Gold World News Flash |
- GOLD & Silver Prices to INFINITY, Dollar Collapse & the Mogambo Guru
- Peter Schiff - The US is in Worse Shape than Italy
- Silver: The Party Isn’t Over Yet
- The Dollar and Euro Are Mathematically Certain To COLLAPSE
- Gold Seeker Closing Report: Gold and Silver End Mixed
- Global Financial Crisis II: maybe it's not coming to an economy near you after all
- The Beginning of the End of Fiat Money
- Gold Price Manipulation Blatant And Disgusting...Desperate
- Swiss brokerage adopts GATA's view of imaginary 'paper gold'
- Grandich Client Sunridge Gold
- Dimitri Speck: Price irregularities in the silver market
- Fund manager Eveillard muses on government punishment of gold owners
- Negative interest rates in India driving record demand for gold
- Peter Schiff: The US is in Worse Shape than Italy
- Kerry Lutz Interview with Chris Duane
- The Gold Price "Must Hold" Support Is Now $1,740
- Investors in India pouring record amounts into gold
- Precious Metal Mining Companies: The Utilities of the Future
- Option traders placing big bullish bets on gold — biggest since just before the last big run-up
- The Dollar is Toast! The Future is Silver
- The Euro Crackup
- 'Buckle Up', Says Silver
- The European Debt Crisis, Two Years On
- Credit Closes at Lows As Equity Ends At Highs
- Gold Daily and Silver Weekly Charts - Forget MF, Think MMF Variable NAV
- Bled Dry, In Slow Motion
- Gold Stocks Are Dirt Cheap
- Why Are European Politicians Arguing Over Central Bank Gold
- Costless, Limitless, Meaningless Money, Part II
- LGMR: Gold Picture "Bullish" as Rumors Spread of ECB "Nuclear Option", Signs of Contagion "Already Visible in France"
| GOLD & Silver Prices to INFINITY, Dollar Collapse & the Mogambo Guru Posted: 10 Nov 2011 05:44 PM PST | ||||
| Peter Schiff - The US is in Worse Shape than Italy Posted: 10 Nov 2011 04:30 PM PST  With gold, silver still consolidating recent gains, today King World News interviewed Peter Schiff, CEO of Europacific Capital. When asked about rumors of gold sales from Italy and how this might impact the gold market, Schiff responded, "I don't think there are going to be big gold sales, the Bundesbank has made that clear. It would be a mistake. There would be a lot of other central banks that would be quick to buy Italy's gold. Then Italy would be in even worse shape because they would have even less gold. So I don't think that is going to be in the cards."
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| Silver: The Party Isn’t Over Yet Posted: 10 Nov 2011 04:29 PM PST Investing is often a study of inconsistencies and contradictions. If it weren't, the markets would be a simple game and there would no back and forth between buyers and sellers, greed and fear and technical analysts, fundamentalists and momentum players. Our experience with silver since the end of last year illustrates this [but]*we [still]*think it makes sense to get exposure to the metal. [Let us explain.] Words: 820 So says Dr. Stephen Leeb ([url]www.leeb.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 (sub-titles and bold emphases) 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. ...
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| The Dollar and Euro Are Mathematically Certain To COLLAPSE Posted: 10 Nov 2011 04:28 PM PST | ||||
| Gold Seeker Closing Report: Gold and Silver End Mixed Posted: 10 Nov 2011 04:00 PM PST Gold fell almost 1% to $1753.70 in Asia before it rose to see a slight gain at $1775.07 in London and then plummeted all the way down to $1736.03 by midmorning in New York, but it then rallied back higher into the close and ended with a loss of just 0.57%. Silver climbed to $34.318 before it dropped down to $33.133 by about 10:30AM EST, but it also rallied back higher in late trade and ended with a gain of 0.09%.
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| Global Financial Crisis II: maybe it's not coming to an economy near you after all Posted: 10 Nov 2011 04:00 PM PST Wall Street shares have risen by between 7 per cent and 10 per cent in five trading days, depending on which share index you follow. Europe's main market index is up 8.5 per cent in the same time. Our market has rallied 9 per cent, or by 15 per cent if you swapped unhedged from US dollars into Australian dollars to get on board: the Aussie dollar is back to parity and up about 6 per cent in a week. This is all about psychology. The market's hive mind is suddenly hopeful that this year's crisis will not have a second leg. But if the hive mind proves right, the rally will accelerate sharply. The 2008-09 global crisis is a guide to where we are at now. Until September 15, 2008, it was a market event. Asset prices were falling as write-offs proliferated, but the impact on the real economy was still being debated. Advertisement: Story continues below But the collapse of Lehman Brothers on September 15 and the rescue of many other massive financial institutions that followed generated a second, concussive wave. 
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| The Beginning of the End of Fiat Money Posted: 10 Nov 2011 02:50 PM PST By: John Browne Thursday, November 10, 2011 Last week, the G-20 meetings did not produce an expanded bailout fund for the eurozone. While this may bode well for the long-term solvency of the member-states (moral hazard and all), it has also triggered a market reaction that I expect to help destabilize the common currency. Yesterday's market moves suggested that this development is good for the dollar and bad for gold. Allow me to step back from the stampeding herd to evaluate whether they are, in fact, moving in the right direction. The argument for the dollar and against gold is simplistic, and I will evaluate it against the four-stage collapse I see ahead for the Western currencies. Arguing that gold is a hedge only against inflation, and taking current inflation figures at face value, mainstream analysts have concluded that gold is grossly overvalued – that it may, in fact, be...
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| Gold Price Manipulation Blatant And Disgusting...Desperate Posted: 10 Nov 2011 01:36 PM PST For me to say that I am DISGUSTED with the BLATANT manipulation of the Precious Metals markets would be a gross understatement. Explain the following market action today...I can't. GATA's Bill Murphy can't either. From his Lemetropole Cafe post this afternoon at The James Joyce Table: Behavioral Finance Report *My commentary will be mostly about Behavioral Finance. From a Planet GATA perspective, what else is there? What would I find the markets doing this morning when I woke up after yesterday's commotion? Huh I thought when I turned on the tube. The DOW was sharply higher and gold was crushed. Was the dollar soaring? No, it was lower. Were commodity prices getting battered? No, oil was higher. Was there some miraculous news out of Europe signifying real progress in their growing fiscal problems? None at all. Bond yields in Italy came down below the so-called critical 7% level thanks to some mysterious buying. However, bond yields in Germany and France have risen to euro level highs. Seriously, why was "the price" of Gold down today? Oil price rises as US supplies shrink BusinessWeek - Oil prices climbed above $97 per barrel Wednesday on signs that the US is consuming more fuel. The government said Wednesday that diesel ... Snap Reactions To Italy's €5 Billion Bill Auction, Which Reeks Of Illegal ECB Intervention From ZeroHedge Earlier today Italy sold €3 billion in 1 year Bills at an average yield of 6.087%, the highest since September 1997, and almost 3% higher compared to a month ago, when it prices at 3.570%. Yet there was a stunning twist: the 1 Year was trading at a whopping 7.75% in the gray market minutes before the auction, or almost 200 bps wide of the auction result, something which never happens under normal conditions unless the invisible hand of the central bank has anything to say about it. Now we know already that the ECB stepped in to aggressively mop up Italian bonds in the secondary market immediately after the auction to bring 10 year yields below 7%, however briefly: the bond has since widened above that level once again. Yet what is shocking is the primary market strength for the 1 year: since the ECB is prohibited by law from intervening in the primary, auction market, we wonder just what illegal backdoor funding scheme the ECB has concocted with friendly banks in order to have the auction price where it did, and how much money was transferred by back door channels to keep Europe from imploding one more day. Considering that the EURUSD was trading below 1.35 just prior to the auction at around 3 am, and has since regained losses, just as we expected yesterday, please remind us to add this latest illegal central bank intervention feature to the list of things to uncover once Europe blows up and the ECB's secret trading records are laid out for all to see. In the meantime, here is the Wall Street snap reaction to the Bill auction. Does it really matter that the price of Gold was down today, despite every reason for it to be up? HELL NO! It's just noise... Gold IS going higher. Silver IS going higher. Oil IS going higher. You name it, it IS going to go higher in price. There have been many head scratching days like this in our 10-year long Gold Bull Market...my hunch is there will NOT be very many more. From UBS: "The amount of gold shipped from Hong Kong to the mainland jumped to 56.9 tonnes during the month, from an average monthly flow of 18 tonnes to August. The September figure is nearly 500% higher than in the same month last year and lifts total shipments for the first three quarters of 2011 by 128% y/y." "In the three months July, August and September, China imported around 140 tonnes of gold compared to 120 tonnes in the whole of 2010." Global demand for physical Gold makes the "paper price"of Gold look silly. And if you think the "paper price"of Silver is even sillier, consider this demand stat: From Mark W. Kellstrom, CFA Strategic Energy Research and Capital, LLC: Silver Eagle Bullion Sales Hit New Record In 2011. The correction in silver prices has not shaken investor confidence. In fact, bullion investors have stepped up their purchases this year. With just under two months still remaining in 2011, sales of the American Silver Eagle have already surpassed the record level of 2010 with sales of 36,375,500 ounces. If sales of the Silver Eagle for November and December match the levels of 2010, total sales for 2011 should total over 42 million ounces or more than 20% above the record breaking sales level of 2010. Investors also appear to be wising up to the manipulation in the silver market as weak hands strengthen. This is evidenced by the fact that some of the strongest sales months during 2011 were during the sharp sell offs. Rather than panic, sell silver positions or move into cash, investors stepped up their purchases of silver eagles coins to take advantage of the depressed prices. Considering the physical demand for Gold AND Silver, and couple it with the FACT that the banks have no choice but to PRINT PRINT PRINT money to pay for their debts, prices can only rise from here no matter what shenanigans the CRIMEX banking cartel comes up with. Secret gold price suppression won't last much longer Geopolitical analyst James G. Rickards, who spoke at GATA's Gold Rush 2011 conference in London in August, today tells King World News that a second but secret London Gold Pool is being operated by Western central banks to suppress gold's price and that he doesn't expect it to surive more than two more years. An excerpt from the interview has been posted at the King World News blog here: The CRIMEX Banking Cartel is desperate to halt the recent breakout in the price of Gold. Just look at The Big Picture posted below. It is worth a thousand words of support for the Gold market.  Gold could not be better poised for an assault on $2000. F*#$ the CRIMEX! ECB Preparing Italy Bailout, Massive Inflation ComingWednesday, November 9, 2011 read article... 
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| Swiss brokerage adopts GATA's view of imaginary 'paper gold' Posted: 10 Nov 2011 12:52 PM PST 8:52p ET Thursday, November 10, 2011 Dear Friend of GATA and Gold: More evidence that GATA's understanding of the gold market is increasingly shared comes this week from the Swiss brokerage house EFT Financial Products in Zurich, which, in a brochure marketing its new gold-related products, notes that much if not most of the gold the Western world thinks it has is only imaginary "paper gold." Page 12 of the brochure says: "Gold is excessively leveraged via the OTC and futures markets. Whilst many commodities are rarely settled physically, as it would be impractical, we could see a surge in demand for delivery of physical gold during a financial crisis. With the current 92-1 leverage in the markets, should 1 percent of investors request physical delivery, then the whole system would come under considerable strain." GATA has been working on exactly that, and now maybe EFG is too. Its gold products brochure has been posted here: http://www.gata.org/files/EFGFinancial-GoldProducts.pdf 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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| Posted: 10 Nov 2011 12:31 PM PST The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! November 10, 2011 05:10 PM Sunridge Gold – Positive Initial Assay Results from 7000m drill program at Gupo Gold Deposit ~ OEL Comment 031111 [url]http://www.grandich.com/[/url] grandich.com...
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| Dimitri Speck: Price irregularities in the silver market Posted: 10 Nov 2011 12:22 PM PST 8:23p ET Thursday, November 10, 2011 Dear Friend of GATA and Gold: Market analyst and GATA consultant Dimitri Speck, writing at Safe Haven this week, charts intervention in the gold and silver markets back to 1993, this time with an emphasis on silver. Speck's commentary is headlined "Price Irregularities in the Silver Market" and you can find it at Safe Haven here: http://www.safehaven.com/article/23240/price-irregularities-in-the-silve... 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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| Fund manager Eveillard muses on government punishment of gold owners Posted: 10 Nov 2011 12:17 PM PST 8:15p ET Thursday, November 10, 2011 Dear Friend of GATA and Gold: In an interview today with King World News, fund manager Jean-Marie Eveillard muses about the fundamental circumstances favoring gold, the possibility that governments will try to punish gold owners, and the desperation that would be signalled if insolvent nations like Italy tried to sell their gold. An excerpt from the interview is posted at the King World News blgo here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/10_E... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT For Continuous Wealth Creation, the Hera Research Newsletter The life cycles of companies that produce natural resources allow investors to allocate assets among companies at different stages of development and to profit from transitions between stages. Based on natural resource company life cycles, the Hera Research Newsletter maximizes profits through deep, fundamental analysis at each stage of development and by moving gains back to earlier-stage companies in a continuous wealth-creation process. Hera Research covers a pipeline of high-quality natural resource companies at different stages of development. The companies span discovery and production of gold, silver, and platinum group metals, select base metals, oil and gas, green energy, agriculture, rare earth elements, uranium, and more. Discover the unique value of the Hera Research Newsletter by visiting: http://www.heraresearch.com/newsletter.html Or call Ron Hera at 360-339-8541x101. Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Golden Phoenix Signs Definitive Agreement to Acquire and Reopen Santa Rosa Gold Mine in Panama Company Press Release SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation. Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher. Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine. Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status." For Golden Phoenix's complete statement, please visit: http://goldenphoenix.us/press-release/golden-phoenix-signs-definitive-ac...
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| Negative interest rates in India driving record demand for gold Posted: 10 Nov 2011 11:47 AM PST Investors Fleeing Bonds, Savings Spur Record Flows Into Gold: India Credit By Tushar Dhara and Swansy Afonso http://www.bloomberg.com/news/2011-11-10/investors-fleeing-bonds-savings... NEW DELHI -- Investors in India are withdrawing from government bonds and national-savings schemes to pour record amounts into gold. Funds that invest in sovereign debt shrank 4 percent from a month earlier to 30.2 billion rupees ($606 million) in September and those that buy gold rose 8 percent to an all-time high of 81.73 billion rupees, according to the Association of Mutual Funds in India that is also known as AMFI. Individual investors withdrew 78.7 billion rupees between April and September from small-savings deposit plans such as those run by post offices, the most since at least 2000, government data show. Benchmark bond yields in Asia's third-biggest economy are headed for the biggest annual increase since 2009 as investors seek shelter from inflation that has held above 9 percent since December. The yield on the nation's 10-year notes is 81 basis points below the rate of inflation, compared with 14 basis points in South Korea. Indonesia's bonds yield 179 basis points more than the rate of consumer-price increases. ... Dispatch continues below ... ADVERTISEMENT Golden Phoenix Completes Operating Agreement Golden Phoenix Minerals Inc. (GPXM) has entered a joint venture operating agreement with Silver Global S.A., a Panamanian corporation, governing the operational and management aspects of their new joint venture company, Golden Phoenix Panama S.A., a Panamanian corporation formed to hold and operate the Santa Rosa gold mine in Canazas, Panama, and explore the mine's adjacent property. Golden Phoenix will be manager of the joint venture company. Silver Global will handle all social programs, political and community relations, and human resource matters for the joint venture company in Panama. Golden Phoenix and Silver Global also have agreed to work together on all future acquisitions within Panama and to bring such new opportunities to the joint venture company. Golden Phoenix will be earning in to a 60 percent interest (and potentially an 80 percent interest) in the Santa Rosa mine. Upon signing the joint venture agreement and completing the corresponding acquisition payment, Golden Phoenix will earn an initial 15 percent interest in the joint venture company. Tom Klein, CEO of Golden Phoenix, says the agreement "creates a solid foundation for the development and planned re-opening of Mina Santa Rosa." For Golden Phoenix's full statement on the joint venture operating agreement, please visit: http://goldenphoenix.us/press-release/golden-phoenix-completes-joint-ven... "There is asset switching, and people are betting more on gold as it is a safer asset and offers a hedge against India's high inflation and the economic uncertainty affecting the world," Debasish Mallick, the Mumbai-based chief executive officer at IDBI Asset Management Ltd. that oversees about $1 billion, said in an interview on Nov. 9. "Investing in gold is a very prudent asset-allocation strategy." IDBI Asset's first gold mutual fund, which collected 1.1 billion rupees from 12,000 individual investors, will start trading on Nov. 17. Funds that invest in gold have more than doubled from 35.2 billion rupees at the end of last year, while those that buy sovereign debt have shrunk 26 percent from 41 billion rupees, AMFI data show. Individual investors withdrew money from state-run savings plans, which the government can tap directly, for a third straight month in September. The plans offer a return of 8 percent, while State Bank of India (SBIN), the nation's biggest lender, pays 9.25 percent on one-year deposits, its website shows. That still trails price increases in the world's second most populous nation. The wholesale price index rose 9.72 percent in September from a year earlier after climbing 9.78 percent in August, official data show. "Inflation is running ahead of bank deposit rates," Ritesh Jain, the Mumbai-based head of investment at Canara Robeco Asset Management Ltd., which oversees about $1.75 billion, said in an interview on Nov. 9. "People are seeing the value of their money eroding. There is still enough juice in gold to continue to attract investment." The yield on the government's 8.79 percent bonds due November 2021 rose five basis points, or 0.05 percentage point, to 8.91 percent on Nov. 9, according to the central bank's trading system. India's financial markets were closed yesterday for a public holiday. The rate on notes due in a decade has climbed 99 basis points this year. The yield rose 233 basis points in 2009 following the global financial crisis that was spurred by the collapse of Lehman Brothers Holdings Inc. India's banks, the biggest buyers of government securities, sold 195.3 billion rupees more local-currency notes than they bought in September, the most since October 2010, according to central bank data. Global investors are also seeking higher premiums to hold Indian debt. The difference in yields between 10-year sovereign rupee bonds and similar-maturity U.S. Treasuries widened to a record 697 basis points on Nov. 9. Rupee-denominated notes returned 1.8 percent this year, the worst performance among 10 Asian local-currency debt markets monitored by HSBC Holdings Plc. The rupee slid 1.4 percent on Nov. 9, the most since September, to 50.1750 per dollar on concern Europe's lingering debt crisis will damp growth in the global economy. The currency has slumped 10.9 percent this year, the worst performance among Asia's 10 most-traded currencies. Gold for immediate delivery traded at $1,766 an ounce yesterday. Bullion prices will climb 15 percent more to a record $2,038 an ounce by the end of the year, according to the average estimate of 16 respondents in a Bloomberg survey conducted at a London Bullion Market Association conference in Montreal in September. India's combined imports of gold and silver rose 40 percent in October to $7.2 billion from a year earlier, Trade Secretary Rahul Khullar told reporters in New Delhi on Nov. 8, attributing the increase to "asset switching." Demand for gold in the South Asian nation may rise to a record for a second straight year, David Lamb, the managing director of the jewelry and marketing unit at the World Gold Council, said at a conference in New York on Oct. 26. Consumption rose to a record 963.1 metric tons last year, driving imports to an all-time high of 958 tons, according to the council. Higher gold prices may damp demand, according to the Bombay Bullion Association. The nation will import 900 metric tons this year, 6 percent less than in 2010, Prithviraj Kothari, president of the association, said in an interview yesterday. "I am not so bullish on gold," Kunal Shah, head of commodity research at Mumbai-based brokerage Nirmal Bang Commodities Pvt., said in an interview on Nov. 9. "A growth slowdown in the developed world and inflation concerns in emerging markets will drag down commodity prices, including gold." The cost of insuring the debt of State Bank of India against default using credit-default swaps has risen this month. Five-year swaps on the lender, viewed as a proxy for the nation, cost 305 basis points on Nov. 9 from 266 basis points at the end of last month, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in privately negotiated markets. The swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent if a company fails to adhere to its debt agreements. Europe's debt crisis will spur demand for gold, according to San Mateo, California-based fund ASA Ltd., which invests in mining companies. The value of bullion held by the Reserve Bank of India has climbed 27 percent this year to $28.7 billion, more than the 24 percent increase in gold prices, suggesting that the monetary authority is boosting its reserves of the metal. "The list of problems in Europe is growing faster than the possible solutions," David Christensen, who oversees $650 million as chief executive officer at ASA, said in an interview in New York on Nov. 9. "That's adding more fuel toward gold being added as a safe haven. Institutional investors and central banks are all adding gold to their portfolios." Tasneem Lokhandwala, a 27-year-old freelance assistant director of movies in Mumbai, says she moved money out of bank deposits into gold funds after bullion prices fell 11 percent in September. "Gold rates keep rising no matter what, and the return is higher than what the banks offer," Lokhandwala said in an interview on Nov. 9. "Gold is mostly a way of collecting for marriage." Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT For Continuous Wealth Creation, the Hera Research Newsletter The life cycles of companies that produce natural resources allow investors to allocate assets among companies at different stages of development and to profit from transitions between stages. Based on natural resource company life cycles, the Hera Research Newsletter maximizes profits through deep, fundamental analysis at each stage of development and by moving gains back to earlier-stage companies in a continuous wealth-creation process. Hera Research covers a pipeline of high-quality natural resource companies at different stages of development. The companies span discovery and production of gold, silver, and platinum group metals, select base metals, oil and gas, green energy, agriculture, rare earth elements, uranium, and more. Discover the unique value of the Hera Research Newsletter by visiting: http://www.heraresearch.com/newsletter.html Or call Ron Hera at 360-339-8541x101.
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| Peter Schiff: The US is in Worse Shape than Italy Posted: 10 Nov 2011 11:33 AM PST from King World News:
Peter Schiff continues: Read More @ KingWorldNews.com
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| Kerry Lutz Interview with Chris Duane Posted: 10 Nov 2011 11:30 AM PST from The Financial Survival Network: Chris and I resume our weekly discussion. He's a little "under the weather" so I pick up some of the slack. We discuss everything from the Opium Wars, Petro-Dollar Dominance, to the world's richest tyrants. We also discuss possible/probable causes for our nation's seemingly never ending series of wars as well as the eventual day when the Dollar Merry-G0-Round stops and the world tries to get off. Always interesting, irreverent and never dull. Listen in. Click Here to Listen to the Interview
This posting includes an audio/video/photo media file: Download Now | ||||
| The Gold Price "Must Hold" Support Is Now $1,740 Posted: 10 Nov 2011 11:17 AM PST Gold Price Close Today : 1758.90 Change : (32.00) or -1.8% Silver Price Close Today : 3409.5 Change : (25.3) cents or -0.7% Gold Silver Ratio Today : 51.588 Change : -0.552 or -1.1% Silver Gold Ratio Today : 0.01938 Change : 0.000205 or 1.1% Platinum Price Close Today : 1618.50 Change : -9.90 or -0.6% Palladium Price Close Today : 649.40 Change : 4.40 or 0.7% S&P 500 : 1,239.70 Change : 10.60 or 0.9% Dow In GOLD$ : $139.79 Change : $ 3.81 or 2.8% Dow in GOLD oz : 6.762 Change : 0.184 or 2.8% Dow in SILVER oz : 348.84 Change : 5.85 or 1.7% Dow Industrial : 11,893.86 Change : 112.69 or 1.0% US Dollar Index : 77.60 Change : -0.326 or -0.4% The GOLD PRICE lost $32 by time Comex closed it at $1,758.90 today, but it held on to that $1,750 after a low at $1,736.30. Good, but I reckon it will drop again tomorrow. Course, only a fool would say anything about gold right now, with all the world's NGM working to keep it down and a world wide financial blow up driving it up. Never mind, after all the smoke clears, the GOLD PRICE will still be headed higher. $1,740 has now become the "must-hold" support. The SILVER PRICE lost only 25.3c today to close Comex at 3409.5. Low came at 3322c, high at 3430c. GOLD SILVER RATIO actually fell today (silver was stronger than gold) to 51.588 from 52.140. The SILVER PRICE has now worked itself into a position where it must hold about 3325, because there stands the 20 dma (3333c) and the rising trend line. Break that and it must fall a stout ways, maybe to 3000c. On the other hand (to sound like an economist) if silver can hold that line, the whole picture changes, and everything begins to look up. Today's tale is quickly told. Same indecision holds sway in gold, stocks going nowhere (but dramatically), fiat currencies all sick, but the euro is sickest with the yen next. I've been thinking about "innovation." I know that if you make automobiles, you've got to change the thing every year or people will stop buying it, no matter that it's all just a moveable sledge that takes you from one place to another and all that changing merely makes it more expensive and less reliable. Been thinking about "innovation" -- better word is "novelty" -- because I realize that I spend most of my time sending the same message, albeit in different words. There's a reason for that: It's right. When it stops being right, I'll say something else. Till then, if y'all get bored with my saying pretty much the same thing, well, go listen to CNN or NPR or anybody on Wall Street who is always chasing novelty. To pick your pocket And let me know when they finally get it right. After all, I ain't nothing but a natural born durn'd fool from Tennessee. US dollar index closed down 32.6 basis points (0.42%) to 77.60 but that don't mean spit in the wind. Clearly it has broken out through 77.4 resistance and will move higher. Clearly the euro (closed 1.3604, up 0.44%) has a future at vastly lower price, around 120, and just as clearly the Japanese Nice Government Men are fighting like hyenas to keep the yen from appreciating as money tsunamis out of the euro looking for a refuge. Europe continues to dither. Rumors now about breaking the euro up into tiers of countries. Germany is the go-wheel in everything, with most to lose if the euro become the defuncto. After all, the EU and the euro has brought Germany what 300 years of war could not. Beginning to look like a "managed crisis", although I am certainly not making Germany the Bad Boy in all this. The managers are cosmopolites, louyal to no nation and no interest but their own. Dow rose 112.92 points or 0.96% to 11,893.86 but remains beneath its 200 dma (11,975). S&P rose 10.6 (0.86%) to 1,239.70. Stocks: better'n burning up $1,000 bills with a match! 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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| Investors in India pouring record amounts into gold Posted: 10 Nov 2011 11:07 AM PST "Investors in India are withdrawing from government bonds and national-savings schemes to pour record amounts into gold." USAGOLD comment: Indian demand has also served as a precursor in the past to larger global movement into physical metal. Savings withdrawals in India are the largest since 2000 — just before the long-term bull market in gold began. Similar reports are circulating from China. Imports from Hong Kong jumped a record 30% in September according to a Bloomberg report. Chinese investors like to buy when things are quiet, and right now things are quiet. But as the previous post indicates. . . .perhaps not for long. ( I wouldn't be surprised to hear a couple of months from now that it was Chinese investors buying on the dips over the past 30 days.) Lance Roberts, Streettalk Advisors, sums it up: "The turmoil in Europe has brought the fear trade back to gold." Nothing moves gold market demand like concern about the financial system, and more often than not in this bull market run, it has been demand from China and India on the dips that has led the way. MK
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| Precious Metal Mining Companies: The Utilities of the Future Posted: 10 Nov 2011 11:00 AM PST Gold and silver mining stocks will be the utility stocks of the future as they essentially mine for the only true store of wealth. One could argue this is a crazy assumption to make and point to...
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| Posted: 10 Nov 2011 10:43 AM PST Nov. 10 (Bloomberg) — Gold options traders are placing the most bullish bets since August as Europe's debt crisis spreads. . . Demand for calls on the gold ETF, the world's biggest exchange-traded product backed by precious metals, has surged to the highest level since Aug. 8. That day, the ratio jumped to a one-year high of 1.57 on the first trading session after Standard & Poor's stripped the U.S. of its AAA credit rating. (Ed. Note: That ratio of calls to puts is now at 1.5 calls to 1 put.) USAGOLD comment: If you look back at the price of gold on August 8, 2011 (the reference point for this article), gold was just under $1700 sitting on the tarmac revving up its engines. A month later the price surpassed the $1900 per ounce level, and as this article points out, the big jump in the call/put ratio preceded the surge in prices. The market senses trouble brewing. . . . . .more so than at any time since early August. MK
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| The Dollar is Toast! The Future is Silver Posted: 10 Nov 2011 10:21 AM PST Psychologists tell us that there are five stages of grief over loss of whatever kind, usually death, or breaking up with a loved one, which are: denial, anger, bargaining, depression, acceptance. I’ve applied these to the loss of the dollar, as I see most people today are still stuck in denial, and here’s how to deal with that. Words: 1100* So says Jason Hommel ([url]http://silverstockreport.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=#...
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| Posted: 10 Nov 2011 09:45 AM PST by Jeffrey Tucker, Whiskey and Gun Powder: Watching the euro melt has been like watching a train wreck in slow motion. You knew it was coming. You know which cars on the train are next line to be mashed. There is nothing you can do to stop it. You can only watch as it happens, with one car after another compressing like a tin can, and all you can do is say, "I told you so," the entire time. The whole European currency scheme was both brilliant and crazy. It was brilliant because Europe should have a united currency. In fact, the whole world should have a united currency. Once upon a time, it did. It was called the gold standard. National currencies were just another name for the same core thing — a nationalist spin on a global consensus. If some country had waved around an unbacked piece of paper and called it money, no one would have taken it seriously. Read More @ WhiskeyAndGunPowder.com
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| Posted: 10 Nov 2011 09:26 AM PST By the looks of things yesterday, most equity traders needed to be reminded of the basic transmission dynamics of how a credit/liquidity crisis moves through the system and back again. Read More...
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| The European Debt Crisis, Two Years On Posted: 10 Nov 2011 08:51 AM PST No doubt, most Daily Reckoning readers are aware of yesterday's shocking headlines: Mariah Carey lost 70 pounds…and Taylor Swift won the Country Music Award for "Entertainer of the Year." Meanwhile, the European Union continued to unravel faster than a Kardashian marriage. Because the European leaders have failed to contain the crisis within the economic boundaries of the Peloponnesian Peninsula, it is now fanning out across the Ionian Sea and up the Adriatic like a toxic plume…and is washing ashore in Italy. Investors are terrified to wade into the water. Italian bond yields are spiking higher and stocks are plummeting worldwide. The crisis didn't seem so worrisome when it was just a "Greek thing" — when the story was just about the "lazy Greeks." But now the story is also about "Big Greece," or Magna Graecia — a.k.a. Italy. Going back a couple of millennia, Greek settlements were so prolific in Italy and Sicily that the region was sometimes referred to as Magna Graecia, or "Big Greece." The name stuck, but its meaning evolved. Magna Graecia became a kind of slur, referring to the southern half of Italy — home of the "lazy Italians." This meaning of this term may be in the process of evolving once again. Magna Graecia might as well refer to the all the heavily indebted nations of the Western world. We are all Greeks now. When the very first sign of a potential crisis sprouted in Athens nearly 2 years ago, most investors dismissed it as a minor blight on an otherwise fertile economic landscape. One rescue package — or two — would take care of the problem and we'd be on our way. Here at The Daily Reckoning, we don't mind saying, we provided a dissenting point of view. We warned early and often that the Greek crisis would not simply "go away." We warned that it would metastasize throughout the euro zone and would imperil the euro itself. (It's true; we said it. You can look it up for yourself). Here's a little something we wrote a year and a half ago. Seems like just yesterday: Rome wasn't built in a day, of course. So we should not expect Athens to be rescued in a week…or ever. The country's fiscal condition is beyond repair. Either Greece slips into the Mediterranean, figuratively speaking, or the euro does…or both… In a worst-case scenario, the ECB will exhaust its cash, credit and credibility trying to save Greece…and will destroy the euro in the process. Best case, the "fix" will persuade a few Wall Street strategists that the "worst of the euro crisis is over" and will suck a few more suckers into the European sovereign debt markets before the situation gets REALLY ugly. And it will get ugly…one way or another. Many investors behave as if sovereign defaults are like polio: eradicated forever. These investors are half right. Polio has been eradicated. Greece may not actually default, depending on the rescue measures that come its way. But Greece is already bankrupt. The creditors to Greece should understand that history is not on their side. In fact, the creditors to every sovereign borrower should understand that history is not on their side. "While a European sovereign default has appeared inconceivable in recent history," a recent Wall Street Journal article observes, "defaults and debt re-schedulings were actually a common feature of the European financial landscape throughout the nineteenth century and up until the end of World War II, according to the economists Carmen Reinhart and Kenneth Rogoff. "Greece has defaulted or rescheduled its debt five times since gaining independence in 1829…" Governments default. That's what they do. They tax; they squander the tax revenues; they default. This is the established unnatural order of the governmental world. The Greek crisis may be the first sovereign debt debacle of recent times, but it won't be the last. Our caution remains. But you don't have to take our word for it. Just "listen" to what the markets are saying. For example, as we suggested in the September 7, 2011 edition of The Daily Reckoning, pay attention to LIBOR rates. We observed: The signs of credit distress are increasing. These signs take various forms. But one of the most telling forms is the direction of LIBOR interest rates. LIBOR stands for "London Interbank Offered Rate." It is the rate at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank lending market). In most circumstances, LIBOR rates track short-term Treasury rates. But in the midst of crisis conditions, LIBOR rates tend to spike, while Treasury rates fall. That's exactly what happened during the credit crisis of 2008, as the chart below illustrates.
In the depths of the crisis, LIBOR rates soared, reflecting the reluctance of banks to lend money to other banks. The more worrisome the crisis seemed to be, the higher LIBOR rates climbed. As such, the LIBOR rate functioned as a kind of "fear gauge." And so it remains…
During the last few weeks, LIBOR rates have been on the rise once again. They have not risen high enough to sound a distress signal, but they have risen high enough to raise an eyebrow. Let's call it an early warning sign. This warning sign is still flashing amber. Since our warning in early September, LIBOR rates have continued their steady upward climb, which indicates that credit stresses are increasing.
Meanwhile, government bond yields in the PIIGS nations of Portugal, Italy, Ireland, Greece and Spain are also surging higher — another clear sign of distress. In the July 12, 2011 edition of The Daily Reckoning, we observed: The euro fell to its lowest level since May, the Italian stock market fell to its lowest level since 2009 and Spanish bond yields jumped to their highest level since 1997. This small sampling of distress in the European financial markets would suggest that a credit crisis is beginning, not ending. Greek two-year yields soared to 31% yesterday, but that ridiculous number hardly seems newsworthy. Greece is broke and everyone knows it…except the EU and the IMF. Greek bond yields might as well be one billion percent. Does anyone really expect to receive interest payments for the life of the bond? The new news is not Greece; it is that the Greek crisis is now a genuine European crisis. Throughout the PIIGS nations of Portugal, Italy, Ireland, Greece and Spain, bond yields have spiked sharply since July 5. On that fateful day, the Greek parliament voted to accept the austerity measures imposed by the E.U. and the IMF, thereby opening the door to the bailout funds that were supposed to make everything all better. On that same day, however, Moody's downgraded the Portuguese government debt to "junk." One week later, the financial markets seem to have decided that the cold, hard facts inspiring the Portuguese downgrade are of greater significance than the smoke, mirrors and empty promises that underpin the "Greek rescue." The situation in Europe is becoming so frightening that, ironically, investors are dumping the debt securities of Europe's most indebted nations in order to buy the debt securities of the world's most indebted nation.
While Spanish and Italian bond yields are spiking to multi-year highs, US bond yields are falling (i.e. bond prices are rising). This "flight to quality" move into Treasurys seems laughable… But we don't make the rules, dear investor, we merely mock them. If a Treasury bond is "quality," Thalidomide deserves a Nobel Prize in Chemistry… "Quality" rarely rolls off a government's printing press. Again, these trends have been intensifying for the last several months…despite numerous official pronouncements along the way that the EU had devised a potent and credible rescue plan. Investors continue to dump PIIGS debt and to flock into the US Treasury market.
Net-net, the crisis is not over. It is gaining momentum. Therefore, we would repeat the observation we made on July 12: Treasury bonds are not the sort of "quality" an investor wishes to hold long-term. The quality worth owning long-term is much more likely to ascend up a mine shaft — like gold and platinum — or sprout from the soil — like wheat and soy beans — or spring from the mind of enterprising innovators — like RCA Victor and Apple Computer. Throughout crises and depressions and all other forms of economic adversity, enterprising innovators somehow find a way to succeed. The 1930s produced some of America's greatest success stories. Perhaps, the 2010s will repeat the performance. Eric Fry The European Debt Crisis, Two Years On 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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| Credit Closes at Lows As Equity Ends At Highs Posted: 10 Nov 2011 08:42 AM PST Investment grade and high yield credit spread markets, which typically trade very closely coupled with equities, followed the path of the European session and completely negatively diverged from stocks today. IG and HY credit closed very close to its wides of the day while the S&P managed to limp up on average volume to close near the day's highs - after stagnating around VWAP for much of the afternoon. Into the close, we saw a similar pattern to yesterday as hedgers jumped in to credit and HYG (the high-yield ETF) dropped significantly and IG credit (a cheap hedge) lost ground. ES tracked risk markets (outside of credit) almost perfectly all day long - something we haven't seen in a few days - as today appeared very much a wait-and-see day with Europe's modest outperformance enough to quench sellers in equity positions for today at least. Commodities (ex-Oil) were largely unchanged as the dollar ended modestly lower as EURUSD oscillated on Merkel rumors and correlation trades. TSYs rallied off what was an awful 30Y auction but ended the day higher in yield and steeper in curve.
Given the detail in the chart we suggest you click to enlarge it. From earlier in the week, equities appear to have been clinging to hope while professionals in the credit markets have been derisking. HY has faced some stress from two BK (or near BKs) but today's action is as divergent as we have seen in days with IG and HY (dark and light red) closing near their lows of the day as stocks (blue) end near their best levels. Also note the late day dive in HYG (green) as it dived to catch up to HY's performance - this is once again related to the liquidity preference as longs obviously concerned about holding overnight reached for whatever was easiest to hedge.
The moves in equity markets - specifically the S&P 500 futures - were extraordinarily correlated with risk assets today. As we often say, if you can see EURUSD then all is clear. But today the chart below, which can be tracked intraday here, shows the broad risk-basket and ES were keeping each other company all day suggesting little 'exogenous' buying or selling pressure from real money.
Away from our normal charts, we note that the cross-currency basis swap for EURUSD has reached levels not seen since 2008. This tends to be a decent proxy for the funding stresses between USD and EUR denominated markets and suggests the seriousness of the bank funding markets that perhaps Libor (with its central bank disintermediation) does not always transparently indicate.
and EUR-USD swap spreads indicate - at least for now - that EURUSD has reached a model-based 'fair-value'. Based on the full term structure of swap spread differentials between the USD and EUR, this chart gives some sense for the drop in the EUR that we have highlighted caused the short-squeeze, the over-correction spike and the settling back to 'nromal' for now. Of course, with Greek, Italian, French, and Austrian bond spreads all breaking records (and EFSF bonds deteriorating rapidly), the growing expectation that the ECB will print-and-rescue is perhaps weighing (among other things) on the FX market.
All-in-all, it is incredible to us that we can see such divergences among the major asset classes - especially given HY's still extreme cheapness to equities (if one had a bullish perspective). Under the covers, chaos is reigning and relying on good-old-fashioned Dow indications is clearly not enough to manage risk in this environment - though we hope that has been obvious for years. Charts: Bloomberg
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| Gold Daily and Silver Weekly Charts - Forget MF, Think MMF Variable NAV Posted: 10 Nov 2011 08:35 AM PST | ||||
| Posted: 10 Nov 2011 08:30 AM PST Addison Wiggin – November 10, 2011
And with that, the largest county in Alabama slimed its way into the history books as the biggest municipal bankruptcy in U.S. history.
Yes, there was the usual corruption and backroom dealing. There was even outright bribery, for which four county commissioners are doing time.  But it takes something extra special to multiply the cost of a municipal project by a factor of 20. And even more depravity to force local small-business owners to close up shop because they can't afford a water and sewer bill of $500 a month. That "something special" was cooked up by Wall Street. Derivatives… in this case, interest rate swaps. J.P. Morgan sold county commissioners on taking out what amounted to a humongous adjustable-rate mortgage. Instead of controlling the costs of debt service, the costs exploded — to a point where the county could no longer keep up the interest payments, much less pay down any principal. Curiously, while the bribees are in prison, the bribers from J.P. Morgan faced only civil charges from the SEC, which the firm settled for $722 million. Pocket change.
You could likely drive no more than 10 miles from your own home and find a public works project — a bridge, a sewage plant, a school — that will never be paid off. You can almost hear the commissioners moan: "There's never enough tax revenue to pay off the bonds and pay all the other bills at the same time. And when a recession hits, there's even less revenue coming in… but the debt still needs to be serviced." Once the bond comes due, it gets rolled over into a new bond… and local residents keep paying for it via taxes or user fees. Great if you're collecting on the bond… but…
According to James Spiotto, a bankruptcy specialist with the firm Chapman and Cutler, Chapter 9 bankruptcy law was amended in 1988 to ensure that bondholders continued to get paid even after a municipality lands in bankruptcy court. "The whole purpose," he told The New York Times last summer, "is to assure the market that in times of distress, the bonds will be paid." Jefferson County sewer rates are still set to rise even in bankruptcy, according to The Birmingham News. In other words, bankruptcy filing or no, residents get bled dry in slow motion. The schemes are the flip side of the list of "new taxes and weird fees" we've been trying to entertain ourselves with while the country works its way through this macabre dance with public finance. Here's your seat, if you want to stop before the music ends.
We're not sure what anyone's supposed to be relieved about…. Italy is just as hopelessly in debt as it was yesterday. The chatter about a "radical overhaul of the European Union" that turned a rotten day into a rout by the close… umn, it's still out there. French banks still hold about 20% of Italy's debt.  And U.S. money market funds still have well over 40% of their assets sunk into the short-term debt of European banks. (More than half of that 40% still consists of commercial paper issued by the big French banks with all that exposure to Italy!) Uehy. "There is no way the PIIGS can get out of their debt problems," warns our short strategist Dan Amoss, "with the current plan of more borrowing and budget austerity measures." Dan is following the eurozone's backwash on American shores as closely as anyone. If you want to build a break wall around your finances, we recommend you look into his strategy.
Wee-hoo! In today's market, any number under 400,000 is cause for celebration. The last time there was a sustained stretch of numbers under 400,000 was back before the end of the world as we knew it in early 2008. Before the hoi polloi realized the gas had already escaped the bag… the bubble had burst… and the official "recession" was on its way to being declared under way (six months later). Alas, as unimpressive as the numbers are, they did deliver a nice short-term trading opportunity for Abe Cofnas and his black box trading binary strategy. "I have been watching the weekly initial jobless claims data very closely," Mr. Cofnas wrote yesterday morning, "and I have detected a pattern" pointing to a range between 390,000-410,000. Using the information, had you been following Abe's advice, you may have entertained the idea of trading the option on the weekly claims figure he suggested… which ultimately lead to 30% gains in 24 hours. Yes, there is such a thing… part of the niche market that Abe follows, unique among North American advisories. To learn more about the fast-moving opportunities available nowhere else, look here.
Idaho's Sunshine Minting reports $1.25 billion in revenue from Uncle Sam in the year ended Sept. 30. The previous year's orders totaled $591 million. Sunshine is one of five companies that supplies blanks to the U.S. Mint. [Ed. Note: We still have an extraordinary offer available — 10 Silver Eagles, plus one Gold Buffalo... plus a handsome, discreet storage solution: a hollowed-out book that consists of Empire of Debt and Mobs, Messiahs and Markets stitched together. Supplies are dwindling by the day — get yours while they're still available.]
"Which is just the forerunner of things to come in the US of A." "In other words, the few or at least 50% aren't going to suffer unless we all suffer. I don't know how far off the calamity is, but I for one will not join the soup lines. As far as I am concerned, if ya can't see it coming, you're going to deserve what ya get." The 5: Well stated. Our own soup line prevention program can be found here.
"The 'tax' is self-imposed by Christmas tree growers across the country to support research and marketing. It has been in the works for several years and there have been several public comment periods. The response by growers has been largely supportive." "The funds will be supervised by a board of growers. The program is also subject to another vote of contributors after three years. If it does not function well, it will no doubt be voted out." "Please read the information available at USDA before condemning the program." The 5: "Self-imposed?" So a tree grower who thinks this is a stupid idea and wants to opt out of the 15-cent-per-tree fee would be exempt? If you and some of your fellow growers want to get together on a marketing campaign, go for it. But, the bad publicity is giving the Agriculture Department second thoughts. "USDA is going to delay implementation and revisit this action," says White House spokesman Matt Lehrich. Heh. [Small editorial note: We actually have a Christmas tree farm in New Hampshire. It's a small cut-your-own operation, so not subject to the tax, but the market and industry are not entirely unfamiliar to us.]
[Whoops.] "I thought you may have misquoted him, as the strait connects to the Arabian Sea. In checking his report, I see he indeed stated this. It's just a geographical detail, and beside the point. Will subscribe, as his performance is quite impressive." "Keep up the great work! I am a fan. Also, of your taste for the ladies: Heh." The 5: Nostra culpa. Byron knows the region well, having landed Navy jets on aircraft carriers over there. Crazy how things get mucked up and missed by writers, editors and producers alike these days. You'd think we all worked for Fox News or CNN, wouldn't you? That said, we are indeed proud of Outstanding Investments' track record — named the best over the last 10 years among nearly 100 newsletters tracked by the independent Hulbert Financial Digest. Thank you for subscribing.
"How 'bout some beefcake to go with that gratuitous cheesecake?" The 5: The last time we got this question, a female reader said she'd "like some of the older stars — they are still sexy" and we tried this. Umn, you don't want to go there again. "You mentioned," our fair reader goes on, pivoting to another topic, "a new law in Massachusetts that requires that even if one successfully fights a moving violation, they still have to pay court costs. My husband found out that hard way this is already law in Oklahoma." The 5: Bummer.
"And of course, the chuckles are often priceless from some of the boobs that respond with their silly comments. Especially the guy who just read his first issue and thinks he hired his very own personal investment guru awaiting his commands. "What' wrong with you guys? Listen to the man…" The 5: Right. Cheers, Addison Wiggin P.S. "The best place to store (hide) your gold and silver," a reader recommends following up on our book safe tangent, "is in a safe set into a concrete slab. "But the safe needs to be in a place where nobody will know it's there. Under a water heater is ideal, but washing machines work too, or under the oil drip pan in your garage. You should also have a 'regular' safe to open for the criminal holding a gun to your head or the burglar poking around in your house (with a bit of gold and silver to sacrifice in it)." "I hope I haven't given too much away!" The 5: That would work if you have a sizeable quantity… our "booksafe" is for a smaller stash — the one that we're all but giving away right now. P.P.S. "Bank Transfer Day" last Saturday, organized to coincide with Guy Fawkes Day, appears to have been a bust… at least if the objective was to start a run at one of the big money center banks. We're not much on organized protests; we think you're much better off taking matters into your own hands. That's the idea behind what the folks at Whiskey & Gunpowder have dubbed their "ditch the dollar" campaign. You don't have to carry a sign or hawk petitions… and once you take the two simple steps they describe in this presentation, you'll be well on your way to safeguarding your hard-earned wealth.
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| Posted: 10 Nov 2011 08:23 AM PST Author: Kevin Brekke Synopsis: A short but insightful look at gold stock analysts' typical methods reveals why gold stocks are so undervalued at present. Also in today's edition: a new US tax snare is in the works for noncitizen property buyers; and signs of life from off-planet. Dear Reader, You have to hand it to our species – we Homo sapiens are a clever and devious bunch. If we scoot out a bit on the lower branches of the anthropological family tree – creationists should probably skip this next part – our ancestors, once equipped with an appropriately sized brain, were quite adaptable. From fashioning tools to mastering husbandry, the challenge of controlling those things necessary for survival has always been critical to adaptation. And that included outfighting or outsmarting Neanderthals for position, dominance, and resources. Kubric''s opening scene of 2001...
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| Why Are European Politicians Arguing Over Central Bank Gold Posted: 10 Nov 2011 07:48 AM PST In recent days we have heard that several G20 leaders of the world's major economies discuss the possibility of Eurozone countries pooling their borrowing rights at the International Monetary Fund to provide greater leverage for the EFSF. The Bundesbank holds Germany's Special Drawing Rights, secured by its gold reserves. Apparently, the proposal had caused tension between Bundesbank President, Jens Weidmann, and Finance Minister, Schaeuble, as well as between Weidmann and the ECB.
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| Costless, Limitless, Meaningless Money, Part II Posted: 10 Nov 2011 07:35 AM PST by Adrian Ash BullionVault Thursday, 10 November 2011 If this risks sounding metaphysical, so it should... SO a DOLLAR is still a Dollar, just as Richard Nixon told US citizens it was 40 years ago this summer. Whether the Euro will be worth anything next week, who can say? But since then, 15 August 1971, that's all the Dollar has been – one dollar alone, rather than a quantity of rare, indestructible gold bullion, that "barbarous relic" of pre-Industrial superstition, and beloved of the 21st century's fastest-growing, wealth-accumulating societies today. Does it matter? The day before President Nixon's announcement, only a foreign central banker could have exchanged dollars for metal, demanding gold bullion from the US Treasury's hoard with a fistful of what were in effect receipts. (The citizen's right to swap the Dollar for gold had gone four decades sooner, along with that freedom to own or trade bullion finally revived under Nixon's successor, Gerald Ford, o...
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| Posted: 10 Nov 2011 07:33 AM PST London Gold Market Report from Ben Traynor BullionVault Thursday 10 November, 08:15 EST Gold Picture "Bullish" as Rumors Spread of ECB "Nuclear Option", Signs of Contagion "Already Visible in France" U.S. DOLLAR gold prices rallied to $1772 an ounce Thursday morning London time – 1.7% below the week's high – while European stock markets also regained some ground as rumors spread that the European Central Bank might intervene in the debt crisis. Silver prices climbed to just below $34 per ounce around lunchtime – 3.8% below this week's high – while commodities were mixed and major government bond prices fell. Earlier in the day, gold prices fell throughout Thursday's Asian trade – hitting a low of $1754 per ounce, having risen to $1798 the day before. "Flow wise we saw nothing but selling today," says one Hong Kong bullion dealer. "Gold's flirtation with $1800 has ceased for the time being," adds a note from the London desk at Mitsui Precious Metals. "Th...
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With gold, silver still consolidating recent gains, today King World News interviewed Peter Schiff, CEO of Europacific Capital. When asked about rumors of gold sales from Italy and how this might impact the gold market, Schiff responded, "I don't think there are going to be big gold sales, the Bundesbank has made that clear. It would be a mistake. There would be a lot of other central banks that would be quick to buy Italy's gold. Then Italy would be in even worse shape because they would have even less gold. So I don't think that is going to be in the cards."
"We've reached the last resort," Jefferson County, Alabama, commissioner Joe Knight declared last night. "We could continue and keep kicking this can down the road but I think the people of Jefferson County have had enough."
What finally did Jefferson County in? A $250 million sewer project that morphed and mutated its way into a $5 billion suck hole of falsehood and hypocrisy.
Trouble is, the municipal bond market is rife with these kinds of swindle-conomic schemes…
There's no way to get out from under these payments in perpetuity — even going the route Jefferson County is going.
U.S. stocks are enjoying what's commonly called a "relief rally" today. At last check, the Dow has recovered about 100 points of yesterday's 400-point loss.
Oh, well, all that is over in Europe anyway. They're just a bunch of socialists, anyway, so who cares right? The stock rally in the U.S. today is being goosed in part by the latest weekly figure on unemployment claims. It's down to 390,000 according to the Bureau of Labor Statistics.
The "risk-on" trade is taking some of the wind out of gold's sails today. The spot price is back to $1,750, while silver is down to $33.70.
Demand for silver, we learned this morning, from one of the U.S. Mint's main suppliers doubled over the last year.
"Neither the Italian public nor the Greek public is going to support any government that imposes real austerity measures," writes a reader with a foreboding message. "This is what the financial markets are coming to understand."
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"I noticed in yesterday's 5 you stated Byron said the Strait of Hormuz (oil choke point) connected the Persian Gulf to the Mediterranean."
"As a female reader of the 5," writes a correspondent from the fairer sex, "my only complaint with your occasional inclusion of photos of attractive women is that there's nothing in it for me."
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