Gold World News Flash |
- Wall Street Protest Starting to Look Like Egypt
- Monthly Gold Charts - Closing Price Only
- EU Elite Lost At Sea
- Testing a Thesis
- Children of Depression!
- Don't worry, gold's correction is 'about over,' Lassonde tells King World News
- 4 Market Signs Signaling a Recession
- Stunning Plunge in COMEX Commercial Silver Net Short Positions
- Pierre Lassonde: Gold Correction Over, Expect $10,500 Gold
- Bernanke’s Plot to Overthrow the US Dollar
- A Breach $1725 or $1540 Will Speed the Gold Price Along in the Direction of the Breakout
- On the Brink: World-Changing Events in All Markets
- Pierre Lassonde - Gold Correction Over, Expect $10,500 Gold
- George Soros: a Great Depression-like Scenario Could Very Well Play Out ? Here?s Why
- Prophets Of Doom: 12 Shocking Quotes From Insiders About The Horrific Economic Crisis That Is Almost Here
- Is Gold Mining Returning to Yukon?
- Are Silver and Copper Prices Predicting a Global Recession?
- Beware a “Vicious Cycle”
- Want Silver? Too Bad...
- Guest Post: Looking Back To the Late '80s For 'Contagion' Guidance
- Guest Post: Looking Back To the Late '80s For 'Contagion' Guidance
- Gold Daily and Silver Weekly Charts
- COT Gold, Silver and US Dollar Index Report - September 30, 2011
- Got Gold Report: 'Stunning' reduction in big commercial shorts in gold, silver
- We're Getting Closer
- We're Getting Closer
- Today Was A Really Really Ugly Day For The Stock Market
- U.S. States Seek to Break Financial Connection with Federal Government
- Scott Gardner: Europe's Debt Crisis and Its Effect on Gold
- Gene Arensberg: Second largest bull-market correction for silver
| Wall Street Protest Starting to Look Like Egypt Posted: 30 Sep 2011 06:54 PM PDT Alexander Higgins reports:
Here are some additional photographs from a helicopter. Who Are the Protesters?Wall Street is trying to write all of these people off as being The poor and the desperate, formerly-middle class people participating in the protests are not taking well to Wall Street's "Let them eat cake" response. But all types are marching, including grannies and pilots: 
Marines and other military men and women. Wealthy folks such as Russel Simmons and Alec Baldwin. On the other side of the protest line, Mayor Bloomberg is whining that the protesters are targeting bankers who "are struggling to make ends meet". Class Warfare?Yes, this is class warfare. But it is class warfare by the 1% against the other 99% (and see this). Specifically, it is the looting of the country by the top .1% through fraud. As Warren Buffet – one of America's most successful capitalists and defenders of capitalism – points out:
Leading economists note that rampant inequality was one of the main causes of the Great Depression and of the current economic crisis. Indeed, given that inequality in America is worse than Egypt (or Tunisia, or Yemen or most Latin American banana republics), and that social mobility is lower in America than in most European countries (and see this), we have been predicting these types of protests for years. If Wall Street is starting to look like Tahir Square, it is because
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| Monthly Gold Charts - Closing Price Only Posted: 30 Sep 2011 05:42 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] ...
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| Posted: 30 Sep 2011 04:12 PM PDT by Alasdair Macleod, GoldMoney.com:
Keynesians argue that the worst thing to do is to slash public spending. I would argue that the worst thing you can do is to not cut public spending, because public spending, which dominates most European economies, is a misallocation of economic resources, stifling their private sectors. A public sector is an economic burden, not a benefit, and the strangulation of private sectors in the eurozone is the fundamental economic problem.
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| Posted: 30 Sep 2011 03:08 PM PDT Thus far, I've noticed little interest in assessing the early effects of Dr. Bernanke's experimental manipulation of bond yields, stock prices and dollar devaluation. I'll throw in my two cents worth: the Fed has orchestrated ... Read More...
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| Posted: 30 Sep 2011 02:42 PM PDT from BigDad06: YouTuber 'BigDad06' interviews Silver Shield (aka. Chris Duane), founder of the Sons of Liberty Academy, and operator of the popular blog, Dont-Tread-On.Me.
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| Don't worry, gold's correction is 'about over,' Lassonde tells King World News Posted: 30 Sep 2011 02:07 PM PDT 10p ET Friday, September 30, 2011 Dear Friend of GATA and Gold: Mining entrepreneur Pierre Lassonde tells King World News tonight that gold's correction is "about over," that "people don't have to worry for one second," and that gold is going to $10,500, if not necessarily by next Thursday. You can find an excerpt from the interview at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/30_Pi... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Drills 120.9 Meters Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the drill results received from its 2011 drilling Wellgreen platinum group elements, nickel, and copper project in the Yukon Territory. Borehole WS11-188 encountered 457 meters of mineralization grading 0.47% nickel equivalent (including 0.72 grams per ton platinum, paladium, and gold) from surface to the footwall contact. Within this larger swath of mineralization, the hole encountered a high-grade section of 17.8 meters of 3.14 grams per ton platinum, palladium, and gold, 1.03% nickel, and 0.74% copper (1.77% nickel equivalent). The hole was drilled completely outside of current resource boundaries, between the East Zone resource and the West Zone resource that was reported in the company's press release no July 14, 2011. The high-grade intercept located between the two resources not only demonstrates that the East and West Zone resource form a single, geologically contiguous body but also indicates that the higher-grade material in the East Zone continues to the west and at depth at Wellgreen. For drill result tables and maps, please see the company's full press release here: http://www.prophecyplat.com/news_2011_sep26_prophecy_platinum_wellgreen_... Join GATA here: The Silver Summit http://cambridgehouse.com/conference-details/the-silver-summit-2011/48 New Orleans Investment Conference http://www.neworleansconference.com/ Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| 4 Market Signs Signaling a Recession Posted: 30 Sep 2011 01:43 PM PDT By EconMatters We at EconMatters expected the QE2 froth to come out of markets once the fed experiment of artificially inflating asset prices was over, and for the most part this is exactly where we are today at the crossroads.
Are we going to just trudge along with a slow growth economy until the world finally works its way out of the housing inventory overhang, and the next building phase takes hold and there is a strong surge in the labor markets from the bottom up, or are we going to take the next leg down and head back into a recessionary environmen?
Remember, the official definition for a recession is two consecutive quarters of negative GDP growth, and is determined after the fact. However, there are some market signs which in real time can give us a clue as to which course the economy seems to be taking.
Crude Oil The First is the price of Oil which is a barometer for economic growth and future expectations for demand. I know that is the analyst approach for the benchmark, the more cynical side of me believes the price of Oil trades more in line with the S&P 500, and is really more of an asset class investment vehicle than any true economic indicator of strong future demand for the commodity.
But in either case if WTI falls below $70 and stays there than I would say this is a pretty good sign that the US is likely experiencing at least one quarter of negative GDP growth, and pretty near recessionary levels. In regards to Brent, there is approximately a $22 premium over WTI right now, and any significant tightening of this spread would also be something to pay attention to for recessionary concerns.
An overall price level for Brent potentially signaling a recession would be the $85 level, if Brent trades below this level for any significant amount of time this not only indicates that things are pretty bad in the US and Europe, but that China is experiencing a substantial slowdown as well.
The reason for this is that if China is still growing at 9% they can use lower Oil prices to stockpile supplies and provide some kind of floor in the Oil market, but if the Brent contract price becomes weak this tells a lot about what economic conditions are like in the emerging economies.
Copper
The Second asset class to be cognizant of is the Copper market. Copper is often referred to as having a PhD in economics for its insight into industrial demand for the manufacturing, construction, and supply chain sectors of the economy.
It has lost some of that appeal as an economic indicator with its recent (last couple of years) status as a currency hedge being pulled up by Silver and Gold in particular on currency devaluation concerns. But still if Copper trades below $2.50 a pound and stays there then we are probably in a full blown recession, and fiscal and monetary policy responses will be direly needed to counteract this deflationary spiral.
Congress would have to get serious about stimulating the economy by providing some reallocation of resources which create little to no additive jobs to large scale infrastructure projects which create many more jobs all along the supply chain and also incorporate heavy handed tax incentive policies for small and medium sized businesses which are struggling now due to reduced loan capacity from the lending institutions.
Congress probably needs to incentivize banks to lend maybe even at the expense of some bad loans along the way if we are at this stage in the economy because this stage feeds on itself and perpetuates the deflationary cycle further.
S&P 500
This means risk capital has left the building so to speak, and is tucked away in capital preservation mode. It also means the "Wealth Effect" in reverse, people don`t feel much like spending (especially on discretionary consuming) when they feel poor, and are in the hunkered down saving mode.
These effects extend all the way through the economy from the retail sector which needs fewer employees, to the entertainment and dining sector of the economy as well. All this means less jobs, and higher unemployment.
Another troubling sign for the economy is that CEOs watch stock prices diligently, maybe a little too much, but they do. And a weak stock price for large companies means a conservative nature towards financing aggressive projects, and even worse full blown cost cutting mode. All of which means less jobs, and a continued perpetuation of the deflationary cycle in the economy.
Another disconcerting aspect of a 950 S&P level would be that an already beleaguered banking and financial services sector would probably be reducing jobs at a significantly higher rate, and this sector weakness permeating through the economic has the definition of recession written all over it.
Cotton
However, being skeptical by nature and observing that Cotton behaved similarly to many other commodities like Oil, RBOB, Silver, Copper, and Equities prior to and directly after Bernanke`s Jackson Hole Speech where he signaled QE2 all the way to the ending of QE2 and its effects.
It appears that the run up in Cotton was for the most part fueled by artificial means and not true demand, or supply shortage issues. By artificial means I refer to as hot capital inflows into the commodity fund space, with the added artificiality of $600 Billion of new liquidity sloshing around the financial markets looking for a home like a bull in a china shop.
Cotton is currently trading around $100, and breaking through the $60 level would be quite bearish and reflective of a recessionary trend for the commodity as clothes when you really get right down to it are highly discretionary.
When global consumers pull back because of several quarters of above average inflation and stagnant wages, this equates to lower purchasing power and eventually prices must come back down as the entire supply chain adjusts to a lower consumption model.
So if we should witness $60 Cotton, this is a sign that consumers have pulled back, and is now being reflected back through the supply channels to the base commodity Cotton, and is another deflationary recessionary market signal.
A Real Inflection Point
But that come mid October through the Christmas Holiday season where many businesses make their numbers, and economic activity and data start grinding higher that this just represents an excellent buying opportunity (maybe one more little leg down).
Furthermore, that asset prices and economic activity remain bullish through the strong investment and business activity months of January through May, with the added benefits of 2012 being an election year, that markets could go on a nice run from mid-October to the end of May before any signs of summer selling occurs, and investors might want to take some profits.
And who knows with it being an election year, we might run straight through until the end of 2012 ( a lot of this depends on Congress working together, markets approving of election results, etc.) So this appeared to be a great time to start accumulating positions.
But Markets have been selling hard into any rallies, there is a lot of investor and business uncertainty out there in the market, and there are more signs that we have the potential to move in the other direction, towards another recession, the dreaded double dip, then there were just a month ago.
In short, the economy seems to be at a crucial point, and a credible argument can be made for going in either direction from here, and this is illustrated in the cautious approach by investors.
So these are some of the market signs that may give investors and market watchers a heads-up that the economy is heading in the wrong direction long before the economic data and GDP reports confirm that we are indeed in a recession.
Further Reading: Are Sliver and Copper Prices Signaling A Global Recession? Physical Silver Investors Are Being Hoodwinked by the Futures Market
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| Stunning Plunge in COMEX Commercial Silver Net Short Positions Posted: 30 Sep 2011 12:45 PM PDT from GotGoldReport.com: The CFTC just released its commitments of traders (COT) report at 15:30 ET for trader's positions as of the close on Tuesday, September 27 and the data show a stunning drop in the large commercial net short positions in both gold and in silver futures. For example, as silver fell $7.88 or 19.8% Tues/Tues, from $39.76 to $31.88, traders classed by the CFTC as "commercial" reduced their collective net short positioning (LCNS) by an extremely large 16,446 contracts to show 24,262 contracts net short. This, while the open interest fell by 10,089 to 102,014 open. Just below is our graph for the commercial net short positioning for silver futures on the COMEX.
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| Pierre Lassonde: Gold Correction Over, Expect $10,500 Gold Posted: 30 Sep 2011 12:29 PM PDT from King World News:
With so much worry surrounding the gold and silver markets, today King World News interviewed legendary Pierre Lassonde, to get his thoughts on what to look for going forward. Pierre is arguably the greatest company builder in the history of the mining sector. He is past President of Newmont Mining and past Chairman of the World Gold Council and current Chairman of Franco Nevada. When asked what to expect going forward for gold, Lassonde responded, "Two weeks ago I was the keynote speaker at the London Bullion Market Association Annual Meeting meeting in Montreal. Gold at the time was close to $1,900 and in my speech I said don't be surprised to see a correction in the gold price of up to 20% over the next few months because I think it's overdue. I didn't know that it was going to happen in two weeks, but it did." Pierre Lassonde continues: Read More @ KingWorldNews.com
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| Bernanke’s Plot to Overthrow the US Dollar Posted: 30 Sep 2011 12:21 PM PDT Bill Bonner View the original article. September 30, 2011 09:00 AM Where's the Bastille…? The Dow got a boost yesterday — up 143 points. Gold remained where it was — about $1,617. Dear Readers know what we think. The Great Correction has a lot of work to do — there are so many things that need correction. And it will take time to do it. Meanwhile, your goal as an investor is to lose less money than everyone else. He who loses least wins! Stocks should go down. Real estate should go down. Even gold should go down…as the dollar goes up! Cash will be king… …until the revolution. What kind of revolution? When? Ah…dear reader…you're asking a lot from a free service! But what the heck… We're happy to tell you what we think. We just hope it's worth at least what you paid for it. Here's the way we see it. Cash is king in a de-leveraging, dis-inflationary, depressing slump. The king should reign for a long time…because it will take a l...
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| A Breach $1725 or $1540 Will Speed the Gold Price Along in the Direction of the Breakout Posted: 30 Sep 2011 12:16 PM PDT Gold Price Close Today : 1,620.40 Gold Price Close 23-Sep : 1,637.70 Change : -17.30 or -1.1% Silver Price Close Today : 3004.1 Silver Price Close 23-Sep : 3006 Change : -1.90 or -0.1% Gold Silver Ratio Today : 53.940 Gold Silver Ratio 23-Sep : 54.48 Change : -0.54 or -1.0% Silver Gold Ratio : 0.01854 Silver Gold Ratio 23-Sep : 0.01836 Change : 0.00018 or 1.0% Dow in Gold Dollars : $ 139.22 Dow in Gold Dollars 23-Sep : $ 135.96 Change : $ 3.26 or 2.4% Dow in Gold Ounces : 6.735 Dow in Gold Ounces 23-Sep : 6.577 Change : 0.16 or 2.4% Dow in Silver Ounces : 363.28 Dow in Silver Ounces 23-Sep : 358.33 Change : 4.95 or 1.4% Dow Industrial : 10,913.38 Dow Industrial 23-Sep : 10,771.48 Change : 141.90 or 1.3% S&P 500 : 1,131.42 S&P 500 23-Sep : 1,136.00 Change : -4.58 or -0.4% US Dollar Index : 78.572 US Dollar Index 23-Sep : 78.356 Change : 0.216 or 0.3% Platinum Price Close Today : 1,527.00 Platinum Price Close 23-Sep : 1,610.40 Change : -83.40 or -5.2% Palladium Price Close Today : 611.00 Palladium Price Close 23-Sep : 641.10 Change : -30.10 or -4.7% GOLD and SILVER are bewildered and indecisive. Yesterday gold fell 60 cents and silver rose 38.8c, today silver fell 43.1c to 3004.1c while gold rose $4.90 to $1,620.40. Gold's range was 1.75%, from 1634.15 to $1,606.93. Silver range was 5%, from 3116c to 2968.5c. Silver was jumpy and hard to trade, kept drifting below 3000c and hitting 10c air pockets. The Gold Price did nothing today to resolve the ambiguity it left us in yesterday. Like a coil, its range is tightening and tightening, meaning selling pressure and buying pressure are about evenly matched here, but both are pushing with all their might. Like evenly match wrestlers (real wrestlers, not the TV masqueraders), one or the other will break the hold. Frankly, for the very short term, next week, it could go either way. A rally to $1,700 - $1,725 would not surprise me, but I still have to stand on my watchtower, looking for lower prices. Here are the boundaries for gold: short term range is bounded by 1640 and 1580. Longer term, it's bounded by $1,675 (let's say $1,725 for genuine believability) and $1,540. A breach of those levels will speed it along in the direction of the breakout. For the Silver Price, the boundaries are 3125c to 2900c short term, and 3350c and 2600c longer term. What about other considerations? The Gold Price has already hit its 150 day moving average (now $1,580.35), a frequent limit to gold corrections, and bounced off. $1,550 offers strong lateral support, but $1,435 is stronger. The Silver Price today hit and smashed its 300 dma (3164c)which in the past has generally contained declines, although silver might trade below that mark for a little while. If the strong support at $2600 doesn't hold, then reckon with 2500c, even 2000c. Better get your balance. For the next 3 - 6 months a deflation scare will be all the talk of the Mighty on the TV, etc. Dollar will rally, stocks will swoon, silver and gold will slug along, maybe trend down. All the talk will be of deflation, while in fact the chance that the monetary institutional set up of the US government, central bank, and financial system will fall into real deflation is somewhat smaller than the chance of my being crowned King and Chief Chicken Catcher of Umbazziland. Once the deflation scare catches hold, the Bernancubus and his running dogs in Europe and elsewhere will puke out money like Old Faithful. So y'all keep your eyes on the horizon, not the road right in front of your car hood, and know that this precious metals bull market remains intact. Gold/Silver ratio, by the way, rose this week and we are still targetting 57.5 for a swap from gold to silver. Despite a very rough week for silver and gold, at week's end the scores haven't changed very much. "Buy the rumor, sell the news," counsels the market proverb. News came this week with the German Bundestag agreeing to back the bail-out for Europe's rotten sovereign debt, demonstrating that the banks own as many German politicians as they do American. The rumor of that event drove stocks up this week. When the news came they'd done it, twas time to sell stocks. They fell again today to prove it to you. One of my oldest friends and mentors, EH, reminded me today, in the teeth of the new Bimbo Financial Journalists and other newly discovered investing geniuses commenting on TV, to compare gold's performance against stocks. This arises because these lamebrains keep on propagandizing a non-existent bull market in stocks, and prophesying the end of gold. Let us therefore drag out the dusty and uncomfortable facts: Gold from 12/31/10 to 9/30/11, up 14%; stocks, down 5.7%. Gold from 9/30/10 to 9/30/11, up 23.9%; stocks, up a mighty 1.2%. Let us hear no more bloviating from the financial parvenus and pimps. Stocks today lost 1.38% or 153.98 points to close dead on Dow 11,000. S&P500 lost 17.98 or 1.55% to close 11,142.42. I may be no more than a natural born durned fool from Tennessee, but leastways I have enough math to cipher percentages, even if I ain't no TV commentator with a pretty face and a low cut blouse or and ugly face and a shirt and tie. Dow has been trending downward -- lower highs, lower lows, for the education of TV financial journalists -- since Monday. Dow in the last week and a half has traded DOWN through the short term (since August) uptrend line which experience saith portendeth lower prices. STOCKS -- they are the wooden minnow baiting the hook for Investors. US DOLLAR INDEX continues to rally, never mind how hard the Nice Government Men from Fed and Treasury try to slap it down. This week it successfully posted a rounding bottom, scooping down from Monday's 78.80 high and trading right now at 78.792. The wretched Euro gapped down again today in its slide to perdition, or 1.3000, whichever comes first. Closed 1.3388, down 1.51% and a new low for the move. Somebody oughta FIRE those European NGM, cause they ain't doing their job. Nipponese Yen appears tamed today, at least closing at 129.79c/Y100 (Y77/$1) below its 20 dma (130.08) and right at the top border of an even-sided triangle. Y'all enjoy your holiday! Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. 
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| On the Brink: World-Changing Events in All Markets Posted: 30 Sep 2011 12:02 PM PDT by Julian D. W. Phillips:
We have been around world financial markets, including gold, for more than 40 years watching the gold price move from $42 per ounce through what we are seeing today. More importantly we've seen why the gold price has moved over these decades and fully understand the monetary history and role of gold. The events of the last three years have interrupted the currency experiment that used paper notes not redeemable either in gold or in anything else except more paper notes. Right now we're watching the most recent experiment. The euro, which is only one decade old, suffers the consequences of sub-par financial management, and it's taking Europe to the brink of failure. It's touch-and-go as to whether the Eurozone or the euro will survive the present crises. The Eurozone bailout package almost doubled in size to cope with Greece, Ireland and Portugal, to over €400 billion. The markets smiled at first, but then sank back into trepidation as the Italian government had to pay the highest interest ever for funds at yesterday's auction. When markets keep on being disappointed it signals something far more than just a temporary correction. As markets just dip slightly it's becoming clear that they're in a sort of denial, waiting for something to trigger what we're expecting at any time.
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| Pierre Lassonde - Gold Correction Over, Expect $10,500 Gold Posted: 30 Sep 2011 11:56 AM PDT My eyes are focused 100% on my Dow/Gold ratio. The ratio started eleven years ago at 42 to 1 and now it is down near 6 to 1....
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| George Soros: a Great Depression-like Scenario Could Very Well Play Out ? Here?s Why Posted: 30 Sep 2011 11:32 AM PDT Europe is on the verge of a collapse, and unless something gets done relatively soon, (perhaps as soon as the next few weeks), Europe is likely to experience their own 2008 scenario. The U.S. and Chinese economies are heavily dependent on exporting goods to Europe, and with Eurozone growth slowing as a result of the potential default in Greece, and then on to the rest of the PIIGS, a “Great Depression-like scenario” could very well play out. [In fact,] George Soros thinks we are headed towards another Great Depression and, you know what, he’s right!*What do you think? Is George Soros right? Are we headed for another depression? Words: 530 So asks Jonathan Chen*([url]www.benzinga.com[/url]), a Benzinga staff writer, in an article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited for the sake of clarity and brevity to ensure a fast and easy read. The author's views and conclusions are unaltered and no personal comments hav...
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| Posted: 30 Sep 2011 11:02 AM PDT from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
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| Is Gold Mining Returning to Yukon? Posted: 30 Sep 2011 09:53 AM PDT Author: Vedran Vuk Synopsis: Yukon – a historic gold-mining territory which has lapsed in that activity of late – may be on the cusp of a resurgence. Louis James provides some tantalizing details. Dear Reader, Today I have a small conspiracy theory in the financial world for you to think about. One of our readers, Dennis, recently wrote in asking if a rogue trader such as the one at UBS would have been treated differently had his rogue activities been profitable. From what I know of risk-management departments, traders are punished for making unauthorized trades rather quickly. Usually they are caught by the end of the day. Hence, there isn't time for the trader to earn billions. Even if his rogue activity paid off, he probably hasn't put the company so far in the black that a manager would feel awkward about punishing him. After all, there's a human element at pla...
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| Are Silver and Copper Prices Predicting a Global Recession? Posted: 30 Sep 2011 09:14 AM PDT Silver and copper have recently been going through their own private bear markets. Since the open on September 1st, silver futures have sold off by more than 25%. During the same time frame, copper futures sold off by around 24%. Read More...
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| Posted: 30 Sep 2011 09:13 AM PDT Addison Wiggin – September 30, 2011
The drop was modest, 0.1%. But spending, on the other hand, rose 0.2%. Thus, Americans' revert to a trend we'd come to know, love and expect during the bubble years. The "savings rate" dropped to 4.5%, the lowest since December 2009.
A host of factors are at work, disconcerting news filtering in from three continents. Including a "sucker punch" no one in the mainstream saw coming… or, frankly, is prepared for.
HSBC's Chinese purchasing manager's index came in at 49.9 — right below the 50 dividing line between expansion and contraction.
The Germans "have already got the printing machines going," observes Philippa Malmgren, co-founder of the firm Principalis, speaking at conference in London. "and are bringing out the old deutsche marks they have left over from when the euro was introduced." "The decision has already been made by the government that leaving the euro is a possibility."
The volatility index, for its part, jumped back above 40… on the high end of its recent range. 
If you believe we've been in one long recession, or even a "Great Correction," as Bill Bonner calls it, for the last four years, you can go ahead and yawn now. But get it over quick. When ECRI calls recession, a lot of "smart money" starts running for the exits. The ECRI is "the single conventional economics consultancy I respect," says our short strategist Dan Amoss. "Their model doesn't issue false alarms. It relies on a robust series of economic metrics." Last year, bloggers and arm chair economists alike latched on to ECRI's weekly leading economic index, claiming it was a surefire recession indicator and it was flashing red. But ECRI held off on calling a "double dip" recession in the U.S. Data they track were turning positive — even before Fed chief Ben Bernanke announced QE2. Now, however, "the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not 'soft landings,'" according to ECRI's statement. "It's important to understand that recession doesn't mean a bad economy — we've had that for years now," ECRI goes on. "It means an economy that keeps worsening because it's locked into a vicious cycle. It means that the jobless rate, already above 9%, will go much higher, and the federal budget deficit, already above a trillion dollars, will soar."
From where Dan sits, it makes a new and aggressive easy-money program from the Federal Reserve a sure thing. "A $1 trillion QE3 would be just the beginning," Dan advised his readers today, "if Ben Bernanke and the Fed doves perceive a U.S. recession on the horizon." "Each successive round of central bank intervention will pressure the input costs of most businesses even further, and those that cannot pass through costs will see lower stock prices. It's clear that with the way the global economy is currently set up, commodities continue to be the sector with the tightest supply bottlenecks." "The next rebound in the stock market — which may not arrive until we see another sharp 10-20% decline in the S&P 500 — will be concentrated in fewer industries, including natural resources, because they will increasingly be perceived as better stores of value than paper money." "I'll repeat my guidance from the past several months: Hold your open short positions, and use panicked selling of quality gold mining and energy companies to build positions to hold for the long term." Dan has six ideas on how to implement this guidance in a special report. He also has a seventh recommendation in his newest issue, coming out this afternoon. If you'd like to be on board, here's where to go.
What's more, "Bernanke disappointed the gold market when he did not expand his balance sheet" during the announcement of Operation Twist last week. "He sterilized his purchases of longer-dated Treasuries." "So the reason for the decline was the combination of that one-two punch. I don't think it's going to last much longer. This is a buying opportunity, in my opinion."
The euro's been knocked back to $1.345.
In Japan, there's talk yet again of intervention to keep the yen from strengthening. Of course, because it's been working so well all along. [Ed note. The yen's movements this week delivered a 130% gain to readers of Strategic Currency Trader. Editor Abe Cofnas will issue new recommendations first thing Monday morning, all of them set to play out before the end of the week. To learn more about this one-of-a-kind way to play forex, check this out.]
 Hmmmn… It would be scary… if it wasn't so, well, earnest. The reporter refers to an expert named Todd Hirsch and does so in a way that presumably her audience would recognize. On his website, Mr. Hirsch bills himself as "Alberta's foremost economist." Assuming the reporter represented his views accurately, we weep for you Alberta… good luck.
This plainly satirical news story was posted yesterday on website of the satirical The Onion. If you know what The Onion is all about, this is typical fare. The Onion Twitter feed sported the following:  Apparently, commanders at the Capitol Police force in Washington are lacking even that much brain capacity. "It has come to our attention," read a subsequent statement from the Capitol Police force, "that recent twitter feeds are reporting false information concerning current conditions at the U.S. Capitol. Conditions at the U.S. Capitol are currently normal. There is no credibility to these stories or the Twitter feeds." OK, so the Capitol Police force has less than a quarter of a brain. And like most bureaucracies, it takes itself waaay too seriously. Their statement concludes: "The U.S. Capitol Police are currently investigating the reporting." They're "investigating the reporting"? So… is a SWAT team about to descend on Onion offices? Stay tuned…
"It's a shame that GoldMoney bends over for the AFM (Authority for Financial Markets) without putting up a fight. The Dutch Authorities want to interfere in all markets and want to control everything. Are there any other good online alternatives besides GoldMoney?" The 5: It wasn't for lack of fight on the part of GoldMoney. They tried their best to make the case that GoldMoney did not constitute an "investment object," but logic and a good legal team can only take you so far. The problem now is that under Dutch regulations, any other "offshore gold storage program" of the sort we've discussed in the past would be viewed the same way. Unfortunately, Dutch citizens/residents who want to store gold overseas are going to have to find bullion and a vault on their own now.
"Generally speaking, investing in an established business that is not issuing new shares or buying other businesses with stock is not really putting money into the company's treasury." "If the most money is to be made from these types of businesses and you are concerned about it, then invest in them and use the money you make for something good. In my mind, it doesn't matter where the money comes from (as long as you get it honestly), but what you accomplish with it." "It all spends the same and can be used for good or evil. What better way to fight evil than to take money produced from evil and use it for good? Kind of like beating them at their own game."
"Like, that's really gonna happen."
"Take Monsanto for example. How can anyone invest in this company and then look in the mirror without blushing with shame? And I really don't want to go the way of all flesh knowing that my hard-earned savings were used by warmongers to finance the development of flying death."
"In order to put us all down on our knees begging for their merciful help, it is looking like they intend to broaden the war, maybe into World War III, and this combined with the destruction of our currency and economy should accomplish their plans for submission." "Let's not help them. Invest in real money, food, fuel, water and other necessary staples for survival." "I have already lost one country to communism, and this looks more like its blood brother, fascism. Let's wise up and oppose them all the way."
"Our freedoms have been severely curtailed in the past decade, in the name of security. I, like our Founding Fathers, want security from an overweening government that's no longer responsive to human needs, but rather those of very large corporations." "I hope your editorial board takes a very principled stand in this matter, one that sides clearly with human beings over robots, and with small businesses over large ones, even at the cost of some financial risk/reward ratio." The 5: Unfortunately, we expect we're going to think about them a lot more in the months and years ahead. Have a good weekend, Addison Wiggin P.S. So reads the declaration of the Utah Monetary Summit, which concluded this week in Salt Lake City: "As an essential element of true liberty and of the pursuit of happiness in a free society, all people enjoy the inherent and unalienable right to lawfully acquire, hold and use as a medium of exchange whatever form or forms of money they may prefer, including especially gold and silver coin." "The Utah Monetary Declaration is a financial declaration of independence whereby states are beginning to opt out of the Federal Reserve System," wrote Ron Hera in an email addressed to us this morning. Mr. Hera was an attendee and a signer of the declaration. "The United States is approaching a constitutional crisis," Mr. Hera suggests, "because states are beginning to financially break away from the federal government. This is no less serious than the American War of Independence or the War Between the States." You may recall Utah passed a law this year affirming the legal tender status of U.S. Gold and Silver Eagles. Having just reread the history of independent banking in the U.S. covered in The Case for Gold, one wonders where this will lead… The monetary summit attracted a few names you'll recognize from these pages, including our friend Nathan Lewis, author of Gold: The Once and Future Money, GoldMoney.com founder James Turk and silver guru David Morgan. For Mr. Hera's full account of the week's activities in Salt Lake, check out today's Whiskey & Gunpowder. P.P.S. As a side note, we'll be attending the Conference on a Stable Dollar: Why We Need It and How to Achieve It, hosted by the Heritage Foundation next Wednesday and Thursday, Oct. 5-6. Lew Lehrman, Dr. Paul's co-author on The Case for Gold, will be the keynote speaker during dinner on Wednesday night. The aforementioned Nathan Lewis sits on a panel discussing the logistics of a stable dollar early in the morning on Thursday. Details to come… stay tuned.
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| Posted: 30 Sep 2011 09:12 AM PDT As silver prices plummet, the mint has halted production – waiting for a price-fix.
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| Guest Post: Looking Back To the Late '80s For 'Contagion' Guidance Posted: 30 Sep 2011 08:59 AM PDT Submitted by Jeffrey Snider via Real Clear Markets Looking Back To the Late '80s For 'Contagion' Guidance The clock has been turned back to 1989 and the stock market briefly cheered the temporal transformation, although credit markets have remained far less sanguine. With Europe on everyone's collective mind, rumors of an expanded European Financial Stability Fund (EFSF) acting akin to the early version of U.S. TARP had many hoping that a true resolution had finally been found. Of course, the first plan (the one sold to Congress) for TARP was to act as a resurrected Resolution Trust Corporation (RTC), so the markets are reaching back to the late 1980's for guidance on how to "successfully" contain banking contagion. The RTC was created in response to the widening savings and loan crisis of the mid-1980's. By the time it opened its doors on August 9, 1989, 296 thrift banks had already failed, with approximately $125 billion in combined assets. Policymakers at the time were desperate to avoid what many believed was another forming Great Depression. The plan for the RTC was simple and straightforward: buy up the assets of the failed banks, fund and warehouse them over time so that the inevitable firesales that typically accompany bank failures could be avoided and not hinder any expected recovery or, worse, drag even healthy institutions down. All that required funding, of course, but, more importantly, it meant absorbing losses since the pool of assets the RTC would gather would largely consist of non- or sub-performing (by 2008 they called this kind of asset "toxic"). The FDIC notes contemporary loss estimates at the outset: "For example, most loss projections for RTC resolutions during the year leading up to passage of FIRREA in 1989 were in the range of $30 billion to $50 billion, but some reached as high as $100 billion at that time. Over the next few years, as a greater-than-expected number of thrifts failed and the resolution costs per failure soared, loss projections escalated. Reflecting the increased number of failures and costs per failure, the official Treasury and RTC projections of the cost of the RTC resolutions rose from $50 billion in August 1989 to a range of $100 billion to $160 billion at the height of the crisis peak in June 1991; a range two to three times as high as the original $50 billion." As is usually the case in these circumstances, staring into the beginning of an abysmal crisis, estimates are never really accurate since no one ever wants to face up to the scale of the problem, or at least do not want the public to know what the ultimate tab will be when all is said and done. This is page one in the handbook for government intervention - underestimate the scale. Underestimating is also helped by an over-adherence to mathematical models and simulations that are entirely based on static assumptions derived from "good" times and periods, providing enough seemingly solid rationalizations for why it won't be so bad. Again, the FDIC quotes the former RTC chairman L. William Seidman's summation of that time: "Only three months after the cleanup started it was already evident that the problem was far worse than anyone in government had envisioned, including me, and it was getting worse every day. The economy was beginning to slide into recession. Real estate was in real depression in some parts of the country, particularly in Texas, where the savings and loan problem was the largest . . . we would also need billions more to pay off depositors and carry weak assets of the institutions until they were sold and we could recover the funds we had invested . . . we were faced with taking the most politically unacceptable action of all, having to admit that we made a big mistake." Ultimately the FDIC estimates that the RTC cost taxpayers $123.8 billion, including the interest costs of floating bonds to fund all these activities. Given that the RTC ultimately shepherded 747 thrifts with a combined $393 billion in assets into oblivion, what might an EFSF be looking at when the big banks in Europe each have assets totaling several trillion? That is just the first warning and should serve as a lucid reminder of what may be in store for Europe (notwithstanding additional potential collateral damage all over the globe). A second warning comes from Mr. Siedman. He admits, perhaps unwittingly, that the RTC did nothing to prevent the coming housing depression of that time (in parts of the U.S.), nor did it prevent the wider economic recession in 1991. Instead, what posterity regards as the significant success of the RTC episode is that the 1991 recession was far milder than those initial expectations (though former President George H.W. Bush may disagree), and fears of a second Great Depression. The banking panic and collapse of the S&L's was thus safely "contained", or so it goes. I think, however, in the light of the history of the next two decades another cost has to be added to the tab of the RTC bill. Though it will be impossible to measure accurately, there has to be an account for what happened in finance after the final destruction of the savings and loan industry - which is exactly what the RTC accomplished. From the early 1990's on, marginal credit production ceased to be a function of deposit multiplication of central bank "money". The age of securitization and equity balance sheet capacity was born, intentionally to offset the lost credit capacity of all those failed S&L's. The overall credit market slowed to its weakest point since the 1930's during the year 1992. The overall share of total financial credit owned by the S&L industry had fallen to 8.5% by that time from 20% in 1970, and 16.2% as late as 1988. In 1988, GSE's and their sponsored mortgage pools accounted for a combined 12.7% of financial credit, growing their share to 15.7% by 1992 and a total of 20% by the year 2000. Even ABS issuers had surpassed S&L's by the turn of the millennium, accounting for 6.5% of intermediary credit compared to an irrelevant 5.3% for thrifts. As much as this might be proclaimed a successful transition from the anachronistic notion of deposit/credit relationship of the traditional money multiplier, to the "modern" wholesale money investment bank system of balance sheet equity governance, the seeds of the credit bubbles were planted by the RTC's S&L unwind. These changes have had unintended consequences through the years, including, but not in any way limited to, the dramatic housing bubble that has defined the precursory need to bail out the global banking system again. There is a large cost here that may never be fully known, but is all too real. Had the private sector borne more of the actual losses back then (the FDIC estimates private losses at only $29 billion) then the history of banking might have been different, though we will never know. A chastened banking system might not have so easily expanded during the 1990's, especially if that chastening had led to the correct pricing of systemic and asset risks. In the current case, an EFSF that mimics the RTC may never get as far as another few credit bubbles, no matter how hard monetary and fiscal authorities try to create them. Where the "success" of the RTC and likely failure of the EFSF intersect is in the available conduit(s) of credit production. The monetarists' implants within the new and "improved" credit and banking system of the 1990's were fruitful only because of the ripe conditions of that age. First of all, the household balance sheets of the American public, even in the most affected areas, were in as good a shape as they had ever been. At the beginning of 1991, U.S. households held $1.5 trillion more in deposit accounts and fixed income assets than they owed in credit market debt. Americans could borrow over the next few decades because of this starting position of relatively stable, less risky net worth (that transitioned to price net worth from that point on). American and European households today are not in a similarly less risky position. Even if they were, there is no credit market mechanism left to transmit credit money throughout the global economic system. In the early 1990's, as the S&L's collapsed into near oblivion, the GSE's took over the mortgage market and commercial banks took over the rest (eventually moving to off-balance sheet arrangements that may never have worked in an environment where depository credit was still viable and sizable). Both classes of intermediaries were largely unscathed from that period and stood awaiting the opportunity to essentially grab market share. Once that was accomplished, leverage of equity capital (thanks in large part to the stock bubble) was the primary marginal source of credit for the next fifteen years. I doubt any of that would have been possible had the traditional link of deposits not been severed by the S&L failures and the monetary incentives to "influence" household savings into price assets. Today, the entire global system is imperiled, not just a single subset. The largest banks in the world are exactly the ones where all the trouble is centered. We are not talking about quietly dissolving 747 small banks; we are really talking about keeping a few dozen of the biggest banks afloat by allowing them to offload embedded losses of a still unknown scale. If marginal credit production since 1992 has been done on the back of securitizations and balance sheet capacity, it cannot overcome the roadblocks of no balance sheet capacity (since it has become concentrated in these largest banks) and a now-extinct securitization pipeline. The ultimate irony will be if somehow a depository system reappeared and re-established marginal credit supremacy, but that would take a confirmed commitment to stability and the correct pricing of risks. In reality, the entire hope of the EFSF effort is to simply get rid of the persistent crisis of the banking system - another psychological ploy to enact or reboot rational expectations of a recovery. Even if the EFSF were to relieve these suffering institutions of their Greek debt, it does not solve the problem of their Portuguese or Italian debt exposures. Nor does it solve the problem of Portugal and Italy. What is really happening across the world is the peeling back of the façade of the last few decades of monetarism. The banking system, per se, is not the problem. The problem is that the world has too many existing claims on its created productive assets and the perceptions of the world's ability to create additional productive assets. And in many cases, quite sadly, those productive assets have been neglected in the sorry chase for paper profits, often financed by overly cheap and abundant credit. Short-term thinking about stock buybacks and dollar devaluation has trimmed the amount of resources devoted to actual, productive innovation. I don't think it is any coincidence that the last decade was noticeably lacking of revolutionary innovations, the kind of innovations that changed the very nature of business and commerce (even how we live our lives). Over the same time, the amount of debt accumulated on the backs of the neglected productive economy multiplied exponentially. Is it any wonder that we now routinely question the ability of large nations to repay said claims? So much human capital and innovation has been devoted to the realm of finance that, in admittedly perfect hindsight, it is easy to see a crowding out of true potential wealth (we might be better off if math geniuses were presented with a different regime of incentives that valued the solutions to more real world problems over the pursuit of a "perfect" algorithm for high frequency trading, at the same time real innovation that is done in the laboratory of trial and error does not fit into the sclerotic notion of risk represented in the mathematical paper chase). The larger panic about banks is simply a realization that the music has been playing an awfully long time without interruption, and the game of musical chairs is nearly at its end. What is surprising to many is the sheer number of players (debt claims) and the disastrous deficiency of chairs (productive assets). The mad scramble for those remaining chairs will be impolite and unfortunately violent (both metaphorically and literally speaking). The hopes of the entire age of monetarism now rest on a global economy that is visibly weakening, and likely already contracting (though the confirmation will not come until government revisions to initial estimates are published many months from now). Credit is not an answer to the problem of too much credit. In one respect this is a positive development. So many parts of the world are now impervious to monetary policy's disastrous ends, especially the suicidal trend of households to move out of par assets and into price assets (both stocks and real estate). The massive undertaking of risk over the last few decades has been completed solely because it was so badly mispriced by monetary policies all over the world. A systemic reset to risk pricing would disable all these short-term incentives to chase and pile paper. Without hope of a monetary or fiscal solution, and with the process of sovereign loss transfers finally at its logical end, the economic backdrop looms as a scary contrast to the QE-inspired run in risk price assets of last autumn. Perhaps that also serves as a warning that this idea of easy money will be a hard habit to break, translating into an elongated period of substandard conditions and agonizing mistakes. This matches the historical pattern of ratcheting crises that bookend fleeting solutions. Clearing out these last vestiges of the monetary structure would be a welcome end to the neglect of the productive economy. Not only would an end to wanton dollar destruction close the incentive to send productive investment overseas, but coupled to a diminished incentive to devote an obscene proportion of corporate profits to stock price enhancements might just get businesses to invest locally - spurring small businesses in the process. As much as the Fed decries "slack" in the economy, expanding manufacturing production is not the only measure of productive capacity and wealth (there is much potential in investing in the human capital and capacity where future innovation resides). R&D is not the end all, be all of business growth, but when the past leaders in innovation willingly spend twice as much on stock repurchases as R&D (Microsoft and Cisco, for example) some rebalancing might just be in order. The real economic recovery lies not in the credit and accounting schemes that shuffle paper from one perception to another, whether it be an RTC, EFSF, or Eurobonds, or even IMF bonds. The economic recovery we all want is waiting for a return to universal acceptance of the idea of wealth itself. Once the system shifts from this insipid idea of wealth being piles of money to wealth being productive ability, then the economic incentives of all businesses and intermediaries can be re-aligned with the long-term potential for real, solid growth. In the meantime, the death of the old system will be hard to watch. The desperate flailing and floundering of the old guard of monetarism can still be dangerous. And volatile.
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| Guest Post: Looking Back To the Late '80s For 'Contagion' Guidance Posted: 30 Sep 2011 08:59 AM PDT
Submitted by Jeffrey Snider via Real Clear Markets Looking Back To the Late '80s For 'Contagion' Guidance The clock has been turned back to 1989 and the stock market briefly cheered the temporal transformation, although credit markets have remained far less sanguine. With Europe on everyone's collective mind, rumors of an expanded European Financial Stability Fund (EFSF) acting akin to the early version of U.S. TARP had many hoping that a true resolution had finally been found. Of course, the first plan (the one sold to Congress) for TARP was to act as a resurrected Resolution Trust Corporation (RTC), so the markets are reaching back to the late 1980's for guidance on how to "successfully" contain banking contagion. The RTC was created in response to the widening savings and loan crisis of the mid-1980's. By the time it opened its doors on August 9, 1989, 296 thrift banks had already failed, with approximately $125 billion in combined assets. Policymakers at the time were desperate to avoid what many believed was another forming Great Depression. The plan for the RTC was simple and straightforward: buy up the assets of the failed banks, fund and warehouse them over time so that the inevitable firesales that typically accompany bank failures could be avoided and not hinder any expected recovery or, worse, drag even healthy institutions down. All that required funding, of course, but, more importantly, it meant absorbing losses since the pool of assets the RTC would gather would largely consist of non- or sub-performing (by 2008 they called this kind of asset "toxic"). The FDIC notes contemporary loss estimates at the outset: "For example, most loss projections for RTC resolutions during the year leading up to passage of FIRREA in 1989 were in the range of $30 billion to $50 billion, but some reached as high as $100 billion at that time. Over the next few years, as a greater-than-expected number of thrifts failed and the resolution costs per failure soared, loss projections escalated. Reflecting the increased number of failures and costs per failure, the official Treasury and RTC projections of the cost of the RTC resolutions rose from $50 billion in August 1989 to a range of $100 billion to $160 billion at the height of the crisis peak in June 1991; a range two to three times as high as the original $50 billion." As is usually the case in these circumstances, staring into the beginning of an abysmal crisis, estimates are never really accurate since no one ever wants to face up to the scale of the problem, or at least do not want the public to know what the ultimate tab will be when all is said and done. This is page one in the handbook for government intervention - underestimate the scale. Underestimating is also helped by an over-adherence to mathematical models and simulations that are entirely based on static assumptions derived from "good" times and periods, providing enough seemingly solid rationalizations for why it won't be so bad. Again, the FDIC quotes the former RTC chairman L. William Seidman's summation of that time: "Only three months after the cleanup started it was already evident that the problem was far worse than anyone in government had envisioned, including me, and it was getting worse every day. The economy was beginning to slide into recession. Real estate was in real depression in some parts of the country, particularly in Texas, where the savings and loan problem was the largest . . . we would also need billions more to pay off depositors and carry weak assets of the institutions until they were sold and we could recover the funds we had invested . . . we were faced with taking the most politically unacceptable action of all, having to admit that we made a big mistake." Ultimately the FDIC estimates that the RTC cost taxpayers $123.8 billion, including the interest costs of floating bonds to fund all these activities. Given that the RTC ultimately shepherded 747 thrifts with a combined $393 billion in assets into oblivion, what might an EFSF be looking at when the big banks in Europe each have assets totaling several trillion? That is just the first warning and should serve as a lucid reminder of what may be in store for Europe (notwithstanding additional potential collateral damage all over the globe). A second warning comes from Mr. Siedman. He admits, perhaps unwittingly, that the RTC did nothing to prevent the coming housing depression of that time (in parts of the U.S.), nor did it prevent the wider economic recession in 1991. Instead, what posterity regards as the significant success of the RTC episode is that the 1991 recession was far milder than those initial expectations (though former President George H.W. Bush may disagree), and fears of a second Great Depression. The banking panic and collapse of the S&L's was thus safely "contained", or so it goes. I think, however, in the light of the history of the next two decades another cost has to be added to the tab of the RTC bill. Though it will be impossible to measure accurately, there has to be an account for what happened in finance after the final destruction of the savings and loan industry - which is exactly what the RTC accomplished. From the early 1990's on, marginal credit production ceased to be a function of deposit multiplication of central bank "money". The age of securitization and equity balance sheet capacity was born, intentionally to offset the lost credit capacity of all those failed S&L's. The overall credit market slowed to its weakest point since the 1930's during the year 1992. The overall share of total financial credit owned by the S&L industry had fallen to 8.5% by that time from 20% in 1970, and 16.2% as late as 1988. In 1988, GSE's and their sponsored mortgage pools accounted for a combined 12.7% of financial credit, growing their share to 15.7% by 1992 and a total of 20% by the year 2000. Even ABS issuers had surpassed S&L's by the turn of the millennium, accounting for 6.5% of intermediary credit compared to an irrelevant 5.3% for thrifts. As much as this might be proclaimed a successful transition from the anachronistic notion of deposit/credit relationship of the traditional money multiplier, to the "modern" wholesale money investment bank system of balance sheet equity governance, the seeds of the credit bubbles were planted by the RTC's S&L unwind. These changes have had unintended consequences through the years, including, but not in any way limited to, the dramatic housing bubble that has defined the precursory need to bail out the global banking system again. There is a large cost here that may never be fully known, but is all too real. Had the private sector borne more of the actual losses back then (the FDIC estimates private losses at only $29 billion) then the history of banking might have been different, though we will never know. A chastened banking system might not have so easily expanded during the 1990's, especially if that chastening had led to the correct pricing of systemic and asset risks. In the current case, an EFSF that mimics the RTC may never get as far as another few credit bubbles, no matter how hard monetary and fiscal authorities try to create them. Where the "success" of the RTC and likely failure of the EFSF intersect is in the available conduit(s) of credit production. The monetarists' implants within the new and "improved" credit and banking system of the 1990's were fruitful only because of the ripe conditions of that age. First of all, the household balance sheets of the American public, even in the most affected areas, were in as good a shape as they had ever been. At the beginning of 1991, U.S. households held $1.5 trillion more in deposit accounts and fixed income assets than they owed in credit market debt. Americans could borrow over the next few decades because of this starting position of relatively stable, less risky net worth (that transitioned to price net worth from that point on). American and European households today are not in a similarly less risky position. Even if they were, there is no credit market mechanism left to transmit credit money throughout the global economic system. In the early 1990's, as the S&L's collapsed into near oblivion, the GSE's took over the mortgage market and commercial banks took over the rest (eventually moving to off-balance sheet arrangements that may never have worked in an environment where depository credit was still viable and sizable). Both classes of intermediaries were largely unscathed from that period and stood awaiting the opportunity to essentially grab market share. Once that was accomplished, leverage of equity capital (thanks in large part to the stock bubble) was the primary marginal source of credit for the next fifteen years. I doubt any of that would have been possible had the traditional link of deposits not been severed by the S&L failures and the monetary incentives to "influence" household savings into price assets. Today, the entire global system is imperiled, not just a single subset. The largest banks in the world are exactly the ones where all the trouble is centered. We are not talking about quietly dissolving 747 small banks; we are really talking about keeping a few dozen of the biggest banks afloat by allowing them to offload embedded losses of a still unknown scale. If marginal credit production since 1992 has been done on the back of securitizations and balance sheet capacity, it cannot overcome the roadblocks of no balance sheet capacity (since it has become concentrated in these largest banks) and a now-extinct securitization pipeline. The ultimate irony will be if somehow a depository system reappeared and re-established marginal credit supremacy, but that would take a confirmed commitment to stability and the correct pricing of risks. In reality, the entire hope of the EFSF effort is to simply get rid of the persistent crisis of the banking system - another psychological ploy to enact or reboot rational expectations of a recovery. Even if the EFSF were to relieve these suffering institutions of their Greek debt, it does not solve the problem of their Portuguese or Italian debt exposures. Nor does it solve the problem of Portugal and Italy. What is really happening across the world is the peeling back of the façade of the last few decades of monetarism. The banking system, per se, is not the problem. The problem is that the world has too many existing claims on its created productive assets and the perceptions of the world's ability to create additional productive assets. And in many cases, quite sadly, those productive assets have been neglected in the sorry chase for paper profits, often financed by overly cheap and abundant credit. Short-term thinking about stock buybacks and dollar devaluation has trimmed the amount of resources devoted to actual, productive innovation. I don't think it is any coincidence that the last decade was noticeably lacking of revolutionary innovations, the kind of innovations that changed the very nature of business and commerce (even how we live our lives). Over the same time, the amount of debt accumulated on the backs of the neglected productive economy multiplied exponentially. Is it any wonder that we now routinely question the ability of large nations to repay said claims? So much human capital and innovation has been devoted to the realm of finance that, in admittedly perfect hindsight, it is easy to see a crowding out of true potential wealth (we might be better off if math geniuses were presented with a different regime of incentives that valued the solutions to more real world problems over the pursuit of a "perfect" algorithm for high frequency trading, at the same time real innovation that is done in the laboratory of trial and error does not fit into the sclerotic notion of risk represented in the mathematical paper chase). The larger panic about banks is simply a realization that the music has been playing an awfully long time without interruption, and the game of musical chairs is nearly at its end. What is surprising to many is the sheer number of players (debt claims) and the disastrous deficiency of chairs (productive assets). The mad scramble for those remaining chairs will be impolite and unfortunately violent (both metaphorically and literally speaking). The hopes of the entire age of monetarism now rest on a global economy that is visibly weakening, and likely already contracting (though the confirmation will not come until government revisions to initial estimates are published many months from now). Credit is not an answer to the problem of too much credit. In one respect this is a positive development. So many parts of the world are now impervious to monetary policy's disastrous ends, especially the suicidal trend of households to move out of par assets and into price assets (both stocks and real estate). The massive undertaking of risk over the last few decades has been completed solely because it was so badly mispriced by monetary policies all over the world. A systemic reset to risk pricing would disable all these short-term incentives to chase and pile paper. Without hope of a monetary or fiscal solution, and with the process of sovereign loss transfers finally at its logical end, the economic backdrop looms as a scary contrast to the QE-inspired run in risk price assets of last autumn. Perhaps that also serves as a warning that this idea of easy money will be a hard habit to break, translating into an elongated period of substandard conditions and agonizing mistakes. This matches the historical pattern of ratcheting crises that bookend fleeting solutions. Clearing out these last vestiges of the monetary structure would be a welcome end to the neglect of the productive economy. Not only would an end to wanton dollar destruction close the incentive to send productive investment overseas, but coupled to a diminished incentive to devote an obscene proportion of corporate profits to stock price enhancements might just get businesses to invest locally - spurring small businesses in the process. As much as the Fed decries "slack" in the economy, expanding manufacturing production is not the only measure of productive capacity and wealth (there is much potential in investing in the human capital and capacity where future innovation resides). R&D is not the end all, be all of business growth, but when the past leaders in innovation willingly spend twice as much on stock repurchases as R&D (Microsoft and Cisco, for example) some rebalancing might just be in order. The real economic recovery lies not in the credit and accounting schemes that shuffle paper from one perception to another, whether it be an RTC, EFSF, or Eurobonds, or even IMF bonds. The economic recovery we all want is waiting for a return to universal acceptance of the idea of wealth itself. Once the system shifts from this insipid idea of wealth being piles of money to wealth being productive ability, then the economic incentives of all businesses and intermediaries can be re-aligned with the long-term potential for real, solid growth. In the meantime, the death of the old system will be hard to watch. The desperate flailing and floundering of the old guard of monetarism can still be dangerous. And volatile.
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| Gold Daily and Silver Weekly Charts Posted: 30 Sep 2011 08:53 AM PDT |
| COT Gold, Silver and US Dollar Index Report - September 30, 2011 Posted: 30 Sep 2011 08:26 AM PDT COT Gold, Silver and US Dollar Index Report - September 30, 2011.
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| Got Gold Report: 'Stunning' reduction in big commercial shorts in gold, silver Posted: 30 Sep 2011 08:11 AM PDT 4:07p ET Friday, September 30, 2011 Dear Friend of GATA and Gold: Gene Arensberg has just posted a flash addendum to his latest Got Gold Report, reporting a "stunning" reduction in the short positions of the big commercial traders in gold and silver futures. You can find the flash here: http://www.gotgoldreport.com/2011/09/stunning-plunge-in-comex-commercial... 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: 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 120.9 Meters Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the drill results received from its 2011 drilling Wellgreen platinum group elements, nickel, and copper project in the Yukon Territory. Borehole WS11-188 encountered 457 meters of mineralization grading 0.47% nickel equivalent (including 0.72 grams per ton platinum, paladium, and gold) from surface to the footwall contact. Within this larger swath of mineralization, the hole encountered a high-grade section of 17.8 meters of 3.14 grams per ton platinum, palladium, and gold, 1.03% nickel, and 0.74% copper (1.77% nickel equivalent). The hole was drilled completely outside of current resource boundaries, between the East Zone resource and the West Zone resource that was reported in the company's press release no July 14, 2011. The high-grade intercept located between the two resources not only demonstrates that the East and West Zone resource form a single, geologically contiguous body but also indicates that the higher-grade material in the East Zone continues to the west and at depth at Wellgreen. For drill result tables and maps, please see the company's full press release here: http://www.prophecyplat.com/news_2011_sep26_prophecy_platinum_wellgreen_...
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| Posted: 30 Sep 2011 08:07 AM PDT  I couldn't be more delighted than to see the DAX get tagged for 2.5% today. This is a consequence of the "Successful" vote yesterday in the German Parliament to throw more good money after bad. The hit (so far) to German investors comes to $40b. That should make them happy this weekend. It's not just investors that a giving the raspberry. According to this WSJ article yesterday, 75% of the folks in German are fed up with more bailouts. A poll for national German broadcaster ZDF earlier this month shows three-quarters of Germans are against the expanded European rescue fund. How can this happen? Politicians are doing what the voters don't want. It can only mean that new politicians are coming and the bailouts will be curtailed. Keep in mind that the expanded EFSF is still woefully inadequate to address the debt problem in the EU. There has to be a much bigger effort. In my view, anything less than Euro $2 Trillion is not going to work. A big bazooka is required, a popgun is being offered. This brings us to the speculation this week about a Euro SPV. There was the "Leisman Plan" (I wanna puke) and the EURECA Plan. These are confusing to most people. Let me make it easy. What is being proposed are Euro Bonds in disguise. This is just financial engineering to cosmetically create a joint and several EU debt obligation. This won't work. The ratings agencies and investors will see through this. If something silly like this is going to come I would anticipate that Moody's and S&P will downgrade both France and Germany within weeks. Everything that is being offered is just a half-assed effort to deal with a very big problem. The conclusion for me is that the Euro has to continue to suffer on the crosses as a result. I see the dollar as the backbone for the markets in general. In a "perfect" world an orderly depreciation of the dollar (5% a year) is a "good thing". It supports US inflation (that makes debt look smaller). A weak dollar is beneficial for tourism, and encourages foreigners to buy real assets like real estate. It gives US manufacturers of big-ticket items (planes/construction equipment) a pricing advantage. It also provides a big boost to translated earnings for the S&P multinationals. The very worst thing that could happen to the US economy in the 4th quarter is that the dollar gains 10% against the Euro. That looks like what is coming to me. Don't buy the dips, sell the rallies.
********************************* BLATANT BREACHES On the subject of the EU and the banks, an interesting speech by Hans Hoogervorst, Chair of the International Accounting Standards Board (IASB). He spoke at an investors conference in Boston (PDF) yesterday. I wasn't there. He was quoted as saying: European banks carried out "blatant breaches" of IFRS in valuing their holdings of Greek debt.
Mr. Hoogervorst's comments were consistent with his letter (PDF) to the European Securities and Markets Authority. Some tidbits from that letter:  There have been indications in the market that some European companies are applying the accounting requirements for fair value measurement and impairment losses in a way that seems to differ from the objective of IAS 39 Financial Instruments: Recognition and Measurement. . This is evident particularly in their accounting for distressed sovereign debt, including Greek government bonds. . The bottom line from the chair of the International Standards Board is that the European banks are fudging their books. This is not the Blogs making this assertion. It's coming from the highest authority that exists. This conflict can't be ignored much longer. It's possible that the EU banks will try to wash this over one more time in their third quarter statements. I think it will be damn near impossible for them to issue annual reports for 2011 without full disclose. In other words, don't load up on the EU banks just yet… . 
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| Posted: 30 Sep 2011 08:07 AM PDT
I couldn't be more delighted than to see the DAX get tagged for 2.5% today. This is a consequence of the "Successful" vote yesterday in the German Parliament to throw more good money after bad. The hit (so far) to German investors comes to $40b. That should make them happy this weekend. It's not just investors that a giving the raspberry. According to this WSJ article yesterday, 75% of the folks in German are fed up with more bailouts. A poll for national German broadcaster ZDF earlier this month shows three-quarters of Germans are against the expanded European rescue fund. How can this happen? Politicians are doing what the voters don't want. It can only mean that new politicians are coming and the bailouts will be curtailed. Keep in mind that the expanded EFSF is still woefully inadequate to address the debt problem in the EU. There has to be a much bigger effort. In my view, anything less than Euro $2 Trillion is not going to work. A big bazooka is required, a popgun is being offered. This brings us to the speculation this week about a Euro SPV. There was the "Leisman Plan" (I wanna puke) and the EURECA Plan. These are confusing to most people. Let me make it easy. What is being proposed are Euro Bonds in disguise. This is just financial engineering to cosmetically create a joint and several EU debt obligation. This won't work. The ratings agencies and investors will see through this. If something silly like this is going to come I would anticipate that Moody's and S&P will downgrade both France and Germany within weeks. Everything that is being offered is just a half-assed effort to deal with a very big problem. The conclusion for me is that the Euro has to continue to suffer on the crosses as a result. I see the dollar as the backbone for the markets in general. In a "perfect" world an orderly depreciation of the dollar (5% a year) is a "good thing". It supports US inflation (that makes debt look smaller). A weak dollar is beneficial for tourism, and encourages foreigners to buy real assets like real estate. It gives US manufacturers of big-ticket items (planes/construction equipment) a pricing advantage. It also provides a big boost to translated earnings for the S&P multinationals. The very worst thing that could happen to the US economy in the 4th quarter is that the dollar gains 10% against the Euro. That looks like what is coming to me. Don't buy the dips, sell the rallies.
********************************* BLATANT BREACHES On the subject of the EU and the banks, an interesting speech by Hans Hoogervorst, Chair of the International Accounting Standards Board (IASB). He spoke at an investors conference in Boston (PDF) yesterday. I wasn't there. He was quoted as saying: European banks carried out "blatant breaches" of IFRS in valuing their holdings of Greek debt.
Mr. Hoogervorst's comments were consistent with his letter (PDF) to the European Securities and Markets Authority. Some tidbits from that letter: There have been indications in the market that some European companies are applying the accounting requirements for fair value measurement and impairment losses in a way that seems to differ from the objective of IAS 39 Financial Instruments: Recognition and Measurement. . This is evident particularly in their accounting for distressed sovereign debt, including Greek government bonds. . The bottom line from the chair of the International Standards Board is that the European banks are fudging their books. This is not the Blogs making this assertion. It's coming from the highest authority that exists. This conflict can't be ignored much longer. It's possible that the EU banks will try to wash this over one more time in their third quarter statements. I think it will be damn near impossible for them to issue annual reports for 2011 without full disclose. In other words, don't load up on the EU banks just yet… .
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| Today Was A Really Really Ugly Day For The Stock Market Posted: 30 Sep 2011 08:04 AM PDT One observation of note: gold acutally rallied during the last few minutes of sell-off in the NYSE/Dow/SPX. It should be disconcerting to technicians and bubbleheads that the market shit the bed like this on the last day of a quarter, which is usually used to make the markets look friendly. In the after-market right now, the SPX futures are still selling off, while gold and silver grind higher... Have a great weekend all. 
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| U.S. States Seek to Break Financial Connection with Federal Government Posted: 30 Sep 2011 08:03 AM PDT Dear David, This is exactly what gold is doing on its own. Ry, Jim
From: Hera Research, LLC http://www.heraresearch.com/ Dear David, I hope you don't mind receiving this note. Let me say that I am not given to hyperbole. This is the most important message I have ever sent. I urge Continue reading U.S. States Seek to Break Financial Connection with Federal Government
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| Scott Gardner: Europe's Debt Crisis and Its Effect on Gold Posted: 30 Sep 2011 07:52 AM PDT The Gold Report: In one of your June research reports you wrote, "In the Eurozone, there has been limited political will to really make an impact on the debt side of the equation. With gross domestic product (GDP) growth set to slow, things should really get interesting for euro policymakers as they attempt to make their shaky union work." In the Eurozone, there is more than adequate money to take care of the debt situation, but the question remains, is there enough political will to keep all the member countries inside the Eurozone? What sort of impact will pending Eurozone issues have on the gold price? Scott Gardner: First off, you say that there's enough money, but I think that a lack of money is the primary concern. The European Financial Stability Fund has something like €440B in committed capital and the members haven't agreed upon future funding requirements. Also, the European Central Bank (ECB) itself only has €10B. If you compare that to the three largest banks in France, ...
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| Gene Arensberg: Second largest bull-market correction for silver Posted: 30 Sep 2011 07:26 AM PDT 3:25p ET Friday, September 30, 3011 Dear Friend of GATA and Gold (and Silver): The Got Gold Report's Gene Arensberg writes today that despite silver's recent plunge its bull market is intact, even if junior mining company shares are priced as if gold is selling for $400 per ounce and not four times as much. Arensberg's commentary is headlined "Second Largest Bull-Market Correction for Silver" and you can find it at the Got Gold Report here: http://www.gotgoldreport.com/2011/09/second-largest-bull-market-correcti... 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 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: 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:
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Since I last wrote about the euro crisis, events have taken a predictable turn for the worse. In my 
We are getting so close to a financial collapse in Europe that you can almost hear the debt bubbles popping. All across the western world, governments and major banks are rapidly becoming insolvent. So far, the powers that be are keeping all of the balls in the air by throwing around lots of bailout money. But now the political will for more bailouts is drying up and the number of troubled entities seems to grow by the day. Right now the western world is facing a debt crisis that is absolutely unprecedented in world history. Europe has had a tremendously difficult time just trying to keep Greece afloat, and several much larger European countries are now on the verge of a major financial crisis. In addition, there is a growing number of very large financial institutions all over the western world that are also rapidly approaching a day of reckoning. The global financial system is a sea or red ink, and when we get to the point where there are hundreds of ships going under how is it going to be possible to bail all of them out? The quotes that you are about to read show that quite a few top financial and political insiders know that things cannot hold together much longer and that a horrific economic crisis is coming. We built the global financial system on a foundation of debt, leverage and risk and now this house of cards that we have created is about to come tumbling down.
Incomes for average Americans fell last month for the first time in nearly two years, according to the Commerce Department.
Today is the last day of the third quarter. Barring a miraculous and spectacular rally, the Dow will have turned in its worst performance since the first quarter of 2009.
China's manufacturing sector shrank for the third straight month. That "jab" was just a little tap to let the market know something's coming…
There's growing talk of Germany leaving the euro. Another "jab" with a bit more umph behind it.
These initial jabs had already slapped the S&P silly… back below 1,150 at this writing.
Now, the sucker punch: "The U.S. economy is indeed tipping into a new recession," declares a report this morning from the Economic Cycle Research Institute (ECRI). "And there's nothing that policy makers can do to head it off."
"The ECRI call is a big deal," says Dan Amoss. "It may cause investors to panic, and finally incorporate a recession into their earnings models" — something that's been glaringly absent to date.
Gold is winding up the week holding the line above $1,600. At last check, the spot price was $1,629. Silver is likewise keeping above a round number, in this case $30. The bid right now is $30.50.
"Why gold is falling," says our newest analyst Michael Pento, "has to some degree to do with what is going on in Europe. Sovereign nations are dumping whatever they can and some of them have significant gold reserves and they are putting them on the market."
The greenback is strengthening big-time to wrap up the week. After spending much of the week below 78, the dollar index is back to 78.5.
The dollar and the yen were the world's best-performing major currencies in the third quarter, according to an index of 10 currencies maintained by Bloomberg.
If you're looking for an alternative explanation of why gold tumbled from $1,900 this month, we found one fitting for a good Friday afternoon laugh. It comes from a local newscast in Calgary. We'll let the lass speak for herself:
Last today… it's no secret Congress is desperate for revenue. But anyone with half a brain, or even a quarter, would recognize the following as satire:
"I'm one of the persons affected by the GoldMoney decision to close all Dutch accounts," writes a reader from the Netherlands.
"I personally don't see anything wrong with it," writes a Reserve member in response to our inquiry about the ethics of investing in raw materials used primarily by the military-industrial complex.
"Invest in warmongers?" a reader writes. "Of course, if it will make a good and fast profit, which I can then use to flee the Union of Soviet Socialist States of Amerika. Stopping the warmongering still requires broad support and action from the sheeple, the booboisie.
"I do confess," adds a reader coming down on the other side, "I am sometimes perplexed about the ethics of investing.
"No doubt about it," says another, "unless you are totally asleep or totally dumbed down, all of these raw materials are eventually meant to be used in imposing on us the planned One World Government (New World Order)."
"I am very pleased," our final correspondent writes, "that The 5 actually considers the consequences of investing in industries that are patently dangerous to our freedom, like those involved in making drones or eavesdropping on U.S. citizens."| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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