Gold World News Flash |
- False Comparison To 2008
- Howard Marks Explains "What's Behind The Downturn"
- Howard Marks Explains "What's Behind The Downturn"
- WikiLeaks Drops Bombshell on Gold Market; GATA Right Again!
- Embry - JP Morgan Trapped Short in Silver, Gold Strongly Bid
- Gold Seeker Closing Report: Gold Falls Nearly 3% While Stocks Gain Over 2%
- Embry covers nearly everything in King World News interview
- Japan's Economy Implodes Again: No Scapegoats This Time
- Japan's Economy Implodes Again: No Scapegoats This Time
- Bolivia's central bank will buy domestic gold production to boost reserves
- US Dollar Bull Cycle Warming Up
- Giant Sucking Sound Part 2? The NAFTA Of The Pacific Will Soon Allow Millions More American Jobs To Be Shipped Overseas
- If the Gold Price Closes Below $1,792.50, it Will Drop Much Lower
- Do the Western Central Banks Really Believe A Lower Gold Price Will Cut Demand For The Precious Metal?
- Massive Criminal Raid by Our Bankers / Precious Metal Shares Hold Up
- Hilsenrath Speaks: "Fed Prepares To Act"
- Hilsenrath Speaks: "Fed Prepares To Act"
- Fear and Loathing on Wall Street
- John Hathaway: Gold Will Now See Massive Mainstream Fund Flows
- Ambrose Evans-Pritchard: German court curbs future bailouts, bans EU fiscal union
- A September to Remember?
- JP Morgan Previews Obama's Tomorrow Speech: "We Anticipate That Little Will Come Out Of It"
- JP Morgan Previews Obama's Tomorrow Speech: "We Anticipate That Little Will Come Out Of It"
- Why There’s No Employment Growth in America’s Profit Centers
- Look who's watching GATA
- 20 Quotes from European Leaders That Prove That They Know That the Financial System in Europe Is Doomed
- Gold Daily and Silver Weekly Charts - Predictable Moves in the Bretton Woods Endgame
- Silver SLV ETF Coil Should Resolve to Upside
- Gold False Comparison To 2008
- David Tepper Is Balls To The Wall In Cash
| Posted: 07 Sep 2011 06:34 PM PDT by Jim Willie CB September 7, 2011 home: Golden Jackass website subscribe: Hat Trick Letter Jim Willie CB, editor of the "HAT TRICK LETTER" Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy. Whenever it suits Team Titanic from the increasingly tense helm, more phony comparisons are trotted out in baseless news stories posing as...
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| Howard Marks Explains "What's Behind The Downturn" Posted: 07 Sep 2011 04:53 PM PDT Oaktree's Howard Marks once again cuts through what he perceives is the market's irrationality to explain what, to him, was the cause of the historic market collapse in early August: "Markets usually do a pretty good job of coping with problems one at a time. When one arises, analysts analyze and investors reach conclusions and calmly adjust their portfolios. But when there's a confluence of negative events, the markets can become overwhelmed and lose their cool. Things that might be tolerable individually combine into an unfathomable mess whose extent and ramifications seem beyond analysis. Market crises are chaotic, not orderly, and the multiplicity and simultaneity of contributing causes play a big part in making them so. It's my sense that it was the simultaneous nature of these occurrences – in addition to, or perhaps rather than, their force individually – that rendered the markets so incapable of maintaining their equanimity.Certainly that was the case in early August. For the first time in history, the Dow Industrials either rose or fell by at least 400 points four days in a row... Importantly, we saw the onset of one of those negative feedback loops where intelligence is imputed to market developments. We're told the falling prices reflect problems lying ahead, and thus investors sell in response to the message being provided by . . . investors who're selling. Again, I think it was the collective force of these things that convinced people the world was a scary place. What could be worse than the convergence of a number of major worries whose extent, interaction and solution seem beyond comprehension."
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| Howard Marks Explains "What's Behind The Downturn" Posted: 07 Sep 2011 04:53 PM PDT
Oaktree's Howard Marks once again cuts through what he perceives is the market's irrationality to explain what, to him, was the cause of the historic market collapse in early August: "Markets usually do a pretty good job of coping with problems one at a time. When one arises, analysts analyze and investors reach conclusions and calmly adjust their portfolios. But when there's a confluence of negative events, the markets can become overwhelmed and lose their cool. Things that might be tolerable individually combine into an unfathomable mess whose extent and ramifications seem beyond analysis. Market crises are chaotic, not orderly, and the multiplicity and simultaneity of contributing causes play a big part in making them so. It's my sense that it was the simultaneous nature of these occurrences – in addition to, or perhaps rather than, their force individually – that rendered the markets so incapable of maintaining their equanimity.Certainly that was the case in early August. For the first time in history, the Dow Industrials either rose or fell by at least 400 points four days in a row... Importantly, we saw the onset of one of those negative feedback loops where intelligence is imputed to market developments. We're told the falling prices reflect problems lying ahead, and thus investors sell in response to the message being provided by . . . investors who're selling. Again, I think it was the collective force of these things that convinced people the world was a scary place. What could be worse than the convergence of a number of major worries whose extent, interaction and solution seem beyond comprehension."
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| WikiLeaks Drops Bombshell on Gold Market; GATA Right Again! Posted: 07 Sep 2011 04:45 PM PDT by Dominique de Kevelioc de Bailleul With an avalanche of ever-tantalizing news stories and upcoming nail-biting scheduled officialdom events in both Europe and the U.S. all hitting the gold market at once in September, discerning the story that could propel some distance from Jim Sinclair's exosphere target of $1,764 in the gold price weighs heavily in favor of the WikiLeaks story and its potential explosive impact on the price of gold from the $1,900 print to Sinclair's ultimate target of $12,000+. Though the European financial crisis soap opera moves from Greece and Portugal to, now, Italy and Germany, shifting temporarily away from France, with Belgium's dirty laundry on deck in case there's a lull in the action, the WikiLeaks release of a U.S. State Department internal cables on the subject of Beijing's plan for undermining the U.S. dollar through the gold market even trumps the Israel/Turkey potential gray-swan military conflict brewing in the Mediterranean (could ex-CIA operative Robert Baer be right about an Israeli attack in the region by the fall?). The leaked State Department U.S. embassy cable – 09BEIJING1134, published by WikiLeaks exposes both the clandestine operations at the Fed/Treasury as well as reveals who's been sleeping with the enemy…
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| Embry - JP Morgan Trapped Short in Silver, Gold Strongly Bid Posted: 07 Sep 2011 04:24 PM PDT  With continued volatility in both the gold and silver markets, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management. When asked about the action in gold and what he is doing with his own money Embry replied, "I've been buying gold shares, I mean this is no different than the smash that we had a couple weeks ago when they (the cartel) took it from $1,900 to $1,700. One of the reasons for the takedown is they know what's coming. You've got the Fed meeting on the 20th and 21st but they are not going to solve anything. It's the same suspects doing the same games and it will end the same way."
This posting includes an audio/video/photo media file: Download Now |
| Gold Seeker Closing Report: Gold Falls Nearly 3% While Stocks Gain Over 2% Posted: 07 Sep 2011 04:00 PM PDT Gold fell all the way to $1792.80 by a little after 10AM EST before it rallied back higher in the last few hours of trade, but it still ended with a loss of 2.96%. Silver dropped to as low as $40.406 before it also rebounded in late trade, but it still ended with a loss of 0.62%.
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| Embry covers nearly everything in King World News interview Posted: 07 Sep 2011 03:40 PM PDT 11:36p ET Wednesday, September 7, 2011 Dear Friend of GATA and Gold (and Silver): Sprott Asset Management's chief investment strategist, John Embry, today comments to Knig World News about the volatility in the gold market, the Swiss devaluation, the outlook of Russia and China toward the gold market, and the impossibility of covering the short position in silver. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/8_Emb... 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
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| Japan's Economy Implodes Again: No Scapegoats This Time Posted: 07 Sep 2011 02:18 PM PDT While the easily amused were obsessing with choosing the best one line punchlines to describe the status quo posturing on TV in the form of another highly irrelevant political spectacle, Japan's economy imploded, only this time for real. Unlike back in Q2 when every downtick in the economy was blamed on the Tsunami and on the Fukushima explosion, we just got, 6 months later, the report for Japanese machinery orders which collapsed 8.2% in the month of July, for the biggest drop in 10 months, over and above anything seen during the Fukushima days. This is exactly 100% worse than the 4.1% drop predicted. The reasons according to Reuters: "companies are delaying investment due to worries about a strong yen, slackening global growth and slow progress in reconstruction from the March earthquake." Of these the Yen is by far the most relevant. And thanks to the SNB, the Bank of Japan, whose currency has suddenly become the only safe risk haven, will have no choice but to add balance sheet insult to economic injury and resume JPY interventions, only this time the duration will be even shorter than the last such episode which lasted all of 3 days (see below). This in turn will force all other central banks to do more of the same until relative devaluation, and the biggest currency lower, is the name of the only game in a few weeks. As for the winner: the only real currency which can not be printed, well, that story is very well known by now. More on the latest confirmation of Japanese economic devastation (which nobody could predict):
Here is why this is extremely favorable for, what else, gold, which has risen $25 since the GOP's orange spraytan colored circus began.
As for the recently popular theme documenting the collapsing half life of central bank interventions, this chart speaks volumes.
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| Japan's Economy Implodes Again: No Scapegoats This Time Posted: 07 Sep 2011 02:18 PM PDT
While the easily amused were obsessing with choosing the best one line punchlines to describe the status quo posturing on TV in the form of another highly irrelevant political spectacle, Japan's economy imploded, only this time for real. Unlike back in Q2 when every downtick in the economy was blamed on the Tsunami and on the Fukushima explosion, we just got, 6 months later, the report for Japanese machinery orders which collapsed 8.2% in the month of July, for the biggest drop in 10 months, over and above anything seen during the Fukushima days. This is exactly 100% worse than the 4.1% drop predicted. The reasons according to Reuters: "companies are delaying investment due to worries about a strong yen, slackening global growth and slow progress in reconstruction from the March earthquake." Of these the Yen is by far the most relevant. And thanks to the SNB, the Bank of Japan, whose currency has suddenly become the only safe risk haven, will have no choice but to add balance sheet insult to economic injury and resume JPY interventions, only this time the duration will be even shorter than the last such episode which lasted all of 3 days (see below). This in turn will force all other central banks to do more of the same until relative devaluation, and the biggest currency lower, is the name of the only game in a few weeks. As for the winner: the only real currency which can not be printed, well, that story is very well known by now. More on the latest confirmation of Japanese economic devastation (which nobody could predict):
Here is why this is extremely favorable for, what else, gold, which has risen $25 since the GOP's orange spraytan colored circus began.
As for the recently popular theme documenting the collapsing half life of central bank interventions, this chart speaks volumes.
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| Bolivia's central bank will buy domestic gold production to boost reserves Posted: 07 Sep 2011 01:45 PM PDT By Alex Emery http://www.bloomberg.com/news/2011-09-07/bolivia-central-bank-to-buy-loc... Bolivia's central bank will buy gold from local producers to boost its international reserves, the Andean country's vice president, Alvaro Garcia Linera, said today. Bolivian President Evo Morales enacted a law authorizing the bank to buy gold through state mining company Empresa Boliviana de Oro, Garcia Linera said in a speech broadcast by La Paz-based television station Bolivision. The bank will pay miners the same rate as traders who sell the gold to Brazil and Peru, Garcia Linera said. Bolivia's central bank has increased its international reserves 10-fold to $11 billion since 2005, he said. Bolivia produced 6 metric tons of gold last year, down 14 percent from 2009, according to the Mining Ministry. ADVERTISEMENT Golden Phoenix to Present at Investment Conference at Waldorf Company Press Release The chief executive officer and the communications director of Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) will speak at the Rodman & Renshaw Global Investment Conference at the Waldorf Astoria Hotel in New York City on Tuesday, September 13. The CEO, Thomas Klein, and the communications director, Robert Ian, will address the conference from 2:50 to 3:15 p.m. at the hotel. The conference's keynote speakers include former Vice Presidents Dick Cheney and Al Gore and former Secretary of State Henry Kissinger. "At this conference Golden Phoenix will introduce its royalty mining growth strategy to a global investment audience," Klein says. "With rising gold prices, industry consolidation, and central banks becoming net buyers of gold, we believe that the investment demand for emerging and diversified gold producers like Golden Phoenix offers the potential for significant growth." 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 offer the potential for exploration upside with the backing of production and future royalty streams. For information about the conference, including last-minute room and schedule changes, please visit: http://www.rodmanandrenshaw.com/conferences?id=164 For the complete press release, please visit: http://goldenphoenix.us/press-release/golden-phoenix-to-speak-at-rodman-... 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_...
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| US Dollar Bull Cycle Warming Up Posted: 07 Sep 2011 01:41 PM PDT There is a long term bullish US Dollar cycle due to have a run. The short term cycles are implying that things are warming up for a US Dollar rally. This is not good for risk on trade ... Read More...
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| Posted: 07 Sep 2011 01:35 PM PDT from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
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| If the Gold Price Closes Below $1,792.50, it Will Drop Much Lower Posted: 07 Sep 2011 01:35 PM PDT Gold Price Close Today : 1814.20 Change : (55.70) or -3.0% Silver Price Close Today : 41.572 Change : (0.246) or -0.6% Gold Silver Ratio Today : 43.64 Change : -1.075 or -2.4% Silver Gold Ratio Today : 0.02291 Change : 0.000551 or 2.5% Platinum Price Close Today : 1821.80 Change : -62.40 or -3.3% Palladium Price Close Today : 753.45 Change : -25.60 or -3.3% S&P 500 : 1,165.24 Change : 33.38 or 2.9% Dow In GOLD$ : $130.07 Change : $ 6.93 or 5.6% Dow in GOLD oz : 6.292 Change : 0.335 or 5.6% Dow in SILVER oz : 274.58 Change : 8.20 or 3.1% Dow Industrial : 11,414.86 Change : 275.56 or 2.5% US Dollar Index : 75.43 Change : -0.518 or -0.7% The SILVER PRICE didn't fall nearly as much as gold today, and that took the gold/silver ratio BELOW the 20 dma. Isn't signaling any huge fall in SILVER and GOLD. GOLD, however, confirmed and completed yesterday's Key Reversal by closing down $55.70 at $1,814.20. Low came at $1,792.50, high at $1,874.40. Bottom line for me? Gold dipped below $1,800 and $1,810 then closed above $1,810. today landed gold smack on its 20 dma, which in the past year has limited most retracement --- generally if not utterly. Today's action resembleth not a market in a rout. Too many people waiting under the price to buy gold at a bargain. Never mind my opinion, here's a line in the sand: Gold should not close below $1,800. If it closes below $1,792.50, it will drop much lower. Above it must conquer $1,840 to turn up. Silver's low reached 4041.7c, then spiked back sharply. Didn't want to stay below 4100c, and closed Comex at 4157.2c. By its stingy drop today, silver refused to confirm gold's big drop. Maybe that means nothing, but it catches my eye because it just doesn't fit. BICBW. Tomorrow the silver price must hang on above 4040c, and I'd be happier if it stayed above 4120c. Bottom line: I don't think this will unfold into anything more than a fairly routine and shallow correction. Deep losses tomorrow would gainsay that outlook. This "risk-on/risk-off" schizophrenia is sending money slamming from one market to the other, and only displays how utterly confused, frightened, and diffident markets are. Stocks benefitted from the "risk-on" fit, gaining 275.56 (2.47%) for a Dow close at 11,414.86. S&P500 closed up 33.38 (4.2%) at 1,198.62. Nuts. Looney. Cuckoo. Stocks jumped straight up about the same level they plunged straight down to 10,900+ yesterday. Now 11,300 has been conquered and 11,500 waves the next challenge. Dow has climbed above its 20 dma (11,251) so might be headed up. I'll have to see it climb above 11,717 (the last intraday high) before I believe that it is doing anything but readying itself to jump off the cliff. Needs to confirm today's reversal with a higher close. Stocks -- they put the stink in Limburger cheese without ever leaving Wall Street. US Dollar bounced off 76 resistance,. It dropped 51.8 basis points (0.67%) to 75.434. 'Twill be adequate for it to hold above 75.20. Remember that 75.40 is the top of that range that has so long imprisoned the dollar, so today may be simply a final kiss good-bye. Dollar's drop helped not the Franken-currency. Euro rose 0.72% to 1.4099, but chart remains a mess and will post much lower prices. Much lower. Yen gained 0.56% but still heads down. Closed 129.51c/Y100 (Y77.2/$). Bernard O'Bama is supposed to address congress tomorrow with a plan to spend $300 billion to create jobs' while at the same time cutting government expenditures. Lessee -- mmmmm. He plans to make us rich by taking money out of one pocket and putting it in the other. Sounds like a government deal to me. And 'create jobs'? Government create jobs? With what production? What money? Government is a consumer. All they money they get they must tax or borrow, which takes money from those who really create jobs and gives to those who eat donuts and pretend to work. How did I fall into this lunatic world? Please remember that I will be vacationing from 9 September through 16 September, and so will not be sending out these daily commentaries. God willing, I will return on 19 September, rested. goldprice.org will be sending daily closing prices. I had no more written about silver dollars last night than the silver market dropped enough to raise their premium. They tend to be sticky to the downside, and not to fall with silver. Thus when I looked at them three days ago and silver was $43 an ounce and the silver dollars were $34 each, they were a good buy. But silver fell and they didn't, running up their premium. So let them be for a while. We'll get another change above $43 spot silver. Whoa! Y'all really don't understand the various forms of silver, judging from the questions I got from my comments yesterday about silver dollars. Here's what's in the market: A. One troy oz content, .999 fine silver rounds (coins) or bars, privately minted. $43.95/oz or 5.6% premium. B. 0.999 troy oz content, .999 fine silver American Eagles minted by US Mint. $45.81/oz or 10.1% premium C. 0.765 troy oz content each, 90% fine silver dollars, minted by US Mint from 1792 - 1935; Morgan dollars minted 1878-1904 and 1921; Peace minted 1921 - 1935. Peace dollars, $34.10 ea/$44.79 oz or 7.1% premium D. 0.715 troy oz content per dollar face value, 90% fine silver silver dimes, quarters, and halves minted by US Mint from 1853 - 1965. $30.129 per dollar = $42.14/oz or 1.3%. When I say silver American Eagles are a rotten buy, just look at the price, $3.67 more per ounce than US 90% silver coin. Remember, OVER TIME PREMIUM ALWAYS DISAPPEARS, so you will NOT, repeat NOT, recover that premium when you sell at market peak. Then all ounces will be equal, so buying Eagles gains you nothing and makes the Yankee mint rich -- not my goal. 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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| Posted: 07 Sep 2011 01:14 PM PDT Let's see now,... Dollar down, Oil up, copper up, CRB Index up. Gold and Silver down? Gold down 3%?! How can Gold be down 3%? Who would be dumb enough to sell their Gold? Western Central Banks? Of course! We can't have Gold going up and hit new ALL-time highs day after day if the financial system is collapsing... That TRUTH would just hurt WAY to much! RANTING ANDY: DEATH STAR ATTACK! HAVE NO FEAR, REBEL ALLIANCE! By Andy Hoffman I want to recap what has "happened" in the past few DAYS: 1. Collapsing stock markets, led by Major banks across the entire Western world 2. Rising credit default swap spreads, in many cases to record highs, for the aforementioned banks and essentially all Western sovereigns 3. Shockingly horrible economic data in both the U.S. and Europe, including the catastrophic U.S. jobs report on Friday 4. The U.S. government AGAIN breaching its debt ceiling, to NO FANFARE AT ALL! 5. Obama preparing a speech where he will propose additional, MASSIVE SPENDING with printed dollars on non-productive infrastructure jobs (word is it will be $300 billion) 6. The lordly Swiss National Bank PEGGING ITS SUPER-STRONG CURRENCY to the COLLAPSING EURO, eliminating one of gold's ONLY "competitors" as a safe haven 7. Wikileaks disclosures that the Chinese are well aware of the U.S./European policy of surreptitiously (and illegally) suppressing gold prices, and that the U.S. government KNOWS the Chinese know this! 8. The commencement of September, with just two weeks until the Fed meeting where a QE3 announcement is nearly certain, and three weeks until Europe likely approves creation of the ESFS, a €4 trillion fund printed out of thin air to bail out PIIGS 9. News that China is now planning to end its policy of monetary tightening, and go back to EASING again (http://www.bloomberg.com/news/2011-09-07/china-likely-to-ease-money-policy-journal-says-correct-.html)! Yes folks, this list, which is far from complete, lists just what has happened since FRIDAY! On its own, EACH item on this list would yield a SOARING gold price if the market were freely-traded, and combined this is an even more potent brew with the potential to COLLAPSE THE ENTIRE FINANCIAL SYSTEM ITSELF, let alone the gold Cartel. So if anyone is "worried" about today's MOB HIT ON GOLD AND SILVER, put yourself at ease and use yet another government-engineered "flash crash" to LOAD UP on Precious Metals, as much as you possibly can! Gotta love Ranting Andy for putting the Gold markets behavior the last couple of days into perspective so succinctly. Don't you find it a bit odd, that despite a continuing surge in the fundamental reasons to own Gold, the price seems to collapse every time it hits new ALL-time highs. Do people that own Gold really say to themselves, "Oh my, Gold is at a new All-time high, I better sell my stash!"? The chart below would certainly prove that to be a stupid decision:  Only a Western Central Bank, intent on offering the Chinese, the Russians, the Indians, and the Arabs a discount price at which to steal the "wealth of the west" would do such a blatantly stupid thing as sell Gold at a new All-time high. Seriously: This chart definitely looks like a loser...SELL that Gold ASAP!  Silver has risen 800%, better sell that Silver ASAP!  Yes definetly, sell those Bubble Metals and buy, buy, buy those "cheap" American stocks!  It should be clear by now to anybody watching the Precious Metals that the efforts by the Western Central Banks to suppress Gold and Silver prices has been futile. At best, they have only slowed their accent. Now, they only offer those that seek the Precious Metals as a safe haven in a global currency war, an opportunity to purchase their insurance at discounted prices. It should be no surprise that Western Central Bank Gold "interventions" last only hours now, instead of days and weeks as they have in the past. Like the Japanese Yen interventions in March, and again in August, the Swiss Franc intervention will fail given time. The Japanese Yen interventions were quickly followed by huge spikes in the price of Gold. Only a fool would believe that a huge spike in Gold will not follow yesterday's Swiss Franc intervention...despite the organized take down of Gold as the Swiss Franc intervention was announced. Dan Norcini explains below in a blog post today: "If it is not obvious by now, it should be -an attempt by the Central Banks of the West to derail the rise in the gold price is currently underway. I mentioned in my midday comments that an effort would take place to prevent gold from moving beyond $1900 in an attempt to paint a double top on the daily price chart and induce a round of technically related selling from speculators on the long side. This effort can clearly be seen in the following ONE MINUTE BAR CHART which reveals an enormous spike of 4,000+ contracts in the middle of the evening during a time period in the gold trading not normally known for this sort of volume. The question must now be raised - if this was a hedge fund blowing out of a long gold position, why wait for such a low liquidity environment in which to execute to trade knowing full well that by so doing, one would be guaranteed the worst possible exit price for the trade. Also, since the price of gold has been RISING and NOT FALLING, why would any gold long be forced to unload a position. It certainly is not under any duress from price action. We can probably eliminate this as the cause therefore since only the rankest of fools would attempt such a thing. The next question that must then be raised is if this were a hedge fund doing the selling to establish a fresh short position, why would they sell in such size at such an hour guaranteeing themselves to be filled with a fresh short position at the worst possible price by selling into a hole? The logical answer is that they would not do such a thing. By the process of elimination and due to the fact that a major attempt by a Western Central Bank (the Swiss National Bank) to deliberately debase their currency occurred less than 24 hours previous to this selling barrage, added to the fact that an obvious raid took place on gold knocking it down below $1900 during the time frame in which the Swiss Franc devaluation was announced, this huge sell order must be therefore traced back to the Western Central Banks which are now going after the gold price in an attempt to cloak their utterly incompetent, impotent and predictable response to the current economic woes of the West. To assume that the ECB, the Federal Reserve, the Bank of England, the Bank of Canada, and any other major Central Bank of the West did not have previous knowledge of the plans by the Swiss National Bank to debase the Franc is to live in a fantasy land and be devoid of all sound wisdom. Of course they knew beforehand as something of this importance would not be done unilaterally by the Swiss. The attack on Gold is therefore an effort by these modern day alchemists who are attempting to achieve prosperity by magically altering slips of paper into something that might constitute value in the eyes of the beholder to discredit the yellow metal and send it careening lower. China must be watching this with both disgust and delight. Disgust in seeing the depths of corruption that ails the Western monetary system and delight in the fact that the machinations of these conjurers is providing a discount in the price of the metal which they will be more than pleased to accept. Take a look at the following chart and tell me with a straight face that this is NORMAL trading action. Any trader worth his salt knows this chart looks amazingly like a chart of a currency facing INTERVENTION PRESSURE from a Central Bank." Central banks smashed gold ahead of Swiss devaluation, Davies says Submitted by cpowell Hinde Capital CEO Ben Davies today remarks to King World News about the suspicious pounding of gold in the minutes just prior to the announcement of the Swiss franc's devaluation, which would have seemed hugely supportive of gold as the only remaining safe-haven currency. In regard to gold, Davies says: "Why was it selling off just ahead of a really bullish announcement? You have to believe that there was some coordinated action. ... The central banks will all have been in on knowing ahead of time that the Swiss were going to announce this. So there was central bank selling because they really didn't want the price of gold to skyrocket on what is incredibly bullish news for gold." Or perhaps, much of the recent decline in the price of Gold may also simply be related to the fear that yet another CME margin increase in Gold may be imminent. China's largest Gold exchange, The Shanghai Gold Exchange will raise trading limits and margin requirements on its Gold and Silver forward contracts on Sept. 9 to prevent excessive volatility. This is noteworthy because the CME followed the last two Shanghai Gold Exchange margin increase with increase of their own with in 2-3 trading days, blaming "market volatility" for their decision. Volatility created solely by the margin increases themselves. A pending CME margin increase in Gold is something to be wary of through the balance of the week. The hit in Gold is a boon for Silver investors...BUY THE DIP! As Swiss devalue their franc, gold may be last currency standing By Jeff Cox, CNBC.com Just as talk had begun to intensify about a gold bubble building, the metal got another boost today when the Swiss National Bank announced measures to decrease the value of the franc. The SNB's move was widely viewed as positive for gold because the metal will gain even more popularity as a safe-haven investment of choice. For the past 14 months -- and, in fact, since Lehman Brothers failed in September 2008 -- the franc has experienced a parabolic rise as financial instability beset many of its neighbors as well as the US. But the Swiss central bank, faced with worries that the ever-strengthening currency would jeopardize the country's export-based economy, announced an aggressive cap for the franc's value against the euro. Consequently, the currency tumbled more than 8 percent in Tuesday trade. Gold, while down narrowly amid a global asset selloff, is expected to fare well in the days ahead. "With Japan massively intervening in the (currency) market and the Swiss effectively curbing the safe-haven status of the Swiss franc today, we only really have gold as the last-standing safe-haven currency around," David Rosenberg, senior economist and strategist at Gluskin Sheff in Toronto, wrote in his daily note. "While the US dollar has liquidity, it unfortunately has a debt burden alongside it that gold does not." FLASH: China knows about gold price suppression, and U.S. knows China knows China knows that the U.S. government and its allies in Western Europe strive to suppress the price of gold, and the U.S. government knows that China knows, according to a 2009 cable from the U.S. Embassy in Beijing to the State Department in Washington. More Beijing embassy cables show China sees gold as central in currency war More news media-monitoring cables from the U.S. Embassy in Beijing to the State Department in Washington show that both China's government and the nation's financial press, tightly controlled by the government, consider gold to be the main weapon in a world currency war that is under way. 
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| Massive Criminal Raid by Our Bankers / Precious Metal Shares Hold Up Posted: 07 Sep 2011 01:09 PM PDT by Harvey Organ: Good evening Ladies and Gentlemen: Gold was whacked in the wee hours of the morning and continued during the comex trading session. Gold finished the comex session at $1814.20 down a huge $55.70 from yesterday. The price of silver did not follow the lead of its older and wiser cousin gold as it slipped by only 23 cents to $41.57. I guess the world was excited that Obama was wishing to stimulate the economy by 300 billion dollars. The stock markets around the globe were higher as they too sensed a global stimulation. Let us head over to the comex and assess the damage. Read More @ HarveyOrgan.Blogspot.com
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| Hilsenrath Speaks: "Fed Prepares To Act" Posted: 07 Sep 2011 01:07 PM PDT Anyone who may have been harboring doubts that the Fed will pull yet another economically destructive policy out of its bag of genocidal tricks on September 21 can now relax. Jon Hilsenrath has spoken, and while we don't know just what form QE3 will take place (as a reminder any form of duration extension, and hence, artificial risk shit can be reduced to the broad definition of Quantitative, or otherwise, easing), he does give us a menu of three options: i) Operation Twist, as first discussed by Zero Hedge back in May, ii) a reduction in the Interest on Overnight Excess Reserves (IOER) from 0.25% to something... lower, a move that would wreak havoc and completely destabilize money markets, and iii) more jawboning - a step the would merely make existing promises, such as the ZIRP through mid-2013 even less effective. Bottom line: like it or not, in two weeks we all do the twist. From said mouthpiece:
The three options, of which number one is all the matters:
Funny, because this is precisely the fake assertion we refuted earlier by showing the recent move in the 10 Year yields, and the dramatic plunge in MBA refi applications. But that's irrelevant: the Fed will do whatever it will do without regard for actual practicality and/or reality. Also, let's not forget that when the 2s10s hits 50 bps and the Treasury is scrambling to come up with excuses for TARP 2, we will all know what caused the latest and final implosion of BofA. The other two options which are completely irrelevant, as they will not be used:
And there you have it. The only question remaining is whether or not, as Morgan Stanley suggested earlier, the Fed would act in conjunction with all global investment banks in another round of global easing. Since this is coming from Morgan Stanley, and since gold has indicated there is no way in hell this would happen, we can safely ignore it, but we recreate the report below for those who wish to be entertained. Lastly, the question of whether plain vanilla LSAP (Large Scale Asset Purchases) will be announced in two weeks is unknown although as was previously discussed the most likely timeframe is for the Fed to convert about $450 billion in 1.5 - 4 year bonds into long term ones, a process which will take about 6-8 months at about $55-$65 billion in POMO per month, at which point the Fed will have to expanded aggressively in monetizing all of the remaining $2.4 trillion in debt to be issued over the next 12 months. As such we expect LSAP to be announced in March of 2012. Also as a reminder, for those desperate for more hints even though the gameplan is now well known, tomorrow at 1:30 pm Bernanke speaks at the Economic Club of Minnesota Luncheon, in Minneapolis, Minnesota - an event which may see some local protests. While it is unexpected that he will share anything actionable at this point, the market will most certainly surge by another 10-15 points regardless of what he says. After all there will be headlines, and with Europe closed, this is all that will matter.
Here is the justification for Morgan Stanley's delusions that global concerted easing will finally make that bullish steepener idea reality of 3 years of endless errors.
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| Hilsenrath Speaks: "Fed Prepares To Act" Posted: 07 Sep 2011 01:07 PM PDT
Anyone who may have been harboring doubts that the Fed will pull yet another economically destructive policy out of its bag of genocidal tricks on September 21 can now relax. Jon Hilsenrath has spoken, and while we don't know just what form QE3 will take place (as a reminder any form of duration extension, and hence, artificial risk shit can be reduced to the broad definition of Quantitative, or otherwise, easing), he does give us a menu of three options: i) Operation Twist, as first discussed by Zero Hedge back in May, ii) a reduction in the Interest on Overnight Excess Reserves (IOER) from 0.25% to something... lower, a move that would wreak havoc and completely destabilize money markets, and iii) more jawboning - a step the would merely make existing promises, such as the ZIRP through mid-2013 even less effective. Bottom line: like it or not, in two weeks we all do the twist. From said mouthpiece:
The three options, of which number one is all the matters:
Funny, because this is precisely the fake assertion we refuted earlier by showing the recent move in the 10 Year yields, and the dramatic plunge in MBA refi applications. But that's irrelevant: the Fed will do whatever it will do without regard for actual practicality and/or reality. Also, let's not forget that when the 2s10s hits 50 bps and the Treasury is scrambling to come up with excuses for TARP 2, we will all know what caused the latest and final implosion of BofA. The other two options which are completely irrelevant, as they will not be used:
And there you have it. The only question remaining is whether or not, as Morgan Stanley suggested earlier, the Fed would act in conjunction with all global investment banks in another round of global easing. Since this is coming from Morgan Stanley, and since gold has indicated there is no way in hell this would happen, we can safely ignore it, but we recreate the report below for those who wish to be entertained. Lastly, the question of whether plain vanilla LSAP (Large Scale Asset Purchases) will be announced in two weeks is unknown although as was previously discussed the most likely timeframe is for the Fed to convert about $450 billion in 1.5 - 4 year bonds into long term ones, a process which will take about 6-8 months at about $55-$65 billion in POMO per month, at which point the Fed will have to expanded aggressively in monetizing all of the remaining $2.4 trillion in debt to be issued over the next 12 months. As such we expect LSAP to be announced in March of 2012. Also as a reminder, for those desperate for more hints even though the gameplan is now well known, tomorrow at 1:30 pm Bernanke speaks at the Economic Club of Minnesota Luncheon, in Minneapolis, Minnesota - an event which may see some local protests. While it is unexpected that he will share anything actionable at this point, the market will most certainly surge by another 10-15 points regardless of what he says. After all there will be headlines, and with Europe closed, this is all that will matter.
Here is the justification for Morgan Stanley's delusions that global concerted easing will finally make that bullish steepener idea reality of 3 years of endless errors.
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| Fear and Loathing on Wall Street Posted: 07 Sep 2011 09:52 AM PDT Ah, I love the smell of fear in the morning! Stocks around the globe are getting hammered. So the only thing selling faster than stocks these days is replacement underwear. The usual suspects are at work again. Greece is about done. The yield on 1-year Greek bonds rose to 82%. Think about that. That's the market saying a Greek default is inevitable. But the problems, of course, don't stop with Greece, or this wouldn't be worth reporting. All of Europe is under a cloud. The banking system is on the verge of collapse. Europe has the same problem the US did in '08, except that in the US, banks held mortgage debt that was going up in flames and opening up huge craters in bank balance sheets. In Europe, it's sovereign debt. In other words, European banks hold Greek government paper, and Italian government paper and Spanish paper and the rest. Josef Ackermann, the CEO of Deutsche Bank, summed it up: "It is obvious, not to say a truism, that many European banks would not cope with writing ...
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| John Hathaway: Gold Will Now See Massive Mainstream Fund Flows Posted: 07 Sep 2011 09:41 AM PDT from King World News:
With gold and silver correcting, today King World News interviewed John Hathaway, the prolific manager of the Tocqueville Gold Fund. When asked about the action in gold Hathaway responded, "To me it's just standard operating procedure for how markets correct. It got a little scary when gold touched $1,900 a couple of times because it was so stretched out and normal market protocol calls for some backing and filling here. I think that's all it is, just static (noise)." John Hathaway continues: Read more @ KingWorldNews.com
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| Ambrose Evans-Pritchard: German court curbs future bailouts, bans EU fiscal union Posted: 07 Sep 2011 09:26 AM PDT By Ambrose Evans-Pritchard Germany's constitutional court has at last delivered its Solomonic judgment on Europe's rescue machinery. It chose to avert Gotterdammerung. The nexus of bailouts already agreed for Greece, Portugal, and Ireland are allowable under Germany's Basic Law -- or Grundgesetz -- because there is no "automatic" transfer of money beyond the Bundestag's control. Germany may participate in Europe's E440 billion (L388 billion) bailout fund (EFSF). To prohibit the existing rescues would have brought down the temple of monetary union within days, and with it Europe's financial system. The judges did not want a global depression on their conscience. Fears that the court might queer the pitch in some complicated way have been eating at markets for weeks, so Wednesday's relief rally was predictably fast and furious. Germany's DAX index surged 3.7 percent and Milan's MIB was up 4.2 percent as Italian banks came back from death. ... 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 Yet euphoria is surely misplaced. The court's president, Andreas Vosskuhle, cautioned Chancellor Angela Merkel and Brussels to watch their step. "This was a very tight decision. But it should not be mistakenly interpreted as a constitutional blank cheque authorising further rescue measures," he said. The opinion is a partial victory for the professors who brought the case and fear that Euroland's crisis is dragging Germany across the Rubicon into an EMU debt union without treaty authority or democratic control. Karl Albrecht Schachtschneider, their lead jurist, called the verdict "a bad day for Germany and Europe and a slap in the face of the country". Yet in reality the professors extracted language that kills off any prospect of a debt union, or an EU treasury and fiscal federalism, for the foreseeable future. "The Bundestag's budget responsibilities may not be transferred through open-ended appropriations to other actors. In particular, no financial mechanisms can lead to meaningful fiscal burdens without prior approval," said the opinion. "No permanent treaty mechanisms shall be established that leads to liability for the decisions of other states, especially if they entail incalculable consequences," it said. The ruling is "a clear rejection of eurobonds", said Otto Fricke, finance spokesman for the Free Democrats (FDP) in the governing coalition. Above all, the court ruled that the Bundestag's fiscal sovereignty is the foundation of German democracy and that Article 38 of the Basic Law prohibits transfer of these prerogatives to "supra-national bodies." By stating that there can be no further bail-outs for the eurozone without the prior approval of the Bundestag's budget committee, the court has thrown a spanner in the works and rendered the EFSF almost unworkable. It restricts the ability of Chancellor Angela Merkel to strike rescue deals at EU summits, leaving it unclear how she or any future Chancellor could respond to the sort of crisis that blew up in late July of this year when Italian and Spanish bond yields reached danger levels above 6 percent. Moreover, Finland, the Netherlands and Slovakia are all eyeing variants of this legislative veto. Mrs Merkel is already facing a simmering mutiny in the Bundestag. Up to 25 deputies from her coalition -- mostly from the FDP and Bavaria's Social Christians (CSU), but also top Christian Democrats -- intend to vote against the revamped EFSF later this month or abstain. What this reflects is the deeper revolt by German society over escalating rescue costs and the threat to German nationhood. The budget committee is already fractious and is likely to prove tougher with each fresh demand. The question is how will it respond to the disintegration of Greece's rescue programme or if and when Brussels again pushes for a massive boost in the firepower of the EFSF to cope with Spain and Italy. The path remains strewn with hurdles. Slovakia said it will not debate the EFSF bill until December, delaying activation until February, leaving a very reluctant ECB to hold the fort by purchasing Club Med bonds. Richard Sulik, the president of the Slovak parliament, has vowed to do everything he can to block the EFSF. Harvinder Sian from RBS said both Athens and the EU-IMF team are likely to keep Greece's programme alive for another quarter, with the risk of a "hard default" in December. He said the sorts of "19th-century colonial demands" now being made on Greece have provoked armed revolutions in the past and might tempt Athens to act first, especially since 90 percent of Greek debt is subject to Greek contract law. The contagion risk remains acute. Portugal is "fundamentally uncompetitive" and carries a debt stock (360 percent of GDP) too large for plausible deflation. "Spain is only at the start of a multi-year post bubble adjustment, while Italy has proven ungovernable in the gold-standard world of EMU," said Mr Sian, warning that private investors will not touch the region as long as there is any fear of EMU dissolution. UBS has even put precise figures on the costs of break-up, deeming the current structure unworkable. "We note that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government or civil war," it said. As long as major banks are uttering such thoughts, this crisis can only rumble on. 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: 07 Sep 2011 09:13 AM PDT Dave Gonigam – September 7, 2011
Would September turn out like most Septembers — historically, the market's worst month? Or September of last year — the best September since 1939? The first two trading days of this week have yielded an early answer — both!
The big move today is attributed to the following…
Well, the last one makes about as much sense as the others. The court ruling and the speech have about as much chance of restoring "normalcy" as Murphy. Maybe less…
Under the Obama-Boehner deal signed into law Aug. 2, the ceiling was raised an initial $400 billion — sort of an appetizer before the feast. Thus, the current ceiling is $14.694 trillion. As of the close of business last Friday, the most recent figures available, the total debt subject to that limit is nearly $14.650 trillion. Hmmm… Only $45 billion in wiggle room. In a $3.8 trillion budget, the ceiling will likely come into play next week. Treasury would have to start borrowing from federal pension funds and performing other accounting trickery. The president can ask to bump up the ceiling another $500 billion. In a convoluted procedure that would make the Founders pound their heads against a brick wall, Congress can choose to either do nothing and allow the ceiling to increase… or take a vote on whether to reject said increase. And some people thought the Aug. 2 agreement actually settled something.
Meanwhile, "the yield on 1-year Greek bonds rose to 82%," says Chris Mayer. "Think about that. That's the market saying a Greek default is inevitable. But the problems, of course, don't stop with Greece, or this wouldn't be worth reporting. All of Europe is under a cloud. The banking system is on the verge of collapse. "Europe has the same problem the U.S. did in '08, except that in the U.S., banks held mortgage debt that was going up in flames and opening up huge craters in bank balance sheets. In Europe, it's sovereign debt. In other words, European banks hold Greek paper, and Italian paper and Spanish paper and the rest."
"Libor stands for 'London interbank offered rate.' It is the rate at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank lending market). "In most circumstances, Libor rates track short-term Treasury rates. But in the midst of crisis conditions, Libor rates tend to spike, while Treasury rates fall. That's exactly what happened during the credit crisis of 2008."  "In the depths of the crisis, Libor rates soared, reflecting the reluctance of banks to lend money to other banks. The more worrisome the crisis seemed to be, the higher Libor rates climbed. As such, the Libor rate functioned as a kind of 'fear gauge.'" "And so it remains…"  "During the last few weeks, Libor rates have been on the rise once again. They have not risen high enough to sound a distress signal, but they have risen high enough to raise an eyebrow."
"This could be a joker in the deck for the euro. Expect a lot of volatility. The EUR/USD could see a breakdown of the $1.40 level. This is positive for the dollar. There is also increased probability that the European Central Bank will CUT rates. In other words, the grass is not greener on the other side of the Atlantic."
"High correlations mean that most of the stocks in the market are behaving like the S&P 500. Right now, the CBOE S&P 500 Implied Correlation Index is the highest it's been since the mini-crash last March. That means that for better or worse, all stock investors are getting the same treatment." "Some (albeit few) stocks are showing better-than-average relative strength right now. Tech names in particular should hold up well this month." "The big caveat to all of this is a breakdown below 1,120 in the S&P. That's the technical sell signal that traders will be watching intently."
At last check, the spot price was $1,807. Silver has held above $40 for nearly two weeks now, currently trading at $41.15.
"When you look forward to the supply situation from the world mining industry," says our resident rockhound Byron King, "there is a great danger that world mine supply could drop dramatically and precipitously in, say, the next five-10 years. "The next two-three years will probably be OK," Byron said recently on The Money Answers Show podcast, "but by five years from now, you could see a country like South Africa have a precipitous drop in gold output because many of their mines are literally as deep as the technical limits of the ability to dig a hole. "If not this year," Byron concluded, "certainly early next year, 2012, we're going to see gold prices over $2,000 an ounce. And I could see, within a couple of years, gold in the $2,500 an ounce range." [Ed. Note: If you enjoy the insights from editors like Byron, Jonas, Abe and Chris… you might be a good fit for the small circle of readers that gets access to every one of their issues and alerts, complete with every buy and sell recommendation. That's what comes with a membership to the Agora Financial Reserve — lifetime access to nearly everything we publish, for an exceptionally low one-time fee. Rather than go on and on about the benefits of membership (you can examine those here), we'll leave it to current members to explain why it's such a great deal.
"Still," this last one goes on, "I worry that nothing keeps 'working' indefinitely if it gets big enough. I hope you can resist the temptation to expand to the point that your letter writers start 'making markets' and begin to lose their niche effectiveness. "This is a real danger and (I suspect slowly) would become a huge disappointment to your longest-time subscribers." On that score, Reserve members have nothing to worry about. We keep a strict limit on membership to 1% of Agora Financial readers. It's not for everyone… and the only way you'll know for sure is by examining the lifetime of benefits you get for your one-time fee. Here's where you can do so. Just two things to bear in mind: First, members can attend our Safety and Survival Summit here in Baltimore Oct. 13-14 and hear from our editors in person about their latest strategies. And second, the doors to the Reserve close tomorrow night at midnight; it will be months before we reopen them to new members.]
 As we mentioned last week, Schaefer's portrayal of a burning Chase bank branch in Van Nuys, Calif., earned him two visits from the local constabulary — one while he worked at his easel across the street from the bank and another at his home days later. "Do you hate banks? Do you plan to do that to the bank?" were among the probing questions he was asked by detectives, no doubt eager for the plaudits that would come with preventing another Sept. 11. For his trouble, Schaefer will make out better than Vincent van Gogh when he painted Red Vineyard at Arles. As Schaefer explained in his eBay listing, legend has it van Gogh was paid 400 francs, or 4.1 ounces of gold. Today, that would be about $7,500. Schaefer started the bidding on Chase Burning at a one-half ounce ($920), but he's set to collect more than five and a half. Meanwhile, "I have listed a new painting of a bank on fire," says Schaefer, "This time, it's Bank of America. Painted from life from the patio of my local Starbucks." "The irony," quips the L.A. Taco blog, "is that now the only people who can afford to buy his work are the same people who looted the financial system in the first place — bankers." Cheers, Dave Gonigam P.S. Gold stocks are off today… but not nearly as much as the metal itself. The HUI index is down less than 1% from yesterday's record. "Gold stocks still lag the metal and remain a compelling buy," says Chris Mayer. Which is why it's an ideal time to grab a copy of our special gold stock report — identifying the favorite picks among all our editors. It's an exclusive to members of the Agora Financial Reserve — a small, but important benefit among many. This week is your final chance before we close membership for the next few months. Your invitation is right here.
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| Posted: 07 Sep 2011 09:12 AM PDT JP Morgan, whose Banker In Chief has not spared harsh words in the past to describe the POTUS, has released its just as uncompromising assessment of tomorrow's Obama speech which if predictions are correct, will be such a load of hot air, that the mere non-news factor alone should send the market into a volumetric coma on Friday, hence pushing ES limit up easy by close of Friday. Michael Feroli's take: "Cynically, one could say this is merely pushing back the fiscal drag past the time of the next election. More constructively, one could argue that this is pushing back the fiscal drag to a point in time when household sector balance sheet repair has hopefully progressed enough that the private sector can generate self-sustaining growth momentum. Either way, the Republicans in the House are unlikely to be easily impressed by the President's arguments. None of the major programs proposed has received much support from Republicans, and if any were eventually passed it would probably only be after bruising negotiations later in the year. All in all, we anticipate that little will come out of tomorrow's speech to make us re-think the near-term outlook." The outlook, in question and presented previously, being one that jives with the S&P at 900, and certainly not at 1200. From JP Morgan's Michael Feroli
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| JP Morgan Previews Obama's Tomorrow Speech: "We Anticipate That Little Will Come Out Of It" Posted: 07 Sep 2011 09:12 AM PDT
JP Morgan, whose Banker In Chief has not spared harsh words in the past to describe the POTUS, has released its just as uncompromising assessment of tomorrow's Obama speech which if predictions are correct, will be such a load of hot air, that the mere non-news factor alone should send the market into a volumetric coma on Friday, hence pushing ES limit up easy by close of Friday. Michael Feroli's take: "Cynically, one could say this is merely pushing back the fiscal drag past the time of the next election. More constructively, one could argue that this is pushing back the fiscal drag to a point in time when household sector balance sheet repair has hopefully progressed enough that the private sector can generate self-sustaining growth momentum. Either way, the Republicans in the House are unlikely to be easily impressed by the President's arguments. None of the major programs proposed has received much support from Republicans, and if any were eventually passed it would probably only be after bruising negotiations later in the year. All in all, we anticipate that little will come out of tomorrow's speech to make us re-think the near-term outlook." The outlook, in question and presented previously, being one that jives with the S&P at 900, and certainly not at 1200. From JP Morgan's Michael Feroli
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| Why There’s No Employment Growth in America’s Profit Centers Posted: 07 Sep 2011 09:02 AM PDT The financial markets seem to have caught a runny nose. But at this point, it's hard to say if it's the runny nose that follows a mild allergic reaction or the one that precedes a life-threatening pneumonia. Despite a chronic case of the sniffles, the stock and bond markets of the world have performed reasonably well for most of the last of the two years. Even though the financial markets are acutely allergic to most strains of credit distress, Dr. Bernanke's "Liquidity Elixir" has provided an effective antidote so far. Even so, we suspect the elixir is treating symptoms, rather than the disease itself. Debt liquidation — either by repayment or default — continues to hobble economic growth worldwide, and also to terrify stock market investors. Economies usually thrive when private-sector credit is expanding, and struggle when private-sector credit is contracting. The latter circumstance is the one that pertains today. To make matters worse, public-sector credit is expanding. In effect, the US Postal Service and the IRS are increasing their indebtedness, while Apple Computer and ExxonMobil are reducing theirs. Unfortunately, "cost centers" like the IRS do not create employment growth; "profit centers" like Apple Computer do. Therefore, when a country's profit centers are retrenching, its job-creating engines will also be retrenching. And when a country's job-creating engines are retrenching, nothing good can happen. Employment growth stagnates and credit distress accelerates throughout most parts of the economy. Welcome to America, 2011. Despite trillions of dollars of federal stimuli, the US economy can't seem to shake off its hangover. Businesses are slow to invest and slow to hire. As a result, household finances continue to deteriorate…and defaults continue to mount. Not surprisingly, many of the world's largest financial institutions are just as sick as they were three years ago. And many of the world's largest governments are even sicker. Dr. Bernanke's elixir may be able to work wonders, but it can't work miracles. Bad loans go bad…eventually. Bad loans go bad, no matter whether the borrower is a mortgage-holder who "bought" more house than he could afford or a government that promised more benefits than it could afford. The only time a bad loan "goes good" is when a central bank or a national treasury or some other "angel investor" intercedes to rescue the lender from his own incompetence. The problem with this selective intercession is that it alters the course of history for selected institutions or individuals, but not for the economy at large. Selective intercession is a sand castle. It might divert a wave or two. But after three waves, you would never know the thing was ever there. Three years after the bailouts of 2008, the sand castles of government intervention are gone. Only the pounding surf of debt liquidation remains…and the surf is pounding away, both at European governments and at American households. As such, the signs of credit distress are increasing. These signs take various forms. But one of the most telling forms is the direction of LIBOR interest rates. LIBOR stands for "London Interbank Offered Rate." It is the rate at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank lending market). In most circumstances, LIBOR rates track short-term Treasury rates. But in the midst of crisis conditions, LIBOR rates tend to spike, while Treasury rates fall. That's exactly what happened during the credit crisis of 2008, as the chart below illustrates.
In the depths of the crisis, LIBOR rates soared, reflecting the reluctance of banks to lend money to other banks. The more worrisome the crisis seemed to be, the higher LIBOR rates climbed. As such, the LIBOR rate functioned as a kind of "fear gauge." And so it remains…
During the last few weeks, LIBOR rates have been on the rise once again. They have not risen high enough to sound a distress signal, but they have risen high enough to raise an eyebrow. Let's call it an early warning sign. So whatever else you may be watching to guide your investment decisions, don't forget to watch LIBOR. Eric Fry Why There's No Employment Growth in America's Profit Centers 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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| Posted: 07 Sep 2011 08:59 AM PDT 5:01p ET Wednesday, September 6, 2011 Dear Friend of GATA and Gold: Just when you start thinking that everything is futile, that everyone connected with the markets is bought off or stupid, and that "Say Not the Struggle Naught Availeth" is getting old, we find out that we're being watched -- and not just by the usual peeping Toms and repo men but by some pretty important and even sinister people. It was that way in 2004 when out of the blue the deputy chairman of the Bank of Russia, Oleg Mozhaiskov, mentioned GATA at a meeting of the London Bullion Market Association in Moscow, thereby letting the bullion bankers know that Russia was on to their rigging of the gold market: It was that way this month when publication of the cables from the U.S. embassy in Beijing disclosed that the Chinese government's view of the gold market matches GATA's: http://www.gata.org/node/10381 http://www.gata.org/node/10387 ... Dispatch continues below ... 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 And then today our friend B.S. spotted an obscure reference to GATA at the Internet site of New York Times columnist Paul Krugman, who had just attempted some technical analysis of the gold market. Krugman concluded: "Larry Summers directs me to a 1988 paper he wrote with Robert Barsky with a similar theme, although applied to the gold standard era rather than recent events." An Internet link was embedded in that final sentence -- http://www.gata.org/files/gibson.pdf -- and it took the reader to GATA's Internet site, where the academic paper in question has been posted for a long time. Of course Summers is the former Harvard economics professor and U.S. treasury secretary who, with Robert Rubin, whom he served as deputy treasury secretary, developed the U.S. government's end of the modern surreptitious gold price suppression scheme, which was based in part on the research of the academic paper Krugman cited, a paper rediscovered and first made relevant in 2001 by GATA compatriot Reginald H. Howe, the original gold price suppression litigator: Of course Krugman knows nothing about what's really happening with gold and surely doesn't want to know about it -- how could he, working for The New York Times and having won a Nobel Prize? But Summers is a mastermind of the price suppression scheme and market manipulation, and Krugman now has shown Summers to have been trolling around at GATA's Internet site. We'd like his autograph. We already have his fingerprints. Krugman's blog with the link to GATA can be found here: http://krugman.blogs.nytimes.com/2011/09/06/treasuries-tips-and-gold-won... 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 Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Posted: 07 Sep 2011 08:51 AM PDT Michael Snyder The financial crisis in Europe has become so severe that it has put the future of the euro, and indeed the future of the EU itself, in doubt. If the financial system in Europe collapses, it is going to plunge the entire globe into chaos. The EU has a larger economy and a larger population than the United States does. The EU also has more Fortune 500 companies that the United States does. If the financial system in Europe breaks down, we are all doomed. An economic collapse in Europe would unleash a financial tsunami that would sweep across the globe. International Monetary Fund Managing Director Christine Lagarde: "Developments this summer have indicated we are in a dangerous new phase" Most of the individuals quoted above desperately want to save the euro. They are not going to go down without a fight. The overwhelming consensus among the political and financial elite in Europe is that increased European integration in Europe is the answer. This would be yet another example of the classic problem/reaction/solution paradigm. The "problem" would be a horrible financial crisis and economic downturn in Europe. The "reaction" would be a cry from the European public for someone to "fix" things and return things back to "normal". The "solution" would be a "United States of Europe" with much deeper economic and political integration which is something that many among the political and financial elite of Europe have wanted for a long, long time. Right now, the people of Europe are very much opposed to deeper economic and political integration. For example, 76 percent of Germans says that they have little or no faith in the euro and one recent poll found that German voters are against the introduction of "Eurobonds" by about a 5 to 1 margin. It looks like it may take a major crisis in order to get the people of Europe to change their minds. Unfortunately, it looks like that may be exactly what is going to happen. 
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| Gold Daily and Silver Weekly Charts - Predictable Moves in the Bretton Woods Endgame Posted: 07 Sep 2011 08:46 AM PDT |
| Silver SLV ETF Coil Should Resolve to Upside Posted: 07 Sep 2011 08:40 AM PDT Increasingly, my pattern work in the iShares Silver Trust (SLV) is telling me that all of the action off of the Aug 22 recovery high at 42.30 through today's low at 39.21 is taking the form of a large coil that is positioned in the upper 40% of the entire advance from the May corrective low at 31.55. If my pattern work proves accurate, then today's low should represent the latest coordinate in the coil -- and as such should not be violated if the integrity of the pattern is to be preserved.
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| Posted: 07 Sep 2011 08:36 AM PDT Whenever it suits Team Titanic from the increasingly tense helm, more phony comparisons are trotted out in baseless news stories posing as legitimate analysis. The latest propaganda plank is that the current financial climate, worse by the week, resembles 2008 and therefore bodes badly for the Gold & Silver prices. The implicit inference has no basis. In the final months of that fateful 2008 year, when Lehman Brothers served as the flagship going down in icy waters, writing the epitaph that marked the historic death event for the US banking industry, not yet recognized, the precious metal price fell by a huge amount in a liquidity drain amidst a grand crisis.
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| David Tepper Is Balls To The Wall In Cash Posted: 07 Sep 2011 08:34 AM PDT
For those wondering why David Tepper will be strangely missing from CNBC for his annual pre-QE cheerleading appearance, we now have the answer. As Institutional Investor reports, the Appalloosa head man, who was long everything but mostly financials in the form of BofA and Citi last year, and managed to get out just in time before the wipe out which left his colleagues at Paulson and Co. dazed following a 34% YTD loss, has decided to invest in a strange asset: cash. "Sources say he has gone 30 percent to 40 percent in cash, which is very high for him. Some of his cash is invested in U.S. Treasuries, which have in turn risen in value in recent weeks." II clarifies: "Keep in mind that Tepper had about 30 percent in cash entering 2009, shortly before he started buying up banks such as Bank of America before anyone else had the guts to do the same and racked up triple-digit gains by the end of the year." And in a very odd development for the man known to take aggressive risks ahead of everyone else, we learn that "he will remain cautious until there is improvement in the European bank crisis. Of course, if the markets tank, you can be sure he'll be aggressively scouring for bargains." Alas, the markets refuse to tank on generic expectations that the second market start to tank, dip buying materializes on vapor volume and expectations that the Fed will once again kick the middle class in the gonads only to make stock chasers whole. Yet if even Tepper is staying on the sidelines, just what informational advantage does the HFT momentum pursuing crowd have? Per II:
Tepper is not buying... Yet E-Trade babies are all over the S&P heatmap.
In the meantime Europe is not only not getting 'worked out', it is getting worse daily (daily ECB deposit facility usage just hit a fresh year high at €170 billion), which according to the above explains why none of the smart money is getting in. Which begs the question: are all major intraday no volume rallies like today's (which saw ES volume at 30% below the 20 DMA), nothing but short covering sprees without any actual buying? All signs point to yes. It also means that sooner or later the shorts will stop freaking out that good news will come out of left field (it won't) and instead of the daily EOD cover they will finally grow enough confidence to keep shorts overnight. At that point, goodbye uber-hilarious CNBC line that "market wants to go higher"... because it no longer will.
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The United States is negotiating one of the biggest free trade agreements in history and there is barely a peep about it on the news. Years ago, Ross Perot warned that if NAFTA was implemented there would be a "
As traders returned to their desks from a long weekend, or even a long summer, one question was top of mind…
After dropping 300 points yesterday morning, the Dow recovered all but 100 of those points by day's end. As of this writing, the blue chips are up another 200.
The president, we're told, will propose $300 billion in new stimulus tomorrow night — half of it tax cuts, half of it new spending. What he proposes to do about the debt ceiling, we don't know… but he'll need to propose something quick.
Nor is Europe "fixed." Traders in the credit default swap market give Greece an 87.9% probability of default in the next five years.
"Signs of credit distress are increasing," says Eric Fry at 
"On Sept. 29, the German parliament votes on a sovereign debt package," says 
For the moment, the euro is holding above that key level, at $1.405. The dollar index has weakened, but not much, to 75.7.
"There are two big factors that could be significant for investors in September," says 
Gold is getting hammered today. But in the rarefied air gold occupies these days, "hammered" still means it's holding above $1,800 — a level first reached less than a month ago.
Aside from gold being 
With a few hours remaining in his eBay auction, artist Alex Schaefer appears set to bring in a tidy sum after his unfortunate run-in with the law.
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