Sunday, November 27, 2011

Gold World News Flash

Gold World News Flash

International Forecaster November 2011 (#8) - Gold, Silver, Economy + More

Posted: 27 Nov 2011 04:33 AM PST

In Europe each time a new player is presented we find he is a Goldman Sachs' alumnus. Recent entries are Mario Monti "appointed" PM of Italy, Lucas Papademas "appointed" PM of Greece and Mario Dragahi "appointed" President of the European Central Bank. The banks blatantly control governments and agencies presenting us with an oligarchy, which controls most of the nations on the planet. In America politicians are bought and paid for. In Europe there is a different mind set, a shared worldview of bureaucrats, technocrats, politicians and the elite bankers of world government and domination.


Gold to Profit from Economic Uncertainty

Posted: 27 Nov 2011 04:22 AM PST

The mountains of debt engulfing Western economies is likely to lead to hyperinflation according to Clive Maund, president of clivemaund.com. In this exclusive interview with The Gold Report, Maund details the scenario he sees for collapse.


Central bank gold buying to rise from 142 to 450 tons in 2011 says World Gold Council

Posted: 27 Nov 2011 04:14 AM PST

Purchases of gold bullion by the central banks of the world will rise from 142 tons last year to 450 tons in 2011, predicts the World Gold Council. However, gold industry experts are still expecting a pull-back in gold prices as global equity markets fall sharply over the next two months as the eurozone crisis comes to a head.


The Secular Bear Market and Gold's A-Wave Advance

Posted: 26 Nov 2011 06:54 PM PST

I have decided to post the weekend premium report to the blog this week. In this report I'm going to take a look at what has transpired and what is likely to come, as the third leg down in the secular bear market begins to intensify. Back in April of this year I warned investors to get out of stocks in their 401(k) accounts. At the time the dollar was moving into the timing band for a major three year cycle low. It has always been my expectation that the rally out of that major bottom would correspond with the stock market moving down into the third bear market leg of the secular trend that has been in place since 2000. As we now know the dollar did bottom in May of this year and that did correspond with the top of the cyclical bull market that began in March of 2009. It has also been my expectation that the next four year cycle low would occur in the fall of 2012, and that 2012 would be one of the worst economic years in human history. This is already start...


Congress to Vote Next Week on EXPLICITLY Creating a Police State

Posted: 26 Nov 2011 05:19 PM PST

IF YOU THOUGHT POLICE BRUTALITY WAS BAD … WAIT UNTIL YOU SEE WHAT CONGRESS WANTS TO DO NEXT WEEK

 

The police brutality against peaceful protesters in Berkeley, Davis, Oakland and elsewhere is bad enough.

But next week, Congress will vote on explicitly creating a police state.

The ACLU's Washington legislative office explains:

The Senate is gearing up for a vote on Monday or Tuesday that goes to the very heart of who we are as Americans. The Senate will be voting on a bill that will direct American military resources not at an enemy shooting at our military in a war zone, but at American citizens and other civilians far from any battlefield — even people in the United States itself.

 

***

 

The Senate is going to vote on whether Congress will give this president—and every future president — the power to order the military to pick up and imprison without charge or trial civilians anywhere in the world.

 

***

 

The power is so broad that even U.S. citizens could be swept up by the military and the military could be used far from any battlefield, even within the United States itself. The worldwide indefinite detention without charge or trial provision is in S. 1867, the National Defense Authorization Act bill, which will be on the Senate floor on Monday.

 

***

 

I know it sounds incredible. New powers to use the military worldwide, even within the United States? Hasn't anyone told the Senate that Osama bin Laden is dead, that the president is pulling all of the combat troops out of Iraq and trying to figure out how to get combat troops out of Afghanistan too? And American citizens and people picked up on American or Canadian or British streets being sent to military prisons indefinitely without even being charged with a crime. Really? Does anyone think this is a good idea? And why now?

 

***

 

In support of this harmful bill, Sen. Lindsey Graham (R-S.C.) explained that the bill will "basically say in law for the first time that the homeland is part of the battlefield" and people can be imprisoned without charge or trial "American citizen or not." Another supporter, Sen. Kelly Ayotte (R-N.H.) also declared that the bill is needed because "America is part of the battlefield."

 

***

 

The senators pushing the indefinite detention proposal have made their goals very clear that they want an okay for a worldwide military battlefield, that even extends to your hometown.

PART OF AN ONGOING TREND

 

 

While this is shocking, it is not occurring in a vacuum. Indeed, it is part of a 30 year-long process of militarization inside our borders and a destruction of the American concepts of limited government and separation of powers.

As I pointed out in May:

The ACLU noted yesterday [that] Congress is proposing handing permanent, world-wide war-making powers to the president – including the ability to make war within the United States:

 

***

 

As I noted in 2008:

 

An article in the Army Times reveals that the 3rd Infantry Division's 1st Brigade Combat Team will be redeployed from Iraq to domestic operations within the United States.

The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with "civil unrest" and "crowd control".

The soldiers are learning to use so-called "nonlethal weapons" designed to subdue unruly or dangerous individuals and crowds.

 

This violates posse comitatus and the Constitution. But, hey, we're in a "national emergency", so who cares, right?

 

(We're still in a declared state of national emergency).

 

I noted a couple of months later:

Everyone knows that deploying 20,000 troops on U.S. soil violates Posse Comitatus and the Constitution.

 

And everyone understands that staging troops within the U.S. to "help out with civil unrest and crowd control" increases the danger of overt martial law.

 

But no one is asking an obvious question: Does the government's own excuse for deploying the troops make any sense?

 

Other Encroachments On Civil Rights Under Obama

 

As bad as Bush was, the truth is that, in many ways, freedom and constitutional rights are under attack even more than during the Bush years.

 

For example:

 

Obama has presided over the most draconian crackdown on leaks in our history — even more so than Nixon.

 

As Marjorie Cohen – professor at Thomas Jefferson School of Law and past president of the National Lawyers Guild – writes at the American Constitution Society for Law and Policy:

 

Army Pfc. Bradley Manning, who is facing court-martial for leaking military reports and diplomatic cables to WikiLeaks, is being held in solitary confinement in Quantico brig in Virginia. Each night, he is forced to strip naked and sleep in a gown made of coarse material. He has been made to stand naked in the morning as other inmates walked by and looked. As journalist Lance Tapley documents in his chapter on torture in the supermax prisons in The United States and Torture, solitary confinement can lead to hallucinations and suicide; it is considered to be torture. Manning's forced nudity amounts to humiliating and degrading treatment, in violation of U.S. and international law.

 

Nevertheless, President Barack Obama defended Manning's treatment, saying, "I've actually asked the Pentagon whether or not the procedures . . . are appropriate. They assured me they are." Obama's deference is reminiscent of President George W. Bush, who asked "the most senior legal officers in the U.S. government" to review the interrogation techniques. "They assured me they did not constitute torture," Bush said.

 

***

 

After State Department spokesman P.J. Crowley criticized Manning's conditions of confinement, the White House forced him to resign. Crowley had said the restrictions were "ridiculous, counterproductive and stupid." It appears that Washington is more intent on sending a message to would-be whistleblowers than on upholding the laws that prohibit torture and abuse.

 

***

 

Torture is commonplace in countries strongly allied with the United States. Vice President Omar Suleiman, Egypt's intelligence chief, was the lynchpin for Egyptian torture when the CIA sent prisoners to Egypt in its extraordinary rendition program. A former CIA agent observed, "If you want a serious interrogation, you send a prisoner to Jordan. If you want them to be tortured, you send them to Syria. If you want someone to disappear – never to see them again – you send them to Egypt." In her chapter in The United States and Torture, New Yorker journalist Jane Mayer cites Egypt as the most common destination for suspects rendered by the United States.

 

As I pointed out in March:

 

Former constitutional law teacher Glenn Greenwald says that – in his defense of state secrecy, illegal spying, preventative detention, harassment of whistleblowers and other issues of civil liberties – Obama is even worse than Bush.

 

Indeed, Obama has authorized "targeted assassinations" against U.S. citizens. Even Bush didn't openly do something so abhorrent to the rule of law.

Obama is trying to expand spying well beyond the Bush administration's programs. Indeed, the Obama administration is arguing that citizens should never be able to sue the government for illegal spying.

 

Obama's indefinite detention policy is an Orwellian nightmare, which will create more terrorists.

 

Furthermore – as hard as it is for Democrats to believe – the disinformation and propaganda campaigns launched by Bush have only increased under Obama. See this and this.

 

And as I pointed out last year:

 

According to Department of Defense training manuals, protest is considered "low-level terrorism". And see this, this and this.

An FBI memo also labels peace protesters as "terrorists".

 

***

 

A 2003 FBI memo describes protesters' use of videotaping as an "intimidation" technique, even though – as the ACLU points out – "Most mainstream demonstrators often use videotape during protests to document law enforcement activity and, more importantly, deter police from acting outside the law." The FBI appears to be objecting to the use of cameras to document unlawful behavior by law enforcement itself.

 

The Internet has been labeled as a breeding ground for terrorists, with anyone who questions the government's versions of history being especially equated with terrorists.

Government agencies such as FEMA are allegedly teaching that the Founding Fathers should be considered terrorists.

 

The government is also using anti-terrorism laws to keep people from learning what pollutants are in their own community. See this, this, this and this.

 

Claims of "national security" are also used to keep basic financial information – such as who got bailout money – secret. That might not bode for particularly warm and friendly treatment for someone persistently demanding the release of such information.

 

The state of Missouri tried to label as terrorists current Congressman Ron Paul and his supporters, former Congressman Bob Barr, libertarians in general, anyone who holds gold, and a host of other people.

 

And according to a law school professor and former president of the National Lawyers Guild, pursuant to the Military Commissions Act:

 

Anyone who … speaks out against the government's policies could be declared an "unlawful enemy combatant" and imprisoned indefinitely. That includes American citizens.

 

Obama has refused to reverse these practices.

THERE IS STILL A CHANCE TO STOP IT

 

The ACLU notes that there is some hope:

 

But there is

Alasdair Macleod: A crude awakening

Posted: 26 Nov 2011 02:36 PM PST

10:33p ET Saturday, November 26, 2011

Dear Friend of GATA and Gold:

Economist and former banker Alasdair Macleod's new commentary, posted at GoldMoney, argues that world oil demand will start exceeding declining supply so much that a devastating inflation will result, against which gold should be a pretty good hedge. Macleod's commentary is headlined "A Crude Awakening" and you can find it at GoldMoney here:

http://www.goldmoney.com/gold-research/alasdair-macleod/a-crude-awakenin...

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


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Prophecy Granted Landmark Chandgana Power Plant License

Company Press Release
Monday, November 21, 2011

VANCOUVER, British Columbia -- Prophecy Coal Corp. (TSX: PCY)(OTCQX: PRPCF)(Frankfurt: 1P2) announces that its wholly-owned Mongolian subsidiary, East Energy Development LLC, has received the license certificate from the Mongolian Energy Regulatory Authority to construct the 600-megawatt Chandgana power plant.

This 600-mw thermal power plant license is the first of its size issued by the Mongolian government. To ensure strict compliance with Mongolian laws and regulations in obtaining this license, Prophecy retained Mongolian and international consultants over the past 18 months and spent much effort on community relations.

Coal for the Chandgana mine-mouth power plant will be supplied from Prophecy's Chandgana Tal deposit, for which the company has already obtained a full mining license. Tal contains 141 million tonnes of measured coal and is located just 9 kilometers north of Prophecy's Chandgana Khavtgai project, a deposit with more than 1 billion tonnes of measured and indicated coal.

Chandgana is 60 km from Underkhann city (East Energy System) and 150 km from Baganuur city (Central Energy System). Construction of transmission lines linking the two cities through Chandgana is seen as a top priority for a much-improved and more efficient national Mongolian energy system.

John Lee, chairman and CEO of Prophecy Coal, says: "Prophecy has distinguished itself as the premier candidate to build the next Mongolian thermal power plant. There is an understanding among all stakeholders that Mongolia, being one of the world's fastest-growing economies, needs additional power. With the International Monetary Fund projecting a deficit for Mongolia of more than 600 mw by 2016, this need has become urgent and can no longer be delayed."

For Prophecy Coal's full press release, complete with maps, please visit:

http://www.prophecycoal.com/news_2011_nov21_prophecy_granted_landmark_ch...


Join GATA here:

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

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

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

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

Support GATA by purchasing gold and silver commemorative coins:

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

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


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

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf

New German-French treaty planned to give cover to ECB bond buying

Posted: 26 Nov 2011 02:30 PM PST

From Reuters
Saturday, November 26, 2011

http://www.reuters.com/article/2011/11/27/us-eurozone-integration-ecb-id...

BERLIN -- German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means -- including a quick new Stability Pact -- to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday.

The Sunday newspaper reported in an advance before publication that if necessary Germany and France were ready to join a number of countries in agreeing to tough budget discipline.

The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week.

... Dispatch continues below ...


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

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf


The report said that because it would take too long to change existing European Union treaties, euro zone countries should avoid such delays be agreeing to a new Stability Pact among themselves -- possibly implemented at the start of 2012.

It could be similar to the Schengen Agreement that allows for uninhibited cross border travel for citizens in countries that take part. Among the countries in the Stability Pact there would be a treaty spelling out strict deficit rules and control rights for national budgets.

The European Central Bank should also emerge more as a crisis fighter in the euro zone. The ECB is independent and governments cannot tell it what to do. But the expectations on the ECB are clear, Welt am Sonntag wrote.

"Based upon these measures, there should be a majority within the ECB for a stronger intervention in capital markets," Welt am Sonntag said. It quotes a central banker as saying: "If the politicians can agree to a comprehensive step, the ECB will jump in and help."

In Brussels on Friday, euro zone officials said a push by euro zone countries toward very close fiscal integration could give the ECB the necessary room for manoeuvre to scale up euro zone bond purchases and stabilize markets.

The ECB, which cannot directly finance governments, has been buying Italian and Spanish bonds on the secondary market since August to try to keep down borrowing costs for the euro zone's third and fourth largest economies and contain the spreading of Europe's sovereign debt problem.

Such tight fiscal integration is being considered by France and Germany, the officials said, with Berlin pushing to change the European Union treaty so that a country could be sued for breach of EU budget rules in the European Court of Justice.

The European Commission, the EU executive arm, put forward proposals on Wednesday to grant it intrusive powers of approval of euro zone budgets before they are submitted to national parliaments, which, if approved, would effectively mean ceding some national sovereignty over budgets.

This could lead to joint debt issuance for the euro zone, where countries would be liable for each others' debts.

Germany strongly opposes the joint issuance idea fearing spendthrift countries would piggyback on its low borrowing costs - meaning no gain for the virtuous and no pain for the sinners.

* * *

Join GATA here:

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

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

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

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

Support GATA by purchasing gold and silver commemorative coins:

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

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


ADVERTISEMENT

Prophecy Granted Landmark Chandgana Power Plant License

Company Press Release
Monday, November 21, 2011

VANCOUVER, British Columbia -- Prophecy Coal Corp. (TSX: PCY)(OTCQX: PRPCF)(Frankfurt: 1P2) announces that its wholly-owned Mongolian subsidiary, East Energy Development LLC, has received the license certificate from the Mongolian Energy Regulatory Authority to construct the 600-megawatt Chandgana power plant.

This 600-mw thermal power plant license is the first of its size issued by the Mongolian government. To ensure strict compliance with Mongolian laws and regulations in obtaining this license, Prophecy retained Mongolian and international consultants over the past 18 months and spent much effort on community relations.

Coal for the Chandgana mine-mouth power plant will be supplied from Prophecy's Chandgana Tal deposit, for which the company has already obtained a full mining license. Tal contains 141 million tonnes of measured coal and is located just 9 kilometers north of Prophecy's Chandgana Khavtgai project, a deposit with more than 1 billion tonnes of measured and indicated coal.

Chandgana is 60 km from Underkhann city (East Energy System) and 150 km from Baganuur city (Central Energy System). Construction of transmission lines linking the two cities through Chandgana is seen as a top priority for a much-improved and more efficient national Mongolian energy system.

John Lee, chairman and CEO of Prophecy Coal, says: "Prophecy has distinguished itself as the premier candidate to build the next Mongolian thermal power plant. There is an understanding among all stakeholders that Mongolia, being one of the world's fastest-growing economies, needs additional power. With the International Monetary Fund projecting a deficit for Mongolia of more than 600 mw by 2016, this need has become urgent and can no longer be delayed."

For Prophecy Coal's full press release, complete with maps, please visit:

http://www.prophecycoal.com/news_2011_nov21_prophecy_granted_landmark_ch...

$707,568,901,000,000: How (And Why) Banks Increased Total Outstanding Derivatives By A Record $107 Trillion In 6 Months

Posted: 26 Nov 2011 12:44 PM PST

While everyone was focused on the impending European collapse, the latest soon to be refuted rumors of a quick fix from the Welt am Sonntag notwithstanding, the Bank of International Settlements reported a number that quietly slipped through the cracks of the broader media. Which is paradoxical because it is the biggest ever reported in the financial world: the number in question is $707,568,901,000,000 and represents the latest total amount of all notional Over The Counter (read unregulated) outstanding derivatives reported by the world's financial institutions to the BIS for its semi-annual OTC derivatives report titled "OTC derivatives market activity in the first half of 2011." Indicatively, global GDP is about $63 trillion if one can trust any numbers released by modern governments. Said otherwise, for the six month period ended June 30, 2011, the total number of outstanding derivatives surged past the previous all time high of $673 trillion from June 2008, and is now firmly in 7-handle territory: the synthetic credit bubble has now been blown to a new all time high. Another way of looking at the data is that one of the key contributors to global growth and prosperity in the past 10 years was an increase in total derivatives from just under $100 trillion to $708 trillion in exactly one decade. And soon we have to pay the mean reversion price.

What is probably just as disturbing is that in the first 6 months of 2011, the total outstanding notional of all derivatives rose from $601 trillion at December 31, 2010 to $708 trillion at June 30, 2011. A $107 trillion increase in notional in half a year. Needless to say this is the biggest increase in history. So why did the notional increase by such an incomprehensible amount? Simple: based on some widely accepted (and very much wrong) definitions of gross market value (not to be confused with gross notional), the value of outstanding derivatives actually declined in the first half of the year from $21.3 trillion to $19.5 trillion (a number still 33% greater than US GDP). Which means that in order to satisfy what likely threatened to become a self-feeding margin call as the (previously) $600 trillion derivatives market collapsed on itself, banks had to sell more, more, more derivatives in order to collect recurring and/or upfront premia and to pad their books with GAAP-endorsed delusions of future derivative based cash flows. Because derivatives in addition to a core source of trading desk P&L courtesy of wide bid/ask spreads (there is a reason banks want to keep them OTC and thus off standardization and margin-destroying exchanges) are also terrific annuities for the status quo. Just ask Buffett why he sold a multi-billion index put on the US stock market. The answer is simple - if he ever has to make good on it, it is too late.

Which brings us to the the chart showing total outstanding notional derivatives by 6 month period below. The shaded area is what that the BIS, the bank regulators, and the OCC urgently hope that the general public promptly forgets about and brushes under the carpet.

Try not to laugh. Or cry. Or gloss over, because when it comes to visualizing $708 trillion most really are incapable of doing so.

Total outstanding gross market value by 6 month period:

There is much more than can be said on this topic, and has to be said, because an increase of that magnitude is simply impossible to perceive without alarm bells going off everywhere, especially when one considers the pervasive deleveraging occurring at every sector but the government. All else equal, this move may well explain the massive surge in bank profitability in the first half of the year. It also means that with banks suffering massive losses, and rumors of bank runs and collateral calls, not to mention the aftermath of the MF Global insolvency, the world financial syndicate will have no choice but to increase gross notional even more, even as the market value continues to get ever lower, thus sparking the risk of the mother of all margin calls: a veritable credit fission reaction.

But no matter what: the important thing to remember is that "they are all hedged" - or so they say, a claim we made a completely mockery of a few weeks back. So ex-sarcasm, the now parabolic increase in derivatives means that when the bilateral netting chain is once again broken, and it will be (because AIG was not a one off event), there will simply be trillions more in derivatives that no longer generate a booked cash flow stream for the remaining counterparty, until at the very end, the whole inverted credit0money pyramid collapses in on itself.

And for those wondering what the distinction is between notional and

Notional amounts outstanding: Nominal or notional amounts outstanding are defined as the gross nominal or notional value of all deals concluded and not yet settled on the reporting date. For contracts with variable nominal or notional principal amounts, the basis for reporting is the nominal or notional principal amounts at the time of reporting.

 

Nominal or notional amounts outstanding provide a measure of market size and a reference from which contractual payments are determined in derivatives markets. However, such amounts are generally not those truly at risk. The amounts at risk in derivatives contracts are a function of the price level and/or volatility of the financial reference index used in the determination of contract payments, the duration and liquidity of contracts, and the creditworthiness of counterparties. They are also a function of whether an exchange of notional principal takes place between counterparties. Gross market values provide a more accurate measure of the scale of financial risk transfer taking place in derivatives markets.

Well, no. It is logical that the BIS will advise everyone to ignore the bigger number and focus on the small one: just like everyone was told to ignore gross exposure and focus on net... until Jefferies had to dump all of its gross PIIGS exposure or stare bankruptcy in the face; so no - the correct thing to say is "gross market values provide a more accurate measure of the scale of financial risk transfer" if one assumes there is no counterparty risk. Because one the whole bilateral netting chain is broken, net becomes gross. And gross market value becomes total notional outstanding. And, to quote Hudson, it's game over.

As for the largely irrelevant gross market value, which is only relevant in as much as it will be the catalyst which will precipitate margin calls on the underlying notionals, all $700+ trillion of them:

Gross positive and negative market values: Gross market values are defined as the sums of the absolute values of all open contracts with either positive or negative replacement values evaluated at market prices prevailing on the reporting date. Thus, the gross positive market value of a dealer's outstanding contracts is the sum of the replacement values of all contracts that are in a current gain position to the reporter at current market prices (and therefore, if they were settled immediately, would represent claims on counterparties). The gross negative market value is the sum of the values of all contracts that have a negative value on the reporting date (ie those that are in a current loss position and therefore, if they were settled immediately, would represent liabilities of the dealer to its counterparties).

 

The term "gross" indicates that contracts with positive and negative replacement values with the same counterparty are not netted. Nor are the sums of positive and negative contract values within a market risk category such as foreign exchange contracts, interest rate contracts, equities and commodities set off against one another.

 

As stated above, gross market values supply information about the potential scale of market risk in derivatives transactions. Furthermore, gross market value at current market prices provides a measure of economic significance that is readily comparable across markets and products.

And here again, what they ignore to add is that the measure of economic significance is only relevant in as much as the world's banks don't begin a Lehman-MF Global tango of mutual margin call annihilation. In that case, no. They are not measures of anything except for what some banks plug into some models to spit out a favorable EPS treatment at the end of the quarter.

Expect to see gross market value declines persisting even as the now parabolic increase in total notional persists. At this rate we would not be surprised to see one quadrillion in OTC derivatives by the middle of next year.

And, once again for those confused, the fact that notional had to increase so epically as market value tumbled most likely means that the global derivative pyramid scheme (no pun intended) is almost over.

Source: OTC derivatives market activity in the first half of 2011 and Semiannual OTC derivatives statistics at end-June 2011

Prepare for Riots in Euro Collapse, Foreign Office Warns

Posted: 26 Nov 2011 10:08 AM PST

British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.

by James Kirkup, Telegraph.co.uk:

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.

Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.

The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.

A senior minister has now revealed the extent of the Government's concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.

Read More @ Telegraph.co.uk

A Glimpse Into the Future of the Stock Market and Dollar

Posted: 26 Nov 2011 09:04 AM PST

by Charles Hugh Smith, OfTwoMinds.com:

The "accident" many have been waiting for has finally happened, and it's called Europe. That doesn't bode well for the U.S. stock market.

A lot of technical analysts and financial pundits are expecting a standard-issue Santa Claus Rally once a "solution" to Europe's debt crisis magically appears. There will be no such magical solution for the simple reason the problems are intrinsic to the euro, the Eurozone's immense debts and the structure of the E.U. itself.

We can fruitfully start a speculative look into the future of the U.S. stock market and dollar with a quote from John Mauldin's book Endgame: The End of the Debt Supercycle and How It Changes Everything:

Read More @ OfTwoMinds.com

Guest Post: A Glimpse Into The Future Of The Stock Market And Dollar

Posted: 26 Nov 2011 08:50 AM PST

Submitted by Charles Hugh Smith from Of Two Minds

A Glimpse Into The Future Of The Stock Market And Dollar

The "accident" many have been waiting for has finally happened, and it's called Europe. That doesn't bode well for the U.S. stock market.

A lot of technical analysts and financial pundits are expecting a standard-issue Santa Claus Rally once a "solution" to Europe's debt crisis magically appears. There will be no such magical solution for the simple reason the problems are intrinsic to the euro, the Eurozone's immense debts and the structure of the E.U. itself.

We can fruitfully start a speculative look into the future of the U.S. stock market and dollar with a quote from John Mauldin's book Endgame: The End of the Debt Supercycle and How It Changes Everything:

Economic theory tells us that it is precisely the fickle nature of confidence, including its dependence on the public's expectation of future events, which makes it so difficult to predict the timing of debt crises. High debt levels lead, in many mathematical economics models, to "multiple equilibria" in which the debt level might be sustained —or might not be.

 

Economists do not have a terribly good idea of what kinds of events shift confidence and of how to concretely assess confidence vulnerability. What one does see, again and again, in the history of financial crises is that when an accident is waiting to happen, it eventually does. When countries become too deeply indebted, they are headed for trouble. When debt-fueled asset price explosions seem too good to be true, they probably are. But the exact timing can be very difficult to guess, and a crisis that seems imminent can sometimes take years to ignite.

The accident has finally happened, and it's called the euro/European debt crisis. I see a lot of analysts trying to torture a Bullish interpretation out of the charts, so let's take a "nothing fancy" chart of the broad-based S&P 500 with five basic TA tools: Bollinger Bands to measure volatility, relative strength (RSI), MACD (moving average convergence-divergence), stochastics and volume.

 

 

If we use Technical Analysis 101 (basic version), a number of things quickly pop out of this chart--and none of them are remotely bullish.

1. This market is not even close to being oversold. Bulls are hoping that the selloff has created an extreme of negative sentiment, which would be a reliable indicator that the market is about to rally. But there is no evidence of such an extreme, and the VIX/VXO (not shown) is also not at an extreme.

Rather than an extreme of negative sentiment, we see complacency, and a long way down to reach extremes in RSI and stochastics.

2. The 200-week moving average (MA) has offered picture-perfect resistance and support. The entire August-September period of wild swings of volatility can be seen here as a struggle around the 200-week MA.

In a classic retracement, the SPX shot up and recovered the 50-week MA, but failed to hold that level. Now it is heading back down for another retest of the 200-week MA. Only this time the chart is significantly weaker than in September, and the low-volume "oversold/hopium" rally in October was technically underwhelming.

3. Another clue that supports the notion that the 200-week MA will fail to hold this next text is the beautiful (to technicians) complex head-and-shoulders pattern which is made up of a shallow HS triple top formed from March to August of this year, and a second outer left shoulder formed in November of 2010.

The corresponding right shoulder was traced by the October rally that just rolled over. This completes a long-term head and shoulders topping pattern.

4. The MACD is extremely negative, being well below the neutral line and rolling over into a bearish cross. Coincidentally, the stochastics also rolled over in a bearish cross.

5. Price tends to alternate between the Bollinger bands; rallies will rise to the upper band and push it higher, while declines will fall to the lower band and ride it down. Thus the lower band is a reasonable initial target for this decline. The problem for Bulls is that this target is well below the 200-week MA, meaning that hitting the lower band will mean the 200-week MA will be decisively broken.

If price does fall to the lower band, we can anticipate an oversold rally back up to the 200-week MA, followed by a renewed plunge to new lows.

An insightful technical analyst who prefers to be known only as "Chartist Friend from Pittsburgh" shared two very long-term charts of the Dow Jones Industrial Average (DJIA) and the U.S. dollar. As I have noted here many times, the current era has seen the DJIA and the dollar on a see-saw, meaning a falling dollar has corresponded to a rising stock market, and voce versa.

These charts are remarkably self-explanatory:



The implications of this chart are not exactly Bullish, as it targets a long-term bottom between 1,000 and 600.

Turning to the U.S. dollar, our Chartist Friend observed, The monster decade long head & shoulders on the DJIA is well documented, but I have yet to see anyone other than myself make a connection between the DXY mid-90's bottom and the bottom that it is forming today."

 

 

 

 

 

 

Our Chartist Friend from Pittsburgh has noted how a classic 5-point pattern may be repeating, which targets the 86-88 level in the DXY near-term. Longer term, this chart suggests a rally of much greater duration and vigor than most analysts dare extrapolate in the current dollar-Bearish climate.


Oil, inflation and gold

Posted: 26 Nov 2011 08:27 AM PST

The following article is posted at GoldMoney, here.  

A crude awakening

2011-NOV-26

Image001
One of the joys of interviewing some of the best brains in the world of finance and economics is that they alert you to important factors that perhaps you haven't fully considered. This was my experience with Chris Martenson in Madrid last week (the interview will be posted on the GoldMoney website in the coming weeks). He reminds us that the availability and price of oil are central to our economic future.
The basic argument is this: very little can happen in our lives without oil. It is required for mining, agriculture, manufacturing, transport and distribution. Global consumption is rising, and extraction has levelled off. Oil-exporting nations are consuming more, leaving smaller balances for those with oil deficits. The cost of extraction is rising sharply: whereas fifty years ago it cost one barrel of energy to extract a hundred, we are moving towards new fields where the rule is one barrel for three. We face a train-wreck between the increasing rates of global consumption and the declining rates of net exportable production.
We are familiar with this story, but most of us underestimate its importance, so it is worth repeating. The chart below (which is based on statistics from BP's Statistical Review of World Energy 2011) sums up the problem.
Image005
The black line is the five-year moving average of the balance between annual production and consumption, represented by the black columns. The last year of production surplus was 1981, thirty years ago, and since then the world has drawn down on strategic stockpiles and inventory to meet consumption demand, at a trend rate that is now accelerating. The blue columns represent the European balance, which has benefited from North Sea oil and which is now running out. The red columns represent North America and Mexico, whose production has been deteriorating since 1984. But most frightening is the Asia/Pacific deficit, the yellow columns, which has soared over the last twenty years.
The chart clearly shows a picture of an imbalance between production and consumption that cannot continue much longer. The world is now caught between inflexible demand – because oil is vital to our very existence – and declining net production. This explains the oil price, which is the blue line in the second chart (I shall comment on gold in a moment).
Image004
There have been three phases: the first, when OPEC jacked up the price of oil; the second when more expensive non-OPEC fields came on stream putting a cap on prices, and finally the third, where prices have increased seven times so far. It is this third trend, from which there is no apparent escape. The chart is on a logarithmic scale, which means that prices have been rising at an exponential rate since 1998.
With the production/consumption imbalance set to deteriorate further, there can be only one result, and that is considerably higher prices. Based on BP's statistics, which show that the world's most vital commodity has been in a supply deficit for the last thirty years, the logical outcome is a price explosion. And with quantitative easing in the markets there will be extra money to pay higher prices, the consequences for global price inflation do not bear thinking about. On this evidence we can therefore confirm Chris Martenson's analysis.
Living with an energy supply crisis will require a radical change in our lifestyles – downwards. The best financial protection from this event appears to be physical gold, which has tracked the price of oil reasonably well over the years as shown in the second chart, and can be expected to continue to do so. After all, the combination of the most rapid global monetary expansion in peace-time history and soaring oil prices is an inflationary disaster in the making.
Alasdair Macleod
macleod@financeandeconomics.org
www.financeandeconomics.org

Britain's Foreign Office Prepares For Riots In Europe; Sees Euro Collapse "When, Not If"

Posted: 26 Nov 2011 07:31 AM PST

As every major developed economy hits Bass's Keynesian Endgame, the status quo is set to change dramatically. Nowhere is this climax playing out louder than in Europe and the implicit solution of Germany-uber-alles (while seemingly inevitable though nevertheless lengthy in execution) is likely to not sit well with many of the EMU nations. To wit, The Telegraph today reports that Britain's Foreign Office is advising its overseas embassies to draw up plans to help expats should the collapse of the Euro turn explosive. Almost incredibly, a senior minister has revealed that Britain is now planning on the basis that a euro collapse is matter of time.

The Telegraph: Prepare for riots in euro collapse, Foreign Office warns

British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.

 

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.

 

Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.

 

The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.

 

A senior minister has now revealed the extent of the Government's concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.

 

"It's in our interests that they keep playing for time because that gives us more time to prepare," the minister told the Daily Telegraph.

 

Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest.

 

Greece has seen several outbreaks of civil disorder as its government struggles with its huge debts. British officials think similar scenes cannot be ruled out in other nations if the euro collapses.

 

Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash.

 

Fuelling the fears of financial markets for the euro, reports in Madrid yesterday suggested that the new Popular Party government could seek a bail-out from either the European Union rescue fund or the International Monetary Fund.

 

There are also growing fears for Italy, whose new government was forced to pay record interest rates on new bonds issued yesterday.

 

The yield on new six-month loans was 6.5 per cent, nearly double last month's rate. And the yield on outstanding two-year loans was 7.8 per cent, well above the level considered unsustainable.

 

Italy's new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.

 

The Italian government yesterday said that in talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Prime Minister Mario Monti had agreed that an Italian collapse "would inevitably be the end of the euro."

 

The EU treaties that created the euro and set its membership rules contain no provision for members to leave, meaning any break-up would be disorderly and potentially chaotic.

 

If eurozone governments defaulted on their debts, the European banks that hold many of their bonds would risk collapse.

 

Some analysts say the shock waves of such an event would risk the collapse of the entire financial system, leaving banks unable to return money to retail depositors and destroying companies dependent on bank credit.

 

The Financial Services Authority this week issued a public warning to British banks to bolster their contingency plans for the break-up of the single currency.

 

Some economists believe that at worst, the outright collapse of the euro could reduce GDP in its member-states by up to half and trigger mass unemployment.

 

Analysts at UBS, an investment bank earlier this year warned that the most extreme consequences of a break-up include risks to basic property rights and the threat of civil disorder.

 

"When the unemployment consequences are factored in, it is virtually impossible to consider a break-up scenario without some serious social consequences," UBS said.

Britain's Foreign Office Prepares For Riots In Europe. Sees Euro Collapse "When, Not If"

Posted: 26 Nov 2011 07:31 AM PST


As every major developed economy hits Bass's Keynesian Endgame, the status quo is set to change dramatically. Nowhere is this climax playing out louder than in Europe and the implicit solution of Germany-uber-alles (while seemingly inevitable though nevertheless lengthy in execution) is likely to not sit well with many of the EMU nations. To wit, The Telegraph today reports that Britain's Foreign Office is advising its overseas embassies to draw up plans to help expats should the collapse of the Euro turn explosive. Almost incredibly, a senior minister has revealed that Britain is now planning on the basis that a euro collapse is matter of time.

The Telegraph: Prepare for riots in euro collapse, Foreign Office warns

British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.

 

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.

 

Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.

 

The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.

 

A senior minister has now revealed the extent of the Government's concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.

 

"It's in our interests that they keep playing for time because that gives us more time to prepare," the minister told the Daily Telegraph.

 

Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest.

 

Greece has seen several outbreaks of civil disorder as its government struggles with its huge debts. British officials think similar scenes cannot be ruled out in other nations if the euro collapses.

 

Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash.

 

Fuelling the fears of financial markets for the euro, reports in Madrid yesterday suggested that the new Popular Party government could seek a bail-out from either the European Union rescue fund or the International Monetary Fund.

 

There are also growing fears for Italy, whose new government was forced to pay record interest rates on new bonds issued yesterday.

 

The yield on new six-month loans was 6.5 per cent, nearly double last month's rate. And the yield on outstanding two-year loans was 7.8 per cent, well above the level considered unsustainable.

 

Italy's new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.

 

The Italian government yesterday said that in talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Prime Minister Mario Monti had agreed that an Italian collapse "would inevitably be the end of the euro."

 

The EU treaties that created the euro and set its membership rules contain no provision for members to leave, meaning any break-up would be disorderly and potentially chaotic.

 

If eurozone governments defaulted on their debts, the European banks that hold many of their bonds would risk collapse.

 

Some analysts say the shock waves of such an event would risk the collapse of the entire financial system, leaving banks unable to return money to retail depositors and destroying companies dependent on bank credit.

 

The Financial Services Authority this week issued a public warning to British banks to bolster their contingency plans for the break-up of the single currency.

 

Some economists believe that at worst, the outright collapse of the euro could reduce GDP in its member-states by up to half and trigger mass unemployment.

 

Analysts at UBS, an investment bank earlier this year warned that the most extreme consequences of a break-up include risks to basic property rights and the threat of civil disorder.

 

"When the unemployment consequences are factored in, it is virtually impossible to consider a break-up scenario without some serious social consequences," UBS said.

Japan Stock Market Meltdown, Screaming From the Rooftops

Posted: 26 Nov 2011 04:33 AM PST

I promise that for now, this is the last time I will comment on the Japanese stock market. I only feel the need to scream from the rooftops on this one because I am not seeing anyone else commenting on it, and I believe it is HUGELY important. The third (?) largest economy in the world is demonstrating conditions ripe for a stock market meltdown.


munKNEE.com?s Most Read Articles Week-ending November 26th, 2011

Posted: 26 Nov 2011 04:13 AM PST

You probably don’t have enough time during the past week*much to surf the internet in search of informative and well-written articles on the health of the economies of the U.S., Canada and Europe; the on-going development of the world’s financial crisis and the various investment opportunities that present themselves related to commodities (gold and silver in particular) and the stock market – but don’t worry! – I have done it for you. I read hundreds of articles each day and post “edited excerpt”*versions of the most informative on www.munKNEE.com – Your Key to Making Money. Below are introductory paragraphs and links to the*most read articles*for the week ending November 26th, 2011. [INDENT]Why wait until the end of the week to read the next summary. Sign up here to receive every one of the select edited excerpt summaries the moment they are posted on munKNEE.com [/INDENT]————————&...


Guest Post: Woman Pepper Sprays Shoppers To Get Xbox

Posted: 26 Nov 2011 03:22 AM PST

From Brandon Smith of Alt Market

Woman Pepper Sprays Shoppers To Get Xbox

 

It never fails.  Every Black Friday we get yet another heaping helping of pure unadulterated ignorant mentally deficient bottom feeding fat-saturated sheeple mania.  Every year it gets worse.  And, every holiday season I am faced with the painful question of whether or not these people are actually worth saving.  My answer so far has always been a begrudging "yes".  Many of them have been conditioned by a society on the brink of collapse, not just of economy, but also of conscience.  That doesn't mean, however, that I excuse this kind of behavior.  Frankly, if some mongoloid Wal-Mart shopper tried to pepper spray me in the face for a video game, I would beat them into cranberry sauce and drink some delicious eggnog to celebrate.  Is this a well balanced response?  Probably not.  But then again, they would likely think twice before pulling the same stunt on anyone else.  Actually, in my humble opinion, at least half the population of this country needs a good a smack upside the head.  Seriously......this situation is getting uncomfortably crooked.......

Imagine how these same people might act in the event that they not only get no Xbox, but no food due to financial instability.  Imagine a 200 pound spoiled toddler with an addiction to immediate gratification being told "you are owed nothing".  The response would probably be similar to (or even worse than) a large portion of the American populace as featured in the videos below:

And for more Black Friday despair, check out the rap sheet for Wal-Marts across the country yesterday:

http://news.yahoo.com/battle-black-friday-deals-includes-pepper-spray-sh...

Haynes, Norcini review precious metals' week at King World News

Posted: 26 Nov 2011 02:22 AM PST

10:21a ET Saturday, November 26, 2011

Dear Friend of GATA and Gold (and Silver):

The weekly precious metals review at King World News finds Bill Haynes of CMI Gold and Silver reporting a slow week on the retail side and futures market analyst Dan Norcini predicting more bond monetization in both Europe and the United States. You can listen to the interviews at the King World News Internet site here:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/11/26_...

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


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Golden Phoenix Signs Definitive Agreement to Acquire and Reopen Santa Rosa Gold Mine in Panama

Company Press Release
Monday, September 19, 2011

SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation.

Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher.

Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine.

Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status."

For Golden Phoenix's complete statement, please visit:

http://goldenphoenix.us/press-release/golden-phoenix-signs-definitive-ac...

Jim Rogers: “In A Sudden Crises Gold & Silver May be All People Can Think Of”

Posted: 26 Nov 2011 02:18 AM PST

This too will be a brutal passage

Posted: 26 Nov 2011 02:14 AM PST

"Is everything gonna be all right"?

This is the question Ron Holland raises in a recent article, and of course the only answer is, no one really knows.  "My advice is to legally diversify much of your wealth outside your home country, currency and the political leeches running everything and then live your life."  What else can we do?  We can pay close attention to the big banks and the governments they fund. 

1.  "As a contrarian I believe if the PIIGS return to their national currencies, this could actually benefit both them and those northern European nations remaining in the euro. While a win/win situation for individual nations this would be catastrophic for the banking elites and they seldom lose and why I believe the banks and EU politicians will do their best to keep every nation in the EU."

2.  "If you want to know what will happen in the US, just watch the mega-bank bailouts in Europe and the forced austerity measures on the already bankrupt PIIGS and their citizens, this is our future. Forget what the politicians promise, the financial experts say or the establishment news propaganda as the tide of wealth confiscation will also sweep the United States. The Federal Reserve and central bank cartels have created too much fiat money and the politicians have borrowed too much sovereign debt to buy votes and they will steal your wealth to prop up the governments, banking elites and political establish."

3.  The Super Committee, as expected, has turned out to be a Super Farce.  "Basically nothing will happen in reducing the budget and our debt will be continually downgraded."

4.  Could a Middle East war jack oil prices up to $200 a barrel?  If Israel gets its way, there will be war against Iran.  Oil prices could soar.  A revolution in Egypt could cause further havoc in the Middle East.

5.  Governments will crack down hard on dissenters, as witnessed in Egypt and the United States. Police are no longer "peace officers."  They are fast becoming militarized - even in the schools.  Law and order will be reduced to obey or else. 

6.  "If the firewall around the sovereign debt of Italy fails then the entire continent will likely be thrown into a prolonged recession and debt crisis as rising interest rates and falling bond prices jump the Atlantic to the final western redoubt of stable government bonds, the United States. This is what everyone fears most, no place of safety in the West."

7.  Was the MF Global Collapse "a deliberate attack against those making money speculating against the dollar and favoring gold?"  As Lawrence Lepard wrote recently,
Personally, I have $90,000 at MF Global and I would like to have my honestly earned money returned. Unfortunately, the odds of that happening any time soon seem slim. In part because when MF Global entered bankruptcy the judge appointed a Trustee whose law firm has done substantial work for JP Morgan, a deeply interested party. We will probably never find out what happened here. . . . 
I, for one, do not accept that Jon Corzine is stupid enough to lever up MF Global 40:1 and use the proceeds and customer money to bet on European sovereign debt. This was a hit, pure and simple. That is why there is no resolution to the problem.
And why a "hit"?  Simple: To punish commodities speculators for betting against government debt and fiat money.

So, how in the world can we wake up feeling optimistic about the future?  We can't.  That's asking too much.  The government parasite is too big and powerful.  And the government is imploding, financially.

Holland: "My answer is to quit worrying, take sound preparations and then get on with your life. Every generation and nation have had their trials and tribulations, success and failures and although today looks eerily like the 1930's, this too will pass."

True.  But it will be a brutal passage for many.

Crowds Greet Venezuela's Gold as it Begins Trickling Home

Posted: 26 Nov 2011 01:41 AM PST

¤ Yesterday in Gold and Silver The gold price didn't do much of anything until shortly after 1:00 p.m. Hong Kong time early in their Friday afternoon. Then a seller of sorts showed up...and minutes before 9:00 a.m. in London, gold got hit...and by 9:30 local time, the low was in for the day. From there, the gold price meandered until shortly after the Comex open. Then a rally of some substance began. This lasted until the gold price got up to the $1,700 spot mark...and then a not-for-profit seller sold it down about twenty bucks into the close of Comex trading. Gold, which was in positive territory by 10:30 a.m...closed down $14.50 on the day at $1,680.30 spot. The high tick was $1,699.00 spot. Gross volume was very heavy...and a lot of it was the last of the roll-overs of the December contract. Silver' price pattern was very similar to gold's. The big spike up at 9:00 a.m. in New York saw silver jump more than 60 cents in just a few minutes, before a willing...


This Past Week in Gold

Posted: 26 Nov 2011 01:17 AM PST

Summary: Long term - on major buy signal. Short term - on sell signals. We are currently 100% invested on the short side of the markets. Read More...



Disappointing Year for Gold and Silver

Posted: 25 Nov 2011 10:08 PM PST

2011 is very soon to become a disappointment. U.S. dollar was popularly forecast to be zero by now. As is readily evident in the chart, a second possibility existed. Why did the dollar not go to zero? Well first, that was a ridiculous expectation. Secondly, that forecast was doomed to failure because it rapidly became the consensus forecast.


Jim Rogers: Owning silver means you profit whether the economy tanks or not

Posted: 25 Nov 2011 08:00 PM PST

Buying Silver is a no brainer, And why not? Considering that governments are printing money, silver will prove to be a very good bet.


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