Gold World News Flash |
- Jim Rickards - Who’s the Sucker at the Global Gold Poker Table?
- COMEX Commercial Silver Net Shorts Lowest in Eight Years
- By the Numbers for the Week Ending October 7
- Paulson's Biggest Fund Cut In Half
- Paulson's Biggest Fund Cut In Half
- American Silver Eagle Bullion Coins Shatter Annual Sales Record in October 2011
- Quantitative Easing, or When There's Nowhere Left to Run
- Peter Schiff: Listener Questions
- Commercial shorts in silver at their lowest level in 8 years, Arensberg reports
- Madrid precious metals conference includes Turk, Griffin, Castaneda, and Martenson
- GATA conference speakers Ben Davies and Jim Rickards interviewed by King World News
- Gold Price Reached a High of 1,663.64 Today, then Fell Back
- Gold and silver, unlike paper money, never die
- Silver is as good as - or better than - gold
- Guest Post: Economic Punctuated Equilibrium
- COMEX Commercial Silver Net Shorts Lowest in Eight Years
- Jim Rickards: Who’s the Sucker at the Global Gold Poker Table?
- The Nature of Money and Our Monetary System
- Silver is as Good as (or Better Than) Gold
- Market Snapshot: Financials Finish Weak On An Unchanged Week
- Update On Wall Street Protests
- Back to Barter
- Can Gold Continue to Glimmer ? and Glitter?
- Gold Daily and Silver Weekly Charts - Anglo-American Bullion Banking Cartel at Risk
- GIABO & Crash JP Morgan, Buy Silver at #occupytulsa
- Congressional Research Service Finds US Exposure To Europe At $640 Billion And "Could Be Considerably Higher"
- COT Gold, Silver and US Dollar Index Report - October 7, 2011
- Gold in Limbo as Range Tightens
- No Return on Government Investments
- Ben Davies - Buy Gold, The Only Option Left is to Print Money
| Jim Rickards - Who’s the Sucker at the Global Gold Poker Table? Posted: 07 Oct 2011 04:01 PM PDT  With gold and silver continuing to consolidate, today King World News interviewed KWN Resident Expert Jim Rickards, Senior Managing Director at Tangent Capital Markets, to get his take his take on the current crisis and what is happening with gold. When asked about his recent meetings with world leaders Rickards stated, "It's really important for me to get out, get around the world and meet with government officials, investors and others to get their perspective. It's not quite as US centric as you would think. For example, in the Middle-East and talking with our allies there, they are very, very focused on Iran."
This posting includes an audio/video/photo media file: Download Now |
| COMEX Commercial Silver Net Shorts Lowest in Eight Years Posted: 07 Oct 2011 03:38 PM PDT from GotGoldReport.com: HOUSTON — The Commodity Futures Trading Commission (CFTC) just released its commitments of traders (COT) report at 15:30 ET Friday for trader's positions as of the close on Tuesday, October 4, and according to that report traders the CFTC classes as "commercial" reported their least net short positioning for silver in more than eight years. Recall that a week ago we reported a stunning drop in the large commercial net short positions (LCNS) in both gold and in silver futures. The "commercials" continued to reduce their net short positioning in this week's report, a small 1,932-contract reduction in gold futures, but another relatively large reduction of 5,339 contracts in the LCNS for silver futures.
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| By the Numbers for the Week Ending October 7 Posted: 07 Oct 2011 03:20 PM PDT Just below is this week's closing table, followed by the CFTC disaggregated commitments of traders (DCOT) recap table for the week ending October 7, 2011.
Continued… Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts should be done by the usual time, (18:00 ET) on Sunday. No Got Gold Report this weekend as previously disclosed. We beg our reader's indulgence as we prepare for the NOIC.
All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report.
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| Paulson's Biggest Fund Cut In Half Posted: 07 Oct 2011 01:50 PM PDT A few days ago we suggested that based on ongoing losses in the portfolio of Paulson & Co, the biggest fund of the firm, Advantage Plus, is down a massive 50% YTD. A few hours ago, Absolute Return confirmed that the firm which has stepped on virtually every single possible landmine year to date, has had its AUM cut if not exactly in half, then surely close enough for Keynesian work, at -47%. And with that the speculations of an imminent terminal redemption event coupled with liquidations of the firm's gold share class (its GLD holdings) will resume, although the one thing unclear is whether Paulson has already sold off the bulk of his winners. We are confident we will learn the answer as soon as Monday.
And also:
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| Paulson's Biggest Fund Cut In Half Posted: 07 Oct 2011 01:50 PM PDT
A few days ago we suggested that based on ongoing losses in the portfolio of Paulson & Co, the biggest fund of the firm, Advantage Plus, is down a massive 50% YTD. A few hours ago, Absolute Return confirmed that the firm which has stepped on virtually every single possible landmine year to date, has had its AUM cut if not exactly in half, then surely close enough for Keynesian work, at -47%. And with that the speculations of an imminent terminal redemption event coupled with liquidations of the firm's gold share class (its GLD holdings) will resume, although the one thing unclear is whether Paulson has already sold off the bulk of his winners. We are confident we will learn the answer as soon as Monday.
And also:
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| American Silver Eagle Bullion Coins Shatter Annual Sales Record in October 2011 Posted: 07 Oct 2011 01:19 PM PDT by Rhonda Kay, CoinNews.com:
American Silver Eagle year-to-date sales hit 34,673,500 Thursday, October 6, blasting past the annual record of 34,662,500 achieved in 2010. The coins soared another 400,000 Friday, rising to 35,073,500 for the year. Lower silver prices have been a factor in influencing the large number of bullion coins purchased in the last two weeks. The precious metal nose-dived during the third week in September, plummeting more than $10 an ounce to below the level it had maintained throughout most of the summer. Until then, September Silver Eagle sales had been sluggish. They immediately took off. September ended as the second best month ever for the series with the United States Mint selling 4,460,500.
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| Quantitative Easing, or When There's Nowhere Left to Run Posted: 07 Oct 2011 01:13 PM PDT by Alasdair Macleod, GoldMoney.com:
The ECB, together with the national central banks, can only support these banks by writing a blank cheque on itself, while using all means possible to conceal and play down the losses in the system. This essentially is what happens with the good-bank/bad-bank solution: if the bad stuff is carted away to be dealt with out of the public gaze leaving the good stuff behind, what is there to worry about?
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| Peter Schiff: Listener Questions Posted: 07 Oct 2011 12:57 PM PDT |
| Commercial shorts in silver at their lowest level in 8 years, Arensberg reports Posted: 07 Oct 2011 12:51 PM PDT 1:50a BST Saturday, October 8, 2011 Dear Friend of GATA and Gold (and Silver): A flash from Gene Arensberg's Got Gold Report tonight discloses that the large commercial traders in silver futures have reduced their short positions to the lowest level in eight years, apparently doing a huge amount of covering on the recent price decline. You can find Arensberg's commentary at the Got Gold Report here: http://www.gotgoldreport.com/2011/10/comex-commercial-silver-net-shorts-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Be Part of a Chance to Discover Multi-Million-Ounce Gold and Silver Deposits in Canada Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600. 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 The United States Once Again Can Establish a Stable Dollar Worth Its Weight in Gold Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, has released a plan to restore economic growth through a stable dollar. The plan, titled "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies," responds to the recurrent economic crises of the last century and outlines a detailed proposal for America's leadership on "how we get from here to there." That is, how we get from the present unstable paper dollar to a stable dollar as good as gold. James Grant, author and editor of Grant's Interest Rate Observer, says of the Lehrman plan: "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman the country has finally found him." To learn more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: http://www.thegoldstandardnow.org/gata
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| Madrid precious metals conference includes Turk, Griffin, Castaneda, and Martenson Posted: 07 Oct 2011 12:37 PM PDT 1:20a BST Saturday, October 8, 2011 Dear Friend of GATA and Gold: The Spanish Precious Metal Society, OroyFinanzas, is joining with PortalOro and the Spanish Gemological Institute to sponsor the third annual Gold and Silver Meeting in Madrid on Wednesday, November 16. Speakers will include GoldMoney founder and GATA consultant James Turk; G. Edward Griffin, author of the polemical history of the U.S. Federal Reserve system, "The Creature from Jekyll Island"; the economist Dr. Juan Castaneda of UNED University in Madrid; and market analyst and blogger Chris Martenson of chrismartenson.com. Admission is 30 euros in advance and 40 at the door. Simultaneous translation into Spanish and English will be available for all presentations. Attendance is limited, so please make reservations promptly. The conference's Internet site is: http://www.oroyfinanzas.com/gold-silver-meeting-madrid-2011/ For more information, please write to: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Lewis E. Lehrman on How to Solve the U.S. Debt Problem Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program. Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust. Lehrman says: Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy. We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals, and working people 0 percent at the bank, you are not going to encourage them to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust." To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: http://www.thegoldstandardnow.org/gata Join GATA here: 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 Be Part of a Chance to Discover Multi-Million-Ounce Gold and Silver Deposits in Canada Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600.
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| GATA conference speakers Ben Davies and Jim Rickards interviewed by King World News Posted: 07 Oct 2011 12:13 PM PDT 12:01a BST Saturday, October 8, 2011 Dear Friend of GATA and Gold: Hinde Capital CEO Ben Davies tells King World News that fractional-reserve banking is dying, that massive money printing is the only way for governments to recapitalize banks, and that gold has bottomed. You can read a summary of the interview here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/7_Be... Meanwhile geopolitical analyst James G. Rickards, also interviewed by King World News, echoes GATA's observation that official gold reserve data is unreliable, that many governments have more gold than they're acknowledging, and that China, with the most in paper assets, is now the "sucker" at the global poker table: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/8_Ji... Both Davies and Rickards spoke at GATA's Gold Rush 21 conference in London in August. 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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| Gold Price Reached a High of 1,663.64 Today, then Fell Back Posted: 07 Oct 2011 12:13 PM PDT Gold Price Close Today : 1,634.50 Gold Price Close 30-Sep : 1,620.40 Change : 14.10 or 0.9% Silver Price Close Today : 3095.8 Silver Price Close 30-Sep : 3004.1 Change : 91.70 or 3.1% Gold Silver Ratio Today : 52.797 Gold Silver Ratio 30-Sep : 53.940 Change : -1.14 or -2.1% Silver Gold Ratio : 0.01894 Silver Gold Ratio 30-Sep : 0.01854 Change : 0.00040 or 2.2% Dow in Gold Dollars : $ 140.42 Dow in Gold Dollars 30-Sep : $ 139.22 Change : $ 1.20 or 0.9% Dow in Gold Ounces : 6.793 Dow in Gold Ounces 30-Sep : 6.735 Change : 0.06 or 0.9% Dow in Silver Ounces : 358.65 Dow in Silver Ounces 30-Sep : 363.28 Change : -4.63 or -1.3% Dow Industrial : 11,103.12 Dow Industrial 30-Sep : 10,913.38 Change : 189.74 or 1.7% S&P 500 : 1,155.46 S&P 500 30-Sep : 1,131.42 Change : 24.04 or 2.1% US Dollar Index : 78.792 US Dollar Index 30-Sep : 78.572 Change : 0.220 or 0.3% Platinum Price Close Today : 1,496.60 Platinum Price Close 30-Sep : 1,527.00 Change : -30.40 or -2.0% Palladium Price Close Today : 590.70 Palladium Price Close 30-Sep : 611.00 Change : -20.30 or -3.3% Looks like SILVER, GOLD, and stocks recovered this week, but only if you don't hear those drums throbbing in the jungle. There's bad juju ahead, Bwana, as they used to say in the Tarzan movies. The GOLD PRICE reached a high of 1,663.64 today, then fell back. I count that as another challenge of $1,675, and a third failure. Worse, the GOLD PRICE closed Comex down $17.40 at $1,634.50. that leaves $1,630 as the nearest support. If GOLD crosses that line, then sinks through $1,600, it will skid a long ways. On the other hand, if the GOLD PRICE keeps climbing and breaks through $1,725, then gold's bottom has already been posted. However, I don't expect that. European crisis hasn't been cured yet. Crisis is like malaria. It makes you sick as a dog, then leaves. Then all unexpectedly, it returns. The cause of the crisis has not yet been treated, or perhaps the disease is so vast, no one has the resources to treat it. Either way, it will return, with teeth bared. Wow. How could I have said yesterday that the MACD and RSI showed silver overBOUGHT when I meant overSOLD? Well, it's oversold, and when those indicators are oversold, it argues that silver ought to RALLY. (Listen to what I mean, not what I say.) What withers my optimism? For one thing, oversold can get MORE oversold. For another, after a plunge like the one SILVER and GOLD PRICES took the week of 26 September, markets normally recover a bit, then make one more plunge down. Art lives in identifying when that has happened. Both SILVER and GOLD are oversold, but both also show Flag or Pennant patterns on their charts, and flags always fly at half staff. That, too, implies lower prices, BICBW. However, today's performance, after yesterday's gains of 165.3c and $11.60 to the top of gold's range, felt weak, like a everybody was cashing out at week's end. Losing 101.2c today silver closed Comex at 3095.8c, once again below that critical 3100c mark. Today and yesterday SILVER did no more than rally up to its 300 day moving average (now 3186c), needful but not particularly inspiring. At its lowest The GOLD PRICE pierced its 150 dma (now 1587.71), but has not moved far from that mark, merely bounding along it ($1,535 was roughly the 200 dma). Now maybe that touch off the 200 dma was the bottom for gold. Could be, but even so I expect to see it go back for one final Kiss Good-bye before a bottom is complete. Those oversold conditions might also be worked off not by a sustained rally, but a short-lived one. I reckon my doubt is showing. I'm just not ready to throw caution overboard and dive into SILVER and GOLD after it. For one thing, I expect to see the gold/silver ratio reach at least 57.5, and it hasn't touched that yet. So we wait, with patience, remembering that many times not doing anything also means you are not doing anything wrong, either. Not always, but sometimes. Stocks went up, down, then up, and down again. Raggedy. Weak. Dow touched 11,232 (up 110) early in the day, then dropped as low as 11,051, climbed again and failed, and closed the day down 20.21 (0.18%) at 11,103.12. S&P500 dropped 9.51 for the day, down 0.82%, to 1,155.46. Today has a double-toppy look, and not breaking through 11,200 next week will confirm that suspicion. Stocks must hold 10,700 support or turn down again. It is intensely painful to watch stocks and contemplate all the folks who will ride that sinking ship down as it takes their retirement under the waves. They have a conceptual block so powerful, so strong, so unassailable, that they simply must listen to the "experts" and financial planners who keep on doing the thing that doesn't work, because they know nothing else. STOCKS -- they're a blind date with Typhoid Mary. US Dollar index rose a little today to close 15.8 basis points or 0.20% higher. Remember that earlier in the week it touched off 79.84, probably the top of its first leg of the rally from 73.45. Dollar may fall back to 78 or even 77.75, but its immediate future is calling it higher, lots higher, to 82.5 at least, I reckon. Having lifted itself up off a 1.3164 bottom three days ago, the euro fell back on its bed of pain today. Fell short of its 20 day moving average (1.3551). Still destined to re-visit 1.2000. Yen basically stood still today, closing at 130.39, still moving sideways, crawling along its 20 and 50 dmas. Y'all enjoy your weekend! 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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| Gold and silver, unlike paper money, never die Posted: 07 Oct 2011 11:06 AM PDT for those who hold gold and silver, they need not worry about having confidence. They have something which has been money for over 6,000 years.
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| Silver is as good as - or better than - gold Posted: 07 Oct 2011 10:58 AM PDT Silver prices have greatly outpaced gold - not just in this period, but for most of the past decade.
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| Guest Post: Economic Punctuated Equilibrium Posted: 07 Oct 2011 10:53 AM PDT Submitted by Brian Rogers of Fator Securities Economic Punctuated Equilibrium "I have been studying the traits and dispositions of the "lower animals" (so called) and contrasting them with the traits and dispositions of man. I find the result humiliating to me." - Mark Twain, Letters from the Earth Talking Brazil Happy Friday to one and all. First things first, I just finished a multi-city non-deal roadshow with Banco Fator's head of equity research and strategy, Lika Takahashi. For those who aren't familiar with Lika, you really should be. She has been one of if not the most pragmatic, conservative Brazil equity strategists in the market and typically destroys her competition with her price target on the Ibov. Investors we spoke to had 3 main questions for Lika: 1) what is our outlook for inflation in Brazil, 2) what is our outlook for growth in Brazil and 3) what is our take on the Brazilian central bank's recent decision to cut rates by 50bps. On inflation, I think central bank head Tombini has a problem. He said he expects global growth to decline and this downturn in GDP will attenuate inflationary pressures in Brazil. The problem I have with this view is that the Fed, BOE, ECB and BOJ won't simply sit around and take a deflationary slowdown without a fight. They will print, obviously. This will produce monetary inflation and will help to keep commodity prices resiliently high. Tombini expects inflation to come down, I say good luck with that. On growth, it's possible that Brazil keeps the 3.4% or so growth next year based on the strength of their services labor market and government spending for the World Cup and other infrastructure projects. However, keep a close eye on China. For the first six months or so of the year there weren't too many analysts overly concerned about dramatically slowing growth in China. However, the last few months have seen a bevy of "hard landing" articles about China. If China does hard land, say 6% growth, then Brazil will also slow dramatically. On the central bank's decision to cut rates only 2 days after Dilma went on TV and said that she wished rates would go down, I obviously feel that the days of central banking independence championed by Henrique Meirelles are dead. All that being said, I should note here that I am actually quite bullish on Brazil. Why? Simply put, they have options. Despite my concerns about Tombini's recent move, the central bank has a plethora of tools they can implement to help stabilize any major volatility. Government spending and general debt levels have been conservative recently and could be increased to offset bad times. And finally, Brazil has one of the best demographic profiles around with a huge population of young people and an increasing trend of poor people moving up the economic ladder. It's not that Brazil will avoid all problems, they won't, it's just that on a relative basis Brazil is much better positioned to deal with their problems than the vast majority of developed nations and nearly all of the emerging market countries. Which brings me to the macro view. Economic Punctuated Equilibrium The late Harvard/NYU paleontologist Stephen Jay Gould and Niles Eldredge, who is the curator of the invertebrates department at the American Museum of Natural History, proposed a rather radical evolutionary theory in 1972 called punctuated equilibrium. The evolutionary thinking at the time was generally that species changed very slowly and gradually over time. Gould and Eldredge challenged this notion with punctuated equilibrium by arguing that rather than slow, gradual change, species remained stable for long periods of time and only changed during short, brief bursts of major change. For example, an animal population could live for many generations without any noticeable change in genetic make-up. Then, due to the effects of an earthquake, volcano, climate change or some other major event, the population could be split into different groups with different geographies, food and water sources, climates, etc. As the populations react to the sudden change, they will go though rapid and noticeable adaptations to their new environment which will result in great change over a short period of time. However, after the major adjustment takes place, the population will stabilize again and largely remain the same until another great environmental change. I'm obviously generalizing here and my apologies to the late Professor Gould and Professor Eldredge for the dumbed down explanation of their great theory, but I'm just an average equity research salesman and need to keep this simple. When I think about the history of the financial and economic system of the US, I see many ways in which the theory of punctuated equilibrium is playing out. By and large, we have lived through long periods of general stasis punctuated by brief periods of radical change. Some of those periods of change can be identified as the creation of the Fed in 1913, the Bretton Woods Conference in 1944, the closing of the gold window in 1971 and the repeal of Glass-Steagall in 1999 via Gramm-Leach-Bliley. After every one of these major turning points, the market has had to make quick, radical adjustments. Following the adjustments, sometimes painful ones, the market would enter into relatively long periods of "stability." But stability for whom? The 1% that controls the game. He Who Controls the Game Wins In my opinion, the problems we face today are not because we built a robust, transparent, fair system that is simply facing a few bumps in the road. Hardly. The problems we face today exist because the economic system has never been allowed to evolve into a system that is truly fair or just for all. Rather it is designed to ensure that the 1% who have always controlled things will maintain that control. It's all very subtle, but make no mistake about it, crony-capitalism is the rule of the day. And even when we did implement evolutionary changes that benefited all members of society (Glass-Steagall), the powers that be patiently waited until the moment was right to snatch that freedom away from the people and hand it back to the 1% (Gramm-Leach-Bliley). The Fed controls the issuance of our currency and thus controls the price of money. The Fed also oversees our banks and thus plays a hugely vital role in how transparent (or not) our banking system is. Politicians control the legislative process and largely determine the judges that oversee the judicial process. These same politicians are controlled by large corporations and wealthy individuals due to the ridiculous way our campaign finance laws work and our lack of term limits. See the pattern? Is a New Economic Punctuated Equilibrium Moment Upon Us? Given the complete and utter disaster that awaits us once the curtain is finally drawn back in Europe, it's important to consider whether or not the crisis we currently face is nothing but another downturn or is it in fact another game-changing, punctuated equilibrium moment? I firmly believe it is the latter. I'll spare the audience the laundry list of challenges we face as a global economy - unsustainable debt loads, ghost cities, peak oil, climate change, over $700tr in notional derivative exposure, etc. - it's a long list. In the final analysis, it's hard to conclude anything other than the system we've known since 1971 is about to implode. The powers that be know this and they are very afraid. Every piece of chewing gum they've tried to use to glue their global economic model back together again has failed. Humpty Dumpty has had a great fall but the cracking-up isn't over yet. Indeed, we have arrived again at one of the great turning points in economic history. However, the current destination is the one that the 1% hate so much. This is the moment where some of the 1% lose their grasp on power and money and witness first-hand Schumpeter's creative destruction. Historically, these are the times when pitchforks are carried and torches lit. Think about how wealthy, powerful Brits felt when news of the original Tea Party made its way to London. Think about how a rich plantation owner in the South felt when news of Lee's defeat at Gettysburg filtered down. Think about how a New York investment banker felt in 1933 when Glass-Steagall was passed. They were very likely afraid, very afraid. The edifice of their power and wealth was crumbling down around them. Which brings me to Zuccotti Park. Something Very Big Is Occupying Wall Street Financial analyst and commentar Mike Krieger wrote a great piece yesterday where he discussed the Occupy Wall Street protestors and what's happening in Lower Manhattan. One of the comments I particularly liked was Mike's use of Mahatma Gandhi's great quote to describe how the protestors are being viewed by the powers that be. "First they ignore you, then they laugh at you, then they fight you, then you win." - Mahatma Gandhi The protestors downtown have moved past the ignore stage as the media blackout has given way to the sheer weight of the story. The strategy has now shifted to discrediting/laughing at/making fun of the protestors. The problem with this phase for the media will be the extremely difficult way it's going to be to pigeon hole this crowd. They don't represent the left or the right. They don't represent the Dems or Repubs, business owners or labor unions, capitalists or socialists, rich or poor, black or white. They represent all of us. All of the above groups are present and participating in these rallies. The protestors aren't necessarily anti-capitalist or anti-corporation per se. They are anti the current system. The system that they have no influence over and yet controls their lives. The system that has seen average real wages remain flat for decades while inflation slowly exacts its insidious costs. The system that pushes forward fake politicians with movie star smiles, populist rhetoric and polished speaking styles, whose sole mission once elected is to maintain the status quo for the wealthy individuals and corporations that got them elected. The system that prints out of thin air and borrows from third world China and elsewhere trillions of dollars to bail out the wealthy while sending the bill the average taxpayer. The system that will produce, for the first time in the history of the United States of America, a current generation of young citizens who will be worse off than their parents were before them. That's what I think the protestors are all about and I support it 100%. Occupy Wall Street is creating the next economic punctuated equilibrium moment and I say the sooner the better. Have a great weekend. Brian * Fator Securities LLC, Member FINRA/SIPC, is a U.S. entity and a member of the Fator group of companies in Brazil. The comments below are from Brian Rogers, who is employed by Fator Securities (Brian's opinions are his own and do not constitute the opinions of Fator Securities or the Fator group of companies). Fator Securities LLC is not affiliated with Zero Hedge or any third party mentioned in this communication; nor is Fator Securities LLC responsible for content on third party websites referred to in this communication. This material was not prepared by Fator Securities LLC. U.S. Persons seeking further information must contact Fator Securities LLC in New York at (646) 205-1160. This material shall not constitute an offer to sell or the solicitation of any offer to buy (may only be made at the time qualified participants are in receipt of the requisite documentation, e.g., confidential private offering memorandum describing the offering, related subscription agreement, etc.). Securities shall not be offered or sold in any jurisdiction in which such offer, solicitation or sale would be unlawful or until all applicable regulatory or legal requirements of such jurisdictions have been satisfied. This material is not intended for general public use or distribution and is intended for distribution only to appropriate investors. The opinions contained herein are based on personal judgments and estimates and are, therefore, subject to revision. Past performances are not indicative of future results.
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| COMEX Commercial Silver Net Shorts Lowest in Eight Years Posted: 07 Oct 2011 10:52 AM PDT Special Got Gold COT Flash Report --Large traders the CFTC classes as "commercial" report lowest combined net short position for silver since April 1, 2003. --COMEX Commercials reduce net short bets on silver by 60% past month as silver drops 28.5% - position suggests low confidence in lower silver prices. To put the silver changes in our usual format, as silver fell $1.84 or 5.8% Tuesday to Tuesday, from $31.88 to $30.04, commercial traders reduced their collective net short positioning by a large 5,339 contracts (22%) to show just 18,923 contracts net short. The total open interest edged 912 contracts lower to 101,102 open.
Indeed, we have to go all the way back to April 1, 2003 to find a lower commercial net short position for silver futures (15,845 contracts then with silver then $4.43). Just below is a much longer term chart of the silver LCNS for reference. Apologies are in order. This is a very large chart and it has to be reduced quite a bit to appear in this format.
The last time that the relative commercial net short positioning was below a very low and very bullish 18.7% was also in that April 1, 2003 COT report, when the LCNS;TO came in at 17.8% (with $4.43 silver). Clearly we can say that the large commercial traders have taken advantage of the current drop in the silver price to get the heck out of a huge portion of their formerly underwater net short positions. Indeed, as of Tuesday, they had reduced their net short positions to the equivalent of where they were with silver bottom hugging at $4.43 eight years ago.
Does that mean that silver is set to rally sharply? No, not necessarily, of course. Anything is possible short term, especially with all the angst out there and potential black swans circling (and landing). But what we think it does mean is that the heaviest of the "heavy hitters" in silver futures are positioning as though they really don't want to bet on a falling silver price very much. As a matter of fact, in the Bank Participation in Futures report, issued monthly by the CFTC, we note that the less-than-four reporting U.S. banks in silver futures reported a net short position of "only" 14,388 COMEX contracts, a reduction month-on-month of 9,471 lots (39.7%) to their smallest nominal net short positioning since July 1, 2008 – just ahead of the 2008 Panic (6,177 contracts net short then with silver then $18.10).
Interestingly, although the U.S. banks are at their lowest nominal net short positioning for silver futures in three years, what net shorts they still have actually rose as a percentage of all commercial net short positions – from 50.44% to a relatively high 76% as of Tuesday. That is in part because the commercial net short position is itself quite low at "only" 18,923 contracts net short.
Bottom line: The market price of silver is liable to do anything very short term, but the largest of the largest commercial traders are positioning as though they believe that silver has a great deal more upside than the opposite. For the week silver down $1.84 or 5.8% - LCNS down 5,339 or 22% - to the lowest LCNS in 8 years. This suggests little confidence by the comercials in lower silver prices looking ahead.
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| Jim Rickards: Who’s the Sucker at the Global Gold Poker Table? Posted: 07 Oct 2011 10:39 AM PDT from King World News:
Jim Rickards continues:Read More @ KingWorldNews.com
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| The Nature of Money and Our Monetary System Posted: 07 Oct 2011 10:34 AM PDT by Johnny Silver Bear, SilverBearCafe.com:
One of the most important aspects of your financial survival concerns your understanding of the nature of money. If you believe that precious metals do not constitute "money", you may have been misled. If you have been misled, who misled you? Why? And "What's wrong with this picture"? Read More @ SilverBearCafe.com
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| Silver is as Good as (or Better Than) Gold Posted: 07 Oct 2011 10:25 AM PDT by Adam Courtenay, TheNational.ae:
And then, all of a sudden last month, gold experienced a 20 per cent drop. Some say it was just a technical readjustment, what traders call a "reversion to the mean". Others point to the strength of the US dollar, which became increasingly attractive as the European debt crisis unfolded, causing a mass movement in its direction.
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| Market Snapshot: Financials Finish Weak On An Unchanged Week Posted: 07 Oct 2011 09:25 AM PDT Financials were the day's worst performers as already-priced-in downgrades from Europe, and absolutely not-priced-in talk of worrying liquidity upsets in RMBS markets, staggered them -3.5% pulling back to very fractionally above unchanged on the week. S&P futures managed a small loss on the second lowest volume day since 9/20 with some 'inhuman-looking' moves especially towards the close where ES ripped 20pts (with no support from risk) only to give it all back even quicker. FX also traded in very gappy mode today with some rips and dips - especially after Europe closed as the USD ended the day higher but down marginally lower on the week. TSYs weakened into the close with 30Y outperforming (and 7Y underperforming) post NFP this morning. Credit remained stubbornly weak into the close even as equities burst higher which is similar to commodities and oils in the last few hours as they dropped from their earlier highs and stabilized.
After all the excitement, XLF closed the week with a 0.17% gain - over 4% off its highs of the week but the major moves were more evident under the covers with MS ending the week +5.5% (-5.1% today with a very ugly close, CDS leaking wider all day long, and OTM put vols skewing up once again). MS is around 9% off its intraday highs from yesterday but 20% off its lows from early Tuesday). GS, BofA, and American Express all closed down on the week with WFC, GE, and JPM managing small gains. All the TBTFs closed at or very near the lows of the day today as volume picked up (perhaps as the details of the potential European exposures were discussed). We note that the earlier discussion on PrimeX seems to have shuttered that market as we have not seen a run all day and suspect some of the growing concerns at the lop-sided nature of dealer-positioning and immediacy of weak recoveries and jumbo mortgages might leave us with small doors and large crowds once again - perhaps why financials were relatively sold today as dealer scrambled for whatever liquid hedge they could find.
We noted earlier than credit underperformed in Europe and sure enough we saw credit underperform - especially into the close - as the US day progressed. Most ridiculous of all was the last hour or so when a wondering algo seemed to stumble upon an aimless ES. The evidence in the span of around 30 minutes was total dislocation from the normal trading environment - only to crash back to reality right before the cash market close. Volumes were lagging and lagged even more as we levitated - only to increase significantly again as we broke through VWAP and crashed back down to credit's reality. Credit's performance was mixed this week with GS +32bps, MS -60bps, BAC -17bps, WFC unch, and JPM -2bps - not exactly a resounding 'all clear' and when we look at TRACE data, corporate bond trading shows there was a major derisking in financials by the buy-side as (in order) MS, GS, JPM, CIT, BAC, DE, C, and DB all saw major net-selling as MS and GS saw the largest volume of trades. IG and HY were basically unch today but IG managed to compress 5bps on the week against intrinsics which closed almost unchanged on the week. The IG curve though notably flattened in 3s5s and steepened in 5s7s and 5s10s - perhaps reflecting the butterfly shifts in the TSY curve that has risen so much this week (corporates outperformed in the belly while TSYs underperformed relative to the wings).
FX markets were choppy all day but EUR closed at its lows of the day basically unchanged on the week. CHF was over 2% weaker against the USD and AUD over 1% stronger on the week though GBP was the strongest vs USD today. Gold underperformed on the week, still managing a 0.85% rise (more than doubling the -0.3% drop in the USD) as oil, copper, and silver huddled together around 4-4.5% gains on the week as Silver lost decent ground after Europe closed today.
All-in-all, a violent day to end a very aggressive week that saw equities leading risk higher only to pull back towards the close to a more reasonable 'CONTEXT'. It still seems like we will need an FX or TSY catalyst to pull equities off their pedestal here (and perhaps the downgrade concerns after-hours which modestly impacted the EUR before it closed will be enough) as risk assets in general are supportive of equities. Credit remains the one asset class that, medium-term, is not buying the strength suggesting the S&P remains 40pts rich here to current HY bond expectations. We suspect angst among the European chatter-heads will not resolve anything and the concerns in PrimeX will be the main talking point for masters-of-the-universe this weekend.
Charts: Bloomberg
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| Update On Wall Street Protests Posted: 07 Oct 2011 09:10 AM PDT WWII Vet to Wall Street Protesters: "I Am So Proud Of All You People" WWII and Other Military Vets Support Wall Street Protest A reader posted the following comment regarding the Occupy Wall Street protests:
I'm not certain whether the reader is one of these gentlemen attending the Occupy Wall Street protests:
In fact, military men of all ages support the protests:
Conservatives Support Protests Conservative Groups Support Protests Last month, I called on conservative groups to endorse the Occupy Wall Street protests:
Karl Denninger – one of the founders of the Tea Party – certainly supports the protests, even if he doesn't agree with some of the positions taken by some of the protesters. And yesterday, the Oath Keepers and a founding member of the Tea Party announced that they are supporting the protests: Common Ground Between Conservatives and Liberals As I've previously noted, both liberals and conservatives hate corporate socialism (where the federal government favors giant corporations at the expense of the little guy) . The Oathkeepers announcement zeroes in on this issue in a way that both conservatives and liberals can agree on:
While Michael Moore says that capitalism itself is the problem, Mr. Moore is wrong. As I've previously noted: Corrupt Politicians As Enablers of Corruption The Oathkeepers and conservative alternative media powerhouse Alex Jones also zero in on the Federal Reserve system as a core problem. As Oath Keepers notes in its announcement:
While progressives might assume that the Fed has helped the economy from getting worse, or that the importance of ending the Fed is being overhyped, top economists and financial experts disagree. See this, this and this. As I pointed out Monday, whatever people think the government should do, the D.C. politicos have actually been a large part of the problem:
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| Posted: 07 Oct 2011 08:54 AM PDT Dave Gonigam – October 7, 2011
The article described a growing number of informal groups, its members numbering in the hundreds, who trade a host of goods and services — language classes, baby-sitting, computer support, home-cooked meals — bypassing the euro. In the city of Volos, "the group's founders are adamant that they work in parallel to the regular economy," the paper reports, "inspired more by a need for solidarity in rough times than a political push for Greece to leave the eurozone and return to the drachma." In other words, it's not a matter of protest, but of necessity.
The Park Auto Mall recently accepted a 13-year-old buckskin quarter named Dallas for a trade-in. Its owner needed a used minivan. She had no money for a down payment, and no need for Dallas. Dealership owner Fred Najjar's kids always wanted a horse. Done deal.  In the last two months, Najjar has also accepted a professional Canon camera and an authenticated Thomas Kinkade painting. "Whenever the bank requests money down," says Najjar, "we suggest to the customer, 'What do you have to trade? Something you're not using.'"
Mr. Williams takes the government's skewed economic numbers and runs them the way they were 30 years ago. This morning, the Bureau of Labor Statistics issued its monthly nonfarm payrolls report. Let's examine the official numbers, and Williams' revisions…
According to the official report, employers added 103,000 jobs last month — not even enough to keep up with the natural growth of the population. Compared with all the other postwar recessions, the "recovery" looks somewhere between anemic and abysmal. The folks at Calculated Risk who faithfully maintain this chart concede they're running out of room and will have to expand it.  As of this morning, the nation has 6.6 million fewer payroll jobs than it did at the start of the official recession in December 2007.
"Looking back at 2008, Challenger Gray & Christmas presaged a huge amount of layoffs to come, well ahead of the employment report," he says in an interview with TheStreet.com." Recall from our report Wednesday that Challenger counted 115,730 firings last month — up 126% from the month before, and a 212% increase year over year. With that in mind, "We're going have some very weak jobs numbers in the coming months because of the Challenger Gray & Christmas numbers," says Mr. Pento. "In the next few months, we're going to see anemic numbers and then going negative in early 2012." And that's assuming no black swans arrive. As it is however, we're spying a virtual flock of them this morning.
"This would be a crisis that would be, in my view, more serious than the crisis in 2008," adds Shapiro, who runs the consulting firm Sonecon and worked in the Clinton administration Commerce Department. "We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France — that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected." "All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world."
A U.S. stock market that had traded up or slightly flat on the better-than-expected unemployment numbers turned decidedly south. The S&P is down nearly 1%.
The "right thing" in Mr. King's judgment is more "quantitative easing," which the Bank of England announced this week. No, it won't work any more than it worked in the United States. But that's not the point: The move is "pretty much a vote of no confidence in European officials," former Bank of England bigwig Richard Barwell tells Bloomberg. "Either the virus is already in the U.K. so they had to respond, or they don't believe the problem will be sorted out. I lean toward the second because of how much they've done."
"Bank of New York is going to go down," he declares to King World News. "Between Bank of New York Mellon and State Street, these two institutions have stolen between $6-10 billion from tens of millions of Americans' retirement savings accounts." On Tuesday, federal prosecutors and New York Attorney General Eric Schneiderman sued BNY Mellon, claiming it defrauded its clients by overcharging on foreign currency trades. Markopolos says he worked to bring the scheme to investigators' attention. "Every day, every time a state pension fund traded, the bank would steal approximately three tenths of one percent from every transaction," he explains. "As an example, every time a pension fund bought a currency, what the Bank of New York would do is look back 20 hours and assign all of the state pension funds purchase transactions at the high of the day." Assuming this took place and the pension funds did not agree to it, this would be a rather serve problem. We're not in a position to say whether Markopolos is on solid ground or not. We are in a position to say this adds more uncertainty to a landscape that's already tinder-dry and waiting for a spark. "America's economy in 2011 is a crumbling house of cards," says our short strategist Dan Amoss. "The 'recovery' they tout — it's held together by false statistics and worthless paper." Dan has constructed a six-part strategy to protect your portfolio no matter which spark sets off the wildfire. You can review it at this link.
Peter is hearing many anecdotes about shortages of physical silver. To wit: "I used to buy silver from a shop in Khobar in Saudi. From the last four weeks, they said they ran out of silver. I cannot find anyone who sells silver in Saudi now. I asked them from where do they get their silver. They said the UAE. The problem is they have only 1 kg bars… and I still cannot find any supplier." Forget the UAE, says Peter — and he should know, being based in Dubai. "Our information is that the 1 kg bars are all sold out too. We've also had feedback about low or no stock in Texas and Australia from big private bullion dealers there." With the disparity between high demand and low prices, "the snap back for silver prices now has the capacity to be sensational," Peter says, "and far beyond the mini-spike in the first few months of this year from $30 to almost $50 again. So those who go seeking out physical silver to buy at current prices are going to be very well rewarded and soon."
 "I believe we're in the middle of a temporary silver crash and now is the time to build up your holdings. In other words, silver is on sale."
"What was interesting is that everybody that was interviewed, including a former military guard that served there, says that there is no gold in Fort Knox. The entire Fort Knox thing is a sham." "That military person said that his platoon was issued rifles but never any ammunition, which he thought was odd and queried it until an officer told him that it was all for show, there was very little if any gold there. I guess when Nixon took the U.S. off the gold standard, it was because the gold stock was already starting to dwindle." "Other people that were interviewed said the government artificially depresses the price of gold. If people knew that there was no gold in Fort Knox, the price would be $5,000 an ounce. Try to obtain the episode and let us know what you think. I thought it was pretty scary." The 5: We missed it, but we do know Rep. Ron Paul has drafted a bill authorizing a top-to-bottom audit of the gold in Fort Knox. Unfortunately, he hasn't been able to line up a single co-sponsor.
"If you really want to do something for humanity, you could help us get rid of the Fed. Any group of private investors that can make nothing and charge you interest for it belongs in jail. It is like a tax on the air you breathe. The Fed's money does not exist, never existed and will not exist." "But of course, this will end up in the nut case file, and I do not care. It does not change a thing. The reality is that money exists only on a computer and the good graces of very kind, but not very bright humans." The 5: Um… Glad to see you've been paying attention for however long you've been reading… Have a good weekend, Dave Gonigam P.S. "Fascism," writes Ludwig von Mises Institute founder Lew Rockwell, "is the system of government that cartelizes the private sector, centrally plans the economy to subsidize producers, exalts the police state as the source of order, denies fundamental rights and liberties to individuals and makes the executive state the unlimited master of society." "This describes mainstream politics in America today." Lew teases out a host of implications in a thoughtful essay: He also demonstrates why the homeland fascist experiment is doomed to failure, and sooner rather than later. Give it a look in today's Whiskey & Gunpowder.
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| Can Gold Continue to Glimmer ? and Glitter? Posted: 07 Oct 2011 08:31 AM PDT In recent weeks, a number of market watchers and media headlines have declared that the gold "bubble is finally bursting" and the "gold rally is over." I disagree. First, I've never believed that gold was in a bubble. Second, I believe that prices for the precious metal are likely to remain high for the foreseeable future. Below*I outline 3 long-term factors*that support that view. Words: 833 So says Russ Koesterich, CFA ([url]www.isharesblog.com[/url]) in further edited excerpts from*an article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited ([ ]), abridged (…) and reformatted below, where necessary,*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 have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Koesterich gos on to s...
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| Gold Daily and Silver Weekly Charts - Anglo-American Bullion Banking Cartel at Risk Posted: 07 Oct 2011 08:28 AM PDT |
| GIABO & Crash JP Morgan, Buy Silver at #occupytulsa Posted: 07 Oct 2011 08:16 AM PDT Stacy Summary: Awesome pictures from #occupytulsa from Christopher King.
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| Posted: 07 Oct 2011 07:43 AM PDT
If there is one thing that matches John Paulson's dramatic conversion to the anti-Midas of our times, it is Tim Geithner's uncanny ability to say something only to be proven to be a pathological liar within months if not weeks (who can possibly forget: "Is there a risk that the United States could lose its AAA credit rating? Yes or no?" "No risk of that."). Now we can add hours. Because it was only yesterday that in testimony to Congress, he said in an attempt to be the latest to defend Morgan Stanley, that "The direct exposure of the U.S. financial system to the countries under the most pressure in Europe is very modest." Really? That's funny because none other than the Congressional Research Service said that U.S. bank exposure to the European debt crisis is estimated at $640 billion, according to Dow Jones. Wait, that is impossible: even Morgan Stanley, the bank that stands to see a bear raid if the CRS' conclusion is valid, said that its net exposure is negligible. And none other than CNBC confirmed that gross exposure is irrelevant, regardless that AIG taught us that in a state of insolvency contagion net becomes gross, and bilateral netting can be thrown out of the window (what happens when that counterparty you hedged your exposure with... goes bankrupt? Ask Hank Paulson, Lloyd Blankfein and Joe Cassano, they know). But wait there's more: "The CRS says, however, there are two other factors that could cause a dramatic reassessment. The estimate doesn't include U.S. bank exposure to European bank portfolios that include assets in the weak member countries. Also, it doesn't account for euro-zone assets held by money market, pension, and insurance funds. "Depending on the exposure of non-bank financial institutions and exposure through secondary channels, U.S. exposure to Greece and other euro-zone countries could be considerably higher." So... someone is lying you say? What is the take home here? That US exposure is $640 billion or "considerably higher" despite what Morgan Stanley and Geithner are lying? Not at all. The truth is the nobody has any idea how to quantify US exposure to Europe. But it is not only massive, but that all hedges that banks have in place will promptly be rendered worthless when the dominoes, and thus counterparties start falling. So the only conclusion is that anyone who tells you to ignore gross, or that the number is under control, is nothing but a pandering liar. And anyone investing based on such trite promises will guaranteed lose all their money. More from Dow Jones:
In conclusion we will ask any TV commentator, analyst, executive or simply bag of hot air to please read the following explanation why bilateral netting is a wrong, wrong, wrong concept when you have a global financial collapse. Unless of course, said bags, execs, etc, have an urge to sound like they have no idea what they are talking about...
But don't take our word for it: a former advisor to the IMF told all of this, and much more, to the BBC a few days ago:
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| COT Gold, Silver and US Dollar Index Report - October 7, 2011 Posted: 07 Oct 2011 07:39 AM PDT COT Gold, Silver and US Dollar Index Report - October 7, 2011.
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| Gold in Limbo as Range Tightens Posted: 07 Oct 2011 07:30 AM PDT courtesy of DailyFX.com October 07, 2011 06:46 AM 300 Minute Bars Prepared by Jamie Saettele, CMT “Gold’s plunge reversed just shy of its 200 day average, which hasn’t been reached in over 2 years! An impulse is unfolding from the high so expectations are for this rally to reverse near the current level and for gold to drop in a 5th wave to a new low.” Look lower in a 5th wave towards 1500 and 1478 (July low). Exceeding 1677 would shift focus to 1720 and 1762. Trend Strength (M,W,D) – 1, 0, (1) Latest Video Weekly Forecast COT...
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| No Return on Government Investments Posted: 07 Oct 2011 07:12 AM PDT The news was good yesterday. Investors heard that Europe had its problems under control. Then, Obama told them that he was going to give the economy a jolt. Investors breathed a little easier. The feds were on the case. The Dow rose 183 points. Meanwhile, bonds went down, with the yield on the 10-year note rising to almost 2%. Oil rose too, and ended the day trading over $80. Even gold went up — $11. Here's The New York Times' report on Obama's press conference: In perhaps his most sober remarks about the economy this year, President Obama on Thursday described the weakening economy as "an emergency" and made the case for his jobs bill as "an insurance policy against a possible double-dip recession." "Our economy really needs a jolt right now," Mr. Obama said… "This is not the time for the usual political gridlock," the president added. "The problems Europe is having today could have a very real effect on our economy at a time when it's already fragile." Mr. Obama proposes to spend $447 billion to reduce joblessness. He doesn't have $447 billion, of course. So the money has to come from elsewhere. Remind us how that works. You take $447 billion from people who are investing and spending…so you can give to other people. Why? So they can invest and spend! We must be missing something. Wait! Here is it…the NYT continues… To allay the concerns of Senate Democrats, Mr. Obama said that he could support their proposal to pay for the jobs plan by imposing a 5.6 percent surtax on individual taxpayers' income above $1 million. Oh…that must be it. The millionaires don't need the money. They don't spend it. But don't they invest it? Of course they do. The Obama plan is just another redistribution scam. You take money from one group of people and you give it to another group. Corrupt, degenerate and ineffective, right? Wrong. It's actually worse. Because government is a notoriously bad spender. It takes resources and wastes them. Its wars…its welfare programs…its prisons…its education…its subsidies and boondoggles — more often than not, these investments of capital are not just stupid and larcenous. They also destroy wealth. You put a dollar in. You get 50 cents back, if you're lucky. Federal spending on education has soared over the last 40 years. Guess how much higher test scores have gone. Go ahead, take a guess. Well…the answer is zero. Billions and billions invested. No return. Nada. Zilch. You're probably thinking…well…it may not pay off overall, but at least it pays for the student, right? Wrong. Guess how much the typical college graduate's income has gone up in real terms over the last 40 years. Go ahead, take a guess. Zero! Or how about spending money to fight drugs? Guess how effective that has been. Never mind…you know the answer. Or take spending on health care. The US spends far more on health care — both in terms of raw numbers and in terms of its GDP — than anywhere else. Compared to a nation such as Chile, for example, it spends more than twice as much. But do Americans live twice as long as Chileans? Nope. The Chileans live longer than Americans. What's the rate of return on all those extra billions we spend? Zero. Well, there's always national defense and police protection. That's where government knows what it is doing. "Political power comes out of the barrel of a gun," said Mao. So they must know what they're doing with guns, right? That's where we get our money's worth…a good return on our investment, right? Are you kidding, dear reader? We spend about as much as the entire rest of the world combined… but are we safer? Not a bit. At home, our crime rates are as high as almost any other country you care to look at — even though we keep a far larger percentage of our population behind bars. As for being protected from terrorism, US military spending probably brings a negative return; terrorists are more likely to target Americans because the Pentagon sticks its nose into everybody's business all over the planet. In short, government spending kills capital. It makes a nation poorer. It doesn't matter whether the money is taxed from the rich…or from the poor, the result is the same. Resources…real things of real value…are destroyed, used up, consumed…with little or no pay back. You ask…why is the US economy growing so slowly? Why can't it recover? Why do we seem to lurch from one crisis to another? Here's an answer: because more and more of the economy's resources are controlled — mismanaged…and misallocated — by the government. Some are directly misallocated — spent by the government itself. Others are indirectly misallocated — tricked into bad investments by the Fed's low interest rates, tax policies, regulations and subsidies. (For example, there has been an explosion in student debt since the crisis of '07-'09 began — up 300%. The government invests in a lot more "education." What is the return on investment?) Result: the economy stalls. The middle class is gradually ruined. The empire stumbles toward its eventual collapse. Bill Bonner No Return on Government Investments originally appeared in the Daily Reckoning. The Daily Reckoning provides over 400,000 readers economic news, market analysis, and contrarian investment ideas.
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| Ben Davies - Buy Gold, The Only Option Left is to Print Money Posted: 07 Oct 2011 07:10 AM PDT We are effectively going to try to create money out of thin air. Where are we going to get it from? Where does this end?
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2011 officially holds the record as the best year ever for 
Over the last few weeks there has been a growing realisation that the weaker members of the eurozone are caught in debt traps. When the "PIIGS" (Portugal, Ireland, Italy, Greece and Spain) signed up to the eurozone they gave up the right to devalue, which is the traditional and delusionary escape route for sovereign debtors. But when you come up against the realities of hard money, this route is blocked. A temporary solution has been to gets banks to buy government bonds, but the banks can take no more. This leaves us with a banking problem, but fortunately their solvency is being underwritten by the European Central Bank, without which the eurozone would have ground to a financial halt.
With gold and silver continuing to consolidate, today King World News interviewed KWN Resident Expert Jim Rickards, Senior Managing Director at Tangent Capital Markets, to get his take his take on the current crisis and what is happening with gold. When asked about his recent meetings with world leaders Rickards stated, "It's really important for me to get out, get around the world and meet with government officials, investors and others to get their perspective. It's not quite as US centric as you would think. For example, in the Middle-East and talking with our allies there, they are very, very focused on Iran."
As the editor of the Silver Bear Cafe, I try to focus on the ramifications of world events. I try to understand how what's going on now will affect your pocketbook next week, next month, next year. It is my sole intent to help you consider the possibilities which will, in turn, help you prepare for your financial future.
Everybody knows about the value of gold. For the past few years, since the global financial crisis set in, it has been the only asset type that has seemed unstoppable. Every time it reached an impossible high, it rallied even further. Every sign of bad news from the world economy was a signal for gold to move into uncharted territory.
"Battered by Economic Crisis, Greeks Turn to Barter Networks," read a headline from last weekend's New York Times.
"Auto dealer takes horse as down payment for used car," reads a headline from the Pinellas Park Beacon in Florida — demonstrating that America is farther down the road to Greece than many might like to admit.
Unemployment has reached a postwar record, according to ShadowStats.com's John Williams — demonstrating that other businesspeople might have to adopt Mr. Najjar's practices if they hope to keep getting customers through the door.
"Layoffs are more of a predictor" of the jobs picture these days than the government report, says Michael Pento, the newest addition to our team of analysts.
Assuming euro leaders don't come up with a solution to their crisis, and soon, "I believe within perhaps two-three weeks we will have a meltdown in sovereign debt," predicts International Monetary Fund adviser Robert Shapiro, "which will produce a meltdown across the European banking system.
Right on cue, Fitch downgraded the sovereign debt of Italy and Spain after the close in Europe, around lunchtime in the United States.
"This is the most serious financial crisis we've seen, at least since the 1930s, if not ever," adds Bank of England chief Mervyn King. "We're having to deal with very unusual circumstances, but to act calmly to this and to do the right thing."
Then there's the possibility of a banking crisis that starts in the United States, independent of anything going on in Europe. That's the scenario raised by Harry Markopolos, the man who blew the whistle on the Bernie Madoff fraud.
Precious metals are drifting lower as the week winds down. Gold has settled to $1,634, while an ounce of silver fetches $31.07.
"If you can find any silver these days, you will pay quite a substantial premium over the spot price," writes Peter Cooper, one of Addison's contacts in the Middle East. "But pay it because that is probably still a bargain compared to where silver prices are going."
"Earlier this year," adds our resident rockhound Byron King 
"I watched Brad Meltzer's 'Decoded' last night on the History Channel," a reader writes. "It was about Fort Knox."
"I get a kick out of all the space and energy about nothing," writes another after yesterday's issue about chasing yield. "T-bills and bonds do not exist will not exist and are nothing but nothing. They are made from nothing. Why would you complain about getting a measly 1.5% interest on your 'money' when it does not exist?"| 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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