Gold World News Flash |
- Stephen Leeb - GS Bullish...How it Will Impact Gold & Silver
- ‘D-Day’ Near For GLD
- Retail Trader Positioning 1st November – EURGBP switcheroo
- The U.S. is Headed Toward a Complete and Utter Collapse of its Financial System
- Why Gold Stocks are Set for a Big 2012
- Don Coxe Update On Europe
- This Year’s ‘Lehman Moment’ Might Occur Soon
- Gold Seeker Closing Report: Gold and Silver Fall With Stocks
- Rating Agencies Scam the World
- Harvey Organ's: The Daily Gold & Silver Report
- James Turk - Silver Formation Projects Spike to $60 - $75 Level
- The Global Derivative Implosion Has Begun
- Weimar inflation expert Adam Fergusson is interviewed by GoldMoney's James Turk
- Someone Is Going To Jail For This: MF Global Caught Stealing Hundreds Of Millions From Customers?
- CHART OF THE DAY: Why John Paulson Says There's No Gold Bubble
- Why Gold, Silver are Rising and Not Falling?
- The Air Has Been Let Out Of The Balloon
- MF Global Files for Bankruptcy / Questions on Obama Legitimacy / Silver and Gold Raid
- Monthly Gold Charts - October 2011
- U.S. Faces Much Worse ‘Japanization’
- There is NOTHING More Bullish for Precious Metals Than Central Banks Devaluing Their Currencies
- Gold Reverses from Fibonacci Measurement and Channel
- Gold Price Dropped As Dollar Rallies, Bull Market Is Alive and Well, Just Undergoing a Correction
- Open Europe On The Greek Referendum: Is Democracy Finally Coming Home?
- How Will the Yen Intervention Affect Gold and Silver?
- David Goguen: Four Latin American Junior Takeover Targets Identified
- Is US Culture Stifling Entrepreneurship?
- Ugly Close As 30Y TSY Yield Drops Most Since March 2009
- Foreign Borrowing Poses An Imminent Threat to the U.S. Dollar and U.S. Financial System
- Stocks in October: Believers and Skeptics Face Off
| Stephen Leeb - GS Bullish...How it Will Impact Gold & Silver Posted: 31 Oct 2011 07:28 PM PDT "There is no other currency out there that can even remotely replace gold."
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| Posted: 31 Oct 2011 07:21 PM PDT The SPDR Gold Trust, more commonly known by its NYSE ticker symbol "GLD", represents a triumph of "bankster engineering" in the gold market.
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| Retail Trader Positioning 1st November – EURGBP switcheroo Posted: 31 Oct 2011 06:42 PM PDT A strong shift in sentiment against the Euro was the theme of yesterdays action, this has resulted in a big shift in retail positioning in the EURGBP today which went from over 60% of retail traders being short (and correct) to now over 60% being long (and wrong as they are most of the time). In keeping with our contrarian view we maintain a short bias on EURGBP. USDJPY despite intervention seems to be pulling back from the highs, Japan has promised sustained intervention to curb the squeeze felt by Japanese exporters. Today's Data & journal links eurusd | gbpusd | usdjpy | s&500 | nasdaq | dow jones | gold| crude oil
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| The U.S. is Headed Toward a Complete and Utter Collapse of its Financial System Posted: 31 Oct 2011 05:56 PM PDT The U.S. is headed inexorably toward a systemic failure, a complete and utter collapse of the financial system. TARP and all the other machinations have not improved the underlying insolvency of the banking system. They have, however, deferred a collapse and ensured that it will ultimately be worse. [Let me explain.] Words: 1385 So says Monty Pelerin ([url]www.economicnoise.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 [/COLOR] Pelerin goes o...
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| Why Gold Stocks are Set for a Big 2012 Posted: 31 Oct 2011 05:16 PM PDT Last week we discussed the concept of relative strength. Again, relative strength is the measuring of one market against another. There are perhaps 1000 mining companies and maybe 5% of them are worthy of your research and investment. Fundamental analysis should lead you to the best companies while technical analysis (relative strength analysis in this case) can generate a precise list of top prospects. Today we are focusing on relative strength in a larger context and will then apply it to the gold stocks. One of the best times to use relative strength is during or after a strong market selloff or panic. After 2008, I was most bullish on Gold and Agriculture for the simple fact that both didn’t have the long-term technical damage that occurred in most markets. Most markets plunged below 2005 lows. Markets that escaped that fate and held up reasonably well would make new highs first and well ahead of global stock indices (which have yet to make new highs). In the...
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| Posted: 31 Oct 2011 04:14 PM PDT Don Coxe Update On Europe Focus on Europe
Q+A
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| This Year’s ‘Lehman Moment’ Might Occur Soon Posted: 31 Oct 2011 04:00 PM PDT This originally appeared in the Daily Capitalist and was written by DoctoRx who writes our market commentary. He has 30 years of investment experience.
The strangely-named MF Global is now the subject of the lead article of the online NYT, with the title Regulators Investigating MF Global for Missing Money. Here's the lede:
One of the reasons for the stock market crash after Lehman is discussed in the article. Innocent hedge fund money (if there is such a thing!) was lost to the rightful owners in the collapse. If indeed there has been misappropriation of customer funds at MF, how many customers are going to withdraw their funds from other commodities accounts as well as from standard stock/bond brokers, after selling their holdings first? Especially after the frustrating decade-plus we have experienced in the financial markets, why shouldn't people just move to direct ownership of Treasurys and into FDIC-insured bank deposits? The story could hardly be worse. MF Global was not just any old futures firm. It was run by a stalwart of the Democratic establishment and the former leader of Goldman Sachs. If his firm was guilty of what would basically be akin to embezzlement of funds owned by the firms clients, whether or not Mr. Corzine was blameless, how could one trust a securities firm run by someone who had not been a high-ranking government official? A major "risk-off" move could be in the making.
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| Gold Seeker Closing Report: Gold and Silver Fall With Stocks Posted: 31 Oct 2011 04:00 PM PDT Gold dropped back down to as low as $1704.55 by a little after 3AM EST before it bounced back higher in London and New York, but it still ended with a loss of 1.19%. Silver fell to as low as $34.095 by a little before 10AM EST before it also rallied back higher, but it still ended with a loss of 2.21%.
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| Rating Agencies Scam the World Posted: 31 Oct 2011 02:55 PM PDT from WealthCycles:
After the collapse of Lehman Brothers in late 2008, you would think we should have learned a lesson—that leverage is dangerous, that the banking system is fundamentally flawed, and that ratings agencies are useless. The latest news of the imminent demise and fire sale of broker-dealer MF Global shows that those lessons were truly lost. ZeroHedge posted the current ratings from our favorite rating agencies: "And the winners are…. Moody's Ba2-; S&P: BBB-; Fitch: BB+;" And just to throw insult to injury, today Bloomberg released a video about an interesting study that confirms our worst suspicions—that ratings agencies are a pay to play operation—meaning the more a company pays, the higher the rating.
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| Harvey Organ's: The Daily Gold & Silver Report Posted: 31 Oct 2011 02:08 PM PDT MF Global files for bankruptcy/Questions on Obama Legitimacy/silver and gold raid
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| James Turk - Silver Formation Projects Spike to $60 - $75 Level Posted: 31 Oct 2011 01:33 PM PDT When silver takes out $43 it should rocket just like it did earlier this year when it nearly doubled in price.
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| The Global Derivative Implosion Has Begun Posted: 31 Oct 2011 01:27 PM PDT By Bix Weir Word from EVERYWHERE is that the global derivative implosion has begun and THERE IS NO STOPPING IT NOW! It is now out in the open with MF Global and the dominoes are falling fast. Here's the latest from Zerohedge.com: Panic Behind The MF Scenes As Company Refuses To Disclose Information To Regulators Even In Death "Whatever MF is hiding is not something that will hurt it or much less its stakeholders for which the management team obviously never cared one iota. After all the company is already dead. Whatever is on its books has huge impacts to those either behind the corporate veil, read Mr. Corzine, who may or may not have regulatory issues arising from 10(b)-5 "concerns", or more probably, to other banks and Primary Dealers." And there will be more…MANY MORE! The Quadrillion dollar derivative mess is unraveling as we speak. Time to get your last pennies out of the bank…if you still can. We will kick ourselves for believing that paper and electronic blips were REAL assets. HA! And you thought those tulip bubble people were delusional…at least they ended up with nice gardens! The European implosion can happen at any moment followed quickly by the US implosion. When this is over those with money "in the system" will end up with NOTHING! All the pieces are in place. WE THE PEOPLE are ready to kick the banksters to the side of the Road! All the best to you and yours. – Bix Read More from Bix @ RoadToRoota.com
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| Weimar inflation expert Adam Fergusson is interviewed by GoldMoney's James Turk Posted: 31 Oct 2011 01:17 PM PDT 9:15p ET Monday, October 31, 2011 Dear Friend of GATA and Gold: In the latest GoldMoney interview, the historian Adam Fergusson, author of the definitive account of the Weimar inflation, "When Money Dies," discusses with GoldMoney founder James Turk how inflation destroyed the German economy corrupted German society in the 1920s and how that experience may relate to the inflationary solution for governments today. The interview is 35 minutes long and you can watch it at the GoldMoney Internet site here: http://www.goldmoney.com/video/fergusson-turk-interview.html?gmrefcode=g... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Drills 120.9 Meters Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the drill results received from its 2011 drilling Wellgreen platinum group elements, nickel, and copper project in the Yukon Territory. Borehole WS11-188 encountered 457 meters of mineralization grading 0.47% nickel equivalent (including 0.72 grams per ton platinum, paladium, and gold) from surface to the footwall contact. Within this larger swath of mineralization, the hole encountered a high-grade section of 17.8 meters of 3.14 grams per ton platinum, palladium, and gold, 1.03% nickel, and 0.74% copper (1.77% nickel equivalent). The hole was drilled completely outside of current resource boundaries, between the East Zone resource and the West Zone resource that was reported in the company's press release no July 14, 2011. The high-grade intercept located between the two resources not only demonstrates that the East and West Zone resource form a single, geologically contiguous body but also indicates that the higher-grade material in the East Zone continues to the west and at depth at Wellgreen. For drill result tables and maps, please see the company's full press release here: http://www.prophecyplat.com/news_2011_sep26_prophecy_platinum_wellgreen_... Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Someone Is Going To Jail For This: MF Global Caught Stealing Hundreds Of Millions From Customers? Posted: 31 Oct 2011 01:06 PM PDT Say you are the head back office guy at MF Global, it is the close of trading on Thursday, the firm has already completely drawn down on its revolver, and all the resulting cash in addition to all the firm's cash at your disposal in affiliated bank accounts, up to and including petty cash, has been used to satisfy margin demands due to declining collateral value, yet the collateral calls just won't stop, and impatient voices on the other side of the phone line demand you transfer even more cash over immediately or else risk default proceedings commenced against you within minutes. What do you do? Do you go ahead and tell your superior that the firm is broke even though the co-opted media is trumpeting every 5 minutes that "MF Global is fine", knowing full well you will be immediately fired for being the bearer of bad news, or do you assume that courtesy of your uber-boss being the former head of the Vampire Squid, and thanks to infinite moral hazard which after Lehman made sure nobody would ever fail ever again, that there is simply no way that you will be left without some miraculous rescue, if only you can last one more day, and as a result proceed to "commingle" some client funds with the firm's cash. It turns out that at MF Global you do the latter... over and over... until you have literally stolen hundreds of millions from the firm's client accounts in hopes that the miracle rescue will come on Friday... then over the weekend... and then you realize no miracle is coming, partly because your actions have been exposed, partly because miracles only exist in fairy tales. The next thing you know, your firm is bankrupt and hundreds of clients are about to learn that all their money is gone. Poof. This is not a fictional tale. This is precisely what very likely happened at MF Global in the past 72 hours. And someone has to go to jail. That someone, if indeed this criminal act is proven to have taken place, should be none other than Jon Corzine himself. The sad truth of just how low Wall Street has fallen comes to us courtesy of the New York Times:
As for the details:
And just like in the Lehman collapse where tens if not hundreds of international prime brokerage hedge fund clients, due to no fault of their own, found themselves insolvent after their cash ended up being caught at the London Lehman office (the details of how that money was illegally transferred from London to the US is a different topic entirely) and never to be seen again except to satisfy general unsecured claims, so thousands of MF clients are about to realize that money they thought they had, even if completely unencumbered with other assets, read pure cash, read money not at risk, is now gone forever, and they will have to wait years until the bankruptcy process determines if the claim deserves priority status to the unsecured bondholders. Best case: assume a 70% haircut on the money, if it is every to be seen again at all. So who can be sued? Who can be blamed for this malicious and purposeful criminal act? Why everyone from the back office clerk presented in the thought experiment above, all the way up to the man at the very top, Jon himself, who, like in every other act of Wall Street impropriety will plead stupidity and deny he ever knew of this crime. Unfortunately, our criminal regulators, who will be just as complicit in clearing him of all wrongdoing, will aid and abet this latest destruction of faith in US capitalism. What happens next? Why customers at all other brokerages, all other exchanges, afraid that their money will suffer the same fate as MF, even if they transact with perfect solvent clearers and agents, will proceed to pull their money, as they know they have nobody to trust but their own prudent and forward looking actions. Which in turn will start the kind of liquidity drain that killed not only Lehman, but froze money markets, and with that brought the complete capital markets to a standstill, only to be thawed after the Fed pledged multiples of the US GDP to rescue Wall Street in October of 2008. And that, dear reader, is called unintended consequences, and how the bankruptcy of a small exchange can avalanche into a crippling Ice Nine of what is left of capital markets all over again, courtesy of crony capitalism, rampant criminality and a regulator and enforcement body that is more fascinated with midget porn than any regulating or enforcing of the very firms it hopes to get an assistant general counsel job from in a few short years.
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| CHART OF THE DAY: Why John Paulson Says There's No Gold Bubble Posted: 31 Oct 2011 01:02 PM PDT John Paulson gave a speech last night to the Chinese Finance Association, where he discussed gold, inflation, the outlook for the economy....
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| Why Gold, Silver are Rising and Not Falling? Posted: 31 Oct 2011 01:00 PM PDT You would have thought that a 'resolution' to the Eurozone debt crisis would have caused gold to tumble, the euro to soar, and the dollar to fall –perhaps with the gold price in the dollar steady. So why is the price of gold behaving as it is?
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| The Air Has Been Let Out Of The Balloon Posted: 31 Oct 2011 12:50 PM PDT from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
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| MF Global Files for Bankruptcy / Questions on Obama Legitimacy / Silver and Gold Raid Posted: 31 Oct 2011 12:26 PM PDT by Harvey Organ: Good evening Ladies and Gentlemen: Today the price of gold fell by $22.00 to $1724.20 as the bankers decided to raid in concert with an intervention by the Japanese to lower their Yen. The price of silver followed suit down by 93 cents to $34.34. The big news of the day is the bankruptcy filing by MFGlobal a huge trading firm under the direction of former Goldman Sachs CEO and also the former Governor of the State of New Jersey and Senator for that state. I will in the body of my commentary explain what went wrong over at MF Global and expected consequences. First let us head over to the comex and assess the damage today. Read More @ HarveyOrgan.Blogspot.com
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| Monthly Gold Charts - October 2011 Posted: 31 Oct 2011 11:55 AM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] I have to keep my comments brief today as it is time for Halloween! Looks like precious metals owners got a back of tricks today instead of treats. The culprit was the intervention by the Japanese monetary authorities who hit the Yen with a barrage of selling and sent the markets into a tizzy. The subsequent rally in the US Dollar then had the mindless hedgies dumping everything they bought late last week as equities were trashed along with the commodity sector in general. Copper and silver were both sold off and gold went along for the ride to the downside. If some of you might have noticed the Treasury bond had a gargantuan 3 point rally after just suffering a three point sell off last Thursday. How's that for ridiculously insane price action. The entire business cycle, just completely changed over the course of the last 4 days. Tomorrow it could merely take 24 hours to re-reverse the busin...
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| U.S. Faces Much Worse ‘Japanization’ Posted: 31 Oct 2011 11:27 AM PDT by Jeff Nielson, Bullion Bulls Canada:
At that same time I was equally adamant in my own writing: the U.S. would be extraordinarily lucky if its economic collapse was no worse than that of Japan. In fact my expectation was that the collapse of the U.S. economy would be many times worse than what has become a "Lost Generation" for the economy of Japan, resulting in my dubbing the collapse of the U.S. economy to be its "Greater Depression". As we near the end of 2011, we now see something which would have been unthinkable just three years earlier: a U.S. business icon (gently) warning the U.S. business and political communities of the many reasons to expect the U.S.'s economic collapse to exceed the severity of Japan's own depression. Read More @ BullionBullsCanada.com
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| There is NOTHING More Bullish for Precious Metals Than Central Banks Devaluing Their Currencies Posted: 31 Oct 2011 11:25 AM PDT by Andrew Hoffman, MilesFranklin.com:
The global economy is like the train at the end of Back to the Future III, careening down the track at 88 miles per hour en route to its inevitable crash into Clayton Ravine. No matter what sticks and stones are placed on the track to slow its momentum (such as FAKE bailout schemes, such as we saw last week, and "Yenterventions", as we see this morning), the train will inevitably crash, and do so in spectacular fashion. This is why it is GUARANTEED that PHYSICAL Precious Metal prices will rise until a new gold standard is forced upon the world by the litany of collapsing currencies. Before I get to the point of this RANT, I need to catch you up with the "horrible headlines" since my last missive was published on Friday. A daunting task, as nearly THIRTY are listed in my "future RANT" section, but no matter, this is what I LOVE to do.
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| Gold Reverses from Fibonacci Measurement and Channel Posted: 31 Oct 2011 11:01 AM PDT courtesy of DailyFX.com October 31, 2011 06:56 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 reversed from channel resistance which is defended by the 100% extension of the rally from the low at1750. I am cautiously bearish against 1752.45. Trend Strength (M,W,D) – 1, 0, 1 Latest Video Weekly Forecast COT...
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| Gold Price Dropped As Dollar Rallies, Bull Market Is Alive and Well, Just Undergoing a Correction Posted: 31 Oct 2011 10:40 AM PDT Gold Price Close Today : 1724.20 Change : (22.00) or -1.3% Silver Price Close Today : 3433.7 Change : 93.3 cents or -2.6% Gold Silver Ratio Today : 50.21 Change : 0.705 or 1.4% Silver Gold Ratio Today : 0.01991 Change : -0.000283 or -1.4% Platinum Price Close Today : 1606.10 Change : -39.40 or -2.4% Palladium Price Close Today : 649.00 Change : -14.85 or -2.2% S&P 500 : 1,253.31 Change : -31.78 or -2.5% Dow In GOLD$ : $143.33 Change : $ (1.45) or -1.0% Dow in GOLD oz : 6.934 Change : -0.070 or -1.0% Dow in SILVER oz : 348.17 Change : 1.38 or 0.4% Dow Industrial : 11,955.01 Change : -276.10 or -2.3% US Dollar Index : 76.55 Change : 1.454 or 1.9% GOLD and SILVER are the currency alternatives -- competitors, if you will -- to the euro, yen, and dollar. Thus when the dollar rallies, you can expect silver and gold to take body blows. Today they did. THE GOLD PRICE dropped $22 (1.3%) to turn off the Comex lights at $1,724.20. Big drop had already happened on the other side of the world time the globe's turning brought midnight Sunday/Monday to the Eastern Time zone. That's the great thing about government surprise parties, no way to decline the invitation. Most of the day GOLD traded from $1,725 to $1,712, although the low came before New York opened at $1,704.60. Closing under that $1,725 support offered no encouragement to gold bugs, and will likely knock prices again tomorrow. $1,705 is the support to watch. That marks the upper boundary line of gold's trading from the end-September collapse until last week's upside breakdown. Falling through that mark opens a trapdoor for the GOLD PRICE with a $1,650 basement. $1,605 is possible, and home to the 150 day moving average. The SILVER PRICE, more manic as usual, lost 2.6% today, 93.3c, to close Comex at 3433.70, beneath 3450c support. Likely target is 3200-ish, about where 'twill meet the rising trend line. If it falls thru that, silver holders will be writhing in pain. BOTTOM LINE: Bull market is alive and well, just undergoing a correction. Y'all hang on -- don't let that bull shake you off! I'm going to share a little secret with y'all. I've been working on a book. For 15 years. No, not about silver and gold, hardly mentions them. Rather, it's the tale of moving with my family to a farm waaayout in the country, so far out you have to order sunlight from Sears and Roebuck. It exposes all, from colossal mistakes to miniscule successes. I'll tell you where the dead animals are buried, and who (probably) killed them. You'll learn how we got to 27 dogs at one point, how we fell into the pig business, and how not to herd sheep (Hint: gotta have a Border Collie). You'll hear about the joys -- Bodacious Hoedowns and Agrarian Challenges -- and the sorrows -- how many chickens can a skunk kill? You will also no doubt find it even easier to laugh at me than I do to laugh at myself, and you will meet my whole family and others for miles around. Stocks stir my soul to poetry: Under water everywhere, and all th'indices did shrink! Underwater everywhere, and every stock did stink! Last Thursday I wrote that you should look around and fix the sight in you mind, because for stocks that was as good as it gets. Now y'all see why I said that. Today the Dow closed at 11,955.01 and lost 2.26% or 276.1 points, all but 85.97 points of what it gained in the last two days. It lost 76.25% of the last two days gains. S&P500 lost 31.78 or 2.47% today. Now all those who bought the euro "fix" are beginning to sober up, rub their eyes, and wonder what in the WORLD they were thinking to buy stocks like that? Now I bet y'all understand why they serve free drinks in casinos. I was wondering when the Nice Government Men in Japan were going to act to save their export addicted economy, and they did this morning. I will forbear the obvious martial arts and samurai and ninja references, and observe merely that they slapped the yen winded. It dropped to 127.92 c/Y100 (Y78.17/$1, down 3.02% from Friday. Since it was a government surprise party, they threw it over the weekend for the rest of us) so that it all happened at once and beat the longs senseless. 'Twill be a while before they go long yen again. Chart damage will last a while, too. Yet the Japanese only set the stage for more trouble down the road, since they did not announce, like the pragmatic Swiss, that they would not tolerate the yen over such and such a rate. Thus they again have to make another surprise raid on their own currency. Central banking is NOT the road to currency stability. Euro's day in the sun is over, too. Japanese move today sent money screaming into dollars for safety, so the Euro gapped down -- largely -- below its 200 DMA (1.40.86) then fell to the 50 DMA (1.3842) for good measure, wiping out all the last week's gains. Closed at 1.3852, down 2.1%. And who was the gainer in all this, save the US dollar, the currency everyone loves to hate but buys anyway. Dollar bounded up off 75 to end the day up 145.4 basis points (1.87%) at 76.551, leaving the last two days behind as a spike bottom and suspected turnaround -- as suspect as a cat with yellow feathers on his chin when your canary goes missing. For a while at least, the dollar will rally. Until the next crisis, which might be two days or two weeks or two months or two minutes, but surely will come. Today will be the last day I will send a commentary until 8 November. I'll miss y'all, but I have to attend a timber framing class. 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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| Open Europe On The Greek Referendum: Is Democracy Finally Coming Home? Posted: 31 Oct 2011 10:09 AM PDT Euroskeptic think thank Open Europe once again appears on the scene with one of the first more extended reactions to what the possibility of a Greek referendum, which according to the Guardian will take place in January, means for Greece, the Eurozone, and the latest bailout (which according to Williem Buiter, who reiterates to the FT something we said 2 months ago, needs to be €3 trillion). One thing we would like to point out is that if indeed the popular vote on the future of Europe will take place in January, then kiss the year end rally goodbye as the uncertainty around the market will be insurmountable by anything the bureaucrats can throw at the concern that Europe is on fast-track to political suicide. From Open Europe Democracy Is Coming Home... Interesting developments coming out of Greece this evening, as Greek Prime Minister George Papandreou has called a referendum on the latest Greek bailout and austerity package. Speaking to the Greek parliament he said:
It's not yet clear exactly what will be voted on, but we imagine it will have to include the entire second bailout package, including the 50% write down for Greek bondholders, as well as the austerity and fiscal conditions attached to the latest package. So a lot of important factors for the future of Greece in there. As if that wasn't enough, it will be tied to a vote of confidence on the current Greek government. So which way will it go? Well, it's tough to say off the bat. A recent poll showed that 59% of Greeks think the new package is "negative" or "probably negative" for Greece, and there's been no hiding their displeasure with the austerity measure and economic collapse. As such, there wouldn't be too many Greeks who would be sad to see the back of Papandreou. On the other hand, they may be keen to see Greek bondholders take some losses finally and endure some pain (although given the Greek bank and pension fund exposure to Greek sovereign debt this could end up costing Greek taxpayers again in the end). The same poll also found that 72.5% of Greeks want to stay in the eurozone. Clearly, there are some conflicting feelings. Have no doubt that if Greece votes down the latest package it could be bad for Greece and the eurozone. It would leave Greece with almost no funding and no government – pushing the country very quickly towards a disorderly default and disorderly exit of the eurozone. That would be painful for both the eurozone and, especially Greece, have no doubt, the financial market turmoil and unknown knock-on effects would send the whole of Europe (including the UK) into a spiral of uncertainty. This could be big turning point in this crisis. The EU should move quickly to come up with plans to mitigate the fallout of a no vote, specifically how to handle a rudderless and broke Greece, which would probably include plans for allowing it to exit the euro. A yes vote would be far from a solution, at best it would buy some time for the Greek government and the EU to enforce some necessary reforms thanks to a fresh mandate. As with any referendum it may come down to the phrasing of the question. Let's hope the Greek government and the EU do a better job of communicating the issues at hand than they have done so far in this crisis.
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| How Will the Yen Intervention Affect Gold and Silver? Posted: 31 Oct 2011 10:06 AM PDT The relationship between the US dollar index and precious metals is an important one to respect. Last week, the dollar index experienced a sharp decline as the EU plan offered support to the euro, which is the largest weighted currency in the dollar index basket. As a result, gold and silver had a terrific week. Now, the Japanese yen is sending the US dollar sharply higher, and precious metals lower.
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| David Goguen: Four Latin American Junior Takeover Targets Identified Posted: 31 Oct 2011 10:03 AM PDT The Gold Report: China posted its worst growth rate in more than two years during the third quarter. China is one of gold's biggest buyers and largely drives demand. Should gold bugs be concerned? David Goguen: I don't think so. While it was the worst growth rate in two years, China still had a very respectable growth rate of 9.1%. Also adding to demand is China's growing middle class and its affinity toward gold bullion that has lasted centuries and will likely continue for centuries both as a savings vehicle (through retail investment demand) and as the central bank continues with its purchases to diversify its foreign currency reserves. According to figures released by the World Gold Council, China and India accounted for 54% of global bar and coin investment and 55% of global jewelry demand in 2010. These markets for gold have been growing at a remarkable 30% per annum. TGR: Global markets seem confident that a plan can be reached to solve the Eurozone's sovereign debt problems. ...
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| Is US Culture Stifling Entrepreneurship? Posted: 31 Oct 2011 09:35 AM PDT Synopsis: Has the concept of entrepreneurship become narrowed and warped in the US? Vedran Vuk argues convincingly that it has. Also in today's issue: more Japanese currency manipulations; and banks are handing out pink slips. Dear Reader, On a recent trip to NYC, I finally tried a New York bagel. One semester while I was studying in Baltimore, my three roommates were all New Yorkers, and they would endlessly rave about the bagels. Perhaps that was what they missed the most about the city. After eating my first NYC bagel, I understand their obsession. If I lived in the city, I would have a serious carb-intake problem. With this experience in mind, I have an interesting conundrum for you to think about today: Why does one have to travel to New York for a really good bagel? As my former roommates realized, one can't even get the same quality bagels even five hours outside the city. I'm not asking why there aren't good bagels in Bangladesh, but why are there no equivalently good bagels in an American city nearby? This question doesn't just apply to bagels, of course; it's relevant to all sorts of food. For example, I haven't found an excellent creole restaurant outside of Louisiana. I've discovered some adequate knockoffs that bring me back to the memory of a better meal long gone by, but nothing that would make my jaw drop as do many restaurants in New Orleans. This seems hard to explain simply by market demand. Do people in other cities prefer buying mediocre bagels? It seems like a strange claim to make. Furthermore, how is that I can find excellent Nepalese and Vietnamese food across the country but can't get a decent fried catfish and hushpuppies in the northern US? While I was living around D.C., there were – believe it or not – two restaurants serving excellent Bosnian food. They took me right back to being in the Balkans. These places weren't cheap imitations – they could successfully compete in the home country as well. In D.C, it was easier to fulfill my cravings for Eastern European, Japanese, Korean, and Indian food than for delicacies from the Deep South that originate only several states away. I might have a clue to the problem's origin, but I'm not sure of the possible solution. Maybe you readers can write in and share your thoughts. In my opinion, we have a real lack of entrepreneurship particularly among the lower classes of American society. Someone out there knows how to make that excellent bagel. They're likely waking up at the crack of dawn in NYC while being paid an abysmal wage. Someone in Mississippi is frying a catfish and hushpuppies to perfection for minimum wage. There's a saucier in New Orleans concocting mind-blowing creole sauces for not much more money. Why do such individuals not consider taking their talents somewhere else and starting a business? The first thing that comes to mind is the constraint of credit and funds. Of course, not everyone working for rock-bottom wages is going to figure out a way to start a restaurant, but I'm not asking why everyone doesn't start a specialty restaurant. Rather why is it that almost no one starts one? It's the reason why local cuisines don't spread far in the US. Furthermore, immigrants disprove the claim of it being due to a constraint of funds. When I was living in Baltimore, I could get pretty authentic Mexican food. In fact, there were an incredible number of options. If recent immigrants who can barely speak English have opened up restaurants, it's hard to argue that Americans can't start similar businesses. Those business owners almost certainly didn't all cross the border with a trust fund at their disposal. One reason behind this could be the way entrepreneurship is praised in the US. We hold a very specific type of entrepreneur on a pedestal. Think about Steve Jobs or Bill Gates, two of the most lauded US businessmen today. One aspect of their career routes is encouraging: the part about dropping out of college and starting their businesses. The rest of their story is actually discouraging for many. In some ways, they're horrible role models for entrepreneurship. First of all, these guys are geniuses. You and I… are probably not as smart as they are. A braniac making computers in his garage isn't an ideal example for the average Joe. We need more examples of regular people with average talents – or even below-average talents – starting a business. In the US, entrepreneurship is often portrayed as something reserved for an elite, intellectual class. The message seems to be, "Only start a business if you've really got it figured out." The entrepreneur drops out of college not because he's dumb – but rather because he's too smart and visionary for school. In a way, that's not what entrepreneurship is all about. Despite the common portrayal, it's not about being smarter than everyone else; it's about creating something for yourself. The average Mexican taco joint isn't flipping the culinary world on its head; it's simply carving out its piece of the pie with its workers' skills. Furthermore, as Americans, we seem to have an idea that a business plan is only good if it will make one wealthy. If the idea can't make a million or even a hundred thousand bucks, it isn't worth doing. People from other countries seem to see it differently. The guy working a gyro cart on the corner is probably lucky to clear a lower-middle class lifestyle, but he starts his business knowing that ahead of time. Somewhere along the way, there was a change in America's entrepreneurial spirit. Entrepreneurship is no longer a process of creating a job for oneself; rather, it's seen as the exploitation of some genius idea or utilizing superior intelligence outside an academic context. That's really not what it's all about. This change isn't just an economic tragedy, but also a cultural one. We need more people to spread local American cuisine – to other states and even abroad. Consider this: right now, there are thousands upon thousands of students graduating with college degrees in art, music, and English. They're preserving traditions dating back centuries. In contrast, how many Americans are learning to make an excellent New York bagel or a proper Philly cheesesteak? In my opinion, this culinary art form is more important than those classical majors. Call me uncultured if you will, but I'm much more interested in having an authentic cheesesteak down the street than another art gallery. There's a lot on the line here. We're losing something intrinsic to America, and I'm afraid that when it's gone, it will be difficult to get back. [To be a successful investor is something like being a successful entrepreneur: one must be willing to look at things from a different perspective than most others and take informed risks. The Casey Report, with its focus on big-picture analysis and contrarian investing, offers subscribers actionable stock recommendations as well as thought-provoking analyses of shifting trends. Put our experts to work for you: a three-month trial subscription is risk-free.]
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| Ugly Close As 30Y TSY Yield Drops Most Since March 2009 Posted: 31 Oct 2011 09:34 AM PDT While much was made of the MF Global news today, we suspect that the tipping point for risk assets was more likely driven by the plethora of reality-based analysis of the situation in Europe combined with the afternoon news that Greece is facing a referendum and a lack of demand for the EFSF issue today. Heavy volume arrived into the close to the downside, suggesting asset allocation rotation from equities to bonds, which helped propel TSYs even further down in yield. The entire complex flattened notably with 30Y outperforming -24.5bps, the largest single-day yield move since March 2009, as the much-watched 2s10s30s butterfly has retraced all of last week's increase. ES closed at its lows (down over 2.5%) only to extend those losses in the evening session as we post.
At over 4 standard deviations, today's drop in 30Y yields was the highest for a single-day since 3/18/09.The roundtrip in the entire TSY complex from last Wednesday is quite impressive and remains surprising as to how a broad market can interpret what was so clearly no-real-news in such a schizophrenic way without some 'help'.
35bps sell-off in 30Y at its best early Friday - only to give it all back and some by the close of today - perhaps there is something to our perspective on MF Global and its TSY inventory last week. The drop in TSY yields was initially shrugged off by ES but very quickly it became clear that fears were gathering and ES accelerated to the downside - with IG and HY credit tracking wider also. VWAP acted as natural resistance at every small rally suggesting there was more of an institutional bias to selling today - which again fits with the rotation we would expect after such an aggressive month's performance in stocks.
As the day wore on, all risk-drivers were reverting back to what is more realistic (as opposed to the intervention-dislocation from the overnight session). EURJPY has retraced almost the entire move and as we closed CONTEXT and ES were back in line - rather surprisingly given the amount of movement (and lack of recalibration) in asset classes today - though we did note earlier that risk-off in broad markets was dominating any correlation-drivers.
Under the surface, HY and HYG underperformed stocks (having not really seen the kind of risk-on moves to bring them back to fair even with last week's ebullience) but IG was the worst relative-performer (as we suspect low-cost hedges /shorts were laid back out). Financials in the US were not pretty (even though Materials and Energy underperformed broadly) as CDS widened and stocks tumbled in the majors (e.g. MS -9% and 35bps wider!!). We have to say it was rather quiet and slow to start with - which makes sense given last week's violence - but by the close equities and credit were losing ground fast once again. EURUSD lost 1.39 and DXY managed a 2% gain from Friday's close (as JPY's 3% loss contributed). PMs slid lower as the dollar rallied and aside from what appeared to be a liquidation (and unique to itself) rip-fest in WTI in the middle of the day, moves in commodities were all negative. Volumes were in general light until the last hour or so. Whether this was MF related as traders were anxiously re-arranging clearing or a month-end wait to transact is unclear. It is clear, however, that firms are clearly derisking (as IG reaches back to fair-value and HY cheap once again and the European financials and sovereigns face renewed pressures).
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| Foreign Borrowing Poses An Imminent Threat to the U.S. Dollar and U.S. Financial System Posted: 31 Oct 2011 09:21 AM PDT The United States is the largest debtor nation in the history of the world, and our borrowing is increasing. In 1950 spending for social programs was only one percent of the total Federal Budget. As the economy grew, social programs expanded to include Social Security, Medicare, Medicaid, Food Stamps, Unemployment Compensation, Supplemental Security for the Disabled, and educational programs. In 1983 as the United States pulled out of an ugly recession and brought inflation under control, social programs consumed 26% of the budget. In fiscal year 2012, they’ll eat up an estimated 57% of the budget.
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| Stocks in October: Believers and Skeptics Face Off Posted: 31 Oct 2011 08:50 AM PDT After a strong run-up Thursday followed by a weaker one Friday, major US stock indexes are in retreat. The Dow, the S&P, the Nasdaq and the Russell 2000 have all surrendered more than 1%, a move attributed, in part, to a realization that the eurozone rescue plan bears a striking resemblance to Gertrude Stein's description of Oakland: "There is no there there." "Politicians have delayed addressing the [eurozone] problem yet again," says commodities guru and Vancouver veteran Jim Rogers, giving voice to that realization. "It will come back in a few weeks or a few months," he told Investment Week, "and the world will still have the same problem, but this time, only worse, because the European Central Bank and other countries will be deeper in debt. "Most European countries are increasing their debt, rather than decreasing their debt," Rogers said. "Until that changes, the problems are going to continue, just as they will in the US." Too, there's the realization that past bets on the eurozone can still come back to haunt: thus, the collapse of MF Global, the holding company for a broker-dealer run by Goldman Sachs alum and former New Jersey governor Jon Corzine. MF Global filed for Chapter 11 bankruptcy this morning, thanks to bad bets on eurozone government debt. Among other impacts: The New York Fed will have to find someone to take MF Global's place as a primary dealer — one of 20 megabanks required to bid at every US Treasury auction in exchange for a passel of government privileges. Even with today's losses, stocks will, likely, close the month in what the establishment media were touting as "the biggest monthly gain since 1974." Claims like this always stir up our skepticism. There was, indeed, a monster rally in October 1974. The S&P rose nearly 18%. But most of those gains evaporated by Christmas that year. On the other hand, October 1974 did mark a significant bottom. The S&P was up nearly 50% by early 1976. Addison Wiggin Stocks in October: Believers and Skeptics Face Off 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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Do you hear that sound? It is the sound of Europe being hit with a cold dose of financial reality. The air has been let out of the balloon, and investors all over the world are realizing that absolutely nothing has been solved in Europe. The solutions being proposed by the politicians in Europe are just going to make things worse. You don't solve a sovereign debt crisis by shredding confidence in sovereign debt. But that is exactly what the "voluntary 50% haircut" has done. You don't solve a sovereign debt crisis by pumping up your "bailout fund" with borrowed money from China, Russia and Brazil. More debt is just going to make things even worse down the road. You don't solve a sovereign debt crisis by causing a massive credit crunch. By giving European banks only until June 2012 to dramatically improve their credit ratios, it is going to force many of them to seriously cut back on lending. A massive credit crunch would significantly slow down economic activity in Europe and that is about the last thing that the Europeans need right now. If the deal that was reached last week was the "best shot" that Europe has got, then we are all in for a world of hurt.
As the collapse of the U.S. economy quickly evolved into the Crash of '08; politicians, "experts", and mainstream media shills were unanimous: the U.S. economy would/could "never experience the Lost Decade" experienced by Japan's economy after several, huge asset bubbles simultaneously burst.
This is my first Miles Franklin RANT written in Denver, and I have A LOT to say!
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