Gold World News Flash |
- Will Dividends Make Mining Shares Glitter More Than Gold?
- Gold and Silver Precious Metal Charts Point to Higher Prices
- Stock Market Sitting on Nothing But Air, Dollar About to Breakout?
- Gold Market Update
- Why Silver For A Monetary Collapse?
- The Contrarians Quandary
- International Forecaster November 2011 (#6) - Gold, Silver, Economy + More
- Has the Bear Returned?
- Middle East gets its first ever online gold and silver trading platform
- Eye Of The Hurricane
- Why gold is better than cash
- Anger Rises as MF Global Clients See Billions Frozen
- Why Silver For A Monetary Collapse? Part 1
- Japan's Kokusai Liquidates Remainder Of Euro Sovereign Exposure, Just As European Primary Issuance Supply Surges
- Japan's Kokusai Liquidates Remainder Of Euro Sovereign Exposure, Just As European Primary Issuance Supply Surges
- Jim O'Neill Describes Europe's Surreal Times, Asks If Germany And The Euro Area Even Want The Monetary Union Any Longer
- Jim O'Neill Describes Europe's Surreal Times, Asks If Germany And The Euro Area Even Want The Monetary Union Any Longer
- Is There a Risk The Euro Will Collapse?
- Audio of Rickards interview posted at King World News
- On the Verge of Huge Stock Market Crash, Implications For Gold and Silver
- Silver Market Update 20-Nov-2011
- Some Heretical Thoughts on the U.S. Dollar
- Bankster-Created Commodity Crisis Intensifies
- Twice in a week, Financial Times pays grudging respect to gold
- ES Opens -1% As Oil, Gold, And FX Carry Leak Lower
- The Gold Triple Play - Volatility, Currencies and Europe
- Gold Market Update - Nov 20, 2011
- Silver Trend Rethink on Mounting Deflation Threat
- Silver Market Update - Nov 20, 2011
- Gold Caution on Building Deflationary Forces
| Will Dividends Make Mining Shares Glitter More Than Gold? Posted: 21 Nov 2011 01:00 PM PST Of late we've seen clever moves by some precious metals mining companies to link the dividends they pay to the income they achieve on a quarterly basis. These include Silver Wheaton, Newmont, Hecla –no doubt to be followed by many more. Why have they decided to do this? The answer goes back to why we invest in the first place. We do so to make money to provide income and capital in the future. To do this we must maximize our total returns from those investments. Investments therefore must be money-making machines, not just good miners or growing companies.
|
| Gold and Silver Precious Metal Charts Point to Higher Prices Posted: 20 Nov 2011 07:39 PM PST Over the recent couple months the precious metals charts have made some sizable moves. Most investors and traders were caught off guard by the sharp avalanche type selloff and lost a lot of hard earned capital in just a few trading sessions. Gold dropped over 20% and silver a whopping 40%.
|
| Stock Market Sitting on Nothing But Air, Dollar About to Breakout? Posted: 20 Nov 2011 07:26 PM PST -- The VIX pullback to intermediate-term trend support at 32.08. It is on a weekly buy signal, having crossed above its 4-year cycle support at 27.26 (red line). The buy signal is confirmed on the daily chart, as it is necessary to remain at or above intermediate-term Support/Resistance. The current buy signal remains in effect for a probable three weeks or longer. That indicates the probability of strong positive momentum in the Volatility Index lasting through early December.
|
| Posted: 20 Nov 2011 07:02 PM PST Gold has behaved as predicted in the last update, which was two weeks ago. It advanced a little further into nearby resistance, before reacting back quite sharply on Thursday. However, whereas in the last update we were looking to buy on this dip in the expectation of renewed advance, we are now more cautious, due to mounting evidence that politicians and world leaders may soon be overwhelmed by deflationary forces despite their strenuous efforts to keep them at bay by means of endless QE.
|
| Why Silver For A Monetary Collapse? Posted: 20 Nov 2011 06:58 PM PST We are at the edge of a major economic crisis. Our monetary system is the underlying cause of this major crisis. The massive debt bubble created by our monetary system is about to burst. The demonetization of gold and silver, has over the years diverted value from these metals, to all paper assets (such as bonds) linked to the debt-based monetary system.
|
| Posted: 20 Nov 2011 06:41 PM PST Bullion Vault
|
| International Forecaster November 2011 (#6) - Gold, Silver, Economy + More Posted: 20 Nov 2011 06:19 PM PST German Chancellor Merkel keeps moving the field of play away from the European Central Bank, and to the people of the euro zone. That is so she can get legislation to remove the sovereignty of EU members. The pitch is, if the new EU is to work all fiscal decisions that will have to be determined in unison by bureaucratic technocrats, all of whom want world government.
|
| Posted: 20 Nov 2011 06:10 PM PST Gold Scents
|
| Middle East gets its first ever online gold and silver trading platform Posted: 20 Nov 2011 06:05 PM PST Gold.ae has launched as the Middle East's first ever online gold and silver trading platform, an indication of the growing interest in investment in precious metals in the region. It operates under the tax-free umbrella of the Dubai Multi Commodities Centre, a specialist freezone for commodities trading.
|
| Posted: 20 Nov 2011 06:01 PM PST It was a fine week to head out of town to a tropical beach, sit, drink, read and swim to you hearts content and forget about this crazy market and the smashing gold and silver and most equities and indices took.
|
| Posted: 20 Nov 2011 05:00 PM PST FinanceandEconomics
|
| Anger Rises as MF Global Clients See Billions Frozen Posted: 20 Nov 2011 03:51 PM PST
By David Sheppard and Jeanine Prezioso Three weeks after MF Global's collapse, furious former customers are still fighting for access to billions of dollars as they question why as much as two-thirds of their money is still frozen. While authorities have touted the fact that they are returning 60 percent of the collateral and cash that had been frozen in the wake of the broker's October 31 bankruptcy, a closer look shows that in fact only about 40 percent of customers' total funds have been authorized for release so far. The remainder, more than $3 billion, ostensibly remains on hand to cover a shortfall originally estimated by MF Global to regulators at just $600 million. Because the bankruptcy trustee, regulators and exchanges have made no comment on the missing funds in weeks — and have given no information as to how much cash they are retaining — customers are left guessing exactly how much might end up in the creditors' process of the bankruptcy.
|
| Why Silver For A Monetary Collapse? Part 1 Posted: 20 Nov 2011 03:47 PM PST We are at the edge of a major economic crisis. Our monetary system is the underlying cause of this major crisis. The massive debt bubble created by our monetary system is about to burst. Read More...
|
| Posted: 20 Nov 2011 02:19 PM PST When we discussed the specifics of the ongoing European bank run, we cited from the NYT which noted the actions of a core Japanese mutual fund with European sovereign exposure, namely that "earlier this month, Kokusai Asset Management in Japan unloaded nearly $1 billion in Italian debt." The Nikkei has just reported that this was merely the beginning: "Kokusai Asset Management Co. has sold all Spanish and Belgian government bonds that were part of its flagship fund, Global Sovereign Open, The Nikkei learned Monday. As of Nov. 10, Spanish and Belgian bonds accounted for 1.8% and 3.1% of the fund, respectively. The share of the bonds in the fund's portfolio fell to zero as of Thursday." Just what prompted this drastic move and very loud slap in the face of the European confidence building exercise? "A Kokusai Asset Management official said the company sold off the bonds, amid widespread concerns about the outlook for Europe's sovereign debt crisis to avoid hurting the value of the fund, given volatile prices of the bonds. The mutual fund operator had already divested the fund of all its French government bonds in October and all Italian bonds in early November." It is safe to say that where one core asset managers has been (and no longer is), everyone else will shortly follow. For the simple reason that it is now if not cool to not have European exposure, it is certainly required by one's LPs to cut down on all European bonds. Kokusai is merely the canary: expect everyone else to go ahead and dump the €741 billion in non-domestically held Italian (and then all other European sovereigns) bonds. Good luck ECB buying these in the secondary market. And one market where the ECB can do nothing by charter, is the primary issuance one, where as the following update from Morgan Stanley shows, things are getting from from bad to worse.
And if, IF, Europe somehow finds a buyer for all of this stuff even as all other prudent asset managers are mimicking the Tesoro and selling on their own...then we get 2012, where things go from bad to worse to truly surreal - sorry Jim O'Neill, but in this case your astonishment would be perfectly valid.
|
| Posted: 20 Nov 2011 02:19 PM PST
When we discussed the specifics of the ongoing European bank run, we cited from the NYT which noted the actions of a core Japanese mutual fund with European sovereign exposure, namely that "earlier this month, Kokusai Asset Management in Japan unloaded nearly $1 billion in Italian debt." The Nikkei has just reported that this was merely the beginning: "Kokusai Asset Management Co. has sold all Spanish and Belgian government bonds that were part of its flagship fund, Global Sovereign Open, The Nikkei learned Monday. As of Nov. 10, Spanish and Belgian bonds accounted for 1.8% and 3.1% of the fund, respectively. The share of the bonds in the fund's portfolio fell to zero as of Thursday." Just what prompted this drastic move and very loud slap in the face of the European confidence building exercise? "A Kokusai Asset Management official said the company sold off the bonds, amid widespread concerns about the outlook for Europe's sovereign debt crisis to avoid hurting the value of the fund, given volatile prices of the bonds. The mutual fund operator had already divested the fund of all its French government bonds in October and all Italian bonds in early November." It is safe to say that where one core asset managers has been (and no longer is), everyone else will shortly follow. For the simple reason that it is now if not cool to not have European exposure, it is certainly required by one's LPs to cut down on all European bonds. Kokusai is merely the canary: expect everyone else to go ahead and dump the €741 billion in non-domestically held Italian (and then all other European sovereigns) bonds. Good luck ECB buying these in the secondary market. And one market where the ECB can do nothing by charter, is the primary issuance one, where as the following update from Morgan Stanley shows, things are getting from from bad to worse.
And if, IF, Europe somehow finds a buyer for all of this stuff even as all other prudent asset managers are mimicking the Tesoro and selling on their own...then we get 2012, where things go from bad to worse to truly surreal - sorry Jim O'Neill, but in this case your astonishment would be perfectly valid.
|
| Posted: 20 Nov 2011 01:45 PM PST Among the traditionally meandering permabullish ramblings of a man who continues to ignore the disconnect between reality and his view of the world, tonight's note by GSAM loss leader Jim O'Neill "Surreal Times" has a very ominous rhetorical question inbetween all the bullish propaganda: "The ECB doesn't seem to regard 10-year Italian bonds as a bargain and, of course, it is rather tricky as they need to be sure that Monti will deliver. In turn, this means that what is really important is that Mario gets support from those in the background and, ultimately, the Italian voters. And then there is Spain. And still, of course, the troubling Greek situation. And ultimately, the complex world of Berlin and Frankfurt. As many European newspapers are asking in recent days, does Germany actually really still want the EMU? And, as I shall now provocatively ask, does the Euro Area? All very surreal." No Jim, all very logical, because for the first time in decades, Europe is finally starting to do the math and realizes it is failing miserably. It is those stuck in a world in which combined total exports are greater than total imports by over $300 blilion: a mathematical lunacy, who think that what is happening is "very surreal." To everyone else, the right phrase is "very much expected." From Goldman's Jim O'Neill Surreal Times. Another fascinating week passes with the European mess understandably dominating the minds of everyone around the world. It is quite surreal. There are no signs of any real collective central leadership, many key players are hardening their positions, other regions of the world are increasingly worrying about it, and markets ended the week with a sort of eerie silence. As I often have said since the European troubles escalated in August, there is life outside of Europe. That remains the case. But virtually wherever and whoever I talk to or with, people are so focused on the European issues. In the week ahead, I will be participating in a board meeting of BRUEGEL, the European think tank, which will be most interesting. Anyhow, more of this topic and others below. Good Lord – Gaylord! My last week started with a brief 2-day trip to Maryland and back. I thought I was going to Washington DC, but, in fact, it was a few miles out in what seemed like a new purpose-built area called National Harbour. I had been invited to participate in a panel at an event for UBS (Paine Webber) at a get together of their most senior nationwide sales team. I had the honour of being on a panel with Alan Greenspan, Otmar Issing and Ken Rogoff to discuss and debate the world. I think I was there to make the drinks (and offer some perspectives on the so-called emerging world too). The venue was the Gaylord Hotel, which seemed to expand for miles. Think one of those so-called Ghost cities in China or Vegas, but a few miles outside DC. Most surreal. But it was fascinating and thanks to the hosts for inviting me. I took away two things from this discussion. The first is that everyone wants to talk about Europe, and most people are so negative about it all. I didn't hear much positive sentiment there myself, but I will repeat what I wrote last weekend. I can't see how the EMU can survive without Italy, and I can't see Italy surviving with 6-7 pct 10-year bond yields. Something has to give, which is actually why it is quite exciting now – even if it is somewhat scary. The second takeaway, and more important one, is that my confidence in the US cyclical recovery picking up momentum is higher than before I joined this panel, not least of which because I heard independent confirmation of the things I notice. I don't think it is appropriate to mention what others actually said, but it was consistent with my own thoughts. In addition to most actual points of reference supporting this view – another modest decline in job claims this week – I detect more minds coming around to my thinking that we may be close to a turning point in the US housing market. As I start to think seriously about 2012 and where GDP might be, both absolutely and relatively to consensus, it seems to me that there are notable upside risks to the US outlook. Of course, there are plenty of things that might go wrong, but there are also plenty of things that could go right. China and the RMB. As I write this Viewpoint, there are some interesting comments on the wires that imply that Beijing is exploring widening the trading bands of the RMB. This wouldn't surprise me at all. While many will see this as purely a sign of likely renewed appreciation of the RMB against the Dollar, I am not sure that is the real key. In the reported comments, Premier Wen has said that China will "strengthen the Yuan's trading flexibility in either direction," which could suggest that if the US$ were to appreciate significantly, then the RMB might actually decline against the Dollar. This will ultimately be what happens, i.e., the RMB will become more volatile as it becomes more open and less controlled. It will go up as well as down. What is more clear to me is that such a development is all part of what might be an accelerating path towards opening up the RMB as Beijing moves towards full convertibility. I am now assuming that 2015 is a realistic goal, and if this statement is soon backed up by evidence, happening so soon after the G20 meeting, it is a rather good sign for the world. It is also extremely exciting for anyone involved in the asset management business, as it means we are likely to see considerable developments in the Chinese bond and equity markets. And, this will all be consistent with the 5- year plan and China moving towards a more domestic consumer-driven economy. Like many other weeks, I had many interesting conversations with people about China (and the other Growth Markets) this week. On Friday, I had a particularly interesting chat over a sandwich lunch about the big picture with an investor. This gentleman shares my own optimism, but he had been asked to stress test the rather negative views of his colleagues who couldn't join us. In particular, they wanted to really delve into who is going to buy all the things that China will produce in the future, implying that they won't be able to produce much, and that China is heading for a hard landing. I think this is an understandable, but also a weird question. It is understandable because so many Western observers, especially from my generation, simply can't get their minds around China becoming a significant consumer. It is weird because it is so Western-minded. My best way of answering this beyond repeating all the numbers I have worked on with my colleagues, is to cite 2 anecdotes. One comes from a meeting 12 months ago or so with the CEO of one of the world's best known retailers who has been expanding considerably in China. He wanted my views on when he should plan to exit, as he thought it was inevitable that China would find a credible domestic competitor at some stage. The second relates to a personal investment I made many years ago in a Chinese luxury company, which continues to grow rather well. It has a number of suitors, including European ones. As I ended up saying, even in the consumer's share of total output weren't to rise above 35 pct of GDP by 2020, China will create at least $3,500 trillion worth of consumption value between now and then – about 10 times the size of Greece. If it were to rise to 45 pct, at least an additional $5 trillion, or the equivalent of 2½ new Italy's. Europe and the Euro Area. What another remarkable week. We are all fond of saying that Europe doesn't move very quickly, but look at the events that have occurred in Italy this past fortnight. Berlusconi is gone, Mario Monti is in place, and the country now has a technocratic government led by a collection of reformist-minded individuals and a very pro-European leader. Mario unveiled the broad path of likely initiatives, and from where I sit as someone who has followed the Italian economy closely for 30 years, it looks quite exciting. Not only are there ideas to deal with important deficit and debt challenges, but of greater importance, ideas to boost Italy's supply side potential, including steps to encourage and help women enter the labour force and to attract the young and brightest from not going overseas to seek opportunity. A significant part of me thinks that 7 pct 10-year bonds for Italy may turn out to be a bargain. However, there are so many hurdles. The ECB doesn't seem to regard 10-year Italian bonds as a bargain and, of course, it is rather tricky as they need to be sure that Monti will deliver. In turn, this means that what is really important is that Mario gets support from those in the background and, ultimately, the Italian voters. And then there is Spain. And still, of course, the troubling Greek situation. And ultimately, the complex world of Berlin and Frankfurt. As many European newspapers are asking in recent days, does Germany actually really still want the EMU? And, as I shall now provocatively ask, does the Euro Area? All very surreal. Is it Time for a Referendum? One of the most interesting things that didn't get that much press this past week is that German Chancellor Merkel is now openly saying that she believes the Treaty surrounding the EMU should be changed. I think I am right in saying this is the first time she has stated this definitive goal, and may be seen as a signal that Germany thinks it can take Europe, or the Euro Area, or at least those that want and can stay in it, down the path of more fiscal and political union. This, as I have written about many times, is what key German thinkers have believed was ultimately inevitable and should have been agreed before the EMU started in 1999. Beyond all the critical short-term questions, renegotiating the Treaty for more substantive changes is a really big step in my view. It is probably a sensible step to take, as it would allow everyone in Europe a fresh say on what they are really signed up for. As I have also written before, this crisis is not really a sovereign debt crisis, but a crisis of the EMU's structure and leadership. In this context, I found myself thinking why not actually use this as an opportunity to do something really radical and seek more legitimacy from the European people? As part of a new Treaty, why not allow or encourage all 27 member countries to hold a referendum on what the new Treaty would be and, therefore, seek genuine support from our citizens? In the rather unlikely event that this would happen, it would seem to me that many of the persistent alternative views between different EMU players, including the ECB, would probably disappear. It seems like a very unlikely thing to happen, but given the remarkable unfolding events across Europe, how can anything be ruled out, especially when it would probably allow the EMU to be strengthened and help the legitimacy of the EU itself. And Finally, a Brief Note on Japan. The Economist magazine this week has a most interesting short piece pointing out that Japan showed stronger GDP per capita growth in the past decade than either the US or Europe. That simple, but important, analysis comes at the end of a week when Japan reported 6 pct annualized growth last quarter, not far off BRIC-like standards and way above the US and Europe. I published an op-ed online in the FT about this last week, and pointed out that markets seem pretty disinterested in the Japanese growth numbers. This is especially interesting when Japanese equities are at such a remarkably low valuation compared with certainly any metric. And, at the other extreme, the Yen is so idiotically expensive. Something has to give here also. I suspect what it might end up being is that markets start to realize that the US is not going down the path of Japan, and the Yen begins to reverse, perhaps significantly. It might take more involvement from the monetary authorities to help it along. If this outcome doesn't happen, then Japan's relative growth outperformance might end up being even more temporary than many expect, as more big Japanese corporations abandon domestic production. All very interesting, and yet another source of big opportunity going forward. It looks to me that there are so many opportunities for investors as we near the end of 2011 and into 2012. We just have to figure out what side of them to be on! Jim O'Neill Chairman, Goldman Sachs Asset Management
|
| Posted: 20 Nov 2011 01:45 PM PST
Among the traditionally meandering permabullish ramblings of a man who continues to ignore the disconnect between reality and his view of the world, tonight's note by GSAM loss leader Jim O'Neill "Surreal Times" has a very ominous rhetorical question inbetween all the bullish propaganda: "The ECB doesn't seem to regard 10-year Italian bonds as a bargain and, of course, it is rather tricky as they need to be sure that Monti will deliver. In turn, this means that what is really important is that Mario gets support from those in the background and, ultimately, the Italian voters. And then there is Spain. And still, of course, the troubling Greek situation. And ultimately, the complex world of Berlin and Frankfurt. As many European newspapers are asking in recent days, does Germany actually really still want the EMU? And, as I shall now provocatively ask, does the Euro Area? All very surreal." No Jim, all very logical, because for the first time in decades, Europe is finally starting to do the math and realizes it is failing miserably. It is those stuck in a world in which combined total exports are greater than total imports by over $300 blilion: a mathematical lunacy, who think that what is happening is "very surreal." To everyone else, the right phrase is "very much expected." From Goldman's Jim O'Neill Surreal Times. Another fascinating week passes with the European mess understandably dominating the minds of everyone around the world. It is quite surreal. There are no signs of any real collective central leadership, many key players are hardening their positions, other regions of the world are increasingly worrying about it, and markets ended the week with a sort of eerie silence. As I often have said since the European troubles escalated in August, there is life outside of Europe. That remains the case. But virtually wherever and whoever I talk to or with, people are so focused on the European issues. In the week ahead, I will be participating in a board meeting of BRUEGEL, the European think tank, which will be most interesting. Anyhow, more of this topic and others below. Good Lord – Gaylord! My last week started with a brief 2-day trip to Maryland and back. I thought I was going to Washington DC, but, in fact, it was a few miles out in what seemed like a new purpose-built area called National Harbour. I had been invited to participate in a panel at an event for UBS (Paine Webber) at a get together of their most senior nationwide sales team. I had the honour of being on a panel with Alan Greenspan, Otmar Issing and Ken Rogoff to discuss and debate the world. I think I was there to make the drinks (and offer some perspectives on the so-called emerging world too). The venue was the Gaylord Hotel, which seemed to expand for miles. Think one of those so-called Ghost cities in China or Vegas, but a few miles outside DC. Most surreal. But it was fascinating and thanks to the hosts for inviting me. I took away two things from this discussion. The first is that everyone wants to talk about Europe, and most people are so negative about it all. I didn't hear much positive sentiment there myself, but I will repeat what I wrote last weekend. I can't see how the EMU can survive without Italy, and I can't see Italy surviving with 6-7 pct 10-year bond yields. Something has to give, which is actually why it is quite exciting now – even if it is somewhat scary. The second takeaway, and more important one, is that my confidence in the US cyclical recovery picking up momentum is higher than before I joined this panel, not least of which because I heard independent confirmation of the things I notice. I don't think it is appropriate to mention what others actually said, but it was consistent with my own thoughts. In addition to most actual points of reference supporting this view – another modest decline in job claims this week – I detect more minds coming around to my thinking that we may be close to a turning point in the US housing market. As I start to think seriously about 2012 and where GDP might be, both absolutely and relatively to consensus, it seems to me that there are notable upside risks to the US outlook. Of course, there are plenty of things that might go wrong, but there are also plenty of things that could go right. China and the RMB. As I write this Viewpoint, there are some interesting comments on the wires that imply that Beijing is exploring widening the trading bands of the RMB. This wouldn't surprise me at all. While many will see this as purely a sign of likely renewed appreciation of the RMB against the Dollar, I am not sure that is the real key. In the reported comments, Premier Wen has said that China will "strengthen the Yuan's trading flexibility in either direction," which could suggest that if the US$ were to appreciate significantly, then the RMB might actually decline against the Dollar. This will ultimately be what happens, i.e., the RMB will become more volatile as it becomes more open and less controlled. It will go up as well as down. What is more clear to me is that such a development is all part of what might be an accelerating path towards opening up the RMB as Beijing moves towards full convertibility. I am now assuming that 2015 is a realistic goal, and if this statement is soon backed up by evidence, happening so soon after the G20 meeting, it is a rather good sign for the world. It is also extremely exciting for anyone involved in the asset management business, as it means we are likely to see considerable developments in the Chinese bond and equity markets. And, this will all be consistent with the 5- year plan and China moving towards a more domestic consumer-driven economy. Like many other weeks, I had many interesting conversations with people about China (and the other Growth Markets) this week. On Friday, I had a particularly interesting chat over a sandwich lunch about the big picture with an investor. This gentleman shares my own optimism, but he had been asked to stress test the rather negative views of his colleagues who couldn't join us. In particular, they wanted to really delve into who is going to buy all the things that China will produce in the future, implying that they won't be able to produce much, and that China is heading for a hard landing. I think this is an understandable, but also a weird question. It is understandable because so many Western observers, especially from my generation, simply can't get their minds around China becoming a significant consumer. It is weird because it is so Western-minded. My best way of answering this beyond repeating all the numbers I have worked on with my colleagues, is to cite 2 anecdotes. One comes from a meeting 12 months ago or so with the CEO of one of the world's best known retailers who has been expanding considerably in China. He wanted my views on when he should plan to exit, as he thought it was inevitable that China would find a credible domestic competitor at some stage. The second relates to a personal investment I made many years ago in a Chinese luxury company, which continues to grow rather well. It has a number of suitors, including European ones. As I ended up saying, even in the consumer's share of total output weren't to rise above 35 pct of GDP by 2020, China will create at least $3,500 trillion worth of consumption value between now and then – about 10 times the size of Greece. If it were to rise to 45 pct, at least an additional $5 trillion, or the equivalent of 2½ new Italy's. Europe and the Euro Area. What another remarkable week. We are all fond of saying that Europe doesn't move very quickly, but look at the events that have occurred in Italy this past fortnight. Berlusconi is gone, Mario Monti is in place, and the country now has a technocratic government led by a collection of reformist-minded individuals and a very pro-European leader. Mario unveiled the broad path of likely initiatives, and from where I sit as someone who has followed the Italian economy closely for 30 years, it looks quite exciting. Not only are there ideas to deal with important deficit and debt challenges, but of greater importance, ideas to boost Italy's supply side potential, including steps to encourage and help women enter the labour force and to attract the young and brightest from not going overseas to seek opportunity. A significant part of me thinks that 7 pct 10-year bonds for Italy may turn out to be a bargain. However, there are so many hurdles. The ECB doesn't seem to regard 10-year Italian bonds as a bargain and, of course, it is rather tricky as they need to be sure that Monti will deliver. In turn, this means that what is really important is that Mario gets support from those in the background and, ultimately, the Italian voters. And then there is Spain. And still, of course, the troubling Greek situation. And ultimately, the complex world of Berlin and Frankfurt. As many European newspapers are asking in recent days, does Germany actually really still want the EMU? And, as I shall now provocatively ask, does the Euro Area? All very surreal. Is it Time for a Referendum? One of the most interesting things that didn't get that much press this past week is that German Chancellor Merkel is now openly saying that she believes the Treaty surrounding the EMU should be changed. I think I am right in saying this is the first time she has stated this definitive goal, and may be seen as a signal that Germany thinks it can take Europe, or the Euro Area, or at least those that want and can stay in it, down the path of more fiscal and political union. This, as I have written about many times, is what key German thinkers have believed was ultimately inevitable and should have been agreed before the EMU started in 1999. Beyond all the critical short-term questions, renegotiating the Treaty for more substantive changes is a really big step in my view. It is probably a sensible step to take, as it would allow everyone in Europe a fresh say on what they are really signed up for. As I have also written before, this crisis is not really a sovereign debt crisis, but a crisis of the EMU's structure and leadership. In this context, I found myself thinking why not actually use this as an opportunity to do something really radical and seek more legitimacy from the European people? As part of a new Treaty, why not allow or encourage all 27 member countries to hold a referendum on what the new Treaty would be and, therefore, seek genuine support from our citizens? In the rather unlikely event that this would happen, it would seem to me that many of the persistent alternative views between different EMU players, including the ECB, would probably disappear. It seems like a very unlikely thing to happen, but given the remarkable unfolding events across Europe, how can anything be ruled out, especially when it would probably allow the EMU to be strengthened and help the legitimacy of the EU itself. And Finally, a Brief Note on Japan. The Economist magazine this week has a most interesting short piece pointing out that Japan showed stronger GDP per capita growth in the past decade than either the US or Europe. That simple, but important, analysis comes at the end of a week when Japan reported 6 pct annualized growth last quarter, not far off BRIC-like standards and way above the US and Europe. I published an op-ed online in the FT about this last week, and pointed out that markets seem pretty disinterested in the Japanese growth numbers. This is especially interesting when Japanese equities are at such a remarkably low valuation compared with certainly any metric. And, at the other extreme, the Yen is so idiotically expensive. Something has to give here also. I suspect what it might end up being is that markets start to realize that the US is not going down the path of Japan, and the Yen begins to reverse, perhaps significantly. It might take more involvement from the monetary authorities to help it along. If this outcome doesn't happen, then Japan's relative growth outperformance might end up being even more temporary than many expect, as more big Japanese corporations abandon domestic production. All very interesting, and yet another source of big opportunity going forward. It looks to me that there are so many opportunities for investors as we near the end of 2011 and into 2012. We just have to figure out what side of them to be on! Jim O'Neill Chairman, Goldman Sachs Asset Management
|
| Is There a Risk The Euro Will Collapse? Posted: 20 Nov 2011 01:39 PM PST |
| Audio of Rickards interview posted at King World News Posted: 20 Nov 2011 01:33 PM PST 9:30p ET Sunday, November 20, 2011 Dear Friend of GATA and Gold: Full audio of last week's King World News interview with geopolitical analyst James G. Rickards, who spoke at GATA's Gold Rush 2011 conference in London in August, has been posted at the King World News Internet site here: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/11/19_... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT The United States Once Again Can Establish 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: 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 Be Part of a Chance to Discover 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.
|
| On the Verge of Huge Stock Market Crash, Implications For Gold and Silver Posted: 20 Nov 2011 01:29 PM PST by Willem_Weytjens, MarketOracle.co.uk:
We might be on the verge of another huge market crash, one similar to 2008. Check out the following chart below, and you will see why… – The RSI hasn't been overbought anymore in a long time, indicating weakness in stock markets… The same was true in 2008. – The SP500 found heavy resistance in the 1260-1280 zone (just as we warned our subscribers), which was the low of June 2011. A similar thing happened back in May 2008, where price ran into resistance of the November 2007 low. – Look at the exponential moving averages (20, 50, 100 and 200 EMA's). They have now been converging as price rallied, but right now, price is falling below these EMA's, just like in late May 2008. – The MACD is now flirting to break the green support line, just like in May 2008, right before financial armageddon occured, and price is right at the green support line now, just like in 2008. Read More @ MarketOracle.co.uk
|
| Silver Market Update 20-Nov-2011 Posted: 20 Nov 2011 01:26 PM PST by Clive Maund via SilverSeek.com:
We have had a major rethink since the last update was posted, which was one reason why no update was posted last weekend. This rethink has been occasioned by the rapid tilt towards deflation of the past couple of weeks. In the last update you may recall that we assumed that politicians and world leaders would follow the easiest route of QE which would lead in the direction of hyperinflation, but we really should know by now that you can't assume anything in this business. For sure, most of them would like to follow this route, for it buys them the maximum time before they end up at the end of a rope, but unfortunately for them they are losing control and things are starting to fall apart at alarming rate. Details of the latest thinking re the deflation/hyperinflation arguments are set out in the parallel Gold Market update, to which you are referred, and it will suffice here to give as examples of the tilt towards deflation the moves in the US to rein in the deficits and of course the spiking bond interest rates in Europe – if we do not see dramatic large scale intervention by the European Central Bank (ECB) involving a massive blast of QE, Europe will be finished shortly as a united economic entity, and after a possible temporary party to celebrate the demise of Europe, the US Treasury market will collapse.
|
| Some Heretical Thoughts on the U.S. Dollar Posted: 20 Nov 2011 01:21 PM PST by Charles Hugh Smith, OfTwoMinds.com:
The value of the U.S. dollar is created by demand, and other heresies. Like everything else here, my thoughts on the U.S. dollar do not fit any one conventional ideology. In other words, they will likely offer abundant sources of annoyance for virtually everyone. Put another way: heresy has its costs. I am a trader at heart, so the U.S. dollar is no different than pork bellies or oil. It is a commodity that can be traded with relative transparency, and it moves in cycles and trends like every other tradable commodity, stock, option, futures contract or bond. I have no emotional attachment one way or the other to the USD/DXY, nor do I think it "should" do this or that or that "because of X,Y and Z." The vast majority of commentators implicitly express an emotional attachment to the USD. Establishing an emotional bond with a trade is an excellent way to lose your capital. As the trading saying goes: marry your spouse, not your trades. The reason is that once you have formed a love/hate attachment to a trade, then you are willfully blind to any indications that your position might be "wrong" in the sense of being a losing trade.
|
| Bankster-Created Commodity Crisis Intensifies Posted: 20 Nov 2011 01:15 PM PST by Jeff Nielson, Bullion Bulls Canada:
In a recent commentary, "Silver: Shorting Consumes, Investing Conserves", I provided a detailed argument explaining how and why the extreme and chronic manipulation of commodity markets by multinational bankers inevitably does an enormous amount of harm. I then provided overwhelming evidence in support of this principle with respect to the silver market. This commentary will follow up on that work, except this time I will demonstrate these principles in a broader, more comprehensive manner. The basic dynamics are very straightforward, and have been discussed in considerable detail in many of my previous commentaries. We start with the bankster game of theft-by-serial-currency-dilution. The bankers relentlessly drive the value of our paper currencies toward zero through over-printing their paper money. There is absolutely no difference between destroying our purchasing power by debasing our money and simply reaching into our wallets and stealing it. Read More @ BullionBullsCanada.com
|
| Twice in a week, Financial Times pays grudging respect to gold Posted: 20 Nov 2011 01:09 PM PST All That Glisters Financial Times, London http://www.ft.com/intl/cms/s/0/198968b6-11ea-11e1-a114-00144feabdc0.html Some commodities bewitch investors, then lose their appeal for ever. Tulip bulbs will probably never again arouse the passions they did in 1636; anti-comet umbrellas are unlikely to regain the popularity they enjoyed in the heady days of 1910. Bursts of enthusiasm for gold, however, recur again and again. The latest group to succumb to the urge to gobble up ingots are the world's central banks. Even with the gold price close to all-time highs, central bankers in Russia, Thailand, and Bolivia have been snapping up the metal and central banks as a whole have become net buyers for the first time since 1988. Some economists think that gold is in a bubble. But by the standards of past speculative frenzies, this is mild stuff. Speculators in the Mississippi Bubble that engulfed France in the 18th century were so desperate to exchange contracts that an enterprising Parisian hunchback was reputedly able to earn considerable sums by renting out his hump as a writing surface. During the South Sea Bubble a company was listed to "carry out an undertaking of great advantage, but nobody to know what it is." ... Dispatch continues below ... 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_... Today's central banks, by contrast, are buying more in sorrow than in madness: Their purchases are largely a response to the persistent fall in the dollar's value. Nonetheless, along with their enthusiastic gold sales over two decades, the central banks' recent spree has the makings of an unorthodox sell-low-buy-high strategy. For investors with more conventional tastes, now is probably not an obvious time to be buying gold. Unless, of course, one believes that there is a large enough supply of goldbugs to keep the gold price rising for some time yet -- or if one believes that the crisis in the world economy presages a monetary armageddon, in which gold bars were one of the few remaining stores of value. This may comfort central banks -- but in that case they will have far weightier issues to worry about. * * * By Lex http://www.ft.com/intl/cms/s/3/59f07c7e-113f-11e1-a95c-00144feabdc0.html "Tradition" -- that was Ben Bernanke's succinct reply recently when asked why central bankers continue to hold so much gold even while insisting that it is not money. Now, after a decade in which official gold reserves shrank continuously -- outpacing growth in exchange-traded funds nearly twofold -- there may be a change in the air. Central banks made the largest purchases of gold in decades in the past quarter, says the World Gold Council. Given the sums involved, Mr. Bernanke could be forgiven for just shrugging. Even at near-record prices, the purchases, at about $8 billion, amount to a rounding error in the scope of global reserves. Indeed, all the gold controlled by the US government, which has by far the world's largest official reserves, equals just 3 per cent of America's official debt, which just passed the $15,000 billion mark. Even Italy, a particularly large holder of bullion (in third place globally with the 10th largest economy) would be able to retire less than 6 per cent of its enormous sovereign debt if it were to dump its 2,451 tonnes. But while the dollar amounts may be paltry, Mr. Bernanke must grasp that the symbolism is anything but. It is a mark of creeping distrust in the unofficial reserve currency, which nervous central bankers see being printed by the trillions even as America's political leadership shows no sign of dealing with its daunting fiscal challenges. Fiscal worries are even more acute for the number two and three reserve currencies, the euro and the yen. Central bankers are late to the gold party. Private buyers of ETFs alone have accumulated 15 times as much since their advent a decade ago as governments bought last quarter. But their shift should be of far more concern. Does this mean that Mr. Bernanke is wrong and that gold really is money? Not at all -- paper is money and that particular innovation, however recent, will be difficult to reverse. What it does mean is that some very influential people fear that one day it may no longer be worth the paper it is printed on. Join GATA here: Vancouver Resource Investment Conference http://cambridgehouse.com/conference-details/vancouver-resource-investme... California Investment Conference 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: 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
|
| ES Opens -1% As Oil, Gold, And FX Carry Leak Lower Posted: 20 Nov 2011 10:14 AM PST While EURUSD had managed to clamber back into the green from a modest 25pip drop (bouncing off 1.3500), carry crosses (most specifically AUDJPY) are ebbing lower and Oil and Gold's soft opening is dragging equity futures to a dismal start. ES opened -13pts (around 1%), below its 50DMA (first time since 10/10) and at its lowest in over a month. With TSYs not open yet, ES is mildly lower than CONTEXT but we would expect the implicit shift in 2s10s30s to sync up with equity derisking.
UPDATE: ES 1201 seemed to spur some serious volume for the overnight session. UPDATE 2: NEW YORK MAYOR TO HOLD NEWS CONFERENCE AT 7:30 P.M. (0030 GMT) ON TERRORISM-RELATED ISSUE - CNN
|
| The Gold Triple Play - Volatility, Currencies and Europe Posted: 20 Nov 2011 08:30 AM PST By Frank Holmes CEO and Chief Investment Officer U.S. Global Investors Resurgent investment lifted global gold demand 6 percent from the previous year to just over 1,000 tons during the third quarter of 2011, according to the latest Gold Demand Trends Report from the World Gold Council (WGC).* The ***potent cocktail of inflationary pressures in the emerging world and the European sovereign debt fiasco left investors searching for a safe haven—they looked for it in gold. In an uncertain era where many asset values are declining, gold has thrived. Gold prices averaged $1,700 an ounce during the third quarter of 2011, 39 percent higher than the same time last year and 13 percent above the previous quarter, according to the WGC. In total, investment demand increased 33 percent on a year-over-year basis to reach the th...
|
| Gold Market Update - Nov 20, 2011 Posted: 20 Nov 2011 08:15 AM PST Clive Maund Gold has behaved as predicted in the last update, which was two weeks ago. It advanced a little further into nearby resistance, before reacting back quite sharply on Thursday. However, whereas in the last update we were looking to buy on this dip in the expectation of renewed advance, we are now more cautious, due to mounting evidence that politicians and world leaders may soon be overwhelmed by deflationary forces despite their strenuous efforts to keep them at bay by means of endless QE. For gold's strong uptrend to continue we need to see continued currency debasement and inflation and the maintenance of sufficient liquidity to head of any incipient credit crises that could quickly cause interest rates, which have been artificially suppressed for years now, to skyrocket. The trouble is, however, that various parties are starting to break ranks and trying to use the quaint old fashioned methods of dealing with debt, such as trying to pay it down and reinin...
|
| Silver Trend Rethink on Mounting Deflation Threat Posted: 20 Nov 2011 08:11 AM PST We have had a major rethink since the last update was posted, which was one reason why no update was posted last weekend. This rethink has been occasioned by the rapid tilt towards deflation of the past couple of weeks. In the last update you may recall that we assumed that politicians and world leaders would follow the easiest route of QE which would lead in the direction of hyperinflation, but we really should know by now that you can't assume anything in this business. For sure, most of them would like to follow this route, for it buys them the maximum time before they end up at the end of a rope, but unfortunately for them they are losing control and things are starting to fall apart at alarming rate.
|
| Silver Market Update - Nov 20, 2011 Posted: 20 Nov 2011 08:09 AM PST Clive Maund We have had a major rethink since the last update was posted, which was one reason why no update was posted last weekend. This rethink has been occasioned by the rapid tilt towards deflation of the past couple of weeks. In the last update you may recall that we assumed that politicians and world leaders would follow the easiest route of QE which would lead in the direction of hyperinflation, but we really should know by now that you can't assume anything in this business. For sure, most of them would like to follow this route, for it buys them the maximum time before they end up at the end of a rope, but unfortunately for them they are losing control and things are starting to fall apart at alarming rate. Details of the latest thinking re the deflation/hyperinflation arguments are set out in the parallel Gold Market update, to which you are referred, and it will suffice here to give as examples of the tilt towards deflation the moves in the US to rein in the ...
|
| Gold Caution on Building Deflationary Forces Posted: 20 Nov 2011 08:08 AM PST Gold has behaved as predicted in the last update, which was two weeks ago. It advanced a little further into nearby resistance, before reacting back quite sharply on Thursday. However, whereas in the last update we were looking to buy on this dip in the expectation of renewed advance, we are now more cautious, due to mounting evidence that politicians and world leaders may soon be overwhelmed by deflationary forces despite their strenuous efforts to keep them at bay by means of endless QE.
|
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment