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Tuesday, September 27, 2011

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SLV: Toast

Posted: 27 Sep 2011 07:10 AM PDT

SafeHaven

Oil Price Spread Gets A Good Explanation

Posted: 27 Sep 2011 06:24 AM PDT

By Carlos X. Alexandre:c

The Financial Times reported on September 16, that Platts plans to overhaul the oil benchmark known as Brent. Platts is "the pricing agency that acts as the de facto regulator of the Brent crude oil market," and is owned by McGraw-Hill (MHP).

The spread between West Texas Intermediate, also known as WTI, and Brent started to widen about one year ago, and it used to be that WTI was a couple dollars higher than Brent. The reasoning for the larger spread has resulted in a variety of theories, but the last move by Platts is the best explanation of all.

Platts, in a notice issued on Friday, said it planned to move with the changes by January 6, 2012, adding that it had "received substantial support for the move". The changes would impact on the multibillion-dollar Brent market, which consists of layers of physical, forward, swaps, futures and options contracts.


Complete Story »

Fundamentals Still Support Gold Bull Market Despite Recent Sell-Off

Posted: 27 Sep 2011 06:18 AM PDT

By Pater Tenebrarum:

Precious Metals Sell Off

On Thursday and Friday, the decline in precious metals prices accelerated, in the process breaking a number of short-term and in some cases medium-term support levels.

To this we want to note that the increase in margins on gold, silver and copper futures by the CME was not the reason for the decline, but its consequence. Consider for instance that at one point on Friday, the gold contract was down by $114. At that point a buyer on Thursday's close would have had a 'paper loss' of $11,400 per contract. However, before Friday, the initial margin per gold contract was only $9,450, with the maintenance margin at $7,000. Obviously, at the low point, more than the initial margin of our putative buyer would have been wiped out. In that sense, Friday's margin increase to $11,450 initial and $8,500 maintenance margin is probably insufficient.

We mention this


Complete Story »

Record Silver Booty For Odyssey Marine Exploration

Posted: 27 Sep 2011 05:58 AM PDT

By Wall Street Strategies:

By David Urani

I love to learn new, interesting things whenever I can. The most new and interesting thing I came across Monday was Odyssey Marine Exploration Inc. (OMEX). OMEX is a deep ocean shipwreck treasure hunter, and that surely makes it one of the most unique publicly traded stocks out there. OMEX popped up onto my radar because of the 9% move it made directly after confirming that it found the remains of the SS Gairsoppa, a 412-foot English cargo ship sunk in 1941. Being a bit of a history buff and a generally inquisitive sort, I decided to read further and found an intriguing situation brewing at OMEX.

You see, the SS Gairsoppa, according to records, was carrying about 7 million ounces of silver before it was sunk to the depths by a German U-boat torpedo. There's still a good amount of work yet to be done, as


Complete Story »

Looking At Tuesday's Markets

Posted: 27 Sep 2011 05:51 AM PDT

By Marc Chandler:
Asian stocks staged their biggest rally in since April 2009 after hitting 16-month lows yesterday. Wall Street's sharp gains on Monday, encouraged by favorable noises from Europe and action in the US Senate to avoid an imminent closure of the government and a repeat of last month's farce. The dollar has been confined to yesterday's trading ranges against the euro, Swiss franc and yen. The initial attempt to take sterling higher succeeded, but only to fail in front of $1.56. The dollar-bloc which has been the most beaten up over the past week have risen through yesterday's highs. The price action underscores the consolidative/corrective tone as participants await fresh developments.
There are two important votes today. The first is in Greece where parliament votes on the new property tax. The government has a a 4 seat majority, but there have been six MPs who have threatened to vote against the

Complete Story »

Here is WHY Gold & Silver HAVE Bottomed

Posted: 27 Sep 2011 05:34 AM PDT

According to John Hathaway in recent interveiw with KWN:

"I would be on guard for a retest of the lows, but that's how you go to higher highs."

"You can't go to higher highs when you are at $1,900 and fully extended with everybody on board. To me this was all constructive."

"It would be better for gold to do some backing and filling for a couple of months. I'm not a technician, but I do know markets and you have to dampen some of the enthusiasm. Its (the market is) just separating gold from weak holders."

"They (central planners) are going to paper it over, there is no doubt about it and they will buy time, but there won't be any solutions. We will be back in the same mess somewhere down the road. So nothing has been resolved other than just buying time."

Read more @ King World News

WATCH: Schiff – The State Of The Gold Market

Posted: 27 Sep 2011 05:11 AM PDT

Peter Schiff gives his analysis of recent developments in the precious metals markets.

~TVR

Vulture Bargain Update for September-October Posted

Posted: 27 Sep 2011 04:56 AM PDT

Vultures (Got Gold Report Subscribers) please log in to the password-protected GGR subscriber pages for an important Vulture Bargain Update posted today, Tuesday, September 27.  We update our notations for all of our Vulture Bargain companies during this cascade negative liquidity event and protracted small resource company buyer's strike.  Highlights include a buyout for our VB #9 at a 50% premium and a deal by our VB #3 to sell part of their holdings to an earn-in partner, removing the need to raise cash in this environment. 

Gold Rebounds Strongly From Lows of $1,532

Posted: 27 Sep 2011 03:19 AM PDT

Why the Gold Price Fell, Will It Recover?

Posted: 27 Sep 2011 02:14 AM PDT

Gold Forecaster

The Fear From Which Significant Rallies Occur in Gold And Silver

Posted: 27 Sep 2011 02:09 AM PDT

Case Closed. We are surrounded by Idiots. "the dollar is backed by the US Govt and no matter what happens is backed by the Fed and that's much more safe"

Posted: 27 Sep 2011 01:44 AM PDT

ECB: gold and gold receivables remain unchanged

Posted: 27 Sep 2011 01:38 AM PDT

Paging Blythe...Asians cleaned out the physical shops on your discount...paging Blythe.....

Posted: 27 Sep 2011 01:19 AM PDT

BTFD? huh...

"We've seen a lot of buy-on-dip type on the physical market, said Dick Poon, manager of precious metals at Heraeus in Hong Kong"

Click here for entire article...

Eight top dividend-paying gold stocks

Posted: 27 Sep 2011 12:47 AM PDT

From Dividend Growth Stocks:

With the U.S. debt quickly approaching 100% of the GDP and the declining financial condition of European countries, we are seeing some very jittery financial markets. Whether you live in the U.S. or are a citizen of the world, we should all be concerned with the current financial condition of the world, and many people are. This is evidenced by the significant run up in gold.

At $1,800 per ounce, gold seems expensive to some. But for others, such as Jim Rogers, the expectation is that the price of gold will continue upward past $2,000 per ounce. Who's right? What can investors do to add exposure to precious metals when they are uncomfortable buying at these historically high levels?

One place I am looking is precious metals mining stocks. Contrary to the metals they mine, many of these stocks are trading at the lower end of historic levels.

Wanting to further reduce risk, I am only looking at stocks that pay a dividend. Many of the top mining companies are expanding and growing their dividends. Some are linking their dividend payments to the metal they mine.

Here are some stocks I am looking at...

Read full article...

More on gold stocks:

Why resource guru Sprott is now selling gold

Legendary investor Eveillard predicts a gold stock mania

An answer to the question every gold stock investor is wondering now

Precious metals are SURGING back: Silver up over 26% from yesterday's lows

Posted: 27 Sep 2011 12:45 AM PDT

From Zero Hedge:

It appears rumors (there's that word again) of precious metals' demise have been greatly exaggerated yet again.

After hitting a low of $26/ounce just shortly after 24 hours ago, the metal has since soared by a whopping 26% to $32.90. (Thank you CME and Shanghai Gold Exchange.) That's $6.90 in one day. The same with gold.

It seems that the market has finally had its brain kicked in a little following the realization that an expansion in the EFSF from E440 billion to E3 trillion (which has about 0.01% probability of happening, and would likely see the mobilization of a certain army first) would mean an exponential decline in the credibility of that "other" currency, which...

Read full article...

More on precious metals:

This is how high gold and silver could climb

Unbelievable chart shows gold could double by the end of the year

The No. 1 reason you should still be accumulating gold for the long term

Porter Stansberry's crisis update: This is what will happen next

Posted: 27 Sep 2011 12:39 AM PDT

From Porter Stansberry in the S&A Digest:

In Friday Digests, I always do my best to teach you something new about finance... something you're unlikely to learn on your own… something your broker would never mention... something valuable... something that gives you a better "toolbox" as an investor.

It's funny that I continue to write these messages because I don't believe in teaching. Or as I like to say: There is no teaching. There is only learning. Few subscribers actually want to learn anything. It's a wonderful thing to be confident about your ability to invest successfully... to always know how take money out of the market in any environment. What I'm really trying to do is to broaden your horizons and inspire you to learn more about finance. Having access to this knowledge has greatly enriched my life.

Take the short positions in my newsletter, for instance. Since the market peaked on April 29, I've recommended seven short sells against only two long positions. That means, while most people were losing money in stocks this summer, we've been able to make a lot of money – about 22% on average for each position. And all the recommendations have been profitable.

Did I know exactly when the market would peak? No, of course not. Do we make money on every single short recommendation? No, of course not. But… as you watched the market turn over this year… it didn't take a rocket scientist to see why adding short positions made sense. If you're familiar with shorting stocks, employing this strategy was simple and kept you in the market this summer. But if you've never tried it… if you don't understand it… you were probably left absorbing losses with no good way to hedge.

So if you're a new subscriber, I urge you to see what I've written about buying discounted corporate bonds, selling options, and the importance of having access to the downside of the market, via selling stocks short. Looking at the various gauges of market volatility (the VIX is now over 40!), it's probably a good time to look carefully at selling some options. I firmly believe that if more of our subscribers understood these financial options – bonds, shorting stocks, selling options – they would be unlikely to ever simply buy stocks again.

Happily, I think we've made some progress. Paid-up subscriber John Howlett wrote to me this week…

I wanted to echo a comment that Porter made a while back in the Digest concerning Mike William's True Income (discounted corporate bonds) and Doc Eifrig's Retirement Trader (which focuses on selling option to generate income) being two of your best newsletters. The comment stuck with me because I had come to the same conclusion probably about a week prior...

When I first subscribed to one of your newsletters about three years ago, I made mistake after mistake – wrong position sizes, lack of trade stops, buying leveraged short funds to try to time the market, lack of discipline, doing too much, etc. If you can name it, I did it. The funny thing is that I considered myself a conservative investor... yet somehow these things "happened." In any case, True Income is fantastic. Not much needed except to be patient and to buy the bonds at a good price… His calls on Global Industries and Western Refining doubled my investment in them – safely.

I had seen where Porter had several times mentioned the power of selling options – particularly puts. Not buying options, but selling them. It only took a couple of trades with Dr. Eifrig's principles to see just how right this was. In just a few weeks, I understood enough to expand his ideas to other stocks – mainly with Dan's World Dominators – putting together a spreadsheet to keep track of the option and stock together and treat them as one position.

It was stunning to see that with careful work, a person can make 18%-20% per year – or more – selling options while reducing risk. On market down days, I'm looking to sell puts. On market up days, I'm looking to sell calls. Bottom line... I have learned tremendously from these guys. My personal opinion is right along Porter's on this one. These two newsletters are gems – your readers that don't use them are missing out.

Let me emphasize... John Howlett is not an employee or a relative. We didn't solicit his comment in any way... And we didn't edit his comment for anything other than length and clarity. I say so because I understand there is a tremendous amount of cynicism and skepticism in the newsletter subscriber community – and rightfully so.

The simple truth is... the sophisticated strategies found in our publications True Income and Retirement Trader make these newsletters difficult to sell or even to explain to novice investors. Subscribers must be willing to learn. And most people are not. It's simply up to you. Try these products – along with shorting stocks via my newsletter (Stansberry's Investment Advisory) – and see if it doesn't change everything about your outlook on investing. I know it will. But I also know most people will never, ever take the first step.

In today's Digest, I'm going to return to the unfolding global banking crisis. I know, I know... many of you are tired of reading about it. A longtime reader – probably the first subscriber I ever gained – complained to me this week via e-mail that he doesn't even read the Digest anymore because he is so tired of my doom and gloom...

I used to NEVER miss an issue because I was sure I'd learn something useful and they were exquisitely smart in some sort of truncated way… Now I feel like I'm getting an ongoing macro analysis of the world economic crisis… The truth is that I often glance at the Digest now and then delete them… I think I read this stuff for wit and attitude more than for his analysis… since your analysis is pretty much the same as it's always been.

He's right, of course. If you go back and read my March 2010 issue of Stansberry's Investment Advisory – "The Greatest Danger American Has Ever Faced" – you'll see that I specifically warned about the huge losses facing Europe's banking sector 18 months ago. I didn't believe these losses could be financed, given the perilous state of Europe's sovereign creditors.

To give a specific example, I picked Italy's UniCredit, because it is the direct predecessor of Kreditanstalt, the Austrian bank whose failure in 1931 knocked Europe and eventually America, off the gold standard.

Today, UniCredit is the largest creditor to Eastern Europe. It owns, for example, Bank Pekao, Poland's largest lender. It generates about half of its profit from Ukraine, Hungary, Romania, and Slovakia. JPMorgan estimates loans to Eastern Europe will generate roughly $40 billion of losses by the end of 2010. And who will bail out UniCredit's depositors if it fails? The Italian government? It can't. It is already struggling with enormous deficits and a debt-to-GDP ratio more than 100%. The rules of the European Monetary Union won't allow Italy's government to add that much more debt to its balance sheet. So what will happen…? I believe the crisis that began with subprime mortgages in 2008 will continue to spread until the world's sovereign credits collapse and the global system of paper money fails. – Stansberry's Investment Advisory, March 2010

Given that outlook... it's not surprising that most of what I've written since then has been a continuation of these warnings. My monthly titles since then include: "Hungary Matters," "The Worst Is Yet to Come," "Risks of a Global Famine," "The BIG Collapse in Bonds," "Time Is Running Out," "For Whom The Bell Tolls," "The Day the Dollar Dies," "Phase III of the Monetary Crisis," and last month's "Europe's Breaking Point." Clearly, I've been hitting people over the head with the message.

And for some people, the message has gotten old... They're tired of reading it. Perhaps they didn't take action sooner to protect themselves... Or perhaps they believe the tide is about to turn, and they want to know what to do next... Or perhaps they're simply tired of reading bad news. Sorry. I don't make the news. I just report it... and I continue to believe these risks are so serious that nothing else is as important. Not even close.

So... here's what will happen next. Soon, Greece will default. This will begin a chain reaction of European bank failures, because most banks in Europe have only written off a small portion (21%) of the value of the Greek bonds they hold. French banks are particularly vulnerable right now. This, in turn, will cause banks to stop lending to each other out of fear.

It will also lead to big losses in the commercial paper market. That's how the crisis will spread to the U.S. – our money-market funds still hold roughly 42% of the assets in loans to Europe's banks. Companies with exposure to European financial assets (like GE) and those that depend heavily on the commercial paper market for funding (like Capital One) will see their share prices plummet. As the global economy stalls and then moves into recession, unemployment will worsen… and political tensions will greatly increase. I expect large-scale civil unrest in both Europe and the U.S.

In the short term, commodities are also likely to fall sharply. The crisis is nearing a breaking point. Europe represents the world's largest economic area. I expect oil will fall at least in half from its peak. You could see silver fall, temporarily, by maybe another 30%. Gold could fall by maybe 25% from its peak. Base metal and energy commodities – stuff like copper and coal – will get crushed, like they did in 2008. In short, this is Europe's turn to have a Lehman Brothers-like banking collapse. Only this time, it will involve dozens of huge banks and several different countries, all of which have different ideas about how the crisis should be solved.

And that means it will probably be a longer and deeper crisis than Lehman Brothers. But... sooner or later... we're going to see a massive reversal. The Fed will step in to support the ECB, and a tremendous amount of new euro will be issued. I expect the euro to fall to parity – 1:1 – with the dollar before this crisis is over.

The hard part will be knowing when the time comes to jump back into blue-chip stocks, strategic commodities (like oil shale assets), discounted corporate debt (which I believe will get much, much cheaper from here), and strategic metals (like gold, silver, copper, and iron). During the Lehman crisis, the peak interest rate spread between junk bonds and U.S. Treasurys was around 22%. The spread on European bank debt could get at least that high, as will most of the sovereign debt of the peripheral nations. And we're just not there yet.

Is there a chance I'm wrong? Is there any realistic way to solve this crisis without a Greek default and a European banking crisis? I don't see how. Germany is the only truly solvent, large European country left. And the German voters continue to hand the ruling party loss after loss in local elections, specifically because the public is almost unanimously against Germany bailing out the rest of Europe. Likewise, the German representative of the ECB resigned last week out of protest against any future quantitative easing, aka money-printing.

What should you do while this crisis continues to deepen? The same advice I've been giving since March 2010. If you're sophisticated, you want to build a large book of short sells to hedge your stock market exposure. You should own at a minimum 15% of your assets in gold and silver. If you're unable or unwilling to hedge your portfolio, I recommend putting half your portfolio in Treasury notes (via the iShares short-term Treasury Bond fund, SHY) and half your portfolio into gold (via the iShares gold fund, GLD). Doing this 50-50 split between gold and the U.S. dollar is the only true way to go to "cash," given the tremendous uncertainty in the future of the global paper money system.

I wish I had better news… or a more promising strategy I could endorse. But as always, I've got to write what I believe. I hope you'll remain patient with me and continue to subscribe. When the market turns, I'll get you back in... just as I did in November 2008 through May 2009.

More from Porter Stansberry:

Three terrible lies you need to know about gold

Porter Stansberry: Why stocks are plummeting now

Porter Stansberry: Watch this "canary in the coal mine" of the global crisis

Positions

Posted: 27 Sep 2011 12:18 AM PDT

Overnight lookin good.

Silver up a shit ton from the $26 lows. Must be because the 'liquidation' is miraculously over the day of COMEX options expiry. Right.

This is a gap up day, I will be taking money off the table on open from all my positions as they MAY try and fill the gap down. If they rally from the beginning I will keep and see how the afternoon squeeze plays out. There may be a hefty short squeeze coming....

I will trim my GLD, JPM, and NFLX calls that I bought at 3:55 yesterday at the close. If I were to keep more contracts of these, it will be the GLD.

Do as you wish...those that didnt buy physical, and you think that was the low, here is one of my main dealers online. If you enter my discount code you will save a tiny amount. Better then nothing. www.silvergoldbull.com DISCOUNT CODE: sgb-sgs

Word on the street is that Maples and ASE supply vanished over the weekend. Congrats Blythe, you are really winning this game.

**I have also added a twitter feed on the left hand side to keep up while on not at the desk!

NOTE: If you are buying from the states, change the currency to the US flag at the top.

A Strong Dollar Means Opportunity

Posted: 27 Sep 2011 12:00 AM PDT

Gold and silver prices bounce of session lows

Posted: 26 Sep 2011 10:15 PM PDT

Precious metal prices remained subdued yesterday - though bulls will have been encouraged to see gold and silver prices rebound quickly off of the lows reached early in the trading session. At ...

Lewis Lehrman to Present Plan For a Return to the Gold Standard

Posted: 26 Sep 2011 09:17 PM PDT

¤ Yesterday in Gold and Silver

Gold sold off a hair at the open...and then recovered its losses by 9:00 a.m. Hong Kong time on Monday morning...which was 9:00 p.m. Sunday night in New York.  Then the selling started...and by the time the bloodshed ended just minutes before the London open, the bullion banks had peeled another $120 or so off the spot gold price.

The subsequent [short covering?] rally took gold back up to around the $1625 mark by 10:00 a.m. in London.  From there it traded sideways until the London p.m. gold fix at 3:00 o'clock local time...10:00 a.m. in New York.  Once the 'fix was in'...gold got sold down to around $1,600 spot..and stayed there until about 2:30 p.m. Eastern time in the New York Access Market.

Gold then rallied to close at $1,628 spot...and down 'only' $29.20 on the day.  Net volume was monstrous again...around 350,000 contracts...a hair higher than Friday's volume.

Silver's price path was just about the same as gold's.  The low price print [around $26 spot] came minutes after 2:00 p.m. Hong Kong time on Monday afternoon...about an hour before London opened at 8:00 a.m. British Summer Time.

From there, the price rallied back [bullion bank short covering?] about four bucks to $30 spot by 9:30 a.m. in London...before getting sold down two dollars by 9:30 a.m. Eastern time...which was the New York low .  From there it rallied about $2.50 by mid-lunchtime.

By the time that trading ended in the New York electronic market, silver was only down 18 cents from Friday's close...but what a wild ride in the interim!  Volume was monstrous once again...around 102,000 contracts net.

Despite the fact that gold was down more than $60 when the equity markets opened at 9:30 a.m. Eastern time, the shares actually spent some time in positive territory in early morning trading.  The HUI kept chugging higher from it's post-p.m. London gold fix low at 10:15 a.m...and shortly before 2:00 p.m. really caught a bid...and climbed to close up 2.04%.  This was a magnificent performance considering the fact that the gold price closed down about $30 bucks on the day.

With some exceptions, the silver stocks did very well for themselves...and Nick Laird's Silver Sentiment Index was up 1.96%

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 23 gold, along with 28 silver contracts were posted for delivery on Wednesday.  There's not a lot to see, but if you wish to check out the action, the link is here.

Well, I was mentally braced for the worst when I checked GLD and SLV yesterday.  Yes, GLD was down 175,189 ounces...but the big surprise was SLV, where 2,774,799 troy ounces were added!  You could have knocked me over with a feather.  Maybe there will be a big withdrawal today.

It was no surprise to me to see a big sales report from the U.S. Mint yesterday.  They sold 15,500 ounces of gold eagles...2,500 one-ounce 24K gold buffaloes...and a very chunky 1,025,000 silver eagles.  Month-to-date sales are as follows...65,000 ounces of gold eagles...10,000 one-ounce 24K gold buffaloes...and a whopping 3,325,500 silver eagles.  Based on retail bullion sales that I know about in various parts of North America, September will be another strong month for the mint...but it certainly didn't start out that way.

Friday was a busy day over at the Comex-approved depositories.  They reported receiving 1,488,872 troy ounces of silver, but only shipped 26,907 ounces out the door.  The link to that action is here.

Here's an interesting comment that I got from my friend Bron Suchecki over at The Perth Mint yesterday.  I'd sent him an e-mail on the weekend asking him how sales were both on Friday...and their Monday, which started Sunday night here in North America.  This was the reply that I got...

"The Perth Mint has been very busy this Monday morning with a lot of buying [but also some selling], however buying is outweighing selling by a fair margin [pun intended]...and the decrease in the AUD/USD has taken some sting out of the drop for Aussie investors.

"I see this sell-off driven by leveraged "weak hand" money. In contrast, average investors [the real smart money] are looking at this as an opportunity to buy in or top up at cheaper prices. These buyers are "strong hands" and have been the ones who have been driving the trend all these years.

My bullion dealer here in Edmonton had another record day in bullion sales on Monday...even larger than the record day he had on Friday.  It was wall-to-wall buyers all day...and the phone was ringing off the hook.  Nobody sold an ounce of anything.

Here's anther piece of technical analysis on the gold price by reader Scott Pluschau.  The 'Subject' line of the e-mail read "Hammer Reversal on Gold Futures".

Hi Ed...

The Gold Futures today formed a single candle called a "Hammer" on the Daily chart.  This is a well known and popular reversal pattern in Japanese Candlestick analysis.  The hammer shows strong demand at lower prices in the auction. The lower wick of the candle has to be multiple times the size of the body of the candle which can be seen in the chart where I drew a blue oval.  It would be even more bullish if the closing price was higher than the open.  

The hammer in theory represents a turning point, since the Bears tried to push lower but got rejected, weakening them...and now there's potential for the Bulls to start a short squeeze.  This single candlestick pattern needs confirmation.

I attached the chart in case you can't visualize it in the text. Scott

Here's the 1-year Gold/Silver Ratio

(Click on image to enlarge)

I have a lot of stories today...and I hope I can get them all posted before I run out of time.

Are the bullion banks, as short-sellers of last resort, going to actively short the next price rally in all the metals...gold, silver, platinum, palladium and copper?
Where is Mexico's gold, and is it really gold at all? Retiring Japanese bureaucrats buy gold, while the general population sells. "Gold is Quite Oversold" - Marc Faber

¤ Critical Reads

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S&P Could Face Legal Action Over CDO Ratings

The Securities and Exchange Commission is considering taking civil action against Standard & Poor's for its rating of a 2007 mortgage debt offering. Such action could be just the first shot in a legal assault against the major credit rating agencies.

The three major agencies – S&P, Moody's Investors Service and Fitch Ratings – gave high ratings to mortgage investments that turned out to be worthless and contributed to the 2008 financial crisis.

If the SEC charges S&P with violating securities laws, it would mark the first time it's brought an enforcement action against a top rating agency.

I've always considered the U.S. rating agencies as instruments of the American Empire to be used as financial weapons against other nations...and this has turned out to be the case beyond my wildest nightmares.  I thank Florida reader Donna Badach for sharing this Huffington Post story with us...and the link is here.

View full GSD edition

BBC Speechless As Trader Tells Truth: "The Collapse Is Coming...And Goldman Rules The World"

In an interview on BBC News Monday morning that left the hosts gob-smacked, Alessio Rastani outlined in a mere three-and-a-half-minutes what we all know and most ignore. While the whole interview is worth watching, the money shot for us was "This economic crisis is like a cancer, if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late!".

While we do not know who this trader is, one thing we can be 100% certain of is that he will never appear on CNBC.

I thank Edmonton reader B.E.O. [amongst others] for sending me this piece...and the link to the zerohedge.com story is here.

View full GSD edition

Walker's World: The IMF fails again

There was disappointment, but no real surprise, that the annual meeting in Washington of the International Monetary Fund and the World Bank failed to produce a comprehensive solution to the euro crisis.

Although the regional commanders of the global economy were gathered, from finance ministers to central bankers and they all knew the stakes and the deep peril that now threatens, there was an air of fatalism to the meetings. It will get worse before it gets better, they seemed to conclude, because the politicians cannot bring themselves to deliver the financial measures that will be required.

This UPI story is well worth the read...and I thank Roy Stephens for sending it along.  The link is here.

View full GSD edition

£1.75 trillion deal to save the euro

British taxpayers risk being caught up in a £1.75 trillion deal aimed at saving the euro by allowing Greece to default on its massive debts.

The three-pronged deal would set up a massive fund to create a "firewall" around the most indebted eurozone countries, allow for an "orderly" Greek default on at least some of its liabilities, and bail out European banks most at risk from debt.

German and French officials came up with the strategy which aims to end the eurozone's sovereign debt crisis before it spirals completely out of control, plunging the world back into recession.

The likely deal came ahead of a major new setback for the British economy - with BAE Systems, Britain's biggest manufacturer, poised to cut 3,000 jobs.

This story was in The Telegraph on Saturday...and is Roy Stephens second offering of the day.  As he said in the e-mail to me..."It's interesting how the numbers no longer have any meaning...it's all make believe."  That it is...and the link is here.

View full GSD edition

France denies plan to inject €15bn into its major banks

France has denied reports that it had drafted a plan to inject up to €15 billion into its major banks amid fears over their heavy exposure to Greek debt.

The Journal du Dimanche reported on Sunday that the state offered a €10-15 billion bank recapitalisation at a meeting earlier this month with senior officials from five institutions: BNP Paribas, Société Générale, Crédit Agricole, Banque Populaire-Caisse d'Épargne and Crédit Mutuel.

A sharp drop in the share prices of French banks since the beginning of the summer has led to speculation that the state may have to intervene and set up a recapitalisation fund, as it did during the 2008 global banking crisis.

This story was posted in The Irish Times on Monday...and it's Roy's third offering of the day.  The link is here.

View full GSD edition

Central banks are intervening in currency markets all over the place

The South Korean central bank surprised the markets on Friday with a $4 billion lightning intervention in support of the won, carried out in the last two minutes of trading,

The day before, Brazil spent $2.75 billion selling dollars in the currency swaps market to stop the rapid decline of the real.

Does this mean central banks in emerging markets are finally trying to reverse the sharp plunge in their currencies over the past month?

Probably not, currency strategists believe. Officials are primarily aiming to curb what they see as excessively wild swings in their currencies. They want stability, not appreciation.

But, as Chris Powell put it...they're probably managing gold and silver prices as well...but the folks over at the Financial Times who posted this story, would never ask about that.

This FT story was printed in the clear in this GATA release yesterday...and the link is

BBC Speechless As Trader Tells Truth: "The Collapse Is Coming...And Goldman Rules The World"

Posted: 26 Sep 2011 09:17 PM PDT

BBC Speechless As Trader Tells Truth: "The Collapse Is Coming...And Goldman Rules The World"

In an interview on BBC News Monday morning that left the hosts gob-smacked, Alessio Rastani outlined in a mere three-and-a-half-minutes what we all know and most ignore. While the whole interview is worth watching, the money shot for us was "This economic crisis is like a cancer, if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late!".

While we do not know who this trader is, one thing we can be 100% certain of is that he will never appear on CNBC.

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Lehrman to present plan for return to gold standard: New York Sun

Posted: 26 Sep 2011 09:17 PM PDT

Lehrman to present plan for return to gold standard: New York Sun

A New York Sun editorial yesterday reports that industrialist and philanthropist Lewis E. Lehrman, a member of the U.S. Gold Commission 30 years ago, will present, on October 5th, a detailed plan for the restoration of a gold standard in the United States. Lehrman's plan will be announced at a conference sponsored by the Heritage Foundation in Washington.

The Sun's editorial is headlined "Plan to Return America to the Gold Standard Set to Be Offered at Washington".  It, too, is a must read...and the link is here.

Avoid counterparty risk as financial system topples, Turk tells King World News

Posted: 26 Sep 2011 09:17 PM PDT

Avoid counterparty risk as financial system topples, Turk tells King World News

GoldMoney founder, GATA consultant, and Free Gold Money Report editor James Turk told King World News this weekend that the Western financial system is wobbling like a top about to fall over, that counterparty risk has to be avoided, and that this can be done only with gold. The interview is 11 minutes long and is posted over at the KWN website...and the link is here.  I thank Chris Powell for wordsmithing the introduction.

Why We're Aggressively Buying Gold, Silver & Miners - Rick Rule

Posted: 26 Sep 2011 09:17 PM PDT

Why We're Aggressively Buying Gold, Silver & Miners - Rick Rule

"What we are seeing in the markets right now is exactly the type of psychotic break, the type of non-fundamentally related volatility, that has over the last twenty or thirty years given us the entry points that have, in fact, built our track record."

This King World News blog is a must read...as Rick is buying while "blood is running in the streets".  The link is here.

Wartime wreck to give up £148m in lost silver bullion

Posted: 26 Sep 2011 09:17 PM PDT

Wartime wreck to give up £148m in lost silver bullion

The largest ever consignment of precious metal found in the sea - 200 tons of silver [7 million troy ounces] worth £148m - has been discovered along with the wreck of a British cargo ship sunk during the Second World War by a German U-boat.

Odyssey Marine, an American underwater archaeology and salvage firm, announced the discovery yesterday along with plans to recover the bullion as part of a contract with the British Government which will see the company retain 80 per cent of the value of the cargo.

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Gold Premium Over Platinum Seen Rising to Record

Posted: 26 Sep 2011 09:17 PM PDT

Gold Premium Over Platinum Seen Rising to Record

Gold's premium to platinum, already the biggest in almost two decades, may surge to the highest on record in the next year because of investors' mounting concern about the global economy.

Gold cost 3.1 percent more than platinum in London on Thursday, compared with an average discount of 39 percent over the past decade, data compiled by Bloomberg show. The metal may reach a premium of 26 percent in the third quarter of 2012, according to David Wilson of Société Générale S.A. in London, the most accurate platinum, palladium and silver forecaster tracked by Bloomberg over two years. That would be the highest in data compiled by Bloomberg going back to 1987.

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Is China Business News following the gold issue through GATA?

Posted: 26 Sep 2011 09:17 PM PDT

Is China Business News following the gold issue through GATA?

Here's a very interesting GATA release that came out on Sunday.  Chris Powell has already wordsmithed this...so I won't reinvent the wheel with my introduction.  This is a must read...and the link is here.

China launches its first gold vending machine

Posted: 26 Sep 2011 09:17 PM PDT

China launches its first gold vending machine

China, already the world's -second-largest bullion consumer, has installed the country's first gold vending machine in a busy shopping district in Beijing, state media said yesterday.

Shoppers on the popular Wangfujing Street can insert cash or use a bank card to withdraw gold bars or coins of various weights based on market prices, the People's Daily said on its Web site.

Each withdrawal is capped at 2.5kg, or 1 million yuan (US$156,500), worth of gold, the report said.

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Sick Market Beg for More QE

Posted: 26 Sep 2011 09:09 PM PDT

Gold and the general markets are taking a beating. There is no confidence anywhere to be found. Could this force Bernanke to dump more QE to stimulate markets?

Dow Jones Industrial Average: Closed at 10771.48 +37.65 on very low volume of 223mm versus a normal at 954mm. Momentum peaked and turned down. There is new and strong double bottom support 10,700. Resistance is 10950. The close was under all moving averages. The 50-day average is 11479, far above the close. We suspect Bernanke knew this bad day was coming and this is why he did not want to prematurely offer another QE-3 until he was forced into it under higher pressures. Watch for sick markets until the QE-3 is formerly announced.

S&P 500 Index: Closed at 1136.43 +6.87 as traders in this market were very busy and turned in about 160% of normal volume. Momentum peaked and turned down mildly. Price dropped out of a continuation triangle and closed under all moving averages. There is hard support at 1100-1120. There is new resistance at 1165 on price and up against the lower channel line of a previous trading triangle. If rumors or clues are let out about a new QE-3 being announced on Monday or Tuesday, or even over the weekend, we think the market recoveries will be swift and furious.

S&P 100 Index: Closed at 512.53 +2.97 on 115% of normal volume and turning down momentum. Support is now 500 and resistance is 520-530. Price closed under all moving averages and fell out of a supporting triangle. With no helping news from central bankers the price could test 500 again and perhaps fall through and under it. With a QE-3 announcement, this index could rather quickly move-up to resistance on the 200-day moving average at 559-560. Next week's trading promises to very interesting. If traders can get in on the right side of some very fast upward markets it could make their whole year in a matter of a few days.

Nasdaq 100 Index: Closed at 2206.86 + 22.27 on normal volume and flat momentum. Both resistance and support sit on 2200, a magnet number for this index. Part of the recovery today was the appointment of Meg Whitman as the new CEO at Hewlett-Packard. Interestingly, there were later rumors of Oracle perhaps wanting to buy Hewlett-Packard and this helped this market as well. Price could fly to 2300-2400 if the QE-3 is announced. If it is not, we would look for 2150 support on the index next week.

30-Year Bonds: Closed at 144.74 -1.02 after touching 145.00 resistance and pulling back. Bonds are over-bought and the momentum has peaked and turned sideways to mildly down. Price is above all moving averages and the 20-day is 140.51 on lower support. When stocks caved-in, bonds rallied and now we are seeing the beginnings of a pivot reversal in both markets. New nearby lower support is 144.00-143.50. Watch for a gradual peaking and then selling in bonds as stocks try to regain footing. This whole idea stalls and goes sideways if there is no QE-3 announced next week.

GDXJ Junior Gold Miners And XAU: The GDXJ closed at 29.69 -2.00 on very high volume and falling momentum. Price did a huge three-point gap drop downward finally getting support and a new base at just under 30.00 on the index. Should the market rally next week on my proposed QE-3 announcement, I would expect heavy buying, filling that huge gap and taking price back up to first 32.00 and then 35.00 resistance. On the XAU after closing at 188.92 -8.19, we see falling momentum and a flat to down metal to shares ratio. Even worse, the price is under all moving averages and a recent trading range support line. The new resistance is 190-192.5. A comparison of both charts shows a worse case in the XAU and a slightly better one for the GDXJ. There will be more selling next week unless we get some hard stimulus from Bernanke.

Gold: Closed at 1651.50 -88.40 on falling momentum and a down day exceeding over 100 points. While gold is under the 20 and 50 day moving averages the close was over 100 points higher than the 200-day moving average. Gold did take a beating today but the fundamentals and technicals signal gold remains on the bull trend upward course. New nearby support is 1648.50 with resistance at 1707. With some stimulus next week, gold could rally all the way toward 1923-2000 before the end of this year. Without it we might be testing lower support at 1607 quite soon.

Silver: Closed at 31.03 -4.92 with the futures trading down as much as $6.00; a huge negative move for silver. Momentum skidded lower in a waterfall. Price has been resisting and supporting between $39.00 and $41.00 since July. Our concern was the close far under the 200-day moving average at 35.50. With that kind of a lower close we know some hard sell-stops got hit and there had to be some margin calls. If we get some stimulus, silver could go all the way back to $40-$41 in a flash and maybe even move into over-bought at $43-$45-$48. Without stimulus, silver could slide under $30 headed for $28.50 and $26.50.

US Dollar: Closed at 78.29 -0.09, after resisting just under 80.00 at 79.50. Momentum is up but media happy talk about Euro-land and Euro repairs have halted the dollar's rise. New support is 78.00-77.50. The long bonds have been trading higher with the dollar, as the inverse trade, the weaker Euro has been selling. Should there be support for the markets by Bernanke, we think the dollar stands firm and trades sideways. The skidding Euro is now finding support just above 135. Very hard upper dollar resistance is the old magnet number of 80.00. In reality, a Bernanke stimulus for the USA might help Europe too, as traders would get a sense of relief that there might be some help headed toward Euro-land as well. The price bar closed in the center today on this Friday signaling undecided for Monday.

Crude Oil: Closed at 80.16 -0.37 on very hard support and resistance of 80.00. The trading range is 78.50 to 82.50. While the momentum is falling and the close was under all moving averages and the previous trading range channel lines, we now see triple price support at $80.00 for crude oil. Oil hit oversold this week on the futures trading as low as 77.50. Next week, oil stays under 80.00 to 77.50 with no stimulus. With stimulus, the price could break out of 80.00 and rise to $86.00, or better.

CRB Index: Closed at 301.87 -5.37 on bottoming momentum and a price that dropped out from and under a selling lower trading range support line. The traders produced a gap between 311 and 320 during this selling. A stimulus could take the price back up to 320-330 resistance. With no stimulus we will test 300 support then move next to 295. Overhead resistance is 321. If the metals, grains and energy can move-up on new stimulus, we think price could test 330-332 near the 200-day moving average.


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