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• Michael Hudson: Some Modest Proposals for Reforming the U.S. Financial and Tax System
• Margin hikes again at CME/Gold and silver rebuff attacks/Big lawsuit filed against banks on MFGlobal scandal
• Ford Library Confirms Fed Letter Tying Germany to Gold Price Suppression
• Don't Invest, Gamble!
• Signs Of The Future: Developed Countries Vs. Emerging Countries
• The Best Gold Storage Ideas Youve Never Considered
• Dont Sweat the Correction in Gold
• The Demonisation of Gold 1933-1980
• The Myth Of The New American Gold Standard
• By the Numbers for the Week Ending November 18
• Tremendous Manipulation of Both Gold & Silver
• Silver to Surpass $50 in 2012
• Gold & Silver Dip Should Be Short Lived
• A World on the Brink
• What 2011 Gold Price Correction?
• BlackRock Debuts International Preferred Stock ETF
• Friday ETF Roundup: DBB Gains, VXX Falls On Market Strength
• Ron Struthers: Timing the Gold Market
• The Art Of Valuing A Gold Mining Company Like Barrick Gold
• Political Solutions to Economic Problems
• The Coming European Superstate That Germany Plans To Cram Down The Throats Of The Rest Of Europe
• A shocking take on the MF Global scandal
• Don't Sweat The Correction In Gold
• Precious Metals Update: Germany's Gold Hoard And The Mark-Up Epiphany
• This China gold story could literally change your life
• Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Almost 4% and 7% on the Week

Michael Hudson: Some Modest Proposals for Reforming the U.S. Financial and Tax System Posted: 19 Nov 2011 04:59 AM PST By Michael Hudson, cross-posted from New Economic Perspectives. On November 3, 2011, Alan Minsky interviewed me on KPFK's program, "Building a Powerful Movement in the United States" in preparation for an Occupy L.A. teach-in. To clarify my points I have edited and expanded my answers from the interview transcript. Alan Minsky: I am joined now by Michael Hudson. He is a distinguished research professor of economics at the University of Missouri-Kansas City, and also is president of the Institute for the Study of Long Term Economic Trends. Welcome to the show, Michael. Michael Hudson: Thank you very much. Alan Minsky: Michael Hudson is scheduled to address Occupy L.A. as part of a teach-in that includes William Black and Robert Scheer, who will be moderating the panel that Michael will be on this weekend. Michael, I'm familiar with your work and I know that you are a big-picture economic thinker. This is definitely a movement that is asking the big questions about how the global economy and the national economy should be re-organized. What would you say to the movement at large about how best to organize a high-tech modern industrial economy in a way that would produce more social and economic justice? America is being radicalized by coming to realize how radical Wall Street's power grab is Michael Hudson: The Occupy Wall Street movement has many similarities with what used to be called the Great Awakening periods in America. Such periods always begin by realizing how serious the problem is. So diagnosis is the most important tactic. Diagnosing the problem mobilizes power for a solution. Otherwise, solutions will seem to come out of thin air and people won't understand why they are needed, or even the problems that solutions are intended to cure. The basic problem today is that nearly everyone is in debt. This is the problem in Europe too. There are Occupy Berlin meetings, the Greek and Icelandic protest, Spain's "Indignant" demonstrations and similar ones throughout the world. When debts reach today's proportions, a basic economic principle is at work: Debts that can't be paid; won't be. The question is, just how are they not going to be paid? [Cf. Leviticus 25. --lambert] People with student loans are not permitted to declare bankruptcy to get a fresh start. The government or collection agencies dock their salaries and go after whatever property they have. Many people's revenue over and above basic needs is earmarked to pay the bankers. Typical American wage earners pay about 40 percent of their wages on housing whose price is bid up by easy mortgage credit, and another 10 to 15 percent for credit cards and other debt service. FICA takes over 13 percent, and federal, local and sales taxes another 15 percent or so. All this leaves only about a quarter of many peoples' paychecks available for spending on goods and services. This is what is causing today's debt deflation. And Wall Street is supporting it, because it extracts income from the bottom 99% to pay the top 1%. Half a century ago most economists imagined that the problem would be people saving too much as they got richer. Saving meant non-spending. But the problem has turned out to be just the opposite: debt. Overall salaries have not risen in decades, so many people have borrowed just to break even. Instead of an era of free choice, very little of their income is available for discretionary spending. It is earmarked to pay the financial, insurance and real estate sectors, not the "real" production and consumption economy. And now repayment time has arrived. People are squeezed. So when America's saving rate recently rose from zero to 3 percent of national income, it takes the form of people paying down the debts. Many people thought that the way to get rich faster was to borrow money to buy homes and stocks they expected to rise in price. But this has left the economy financially strapped. People are feeling depressed. The tendency is to blame themselves. I think that the Occupy Wall Street movement, at least here in New York, is like what has occurred in Greece and also in the Arab Spring. People are coming together, and at first they may simply watch what's going on. Onlookers may come by to see what it's all about. But then they think, "Wait a minute! Other people are having the same problem I'm having. Maybe it is not really my fault." So they begin to see that all these other people who have a similar problem in not being able to pay their debts, they realize that they have been financially crippled by the banks. It is not that they have done something wrong or are sore losers, as Herman Cain says. Something radically wrong with the system. Fifty years ago an old socialist told me that revolutions happen when people just get tired of being afraid. In today's case the revolution may grow nearer when people get over being depressed and stop blaming themselves. They come to think that we are all in this together – and if this is the case, there must be something wrong with the way the economy is organized. Gradually, observers of Occupy Wall Street begin to feel stronger. There is positive peer pressure to reinforce their self-confidence. What they intuitively feel is that the Reagan-Clinton-Bush-Obama presidencies have squeezed their lives. The economy has become untracked. What's basically wrong is that the financial system is running the government. For years, Republicans and Democrats both have said that a strong government, careful regulation and progressive taxation is the road to serfdom. The politicians and neoliberal economists who write their patter talk say, "Let's take planning out of the hands of government and put it in the 'free market.'" But every market is planned by someone or other. If governments step aside, then planning passes into the hands of the bankers, because of their key role in allocating credit. The problem is that they have not created credit to finance industrial investment and employment. They have lent for speculation on asset price inflation using debt leveraging to bid up housing prices, stock and bond prices, and foreign exchange rates. They have convinced borrowers that they can get rich on rising housing prices. But this merely makes new homebuyers go deeper into debt to buy a home. And when banks say that rising stock and bond prices are good for the economy, this price rise lowers the dividend or interest yield. This means that pension funds and individuals have to save much more for retirement. Instead of improving their life, it makes them work harder and borrow more just to stay in place. The banking system's alternative to "the road to serfdom" thus turns out to be a road to debt peonage. This financial engineering turns out to be worse than government planning. The banks have taken over the Federal Reserve and Treasury and put their lobbyists in charge – men such as Tim Geithner and the others with ties to Rubinomics dating from the Clinton administration, and especially to Goldman Sachs and other giant Wall Street firms. So the first thing to realize is something that is characteristic of all great reform movements. Voters are not yet supporting a radical position to restructure the whole system. But at least they are coming to see that small marginal reforms won't work, or are simply trick promises, like President Obama's promise that banks would renegotiate mortgages for homes in negative equity as part of the quid pro quo for the bailouts they received from Treasury Secretary Geithner. There's been no quid pro quo, merely talk. People see that law enforcement is missing when it comes to the banks and Wall Street. So simply restoring the criminal justice system would be progress. It used to be that if you ran a fraud, if you cheated people, if you lied on your income tax and falsified statistics, then you would be sent to jail. But the Obama administration has appointed Eric Holder to represent Wall Street. He has not thrown any bankers in jail, recognizing that they are the major campaign contributors of the party, after all. What is easiest for most people to accept is the idea of restoring the way the economy used to be more in balance – back when people earned income by being productive rather than getting rich by transferring other peoples' savings and public giveaways into their own pockets. But what I sensed in New York was anger not only at this economic problem, but the fact that the political system is broken. There is no one to vote for as an alternative to pro-bank candidates. So what began as anger has become a gathering awareness that Mr. Obama was simply fooling voters instead of leading the change he promised. That's what politicians do, of course. But people hoped that he might be different. That was the gullibility he played on. He has turned into the nightmare they thought they were voting against. Moving to the right of the Republicans, he started his administration by appointing the Simpson-Bowles Commission staffed by opponents of Social Security. He recently followed that up by appointing the Congressional Super-committee of Twelve to come out with an even more anti-Social Security, anti-Medicaid and anti-minority position that the Republicans could get away with. If they would have tried to pass such a right-wing policy, the Democratic Congress would have refused to pass it. But they don't know how to deal with a Democratic president who appoints Wall Street lobbyists to his cabinet and acts like Margaret Thatcher saying that There Is No Alternative (TINA) to making Social Security recipients, labor and minorities pay for Wall Street's bad gambles and bank losses. He has helped Wall Street capture the government – on behalf of the 1%. The man whom Mr. Obama asked to be his mentor when he joined the Senate was Joe Lieberman. He evidently gave Obama expert advice about how to raise funds from the financial class by delivering his liberal constituency to his Wall Street campaign contributors. So the problem is not that President Obama is well meaning but inept – an idealist who just can't fight the vested interests and insiders. He's thrown in his lot with them. In fact, he really seems to believe the right-wing, pro-Wall Street ideology – that the economy can't function without a financial system that guarantees "savers" (the top 1%) against loss, even when the bottom 99% have to pay more and more. And on a personal level, Mr. Obama knows that his fund raising comes mainly from Wall Street, and the only way to get this money is to sell out his constituency. You've got to give him enough credit to recognize this obvious fact. The upshot is that we now have a political nightmare. Yet Mr. Obama still seems to be the best that the Democrats can offer! This is why I think the protestors are saying they are not going to let the Democrats jump in front of the parade to try and mobilize support for their party. Like the Irish say: "Fool me once, shame on you. Fool me twice, shame on me." They realize that the financial system is broken and that neither party is trying to do much about it. So the political system has to be changed as well as the economic system. Suppose you were going to design a society from scratch. Would you create what we have now? Or would you start, for instance, by reforming the most egregious distortions of campaign finance? As matters stand, Goldman Sachs has been able to buy the right to name who is going to be Treasury Secretary. They selected Geithner, who gave them $29 billion from A.I.G. just before he was appointed. It's like that all down the line – in both parties. Every Democratic congressional committee chairman has to pay to the Party a $150,000 to buy the chairmanship. This means that the campaign donors get to determine who gets committee chairmanships. This is oligarchy, not democracy. So the system is geared to favor whoever can grab the most money. Wall Street does it by financial siphoning and asset stripping. Politicians do it by getting money from the beneficiaries – the 1%. Once people realize that they're being screwed, that's a pre-revolutionary situation. It's a situation where they can get a lot of sympathy and support, precisely by not doing what The New York Times and the other papers say they should do: come up with some neat solutions. They don't have to propose a solution because right now there isn't one – without changing the system with many, many changes. So many that it's like a new Constitution. Politics as well as the economy need to be restructured. What's developing now is how to think about the economic and political problems that are bothering people. It is not radical to realize that the economy isn't working. That is the first stage to realizing that a real alternative is needed. We've been under a radical right-wing attack – and need to respond in kind. The next half-year probably will be spent trying to spell out what the best structure would be. There is no way to clean up the mess that the Democratic Party has become since politics moved into Wall Street's pockets. The Republicans also have become a party of lobbyists. So it looks like there is no solution within the existent system. This is a revolutionary, radical situation. The longer that the OWS groups can spend on diagnosing the problem and explaining how far wrong the system has gone, the longer the demonstrators can gain support by showing that they share the feelings everybody has these days – a feeling of being victimized. This is what is creating a raw material that has to potential to flower into political activism, perhaps by spring or summer next year. The most important message is that all this impoverishment and indebtedness is unnecessary. There is no inherent economic reason for things to be this way. It is not really the way that "markets" need to work. There are many kinds of markets, with many different sets of rules. So the important task is to explain to people how many possibilities there are to make things better. And of course, this is what frightens politicians, Wall Street lobbyists and the other members of the pro-oligarchic army of financial raiders. Alan Minsky: Well, let me ask you this – and of course, it is something of an intellectual speculative game. Let's say that it's January 2013, and the radical progressive candidate X, Dennis Kucinich or Bernie Sanders, is miraculously elected president, and Michael Hudson is the chief economic advisor. What would you do, given the opportunity with a favorable congress, to transform the American economy in ways that would produce policies you think would at least start to help break the grip that the financial sector has had in devastating the economy in terms of its performance for average households? Restore America's past prosperity and rescue the future from the financial grabbers Michael Hudson: There are two stages to any kind of a transformation. The first stage is simply to start re-applying the laws and the taxes that the Bush and Obama administrations have stopped applying. You don't want Wall Street to be able to put its industry lobbyists in charge of making policy. So the first task is to get rid of Geithner, Holder and the similar pro-financial administrators whom Obama has appointed to his cabinet and in key regulatory positions. This kind of clean-up requires election reform – and that requires a reversal of the Supreme Court's recent Citizens United ruling that enables a financial oligarchy to lock in its control of American politics. One of the first things that is needed – and only a President could do it – would be to demand a new Supreme Court. This is what Roosevelt threatened, and it worked. You make them an offer they can't refuse. If this can be done only by expanding the number of court justices, then you nominate ones who are not radicals on the right – judges who will reverse the 19th-century ruling that corporations are the same as people and indeed have even more rights (and certainly more campaign money) than people have. You then move to clean up the corruption of the legal system that has protected financial crooks instead of sending them to jail. Financial fraud has effectively been decriminalized, at least by Wall Street's largest campaign contributors. But this is really Bill Black's area. I'm only going to talk about financial and tax reforms here, because they are the easiest to understand and ultimately the most immediate task. Prevent monopoly price gouging. Bring bank charges in line with the real cost of doing business. What is needed today is more than just going back to the past ideals. After all, the good old class warfare was not so rosy either. But at least the Progressive Era had a program to subordinate finance to serve industry and the rest of the economy. The problem is that its reformers never really had a chance to carry out the ideas that classical economists outlined. The classical idea of a free market economy was radical in its way – precisely by being natural and thus getting rid of unnatural warping by special privileges for absentee landlords and banks. This led logically to socialism, which is why the history of economic thought has been dropped – indeed, excluded – from today's academic curriculum. What is needed is to complete the direction of change that World War I interrupted and that the Cold War further untracked. After 1945 you didn't hear anything any more about what John Maynard Keynes called for at the end of his General Theory in 1936: "euthanasia of the rentier." But this was the great fight for many centuries of European reform, and it even was the path along which industrial capitalism was expected to evolve. So let me begin with what was discussed back in the 1930s, trying to recover the Progressive Era reforms. Setting up a more fair banking and financial system requires changing the tax favoritism as well, which I will discuss below. There are a number of good proposals for reform. One of the easiest and least radical is set up a public option for banking. Instead of relying on Bank of America or Citibank for credit cards, the government would set up a bank and offer credit cards, check clearing and bank transfers at cost. The idea throughout the nineteenth century was to create this kind of public option. There was a Post Office bank, and that could still be elaborated to provide banking services at cost or at a subsidized price. After all, in Russia and Japan the post office banks are the largest of all! The logic for a public banking option is the same as for governments providing free roads: The aim is to minimize the cost of living and doing business. On my website, michael-hudson.com, I have posted an article just published in the American Journal of Economics and Sociology on Simon Patten. He was the first professor of economics at the Wharton Business School. He spelled out the logic of public infrastructure as a "fourth" factor of production (alongside, labor, capital and land). Its productivity is to be measured not by how much profit it makes, but by how much it lowers the economy's price structure. Providing a public option would limit the ability of banks to charge monopoly prices for credit cards and loans. It also would not engage in the kind of gambling that has made today's financial system so unstable and put depositors' money at risk. Ideally, I would like to see banks act more like the old savings banks and S&Ls. In fact, the most radical regulatory proposal I would like to see is the Chicago Plan promoted in the 1930s by the free marketer Herbert Simon. This is what Dennis Kucinich recently proposed in his National Emergency Employment Defense Act of 2011 (NEED). This may seem radical at first glance, but how else are you going to stop the banks from their mad computerized gambling, political lobbying and creating credit for corporate raiders to borrow and pay their financial backers by emptying out pension funds and cutting back long-term investment, research and development? The guiding idea is to take away the banks' privilege of creating credit electronically on their computer keyboards. You make banks do what textbooks say they are supposed to do: take deposits and lend them out in a productive way. If there are not enough deposits in the economy, the Treasury can create money on its own computer keyboards and supply it to the banks to lend out. But you would rewrite the banking laws so that normal banks are not able to gamble or play the computerized speculative games they are playing today. The obvious way to do this is to reinstate the Glass-Steagall Act so that they can't gamble with insured deposits. This way, speculators would bear the burden if they lost, not be in a position to demand "taxpayer liability" by threatening to collapse the normal vanilla banking system. Abolishing Glass-Steagall opened the way for Wall Street to organize a protection racket by mixing up peoples' deposits with bad gambles and with the growth of debts way beyond the ability to be paid. To sum up, the idea is to shape markets so as to steer the banks to lend for actual capital formation and to finance home ownership without credit inflation that simply bids up prices for homes as well as for other real estate, stocks, and bonds. Tax reform needs to back up and reinforce financial reform Today's economic problem is systemic. This is what makes any solution so inherently radical. In changing part of the economic system, you have to adjust everything, just as when a doctor operates on a human body. Financial reform requires tax reform, because much of the financial problem stems from the tax shift off real estate and finance onto labor and industry. Taxes are the business of Congress, not the President or his advisors, but I assume that your question really concerns what I think the economy needs. The most obvious fiscal task that most people understand – and support – is to restore the progressive tax system that existed before 1980, and especially before the Clinton and Bush tax cuts. It used to be that the rich paid taxes. Now they don't. But the key isn't just income-tax rates as such. What needs to be recognized is the kind of taxes that should be levied – or how to shift them back off labor onto property where they were before the 1980s. You need to restore the land taxes to collect the "free lunch" that is not really "free" if it is pledged to pay the banks in the form of mortgage interest. Over the past few decades the tax system has been warped more and more by bank lobbyists to promote debt financing. Debt is their "product," after all. As matters now stand, earnings and dividends on equity financing must pay much higher tax rates than cash flow financed with debt. This distortion needs to be reversed. It not only taxes the top 1% at a much lower rate than the bottom 99%, but it also encourages them to make money by lending to the bottom 99%. The result is that the bottom 99% have become increasingly indebted to the top 1%. The enormous bank debt attached to real estate does not reflect rising rents as much as it reflects the tax cuts on property. Wall Street lobbyists have backed Congressional leaders who have shifted taxes onto consumers via sales taxes and income taxes, as well as FICA payroll withholding. This ploy treats Social Security and Medicare as "user fees" rather than paying them out of the overall budget – and financed out of progressive taxation on the top 1%. If wage earners pay more in FICA, you can be sure that the wealthy get a tax cut. This anti-progressive tax shift is largely responsible for the richest 1% doubling their share of income. It also has led to the 99% having to pay banks what they used to pay the tax collector. They pay interest rather than taxes. If I were economic advisor, I would explain just how this works – which is what I already try to do on my website. In a nutshell, the tax shifts since World

Margin hikes again at CME/Gold and silver rebuff attacks/Big lawsuit filed against banks on MFGlobal scandal Posted: 19 Nov 2011 12:19 AM PST

Ford Library Confirms Fed Letter Tying Germany to Gold Price Suppression Posted: 18 Nov 2011 11:49 PM PST ¤ Yesterday in Gold and Silver The gold price recovered quickly from it's 9:00 a.m. Hong Kong time downdraft during Friday morning trading...and then began a slow climb that lasted until shortly before lunch in London.  Then the rally developed considerably more legs from there...and about an hour later, a not-for-profit seller showed up and drove the price down about twenty bucks going into the London p.m. gold fix. The rally that followed got smacked before it went vertical...and then the gold price got sold off.  Once Comex trading was over and electronic trading began at 1:30 p.m. Eastern time, the gold price traded sideway going into the close of the New York Access Market. Gold closed at $1,724.80 spot...up $4.90 on the day.  Net volume was reasonably light at 127,000 contracts. Silver also got whacked at 9:00 a.m. in Hong Kong...but by 1:00 p.m. it was on the rise again...and pretty much followed the same price path as gold.  The major difference between gold's price path and silver's, was the big rally that occurred between 12:30 and 1:30 p.m. Eastern time in New York, where silver added almost a dollar to its price within a sixty minute time period. But once electronic trading began, there was a trader there to make sure that part of that nice gain disappeared...and that the silver price didn't close on its high of the day. Silver did close up 70 cents on the day, however...and finished the week at $32.41 spot.  Net volume was a very chunky 40,000 contracts. The dollar high came in early morning trading in the Far East yesterday...and by 7:30 a.m. Eastern time in New York, it had shed about 75 basis point.  From there, a 50 basis point rally began, that ended about 10:20 a.m...and from that point, the dollar traded sideways into the close. The gold price peaked at the exact moment that the dollar hit its nadir for the day.  But once the London gold fix was in just before 10:00 a.m. Eastern time, gold began to rise along with the dollar...and had to be given another smack starting around 10:40 a.m...even though the dollar traded sideways from that point.  The decline in the gold price as the dollar rose between 7:40 a.m. and 10:00 a.m. Eastern looked just too perfect to be free-market price action, as it was an absolutely straight line. The gold stocks struggled to stay in positive territory during the entire New York trading session...and even though the gold price was in positive territory at the close of Comex trading at 1:30 p.m. Eastern time, the stocks faded a bit more going into the close...and the HUI finished down 1.39% on the day. Even though the silver price did very well for itself yesterday, the stocks didn't really reflect that...and Nick Laird's Silver Sentiment Index closed down 0.74%. (Click on image to enlarge) The CME Daily Delivery Report showed that only nine gold contracts were posted for delivery on Monday. After Thursday's gold price thrashing, both Ted Butler and I felt that there might finally be a decline in the gold holdings over at the GLD ETF.  Well, that didn't materialize, as another 116,729 troy ounces of the yellow metals was deposited.  Unfortunately the same can't be said for SLV...as a very chunky 2,188,948 troy ounces of the metal were withdrawn. The U.S. Mint had another sales report.  It wasn't much, but for gold, it was the biggest sales day so far this month.  They reported selling 4,000 ounces of gold eagles, along with 2,500 one-ounce 24K gold buffaloes...and 25,000 silver eagles.  Month-to-date the mint has sold 17,500 ounces of gold eagles...4,000 one-ounce 24K gold buffaloes...but only 844,000 silver eagles. The Comex-approved depositories took in 619,643 ounces of silver on Thursday...and shipped 635,901 ounces out the door.  The link to that action is here. Yesterday's Commitment of Traders Report [for positions held at the close of Comex trading on Tuesday, November 15th] didn't reveal much.  Ted Butler told me that this Friday's report was basically an extension of last Friday's report...and both should be looked at as one report.  Apparently the CFTC admitted as much in a footnote on the report...that because of the MF Global fiasco, not everything that should have been reported in the prior week, was...and this report contains all that missing data. Silver's Commercial net short position rose by 1,581 contracts or 7.9 million ounces...and gold's Commercial net short position rose by 7,228 contracts...722,800 ounces of gold.  As per the CFTC's comments, most of this activity was the result of what happened in the prior week's trading activity...and not the current's week's activity.  Ted said that most of the deterioration was the result of the small Commercial traders selling long positions for a profit. But the COT report from yesterday really doesn't matter any more, as the serious price activity of the last three weeks occurred on Wednesday and Thursday of this past week, as both precious metals got slammed...and the timing was no accident.  As I said in this space yesterday, they waited until after the Tuesday cut-off for this Friday's COT report before they did the dirty.  This sell-off pattern doesn't happen like this all the time, but it happens this way more often than not. Since November 20th falls on a weekend this month, The Central Bank of the Russian Federation did what it normally does in this circumstance, it updated its website for October on Friday.  They reported purchasing 600,000 ounces of gold during that month...and they have two more months left to go. As of the end of October, their total gold reserves totaled 28.0 million ounces.  They announced early last week that they were going to be buying 100 tonnes of gold in total this year...and to reach that amount, they have to buy an additional 600,000 ounces during the last two months of 2011.  I have no doubt that they'll keep their word. Here's Nick Laird's most excellent graph for your viewing pleasure. I love Saturday's column the best, because after I hit the 'send' button, it's the only time all week that my in-box is empty.  There are lots of important stories here, so I hope you have the time this weekend to go through them. Email Print Each passing day gets us closer to the black hole that's about to swallow up the world's financial and monetary system...and we're circling the event horizon at an ever-faster rate. Russia's Central Bank adds 600,000 ounces of gold to its reserves in October. GLD ETF adds another 116,729 troy ounces of gold on Friday. More price suppression on eve of option expiry, Embry tells King World News. ¤ Critical Reads Subscribe Seven banks sued over MF Global collapse Seven banks that helped MF Global Holdings Ltd sell bonds were sued by pension funds who said the bonds' offering prospectuses concealed problems that led to the futures brokerage's collapse. The lawsuit was filed Friday afternoon in Manhattan federal court against units of Bank of America Corp, Citigroup Inc, Deutsche Bank AG, Goldman Sachs Group Inc, Jefferies Group Inc, JPMorgan Chase & Co and Royal Bank of Scotland Group Plc. Other defendants include several officials associated with MF Global, including former Chief Executive Jon Corzine. This short Reuters story was filed late last night in New York...and is Roy Stephens first offering of the day.  The link is here. View full GSD edition US Congress rules that pizza is a vegetable Pizza can be classed as a vegetable – at least according to a decision made by the US Congress. Who knew? American lawmakers have ruled that the amount of tomato paste in pizza sauce means that pizzas can be counted as a vegetable. The bizarre move, which was decided in a vote on the annual spending bill for the Department of Agriculture, happened for purely political reasons. You can't make this stuff up...and I'm sure that the U.S. cartoonists will have a field day with this one.  This story was posted over at the Irish website thejournal.ie yesterday...and I thank reader Matthew Nel for tracking it down on our behalf.  The link is here. View full GSD edition Pentagon successfully tests hypersonic flying bomb The Pentagon on Thursday held a successful test flight of a flying bomb that travels faster than the speed of sound and will give military planners the ability to strike targets anywhere in the world in less than a hour. Launched by rocket from Hawaii at 1130 GMT, the "Advanced Hypersonic Weapon," or AHW, glided through the upper atmosphere over the Pacific "at hypersonic speed" before hitting its target on the Kwajalein atoll in the Marshall Islands, a Pentagon statement said. Kwajalein is about 2,500 miles (4,000 kilometers) southwest of Hawaii. The Pentagon did not say what top speeds were reached by the vehicle, which unlike a ballistic missile is maneuverable. Scientists classify hypersonic speeds as those that exceed Mach 5 -- or five times the speed of sound -- 3,728 miles [6,000 kilometers] an hour. There's no hiding from The Empire now.  This AFP story was picked up by google.com...and I thank reader Scott Pluschau for digging it up for us.  The link is here. View full GSD edition Jim Rickards Times Two Jim has been everywhere these days...and of course the subject of his new book Currency Wars: The Making of the Next Global Crisis always comes up.  But what I've noticed from these two interviews posted below, is that they are not only different in style, they also differ somewhat in substance, as Jim goes off on the odd tangent here and there...and discusses one thing in one interview...and something totally different in another, although the main thrust of his comments are basically the same. As you know, I've been an unabashed Rickards fan from the first time I heard him in an interview several years back.  I posted his audio interview with Eric King earlier this week...but here is again in two separate interviews.  The first one is an mp3 file from an interview he did with Bloomberg on Thursday.  It runs for a good twenty minutes...and I thank reader John Lawless for sending it my way...and the link to that is here. The second one is one he did on the program Capital Account over at Russia Today...and it looks like it was done on Thursday as well.  It's a longish full video interview that starts about the 2:20 mark...and runs for just about twenty minutes.  This youtube.com video was sent to me by Matthew Nel...and the link is here. View full GSD edition Eric King Interviews John Mauldin At midnight last night, Eric sent me this audio interview with John Mauldin.  Eric called it "tremendous"...just like he does every interview...but I would think he's pretty close to the mark on this one.  I haven't had the time to listen to it yet but, like you, I'll be listening to it this weekend when I get the time.  The link to this must listen interview is here. View full GSD edition Jim Rickards...just one more time! After posting two interviews of Jim's in this column already, I was somewhat taken aback when Eric King sent me this interview in the wee hours of this morning.  But there's a lot of fresh material in here...and I consider it well worth the listen

Don't Invest, Gamble! Posted: 18 Nov 2011 10:27 PM PST Phoenix Capital Research has a very negative outlook on the near term. Their outlook is similar to my own (my emphasis added): We have been getting MAJOR warning signs of a collapse for months now. No less than the Bank of England, the IMF, and legendary asset management firm Franklin Templeton have warned that we [...]

Signs Of The Future: Developed Countries Vs. Emerging Countries Posted: 18 Nov 2011 09:17 PM PST By John M. Mason: The world goes on. Whereas the news has tended to be dominated by what is happening in Europe, with some attention going to the United States, things are still going on in other parts of the world. For example, "Standard & Poor's has become the third rating agency this year to upgrade Brazil's sovereign debt…" "Brazil's debt fundamentals are already seen by markets as superior to many European countries with spreads on the Latin American country's debt trading tighter than those of many eurozone countries." "The move…emphasizes the growing divergence between the fast-growing large emerging markets, led by China, Brazil, and India, and the advanced economies." Meanwhile, the central banks in emerging markets are buying gold in the largest quantities for forty years. The forty years is important for that refers back to 1971 when President Richard Nixon severed the tie between the United States dollar and gold. "The scale Complete Story »

The Best Gold Storage Ideas Youve Never Considered Posted: 18 Nov 2011 09:00 PM PST

Dont Sweat the Correction in Gold Posted: 18 Nov 2011 05:56 PM PST

The Demonisation of Gold 1933-1980 Posted: 18 Nov 2011 04:45 PM PST The Privateer

The Myth Of The New American Gold Standard Posted: 18 Nov 2011 04:00 PM PST

By the Numbers for the Week Ending November 18 Posted: 18 Nov 2011 01:37 PM PST HOUSTON --  Just below is this week's closing table followed by the CFTC disaggregated commitments of traders (DCOT) recap table for the week ending November 18, 2011. If the images are too small click on them for a larger version. Continued… Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (18:00 ET).   Gold and Silver Disaggregated COT Report (DCOT)   In the DCOT table below a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter.  All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report. (DCOT Table from Friday, November 18, for data as of the close on November 15.  Source CFTC for COT data, Cash Market for gold and silver.

Tremendous Manipulation of Both Gold & Silver Posted: 18 Nov 2011 12:19 PM PST from King World News: With gold trading at $1,725 and silver above $32, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management to get his take on where he sees gold, silver, the US dollar and the mining shares headed. When asked about the Australian Conference, where he was a keynote speaker, and the action in gold and silver, Embry responded, "I just got back from Australia last night and I thought the conference was absolutely outstanding. It was a credit to everyone involved in organizing the event, it was first class. As far as the action in gold, I don't want to be arrogant, but I actually know that we have a big option expiry coming up on Tuesday and this is just business as usual." John Embry continues: Read More @ KingWorldNews.com

Silver to Surpass $50 in 2012 Posted: 18 Nov 2011 12:07 PM PST by Brittany Stepniak, WealthWire.com This past Wednesday night, experts met at the Silver Institute in New York City and speculated on the silver's forecast for the rest of this year through the end of next year. Bullish predictions ensued. Yesterday's sharp price dip may be attributed to the fact that the SGE "announced an immient margin hike" overnight. From Reuters: "The Shanghai Gold Exchange said it will raise margins on silver forwards to 18 percent from 15 percent from Monday if the silver contract hits its daily trade limit on settlement on Friday. The exchange said it would lift daily trade limits on silver forward contracts to 15 percent from 12 percent if the contract hits limit up or down on settlement on Friday." Read More @ WealthWire.com

Gold & Silver Dip Should Be Short Lived Posted: 18 Nov 2011 12:06 PM PST by David Schectman, MilesFranklin.com: I have inserted part 2 of a series of articles on investing in mining shares for our readers who are interested in learning more about them. Eric Angeli is a personal friend and the broker of choice for myself, my son Andy and for my wife Susan. Global Resources, Rick Rule's firm, is a fine company and Eric is a great broker. Personally, I am lightening my mining share portfolio and moving the proceeds into physical gold and silver, but if you are into the shares, read Eric's article. Very informative. Read More @ MilesFranklin.com

A World on the Brink Posted: 18 Nov 2011 12:00 PM PST by Rick Ackerman: [How much longer can Europe and the U.S. postpone the global financial system's collapse? We doubt that the chicanery that has sustained it so far will see us into the New Year. In the essay below, Rick's Picks contributor Erich Simon sees an epiphany coming that could reshape the face of modernity. RA] There is a beginning and end to everything, and I find it interesting that Italy and Greece, two of the oldest, are "winding down" as expressed by their financial dredge. Meanwhile, the countries to the north, whose social thrust is mediated by harsher environments, continue to service existing loans into managed growth and a semblance of balance. The debt game is all about growth into a finite environment. We are witnessing countries at the margin of both demographic and cultural surge beginning to falter. Perhaps this is indictment that nothing can last forever because the universe doesn't allow for that; like immortality, it would never allow for "turnover" or "progress." How many Michelangelos before it's time to move on? Read More @ RickAckerman.com

What 2011 Gold Price Correction? Posted: 18 Nov 2011 11:59 AM PST by Vedran Vuk, Casey Research: Dear Reader, Communism screwed up the world. No, I'm not referring to the politics of the 20th century, but rather the reverberations still felt today – particularly in regard to rising commodity prices and oil. We often think about communism as a local intervention in the economies of Russia, China, and other places, but in reality, it was a worldwide market intervention. Let me explain the problem by discussing economic theory in other examples. When a government artificially lowers prices, the wrong signal and incentives are sent to the market. College education is a good example at present in the US. The government provides relatively cheap state schools and makes education even more affordable with student loans. As a result, some people choose career paths that they otherwise might not. If each student had to pay $40K per year in tuition, I can guarantee that the number of art, sociology, and political science majors would fall through the floor. When tuition is a couple of hundred dollars at the community college or a couple of thousand at the state school, we can afford the luxury of more whimsical degrees with higher degrees of risk. Read More @ CaseyResearch.com

BlackRock Debuts International Preferred Stock ETF Posted: 18 Nov 2011 09:56 AM PST By John Spence: Exchange traded fund providers continue to roll out new products designed to satisfy investors' craving for yield. BlackRock's iShares has launched the iShares S&P International Preferred Stock Index Fund (IPFF). It has an expense ratio of 0.55%. "The fund is the first ETF that offers access to local currency, preferred securities that are offered in developed markets outside the U.S.," BlackRock said in a press release. Preferred shares usually have higher dividends but don't carry voting rights. They also take priority over common stock in a bankruptcy. "Income-seeking investors are starved for yield opportunities, but traditional income sources today are offering historically low yields," said Darek Wojnar, head of iShares product development at BlackRock. "At the same time, it has been challenging for investors to easily tap into potentially attractive income sources beyond their home markets," he said, adding the ETF provides currency diversification away from the U.S. dollar. Preferred Complete Story »

Friday ETF Roundup: DBB Gains, VXX Falls On Market Strength Posted: 18 Nov 2011 09:45 AM PST By Jarred Cummans: Today left investors with little information to chew on going into the weekend. The past week has been dominated by European woes as well as speculation over the U.S. The Congress "Super Committee" has until Wednesday to pass an important budget deficit plan that will aim to trim $1.2 trillion. So far, it would seem that negotiations have gone nowhere and will likely go down to the wire. The last time negotiations nearly ran out of time equities saw harsh losses on multiple days as we endured one of the most volatile months in recent memory. Next week will feature a heavy focus on these important delegations despite the upcoming Thanksgiving holiday. Markets finished relatively flat on the day. The Dow jumped by 25 points while the S&P lost just 0.04%. The Nasdaq did not fare quite as well as that index saw losses just over half a percent. Gold Complete Story »

Ron Struthers: Timing the Gold Market Posted: 18 Nov 2011 09:12 AM PST Source: Brian Sylvester of The Gold Report  (11/18/11) Every investor knows that it's hard to time the market. But Ron Struthers, editor of Struthers' Resource Stock Report and a 25-year investment veteran, has been able to weave his way in and out of the market with aplomb this year. In this exclusive interview with The Gold Report, Struthers tells what he's seeing in his technical analysis that is signaling it's time to buy back in after selling off many gold equities in April. Companies Mentioned: Agnico-Eagle Mines Ltd. – Avino Silver & Gold Mines Ltd. – B2Gold Corp. – Claude Resources Inc. – First Majestic Silver Corp. – Hy Lake Gold Inc. – Kinross Gold Corp. – Levon Resources Ltd. – Pan American Silver Corp. – Paramount Gold and Silver Corp. – Richmont Mines Inc. – Sandspring Resources Ltd. – Silver Standard Resources Inc. The Gold Report: Ron, you said in your report that you're buying back most of the equities you sold in April. Why is it time to get back into the market? Ron Struthers: Most of these stocks have been valued at $1,100/ounce (oz) of gold. They're not pricing the rise in the price of gold at all yet. There's a disconnect or disbelief in the market. Precious metal stocks have corrected way too far, to valuations we have not seen since the 2008 credit crisis. Following that crisis our average yearly return on my precious metal picks was 155% in 2009 and 99% in 2010. I see this opportunity again. TGR: Is that because the market is expecting the price for gold to come down? RS: That is the expectation, of course not among a lot of the goldbugs, myself included. Some see higher prices, but the general view of the mainstream investment community is the gold price is expected to come down. It is seen by them as rising too far, they do not understand what influences the gold market, and they mostly hear that it is another bubble. TGR: Canaccord Research uses a sentiment indicator based on insider trading tracking by INK Research. The sentiment indicator uses a ratio of companies with buy-only transactions from insiders divided by companies with sell-only transactions from insiders over 30-day and 60-day periods. Some recent results from the sentiment indicator look quite positive. RS: Insiders typically know best because they're running the companies, so it's always positive when there is more insider buying. I like the sentiment indicator ratio. A lot of companies have insiders buying and selling, which produces a clouded picture. By using the ratio of buy-only to sell-only, it gives a clearer picture of what insiders are doing. I don't necessarily say they time the market that great, but it's another positive sign that the insiders think the stocks are too cheap. TGR: Are there more insiders buying than selling across the board? RS: That's what that ratio is saying in regard to precious metal stocks: Insiders are buying more aggressively into the market; they see the best place to put their cash is in these companies. TGR: You rely heavily on market charts to time your investment decisions. What charts do you rely on most? RS: I always look at the broad-based market by using the S&P 500. Then look at the PHLX Gold/Silver Sector index (XAU:NASDAQ) and the AMEX Gold Bugs Index (HUI:NYSE). I also track the TSX Venture Exchange, which is a good benchmark for the junior resource market. TGR: What key things are those charts telling you right now? RS: They've all come down a fair bit. The S&P had a nice run from a bounce off support around 1,100 points in early October, but it has pulled back. That market is in a sideways pattern, which is just fine for gold equities. Steep sell offs in the general equity market have often in the past been negative for gold equities, so I watch this and for signs that gold stocks are breaking free from the influence of the general market. The AMEX Gold Bugs Index had a breakout to a new high over 600 points about two months ago. What I've noticed on the AMEX Gold Bugs Index is that the gold stocks have not been going down with the market every time. They've been holding or rising. They're bucking the trend, which is a really positive indicator. For example, at the end of October, the S&P sold off big two days in a row while the AMEX Gold Bugs Index bounced back the second day, completely recovered by the third day and went on to much higher levels from the selloff while the S&P has yet to recover to its previous October high. The Venture Exchange had quite a correction from about 2,400 to 1,350 points. The juniors corrected much further than the senior and midtier golds. In September, the Venture Index was at its high from last year, about 1,750 points, a support level, and then there was a big sell-off in gold at the end of September as the gold price was knocked down about $300/oz with central bank Intervention. The index also took a quick, sharp drop on that sell-off in gold. That really hammered a bottom into that market, down to 1350. Since then, it's rallied up a fair bit, but I'm still looking for about another 200 points. I'd like to see it get over 1,800 to be sure that it's in a new bull move for the juniors. That would be a higher high, above the level where it fell from in September. TGR: Is that what you're anticipating? RS: Yes, but I want to see proof or confirmation that it happens. I want to see a move in that index. That will seal the case that it's going much higher. But if it gets to that 1,800 level and isn't able to go through that, I might take a more conservative stance on the junior market, lighten up a bit, and go more to cash. TGR: What did you notice in April that caused you to start liquidating your portfolio? RS: The biggest influence on my decision to time the selling then was the price of silver. It was having a very strong move. I figured silver wanted to get to that $50/oz mark, which was the old historic high, but would then see a good correction. It moved up so strongly and so fast, so a good correction would be normal. Gold and silver equities had both been strong up to that point, the TSX Venture Index had a 1,000-point rally, the Amex Gold Bugs Index 200 points, so my feeling was silver was going to have a peak in the intermediate term when it reached that $50/oz mark and its correction could be a catalyst for a good correction in both silver and gold stocks. TGR: You noted over the summer that some strength was coming back into the gold price. Why didn't you jump back in then? RS: Actually, we were starting to buy back in during July and August, just not that aggressively. I was looking for a bottom around then, but in hindsight the bottom came later. We've started buying more aggressively these last couple of months. It's always difficult to time the market exactly. TGR: There are a lot of concerns about sovereign debt problems in Greece and Italy. In a Nov. 2 research report you said, "Greece deserves to go bankrupt and will go bankrupt in time along with all of Europe followed by Great Britain and the U.S." That's a bit extreme. Some well-known economists believe that there may not be any bankruptcies necessarily, but there could be 20 years of static growth. RS: Europe is prolonging this in the hopes that the economies will pick up, tax revenues will grow again and things can continue as they always have. The real problem is simply too much debt and the debt problem can't be fixed by adding more debt. The only way to fix that problem is to settle the debt, liquidating to pay down and/or restructure defaulting on some or all of the debt as what happens in a bankruptcy. In the case of Greece, it's not called a bankruptcy, but when debt holders accept pennies on the dollar or, in the Greece case thus far, 50% on your bonds, it is basically a default or like a bankruptcy agreement. At 50%, this is still not enough and will not work; even with rosy projections the Greece debt will be back up to 120% of GDP in a few years. Assuming this agreement goes through, it will default again and more debt will be defaulted on; in the end it will probably work out that bond/debt holders receive closer to $0.20 on the dollar. Call it what you like, I say bankruptcy. This excessive debt problem, either way too much sovereign debt like Greece or too much private debt like we have seen in the U.S.—and a combination of the two—is a problem around the world, including most of Europe, Ireland, Britain, Japan and the U.S. All this debt will be defaulted on within the next several years. The U.S has not resolved the debt problem that came to light in 2008. It has basically moved the bulk to the Fed balance sheet. The U.S. has 50 states and many of them have a larger GDP than Greece and just as bad of a debt problem. Perhaps the U.S. has 25 Greece-like problems yet to deal with, on top of the private sector debt problem and eventually a sovereign debt problem because it will keep piling on $1+ trillion Federal debt a year, as long as the bond market allows it. In other words, it is just like a ticking clock with a too short fuse. TGR: What are some of your favorite companies? RS: With the seniors, I more or less have kept them on my list a long time. I don't trade them much. I like Goldcorp Inc. (G:TSX; GG:NYSE) and Barrick Gold Corp. (ABX:TSX; ABX:NYSE). Goldcorp is one I haven't had on my list for quite a while, but I added Barrick back on last year. Barrick took the hit writing off its hedge book and has some big new mines coming onstream, so I expected cash flows and earnings would rise. Barrick's latest quarter showed that, and the stock now pays over a 1% dividend yield, but like most gold stocks, it has yet to show much of this in the share price. I also like Agnico-Eagle Mines Ltd. (AEM:TSX; AEM:NYSE). In silver, there's Pan American Silver Corp. (PAA:TSX; PAAS: NASDAQ). I Iike First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:Fkft) as more of a senior producer as well. TGR: Earlier this year, Pan American had production guidance of 23–24 million ounces (Moz) of silver. It revised that around the middle of the year to about 22.5 Moz. Nonetheless, its third-quarter profit was $0.49/share or $52.5 million (M). It's getting unprecedented revenue. Is that sustainable? RS: I think so because the silver price has come down and has been in a sideways pattern, so it has really built a base now at higher levels. I think it will be moving higher with just the strong growing demand from the solar industry, and then there is the growing demand as a currency or investment, the poor man's gold. That is obviously going to help all of these producers. What I find with Pan American, and some other more senior stocks, is that they are under-owned. From various analysis I have seen, total investment funds have less than a 1% allocation in precious metals. Once buyers come back into the market, these are among first things the funds are going to buy in the underweight sector. Meaning Pan American is a go-to silver stock that a lot of those funds would buy. TGR: Would you purchase Pan American over Silver Standard Resources Inc. (SSO:TSX; SSRI:NASDAQ)? RS: I would have to compare the two charts, but they're both major silver producers that funds would consider in the silver market. Both have been way oversold compared to action in the silver price. TGR: Some of the senior companies are having record quarters in terms of free cash flow. What do you like about these companies on a long-term basis? RS: With the seniors, I'm always looking for a good pipeline of new projects coming on so there will be growth in gold production. That way there is not only the valuation rise on the price of gold, but increasing production. That's one thing I liked about adding Barrick back on. It has some new mines coming on, like Donlin Creek and Cerro Casale. Kinross Gold Corp. (K:TSX; KGC:NYSE) is another one I have on my list for that reason. It has a few new mines coming onstream, the Tasiast project, Fruta del Norte, Lobo-Marte and Dvoinoye. TGR: Do you think some of the intermediates and the senior producers will merge or suggest takeovers? RS: Yes. I'm expecting to see more activity there. It's getting harder to build and find producing mines. Especially with these valuations, it's much easier just to buy them on the stock market. I think there will be increased merger activity in the next several months. TGR: It's interesting, too, when you look at a company like Agnico-Eagle—its executives Sean Boyd and Ebe Scherkus are not young men anymore. You have to wonder about their long-term appetite for this game at this point. RS: That's a widespread problem in the industry. Not a lot of young people are coming up. There's definitely a shortage of those skill sets, another reason that mergers might make more sense. TGR: What about some intermediate producers on your list, Ron? RS: I have a number there that I like: Richmont Mines Inc. (RIC:TSX; RIC:NYSE.A), B2Gold Corp. (BTO:TSX; BGLPF:OTCQX), and Claude Resources Inc. (CRJ:TSX; CGR:NYSE.A), which is another one that we recently bought back. These are more small-to-intermediate producers, because I think there's better value in the smaller producers. Claude Resources is actually a junior producer in Saskatchewan, where its Seabee mine is located. Its production is pretty good and will be expanding with the Santoy mine within trucking distance. Claude is acquiring the remaining percentage of the Amisk project from its partner, so will have 100% of about 1.5 Moz defined there. In Red Lake, another mine advancing is its Madsen project, which it has been exploring and ramping up, currently up to about 1.2 Moz gold. Madsen was a past-producing mine, which makes it quicker to permit to production; the company should experience a significant bump in production when that comes onstream. That is a ways out yet, but Claude is not even being fully valued on its current mining operation. Its total gold resources in the ground are just being valued at about $70/oz. Investors are really getting one of the other projects, Amisk or Madsen, for nothing. TGR: What about Avino Silver & Gold Mines Ltd. (ASM:TSX.V; ASM: NYSE.A; Gv6: Fkft)? RS: That's one of my favorite silver juniors. It is just starting production. There is typically a boost in stock price when production starts because the company is moving into a phase of cash flow from a long period of no cash flow. I like it for that reason, but it's also undervalued as well. TGR: It's mining the Avino Mine in Durango, Mexico. There is further potential to expand the resource through the Guadalupe deposit, which is part of Avino. Tell us about that. RS: In addition to starting production, I like a company that can increase that production and reserves. Avino Silver & Gold can easily do that at the Avino Mine. The zones at both Guadalupe and San Gonzalo are still open, so they can be expanded along strike and depth. A lot of the other zones on the property have not been drilled that much, so there's room for expansion on practically all the zones there, including the original Avino vein still open at depth. TGR: In some areas, it's getting about 300 grams per ton (g/t) of silver and the recoveries have been around 80%. That's certainly well above average. RS: Both are certainly very good numbers. It's typical of what can be found in Mexico—very rich veins as long as there is good-enough width and Avino has that so we can expect a very profitable mine operation. TGR: What about some junior names that are offering a strong value? RS: One of the recent ones I've picked is Sandspring Resources Ltd. (SSP:TSX.V). Its Toroparu deposit in Guyana has been growing steadily. It's up to 9–10 Moz Indicated and Inferred. That stock's price is between one-half and one-third of its high. TGR: Sandspring has millions of pounds of copper there, too, but the market's not really giving it credit for that. RS: It's not even giving a good value for the gold. When I looked at the company, I said to myself, "Just ignore the copper because it's not getting valued at all for that." Why? It's the same thing with all these stocks that are valued so low. They're just out of favor and not getting the valuation they deserve. It's just market sentiment, not anything specific with Sandspring. TGR: In July, Agnico-Eagle made a foray into the Red Lake Camp by investing $70M in Rubicon Minerals Corp. (RBY:NYSE.A; RMX:TSX). In 2008, Agnico lost out on a bid for Gold Eagle Mines with Goldcorp. Now both senior producers have a presence in the Red Lake camp. Agnico's corporate secretary Greg Laing holds a seat on the board of Hy Lake Gold Inc. (HYL:CNSX; HYK:Fkft), which is also in Red Lake. But Hy Lake has a joint venture with Goldcorp. What do you think about the prospects for Hy Lake given its relationship with both producers? RS: I think that's ideal. That is really what a junior needs to do. Down the road, when it has proven out the reserves, it wants to have competition to buy it out. Agnico-Eagle and Goldcorp are the two gorillas in that neck of the woods. They are the two you want to have fighting over your stock when you discover a mine. It's an excellent move. TGR: What do you make of the Rowan property? RS: It's excellent. There were three past-producing mines near Rowan and the adjacent properties, so we know there's still gold there. And it is finding robust gold grades in the drill results all the time. It's just a matter of time to do enough drilling there before it proves up a mineable deposit. TGR: Paramount Gold and Silver Corp. (PZG:NYSE.A; PZG:TSX) has a new resource on its Sleeper gold deposit and it's had some good results from the San Miguel project in Mexico. What do you make of it? RS: Those are two excellent projects and I like them both. The Sleeper project still has a lot of room to expand its resource numbers. So does San Miguel. The company has been actively drilling both projects. There should be an updated resource number on San Miguel within a few months. TGR: Sleeper has about 3 Moz outlined. How does that compare to other projects in the area? RS: It compares very well. Although the grade is a bit lower than many, the recoveries are good, up to 89% and with just $1,100/oz gold used in most studies currently, it can be very profitable. It needs to get up to the 3–5 Moz mark, where it is headed to really interest the major producers. The seniors need fairly large mines to have any impact on replacing their reserves. The 3–5 Moz mark is a minimum, but 10 Moz would be ideal. TGR: What do you expect the new results on San Miguel to clock in at? RS: The last time it was calculated around 1.7 Moz; it only updated some of the zones. I understand this next calculation is going to include all of the zones on the property and new discoveries. I'm looking for the number to get up to 4–5 Moz. These new resource calculations that still have plenty of room to grow will soon get the company up in the league of 10 Moz with the two projects. TGR: What's one last investment idea that you could leave our readers with? RS: I like Levon Resources Ltd. (LVN:TSX.V; L09:Fkft; LVNVF:OTC). It's proving up a Penasquito-type target that Goldcorp is mining in Mexico. It's growing very quickly with a current phase 4, 130,000-meter drill program underway; that is a huge drill program. It has about five drills running and it already has over 300 Moz silver Indicated, almost 1 Moz gold and billions of pounds of zinc and lead. Its stock got sold off steeply in this correction, so it's an excellent buying opportunity now. Levon has no need to fi

The Art Of Valuing A Gold Mining Company Like Barrick Gold Posted: 18 Nov 2011 09:08 AM PST By Haakon Pedersen: A different strategy is required to value a mining company as a mine is a finite resource. When the deposits are depleted that mine is finished. This is in contrast to a "traditional" company where you can model the cash flows over an infinite time horizon, e.g. Apple (AAPL) doesn't run out of iPads (ignoring short-term supply disruptions) and can innovate new products if demand weakens. Evaluating a gold mining company can be considered an "art" because its value is highly dependent on the price of gold, which itself produces no cash flows, making it difficult to assign a fair value to it. In this article I explain how we can assign a floor to a mining company's stock and why it is difficult to assign an exact value. Before we do the company valuation let's check to see if the product itself is worth investing in. Gold generally performs Complete Story »

Political Solutions to Economic Problems Posted: 18 Nov 2011 09:00 AM PST Are you tired of seeing European politicians meddle with the value of your share portfolio on a daily basis? Their bickering is unleashing waves of optimism and pessimism around the world. Hedge fund manager Kyle Bass pointed out to the BBC 'you know how screwed up Europe is when you have a German Pope and an Italian central banker.' The poor pope! You've heard all about Europe's economic problems for a while now. What of solutions? Here is our attempt to sum them up for you: This round hole won't fit into its square peg. In other words, they've got it wrong and backwards. Now on to the details. How does changing your political leader change your economic situation? It doesn't. But that's what the Greeks and Italians propose will solve the debt crisis. They've reshuffled their heads of state. The Italians have appointed a cabinet with - get this - not one politician. They didn't vote for a single member of the new government. And you thought Berlusconi ruled inappropriately! But maybe an autocracy is just what the Italians need... after Berlusconi... That's how an optimist could interpret it anyway. Economic Problems Will Catch Up With Politics What's remarkable about the political shenanigans in Europe is that the stock markets buy it. Literally and figuratively. That's why the stock markets have resembled a seesaw lately. Up on good political news. Down on the bad. Ending nowhere. When the political news cycle determines the price of your stocks, it is going to end badly. The seesaw is going to turn out to be a Korean Plank; someone will be launched into the air and land hard. And that means the fun will be over for whoever is left on the other end of the seesaw too. But who is in for the most spectacular crash? One thing history teaches us is that a real crash comes from somewhere unexpected. Does that count Europe out? Maybe. Europe is in for an economic crisis. But stocks around the world have discounted that to some extent. That's a snazzy way of saying they have factored it into the prices of investments. To what extent they have discounted the severity of the crisis is another question. Less obvious crises you should proof your portfolio against include a Chinese economic collapse and an Australian housing bubble pop. To find out how to proof your portfolio against them, click here. By the by, we've left the Americans and their mess out of our list of things to worry about because it's difficult to make heads or tails of them. Here is an example of the nincompoopery coming out of the US central bank... affectionately known as 'The Fed'. Bloomberg, November 14th: 'Federal Reserve Bank of Dallas President Richard Fisher said the U.S. economy is "poised for growth" going into next year and that he sees a declining likelihood the central bank will need to ease further.' Bloomberg, November 14th: 'The odds of a U.S. recession in early 2012 exceed 50 percent as a result of Europe's debt crisis, according to researchers at the Federal Reserve Bank...' Yes, on the same day, two research groups from the same institution managed to completely contradict each other. It's not clear what they are smoking at the Fed these days, but it's definitely working. We prefer a stiff drink when thinking about the $14 trillion - no, wait - $15 trillion dollars of debt everyone seems to expect the Fed to inflate away. Ultimately, economic problems catch up with politics. Sometimes in a good way, like the fall of the Soviet Union. But it isn't always pleasant to have economic law pull you back to reality by the ear. It can lead to a world war, for example. Whether the world reacts badly to the realisation that welfare states don't work is still up for grabs. On the one hand, times will be tough. But when times are tough, the tough get going. We could see a resurgence in economic growth once debt troubles force deadbeat governments to downsize. And that forces people to work hard. What has become very clear this week is that economic problems are accelerating. Finance guru's blogs are running hot. Derivates are fluctuating all over the place. Swiss credit default swaps rallied (worsened) 50% in a single day! Downgrades are sucking Germany's banks into the crisis. And American banks are just discovering their exposure to Europe's economic problems, while their own nation teeters with its own debt problems. So economics is stepping up the pace. It's catching politics. And it's going to win. Nick Hubble, for The Daily Reckoning Australia Similar Posts: The Anniversary of the "Esperanto Money" Dealing with Future Economic Problems Today The Bernanke Pout Why Real Investors Love Political Incompetence South Australia Law Will Have a Chilling Effect on Political Speech

The Coming European Superstate That Germany Plans To Cram Down The Throats Of The Rest Of Europe Posted: 18 Nov 2011 08:00 AM PST A lot of people were puzzled about what German Chancellor Angela Merkel meant when she recently stated that the ultimate solution to the financial crisis in the EU would "mean more Europe, not less Europe".  Well, now we are finding out.  A leaked internal German government memo entitled "The Future of the EU: Required Integration Policy Improvements for the Creation of a Stability Union" actually proposes the creation of a "European Monetary Fund" which would be given the power to run the economies of troubled European nations.  This "stability union" would be quickly followed by the creation of a full-fledged "political union".  Essentially, this leaked memo proposes the creation of a "European Superstate" which will be crammed down the throats of the rest of Europe whether they like it or not.  National sovereignty would be a thing of the past and European bureaucrats would run everything.  Of course this will never be accepted by the people of Europe until they feel the bitter pain of the coming financial collapse, but we are starting to see that there is already a clear plan for what the Germans wish to implement in the aftermath of the coming crisis. A lot of people have just assumed that if there is a massive financial collapse in Europe and the euro crashes that it will mean that end of the euro and potentially the breakup of the EU.  But that is not what the Germans have planned at all. An article in the Telegraph has posted details about the leaked internal German government memo mentioned above.  It really is startling to see that a full-fledged "political union" in Europe is being discussed at the highest levels of the German government.... The six-page memo, by the German foreign office, argues that Europe's economic powerhouses should be able to intervene in how beleaguered eurozone countries are run. The confidential blueprint sets out Germany's plan to tackle the eurozone debt crisis by creating a "stability union" that will be "immediately followed by moves "on the way towards a political union". It will prompt fears that Germany's euro crisis plans could result in a European super-state with spending and tax plans set in Brussels. Can you imagine what Europe would look like under such a plan? National sovereignty would be a thing of the past. Another article in the Telegraph says that the leaked memo proposes that immediately a "European Monetary Fund" should be set up that would have the power to take over and run the economies of European nations that get into too much debt.  But according to the memo this would just be an intermediate step toward a full "political union".... The six-page German foreign ministry paper sets out plans for the creation of a European Monetary Fund with a transfer of sovereignty away from member states. The fund will have the power to take ailing countries into receivership and run their economies. Even more controversially, the document, entitled The future of the EU: required integration policy improvements for the creation of a Stability Union, declares that the treaty changes are a first stage "in which the EU will develop into a political union". "The debate on the way towards a political union must begin as soon as the course toward stability union is charted," it concludes. As the crisis in Europe has gotten worse, the Germans have become more aggressive about throwing their weight around.  At this point, German Chancellor Angela Merkel is the most important politician in Europe and she has been taking the lead in responding to this financial crisis. As I have written about previously, there have been persistent rumors that French President Nicolas Sarkozy and German Chancellor Angela Merkel have been "secretly plotting" to create a "new eurozone" that will fundamentally change the way that Europe is run. For example, the following is from an article that recently came out  in the Telegraph.... France is drawing up plans to create a breakaway organisation of eurozone countries with its own treaty, parliament and headquarters – a move that could significantly undermine the existing European Union. That same article also talked about the goals that France and Germany are hoping to achieve through all of this.... France and Germany are understood to want to strengthen the union between eurozone countries with new taxes and legal measures to stop nations borrowing and spending too much in future. Of course it is important to note that there is no way that the people of Europe are going to go for any of this right now. But after feeling the pain of a massive financial collapse for a while will they change their minds? What is clear is that the status quo is not going to last much longer.  Something has got to change.  Unfortunately, Germany and France seem determined to push the rest of Europe in the direction of creating a European Superstate. If you want to get a really good idea of what is happening in Europe right now, just check out this video of a recent speech by Nigel Farage on the floor of the European Parliament on November 16th, 2011.  Trust me, it is worth the couple of minutes that it takes to watch it. But before fundamental structural changes take place in Europe, we are going to see an absolutely crippling financial collapse first.  With each passing day, there are more signs that things are rapidly unraveling.  The following are just a few of the noteworthy news items from Europe that have come out over the past week.... *In Italy there were violent clashes between protesters and police after Mario Monti unveiled his new austerity program.  To get an idea of how crazy things are getting over in Italy, just check out this video. *Just like what happened when austerity was implemented in Greece, it looks like Italy is now headed down the road toward a major recession.  Industrial orders in Italy for the month of September declined by 8.5 percent.  That is really, really bad news. *The EFSF has already been forced to buy up huge numbers of its own bonds.  That essentially means that the EFSF is already a bad joke. *Dozens of big banks all over Europe have been downgraded in recent weeks.  Even German banks are getting downgraded now.  The other day, Moody's downgraded the ratings of 10 major German banks. An increasing number of people that work in the financial world are starting to get really freaked out about everything that is going on. The following is what Mark Mobius, head of the emerging markets desk at Templeton Asset Management, had to say recently.... "There is definitely going to be another financial crisis around the corner, because we haven't solved any of the things that caused the previous crisis." Willem Buiter, the chief economist of Citigroup, believes that if something is not done quickly, there will be a financial collapse in Europe in very short order.... "Time is running out fast.  I think we have maybe a few months -- it could be weeks, it could be days -- before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it. So they have to act now." Ann Barnhardt of Barnhardt Capital Management actually shut down her entire firm because she could no longer guarantee that the money her clients were putting into the futures and options markets would be safe.  Posted below are extended excerpts from the open letter that she recently released to the public.  Normally I would not post such extended excerpts, but in this case I believe that they are warranted.  What Barnhardt has written should be a huge wake up call for all of us.  It is refreshing (and a bit frightening) to get an honest assessment of the corruption in the financial world from someone that has made a good living in that world.  The following is how she began her letter.... It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator. The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy. So how did the MF Global collapse wreck the system?  Barnhardt went on to explain this.... The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system. Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let's not sugar-coat this or make this crime seem "complex" and "abstract" by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette. Even more frightening, Barnhardt says that the MF Global collapse is just the "tip of the iceberg" and that more collapses like this are about to happen.... I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG's leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn't that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm. So what does Barnhardt say that we should all do?  She is actually recommending that everyone should completely abandon the futures and options markets.... And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism. Remember, a few weeks ago I warned you all that a massive derivatives crisis is coming.  Anyone that plays around with derivatives at this point is playing with fire.  Barnhardt says that she will never reopen her firm until Barack Obama is removed from office and fundamental reforms to the financial system have been implemented.... Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy. We are on the verge of a financial crisis that could potentially be just as bad (or even worse) than the financial crisis of 2008. Right now, 2012 is shaping up as a very, very bad year. As I have written about previously, when European leaders proposed that private Greek bondholders should take a "50% haircut", they massively undermined faith in the European financial system. Now panic and fear are in the air and it is unlikely that financial markets will be calmed any time soon. Already, there are early signs of the kind of massive credit crunch that almost brought about "the end of the world" in financial markets back in 2008. For example, a CNBC article that was posted on Friday reported that the flow of credit in Europe is seriously drying up.... Fear over European banks' exposure to risky government debt stalked markets and harried bank executives on Friday, as unsecured lending between banks evaporated and the cost of secured loans rose. And as a recent article posted on Zero Hedge discussed, a similar thing is starting to happen in the United States.... The entire dollar funding market is now at levels not seen since the Lehman collapse and is effectively frozen. Only this time it is much, much worse as never before has the global central bank cadre been assumed and implied to be backstopping the global liquidity cascade. Ex-out the implied backstop by the monetary authorities, and liquidity is now locked up more than ever in the history of capital markets. So what should we do about this? We should take action and get prepared for what is coming. Unfortunately, an increasing number of Americans seem to be "checking out" instead.  According to a recent Gallup poll, alcohol consumption in the United States has hit a 25 year high.  More than one out of every ten Americans over the age of 12 is on prescription antidepressants, and most American families spend endless hours staring at the television in an attempt to escape the pain and the frustration that they constantly feel. Hopefully by working together we can help more Americans (and more Europeans as well) to wake up, to get off their couches, and to take action in a positive way. Time is running out and the economic crisis is rapidly getting worse. We don't have any time to waste.

A shocking take on the MF Global scandal Posted: 18 Nov 2011 07:53 AM PST From Zero Hedge: Imagine you are Ben Bernanke, or on the Board of Governors of the Federal Reserve. The time frame is July and August of 2011 and the price of gold is on a tear. Commodities inflation has been persistent and is breaking out everywhere. Your prediction that inflation "is contained" and is a "temporary phenomena" are beginning to look absurd. What do you do? Simple. Hint that QE3, the primary drive of inflation, is coming... And then fail to deliver at the September Federal Open Market Committee (FOMC) meeting. That takes care of the price of gold and the gold stocks. Ah, but those pesky commodities speculators keep making money and trading against what you want the markets to do. So what is to be done there? Hey Jon Corzine, how about you tank the largest broker for the small commodities punters in the world, and we let them twist in the wind? That will serve them right. Teach them to bet against the government-approved scenario. Think it did not happen? Well, think again. All of the pieces fit... Read full article... More on MF Global: An outrageous new scandal could bring on a "Lehman 2.0" collapse Must-read: "The entire system has been utterly destroyed by the MF Global collapse" More outrageous details emerge about Jon Corzine, Democrats, and the MF Global collapse

Don't Sweat The Correction In Gold Posted: 18 Nov 2011 07:44 AM PST I've told more than one concerned investor that when the gold price falls, they should "come back in three months" and see if they're still worried. The idea is that the daily and monthly gyrations are nothing to fret over, that the price will recover and, in time, fetch new highs. That advice has worked every time gold underwent any significant correction (except in late 2008, when one had to take a longer view than three months). Here's proof. I've traded emails regularly with Brent Johnson ever since meeting him at an investor event I spoke at a couple years ago. He's the managing director of Baker Avenue Asset Management, a wealth management firm with over $700 million in assets. He forwarded some charts he'd prepared for his clients that put gold's September decline into perspective; it's a good visualization of my standing advice to worriers. The following charts document Complete Story »

Precious Metals Update: Germany's Gold Hoard And The Mark-Up Epiphany Posted: 18 Nov 2011 07:40 AM PST By Bret Rosenthal: Gold & Silver: Are You Enjoying the Ride? I wrote a post on November 4, titled. "Precious Metals Outlook: Volatility is Part & Parcel of a Major Bull Market" and this month has not disappointed. The wild swings of the metals continue unabated as the struggle between good and evil play out in Europe and right here in the USA. The struggle I refer to encompasses the almost constant stream of news stories that either put a strain or a surge on global liquidity. Please stop listening to the worthless commentary from whatever news source you prefer. The commentary is misleading and will never help you understand the true direction of the markets. These news sources want you to stay confused and in turn hooked on the worthless swill they peddle. Instead, take a brave step out from under this news tyranny and join us using an ancient and perhaps Complete Story »

This China gold story could literally change your life Posted: 18 Nov 2011 07:34 AM PST From Sean Goldsmith in the S&A Digest: Central banks purchased 148.4 metric tons of gold in the third quarter – more than double the level reported in the second quarter and nearly seven times higher than in the third quarter of 2010. This is the highest quarterly level since central banks became net buyers of gold in the second quarter of 2009. Says Marcus Grubb, managing director of investment at the World Gold Council… While one can account for some of the purchases – from Thailand, Bolivia, Russia etcetera – there is an unaccounted amount out there. A clue probably lies in the fact that a lot of buying has been from central banks that have been in surplus, [in regions] like Asia, Central Asian and Latin America. Grubb expects the unknown buyer to become public in a couple months. But we already know the "secret" buyer is China… China is buying up the world's gold supply… And it can make you very rich in the process. In fact, China's gold situation may be the single best money-making opportunity traders will have to get rich in the next five years. But first, a bit of background… Regular S&A readers are familiar with China's ravenous appetite for gold and silver. The country has a long and deep cultural affinity for gold and silver… which is why the Chinese government openly encourages its citizens to buy precious metals. China has also "fast tracked" its mining industry over the past decade or so… And has become the world's No. 1 gold producer. China desperately wants to return to its status as one of the world's great powers… with one of the world's great currencies. But it knows it will need huge amounts of "real money" to back its currency. You can read about this incredible gold trend in this DailyWealth piece from two years ago. China's massive gold purchases are a major reason gold has advanced for 10 consecutive years. And this year is a lock to make it 11 consecutive years. This week, the massive Chinese gold accumulation plan took another step forward when one of its state-owned gold companies made an all-cash, $1 billion buyout offer for Brazil-focused Jaguar Mining. The offer is a huge 73% premium over Jaguar's pre-offer share price. You see, China isn't just buying gold bullion… And it's not just developing its own reserves… It's also looking to buy in-ground gold hoards all over the world. And it has the cash to do so. As one mining insider said a few years ago about China's resource acquisitions, "The Chinese are just a different kind of buyer." So… as the Chinese and other Asian countries vacuum up the global gold supply… and as the United States and Europe debase their paper currencies… what is the single best way to play rising gold prices? What is the best way to get extremely rich from this uptrend? For conservative investors, we recommend gold and silver bullion and high-quality gold stocks. Folks with some trading experience can consider smaller, "junior" gold stocks. You'll do well in those areas. But option traders – specifically option traders who are following Jeff Clark's work in the S&A Short Report – stand to make truly spectacular amounts of money. In recent years, Jeff has worked out an incredible options trading strategy in the gold and gold stock market. His track record in just the past two years in gold and silver stocks is incredible. In particular, over the past six months, Jeff's readers have made the following returns… - 70% in one month on Kinross Gold. - 55% in two weeks again on Kinross Gold. - 80% in two weeks on Market Vectors Gold Miners Fund (GDX). - 100% in three weeks on Gold Fields. - 140% in one week buying puts on SPDR Gold Shares Fund (GLD). - 100% in three weeks on Seabridge. - 65% in two weeks on Hecla Mining.  - 85% in one week on Exeter Resources. To show you how he's turned the gold and silver markets into a broken slot machine, Jeff is doing something he's never done before. He's put together a unique presentation that goes over his gold stock "key" and how this unusual trading system is likely the most profitable way you can play the uptrend in gold prices. We warn you: This system is not for everyone. But if you consider yourself a trader… or if you're simply curious amount making gains in the gold market… we strongly encourage you to hear what Jeff has to say. Crux Note: You can access Jeff's presentation here. More on gold: Top manager Einhorn is making a big bet on gold stocks Casey Research: Gold mining stocks are dramatically undervalued Gold MANIA: Why we could be on the brink of the biggest bubble in history

Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Almost 4% and 7% on the Week Posted: 18 Nov 2011 07:18 AM PST Gold rose $19.10 to $1737.20 by a little before 8AM EST before it chopped back down to $1712.70 by early afternoon in New York, but then rallied back higher in late trade and ended with a gain of 0.36%. Silver climbed to as high as $32.473 in London before it also fell back off a bit in New York, but it then rose to a new session high of $32.585 at about 1:30PM EST and ended with a gain of 2.31%.

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