Gold World News Flash |
- Peter Schiff - Lots of Upside Left in the Gold Bull Market
- Robin Griffiths - Global Bank Crisis Will Push Gold Over $2,000
- Gold Seeker Closing Report: Gold and Silver Gain Almost 2% and 3%
- LOL – This Stock Market Rally Is For Suckers
- Peak Silver Revisited: Impacts Of A Global Depression, Declining Ore Grades & A Falling EROI
- History Channel's 'Decoded' program on Fort Knox is posted at YouTube
- Putin's New Vision of "Eurasia"
- GoldMoney's James Turk interviews Oroyfinanzas founder Marion Mueller
- Precious Metals Market Report – 10.13.11
- Gold -- September 2011 Month End Developments -- Gold at $1624.70*
- Erste Group Reveals Stunner: Reports Billions In Previously Undisclosed Underwater Sovereign CDS; Who Is Next? And How Much More Is Out There?
- Hedging With Gold Against Imminent Economic Collapse
- Gold Miners’ M&A Trend Shifts
- China Currency Bill: Politics vs. Economics
- Quick Update
- The Wonder Years
- If The Gold Price Passes Above $1,675 It Might Rally To $1,725
- Gold and Silver Rise / Dexia Bank Nationalized
- Our Gold and Silver Business Has Never Been Better
- Robin Griffiths: Global Bank Crisis Will Push Gold Over $2,000
- Russell Napier On The End Of Supply & Demand, Bank Nationalizations As An Upside Catalyst, And Relative East Vs West Value
- Ian Gordon: Hedging With Gold Against Imminent Economic Collapse
- Gold Miners’ M&A Trend Shifts
- Functionally Bankrupt
- GREATER DEPRESSION POSTPONED?
- 100 FASCINATING FACTS
- Silver?s Expected Outperformance Will Cause Gold:Silver Ratio to Decline
- Gold Daily and Silver Weekly Charts - La Douleur du Monde - Dec Gold Futures
- Inflation, Deflation, Stagflation – All Will Benefit The Gold Price
- Airbus Parent Warns French Banks Having Further Liquidity Issues
| Peter Schiff - Lots of Upside Left in the Gold Bull Market Posted: 10 Oct 2011 05:55 PM PDT  With global markets continuing to gyrate along with gold and silver, today King World News interviewed Peter Schiff, CEO of Europacific Capital. When asked about the recent rally, Schiff responded, "Well the rally seemed to be inspired by the fact that Germany and France are claiming they have a solution to the banking problem. I don't know that they have shown anybody what the solution is, but apparently that was enough for an oversold market to rally."
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| Robin Griffiths - Global Bank Crisis Will Push Gold Over $2,000 Posted: 10 Oct 2011 04:02 PM PDT  With gold, silver and stocks rallying, today King World News interviewed one of the top strategists in the world, 40 year veteran Robin Griffiths of Cazenove. Cazenove is one of the oldest financial firms on the planet and is widely believed to be the appointed stockbroker to Her Majesty The Queen. KWN wanted to get Griffiths thoughts on the action in gold, but first we asked about the reason for the rally in stocks and what is happening in Europe, Griffiths responded, "The cause of the rally in Europe is that Angela Merkel, the Chancellor of Germany and Nicolas Sarkozy, the President of France, have had a meeting and they are coming up with a plan. So far there are no details about the plan other than the total agreement that we need a plan. So it's a plan to have talks about making a plan later is what we've got."
This posting includes an audio/video/photo media file: Download Now | ||
| Gold Seeker Closing Report: Gold and Silver Gain Almost 2% and 3% Posted: 10 Oct 2011 04:00 PM PDT Gold climbed higher throughout most of world trade and ended near its New York noontime high of $1674.72 with a gain of 2%. Silver rose to as high as $32.323 and ended with a gain of 2.8%.
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| LOL – This Stock Market Rally Is For Suckers Posted: 10 Oct 2011 03:21 PM PDT from The Economic Collapse Blog:
Hey, have you heard? The stock market is absolutely soaring right now. The Dow was up 330 points on Monday, and overall the Dow has risen by more than 10 percent since October 3rd. So should we all be throwing our money into the stock market in order to take advantage of this tremendous rally? Well, if you actually believe that the sovereign debt crisis has passed and that we are no longer on the verge of a massive worldwide financial crisis then I have a bridge that I would like to sell you. The stock market may be soaring, but absolutely nothing has been solved. The truth is that this stock market rally is for suckers. The primary reason why stocks rose today was because German Chancellor Angela Merkel and French President Nicolas Sarkozy promised that they would reveal a "comprehensive response" to the European debt crisis by the end of this month. When pressed for specifics, Sarkozy stated that "now is not the moment to go into the details." So do global financial markets really have a legitimate reason to be giddy about the super secret plan cooked up by Angela Merkel and Nicolas Sarkozy, or are Merkel and Sarkozy just blowing a bunch of smoke? Read More @ TheEconomicCollapseBlog.com
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| Peak Silver Revisited: Impacts Of A Global Depression, Declining Ore Grades & A Falling EROI Posted: 10 Oct 2011 03:01 PM PDT Submitted by SRSrocco The world is about to peak in global silver production. This will not occur due to a lack of silver to mine, but rather as a result of the peaking of world energy resources, declining ore grades, and a falling Energy Returned On Invested – EROI. The information below will describe a future world that very few have forecasted and even less are prepared. This is an update to my previous article Peak Silver and Mining by a Falling EROI. In my first article I stated that global silver production may peak in 2009 if we were to enter a worldwide depression. We did not have the global depression as massive central bank printing and bailouts have thus far postponed the inevitable. Full report (pdf)
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| History Channel's 'Decoded' program on Fort Knox is posted at YouTube Posted: 10 Oct 2011 02:09 PM PDT 3:05a BST Tuesday, October 11, 2011 Dear Friend of GATA and Gold: The Fort Knox episode of "Brad Meltzer's 'Decoded'" on the History Channel, first broadcast on October 5, an episode in which GATA has a major part, has migrated to YouTube in three installments: http://www.youtube.com/watch?v=IXXMSduH6YE&feature=share http://www.youtube.com/watch?v=R55IuZArAcY&feature=related http://www.youtube.com/watch?v=krhgH8D6rdI&feature=related 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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| Putin's New Vision of "Eurasia" Posted: 10 Oct 2011 02:06 PM PDT [FONT=Times New Roman]Many western politicians have harbored deep suspicions of Russian Prime Minister Vladimir Vladimorovich Putin since he first emerged on the Russian political stage in 1999. This is hardly surprising, given his KGB background, though those with longer historical memories will recall that Yuri Andropov came from the same organization and that the West grudgingly found a way to work with him. While the worst aspects of the Cold War faded away with the peaceful collapse of the USSR in late 1991, twenty years later, trying to figure out Kremlin politics remains as vital an exercise as ever, and the "Putin era" has provided Washington analysts desperately reinventing themselves to hang on to their jobs with rich fodder. Is Putin a democrat? Stalinist? Or something in between? Place your bets. What does seem to be apparent, with last week's announcement that current President Dmitrii Medvedev would stand down in next year's presidentia...
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| GoldMoney's James Turk interviews Oroyfinanzas founder Marion Mueller Posted: 10 Oct 2011 01:30 PM PDT 2:20a BST Tuesday, October 11, 2011 Dear Friend of GATA and Gold: GoldMoney founder and GATA consultant James Turk interviewed Marion Mueller, the founder of Spain's gold-oriented Internet site, Oroyfinanzas.com, during GATA's Gold Rush 2011 conference in London in August. They discussed the collapse of the world financial system, the need for a new system based on sound money, and Spain's awful economic circumstances. Mueller noted that most of the world's gold is mined in Spanish-speaking countries but those countries are not well-informed about gold's crucial place in a more democratic international financial order. The interview is 15 minutes long and you can watch it at the GoldMoney Internet site here: http://www.goldmoney.com/video/mueller-turk-interview.html?gmrefcode=gat... Oroyfinanzas is one of the sponsors of the third annual Madrid Gold and Silver Meeting, to be held Wednesday, November 16: http://www.gata.org/node/10539 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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| Precious Metals Market Report – 10.13.11 Posted: 10 Oct 2011 01:14 PM PDT By Catherine Austin Fitts We have a lot to talk about. Events in the financial and precious metals markets are a clear indication of the tremendous change underway. I am back in Tennessee and headed east on Thursday to join Franklin Sanders for dinner and the Precious Metals Markets Report. Also [...]
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| Gold -- September 2011 Month End Developments -- Gold at $1624.70* Posted: 10 Oct 2011 12:14 PM PDT With September finished, we can see that the long-term momentum backdrop is now negative. The monthly 14-period stochastic oscillator has decisively turned down. Indicator readings are declining at elevated levels ... Read More...
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| Posted: 10 Oct 2011 12:03 PM PDT from ZeroHedge:
Anyone looking at a heatmap of European markets today will see a sea of green punctuated by a very red island in the middle. The culprit: Austrian mega bank Erste, which issued an ad hoc and very unexpected press release, in which it warned that losses in its Hungarian and Romanian books would lead to a 14% hit, or €1.1 billion, to tangible book value, something that in itself is not a surprise to anyone (except the stress test). After all, since early 2010, most have known that due to Swiss Franc-based mortgage exposure, Hungary is next to follow in the PIIGS footsteps, and its collapse has so far been delayed due to lower overall public and private sector leverage. What was, however not only a surprise, but a shock, was that Erste disclosed some major losses on its €5.2 billion CDS portfolio, consisting of "EUR 2.4 billion related to financial institution exposures, and EUR 2.8 billion related sovereign exposures". Why is this a surprise? UK-based financial advisory Autonomous explains: "The fact that Erste had a sovereign CDS portfolio which was not marked-to-market has left many investors scratching their heads. As a reminder the EBA stress test data showed Erste to have zero sovereign CDS exposure within its sovereign mix compared to the €2.8bn it now appears to have 'fessed up' to (taking a cumulative €460m hit).
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| Hedging With Gold Against Imminent Economic Collapse Posted: 10 Oct 2011 11:56 AM PDT from GoldSeek.com:
After leaving the securities brokerage industry in 2009, Ian Gordon founded Longwave Analytics and Longwave Strategies to focus on protecting investors from what he believes is a global macroeconomic meltdown that is already underway. Gordon proposes that physical gold and certain gold stocks will be investors' best hedge and overall solution to the worst financial crisis the world has seen. In this exclusive interview with The Gold Report, Gordon shares his thoughts on the current economic mess and how investors can take action now. The Gold Report: You founded this firm based on your long wave theory that is based on the Kondratieff Cycle. How is this same or different from Kondratieff? Ian Gordon: We have gone significantly beyond Kondratieff's original thesis published in 1925. I am very proud that we have made the cycle far more encompassing than Kondratieff would have ever envisioned. For instance, one of the key things we have done is identify an investment cycle within the long cycle. This is an extremely valuable tool for investors, which allows them to make appropriate investment decisions in each quarter of the cycle
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| Gold Miners’ M&A Trend Shifts Posted: 10 Oct 2011 11:53 AM PDT Author: Vedran Vuk Synopsis: Gold's recent price drop has brought a change to merger and acquisition activity among miners; such deals are also being viewed more cautiously than during the M&A boom. Dear Reader, Many articles have already been written about the fallacies behind the Occupy Wall Street protests. Yes, the majority of protestors are ill-informed commies; I get the picture. However, I want to address one idea prevalent among Occupy Wall Street, the Tea Party, and almost any other political group. It's the idea that we should get corporate money out of Washington. At first, this makes perfect sense, but a closer look at the problem reveals that it's a bit more complex. What Americans should really rally against is crony capitalism, interventionism, and special favors. Lobbyists can sometimes be on the side of good and sometimes on the side of evil, but t...
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| China Currency Bill: Politics vs. Economics Posted: 10 Oct 2011 11:45 AM PDT The latest move onChina politics at Washingtonis the China currency bill, due at the U.S. Senate on Tuesday, Oct. 11. The proposal would levy tariffs on China and four other Asian countries for artificially depressing the value of their currencies to boost their exports. To us, it seems evident that those in Washington have not thought this through completely (or chose to ignore). Here is how the math would work. According to the government trade data, China imports from the U.S. about $57.7 billion for the first 7 months of 2011 ($100 billion annualized), and the number will only grow with increasing Chinese household income. So just based on pure math,the Big Question #1 is this: How many American jobs will be lost if the U.S. loses all or even part of the $100 billion annual export business with China when China retaliates with similar tariffs on U.S. goods? The same math works for the U.S. imports from China, which is at about $374 billion annualized using the July 2011 year-to-date figure. So the Big Question #2is: How much damage would the U.S. tariff on Chinese imported goods do to the pocketbook of American business and consumers? It seems many are quite fixated on the trade deficit number the U.S. has with China. However, as the table (showing the top 10 countries) and chart below illustrates, America runs trade deficits with many other trading partners, not just China. And realistically, the total trade deficit of $160.4 billion for the first seven months of 2011, even if completely reversed to zero, is a tiny drop in the big bucket of the $14-trillion U.S. economy. The point is that even if China revalues Yuan to Washington's satisfaction, it will not have the significant impact to the U.S. economy and jobs as some are led to believe.
One strong support of this currency bill is that by keeping the Chinese Yuan artificially low, many American jobs have lost/outsourced to China; whereas in fact,tax is actually one of the biggest considerationsthat U.S. corporations have moved operations overseas, including China. Another reason China has become attractive to many western firms (including the U.S.) is the access to a large and highly educated work force on a lower pay scale. Due to the long ingrained cultural belief that values higher education,China has too many college graduatesthat the domestic economy can't fully absorb yet. Apple, for example, has a huge China operation with Foxcom producing its popular i products, but hit a wall at Brazil. Reuters reportedthat Apple's $12 billion iPad deal with Brazil came to a screeching halt partly due to "Brazil's own deep structural problems such as a lack of skilled labor,"high taxes and bad infrastructure. In addition todecades of anti-business policies, including unfavorable tax treatments and bureaucratic regulations, to disincentivize establishing business at home, the U.S. also has similar structural problems to those of Brazil in labor and infrastructure. A few forecasts we have seen so far already indicate that the U.S. isnot producing enough college educated work forceto even fuel its normal growth. On the infrastructure side, according to the estimate by the American Society of Civil Engineers (ASCE), America is in need of $2.2 trillion investment to high-grade the aging and outdated infrastructureup to where they should be. Now, since the central focus of this latest currency bill is China's "currency manipulation", we can take a look at other countries that have also dabbled in this sport. For instance, Japan has repeatedly intervened in the currency market over the years. So, does the massive unprecedented G7 Yen intervention in March count? How about when Swiss National Bank (SNB) vowed to "defend" the minimum EUR/CHF exchange rate at 1.20 with some very sizable interventions in the open currency market? The two aforementioned examples may all have perfectly legitimate reasons, but they highlighted the fact that no country wants a strong currency which hurts its export business. Many central banks have intervened in the currency market (some well publicized, some more "discrete") when its currency put the country at a disadvantage. And these past interventions will not be the last either. On that note, China most likely could make a fairly good argument that the U.S. Fed's programs ofQE's,Twist, the rising federal deficits, and debt are all just part of the effort by the U.S. government todebase the Dollarin order to have the trade advantage over rival currencies as well. Also from a logical point of view, should the bill not be amended to include all of the U.S. trading partners who have engaged in currency intervention activity? If so, thenthe Big Question #3would be: Is the U.S. ready for a global trade war? So it is quite hypocritical for the politicians at Washington to single China out when there are many other countries (including the U.S.) doing exactly the same thing. What it comes down to is that many U.S. politicians are facing reelection in 13 months, and China currency bill is one easy mark to show voters that they are doing something to address the unemployment issue. However, one such bill would come with a hidden high price tag and serious repercussion to the U.S. economy that taxpayers can not afford to foot. Even if Washington has the answers and contingency plans in place for the3 Big Questionsasked herein (which is highly improbable, and also begs the question of risk/reward and value-add), the currency bill is nothing more than politics to save their own jobs in the next election, instead of one with any kind of economic considerations. Frankly, in light ofthe U.S. debt and deficit shamble, lawmakers would be much better off focusing on cleaning the fiscal house (and not to repeat the embarrassingdebt ceiling debateto get yet anothersovereign credit downgrade), instead of spending precious time and energy taking on China and/or any of the trading partners over currency valuation. ©EconMattersAll Rights Reserved |Facebook|Twitter|Post Alert|Kindle
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| Posted: 10 Oct 2011 11:44 AM PDT from TFMetalsReport.com:
First, watch the overnight action very closely. On past American bank holidays where the PM price has risen, the metals have subsequently been raided on the Globex and LBMA, by The Cartel, in an attempt to immediately claw back the gains. President's Day in February and Labor Day last month come to mind. Additionally, someone blew out some silver right at the close…enough to drop price about 30 cents. Did the EE alert a few friends of their overnight intentions? We'll see… Read More @ TFMetalsReport.com
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| Posted: 10 Oct 2011 11:36 AM PDT Over 70 percent of GDP comes from personal consumption. For the past decade home equity and credit from other sources fueled growth because of falling household incomes. What happens when credit contracts and home equity evaporates? from mybudget360.com: In a debt based economy a credit crisis is similar to an uncontrollable virus spreading from house to house. The slow infection hibernated for decades until it went into a pandemic. It is troubling to see how the middle class is slowly being dismantled. However there is one silver lining of the home price correction. Americans spend most of their money on housing as we will highlight later in this article. The media never bothers showing a detailed budget to Americans since the average per capita income is $25,000 and they don't want to scare off people from purchasing that new trinket. Over 70 percent of our annual GDP comes from personal consumption expenditures. We are a spending nation but for the last decade, much of that spending came from the phony equity brought on by the housing bubble. Inflated home values really only benefit the banks at this point in time. With smaller incomes Americans would receive an automatic boost if they spent less of their smaller paycheck on housing. With credit contracting and home prices moving lower, there is little reason to believe that we will suddenly see a resurgence of debt based spending.
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| If The Gold Price Passes Above $1,675 It Might Rally To $1,725 Posted: 10 Oct 2011 11:35 AM PDT Gold Price Close Today : 1669.60 Change : 35.10 or 2.1% Silver Price Close Today : 31.944 Change : 0.986 or 3.2% Gold Silver Ratio Today : 52.27 Change : -0.531 or -1.0% Silver Gold Ratio Today : 0.01913 Change : 0.000192 or 1.0% Platinum Price Close Today : 1520.70 Change : 24.10 or 1.6% Palladium Price Close Today : 613.75 Change : 23.05 or 3.9% S&P 500 : 1,194.89 Change : 39.43 or 3.4% Dow In GOLD$ : $141.56 Change : $ 1.15 or 0.8% Dow in GOLD oz : 6.848 Change : 0.056 or 0.8% Dow in SILVER oz : 357.91 Change : -0.74 or -0.2% Dow Industrial : 11,433.18 Change : 330.06 or 3.0% US Dollar Index : 77.53 Change : -1.210 or -1.5% In perfect hindsight I erred Friday by concluding that the GOLD PRICE had made its third -- and fatal final failing -- attack on $1,675. Probably did that today, but then again if gold passes above that it might rally to $1,700 - $1,725 and make you think it was eating chili peppers and chewing garlic and on its way to the moon -- just before it fails again. Listen, if the GOLD PRICE gets through $1,750, y'all can point in my direction and laugh about how wrong I was, because that would prove it had begun rallying again. Till then, don't laugh too loud. Bottom of the GOLD PRICE range lies at about $1,595. Break below there brings a re-visitation to $1,535 or lower. Comex gold closed 1,669.6, up $35.10. Today the SILVER PRICE successfully broke through 3100c and closed Comex at 3194.4c, up 98.6c. Still, this leaves silver below still more formidable resistance at 3250c. Looking at the flag on silver's chart, today made no progress at all toward gainsaying that harbinger of lower prices. Both SILVER and GOLD could rally for a week or more to work off the present oversold condition and prepare for another leg down. Exercise caution. In the time after Germany invaded Poland in 1939 with its "Blitzkrieg" (Lightning war) and the beginning of the German offensive into the the Low Countries in spring 1940 the inactive lull war called "Sitzkrieg" (Sitting war). Folks began to wonder, before the lightning struck again, whether there would even be a war. Y'all know what they found out. Likewise today Greece has for all intents and purposes defaulted, with all that implies for the financial system and the euro flying apart. Yet nothing has happened, no follow-through. Don't be fooled by Sitzkrieg. The lightning will yet strike, dollar will rally, stocks, gold, and silver will fall, and central banks (like England's last week) will begin even more tsunamis of quantitative easing and whatever ever other monetary emetic they can imagine to pump up money supplies around the world. And it will have as much effect as throwing a feather into a jet engine. Today's trading was probably dominated as much by traders' holiday absence from the market as it was by anything else. US DOLLAR INDEX took a big fall today, but you need not search the headlines for the cause. Might find the catalyst there, but not the cause, for the cause is "the fullness of time." That is, dollar is correcting its long climb from 73.45 to 79.84, and this fall merely belongs to that correction. Dollar might yet fall to 77.25, about where the top trading channel lies, and give it one final Kiss Good-Bye. Do not, however, fall into the error of concluding that the dollar's rally has ended. You will pay dearly for that error. Yen went nowhere today, closed 130.37/Y100 (Y76.70/$1) or down a microscopic 0.02%. Flat. Euro was the big gainer, adding 2.01% to 1.3647. This left a gap up o'erleaping the 20 day moving average (1.3550), which points to higher prices. Still, till it crosses 138.25, bottom line of the trading channel, nothing meaningful has occurred. STOCKS rose a frenzied 330.60 or 2.97% today for a Dow close at 11,433.18 (S&P added 3.41% or 39.43 to 1,194.89). This did take the Dow through 11,200 resistance, but for what? Like one of those old grade B movies from the 1930s where the British expedition reaches the oasis as all are about to perish from thirst. So what? You're still stuck in the middle of the desert. Much good that does. Today's massive move merely brings the Dow to the bottom line of the Jaws of Death from whence it broke down at 11,600 in August. Stocks better start looking for that next oasis. When are people going to wake up and face it: stocks have been in a primary down trend (bear market) since 2000? 2007's higher high merely put a double top on that bear market, so stocks will languish to 2015 or longer. Stocks -- how Wall Street makes, and Main Street loses, its money. 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 Rise / Dexia Bank Nationalized Posted: 10 Oct 2011 11:31 AM PDT by Harvey Organ: Good evening Ladies and Gentlemen: Today is a holiday in Canada and Columbus day in the USA so trading was very thin. The big news was the carving up of Dexia Bank in Belgium/France and a new plan by Sarkozy and Merkel to save the Euro and Greece which will come at the end of the month…another "plan to plan". This will not work as the global financial scene will implode. Let us head over to the comex and see what transpired today. Read More @ HarveyOrgan.Blogspot.com
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| Our Gold and Silver Business Has Never Been Better Posted: 10 Oct 2011 11:26 AM PDT by David Schectman, MilesFranklin.com:
In the past, when prices fell, our business fell too. This simple "turn-about" is very significant. It signals the beginning of the end of the Gold and Silver Cartel. No matter how hard they lean on the price, it bounces right back due to massive physical off-take.
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| Robin Griffiths: Global Bank Crisis Will Push Gold Over $2,000 Posted: 10 Oct 2011 11:21 AM PDT from King World News:
Robin Griffiths continues: Read More @ KingWorldNews.com
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| Posted: 10 Oct 2011 10:28 AM PDT Following up to his must read September 20 presentation from the CLSA economic forum titled "Darkness on the Edge of Town" in which the core topic was the upcoming cliff in the capacity of monetary intervention to impact the economy (something which apparently did not prevent the BOE or the ECB to announce further monetary easing in the subsequent weeks, and which in our opinion will have no impact on the Fed as it eventually sets off on its own merry LSAP path), is the following interview given to Bloomberg TV in which the strategist, previously known for his bold S&P at 400 prediction, in which he defines the new regime as one where supply and demand no longer matter, and all is determined by centrally planning governments across the developed world. The conclusion is that while as a result of failed government policies the developed world stagnates, and the market tumbles, as a result of "earnings not holding up and thus driving stocks lower", it is Asia where any potential growth remains, and as such investors should take their dollar holdings and dump them in India (for example). One last topic was the imminent nationalization of numerous European banks (over and above what happened with Dexia, and the follows up from earlier today, Greek Proton and Danish Max). In some ways, Napier put his finger on today's market pulse when he said that investors will paradoxically like a bank nationalization as it will remove uncertainty if only in the short-term. "It is a very negative long-term thing for Europe" he says, but adds that "speaking to investors at the CLSA economic forum they are so convinced the euro is going to collapse that when it doesn't collapse, the market will probably go up." That said he concludes, "this is a major structural turning point and a bad thing for return on capital in Europe." Oh well, who cares about a year, or a month, or even a week into the future. Career risk is here and it is right now, and one must do precisely whet everyone else does.
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| Ian Gordon: Hedging With Gold Against Imminent Economic Collapse Posted: 10 Oct 2011 09:53 AM PDT The Gold Report: You founded this firm based on your long wave theory that is based on the Kondratieff Cycle. How is this same or different from Kondratieff? Ian Gordon: We have gone significantly beyond Kondratieff's original thesis published in 1925. I am very proud that we have made the cycle far more encompassing than Kondratieff would have ever envisioned. For instance, one of the key things we have done is identify an investment cycle within the long cycle. This is an extremely valuable tool for investors, which allows them to make appropriate investment decisions in each quarter of the cycle. TGR: Do you feel that you have legitimized the Kondratieff Cycle beyond theory and as a general principle? IG: Well, I think we have. The proof is in the pudding. We have been able to recognize exactly where we are in the cycle and envision what the implications are likely to be. I think we have been able to pinpoint that with a great deal of accuracy the critical aspects of the cycle a...
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| Gold Miners’ M&A Trend Shifts Posted: 10 Oct 2011 09:40 AM PDT Synopsis: Gold's recent price drop has brought a change to merger and acquisition activity among miners; such deals are also being viewed more cautiously than during the M&A boom. Dear Reader, Many articles have already been written about the fallacies behind the Occupy Wall Street protests. Yes, the majority of protestors are ill-informed commies; I get the picture. However, I want to address one idea prevalent among Occupy Wall Street, the Tea Party, and almost any other political group. It's the idea that we should get corporate money out of Washington. At first, this makes perfect sense, but a closer look at the problem reveals that it's a bit more complex. What Americans should really rally against is crony capitalism, interventionism, and special favors. Lobbyists can sometimes be on the side of good and sometimes on the side of evil, but they are not inherently the root problem. Let me make my point through an example. Suppose I'm a peanut farmer in South Carolina. One day the news reports on an unfortunate kid who died from a peanut allergy. In response, some Congressman overreacts. He wants new regulations on peanuts and educational programs to warn parents about the dangers of serving peanuts. Furthermore, he wants increased inspections of farms and records of all food manufacturers using peanuts. Naturally, this is pretty bad news for me and my fellow peanut farmers. We have to do something to stop the wave of regulations. Unfortunately, there are only a couple thousand peanut farmers in the US. In a democracy of 300 million, a few thousand votes won't get anyone very far. But couldn't the peanut farmers organize and inform others of the problem? Sure they could; but this won't help much because voting is always a package deal. Let's say the peanut farmers convince you of their case against the regulation. Now what? Well, there are two politicians running, and one of them has promised to protect the peanut farmers. You're going to vote for him, right? Probably not. After looking into the politician's stands, you notice that he supports a number of things that you're against, like abortion, universal health care, and the wars overseas. That's the package-deal problem. If one wants to support the peanut farmers, one's vote will support all sorts of perhaps undesirable views. One can't vote for the peanut farmers in a vacuum. As a result, the majority of people will not change their vote to help the peanut farmer – even if they sympathize with his position. At best, the peanut farmers may be able to convince their local Congressman to help them. The farmers could make a case for the economic interests of the community. What else could the peanut farmers do? They could create a peanut-farmer association that donates money to politicians to consider their issues. Through this method, they can influence their local Congressman as well as dozens of others across the country – particularly the ones on the appropriate agriculture committees. As a result, the peanut farmers who previously had no voice in a democracy of 300 million can be heard regarding issues that affect them. Here's the problem: Lobbyists are never satisfied with just defending their interests. After acquiring some friends in Congress, the farmers may ask for special favors. Why not throw in a special $10-million subsidy to the peanut farmers in the next $100-billion spending bill? The peanut farmers can get away with this subsidy for the same reason that lobbying is necessary in the first place – voters don't care enough about the subsidy. Would a $10-million subsidy to peanut farmers really change your mind about a politician who has spent billions? Probably not. The funds must get pretty large before the average voter cares (examples include the auto industry and financials). Hence, the bill passes unnoticed. In my opinion, the anger should be focused on these special favors – not on lobbying itself. Democracy has an inherent flaw, in that it often ignores minority interests. Whether one is a peanut farmer or dentist or restaurant owner or tech worker, the majority of citizens don't care about specialty groups. If there's some major regulation affecting your industry, the rest of the population will not come to your aid. It's not their fault. One can't keep up with every regulation; and then there's the package-deal dilemma mentioned earlier. Lobbying to defend oneself from government stupidity is not wrong. In fact, if corporations couldn't defend themselves against the government, the market would likely become much less free. I certainly wouldn't want to see a US where corporations had no defense against politicians like Barney Frank, Nanci Pelosi, and the gang. If we got rid of all the lobbyists, some things would improve and others would get worse. In short, I'm not saying that lobbying is a good thing. If anything, it has become a necessary evil for companies to protect themselves in a world where the government holds a very big stick. If the government were smaller and unable to grant special favors to companies and special interests, the number of lobbyist would naturally decrease. Next in the issue, Andrey Dashkov will discuss recent M&A activity in the gold sector. Things have slowed down but there's still some interesting activity happening.
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| Posted: 10 Oct 2011 09:14 AM PDT Addison Wiggin – October 10, 2011
We know, "yawn"… stretch. Until, well, you learn this city should be swimming in wealth. It's in the heart of Silicon Valley.
At $245 million a year, pensions and retiree health care take up half of the city budget. The figure will likely grow to $400 million by 2014. "Legally obliged to meet these costs," writes Michael Lewis in an eye-opening Vanity Fair piece, "the city can respond only by cutting elsewhere." "As a result, San Jose, once run by 7,450 city workers, was now being run by 5,400 city workers. The city was back to staffing levels of 1988, when it had a quarter of a million fewer residents." "It started in the 1990s with the Internet boom," Mayor Chuck Reed tells Lewis. "We live near rich people, so we thought we were rich." Result: Increasingly rich pay and benefits packages for the public-employee unions.
And that's just wages. "Our police and firefighters will earn more in retirement than they did when they were working," says Reed. "The city owes so much more money to its employees than it can afford to pay," reports Lewis, "that it could cut its debts in half and still wind up broke."
At that moment, pay and benefits for city workers ate up 80% of the budget. Now, the police and fire departments function with half the personnel they had pre-bankruptcy. There are effectively no other city services. "Do you know that some cities actually pave their streets?" city manager Phil Batchelor tells Lewis. "That's not here." He has a staff of one. "When she goes out to the bathroom," says Batchelor, "she has to lock the [office] door, because I'm in meetings, and we have no one else." The only real activity at city hall takes place on the steps outside, during foreclosure auctions. Supply is high in Vallejo: One in every 16 homes is in foreclosure. Between 2006-10, the average home price fell 66%.
That's according to the National League of Cities, which found a double-whammy: falling property prices cratering property tax revenue, and unemployment cratering income and sales tax revenue. "Those two sources of revenue were moving upward together during the boom," said survey director Christopher Hoene, "and they're now moving downward together during the downturn." Thus…
35,000 of those cuts came last month, according to the unemployment figures released on Friday by the Bureau of Labor Statistics.
British researchers writing this month in the medical journal The Lancet warn that an already stressed Greek health care system has been brought to the breaking point…
"In an effort to finance debts," the researchers write, "ordinary people are paying the ultimate price: losing access to care and preventive services, facing higher risks of HIV and sexually transmitted diseases and, in the worst cases, losing their lives." And what of the government workers whose pay is being cut — those who've managed to hang onto their jobs? They go on strike. Repeatedly. The country's two biggest unions staged a walkout last Wednesday that shut down the Athens airport. One protester from the government-owned power utility says, "We're prepared — we've blacked out the country before." And some of the protests turn ugly…  How faraway is this ugly reality in Greece — routine riots and strikes, blackouts, a crumbling health care system — in your own neighborhood? If a city like San Jose is scraping to hold everything together, how bad is it where you are? This is a question that gets to the core of our updated forecast. "I think we've suffered from a series of mass delusions," says the mayor of San Jose. Delusions indeed. We offered 10 such delusions on Page 271 of Empire of Debt. What happens next? You may have had a chance to view this scintillating video we just made to introduce new readers to The 5 and our research project Apogee over the weekend: 
Empty promises? Of course. Extend-and-pretend games? You bet. Spending from an empty pocket? Naturally. But this morning, it's good for more than 250 Dow points. Either that or it's because Netflix is backing off its idiotic plan to split up its streaming and DVD services. The S&P is up nearly 3%, to 1,188.
"The breakdown below 1,120 had the potential to be a short signal for investors, but the lack of confirmation the following day negated the bearish signal. Clearly, investors who decided to go short last Tuesday morning got shellacked when the market reversed."
Silver is also rallying, to $32.09.
"When risk aversion is the dominant market theme, the U.S. dollar is attractive. This has led to a large upward trend in the U.S. dollar against the Swiss franc. However, when the market is in a risk-appetite mood, capital will tend to leave the U.S. dollar to look for greater return in other baskets, and the USD/CHF is the vehicle to profit from a downward move." Abe recommended a trade accordingly; it has the potential for a 136% payout by Friday. Most of the trades he recommends play out in just four days in the one-of-a-kind market he follows. There's nothing else like it… as Abe enthusiastically explains here.
As prime minister, Lee Kwan Yew declared English as the language of business, government and public schools in 1965. Now at age 88, and out of power for more than 20 years, he makes a point of speaking Mandarin to his grandchildren. "I think it's a mistake" for ethnic Chinese parents in Singapore to speak to their kids in English, Lee told a business gathering on Friday. "They will learn English in school anyway and they should keep up their Mandarin at home so that the child will naturally speak Mandarin and find it easy in school."  The price of abandoning Mandarin? Chinese Singaporeans "would also not be able to take advantage of a rising China," sums up a CNN report, "and its attractive market of 1.3 billion people." Not that Lee thinks he was wrong. He explains all, we're told, in a book coming out next month. Of course he does.
"I await the day when the masses awaken to the fact that they are slave to the very few and their awakening to the power of the individual to a level where they start exercising their power to their own advantage. "Yes, I have confidence in the rising consciousness of the individual." The 5: Welcome.
"Now rates are near zero already, and that can't be used to stimulate, thus the slower rebound. Because rates are so low, the Fed invented QE1 and QE2. The results of that are unknown because it hasn't been done before. We are in different times." The 5: Indeed, this is no ordinary "business cycle" recession. It's a "balance sheet" recession — or depression, take your pick. Any recovery will likely be difficult until a host of debts are either paid off or liquidated.
"I'd sure like to know for sure, just for the fun of the fallout." The 5: Over the weekend we got around to watching the History Channel's installment of Decoded, all about Fort Knox, that a reader brought to our attention Friday. The most striking fact in the documentary is how in nearby Elizabethtown, "everybody knows" the gold isn't there. The show did little to explore what might've happened to it.
"I know that you understand enough about the global crisis to understand that if that happened, America would be facing disaster. "I wonder how many of your readers have asked themselves the following question: China has long linked its yuan to the dollar; what is the likelihood that, in the foreseeable future, and in panic, America decides to link the dollar to the yuan? Yoohoo!!! Everything will be reversed. It reminds me of the ancient Chinese saying: 'Man who lie on stomach have crack-up.' Figure it out! "Your 5 Min. Forecast is a treasure! Whoever invented it is a genius!"
"I have a question, or rather a comment: Why do almost all of the Agora-sponsored investment presentations end with the suggestion that you spend $99.00 to subscribe to a newsletter with 'all the answers' to your investment problems?" The 5: Um… well… that's how we stay in business. To maintain our editorial independence, with two exceptions, we don't accept advertising. So you — our paying subscribers — are our most important source of revenue.
The 5: You're a brave individual to even ask… Cheers, Addison Wiggin P.S. "In a grim sign of the enduring nature of the economic slump," The New York Times reports this morning, "household income declined more in the two years after the recession ended than it did during the recession itself…" During the "official" recession between December 2007-June 2009, household income fell 3.2%. In the two years that followed, it fell 6.7%. If income is down, that spells even less revenue for the states and cities that are already slashing services. The "Greek scenario" described above might be even closer than you think as the mother of all asset bubbles begins to implode.
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| Posted: 10 Oct 2011 09:13 AM PDT Can those in control keep the collapse from happening until 2015? Could the stock market rally for the next year? Could Congress come to an agreement on spending cuts and tax increases? Could Europe fend off default in Greece, Italy, Portugal and Spain? Here is an article that says that the collapse won't occur until 2015 [...]
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| Posted: 10 Oct 2011 09:07 AM PDT To take your mind of Occupy Wall Street, here are some neat facts every American needs to know from http://theeconomiccollapseblog.com/ The Top 100 Statistics About The Collapse Of The Economy That Every American Voter Should Know The U.S. economy is dying and most American voters have no idea why it is happening. Unfortunately, the mainstream [...]
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| Silver?s Expected Outperformance Will Cause Gold:Silver Ratio to Decline Posted: 10 Oct 2011 08:22 AM PDT [A]s we've consistently seen, when financial conditions get particularly rough, gold and silver lose their safe-haven appeal [but their]…prices may have already struck bottom and, [al]though we don't expect them to run away to the upside, now may be the time for long-term investors to accumulate positions. That said, what should an investor buy: gold or silver? That is always an interesting question, but especially so during periods of rapid price movements such as now. [Below I analyze the gold/silver ratio*and come up with the answer.] Words: 760 *So says the Hard Assets Investor ([url]www.hardassetsinvestor.com[/url])**in edited excerpts from*an article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited ([ ]), abridged (…) and reformatted below*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 integr...
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| Gold Daily and Silver Weekly Charts - La Douleur du Monde - Dec Gold Futures Posted: 10 Oct 2011 08:20 AM PDT | ||
| Inflation, Deflation, Stagflation – All Will Benefit The Gold Price Posted: 10 Oct 2011 08:06 AM PDT Gold is a non-national asset which becomes protection against inflation, deflation, and stagflation across the globe and it's these qualities that will force the monetary system to bring gold back into the global, monetary system. According to the Oxford English Dictionary:, Inflation, the general increase of prices and fall in purchasing value of money. Deflation, reverse or reversal of inflation. Stagflation, state of inflation without the corresponding increase of demand and employment. A situation arises where the quantity of money is not as important as how far its circulation reaches. It slowly becomes insufficient to buy the needs and wants of the population at the periphery of the economy. For instance in stagflation, there may be money around but it's not producing the economic flows that it should. This can also be tied to the extent of the circulation and the velocity of money itself. There may be sufficient money around but is becomes locked up in Treasury bonds and not lent into the economy to stimulate economic activity (such is the case now). Asset prices rise in this environment and further make inadequate the money for purchasing such assets. Alternatively, the reduction of money can happen in situations, like today, when mortgages are at an all-time low of 3.94%, but through fear of falling house prices (reducing creditworthiness) potential job losses and the consequential need to save for the rainy day, house buying drops off. Every situation produces a reduction in the available supply of money and precipitates liquidity crises. This is from where the major threat to monetary stability comes. In our global world, with its plethora of national currencies, a non-national asset becomes protection against inflation, deflation, and stagflation across the globe. Why should this be good for gold? Gold is both an international asset and international cash. It's the combination of these qualities (and the liquid nature of gold, in the most difficult of situations) that set it apart from paper money and other assets. It's these qualities that will force the monetary system to bring gold back into the global, monetary system in one way or another. "NORMAL" INFLATION Today in every country across the world, there is inflation -even when a country is in recession. When we hear the reports on inflation changes, we usually hear just one rate affecting the currency zone we live in. In reality there are several types of inflation, each driven by a different set of forces. The serious food inflation being suffered by much of the world has reached 70% in some parts of the world. This is a result of demand and supply pressures. The pressures on the poor are the most worrying from this source of inflation. Some households spend a large percentage of their income on food, so such rises have a serious impoverishing impact on their lives. In the developed world, where a much smaller percentage of disposable income is spent on food, such inflation is not as pernicious. To the investment world, the differences show the impact on the ability to invest, the shortage of liquidity for citizen's everyday lives. Where it's possible, this type of inflation can be managed by increasing the amount of food grown -so increasing supply and lowering local prices. Take a look at oil and other energy inflation. The fact that the oil price is easily managed by oil producers makes any inflation from this source manufactured to suit the needs of those people. As the world runs on oil, price rises affect everyone to a greater degree. Oil prices reflect the sum total of global demand. China, where economic growth is bringing the poor (i.e. low oil-utilizing population) into a world where oil takes a growing part of their lives, is seeing rapidly increasing demand. As half the world falls into this category, we foresee demand from that source growing almost exponentially. The developed world may be going through a falling demand phase, but this could fail to lower prices as the emerging world is more than compensating for such falls. ENERGY INFLATION Worse still, in the majority of nation's oil, demand represents a major import to every nation. The foreign exchange needed to pay for this has to come from the income from exports (except in the case of the U.S., where they have run a trade deficit for several decades through the printing of new money, which is a leading U.S. export). Oil price inflation is of a different nature as it affects profitability of business and therefore the economic performance of nations themselves. Falling oil prices have a stimulatory impact on nations as money rises in oil purchasing power, when oil prices fall. Again, we see an impact on general liquidity Oil price inflation is considerably more pernicious, for oil payments represent a draining of money from a nation because oil payments leave the developed world and arrive on the shores of oil producers, sucking wealth out of those oil importing nations. The same happens with cheap imports. Consequently, we're seeing a draining of wealth from the West to the East. The only way to stop this is to lower oil demand and raise the prices of imports (i.e. Protectionism). In today's global economy, this is proving no alternative The burden on smoothing out the three liquidity problem makers -inflation, deflation and stagflation-falls upon the shoulders of the country's central bank. CENTRAL BANK MONEY MANAGEMENT In terms of ensuring price stability, central banks have to balance the needs of their economy with the money supply available to it. Price stability is achieved when they succeed in balancing the two; however, with governments adding to their burdens by passing some of the responsibility for growth and economic stimulation onto them, they find that they're forced to bend the rules of price stability, and often. In the present economic climate, with a recession impending or underway, central banks across the developed world have turned to quantitative easing (significantly increasing money supply through money market and Treasury market operations) to increase money supply and overall liquidity to encourage the banks to find it easy to lend and give the economy the liquidity it needs to grow. This hasn't worked nearly as well as had been hoped, for the deflationary forces and slowing growth have discouraged bank lending -businesses and consumers have not sought this extra money. As a result, it has found its way into government bonds and bills against central banks using somewhat toxic assets as collateral There are two possible solutions:
A DIFFERENT TYPE OF INFLATION There is an analogy that may be useful to the reader. The human body needs blood to feed and nurture it. The body requires a certain volume of blood, going at a certain speed and circulation to the outer reaches and capillaries of the body. Interfere with these processes and the body loses its health. The Fed is the supplier of money and can to some extent influence the speed at which it travels. When the circulation slows, the Fed can add quantities of money to speed it up (i.e. quantitative easing). By lowering interest rates, it's hoped that the circulation is improved, and the speed at which the money travels regulates the nurturing ability of that money. But it takes government to exercise the body so that it makes its blood system healthy. When government fails to exercise, the blood systems come under pressure. Today we find central banks in a very difficult position because the additional money supply has simply expanded the volume of money without forcing its circulation to reach consumer levels effectively. It has found its way into unutilized 'pools' -banks and Treasury bonds where it's of little use to the economy overall. So, economic activity continues to shrink alongside dropping demand and employment. That's why the Fed, in a cleft stick, issued this statement, "The Fed "will continue to closely monitor economic developments and is prepared to take further action as appropriate to promote a stronger economic recovery in a context of price stability." Bernanke may not be finished after attempts in August, September to strengthen record monetary stimulus with unconventional tools. The central bank's near-zero benchmark interest rate and $2.3 trillion of housing and government-debt purchases since 2008 have failed to produce self-sustaining growth in the economy and employment. The Fed is scared of deflation; they're more concerned with preventing deflation rather than containing inflation. Deflation destroys businesses and wounds the economy, long-term. Inflation just drops the value of money. Source: Mineweb
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| Airbus Parent Warns French Banks Having Further Liquidity Issues Posted: 10 Oct 2011 07:55 AM PDT
A few weeks ago it was Siemens pulling money out of French banks, then it was the Chinese, now it is EADS' (Airbus parent European Aeronautic Defence & Space) turn to warn about French bank liquidity. From Dow Jones: "French banks are experiencing difficulties providing financing for aircraft purchases by airlines, a market that is largely dominated by dollar transactions, Louis Gallois, chief executive of European Aeronautic Defence & Space Co. (EAD.FR, EADSY), said Monday. "French banks clearly have problems financing aircraft purchases," he said, speaking on the sidelines of an event to launch a new French think-tank to promote the French industry. Mr. Gallois's comments come as French banks have indicated that they were planning to cut back on dollar financing, as raising dollars has become increasingly difficult." Not like any of this will come as news to anyone who does not get their news from the mainstream media, but it is something different to see it in practice. Net result: we now finally see why companies are hoarding so much cash on their books - in lieu of an insolvent banking system, they are all becoming their own vendor and customer financing providers! Luckily, a government subsidized EADS is not as insolvent as its peer banks: "EADS is cash rich, and is not faced with any problem when it comes to buying parts in dollars, he said. "We aren't experiencing any dollar shortage," he said, adding that "we know how to deal with it." More:
His assessment of the economy?
And with that out of the way, the panicked short squeeze may continue for the 5th day in a row. h/t London Dude Trader
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Turd's in charge of the 12 & under soccer carpool tonight so just a quick update.
We have been in business for 21 years and in all those years we have done over two million dollars in sales in a day only a dozen times. Six of those days occurred in the last 10 days. I realize that you have nothing to reference this to, but trust me, that is a LOT of business; especially for seven brokers. There are firms in our industry with 50 or more sales people who rarely ever do that much business in a day. It is a testimony to the quality of people who work for Miles Franklin AND to the insatiable demand for gold and silver. Twice, in the past six months, gold and silver have been crushed. In each case, almost immediately our phones start ringing off the hooks. The more my personal portfolio of gold and silver falls the more business at Miles Franklin increases. Our readers are among the most "with it" and highly educated investors out there! I take great pride in that fact and take some of the credit for their savvy investing. It tells me that I am not talking to the wall.
With gold, silver and stocks rallying, today King World News interviewed one of the top strategists in the world, 40 year veteran Robin Griffiths of Cazenove. Cazenove is one of the oldest financial firms on the planet and is widely believed to be the appointed stockbroker to Her Majesty The Queen. KWN wanted to get Griffiths thoughts on the action in gold, but first we asked about the reason for the rally in stocks and what is happening in Europe, Griffiths responded, "The cause of the rally in Europe is that Angela Merkel, the Chancellor of Germany and Nicolas Sarkozy, the President of France, have had a meeting and they are coming up with a plan. So far there are no details about the plan other than the total agreement that we need a plan. So it's a plan to have talks about making a plan later is what we've got."
It's a familiar story: a city strapped for revenue cuts back on services. The library is closed three days a week. The parks are looking a little scruffy. A community center was built… but there's no money to open it.
San Jose, Calif., has the second-highest per capita income of any city in the United States, behind only New York. It's one of the few cities to have a AAA credit rating. And it's… functionally bankrupt.
In 2002, the police secured an 18% pay increase for the next three years. Then the firefighters won a 23% increase. The cops cried foul and insisted on renegotiating. They won an additional 5%.
About an hour and 15 minutes north of San Jose is… well, not a mirror image, but maybe a funhouse mirror image. In 2008, Vallejo became the largest California city ever to file for bankruptcy.
Whether wealthy like San Jose, or destitute like Vallejo, the story is much the same. Half of U.S. cities have cut staff, canceled projects or raised fees this year to cope with shrinking revenue.
Since the September 2008 seizure of world financial markets, local governments have fired 535,000 workers.
What will this picture look like another year or two down the road? We need look no further than that poster child of insolvency, Greece.
Until the next wave of the crisis hits, it's "risk on." Markets everywhere are rallying on the following news from across the pond:
"From a technical broad market standpoint, not a whole lot has changed in the last week," advises 
Precious metals are also a beneficiary of today's rally. Gold is up to $1,668, the highest it's been in over two weeks.
With hot money moving into stocks and metals, the dollar has taken a thumping today. The dollar index is down more than 1.5%, to 77.4, also a level not seen since late last month.
"This week, the U.S. dollar may lose its shine," wrote our currency trading specialist Abe Cofnas to readers this morning.
The man who made English the first language of Singapore is now lamenting the fact his countrymen are losing touch with Mandarin.
"My apology for being quite unfair to you," writes the reader who took us to task Friday for our alleged failure to hold the Federal Reserve to account. "I have no knowledge of your books or movie. My prejudice is showing, and I hate prejudice.
"Regarding the unemployment chart in Friday's issue," writes another reader offering a more pointed critique, "It can be a study in the use of Federal Reserve interest rate management. In the early years, the rates were high, so when the Fed lowered them, it stimulated the economy and produced faster rebounds.
"I'm sure you read it the same way I do," writes a reader of our passing mention that Rep. Ron Paul can't line up a co-sponsor for his bill to audit the gold in Fort Knox. "They are scared it is not there. Just look the other way and ignore the scam. What a great Black Swan event: No gold. And the next conspiracy theory: Where did it go?
"For several years now," another reader writes about Europeans already reverting to national currencies, "the usage of deutsche marks has been increasing in southeast Germany."
"Just back from teaching in China (to which I'll return)," a reader writes, "I have to admit to you that the Chinese authorities are fed up with America's inaction on its deficit problem and are considering not raising the value of the yuan against the dollar, but, in fact, lowering it.
"I enjoy reading the 5 Min. Forecast in spite of the doom and gloom," writes a reader who manages to get the compliment… and the inevitable "yes, but" part into the same sentence.
"U.S. Customs at Dallas/Fort Worth International told me," writes a reader weighing in on face value versus bullion value of U.S. Gold Eagles, "that they value $50 Eagles at face value since they are U.S. currency."
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