Obama's Solyndra factory on the roofs of the 65 Chevy Volts that were sold in the U.S. this year, to alleviate our oil supply problem. The reliability and stability of our oil supply takes second place to the price increases caused by Ben Bernanke and his printing press. The average American housewife driving her 1.5 children in her enormous two and a half ton Chevy Tahoe or gigantic Toyota Sequoia two miles to baseball practice doesn't comprehend why it is costing her $100 to fill the 26 gallon tank. If she listens to the brain dead mainstream media pundits, she'll conclude that Big Oil is to blame. The real reason is Big Finance in conspiracy with Big Government. Ben Bernanke is responsible for Americans paying $4 a gallon for gasoline. Zero interest rates, printing money out of thin air to buy $2 trillion of mortgage and Treasury bonds, and propping up insolvent criminal banks across the globe have one purpose – to deflate the value of the U.S. dollar. The rulers of the American Empire realize they can never repay the debts they have accumulated. They have chosen to default through debasement. It's an insidious and immoral method of defaulting on your obligations. Let's look at from the perspective of our two biggest oil suppliers. A barrel of oil cost $40 a barrel in early 2009. The U.S. dollar has declined 30% versus the Canadian dollar since early 2009. The U.S. dollar has shockingly declined 20% versus the Mexican Peso since early 2009. How could the mighty USD decline 20% against the currency of a 3rd world country on the verge of being a failed state? Ask Ben Bernanke. Our lenders can't do much about the continuing debasement of our currency, but our oil suppliers can. They will raise the price of oil in proportion to our currency devaluation. Since Bernanke's only solution is continuous debasement, the price of oil will relentlessly rise. Peak Oil Has Arrived"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity." - 2010 Joint Operating Environment Report
We've arrived at the point where demand has begun to outpace supply and even the onset of another worldwide recession will not assuage this fact. World oil supply has peaked just below 89 million barrels per day. Supply has since fallen to 87.5 million barrels per day, as Libyan supply was completely removed from world markets. The International Energy Agency is already forecasting worldwide demand to reach 90 million barrels per day in the second half of 2011 and reach 92 million barrels per day in 2012. The IEA warns that "just at the time when demand is expected to recover, physical limits on production capacity could lead to another wave of price increases, in a cyclical pattern that is not new to the world oil market."
The world is trapped in an inescapable conundrum. As supply dwindles, prices increase, causing global economies to contract, and temporarily causing a drop in prices, except the lows are higher each time. The drill, drill, drill ideologues do nothing but confuse and mislead the easily led masses. We have 2% of the world's oil reserves and consume more than 20% of the daily output. We consume 7 billion barrels of oil per year. Drilling for oil in the Arctic National Wildlife Refuge in Alaska and areas formerly off limits in the Outer Continental Shelf will not close the supply gap. The amount of recoverable oil in the Arctic coastal plain is estimated to be between 5.7 billion and 16 billion barrels. This could supply as little as a year's worth of oil. And it will take 10 years to produce any oil from this supply. The OCS has only slightly more recoverable oil at an estimated 18 billion barrels and the BP Gulf Oil disaster showed how easy this oil is to access safely. The new over hyped energy savior is shale gas. The cheerleaders in the natural gas industry claim that we have four Saudi Arabias worth of natural gas in the U.S. This is nothing but PR talking points to convince the masses that we can easily adapt. The amount of shale gas that can be economically produced is far less than the amounts being touted by the industry. The wells deplete rapidly and the environmental damage has been well documented. And last but certainly not least, we have the abiotic oil believers that convince themselves the wells will refill despite the fact that there is not one instance of an oil well refilling once it is depleted. I wrote an article called Peak Denial About Peak Oil exactly one year ago when gas was selling for $2.60 a gallon. I railed at the short sightedness of politicians and citizens alike for ignoring a calamitous crisis that was directly before their eyes. Just like our accumulation of $4 billion per day in debt, peak oil is simply a matter of math. We cannot take on ever increasing amounts of debt in order to live above our means without collapsing our economic system. We cannot expect to run our energy intensive world with a depleting energy source. There is no amount of spin and PR that can change the math. Un-payable levels of debt and dwindling supplies of oil will merge into a perfect storm over the next ten years to permanently change our world. The change will be traumatic, horrible, bloody and a complete surprise to the non-critical thinking public. "In the longer run, unless we take serious steps to prepare for the day that we can no longer increase production of conventional oil, we are faced with the possibility of a major economic shock—and the political unrest that would ensue." – Dr. James Schlesinger – former US Energy Secretary, 16th November 2005 We were warned. We failed to heed the warnings. If we had begun making the dramatic changes to our society 5 to 10 years ago, we may have been able to partially alleviate the pain and suffering ahead. Instead we spent our national treasure fighting Wars on Terror and bailing out criminal bankers. Converting truck and bus fleets to natural gas; expanding the use of safe nuclear power; utilizing wind, geothermal, and solar where economically feasible; buying more fuel efficient vehicles; and creating more localized communities supported by light rail with easy access to bike and walking options, would have allowed a more gradual shift to a less energy intensive society. We've done nothing to prepare for the onset of peak oil. Until this foreseeable crisis hits with its full force like a Category 5 hurricane, Americans will continue to fill up their M1 tank sized, leased SUVs, tweet about Lady Gaga's latest stunt, and tune in to this week's episode of Jersey Shore. Meanwhile, economic stagnation, catastrophe and wars for oil are darkening the skies on our horizon. "Dependence on imported oil, particularly from the Middle East, has become the elephant in the foreign policy living room, an overridin | ||||||||||||||||||||||||||||||||||||||||||
| Is GATA suddenly becoming almost respectable? Posted: 04 Sep 2011 04:51 AM PDT 1:02p ET Sunday, September 4, 2011 Dear Friend of GATA and Gold: Thanks to a friend met in London just after GATA's Gold Rush 2011 conference there last month, your secretary/treasurer has been invited to affect some respectability and speak at a couple of financial conferences well outside the usual precious metals circuit. The first is the CLSA Investor Forum in Hong Kong from September 19-23, said to be the largest investment conference in Asia. Host of this year's conference is to be the actor and human rights advocate George Clooney: https://www.clsa.com/about-clsa/media-centre/2011-media-releases/clsa-to... The conference is open only to CLSA clients. Then on October 10 your secretary/treasurer has been invited to address the weekly Pi Capital conference, which, the previous week, will be hearing from former President Jimmy Carter and, a couple of weeks later, from fund manager George Soros: http://www.picapital.co.uk/events.aspx?MasterId=176 Some current or present government officials with responsibility for the British end of the gold price suppression scheme may be in the audience, so it could be interesting. But this too is a members-only event. That GATA suddenly should be welcome, if only tentatively, in such circles may be construed as evidence that the gold price suppression scheme is beginning to escape derision as mere "conspiracy theory" and starting to seem at least plausible, probable, or even fully documented to people in a position to act on the knowledge. In any case GATA has come a long way since its incorporation 12 years ago. If you're encouraged by our progress and are inclined to help sustain our work, please consider making a donation: We promise to try to keep making trouble with it. Remember that the World Gold Council, which presumes to speak for both the gold mining industry and gold investors, is said to have an annual budget of more than $60 million, raised from assessment against the mining companies that are its members, and most of that just goes for hanging out with beautiful young women modeling expensive jewelry. (Somebody's got to do it, we suppose.) But it's not merely envious to note that this does little for the cause of establishing free markets in the monetary metals, even as GATA, having no regular income, has no annual budget. We sustain ourselves on what our friends can provide irregularly. On the other hand, maybe the gold price suppression scheme will blow up in advance of the Hong Kong and London conferences and we can move on to trying to prove something else -- maybe flying saucers or Bigfoot. Maybe that would get us into The Wall Street Journal or The New York Times at last. CHRIS POWELL, Secretary/Treasurer 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_... 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:
|
The banking crisis of 2008 alerted us to the risk of a systemic collapse of the banking system. Today these fears again seem very real, with concerns over the European banks and the share prices of banks everywhere having taken a big hit recently. Splitting the banks into domestic lending and investment banking has also returned to the top of the political agenda in Britain this week.
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment