Gold World News Flash |
- Peter Schiff - Where Gold, Silver & the Dollar are Headed Next
- Gold Seeker Weekly Wrap-Up: Gold and Silver Gain About 7% and 13% on the Week
- Guest Post: Eric Janszen: We Are Witnessing The Death Of The Dollar
- Be Honest – The European Debt Deal Was Really A Greek Debt Default
- Dollar Bulls are Trapped if the RISK TRADES continue
- The Gold Price Must Close Above $1,800 For Two Days Running, Gold Up 6.8% This Week
- Peter Schiff: Where Gold, Silver & the Dollar are Headed Next
- The Problem with Godvernment
- Confessions of a Gold Scammer
- Owning Stocks is Like Gambling
- Gold Stock Technicals Are Ultra Bullish
- Weekly Bull/Bear Recap: October 24-28
- Modest Late Day Excitement Tops Quiet Day
- Duh, ya think? Canadian central banker says QE weakens the currency
- The “Flush Fee” (Seriously)
- Royal Canadian Mint offers its own convertible gold ETF
- After several decades of being net sellers, the world’s central banks became net buyers of gold in the second quarter of 2009.
- European bailout inadequacy, seasonality to support metals, Davies tells King
- LGMR: China Considers "Strategic Opportunities" of Bailing Out Europe, EFSF "Lacks Funds to Support Both Banks Sovereigns"
- Kevin Puil: Exotic Congo Holds Hidden Values
- Markets Rally. Details to Follow…
- COT Gold, Silver and US Dollar Index Report - October 28, 2011
- White House Orders Review Of Energy Department Loans To Avoid Solyndra Subpoena And Exercising "Executive Privilege"
- White House Orders Review Of Energy Department Loans To Avoid Solyndra Subpoena And Exercising "Executive Privilege"
- Gold Daily and Silver Weekly Charts
- Gold at Short Term Channel-Resistance Extends to Upper 1700s
- Commodities, Including Gold & Silver, Historically Perform Well (on Average) in November
- The Daily Market Report
- Will Gold and Silver Go Up Along with the General Stock Market?
- Will Precious Metals Go Up Along with the General Stock Market?
| Peter Schiff - Where Gold, Silver & the Dollar are Headed Next Posted: 28 Oct 2011 04:10 PM PDT  With gold, silver and stocks all having big up-moves this week, today King World News interviewed Peter Schiff, CEO of Europacific Capital. Schiff made some great calls recently including the move higher in the euro. When asked about the huge move in gold and silver, Schiff stated, "I think there's more to come. Look at the technical action in everything, in stocks around the world, in commodities. Look at the price of crude oil and look at the dollar, the dollar is breaking down. I mean we had a huge decline against the Australian dollar, but look at that surge back into the 1.40s on the euro."
This posting includes an audio/video/photo media file: Download Now |
| Gold Seeker Weekly Wrap-Up: Gold and Silver Gain About 7% and 13% on the Week Posted: 28 Oct 2011 04:00 PM PDT Gold climbed up to $1752.38 in early Asian trade before it fell back to $1732.45 by a little after 8AM EST, but it then bounced back higher in New York and ended with a loss of just 0.05%. Silver rose to $35.521 in Asia before it fell back to $34.72, but it also rallied back higher in late trade and was able to close with a gain of 0.23%.
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| Guest Post: Eric Janszen: We Are Witnessing The Death Of The Dollar Posted: 28 Oct 2011 01:11 PM PDT Submitted by Adam Taggart of Chris Martenson.com Eric Janszen: We Are Witnessing The Death Of The Dollar What do you get when the producer of the world's reserve currency takes on too much debt? Nothing less than the end of the US Treasury-based monetary system. So says Eric Jansen, economic and financial market analyst and proprietor of iTulip.com. In chronicling the decline of the global economy over the past decade, Eric has formulated a framework called the "Ka-POOM" theory, which endeavors to understand how the immense run-up in global debt will be resolved. In short, it looks at the at the credit bubble that began in the early 1980's, started accelerating in 1995, and has now reached epic proportions. The amounts are so staggering at this stage that Eric believes it is too politically undesirable to let natural market adjustments clear them away - the magnitude of the deflationary pain this would create is simply unacceptable for politicians looking to get re-elected. The only other available option left is to service these debts via a dramatically devalued currency. Hence the key role the Fed is playing today. The Fed is at the epicenter of this process, intervening heavily to keep the natural corrective market forces at bay. In this, it has a dual strategy. The first is to keep asset prices high (i.e., fight asset deflation), which it is doing by keeping interest rates historically low. The second is to keep wage and commodity costs under control, which it primarily does via devaluing the currency (maintaining a "weak dollar"). And, of course, through its intervention, the Fed is doing all it can to keep the current financial system in place to perpetuate the process for as long as possible. The end result is a fundamental shift in risk from Wall Street to the taxpayer. So the big question is: how long can this last? Is there a point at which confidence in the system breaks and market forces finally overwhelm the intervention? Eric's answers: "Much longer than most people expect." And "Yes." First off, as the most important central bank in the world, the Fed has supernormal powers. In theory, it can expand its balance sheet infinitely. It's ability to absorb massive amounts of new liabilities is theoretically limitless - much of which can be easily concealed from an accounting standpoint. And since the US is both the world's largest economy as well as the provider of its reserve currency, other countries are compelled to support the current regime. A mortal crack-up in the US economy would deliver undue pain to all its trading partners, so they continue to buy Treasuries in sufficient amount to fund US economic activity. But that's not to say they're happy about it. And here's where attention should be paid (and where the importance of gold comes in). For much of the past century, the United States comprised approximately 54-58% of the global economy. Today, it's share has shrunk down to about 18%. Meaning: it's relative importance to the global system has diminished. Issuing the world's reserve currency is a privilege that must be continually earned through transparency and sound stewardship - qualities the US has been in flagrant lack of in the past several decades as it has been blowing asset bubbles and running trillion-dollar deficits via incurring massive debts and increasing its money supply tremendously. So, even as they continue to support the current Treasury-backed monetary regime, the world's central banks have begun hedging their exposure. After several decades of being net sellers, the world's central banks became net buyers of gold in the second quarter of 2009. As Eric puts it:
Eric sees this move by central banks of positioning themselves closer to the door as a natural step to the inevitable endgame here, which is the dissolution of the US Treasury dollar-based monetary system. Due to entrenched special interests, politics, escalating commodity scarcity, and other factors - he does not see the US taking necessary corrective action before confidence in the solvency of the US and its currency collapses. As such, Eric advises investors position themselves into gold and assets that take advantage of rising rents and energy prices. Click the play button below to listen to Chris' interview with Eric Janszen (runtime 43m:46s):
iTunes: Play/Download/Subscribe to the Podcast Or click here to read the full transcript.
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| Be Honest – The European Debt Deal Was Really A Greek Debt Default Posted: 28 Oct 2011 12:52 PM PDT from The Economic Collapse Blog:
Once the euphoria of the initial announcement faded and as people have begun to closely examine the details of the European debt deal, they have started to realize that this "debt deal" is really just a "managed" Greek debt default. Let's be honest – this deal is not going to solve anything. All it does is buy Greece a few months. Meanwhile, it is going to make the financial collapse of other nations in Europe even more likely. Anyone that believes that the financial situation in Europe is better now than it was last week simply does not understand what is going on. Bond yields are going to go through the roof and investors are going to start to panic. The European Central Bank is going to have an extremely difficult time trying to keep a lid on this thing. Instead of being a solution, the European debt deal has brought us several steps closer to a complete financial meltdown in Europe. Read More @ TheEconomicCollapseBlog.com
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| Dollar Bulls are Trapped if the RISK TRADES continue Posted: 28 Oct 2011 12:00 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Take a look at the following Commitment of Traders chart detailing the huge number of speculators that are positioned on the Long side of the US Dollar. There was a large amount of talk about the Dollar embarking on a Bull market not all that long ago and that combined with the Flight out of the Euro sent huge numbers of these specs rushing into the Dollar. When the Europeans rained on their parade this week, the bottom dropped out of the Greenback as there was no one on the other side of the market to buy the Dollar from these specs who were all frantically selling it at the same time. If the risk trades continue, the Dollar is going to come under additional selling pressure which will likely drop it down into a major support zone on the chart. If that gives way, there exists an enormous amount of speculators who are going to get hurt very badly and will be selling frantically which just migh...
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| The Gold Price Must Close Above $1,800 For Two Days Running, Gold Up 6.8% This Week Posted: 28 Oct 2011 12:00 PM PDT Gold Price Close Today : 1,746.20 Gold Price Close 21-Oct : 1,635.10 Change : 111.10 or 6.8% Silver Price Close Today : 3527 Silver Price Close 21-Oct : 3117.3 Change : 409.70 or 13.1% Gold Silver Ratio Today : 49.509 Gold Silver Ratio 21-Oct : 52.452 Change : -2.94 or -5.6% Silver Gold Ratio : 0.02020 Silver Gold Ratio 21-Oct : 0.01906 Change : 0.00113 or 5.9% Dow in Gold Dollars : $ 144.79 Dow in Gold Dollars 21-Oct : $ 149.29 Change : $ (4.50) or -3.0% Dow in Gold Ounces : 7.004 Dow in Gold Ounces 21-Oct : 7.222 Change : -0.22 or -3.0% Dow in Silver Ounces : 346.79 Dow in Silver Ounces 21-Oct : 378.81 Change : -32.03 or -8.5% Dow Industrial : 12,231.11 Dow Industrial 21-Oct : 11,808.79 Change : 422.32 or 3.6% S&P 500 : 1,285.09 S&P 500 21-Oct : 1,238.25 Change : 46.84 or 3.8% US Dollar Index : 75.042 US Dollar Index 21-Oct : 76.291 Change : -1.249 or -1.6% Platinum Price Close Today : 1,645.50 Platinum Price Close 21-Oct : 1,516.00 Change : 129.50 or 8.5% Palladium Price Close Today : 663.85 Palladium Price Close 21-Oct : 617.00 Change : 46.85 or 7.6% The GOLD PRICE and the SILVER PRICE, too, fed off the fat and phony Euro feast. They may have gobbled up so much they wind up puking it all back. From Thursday to Thursday (yesterday), the GOLD PRICE rose $134.80 (8.3%) hand in hand with silver up 482.9c (16%). That's as good as it gets. You can't expect moves like that to last forever -- or even very long. Today GOLD flattened, losing 50c to shutter Comex at $1,746.20. Think of a baseball thrown into the air, how it rises and rises and rises, then seems to hesitate and begins to fall. Looking at a five day chart, gold was trapped below $1,660, broke out Tuesday and ratcheted to $1,725, then yesterday stepped to $1,750. Chart shows three plain steps. The GOLD PRICE hit its 50 DMA yesterday ($1,739), a frequent target for upside corrections. Above awaits also the $1,775 milestone where gold broke down in late-September -- final kiss good-bye? Of course, gold will erase all my suspicions if it closes above $1,800 for two days. Otherwise, expect lower prices, a trip to $1,600 (150 DMA) or even $1,550 (apex of last triangle gold broke out of). The SILVER PRICE chart looks like gold's, only moreso,. since it's more volatile upside and downside. Yesterday silver nearly reached its 200 DMA (3631c), a likely barrier to further gains. Limit to this rally appears to be 3700c, maybe 3800c at most. I will be mildly surprised if gold and silver gain much next week. Shoot me if you will, but I still hear the charts whispering that both metals have not yet finished this correction and bottomed. If gold can close two days above $1,800 -- never mind where silver stands -- I'll confess I was wrong. Otherwise, I do the world's hardest job: WAIT. Here's a tee-tiny investment tip for all of y'all: NEVER BUY SEMI-NUMISMATIC COINS AS A GOLD INVESTMENT. Collecting coins as a hobby is one thing, investing another. Over time, premium always disappears. Proving it again, a fellow yesterday showed me an investment he had made -- based on the dealer's protestations that "these aren't subject to government confiscation" -- in XF and AU grade US $20 gold pieces. Bottom line is, he paid about a 35% premium, which in the last year has completely vanished. Today he could sell the whole batch for 1.5% more than he paid a year ago. If he had simply bought old tacky gold bullion Krugerrands, he would have made a 36% return on his investment, after all transaction costs. And y'all listen: the chance of the yankee government confiscating your gold ranks substantially lower than the chance of your being abducted by Zambodian aliens on your way home tonight. This ain't 1934. Y'all better be careful who you deal with in the silver and gold business, present company included. Some of them are ignorant, and some of them would steal the quarters off a dead man's eyes. When your money is at stake, there's no substitute for doing your own research and asking lots of questions. Of course, you ought to be equally chary of ANYBODY selling any financial ANYTHING, from stocks to insurance to mortgages. Some weeks not much happens, but that wasn't this week. While stocks rose, SILVER and GOLD rose a lot more. All this turmoil arose out of the Eurocrats' indecision about a bank bailout plan. When that uncertainty was removed yesterday -- allegedly -- euro, stocks, silver, and gold shot up and the dollar tanked. Mark it well: for stocks and the euro, yesterday was as good as it gets. Quite literally. As good as it gets. I checked the Dow chart today, and plain as the world there were the lip-prints of a final kiss good-bye yesterday. What do I mean? Dow was making a long narrow triangle within a broadening top. Draw a line from the March low thru the June low. The waterfall breakdown fell through that line in August, and fell from 12,000 to 10,600. Yesterday the Dow only accomplished a rally to that trendline. With breakdowns or breakouts upside, markets very frequently return to the point of breakout for that final kiss good-bye before continuing in the direction of the original break. Lip prints. Stocks had been vacillating, hoping for a solution to the European financial crisis. When yesterday's counterfeit was presented, all the hungry fish jumped at it, swallowing the wooden minnow. Now that focus has been removed from Europe, eyes can return to the economy, where they will search in vain looking for any help for stocks. Now stocks may even move higher, even to 12,800, the last top. This will complete the megaphone/Jaws of Death pattern, and cap the whole mess with a fatal triple top. If y'all have stocks left -- in your IRA, 401(k), in your basement -- this is the last train, blowing the whistle and leaving the station. Time to sell. Dow today rose 22.56 points (0,187%) to 12,231.11 and the S&P500 rose 0.5 (0.04%) to 1,285.09. Stocks -- your reservation at the under-the-culvert Cardboard Hilton Retirement Home. The European "fix" fixes nothing, but when you blow some smoke in front of it and back-light it from behind, it looks a lot bigger. They plan to leverage 440 billion euros to $1.4 trillion to buy up sovereign debt, 5:1 leverage. How might they demonstrate more plainly that they understand nothing? Leverage brought them here in the first place -- leverage will save them? Never mind, the fix was sufficient illusion to suck in most of the world, for 48 hours at least. The dollar took a body slam, losing 121 basis points yesterday. Today the dollar re-traced all yesterday loss, but didn't hold on to all those gains. Still, it closed above 75, up 16.3 basis points (0.21%) at 75.042. 200 day moving average stands at 75.77. It would be logical that a spike thru the 200 DMA that springs back quickly ends the dollar's decline. If that "it will rally" outcome is operating, then next week the dollar will remain above 75. On the other hand, if the dollar index sinks below 74.80, the dollar will keep right on sinking. Euro made a big jump yesterday, but again, that was as good as it gets. High yesterday was 1.4247, about where the Euro broke down in early September. It might edge higher, but we have most likely seen the limit of its recovery. No gains from here worth chasing. Japanese yen made another new all-time high close today at 131.90c/Y100 (Y75.82/$1), up 0.17%. Inauspiciously it has traded out a little rising wedge, and those generally break out to the downside. At dawn on 28 October 1940 Italian dictator Benito Mussolini's ambassador demanded of Greek Prime Minister Ioannis Metaxas that Greece allow Axis forces to enter Greece and occupy certain strategic points. Metaxas answered with one word, "Ohi!" -- "No!" Greeks took to the streets shouting "Ohi!" Axis forces invaded and occupied Greece, but they didn't stay forever. The Greeks understood the one word upon which all human freedom hangs: "No!" Y'all enjoy your weekend! Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2010, 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: Where Gold, Silver & the Dollar are Headed Next Posted: 28 Oct 2011 11:54 AM PDT from King World News:
Peter Schiff continues: Read More @ KingWorldNews.com
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| Posted: 28 Oct 2011 10:48 AM PDT by David Galland, Casey Research: Dear Reader, I received quite a few reader emails in response to my column on Occupy Wall Street last Friday. While most were positive (and thank you for that), there were a number expressing a less supportive view. An illustrative excerpt: You say that gov'ts should meddle less – I disagree as look what the governments' lack of regulation of derivatives and of the banks has accomplished – a world economic meltdown – we definitely need more regulation, not less – to protect the taxpayers from the unbridled power, exploitation and greed of the rich financial class.
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| Posted: 28 Oct 2011 10:38 AM PDT |
| Owning Stocks is Like Gambling Posted: 28 Oct 2011 10:37 AM PDT by Andrew Hoffman, MilesFranklin.com:
NEVER in my life have I had such clarity of thought, mind, and conscience. I am FREE of the bondage, lies, and CONTROL over my life the gold Cartel held for the past decade. Not that I did anything RECKLESS by investing heavily in mining stocks, which I essentially broke even on over a nine-year period. To the contrary, I am a conservative person by nature, and acted as essentially all my "Comrades in Gold Arms" over that period. Yes, I owned a lot of mining stocks, but didn't view them as "risky" due to my confidence in the gold and silver bull markets, which I was DEAD ON right about in spades.
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| Gold Stock Technicals Are Ultra Bullish Posted: 28 Oct 2011 09:20 AM PDT Morris Hubbartt Weekly Market Update Excerpt posted Oct 28, 2011 US Dollar Chart Sentiment Analysis [LIST] [*]The US dollar rally was predicted by many analysts to be “mighty”. I projected it to be short lived, and argued that it would become a meltdown situation. Technically, a head and shoulders formation is now clearly apparent, and the neckline has activated a move towards a target of 73. [*]Sentiment indicators, as discussed last week, continue to show the dollar is poised for a serious decline. My technical work continues to project a 65-66 longer term target. This dollar forecast, if it even plays out partially, is enormously bullish for hard assets. [*]Fundamentally, I’m no fan of the fiat currencies. In Europe there are attempts to implement austerity measures. Is it too little, too late? Time will tell, but historically real austerity often tends to come only after government currencies hyper-inflate their currenci...
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| Weekly Bull/Bear Recap: October 24-28 Posted: 28 Oct 2011 09:04 AM PDT Submitted by Rodrigo Serrano of Rational Capitalist Speculator Weekly Bull/Bear Recap: October 24-28 Bull - The bears are furious as Europe once again, to their disbelief, unites and puts forth a €1 trillion package to backstop banks and sovereign debt markets. Eurozone officials also negotiate a voluntary haircut of 50% with banks to put Greece on a sustainable path forward and create time for real reform to take place. The avoidance of a credit event as well as a recapitalization fund of €106 billion ensures that there will not be a disorderly default and that infected banks will be ring-fenced thereby stemming the contagion. The effectiveness of the package results in global equity markets rallying to finish off the week and the Euro rebounding above the important 1.40 mark. The greatest impediment to the global recovery has been lifted. Societe Generale strategists said, "the agreement was likely to prove sufficient to ease financial stress and should be comprehensive enough to give the euro area a 'window of opportunity' to put its house in order". + 3Q GDP grows at its fastest pace this year in a marked rebound from the prior quarter. The gains are lead by…. the resilient consumer. Double-dippers are finished. Ignore the consumer confidence surveys. Yes, people are glum about the economy but life goes on. People are learning to live with the current circumstances, which by the way are slowly getting better. The holiday shopping season will pleasantly surprise judging by this news and the most recent uptick in confidence as per the University of Michigan Consumer Sentiment Survey. Moreover, according to the Chicago Fed National Activity Index, the economy isn't in recession, only a soft-patch. The 3 month moving average rose to -0.21 in September from -0.28. The improvement was centered around employment-related indicators. And finally, the Philly Fed State Coincident Index increased in September and shows continued improvement from this summer's soft-patch. + The S&P 500 has broken through its 200-day moving average. It has also penetrated the neckline resistance. The Dow Theory is also back into effect as both the industrials and transportation averages have broken through their prior highs. How was the breadth in the latest rally? I would say healthy. Credit has also participated in the rally. These are signs that the technical picture has improved substantially. The index is poised to challenge the bull market highs. Shorts are getting decimated. Money managers are hopping on board as seasonality is supportive of positive returns to finish the year (Santa Claus rally!), they don't want to miss the boat! —(S&P 500 below)
+ Yet more signs that the global economy remains on firm footing: Caterpillar (CAT) scores an A+ in its earnings release, reporting a net income/share of $1.71 vs. estimates of $1.57, while guiding higher in its forecast. Order backlogs remain at an all-time high; China's always salient flash PMI moves back into expansion territory, rising to 51.1 from 49.9. Even better, more signs surface that inflation has indeed peaked and Mr. Wen has signaled a in shift in policy, geared more towards growth. No hard-landing in China = supported global growth picture. Copper rockets over 11% this week. Even Japan gives investors good news with September exports rising by 2.4% YoY vs. estimates of 0.4%, while household spending came in better than expected and the unemployment-rate fell. + While the headline was negative, Durable Goods Orders showed broad strength under the hood. Orders excluding transportation were up 1.7%, better than the 0.4% expected by analysts, while business capital investment rose 2.4% (this data series just hit a new all-time high). Furthermore, we have the American Trucking Association (ATA) announcing that September's tonnage index rose 1.6% after a revised -0.5% reading (was -0.2%). Chief Economist Bob Costello believes that the economy will skirt another recession. None of these data points are pointing to a double-dipping economy. The manufacturing sector is hanging in and remains very resilient. + There are more signs that the Fed is close to stepping up to support market sentiment and the economy. William Dudley, Fed Vice Chairman, is echoing earlier speeches by Fed members Tarullo and Yellen last week on a possible QE3. It's a fantastic time to go long the market and commodities in particular (due to China's soft-landing). When will the bears understand that you "don't fight the Fed"? + New Home Sales popped 5.7% and inventory fell to the lowest in over 6 months as supply continues to whittle down. Lower supply will eventually lead to stabilized prices and consumer confidence. Additionally, changes to the Home Affordable Modification Program (HAMP) will help make refinancing more accessible and streamlined. Other programs to unclog the financial arteries related to the housing market are being discussed. Slowly but surely the housing market is healing. Have you seen homebuilding stocks lately?! Bear - Consumer confidence as per the Conference Board plunges in October to the lowest since….(drum roll)…. March '09. Both current nor future conditions are spared; the former dropping from 33.3 to 26.3, while the latter falls from 55.1 to 48.7. Job-related measures also show deterioration with "jobs not so plentiful" rising to 49.5% from 45%. Meanwhile, the Bloomberg Consumer Comfort survey corroborates. Not the results you want to see headed into the holiday shopping season. - The bull's thesis that the global economy remains on firm footing belies the true nature of the recovery's condition (or lack there of), especially when looking at the latest Eurozone Services PMI data. October's measure shows contraction for the sector at the broadest pace in more than 2 years (47.2 from 49.1). More austerity coming down the pipe doesn't bode well in the months ahead. While "CAT" may have scored an A+ in its earnings and outlook, a slew of other companies (one of them being 3M) don't see the same scenario in the coming quarters. Officials in Hong Kong report the country's first drop in exports in almost 2 years and see the outlook as "bleak". India is dangerously approaching stagflationary conditions, evidenced by their recent rate increase coupled with a downgrade of their GDP forecast. Japan downgrades its growth forecast as well. - Let's simplify the opprobrium with regards to the Eurozone's latest bailout (nitty gritty can be seen here). 1st) it fails to respect the laws of mathematics, such as factoring out pre-existing commitments and guarantees that won't be paid ("stepping-out guarantors": Greece, Ireland, Portugal, Spain, and Italy); 2nd) it fails to account for historical first-loss rates of 50% for sovereign defaults, not the 20% agreed; 3rd) it fully eliminates the possibility of Belgium getting its rating slashed, which would eliminate their contribution to the bailout fund—-we're not even considering France yet, even though the OAT/Bund spreads are close to record highs; and finally 4) It decimates the Sovereign CDS market, which has its own unintended consequences. The best method of protection now is simply not to buy/provide credit, or outright selling/shorting of sovereign bonds. On a side note, this bailout result for Greece becomes an incentive for other countries who have fallen on hard economic times to demand the same treatment. "Why should we suffer when they got rewarded for not fulfilling their austerity promises?". The circular nature of this plan, the faulty math, and its the rosy assumptions make it unequipped to handle even a slight deterioration in the economic landscape; for instance, a recession in Europe (which would jeopardize France's AAA rating), or a highly probable downgrade in Belgium. The Chinese aren't confident and are prevaricating in their commitment to fund the rescue. To drive this whole point home, there was little follow-through from Thursday's rally and doubts are already resurfacing.
- Governments are incapable of allocating a nation's resources. These are the results of their actions. And now they just doubled down by leveraging up to save a failed Euro experiment. Europe, you are not defeating the speculators, you are making them stronger. The specious plan of leveraging the EFSF is only working to infect the core of Europe and more importantly is beginning to seed a dangerous sense of nationalism as continued demanded austerity is slowly being seen as a (il)legal act of war. The more hardship there is (Spain Unemployment just hit the highest in 15 yrs), the more fervid this sentiment it will become. - Do you want to put stock in some PMI survey gauging peoples' perceptions of the Chinese economy, or do you want to see hard evidence of a slowdown? Here's some disturbing activity in the property market. The bubble is popping. Time to choose one of two fatal poisons for the Communist party, Mr. Wen. Clamp down on credit and you get increased protests as people's life savings vanish as the property bubble pops leading to a subsequent collapse of the economy; or stimulate, leading to wage/panic-induced inflation spiraling out of control. Material Yuan appreciation seems to be out of the question, to the chagrin of Congress. Clock's ticking Mr. Wen. One thing you might want to remember is that the Fed is pondering another QE experiment (ie. exporting inflation). Just thought you'd like to know. - A dangerous escalation took place between government authorities and "Occupy (You name the city)" movement. The trend of this campaign is moving toward violence, not compromise. The country's politics fell into disrepute long ago, but this may take it to a whole new level. Politicians better start doing something and soon.
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| Modest Late Day Excitement Tops Quiet Day Posted: 28 Oct 2011 08:53 AM PDT FX markets have pretty much trodden water for the last 24 hours with admittedly a small USD bullish bias providing little ammo for any correlation-driven risk-asset moves today. Credit markets did wonder gently up and down but ES was like a Parkinson's patient off his meds as it noisily whipped up and down in a small range generally tracking credit. Into the close HY and ES surged (on nothing except perhaps the EUR futures CoT data) as MF Global's stock price dived but HY managed to hold and close at its highs while ES pulled back modestly. IG didn't play into the late day exuberance and we suspect the HY shift is more index arb as intrinsics actually widened on the day and the index remains cheap. HY is still 'cheap' as a risk asset relative to equities which might explain some of the grab here into the close but with a weekend of uncertainty ahead, why not wait til Monday to add risk? Copper managed to rally from pre-open today as did oil marginally but Silver and Gold were unimpressive as they held gains (much as DXY was holding its losses on the week).
ES managed to make higher highs than early in the day (as did HY) but IG credit did not. The surge in HY was unusual especially seeing as the HY bond advance-decline line has risen into an empirically expensive region here. HYG and HY tracked each relatively well today - following yesterday's very notable divergence - but HY remains notably expensive as HYG basically went sideways all day. HYG and SPY managed to come back toegther by the close - again suggesting something technical at play specifically with HY17 index.
Volumes were definitely low with ES around 25% below average today and secondary bonds still quiet though IG picked up a little as issuance held. Still little to no HY issuance (which helps explain the advance in HY bond net buying as fund flows pick up) suggests risk appetite for new money is not frothy yet - perhaps they are waiting for November.
Late in the day, we saw a familiar pattern emerge as index vol dropped but implied correlation rose. This tends to imply that some macro overlays were being lifted (as single-name protection was maintained) - which fits with the moves we also saw in HY credit indices and fair-value. We would also add that VIX/VXV (short over medium term vol term structure) is very steep but implied skewness and kurtosis (as we have discussed here before) as well as the vol skew appear much more 'hedged' than the broad market - i.e. professionals are definitely maintaining hedges to some degree in equity markets as opposed to buying into the exuberance. This does provide some ammo for those suggesting there is more room to the upside here as more capitulations are possible but the last couple of days we have fundamentally pointed to two main drivers of stress for equities which indicate a deteriorating EPS outlook no matter how many times we repeat the 70%-beat-earnings mantra.
Some context on the week is needed when considering commodities and FX. The USD is around 1.9% weaker on the week but as is evident above, the last 24 hours either saw everyone who trades commodities talking to their clearing houses or just away for the weekend (except of course Copper). The earlier discussions with regard to the TSY complex and MF Global proved interesting and today saw TSYs rally back and 2s10s30s drop (carry bid). Stocks definitely disconnected from the TSY complex today but it seems in general bond and equity markets (think MIB vs BTPs) have become unqiuely driven asset classes thanks to interventions. All-in-all, a quiet day with some flurry of risk-on at the close which seemed more technical than real demand. The wait-and-see mode in which FX traded made most sense given the weakness in European debt markets and as we closed ES remains 5-7pts expensive to CONTEXT (the broad risk-basket index).
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| Duh, ya think? Canadian central banker says QE weakens the currency Posted: 28 Oct 2011 08:52 AM PDT And he says central banks should be more forthcoming. Does that include subjects like gold? * * * Carney: QE's Stealth Effect Is a Weaker Currency By Kevin Carmichael http://www.theglobeandmail.com/report-on-business/economy/economy-lab/da... Bank of Canada Governor Mark Carney said central banks have been less than forthcoming in admitting that one of the primary aims of quantitative easing is to weaken their foreign-exchange rates, remarks that will fuel a tense debate over the effect the Federal Reserve's policies have had in stoking the currency war. "The unspoken issue with quantitative easing writ large is the exchange rate channel," Mr. Carney said Wednesday evening in New York at a conference organized by the Economist magazine. "The one area where central banks maybe haven't been quite as up front is (that) the fact is that when you quantitative ease, the portfolio-balance effect, which is the main transmission mechanism, operates through the exchange-rate channel, just as it does when you lower interest rates," Mr. Carney continued. "That is part of the stimulus you get." ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf With its benchmark interest rate near zero, the Fed has created dollars to buy financial assets worth about US$2 trillion to keep downward pressure on borrowing costs. That policy also has contributed to a weaker dollar, which has been a boon for U.S. exporters -- and an irritant for some U.S. trading partners, such as Brazil and South Korea, that have had to cope with rising currencies. But Mr. Carney's objective was not to criticize quantitative easing. He said Fed chairman Ben Bernanke "has delivered" and the heavy criticism he has received "appears unwarranted." Mr. Carney said the Fed's two asset purchase programs -- commonly referred to as quantitative easing, or QE -- have been a "net positive for Canada," even though the loonie surged above parity with the U.S. dollar. Rather, Mr. Carney was trying to make a finer point. He suggested that much of the rancor over QE could have been avoided if central bankers were clearer in their communication of policy. "The issue goes back to a calm understanding of why an institution is doing it, what the end objective is," he said. A good place to begin would be avoiding describing QE as business as usual, Mr. Carney said. QE should be clearly defined as an exceptional policy that will be deployed only when absolutely necessary. "It's important to be up front," he said. Join GATA here: New Orleans Investment Conference http://www.neworleansconference.com/ Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Drills 120.9 Meters Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the drill results received from its 2011 drilling Wellgreen platinum group elements, nickel, and copper project in the Yukon Territory. Borehole WS11-188 encountered 457 meters of mineralization grading 0.47% nickel equivalent (including 0.72 grams per ton platinum, paladium, and gold) from surface to the footwall contact. Within this larger swath of mineralization, the hole encountered a high-grade section of 17.8 meters of 3.14 grams per ton platinum, palladium, and gold, 1.03% nickel, and 0.74% copper (1.77% nickel equivalent). The hole was drilled completely outside of current resource boundaries, between the East Zone resource and the West Zone resource that was reported in the company's press release no July 14, 2011. The high-grade intercept located between the two resources not only demonstrates that the East and West Zone resource form a single, geologically contiguous body but also indicates that the higher-grade material in the East Zone continues to the west and at depth at Wellgreen. For drill result tables and maps, please see the company's full press release here: http://www.prophecyplat.com/news_2011_sep26_prophecy_platinum_wellgreen_...
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| Posted: 28 Oct 2011 08:37 AM PDT Addison Wiggin – October 28, 2011
The state of Maryland is trying to increase the latter part of the phrase a little too literally for our taste this morning:  As homeowners in the Free State, we pay what's come to be known as the "flush fee." No lie. It amounts to $30 a year, paid via quarterly water and sewer bills. The money, they say, is used to clean up the Chesapeake Bay. We presume it also fills the coffers of the "hookers and blow" fund for members of the state organization that oversees its disbursement. But what do we know? We're just citizens, we're not "professional" politicians. This week, a separate body known as the Task Force on Sustainable Growth and Wastewater Disposal — no lie — started kicking around the idea of doubling that fee to $60 come 2013… and $90 by 2015. "The problem is we have no fiscal discipline," says our state comptroller, refreshingly stating the obvious… and going on record as opposing any tax or fee increases for the next two years. We're not optimistic his arguments will carry the day. We add the flush fee to our long and growing list of "new taxes and weird fees." Got any more you think we're missing? Email The 5 here. Our thesis: The front line of the financial crisis is not fought in the headlines, on Capitol Hill or among the zombies of OWS, but in your neighborhood. Who actually bears the brunt? Why you do… the honest taxpaying citizen who hopes to save and retire someday. Ugh. [Ed note: You know we have more thoughts on the subject. If you haven't examined some of the solutions we present for the rapaciousness of bankrupt governments, morally or otherwise, you can do so here.]
"Skepticism Grows Over Euro Debt Plan" read a headline at TheStreet.com before the open. What? Buyer's remorse? And so soon? Say it isn't so!
Recall that one of the linchpins of the plan is a leveraging of the eurozone bailout fund from €440 billion to €1.4 trillion. This morning, the Bundesbank had the temerity to remind the world that such methods "resembled the risky finance methods that triggered the crisis in 2008," as the U.K. Telegraph put it. Continuing with its proclamation of the emperor as buck naked, Bundesbank president Jens Weidmann said the end result could easily be taxpayers getting stuck with the bill for Italian and Spanish government bonds. Pimco's Bill Gross, the "bond king," is likewise skeptical. "No bazooka but should stabilize markets for now," he tweeted yesterday. "Without it, the plan is a giant SIV [structured investment vehicle] with levered risk." We'll know that sometime next week… after yet another summit. God, this is making our head hurt.
In large part, that's because of dollar weakness. The CRB and the dollar index haven't been exact mirror images this fall… but a chart still makes for a striking visual.
For the moment, the news from Europe may well allow "a further unwinding of fear purchases that drove the U.S. dollar to 10-month highs," as our resource trader Alan Knuckman puts it. "Additional stock market stability should put the currency back on the 20-year downward trend… and add new life to commodities."
Personal income as measured by the Commerce Department rose only 0.1% last month. But consumer spending grew 0.6%. Year over year, spending is also outpacing income growth.
If members of the Federal Open Market Committee (FOMC) are looking to unleash QE3 when they meet next Tuesday and Wednesday, there's nothing in that number to hold them back.
"Meaning that if you look at central banks, the big institutions and even individual investors, you find gold is a tiny fraction of their financial holdings." Absolutely, if you judge by this chart. It takes all $146 trillion in global assets held in private hands and splits them up by asset class…
Gold ownership among institutional investors is clocking in at 1.0%, according to the Bank for International Settlements (BIS) and a bevy of other research groups listed above. "At the height of the gold mania in 1981," notes Casey Research's Ed Steer, "that percentage was 26%…and at the height of the Great Depression, it was 20%." The obvious: Gold ownership among the suit and tie set was a scant higher in those days than it is today.
Gold production was about 2,689 tons in 2010, compared with 2,641 in 2001, according to the GFMS Gold Survey. Name another commodity that's enjoyed such a rise in price but no corresponding increase in supply. If you look at copper, the price is up fivefold and production is up 20% in response. "Why is gold such a laggard?" asks Chris. "One reason is that South Africa no longer produces as much gold as it once did. Hard to believe now, but in the 1970s, two-thirds of global gold supply came from South Africa. In 1970, it produced 1,000 tons of gold all by itself. Last year, it barely mustered 200 tons." "It's mined out the good ore. Whereas it used to get 13 grams of gold per ton of rock, now it gets just three. This is a global phenomenon. Average grades the world over fell from 12 grams per ton in the 1960s to just 2 by 2009." Meanwhile, GFMS estimates that a typical gold producer's cash costs run $800-1,000 per ounce. Last year, it was only $650-800. "In part," says Chris, "the market is meeting demand by recycling the metal. If you look at the amount of gold recycled annually, it's about doubled in the last few years. Scrapping of jewelry for gold actually exceeded new jewelry in North America and Europe last year. But even that's tapering off. Recycled gold is running around 1,600 tons annually, and actually fell 4% globally in the first quarter of 2011." "I still like gold. I like gold stocks, too, but they have disappointed all year. It can't last, and I expect gold stocks will have their day in the sun here soon." [Ed note: In part because of Chris' recent findings, but also following input from regular 5 contributors Rick Rule and Frank Holmes, we're convening an online summit regarding the lag in gold miners next week. Stay tuned for details.]
"In the circumstances of a continuing fall in prices, tepid demand and oversupply," reads a statement from Baotou Rare Earth, "Baotou will halt smelting and separation at its processing units from Oct. 19 to further stabilize the market and balance supply and demand." Prices are, indeed, coming down after China imposed export controls and cracked down on illegal rare earth mining this year. "So," sums up Byron King in an email, "rare earth prices weaken in the face of rocket-assisted price rises…. then the Chinese close down the shop for a month (or at least they say that's what they're doing). Very clever." That should put wind in the sails of the few rare earth companies in a position to reach production soon. Byron has three names in mind… on the heels of big rare earth gains he's already racked up, including 178% on Molycorp. New subscribers to Energy & Scarcity Investor can learn about all three of these names. Act here.
"Gangs of Eastern Europeans are stealing chewing gum from supermarkets" in the U.K., the Telegraph reports this morning, "because it can be used as currency in their home countries." From Shrewsbury to Telford, Shropshire to Bridgnorth, thefts are rampant, we're told. "I have done some investigations," says Shrewsbury Constable David Walton, "and in Romania, if you go into a shop and purchase goods, as opposed to change, they will give you sticks of chewing gum." Romania belongs to the EU, but retains its own currency, the leu. Inflation was reported this month at 3.5%, the lowest in 21 years. So without further investigation ourselves, we're at a loss to explain the phenomenon. But so are the authorities. After a close reading of the story, it appears the only evidence cops have tying the thefts to Eastern Europe is that cars with Romanian registration often turn up near the scene. Hmmn… moving on:
"I need to live on that money and grow it so it will go as far as it will go. My biggest concern about America is largely irrelevant. I'm not going to be around to see its demise, and I am sorry it will be more difficult for my children than it was for me."
"At 55, even with 24 years developing software, jobs at this age are difficult to get. Consequently, my biggest concern would be being out of work, again, and having difficulty in even attempting to get some funds set aside that I can trade and control." "This economy needs to get back on its feet. We clearly need much less government spending (even though I just became a part of that), a better tax structure for clarity and simplicity and much less regulation and intrusion into our business and personal lives so that the entrepreneurial spirit can be released." "As stated, I do work full time, but I also run my own company. It is regrettably just me because there are too many regulations and too much additional administrative paperwork that I can't keep up with on a part-time basis to try and market myself and bring on employees." The 5: We can't promise you'll get off the wage-and-hours treadmill by signing up for Project X… but if you're able to set aside a portion of your funds in savings, we aim get you off to a solid start.
"While not better than yours, I'm sure that it will be much better than that of anyone in our current government." The 5: Yes, we're looking forward to her "commentary" too. Well put.
"I'm still gasping for breath laughing at the LiLo references! We may all be going to hell in a handbasket, but your ability to make it this funny should qualify you for some kind of award." "The 5 is brilliant. Only thing I need to read to be sure I know what's really going on………" "You are on a roll. To quote the Scorpions, 'Don't stop at the top'". The 5: We prefer "Hell in a Bucket" by Barlow and Weir. Enjoy the ride, Addison Wiggin P.S. Did we mention there's no obligation to pay us money if you register to learn more about Project X? Your feedback alone is worth the cost to us. To avoid annoying you if you're not interested in learning more, we're closing registration for the project next Thursday, Nov. 3, 2011… After that, future happenings related to the project will make their way to you only if you've indicated you want to learn more by registering. Here.
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| Royal Canadian Mint offers its own convertible gold ETF Posted: 28 Oct 2011 08:36 AM PDT Royal Canadian Mint Announces Offering of New Gold Investment Product Royal Canadian Mint Press Release http://www.mint.ca/store/news/royal-canadian-mint-announces-offering-of-... OTTAWA, Ontario -- The Royal Canadian Mint is pleased to announce its initial public offering of exchange-traded receipts (ETRs) under the mint's new Canadian Gold Reserves program. Each ETR provides evidence of ownership in physical gold bullion held in the custody of the mint at its facilities in Ottawa, Ontario. The Canadian Gold Reserves program marks the expansion of the mint's successful core bullion and refinery business. "We believe that this new program will build on our reputation and continued success as a world-class custodian of precious metals," said Ian E. Bennett, president and CEO of the Royal Canadian Mint. "With the introduction of the Canadian Gold Reserves ETR program we hope that investors will see this as a convenient, efficient, and secure method for investing in and owning physical gold." ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf Unlike other gold investment products, the purchaser of an ETR owns the actual gold rather than a unit or share in an entity that owns the gold. The net proceeds of the offering will be used to purchase gold on behalf of the initial purchasers of ETRs at the London p.m. fix price on the closing date of the offering (closing date). Subject to certain restrictions, ETR holders will be entitled to redeem their ETRs for physical gold products in the form of 99.99 per cent pure gold bars or coins, or for cash based on the future gold price or market price of the ETRs. Subject to market conditions, the initial offering of ETRs is targeting an issue size of approximately C$250 million. The issue price per ETR will be C$20 or the U.S. dollar equivalent and the Per ETR Entitlement to Gold will be determined on the closing date and will be reduced daily by an annual service fee of 0.35 per cent. Subject to the satisfaction of certain conditions, the ETRs will be listed on the Toronto Stock Exchange and commence trading on the closing date. ETRs will be listed in both Canadian and U.S. dollars and may be traded in either currency. Through a competitive process, the Mint has selected a syndicate of investment dealers led by TD Securities Inc. and National Bank Financial Inc., and including BMO Nesbitt Burns Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., Cormark Securities Inc., MGI Securities Inc., and Raymond James Ltd. to distribute the ETRs on a best efforts agency basis. Closing is expected to occur in late November 2011. The offering is being made on a prospectus-exempt basis pursuant to the terms of an order of the Ontario Securities Commission dated August 30, 2011. The ETRs have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States. This media release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Note: An investment in the ETRs involves a degree of risk. These risks result primarily from fluctuations in the price of gold. A detailed description of these risks and other important information about the ETRs and the Canadian Gold Reserves ETR program is contained in the Information Statement. A prospective investor in ETRs should review and carefully consider the risks described in the Information Statement, a copy of which may be obtained in reasonable quantities by contacting TD Securities Inc., Attn: Symcor, NPM (Email: sdcconfirms@td.com, Tel: (289) 360-2009). ETR holders will have no recourse to the Mint or the Government of Canada for any loss on their investment. ... About the Royal Canadian Mint The Royal Canadian Mint is the Crown Corporation responsible for the minting and distribution of Canada's circulation coins. An ISO 9001-2008 certified company, the mint is recognized as one of the largest and most versatile mints in the world, offering a wide range of specialized, high quality coinage products and related services on an international scale. For more information on the Mint and its products and services, visit www.mint.ca. Join GATA here: New Orleans Investment Conference http://www.neworleansconference.com/ Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Drills 120.9 Meters Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the drill results received from its 2011 drilling Wellgreen platinum group elements, nickel, and copper project in the Yukon Territory. Borehole WS11-188 encountered 457 meters of mineralization grading 0.47% nickel equivalent (including 0.72 grams per ton platinum, paladium, and gold) from surface to the footwall contact. Within this larger swath of mineralization, the hole encountered a high-grade section of 17.8 meters of 3.14 grams per ton platinum, palladium, and gold, 1.03% nickel, and 0.74% copper (1.77% nickel equivalent). The hole was drilled completely outside of current resource boundaries, between the East Zone resource and the West Zone resource that was reported in the company's press release no July 14, 2011. The high-grade intercept located between the two resources not only demonstrates that the East and West Zone resource form a single, geologically contiguous body but also indicates that the higher-grade material in the East Zone continues to the west and at depth at Wellgreen. For drill result tables and maps, please see the company's full press release here: http://www.prophecyplat.com/news_2011_sep26_prophecy_platinum_wellgreen_...
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| Posted: 28 Oct 2011 08:30 AM PDT Eric Janszen: We Are Witnessing The Death of the Dollar
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| European bailout inadequacy, seasonality to support metals, Davies tells King Posted: 28 Oct 2011 08:27 AM PDT 4:26p CT Friday, October 28, 2011 Dear Friend of GATA and Gold: Hinde Capital CEO Ben Davies tells King World News today that gold and silver will be strongly supported by the inadequacy of the latest European bailout plan and by seasonal strength in metal demand. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/28_B... 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: 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: 28 Oct 2011 07:58 AM PDT London Gold Market Report from Ben Traynor BullionVault Friday 28 October, 08:30 EDT "Returns to Form" for Gold, China Considers "Strategic Opportunities" of Bailing Out Europe, EFSF "Lacks Funds to Support Both Banks Sovereigns" SPOT MARKETgold prices touched a one-month high of $1752 an ounce during Asian trading on Friday – a 7.9% gain from the start of October – before falling back by lunchtime in London. Stock and commodity markets edged lower and US Treasury bonds gained, as investors began to digest the implications of this week's Euro Summit deal. As we headed towards the weekend, gold prices were hovering around $1737 per ounce – 5.9% higher than last week's close, and set for their biggest weekly gain since August. "The outlook into next week should remain cautious," ones one gold dealer in London. "Gold's return to form [however], after a period of indifferent performance, will have won it back some supporters, especially since this week's ...
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| Kevin Puil: Exotic Congo Holds Hidden Values Posted: 28 Oct 2011 07:41 AM PDT The Gold Report: You just returned from a trip to the Democratic Republic of the Congo (DRC), a country with a troubled past and, some might argue, a troubled future. Few areas are more geologically gifted than the DRC with its vast copper and gold belts. Is it worth the risk? Kevin Puil: The DRC is one of the last major undeveloped gold belts in Africa. Although it has had a troubled past, the Congo implemented new mining codes with the support of the World Bank in 2003 that have mitigated risk quite substantially. In 2006, the country held its first democratic elections in over four decades. The new parliament and government seem to be running the country very well. TGR: Are the companies that are operating in the DRC doing anything else to mitigate the risk? KP: Aside from the general security of any gold operation—being fenced and having security guards, etc.—they are working with the government more closely than they would in a more developed nation. They are also providing a...
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| Markets Rally. Details to Follow… Posted: 28 Oct 2011 07:39 AM PDT Stocks up 339 points on the Dow! Gold at $1,747! Oil over $90! Forget all of our worries about another big swing down in asset prices…about a Japan-like slump that could last a generation…about gold at $1,200 and the Dow at 6,000… …we were wrong, wrong, wrong! At least, that's how it looks today. Stocks are on course for their best month since 1987…or 1974…depending on which report you read. Gold has shaken off the blues…it's rockin' and rollin' again…and seems to be headed back toward $2,000 by the end of the year. And oil, too. The slippery goo — the lifeblood of the modern economy — seems to be going back to $100. Go figure. What set off yesterday's big blitz to the upside? Two things… …first, the Europeans seemed to be getting their act together. There's a big headline in today's Financial Times: "China set to aid Europe bail-out." The Chinese are looking at an investment of up to $100 billion in Europe's stabilization fund. Details to follow… The Greeks are to get another $130 billion of bailout funds. Details to follow… Bondholders are going to go along with a 50% haircut. Details to follow… And the EFSF (the stabilization fund) is to increase to $1 trillion or more. Details to follow… The marching band set the pace yesterday. But in the parade of details to follow we wouldn't be at all surprised to find a few sour notes. And we wouldn't be at all surprised to find that investors sell their stocks when they hear them. In resume, the Greeks can't pay their bills because they don't have enough money…which causes the Greek economy to go flat…reduces revenues to the government and makes it even harder for them to pay their bills. This problem will be overcome by borrowing from other Europeans, who can barely pay their bills either. And, thank the mischievous gods, China has come to the rescue too. China has real money…which it makes by selling products to the people who can't pay their bills. But investors are ready to believe anything. First, they thought they could borrow and spend their way to prosperity. Now, they think they can avoid the consequences of too much borrowing, by borrowing from each other. We'll keep an eye on it, dear reader, and let you know how it works out. The other big news that set off yesterday's rush to buy stocks came from the USA, where it was reported that the recession is off. That's right, according to the feds the US economy grew at a 2.5% rate in the last quarter. Details to follow. Says The Financial Times…the growth was "led by an encouraging jump in consumption." What is encouraging about that? The report tells us that "consumption rose 2.4% at an annualized rate, adding 1.7 percentage points to growth." We also learn that "personal disposable income fell by 1.7%, annualized." How were people able to spend more when their disposable income and wealth were both going down? Good question. The answer is in the report too. The savings rate went down from 5.1% to 4.1%. Now, let's see… Households lost $800 billion of housing value over the last 12 months — or about $8,000 per family. Their incomes fell too. And the largest group of them is facing retirement sometime in the next 15 years, totally unprepared, financially. So…you tell me that the economy is picking up speed thanks to their increased spending? And you tell me too that consumer sentiment — how consumers see their own situation — is at its lowest point in 40 years. Our forecast: recession ahead…if not in 2011, in 2012. Bill Bonner Markets Rally. Details to Follow… originally appeared in the Daily Reckoning. The Daily Reckoning provides over 400,000 readers economic news, market analysis, and contrarian investment ideas.
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| COT Gold, Silver and US Dollar Index Report - October 28, 2011 Posted: 28 Oct 2011 07:32 AM PDT COT Gold, Silver and US Dollar Index Report - October 28, 2011
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| Posted: 28 Oct 2011 07:30 AM PDT The Solyndra-gate scandal, which the GOP realizes has the potential to shake the Obama administration to the very top, refuses to go away. Earlier today AP reported that to a republican Subpoena demanding all documents instead of just those selectively produced, "could trigger a claim of executive privilege by the Obama administration and elevate the political stakes. The loan is being investigated by two House committees, which have released Solyndra-related documents from federal agencies including the Energy and Treasury departments and the Office of Management and Budget." The White House has refused a request by the House Energy and Commerce Committee for all internal White House communications about Solyndra. White House Counsel Kathryn Ruemmler said the committee leaders' request has implications for "long-standing and significant institutional executive branch confidentiality interests." Naturally: it would be a big hit to the presidency's interests if it was uncovered that crony capitalist vigilante #1 himself is more than willing to distributed taxpayer capital to the highest bidder. So instead the The White House is ordering a review of loan guarantees made by the Energy Department after a California solar company that got a half-billion-dollar federal loan went bankrupt. There are more than two dozen of these to a variety of clean energy companies." And here is where the latest joke from this president jumps the shark: "[White House chief of staff] Daley said he's tapping a former Treasury official to conduct the review." A former Treasury official... of the Obama administration? To paraphrase Erin Burnett, "Seriously?" At least in Europe they assume the audience is somewhat sophisticated before they baffle them with endless bullshit and non-news after non-news. Here, they skip that key assumption completely.
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| Posted: 28 Oct 2011 07:30 AM PDT
The Solyndra-gate scandal, which the GOP realizes has the potential to shake the Obama administration to the very top, refuses to go away. Earlier today AP reported that to a republican Subpoena demanding all documents instead of just those selectively produced, "could trigger a claim of executive privilege by the Obama administration and elevate the political stakes. The loan is being investigated by two House committees, which have released Solyndra-related documents from federal agencies including the Energy and Treasury departments and the Office of Management and Budget." The White House has refused a request by the House Energy and Commerce Committee for all internal White House communications about Solyndra. White House Counsel Kathryn Ruemmler said the committee leaders' request has implications for "long-standing and significant institutional executive branch confidentiality interests." Naturally: it would be a big hit to the presidency's interests if it was uncovered that crony capitalist vigilante #1 himself is more than willing to distributed taxpayer capital to the highest bidder. So instead the The White House is ordering a review of loan guarantees made by the Energy Department after a California solar company that got a half-billion-dollar federal loan went bankrupt. There are more than two dozen of these to a variety of clean energy companies." And here is where the latest joke from this president jumps the shark: "[White House chief of staff] Daley said he's tapping a former Treasury official to conduct the review." A former Treasury official... of the Obama administration? To paraphrase Erin Burnett, "Seriously?" At least in Europe they assume the audience is somewhat sophisticated before they baffle them with endless bullshit and non-news after non-news. Here, they skip that key assumption completely.
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| Gold Daily and Silver Weekly Charts Posted: 28 Oct 2011 07:28 AM PDT |
| Gold at Short Term Channel-Resistance Extends to Upper 1700s Posted: 28 Oct 2011 07:10 AM PDT courtesy of DailyFX.com October 28, 2011 07:30 AM 300 Minute Bars Prepared by Jamie Saettele, CMT Gold’s recent decline was a false start as the metal has roared higher to reach monthly highs. I maintain that the rally from the September low is corrective and will be retraced. Gold has entered channel resistance which is defended by the 100% extension of the rally from the low at1750, former support at 1762 and the 61.8% retracement at 1772. I am on the lookout for a top next week. Trend Strength (M,W,D) – 1, 0, 1 Latest Video Weekly Forecast COT...
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| Commodities, Including Gold & Silver, Historically Perform Well (on Average) in November Posted: 28 Oct 2011 06:40 AM PDT Have you been wondering how commodities will fare in November? [Below is a chart of] how select commodities performed in the past 25 Novembers (since 1986). Words: 489 So says David Ristau ([url]http://www.theoxengroup.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 integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Who in the world is currently reading this article along with you? Click [COLOR=#0000ff]here to find out.[/COLOR] Ristau goes on to say, in part: A lot of that will depend on the dollar movement. It appears that the dollar may be ready to weaken further on Euro ba...
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| Posted: 28 Oct 2011 06:23 AM PDT Eurozone Bailout Deal Triggers 'Risk-On'
The EFSF bailout fund will apparently be expanded to about €1 trillion. Greek bond holders were arm-twisted into accepting a 50% haircut. And European banks will be recapitalized. While there wasn't much detail beyond this, stocks were off to the races on Thursday and the euro rebounded to new 7-week highs. The firepower of the EFSF will be amplified via leverage of at least 4x. Leverage was employed because it was politically unfeasible to ask EU member states to make additional contributions or guarantees to the fund. Productive northern European economies, particularly Germany, are loathe to provide any more assistance to what they view as profligate southern European states. Yet what is being widely ignored, is that the very leverage that has been used to bolster the EFSF, in the absence of further direct contribution, has dramatically increased the risk to all the guarantors! Only Bundesbank President Jens Weidmann seems to have taken notice; warning that EFSF leveraging is similar in design to the leveraged products "that helped to cause the crisis". I think most rational thinkers would acknowledge that you don't extract yourself from a leveraged debt crisis by piling on additional leveraged debt, but extraction is probably not really the goal here. Policymakers are simply looking to buy more time. Time that is still getting more and more expensive on some fronts; as evidenced by the record high yield demanded in Friday's Italian 3-year bond auction. This is exactly what the bailout deal was supposed to prevent! It was supposed to ensure the market that EU sovereign debt beyond Greece was a safe and secure investment. Yet the markets still seem to have their doubts. And rightfully so; because once you forgive half of Greece's debt, what's the incentive for Portugal, Spain, Italy, Ireland, Belgium and a host of others to make the necessary fiscal sacrifices — austerity measures — to get their accounts in order? In fact, one might argue that Greece gets the sweetheart deal because they were the worst of the worst, benefiting by being the first to allowed to default. There may just be a benefit for a second mover, but beyond that, I would think that all bets are off. It can't even be ruled out at this point that the end-game hasn't already been set in motion. Cut your deal now, while there are still cards to be played… Gold has retraced 50% of the decline from 1920.50 to 1534.06 and closed back above the 50-day moving average. Both are encouraging technical indications. The yellow metal has been boosted by a weaker dollar, that has suffered at the hand of a resurgent euro. Gold also seems to be reclaiming its roll as the safe-haven of preference. For even as the EU vows to go 'all-in' to save the union, talk of additional quantitative measures to reinvigorate the flagging US economy are on the rise as well. One thing we do know from recent history, hard assets like gold tend to perform admirably when bailouts and easy money are the order of the day.
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| Will Gold and Silver Go Up Along with the General Stock Market? Posted: 28 Oct 2011 06:21 AM PDT The yellow metal, money for more than three millennia, has a close relationship to other forms of money. Some argue that it isn’t gold that has risen in value in the last decade, as much that fiat currencies have lost value against gold. Ever since gold began its spectacular rise a decade ago, the U.S. dollar has lost over 80% of its purchasing power. The other currencies have not fared much better. The euro and the Japanese yen have lost over 70%. Gold is the only form of money that governments cannot create out of thin air which is why the supply of fiat currencies is expanding exponentially faster than gold supplies, which increase by about only 3% per year.
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| Will Precious Metals Go Up Along with the General Stock Market? Posted: 28 Oct 2011 06:19 AM PDT The yellow metal, money for more than three millennia, has a close relationship to other forms of money. Some argue that it isn't gold that has risen in value in the last decade, as much that fiat currencies have lost value against gold. Read More...
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With gold, silver and stocks all having big up-moves this week, today King World News interviewed Peter Schiff, CEO of Europacific Capital. Schiff made some great calls recently including the move higher in the euro. When asked about the huge move in gold and silver, Schiff stated, "I think there's more to come. Look at the technical action in everything, in stocks around the world, in commodities. Look at the price of crude oil and look at the dollar, the dollar is breaking down. I mean we had a huge decline against the Australian dollar, but look at that surge back into the 1.40s on the euro."
"Taxes," the old-timers carp. "They get you coming and going."
U.S. stock indexes are taking a breather after yesterday's euro-euphoria. The Dow is up fractionally; the S&P is down fractionally.
Barely 24 hours after the grand bargain that supposedly saved Greece and the euro in one fell swoop… Germany's central bank is throwing cold water on the whole thing.
For the moment, the currency markets have stabilized after yesterday's Big Announcement. The dollar index sits at 75 on the nose.
Commodities are enjoying a broad rally thanks to the faux-resolution of the euro crisis. At 323, the CRB index is up to a level last seen six weeks ago.
For the second day running, we're getting statistical evidence that Americans are drawing down their "savings" to make ends meet.
In addition, "core personal consumption expenditures" — the Federal Reserve's favorite gauge of inflation — clocked in at 1.6% year over year.
Gold is holding onto its gains from yesterday and the day before. At last check, the spot price is $1,741. Silver is likewise holding steady at $35.11.
"Not only has gold been a coveted form of money for thousands of years," observes Chris Mayer, "it is, as the boys on Wall Street would say, 'underowned.'"
"Beyond this," adds Chris Mayer, "there are the basics of supply and demand. It's interesting to reflect on the fact that gold has gone from $200-plus an ounce in 2001 to $1,600-plus an ounce today. Yet supply has barely budged."
From now through Nov. 19, China's top rare earths producer is shut down.
Here's a commodity experiencing a bizarre dislocation in local market demand… either in the U.K. or in Romania, we're not sure which.
"I am 66 years old," writes a reader who responded to one of our two Project X questions. "I have raised and educated three children and been married for 40 years. I have managed to accumulate about $350,000 for retirement — it isn't enough."
"I'm worried that I don't even have any retirement savings and I'm 55," writes another. "I am clearly way behind, but I do agree with your sentiment that we need to control our own futures. I changed jobs from one I really liked to one with the government because it should offer better stability, but in the current situation, who knows."
"I'll be looking forward to 
"Wow, you truly outdid yourself with today's edition of The 5. A truly marvelous summary of relevant facts blended together with an outrageously funny slant."
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