Gold World News Flash |
- John Hathaway - Generation of Gold Analysts Out to Lunch
- Eveillard - Good Reasons Not to Trust Governments Today
- Gold Seeker Closing Report: Gold and Silver Gain About 2%
- Because Central Banks Just Aren't Enough: G-20 Will Ask IMF To Print Reserve Currency
- Because Central Banks Just Aren't Enough: G-20 Will Ask IMF To Print Reserve Currency
- MF Bankruptcy Causes Biggest Foreign Bank Liquidity Scramble To 'Fed Safety' Ever, Harbinger Of Major Eurobank Stress
- MF Bankruptcy Causes Biggest Foreign Bank Liquidity Scramble To 'Fed Safety' Ever, Harbinger Of Major Eurobank Stress
- Spain's Infrastructure Spending: A Flight to Nowhere
- Markets Mustn't Learn About Our Gold Transactions, Bank of England Says
- More Fallout From MFGlobal / EU Surprises With a Rate Cut / Chinese Silver Investment Goes Parabolic / Silver and Gold Rise
- GOLD: THE TRUTH SHALL SET YOU FREE
- Greenspan Suggested Cutting Taxes on the Wealthy to Increase Debt so the Fed Wouldn't "Lose Control of Monetary Policy"
- Greenspan Suggested Cutting Taxes on the Wealthy to Increase Debt so the Fed Wouldn't "Lose Control of Monetary Policy"
- Jean Marie Eveillard: Good Reasons Not to Trust Governments Today
- In The News Today
- Gold Miners Are Growth Stocks Now
- The Gold Price Today Traded To $1,767.27, and Closed Up $35.50 Near The Top At $1,764.20
- Hugh Hendry Channels Irony And Paradox In His Latest Financial Outlook
- Greek Leader Drops Referendum Plan
- Markets mustn't learn about our gold transactions, Bank of England says
- Want To Avoid A Portfolio Blow Up? Don't Forget Warren Buffett's Two Rules
- ARE YOU A LEMMING?
- Financial writer Gerald Celente interviewed by Alasdair Macleod for GoldMoney
- ES Closes Below 200DMA After 4% Rally Off Overnight Lows
- Einhorn Bets Mining Companies Will Beat Gold
- The Perpetual Payment Machine
- Gold Daily and Silver Weekly Charts - A Pervasive Sense of Disestablishment
- To Hell With What the Fed Says, Inflation is Already Here: Mike Pento
- Michael Krieger Explains Why It Takes Only 5 Minutes
- Gold at Highest Since Late September
| John Hathaway - Generation of Gold Analysts Out to Lunch Posted: 03 Nov 2011 04:40 PM PDT  With the recent strength in the gold and silver markets, today King World News interviewed four decade veteran, John Hathaway, the prolific manager of the Tocqueville Gold Fund. When asked about the action in gold and what he expects going forward, Hathaway replied, "I mean it's great. People got shaken out when gold went below $1,600. The price of gold has come right back up and it's left all of those investors as sold out bulls, so it's great action. I'm actually really pleased with how the stocks are behaving because now we've seen some very good earnings."
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| Eveillard - Good Reasons Not to Trust Governments Today Posted: 03 Nov 2011 04:15 PM PDT  With gold and silver trading strong, today King World News interviewed legendary value investor Jean Marie Eveillard, who oversees $50 billion at First Eagle Funds. When asked about his thoughts on where we are today, Eveillard stated, "I think the long-term secular case for gold is still in place. Some people say after an eleven or twelve year bull market, aren't we in a bubble? There is nothing to say that after twelve years the bull market is over. Look at the bull market in Treasury notes and bonds, it's thirty years old. So there is no particular length of time that implies that a bull market or bear market is over."
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| Gold Seeker Closing Report: Gold and Silver Gain About 2% Posted: 03 Nov 2011 04:00 PM PDT Gold waffled near unchanged in Asia and London, but it then jumped higher in New York and ended near its late session high of $1767.55 with a gain of 2.14%. Silver rose to as high as $34.859 and ended with a gain of 1.56%.
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| Because Central Banks Just Aren't Enough: G-20 Will Ask IMF To Print Reserve Currency Posted: 03 Nov 2011 03:33 PM PDT Four months ago we predicted that in response to the latest round of global economic deterioration, every central bank would very soon join the toner party. Since then we have seen the Fed commence Operation Twist and telegraph another episode of MBS asset purchases; a new QE episode at the Bank of England; a new round of covered bond purchases at the ECB, coupled with an interest rate cut by its latest Goldman Sachs-based president, not to mention the persistent attempts to generate a backstop central bank in the form the EFSF Frankenstein Swiss Army knife; a new round of asset purchases and a massive, several hundred billion snap FX intervention by the Bank of Japan; and last but not least, that stalwart of stability, the Swiss National Bank, went ahead and destroyed the Swiss Franc as the sanest among the fiats by pegging it to that most unstable of currencies, the Euro. In light of the above how gold is not trading north of $2000 is still beyond us, although whether by manipulation or market inefficiency, we can not complain: it is easier to buy gold at $1,750 than at $7,150. Yet not even we could possibly predict just how far the global ponzi cartel would fall to extend the status quo by a few extra months. Because according to Dow Jones, the latest and greatest purchaser of Heidelberg Mainstream 80 machines will be the, drum roll, the IMF! Yes, the same organization that DSK swore would never join the global central banking stupidity, since deposed with a false allegation, and now headed by the woman who brought France to the brink of ruin, will be the marginal printer, now that everyone else is "dodecatuple all in" and sitting all day on the Turbo Print button. From Dow Jones:
How much are we talking here? Oh enough.
Obviously, the SDR does not exist as an actual currency in circulation, and would merely be another "confidence symbol" in a fiat system in which ever fewer have any confidence. Yet there is no such thing as a free "confidence symbol" - someone always has to pay. Who you may ask? Well, if you are sitting at a table, and nobody else is paying... the answer is obvious.
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| Because Central Banks Just Aren't Enough: G-20 Will Ask IMF To Print Reserve Currency Posted: 03 Nov 2011 03:33 PM PDT
Four months ago we predicted that in response to the latest round of global economic deterioration, every central bank would very soon join the toner party. Since then we have seen the Fed commence Operation Twist and telegraph another episode of MBS asset purchases; a new QE episode at the Bank of England; a new round of covered bond purchases at the ECB, coupled with an interest rate cut by its latest Goldman Sachs-based president, not to mention the persistent attempts to generate a backstop central bank in the form the EFSF Frankenstein Swiss Army knife; a new round of asset purchases and a massive, several hundred billion snap FX intervention by the Bank of Japan; and last but not least, that stalwart of stability, the Swiss National Bank, went ahead and destroyed the Swiss Franc as the sanest among the fiats by pegging it to that most unstable of currencies, the Euro. In light of the above how gold is not trading north of $2000 is still beyond us, although whether by manipulation or market inefficiency, we can not complain: it is easier to buy gold at $1,750 than at $7,150. Yet not even we could possibly predict just how far the global ponzi cartel would fall to extend the status quo by a few extra months. Because according to Dow Jones, the latest and greatest purchaser of Heidelberg Mainstream 80 machines will be the, drum roll, the IMF! Yes, the same organization that DSK swore would never join the global central banking stupidity, since deposed with a false allegation, and now headed by the woman who brought France to the brink of ruin, will be the marginal printer, now that everyone else is "dodecatuple all in" and sitting all day on the Turbo Print button. From Dow Jones:
How much are we talking here? Oh enough.
Obviously, the SDR does not exist as an actual currency in circulation, and would merely be another "confidence symbol" in a fiat system in which ever fewer have any confidence. Yet there is no such thing as a free "confidence symbol" - someone always has to pay. Who you may ask? Well, if you are sitting at a table, and nobody else is paying... the answer is obvious.
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| Posted: 03 Nov 2011 02:20 PM PDT When Lehman filed for bankruptcy in that fateful week of September 2008, one thing caught everyone's attention: the epic surge in the Fed Reverse Repos originated by "foreign official and international accounts": essentially cash placed at the Fed by foreign institutions in exchange for collateral, primarily in the form of Treasurys, as well as other securities. This is nothing but an immediate cash parking in a 'safe place', which withdraws overall liquidity from the market, and as has been noted elsewhere, serves as an indirect gauge of banking system funding stress. In the week of September 24, this number soared from $46.6 to $93.7 billion, a $44 billion increase, or the single biggest jump in the history of the series. Well, as the chart below demonstrates, what happened with MF Global caught foreign banks, which as we have noted over the past several weeks have been dumping US Treasury and MBS paper, entirely by surprise as they scrambled to withdraw the last traces of available liquidity from the market, and to place as much of it as possible within the safety (and we use the term loosely) of the Fed. In the just released H.4.1 update, foreign Reverse Repos with the Fed soared from $81.3 billion to $124.5 billion, the most ever, and a weekly surge of $43.2 billion, the second largest ever, second only to the Lehman collapse. Furthermore, as noted daily, European banks have been doing precisely that with local cash from non-US subsidiaries, and parking near record amounts with the ECB (today the European central bank disclosed a whopping €253 billion had been deposited with it: just shy of the 2011 high), even as they have been dumping US Treasurys on one hand, and now are forced to repo what little paper they have left with the Fed due to systemic uncertainties in the MF aftermath, one can see why suddenly there was absolutely no liquidity left in the market, and why the meager €3 billion EFSF bond offering, so desperately needed to fund the ongoing Irish bailout and which incidentally is the story of the week, had to be pulled. Behold the surge in weekly international reverse repos:
And the total weekly international reverse repo notional: we have a new all time record!
As the chart below shows, Fed reverse repo notionals are a very distinct leading indicator to the inverse performance of European financial stocks. Considering this, it would stand to reason that European banks are set to have some very turbulent upcoming days, as the money which should be in the market and be used to buoy European fin stocks, is far, far away, parked at some server located at Liberty 33.
The moral of the story is that the MF Global bankruptcy happened at the worst possible time. On one hand, European banks have been dumping tens of billions of US Treasurys, yet with the aftermath of this primary dealer bankruptcy, they have had to halt such sales and instead pledge USTs as collateral, thereby completely soaking up all incremental liquidity in the market. Recall that reverse repos are used by the Fed as a liquidity absorbing mechanism. Which means that, all else equal, the pain for European banks, courtesy of the allegedly criminal mismanagement of the company of one Jon Corzine, is about to hit previously unseen levels.
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| Posted: 03 Nov 2011 02:20 PM PDT
When Lehman filed for bankruptcy in that fateful week of September 2008, one thing caught everyone's attention: the epic surge in the Fed Reverse Repos originated by "foreign official and international accounts": essentially cash placed at the Fed by foreign institutions in exchange for collateral, primarily in the form of Treasurys, as well as other securities. This is nothing but an immediate cash parking in a 'safe place', which withdraws overall liquidity from the market, and as has been noted elsewhere, serves as an indirect gauge of banking system funding stress. In the week of September 24, this number soared from $46.6 to $93.7 billion, a $44 billion increase, or the single biggest jump in the history of the series. Well, as the chart below demonstrates, what happened with MF Global caught foreign banks, which as we have noted over the past several weeks have been dumping US Treasury and MBS paper, entirely by surprise as they scrambled to withdraw the last traces of available liquidity from the market, and to place as much of it as possible within the safety (and we use the term loosely) of the Fed. In the just released H.4.1 update, foreign Reverse Repos with the Fed soared from $81.3 billion to $124.5 billion, the most ever, and a weekly surge of $43.2 billion, the second largest ever, second only to the Lehman collapse. Furthermore, as noted daily, European banks have been doing precisely that with local cash from non-US subsidiaries, and parking near record amounts with the ECB (today the European central bank disclosed a whopping €253 billion had been deposited with it: just shy of the 2011 high), even as they have been dumping US Treasurys on one hand, and now are forced to repo what little paper they have left with the Fed due to systemic uncertainties in the MF aftermath, one can see why suddenly there was absolutely no liquidity left in the market, and why the meager €3 billion EFSF bond offering, so desperately needed to fund the ongoing Irish bailout and which incidentally is the story of the week, had to be pulled. Behold the surge in weekly international reverse repos:
And the total weekly international reverse repo notional: we have a new all time record!
As the chart below shows, Fed reverse repo notionals are a very distinct leading indicator to the inverse performance of European financial stocks. Unfortunately, the Bloomberg time series shows the weekly average, which was at $91 billion this week, not the actual week end number, which would have been literally off the charts at $124.5 billion, and which would indicate that European banks are set to tumble in the coming days, as the money which should be in the market and be used to buoy European fin stocks, is far, far away, parked at some server located at Liberty 33.
The moral of the story is that the MF Global bankruptcy happened at the worst possible time. On one hand, European banks have been dumping tens of billions of US Treasurys, yet with the aftermath of this primary dealer bankruptcy, they have had to halt such sales and instead pledge USTs as collateral, thereby completely soaking up all incremental liquidity in the market. Recall that reverse repos are used by the Fed as a liquidity absorbing mechanism. Which means that, all else equal, the pain for European banks, courtesy of the allegedly criminal mismanagement of the company of one Jon Corzine, is about to hit previously unseen levels.
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| Spain's Infrastructure Spending: A Flight to Nowhere Posted: 03 Nov 2011 01:02 PM PDT by Andrew Schiff, Euro Pacific Capital, GoldSeek.com:
Spain covers an area about the size of Utah and Arizona combined, and is home to a little more than 46 million people. Although it is neither the largest, most populous, or most prosperous country in Europe, over the past two decades it has nevertheless built the largest high-speed rail network on the continent, covering 2000 kilometers. The same is true of its aggressive highway construction program which has added 5,000 kilometers of new roads over the same time frame. But the most ambitious element of its plan was the construction of 48 airports, 43 of which were international.
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| Markets Mustn't Learn About Our Gold Transactions, Bank of England Says Posted: 03 Nov 2011 12:48 PM PDT by Chris Powell, Secretary/Treasurer, GATA: Dear Friend of GATA and Gold: Denying a recent freedom-of-information request from a citizen of the United Kingdom, the Bank of England has insisted on secrecy for its swapping and leasing of gold from the national reserves. Replying on October 24 to GATA supporter James Burn, who sought a more precise accounting of the British gold reserves, Bank of England spokeswoman Jackie Keating wrote that the gold swap and leasing information is "market sensitive" and its disclosure "would allow enquirers to find out what gold transactions have been taking place." This, the bank's spokesman wrote, would impair the interests of both the British government and the bank's "private customers," to whom the bank "owes a duty of confidentiality." The statement thus confirms that the Bank of England is surreptitiously active in the gold market on behalf of both the British government and the bank's "private customers" and that the interest of British citizens in knowing how their government is meddling in supposedly free markets is quite secondary.
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| Posted: 03 Nov 2011 12:31 PM PDT by Harvey Organ: Good evening Ladies and Gentlemen: Gold finished the comex session at $1764.20 up a full $35.50. Silver also had a good day rising by 56 cents to $34.48. The spark today was the surprise rate cut by the ECB by a quarter of a point to 1.25% from 1.5%. Australia also cut their bench mark interest rate as we are now seeing global finances in turmoil. I will discuss these and more details on the MF Global fiasco in the body of my commentary. First, let us head over to the comex and assess trading there today. The total gold comex OI fell by 3802 contracts to 446,237 with gold having a good day today. I guess some bankers were spooked by the deteriorating conditions around the globe so they thought that it was wise to cover some of their short positions. The front option's expiry month of November saw its OI fall from 103 to 91 for a loss of 12 contracts. We had 74 delivery notices filed yesterday so we gained 6200 oz of gold standing and lost nothing to cash settlements. All eyes are focused on the big December delivery month as this month will be a battleground. The December OI rose by 1512 contracts as big investors wishing to take on the banks pluck their money on the December month and wait for the delivery month to commence. The estimated volume today was pretty good at 149,734 compared to yesterday's confirmed volume of 163,701. Read More @ HarveyOrgan.Blogspot.com
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| GOLD: THE TRUTH SHALL SET YOU FREE Posted: 03 Nov 2011 12:29 PM PDT "Nothing has changed and absolutely nothing has been accomplished. There is no "solution" to the crisis that will not result in massive pain, confusion and wealth decimation. The reason is patently obvious. At least half the continent is completely and helplessly bankrupt. There are only two outcomes to the entire situation. Either the sovereign debts are written off aggressively and the banking system declared insolvent and restructured or the ECB decides to turn on those printing presses to the tune of trillions and destroys the purchasing power of the union in Zimbabwe-like fashion. People will read this and think I am exaggerating . The phrase "it takes 5 minutes" keeps running through my head because all it takes is a small amount of time to see the situation for what it is. I am not that smart. This is obvious. The scary thing is that it is abundantly clear that the vast majority of U.S. investors have not bothered to take the 5 minutes necessary to understand how extreme and binary the outcomes to all this is. Their clients will suffer massively in the months and years ahead as a result of their laziness and lack of macro curiosity. " And it just gets uglier:- Mike Krieger Michael Krieger Explains Why It Takes Only 5 Minutes Gold Has Had Enough With Europe's Stupidity; Surges One can kneejerk every headline coming out of Europe, or one can buy gold, which has finally had enough with this endless BS and has realized that no matter what the ECB will have to print, followed by everyone else. -ZeroHedge And if Gold has had enough of Europe's stupidity, how does it feel about the BS coming out US Federal Reserve? First we get the FOMC "statement" that the financial media analysts scour for a change of sentiment from the "previous statement", or any glimpse of insight into the minds of our Fed Heads "today" as opposed to "last time". You can read yesterday's FOMC statement here. And the scouring results are: * Statement comparison: Nov: FOMC says that "economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year. + September statement read that "economic growth remains slow" Nov: "Nonetheless, recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. + Sep: Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Nov: "Household spending has increased at a somewhat faster pace in recent months." + Sep: "Household spending has been increasing at only a modest pace in recent months" * This phrase remained the same: "Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets." * Fed maintains its program to extend the average maturity of its holdings of securities as announced in September. * Only dissenter was Evans, who sought additional policy accommodation Taking Benny and The Fed Heads at their word, it was pretty obvious QE3 was not going to be unveiled anytime soon...or is it? Why did the Fed "twist" their statement to give the "impression" that the economy had picked up recently [when EVERYBODY knows that is pure BS], and then dump the following in everybody's lap prior to Bumbling Ben's press conference: Fed Slashes Economic Outlook, Raises Inflation And Unemployment Rate Projection From ZeroHedge FED OFFICIALS SEE 2011 GDP 1.6%-1.7% VS 2.7%-2.9% FED OFFICIALS SEE 2012 GDP 2.5%-2.9% VS 3.3%-3.7% FED OFFICIALS SEE LONGER-RUN GDP 2.4%-2.7% VS 2.5%-2.8% FED OFFICIALS SEE 2011 UNEMPLOYMENT 9.0%-9.1% VS 8.6%-8.9% FED OFFICIALS SEE 2012 JOBLESS ESTIMATE 8.5%-8.7% VS 7.8%-8.2% FED OFFICIALS SEE 2013 JOBLESS ESTIMATE 7.8%-8.2% VS 7.0%-7.5% FED OFFICIALS SEE LONGER-RUN JOBLESS 5.2%-6.0% VS 5.2%-5.6% Even the Federal Reserve sees the writing on the wall. If "economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year", why has the Fed slashed growth and employment forecasts going forward? And if their forecast is this bleak, is QE3 in the pipeline? Ask Gold? Gold's breakout at $1677, and subsequent retest, has set the stage for a major surge in the price of Gold. If Gold can close this week above $1767, we can expect it to reach $1824 by Thanksgiving...$1921 by Christmas...and break ABOVE $2000 an ounce by the end of January 2012. These projected numbers are based on the recently completed Ascending Triangle consolidation between the $1531 low on September 25 and the breakout at $1677 on October 24. $1722 is now key support in Gold. $1677 is major support in Gold.  Silver at this time is following in Gold's shadow. It is difficult, and foolish, to try and project the price of Silver in a market that is so severely rigged by the CRIMEX. Silver must close above $34.68 this week to keep pace with Gold, should Gold close above $1767 this week. Not until we see the Gold/Silver Ratio fall below 49 will we see a surge in the price of Silver. Should Gold prices crack $2000 in January, it is highly likely Silver will be knocking on $60 an ounce at that time. I know these are BOLD PREDICTIONS. Not just Gold is fed up with the BS coming out of Europe and the US Federal Reserve...EVERYBODY is! The inflation damn is about to burst. The ONLY way out of this financial calamity is through the printing press, and Gold knows this is true. THE TRUTH SHALL SET YOU FREE ...if you have any doubts: Lear Capital: Is the Fed About to Gut Your Savings and Retirement Accounts as seen on ZeroHedge FREE Video! Are Fed Actions about to crash the dollar and gut your savings and retirement accounts? 
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| Posted: 03 Nov 2011 12:09 PM PDT MOST ECONOMISTS DON'T PAY ANY ATTENTION TO DEBT As I noted in 2009:
Indeed, as Steve Keen documents in his must-read book, Debunking Economics: The Naked Emperor Dethroned, mainstream (i.e. neo-classical) economists don't even take debt into consideration in their models of what makes for healthy economies. As Keen noted in September:
So most economists think that debt - and our money system - don't matter. DEBT IS THE ESSENCE OF OUR MONEY SYSTEM But as the following two quotes show, debt is the very essence of our current money system:
- Chairman of the Federal Reserve Mariner S. Eccles, September 30, 1941 hearing before the House Committee on Banking and Currency
(This must-see 47 minute video provides details). GREENSPAN WORRIED THAT WE'D PAY OFF DEBT ... SO HE SUGGESTED CUTTING TAXES ON THE WEALTHY, TO INCREASE THE DEBT Indeed, despite the harms that too much debt can cause, some in government have worried that paying off our debt would be harmful for our country. As NPR reported last month:
And in talk last a week and a half ago before the United Nations, Nobel prize winning economist Joseph Stiglitz said that -10 years ago, when the U.S. had a surplus - Federal Reserve chairman Alan Greenspan was worried that if we didn't do something, we would end up paying down all of our debt, and then the Fed "wouldn't be able to conduct monetary policy". So Greenspan pushed for a tax break for the wealthy, to increase the debt.
DEBT IN THE REAL WORLD
In the real world - and not even taking into account the debt downgrades to the U.S. - economists have shown that too much debt creates a drag on the economy which stifles growth. Nouriel Roubini points out:
Steve Keen says:
As I noted in July:
On the other hand, as I also pointed out last month, the government isn't even stimulating in an effective way: "Deficit doves" – i.e. Keynesians like Paul Krugman – say that unless we spend much more on stimulus, we'll slide into a depression. And yet the government isn't spending money on the types of stimulus that will have the most bang for the buck: like giving money to the states, extending unemployment benefits or buying more food stamps – let alone rebuilding America's manufacturing base. See this, this and this.
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| Posted: 03 Nov 2011 12:09 PM PDT
MOST ECONOMISTS DON'T PAY ANY ATTENTION TO DEBT As I noted in 2009:
Indeed, as Steve Keen documents in his must-read book, Debunking Economics: The Naked Emperor Dethroned, mainstream (i.e. neo-classical) economists don't even take debt into consideration in their models of what makes for healthy economies. As Keen noted in September:
So most economists think that debt - and our money system - don't matter. DEBT IS THE ESSENCE OF OUR MONEY SYSTEM But as the following two quotes show, debt is the very essence of our current money system:
- Chairman of the Federal Reserve Mariner S. Eccles, September 30, 1941 hearing before the House Committee on Banking and Currency
(This must-see 47 minute video provides details). GREENSPAN WORRIED THAT WE'D PAY OFF DEBT ... SO HE SUGGESTED CUTTING TAXES ON THE WEALTHY, TO INCREASE THE DEBT Indeed, despite the harms that too much debt can cause, some in government have worried that paying off our debt would be harmful for our country. As NPR reported last month:
And in talk last a week and a half ago before the United Nations, Nobel prize winning economist Joseph Stiglitz said that -10 years ago, when the U.S. had a surplus - Federal Reserve chairman Alan Greenspan was worried that if we didn't do something, we would end up paying down all of our debt, and then the Fed "wouldn't be able to conduct monetary policy". So Greenspan pushed for a tax break for the wealthy, to increase the debt.
DEBT IN THE REAL WORLD
In the real world - and not even taking into account the debt downgrades to the U.S. - economists have shown that too much debt creates a drag on the economy which stifles growth. Nouriel Roubini points out:
Steve Keen says:
As I noted in July:
On the other hand, as I also pointed out last month, the government isn't even stimulating in an effective way: "Deficit doves" – i.e. Keynesians like Paul Krugman – say that unless we spend much more on stimulus, we'll slide into a depression. And yet the government isn't spending money on the types of stimulus that will have the most bang for the buck: like giving money to the states, extending unemployment benefits or buying more food stamps – let alone rebuilding America's manufacturing base. See this, this and this.
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| Jean Marie Eveillard: Good Reasons Not to Trust Governments Today Posted: 03 Nov 2011 11:59 AM PDT from King World News:
With gold and silver trading strong, today King World News interviewed legendary value investor Jean Marie Eveillard, who oversees $50 billion at First Eagle Funds. When asked about his thoughts on where we are today, Eveillard stated, "I think the long-term secular case for gold is still in place. Some people say after an eleven or twelve year bull market, aren't we in a bubble? There is nothing to say that after twelve years the bull market is over. Look at the bull market in Treasury notes and bonds, it's thirty years old. So there is no particular length of time that implies that a bull market or bear market is over." When asked about the continued money printing, Eveillard replied, Read More @ KingWorldNews.com
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| Posted: 03 Nov 2011 11:55 AM PDT Dear Extended Family, Gold is headed now into the $2000s with extreme violence. Regards, Jim Jim Sinclair's Commentary It would be funny if it wasn't so sad. Greek PM scraps referendum on Greek debt plan ATHENS, Greece (AP) — Two officials close to the Greek prime minister say he has scrapped his plan Continue reading In The News Today
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| Gold Miners Are Growth Stocks Now Posted: 03 Nov 2011 11:26 AM PDT Earnings season has, so far, been a mixed bag for most industries. But for gold and silver miners this is one for the record books. One of the selling points of precious metals miners is that they're ... Read More...
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| The Gold Price Today Traded To $1,767.27, and Closed Up $35.50 Near The Top At $1,764.20 Posted: 03 Nov 2011 10:59 AM PDT Gold Price Close Today : 1764.20 Change : 35.50 or 2.1% Silver Price Close Today : 3448.8 Change : 55.9 cents or 1.6% Gold Silver Ratio Today : 51.154 Change : 0.204 or 0.4% Silver Gold Ratio Today : 0.01955 Change : -0.000078 or -0.4% Platinum Price Close Today : 1639.00 Change : 37.80 or 2.4% Palladium Price Close Today : 656.60 Change : 8.55 or 1.3% S&P 500 : 1,261.15 Change : 23.25 or 1.9% Dow In GOLD$ : $141.13 Change : $ (0.39) or -0.3% Dow in GOLD oz : 6.827 Change : -0.019 or -0.3% Dow in SILVER oz : 349.24 Change : 0.39 or 0.1% Dow Industrial : 12,044.47 Change : 208.43 or 1.8% US Dollar Index : 76.74 Change : -0.280 or -0.4% My plans changed because a dear friend of mine, Jim Hollingsworth, went to dance with the angels and I have to attend his funeral tomorrow. I have a day here at home, so am sending y'all this commentary. I should return Wednesday, 9 November. Besides, I want to share with y'all some observations on the last few days' events. The SILVER PRICE ranged from 3322c to 3482c. It closed on Comex up 55.9c at 3448.8c. Y'all get mad if you have to, but the market is slowly changing my mind on SILVER and the GOLD PRICE. Short term -- on the 5-day chart) gold has made another upside-down head and shoulders, with a neckline about $1,725 and the bottom of the head at $1,680, Tuesday's low. If so (and you'll know it is NOT so if gold closes below $1,740), it will rise about $50 from the breakout at $1,740, or up to $1,790, call it $1,800. Little sister SILVER has likewise sketched an upside-down head and shoulders, with a neckline at 3460c and head/bottom at 3214c. Head depth points to a target of 3700c. Should silver fall below 3350c - 3325c, twould gainsay that outlook. Market begins to persuade me that the bottoms in SILVER and GOLD have already occurred. Not dogmatic about that yet, but am humbly trying to let the market talk instead of my own natural born fool mouth. The shadow of a divergence falls across the market as silver might very well be arguing with gold about direction. The GOLD PRICE broke out of that putative upside down head and shoulders today, while silver did not. Also the ratio rose today to 51.154, up 0.4%. Not much, but worth noticing. What would y'all think about a man who got into all sorts of trouble because he got drunk and couldn't control himself, and then woke up one morning and said to himself, "Hey, I know how to straighten everything out! I'll go down to the liquor store and buy a couple of bottles of whiskey." That's Europe with its sovereign debt (read: "bank solvency") crisis, and the whole world with its financial system. Just about the time the eurocrats thought they had enough cards to win the game, Greece's Papandreou pulled out the biggest trump in the deck, a plebiscite to approve the whole deal. They deal fell apart, but after sufficient arm-twisting, the deal MIGHT be put together again, if Papandreou backs off the plebiscite. To this, add the bankruptcy of MF Global, led by former Goldman Sachs VP, former New Jersey governor, John Corzine. Corzine turned up his nose at the paltry profits made by the brokerage business, and opted instead for the proprietary trading model of Goldman Sachs. Whoops, although he is a Master of the Universe, as are all Goldman Sachsites, he could not see that the Universe has changed since 2006. He got rid of those stodgy old businesses and bought up all the PIIGS' debt he could, to wit, $6 billion. Along the way the firm went bankrupt, and it seems that zero, $600 billion, or $1.2 billion of the customer's money was mislaid, depending on who's counting. We know something rank was cooking, because the CME closed off all trading for MF Global accounts, except liquidations. When Refco failed a few years ago, whatever company bought out their book just transferred the accounts to their own books and life went on without a hiccup. Not so this time. MF Global's crash raises other question: What other landmines are out there waiting for bankruptcy? So think. Now, not just the market's course is in doubt, but the integrity of the market itself, the rule of law and that minimal stability that promises that when you buy an investment your broker won't steal your money, and when you get ready to sell the investment, your broker -- or SOME broker and SOME market -- will still be alive and trading. All of which shines a spotlight on the value of government market regulation: it's not necessary when there's not a problem, and its no good when there is one. When people's word no longer counts for anything, when honesty dies and all hearts lean to lawyering and larceny, financial markets cannot survive. The rule of law and markets are disappearing before predators like Corzine and Goldman Sachs. But y'all don't worry, the US government -- and governments around the world -- will backstop the financial system, and the banks. Shucks, that'll do it! Look what a good job they've already done with, er, uh, mmmm, I'll come back to that. Folks, I hope y'all have a hoe, some flowerbeds, a bunch of seeds, and some gumption. Y'all are liable to need 'em. Stocks gained 208.43 today (1.76%) after losing 2.5% two days ago. Dow closed at 12,044.47. S&P 500 rose 1.88% (23.25) to 1,261.15. This puts the Dow above its 200 day moving average (11,974) once again, but this still paints a losing picture. Dow may reach 12,400 again, but these are death throes. Stay away, it might be catching. Saw some goof ("financial adviser") say in America's Comic Book Newspaper, USA Today, that the only solution for this wild market is a "diversified portfolio." Now there's a recipe for success, like guaranteeing a winner in Russian roulette by loading up all six cylinders. If anything at all might conceivably pull a profit out of today's stock market, it is utterly judicious stock-picking but it SURE ain't diversification. The US DOLLAR INDEX tried to rally out over the top of its May - September trading channel again, but fell back today. Dropped 28 basis points today (0.36%) to 76.736. However, that's a LOOOONG ways from the 74.72 bottom a few days ago, and Dollar now stands above its 50 dma (76.71). Will move higher. All this "It's fixed -- No it ain't" coming out of Europe is making the currency markets hotter than a rogue nuclear reactor, and almost as easy to trade. Euro definitively broke last week, gapped down twice, and has traded back barely above the 20 DMA (1.3810), closing today at 1.3816, up 0.51%. Clearly the eurocrats will shoot their mother in front of a cop to keep the euro afloat. This has become a criminal enterprise. What? Did I say that? Central banking, indeed, fractional reserve banking, has ALWAYS been a criminal enterprise. Japanese Nice Government Men broke the yen last week, and so far it has stayed broken. Closed today 128.07c/Y100 (Y78.08/$1). The European crisis is destabilizing all markets, and no statesman appears with the only solution, a debt jubilee and taming the banks. That gang of ditherers will do the world more harm than a blood soaked dictator. 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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| Hugh Hendry Channels Irony And Paradox In His Latest Financial Outlook Posted: 03 Nov 2011 10:10 AM PDT Submitted by Brett of Contrary Investing Hugh Hendry Channels Irony and Paradox in His Latest Financial Outlook Yesterday I had the great honor and opportunity to sit courtside for a live one-hour presentation from our favorite contrarian, irreverent hedge fund manager – Hugh Hendry himself. What a thrill! Hendry, as you may know, is partner and Chief Investment Officer at Eclectica Asset Management. While his claims to fame are numerous, his two most notable (for those getting to know him for the first time) are:
Hendry is a big favorite of ours at ContraryInvesting.com. I also just learned that he was "The Plasticine Macro Chapter" interviewed (at the time) anonymously by Steven Drobny in his excellent recent book Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money – which profiles a select group of hedge fund managers (all "off the record") that made money in 2008. I went back and re-read this chapter the night before Hendry's preso, to re-familiarize myself with his investing/trading philosophy.  Hendry electrifies his Sacramento audience. The Power of Irony and Paradox Rather than trying to compete pure "intellect-for-intellect" with the likes of George Soros, Julian Robertson, and the other great minds of the hedge fund world, Henry instead relies upon what he calls "the power of irony and paradox" to foil the logically minded and deliver his superior returns. In other words, he bets on strange events happening – those not anticipated by the mainstream. This strategy paid off in a big way in 2008, when his out-of-the-money options hit big, and his fund returned 31.2%. It has tended to underperform, though, when (to paraphrase Hendry) "bad stuff doesn't happen." Fortunately for Eclectica investors, he sees a bad moon rising once again. Why China is Not 19th Century America While many economic observers have drawn an analogy between China's ongoing industrialization and that of America's, Hendry sees a critical difference. In the US, he says, capital has always been allocated where it could achieve the highest return. In the 19th century, when America was the economic upstart on the block, it was also on the gold standard. Which is very important, according to Hendry, because it allotted entrepreneurs one – and only one – chance to succeed. It was not a time of bailouts and multiple bankruptcies! China is different, he believes, because it is industrializing with a fiat currency. Thus they fall into the trap of misallocating capital – building bridges to nowhere, towers for nobody, and so on. China's goal is similar to that of 1980's Japan in his opinion – full employment, rather than maximizing return on capital. A critical, and even fatal, difference, in his mind. The New Model for the Global Economy You know the old drill – China and Asia produce, the US consumes. They cycle their greenbacks back over this way, finance our debt, we buy more of their stuff, and the beat goes on. This model officially stopped with the launch of QE2, Hendry says, as the US officially started rejecting the globalization that had made the global economy hum (perhaps largely at the expense of US employment and manufacturing). With QE2, dollars were printed and exported – along with inflation – to Asia. This led to the countries in Asia – and Europe, too – raising rates to combat inflation. The result, he says, is that global economic growth has essentially ground to a halt. So what's next? A crash, of course. Europe's Debt Spiraling Out of Control Hendry then pulled up a chart of US and Europe non-financial debt to GDP, illustrating that Europe's debt has been spiraling out of control ever since the formation of the European Union. Participant nations, he puts it, received initial "ALT-A" rates – nice low German interest rates – for signing on. But the fixed exchange rate that the euro imposes on the peripheral nations started the time bomb ticking. Hendry, in fact, is very down on fixed exchange rates, and believes the euro and the dollar/renminbi peg are at the heart of global economic insecurity today. He believes the recent referendum in Greece could be a very significant event, likening it to a 1931 mutiny in England that forced the Brits off the gold standard. He things the Greek referendum could be the trigger to disengage from their fixed exchanged rate (and cited everyone's lack of anticipation for the referendum as a classic example of irony in finance). Stage Not Yet Set for Hyperinflation and Gold $3000 The high CPI numbers being reported in the UK and other Western nations are "meaningless", Hendry says, because in today's economic environment, it does not translate into wage growth. (In the 1970's, it did). Because wage labor is approximately 70% of total business costs, he does not see meaningful inflation without wage inflation. He's also down on gold because it is not a contrarian investment today as it was 10 years ago (he had a nice year in 2003 buying gold and gold stocks when nobody wanted them). The widespread belief among the greatest financial minds today that hyperinflation is inevitable greatly disturbs him. In the Western world, he sees hyperinflation as a political choice – one that requires the will of the populous. (Forget Zimbabwe, he says – that might as well be Timbuktu. It's not our culture.) He sees society's current mood as "dark" (Tea Party, Occupy Wall Street, and social unrest in Europe to name a few), and believes this makes bailouts and money printing very hard. The only environment that makes hyperinflation possible is "the mother of all depressions" he says. In keeping with his anticipation of paradox, he quipped that if you believe in hyperinflation, then you should be levered up long on 10 and 30-year Treasuries…because in order for hyperinflation to become a political reality, deflation must arrive first. 2012 Economic Outlook and Investment Positions Of the many places Hendry doesn't want to be long, China is near or at the top of the list. He thinks China could be subject to a 25% (!) decline in GDP over the next five years. How is that possible? He draws an interesting analogy: "UK GDP fell 8% in the Great Depression, while US GDP fell 25%." Inferring, of course, that today's China is the upstart US to our current "UK peak empire" role. In what he calls "the great unwinding", the strongest economies in the world are also – ironically – the most vulnerable. But that doesn't mean he's bullish on the developed world, either. He has an aversion to just about everything. "It's checkmate. Everywhere it's checkmate." He believes Italy is insolvent, citing their huge borrowing binge over the last ten years that has only achieved 0% growth. He loves Japan – as a culture and place to visit – but is especially bearish on several Japanese sectors. He's long credit default swaps with respect to cyclical, leveraged Japanese businesses. He's also bearish on Japanese utilities, which have issued tremendous amounts of debt since the Fukushima disaster. Hendry's favorite sacred belief – which he's betting against, of course – is the fact that no one believes the ECB will ever cut rates below 1%. He's made bets that he says will deliver a 40-to-1 return if the ECB cuts rates below 1% next year. Big thanks to the CFA Society of Sacramento for hosting the event, and to my pal Jonathan Lederer for landing Hugh and letting me crash the event as his guest!
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| Greek Leader Drops Referendum Plan Posted: 03 Nov 2011 09:46 AM PDT Greece's leaders scrambled to restore political stability in the country and preserve it's euro membership, killing a controversial plan for a referendum on Greece's latest bailout that has roiled global markets and infuriated European leaders. The decision by Greek Prime Minister George Papandreou to shelve the poll capped a tumultuous few days that thrust Athens to the brink of political chaos and forced Europe's leaders to contemplate Greece's exit from the single currency. Faced with a rebellion from within his own party over the referendum, Mr. Papandreou backed away from the plan on Thursday, saying he would seek a bipartisan alliance with Greece's conservative opposition to form a national consensus on the bailout. Though the future of Mr. Papandreou's government remained in doubt ahead of a planned confidence vote on Friday, his decision to drop the proposed referendum quelled fears of an imminent Greek exit from the euro zone, a step that some feared risked triggering the collapse of the currency itself. Leaders of the Group of 20 leading global economies, meanwhile, gathered in Cannes, France, searched for ways to shore up the wider euro currency zone – a major part of the global economy – against the growing financial chaos unleashed by the Greek tumult. Financial markets breathed relief that Greece's planned referendum – whose uncertain outcome could have pushed Greece into the biggest sovereign debt default in history and Europe into a slump– was taken off the table.
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| Markets mustn't learn about our gold transactions, Bank of England says Posted: 03 Nov 2011 09:42 AM PDT 5:44p ET Thusrday, November 3, 2011 Dear Friend of GATA and Gold: Denying a recent freedom-of-information request from a citizen of the United Kingdom, the Bank of England has insisted on secrecy for its swapping and leasing of gold from the national reserves. Replying on October 24 to GATA supporter James Burn, who sought a more precise accounting of the British gold reserves, Bank of England spokeswoman Jackie Keating wrote that the gold swap and leasing information is "market sensitive" and its disclosure "would allow enquirers to find out what gold transactions have been taking place." This, the bank's spokesman wrote, would impair the interests of both the British government and the bank's "private customers," to whom the bank "owes a duty of confidentiality." The statement thus confirms that the Bank of England is surreptitiously active in the gold market on behalf of both the British government and the bank's "private customers" and that the interest of British citizens in knowing how their government is meddling in supposedly free markets is quite secondary. Thanks to our friend Bern, it thus has been demonstrated again that there is plenty of financial journalism to be done simply by pressing central banks with questions about their surreptitious activity in the gold market. Who will be the first mainstream financial journalist to attempt this and to have enough resentment about being shut out of the public's business that he publishes a news story about it? Is there such a mainstream financial journalist willing to risk his invitation to a few very nice Christmas parties and his access to highly placed official sources? The Bank of England's reply to Bern has been posted at GATA's Internet site here: http://www.gata.org/files/BankOfEngland-GoldSwaps&Leases-10-24-2011.pdf CHRIS POWELL, Secretary/Treasurer 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 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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| Want To Avoid A Portfolio Blow Up? Don't Forget Warren Buffett's Two Rules Posted: 03 Nov 2011 09:19 AM PDT John Paulson must be breathing a small sigh of relief. The recent bounce in the prices of bank stocks and gold has, at least for the time being, stopped the bleeding. The patient, alas, is still in critical condition. It's been a rough year for the hedge fund legend. According to the Financial Times, Mr. Paulson's flagship Advantage Plus fund was down 47 percent for the year. The unleveraged version of the fund—ostensibly more conservative—was down by "only" a third. I'll refrain from kicking Mr. Paulson while he's down. I've learned the hard way that the market gods tend to smite the arrogant. And as an investor, I've certainly made my share of bad trades over the years. We all have. Everyone. Yes, even demigods like Warren Buffett, and we'll get to him a little later.The problem, as Mr. Paulson is no doubt painfully aware, is that it is hard to recover from a loss of nearly 50 percent. It doesn't matter if we're talking about a multi-billion-dollar hedge fund or a $50,000 401(k) plan. The math is the same. In order to get back to break even you have to double your money, and that's not particularly easy to do in a short period of time. Take a look at Figure 1. This chart shows the subsequent gains that you'd have to earn in order to recover a given loss. A 10 percent loss requires only an 11 percent gain to get back to break even. A 20 percent loss requires a slightly higher 25 percent to recover.  Figure 1 But now take a look at the bottom of the chart. A 90 percent loss requires a 900 percent gain to break even. A 99 percent loss requires an almost unfathomable 9,900 percent rise. Suffice it to say that, while 90 and 99 percent losses are unfortunately quite common, 900 and 9,900 percent gains are exceptionally rare. This is what prompted Warren Buffett to pen his first two rules of investing:
John Paulson broke Mr. Buffett's two rules by making an enormous bet on an inflationary boom and by failing to ask that all-important question: What if I'm wrong? Paulson had roughly 30 percent of his fund in financials, 15 percent in materials, and 9 percent in oil and gas. (See John Paulson's current portfolio holdings here.) Paulson also happens to be the largest shareholder in the SPDR Gold Trust (NYSE: GLD) and is so enamored with the yellow metal that he offers his investors the opportunity to denominate their shares in gold. (Though this was a savvy marketing ploy, it has absolutely no real value. It doesn't matter what "currency" you report on your quarterly statements. Returns are returns. Paulson's clients who chose to denominate their account in gold took losses every bit as large as those that denominated in dollars.) The problem was not so much that Paulson invested heavily in banks; he certainly wasn't the only investor to believe that American banks were undervalued at the beginning of this year. The problem was that his entire portfolio was one big bet on an inflationary boom. His portfolio holdings were highly correlated to each other and highly dependent on the same macro forces. He had practically no exposure to anything that might do well should inflation fail to materialize—such as high-dividend stocks, utilities, pharmaceutical, etc. And to make it worse, he did it with leverage. This isn't sound portfolio management; it's gambling There is nothing inherently wrong with a little gambling, of course. A cynic could argue that all trading and investing is nothing more than gambling, and to an extent that is true. Risk is certainly part of the game. Good investors—and good gamblers too, for that matter—practice risk control. Whether through careful use of position sizing, diversification, hedging, keeping cash in reserve, or even tools such as stop loss orders, they have processes in place that prevent an investing mistake from turning into a catastrophic loss they may never recover from. If you want to avoid finding yourself in Mr. Paulson's predicament, remember Warren Buffett's two rules. Source: Forbes
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| Posted: 03 Nov 2011 09:17 AM PDT Really, really good article. I love his descriptions of your neighbors. We all know people like this. After reading this, I'd say I'm pretty much screwed, unless one of you really prepared people lets me move in with you. After The Collapse – Who Will Your Neighbors Be? Thursday, 03 November 2011 04:12 Brandon Smith [...]
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| Financial writer Gerald Celente interviewed by Alasdair Macleod for GoldMoney Posted: 03 Nov 2011 08:58 AM PDT 4:55p ET Thursday, November 3, 2011 Dear Friend of GATA and Gold: Gold figures heavily in an interview with financial writer Gerald Celente by economist Alasdair Macleod on behalf of the GoldMoney Foundation, for which he has become a senior fellow. Celente denies that gold is in a bubble and discusses the ridicule heaped on gold investors by the financial establishment. The interview is 38 minutes long and you can watch it at the GoldMoney Internet site here: http://www.goldmoney.com/video/gerald-celente-macleod-interview.html?gmr... CHRIS POWELL, Secretary/Treasurer 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 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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| ES Closes Below 200DMA After 4% Rally Off Overnight Lows Posted: 03 Nov 2011 08:57 AM PDT Amid average volume, ES managed to rally an impressive 45pts off overnight lows to close just shy of the 200DMA on what was mixed (at best) macro data in the US and seemingly more chaos in Europe (does anyone know for sure whether there will be a confidence vote?). High beta and most-shorted stocks dramatically outperformed the broad equity markets as 4% swing days have become so de-rigeur nowadays! Financials went from major loser soon after the open to middle of the pack by the close with only a very late day disconnect between HY credit and stocks (HY outperformed after the bell) of any note as we leaked higher all day long. Heavy new issuance in IG credit saw secondary bond trading pretty balanced from a net-buying/selling perspective - even as TSY yields rose significantly. TSYs saw 2s10s30s rise notably but combined with FX carry crosses, oil, gold, and the dollar - risk asset drivers in general were far less excited than stocks by the close. Commodities lifted further after Europe's close as the USD weakened more leaving gold and oil up around 1.5% on the day.
Stocks and credit tracked each other almost perfectly all day (the dip in HY was bad data) with a very modest contraction in stocks into the close as we pulled back from the 200DMA and HY tracked better into the close. We did see HY3s5s flatter (bull flatteners) so some technical compression and index arb on HY 5Y may have helped as we note HY intrinsics did not rally anything like this much.
The purple line above is the 200DMA and we stalled at that line as resistance today. Volume was at the 50-day average and average trade size was well above average - with heavy volume at or around the close perhaps suggesting professionals covering. For sure, today saw high beta names being grabbed in a hurry (potentially supporting the chase for performance concept touted in the MSM). The chart below shows Goldman's high beta index managed greater than 3% gain today relative to the S&P at only 1.88%.
And furthermore, there was a definite squeeze feel (once again) as Goldman's index of the most shorted names in the Russell also outperformed rather significantly - up 2.9% vs Russell's +1.96%:
Away from stocks, Gold was #winning on the week, managed to get above $1760 to gain just over 1% this week - even as the dollar is over 2% stronger on the week. Note how oil and gold look coupled as do silver and copper this week.
All-in-all, a rather uneventful day considering the massive ramp in stocks with little of note other than risk-on. Perhaps of note is the steepening in the front-end of the vol curve (1mo to 3mo) which often presages another vol spike but macro and micro protection in equities moved pretty well in sync as we rallied. Heading into tomorrow's NFP number it seemed more like squeeze day today as opposed to laying out too many new longs - though Greece did provide headlines that could be seen as net positive - though we are much more negative on the un-democratic escapades seeing only skeptical reasons for these shenanigans at this time. Charts: Bloomberg
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| Einhorn Bets Mining Companies Will Beat Gold Posted: 03 Nov 2011 08:57 AM PDT Hedge-fund manager David Einhorn is betting that gold-mining companies will outperform bullion, reversing the trend from the past six months. "A substantial disconnect has developed between the price of gold and the mining companies," Einhorn said today in a conference call discussing results at Greenlight Capital Re Ltd. (GLRE), the reinsurer where he is chairman. The reinsurer cut holdings of the commodity in the third quarter and moved funds into the Market Vectors Gold Miners ETF, Einhorn said. The exchange-traded fund lost 5.4 percent in the six months ended yesterday, while bullion gained 11 percent. "With gold at today's price, the mining companies have the potential to generate double-digit free cash flow returns and offer attractive risk-adjusted returns even if gold does not advance further," Einhorn said. "Since we believe gold will continue to rise, we expect gold stocks to do even better." The ETF slipped 0.5 percent to $58.51, paring losses from earlier in the day when it dropped as much as 4.8 percent. Einhorn, president of New York-based Greenlight Capital Inc., invests funds for the reinsurer, which was created in 2004. He said he has positioned the reinsurer's portfolio to weather volatility in equity markets tied to slowing economic growth and Europe's sovereign debt crisis. 'Significant Position'"Given the challenging macroeconomic environment, we intend, for the foreseeable future, to continue holding a significant position in gold and other macro hedges in the form of options on higher interest rates and foreign exchange rates, short positions in sovereign debt and sovereign credit-default swaps," the reinsurer said in a regulatory filing yesterday. Einhorn has found new opportunities in the technology and automobile industries, and the reinsurer ended a bet on Pfizer Inc., the world's largest drugmaker, he said today. Greenlight Capital Re swung to a third-quarter net loss of $4.5 million from a profit of $29 million a year earlier as claims costs increased. The Cayman Islands-based reinsurer slipped 2.8 percent to $21.91 today. Source: Bloomberg
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| Posted: 03 Nov 2011 08:45 AM PDT Dave Gonigam – November 3, 2011
Public intellectuals hijacking the "American Dream" and defining it for you in comforting shibboleths… "Stocks for the long run." "Housing always goes up." "A college education is your only ticket to the good life." The first two have long since been shattered. The hammer of reality is about to make impact on the third.
Among this group, the unemployment rate is identical to the national average — 9.1%. And when you consider how the unemployment numbers are fudged, the true rate is likely double that. $25,250 may not sound like much… until you realize that it's more than half the per capita national debt. As of this morning, the national debt is on the verge of $15 trillion… $47,902 for every American.
Of course, that average $25,250 is just that — an average. In some places, it's lower. In Utah and Hawaii, it's under $16,000. But elsewhere, the Project on Student Debt finds staggering numbers… 
"I've paid on my student loans, but I owe just as much as when I started," Laura Pounders told the New York Post last month. She went back to college at age 40, hoping to secure a higher-paying job than the two she had. That was 16 years ago. "It makes me cringe when I hear politicians say we need people to go to college. Why? So you can accrue $50,000 in debt and get a job that pays $8 an hour? I'm going to die with this debt." Indeed, she might. You can get out from an underwater mortgage via foreclosure and/or bankruptcy. Your credit rating is destroyed, and you can borrow in the future only at usurious rates. The lender takes a big write-down and tries to be more careful about whom to lend to in the future. Both get a fresh start. There is no fresh start with student loans. Under a law passed in 2005, student loan debt cannot be discharged in bankruptcy. For lenders, this was just like subprime… only better. Not only could they lend to anyone capable of fogging a mirror, they were guaranteed that if the borrower got into trouble, they had a legal backstop to jack up borrowers' balances via penalties and higher interest… which they could collect by garnishing wages and even Social Security checks. In other words, the student loan industry invented a perpetual-payment machine with the connivance of Washington. Note when the red line on this chart starts to grow like Topsy.  If none of this makes sense to you, it's not supposed to… 
But there's an even bigger bubble on the horizon that still hasn't burst… and that's the bubble of confidence in the proclamations of the elites. Like "stocks for the long run"… and "housing always goes up." And the idea that college is the only ticket to the American Dream. Maybe you bought into these proclamations at one time or another. You cottoned onto the scam earlier than most. Good for you. But that still leaves you in a fix. Like this fellow who signed up yesterday for Project X: "Addison," he writes, "at this point, my wife and I have worked as hard as we know how to; we're both 52 years old… We were reared on the idea that working hard, working honestly and treating people as they should be treated would allow for a retirement if not wealthy, at least dignified. "That dignity is now on a fading horizon, and as far as I can tell, we'll both work until we are unable to go any further. In the meantime, folks who don't really know what 'work' is have made off with my life's savings." This concern gets to the heart of what Project X is all about. A newsletter or trading service alone can't address this. Addison has spent six long years since writing Empire of Debt thinking about how to deliver a comprehensive solution set for people whose illusions are shattered… but who then need to set to work building wealth. In a few hours, the sign-up for Project X will close. We're eager to continue bringing you updates about it. But the only way to make sure you'll receive them is by signing up. After tonight, further updates will go only to those people who've taken that step. Here's where you can do so.
Of course, we know it won't happen… but just the promise that it might has sent the Dow up again today. As of this writing, it's within 20 points of 12,000 again. Helping things along: Greece's prime minister appears to be backing down from his plans to hold the bailout referendum he announced less than 72 hours ago. We can only guess at the sort of discussions that heated up the trans-European telephone lines during that span. 
For months, conventional wisdom had it this couldn't happen: The new ECB chief Mario Draghi, hailing from debt-addled Italy, couldn't afford to be seen as opening the easy-money spigot after being on the job only two days. So much for that. The euro is back below $1.37 now. [Ed. Note: The ECB's move put a spring in the step of Germany's DAX index… delivering a 118% gain in only three days to readers of Strategic Currency Trader. Editor Abe Cofnas has played the DAX like a well-tuned Stradivarius in the last eight weeks… and with more euro-volatility on the way, there's more where that came from. You can be on board for his next trades Monday morning right here.
"The generational blame game we're seeing in The 5 is exemplary of what's become a society that embraces a victimization complex. It's never our fault. Let us find the culprit and bleed them dry. And this, of course, is a natural bedfellow to the entitlement mentality that regularly pops up in such diatribes." "And these lies have been central in the undoing of our society in general. The whole fiscal/employment/social/fascist machine runs on these destructive mechanisms." "For most of us, we just want to figure out how to keep what we have and build upon it. With the middle class slipping into poverty, it's increasingly difficult to gain access to affordable and truly helpful financial advice. How can a guy who makes $500 a week really build a nest egg? Obviously, he can't start with a $1,500 newsletter." "But if someone would educate him, give him the tools to be able to see things as they are and recognize opportunity, perhaps he could begin to build up his holdings. If someone pointed him to a means of turning his tiny $1,000 savings into $1,100, $1,200, $2,000, etc., over a period of time, then such a person would be providing an invaluable service to men who are willing to work, but struggling to make ends meet while doing so." "And obviously, such a plan would need to recognize that debt is killing them just as assuredly as their presumptions at living beyond their means. Balancing all of the above would certainly lead to greater prosperity for our middle class." "Maybe I missed my guess. If so, perhaps your next project could focus on some of these challenges. And while you're at it, I could really use a job." The 5: Project X is not a reference to one generation or another… but on nearly everything else, you've nailed it. As has this reader…
"If you're reading The 5, it is about individuals. It discusses the political and the macro economic picture, but it is about protecting and building individual wealth." "So get off the bandwagon of the Social Security Ponzi scheme. If you can cure it, please do it. Otherwise, start trying to teach your young ones what is going on and let them prepare for their future despite the government." "Project X sounds like it addresses this issue, from the individual's standpoint, and yes, I am a greedy bastard, as I would like to maintain my standard of living and my children's standards of living in the future. And regardless of all the gloom and doom, I plan to enjoy the late years of my life preparing and teaching my children to prepare." "And that is why I subscribe and will continue to subscribe, and not let stupid individual opinions of selected issues interfere with what is being presented in these pages. "Of course, it is always fun to see the outrageous opinions that spur such discussions. Keeps things lively." The 5: It's a tall order, but that's very much what Project X sets out to do. Addison alluded to it in his "breathless rant" email you received yesterday: "What we're building promises to revolutionize the way you see the world… and help you build lasting wealth for you and your family." Granted, it's still a work in progress: "Some of its components," Addison went on, "haven't even been designed because the vision we've set out for the team of editors, producers, photographers, programmers and designers has yet to prove possible. If you're an engineer… you know how this works." We're eager to bring you additional updates about Project X. But that won't be possible after midnight tonight… unless you sign up now to continue to receive them. You see, an integral part of Project X is to bring together like-minded individuals who express the very concerns you've read about today… and the commitment to take matters into their own hands. So after tonight, we're limiting Project X only to those people who've taken the step to sign up. It's a small step. It takes less than 30 seconds. There's no obligation that comes with doing so. But if you want the chance to be a part of something extraordinary, it's a step you need to take. Here's where to go.
The 5: We understand the sentiment. But if you think you've lost control, then you've lost the battle. Project X is about taking control, Washington and Wall Street be damned. If that sounds overwhelming, that's OK… but Project X might not be for you. If you are ready to take control, we urge you to take the next step… and sign up here. Unless you do so, you may never find out what Project X is all about. Regards, Dave Gonigam P.S. "I fear inevitable inflation as a result of printing money," reader M.R. writes, "will erode the value of my retirement plans." He's another of the 7,147 people who've submitted Project X survey responses in the last 10 days. Others are more concerned about a less-stealthy form of confiscation. "I don't believe in America anymore," reader C.G. says bluntly. "They will come for what I have worked for and saved and they will call me rich." We haven't heard from only retirees, either. "The massive debt and lack of action by our federal government," reader B.S. writes, "is leading us into decades of declining employment and depression. I honestly don't know if I will ever be able to retire." Feel a little less lonely now? You're definitely part of a substantial crowd whose voice isn't heard in ordinary media channels. The response prompted Addison to record this short message…  The clock runs out at midnight tonight. If you want to sign up for Project X, please do so now. This will be the final communication about Project X that you'll see in The 5.
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| Gold Daily and Silver Weekly Charts - A Pervasive Sense of Disestablishment Posted: 03 Nov 2011 08:13 AM PDT | ||||||||||||||||||||||||||||||||||||||||||
| To Hell With What the Fed Says, Inflation is Already Here: Mike Pento Posted: 03 Nov 2011 07:23 AM PDT JK Comment: Pento has long been a gold bull (about the only thing he's bullish on), and he continues to make a strong, well-reasoned case in this video.
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| Michael Krieger Explains Why It Takes Only 5 Minutes Posted: 03 Nov 2011 07:16 AM PDT
From Michael Krieger Power concedes nothing without a demand. It never has, and it never will. - Frederick Douglass Fairly quickly, Corzine accumulated a massive net long sovereign debt position that eventually totaled $6.3 billion, or five times the company's tangible common equity as of the end of its fiscal second quarter. I'm told Corzine's move was highly controversial within the firm. But no one overruled him, maybe because after all, he was Jon Corzine. In a mark of just how much Corzine mattered to the market, in early August, MF Global filed a preliminary prospectus for a bond deal, in which the firm promised to pay investors an extra 1 percent if Corzine was appointed to a "federal position by the President of the United States" and left MF Global. – Did accounting help sink MF Global? It Takes 5 Minutes Alright I am going to kick things off with Europe and get that out of the way as quickly as possible. Nothing has changed and absolutely nothing has been accomplished. There is no "solution" to the crisis that will not result in massive pain, confusion and wealth decimation. The reason is patently obvious. At least half the continent is completely and helplessly bankrupt. There are only two outcomes to the entire situation. Either the sovereign debts are written off aggressively and the banking system declared insolvent and restructured or the ECB decides to turn on those printing presses to the tune of trillions and destroys the purchasing power of the union in Zimbabwe-like fashion. People will read this and think I am exaggerating . The phrase "it takes 5 minutes" keeps running through my head because all it takes is a small amount of time to see the situation for what it is. I am not that smart. This is obvious. The scary thing is that it is abundantly clear that the vast majority of U.S. investors have not bothered to take the 5 minutes necessary to understand how extreme and binary the outcomes to all this is. Their clients will suffer massively in the months and years ahead as a result of their laziness and lack of macro curiosity. Remember, there is a very good reason that no "definitive solution" has been announced. There is none. What the Eurocrats are trying to do is pretend that lifelines to bankrupt nations will be enough to tide them over until strong growth allows them to wiggle out of the problems. This has already been proven a failure after they tried it last year as Greece is now worse than ever. So there are two choices and no one can be totally certain which outcome it will be but either one will result in massive wealth destruction. The first choice is the one I prefer (hard defaults and a declaration of insolvency of the banking system followed by restructuring) because it will place the majority of the losses and pain on the elites that led us to this ruin and who own most of the financial assets in the world. The second option (massive inflation and loss of purchasing power) will kill the poor and middle classes as well as the wealthy but financially illiterate. The ruling oligarchs will be fine (until the masses come for their heads) as they understand what they are doing and will move to protect their assets. Since the same criminal, crooked and morally bankrupt financial oligarchy is still pulling the strings worldwide you have to assume they will opt for choice number two, although unforeseen social and political events could throw a wrench into their twisted plans. Gold is the only asset that should outperform in either scenario. Before I leave Europe, there is a must read article posted this week on Zerohedge that everyone needs to read and understand. http://www.zerohedge.com/news/how-us-banks-are-lying-about-their-europea... MF Global What is there to say about this debacle that hasn't been said already. The main point I want to make is that the collapse of this firm and its crony capitalist CEO Jon Corzine fits in perfectly to one of my overriding themes regarding the current fourth turning we find ourselves in. Namely, that the celebrated elites and "financial wizards" will be disrobed, disgraced and proven once and for all to be the frauds they always were. If nothing else, the story of MF Global should make it crystal clear to all observers that the biggest problem the world faces today comes back to a small cadre of financial engineering misfits that continue to be recycled all over the world's positions of power. Most of them have Goldman on their resume or at the least JP Morgan. I just find this hilarious considering that I don't think the clowns at any of these banks could make a dime without government help. When I write this I do not mean to insult individual rank and file people at these firms because I happen to know some of them to be capable and decent; however, come on guys. How can you feel good about your paycheck or trades when you are just a ward of the state that in reality owns you souls. Let's see how you do without the government backstop. We just saw how Corzine did. So Corzine was as "insider" as you get and he blew his firm to smithereens because he made the mistake of working at a firm that was allowed to fail. He represents everything that is ruining America today. Guys like him are everywhere and their reputations and firms will all be plunging into the ground over the next several years. The best part about this whole story is how Corzine was apparently being considered for Treasury Secretary of the United States. I mean this doesn't surprise me at all, but it should be a warning to everyone around the world that it is people exactly like Corzine that make all the important decisions in the world today. While it takes a long time to run entire nation-states into the ground don't you worry they are working hard and are well on their way. You've got to read this gem http://mobile.gothamist.com/2011/07/05/corzine_to_obama_if_i_raise_enoug... The State of the Union (and Financial Markets) The one thing I feel more confident in than anything else right now is that the U.S. consumer is about to roll over. The most interesting dichotomy lately has been the extremely depressed consumer confidence numbers (and falling) coupled with resilient consumer spending. I believe this is about to reconcile itself via much lower rates of consumption. Let's start off with today's Bloomberg Consumer Comfort reading. Bloomberg Consumer Comfort Reading 10 Year Chart
Despite the horrific consumer confidence numbers and the recent stats showing a new food stamp participation record in the United States where we have about 15% of citizens needing government assistance to survive, spending has held up pretty well. How has this happened? Well, it seems the main reason is a decline in the savings rate. U.S. Personal Savings as a % of Disposable Income 10 Year Chart
Peace and wisdom,
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| Gold at Highest Since Late September Posted: 03 Nov 2011 06:30 AM PDT courtesy of DailyFX.com November 03, 2011 07:23 AM Daily Bars Prepared by Jamie Saettele, CMT 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. Trading above there would negate the bearish bias and require a reassessment of the situation. Latest Video Other TA Articles...
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Recently there's been much talk about how infrastructure spending can be a viable solution to our country's current economic woes. President Obama's proposed $447 billion dollar jobs bill contains, among other things, investment in infrastructure projects like road construction. Many progressive economists have called for much more, with some even saying that the utility of such programs is secondary to the short term economic stimulation that would result from hiring unemployed workers. In other words, it doesn't matter what is built, as long as the government creates jobs. But even if the projects are widely regarded as needed, will the benefits justify the costs? Oftentimes the answer is no, as the actions of the Spanish government over the last two decades suggest.
Think back to what the term "American Dream" meant when you were growing up. Somewhere along the line, something went haywire.
The typical 2010 college graduate is larded down with $25,250 of student loans, according to research out this morning from the Project on Student Debt.
The 2010 student debt burden is 5% higher than that of the class of 2009. That tracks the typical tuition increase, according to figures out last week from the College Board.
Total student loan debt is on a pace to top $1 trillion this year. Last year, the total exceeded the amount of credit card debt outstanding for the first time.
We identified a "higher education bubble" 
How time flies. Today and tomorrow are the G-20 meetings in Cannes, France — where we've been promised a final settlement to the eurozone mess.
Also goosing markets: The European Central Bank lowered its benchmark interest rate by a quarter percentage point, to 1.25%.
The ECB rate cut propelled gold to his highest level since late September. At last check, the spot price was $1,762. Silver is steady as she goes… $34.48
"With a name like 'Project X,'" a reader writes, "I surmise that it, in some ways, focuses on the challenges that the heirs of the boomers face. To put it concisely, this would be the erosion of the middle class."
"The generation behind the boomers? Granted the hole is getting pretty deep for them, but frankly, I can't advise how to stop the digging. But what I can do (as a parent) is try to teach and prepare them and open their eyes to the problem they will face. They will pay, we know that."
"I have lost control of my future," writes one of the 7,147 people who've submitted Project X survey responses in the last 10 days. "I am trapped in a decaying economy and controlled by a government that has betrayed her citizens. All because of greed and illiteracy."
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