Gold World News Flash |
- Market Snapshot - The Other Silver-and-Black Not Winning
- Richard Russell - Not So Fast Gold-Haters
- Gold Seeker Closing Report: Gold and Silver Fall About 3%
- Longfellow’s Lament – The Ship of State is Sinking (A Poem)
- The Nikkei Model and Monetary Inflation
- James Turk: Expect $2,000 Gold Within 45 Days
- Caveat Lector: "Let the Reader Beware"
- The New Bankster ‘Weapon’ Against Gold/Silver
- Another Massive Raid as Europe Burns to the Ground / Greek 1 yr Bonds 110% Interest
- All The Money In The World?
- On FX - Shit or go Blind?
- And Now For Some Bad Economic News For A Change
- Harvy Organ's: The Daily Gold & Silver Report
- CNBC, HSBC, and GLD in public relations backfire
- Gold to reach $2,000 in 45 days, Turk tells King World News
- The Gold Price Closed at 1809.90 Down 46.50 or 2.6%
- Porter Stansberry: Enough Already, Let's Return to the Gold Standard!
- James Turk - Expect $2,000 Gold Within 45 Days
- Worst Year in U.S. History For Natural Disasters, A Billion+ Dollar Disaster Every Month
- Eveillard - Expect a Mania in Gold Before This is Over
- "Enough Already, Let's Return to the Gold Standard!"
- Market Snapshot - What Happened?
- Why A Rise In The Dollar Could Be Bullish For Commodities?
- Losing Faith in the “Power” of Central Bankers
- Porter Stansberry: "Enough Already, Let's Return to the Gold Standard!"
- Germany, Greece Flirt With Mutual Assured Destruction
- The Gold and Silver Precious Metals Tsunami
- A Raging Case of Bailout Fatigue
- A Premature Panic?
- Is It Safe to Invest in Gold and Silver at Current Prices for the Long Term?
| Market Snapshot - The Other Silver-and-Black Not Winning Posted: 12 Sep 2011 06:51 PM PDT While the Raiders may have succeeded against Denver tonight, Silver-and-Black Gold (and real gold) are leaking lower as macro data and European/Chinese leader chatter is trumping any more unidentifed-rumor-mongers (URMs). Aussie business confidence fell to its lowest since APR09 and fell its most MoM since OCT08, French CPI came a little hot, and Merkel warned everyone to keep their mouths shut (our rough translation/interpretation) for fear of more uncertainty in financial markets and an "uncontrolled insolvency" in Greece.
Chart: Bloomberg S&P futures are drifting lower slowly with the inevitable snap back to VWAP every few hours (UPDATE: ES now 1% off overnight highs).
Early runs on European credits show some compression but not as much as one might expect given the excitement late in the day in the US. Main is 2.5bps tighter at 197bps, XOver -6bps at 793bps, SovX a meager 1.5bps better at 351bps and SENFIN only 4bps tighter at 310bps. Interestingly, the 3Y spreads are a little wider still - more of the same theme we have seen in the US of curve flattening trades. Lots of tweets and headlines on Greece's imminent default as priced by the CDS market (99.3% probability seems de rigeur) but while it is very high, the fact of the matter is with longer-dated GGBs trading at around 32 (the CTD bonds), default probabilities implied by CDS are a little more like 85% over five years so still ugly. Recovery expectations are clearly lower than the standard recovery assumptions in CDS models since bonds are already trading through those levels (even adjusted for some earned carry). It is also evident (though not exactly reassuring) from the price-based term structure (please ignore yields from now on), that the pivotal period is Q2/3 2012 for now as prices/recovery-expectations are pretty much flat from there to 15 years out at around EUR40. While China was seen by many talking-heads as the solution to the Greek (and now Italian) problems late on Monday, we think Mrs. Merkel's word should be borne in mind (from Bloomberg):
This, as opposed to Wu Xiaoling's (the ex-Chinese central banker) statement picked up by Reuters:
Europe is not opening particularly strong in sovereign bond land - while its early and trading is not exactly super liquid, for 2Y notes, it seems ITA is 3bps higher in yield, PTE +7bps, FRA +5bps, and IRE +5bps - as GER also ebbs 2bps or so higher in yield. GRE is already a few hundred bps higher again across the curve as we noted above with The Troika knocking on the doors. Most asset classes have traded in a very narrow range since the US close with FX majors pretty much unchanged, TSYs modestly higher in yield, and ES marginally in the red (no green, no red). CONTEXT, the risk-basket based view of ES is 8-11bps lower - implying ES is adrift for the moment relative to risk-asset's general lack of excitement.
UPDATE: Italian banks appear magically bid (yet there is no specific from any Italian minister of the mysterious meeting last week - which it seems to us would be standard practice anyway for a large sovereign wealth fund):
...and its seems the Chinese are getting a little more nervous:
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| Richard Russell - Not So Fast Gold-Haters Posted: 12 Sep 2011 04:05 PM PDT  With gold trading around the $1,800 level, here are some key points the Godfather of newsletter writers, Richard Russell, wrote about in his two most recent commentaries, "The gold-haters have climbed on the "it's over" bandwagon again. Their argument is that gold has been in a parabolic rise, and that means "the sure end" of the gold bull market. My reaction: Not so fast. The gold bull market isn't going to end with a three-month sharper up-pointing angle."
This posting includes an audio/video/photo media file: Download Now |
| Gold Seeker Closing Report: Gold and Silver Fall About 3% Posted: 12 Sep 2011 04:00 PM PDT Gold fell throughout most of trade and ended near its late session low of $1808.60 with a loss of 2.48%. Silver fell to as low as $40.078 and ended with a loss of 3.3%.
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| Longfellow’s Lament – The Ship of State is Sinking (A Poem) Posted: 12 Sep 2011 03:52 PM PDT
By Doug Hamel Sit right back and I'll tell a tale History has sung this song Rothschild, he knew the score, We been dancing to counterfeit noise,
Along came 1913 FDR threw paper at it when The cycle repeats itself, Watch the moneyed bankers Some men who have been broken, In '71 Dicky did the deed They love creating chaos It started with 'no child left behind' So they rewarded the loss of discipline To refresh your memory In 20 ought 8, it came to pass. Paulson turned to Giethner Don't panic, offered Greenspan. All we need is a metaphor This time the white knight was a black man Now the Kainsians and the Austrians So they dragged out ole Bin Laddin The presstitutes strut the channels Now events pass by with greater speed. Insulated by their bonuses How do you transfer everything Now dinosaurs propel us, So grab a pen and take note, Start with Mike Maloney Then read Sinclair and Embry, Jim Rogers with his bow tie, Ex- football man, Bill Murphy John Williams, he's the big man Lets not forget Mr. Youtube, Read Neal Furguson's 'Ascent of Money' Across the pond are many folks Lets not forget the finer sex And then there's Stacy Herbert Pay head to James Turk interviews. Then there is the two Erics; Chris Martenson, he walked away Doug Casey wrote it all 30 years ago Jim Rickards has tracked the land SGT is my morning news now, These are all just words So sit back and take the time Trust yourself, go inside. OK I have said enough, Doug Hamel Doug Hamel is a Journeyman Carpenter living in the Rockies of Alberta, Canada.
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| The Nikkei Model and Monetary Inflation Posted: 12 Sep 2011 03:43 PM PDT A likely consequence of dollar depreciation is that the secular bear market in US equities will end with the NDX handily above its 2002 and 2008 lows in nominal dollar terms. Read More...
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| James Turk: Expect $2,000 Gold Within 45 Days Posted: 12 Sep 2011 03:42 PM PDT from King World News:
James Turk continues: Read More @ KingWorldNews.com
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| Caveat Lector: "Let the Reader Beware" Posted: 12 Sep 2011 03:37 PM PDT by Jonathan Kosares Members of Wells Fargo's wealth management team released an article recently entitled, "The Gold Bubble," where it is claimed, in no uncertain terms, that gold is in a bubble. While I would not normally spend time rebutting an entity that would shock me far more if they actually put out a recommendation to buy gold, the subsequent readership this article has received (it was referenced in the business section of the Denver Post, for example) suggests it might be an entertaining, and perhaps useful exercise, to dissect their claims point by point to see what, if any, validity they carry. I also am of the impression that, as coverage on gold becomes increasingly mainstream, gold owners will also be faced with an increasing sum of articles of this type that seek to challenge their resolve. My hope is that this analysis will provide something of template of skepticism, that not everything you read, no matter how credible the s...
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| The New Bankster ‘Weapon’ Against Gold/Silver Posted: 12 Sep 2011 03:24 PM PDT by Jeff Nielson, Bullion Bulls Canada:
In "free and open markets", the simple dynamics of supply and demand will almost always change trading patterns as the years go by – and rising prices re-shape a market. Even in our own, heavily-manipulated markets we would expect that the combination of rising prices and time would serve to create new patterns and dynamics. This is certainly true with precious metals markets. The gold market in particular has exhibited three, distinct phases since its massive, bull market began a decade earlier. The 10-year chart below provides us with an illustration of these phases (and patterns). Read More @ BullionBullsCanada.com
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| Another Massive Raid as Europe Burns to the Ground / Greek 1 yr Bonds 110% Interest Posted: 12 Sep 2011 03:19 PM PDT by Harvey Organ: Good evening Ladies and Gentlemen: Today's commentary will be rather on the short side. Gold closed today down $46.50 courtesy of a massive raid by head banker JPMorgan. The comex closing price was $1809.80. The silver price followed suit falling by $1.41 to $40.16. Today we woke up with all of Europe's bourses in the red: German Dax: down 117.60 or 2.27% the Dow which was down most of the day over 100 points did another Hail Mary and finished up 69 points which is quite laughable. The European banks are in severe trouble. Here are some of the percentage losses of the major banks in Europe: Read More @ HarveyOrgan.Blogspot.com
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| Posted: 12 Sep 2011 02:27 PM PDT From what I can tell, the Chinese - at least, if the rumors are to be believed - are supporting the dollar, supporting the stock market, and supporting the Italian bond market. Read More...
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| Posted: 12 Sep 2011 02:27 PM PDT Way back in the mid 70s I was a Snake trader for a bank. This was a period before the EURO was adopted. The European currencies had established trading bands of 2-3% against each other. This was pre computer days, so figuring out where markets where vis a vis the 7 currencies was disorderly. There were arbs all the time as things got mis-priced. Fertile land for FX types. The front of the Snake was the old Deutche Mark. The back of the Snake was the Italian Lira. I traded the back end. It was a hoot. I met a guy. He was connected. We traded info, took positions and everyone made money. There was one weekend where the rumors were rife that the Italian Lira would be suffering a big devaluation. The market chatter was for a 20% move. But my guy and I had the inside story that this weekend was not going to bring a devaluation. The then Prime Minister and Finance Minister were digging in their heels, is what we were told. So we bet the other side. We went long the Lira for Friday delivery and planned to hold it over the weekend. By having the liquidity we were able to lend it out to all of those who were betting big on the short side. The weekend repo was worth an easy 5%. This is a 3 to 1 bet against you, so you have to be damn sure of the outcome. We thought we were. In the NY afternoon the Italian Finance Minister said something that changed the picture. The guy we were counting on to hold the line for another few days was on the wire saying there was a crisis meeting that weekend. So I called my pal (who also had big positions) and asked, "What should we do?" He says right back to me:
These words mean nothing by themselves. The implication was crystal clear. He no longer had a clue what would happen next. I hung up. Dumped the position at a loss. **************************** I was looking at some EURUSD charts today. Some of the other big crosses as well. I'm of the view that there are some big currency moves in front of us. There is news twice a day that's pushing size money around. Central Banks are involved in unprecedented ways. Volatility is way up. Interbank volume is big, futures too. These are the conditions that bring market breaks. But I can't decide what to bet on. The question "What should I do?" reminded me of that old story. The last few trading days provide some directional signals. On Friday the thinking was that we would have Drachmas on Monday. That logic pushed the EURUSD to close on the lows. This morning we have a bid under the Euro against the crosses as the Greeks didn't move. Late in NY there is a silly story about China buying Italian bonds (They're talking their book) and the Euro closes higher on the day. Okay. That is the trade pattern the market is pointing to. If Europe is going to have a few peripherals walk out of the (monetary) clubhouse then the Euro is headed south for the fall and the winter too. "Ride this baby to 1.20 or better"; is the talk I keep hearing. You would not want to be short the Euro if we woke up some morning and found that the Euro members were narrowed down to France, Germany, Italy, Netherlands (and Belgium too). That group of countries would trade to EUR1.5+ against the dollar. Forget those stop losses you think you have. Keep in mind that the pendulum is going to swing against the USD at some point in the future. Things are not so hot in the USA these days. We probably will have a mini crisis by the end of the month over the Continuing Resolution. To me, the short side of the Euro comes to play if there are more and more steps adopted that attempt to keep the bucket from leaking. More EFSF, CBs lending to banks, new austerity steps and the like. The "United Europe Uber Ales" outcome is the short EUR story IMHO. They will never succeed if that is the goal. But that is not how the markets are trading this. The thinking is quite the other way around. So I'm left wondering if I should shit or go blind. . 
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| And Now For Some Bad Economic News For A Change Posted: 12 Sep 2011 02:19 PM PDT The past few weeks have been so heavy on horrendous newsflow out of Europe, that we've had virtually no chance to analyze the negative news in this country. And following an atrocious H1 GDP number, and just as ugly August Non Farm Payrolls number, many are betting the ranch that at this point the economy has no choice but to go up. As most know by now, the conventional wisdom wildcard that is supposed to take Q2 GDP from its stall speed level back to some modest hockeysticking, is autos, and more specifically car assemblies and production. Unfortunately, as often tends to happen, conventional wisdom is wrong and we are happy to demonstrate, using Stone McCarthy data, that not only will autos not push Q3 GDP higher as expected, but in fact the manufacturing production which is expected to benefit from a strong car market, as well as Industrial Production as a final metric, will disappointing substantially, leading to a major miss in Q3 GDP, which we have anticipated will be at best a zero, and realistically, a negative print, and carry over such manufacturing weakness into Q4 and 2012. From Stone McCarthy:
What does this mean practically?
As a reminder, the last time we did a comparable analysis using Wards data, Stone McCarthy got not only the disappointing "surprise" in IP number right, but led to Zero Hedge predicting the parallel collapse in Q2 GDP as well. To wit, from May 27, "Expect to see drastic downward cuts to May Industrial Production and next, to Q2 GDP." We are 100% confident this will be the case once again. Look for confirmation this Thursday at 9:15 am when the August IP data is released.
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| Harvy Organ's: The Daily Gold & Silver Report Posted: 12 Sep 2011 01:18 PM PDT Another Massive Raid as Europe Burns to the Ground/Greek 1 yr bonds 110% interest
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| CNBC, HSBC, and GLD in public relations backfire Posted: 12 Sep 2011 12:39 PM PDT 8:35p ET Monday, September 12, 2011 Dear Friend of GATA and Gold: GoldSilver.com today notes CNBC's backtracking on its Bob Pisani's reporting September 1 from the secret vault said by gold custodian HSBC to house the metal held by the gold exchange-traded fund GLD. While Pisani twice asserted on camera that "all" the metal in the vault belonged to GLD, he displayed a gold bar that turns out to have belonged to another gold ETF for which HSBC is also the custodian, and CNBC subsequently noted on its Internet site that the vault does indeed hold gold for more than GLD. But no doubt there's still enough there for HSBC to continue to help manage the Western fractional-reserve gold banking system. The GoldSilver.com report is headlined "CNBC-HSBC-GLD Public Relations Backfire" and it can be found here: http://goldsilver.com/news/cnbc-hsbc-gld-public-relations-backfire/ CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Zacks Starts Coverage of Golden Phoenix with 'Outperform' Rating Friday, September 9, 2011 SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) announced today that Zacks Investment Research has initiated coverage of the company with a comprehensive report giving a rating of "outperform." The Zacks report provides information about the company's business model, its royalty mining growth strategy, recent acquisitions, drilling plans, and gold production. The report is available at the Zacks Internet site here: http://scr.zacks.com/show_report.php?t=R1BYTQ== And at the Golden Phoenix Internet site here: http://goldenphoenix.us/pdf/GPXM_InitiationReport.pdf Golden Phoenix Minerals Inc. is a Nevada-based mining company whose focus is royalty mining in the Americas. Golden Phoenix is committed to delivering shareholder value by identifying, acquiring, developing, and joint-venturing gold, silver, and strategic metal deposits. Golden Phoenix owns, has an interest in, or has entered agreements with respect to mineral properties in the United States, Canada, Panama, and Peru, including the company's 30 percent interest in the Mineral Ridge gold project near Silver Peak, Nevada. Please visit the Golden Phoenix Internet site here: For the company's full announcement of the coverage by Zacks, please visit: http://goldenphoenix.us/press-release/zacks-investment-research-initiate... 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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| Gold to reach $2,000 in 45 days, Turk tells King World News Posted: 12 Sep 2011 12:04 PM PDT 8p ET Monday, September 12, 2011 Dear Friend of GATA and Gold: Sharp selloffs in gold and silver this year have been followed by steady increases, GoldMoney founder James Turk tells King World News today, and he expects that pattern to continue -- not only continue but to bring gold to $2,000 within 45 days. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/12_Ja... CHRIS POWELL, Secretary/Treasurer 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 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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| The Gold Price Closed at 1809.90 Down 46.50 or 2.6% Posted: 12 Sep 2011 12:02 PM PDT Gold Price Close Today : 1,809.90 Change : -46.50 or -2.6% Silver Price Close Today : 40.16 Change : -1.41 or -3.5% Platinum Price Close Today : 1,809.40 Change : -28.50 or -1.6% Palladium Price Close Today : 710.25 Change : -26.85 or -3.8% Gold Silver Ratio Today : 45.07 Change : 0.41 or 1.01% Dow Industrial : 10,992.13 Change : -303.68 or -2.8% US Dollar Index : 77.15 Change : 0.92 or 1.2% Important Note: Franklin Sanders is on vacation until the 19th of September. Franklin's parting commentary can be viewed here : http://silver-and-gold-prices.goldprice.org/2011/09/gold-and-silver-prices-today-proved.html While Franklin Sanders is away we will be documenting some of the many charts, calculators, and tools available on goldprice.org and silverprice.org. There are so many of them and we are developing new features all the time, that many of our visitors probably don't know they exist. If you have any questions on how to use any of our charts or feedback please feel free to contact us: goldprice+help@gmail.com  Today we are featuring another one of our popular charts. The Live Gold Price Chart which updates in real time and is our best chart for serious gold traders and those wishing to do their own technical analysis using up to the second data. The quality of this chart and the features it provides, is why many of our visitors have told us they consider this to be the best gold chart online.The Live Gold Price Chart has become an essential tool for gold traders and gold investors around the world. There are no fees to use the charts and they provide you with unlimited access to real time and historical gold price and silver price charts. If you are looking for up to the second updates on the gold price then this is the chart for you. This chart require java so make sure you have downloaded the latest version here. If you are still having trouble with the chart please let us know and we will help resolve any issues. You can look at gold and silver in USD, AUD, CAD, GBP, CHF, EUR, JPY. We also provide, platinum and palladium prices, USD Index, Crude Oil Price, EUR/USD, and 28 other major currency rates. There is a large range of time frames including tick by tick, 1, 5, 10, 15, 30 minutes, 1, 2, 4, 8 hours, daily, weekly and monthly with USD gold price data going back to 1995. There is a range of chart types including the popular bar and line charts. One of the simplest yet most useful tools of the Live Gold Price chart is the ability to add your own trend lines and trend channels on the charts at any time frame. You can also add horizontal lines to monitor past support and resistance levels. Another great feature is the ability to compare to different instruments on the same chart, to do this simply right click the chart area and select overlay from the menu, then the instrument you want to compare. There is the ability to add Fibonacci retracement and many other types of lines and over 50 different studies you can add to the charts including moving averages, bollinger bands and many more. The Live Gold Price chart is also available in 10 national currencies. For more information on how to use these powerful charts please take a look at the Live Gold Price Manual. If you have any questions on how to use these charts or any of the charts on goldprice.org please let us know. Also if you experience any troubles viewing the chart. goldprice+help@gmail.com 
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| Porter Stansberry: Enough Already, Let's Return to the Gold Standard! Posted: 12 Sep 2011 11:30 AM PDT The Gold Report: You've written a lot about the gold standard recently, and an article in your S&A Digest argues that we should greatly prefer gold-backed money because it would limit the ability to increase the money supply. It goes on to point out that increasing the money supply essentially causes inflation. If regulations prohibited governments from expanding the money supply, would fiat currency be as good as the gold standard? Porter Stansberry: In theory, it could be, but in practice that's never happened. I suspect that the market wouldn't have much faith in such rules, and they'd be abused eventually. During the Volcker and Greenspan Federal Reserve periods, from roughly 1981– 2006, two central bankers created a de facto gold standard because they remained relatively consistent vis-à-vis money supply targets. Volcker absolutely targeted money supply, as did Greenspan up until about 1999. He moved away from that stance due to Y2K fears and then the 2001–2002 recession. So we'...
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| James Turk - Expect $2,000 Gold Within 45 Days Posted: 12 Sep 2011 10:49 AM PDT Important thing here is not to lose sight of the big picture. Continue gold & silver accumulation program like we have been talking about for years,
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| Worst Year in U.S. History For Natural Disasters, A Billion+ Dollar Disaster Every Month Posted: 12 Sep 2011 10:39 AM PDT This Has Been The Worst Year For Natural Disasters In U.S. History There has been a natural disaster that has caused at least a billion dollars of damage inside the United States every single month so far this year. According … Continue reading
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| Eveillard - Expect a Mania in Gold Before This is Over Posted: 12 Sep 2011 10:37 AM PDT The developed world, all of them, seem to be intent on printing money. Governments and monetary authorities have very little to show...
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| "Enough Already, Let's Return to the Gold Standard!" Posted: 12 Sep 2011 10:03 AM PDT The money supply increases naturally by exactly the amount of increases in productivity in a healthy economy, notes Stansberry & Associates Investment Research Founder Porter Stansberry. He doesn't have to point out that the economy isn't healthy, nor that the money supply expands every time the printing presses run to bail out a failing business and bring on a new iteration of quantitative easing. The solution is a simple (albeit not necessarily easy) one, Porter tells us in this exclusive Gold Report interview: Return to the gold standard. That will happen, he says, when the people say, "Enough!"
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| Market Snapshot - What Happened? Posted: 12 Sep 2011 09:50 AM PDT A perfectly timed rumor that not only was unprovable but has potential merit (though has no ability to successfully 'fix' any of the issues that are rightfully staggering global equity and credit markets), was enough, combined with some awesomely-ironic VWAP reversion volumes to take the offer stack in S&P futures and squeeze weaker shorts enabling a miraculous run to the green finish line in ES today. Having tested the 1130 level a few times overnight, S&P futures were increasingly anxious every time they reached down to this somewhat critical level and as we broke it for the third time during the day session, sure enough the China/Italy rumor hit as we pointed out earlier. Also, as we noted at the time, the half life of this jump was less than 30 minutes and just as we had fully retraced, the FT posted the story in full technicolor which realistically had absolutely nothing in it at all aside from the fact that a regular purchaser of sovereign bonds globally was meeting withe Italian officials last week (quelle surprise - sorry never learned Italian). That was enough to take ES on a 4-5 Standard Deviation ramp-fest across VWAP and into the green for a wonderful evening of headlines about how we are all saved (just like the Port of Piraeus!!).
This move in ES was not totally unsupported as the EUR pulled back to its best levels of the day - dragging DXY just very modestly into the red for the day. Its worth noting that SEK was a major underperformer today relative to the US (down over 3.5% at one point before the late day ramp). Carry pairs were aided by the relative JPY selling as the day wore on and oil and copper rallied (the latter remained just red on the day as the former managed an almost 2% gain on the day). Silver and Gold seemed to suffer from liquidation early on but recovered some of the day's losses as the dollar rolled lower in the afternoon.
TSYs sold off as ES rallied but yields dropped in the last few minutes of the day even as ES powered into oblivion. notably 5Y underperformed +6bps from Friday followed by 2Y +3.6bps, 10Y +3bps, and 30Y +0.5bps. Credit did behave 'differently' though - as is often the case and we note a few interesting tidbits: 1) there was net-selling in HY cash markets today - something we haven't seen in a while, 2) while HY did rally back into the close it remained 5-10bps wider on the day in 5Y but was very ugly in the less liquid 3Y (last we saw was 30-40bps wider!!), 3) IG rallied back also with ES but underperformed notably and ended the day 3-4bps wider of Friday's close, 4) IG9 (which matures Dec2012) was very ugly also - decompressing notably as those nasty tail names remain under pressure from the heavy-handed high gamma crowd in the tranche space, 5) HYG/JNK did not have as much fun into the close as stocks did (something we have seen again and again and tends to be a signal that equity was a little over its skis).
Charts: Bloomberg Drilling down a little into equity and credit - we note XLF managed to gain 1.3% today but credit spreads were all wider: Citi +15 to 262bps, MS +14 to 350bps, BAC +8 to 370bps, GS +9 to 264bps. Builders were hit particularly hard after Fitch's downgrades of the entire housing market outlook and Insurers did not come back off their wides that much as the equity rally ensued. Interestingly in CMBX land - we saw (yet again) the long correlation trade (betting on increasing systemic risk) as seniors underperformed juniors and we also note (in with builders stress), ABX tranches were weaker pretty much across the board.
On a broad-based risk-asset basis, ES was supported up to around 1150-53 but ES accelerated notably expensive from there. After the day session close, the risk-basket is leaking lower as ES pushes incrementally higher. Add to this the fact that VIX closed up on the day as did Implied Correlation (though both well off their intraday highs) and that as we rallied the last 5-10pts in ES, we saw average trade size rising notably, we suspect professionals were selling into strength once again - though these squeezes always seem to move more than many believe recently. From a cross-asset class perspective, those with a bullish bias would be better positioned adding to HY longs here, and those with a bearish bias should prefer to use equities. In relative-value land, a HY-IG compression - modestly hedged with an equity short should perform well if we remain range-bound.
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| Why A Rise In The Dollar Could Be Bullish For Commodities? Posted: 12 Sep 2011 09:30 AM PDT There is fear in the land. Many are asking where do we go should a deflationary repeat of 2008 be in the cards. Again the response to such an event may be an initial decline in all holdings across the board. Read More...
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| Losing Faith in the “Power” of Central Bankers Posted: 12 Sep 2011 09:26 AM PDT Global equity markets are sinking again today, as the euro zone credit crisis deepens. According to the rumor mill, a default by the Greek government is not merely inevitable, it is imminent. As a result, the cowboys up in Germany and France are circling the wagons. "Germany may be getting ready to give up on Greece," Bloomberg News reports, "as the credit markets signal growing concern about the smaller nation's ability to repay investors. Yields on Greek two-year notes rose above 60 percent today for the first time… "After almost two years of fighting to contain the region's debt crisis and providing the biggest share of three European bailouts [to Greece, Ireland and Portugal]," Bloomberg continues, "German Chancellor Angela Merkel is laying the groundwork for what markets say is almost a sure thing: a Greek default." Of course, a Greek default has been a sure thing ever since the European Union and IMF started shipping euros down to Athens more than a year ago. Bailouts, rescue packages and official protestations to the contrary are all part of the "Inevitable Default Playbook." Over the weekend, Greek Prime Minister, George Papandreou, vowed "to save the country from bankruptcy." The Prime Minister promised, "We will remain in the euro." Ergo, a default is both inevitable and imminent. "It feels like Germany is preparing itself for a debt default," says Jacques Cailloux, chief European economist at Royal Bank of Scotland. "Fatigue is setting in." The threat of a Greek default is not exactly a new story. In fact, it is a very old story here at The Daily Reckoning. As early as February 2010, your editors began linking the words "Greece," "default" and "inevitable." Your editors would re-position these words from time to time, just to keep the story fresh. But the essential message never changed: This thing that cannot possibly last will not last. Greece will default. It's inevitable. But since inevitable is not the same thing as imminent, the financial markets of Europe and the US kept powering ahead for months, without worrying about the due date of inevitable. Obviously, investors are worrying now. Stocks are suffering worldwide, and no stocks are suffering more than European bank stocks. The share prices of Europe's largest banks are down 50% to 70% over the last three months. Here in the States, the financials are also performing dismally. Just today, the share price of Goldman Sachs dropped back below $100 for the first time since March 2009. Somebody is worried…and that worry is also extending to the forex markets, where the euro has dropped to 6-month lows against the dollar and 10-year lows against the yen. As investors scurry away from the risk of additional losses, they are also fleeing a delusion that has been condemning their capital to inevitable (there's that word again) losses. This costly delusion is that central banks and other governmental agencies possess the power to improve economic conditions. For several months, at least, investors have been able to see that government finances throughout the Western World were in shoddy shape…and becoming even shoddier as these governments catapulted billions of dollars and euros into their sluggish economies, hoping something good would happen. Despite this obvious distress, however, global stock markets have been rallying for most of the last two years. Why? Because investors trusted the power of governments to overcome the forces of recession and debt liquidation. Investors placed their faith in the gospel of omnipotent central banking, just as they had always done since the days of Alan Greenspan. But that faith is wavering. Investors are becoming disenchanted with their golden calf. The long-running faith in the power of central banking traces its roots to the great American folktale, Maestro Alan Greenspan. Remember that delightful tale? Alan was the guy who could steer a massive $13 trillion economy just by tweaking one little bitty interest-rate. He was the guy who could produce a rally on Wall Street, simply by raising his eyebrows a certain way during congressional testimonies, or by clearing his throat a certain way when discussing Fed policy. Alan was the guy who always had the right answer, even when there wasn't one. He always knew exactly what to do, even when nothing should've been done. He was more than a Maestro; he was a wizard. No one doubted his power to improve the US economy. And he was also omniscient. He always knew what the proper level of interest rates should be, even when Mr. Market vehemently disagreed. Whether by luck or genius, Greenspan played a hot hand for many years. His "masterful" monetary policy received credit for placing two chickens in every pot and an "affordable mortgage" in every household balance sheet. As a result, investors not only placed their faith in Greenspan's "power" to produce economic growth (and stock market rallies), they also came to believe that governments and central banks, in general, possessed the power to nurture economic growth and/or dampen the effects of recession. But as it turned out, Greenspan did not have all the answers. In fact, he did not have any answers at all. He had gimmicks and quick-fix levers to pull — the one constant ingredient being EZ credit. Greenspan responded to every mini-crisis of his tenure by slashing short-term interest rates. These quick fixes did not actually fix anything, but they did enable the US economy to lurch from bubble to bubble until the financial system had become so fatally levered that a large-scale credit crisis became inevitable. The nation marveled at the Maestro's golden touch, and revered his reputation…until about 2007, when the Greenspan legacy came under review for possible downgrade…outlook "negative." As the housing bubble burst, and the balance sheets of America's largest financial institutions began melting faster than the Wicked Witch of the West, many American investors started to have second thoughts about the wizard-formally-known-as-Alan-Greenspan. They began to realize that Greenspan was merely human, and that central bankers do not possess superhuman powers. And yet, vestiges of the "benign government intervention" delusion remain. Some investors still trust the European Union to "fix" the Greek debt problem, and clearly, some Americans still trust President Obama to "create jobs." Here at The Daily Reckoning, we do not. We distrust central bankers to fix economies and we distrust politicians to create jobs. But that does not mean we lack a belief system. On the contrary, we possess a strong and enduring faith in politicians to borrow money and in central bankers to print it. That's what they do; that's what they have always done. Trusting the power of central bankers and politicians may be a decent, short-term trade; but distrusting that power is a great, long-term investment. Eric Fry Losing Faith in the "Power" of Central Bankers 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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| Porter Stansberry: "Enough Already, Let's Return to the Gold Standard!" Posted: 12 Sep 2011 09:23 AM PDT The Gold Report: You've written a lot about the gold standard recently, and an article in your S&A Digest argues that we should greatly prefer gold-backed money because it would limit the ability to increase the money supply. It goes on to point out that increasing the money supply essentially causes inflation. If regulations prohibited governments from expanding the money supply, would fiat currency be as good as the gold standard? Porter Stansberry: In theory, it could be, but in practice that's never happened. I suspect that the market wouldn't have much faith in such rules, and they'd be abused eventually. During the Volcker and Greenspan Federal Reserve periods, from roughly 1981– 2006, two central bankers created a de facto gold standard because they remained relatively consistent vis-à-vis money supply targets. Volcker absolutely targeted money supply, as did Greenspan up until about 1999. He moved away from that stance due to Y2K fears and then the 2001–2002 recession. So we'...
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| Germany, Greece Flirt With Mutual Assured Destruction Posted: 12 Sep 2011 09:10 AM PDT First we learn from planted leaks that Germany is activating "Plan B", telling banks and insurance companies to prepare for 50pc haircuts on Greek debt; then that Germany is "studying" options that include Greece's return to the drachma. German finance minister Wolfgang Schauble has chosen to do this at a moment when the global economy is already flirting with double-dip recession, bank shares are crashing, and global credit strains are testing Lehman levels. The recklessness is breath-taking. If it is a pressure tactic to force Greece to submit to EU-IMF demands of yet further austerity, it may instead bring mutual assured destruction. "Whoever thinks that Greece is an easy scapegoat, will find that this eventually turns against them, against the hard core of the eurozone," said Greek finance minister Evangelos Venizelos. Greece can, if provoked, pull the pin on the European banking system and inflict huge damage on Germany itself, and Greece has certainly been provoked. Germany's EU commissioner Günther Oettinger said Europe should send blue helmets to take control of Greek tax collection and liquidate state assets. They had better be well armed. The headlines in the Greek press have been "Unconditional Capitulation", and "Terrorization of Greeks", and even "Fourth Reich". Mr Schauble said there would be no more money for Athens under the EU-IMF rescue package until the Greeks "do what they agreed to do" and comply with every demand of `Troika' inspectors. Yet to push Greece over the edge risks instant contagion to Portugal, which has higher levels of total debt, and an equally bad current account deficit near 9pc of GDP, and is just as unable to comply with Germany's austerity dictates in the long run. From there the chain-reaction into EMU's soft-core would be fast and furious. Let us be clear, the chief reason why Greece cannot meet its deficit targets is because the EU has imposed the most violent fiscal deflation ever inflicted on a modern developed economy – 16pc of GDP of net tightening in three years – without offsetting monetary stimulus, debt relief, or devaluation. This has sent the economy into a self-feeding downward spiral, crushing tax revenues. The policy is obscurantist, a replay of the Gold Standard in 1931. It has self-evidently failed. As the Greek parliament said, the debt dynamic is "out of control". We all know that Greece behaved badly for a decade. The time for tough love was long ago, when the mistakes were made and all sides were seduced by the allure of EMU. Even if the Papandreou government met every Troika demand at this point, it would not make any material difference. Greek citizens already understand this, and they understand that EU loan packages are merely being recycled to northern banks. Instead of recognizing the collective EU failure at every stage of this debacle, the creditor powers are taking out their fury on what is now a victim. We have never been so close to EMU rupture. Friday's resignation of Jurgen Stark at the European Central Bank is literally a kataklysmos, a German vote of no confidence in EMU management. Dr Stark is not just an ECB board member. He is the keeper of the Bundesbank's monetary flame. The vehemence of his protest against ECB bond purchases confirm what markets suspect: that the ECB cannot shore up Italian and Spanish debt markets for long without losing Germany. "I look at what is happening in EMU and the words that spring to mind are total and utter disaster", said Andrew Roberts, credit chief at RBS. He thinks German Bund yields could break below 1pc in the flight to safety. Citigroup and UBS both issued reports last week on the mechanics of EMU break-up, both concluding with touching faith that EU leaders cannot and will not allow it to happen. "The euro should not exist," said Stephane Deo from UBS. It creates more costs than benefits for the weak. Its "dysfunctional nature" was disguised by a credit bubble. The error is now "painfully obvious". Yet Mr Deo warns that EMU exit would not be as painless as departing the ERM in 1992. Monetary unions do not break up lightly. The denouement usually entails civil disorder, even war. If a debtor such as Greece left, the new drachma would crash by 60pc. Its banks would collapse. Switching sovereign debt into drachma would be a default, shutting the country out of capital markets. Exit would cost 50pc of GDP in the first year. If creditors such as Germany left, the new mark would jump 40pc to 50pc against the rump euro. Banks would face big haircuts on euro debt, and would need recapitalization. Trade would shrink by a fifth. Exit would cost 20pc to 25pc of GDP. UBS concludes that the only course is a "fiscal confederation", a la Suisse. Well, perhaps, but Germany's top court chilled such hopes when it ruled that the Bundestag's budgetary powers may not be alienated to "supra-national bodies". Nor do I believe that German society is willing to undertake such a burden for Greco-Latins in regions equal to six times East Germany. Citigroup's Willem Buiter disputes the "federalism or bust" dichotomy, saying Anglo-Saxon commentators are trapped in the mental world of the Peace of Westaphalia in 1648, which established the sovereign state as pillar of international order. "There is no recent, close analogue to the EU," he says. As a blend of national and supra-national, the EU resembles the Holy Roman Empire, which united central Europe from the 10th Century until Luther (technically until 1806). Dr Buiter says the two "canonical models" for EMU break-up – that debtors walk out, or the German-led core walks out – are both are fraught with perils. The weak would sell their souls for a mess of potage, discovering that devaluation can be an "uncontrollable process" with little lasting gain for exports. If the German bloc left to create a "Thaler", the costs would be less. However, the rump euro would fall apart, with massive dislocations. "It would not be pretty," he says. Ultimately, political investment in the EU project is by now too great to entertain such thoughts. The eurozone will muddle through along a third way, with spasms of debt restructuring kept within the euro-family. It will fall short of a transfer union or a debt pool, he said. Each of these reports is a terrific read, but as an unreconstructed Westpahlian – and having covered a lot of NO votes to EU referendums – I don't accept that Europe has a teleological destiny towards closer union. It has already pushed its ambitions beyond the tolerance of Europe's historic states and cannot be made democratically accountable. The new fact of recent months is that German society has begun to discern a clash between its own democracy and the fiscal drift of EMU. The two are seen to be in conflict for the first time. Germans may be forced to choose. The outcome to that is far from clear. Nor do I accept the headline figures of UBS. Every Treasury official and every voice of orthodoxy warned in 1931 that British exit from the Gold Standard would unleash the seven plagues. It proved a liberation. The UK, the Empire, and allied states broke free from a system that had become an engine of deflationary Hell. It cleared the way for monetary stimulus and recovery. There is a close parallel between 1930s Gold and EMU, both in destructive effect and totemic sanctity. The Gold Standard was more than a currency system. It was the anchor of an international order and way of life. My solution – like that of Hans-Olaf Henkel, the ex-head of Germany's industry federation (BDI) – is to split EMU into two blocs, with France leading a Latin Union that keeps the euro. This bloc would devalue but not by 60pc, yet uphold its euro debts intact. The risk of default and banking crises would decrease, not increase. The German bloc could launch their Thaler, recapitalizing banks to cover losses from rump euro debt. Disruptions could be contained by capital controls at first. None of this is beyond the wit of man. My bet is that aggregate losses would be lower than the status quo, and the long term outcome much healthier. The EU might even carry on, unruffled. The status quo, however, is not acceptable. EMU's debt-deflation strategy has trapped half of Europe in depression, with youth unemployment reaching 46pc in Spain and no way out for years. Perhaps a global coalition of the G20, IMF, China, and the oil powers will combine to rescue Euroland, as some now hope. But how would that bridge the gap between EMU's North and South? It solves nothing. Source: The Telegraph
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| The Gold and Silver Precious Metals Tsunami Posted: 12 Sep 2011 09:01 AM PDT
By: GoldRunner A tsunami doesn't start with a bang, but with a whimper. The first sign is a little hump in the water way out in the distance that is barely notable. Anyone who catches a glimpse of it simply continues to expect the day to be the same as the last many days – calm and beautiful waters along the shore. This is the point where we are, today in the Precious Metals (PM) sector. Many have seen the little roll of water out in the distance as Gold edged up in the first move of a more parabolic slope, yet most investors are mired in the same expectations of yesterday – a return for Gold to correct down into a lower base. As far as the PM Bull goes, the vast majority of investors are still sitting on their hands – eyes glued to the television – as the global economic mess unwinds driving the Precious Metals from a little bump on the horizon to a 15 foot wall that will engulf them. As with all tsunamis, the vast majority of investors will pause in wonder over the growing wave as it comes closer, but they will not take action until the PM wall is 15 feet high and coming right at them. In reality, that huge PM wave will represent an unseen wave of devaluation of everything they own so eventually, like all tsunamis, the majority of investors will react – all at the same time. Those late-comers to the PM sector will grab charts of Gold, of Silver, and of the PM stocks to see that so far in this PM bull prices have tended to correct back to the mean, so they will decide to wait for a steep correction to get in.
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| A Raging Case of Bailout Fatigue Posted: 12 Sep 2011 08:57 AM PDT I've used the term "outrage fatigue" on numerous occasions as a way of explaining why there has been such a muted outcry from the general population, as the tally of financial atrocities committed against American citizens has exploded. August 22 was just another average day with another average headline that could easily have been ripped from some radical economic watchdog website (liberal or conservative, either one): Wall Street Aristocracy Got $1.2 Trillion from Fed. But the line wasn't the work of someone out there on the anti-capitalist or anti-government fringe. It was attached to an article from the very mainstream Bloomberg News. Bloomberg has been engaged in a long, frustrating FOIA litigation battle with the Federal Reserve over that entity's reluctance publicly to reveal what it has been doing with our money. Slowly, the stone wall has been coming down. And looking at what's behind it, it's pretty obvious why the Fed would have preferred to keep its deeds locked away from all prying eyes. Thus the above headline. And here's an ugly truth that goes along with it: It's a near certainty that the vast majority of those who saw it — probably not too many in number, since the story got scant coverage on the network news — said to themselves, Yeah, we already knew that. Ho hum. Call it "bailout fatigue." Because, guess what? This is not a recycled story from last year. This is news that we didn't know before the 22nd. This money is not a part of the $16.1 trillion in emergency loans the Fed handed to US and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the first-ever, one-time-only GAO audit of the central bank ordered by Dodd-Frank. Nor is it part of the $2 trillion quantitative easing program. Nor is TARP's $700 billion in there, either. Read that again. This $1.2 trillion — and perhaps we also have trillion fatigue, because that's a lot of money — is separate from all that other stuff. It's another hitherto secret funding program that we never would have heard of if Bloomberg hadn't torn it from the Fed's mouth like a rotten tooth. The list of who got the bucks is a basic guide to the American banking industry. $107 billion to Morgan Stanley. $99 billion to Citigroup. $91 billion to Bank of America. Over $75 billion to State Street and just under that to Goldman Sachs and JPMorgan Chase. And the list goes on. And on. And on. Even the disgraced Countrywide Financial got in on the act, claiming about $12.5 billion. In addition, as the Fed was bailing the leaky American boat, it must have asked itself, Why stop here? There are foreigners out there who need our help just as much. So, almost half of the Fed's top 30 borrowers were European firms. They included the Royal Bank of Scotland, which was propped up to the tune of $84.5 billion, the most of any non-US lender, and Zurich-based UBS, which got $77.2 billion. The big foreign borrowers also included Dexia, Belgium's biggest bank by assets, the French Société Générale, Deutsche Bank, Barclays, and Crédit Suisse. "These are all whopping numbers," says Robert Litan, a former Justice Department official who investigated the savings and loan crisis in the 1990s. "You're talking about the aristocracy of American finance going down the tubes without the federal money." So much for the free market, where failed business ventures…well, fail. But not to worry, the Fed did it all for us. "We designed our broad-based emergency programs to both effectively stem the crisis and minimize the financial risks to the US taxpayer," says James Clouse, deputy director of the Fed's division of monetary affairs in Washington. Furthermore, the Fed's official line now is that "nearly all of our emergency-lending programs have been closed. We have incurred no losses and expect no losses." In fact, $13 billion in interest income was supposedly realized. That works out to an average of, yes, one percent. Now that's a pretty nice loan rate if you can get it. They could, and they did. Citigroup, for example, was the most frequent US borrower, in hock to the Fed on seven out of every 10 days from August 2007 through April 2010. On average, the bank had a daily balance at the Fed of almost $20 billion. And the ability to raise truckloads of money for almost no interest raises another disturbing question: Did the banks really need this cash to stay afloat? University of Pennsylvania finance professor Richard Herring, an authority on financial crises, is suspicious, saying that some banks may have used the program to maximize profits by borrowing "from the cheapest source, because this was supposed to be secret and never revealed." But regardless of whether banks needed the Fed's money for survival or used it because it offered the opportunity to turn a quick, easy buck, the central bank's lender-of-last-resort role amounts to a free insurance policy for banks, Herring notes. Access to Fed backup support "leads you to subject yourself to greater risks," Herring says. "If it's not there, you're not going to take the risks that would put you in trouble and require you to have access to that kind of funding." All of this might conceivably make citizens revolt against an entity that uses their money to secretly fund the "Wall Street aristocracy." It might make them vote for a Gary Johnson or a Ron Paul, someone who favors dismantling the Fed. Or not. When a story as big as this one generates a bare minimum of media coverage, you know it's probably headed for that huge waste bin in the corner of the parking lot. The one marked Bailout Fatigue. Regards, Doug Hornig, A Raging Case of Bailout Fatigue 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: 12 Sep 2011 08:55 AM PDT Dave Gonigam – September 12, 2011
It's dawning on traders that Greece is not only not "fixed," but may be on the verge of an honest-to-God default. Thus, gold has reached a record in euros of €1,375.
But that shouldn't come as any surprise. So there's no news that makes a Greek default any more likely today than it was last week… or last month… or last year. Nonetheless, we see market fallout like the following…
This last point should worry you if you have cash parked in a money market fund. As we chronicled in mid-June, 44% of U.S. money market fund assets are invested in the short-term debt of European banks. And of that 44%, more than half are in the commercial paper of the big French banks. If you need cash for short-term liquidity, for goodness sake, stick to U.S. T-bills — a point we underscore in the new issue of Apogee Advisory, coming tomorrow. If you want to be on board, here's where to go.
The euro is nearly flat from Friday, at $1.363. The dollar index has weakened slightly to 77.4.
"Banks holding Greek bonds are facing extra scrutiny, with the cost of protecting against defaults on the Greek bonds (called credit default swaps) soaring to record levels. And headlines suggest there is talk about policy actions to support German banks in case of a Greek default." "These fears are a catalyst to the sell-off in the euro as well as the German DAX. In fact, they have had very close co-movements."  "So no doubt investors are scared this morning. But as we have seen over the past few months, emotions on Monday are often overreactions." Thus is Abe counting on a bounce in both the euro and the DAX between now and Friday… and he's advising his readers to play it accordingly. If all plays out as he expects, it would mean up to 150% gains by week's end. For access to Strategic Currency Trader, look here.
"In the wake of such a decline, once the market gets comfortable with where the Greek bond losses lie (and which banks were dumb enough to write credit default swaps on Greek bonds), focus would return to the central banks' inflationary policies. "And every one of these central banks — perhaps even the People's Bank of China — would shift into 'easing' mode in the wake of a Greek default." The timing would be, if nothing else, convenient for Federal Reserve governors. The Fed's Open Market Committee meets in Washington Tuesday and Wednesday of next week to plot its next move.
For all its ups and downs, gold has yet to break below $1,800 during September. Silver, meanwhile, is at $40.63. The white metal has held above $40 all this month.
At the current pace, the year would end with 103 bank failures… compared with 157 last year and 140 the year before.
Contagion pulled in $23.1 million over the weekend. "The movie, which is about the inevitable next flu epidemic," says our biotech specialist Patrick Cox, "was the big news at the Cannes Film Festival. "Most importantly, director Steven Soderbergh turned to Columbia University's Dr. Ian Lipkin, the director of the Center for Infection and Immunity, to get his science right. Lipkin is the renowned microbe hunter who has led efforts to fight many of the modern world's worst disease threats." Patrick figures the movie might generate some buzz for a flu drug that's just been submitted to the FDA. "Tests show that it works far, far better than available flu drugs — several orders of magnitude better, actually. Though the company doesn't use such terms for legal reasons, I'm saying they have a one-dose cure for even the most lethal influenza viruses. "Their technology is so effective and, at this point, validated that it's mystifying that it's not making headlines." But as Patrick's readers know, it's before a company starts making headlines that the biggest gains can be made. Patrick is eager to tell you about several such companies… and he's even talked us into giving you a break on the membership fee to his premium advisory, Breakthrough Technology Alert. This discount is available only through midnight on Wednesday, so it pays to check it out now.
Until we saw it might cost her $10 million in severance she wouldn't collect. "These people f***ed me over," Bartz said of Yahoo's board after she was fired — over the telephone — on Tuesday. She described the call from Chairman Roy Bostock: "I said, 'Roy, I think that's a [lawyer's] script. Why don't you have the balls to tell me yourself?' "The board was so spooked by being cast as the worst board in the country," Bartz went on. "Now they're trying to show that they're not the doofuses that they are." Somewhere in the course of that interview, we're not exactly sure where, Bartz might well have violated the nondisparagement clause in her $10 million severance package, according to the San Jose Business Journal:  The clause is commonplace in the corporate world — a promise you won't say bad things about your former employer once you part ways. Violate that, and you forfeit whatever you're supposed to collect. We have no idea how this will play out… But if Yahoo pursues the case, we do know we wouldn't want to be in the room with Bartz whenever the papers arrive.
"Given the state of politicians these days, in which they all seem to promise the world only to change their stance after Election Day, I bet it will be a humdinger of a presidential race. There's so much at stake that the promises of change will be flowing like the Vermont rivers after hurricane Irene. "I was hoping you might consider documenting the claims and promises of each relevant candidate as we move along during the campaign (at least the big-picture issues). And then bring out the list later to contrast it to actual decisions and policy shifts as they occur. It just seems to me that somebody should be holding the politicians' feet to the fire." The 5: We appreciate that you rely on us as a BS detector. But there are many sites, blogs, etc., that do a fine job of calling out a sitting president for breaking his promises. Just Google the name of the current president, or his immediate predecessor, along with "hypocrite," and you'll have more material than you'll know what to do with. We'd rather devote our manpower to digging up investment ideas that no one else is talking about — especially those that stand to profit from those broken promises.
"Say it right out, the government has no money, period. They swindle, legislate and steal though taxation, borrowing and printing, and they do it at the point of a gun. I am surprised IRS agents don't carry guns like Fish and Game."
"I read incoming money does not match the outgoing benefits already. Congress already says Social Security is in trouble. This doesn't bode well for me as a social security recipient, nor for all the baby boomers coming on board in the coming years. In a couple of years, Congress will be raising hell about how bad off Social Security is, as they do all the time, then they will want to take it out on all us 'greedy' senior citizens. "I am very worried about this country and don't know what to do about it, except vote them all out in 2012." The 5: You are correct about Social Security collecting less money than it sends out in checks. If you think political action is going to solve the problem, you're welcome to your opinion. But if you want to ensure a stream of retirement income, we suggest you might have to rely more on yourself. We have an entire service devoted to that proposition. You can see what it's all about right here.
"And the military adventures in to-be-lost battles and bases in far-flung places remind me of Napoleon's adventure heading toward Moscow (and the Nazis as well). Supply lines were stretched to the point where defeat became inevitable… in this case, the supply line for the U.S. military is not K rations, but rations of USD. "What does it take for the politicians to wake and realize that the ultimate self-made implosion is coming, and soon?"
"I would love to know what is cooking inside Bank of America, Goldman Sachs and the others." The 5: Um, maybe you missed the point: When private entities do what you propose, it's called hacking. When the government does it, it's called law enforcement. Cheers, Dave Gonigam P.S. "Scheming, speculation and sophisticated tax avoidance," wrote Rep. Ron Paul, "have replaced productive efforts, savings and planning for the future… The futures and options markets have turned into a giant gambling game." What stands out about this passage is that he wrote it not this year, or in 2007 as a warning on the cusp of the global financial crisis… but in 1982. "The new markets that have developed since the dollar lost its precise definition [as a measure of gold] reflect the ingenuity of man," he continued. "Now we see futures sold in currencies, betting on the monetary inflation of various governments. Instead of buying a bond or Treasury bill and holding it, we can now speculate on a daily and massive basis." Ingenuity aside, he did not see this as a good thing. It's as if Dr. Paul was anticipating, from the vantage point of 1982, things like collateralized debt obligations, credit default swaps and other derivative instruments that brought the system to its knees in 2008… and might be on the verge of doing so again. Dr. Paul's collected these insights in a slim volume called The Case for Gold. It was the "minority report" of President Reagan's Gold Commission — which voted overwhelmingly against a return to the gold standard. On Wednesday, Addison heads to Washington with a film crew to talk with Dr. Paul for another new documentary project. He'll ask whether "the fix was in" with this commission: Did Reagan create it as a sop to some of his hard-money supporters, with no intention of following through? Whatever Dr. Paul's answers, The Case for Gold stands as a stark warning of events unfolding before our eyes. For a limited time, we're still making copies available free of charge through this special offer.
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| Is It Safe to Invest in Gold and Silver at Current Prices for the Long Term? Posted: 12 Sep 2011 08:54 AM PDT
By: Chintan Karnani GOLD Global economic uncertainty and the break down in treasuries are the only reason for gold to rise. This resulted in more and more investment demand flocking gold. Gold will fall as and when there is stabilization in the global economy and investors find secure alternate investments. But the US dollar collapse story has begun and more and more central bankers have been net buyers of gold and have been increasing their gold reserves secretly. Even if gold prices crash in the coming months I do not see gold falling below this year's low of $1310 under any circumstances. Intra day volatility has been high and has attracted a lot of day traders and particularly Indian housewives who have now started trading in gold. This is the maturing of the gold market but it also suggests that the current price rise is purely a short term speculative play. I am only concerned over the pace of the rise of gold prices and not the rise. Very high intra day volatility suggests that gold now has become a common man's casino. This casino should burst in the first quarter of 2012. IS IT SAFE TO INVEST IN GOLD FOR THE LONG TERM AT CURRENT PRICES?
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With gold trading above $1,800 and silver over $40, today King World News interviewed James Turk out of Spain. Turk had forecast a massive move for the summer in gold, which is exactly what took place as gold had its biggest summer in 30 years. When asked what to expect from here Turk responded, "When we started talking about the big move I was expecting this summer, gold was roughly $1,480. From that low to the recent peak at $1,920, gold's rise was nearly 30%."
In any long-term bull market, we would normally expect to observe several phases. Put another way, in any long-term trend (in this case higher) we would not expect to see this entire period dominated by a single trading pattern.
Gold hit an all-time record today. Just not in U.S. dollars.
There are rumblings that Germany is making plans to shovel capital into the banks and insurance companies if Greece defaults.
The currency markets themselves aren't reacting to the latest Greek scare… at least not today.
Perhaps the currency markets are sniffing out that reports of a Greek default — while no doubt accurate — might well be premature. "The idea that a Greek default is inevitable is becoming less extremist," says our currency-trading specialist, Abe Cofnas.
U.S. stocks aren't reacting as badly to the latest Greece rumors. Still, the Dow is down another 100 points today after a vicious sell-off Friday. As of this writing, the blue chips are within 200 points of the low reached on Aug. 10.
"A Greek default would spark a scary decline in stocks," counsels 
Gold priced in dollars did not reach a record today. Indeed, the spot price is down another 2% from Friday's close, to $1,820.
For the record, the FDIC has closed 71 banks so far in 2011. The latest came Friday, with a small bank in Milton, Fla.
Ordinarily, we wouldn't take note of what movie was tops at the box office over the weekend… but there's an investment angle this time. And it has nothing to do with movie studios.
We weren't all that amused by — and thus, passed on the opportunity to comment about — the departure last week of Yahoo's foul-mouthed CEO Carol Bartz. Or even her foul-mouthed tirade to Fortune afterward.
"I went right to The 5 Friday," a reader writes, "even though I had a buy recommendation from Chris Mayer sitting next to your email in my inbox. I look forward to your reporting and remarks every day, and I was not disappointed.
"Michael Pento is right on in his response, always has been," writes a reader after our newest editor immediately 
"How can the Obama administration call for Social Security payroll tax cuts?" a reader inquires — with no prompting from us, we might add. "What happens in a couple of years down the road, with less money coming in for Social Security?
"Very good issue Friday," a reader writes of our 
"Any chance," our final reader inquires after seeing our item about the National Security Agency's $2 billion complex in Utah that scoops up emails, web searches and business transactions, "we could, for a pool of investors, get our hands on something like that to spy on the pundits in Wall Street?
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