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- Can gold save the Eurozone?
- Dubai to verify gold weight accuracy in jewelleries
- THE SECULAR BEAR MARKET AND GOLD'S A-WAVE ADVANCE
- Thomas Rustici talks Inflation & Gold
- Gold GBP 1,092/oz, JPY 130,890/oz – IMF: Japan Debt Could "Quickly Become Unsustainable"
- Short-term Gold Price Moves from a Different Perspective
- Covered Call Options: Generating Income From Owning Gold
- LISTEN: Interview with Bix Weir
- Indians Favoring Gold Over Silver
- Bond Vigilantes Turn Their Guns on Germany
- Trouble
- Failed German Auction Will Force ECB to Print
- Silver Shorts Have 60 Days
- The Roads To War And Economic Collapse
- Happy Thanksgiving To The 1% (That Probably Means You)
- China Will Collapse By The End Of 2011
- Gold and Silver Raid / Stocks Tumble
- In The End My Survival Vehicle Will Be Gold
- Picking Winners When Greece Defaults
- India 2011 Gold Imports May Rise
- Serabi Mining shares rise on news of bonanza gold grades from Palito...
- The Coming Greek Default And The Impact On Gold, Stocks And Bonds
- Gold & Silver Market Morning, November 24, 2011
- Precious Metals Tied To Broader Stock Markets And European Fear Factor
- Indians favouring gold over silver
- German Bund Action Goes Badly; Bank of America CDS Spread Hit New High; EuroSovereign and US Bank Spreads Widen More. Will the Germans Finally Break Glass?
- Thomas Rustici talks to Alasdair Macleod about the Fed and Gold
- Gold buying increasing in India as concerns over rupee grow
- Gold, U.S. Dollar, U.S. Treasuries, & China: Contrarian Opportunities?
- A concise history of Gold in China
| Posted: 24 Nov 2011 04:00 AM PST Quote: NEW YORK (CNNMoney) -- With no end to the eurozone debt crisis in sight, there has also been no end to the stream of possible solutions. The latest involves using gold as collateral. With eurozone central banks holding some 64% of the world's gold reserves, they'd have the heft to back that up. And there is some precedent, though that was largely during the pre-euro era. So it is unclear what legal hurdles might need to be overcome to satisfy all 17 euro-area nations. But assuming those challenges could be addressed, experts see it as a real win-win possibility. "Historically it's not unusual for a country to use gold as collateral," said Jeffrey Nichols, managing director of American Precious Metals Advisors in New York. The idea of using gold as collateral was rumored to be part of a broader proposal unveiled by the European Commission Wednesday. Although that plan did not specifically discuss the notion of gold as collateral, experts said it's still a plausible scenario. Eurobonds: The 'solution' that just won't stick The EC's plan did detail three different options for eurobonds, an idea that's been floated around before and one that's been met with staunch resistance from stronger eurozone countries, such as Germany. "I think it was wrong of Germany to dismiss it out of hand," said Robin Bhar, senior metals analyst at Credit Agricole in London. "If we're moving toward the end game, then everything should be ruled in and nothing should be ruled out." Eurozone central banks hold roughly 10,792 metric tonnes of gold. At today's prices, that would give the stash a price tag of nearly $650 billion. While that's not enough to solve all of Europe's problems, it could offer a step in the right direction, especially if it piques the interest of, say China -- a country that has been lukewarm at best about how involved it wants (or doesn't want) to be. Nichols said that "given China's thirst for gold," it could very well become interested in offering some type of financial assistance to eurozone countries in distress. And if the eurozone countries don't want to go 'all in,' it's conceivable that at least one country could try the collateralization route -- barring the potential legal hurdles. "It's quite possible that one of the central banks could use gold as collateral for refinancing," he added. Italy's central bank has the fourth-largest gold reserve holding, at 2,451 metric tonnes. And it's also the country that's attracting the most attention recently, for its burgeoning debt load of €1.9 trillion, a GDP-to-debt ratio of 120% and steep borrowing costs that are keeping its 10-year yield stuck uncomfortably close to 7%. European debt crisis drives gold rush What would all this mean for the price of gold? Assuming the plan gets enough support, both Bhar and Nichols see it as a positive. "It would give a sense that gold held by Euro debtor nations would be less likely to flood the market and give legitimacy to gold having some monetary value," said Nichols. Just a few months ago, gold prices came within spitting distance of $2,000 an ounce. Currently, prices are hovering around $1,700 an ounce. To top of page First Published: November 23, 2011: 8:16 AM ET Good luck to us if they decide to flood the market. |
| Dubai to verify gold weight accuracy in jewelleries Posted: 24 Nov 2011 03:49 AM PST |
| THE SECULAR BEAR MARKET AND GOLD'S A-WAVE ADVANCE Posted: 24 Nov 2011 02:44 AM PST I have decided to post the weekend premium report to the blog this week. In the report I'm going to take a look at what has transpired, and what is likely to come, as the third leg down in the secular bear market begins to intensify. Back in April of this year I warned investors to get out of stocks in their 401(k) accounts. At the time the dollar was moving into the timing band for a major three year cycle low. It has always been my expectation that the rally out of that major bottom would correspond with the stock market moving down into the third bear market leg of the secular trend that has been in place since 2000. As we now know the dollar did bottom in May of this year and that did correspond with the top of the cyclical bull market that began in March of 2009. It has also been my expectation that the next four year cycle low would occur in the fall of 2012, and that 2012 would be one of the worst economic years in human history. This is already starting to unfold across the globe as social unrest that began in the middle east has spread to Europe and now the United States. Economic data has been steadily eroding for months now. We should expect this trend to continue and intensify as we get into 2012. As most of you know I use cycles analysis and sentiment to determine likely timing band's for major turns in the stock market, gold and the dollar. This is what allowed me to anticipate a bottom in the dollar cycle at a time when everyone was expecting the dollar to collapse, and a top in the stock market when everyone was bullish and expecting a move back to new highs. An interesting development in the yearly cycle for the stock market has now emerged. Generally speaking most yearly cycles tend to run about 12 months trough to trough. However the Fed's quantitative easing programs have stretched the yearly cycles from March 2009 into June of 2010, and this year the yearly cycle has stretched again to arrive in October. The market is now set up for the next yearly cycle low to occur in the fall of 2012, which, not surprisingly, is exactly when I have been expecting the next four year cycle low in stocks to bottom.  I have also indicated the expected timing band's for the next three intermediate degree cycle lows. For reasons explained in the nightly reports I don't think the current decline is going to move below the October low. I expect we will find a bottom sometime in the next 1-4 days followed by a Santa Claus rally into the middle of December. If the market avoids making a lower low it will embolden the Bulls to continue holding long positions. The hope for a miracle will be misplaced though as the market will almost certainly begin to roll over before making higher highs and by the next intermediate degree bottom in February/March we will see the October lows broken, and the summer 2010 lows tested. The recent rally out of the October low will undoubtedly be the most powerful countertrend rally of this bear market. Any further countertrend rallies, and there will be several, are likely to be short-lived and weak. The window of opportunity for these long side trades are probably going to be too brief for the average investor/trader to successfully trade. From this point on investors should keep 401(k) accounts solely in money market funds until we reach the bottom sometime in the fall of 2012. This brings us to the topic of gold. Despite what is happening in the stock market gold is clearly still in a secular bull market. That being said the days of easy money from the gold bull are probably over for the next year as stocks move down into their four year cycle low. In the chart below you can clearly see the affects QE1 & 2 had on the gold bull.  They drove the largest C-wave advance of this entire secular bull market. However, for reasons that I will explain below I think the C-wave topped in September and gold is now going to enter an extended consolidation phase for the next year. That begs the question if the C-wave has topped then where was the D-wave? Well I think we just saw it in September. Let me explain. Because of the massive liquidity floating around the world I now think the D-wave terminated with the overnight spike down to $1535 on September 26. I'm now seriously considering that the last D-wave was exceptionally mild because of the extreme global liquidity. If that is the case then gold has now entered an A-wave advance. As most of you know A-waves don't tend to make new highs. So my best guess is that gold will test the $1900 level sometime in the next three weeks followed by an extended corrective move down into an intermediate degree bottom in February (B-wave). That bottom should hold above the $1535 level. What should then follow will be a year long frustrating, whipsawing, consolidation that should terminate slightly before the stock market bottoms in the fall of 2012.  At that point gold will start to sniff out the next round of massive quantitative easing as the Fed and central banks around the world go into full panic mode and begin printing unimaginable amounts of money in the attempt to halt the global sovereign debt implosions and economic depression that will have developed. As usual central planners will not account for the unintended consequences of their actions. This time quantitative easing is going to have the opposite affect that it did in 2009. Yes it will put a bottom in stocks, at least temporarily, but it is also going accelerate the cancer that has now infected currency markets. And as currencies start to collapse so will global bond markets. This is the recipe for the final bubble phase in the gold bull market. While gold is in this long consolidation phase/bear market phase for stocks, trading strategies will be vastly different than they were during QE1 and QE2. Trades are going to be shorter and there will be long periods of time where the correct strategy is to just sit in cash. I started to make the transition to this new trading strategy back in July. The recent breakdown in stocks has now eliminated any reservations I had about the bear market. With that confirmed, there is little doubt that gold has now entered an extended consolidation and that new trading strategies are called for. Make no mistake, we are now entering what will be one of the toughest markets ever to make money in. So far the model portfolio is performing admirably even in these tough conditions. For anyone who would like to sample the nightly premium newsletter, I have opened a $10 one week trial subscription. You will have full access to the SMT premium website including all historical archives, model portfolio, and terminology document for a full week. If during the week you decide the subscription is not for you, or the shorter term trading strategies don't suit you emotionally than simply cancel your subscription by following the directions on the homepage prior to your week expiring. If you do enjoy the newsletter then simply do nothing and your subscription will convert to a yearly membership at the end of the one week trial. Click here to link to the premium website. You will find the subscribe link on the upper right-hand side of the home page.        This posting includes an audio/video/photo media file: Download Now |
| Thomas Rustici talks Inflation & Gold Posted: 24 Nov 2011 02:07 AM PST Thomas Rustici Professor at George Mason University, and Alasdair Macleod, of the GoldMoney Foundation, talk about the European sovereign debt crisis and how it foreshadows similar problems in the USA. A central bank is a monopolistic, central planning agency, with all the implications that this has for the quality of its product. They talk about monetary policy and its flaws. They talk about labour market rigidity and "sticky wages" as deliberate policy. They talk about the European Union and how it has fallen prey to regulatory capture and has morphed from a free market into a mercantilist structure controlled by special interests. They talk about the cost of regulation and how the cost is borne by employees and consumers, not companies, which merely collect. This interview was recorded on October 20th 2011. |
| Gold GBP 1,092/oz, JPY 130,890/oz – IMF: Japan Debt Could "Quickly Become Unsustainable" Posted: 24 Nov 2011 01:09 AM PST |
| Short-term Gold Price Moves from a Different Perspective Posted: 24 Nov 2011 01:00 AM PST SunshineProfits |
| Covered Call Options: Generating Income From Owning Gold Posted: 24 Nov 2011 12:31 AM PST By Michael Connellan: Most investors would like to have at least some portion of their money invested in gold. After all, over the last 10 years the long term trend has been steadily up, and with all the uncertainty in Europe, China and elsewhere, owning some gold makes sense. But investors who invest for income, and rely on that income, face a dilemma: gold itself doesn't produce income, and gold mining stocks typically pay only modest 1-2% dividends. Even BHP – the Melbourne-based natural resources giant with some gold interests – yields just 3.0%. So what's a gold investor who needs reasonable income to do? The answer is a proven, conservative strategy of buying the SPDR Gold Shares ETF (GLD) and selling covered call options – called this because you're 'covered' because you own the underlying security, and 'call' because it gives someone the right to 'call away' the security from you - Complete Story » |
| LISTEN: Interview with Bix Weir Posted: 24 Nov 2011 12:25 AM PST
Bix Weir of RoadtoRoota.com joins us today to talk about gold and silver manipulation and the impending collapse of the world fiat money markets. Bix has been studying markets for a long time and has arrived at the conclusion that once the collapse occurs, it will be the largest debtors who fare the best. And of debtor nations, the United States stands head and shoulders above the rest. According to Bix gold and silver are still screaming bargains who's time will soon come. He believes that eventually the gold to silver ratio will go to 5 to 1, meaning that you will be able to purchase 5 ounces of silver with 1 ounce of gold, unlike the 55 it now requires. Should this circumstance come about, holders of silver will realize dramatic increases in value of their investments. But there's a catch, paper holders of metals could very well be wiped out. Be certain that your Financial Survival Plan is ready to go and don't waste any more time thinking about it, just get it done. Much more @ KerryLutz.com or @ 347.460.LUTZ |
| Indians Favoring Gold Over Silver Posted: 23 Nov 2011 11:57 PM PST by Roman Baudzus, GoldMoney.com:
In recent months many Indian investors have been favouring silver over gold, but now this trend seems to be reverting. Indian investors usually prefer silver to gold mainly because of its lower price and its stronger upward potential. But the developments in the global markets have caused India's silver price to drop, too, since operators and investors at India's local markets follow the developments and trends of the global commodity markets. Nevertheless, demand for physical silver remains very high, mainly due to the festival season that started back in October. During these festivities most Indians purchase gold and silver jewels to offer them as presents to their family and friends. But in recent weeks only the gold price has benefited from this high demand for precious metals, while the silver price has been lagging behind. Read More @ GoldMoney.com |
| Bond Vigilantes Turn Their Guns on Germany Posted: 23 Nov 2011 11:54 PM PST from GoldMoney.com:
The US dollar also recorded further gains against other currencies, with the Dollar Index gaining 1.12% to settle at 79.14. Further gains in the dollar are pretty much assured if we get further signs that Europe's debt crisis is spreading from the periphery to "core" eurozone countries such as Germany, France and Belgium. The gold price faces resistance at $1,700 (round number syndrome), but has strong support on any dips into the $1,650-75 region. The silver price is being buffeted continually by the "risk off" headwinds coming out of Europe. Until inflation/recovery expectations pick up on the part of investors, silver will continue to tread water – along with platinum and palladium. Read More @ GoldMoney.com |
| Posted: 23 Nov 2011 11:53 PM PST from The Economic Collapse Blog:
The global economy is heading for a massive amount of trouble in the months ahead. Right now we are seeing the beginning of a credit crunch that is shaping up to be very reminiscent of what we saw back in 2008. Investors and big corporations are pulling huge amounts of money out of European banks and nobody wants to lend to those banks right now. We could potentially see dozens of "Lehman Brothers moments" in Europe in 2012. Meanwhile, bond yields on sovereign debt are jumping through the roof all over Europe. That means that European nations that are already drowning in debt are going to find it much more expensive to continue funding that debt. It would be a huge understatement to say that there is "financial chaos" in Europe right now. The European financial system is in so much trouble that it is hard to describe. The instant that they stop receiving bailout money, Greece is going to default. Portugal, Italy, Ireland, Spain and quite a few other European nations are also on the verge of massive financial problems. When the financial dominoes start to fall, the U.S. financial system is going to be dramatically affected as well, because U.S. banks have a huge amount of exposure to European debt. The other day, I noted that investor Jim Rogers is saying that the coming global financial collapse "is going to be worse" than 2008. Sadly, it looks like he is right on the money. We are in a lot of trouble my friends, and things are going to get really, really ugly. Read More @ TheEconomicCollapseBlog.com |
| Failed German Auction Will Force ECB to Print Posted: 23 Nov 2011 11:51 PM PST from King World News:
With continued turmoil in global markets and gold remaining firm near the $1700 level, today Michael Pento, of Pento Portfolio Strategies writes for King World News to explain why the failed German bond action will force the ECB into massive inflationary printing: "If you ask me who I think is even more disgusting then the perennial Wall Street cheerleaders, it is those perennial inhabitants in Washington. This week we received further confirmation that it is impossible for our leaders in government to cut even one penny of our debt." Michael Pento continues: Read More @ KingWorldNews.com |
| Posted: 23 Nov 2011 11:50 PM PST CFTC Defines "Swaps"- Silver Shorts Have 60 Days to Comply With Spot-Month Limits from Silver Doctors: Not sure how we missed this, but the CFTC officially defined "swaps" last Friday on November 18th, giving 60 days for traders to comply with the CFTC's new spot-month position limits. Look for: From SD's report on the CFTC position limit ruling : Establishment of speculative limits on Referenced Contracts will occur in two phases: Read More @ SilverDoctors.Blogspot.com |
| The Roads To War And Economic Collapse Posted: 23 Nov 2011 11:49 PM PST by Dr. Paul Craig Roberts, GlobalResearch.ca:
The day before the Thanksgiving holiday brought three extraordinary news items. One was the report on the Republican presidential campaign debate. One was the Russian President's statement about his country's response to Washington's missile bases surrounding his country. And one was the failure of a German government bond auction. As the presstitute media will not inform us of what any of this means, let me try. With the exception of Ron Paul, the only candidate in either party qualified to be the president of the US, the rest of the Republican candidates are even worse than Obama, a president who had the country behind him but sold out the American people to special interests. No newly elected president in memory, neither John F. Kennedy nor Ronald Reagan, had the extraordinary response to his election as Barack Obama. A record-breaking number of people braved the cold to witness his swearing in ceremony. The mall was filled for miles distant from the Capitol with Americans who could not see the ceremony except as televised on giant screens. Read More @ GlobalResearch.ca |
| Happy Thanksgiving To The 1% (That Probably Means You) Posted: 23 Nov 2011 11:49 PM PST By Scott Krisiloff: On a day that the Dow was down 236 points, it doesn't feel like there's much to be thankful for. Between Europe's collapse, Washington's gridlock and China's slowdown, it seems the world is a dangerous place for investors. Despite all the scary headlines, there is of course lots to be thankful for, even from an economic standpoint. Most notably: we are a nation of 1%-ers. The Occupy Wall Street movement has drawn plenty of attention to the income distribution within the United States, pitting the 99% against the 1%. But what goes overlooked by these well meaning folks is that compared to the other 6.7B people on the planet, those occupying Wall Street probably don't come close to being in the 99%. In the US it takes an income of $250,000 per year to be considered a 1%-er, but if you take the global population into the calculation, the number Complete Story » |
| China Will Collapse By The End Of 2011 Posted: 23 Nov 2011 11:48 PM PST from WealthCycles:
Casey Research Host: Your original estimate for the collapse of China was by 2011… do you think (that was) relatively close? Gordon Chang: I think it is very close when you see what is going on right now. Europe seems to be on everyone's mind the last few months. However, there is an elephant in the room that everyone is ignoring, and it's China. For a while it seemed everyone was proclaiming that the 21st century would be "China's Century." Much like the 20th was "America's Century," and the 19th was "Britain's Century." Everyone just seems to accept the fact of China's ascendancy. But is it true? Gordon Chang, who writes for Forbes.com, thinks otherwise. His prediction is that China will collapse by the end of 2011! Read More @ WealthCycles.com |
| Gold and Silver Raid / Stocks Tumble Posted: 23 Nov 2011 11:46 PM PST Gold and Silver Raid / Failed German Auction / Europe and USA Stocks Tumble by Harvey Organ: Good evening Ladies and Gentlemen: Gold closed today down $6.50 to $1695.70 surviving another round of banker raids as they try and stop the option holders from exercising contracts and standing for delivery of metal. The price of silver served as a punching ball to the bankers falling by $1.07 to $31.88. The total gold comex open interest fell by 3317 contracts (from 460,387 to 457,070) as gold rose yesterday quite smartly. We must have had some short covering as the global financial mess escalates. The front options expiry month of November saw its OI remain constant at 21 despite 9 deliveries yesterday. Thus the number of gold ounces standing increases and we also had no cash settlements. The big December contract is now facing first day notice next Wednesday. The OI tonight registers 151,207 but that will decline each day before Tuesday night. The estimated volume today was large at 221,321 compared to yesterday's confirmed volume of 222,689. Read More @ HarveyOrgan.Blogspot.com |
| In The End My Survival Vehicle Will Be Gold Posted: 23 Nov 2011 11:45 PM PST from IBTimes.com:
The global economy is moving into a "survival period" in which gold will provide one of the few areas of protection for investors, according to Richard Russell. The publisher of Dow Theory Letters – the world's longest-running daily investment letter – and a long-time gold bull, Russell reiterated his bullish case for the yellow metal and gold-related investments this week. "I now think of compounding in terms of debt and the compounding of that debt load," Russell wrote. "Today we deal in trillions. Example — Bill Gates, the richest man in America, has about $6 billion in assets. One trillion equals 1,000 billion. The US national debt is $15 trillion and counting. But it's currently compounding at historically low interest rates." Read More @ IBTimes.com |
| Picking Winners When Greece Defaults Posted: 23 Nov 2011 10:47 PM PST By John Lindauer: The first two parts of this series of articles discussed the forthcoming sovereign debt defaults of Greece and other euro countries, in terms of whether Greece and the others would be temporarily bailed out once again. We discussed basic default alternatives when the bailouts end - Complete Story » |
| India 2011 Gold Imports May Rise Posted: 23 Nov 2011 09:55 PM PST |
| Serabi Mining shares rise on news of bonanza gold grades from Palito... Posted: 23 Nov 2011 09:51 PM PST |
| The Coming Greek Default And The Impact On Gold, Stocks And Bonds Posted: 23 Nov 2011 09:40 PM PST By John Lindauer: Part I of this series explained why Greece and one or more other countries will soon be defaulting -- on all, or part of their sovereign debt-- and may leave the 17 country Euro block while continuing in the 27 country European Economic Community (the EEC), Europe's common market. They will be forced to default when they finally become unable to borrow more euros from arms-length lenders to cover their budgetary excesses - because they have no hope of ever paying them back. Before Greece and the others pull out there will be desperate efforts by the governments of Germany and France, by the IMF, and by the EEC's elite to "save" them from defaulting. They will do so for different reasons: the EEC to increase the powers of its elite, the governments to avoid having to bail out their own banks which made loans Complete Story » |
| Gold & Silver Market Morning, November 24, 2011 Posted: 23 Nov 2011 09:00 PM PST |
| Precious Metals Tied To Broader Stock Markets And European Fear Factor Posted: 23 Nov 2011 08:57 PM PST Technically, the silver and gold shares indexes like the HUI, XAU and GDXJ have been moving-up in mildly trending channels since the base-floor after our 2008 Lehman smash. On the other hand, the S&P 500 popped-up too, (post 2008 smash) but quit rising and has now moved into an extended sideways trading channel from later 2009 to and through 2011, except for the recent bull blip this fall. This portends on-coming broader shares market weakness. What this is signaling to us is this: (1) PM shares were oversold and are gradually regaining new support and beginning to rise. This is no world-beating rally, but just a gentle move higher, telling us the shares are healing and ready to rise even more. The metals' junior shares do not fly on daily news as in the broader stock markets. Rather they begin to gently improve and then escalate faster over more cycle time. The S&P's have generally been flat to down but most of this market and the broader stock index markets are powered by big traders, mutual fund managers and hedge fund managers. This heavy moving group covers 70% of all daily trades in a gang. And, for the most part, its like an old boys club as they move together in unison as a flock of lemmings racing toward a higher year-end fund closing to look good and, of course, for big bonuses.         This posting includes an audio/video/photo media file: Download Now |
| Indians favouring gold over silver Posted: 23 Nov 2011 08:15 PM PST Silver contracts for December delivery dropped 641 rupees (1.15%) to 55,205 rupees per kilo at India's futures markets. Operators at India's Multi Commodity Exchange informed analysts that the silver ... |
| Posted: 23 Nov 2011 07:33 PM PST As our overly-long headline tells you, Wednesday was a really bad day in credit land. Not only has the reality of the severity and seeming intractability of the Eurozone mess started sinking in, but US investors seem finally to be facing up to the fact that a full blown crisis would not be contained and will engulf American banks. If you thought September-October 2008 events were nasty, they could look like a mere trial run for what may be in the offing. The Financial Times coverage on the failure of the Bund auction is suitably grim:
It is true, as the quote alludes, that liquidity and trading volumes fall at year end. But this is a little early to see that pattern playing a big role. It may also be true that the very low yield on this particular auction was a deterrent to buyers. But even if there are logical explanations as to why this bad auction means less than it seems, appearances of weakness have a nasty way of becoming reality. And on the US banks:
To make a bad situation worse, the banks are in precisely the same mess they were in in late 2008: under credit market pressure, with stock prices too low to make equity issuance an attractive way out. For a garbage barge to sell a lot of equity in a risk-off market is a tall order. Yet no one is pillorying bank managements or regulators for getting their balance sheets in better shape in 2009 or 2010. The banks continued their overly generous pay practices, failed to retain enough earnings, and couldn't be bothered to sell more stock. The most troubling sign of the day, however, is that the officialdom seems unwilling to take the steps needed to keep the looming crisis from spinning out of control. As we've indicated, the minimum needed measure is for the ECB to signal that it is willing to intervene aggressively. That is not a sufficient as a solution; the underlying problem, that of internal imbalances (meaning Germany's addiction to running big trade surpluses) needs to be dealt with. But you don't tell a patient in the throes of a heart attack to lose weight and start jogging. You stabilize him first, and then when he has recuperated enough, start addressing the underlying pathology. Of course, what we did in the US was keep the patient receiving costly hospital care, and allowed him to order in gourmet meals, so he is now 50 pounds heavier. Despite the continuing refusal by the Bundesbank and Chancellor Angela Merkel to consider eurobonds or other measures that would have the ECB de facto act in a fiscal capacity by monetizing debt, quite a few members of the NC commentariat continue to argue that the Eurocrats will come around in a crisis, just as the US did. I would not be so optimistic. First, even though I deplore many of the actions taken in the US during the crisis, and the fact that this disaster was permitted to happen in the first place, you do have to give Paulson, Bernanke and Geithner credit for going into crisis mode. I don't see the European leadership as willing or able to spend weeks in marathon sessions to cobble emergency responses together (which could just as well be nationalizations rather than rescues). They still seem to be in very deep denial that the situation is decaying as rapidly as it is, and decisive intervention is needed. And do not forget we have deep cultural biases at work. If you try telling a German that having the ECB print is actually a pretty decent idea, particularly given the risk of deflation in Europe, they react as if you've recommended deliberately contracting HIV as a cure for cancer. Second, and related, is that even if the Eurocrats do wake up and become more unified in their responses, they may be too late. Market timetables are faster than political ones. Third is that the complexity of the Eurozone mess is greater than the situation in the US during the crisis. As we noted in our post yesterday:
As I too often say, it would be better if I were wrong. While it is probably too early to tell whether the dismal results of the Bund auction have served as a wake-up call to Germany's leadership, if we don't see a shift in posture very soon, with sovereign and bank bond yields continuing to escalate, the Eurozone may well pass beyond the event horizon. And the worst is that everything evidently continues to seem normal even as you go pat the point of no redemptinn.
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| Thomas Rustici talks to Alasdair Macleod about the Fed and Gold Posted: 23 Nov 2011 07:15 PM PST Thomas Rustici, Professor at George Mason University, and Alasdair Macleod, of the GoldMoney Foundation, talk about the European sovereign debt crisis and how it foreshadows similar problems in the ... |
| Gold buying increasing in India as concerns over rupee grow Posted: 23 Nov 2011 05:42 PM PST |
| Gold, U.S. Dollar, U.S. Treasuries, & China: Contrarian Opportunities? Posted: 23 Nov 2011 05:16 PM PST |
| A concise history of Gold in China Posted: 23 Nov 2011 04:30 PM PST China Gold News |
Silver contracts for December delivery dropped 641 rupees (1.15%) to 55,205 rupees per kilo at India's futures markets. Operators at India's Multi Commodity Exchange informed analysts that the silver price was under sales pressure mainly due to developments overseas. The external value of the US dollar has been appreciating against most other important currencies, thus inhibiting the performance of precious metals and discouraging investors who usually turn to silver as an investment alternative to equities and bonds. Not even Europe's escalating sovereign debt crisis is halting this current trend. In today's early Asian trading the silver price dropped 0.1% to $31.73 per ounce.
The big news yesterday was the lack of demand for German debt at auction, raising questions about just how healthy the supposedly infallible German economy actually is. Germany was only able to sell €3.644 billion ($4.92 billion) of the €6 billion in 10-year bunds on auction for an average yield of 1.98%.
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