Gold World News Flash |
- Gold and Her Flock: Outperformance Time!
- Back Up the Truck: It?s Time to Buy Gold With Both Hands! Here?s Why
- Keith Neumeyer: The Silver Market Lacks Integrity
- Gold is Still Good
- Manipulated U.S. Interest Rates Seesaw Gold Prices
- Sprott Swings For The Silver Fences (Can He Deliver?)
- The Silver Market Lacks Integrity
- Jim Rickards - Who Will Bail Out the Fed & How High for Gold?
- IceCap Asset Management: The Return Of The Dollar
- Gold Seeker Closing Report: Gold Gains 1% and Silver Surges Over $1
- Policy News Trumps Economic Data As Biggest Driver Of Tail Risk Events
- Sprott Buying $1.5 Billion In Silver For PSLV
- David Morgan of Silver-Investor.com on Fox Business News 11-21-11
- Gold Encounters Resistance at 1710
- Bull Market in Food : Rosenberg and Hendry on Ag
- "Holy Crap", Is Silver On The Cusp Of The Mother Of All Short Squeezes?
- Guest Post: Is Gold Still The Answer For Investors?
- Dexia Bailout On Verge Of Collapse, Threatens To Take France AAA Rating Down With It
- Capital Account: Jim Rogers on QE3, MF Global and his Outlook for Gold (11/22/11)
- Relax! Gold, Silver and HUI Index to Bounce Back to Major Highs in Early 2012
- Massive Silver Leaves Eligible (Customer) Vaults / Gold and Silver Rise
- Making Lower Lows
- Silver and Gold Price Are In a Routine Correction In a Bull Market, Keep Averaging Down
- P.J. O’Rourke vs Carville vs Krauthammer in the ‘Big Easy’
- Manipulated U.S. Rates Seesaw Gold Prices
- Is Gold Still the Answer for Investors?
- Silver vigilante no. 1 steps up
- Sprott to Buy $1.5B of Silver Bullion
- Police State USA
- Martin Armstrong: The Real Reason Gold Will Rally
| Gold and Her Flock: Outperformance Time! Posted: 22 Nov 2011 06:13 PM PST Graceland Update
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| Back Up the Truck: It?s Time to Buy Gold With Both Hands! Here?s Why Posted: 22 Nov 2011 06:10 PM PST Since the fundamentals still point to gold’s long-term viability… why [are] investors responding by selling gold…? I was always told not to look a gift horse in the mouth… [so] take advantage of the dip. Words: 880 [INDENT]Lorimer Wilson, editor of [B]www.munKNEE.com (Your Key to Making Money!), has further edited ([ ]), abridged (…) and reformatted the article below for the sake of clarity and brevity to ensure a fast and easy read. The author's views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.[/B] [/INDENT]Who in the world is currently reading this article along with you? Click [COLOR=#0000ff]here to find out.[/COLOR] Schiff goes on to say: Unchanging Fundamentals It’s important to understand the fundamental reasons for owning gold, and those reasons have ...
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| Keith Neumeyer: The Silver Market Lacks Integrity Posted: 22 Nov 2011 06:07 PM PST Hera Research
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| Posted: 22 Nov 2011 06:01 PM PST Aden Forecast
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| Manipulated U.S. Interest Rates Seesaw Gold Prices Posted: 22 Nov 2011 05:32 PM PST This week, world attention finally shifted away from debt problems in Europe to the unresolved and worsening debt crisis here in the United States. The Congressional Super Committee, which had been created over the summer to postpone making tough cuts, chose to avoid responsibility itself. In so doing, the Committee has followed the path of least resistance and maximum irresponsibility. Given the likely after-effects, the outcome should be judged as criminal dereliction of duty. It should now be crystal clear to even the most casual observer that a solution to the U.S. debt crisis will not come from within, but will be imposed, perhaps brutally, from without.
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| Sprott Swings For The Silver Fences (Can He Deliver?) Posted: 22 Nov 2011 05:30 PM PST
By Silver Shield Eric Sprott's PSLV filed a prospectus, as he is required to do, with the intent of purchasing $1,500,000,000 of physical silver for the PSLV. (Click here to download the propectus.) "Though there are a lot of factors at play, such as a volatile silver price, the recent movement could have something to do with Sprott's recently filed prospectus for a new offering of up to $1.5-billion of new Physical Silver Trust units. For the longest time Eric Sprott had been holding off on such a filing, telling the Globe in May that "there will not be an offering that negatively impacts the premium on the PSLV." (Source.) While this is a very exciting development for physical silver holders, I remain very skeptical about if this will really come to fruition. I believe Mr. Sprott is well intentioned and really intends on doing the deed, there is just not enough metal to deliver and I am quite sure heavy pressure will be brought to bear on Mr. Sprott to stop this date with destiny. The counter party to physical silver is a group of criminal men who trade the paper form of it to control the world's resources. When you read the true story about the Hunt Brothers, the Federal Reserve, SEC and Treasury had daily briefing on the Hunts and rigged the game to break their backs. Mr. Sprott has been very wise not to use debt or leverage to make this move, but I know these guys are not going to give up the ship without a dirty fight. I would like to suggest to Mr. Sprott that he keep hitting singles instead of a huge spectacle buy. I know, I know, you are all saying he should just go for it. If you knew the kind of scum he was up against, and you cared about Mr. Sprott, you would encourage that too. If he goes for the gusto and stands for 50 million ounces when there is on 32 million in the Registered Vaults (if you believe that..) he runs the risk of being branded a "market manipulator" and bring the dog howls of bureaucrats, pundits, and politicians.
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| The Silver Market Lacks Integrity Posted: 22 Nov 2011 05:17 PM PST The Hera Research Newsletter (HRN) is pleased to present an incredibly powerful interview with Keith Neumeyer, Chief Executive Officer, President and Director of First Majestic Silver Corp. (TSX:FR / NYSE:AG). Mr. Neumeyer began his career at the Vancouver Stock Exchange and worked in the investment community for 26 years beginning his career in a series of Canadian national brokerage firms including McLeod Young Weir (now Scotia McLeod), then Richardson Greenshields and then Walwyn Stogell McCuthchen (which became Midland Walwyn).
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| Jim Rickards - Who Will Bail Out the Fed & How High for Gold? Posted: 22 Nov 2011 04:36 PM PST  With investors globally beginning to ask who will print next and how much, Jim Rickards put together the following piece exclusively for King World News. One of the reasons Rickards has gained worldwide recognition is because of his ability to forecast, ahead of time, key moves by both the Fed and central planners. Jim Rickards' clients include private investment funds and banks, government directorates around the globe in national security and defense and he has worked directly with the Fed and US Treasury. Jim is also a KWN resident expert and author of the extraordinary new book, "Currency Wars: The Making of the Next Global Crisis."
This posting includes an audio/video/photo media file: Download Now |
| IceCap Asset Management: The Return Of The Dollar Posted: 22 Nov 2011 04:36 PM PST From IceCap Asset Management:
Full report:
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| Gold Seeker Closing Report: Gold Gains 1% and Silver Surges Over $1 Posted: 22 Nov 2011 04:00 PM PST Gold chopped its way higher throughout most of world trade and ended near its early afternoon high of $1705.21 with a gain of 1%. Silver rose to as high as $33.02 and ended with a gain of 3.48%.
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| Policy News Trumps Economic Data As Biggest Driver Of Tail Risk Events Posted: 22 Nov 2011 02:54 PM PST The last six months have been anything but 'normal' in terms of market movements. Whether equity, bond, or FX markets, the high correlations and crashing disconnects have at times been incredible - leaving every risk manager's VaR calculation and desk-quants gamma-hedging program sorely lacking. Goldman specifically surveys the largest moves across asset-classes of the last six months and finds that it is policy announcements that have been far larger drivers of outsize market moves than economic data. This is a significant departure from the previous six months.
Goldman Sachs: US Daily: "Market Movers" – Policy News at Home and Abroad Driving Markets
While neither policy or economic outcomes are specifically harder to hedge, it is the Knightian uncertainty of the desparate policy-makers that is perhaps most worrisome going forward - especially given the lack of resolution anywhere in the world.
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| Sprott Buying $1.5 Billion In Silver For PSLV Posted: 22 Nov 2011 02:42 PM PST It seems Eric Sprott is at it again, last week they filed to purchase $1.5 billion in silver or about 48 million oz at current prices or about 10% of this years production. It will be interesting what the impact on prices will be. If we assume that silver is similar to gold in having a 100 to 1 leverage in paper silver then taking $1.5 billion in silver off the market should have some interesting impacts on paper silver players. See full article here.
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| David Morgan of Silver-Investor.com on Fox Business News 11-21-11 Posted: 22 Nov 2011 02:40 PM PST |
| Gold Encounters Resistance at 1710 Posted: 22 Nov 2011 02:02 PM PST courtesy of DailyFX.com November 22, 2011 01:49 PM 300 Minute Bars Prepared by Jamie Saettele, CMT The 3 wave rally from the September low is viewed as a correction of the decline from the record high and should be completely retraced. Gold briefly traded under channel support and the former 1681 pivot low from late October before rebounding slightly. The bounce from the low should prove ephemeral with resistance at 1710. Latest Video Other TA Articles...
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| Bull Market in Food : Rosenberg and Hendry on Ag Posted: 22 Nov 2011 01:43 PM PST Rosenberg's note today mentioned the global bull market in agriculture. Which,as I recall, was becoming an issue pre-lehman. Inflation is just about the only thing stopping food prices from levitating once again. Trade balances, supply constraints, changing weather patterns, and emerging market demand continue to support a structural bull market.
The holdings in Hugh's Ag fund:
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| "Holy Crap", Is Silver On The Cusp Of The Mother Of All Short Squeezes? Posted: 22 Nov 2011 01:36 PM PST Efforts by the pestilence we know as The CRIMEX, to smash the price of Silver and force December futures contract holders to cough up their claims on physical Silver, appear to have failed miserably. Robust discount prices Monday brought bargain hunters into the Silver playground, instead of shaking down the longs, and turned up the heat on the Rat Bastid Banking Cartel. But be wary, a dead bee can sting you twice. 2.8 Million Ounces of Silver PHYZZ Withdrawn from COMEX Vaults Monday! From SilverDoctors We have 3 major withdrawals to report from Monday's COMEX silver inventory movements, including an almost unprecedentedly large withdrawal of 2.3 million ounces from Brinks' vaults! COMEX WAREHOUSE SILVER INVENTORY UPDATE 11/22/11 *Brink's had a massive withdrawal of 2,346,587 ounces out of eligible vaults *Delaware had a withdrawal of 6,999 ounces out of eligible vaults *HSBC had a withdrawal of 406,010 ounces out of eligible vaults *No Changes for JP Morgan or Scotia Mocatta *TOTAL REGISTERED SILVER was unchanged at 32,563,955 ounces *TOTAL ELIGIBLE SILVER declined a net 2,759,596 ounces to 73,322,667 ounces *TOTAL COMEX SILVER INVENTORY declined to 105,886,622 ounces Over 1 million ounces of MF Global clients' silver remains in the custody of The Morgue: *Registered ounces of metal currently not available for delivery as of 11/4/11 due to MFGI bankruptcy. Included in above totals. DEPOSITORY Registered Brinks 210,320 Delaware 65,706 HSBC 793,734 Scotia Mocatta 351,156 Clearly COMEX silver inventory volatility is increasing almost exponentially now, as customer confidence in the integrity of the exchange itself is now shattered in the wake of the MF Global theft as the CME has refused to make the customers good on the MF Global/JPM theft, and the bullion banks scramble to shift the remaining phyzz under their control around to meet delivery requests and put out fires. Regarding yesterdays hits on Gold and Silver: Silver = "holy crap" From Dave in Denver, The Golden Truth Gold o/i dropped 814, not much considering the magnitude of the hit. Dec o/i dropped 11,819 but there's still 166,545 open December contracts. This is quite a bit considering there's only 5 more trading days to first notice, including today. Silver o/i went UP 4405, and December o/i INCREASED 997 contracts to 33,585. Make your own inferences, but this indicates that someone is either trying to squeeze silver a lot higher and maybe clean out the inventory on the Comex OR JP Morgan is going to make the most aggressive attempt we've ever seen at taking down silver... Understand that 33,585 Silver contracts represent 167,925,000 ounces of Silver. The CRIMEX ONLY has just over 32 MILLION of Silver registered for delivery [roughly 6,500 contracts worth]. Options on the December Silver contract expired today. First Notice Day is Wed. Nov. 30. HOLY CRAP!!! And if the CRIMEX boys didn't have enough problems finding Silver to cover their obligations in the futures markets, I'd like to make mention again of this important news: Eric Sprott just filed a 6-K in Canada so that he can buy an additional $1.5 BILLION in silver (PSLV was $500 million). This may be approved in as little as 2 weeks from now. TORONTO, November 16, 2011 — Sprott Asset Management LP announces that it has filed a preliminary short form base shelf prospectus containing information relating to units of the Trust with securities commissions or similar authorities in all provinces and territories of Canada. Under the shelf prospectus, the Trust may offer from time to time during the 25 month period after a final receipt is received for the prospectus up to US$1.5 billion of units of the Trust. http://www.sec.gov/Archives/edgar/da...243774_6-k.htm I do not know if you were in the room in Spokane when Eric Sprott was at the podium and said that when he went to the market recently to buy approximately 20,000,000 ounces of silver, that it was really difficult to source that amount. It took him three months to receive it all and that approximately 50% of that silver was actually MINED during the three month wait. It shows what a joke the paper silver (and gold) market is when it gets pounded continually but if you actually try to acquire a large amount, it is difficult to source. Frank Yesterday that would have been around 48 million ounces. With the rise in the price, that means a lesser amount, but that is a lot of investment demand silver in a market that we believe is very tight to begin with. Couple of comments… *It is my understanding that Sprott has the approval, but has not made the decision yet that this is a go and nothing has been put into play. However, they now have the right to do so. *It sure makes sense when you are already as long as much silver as Sprott is in a very tight market. This new buying can only goose the price and make their existing silver investments become more profitable. Yes, there is a chance they might not even be able to buy that much over a short period of time. But, boy would that spook the shorts. *Yes Frank, I was in the room. Eric knows how tight the silver market really is because he is a major source actually doing some heavy buying. What he told the audience was not conjecture, it is reality. This understanding is a huge factor in the GATA camp's bullishness and it has been that way since $16. *On that note, here you go… Just to put it in perspective, here is a list of recent bullion purchases by PSLV and CEF... CEF total silver: 77 million (currently) PSLV total silver: 22.3 million ounces (currently) CEF -> April 6, 2011 1.7 million ounces PSLV -> Jan 13, 2011 (finished acquiring on this date) 22.3 million ounces CEF-> May 10, 2010 7.2 million ounces CEF-> Nov 9, 2009 5.2 million ounces At current prices 1.5 billion dollars works out to 45 million ounces. After this PSLV will still have less silver than CEF but it will triple in size from it's current level. Even including CEF purchases the total amount of silver is still nearly double what these two funds took off the market last year. If nothing else, this purchase will finally put to rest the question about a silver shortage, a shortage of physical silver would be very difficult to hide when this much incremental bullion is taken off the market. Peter at http://www.stockreflex.net/ More TRUTH from Bill Holter this evening at the Lemetropole Cafe : Random thoughts To all; the "Super committee" failed to reach any consensus to cut even $1 from future spending. Gee, what a huge surprise! Did anyone really believe back in August that Congress would cut any spending anywhere for anything? The bottom line is that Congress MUST spend to keep GDP from imploding statistically and the debt MUST increase (now exponentially) to keep the debt bubble from imploding. The only way for The Treasury to "pay their past bills" is to borrow more. Revenues alone cannot (have not for many a moon) pay the bills. With normallized interest rates, revenues will not even pay more than the interest on accumulated debt. Broke is broke, enough said. Meanwhile the sovereign debt contagion in Europe is spreading to France and Belgium while Germany's Commerzbank is doing it's best to pull a "BankAmerica". They need another 5 Billion Euros in capital that they have said in the past that they don't need. Foreign bank holdings at the U.S. Fed have ballooned again illustrating the faith and trust (lack of) amongst banks. Make no mistake, we are living through an electronic bank run, no lines or shuttered doors in this Greatest Depression because it is all done with computers. The fact that we don't "see it" in videos or on the news makes it that much more likely that a surprise bank holiday will eventually result. Yesterday Sprott management filed a $1.5 Billion shelf registration for their Silver ETF "PSLV" to which I say BRAVO! Of course it would have been better were this already filed earlier so they could have bought from all the panicked sellers around for the last 4 trading days. I of course say this in jest because the "sellers" were only selling fraudulent and unbacked pieces of paper supposed to represent Silver, PSLV only buys the real deal as per prospectus. Maybe the next time an option expiration comes around, Sprott can be waiting to buy real Silver and call the paper fraudster's bluff?! As for the offering of $1.5 Billion, is this much real physical Silver even for sale? The COMEX says they have something like 32 Million ounces registerd and available for deliver, this is less than $1 Billion. Where will it come from? To put this amount in perspective, it is less than 12 HOURS of the federal DAILY DEFICIT. So we have sort of a "double perspective" here, on the one hand $1.5 Billion is a huge, huge number compared to actual available physical supply yet on the other hand, it amounts to less than a ham sandwich when compared to the big picture! Think about it, $1.5 Billion nowadays is nothing, in some circles it is less than nothing. Can you say a "disconnect from reality"? I wrote yesterday regarding Gold finally being talked about to "save the system". I would like to add a little because this is very dangerous to the powers that be. On the one hand, Gold is hushed up, muted, muzzled and price suppressed to support sovereign issuance of paper. On the other hand, it IS the answer. You must understand that Gold would not be spoken of (other than as a joke of an asset class) if there were not a huge and now unsolveable problem. The fact that it was even mentioned in such "polite circles" means that something has gone very wrong and the end is very very near. The financial system is spinning out of control as the paper bubble has gotten far larger than it's master creators. The paper bubble has bankrupted the banking system and sovereign treasuries, they must (and will) be recapitalized to start anew. Revaluing Gold has always been the answer and now as the biggest paper bubble in all of history implodes, it will be revalued as never before in direct proportion to the bubble that was blown. The entire system must be recapitalized, it must be "reset" back to zero. Savers in paper will have to start all over again as has been done many many times throughout history. In essence, debtors will be forgiven and savers punished. This is not fair I agree, but it is the way it is and always has been. Savers do not have to be wiped out, all they need to do is change the medium they are saving in before this all passes. A few have and will, the masses will not which will amount to governmental confiscation of their savings. Some things have never changed from the beginning of history. I wish you all a Happy Thanksgiving! Regards, Bill H. P.S. One can never know what they really have until they lose everything. Is Silver on the cusp of the Mother Of All Short Squeezes? 
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| Guest Post: Is Gold Still The Answer For Investors? Posted: 22 Nov 2011 12:57 PM PST Submitted by Bud Conrad of Casey Research Is Gold Still the Answer for Investors? Though late to the party as usual, the proverbial man on the street – along with members of mainstream media and Wall Street heavyweights – is finally waking up to the decade-long, 700% increase in the price of gold, joining a growing buzz around the monetary metal. From questions whether gold is in a bubble to predictions that soaring prices are just around the corner, one thing is clear: a new phase of awareness for gold is upon us. How far might it move before these troubling times are over? The Big-Picture Economic Environment Kicking things off, I would like to explore several themes in order to put the current economic situation in context. For example, continuing weakness in employment and housing indicates that the big slowdown that started in 2007 persists. Actually, the economy never exited the recession but rather – thanks to massive intervention – enjoyed a temporary reprieve that I have called the "Eye of the Storm." We experienced the first part of the storm from 2007 to 2009, but by late 2009 and into 2010 massive bailouts, stimulus, and deficit spending produced a false-dawn recovery. This recovery was most pronounced in the financial sector where the government transferred toxic private-sector debt – including large amounts held at Fannie and Freddie – onto the government's own balance sheet. We now are entering the second half of the storm, as it is becoming impossible to ignore the unprecedented and intractable sovereign debt problems sweeping the globe. These problems are especially obvious in the weak countries of Europe where punitive levels of interest rates are pushing weaker members of the eurozone to the brink. As the parts begin to fail, so will the whole. And the US is not so far behind, with its own historic levels of government debt and deficits running at levels never seen before. As we at Casey Research have warned of ahead of time, in their attempts to avert a 1929-style depression, governments took on the bubble in toxic private debt, stupidly transferring that burden onto the government (and taxpayers), causing the problem to morph into today's sovereign debt crisis. Simply, with the government debt too big to ever be repaid, we are now beyond the point of no return. The private debt problem is not resolved, either. That's because much of the bad debt on the books of corporations and financial institutions was hidden through "Extend and Pretend" practices, starting with the elimination of mark-to-market accounting requirements. Much of this debt will eventually be revealed to be in default. Worse, because sovereignties around the world have caused their finances to deteriorate to such extreme levels, they are now ill prepared, and maybe even unable, to step in yet again to soften the blow of private-debt deleveraging and write-downs. As a consequence, the next part of the storm could be prolonged as companies and banks are dragged down. Furthermore, due to their poor decision-making to this point in the crisis, the governments themselves are now facing a loss of confidence in their sovereign debt, evidenced by soaring interest rates and the rising cost of credit default swaps (CDS) for the PIIGS. There is no way to recapitalize the Greek debt, and Finland is right to demand collateral, which it recently has. The contagion will extend to the other PIIGs and to the stronger European countries of Germany and France – they can't also bail out Spain and Italy, which are too big to fail, without destroying confidence in their own economies. Yet absent such a bailout, massive restructuring of weak-country debts held on the books of the banks in the stronger countries will further exacerbate and extend the crisis. Meanwhile, the European Financial Stability Facility (EFSF) is too small, and the resources to cover all the countries in trouble just aren't there. Economists now understand that the PIIGS are well past the point of no return with 130% or so of debt to GDP. The European Central Bank (ECB) will be expanded, like other central banks, to print more euros, but still the system is going to face more debt problems. The ratio of debt to GDP in Europe, the US, and elsewhere (which is projected to only increase from here) will lead to the sort of problems historically associated with Latin American banana republics, collapsed communist states, and certain countries in Africa. While this is not being adequately discussed in the mainstream, the debt of the supposedly advanced countries is projected to explode beyond the levels that are already tormenting the PIIGS. Put another way, in the decade just ahead, I expect the advanced countries to undergo the same pain we are already seeing in the weak countries. Supporting that contention, a new paper by the Bank for International Settlements (BIS) points out that when government debt approaches 80% to 100% of GDP, there is a weakening in the economy. Greece and the euro system aren't just facing an economic weakening but a breakdown of the financial system. Importantly, the debt-to-GDP ratio of the United States is now (conservatively) at 95%, and demands from a tidal wave of retiring baby boomers will make the deficits far worse. Remarkably, annual deficits of a trillion dollars or more over the coming decade are projected. The US debt-to-GDP ratio will break above 100% in two years or less, and debt could double in the next decade if interest rates rise in concert with a widespread loss of confidence in the government's ability to manage its fiscal and monetary affairs. The next logical step in this sovereign debt crisis is for us to see further signs of a loss of confidence in the currency. Such a currency crisis is usually measured by rising inflation that, in turn, leads to higher interest rates, which make the crisis worse. That's because a vicious debt "death" cycle begins to form, with interest on the debt begetting ever-worsening deficits begetting ever higher interest rates that, in time, leave the country unable to even pay the interest on its debt, let alone pay down the debt itself. Sounds dramatic, I know – but that is what is happening in Greece. The major difference from historical events of a similar nature is that this time, it is not just the smaller, less developed countries – the so-called banana republics – that are in the throes of a financial collapse but most of the world's advanced economies. This is certain to end badly. In the short term, the central banks will print up money for their governments and bankers, but in the long run, the loss of confidence will become so great that currencies self-destruct. As the problems extend around the globe, currencies and bond markets will be wiped out together. In time, new currencies will have to be issued, almost certainly with some form of link to gold and other commodities. To survive what's coming, you need to understand the process and try to gauge how fast it may unfold. To shed further light on those issues, in the following I provide data on how serious the situation is and conclude with my predictions for the price of gold. Central Banks Can Print Paper, But They Can't Print Gold Gold is the only real money. In contrast, the power of central bankers to create fiat money out of thin air has distorted our financial systems beyond anything imagined in the early days of slips of paper issued for gold held at the local goldsmith's. To get a sense of the distortion, we'll start by looking at the difference between the quantity of gold held by central banks and the amount of paper money they have issued. As you can see in the chart below, the amount of gold held has been surprisingly stable. But the blue line, a close reflection of the narrow definition of money that has been created globally, shows that the quantity of all forms of financial assets has grown dramatically. The clear point of this chart is that the nominal quantity of the paper money in circulation has been growing much faster than the gold that formerly underpinned that currency and may be called upon to do so again before this is over. Regardless, as the power of money creation greatly benefits the money printers, we expect profligate money spending and creation to continue apace.
Importantly, central banks are no longer selling off their gold but rather are increasing their holdings. You can see that shift in the small upturn in the red line at the right of the chart. Central banks halting gold sales and becoming net buyers of gold decreases supply and increases demand, leading to higher gold prices. As a related anecdote, Venezuela's President Chavez recently recalled gold reserves not currently held in Caracas, exciting the gold bulls with the thought that the withdrawal of some 150-200 tonnes of gold from the Bank of England and bullion banks will force a squeeze on traditional stockpiles of gold. Chavez is further proposing to nationalize Venezuela's gold mines. His many faults aside, I think Chavez understands the situation perfectly and is using his dictatorial powers to move back towards gold faster than slower-moving nation-state competitors. Another way to measure the debasement of the world's currencies is to compare global industrial production to the global quantity of currency in circulation. As you can see in the next chart, industrial production has only moderately increased over time. Since Nixon closed the gold window in 1971, the quantity of currency in which that output is priced has grown exponentially. Is it any wonder that the nominal price of the average car has soared from $3,542 in 1971 to almost $30,000 today?
Of course, the price of gold as measured in these currencies has increased over time. At least in theory, the ratio of the dollar value of gold to the dollar value of all currencies in the world, shown in the next chart, should give us a basic measure as to whether gold is overpriced. As you can see, gold would need to trade closer to $10,000 per ounce to cover all the paper issued over the period. This confirms, in my mind, that although gold is rising rapidly towards $2,000 an ounce, gold investors need not fear that it is in a bubble or that its upward momentum is nearing an end.
Federal Government Deficits Are "Beyond the Point of No Return" The government's debt has accumulated to an amount so enormous that it won't ever be paid back. The annual deficit is unmanageable as Democrats cry for more spending and Republicans want to continue tax cuts. The chart below shows that the current deficit is at a completely new level, even in comparison to the two world wars.
Looking at the future of government deficits, the Congressional Budget Office (CBO) starts with a baseline projection of the expected government budget deficit based solely on laws already enacted. In other words, the baseline doesn't account for new laws, which invariably expand spending. Not surprisingly, as you can see in the chart here of previously published baseline forecasts, the CBO's deficit projections are always optimistic about the expected deficit.
For a look at a more reasonable assessment of the impact of yet-to-be-enacted legislation on future deficits, we turn to a set of data assembled by the Concord Coalition that show much higher deficits going forward. Here are the modifications that underpin what they call a "plausible" scenario: The CBO baseline is adjusted to assume appropriations increase at the same rate as the economy (GDP growth). This increase is closer to the historical average rate of increase. They assume that supplemental appropriations do not continue indefinitely. For the wars in Iraq and Afghanistan, troop levels slowly decrease to about one-third of their level at the time of the estimate. They assume that Medicare physician payment cuts (under the Sustainable Growth Rate (SGR) are postponed, as they have been for the last several years. The major tax cuts are assumed to extend beyond 2010. One-year patches to the Alternative Minimum Tax are enacted, holding the level of taxpayers hit by the tax roughly constant throughout the baseline period. A calculation for the increased debt service (interest payments) that these policies cause is added.
As bad as are the resulting deficit forecasts, however, the assumptions behind even these "plausible" scenarios are so far off from my expectations that I am confident they err on the side of being much too conservative. For example, in the Concord Coalition's assumptions, the Consumer Price Index never rises above 2.3% – all the way out to 2021 – and the unemployment rate drops to 5.4% by 2016. Along the same optimistic lines, 10-year Treasury interest rates never climb above 5.3% and GDP will reach 5% in real terms by 2015. While no one can see the future, all of my work leads me to expect much higher inflation, much higher interest rates and a much slower growth of GDP over the time period. And I can think of worse scenarios, like a recession that cuts tax revenue and higher interest rates that cost more to service the government's debt. The expansion of war to Libya and Pakistan, and a comment from Obama that the Syrian president "must go" indicate that military spending will continue to be high. My point is that even under the CBO's Pollyanna projections, US deficits ensure that total debt continues to rise into increasingly dangerous territory – but actual deficits are likely to be much worse than those projections, and quite possibly devastatingly so. Deficits debase the dollar and are bullish for gold. The economic situation in the US is declining rapidly, with zero net jobs created for August and the numbers from the previous month adjusted to show a further loss of 58,000. And even those dismal numbers understate things: embedded in the latest report were 81,000 jobs added from a flawed birth/death model that estimates new jobs from small business. Elsewhere in the economy, housing prices remain weak and consumer confidence has turned down sharply. The likelihood of continued recession adds to the deficits by decreasing taxes and increasing demands for government spending on unemployment and stimulus. Adding it all together, it becomes clear that the trajectory for government deficits, and therefore more debt, is to continue to go up, and dangerously so. The Fed Papered over the Private Debt Crisis But Is Creating Future Inflation The Federal Reserve jumped into the credit crisis with both feet, tripling its balance sheet since 2008. It did this by creating deposits at the Federal Reserve out of thin air to buy mortgage-backed securities and Treasuries to the tune of $1.6 trillion. Historically, when the Fed paid no interest on deposits, banks would draw down these new deposits to lend out to borrowers in order to make a return, expanding the money supply in the process. By expanding credit, this process also can help prime the economy. That hasn't happened this time around, and credit has not grown in the private sector. The deposits at the Fed are obvious in the chart below. Banks receive 0.25% interest on the deposits, which is better than they can currently earn with short-term loans and T-bills, so the Fed has $1.6 trillion of deposits it never had before.
It is helpful to understand the details of what we call printing money and the physical paper money in circulation. The chart above shows that the outstanding currency in circulation (blue area of the chart) is growing at a relatively slow rate. The amount of paper money is not really decided on by the Fed; it is the result of the preference of the population to carry cash as opposed to having deposits at their bank. When people withdraw cash, as they do around the Christmas holidays, for example, the demand for paper dollars increases at the commercial banks. A commercial bank can send a Brinks truck to the Fed, ask for more dollar bills and have the Fed decrease its account at the central bank. In other words, the process is not driven by the Fed but the consumers and the banks. If the Fed wants inflation, stopping the interest-rate subsidy of paying interest on deposits to the banks would be a good place to start. Then banks would look for places to loan money and inject it into the system. The Fed surprised the market by extending its policy of a 0 to 0.25% fed funds rate to mid-2013. Most people reading that the Federal Reserve plans to maintain current low interest rates out to 2013 probably shrugged and went about their business. But I think it's important to understand that the only way the Fed will be able to meet its low interest rate pledge is to buy Treasuries with newly created money – essentially printing money to purchase the government's unending supply of Treasuries. Quantitative easing, anyone? The big question is whether the policy will have a sizeable effect on markets. The chart below shows the historical jump in the Fed's combined policy tools that were used to lower rates and bail out financial institutions through a variety of programs. These include the big purchase of mortgage-backed securities (MBS) called QE1 and the large purchase of Treasuries called QE2. The point of the extrapolation in the chart is to guesstimate how much more money the Fed might need to create to keep the rate extremely low for another two years. By connecting a straight line from the start of the unusual policy tool expansions in late 2008 to today's number and then extending it to 2013, we can estimate that the policy might require about $1.5 trillion in order to keep the rate low.
The Fed doesn't calculate the amount of money that might be required and probably doesn't know for sure. They just keep buying on the open market until the rate target is reached. If there were a loss of confidence in the dollar, the amount of the purchases required could become very large – and in the extreme, printing more money contributes to that loss of confidence, which in turn causes runaway inflation. We are not there yet. But this kind of open-ended promise is a dangerous precedent because we can't be sure of the ultimate cost of the commitment. And make no mistake, it is an astounding commitment. At the meeting where the decision was made, even more aggressive operations to expand the money supply were discussed. The long-term direction of the Fed is not in doubt: they are debasing the dollar. In the next chart, we look at the mirror image of the commercial bank deposits at the Fed – the cash being held on the balance sheet of the banks. As you can see, this confirms that instead of making loans, they are holding cash, mostly in the form of these Fed deposits. The effect is that the Fed policies have had much less effect on the economy outside of the banking system than would usually be the case, given their extreme bailouts and money "printing." Inflation has been contained to commodities, and interest rates have remained at record lows.
The fact that this money sits mostly as cash deposits at the Fed is why the QE programs have had little effect on the economy. Rather, it is clear that the Fed's priority has mostly been to provide support for the banking system. Though going forward, these deposits – almost $2 trillion – could be easily loaned into the system, and the result could be very inflationary. Europe Is Turning to the US Dollar and to Gold for Safety The loss of confidence in a country is most obvious when lenders demand high interest rates to loan money to a government by buying their bonds. With the yield on two-year Greek government-issued notes now at 45% and one year being quoted at 70%, the situation in Greece has gone beyond the level where the government can operate. The risk in Europe is rapidly becoming more acute as the promised bailouts aren't happening and the population of Germany is turning against a further expansion of the European Financial Stability Facility (EFSF) that was set up in an attempt to calm the situation. A series of routs for German Chancellor Angela Merkel's political party in recent local elections reflects the public discontent with further bailouts at the German taxpayer's expense.
The Wall Street Journal reported on September 5: "The suspension of the talks in Athens between the government and a group of officials representing the providers of Greece's bailout cash came, officials said, amid a dispute about how to address new gaps opening up in the government budget deficit." In September, the Bundestag (the German parliament) is expected to decide on a package that empowers the EFSF to buy bonds preemptively and recapitalize banks. While the bill is likely to pass, the furious debate leaves no doubt that Germany will resist moves to boost the EFSF's firepower yet further. Some say the fund needs €2 trillion to stop the crisis from engulfing Spain and Italy. In short, the very fate of the European monetary union is hanging by a thread. And, as noted earlier, the banking crisis will be more difficult to handle this time – the governments are in much worse shape because they took on so much additional debt in bailing out the banks to this point. So this time a private banking crisis could become much worse, leaving the central banks as the buyers of only resort for government debt. Should that occur – though we at Casey
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| Dexia Bailout On Verge Of Collapse, Threatens To Take France AAA Rating Down With It Posted: 22 Nov 2011 12:22 PM PST from ZeroHedge:
Read More (and Watch the Video) @ ZeroHedge.com
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| Capital Account: Jim Rogers on QE3, MF Global and his Outlook for Gold (11/22/11) Posted: 22 Nov 2011 12:00 PM PST from CapitalAccount: More than $1.2 billion dollars could be missing from customer accounts at MF Global, twice the amount regulators originally predicted. That's according to the bankruptcy trustee. Failing to separate customer money from house funds is breaking the law if that's the case, so where is the indictment for Jon Corzine? Is he too big to jail along with other Wall Street CEOs who some believe should have faced criminal charges for their roles in the 2008 financial crisis? During the S&L crisis, regulators made over 10,000 criminal referrals, according to regulator during that time Bill Black. In the 2008 financial crisis, he says there have been zero. But Martha Stewart was fair game in recent years, remember she got five months for lying related to an insider trading scandal? Meanwhile, some Federal Reserve policy makers said the Fed should consider doing more, according to the minutes from its last meeting meeting that came out in Washington today. But is the Fed already doing QE 3, and just not telling us? We talk to famed investor Jim Rogers who believes that's the case. And as technocrats meet to hatch the eurozone's future, protests on the streets and investors dumping the euro show more people may be betting on its failure.
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| Relax! Gold, Silver and HUI Index to Bounce Back to Major Highs in Early 2012 Posted: 22 Nov 2011 12:00 PM PST With the present major correction in gold, silver and the mining sector it is important to look at the big picture and see what the charts are saying from a technical fractal relationship with what happened back in 1979 when the last truely major bull run occurred. To date the situation is, frankly, no different than it was back then unfolding just as it should. As a result we can expect MAJOR upward price action in physical gold and silver and in their mining (producers, developers, explorers and royalty streamers alike) in the next few months on their way to their respective parabolic peaks in the years ahead. Read on. Words: 1265 Those are the views of*Goldrunner (www.GoldrunnerFractalAnalysis.com) as conveyed in his original article (see original version here). Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has severely edited the article below for the sake of clarity and brevity to ensure a fast and easy read. The author's views and conclusions are unalter...
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| Massive Silver Leaves Eligible (Customer) Vaults / Gold and Silver Rise Posted: 22 Nov 2011 11:58 AM PST by Harvey Organ: Good evening Ladies and Gentlemen: Gold rose today despite turmoil in Austria, Hungary, and France. The closing gold price on the comex today was $1702.20 for a gain of $23.90. The price of silver rose by $1.84 to $32.95. The big news was the massive silver withdrawal by the customer which I will highlight for you in the body of my commentary. Due to the MFGlobal scandal nobody deems that their physical is safe in a comex-banker vault. Let us head over to the comex and see the strange data released today. The total gold comex OI fell by only 814 contracts to 460,387 despite the massive raid yesterday. No gold leaves fell from the tree. The front options delivery month of November saw its OI fall from 31 to 21 for a loss of 10 contracts. We had 9 deliveries so we lost 1 contract to cash settlements. The big front delivery month of December saw its OI fall from 178,364 to 166,545 as many rolled to a future month and not stand for delivery. The estimated volume today was average at 193,037 as we did have considerable rollovers. The confirmed volume yesterday was very high at 249,638. Read More @ HarveyOrgan.Blogspot.com
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| Posted: 22 Nov 2011 11:44 AM PST
 There are a few global stock market indices that have broken below the recent early October fall lows. This is not a good sign. The most important of these is Japan, which I wrote about a few days ago. Here is a 6 month daily candlestick chart of the $NIKK Japanese stock market index thru today's close:  And here's Austria ($ATX), Europe's latest entry into the crisis competition, using the same chart format:  Next up, Portugal ($PSI):  Finally, everyone's favorite basket case, Greece ($ATG):  Will the rest of the world's stock markets, which are above their recent fall lows, hold up or will they follow these countries to new lower lows? Only Mr. Market knows for sure, but I am not optimistic on common equities here. When sovereigns are falling/failing, it is best to get out of the way and stay liquid. Gold is the best form of cash to hold through an international monetary crisis, as it has no counterparty risk and cannot have its value successfully inflated away by desperate governments and bankstaz (unlike paper currencies). Until the Dow to Gold ratio hits 2 (and we may well go below 1 this cycle), Gold will continue to outperform stocks, bonds, real estate, other commodities and cash on a secular basis. If you are crazy enough to try and trade in this environment, consider giving my low cost subscription service a try.  ![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif) 
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| Silver and Gold Price Are In a Routine Correction In a Bull Market, Keep Averaging Down Posted: 22 Nov 2011 11:43 AM PST Gold Price Close Today : 1702.20 Change : 23.90 or 1.4% Silver Price Close Today : 3294.8 Change : 183.5 cents or 5.9% Gold Silver Ratio Today : 51.663 Change : -2.279 or -4.2% Silver Gold Ratio Today : 0.01936 Change : 0.000818 or 4.4% Platinum Price Close Today : 1570.00 Change : 17.60 or 1.1% Palladium Price Close Today : 603.05 Change : 13.65 or 2.3% S&P 500 : 1,188.04 Change : -4.94 or -0.4% Dow In GOLD$ : $139.58 Change : $ (2.63) or -1.9% Dow in GOLD oz : 6.752 Change : -0.127 or -1.9% Dow in SILVER oz : 348.84 Change : -22.30 or -6.0% Dow Industrial : 11,493.72 Change : -53.59 or -0.5% US Dollar Index : 78.26 Change : -0.036 or 0.0% The GOLD PRICE and the SILVER PRICE took the FOMC announcement the other way, or, more likely, merely bounced from yesterday's steep falls. GOLD PRICE climbed 23.90 to close at $1,702.20, which unhappily falls short of the $1,705 support/resistance. The breakdown at $1,712 has now become the new resistance, so unless and until gold can conquer that price, it will continue to fall. Underneath, first support stands at $1,670. High today reached only $1,705.13. The SILVER PRICE was stopped by 3300c. It's still possible that we are seeing a sort of double bottom for silver with lows at 3100c last Thursday and at 3063 yesterday. Today silver added a meaty 183.5c to close at 3294.8 on Comex. Yet without piercing 3300c, silver is fated to drop more. GOLD and SILVER are in a routine correction in a bull market. Keep on averaging down as they feel around for a bottom. I reckon it's because I have no subtlety and am nothing but a natural born fool from Tennessee, but if there's one thing that raises my dander and makes me want to tap dance on somebody's head, it's bureaucratic circumlocution -- talking all around what you need to say to avoid really saying it but trying to say it at the same time. For example, if you see somebody's head is on fire and he doesn't know it yet, how about shouting, "Your head's on fire!" This economical use of English conveys the needful information with a minimum waste of letters and words. What would you think of a goof who instead said, "Excuse me, but I believe that the kindling temperature of your hair fibers has nearly been reached, raising the distinct but not yet certain probability that, should conditions not change and rain not fall from the sky, the temperature rise might result in the combustion of your entire cranial surface." The man's head is SMOKING, goof ball! Talk plain. Not those goofs at the Federal Reserve, who specialize in circumlocution, obfuscation, prolixity, pleonasm, wordiness, evasion, and beating around the bush. Today the Fed released the minutes of the 1-2 November Federal Open Market Committee. Shucked down to the kernel, its was "maybe we might print up even more money, but then again, maybe not." Then -- Oh, fail me not, Blessed Patience -- they discussed options for improving their communications policies! Y'all, the ship of state has been hijacked by clowns. Bozo and Clarabelle could do better than this, and they'd be lots more entertaining. Markets didn't know what to make of this. Dow had dropped 53.59 (0.46%) by day's end to 11,493.72, working its way down to the targeted 11,250. S&P500 dropped 4.94 (0.41%) to 1,188.04. Y'all think about this, too. Markets are as sensitive to uncertainty as Johnson Grass is to Round-up. You spray 'em with uncertainty and they wilt. Yet the Lords of the Fed vacillate like a dying gyroscope. Mercy, we've fallen into a lunatic asylum. US DOLLAR INDEX went nowhere, down 3.6 basis points to 78.264. Euro closed 1.3511, up a sliver of 0.16%. Yen dropped to 129.93c/ Y100 (Y76.96/$1). Flatlining, but part of that might be investors laying low, anticipating the US Thanksgiving holiday. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. 
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| P.J. O’Rourke vs Carville vs Krauthammer in the ‘Big Easy’ Posted: 22 Nov 2011 10:53 AM PST P.J. O'Rourke, James Carville amd Charles Krauthammer debate the subject of income taxes in New Orleans in this short video clip from the full CD collection of the 2011 New Orleans Investment Conference. Definitely worth the time and worthy of sharing.
This clip is one of several that our good friend Brien Lundin has shared on a special "channel" for the NOIC on YouTube. We understand that the New Orleans Investment Conference has just released full CD and DVD recordings of this year's NOIC event. P.J. O'Rourke's presentation alone is worth the price of the CDs, by the way, but we recommend the full set of recordings which the NOIC describes as: "The Complete DVD Set - All 14 individual video recordings, featuring presentations of Marc Faber, Charles Krauthammer, Stephen Leeb, Stephen Hayes, Stephen Moore, Peter Schiff, P.J. O'Rourke and Glenn Beck PLUS the Economic Panel, Global Investment Panel and the Summit On America's Future." To get your own set of high quality disks to watch at your leisure, or merely to find out more about them, just click on the NOIC link here: To visit the NOIC Channel on YouTube follow this link: http://www.youtube.com/user/neworleansinvestment?blend=14&ob=5
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| Manipulated U.S. Rates Seesaw Gold Prices Posted: 22 Nov 2011 10:39 AM PST by John Browne, EuroPac.net:
This week, world attention finally shifted away from debt problems in Europe to the unresolved and worsening debt crisis here in the United States. The Congressional Super Committee, which had been created over the summer to postpone making tough cuts, chose to avoid responsibility itself. In so doing, the Committee has followed the path of least resistance and maximum irresponsibility. Given the likely after-effects, the outcome should be judged as criminal dereliction of duty. It should now be crystal clear to even the most casual observer that a solution to the U.S. debt crisis will not come from within, but will be imposed, perhaps brutally, from without. But while the media focused on Washington, institutional investors remained focused on Paris and Brussels where beleaguered European banks continue to suffer from dangerous overexposure to bad sovereign debt. To avoid these risks, institutions are locked into a flight to what they perceive as 'safety.' Despite the abject failure of American politicians, many of these institutions may be flooding into U.S. dollars and U.S. Treasuries, driving yields to historic lows.
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| Is Gold Still the Answer for Investors? Posted: 22 Nov 2011 10:33 AM PST by Bud Conrad, Casey Research: Though late to the party as usual, the proverbial man on the street – along with members of mainstream media and Wall Street heavyweights – is finally waking up to the decade-long, 700% increase in the price of gold, joining a growing buzz around the monetary metal. From questions whether gold is in a bubble to predictions that soaring prices are just around the corner, one thing is clear: a new phase of awareness for gold is upon us. How far might it move before these troubling times are over? The Big-Picture Economic Environment Kicking things off, I would like to explore several themes in order to put the current economic situation in context.
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| Silver vigilante no. 1 steps up Posted: 22 Nov 2011 09:16 AM PST Sprott to Buy $1.5B of Silver Bullion As the silver and gold price predictably fade ahead of option expiration, JP Morgan's bullion manipulation scheme could be headed for unprecedented problems, not from the record purchases of gold and silver from … Continue reading
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| Sprott to Buy $1.5B of Silver Bullion Posted: 22 Nov 2011 09:15 AM PST The silver price could explode higher in coming months. As the silver and gold price predictably fade ahead of option expiration, JP Morgan's bullion manipulation scheme could be headed for unprecedented problems, not from the record purchases of gold and silver from the Chinese, Indians or Russians, but from one Canadian billionaire. Canadian-based Eric Sprott Management CEO Eric Sprott filed a follow up prospectus for the purchase of an additional $1.5 billion of silver bullion to cover expected demand for the company's exchange traded fund, PSLV. Combined with the recent decline in the PSLV premium to spot silver to 14 percent from the typical 20 percent, along with Sprott's reported sale of some of its holdings of PSLV at the rich premium, it appears a familiar hallmark of a gigantic $580 million silver bullion purchase in December of last year emerges once again. Since demand for silver products at Sprott remain brisk, it should come as no surprise to the silver world that Sprott needs more silver. Yet, only two Web sites mention the breaking news, The Globe and Mail and bullion market reporter Harvey Organ, HarveyOrgan.blogspot.com. Don't expect Eric Sprott to herald the milestone purchase; he's trying to avoid investors front running the purchase. "Since Sprott filed its prospectus last Friday, PSLV units have come down 12 percent, while the price of silver has dropped only 6 percent," stated Canada's daily newspaper, The Globe and Mail, on Nov. 18. "Whether or not the new filing is the root cause of the difference doesn't affect Mr. Sprott much. He has been selling his PSLV units for most of the year (as documented by kid dynamite.)" Because Sprott today represents ½ the size of the Hunt brothers wallet and their attempt to corner the silver market in 1979-80, nimble investors have taken advantage of the bulky Sprott in the past by front running his purchases, as his size and legal entity requires him to file with Canadian regulators—an issue he laments of during his interviews. But for silver investors, the regulation could be a boon to the silver price, as the last time Sprott needed substantial inventory, the silver price soared 177 percent, though Sprott's purchase cannot directly be proven to be responsible for all of that monstrous move. However . . . more than four years earlier, in April 2006, prior to the launch of the NYSE version of PSLV, the Barclay's iShares Silver Trust SLV, spot silver at the COMEX more than doubled at its price peak leading up to the launch of the SLV to $15 from $7.50, as late as September 2005—a double within six months, or a 200 percent ARR. Moreover, further evidence of a coming silver price mega pop may be gleaned from the exciting silver rally of July 2010 to April 2011. That monstrous rally could easily be rivaled soon, as Sprott apparently gears up for a whale of a purchase, $1.5 billion of silver bullion—a nearly three times last year's $580 million purchase and coincidental 177 percent explosion of the silver price. "Today the Globe and Mail announced Eric has filed a short form follow up Prospectus for a billion five physical silver," respected bullion market blogger Harvey Organ wrote in a Nov. 21 post. "holy jeepers, it could be approved in as little as two weeks people tell me, and he can trigger it OVERNIGHT without warning. Just bang, if he has got the orders. WE all know what happened with his last Physical Silver Issue, it was 580 million and blasted Silver 18 to 50 bucks in 5 months." Considering the fundamentals underlying the raging bull market in silver and the confident predictions of, in some cases, another double in the silver price, at least, by spring from industry peer James Turk of Goldmoney, as well as other hard money heavyweights, Ben Davies of Hinde Capital, Jim Rickards of Tangent Capital Markets, Euro Pacific Capital CEO Peter Schiff and QB Asset Management Co-founder Paul Brodsky, it appears the industry insiders to the tiny world of silver anticipated Sprott's need to replenish—and when Sprott needs silver look out. Source: Beacon Equity
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| Posted: 22 Nov 2011 09:07 AM PST Addison Wiggin – November 22, 2011
The cops ransack your home. They don't tell you, but they're searching for drugs and guns. You don't know what's going on… you've done nothing wrong. Matthew Spaulding lived through something like this a week ago today. Consider it the ugly side of "new taxes and weird fees" — the police state coming to your neighborhood.
"Then they threw my dad to the ground, and my dog Sadie was right here, sniffing my head. She was next to me. They shot her. The blood got on my face, and then she took off running behind me, and they shot her like three more times." "My son hit the ground," says Matthew's disabled father, Chris. "I hit the ground, but I didn't make it too fast, so (the officer) jumped on the middle of my back, shoved his knee in and held a gun to the back of my head and handcuffed me. After they shot my first dog, my mom came out." Then it was Matthew's grandmother's turn to be slammed to the ground. The cops were executing a search warrant, looking for drugs and a stolen Xbox video game system. They found nothing. No one was arrested. Two of the family dogs are dead. Police aren't commenting.
 These ignorant rent-a-cops haven't been strung up by their testicles, as you might expect — they've been placed on "administrative leave" and are still getting paid while the incident is under review. We were already vigilant of the ever-increasing use of military tactics by local and city police departments. But this video made us even more concerned…
"Originally," writes Arthur Rizer, an ex-soldier and ex-cop in The Atlantic, "only the largest of America's big-city police departments maintained SWAT teams, and they were called upon only when no other peaceful option was available, and a truly military-level response was necessary." "Today, virtually every police department in the nation has one or more SWAT teams, the members of whom are often trained by and with United States special operations commandos." "When police officers are dressed like soldiers, armed like soldiers and trained like soldiers, it's not surprising that they are beginning to act like soldiers."
The teacher who saw it notified the assistant principal, who — suspecting a sex crime in progress — notified the cops. At least, in this instance, they exercised their better judgment. "Deputies do not appear to be further probing the preteen kiss," according to The Smoking Gun, which obtained a copy of the police report.
Suspecting a robbery, he told his wife and four-year-old son to hide in a closet. He grabbed his AR-15 to defend himself. Five cops fired 71 shots before Guerena could get off even one. The cops had been looking for evidence of drug trafficking. They found none.
"We believe," wrote the court's majority, "a right to resist an unlawful police entry into a home is against public policy and is incompatible with modern Fourth Amendment jurisprudence." No matter that the ruling contradicts a precedent dating back to 1215 and the Magna Carta. Forecast: As the mother of all asset bubbles continues to collapse, the police state will become more aggressive and blindly target the citizens its meant to protect and serve. We're sure, the incidences are already numerous… if you've read about similar events we'd like to know here.
We lament the creeping police state this morning, even as we learned we're now able to download the brand-new Kindle version of The Idea of America — the collection of essays Bill Bonner and Pierre Lemieux assembled as a reminder of what America once was… and by implication, what it's become now.
Traders are mostly marking time until later this afternoon, when minutes from the Federal Reserve's Nov. 1-2 meeting are released… when every amateur Kremlinologist out there will try to sniff out clues to what the Fed will do at its next meeting, on Dec. 13. As Yogi Berra would say, "include us out."
That's the idea behind the "Fed Chairman Game" on the website of the Federal Reserve Bank of San Francisco. You get to tinker with the fed funds rate and see how it affects unemployment and inflation. You even get to see future newspaper headlines that result from the actions you take!  But what you don't get to do is start from current conditions. No, you only get a hypothetical starting condition of a 4.75% fed funds rate (current rate — below 0.25%), unemployment of 4.75% (current rate — 9.0%) and inflation of 2.14% (current rate — 3.6%). This might be the biggest waste of Internet bandwidth since Perez Hilton.
Last month, the Commerce Department's first guess at third-quarter GDP rang in at an annualized 2.5%. The next guess came out this morning: The "expert consensus" was looking for a teensy revision to 2.4%. In the event, we got a major revision, to 2.0%. The year-over-year change looks even worse, at 1.5%. Factor out the Commerce Department's statistical games, and GDP actually fell 3%, according to John Williams at ShadowStats.com.
"Inflation will attack just about everyone spending greenbacks. And more downgrades will be unleashed on U.S. debt." But first, a quick review of how we got here: "Democrats want the Bush tax cuts to expire," says Jim. "And the GOP wants 'serious reforms' to entitlement programs — aka, deep cuts or restructurings to Medicare, Medicaid and Social Security that will, likely, leave you on the outside looking in. "Of course, neither can agree on anything. So nothing will change." "Oh, and those 'triggers' that are supposed to automatically go into effect, which would cut more than $1 trillion from spending starting in 2013, most likely won't happen, either. "If Congress is good at one thing, it's continuing the status quo. It'll surely repeal that part of the original agreement."
The answer, he says, lies in the sort of alternative income plays Jim writes about in Lifetime Income Report: "those that are growing their payments like wildfire and those that already pay substantially larger yields that outpace inflation." Intrigued? Here's where to act. [Ed. Note: Jim's success with alternative income plays has some readers asking for more. One reader put it like this: "Develop a portfolio that performs above average with as little volatility as possible. Above-average performance means that, after inflation, the portfolio returns 5-10% annually, for risk-averse investors." "Other portfolios could be dialed up in risk for moderate investors, and finally, a third portfolio could be developed for those who wish to put a portion of their assets into higher risk/higher reward investments." A tall order... but Jim is about to deliver. This is something he's had in the works for 18 months... and he's ready to take the wraps off next week. Watch this space.]
It's not only BioTime, discussed yesterday, that stands to benefit. Another company he follows is leading the way in "human parthenogenic stem cells," or hpSCs. These cells come from an immature unfertilized human egg. "HpSCs have several enormous advantages over the embryonic stem cells that Geron was using," Patrick explains. "Most notably, hpSCs have only half the genetic complexity of a regular embryonic or induced pluripotent stem cell." What does that mean? Patrick points to research in the prestigious British medical journal The Lancet: "Only 10 hpSC lines would immune match 80% of the world's population." That's something embryonic stem cells could never do. What's more, the company "owns the key patents on hpSCs. I've even heard researchers complain that they own hpSCs themselves, even if somebody else figures out another way to produce them." "Thousands of our best minds are working now to exploit the power of stem cells," Patrick concludes. "This means that breakthroughs are coming in adult, embryonic and induced pluripotent stem cells. Anything learned in any of these areas can then be applied by [this company] to their parthenogenic platform." New readers of Breakthrough Technology Alert receive a special report naming his favorite pioneers in the stem cell field, poised to deliver the life-changing gains. Access here.
Silver is, once again, proving to be the more-volatile metal. Down as low as $31.16 in overnight trading, it's only a dime or so away from $33, again.
The city sued a smoke shop called Island Smokes last week, contending blatant tax evasion. An ordinary pack of cigarettes costs $13 in New York. Using the machine, it's less than $4. "By selling illegally low-priced cigarettes," contends the suit, "defendants not only interfere with the collection of city cigarette taxes, they also impair the city's smoking-cessation programs and impair individual efforts at smoking reduction, thereby imposing higher health care costs on the city and injuring public health." Yes, we're gasping with pretended horror, too. The business is fighting back, its lawyer contending it is neither selling nor manufacturing cigarettes. We wish them luck. We're not holding our breath.
"We flew out of Detroit to St. Petersburg I have a knee replacement, which didn't make it through the scanner undetected. I was pulled off to the side as they explained what was going on. I was searched in front of everyone there, and when they didn't find anything, was allowed to proceed." "This was TSA. They couldn't have been friendlier or more professional in both airports. This is a different world we live in, and I like to know that when I get on a plane, everyone who may seem suspicious is evaluated — even if it's me." "I am so sick of hearing these babies b**** all the time. These a**holes would bitch if they weren't searched." The 5: Hmmm… is that a storm of hostile email we detect? And just in time for the busiest travel day of the year, too… Cheers, Addison Wiggin P.S. Confidential to members of The Essential Investor: It's part of the experiment! We encourage you to post on the wall at the members-only website. I received this message today…  For interesting discussions with your fellow members, log in here. Not part of the team yet? Learn what The Essential Investor is all about, at this link.
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| Martin Armstrong: The Real Reason Gold Will Rally Posted: 22 Nov 2011 09:03 AM PST |
Having followed the fortunes of the beleaguered Belgian bank from before it appeared on anyone's worksheets, we are hardly surprised that the EU Commission charged with confirming the good-bank / bad-bank restructuring is concerned at the deal that Belgium has with the French (and Luxembourg) government to backstop/finance Dexia's debt. 
It's 2:00 a.m. You're sleeping soundly. Suddenly, police in SWAT gear smash open your front door. You and your spouse are shaken from a sound sleep, bright lights shining in your eyes as you're ordered to "get the f*** on the floor."
"They told us to get on the ground," Mr. Spaulding, a Jefferson, Iowa, resident told the local Des Moines TV station. "I got on the ground, and they put me in handcuffs."
Neither are the fat asses who peppered-sprayed tuition-paying student protestors over the weekend at UC Davis. The incident was caught on video by another student and has since gone viral on the Web.
"U.S. police forces have become increasingly militarized, and it's showing in cities everywhere," writes Norm Stamper, the former police chief of Seattle. "Everyday policing is characterized by a SWAT mentality, every other 911 call a military mission."
Last week, the cops were called to an elementary school in Fort Myers, Fla., because a little girl kissed a little boy during gym class.
Last May, a SWAT team in Tucson, Ariz., raided the home of Jose Guerena, an Iraq war veteran who was asleep one morning after working the graveyard shift at a mine.
Even if you've done nothing wrong and you manage to successfully fend off the officers, you might be hauled off for doing so. The state Supreme Court in Indiana ruled last May that if police unlawfully enter your home, you have no right to defend yourself.
"Government is not reason," George Washington warned lo those many years ago. "It is not eloquence. Government is force; like fire, it is a dangerous servant — and a fearful master."
U.S. stocks have gyrated much of the day, mostly on the down side. The Dow was down as much as 100 earlier, but has since recovered the 11,500 level.
Then again, you could pretend to be Ben Bernanke and have perfect knowledge about every aspect of the economy and how it interacts with all the other aspects.
Whoops, the anemic economic growth of the third quarter has even fewer red blood cells than originally thought.
"The U.S. dollar will remain in danger," says our income specialist, Jim Nelson, examining the take-aways from yesterday's failure of the "supercommittee."
"Income investing is one of the only ways to combat inflation," Jim goes on. "But a 2% yield that isn't growing won't help you at all. So right off the bat, Treasuries, savings accounts, bank CDs and even most investment-grade bonds are out the window."
Geron Corp.'s departure from stem cell research "can only help the companies that are actually pioneering regenerative medicine," says Patrick Cox, back today to further assess the fallout.
After sinking to $1,675 yesterday, gold has reclaimed the $1,700 level on this, an options-expiration day for precious metals.
Back to our new taxes and weird fees file: The crackdown on roll-your-own cigarette machines has come to New York City.
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