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Thursday, November 17, 2011

Gold World News Flash

Gold World News Flash

Gold & Whirlwind Crisis

Posted: 17 Nov 2011 08:00 AM PST

What an incredible whirlwind of crisis from seven foul winds around the globe. Most emanate from Europe, which is far from its climax in crisis. Three steps will lead to full blown eruption, the first Italy with rising bond yields and a bank run, the second Spain with rising bond yields and admission that banks are far more insolvent than recognized, and third the failure of all three largest French banks as the principal swine creditor. In fact, a great split has occurred, as France has been cut off from the future world by Germany, which looks East to Russia and China. The Berlin leaders will not be needing French squires to carry their bags, but instead will watch as Paris becomes the appointed leader of the PIIGS.


GoldSeek.com Radio Gold Nugget: Gerald Celente & Chris Waltzek

Posted: 17 Nov 2011 03:00 AM PST

GoldSeek.com Radio Gold Nugget: Gerald Celente & Chris Waltzek


GoldCast Presentation: Magellan Minerals Ltd. [TSX-V: MNM]

Posted: 17 Nov 2011 02:00 AM PST

Magellan Minerals Ltd. [TSX-V: MNM] GoldCast Presentation. Magellan Minerals Ltd. is a well financed, Canadian-based junior exploration company focused on mineral exploration and development in the state of Para in northern Brazil. The Company has interests in a number of properties in the Tapajos region which has a historic gold production estimated at 20-30Moz of gold. The Company has two advanced gold projects, Cuiu Cuiu and Coringa.


How to Improve Your Odds

Posted: 16 Nov 2011 06:10 PM PST

In the high-risk junior resource sector, 95% of the companies investors might choose will fail to hit paydirt. For your best chance to pick winners from among the remaining 5%, Exploration Insights Editor Brent Cook has some advice—including ideas about where to find good advice. In this exclusive interview with The Gold Report, conducted during the 2011 New Orleans Investment Conference, Cook makes the case that selecting juniors whose properties are most likely to pass the drill test also gives investors an ideal, built-in exit strategy.


Taking Calculated Yet Extreme Risks in Mining

Posted: 16 Nov 2011 06:08 PM PST

Thom Calandra, a long-time journalist and mining investor, knows what risks to stomach in search of jaw-dropping returns. Geopolitical risk, for one. Karen Roche of The Gold Report caught up with him at The New Orleans Investment Conference to see what this 30-year veteran of analyzing financial markets took away from the event. In this exclusive interview, Calandra revealed why he'll never invest without setting foot on a project first.


Tax-Loss Selling May Hit Gold Stocks Soon

Posted: 16 Nov 2011 06:05 PM PST

After a big spike up and an overdue correction in the gold price, Adrian Day, chairman and CEO of Adrian Day Asset Management, says that the king of metals is settling back into the steady rise in price that we've grown accustomed to over the past several years. He expects that to continue because the demand drivers have not gone away. But gold equities? As Day tells The Gold Report in this exclusive interview—conducted during the New Orleans Investment Conference—their lackluster performance in light of the gold price's ever-upward march is "just astonishing." To top it off, tax-loss selling at year-end may mean these equities have yet to hit their bottoms.


Market Big Picture (Edit: Including a Weird, Sponaneous Riff on Gold)

Posted: 16 Nov 2011 05:52 PM PST

Biwii


The Grand Unified Presentation Of Everything

Posted: 16 Nov 2011 04:42 PM PST

Physics has the elusive Theory of Everything which consists of several Grand Unified Theories and which represents the holy grail of the science and which "fully explains and links together all known physical phenomena, and predicts the outcome of any experiment that could be carried out in principle." In other words, once proven it would make life boring. We doubt it ever will be. Finance does not have anything like it, for the simple reason that while physics is a deterministic science, finance, predicated to a big extent on assumptions borrowed from the shaman cult known as 'economics' is always and everywhere open ended, and depends just as much on chaotic 'strange attractors' as it does on simple linear relationships. Yet when it comes to presentations, especially of the variety that attempt to explain not only where we are in the world, and how we got there, but also where we are headed, we have yet to see anything as comprehensive as the Investment Strategy guidebook from Pictet's Christophe Donay. If there is indeed a holy grail of presentations, this is it, at least for a few more instants, until something dramatically changes and the whole thing becomes an anachronism. In the meantime learn everything there is to know about global decoupling and the lack thereof, the reality of an over-indebted global regime and its 3 incompatible targets, the outlook for the US and the 30% probability of a hard recession, a recessionary Europe and the five possible outcomes of its crisis, China and its hard landing, and how this all ties into an outlook on where the world is headed together with appropriate investment strategies and proper asset allocation, the fair value of the EURUSD, systemic risk evaluation, cross asset correlation, the impact of central bank intervention, debt redemption profiles, the role of gold and commodities in the new reality, and virtually everything else of importance right here and right now.

From Pictet Investment Strategy 2012:

1. Global overview: current major trends in the global economy

  • Developed markets' growth cycle is not virtuous due to the lack of credit and job creation. Growth rates are well below their potential. At the opposite, emerging market economies benefit from vigorous domestic demand: economic growth does not show any sign of serious
    slowdown.
  • Inflationary pressures should recede by the end of this year in both developed markets and emerging markets' economies. Headline figures evolve well above levels targeted by central banks.
  • In 2011, developed markets' central banks adopted new rounds of quantitative easing except the ECB. However, the efficiency of monetary intervention is limited because credit mechanisms are still broken: the deleveraging process is still ongoing.
  • The euro crisis is intensifying. Governments struggle to adopt adequate measures to tackle the source of the problem.
  • As a consequence, financial markets are requiring higher risk premiums for sovereign bonds. It generates aggravating financing conditions in the real European economies. Hence economic growth is on the path of a vicious circle.

2. US: instability in growth as a consequence of the end of the Great Moderation

3. Double global decoupling in DM's versus EM's

4. Central and alternative scenarios for DM economies

5. From 2008, DM economies have entered an over-indebtedness regime

6. In an over-indebtedness regime, DM governments have 3 incompatible targets

7. The five possible outcomes of the euro crisis

8. Global Trends

  • The end of the Great Moderation could increase States' controls. Central banks, under the pressure of governments, will be more and more tempted to embrace new rounds of currency exchange rates and capital controls.
  • The lack of public financial resources implies that governments will impose new regulations to trap capital in domestic markets.
  • The final outcome of the euro crisis remains uncertain: we don't expect a collapse of the eurozone. But the two ultimate resolutions depend only on political decisions: fiscal union and/or the ECB monetizing governments' debts. Because Europe is multi-cultural, the decision making process is long and painful.

 

The United States

 

9. US: the effective GDP level remains well below potential

  • And if our growth forecasts prove correct, the negative output gap will actually widen in 2012 

10. US: the employment cycle persistently diverges from the investment cycle

11. US: growth in nominal labour income decelerated sharply in H1…

  • …but seemed to have bounced back somewhat over the past few months 

12. US: existing home sales have disappointed over the past few months

  • Housing starts remain globally very weak, but the multi-family segment is recovering strongly

13. US: budgetary policy should be restrictive in 2012,…

  • …but to what extent will depend heavily on what is decided in Congress over the coming weeks

14. US: central scenario - Growth recession in H1 2012

  • As expected, growth bounced back in Q3 relative to H1, and prospects for Q4 appear modestly upbeat as well.
  • However, this improvement is mainly linked to the unwinding of transitory drags, namely the oil and Japanese earthquake shocks.
  • The ongoing recovery remains fairly weak, the housing market depressed and, unfortunately, the debt ceiling drama, the US downgrade and the intensification of the European crisis have led to a sharp confidence and financial shock that will continue to weigh on growth over the coming months.
  • Moreover, budgetary policy will likely become more restrictive next year, to an extent that will depend on political decisions taken before year-end.
  • In that context, we expect the US economy to experience a growth recession in H1 2012, i.e. not a full-blown recession, but still with GDP  increases that are insufficient to prevent a rise in the unemployment rate, followed by some modest improvement in H2.

 

15. US: alternative scenario - Risks of a full-blown recession

  • Our central scenario implies a 2012 growth rate well below consensus estimates. But that's not the end of the story. We see downward risks as quite sizable. Two elements are particularly worrying:
    • Fiscal policy: we believe measures to limit the fiscal tightening in 2012 will be taken before yearend. However, full political paralysis is possible, which would lead to a sharp tightening in 2012.
    • European crisis: encouraging developments on that front were short-lived. A further deepening of the European crisis may well happen now, or at some stage or other next year. This would have a further substantial negative knock-on impact on the US.
  • If one of these two risks becomes reality – or at worst both, a full blown recession is likely in the US next year. This is our alternative scenario and, unfortunately, we give it unusually high probabilities (around 30%).
  • However, we believe that if there is a recession in the US, it is likely to remain relatively mild.

 

European Economy

 

16. Euro area: even the Germans households have capitulated - Consumer confidence suffered a hard knock over the summer

17. Euro area: surveys now clearly in recession territory - Only the post-Lehman deterioration was as rapid as the current downswing

18. Euro area: PMI surveys heralding a recession for the coming winter

19. Euro area: conclusion and key takeaway for 2012: Things are likely to get worse before authorities adopt definitive measures

  • Changes in governments of the periphery (Greece, Italy, Spain) could offer some temporary relief as adjustment programmes will be easier to implement.
  • But the benefits of adjustment programmes are likely to disappoint again as recession will probably hit during the winter.
  • Consequently, the confidence crisis related to imbalances between the huge financial needs and the responses in terms of aid packages will continue to loom large.
  • At this point, pressure will mount on the ECB to significantly step up intervention. This action will offer the needed relief to give authorities the time to mould a new shape for the monetary union
    • institutionalize a form of fiscal transfers
      • European Monetary Funds, fiscal union or euro-bonds…
      • new Treaty
  • The euro should survive, but things are going to get worse before European authorities decide to wheel out their heavy artillery

 

Chinese Economy

 

20. China: 2011, the monetary tightening process is over -  Curbing loan growth was about containing indebtedness ratios and reducing leverage within economy

21. China: hot money inflows have not facilitated the tightening process - High economic growth, interest rate hikes and Yuan appreciation attracted too much capital

22. China: inflation topped in July with the last interest rate hike - The decline in inflation doesn't mean inflation will not remain structurally higher than in the past

23. China's urban households leverage: a rise in consumer debt? - Household debt to disposable income rose only from 26% in 2005 to 45% in 2010

24. China: investments are normalizing to ensure sustained growth - Growth should remain investment-led in 2012 but a bit less than during usual pre-crisis paces (25% yoy)

25. China: growth is structurally declining for next years - Higher inflation is the new normal for China for the next several years.

26. China: conclusion and key takeaway for 2012 -Growth will continue to decelerate to a new lower potential, on the background of a structurally higher inflation.

  • Policymaking in 2012 is about stabilizing growth at potential (8.5-9.0%) and bringing inflation below 5% (4.5-5.5%).
  • It is about reducing reliance on credit, allowing a better allocation of capital, contain irrational and excessive infrastructure spending to ensure quality of growth (impeding waste in capital).
  • Use of fiscal spending should be expected in public works to support growth and cushion deceleration of growth during restructuration phase:
    • Social housing
    • Water conservancy
    • Subways and urbanization
  • We expect promotion of capital expenditures in manufacturing sectors for upgrading the economy and climbing the value chain.
  • Enhancing social safety net to contain inequalities & promote consumption (wealth accumulation) is called inclusive growth.
  • Local government debt, shadow banking, bad loans, property developers, etc… will still be a overhang on sentiment. But if these problems are a serious concern, they are not insurmountable and do not threaten China's economy.

 

Global economic overview takeaway

 

27. Global economic overview takeaway (I)

  • Our economic growth forecasts for 2012 for developed markets have fallen significantly over the past few months. While it is not our core scenario, the likelihood of a global recession (double-dip) is increasing.
  • The global economy is still characterized by a double decoupling and lower economic growth at 3.5%.
  • First decoupling: emerging versus developed economies.
    • The United States and Europe face a lack of domestic demand. Private consumption is impaired by too few job creations. The public debt deleveraging reduces government spending.
    • With 0.5% GDP growth in 2012, Europe is close to a recession, while growth in the United States at 1.5% is well below its 3% potential.
    • Emerging markets are running at an average of 4% sustainable growth rate.
    • In case of a significant economic slowdown, low public debt-to-GDP ratios in emerging markets will allow governments to envisage a strong fiscal policy. The over-indebtedness regime in which developed markets are deeply stuck greatly limits their leeway to act. Only a new style of fiscal policy could become a game changer (e.g. new supply side economics after the next US presidential election).

28. Global economic overview takeaway (II)

  • Second decoupling: coexistence of two inflationary regimes:
    • In developed markets, headline inflation in 2012 is expected to converge quickly to the core inflation rate. Central banks in these markets should start to adapt their monetary policy style from inflation targeting to nominal GDP targeting.
    • In emerging markets, headline inflation should stay well above central banks' targets.
  • In spite of the fact that inflation will diffuse in the economies, the PBoC has already reassessed its inflation target upwards to 4%.

 

Investment Strategy

29. Record Asset Correlation

30. Nominal returns of asset classes depend on risk / reward ratios

31. Asset allocation in risk-off / risk-on modes

 

Currency Market

 

32. Currencies: strong nominal GDP growth is a handicap for currencies!

33. Inflation is crucial for currency performance

34. Currencies' performance dispersions segregated in 3 volatility regimes

35. Currencies: risk-on and risk-off modes of the main currencies

36. Currencies: EUR/USD short term determinants - Pressure on the euro suggests it should be at EUR/USD 1.30 currently

37. Currencies strategies depend on volatility regimes

38. Central banks' intervention in currency market

39. Currencies: asset allocation framework for currencies

  • The CHF safe-haven behaviour is artificially blocked. As a result, the CHF will move in line with the EUR versus other currencies.
  • The CHF should remain in the narrow ran


Are Aliens Buying Louis Vuitton Handbags? - World Exports $338Bn More Than It Imports

Posted: 16 Nov 2011 04:19 PM PST

The export miracle, that we have been cantankerously remonstrating against the possibility of for much of the last year, appears to be running into a wall of reality. The Economist puts its usual number-centric and acerbic spin on the nonsense that economists spew with regard to everyone exporting their way out of the debt-laden deleveraging quagmire we are in.

 

From The Economist: Exports From Mars

 

Economists are constantly urging governments to adopt policies that would reduce global imbalances—which, in crude terms, means that China should slash its current-account surplus and America its deficit. Yet they ignore the biggest imbalance of all: the current-account surplus that planet Earth appears to run with extraterrestrials. In theory, countries' current-account balances should all sum to zero because one country's export is another's import. However, if you add up all countries' reported current-account transactions (exports minus imports of goods and services, net investment income, workers' remittances and other transfers), the world exported $331 billion more than it imported in 2010, according to the IMF's World Economic Outlook. The fund forecasts that the global current-account surplus will rise to almost $700 billion by 2014.

 

 

 

 

Are aliens buying Louis Vuitton handbags? Are little green men bagging the best sunbeds by the hotel pool? The more down-to-earth explanation is that the global surplus reflects statistical errors. Either the current-account deficits of countries such as America are being understated or the surpluses of countries like China are being overstated, and by a rising amount.

 

The puzzle is compounded by the fact that the world ran a persistent current-account deficit for at least three decades until 2005. In 2001 the deficit was equivalent to 0.5% of global GDP, but by next year the IMF's forecasts imply that the surplus could hit a record 0.8% of GDP (see left-hand chart). That turnaround exceeds the increase in China's current-account surplus over the same period. Indeed, the global "surplus" now exceeds China's.

 

A statistical black hole of this scale raises questions about the IMF's forecast that global external imbalances will rise over the coming years. It expects China's current-account surplus to double in dollar terms between 2010 and 2014. A forecast increase in China's surplus ought to mean a bigger deficit elsewhere. Yet the fund also expects the rest of the world combined to run a rising surplus (this includes a big drop in America's deficit).

 

What is going on? Past studies by the IMF concluded that the global deficit in the 1980s and 1990s was largely due to the underreporting of foreign-investment income by rich countries and the under-recording of freight receipts. But over the past decade, the "deficit" on investment income has diminished, partly because governments have cracked down on tax evasion and partly because interest rates have fallen. An IMF study in 2009, by Marco Terrones and Thomas Helbling, concluded that the biggest cause of the switch from a global current-account deficit to a surplus was mismeasurement of services. International trade in financial and legal services, insurance and consultancy is tricky to measure, and exporters are easier to identify than importers. For instance, law firms involved in cross-border deals are usually quite large, whereas most clients' spending on their services is relatively small (though it may not seem that way to the clients). Exporters are thus more likely than importers to exceed the threshold for inclusion in the surveys used to track trade in services.

 

Since that report, however, measurement errors in merchandise trade have jumped and now match those in services (see right-hand chart). Transport lags can cause annual global exports to exceed imports when trade is growing rapidly because goods in transit in December are counted as exports by China, say, but are not counted as imports by America until January. But this cannot account for the scale of the recent rise in the statistical discrepancy because growth in trade has slowed since 2007.

 

Another possible explanation posits that the surge in the global discrepancy broadly coincides with both the explosion in vertically integrated businesses, where firms locate different stages of production in different countries, and the increase in China's trade. A rising share of trade consists of parts, semi-finished goods and final products moving across borders between parent companies and their foreign subsidiaries. In 2009 intra-firm trade accounted for half of America's imports. Transfer pricing used by multinationals to shift profits around the globe may distort trade figures. Much of this mispricing of exports and imports should cancel out, but probably not all.

 

More science, less fiction

 

Overinvoicing of imports and underinvoicing of exports by American multinationals trying to reduce their tax bills would mean that America's true current-account deficit is smaller than officially reported. That would increase, not reduce, the global discrepancy. But under- or overinvoicing of trade within international firms is also used to dodge capital controls. A decade ago firms in emerging economies often reported exports at less than their value or imports at more, to shift money out of a country like China. In recent years, however, China's booming economy and the expected appreciation of the yuan mean that exporters now have more incentive to overinvoice exports in order to bring money into the country. If so, official figures may overstate the surplus of China and other emerging economies.

 

To understand whether global imbalances really are widening or not, you need to know where the errors lie. Rich countries' trade statistics tend to be more reliable than those of emerging economies, where data collection is less developed. If more of the mismeasurement is in the emerging world, the total current-account surplus of emerging markets is probably much smaller than that officially recorded. Zhiwei Zhang, an economist at Nomura, estimates that measurement errors caused by underrecorded profits of foreign firms and capital flows disguised as trade flows may have inflated China's current-account surplus by 3-4 percentage points (last year's surplus was 5% of GDP).

 

The good news is that international concerns about global imbalances may be much less pressing than many think. The bad news is that conventional balance-of-payments measures are clearly less reliable in a world of rising intra-firm trade and complex supply chains. That matters because dodgy statistics lead to policy mistakes. Governments should clean the figures up.

Michael Pento on Full-Blown Bond Market Crisis in 2012 & Gold

Posted: 16 Nov 2011 04:01 PM PST

With continued turmoil in global markets and gold remaining firm in the mid $1700s, today Michael Pento, of Pento Portfolio Strategies explains for King World News readers globally why a full-blown bond market crisis is coming in 2012 and how investors should prepare, "The European debt debacle continues to unravel and yet many investors fail to recognize the profound ramifications of taking the largest economy on the planet offline.  EU 27, which has a GDP north of $16 trillion, is the largest export destination of some of the world's fastest growing economies."


This posting includes an audio/video/photo media file: Download Now

Gold Seeker Closing Report: Gold and Silver Fall About 1% and 2%

Posted: 16 Nov 2011 04:00 PM PST

Gold fell $19.32 to $1762.38 in Asia before it climbed back to almost unchanged at $1778.99 by about 7:25AM EST and then dropped all the way to $1753.52 by a little after 10AM, but it then rallied back higher midday and ended with a loss of just 1.06%. Silver saw a slight gain at $34.605 in London before it fell all the way to $33.622 in New York and ended with a loss of 2.43%.


The Fed makes a weird move

Posted: 16 Nov 2011 02:48 PM PST

The Federal Reserve has taken an unusual step this week. To my knowledge the action is without precedent. There was no prior announcement or discussion preceding the new measures. By itself, this is atypical for Bernanke's Fed. Ben doesn't like to surprise markets. He did this time (I'm sure he personally approved the move). Some details and thoughts on what it might mean.

 

 

For years the NY Fed has conducted "Dollar Rolls" of MBS securities with the Primary Dealers. These transactions provide liquidity to the MBS market. The Fed's description:

 

The Federal Reserve uses agency MBS dollar rolls as a supplemental tool to address temporary imbalances in market supply and demand. A dollar roll is a transaction conducted at market prices that generally involves the purchase or sale of agency MBS for delivery in the current month, with the simultaneous agreement to resell or repurchase substantially similar (although not necessarily the same) securities on a specified future date.

Still confused? So am I. My conclusion is that this is benign. The Fed is just providing order and a degree of predictability to an important capital market. I also don't know how much of this is going on. This Reuters article suggests that it is a Trillion dollar market. (Would love some help on the #s?)

Why would the Fed establish a new margin requirement on something that has been going on fine without one for years? Why now? The answer is easy. It's the fallout from MFG.

In a dollar roll the Fed has no principal risk with the counter-party. The cash and securities are settled through a clearinghouse. But they do have risk in the event the counter-party fails during the 30-day roll. If that were to happen, the Fed would have to replace the position with another party and in the process could suffer a loss.

In an effort to avoid this loss the Fed has established a new 2.5% margin on all MBS dollar rolls. From the Journal:

 

The Federal Reserve said it will be increasing collateral requirements on 21 primary-dealer banks in transactions dealing with mortgage-backed securities, in a move that would be aimed at securing an extra layer of protection against settlement risks with its counter parties.


Random thoughts:

 

* What kind of message does this send? (It was communicated to the PDs via a conference call!) It sends a very mixed message in my direction. Essentially the Fed is saying, "We're not so sure we can trust all of you". Of course this position is justified given that MFG (an ex PD) went into the tank in a matter of days.

It would have been nice if the Fed had taken a different approach and said:

 

We've looked very close. MFG was the only bad apple. It won't happen again. We're comfortable with our counter party risk. No need for changes in margins or haircuts.


But they didn't say that. In fact they have said/done quite the opposite. So to me, it sends an ominous message.

 

.

* A shot at the numbers. Say it was a trillion dollar market. That would mean that at any point and time there would be about $80b outstanding. 2.5% of 80 large comes to a neat $2b. That's not so much money for the PDs. But this is equity money. There is a cost to equity these days at the big firms. There is not one of them that has excess tier 1.

 

.

* I have heard that all the PDs are bellyaching big time over this. It will eat into their profits. I also heard that some of the European banks that are also PDs (BNP, Barclays, Credit Swiss, Deutche Bank, UBS) are really pissed. This is not a good time for them to be asking the Head Offices for an additional allocation of capital.

.

* I don't think this is all that profitable of a business for the PDs. It's just part of the grind of financing Agency MBS paper. This is a slap in the face of the PDs.

 

.

*This appears to be very bad timing by the Fed. We shall see if anyone (other than me) interprets the new margin requirements as a warning sign. I believe we are on very shaky ground on the matter of sovereign debt and the brokers who make the system work. We can't afford to let a few more straws fall on the wobbly camel. I think the Fed may have just added to the fray of concerns.

 

.

*I'm making a big deal of this. I think it may prove to be important. Anytime that the Fed does something unanticipated it's worth noting. There is always something more than meets the eye. The timing is odd. The optics are terrible. The Fed is making credit harder to get (very big numbers involved in MBS land) at what may prove to be exactly the worst moment.

Ben Bernanke has often spoken on the history of the depression. He has pointed at the errors of the FRB in 1937 when credit was tightened and a second leg of deflation started. He has said he would not make that same mistake again. I wonder if he just did. Sometimes small things bring big results in our complex markets.

.

 

Kyle Bass Un-Edited: “Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle. It's That Simple!”

Posted: 16 Nov 2011 02:34 PM PST

from ZeroHedge:

If the abridged summary from BBC's Hardtalk interview with Kyle Bass that we published yesterday was not enough for those seeking sense, truth, and direction, then (as promised) the full 24'30″ interview will quench that desire. Reflecting on the similarities of his subprime perspective, he provides a crucial context for the debt-laden world of sovereign debt that he is now hedging. Shrugging off the somewhat snarky 'nefarious short-sellers' angle of questioning (and insuring the uninsured prod), he simply and elegantly points out how massively asymmetric the bet was, how the asymmetry in Europe has disappeared now, and all the asymmetry lies in Japan. From the 14-minute mark, describes the demographic disaster, destroys the savings myth of the land of the rising sun, and brings into focus how Italy's rapid demise should be a forewarning for the debt-servicing of Japan.

Read More (and Watch the Video) @ ZeroHedge.com

Gold & Whirlwind Crisis

Posted: 16 Nov 2011 02:05 PM PST

by Jim Willie, GoldenJackass.com via GoldSeek.com:

What an incredible whirlwind of crisis from seven foul winds around the globe. Most emanate from Europe, which is far from its climax in crisis. Three steps will lead to full blown eruption, the first Italy with rising bond yields and a bank run, the second Spain with rising bond yields and admission that banks are far more insolvent than recognized, and third the failure of all three largest French banks as the principal swine creditor. In fact, a great split has occurred, as France has been cut off from the future world by Germany, which looks East to Russia and China. The Berlin leaders will not be needing French squires to carry their bags, but instead will watch as Paris becomes the appointed leader of the PIIGS. As the most exposed banks to Southern European sovereign debt, pig slop of immeasurable weight is tied around the laced Parisian necks. The common link across the Atlantic pond is derivative corruption. The Europeans are doing their best to force feed a convenient but cockeyed definition of a debt default event. The Americans resort to old fashioned theft, calling it missing funds, blaming the crisis, while breaching the sacred segregated client fund directive. The crisis struck the US shores with the hidden JPMorgan chamber implosion and urgently needed theft, whose visible face is the MF Global heist and failure. My belief is that JPMorgan used its MFG patsy to anchor derivative trades, that just happened to be long sovereign debt in Europe. Nobody in his right mind, even a Corzine of GSax pedigree would place such large wrong trades unless obligated as a syndicate cog in the machinery. The big US banks will sit on the bankruptcy boards and decide the fate of victim accounts without client representation in a full scale insider exercise that makes a mockery of justice. That has been the American norm.

Read More @ GoldSeek.com

JP Morgan Triples Registered Silver Overnight?!?

Posted: 16 Nov 2011 02:02 PM PST

from Silver Doctors:

JP Morgan has made a MASSIVE adjustment of PHYSICAL SILVER into its REGISTERED VAULTS, moving over 1 MILLION OUNCES from eligible into REGISTERED OVERNIGHT!

For those inquiring as to the significance of an inventory adjustment from eligible to registered vaults, please see The Doc's explanation of registered vs. eligible COMEX categories for a full understanding of the implications.

COMEX SILVER INVENTORY UPDATE 11/16/11
*Brink's received a deposit of 81,297 ounces into eligible vaults

*Brink's also had a withdrawal of 76,253 ounces out of eligible vaults

*The Delaware Depository adjusted 2 ounces out of eligible vaults

*No Changes for HSBC

*JP Morgan adjusted 1,103,280 ounces out of eligible vaults, and into registered vaults.

JPM's registered inventories TRIPLED from 557,265 ounces to 1,660,545 ounces on Tuesday!

Read More @ SilverDoctors.Blogspot.com

The Police State Vs. Occupy Wall Street: This Is Not Going To End Well For Any Of Us

Posted: 16 Nov 2011 01:57 PM PST

from The Economic Collapse Blog:

Right now, we are watching the early rounds of a heavyweight fight between two extremely determined opponents. Occupy Wall Street has no plans of losing this fight and neither do law enforcement authorities. Perhaps those running the show actually believed that raiding Zuccotti Park and more than a dozen other "Occupy camps" around the nation would end these protests, but that is just not going to happen. Whatever your opinion of Occupy Wall Street is, everyone should be able to agree that this is one dedicated bunch. They are absolutely obsessed with their cause and in response to the recent raid on Zuccotti Park organizers are calling for "a national day of direct action" on Thursday. But if Occupy Wall Street protesters want to take things to "the next level", they should not underestimate the resolve of the police state. Over the past decade, the homeland security apparatus of the federal government has been slowly but surely turning this country into a "Big Brother" police state. Today, our law enforcement authorities are obsessed with watching us, listening to us, tracking us, recording us, and gathering information on all of us. We are constantly reminded that we live in a prison grid (just think about what they do to you before you are allowed on an airplane) and they are not about to put up with anyone challenging their authority or their control. Have you even known parents that constantly feel the need to prove that they are "the boss" of their children? Well, that is essentially what the homeland security apparatus in this country has become. All over the United States, law enforcement personnel are taught that every American is a potential terrorist and they are actually trained to "act tough", to bark orders at us and to not let anyone question their authority. If Occupy Wall Street believes that it can get the police state to "back down", they are sorely mistaken. Hopefully everyone will cool off a bit as the temperatures go down this winter. But if we do see a "cooling off", it probably will not last for long. As the U.S. economy continues to get worse, these kinds of protests are going to keep growing and they will become even more intense. Eventually, mass civil unrest will cause the streets of many of our major cities to closely resemble war zones. When it is all said and done, this is not going to end well for any of us.

Read More @ TheEconomicCollapseBlog.com

Al Korelin interviews GATA Chairman Bill Murphy at Silver Summit

Posted: 16 Nov 2011 01:35 PM PST

9:32p ET Wednesday, November 16, 2011

Dear Friend of GATA and Gold:

Al Korelin of the Korelin Economics Report interviewed GATA Chairman Bill Murphy at the Silver Summit in Spokane, Washington, on October 20. Video of the interview is a little more than 8 minutes long and you can watch it at the Korelin Internet site here:

http://www.kereport.com/2011/11/16/gata-chairman-bill-murphy-talks-gold-...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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The United States Once Again Can Establish
a Stable Dollar Worth Its Weight in Gold

Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, has released a plan to restore economic growth through a stable dollar.

The plan, titled "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies," responds to the recurrent economic crises of the last century and outlines a detailed proposal for America's leadership on "how we get from here to there." That is, how we get from the present unstable paper dollar to a stable dollar as good as gold.

James Grant, author and editor of Grant's Interest Rate Observer, says of the Lehrman plan: "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman the country has finally found him."

To learn more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit:

http://www.thegoldstandardnow.org/gata


Support GATA by purchasing a silver commemorative coin:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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:

http://www.goldrush21.com/

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:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


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Be Part of a Chance to Discover
Multi-Million-Ounce Gold and Silver Deposits in Canada

Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada.

Check out the exploration program on our Allco gold/silver project :

-- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit.

-- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries.

-- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited.

To learn more about the Allco property or Northaven's other gold and silver projects, please visit:

http://www.northavenresources.com

Or call Northaven CEO Allen Leschert at 604-696-3600.


The Good, The Bad and The Ugly

Posted: 16 Nov 2011 01:19 PM PST

Alex talks about the global monetary collapse now underway as the criminal bankers move to steal trillions and consolidate their hold over nations and victimize millions of people.

Thom Calandra: Taking Calculated Yet Extreme Risks in Mining

Posted: 16 Nov 2011 01:18 PM PST

The Gold Report: Thom, you've been able to identify some tenfold-return candidates in Ghana, Colombia, Sierra Leone, Quebec and Ethiopia. What creates a candidate that can give you a 10x return and how does one find these candidates? Thom Calandra: Karen, I've been a financial journalist for 30 years. I've focused entirely on natural resources for the past 12 years. I'm also a very heavy investor and I do some investor relations on the side. That combination gives me the ability to meet people a retail investor might not. I like to think I know most of the companies out there with interesting projects. I've always had my favorite jurisdictions, but my one overarching rule is—and I know this is going to sound bizarre—ignore geopolitical risk. I'm not here to determine where the gold, silver, copper or platinum price is going. I'm here to find extremely undervalued prospectors and producers. By ignoring geopolitical risk, for example Colombia in 2007, I was able to get stuff cheap. Sa...


It's All About Gold Now

Posted: 16 Nov 2011 01:08 PM PST

By Greg Hunter's USAWatchdog.com

Dear CIGAs,

At the beginning of this month, the G20 met in France to try to find a way to solve the European sovereign debt crisis.  It ended with world leaders in disarray over a way to come up with a solution.  At first blush, it appears that nothing

Continue reading It's All About Gold Now

In The News Today

Posted: 16 Nov 2011 01:02 PM PST

Jim Sinclair's Commentary

John Williams' excellent subscription service, available at www.shawdowstats.com says:

- GAAP-Based 2011 Federal Deficit Likely Within Five- to Seven-Trillion Dollar Range - Effects of High Oil Prices Still Spreading in Broad Economy - October‚s Annual Inflation: 3.5% (CPI-U), 3.9% (CPI-W), 11.1% (SGS) - Real Retail Sales and Industrial Production Gained in

Continue reading In The News Today

Kyle Bass Un-Edited: "Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle. It's That Simple!"

Posted: 16 Nov 2011 12:55 PM PST

If the abridged summary from BBC's Hardtalk interview with Kyle Bass that we published yesterday was not enough for those seeking sense, truth, and direction, then (as promised) the full 24'30" interview will quench that desire. Reflecting on the similarities of his subprime perspective, he provides a crucial context for the debt-laden world of sovereign debt that he is now hedging. Shrugging off the somewhat snarky 'nefarious short-sellers' angle of questioning (and insuring the uninsured prod), he simply and elegantly points out how massively asymmetric the bet was, how the asymmetry in Europe has disappeared now, and all the asymmetry lies in Japan. From the 14-minute mark, describes the demographic disaster, destroys the savings myth of the land of the rising sun, and brings into focus how Italy's rapid demise should be a forewarning for the debt-servicing of Japan.

Ending up on the Fed's printing and the need for guns and gold, there's a little here for everyone!

"Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple"

 

Kyle Bass Un-Edited: "Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle. It's That Simple!"

Posted: 16 Nov 2011 12:55 PM PST


If the abridged summary from BBC's Hardtalk interview with Kyle Bass that we published yesterday was not enough for those seeking sense, truth, and direction, then (as promised) the full 24'30" interview will quench that desire. Reflecting on the similarities of his subprime perspective, he provides a crucial context for the debt-laden world of sovereign debt that he is now hedging. Shrugging off the somewhat snarky 'nefarious short-sellers' angle of questioning (and insuring the uninsured prod), he simply and elegantly points out how massively asymmetric the bet was, how the asymmetry in Europe has disappeared now, and all the asymmetry lies in Japan. From the 14-minute mark, describes the demographic disaster, destroys the savings myth of the land of the rising sun, and brings into focus how Italy's rapid demise should be a forewarning for the debt-servicing of Japan.

Ending up on the Fed's printing and the need for guns and gold, there's a little here for everyone!

"Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple"

 

Capital Account: Tad DeHaven on the Waste, Fraud, and Abuse of Big Government (11/16/11)

Posted: 16 Nov 2011 12:38 PM PST

We've seen a crackdown in the last few days on Occupy Wall Street from police, and over the 60 days from critics who have derided them as socialists. If that's the problem, then what about the government handouts to people who don't need them? We'll tell you about the wealth redistribution that has billions of dollars in subsidies going to millionaires. And speaking of government payouts, how about more than a million dollar signing bonus for joining one of the mortgage giants controlled by the US Treasury? How about millions paid out to its executives? It's a much better payoff than the one for most US taxpayers, who have spent $170 billion to rescue Fannie Mae and Freddie Mac, in the most expensive bailout of the financial crisis. And the deficit commission, the so-called Super Committee has a week to come up with a deal to downsize the deficit by $1.5 trillion bucks over a decade.

Federal Debt Officially Pass 15 Trillion / Raid on Gold and Silver / More on MFGlobal

Posted: 16 Nov 2011 12:27 PM PST

by Harvey Organ:

I would like to announce to you that we officially surpassed the 15 trillion dollar federal debt level.
Since the GDP is also around 15 trillion dollars, we are now at a Debt/GDP level of 1:1.

[...] Let us begin:

I guess it did not take long for the bankers to raid gold and silver. Gold finished the comex session at $1773.80 down $7.90 on the day. Silver was whacked harder on a percentage basis down 64 cents to $33.81. As of 5 pm, in the access market, here are the prices for gold and silver:

gold: $1762.90
silver:$ 33.75

The price of gold started to swoon when the Dow ran into trouble losing 190 points. The Nasdaq also lost big time losing 69 points. The algos stepped in as the risk trade was off and thus dollar up, gold and silver down and stock market down. Let us head over to the comex and see how trading fared today:

Read More @ HarveyOrgan.Blogspot.com

The Gold Price Closed at $1,773.80 Today Down 0.4%

Posted: 16 Nov 2011 12:24 PM PST

Gold Price Close Today : 1,773.80
Change : -7.90 or -0.4%

Silver Price Close Today : 3381
Change : -63 or -1.9%

Platinum Price Close Today : 1,629.70
Change : -11.50 or -0.7%

Palladium Price Close Today : 654.35
Change : -12.60 or -1.9%

Gold Silver Ratio Today : 52.46
Change : 0.73 or 1.01%

Dow Industrial : 12,096.16
Change : 17.18 or 0.1%

US Dollar Index : 77.95
Change : 0.47 or 0.6%

Franklin Sanders has not published any commentary today, if he publishes commentary later today it will be published here.

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.

The Silver Bears Are Back With Part 8

Posted: 16 Nov 2011 10:16 AM PST

Because if we have to deal with constant and increasingly more ridiculous BS out of Europe over and over and over, it is only fair to get an update from the bears, if for no other reason than pure comedic enjoyment now that the world has been taken over by the Banana Onion.

...As For Corzine - Your Chance To Either Own A Piece Of The Fastest Appreciating Asset, Or At Least Annotate It

Posted: 16 Nov 2011 09:29 AM PST

A long, long time ago, back when we could barely rub together 10 visitors a day, we suggested an "Investment idea that gets you point with the ladies" in the form of art conceived by the inimitable Geoffrey Raymond. Judging by market clearing prices, anyone who listened to our advice back then, when a typical Raymond sold for $20-$30K, has generated returns well in excess of either gold or silver - an SAC-blush worthy 50% CAGR! Raymond's latest product has a starting bid of $85,000 and will only go higher. If anyone has some devaluing fiat with Corzine's name written all over it (literally) they can do the barter here. For everyone else, this is your chance to not only annotate it as Raymond will transcribe the wittiest Zero Hedge comments onto the painting, but tell one of the biggest criminals, and we have to add "alleged" for legal purposes but whatevs, of 2011, who will almost certainly never be arrested, not even if he were to pitch a tent in the middle of Zuccoti Park, how you really feel.

Fund managers Mauldin, Eveillard contemplate paper tidal wave at King World News

Posted: 16 Nov 2011 09:22 AM PST

5:19p ET Wednesday, November 16, 2011

Dear Friend of GATA and Gold:

Europe will either start to monetize everything in sight or crash in the next two weeks, fund manager John Mauldin tells King World News today:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/16_J...

And fund manager Jean-Marie Eveillard tells King World News that the money-printing solution will be painful to bondholders but possibly not so much to equity holders:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/16_E...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Prophecy Platinum Drills 120.9 Meters
Grading 1.26 g/t PGM+Au at Yukon Wellgreen Project

Company Press Release
Monday, September 26, 2011

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_...


Join GATA here:

Vancouver Resource Investment Conference
Sunday-Monday, January 22-23, 2012
Vancouver Convention Centre West
Vancouver, British Columbia, Canada

http://cambridgehouse.com/conference-details/vancouver-resource-investme...

California Investment Conference
Saturday-Sunday, February 11-12, 2012
Hyatt Grand Champions Resort
Indian Wells, California, USA

http://cambridgehouse.com/conference-details/california-investment-confe...

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:

http://gata.org/tshirts

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:

http://www.goldrush21.com/

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:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

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

Gold Breaks Short Term Support Line

Posted: 16 Nov 2011 09:11 AM PST

courtesy of DailyFX.com November 16, 2011 09:26 AM 300 Minute Bars Prepared by Jamie Saettele, CMT Gold has slowly crawled higher for nearly 2 months but has yet to retrace the entire September decline. As long as the channel holds, respect the potential for a continuation of what started in September (sharp declines). Gold has dropped below a short term trendline but a drop under 1735 would trigger a bearish bias. Latest Video Other TA Articles...


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