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Chris Martenson Discusses The Future Of Europe And Of The Global Economy
How President Obama Is Rapidly Becoming A Gold Bug's Best Friend
How President Obama Is Rapidly Becoming A Gold Bug's Best Friend
The transatlantic panic
Sol Sanders | Follow the money No. 95 -- China may soon become the problem
Gold, Eurodollars, and the Black Swan That Will Devour the US Futures and Derivatives Markets
Michael Pento: Insanity Next Week, Watch Europe & Gold
Paper Currency Tour of Death (Brought to You by General Mills)
Michael Pento - Insanity Next Week, Watch Europe & Gold!
Comex Silver Open Interest Lowest Since May 2009
The Best of the Bozeman Police Reports
China Services PMI Crashes As US Lags Not Decouples
While the Fed secretly gives away trillions to paper bugs the world quietly adopts an international gold standard
Pan For Gold On The Streets Of New York City!
Another Reason Silver Prices Could Roar Higher
Peter Schiff’s Urgent Update to Gold & Silver Investors
Which is a Better Long-term Value ? Current House Prices or Current Price of Gold?
Jim Rogers: Faber's Wrong About China
Clearing Houses Are The Mechanism Of All Markets
Jim Rogers: Europe, Gold, Commodities and the Dollar
Alasdair Macleod: Raw inflation via SDRs is next in central banking's scheme
Latest article for GoldMoney
Nigel Farage: Major Banks Teetering on the Edge of Collapse
Human Freedom Rests on Gold Redeemable Money: Howard Buffett
Gold Daily and Silver Weekly Charts
Clearing Houses Are The Mechanism Of All Markets. The system is in a critical seizure.
Huge Gold Deliveries / Low Silver OI / Job Report / More Fallout MFGlobal
Technical Market Report for December 3, 2011
This Past Week in Gold
Trading Physical Gold As Easily As You Trade Stocks: Is Gold Becoming A Tradable Currency After All?

Chris Martenson Discusses The Future Of Europe And Of The Global Economy

Posted: 03 Dec 2011 04:26 PM PST

In the following video Chris Martenson - economic analyst at chrismartenson.com and regular guest contributor to Zero Hedge, and James Turk, Director of the GoldMoney Foundation talk about the problems facing the eurozone as well as the global economy. Chris Martenson points out that the whole world simply has too much debt. This is why he believes that there won't be a real solution to the euro crisis. The big question will rather be who will take losses on the debt, which can't possibly be repaid. The lack of political leadership and unwillingness to accept reality is contributing to this crisis. Additionally, the monetary tools central banks have traditionally used to revive economies are starting to show less and less effect. In Martenson's view, the financial sector has become way too large and interlinked across borders, so that a default by one country could bring down the whole financial systems, because credit default swaps would get triggered and could bring down the writers of those derivatives.

James Turk mentions that today, commercial banks as well as central banks are leveraged at unsustainable levels. While both agree that it makes sense to get back to less risky traditional banking and a sound money system, Martenson raises the question of how it will be possible to bring the leverage down to prudent levels again and how to get rid of the huge amount of complex derivatives. That said, Martenson argues that the gold standard has been proven to be a working monetary system with automatic leveling functions. As a result of the coming structural changes to our monetary system, both men recommend owning tangible assets. They point out, that those who act first have a great advantage.

Martenson talks about the misallocation of capital, which occurs when money is being mispriced. The debt bubble was allowed to grow over the last 40 years and is now starting to burst. Due to cheap money, speculation and leverage have grown enormously. The tech stock and housing bubbles were the latest examples of that. He hopes that we will get rid of the unrestrained money systems with all its imbalances and return to some sort of gold standard system. The accumulation of gold by central banks hints to the fact that gold will play a bigger monetary role in the future.

Talking about European Central bank policy, Martenson speculates that the ECB could be revealed as a "paper tiger", that is unable to stop speculation against European bonds. This could lead to an escalation of the euro crisis if the ECB does not follow the unprecedented example of the Fed in buying up massive amounts of sovereign debt, even though this violates its rules. He wishes more people took the time to understand basic economics; the illusion that government can pay for something without having to collect taxes in the same amount has been created by the constant accumulation of debt. But since debts can't be grown forever we are now in the early stages of finding that the idea that we can always expand and that debt doesn't matter is wrong. Martenson is afraid, that our society as a whole is not prepared for this paradigm shift yet. He believes that resource efficiency and access to resources will be much more important in the future.

How President Obama Is Rapidly Becoming A Gold Bug's Best Friend

Posted: 03 Dec 2011 02:47 PM PST

In the latest note from the masters of the arcane at ConvergEx, Nick Colas' team looks at the historically very strong correlation between home prices (which recently hit an 8 year low: here and here) and unemployment, a foundation stone in every single QE episode as to the Chairman the only controlled variable to set the unemployment rate are average home prices, and flips it. In other words, in their Friday analysis ConvergEx try to extrapolate just by how much home prices need to rise to hit the Fed's projected unemployment rates of 8.7% in 2012 (absent the now generic labor participation rate fudge of course), 8.2% in 2013 and 7.7% in 2014. The answer is disturbing: "In order for unemployment to reach 8.7% in the Composite-10 next year (2012), home prices will have to rise by an average of 3.5%. To reach 8.2% in 2013, they will have to climb 9.4% from their current prices. For a 7.7% unemployment rate in 2014, the necessary rate of increase is 15.4%." It is disturbing because while Case Shiller predicts a 2.7% rise in 2012, we have now seen the 5th consecutive drop in home prices, and the largest sequential decline since March 2011. In other words, not only are home prices not rising, or even stabilizing, they are suddenly deteriorating at an alarming pace yet again. ConvergEx continues: "we have no doubt that the Fed knows these numbers. They know that the housing market only needs a little boost in prices and if historical correlations are trustworthy then the labor picture should begin to brighten. The biggest overhang to this relationship is, of course, the still dauntingly high level of foreclosures and still-empty houses. Only slightly less concerning is the incremental scrutiny all mortgage applications now receive from potential lenders."

And the conclusion for anyone who still does not see why upcoming paper dilution means a non-paper solution (in the form of hard assets) - "If it costs a QE III to get the 3.5% bump in real estate prices, or even a QE IV, then markets should not doubt that the current Federal Reserve will seriously consider it." At the end of the day, the only thing the Fed thinks it can control are asset prices for that most critical of assets: housing. And if rising home prices means diluting a few hundred billion more dollars, so be it. After all, we are now less than 12 months from the presidential election, and all bets are off. As SocGen predicted, expect to see massive monetary easing resume as soon as January when Obama realizes he needs something to go right or else he can kiss that second term good bye. Ironically, the lower the president's interim rating, the higher the price of gold will ultimately rise when all is said and done. Who would have thought that the worst president since Carter would be a gold bug's biggest friend.

Full note from ConvergEx:

When All You Have is a Hammer, Everything Looks Like a Nail

Summary: Even as economists and market watchers celebrate recent improvements in U.S. macroeconomic trends, both the residential housing and labor markets still appear moribund. That's really no surprise, as the correlation between the two markets has been historically quite high. But is that correlation or causation? The Federal Reserve is clearly banking on the latter. So how much do house prices have to recover from current levels to get us to the Fed's own forecast for unemployment in 2012 and beyond? Based on our analysis of the historical data, house prices - as measured by Case-Shiller - will have to increase by 3.5% over the next 12 months to reach the Fed's projected unemployment rate of 8.7% for 2012. To hit the Fed's unemployment targets in 2013 and 2014, the appreciation in residential housing will have to be on the order of 9.4% and 15.4% over those periods. These aren't especially daunting numbers, but they do require an inflection point. House prices are still, after all, trending downward. If that requires a full blown QE III, so be it.

"During these 2 years business conditions had grown steadily worse, unemployment had increased, construction had practically reached a standstill, foreclosures had mounted rapidly, and commercial and banking failures had increased sharply…and appeals for direct governmental assistance for distressed home owners were pouring into the Nation's capital."

Sound familiar? No, it's not Fed Chairman Bernanke testifying in front on Congress – it's the Federal Home Loan Bank Board's Fifth Annual Report, published in 1937 (http://fraser.stlouisfed.org/publications/holc/issue/3011/download/40594...). In the years following the Great Depression, the report shows, mortgage delinquency rates soared as wide scale property price deflation increased the real value of outstanding mortgage debt and rising unemployment meant that more and more people were unable to make payments. Home prices also fell sharply, making it less likely that a homeowner could sell his property to pay the balance on his loan.

Almost seven decades later, we're facing an eerily similar situation: continuing high unemployment, little new construction, an increasing number of foreclosures, bank failures, and, most notably, high mortgage delinquency rates and a seemingly endless decline in home prices.

In the 1930s, the solution was the creation of a slew of federal government agencies which purchased distressed mortgages, offered a stable source of funds for loans, and issued over one million loans for residential-mortgage and economic development. These agencies brought the mortgage market back from the brink and saved many homeowners from crippling mortgage debts:

FHLB – Federal Home Loan Bank System
HOLC – Home Owners' Loan Corporation
FHA – Federal Housing Administration
FSLIC – Federal Savings and Loan Insurance Corporation
FNMA – Federal National Mortgage Association (a.k.a. Fannie Mae)

Today, the Federal Reserve is trying to emulate that success – albeit using a different set of tools. Consider the following statement from Chairman Ben Bernanke: "The housing sector has been a significant driver of recovery from most recessions in the US since WWII. But this time…" (August 26, 2011) This time, housing hasn't rebounded. Many homeowners (some estimates place the percentage as high as half) are "underwater" on their mortgages, new home construction is at one-third of its pre-crisis level, and, most importantly, home prices continue to decline.

Several weeks ago, the Fed introduced "Operation Twist" – a plan to sell $400 billion worth of short-term holdings and use the proceeds to buy longer-term debt with the aim of pressuring long-term yields even lower. A primary purpose of the program was to push down 30-year fixed mortgage rates (FMR), which are tied to the 10-year Treasury bond yield, in order to make homes more affordable and refinancing more manageable for both current homeowners and new buyers. Almost immediately after the program was announced in late September, the average 30-year FMR ticked down from 4.09% (September 23) to just 3.94% in the week ending October 7. In the last few weeks, the rate has hovered around 4.00%, among the lowest levels ever recorded for the 30-year FMR.

There has been a good amount of backlash directed towards Bernanke and the Fed for choosing to influence the housing market rather than focusing on the letter of the institution's famous "Dual mandate": maximum employment in the context of stable prices. Clearly, Chairman Bernanke sees the housing market as cornerstone economic issue, and one that can (when properly pushed and prodded) help create a lasting economic recovery with attendant gains in domestic labor markets.

We decided to look more closely at home prices and unemployment to see what (if any) reason the Fed had to be focusing so heavily on the housing market in its pursuit of economic expansion. We compiled data from 1997 (the first year Case-Shiller kept records for their Composite-10 Index) to the present for both home prices and unemployment across 10 major metropolitan statistical areas (MSAs): Los Angeles, San Diego, San Francisco, Denver, Washington DC, Miami, Chicago, Boston, New York, and Las Vegas. Our findings are as follows:

There is a clear and robust correlation between the historical trends for home prices and unemployment levels for the Composite-10. As the charts below indicate, the relationship between home prices and unemployment is inverse; that is, increases in home prices correlate directly with decreases in the unemployment rate and vice versa.
This correlation also holds true at the individual metro-area level. Some MSAs, such as Boston and New York, experienced relatively moderate declines in home prices after April 2006, increases in the unemployment rate in those regions were also modest. Not surprisingly, those areas worst affected by the housing crisis suffered significantly higher unemployment rates.
The increase in home prices during the housing boom from 2000 to the peak in April 2006 also correlates closely with the price decline following the bust. Among the Comp-10, home prices increased 107.59% from August 2000 until April 2006; conversely, prices declined by 32.23% after the bust. Most notably, those areas that saw the largest increase in home prices during the boom (Las Vegas, Miami, Los Angeles) also saw the steepest declines when the bubble burst. Essentially, every MSA in the Case-Shiller index exhibited strong and predictable mean-reversion as they went from boom to bust.

The most obvious dataset that supports the correlation between home prices and labor markets is construction employment. As the chart shows, those areas that experienced the largest decline in home prices also experienced the largest declines in construction employment during the years following the bust – homes in Phoenix, for example, lost 56.6% of their value, while construction employment dropped 53.5%. Correspondingly, those MSAs in which construction employment declined the least had similarly modest declines in home prices during this period; Dallas home prices only declined 7.12%, while construction employment only went down 0.34%.

These correlations serve to show that the Fed's Operation Twist (and all that Quantitative Easing – past, present and future) is in fact directed towards one of its mandates: promoting maximum employment. Clearly, the Fed sees increasing home prices as a driver of economic recovery because increasing home prices are correlated with higher employment levels and overall better economic health. By decreasing mortgage rates, it hopes to drive up home prices which, in turn, according to this analysis, should also drive down unemployment. Yes, we know that correlation isn't always causation, but we'll flesh out that thought in a minute.

With this in mind, we looked at how much home prices would have to rise both nationally and regionally in order for unemployment rates to meet Fed projections for 2012, 2013, and 2014. The most conservative rate estimates given by the Fed at the latest FOMC meeting are:

8.7% in 2012
8.2% in 2013
7.7% in 2014

By comparing changes in the unemployment rate to percentage changes in home values both on average and individually for the Composite-10, we calculated a regression analysis through which we determined the percentage increase required in home prices to achieve a particular unemployment rate. Using this equation, we came to the following numbers:

For every 5% increase in home prices for the Composite-10, the unemployment rate drops 0.4 points.
In order for unemployment to reach 8.7% in the Composite-10 next year (2012), home prices will have to rise by an average of 3.5%. To reach 8.2% in 2013, they will have to climb 9.4% from their current prices. For a 7.7% unemployment rate in 2014, the necessary rate of increase is 15.4%.
Case-Shiller predicts a 2.7% climb in home prices for next year. On the one hand, that seems a pretty positive outlook, since it takes us most of the way to the 3.5% increase that gets us to the Fed's target unemployment rate. But – and it's a big "but" – house prices are still declining. If you want to be generous, you might say they are "stabilizing." But they are certainly not rising.

Now, we have no doubt that the Fed knows these numbers. They know that the housing market only needs a little boost in prices and if historical correlations are trustworthy then the labor picture should begin to brighten. The biggest overhang to this relationship is, of course, the still dauntingly high level of foreclosures and still-empty houses. Only slightly less concerning is the incremental scrutiny all mortgage applications now receive from potential lenders.

The essential point, however, is that the Fed knows it has to stop the deflationary cycle in the residential housing market. Chairman Bernanke is a student of the history we quoted at the top of this note. If it costs a QE III to get the 3.5% bump in real estate prices, or even a QE IV, then markets should not doubt that the current Federal Reserve will seriously consider it. Whether low interest rates will actually do the trick is another matter. Correlation and causation look the same when viewed in a historical context.

How President Obama Is Rapidly Becoming A Gold Bug's Best Friend

Posted: 03 Dec 2011 02:47 PM PST

Full note from ConvergEx:

When All You Have is a Hammer, Everything Looks Like a Nail

FHLB – Federal Home Loan Bank System
HOLC – Home Owners' Loan Corporation
FHA – Federal Housing Administration
FSLIC – Federal Savings and Loan Insurance Corporation
FNMA – Federal National Mortgage Association (a.k.a. Fannie Mae)

There is a clear and robust correlation between the historical trends for home prices and unemployment levels for the Composite-10. As the charts below indicate, the relationship between home prices and unemployment is inverse; that is, increases in home prices correlate directly with decreases in the unemployment rate and vice versa.
This correlation also holds true at the individual metro-area level. Some MSAs, such as Boston and New York, experienced relatively moderate declines in home prices after April 2006, increases in the unemployment rate in those regions were also modest. Not surprisingly, those areas worst affected by the housing crisis suffered significantly higher unemployment rates.
The increase in home prices during the housing boom from 2000 to the peak in April 2006 also correlates closely with the price decline following the bust. Among the Comp-10, home prices increased 107.59% from August 2000 until April 2006; conversely, prices declined by 32.23% after the bust. Most notably, those areas that saw the largest increase in home prices during the boom (Las Vegas, Miami, Los Angeles) also saw the steepest declines when the bubble burst. Essentially, every MSA in the Case-Shiller index exhibited strong and predictable mean-reversion as they went from boom to bust.

8.7% in 2012
8.2% in 2013
7.7% in 2014

For every 5% increase in home prices for the Composite-10, the unemployment rate drops 0.4 points.
In order for unemployment to reach 8.7% in the Composite-10 next year (2012), home prices will have to rise by an average of 3.5%. To reach 8.2% in 2013, they will have to climb 9.4% from their current prices. For a 7.7% unemployment rate in 2014, the necessary rate of increase is 15.4%.
Case-Shiller predicts a 2.7% climb in home prices for next year. On the one hand, that seems a pretty positive outlook, since it takes us most of the way to the 3.5% increase that gets us to the Fed's target unemployment rate. But – and it's a big "but" – house prices are still declining. If you want to be generous, you might say they are "stabilizing." But they are certainly not rising.

The transatlantic panic

Posted: 03 Dec 2011 02:02 PM PST

FGMR - Free Gold Money Report In recent months the European sovereign debt crisis has acquired a transatlantic scope. The political posturing in the summer surrounding the debate to increase the US government's debt limit has highlighted the fragility of its financial position. That awakening in turn led to the US government losing its triple-A status as well as a greater awareness that numerous US states and local governments have for too long lived beyond their means, a point emphasised by the recent bankruptcy of Jefferson County, Alabama – the largest municipal bankruptcy in US history. And as was made clear this week, politicians in Washington still remain at loggerheads on the issue of cutting the Federal deficit. All of this has contributed to greater financial unease on both sides of the Atlantic. We need to add to the mix of over-leveraged sovereigns the United Kingdom, which is probably more deserving of a downgrade from triple-A status than the US. More al...

Sol Sanders | Follow the money No. 95 -- China may soon become the problem

Posted: 03 Dec 2011 12:54 PM PST

Latest from Uncle Sol. A version of this article is probably going to run in the Washington Times on Monday -- Chris

Follow the money No. 95 | China may soon become the problem

By Sol Sanders solsanders@cox.net

Creeping up on the outer edges of Wall Street and The City soothsayers' economic crystal ball, until now dominated by American and Euro crises, is growing concern about China.

The inane idea China [and India, which is also in trouble] would somehow rescue the world economy is now, finally, dismissed by the pundits -- without apologies. How a largely export-led, mercantilist economy was to save the world with its principle markets in the U.S. and the EU winnowing down was never explained. Continued wishful references to Chinese leadership's equally improbable promises to boost domestic consumption are also falling away.

There is, in fact, a growing consensus the Chinese economy is spiraling down. One respected Hong Kong economist, Ms. Wang Tao of UBS, is predicting a gross domestic growth [GDP] rate toward 7% before yearend. That's below the red line 8% long considered by the double-domes as the minimum to satisfy jobs for China's growing population. Soon we can hope to hear an end to those straight-line projections – so wrong two decades ago in Japan predictions – which take China's current world No. 2 GDP to soaring heights. Indeed, China is the classic example of inadequacies of GDP as an economic barometer. Even assuming official figures are reliable -- which is a far stretch -- China's GDP has inflated with vast over expansion of infrastructure and massive corruption indicating enormous activity but not necessarily a basis for continued stability and growth. [Remember Euroland's GDP/consumption figures before the fall!] Nor do we have more than a notional figure for huge military outlays.

Granted, some of us who have been predicting a China crash for years, arguing its miraculous transformation was jerrybuilt. But we have always said what would trip the fall, when, and how the Chinese would cope with it, is unpredictable – as so many things in life. Some fulltime observers are now turning to the banking structure as chief concern. Whether you look at inadequacies of Communist Party decision makers in their see-saw battle to maintain maximum growth but head off any hint of inflation, a traditional Chinese destroyer of dynasties, the outlook is grim. Larry Lang, a Hong Kong TV personality and Chinese University professor of finance, recently labeled provincial finances as "China's many Greeces". Beijing's writ – as an old proverb goes – ends no longer at the village gate but increasingly at the provincial capital where regional authorities defy the center, desperate to meet growing resources demands. Local politicos have wheedled, persuaded, bribed and threatened local government banks into credit far beyond their capacity to repay. Add that to the huge stock of non-performing loans banks give their Party buddies in the huge inefficient government companies and you have what could be the mother of all financial fiascos.

Just as politics does not end at the banks' doors, the Communist Party is moving into a generational leadership succession year. In theory, the new president and prime minister have been anointed. But there is a lot of shin-kicking with the usual Communist turn to so-called ideological arguments masking personality, regional and purely economic interests. A kind of neo-Maoism has surfaced. And it could take on new life as economic problems deepen because there has always been a strong Party constituency for preserving Soviet controls, planning and government ownership. Never mind that the fabled Chinese entrepreneurial spirit has taken hold with the partial liberalization of the past two decades. But much of this private sector with its disproportionately higher productivity was exports now hit hard with the downturn in the U.S. and Europe.

This has collapsed thousands of private businesses, particularly in South China's clothing and gizmo assembly operations, leading to dramatic literal disappearances of owners and managers and growing unemployment. This, in turn, has fed already escalating unrest; Beijing has stopped reporting even the very suspect official figures. It's early on, of course, to predict this would develop into the kind of provincial disintegration bringing down virtually every China ruling dynasty through its long history. Still….Meanwhile, China's drop in demand for raw materials is already hitting world commodity markets – iron ore, for example, and soon to be coal and soya. That will have its effects on the overseas suppliers from Angola to Brazil to Australia [which has already seen a 10% drop in its high-flying dollar of a few weeks ago]

Gold, Eurodollars, and the Black Swan That Will Devour the US Futures and Derivatives Markets

Posted: 03 Dec 2011 12:06 PM PST

This posting includes an audio/video/photo media file: Download Now

Michael Pento: Insanity Next Week, Watch Europe & Gold

Posted: 03 Dec 2011 11:51 AM PST

from King World News:

With huge volatility in all global markets, the Dow at 12,000, oil above $100 a barrel and gold near the $1,750 level, today Michael Pento, of Pento Portfolio Strategies, writes for King World News to warn readers KWN readers that next week may be the most volatile for all of 2011, "Last week many Wall Street investors were duped into believing the European debt crisis was well on the way to being solved. That's because six central banks led by the Federal Reserve made it cheaper for foreign banks to borrow dollars in emergencies. Stocks and commodities rallied as the U.S. dollar fell in the belief that the Fed was somehow committing to purchasing European debt."

Michael Pento continues: Read More @ KingWorldNews.com

Paper Currency Tour of Death (Brought to You by General Mills)

Posted: 03 Dec 2011 11:25 AM PST

by Stefan B., SGTreport.com:

I was digging through a box of 'junk' earlier today that contains several items that I've had since I was a child. A grey plastic folder with a "Post" cereal logo caught my eye, and I immediately remembered exactly what was inside it, although it's old enough that Mr T. was still cool when I last laid eyes on it (he did own a lot of gold… maybe he was ahead of his time?).

At the time, General Mills was putting worthless foreign paper currencies in their cereal boxes, as a novelty item. I do not recall exactly how much cereal I ate as a child, but apparently it was an absolutely staggering amount, as I was left with enough cash to buy a cereal company.

It makes you ask the simple question: Why would anyone possibly believe that Federal Reserve Notes are so magical that they couldn't become so worthless as to be given out as novelty items in someone's cereal box, on the other side of the world, in the not to distant future? It's not that unthinkable…

Click on any image to open a larger version…

Michael Pento - Insanity Next Week, Watch Europe & Gold!

Posted: 03 Dec 2011 09:17 AM PST

This posting includes an audio/video/photo media file: Download Now

Comex Silver Open Interest Lowest Since May 2009

Posted: 03 Dec 2011 09:10 AM PST

We have received feedback asking if we knew that "the (COMEX) silver open interest is at the lowest it has been in many, many years," or "has fallen below 100,000 contracts for the first time in many years." For the record, as of Tuesday, November 29, the COMEX silver open interest for the big 5,000 ounce contract was 98,959 contracts open following the roll to March and with a large number of non-commercial spread trades* having been taken off (Non-commercial traders reduced spread trades by 6,195 lots in this most recent report according to the CFTC, with 4,818 of those cancelled spreads attributable to traders the CFTC classes as Managed Money).

As the chart just below reveals, the COMEX open interest for silver is indeed at a low level, but not the lowest for "many, many years." The last time the COMEX silver open interest was this low or lower was in the May 26, 2009 COT report (98,120 contracts open then). For reference, the lowest silver open interest on the chart below occurred with the December 2, 2008 report, at 82,434 contracts open.

To head off a question we know we will get from one Vulture in particular, the lowest COMEX silver open interest in our records since 2000 was with the December 21, 2001 report, at 63,848 contracts open then. The highest? February 19, 2008 at a whopping 189,151 lots open then.

Comex Open Interest for SI since June 2006

*A spread trade is a simultaneous long and short trade of the same commodity meant to capture or arbitrage convergence or divergence of the difference between two different contract time periods – or to capture the contraction or widening of the basis.

The Best of the Bozeman Police Reports

Posted: 03 Dec 2011 08:55 AM PST

Culled from the Police Reports page of the Bozeman Daily Chronicle come the best of the Bozeman police reports from the last week along with some items from the Sheriff's Office. Note that a new book featuring the very best of these police reports is now available from the Chronicle for only $10 – just click on the banner below to find out how to order.

It looks as though they had an "off week" at the Chronicle as the latest batch of police reports contains little of the typically colorful commentary that is normally found. I guess everyone has been preoccupied by the big playoff game now underway at Montana State University where the 9-2 Bobcats are hosting the 8-3 New Hampshire Wildcats. As this is written, it is half-time with New Hampshire leading Montana State 19 – 17.

A man reported "a suspicious male who attempted to sell him some things. The male turned out to be a door-to-door salesman with a permit to sell."
A man was warned for walking in the middle of the street while drunk at 1:17 a.m.
A man pulled a rifle from a truck during a dispute on West Main Street at 2:19 a.m. Police confiscated the gun. The man called dispatch at 4:41 a.m., asking for the rifle back.
A man was caught dumping trash into a Dumpster that didn't belong to him. Officers made him pick up the garbage and cited him.
Officers helped two drunken women find their apartment after they tried to get into one that was not theirs.

An 83-year-old woman was caught stealing a sweater and wine from Costco.
Several hunters were maneuvering their cars along Penwell Bridge and Walker roads to keep a large herd of elk from reaching the mountains.
The driver of a white Ford Taurus tore through a Dollar Drive parking lot, almost hit a dog and then flipped off the dog's owner.
A teenage girl trying to walk to Butte stopped to use the bathroom at a Honeysuckle Drive house. Neighbors noticed she had a throwing knife strapped to one leg.
A caller on Grand Avenue suspected their neighbor might be on meth, noting the neighbor's doors were all open, the hood of their van was up, dishes were strewn about and that there were hoses running into a snow bank.
A brown horse was seen walking south in the middle of Amsterdam Road at 7:40 a.m. Deputies corralled the horse.
A skier at the Yellowstone Club pocket dialed 911 at 2 p.m.
Kids were playing with a phone and repeatedly dialing 911 around 4:30 p.m.
Around 4 a.m., police "helped an extremely upset and intoxicated female get home" after she inadvertently left her purse and keys in a bar after closing.
A medical provider at the hospital called around 1:45 p.m. saying a patient was "now recalling that he was in a car accident" sometime early that morning.
A man on West Main Street flagged down an officer to show off his new puppy.
A white dog with a red collar has killed six chickens near Baxter and Love lanes. The chicken owner plans "to shoot the dog next time it comes back."
Someone went through a Churchill Road car and threw the owner's paperwork around.
A possible buffalo was sighted "lumbering along slowly" north in the southbound lane of Gallatin Road.

China Services PMI Crashes As US Lags Not Decouples

Posted: 03 Dec 2011 07:37 AM PST

After hours last night, when all but the most dedicated of market savants (or late stumblers home from a night out checking the Bloomberg one more time) are sleeping, China released its Non-manufacturing PMI data and it was a howler. The series is very cyclical but we note that the November print fell dramatically to its lowest level since the middle of 2008's global economic meltdown. Dropping below the 50 (deteriorating) line for the first time since Feb2011 and combined with the dismal manufacturing PMI print from earlier in the week, we are reminded of David Rosenberg's critical insight 'Don't confuse resilience with lags' when we hear further chatter about the US apparent miracle decoupling. It seems that this 'lag' is already impacting US firms, as we noted earlier, and with EM nations increasingly starved of credit via European bank deleveraging, it seems a game-of-chicken between the Fed and the PBOC may begin on who prints/QEs first to save the world from reality once again.

China non-manufacturing PMI is evidently extremely cyclical (the orange curves) but we note the huge drop off in the November print relative to previous years. Not only is the first November print below 50 in 3 years its only been worse than this level during the crisis meltdown of the global economy.

And from David Rosenberg's Friday Breakfast with Dave, OASIS OF PROSPERITY:

On September 4, 1998, Alan Greenspan famously said, "It is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress".

Everybody talks about decoupling again, this time in reverse. The US economy will somehow not feel the effects of a European recession, even though GDP growth in America is 86% correlated with the pace of activity in the continent.

Don't confuse resilience with lags.

Be that as it may, it is interesting to see practically every country in the world with manufacturing diffusion indices below 50 and the US above 50.

While the Fed secretly gives away trillions to paper bugs the world quietly adopts an international gold standard

Posted: 03 Dec 2011 06:41 AM PST

Trading Physical Gold As Easily As You Trade Stocks: Is Gold Becoming A Tradable Currency After All?

Pan For Gold On The Streets Of New York City!

Posted: 03 Dec 2011 06:39 AM PST

Another Reason Silver Prices Could Roar Higher

Posted: 03 Dec 2011 06:39 AM PST

Matt Badiali writes: Silver is an amazing metal... which is why it's likely to soar over the coming years... You see, silver has more than 10,000 uses. It's one of the world's best conductors of heat and electricity. Inventors filed more patents on silver uses than any other precious metal in the world. And when silver is used for most industrial and technological purposes, it is used up forever... It simply costs too much to try to recycle the tiny bit of silver from every cell phone or casino chip.

Peter Schiff’s Urgent Update to Gold & Silver Investors

Posted: 03 Dec 2011 06:24 AM PST

By Dominique de Kevelioc de Bailleul

Following the surprise move by the Fed and five other central banks to lower the interest rate of dollar swaps by 50 basis points, through Feb. 1, 2013, Euro Pacific Capital CEO Peter Schiff issued a special and urgent update to investors.

"There's an old expression that nobody rings a bell when it's time to buy or sell," Schiff began his video message of Wednesday. " . . . Well, I think the world's central banks rung a pretty loud bell today to buy precious metals."

As the Dow opened on Wednesday, soaring more than 400 points, gold vaulting more than $30 per ounce and silver adding more than a buck following the Fed announcement that the world will soon be flooded with more dollars due to the coordinated cut in the swaps rate, the US currency dropped sharply against its peers which comprise the UDX.

"I believe that it [the dollar] is going to lose a lot more value, not just against other fiat currencies, but against real money, gold and silver," Schiff continued. "I think investors should be buying. Those of you who've been on the sidelines waiting for an opportunity to buy, I would not wait much longer; I would just buy."

Which is a Better Long-term Value ? Current House Prices or Current Price of Gold?

Posted: 03 Dec 2011 06:22 AM PST

So says*Daniel Amerman CFA*([url]http://danielamerman.com/[/url]) in edited exerpts from his original article*:[INDENT]Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The report’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. [/INDENT]Who in the world is currently reading this article along with you? Click [COLOR=#0000ff]here[/COLOR] Amerman goes on to say, in part: When we take the $171,900 current median national price for an existing single family home (per the National Association of Realtors) and ...

Jim Rogers: Faber's Wrong About China

Posted: 03 Dec 2011 06:15 AM PST

Jim Rogers thinks Marc Faber has got it wrong about China, when he says the country is possibly headed for a hard landing, which would lead to a devastating impact on commodities around the world.

"Marc still does not understand China. There are going to be several hard landings in the next few years, but China's will be less hard overall than others such as Greece, U.S., et al," Rogers told CNBC in an email.

Rogers says some parts of China's economy will have a "hard landing" but other parts will continue to boom. He says the commodity market will have a correction, but rebutted Faber's view that it would be devastating.

"Yes, there will be consolidations in the commodity bull market just as all markets have consolidations," he said. "In 1987, stocks declined 40-80 percent worldwide, but it was not the end of the secular bull market in stocks."

Rogers said he was still long commodities, adding that gold went up 600 percent in the 1970s and then corrected by 50 percent scaring a lot of people. "It then continued its secular bull market and rose 850 percent. Corrections are the normal way of all markets."

According to Faber, Rogers' bullish call on commodities is misplaced. "If I was always bullish about commodities and completely missed out on the crash in 2008, then obviously, having tied essentially my reputation to commodities, I'd continue to be bullish," Faber said.

But Rogers said Faber had got it wrong when it came to his call in 2008. "I proclaimed repeatedly far and wide that one should not buy commodities in the run up phase. I also explained that I was not selling mine since we were [and are] in a secular bull market," Rogers said.

"I explained that my shorts of Citibank, Fannie Mae, all the investment banks and homebuilders, plus my long position in the Japanese yen would protect me in any sell-offs. When one's shorts decline 90-100 percent, it is a good year even when one's longs decline," Rogers added.

According to Rogers, Faber is the one who has made many wrong calls, arguing that he "totally missed" the secular bull market in commodities that began in early 1999.

"Also back in those days, he and his friends proclaimed often that China was a mess and would continue to be so," Rogers said. "They all were wildly excited about Russia. Some of his friends even left China to start operations in Russia. We all know how that resulted."

Source: CNBC

Clearing Houses Are The Mechanism Of All Markets

Posted: 03 Dec 2011 05:42 AM PST

from JSMineset.com:

My Dear Extended Family,

We all know bank's balance sheets are cartoons due to FASB's capitulation on the fair market value issue, that the euro financial leaders do not deserve the title leader, and that the Fed is the source of liquidity for Euroland in unlimited cheap dollar swaps, but there is more.

That more is the first failure of a major clearing house.

Clearing is the mechanism of all markets.
It is the guts of the system.
It is the engine under the hood of finance.
It is the pulleys that turn inside the watch.
It is basic to finance for without clearing trades cannot close.

Without faith in the clearing house system where is faith that what your account statement says means anything whatsoever?

Unless MF clients are made whole in every way, the system is broken. It is as if the heads blew off the engine of finance. Where can you keep your money and investments if a clearinghouse is allowed for whatever reason to go broke, therein leaving the clients to suffer?

Read More @ JSMineset.com

Jim Rogers: Europe, Gold, Commodities and the Dollar

Posted: 03 Dec 2011 05:13 AM PST

Porter Stansberry talks to Jim Rogers. Listen to the interview here

Alasdair Macleod: Raw inflation via SDRs is next in central banking's scheme

Posted: 03 Dec 2011 05:10 AM PST

1:10p ET Saturday, December 3, 2011

Dear Friend of GATA and Gold (and Silver):

Economist and former banker Alasdair Macleod writes today that raw monetary inflation via the cashing of Special Drawing Rights from the International Monetary Fund likely will be the next step by central banks to save bankrupt nations, last week's currency swaps having been undertaken to rescue insolvent banks. Macleod's commentary is headlined "Currency Swaps -- the Beginning of a Solution?" and it is posted at GoldMoney's Internet site here:

http://www.goldmoney.com/gold-research/alasdair-macleod/currency-swaps-t...

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

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Golden Phoenix Completes Operating Agreement
for Santa Rosa Gold Mine in Panama

Golden Phoenix Minerals Inc. (GPXM) has entered a joint venture operating agreement with Silver Global S.A., a Panamanian corporation, governing the operational and management aspects of their new joint venture company, Golden Phoenix Panama S.A., a Panamanian corporation formed to hold and operate the Santa Rosa gold mine in Canazas, Panama, and explore the mine's adjacent property.

Golden Phoenix will be manager of the joint venture company. Silver Global will handle all social programs, political and community relations, and human resource matters for the joint venture company in Panama. Golden Phoenix and Silver Global also have agreed to work together on all future acquisitions within Panama and to bring such new opportunities to the joint venture company.

Golden Phoenix will be earning in to a 60 percent interest (and potentially an 80 percent interest) in the Santa Rosa mine. Upon signing the joint venture agreement and completing the corresponding acquisition payment, Golden Phoenix will earn an initial 15 percent interest in the joint venture company.

Tom Klein, CEO of Golden Phoenix, says the agreement "creates a solid foundation for the development and planned re-opening of Mina Santa Rosa."

For Golden Phoenix's full statement on the joint venture operating agreement, please visit:

http://goldenphoenix.us/press-release/golden-phoenix-completes-joint-ven...

Join GATA here:

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

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Saturday-Sunday, February 11-12, 2012
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Currency swaps – the beginning of a 'solution'?

2011-DEC-03

By far the most important event of the week was the joint announcement by the world’s leading central banks that they were extending existing US dollar swap agreements and lowering the swap rate. Furthermore, these dollar swaps will be extended to secondary swaps between individual central banks in non-dollar currencies as required.

The stated purpose of this action, according to the Bank of England, is to ease strains in financial markets to ensure credit continues to be available to households and businesses, and so foster economic activity. Forget the PR spin, it is simply about saving the banks and that is why markets jumped, fuelled by a massive bear squeeze ahead of and after the announcement.

Market reactions aside, the plans for resolving the West’s financial and economic difficulties are becoming clear. There are two different elements to this crisis, which should not be confused: the problems faced by the banks as their balance sheets continue to contract, and Euroland sovereign debt. The agreement to extend currency swaps is designed to help the banks, and measures to address sovereign debt will probably be announced shortly.

The obvious way to deal with sovereign debt will be through the International Monetary Fund, perhaps issuing SDRs (Special Drawing Rights). The SDR was created by the IMF in 1969 to support the Bretton Woods system of fixed exchange rates, a function that was swept away by events. According to the IMF, the SDR is not a currency, but a claim on “the freely used currencies of IMF members”. So if an SDR facility is extended to Italy, for example, the SDR can be cashed in for the underlying currencies and converted into euros. The facility is sitting there unused.

If the SDR route is taken, governments such as Italy would become net buyers of euros, generating a bear-squeeze in both the euro and government bonds bringing yields down smartly. Market-aware central planners love this sort of thing, because they can force the switch in market sentiment from extreme pessimism to do much of their work for them.

So far, so good; but to anyone with a grasp of the economics of sound money, the encashment of SDRs is raw monetary inflation. But with the economic establishment and the general public happy to accept quantitative easing as a responsible economic policy, despite its ultra-thin cover for monetary inflation, it is unlikely the inflationary aspects of SDRs will be understood. Instead, the media will praise the benefits of international co-operation to resolve the sovereign debt problem, selling the concept as a way to counteract contracting bank credit to prevent deflation.

Whether or not the short-term fix for the sovereign debt problem is by activating SDRs, the underlying truth is that a way will be found and it will involve monetary inflation. The alternative is a transfer of real wealth to governments in trouble through taxation of one form or another, and that is not going to happen. So we will end up with two solutions to the current crisis, both of which will accelerate the expansion of money supply everywhere. This is confirmation of a trend firmly established and from which there is no politically acceptable escape.

Money-creation that cannot be stopped has only one logical outcome: the complete debasement of the currency. This is good for gold and silver. Furthermore the first two days’ delivery notices on Comex for the December gold contract total a massive 50 tonnes, indicating the futures market is also set up for a bear squeeze from lack of physical.

Tags: buy gold, central banks, dollar, IMF, inflation, SDR

Author: Alasdair Macleod

Alasdair Macleod

macleod@financeandeconomics.org

www.financeandeconomics.org

Nigel Farage: Major Banks Teetering on the Edge of Collapse

Posted: 03 Dec 2011 04:58 AM PST

King World News has just released the audio of their interview with Nigel Farage: Member of the European Parliament (MEP) & Founding Member of the UK Independence Party (UKIP)

Nigel is MEP for the South East region and is the leader of the parliamentary party in the EU parliament.

He has worked for British, French and American companies operating in the commodity markets, especially the London Metal Exchange (since 1982).

The central aim of the party is the UK's withdrawal from the European Union and to regain control of this nation's governance through our own Parliament at Westminster.

Nigel was a Conservative activist from his schooldays until the overthrow of Margaret Thatcher; John Major's signing of the Maastricht Treaty brought his membership to an end.

You can listen to the interview HERE. (On the left side of the page, half way down, click on the small purple logo that reads, "Listen to MP3 – CLICK HERE")

Human Freedom Rests on Gold Redeemable Money: Howard Buffett

Posted: 03 Dec 2011 04:51 AM PST

by Ed Steer, CaseyResearch.com:

The gold rally that began shortly after 3:00 p.m. Hong Kong time on Friday got hit by the bullion banks the moment that the gold price spiked when the jobs numbers were released at 8:30 a.m. Eastern time.

As I said in my quote in Friday's column…"I'm always interested in seeing how the gold price reacts, or is allowed to react to whatever B.S. numbers come out of the BLS."

Well, we found out.

Gold's high price tick came in at $1,764.40 spot…and the New York low was $1,740.80 spot. Gold closed at $1,745.30 spot, exactly the same price it closed at on Thursday. I wonder if someone got a prize for doing that? Volume was 121,000 contracts.

Read More @ CaseyResearch.com

Gold Daily and Silver Weekly Charts

Posted: 03 Dec 2011 04:46 AM PST

from Jesse's Café Américain:

Gold and silver popped with stocks today, but gave up most of their gains into the close.

I think this is a period when they pause, and will tend to follow stocks at least for the short term as the markets move up and down with rumours and headlines.

The fundamental trend is still very much intact. And the recent Fed activity in providing more dollars to Europe will at some point trigger a rally in gold, and silver, as priced in US Dollars. I have not recently calculated the lag in this. It does vary with the markets and seasons, the meddling of the banks in the precious metals markets being what it is.

I am informed that Greg Weldon sees gold's breakout level around 1804. You may read about that here. It makes some sense since that is roughly the high from the last big gold rally prior to the option expiration smackdown. Personally I see a breakout test around 1830 depending on what point we hit that angular trend channel top. But these are just quibbles. The big prize will be when gold takes out 2000, and then sticks a close above 2100. At that point the public might wake up and smell the burning paper. But perhaps not even then. It depends on what takes us there. It may turn out to be a 'blip' in a greater move higher.

Clearing Houses Are The Mechanism Of All Markets. The system is in a critical seizure.

Posted: 03 Dec 2011 04:18 AM PST

My Dear Extended Family: We all know bank's balance sheets are cartoons due to FASB's capitulation on the fair market value issue, that the euro financial leaders do not deserve the title leader, and that the Fed is the source of liquidity for Euroland in unlimited cheap dollar swaps, but there is more. That more is the first failure of a major clearing house. Clearing is the mechanism of all markets. It is the guts of the system. It is the engine under the hood of finance. It is the pulleys that turn inside the watch. It is basic to finance for without clearing trades cannot close. Without faith in the clearing house system where is faith that what your account statement says means anything whatsoever? Unless MF clients are made whole in every way, the system is broken. It is as if the heads blew off the engine of finance. Where can you keep your money and investments if a clearinghouse is allowed for whatever reason to go broke, therein leaving the cl...

Huge Gold Deliveries / Low Silver OI / Job Report / More Fallout MFGlobal

Posted: 03 Dec 2011 04:18 AM PST

by Harvey Organ:

Good morning Ladies and Gentlemen:

Before beginning, I would like to inform you that no USA bank entered the morgue last night. The FDIC decided to give the boys two extra weeks off due to their hard work for the past several months.

The bankers were surely ready with their fat fingers on the sell buttons in gold and silver as soon as the non farm payrolls were announced and they were weaker than expected. Gold had already reached $1764.00 during the night but when comex opened, the barrage begin. However gold would have none of this nonsense and it closed at $1747.00 up $11.70 on the day. Silver still remains a punching bag for the bankers as it lost 15 cents to $32.55. Let us now head over to the comex and assess trading, deliveries and inventory movements.

Technical Market Report for December 3, 2011

Posted: 03 Dec 2011 03:31 AM PST

Last week I pointed out how currency movements have recently had an extraordinary correlation with the equity markets. On cue central banks announced a plan to support the Euro and trash the dollar and the markets soared. Read More...

This Past Week in Gold

Posted: 03 Dec 2011 03:28 AM PST

Summary: Long term - on major buy signal. Short term - on sell signals. Volatility remains high which indicates a highly unstable market. Read More...

Trading Physical Gold As Easily As You Trade Stocks: Is Gold Becoming A Tradable Currency After All?

Posted: 03 Dec 2011 02:41 AM PST

Reggie Middleton Interviews GBI: Gold Bullion International

gbi-_gold_bullion_international

I
interview a unique firm located on Wall Street that allows investors
(retail & institutional) to actually buy, sell, trade and store
physical gold in the investor's own name. This is part one of a four
part series. This is the introduction. Parts 2,3, and 4 (yet to be
posted) feature some very tough questions. BoomBustBlog interviews are
not pushovers or advertisements. You must be able to hold your own.
Enjoy!

This is a competitor to GBI: Gold Bullion International. Click the graphic to access site.

Click graphic to the left to enlarge!

Click
the graphic to the right to download the Sprott Physical Gold Trust
Prospectus. Sprott is a BoomBustBlog client, but is not aware of this
post (at least not yet) and there are no conflicts here. I may have him
interviewed to enable him to counter assertions made in the interview
above.

Anyone
who considers gold the armageddon trade should also believe that our
select financial sector research will lead to a windfall. Subscriber
reports available to th right...

Free public versions that have
been stripped of tradable valuation information are available to
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interest or insightful, feel free to distribute it (intact) as you wish.

JPM Public Excerpt of Forensic Analysis Subscription 2009-09-18 00:56:22 488.64 Kb

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The SPDRs GLD prospectus is available here. Highlights:

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Gold exchange-traded product information sourced from Wikipedia, the free encyclopedia

Gold exchange-traded products are exchange-traded funds (ETFs), closed-end funds (CEFs) and exchange-traded notes (ETNs) that aim to track the price of gold. Gold exchange-traded products are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and New York. As of 25 June 2010, physically backed funds held 2,062.6 tonnes of gold in total for private and institutional investors.^[1] Each gold ETF, ETN, and CEF has a different structure outlined in its prospectus. Some such instruments do not necessarily hold physical gold. For example, gold ETNs generally track the price of gold using derivatives.

History

The
first gold exchange-traded product was Central Fund of Canada, a
closed-end fund founded in 1961. It later amended its articles of
incorporation in 1983 to provide investors with an exchange-tradable
product for ownership of gold and silver bullion. It has been listed on
the Toronto Stock Exchange since 1966 and the AMEX since 1986.^[2]

The idea of a gold exchange-traded fund was first conceptualized by Benchmark Asset Management Company Private Ltd in India when they filed a proposal with the SEBI in May 2002. However it did not receive regulatory approval at first and was only launched later in March 2007.^[3] The first gold ETF actually launched was Gold Bullion Securities, which listed 28 March 2003 on the Australian Stock Exchange. Graham Tuckwell, the founder and major shareholder of ETF Securities,
was behind the launch of this fund and enlisted N.M. Rothschild &
Sons (Australia) Ltd, Citibank and Deutsche Bank as market makers on the
ASX.^[4]

Fees

Typically
a commission of 0.4% is charged for trading in gold ETFs and an annual
storage fee is charged. U.S. based transactions are a notable exception,
where most brokers charge only a small fraction of this commission
rate. The annual expenses of the fund such as storage, insurance, and
management fees are charged by selling a small amount of gold
represented by each share, so the amount of gold in each share will
gradually decline over time. In some countries, gold ETFs represent a
way to avoid the sales tax or the VAT which would apply to physical gold coins and bars.

In the United States, sales of a gold ETF are treated as sales of the underlying commodity and thus are taxed at the 28% capital gains rate for collectibles, rather than the rates applied to equity securities.^[5]

Exchange-traded and closed-end funds

Central Fund of Canada and Central Gold Trust

The Central Fund of Canada (TSX: CEF.A, TSX: CEF.U, NYSE: CEF) and the Central Gold Trust (TSX: GTU.UN, TSX: GTU.U, NYSE: GTU) are closed-end funds headquartered in Calgary, Alberta, Canada,
mandated to keep the bulk of their net assets in precious metals, with a
small percentage of cash. The Central Fund of Canada holds primarily a
mix of gold and silver, while the Central Gold Trust holds primarily gold.

The custodian of the precious metals assets of both funds is the main Calgary branch of CIBC. Both funds are considered especially safe because of their published codes of governance and ethics, the Central Fund's history of operation since 1961, and the funds' simple prospectuses
which equate shares of the closed-end funds with real units of
ownership in the trusts. As of October 2009, the Central Fund of Canada
held 42.6 tonnes of gold and 2129.7 tonnes of silver in storage, and the
Central Gold Trust held 13.6 tons of gold in storage.

Claymore Gold Bullion ETF

In May 2009 Canadian-based Claymore Investments launched Claymore Gold Bullion ETF (TSX: CGL). As of November 2010 the fund held 10.4 tonnes in gold assets.^[6]

Exchange Traded Gold

Several associated gold ETF's are grouped under the name Exchange Traded Gold.^[7] The Exchange Traded Gold funds are sponsored by the World Gold Council, and as of June 2009 held 1,315.95 tonnes of gold in storage.^[7] Exchange Traded Gold securities are listed on multiple exchanges worldwide by various ETF providers, including:

SPDR Gold Shares

SPDR Gold Shares marketed by State Street Global Markets LLC, an affiliate of State Street Global Advisors,
accounts for over 80 percent of the gold within the Exchange Traded
Gold group. As of 2009, SPDR Gold Shares is the largest and most liquid gold ETF on the market, and the second-largest exchange-traded fund (ETF) in the world.^[8][9]

Stock market listings:

United States (NYSE: GLD), Japan (TYO: 1326), Hong Kong (HKEX: 2840) and Singapore (SGX:GLD 10US$)

The SPDR Gold Trust ETF (GLD) holds a proportion of its gold in allocated form in London at HSBC, where it is audited twice a year by the company Inspectorate. GLD has been criticized by Catherine Austin Fitts and Carolyn Betts for its extremely complex structure and prospectus, possible conflict of interest in its relationships with HSBC and JPMorgan Chase which are believed to have large short positions in gold, and overall lack of transparency.^[10] GLD has been compared with mortgage-backed securities and collateralized debt obligations.^[10]
These problems with SPDR Gold Trust are not necessarily unique to the
fund, however as the dominant gold ETF the fund has received the most
extensive analysis.

Gold Bullion Securities, ETFS Physical Gold and ETFS Physical Swiss Gold

ETF Securities "Gold Bullion Securities" (previously marketed by Lyxor Asset Management) listings:

Australia (ASX: GOL), Belgium, France

Save Your ASSets First

Sunday, December 4, 2011