Gold World News Flash |
- Ellen Brown: A Jubilee for Student Debt?
- London Trader - Sovereign Silver Buying, Middle-East Shortages
- Jim's Mailbox
- John Hathaway - Gold Price Will Soar on Failed Manipulation
- London Trader - China Bought Massive Amount of Gold Today
- Gold Seeker Closing Report: Gold and Silver Fall Over 2%
- Tocqueville's Hathaway muses about intervention against gold
- Chinese buyers love gold's dips in London, King World News says
- Life After Debt
- Harvey Organ's: The Daily Gold & Silver Report
- Explanation on Position Limits / Exemptions / Bank of America Loses Big Case on $8.5 Billion Settlement / Gold and Silver Raid
- THE BEAR IS ABOUT TO SINK HIS TEETH INTO THE LAST HOLDOUT SECTOR
- Gold Stocks to Retest Lows
- The Gold Price Broke Down Nearly Touching The 150 Day Moving Average Closing at $1,611.90
- Peter Schiff: Listener Questions 10/20/11
- If the “Occupy” Movement and Tea Party Join Together, We Can End the Malignant Partnership Between Big Government
- Student Loan Bubble To Exceed $1 Trillion: "It's Going To Create A Generation Of Wage Slavery" And Another Taxpayer Bailout
- Student Loan Bubble To Exceed $1 Trillion: "It's Going To Create A Generation Of Wage Slavery" And Another Taxpayer Bailout
- Ben Davies - Resetting of Gold in the Monetary System
- “It is a compensation scheme and nothing else…”
- Lawrence Lindsey Blames YOU for the Credit Crisis Plus my Weekly Market Update
- Invest in Gold – and the Chinese Renminbi
- Fed Dollar Swap Lines With Europe Soar To $1.9 Billion, Most Since June 2010
- Another down day for the Metals
- “It's disconcerting to see how connected things really are.”
- Gold Daily and Silver Weekly Charts - Risk Off on Euro, Metals Hit As Usual
- Four Facts that PROVE the EFSF Doesn’t Matter… At All
- Invest in Gold – and the Chinese Renminbi
- Last Chance to Own Silver at These Prices
- It's A Boat, It's A Plane, It's The Great Wall Of China: Part Of Symbolic Chinese Landmark Collapses
| Ellen Brown: A Jubilee for Student Debt? Posted: 20 Oct 2011 06:29 PM PDT Among the demands of the Wall Street protesters is student debt forgiveness—a debt "jubilee." Don't be fooled by GLD or SLV. Only GoldMoney offers real bullion allocated in your name.
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| London Trader - Sovereign Silver Buying, Middle-East Shortages Posted: 20 Oct 2011 06:08 PM PDT  On the heels of KWN reporting the Chinese buying massive amounts of gold yesterday, King World News has now interviewed the "London Trader" to get his take on the situation in silver. The source stated, "The price of silver has no reality to the paper market at all, absolutely zero reality there anymore. There is extraordinarily tight supply right now in Asia. When you order silver there is so little available at these prices, that's the trouble. You can order it all day long, but you are going to have to wait for it."
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| Posted: 20 Oct 2011 05:04 PM PDT German Bund sale undersubscribed as risky assets rise CIGA Eric Centralized governments, also known as debt junkies, are having trouble getting their fix. Short term trend changes US Treasuries and US Dollar confirm it. U.S. Dollar ETF U.S. Treasury Bond ETF The wolfpack, already wreacking havoc in Europe, will turn on the Continue reading Jim's Mailbox
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| John Hathaway - Gold Price Will Soar on Failed Manipulation Posted: 20 Oct 2011 04:39 PM PDT  With large fluctuations in the gold and silver markets, today King World News interviewed four decade veteran, John Hathaway, the prolific manager of the Tocqueville Gold Fund. When asked about tightness in the silver market in Asia and the Middle-East, Hathaway replied, "Well, that's very bullish. If there is retail support at these levels, that kind of backstops whatever is going on at the COMEX or behind the scenes at the various exchanges. So that's very positive."
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| London Trader - China Bought Massive Amount of Gold Today Posted: 20 Oct 2011 04:02 PM PDT  Gold and silver bounced off of the lows today because of massive buying from the Chinese. A trader out of London told King World News, "The price discount in gold is the most welcome thing to the entire Eastern Hemisphere. The Chinese are buying very relentlessly because they know what is going to happen. We had a major, major physical buy order today. The Chinese bought a massive amount of physical today at the lows."
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| Gold Seeker Closing Report: Gold and Silver Fall Over 2% Posted: 20 Oct 2011 04:00 PM PDT Gold dropped all the way to $1608.20 by a little before 4AM EST before it rebounded to $1630.17 in London, but it then fell to a new session low of $1603.87 by early afternoon in New York and ended with a loss of 2.07%. Silver saw a slight gain at $31.333 by a little after 10AM EST, but it then plummeted to as low as $29.948 in the next few hours of trade and ended with a loss of 2.79%.
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| Tocqueville's Hathaway muses about intervention against gold Posted: 20 Oct 2011 03:48 PM PDT 11:42p ET Thursday, October 20, 2011 Dear Friend of GATA and Gold: Interviewed today by King World News, Tocqueville Gold Fund manager John Hathaway muses that central bank intervention against gold may have been undertaken to defend negotiations for more sovereign bailouts. You can find an excerpt from the interview at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/21_J... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Golden Phoenix Signs Definitive Agreement to Acquire and Reopen Santa Rosa Gold Mine in Panama Company Press Release SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation. Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher. Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine. Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status." For Golden Phoenix's complete statement, please visit: http://goldenphoenix.us/press-release/golden-phoenix-signs-definitive-ac... 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 For Continuous Wealth Creation, the Hera Research Newsletter The life cycles of companies that produce natural resources allow investors to allocate assets among companies at different stages of development and to profit from transitions between stages. Based on natural resource company life cycles, the Hera Research Newsletter maximizes profits through deep, fundamental analysis at each stage of development and by moving gains back to earlier-stage companies in a continuous wealth-creation process. Hera Research covers a pipeline of high-quality natural resource companies at different stages of development. The companies span discovery and production of gold, silver, and platinum group metals, select base metals, oil and gas, green energy, agriculture, rare earth elements, uranium, and more. Discover the unique value of the Hera Research Newsletter by visiting: http://www.heraresearch.com/newsletter.html Or call Ron Hera at 360-339-8541x101.
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| Chinese buyers love gold's dips in London, King World News says Posted: 20 Oct 2011 03:39 PM PDT 11:40p ET Thursday, October 20, 2011 Dear Friend of GATA and Gold: King World News tonight quotes a London metals trader as saying that Chinese buying greatly enjoys buying gold as the big commercial shorts push the market down and try to extricate themselves. You can read the report at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/21_L... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT For Continuous Wealth Creation, the Hera Research Newsletter The life cycles of companies that produce natural resources allow investors to allocate assets among companies at different stages of development and to profit from transitions between stages. Based on natural resource company life cycles, the Hera Research Newsletter maximizes profits through deep, fundamental analysis at each stage of development and by moving gains back to earlier-stage companies in a continuous wealth-creation process. Hera Research covers a pipeline of high-quality natural resource companies at different stages of development. The companies span discovery and production of gold, silver, and platinum group metals, select base metals, oil and gas, green energy, agriculture, rare earth elements, uranium, and more. Discover the unique value of the Hera Research Newsletter by visiting: http://www.heraresearch.com/newsletter.html Or call Ron Hera at 360-339-8541x101. 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 Golden Phoenix Signs Definitive Agreement to Acquire and Reopen Santa Rosa Gold Mine in Panama Company Press Release SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation. Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher. Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine. Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status." For Golden Phoenix's complete statement, please visit: http://goldenphoenix.us/press-release/golden-phoenix-signs-definitive-ac...
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| Posted: 20 Oct 2011 02:49 PM PDT from WealthCycles:
An NPR Planet Money report today uncovered a government report through the Freedom of Information Act that detailed the repercussions of a special what-if scenario: What if the U.S. government paid off its entire debt? The report, titled Life After Debt, came out during the heady days of the tech boom, when rising profits and credit led to an expansion of the currency supply and a deepening of government coffers because of tax revenues from big capital gains. As a result, then President Bill Clinton presided over modest budget surpluses. While these surpluses were largely an illusion (total debt went up even during surplus years), the government acted as though it would have so much cash, it would have to come up with new uses for it. NPR's chart below shows what they thought the debt would be like up until 2014—and depressingly, what it actually looks like.
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| Harvey Organ's: The Daily Gold & Silver Report Posted: 20 Oct 2011 02:46 PM PDT Explanation on Position Limits/Exemptions/Bank of America loses big case on 8.5 billion settlement/gold and silver raid
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| Posted: 20 Oct 2011 12:29 PM PDT by Harvey Organ: [...] Today our bankers thought it was in their great wisdom today to raid the price of gold and silver. Gold finished the comex session at $1611.90 down $34.10 while the price of silver finished the day down $1.13 to $30.27. It seems that the object of interest for the bankers is silver. Let us head over to the comex and see how trading fared at the comex today. The total gold comex OI fell by 4440 contracts to 433,299 contracts. The front delivery month of October saw its OI fall from 710 to 683 for a loss of 27 contracts. We had 28 deliveries yesterday so we gained 1 contract of gold standing and lost nothing to cash settlements. The big December delivery month saw its OI fall from 264,187 to 259,621 for a loss of 4500 contracts and it is this month which witnessed the bankers full assault on gold. The estimated volume at the gold comex today was very good at 171,917. The confirmed volume yesterday was on the low side at 127,813. Read More @ HarveyOrgan.Blogspot.com
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| THE BEAR IS ABOUT TO SINK HIS TEETH INTO THE LAST HOLDOUT SECTOR Posted: 20 Oct 2011 12:21 PM PDT At this point I think it's pretty clear the general stock market is now in the initial phase of a new bear market. It's trying to generate a bear market rally over the last three weeks, but so far it's been pretty weak. That doesn't bode well once the cyclical and secular bear trend resumes. The HUI mining index is now on the verge of breaking down out of the multi-month megaphone topping pattern. Once it does that will confirm that the bear now has his teeth in the last holdout sector. The sector that led the bull market over the last 2 1/2 years and now the last sector to succumb to the deflationary forces.  As I have noted in the chart I do expect the miners will find at least temporary support at the 200 week moving average. That should correspond with gold putting in an intermediate degree bottom sometime in the next two or maybe three weeks. Presumably it will come with gold below $1535. My best guess is that gold will make an attempt to test the 75 week moving average at that intermediate bottom.  At that point gold should be severely oversold enough to generate a very powerful, snap back, A-wave rally. That should be followed by a multi-month consolidation as gold works off the huge gains of the last 2 1/2 years. This while the stock market continues down into its final four year cycle low. I expect the miners will produce a substantial rally off the 200 week moving average also but I'm afraid they will continue to get dragged down by the general bear market in stocks even if gold does form a high-level consolidation over the next year.  So while I expect to see a great buying opportunity on miners in the next few weeks I doubt it will be a long-term type trade. That probably won't occur until the stock market puts in its final four year cycle low sometime in the fall of next year.       
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| Posted: 20 Oct 2011 11:57 AM PDT Gold shares rebounded in line with other assets but the initial rebound has been met with more selling over the past few days. A retest of the recent lows is now inevitable. Just a few weeks ago, GDX staged an impressive intraday reversal. It gapped lower at the open and was down 7% at its lows before erasing most of its losses. GDX ultimately rallied from $51 to $58. As it stands now, the next few days will be critical for the mining stock complex. Wednesday, GDX closed below support at $55 which hasn’t been penetrated on a weekly basis since June. The market has found reliable support this year at $52 which also marks the 600-day moving average, a level which has supported GDX at every key bottom except in 2008. There are other things to consider beyond basic technical analysis. This chart fromSentimenTrader Home shows the HUI along with some breadth indicators which are looking very healthy relative to 2008. In mid 2008, the McClellan Summation index had alr...
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| The Gold Price Broke Down Nearly Touching The 150 Day Moving Average Closing at $1,611.90 Posted: 20 Oct 2011 10:56 AM PDT Gold Price Close Today : 1611.90 Change : (34.10) or -2.1% Silver Price Close Today : 30.260 Change : (0.986) cents or -3.2% Gold Silver Ratio Today : 53.27 Change : 0.590 or 1.1% Silver Gold Ratio Today : 0.01877 Change : -0.000210 or -1.1% Platinum Price Close Today : 1499.00 Change : -12.50 or -0.8% Palladium Price Close Today : 589.00 Change : -13.70 or -2.3% S&P 500 : 1,215.39 Change : 5.51 or 0.5% Dow In GOLD$ : $148.02 Change : $ 3.55 or 2.5% Dow in GOLD oz : 7.160 Change : 0.172 or 2.5% Dow in SILVER oz : 381.42 Change : 13.23 or 3.6% Dow Industrial : 11,541.78 Change : 37.16 or 0.3% US Dollar Index : 77.19 Change : 0.073 or 0.1% The GOLD PRICE has broken down out of that pennant formation and will trade lower. Today it made a low at $1,603.91, nearly touching the 150 day moving average at $1,602.50. Sturdy confidence that ain't. Now throughout this bull market that 150 DMA has backstopped -- generally -- gold. But against that optimism look at the MACD indicator, which is turning down, nosing after lower prices. If the GOLD PRICE breaks $1,600, it will certainly think about dropping back to the $1,535 last low, or the 200 DMA at $1,547. And if the Eurocrats come up with some plausible face-paint, gold would take a hit on Monday. On the other hand, if they only meet, eat, dither, and retreat, gold will gain. Seems to me politics absorbs way too much of our time. Adults ought to spend their time more profitably than wondering what a bunch of bootlicking banklackies will do. The SILVER PRICE is in the same position as the GOLD PRICE, only more volatile. On Comex today SILVER lost 98.6c (3.15%) to close at 3026c. In the aftermarket it quickly gained 37c (1.22%) to 3063c. Mercy! How do you parse or trade that? Silver reached 2994 today after losing its grip on 3050c support, but then jumped back pretty quickly. NEVERTHELESS, that doesn't look like it has cleared 3050c resistance (support becomes resistance when you approach it from underneath), just silver trading up in a thin aftermarket. Breaking 3000c will send silver down a buck anyway, arguing for much lower prices. Listen, y'all, look at the world around you and take a deep breath. Spit out that central bank ether and think: have any of the fundamental drivers of inflation and the silver and gold bull market changed? No, so the bull market continues, we are just suffering through a correction. Keep calm, silver and gold will come roaring back. Chart for the Dow today looked like a video of somebody kicking an old tin funnel down a road -- up, down, everywhere. Confusion reigns. Dow added a massive 37.16 (.32%) to close at 11,541.78 while the S&P500 added 5.51 (0.46%) to end at 1,215.39. Other indices fell, revealing their confusion and bewilderment. Some guru on the internet said stocks rose on optimism the Euro summit this weekend would arrive at a solution for the bank solvency crisis there. Right, but how'd he know that? How'd he know for sure it wasn't stray dogs or indigestion? From a technical perspective, stocks are still stymied by 11,650 resistance, optimism, stray dogs, or indigestion., DOLLAR INDEX rose slightly today, I reckon because the folks trading that market had no optimism about this weekend. (What kind of sorry people get optimism from a politicians' meeting, anyway?) Dollar index rose a tiny 7.8 basis points (0.18%) to 77.192. The euro remains trapped below the bottom boundary of its trading channel, the one it fell out of in September. Nothing's going to happen until the politicians do something, and the chance of them doing something more than cosmetic is the same as the chance an undertaker has of raising a corpse from the dead after he pretties it up. Closed 137.77c, up 0.15%. Japanese yen remains paralyzed, up 0.2% to 130.23c/Y100 (Y76.79/$1). The dollar's little piddling rise and other phantasms do not account for gold's fall today, down 34.10 (2.1%) to $1,611.90. Nor does it account for gold's aftermarket rise to $1,622.40. Saw the same thing in the silver market and moreso, which makes me think dealers are shorting throughout the day, then covering at day's end. Life has a way of taking matters out of your hands. Shorthanded in the office today, Susan gone to New Albany to pick up the newsletters, and I had to go to a funeral. Can't put a funeral off. I'm taking this opportunity to say Bye-Bye to y'all, just in case Harold Egbert Camping proves right and the world does end tomorrow. Now, I'm not really counting on that being the last day, since Camping also prophesied that the world would end on 21 May 1988, 6 September 1994, and 21 May 2011, without noticeable success. Since 21 May he has been spiritualizing away the failure, and he had a stroke. Frankly, I'm counting on being right here tomorrow, about this time, doing what I always do, and wondering, as always, why some people do the silly things they do. 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 bubble has burst, primary trend down. 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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| Peter Schiff: Listener Questions 10/20/11 Posted: 20 Oct 2011 10:49 AM PDT |
| Posted: 20 Oct 2011 10:21 AM PDT Mike Krieger writes today:
Many others agree with Krieger. As Raw Story notes, free speech advocate Lawrence Lessig told the Occupy DC rally:
I have repeatedly noted that conservatives are wary of big government and liberals are wary of big corporations, but that all Americans hate the system of crony capitalism (also known as "socialism" or "fascism") which we have today. Slate's David Wiegel took a stab at showing the overlap between the Occupy and Tea Party movements:
(I'm not sure it is entirely accurate, but the shared feelings of being "anti-crony capitalism", anti-bailout and hating the fed certainly are.) As I wrote Tuesday:
It's like covering up one eye in a 3-D movie ... you lose most of the image. Being a partisan Democrat or partisan Republican is using only one of your eyes, and missing the big picture in the process. Another key founder of the Tea Party – Karl Denninger – also supports the protests, and points out that the demands of the Tea Party protesters were originally very similar to those of the Occupy protesters (before the mainstream Republican party co-opted the Tea Party) . Numerous local tea party leaders, such as the leader for the Trenton area, also support the Occupy protests. But the truth is that – even if more people currently support the Occupy protests than support the Tea Party – the Occupy protesters should listen to the wisdom from the real, non-coopted Tea Partiers, and not simply patronize them. Because government is at least half the problem, and Obama does not support the 99%. Any Occupy protesters who believe that government will solve all of our problems needs to learn both sides of the story (and see this). Note: While mainstream Democrats will attempt to vilify the Tea Party for its calls to slash the budget, and mainstream Republicans will attempt to demonize the Occupy protesters for their calls for spending, the truth is that we can all unite against corrupt policy which doesn't work.
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| Posted: 20 Oct 2011 09:46 AM PDT First, this is the total amount of student debt in real time:
Per USA Today:
Naturally, just like in the credit bubble days, when NINJA loans were fast and furious, the lines in front of banks stretched around the block. Banks may or may not have known that the loans would be repaid, but nobody pressured borrowers to live in that big McMansion that "demanded" $1 down and a 99.9% LTV. Sure enough, when the day of reckoning comes, it is never the fault of the person who probably should have shown some restraint, but no: after all everyone else is doing it. Well, it is the same thing now. And with generations of people indoctrinated that only those with a college degree can be successful, it is only obvious that student debt is now the next big bubble.
Granted, unlike with the mortgage bubble collapse, this time we know, as Zero Hedge reported earlier in the week, that everyone is on the fraud. We quote from "The Fraud At The Heart Of Student Lending Exposed - The One Sentence Everyone Should Read"
So... debtors know it's a bubble, lenders know it's a bubble, everyone knows it's a bubble, yet it is growing faster now than ever before. If nothing this is a fantastic exercise in observing a slow at first, then fast-motion train wreck from the side. It is without a shadow of a doubt, that not only will the student debt bubble pop, but writedowns on amounts outstanding will be massive, potentially resulting in another hit of 50% to total notionals, or about $500 billion. And since the borrowers will be fully tapped out, and the lenders will plead ignorance, and control the regulators and administration any way, is there any doubt who will once again be forced to pay for this upcoming bail out? This is something that does not require a college degree to figure out...
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| Posted: 20 Oct 2011 09:46 AM PDT
First, this is the total amount of student debt in real time:
Per USA Today:
Naturally, just like in the credit bubble days, when NINJA loans were fast and furious, the lines in front of banks stretched around the block. Banks may or may not have known that the loans would be repaid, but nobody pressured borrowers to live in that big McMansion that "demanded" $1 down and a 99.9% LTV. Sure enough, when the day of reckoning comes, it is never the fault of the person who probably should have shown some restraint, but no: after all everyone else is doing it. Well, it is the same thing now. And with generations of people indoctrinated that only those with a college degree can be successful, it is only obvious that student debt is now the next big bubble.
Granted, unlike with the mortgage bubble collapse, this time we know, as Zero Hedge reported earlier in the week, that everyone is on the fraud. We quote from "The Fraud At The Heart Of Student Lending Exposed - The One Sentence Everyone Should Read"
So... debtors know it's a bubble, lenders know it's a bubble, everyone knows it's a bubble, yet it is growing faster now than ever before. If nothing this is a fantastic exercise in observing a slow at first, then fast-motion train wreck from the side. It is without a shadow of a doubt, that not only will the student debt bubble pop, but writedowns on amounts outstanding will be massive, potentially resulting in another hit of 50% to total notionals, or about $500 billion. And since the borrowers will be fully tapped out, and the lenders will plead ignorance, and control the regulators and administration any way, is there any doubt who will once again be forced to pay for this upcoming bail out? This is something that does not require a college degree to figure out...
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| Ben Davies - Resetting of Gold in the Monetary System Posted: 20 Oct 2011 09:32 AM PDT We are merely going through a rerating, a resetting of gold in the monetary system. We are going to continue to trade higher in coming months...
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| “It is a compensation scheme and nothing else…” Posted: 20 Oct 2011 09:23 AM PDT Nassim Taleb: The Bank Business Model Is A Compensation Scheme And Nothing Else Don't be fooled by GLD or SLV. Only GoldMoney offers real bullion allocated in your name.
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| Lawrence Lindsey Blames YOU for the Credit Crisis Plus my Weekly Market Update Posted: 20 Oct 2011 08:43 AM PDT Mark J. Lundeen [EMAIL="Mlundeen2@Comcast.net"]Mlundeen2@Comcast.net[/EMAIL] 14 October 2011 At the close of today's trading, gold was looking pretty good. Note, too, that the latest correction lasted 14 days (Sept 7-26), of which five trading days did the damage. It didn't feel good, but it's not all that bad. Bull market corrections are painful in their effects, but short-term in their duration; and that is exactly what we see below. Also note the bullish pattern of higher lows since May 2nd. The latest correction in the price of gold looks bad in the chart above, but my Bear's Eye View chart below places gold's latest decline in its true perspective. September's sharp decline was just one more bull-market correction in a continuing bull market in gold. Compare gold's BEV chart above with the Dow's below. Since October 2007, the Dow Jones has yet to see a new all-time high (BEV Zero), while gold has gone on to one new BEV Zero after another fo...
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| Invest in Gold – and the Chinese Renminbi Posted: 20 Oct 2011 08:42 AM PDT Author: Vedran Vuk Synopsis: A new Chinese investment contract may not work out exactly as expected, but it seems sure to be a game-changer for gold. Also in today's issue, Vedran Vuk on the recent Bank of America derivative transfer. Dear Reader, A few readers have written in, spooked by Bank of America transferring $75 trillion (nominal value) in derivatives from the Merrill Lynch unit to the commercial banking unit. This could be just a clever accounting scheme to save Bank of America some money. BofA has estimated that a two-credit rating downgrade – which has already happened – would mean paying an additional $3.3 billion in collateral or termination fees. Or, this could be in preparation for a possible future bailout. Regardless of the reason for the move, someone at risk management messed up. They clearly performed a stress test of a two-rating ...
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| Fed Dollar Swap Lines With Europe Soar To $1.9 Billion, Most Since June 2010 Posted: 20 Oct 2011 08:31 AM PDT For a week in which Europe was supposed to be healing, and certainly not provoking the curiosity of forensic capital chasers, it sure did a heck of a job. In the week ended October 19, the Fed disclosed that not only did it roll its $500 million 7 Day facility (at 1.08%) with the ECB, but it also entered into a new 84-Day 1.09% facility (this is about 60 bps more than 3M USD Libor, confirming just how ridiculous and meaningless the 3 month USD Libor market is). It is of course unclear which bank ends up being on the ECB's receiving end, but one thing is certain: the dollar shortage in Europe is now as bad as it was just after the first Greece insolvency, when nobody was prepared for the bank lockup that followed. Additionally, with deposit loans at the ECB soaring to €182 billion, a runrate which will promptly surpass last month's high, it is once again all too clear that there is no free liquidity in Europe, and that the thesis presented by Zero Hedge over the weekend, that the only reason for the persistent high level of the EUR is due to the sale of USD assets by French banks and subsequent FX repatriation, is what explains the ongoing schism between the European market, which is driven by wholesale asset sell offs by French banks, and the American one, which is electronically trading with 100% correlation to the EURUSD which is sending a completly false "all clear" signal to the market. Historical New York Fed swap line usage:
And the just released Fed data:
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| Another down day for the Metals Posted: 20 Oct 2011 08:30 AM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Both gold and silver continue to move lower and towards the bottom of their trading ranges. In the case of gold it dropped through $1620 and fell to just above $1600 where buyers showed up. It is currently attempting to get back over the $1620 level. Silver violated support at both $31 and then again at $30 but it did encounter some decent-sized buying just below that latter level and has bounced back above $30 as I write this. As expected, the HUI, once it sank through the support region near 520, fell all the way to the next support zone near 500 which extends down towards 490. This needs to hold if the mining shares are going to avoid even steeper losses. The HUI is already deeply negative for the year but has been able to recover on each trip down towards 490 for nearly an entire year now. We would not want to see this level give way. If it does, the critical Fibonacci of 50% comes ...
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| “It's disconcerting to see how connected things really are.” Posted: 20 Oct 2011 08:30 AM PDT Revealed – the capitalist network that runs the world Don't be fooled by GLD or SLV. Only GoldMoney offers real bullion allocated in your name.
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| Gold Daily and Silver Weekly Charts - Risk Off on Euro, Metals Hit As Usual Posted: 20 Oct 2011 08:14 AM PDT |
| Four Facts that PROVE the EFSF Doesn’t Matter… At All Posted: 20 Oct 2011 07:58 AM PDT It's time to settle the debate regarding Europe's banking system. I know that the mainstream media keeps talking about another round of bailouts or an expansion to the Emergency Financial Stability Facility (EFSF) as though these things matter.
But the reality is… they don't. Europe's problems go WAY beyond Greece's debt. And the entire European banking system is primed for a systemic collapse.
Consider the following four facts:
FACT #1: Europe's entire banking system is leveraged at 25 to 1.
This is nearly two times the US's leverage levels. With this amount of leverage you only need a 4% drop in asset prices to wipe out ALL equity. These are literally borderline-Lehman levels of leverage (Lehman was 30 to 1).
Mind you, these leverage levels are based on asset values the banks claim are accurate. Real leverage levels are in fact likely much MUCH higher.
KA-BOOM.
FACT #2: European Financial Corporations are collectively sitting on debt equal to 148% of TOTAL EU GDP.
Yes, financial firms' debt levels in Europe exceed Europe's ENTIRE GDP. These are just the financial firms. We're not even bothering to mention non-financial corporate debt, household debt, sovereign debt, etc.
Also remember, collectively, the EU is the largest economy in the world (north of $16 trillion). So we're talking about over $23 TRILLION in debt sitting on European financials' balance sheets.
Oh, I almost forgot, this data point only includes "on balance sheet" debt. We're totally ignoring off-balance sheet debt, derivatives, etc. So REAL financial corporate debt is much MUCH higher.
KA-BOOM.
FACT #3: European banks need to roll over between 15% and 50% of their total debt by the end of 2012.
That's correct, European banks will have to roll over HUGE quantities of their debt before the end of 2012. Mind you, we're only talking about maturing debt. We're not even considering NEW debt or equity these banks will have to issue to raise capital.
Considering that even the "rock solid" German banks need to raise over $140 BILLION in new capital alone, we're talking about a TON of debt issuance coming out of Europe's banks in the next 14 months.
And this is happening in an environment prone to riots, bank runs, and failed bond auctions (Germany just had a failed bond auction yesterday).
KA-BOOM
FACT #4: In order to meet current unfunded liabilities (pensions, healthcare, etc) without defaulting or cutting benefits, the average EU nation would need to have OVER 400% of its current GDP sitting in a bank account collecting interest.
This last data point comes from Jagadeesh Gokhale, Senior Fellow at the Cato Institute, former consultant to the US Treasury, and former Senior Economic Advisor to the Federal Reserve Bank of Cleveland.
This is a guy who's worked at a very high level on the inside studying sovereign finance, which makes this fact all the more disturbing. And he knew this as far back as January 2009!!!
Folks, the EFSF, the bailouts, China coming to the rescue… all of that stuff is 100% pointless in the grand scheme of things. Europe's ENTIRE banking system (with few exceptions) is insolvent. Numerous entire European COUNTRIES are insolvent. Even the more "rock solid" countries such as Germany (who is supposed to save Europe apparently) have REAL Debt to GDP ratios of over 200% and STILL HAVEN'T RECAPITALIZED THEIR BANKS.
Again, it DOES NOT matter what Sarkozy and Merkel say. It doesn't matter how much leverage the EFSF gets. Europe is broke. End of story. And those investors who get suckered into betting this mess will work out well are very likely going to lose everything.
The impact of the fallout from this will make 2008 look like a joke. The EU is the largest economy in the world. So if its banking system collapses (and it will) we're facing a full-scale Global financial meltdown (the IMF has even warned of this).
That's the reality of the situation we're in today. I know nobody likes to publicly admit it. But it's true.
What happened in 2008 was literally just the warm up. The REAL DEAL is coming in the next 14 months. And it's going to involve corporate, financial, and sovereign defaults.
On that note, if you're looking for specific ideas to profit from this mess, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.
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Good Investing!
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| Invest in Gold – and the Chinese Renminbi Posted: 20 Oct 2011 07:28 AM PDT Synopsis: A new Chinese investment contract may not work out exactly as expected, but it seems sure to be a game-changer for gold. Also in today's issue, Vedran Vuk on the recent Bank of America derivative transfer. Dear Reader, A few readers have written in, spooked by Bank of America transferring $75 trillion (nominal value) in derivatives from the Merrill Lynch unit to the commercial banking unit. This could be just a clever accounting scheme to save Bank of America some money. BofA has estimated that a two-credit rating downgrade – which has already happened – would mean paying an additional $3.3 billion in collateral or termination fees. Or, this could be in preparation for a possible future bailout. Regardless of the reason for the move, someone at risk management messed up. They clearly performed a stress test of a two-rating credit downgrade. I really wonder about the internal conversation after the stress test. Did it go something like this?: "Well, the stress test doesn't look good. If a two-step downgrade happens, we'll have to switch all the derivatives to the commercial banking unit. We're not sure if that's allowed, but we'll find out when we get there." That doesn't exactly sound like a great contingency plan. Even if this isn't related to a possible bailout, I'm concerned by the unconventional risk strategy here. However, our readers are more concerned with the possibility of the federal government bailing out BofA should these derivatives go badly. Of course that's a real concern; but why is there sudden anxiety over this possibility? Folks, this is 2011, not 2007 – did anyone not expect Bank of America to receive a bailout in the event of another crash? It's the second-largest bank in the US, only recently dethroned by JP Morgan Chase. The Fed and Treasury won't let BofA go the way of Lehman Brothers. The Fed has bailed out numerous banks, maintained near-zero interest rates for three years, promised two more years of low rates, enacted QE2, and most recently started to twist Treasuries. Perhaps if BofA fails, these guys would show some restraint? Let's not be naïve here. It doesn't matter where those derivatives are – the commercial unit, the Merrill Lynch unit, or the Planet Mars Bank of America branch expansion unit. As long as Bernanke and the boys are in power, those derivatives are insured by the American taxpayer. During 2008, bailout opponents warned the supporters of creating a moral hazard with their actions. The proponents argued that this was a one-time event. Even some supposed free-market types supported the bailouts. And where are we now? Just look at Europe's situation with Portugal, Ireland, and Greece – and most recently Dexia Bank. Bailouts were not a one-time event – they have become the policy norm for central banks and governments around the world. Unfortunately, the possibility of a BofA bailout isn't news to me. This guarantee has been baked in the cake since 2008. Next up, Alena Mikhan and Andrey Dashkov of the metals team will report on the Renminbi Kilobar, a new way to buy gold priced in the Chinese yuan.
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| Last Chance to Own Silver at These Prices Posted: 20 Oct 2011 07:05 AM PDT Steel yourself for the tremendous volatility that is coming & use every advantage to buy dips. This may be the last chance for silver at these prices...
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| It's A Boat, It's A Plane, It's The Great Wall Of China: Part Of Symbolic Chinese Landmark Collapses Posted: 20 Oct 2011 07:02 AM PDT
It's one thing for China to have a rather embarrassing episode during a boat launch, or even when demonstrating the pride of its airforce. But when a part of the Great Wall Of China itself collapses, literally, you know the proponents of the Chinese Soft-Landing scenario (leaving aside that copper is now down 10% for the week) may want to reassess their thesis. From China Daily, "The damaged portion of the Great Wall is located in a remote area near the county of Laiyuan in Hebei Province, about 200 kilometers southwest of Beijing. The area is home to a dozen small mines, with some operating as close as 100 meters to the centuries-old wall. Villagers and local cultural heritage protection officials told Xinhua that about 700 meters of the wall, which was built during the reign of Emperor Wanli during the Ming Dynasty (1573-1620), had already collapsed, and more walls and even towers are likely to collapse if the mining continues unchecked." And while this is admittedly a symbolic development, we follow up this news with a piece from SocGen's Albert Edwards who has some quite factual observations on why China is now in stall speed and has little hope of a Hollywood ending. But first, more on this highly ironic development, which confirms just how little control over its economy the central government really has:
And in more serious news, here is SocGen's Albert Edwards with a recap of his recurring opinion that China is due for a crunch of epic proportions:
The ironic thing, which virtually invalidates any economic data out of China, is a statistical representation which mocks the lack of volatility of an economy which is booming at an unprecedented pace:
Albert proceeds to discuss last night's news of a major drop off in FX reserves:
Obviously this goes back to a favorite theme of Albert's: the fact that China has to devalue the Yuan eventually. Sure enough, in the footsteps of Brazil's 2nd rate cut in 2 months, even China appears to be sending a loosening signal: last night the PBoC lowered the yield on 3 year bills for the first time in 15 months. Baby steps, yes, and next come RRR reductions, and so on, ultimately culminating with Edwards' prediction. Yet it is his conclusion from today's piece that bears most attention:
This chart should be familiar to regular readers - it was a few short days ago that we presented the comparison of China's M2 and the SHCOMP, which led us to the same conclusion: China M2 Change...
And M2 vs SHCOMP YoY change.
It remains to be seen how long until the SocGen strategist is proven right. In the meantime, expect far more pain for the symbol that once separated China from the evil outside world. Alas, if the decoupling thesis is about to break (once again) then the continued deterioration of the Great Wall will have that much more of a inherent symbolism.
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