Gold World News Flash |
- Bullion Rises in "Very Thin" Trade as ECB Cuts Rates…
- Ben Davies - “Your Country Needs Your Money”
- Shocking Charts And Statistics That Prove That America Is No Longer A Wealthy Nation
- Gold Seeker Closing Report: Gold and Silver Fall With Stocks and Oil
- US Army Preparing To Crush #OccupyWallStreet
- Gold - The Simple Secular Thesis
- The Horrifying Truth about the Collapse of the U.S. Economy
- Are Dim Sum Bonds The Next Chinese Reverse Merger Fraud?
- Risk Assets Deteriorating Rapidly On Europe's SNAFU
- Risk Assets Deteriorating Rapidly On Europe's SNAFU
- Morgan Monetary Piracy
- The Rotten Heart of Europe
- Guns and Gold
- Sarkozy: “The Risk That Europe Will Explode”
- Interview with David Galland 12-8-2011
- Capital Account: William K. Black on MF Global and Jon Corzine Culpability (12/08/11)
- Jawboning: Don`t Fail To Recognize It
- A Look Again At Why Gold is Falling ? and What Actions You Should Take
- Deja Vu? Is Gold Just in a Correcting Phase on Its Way to Parabolic Peak of $4,294?
- The Worldwide Depression/Recession Of 2012
- When Consumers Stop Consuming
- Gold Appearing Extremely Heavy
- Precious Metals Update: Focus on Silver
- The Silver and Gold Price Dropped, I Bought Silver and Gold Today
- Rosenberg On The 8 Areas Of Behavioral Change In 2012
- How Canada Lost the Smartphone, Err… Tablet Wars
- How to Make Money in a 'Fugly' Stock Market: Bob Moriarty
- Hitler Hears About The Collapse Of The Eurozone
- 15 More Days Left For Santa Claus Rally
- Gold Slips on Disappointment Over ECB Moves
| Bullion Rises in "Very Thin" Trade as ECB Cuts Rates… Posted: 08 Dec 2011 05:43 PM PST Bullion Vault
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| Ben Davies - “Your Country Needs Your Money” Posted: 08 Dec 2011 04:50 PM PST  In this piece, exclusively for the King World News blog, Ben Davies, CEO of Hinde Capital, gives KWN readers his take on what the central planners are up to and much more. In Davies' brand new interview he also discusses how this will impact gold and silver prices and many other key factors influencing the markets.
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| Shocking Charts And Statistics That Prove That America Is No Longer A Wealthy Nation Posted: 08 Dec 2011 04:17 PM PST from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
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| Gold Seeker Closing Report: Gold and Silver Fall With Stocks and Oil Posted: 08 Dec 2011 04:00 PM PST Gold rose $14.85 to $1756.15 by a little after 8:30AM EST, but it then fell to as low as $1704.08 by late morning in New York and ended with a loss of 1.96%. Silver surged to as high as $33.217 before it also fell back off in New York and ended with a loss of 2.83%.
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| US Army Preparing To Crush #OccupyWallStreet Posted: 08 Dec 2011 03:17 PM PST  An analyst informs that the US has its army on standby against the Occupy and student movement as the economic situation in America deteriorates day by day.As previously reported, the US has began a deployment of 20,000 troops in the US to deal with civil unrest in the even of a catastrophic even such as a massive large scale terror attacks or economic collapse . Then came news that our beloved Senate has passed SR 1867, the National Defense Authorization Act Bill. Furthermore, the bill will allow the military to treat American Citizens -- such as Occupy Wall Street protestors -- as terrorists by labeling them as threats to national security, and detain them indefinitely in military prisons. Be it civil unrest due to the super committee budget cuts or the a rapidly deteriorating economy that could become a depression greater than the Great Depression all signs indicate the government is preparing the US military for all out civil unrest. Be it the European Debt Crisis, the complete collapse of the US economy due to cancerous corporate greet and parasitic Wall Street Banks, Peak Oil or the truth finally being revealed about the true extent of the Fukushima nuclear meltdown on thing is clear -- the Army is being being mobilized for a domestic deployment on US soil against US citizen. Watch the video..... 
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| Gold - The Simple Secular Thesis Posted: 08 Dec 2011 03:16 PM PST It's more subtle and sophisticated than 'buy Gold and get rich.' But in the end, not much. Traders and speculators are always looking for the edge - much like the hares racing the tortoise. Read More...
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| The Horrifying Truth about the Collapse of the U.S. Economy Posted: 08 Dec 2011 03:13 PM PST  Most Americans still appear to be operating under the delusion that the "recession" will soon pass and that things will get back to "normal" very soon. Unfortunately, that is not anywhere close to the truth. What we are now witnessing are the early stages of the complete and total breakdown of the U.S. economic system. The U.S. government, state governments, local governments, businesses and American consumers have collectively piled up debt that is equivalent to approximately 360 percent of GDP. At no point during the Great Depression (or at any other time during our history) did we ever come close to such a figure? We have piled up the biggest mountain of debt that the world has ever seen, and now that gigantic debt bubble is beginning to pop. As this house of cards comes crashing down, the economic pain is going to become almost unimaginable.U.S. stocks slid, sending the Standard & Poor's 500 Index to a 12-year low, as the government cut shareholders' stake in Citigroup Inc. by 74 percent and the economy shrank at a faster pace than previously estimated. Citigroup plunged 39 percent after the Treasury agreed to convert as much as $25 billion of preferred shares into common stock in a third rescue attempt. Bank of America Corp. tumbled 26 percent, snapping a four-day rally in an S&P 500 group of banks. Alcoa Inc. and Boeing Co. fell more than 3.8 percent after the Commerce Department said gross domestic product contracted at a 6.2 percent annual pace in the fourth quarter. "The City story is a nightmare that keeps getting worse, with no end in sight," said Matthew Kaufler, money manager at Federated Clover Investment Advisors, which oversees $2.1 billion. "The fact that it's occurring on a day when we're getting horrible GDP numbers adds some kerosene to the mix." Read more..... 
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| Are Dim Sum Bonds The Next Chinese Reverse Merger Fraud? Posted: 08 Dec 2011 03:00 PM PST While Draghi somewhat shut the door on the ECB being the lender of last resort today, there appears to be a sucker-of-last-resort where Dim Sum bonds (offshore/HK Yuan-denominated bonds) have seen issuance almost triple in the first 11 months of the year. The WSJ is reporting that 76 entities issued CNY99.1bn YTD, according to the Hong Kong Monetary Authority. Interestingly, the biggest growth in the second half of the year has been from European firms who are unable to raise funds economically due to the crisis of confidence at home. Bloomberg notes BMW and Lloyds as two recent issuers with the latter managing to price CNY-denominated 3Y debt at 3.6% yield against comparable EUR-denominated debt at 5.3% - quite a saving if you're willing to take the currency risk (or looking for non-Euro, non-USD diversification) as a corporate Treasurer (or desperate for the money). But for the bulk of Chinese issuers it would seem evident that the Dim Sum investors are perhaps a little too eager to be lending their Yuan, and therefore not being appropriately compensated for credit risk concerns (even with the implicit FX revaluation bet).
This fear is even more prescient when, according to Bloomberg, one considers that 60% of Asia's fastest growing bond market lack any of the standard leverage covenant restrictions (protection) that Western bondholders are used to. And just to add some more fuel to the rising yield fire of these bonds, Bloomberg just reported that eager bondholders are more than willing (and blind to the risks) to accept one-off payments from issuers in order to accept significant covenant concessions (completely disregarding the credit risks through time). Our Dim Sum index has seen average yields jump a significant 70bps to 3.31% since mid-September leading us to raise concerns that this market, on which ETFs are now being created, is worryingly exposed to both a systemic Chinese credit crunch and idiosyncratic releveraging even if managers view Dim Sum as more of a currency play.
Dim Sum Investors Lack Protection on 60% of Bonds: China Credit
Fees Blind Investors to Returns on Bond Changes, Fidelity Says
PowerShares has a Chinese Yuan Dim Sum Bond Fund ETF (active since late September), which while not super liquid, trades at a modest 1.08% premium to NAV (vs average 1.2%). We have not checked borrow, but we note it has been lagging since mid November.
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| Risk Assets Deteriorating Rapidly On Europe's SNAFU Posted: 08 Dec 2011 02:32 PM PST Since the news broke that there is no 27-nation agreement, risk markets are showing strains. Perhaps a little surprising is the lack of total panic in the EURUSD (50pips or so) as ES (the e-mini S&P 500) has now dropped almost 1% from its after-hours peak. Broadly speaking risk is off across the major markets with US TSYs rallying, the TSY curve flattening, and commodities rolling over (oil under $98) but it is AUD and the carry pairs that are driving ES down as much as anything else.
CONTEXT (the broad risk basket) is biasing to further deterioration in ES led by TSYs and FX carry but all the factors are weaker. ES is holding at the day's lows and as a reminder at the cliff's edge on the 11/30 rip-fest overnight action - feeling fragile up here.
Commodities are rolling over rapidly [Update: Gold and Silver just jerked down a little more than normal]. Charts: Bloomberg
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| Risk Assets Deteriorating Rapidly On Europe's SNAFU Posted: 08 Dec 2011 02:32 PM PST
Since the news broke that there is no 27-nation agreement, risk markets are showing strains. Perhaps a little surprising is the lack of total panic in the EURUSD (50pips or so) as ES (the e-mini S&P 500) has now dropped almost 1% from its after-hours peak. Broadly speaking risk is off across the major markets with US TSYs rallying, the TSY curve flattening, and commodities rolling over (oil under $98) but it is AUD and the carry pairs that are driving ES down as much as anything else.
CONTEXT (the broad risk basket) is biasing to further deterioration in ES led by TSYs and FX carry but all the factors are weaker. ES is holding at the day's lows and as a reminder at the cliff's edge on the 11/30 rip-fest overnight action - feeling fragile up here.
Commodities are rolling over rapidly [Update: Gold and Silver just jerked down a little more than normal]. Charts: Bloomberg
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| Posted: 08 Dec 2011 01:17 PM PST When a major fractional-reserve breakdown occurred in 1907, Thomas Woodrow Wilson, then president of Princeton, endeared himself to the banking movement by declaring that "all this trouble could be averted if we appointed a committee of six or seven public-spirited men like J. P. Morgan to handle the affairs of our country." [Griffin, p. 448] Colonel Edward Mandell House, a close Morgan associate who served as shadow president when Wilson was elected to the White House, became the "unseen guardian angel of the [banking] bill" that emerged in 1913. [Griffin, p. 459] Originally drafted at a secret meeting of banking elites at Morgan's hunting lodge on Jekyll Island, Georgia in November, 1910, the Glass-Owen Bill, as it was finally called, overwhelmingly passed the House and Senate on December 22, 1913 and was signed into law by Wilson the following day. [Griffin, p. 468] The Fed began operations in November, 1914, with Morgan men occupying key positions. The new law gave the bankers what they wanted: a monopoly of the note issue. Commercial banks could only issue demand deposits redeemable in Fed notes or nominally in gold. National banks were compelled to join the System but had the legal option of becoming state banks, which were not required to join though many state banks chose to do so in 1917 when federal regulations were relaxed. [Rothbard. p. 112] Critically, gold coin and bullion were moved further away from the public when member banks shipped their gold to the Fed in exchange for reserves. [Rothbard, p. 119] The inflationary potential of the system is revealed by its structure: The Fed inflated by pyramiding on its gold, member banks by pyramiding on its reserves at the Fed, and nonmembers by pyramiding on its deposits at member banks. Furthermore, after a few years the Fed began withdrawing fully-backed U.S. Treasury gold certificates from circulation and substituting Federal Reserve Notes instead. With Fed notes requiring only 40 percent backing of gold certificates, more gold was available on which to pyramid reserves. Also, with the advent of the Fed, reserve requirements for demand deposits were cut approximately in half, moving from a 21.1 percent average under the National Banking System to 11.6 percent, then lower still to 9.8 percent in June, 1917, after the U.S. had joined the war. Reserve requirements for time deposits dropped from the same 21.1 percent average to 5 percent, then 3 percent in 1917. Commercial banks developed a policy of shifting borrowers into time deposits to inflate even further. [Rothbard, pp. 238-239] Thus, the country now had a government-privileged central bank called the Federal Reserve. By hoarding gold as its pyramidal base, the Fed was weaning the public from the use of gold coins, which would make them easier to confiscate later on. Through the Fed, member banks would be inflating at a uniform rate to avoid trouble with redemption demands. Did this new system bring the big bankers in line, as it was supposed to? Did the Federal Reserve Act provide "a circulating medium absolutely safe," as the Report of the Comptroller of the Currency of 1914 stated? Did the people running the banking cartel, almost all of whom were Morgan men, create a better world for most Americans? Drawing on data from the National Bureau of Economic Research, [Ron] Paul shows that at least 18 "mathematically impossible" recessions have occurred since the Fed's creation. The "Great" War The ones who profited from World War I had little in common with the men who fought it. The fighting was left mostly to young conscripts, many millions of whom were killed or wounded. The ones who profited knew their way around Washington. If monetary control had resided with the market instead of government, the war would not have been fought. Or if it had started, it would've ended much sooner. Sound money had to die before men could die in such large numbers. When war got underway in August, 1914 the European belligerents immediately stopped redeeming their currencies in gold and started issuing debt. Needing a lucrative market for their bonds, England and France selected the House of Morgan in the U.S. to act as their sales agent. The money acquired from bond sales reverted back to Morgan to purchase war materials, rewarding him with commissions on both the sales and the acquisitions. Furthermore, many of the companies with which Morgan did business were part of the vast Morgan domain. The pacifist Morgan, who said, "Nobody could hate war more than I do," was raking in huge profits keeping the Allied war machines cranking out death and destruction overseas. As G. Edward Griffin writes, referencing Ron Chernow's work on the House of Morgan, Morgan offices at 23 Wall Street were mobbed by brokers and manufacturers seeking to cut a deal. The bank had to post guards at every door and at the partners' homes as well. Each month, Morgan presided over purchases which were equal to the gross national product of the entire world just one generation before. [Griffin, p. 236] "The United States became the arsenal of the Entente [Ralph Raico writes]. Bound now by financial as well as sentimental ties to England, much of American big business worked in one way or another for the Allied cause. . . The Wall Street Journal and other organs of the business elite were noisily pro-British at every turn . . . ." For Wall Street, peace was not an option. With the possibility of Allied bonds going into default, investors would incur a loss amounting to $1.5 billion. Commissions would be lost as well as the profits from selling war materials. The Treasury could make direct grants to the Allies but only if the U.S. abandoned its "neutrality" and entered the war. [Griffin, p. 239] Following Wilson's address to Congress, it did so officially on April 6, 1917. The Morgan cash flow was thus saved. The U.S. extended the Allies credits – which reverted back to Morgan to pay off loans – income taxes surged, especially on the wealthy, and the Fed inflated. Between 1915 and 1920 the money supply and prices roughly doubled. Federal deficits were running a billion dollars a month by 1918, exceeding the annual federal budget before the war. . . . Trusting government instead of the market On March 12, 1933 President Roosevelt delivered his first fireside chat and told the American people the new dollar, which they could no longer redeem for gold coin, was money they could trust. "This currency is not fiat currency," he insisted. "It is issued only on adequate security – and every good bank has an abundance of such security." He told his audience their confidence in the "readjustment of our financial system" was the most important element in its success – even, he said, "more important than gold." "Have faith," he pleaded. Do "not be stampeded by rumors or guesses." On April 5, 1933 he issued Executive Order 6102, in which he told Americans that a month hence they would be prosecuted as felons if they still had gold coins in their possession. . . . Alan Greenspan noted that in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent overissuance of money. [Dec. 19, 2002]In other words, with the dollar no longer defined as a weight of gold or other metal, the Fed's "monetary policy" depreciated its purchasing power by 91 percent in 60 years, from 1933-1993. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess.Central bankers merely "witnessed" the "half-century of chronic inflation" that followed their "monetary policy." Sixty years ago Garet Garrett wrote: There is a long history of monetary experience. It tells us that government is at heart a counterfeiter and therefore cannot be trusted to control money, and that this is true of both autocratic and popular government. The record has been cumulative since the invention of money. Nevertheless it is not believed. [my emphasis]It's as if "monetary delusions are, by some strange law of folly, recurring and incurable," he says. When sound money was in use its supply was limited - by nature and economic law, not by government planners. For that reason the state abolished it and stuck us with a money they can create at will. The state's money removes the idea of limited means, and since it's controlled by the state, it removes the idea of limiting the state. Given the federal influence on education, media, and just about everything, should we be surprised no one is on center stage calling the government a counterfeiter? If there is to be a ruling elite, let them rise to their positions naturally, as entrepreneurs on a free market. Only in such an environment will those on top be on permanent probation, as it were, forever subject to the market's approval, because the customers who put them there always have the option of removing them when they fail to deliver. The preceding, including links, is extracted from my new Kindle book, The Jolly Roger Dollar: An introduction to monetary piracy. Download a free sample. 
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| Posted: 08 Dec 2011 01:11 PM PST It has been a deplorable century for the law, agreements, and treaties since that confrontation in 1914, the same year the International Gold Standard unraveled. Read More...
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| Posted: 08 Dec 2011 01:06 PM PST December 8, 2011 [LIST] [*]The Black Friday sales figure that got overlooked... But what, exactly, does it mean? [*]To the rescue... sort of: Eurozone cavalry disappoints. Dan Amoss on what to expect next and how to play it now [*]Housing: Boom times still far away, but Chris Mayer says rental properties are worth a look [*]Corzine testifies about MF Global’s missing $1.2 billion... and inadvertently demonstrates how the system is stacked against smaller companies [*]Readers offer up suggestions of what a “Tax-Out” would look like [/LIST] Here’s an economic indicator that isn’t being analyzed to death on CNBC: Gun sales appear to have set a one-day record on Black Friday this year. In the midst of economic gloom and uncertainty, the FBI reports a record number of background checks for prospective gun buyers — 129,166, to be precise. That shattered the previous record of 97,848... set on Black Friday 2008... when, you co...
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| Sarkozy: “The Risk That Europe Will Explode” Posted: 08 Dec 2011 12:59 PM PST By Wolf Richter www.testosteronepit.com The Swiss government is preparing for a collapse of the euro, according to Swiss Finance Minister Eveline Widmer-Schlumpf. She told parliament that a work group was studying the imposition of capital controls and negative interest rates to protect Switzerland from the capital flight that a euro collapse would engender (Handelsblatt). A tidal wave of euros would drive up the Swiss franc, devastate Switzerland's export economy, and devalue its vast wealth invested in other countries. Already in August, the Swiss National Bank instituted a currency peg and swore to defend it by acquiring "unlimited" amounts of euros, a risky strategy if the euro were to collapse (for the debacle leading up to the peg, read... Swiss Franc Wreaks Havoc In Switzerland). Meanwhile, 27 heads of state convened in Brussels for another European Union summit to find that elusive solution to the debt crisis. It began with dinner at around 8 pm and will continue on Friday. Goal: changes in the EU treaty that would impose Germany's new religion of budgetary discipline on all 27 member states. Violators would be hit with automatic sanctions. The European Court of Justice would have final control over national budgets. (Ironically, Germany was one of the first EU members to violate the existing 3% deficit limit and was the primary reason existing sanctions have never been applied). Short-term measures to keep contagion at bay are also on the agenda. "Europe has never been in so much danger," said French President Nicolas Sarkozy a few hours before the summit (Le Figaro). He worried about "the risk that Europe will explode" and urged that an agreement be found because there were only a few weeks left to make the decisions. He called for more solidarity, more discipline, and more governance within the Eurozone. "An agreement on Friday is crucial," he said. "We won't have a second chance." But Angela Merkel's fiscal-union dictate of belt-tightening and central control over budgets isn't going down all that well elsewhere. "I don't have any support in Sweden for changing the treaty," said Fredrik Reinfeldt, Prime Minister of Sweden upon his arrival in Brussels (Le Figaro). Sweden is one of the 27 EU members but not in the 17-member Eurozone. To contain the debt crisis, he proposed instead the reinforcement of existing bailout funds and more IMF involvement. David Cameron, Prime Minister of the UK, had already thrown down the gauntlet: he threatened to veto any measures that would hurt London's financial industry or would shift sovereignty from the UK to the EU. "A new treaty can't be imposed," said Vivian Reding, Vice President of the European Commission (Le Figaro). Instead, measures should be implemented on the basis of existing treaties. She contended that Angela Merkel's plan of centralized economic governance was "just a copy of the Stability Pact that France and Germany had torpedoed in 2003-2004. The mechanisms to contain the excesses that have led to this crisis existed for a long time but were never applied." Treaty changes require participation of the European parliament, the EU Commission, and all 27 national parliaments. Then the treaty must be ratified by all member states—by referendum in some cases. It would take years and could be derailed by the referendum of a single country. A less onerous alternative: treaty changes that would impact only the 17 Eurozone countries. Sweden, the UK, and other non-euro countries would not have to agree to the changes. It might speed up the timing a little, but if successful, if might split Europe in two: the Eurozone with iron-clad budgets in Merkel's sense, and the remaining ten EU countries with no such restrictions. A simplified procedure has been bandied about: decision by EU countries and ratification by member states. But even that takes time—at least one and a half years, according to an expert cited by the Handelsblatt—as national parliaments might not readily agree. But deep changes, such as outside control of national budgets, would require the normal procedure, rather then the simplified one. In addition, they might require constitutional changes in some countries, which would add to the uncertainty for years to come. Yet everything must be squared away by March, according to Merkel—a deadline, actually: Sarkozy may lose his job during the elections in April/May, and his potential successors to the left and to the right have vastly different ideas and might not bend as easily to Merkel's will.... French Presidential Election: Coup De Grâce For The Euro? Wolf Richter www.testosteronepit.com
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| Interview with David Galland 12-8-2011 Posted: 08 Dec 2011 12:24 PM PST from The Financial Survival Network: In 2005, David Galland was sitting at a coffee shop with legendary investor Doug Casey and several others. They were discussing the impending collapse of the US Economy and how there was really no way left to avoid it. At the time, few people believed there was anything wrong with in the US or elsewhere. Everything seemed to be fine, there were jobs galore, incomes were rising and real estate always went up. Fast forward 6 years later and the ruminations at that meeting have come true in spades. Also at that meeting, they came up with the concept for www.CaseyResearch.com, which has gone on to become an online investment research powerhouse. The quality of the writing and the information is always entertaining and revealing. David joins us to discuss the continuing saga of the Global Economic Collapse and what you need to do to protect your wealth and your family. There has never been a better time in history to start a business. Does that statement amaze you? It's true! The internet has allowed people like myself and David and his partners to reach markets that just 15 years ago were deemed inaccessible to all but the largest corporations. Individuals, who just a few years ago had no idea what to with their lives, are now making it with internet based businesses. David's advice is to study what you love for one hour per day and become and acknowledged expert in that field. And then, make your move, get on the web and go global. Success will eventually find you, just like it has for CaseyResearch and the Financial Survival Network. Click Here to Listen to the Interview
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| Capital Account: William K. Black on MF Global and Jon Corzine Culpability (12/08/11) Posted: 08 Dec 2011 12:23 PM PST from CapitalAccount: From Goldman Sachs to governor to grilling, Jon Corzine former CEO of the now bankrupt MF Global testifies on Capitol Hill. He claims he is clueless about how and where the possible $1.2 billion dollars of his client's money is that is missing. How has all of this happened three years after the financial crisis when Wall Street was supposed to be reined in? And the golden boys of Wall Street have their Goldman tentacles spread over the MF Global case. The head of the CFTC – MF Global's regulator – has recused himself from the MF Global probe because he worked with Jon Corzine at Goldman Sachs. We speak to William K. Black, a former regulator who during the Savings and Loan crisis oversaw more than 10,000 criminal referrals, 1,000 felony convictions, and where hundreds of bankers went to prison. Also, is the government's lackluster approach to transparency exclusive to wall street, or does it reach as far as Area 51? Thousands of people who believe in UFOs and think the U.S. government knows more than it admits were hoping for a breakthrough last month when they signed petitions on the "We the People" website. But they got what they've been getting for decades — nothing. And although these aliens may not have been looking for gold like the one's we covered in one of our last episodes, citizens of Taiwan may find some gold while looking for something less glamorous…dog poop. We explain how an innovative scheme to keep the streets of northern Taiwan clean has seen thousands of citizens dutifully collecting bags of dog poop in the hope of winning $2000 in gold.
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| Jawboning: Don`t Fail To Recognize It Posted: 08 Dec 2011 11:22 AM PST Jim Sinclair's Mineset My Dear Extended Family: The ECB has reasonable funds available to it that, if used in the Euro bond market, would have some impact on containing rates. Gold rises to $1762.50 , just below the $1764 angel. The new President of the European Central Bank says yes we have the money, but no we are not going to use it. Gold goes straight down into the first area of support at $1709- $1710 where it battles all afternoon. Bloomberg releases an article saying that concerted central bank activity to control the price of gold was utilized today. Long scalpers barf out their positions based on the above jawboning MOPE. Gold ranges $100 so far today. [*]Now with a clear head, the ECB has the money and will be forced to use it or watch their best bond markets look like "Day After," and "Mad Max." [*]Central banks have been throwing blocks at the gold price ever since $248 without much success. [*]The Federal Reserve has made dollars available...
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| A Look Again At Why Gold is Falling ? and What Actions You Should Take Posted: 08 Dec 2011 11:22 AM PST As I see it, worsening financial crises lead initially to lower gold prices which are followed by some form of government intervention to alleviate the crises and that action, in turn, eventually results in renewed appreciation in the price of gold. The basic steps in such a transition are really quite*straightforward. Let me explain. Words: 686 So said Plan B Economics ([url]www.planbeconomics.com[/url]) in edited comments from their original article*. [INDENT] Lorimer Wilson, editor of [B]www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has further 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 author's views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be...
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| Deja Vu? Is Gold Just in a Correcting Phase on Its Way to Parabolic Peak of $4,294? Posted: 08 Dec 2011 11:22 AM PST The current volatility in the precious metals market doesn’t necessarily indicate a change in secular direction. [In fact,] if today’s gold price was to rise by the same degree over the next*14 months [as it did*from the beginning of*1979 into 1980, it would hit**$4294/ozt. by Jan 2013! Let me explain.] Words: 420 So says Plan B Economics ([url]www.planbeconomics.com[/url]) in edited excerpts 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-...
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| The Worldwide Depression/Recession Of 2012 Posted: 08 Dec 2011 11:08 AM PST This article originally appeared in the Daily Capitalist. In case you haven't noticed, the rest of the world continues to slow down and the negative data is accelerating. The big powerhouses of the world, the eurozone including Germany, Japan, and China are leading this trend and there is no reason to believe that the U.S. will not follow. I've been writing about this theme frequently lately because, while we are seeing some positive numbers here in the U.S., we are also seeing signs of weakness starting to show up, and since we live in a world of international trade, the world's woes will hit us. The first thing to note about this phenomenon is that the central banks of the world, including the Fed, have been doing all they can to support their economies with plentiful money. According to a recent Bloomberg article, "Central banks across five continents are undertaking the broadest reduction in borrowing costs since 2009 to avert a global economic slump stemming from Europe's sovereign-debt turmoil."
This is nothing new. Since the Crash of 2008, most central banks have been pumping fiat money into their economies. The multiple EU sovereign insolvencies—you don't need to default to be insolvent—are hitting eurozone credit hard, which is a trigger for deflation as money supply declines. Lenders are stuck with bad sovereign loans and there isn't enough money to bail them all out, much less the PIIGS. The thing to remember about the eurozone is that it's not just sovereign insolvencies that is their problem. They became insolvent, yes because governments spent too much, but also because their economies are in the tank mainly for many of the same reasons the U.S. economy declined (money inflation boom, high debt/spending, housing market collapse triggering depression, high taxes and regulation, and various bailouts to prevent recovery). Until they fix the underlying causes, their banks will collapse and countries will default. China's economy relies on the West for its exports, and as a result:
China's frequent monetary stimulus, along with government real estate policies, keeps feeding their real estate boom-bust cycles. Once you look at the data, below, you will see where we and the world are headed. While these economies are shrinking, demand for commodities, capital goods, and manufactured goods all decline. This is impacting commodity prices; they have been falling since this summer (mainly a supply-demand factor, not just a money deflation issue). Each country/zone will have a different reaction to all this. Most will continue to inflate ("print" money). Money printing will have little impact on declining prices for the time being. Unless they panic. If they panic, that is, massively pump money, they will suffer from price inflation. China will have more booms and the eurozone will also stagnate as well. Japan will continue to go "Japanese", and depending on what the Fed does, it is likely we'll go Japanese as well. Here is what it looks like:
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| Posted: 08 Dec 2011 11:01 AM PST Bill Bonner View the original article. December 08, 2011 11:22 AM Dow up 46 yesterday…gold bouncing around. Not much change, in other words. Nobody can figure out what is happening in Europe. Investors wait…and watch. In America, the news has been good and bad. The good news was that unemployment was not as bad as it had been. But the bad news was that the good news was largely fraudulent. John Crudele in The New York Post: Finally, there seemed to be good news about the economy. The nation's unemployment rate dropped to 8.6 percent in November from 9 percent the previous month. If you added in the 1,096,000 people who wanted a job last month but were too discouraged to look for work, the jobless rate would have been closer to 8.8 percent. And a drop from 9.0 percent to 8.8 percent would have been statistically insignificant given the size of the survey upon which the US Labor Department bases its figures. And if you then added in the people who are so disheartened...
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| Gold Appearing Extremely Heavy Posted: 08 Dec 2011 11:01 AM PST courtesy of DailyFX.com December 08, 2011 09:31 AM Daily Bars Prepared by Jamie Saettele, CMT The 3 wave rally from the September low is viewed as a correction of the decline from the record high and should be completely retraced. A look at the long term picture reveals that gold remains above long term trendlines but some of those lines are well below the current level. Even a test of the trendline that has defined price since the summer 2010 lows would result in a test of the mid 1500s (52 week average in the vicinity). A drop similar in amplitude to the one that occurred in September would reach the low 1400s. If gold has entered a larger bear market, then price needs to stay below the September-November trendline. Confidence in the downside is increased as gold has broken trendline support, and held trendline resistance. Other TA Articles...
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| Precious Metals Update: Focus on Silver Posted: 08 Dec 2011 10:58 AM PST This article was written by DoctoRx for the Daily Capitalist. He is a successful investor with 30 years of markets experience. By DoctoRx As I take a break from the Corzine testimony before the House Agricultural Committee, I'd like to briefly comment on the prospects for the precious metals vis-a-vis the U.S.D. The first thing I notice, as someone who always looks at charts to see if price action is in line with my view of the fundamentals, is that a closed-end fund that is half gold and half silver, Central Fund of Canada (CEF) has just tipped into a bear configuration, with the 50, 150 and 200 day simple moving averages aligned so that the shortest moving averages are weaker (lower) than the longer ones. Thus if one doesn't want to differentiate between gold (still by those criteria in a bull market) and silver (clearly in a short- and intermediate-term bear configuration), and go "halvsies" by owning equal dollar amounts of each, the message of the market has begun to tilt against one. Briefly, my record on silver has been good, probably because it has been short and with few calls, thus allowing randomness to work in my favor. I announced quite bullish sentiments in September 2010 around $20/ounce and turned bearish on silver in early May around $40. After the collapse carried it to around $33, I issued a qualified trading buy but after that reiterated that I was staying "risk off" for all commodities other than gold. I began to raise bearish questions this spring about the trend for the price of silver based in part on the persistent high price premium of the Sprott Physical Silver Trust (PSLV). I admire the fund's construction from a tax and redemption standpoint. I also admire Mr. Sprott's investment acumen and his forthright stand in favor of transparency and soundness in monetary affairs. I have owned PSLV shares and those of other metals funds and "believe" in their value. On the other hand, I was naive enough after the bubble markets peaked in 2000 to think that some ebullience in pricing would be differentiated from bubble pricing, but irrational exuberance has returned. In my view, the continued high teens premium of PSLV to the value of the silver the trust owns (i.e., its NAV) is worrisome. Yes, the overpricing may not matter much if silver in a year or two is going to $200/ounce from the current low-$30s price. But we are in a world that if one were to buy PSLV and one year later, the value of its assets were to rise 10% after expenses, the investor in PSLV could easily lose money because the premium to NAV could shrink much more than that. By comparison, a virtually identical Sprott fund owns gold rather than silver, stock symbol PHYS. This fund has settled down from its early near-20% premium to NAV to trade in the 1-4% premium range. PSLV in my view should trade roughly in line with PHYS. That is does not do so worries me. For some time, I have read a variety of precious metals-oriented blogs and position papers. I perceive a high degree of certitude and often very bullish price forecasts for silver that I never see for the non-monetary precious metals or a base metal such as copper. I put that confluence of circumstances together and get cautious. Thus I plan to buy PSLV or one of its relative should despair in PSLV's fans (acceptance of financial reality, in my view) become more prominent. I'm one of those people who would rather buy at $40 on a breakout to the upside on a one-way trip (one would hope) to $70 or $100 rather than buy at $32 and bail if the price drops because I really think that $20-25 is a realistic trading target at some point next year. Readers should understand that these comments are trading comments. In the long run, my guess is that physical silver is a "good", sound investment at today's price, and that a great way to own silver is in a bank vault or in a basement, where the cost of storage is respectively minimal or zero. My observation though is also that silver is probably trading well above its fully-burdened cost of production, whereas I read this week that the cost of producing an ounce of platinum by one of the South African producers is slightly above the current spot price. I "get" that in a Mad Max scenario or in a hyperinflationary depression, there won't be much demand for platinum while silver may become the go-to transactional money, at least for a while. But that's not today's reality, and in the U.S., I don't think it's going to be a 2012 reality either, recession or no recession. Are the markets already reflecting the likelihood of something such as those disasters? Of course, that's possible, but that's not my expectation, and these are the sorts of interesting issues that, as they say, make markets. Finally, while recessions and expansions (busts and booms) come and go, and given that much of Europe is now acknowledged to be in or tipping into recession, much may already be priced into the metals and other commodities markets, neither China nor the U.S. are in acknowledged recessions. If they go into recessions, then since recessions tend to be disinflationary or deflationary (price, not Austrian definition of those terms), and in this highly-leveraged world, there is just no telling how far a spike down in price any commodity might (or might not, of course) have should one or both countries be seen to be in that economic state. In conclusion, I'd feel a lot better about the many calls that silver is finishing a major consolidation and is ready to break out to the upside in a major way if I saw stronger price trends in the non-oil general commodities markets and if I saw less inherent confidence in the pricing of such vehicles as PSLV. Note I am not making a directional "call" at all today. As I've been saying for a while, sometimes sitting quietly in cash or other relatively stable assets and watching trends evolve with which one is comfortable may be wiser for many people than betting real money in what I view as unusually uncertain times. That's what is working for me right now, and of course nothing said here should be construed as anything other than my personal views, and should not be construed as investment advice in any way.
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| The Silver and Gold Price Dropped, I Bought Silver and Gold Today Posted: 08 Dec 2011 10:51 AM PST Gold Price Close Today : 1709.80 Change : (31.10) or -1.8% Silver Price Close Today : 3146.7 Change : 108.8 cents or -3.3% Gold Silver Ratio Today : 54.336 Change : 0.861 or 1.6% Silver Gold Ratio Today : 0.01840 Change : -0.000296 or -1.6% Platinum Price Close Today : 1493.50 Change : -29.50 or -1.9% Palladium Price Close Today : 672.45 Change : -8.60 or -1.3% S&P 500 : 1,234.35 Change : -26.66 or -2.1% Dow In GOLD$ : $145.05 Change : $ 0.25 or 0.2% Dow in GOLD oz : 7.017 Change : 0.012 or 0.2% Dow in SILVER oz : 381.28 Change : 6.64 or 1.8% Dow Industrial : 11,997.70 Change : -198.67 or -1.6% US Dollar Index : 78.83 Change : 0.341 or 0.4% The GOLD PRICE dropped $31.10 (1.8%), all the way down to the 50 dma ($1,708) but HARK! BEHOLD! It broke not support at $1,700-$1,705. Yes, that means something. It means that it fell from one side of the narrow nose-cone it has traded into, to the other side. Triangle has NOT YET resolved with either an upside or a downside breakout. Stepping away from the chart a little more, that means that the uptrend line in force since the end-September low at $1,535 remains in force. Here I am out on that limb, once again. I bought gold today. The SILVER PRICE fell 108.8c, to 3146.7c, down a meaty 3.3%. It pierced the uptrend line by a little, fell as low as 31.42c. This is not yet a downside breakout. It stands on the line, but not yet. I may get my head handed to me on a platter, but I bought more today. Think: silver has been bumping up against its 300 day moving average (3377c). Maybe this is just the back up for a running start at that line. If is am wrong, the market tomorrow will gainsay me loudly and finally, fall maybe to 2950c. If I am right, this point offers a spectacular buy. Euro Central bank did something, but not what anybody wanted. Instead of announcing it would start buying all those sovereign bonds nobody else wants, it announces it was reducing bank reserve requirements 50%, from 2% to 1%, and loosening collateral requirements for loans from the ECB. Also, the bank cut its benchmark interest rate by 1/4%, back to its all-time low of 1%. Well, great. This does nothing to solve the long term government and bank solvency riddles. Stock markets greeted this good news by dropping thru the trap door in the floor. Euro fell, dollar rose, silver and gold dropped, too. Confirming for the nonce my interpretation that 12,200 caps the Dow, it fell 198.67 (1.63%) to close at 11,997.70. Owch, bad juju for investor morale to close below 12,000. S&P500 dropped a massive 2.11% (26.66 points) to 1,234.35. Looks to me like it completed a topping formation from Friday through Thursday, and broke down today. Expect lower prices. US DOLLAR INDEX rose 34.1 basis points (0.44%) leaving behind a five day chart that bottomed at 78.2 and 78.1. Hit 79. Will go higher. Euro fell off 0.5% to 1.3349, so the ECB's inflationary program helped not at all. Yen flattened at 128.74c /Y100 (Y77.68/$1), down 0.02%. We see again that markets are not always logical. The ECB announces it will inflate beaucoup more, and silver and gold drop. Right. Maybe on the scale was tipping away a finger of the Nice Government Men? Not question that this brings good news to gold and silver for the long term. Bad news for the rest of the world, but good for metals. Yesterday Jamie Dimon, CEO of JP Morgan Chase, at a conference sponsored by public-spirited Goldman Sachs, said, "Acting like everyone who's successful is bad and that everyone who is rich is bad -- I just don't get it." Well, Jamie, mayhap I can 'splain it to you. You complained as if you EARNED your wealth by your extraordinary genius and hard work, and thus stacked penny by penny your estimated $231 mn to $3 bn fortune, along with that $17 mn stock and option bonus you were paid in 2009. But Jamie, Jamie, some of us slackers remember where you came from. No, you weren't born in Hell's Kitchen, but you did graduate from Harvard Business School. And boy! Did your hard studying pay off. You were so valuable at that point, just getting out of school with no experience, that your father, executive VP at American Express, put in a good word for you with Sandy Weill, then CEO of Amex. And he hired you upon graduation to start at the bottom? Scouring toilets in the Amex headquarters? Sorting packages in the mail room? Licking envelopes with the little people? Well, not exactly, Jamie. Maybe, just maybe, it's been possible for you to jump higher than all those envious slackers because you started higher than them, by 40 or 50 floors. And maybe, just maybe, you have waxed so rich not from genius and hard work, but because your cronies have boosted you along the way. And while I would be the very last person in the entire universe, known or unknown, ever to say that "rich is bad", I wonder who in God's creation really NEEDS $231 mn to $3 bn, or who really is WORTH $17 mn in bonuses to any company anywhere anytime. Jamie, I have to say that the slackers look at you and they don't say, "Rich is bad," they say, "Look at the arrogant crony capitalist, who has gotten fat on his connections, family, business and government. How, exactly, does he differ from a tape or pinworm?" But don't pay 'em no mind, Jamie. We all know how envious those slackers are. Let them eat cake. SORRY, MY WIFE IS KIDNAPPING ME TOMORROW TO CHRISTMAS-SHOP, SO I WON'T BE PUBLISHING A COMMENTARY. SEE Y'ALL MONDAY. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. 
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| Rosenberg On The 8 Areas Of Behavioral Change In 2012 Posted: 08 Dec 2011 10:08 AM PST
It seems the market's psychology has shifted, in its wonderfully temperamental and instantaneous manner, once again as the last great hope of Thomas Lee and his cohorts is removed. What better time than for David Rosenberg, of Gluskin Sheff, in his inimitable way, to introduce his outlook for 2012 in the form of eight behavioral changes that he expects to overwhelm market psychology in the coming months. Political, financial, and economic transitions for the US, Europe, and China respectively will dominate the coming year and as Rosie points out, the ability to recognize change at the margin (such as basis traders in European sovereigns) is going to be critical in 2012. The shift from one of cyclical extrapolation to secular change is always a hard one to navigate and tactical asset allocation will become foremost in most people's minds over longer-term strategic considerations. The global economy will be forced to endure the mother of all deleveraging cycles as we move through 2012 and capital preservation and income must dominate investment strategy as Rosie's 8 themes play out.
The reality of this new paradigm of secular credit contraction may be coming into sharper focus by the general public than it is for the typical economist, strategist or market pundit. And as we have seen in the spreading sovereign debt and banking crisis in Europe, these challenges are global in nature. As such, one can reasonably expect to see standards of living in the developed world in particular pressured by daunting demographic trends and the growing realization that underfunded pension funds will have to be resolved somehow.
One thing seems reasonably certain: the global economy is going to endure a significant deleveraging cycle as we move through 2012 - one that will affect most if not all parts of the developed world. It will be accomplished by some combination of default and write-downs, debt repayment and rising savings rates. All this promises to be very deflationary and we will have to invest with that prospect in mind, and all the behavioral, political and social shifts that are bound to ensue. EIGHT AREAS OF BEHAVIORAL CHANGE TO WATCH FOR IN 2012 1. Frugality on the part of the global consumer (living within our means; retirement with dignity)
2. Austerity on the part of sovereigns (spending cuts/tax reform)
3. Nationalism (an umbrella for protectionism and isolationism: mean reversion for globalization)
4. Political movement along the ideological and fiscal spectrum (from gridlock to change)
5. Geopolitical change (wars, elections and regime changes)
6. Changes in inflationary/deflationary expectations
7. Changes in growth expectations
8. Changes in asset allocation preference (fund-flows/de-risking)
Deflation has re-emerged as the dominant trend — not inflation —
Frugality has also reared its head again as it pertains to the broad retail sector, another deflationary force, at a time when the U.S. unemployment rate remains stubbornly stuck above 9%. As such, it is absolutely imperative to remain focused on high-quality investments with preservation of capital attributes, and to use the inherent market volatility that is part and parcel of every post-bubble deleveraging cycle to one's advantage by becoming ever more tactical and opportunistic in long-short "relative value" strategies.
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| How Canada Lost the Smartphone, Err… Tablet Wars Posted: 08 Dec 2011 09:52 AM PST Author: Alex Daley Synopsis: Research in Motion's half billion dollar blunder and what it means for investors. Investing Lessons from Research in Motion's Latest $500 Million Blunder... Last week (on Friday after market close, no less – the time when companies send bad news they hope the market will forget about by Monday), Blackberry smartphone maker Research in Motion (RIMM) dropped a bombshell, announcing that not only was its Playbook line of tablet computers floundering – not news to anyone who watches these things – but that the company would incur a massive $485 million charge in Q3 from writing off excess Playbook inventory and expenses. The amount was so staggering that many analysts and industry observers were left wondering exactly how the company could have screwed up so badly. However, given RIM's decline in its core smartphone market – i...
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| How to Make Money in a 'Fugly' Stock Market: Bob Moriarty Posted: 08 Dec 2011 09:52 AM PST The Gold Report: Since the last time we chatted in July, Bob, a lot has happened. Congress raised the debt ceiling, as you predicted. Bob Moriarty: Right. TGR:Then the Super Committee failed to produce an agreement so we can look forward to the automatic debt reduction of $2.2 trillion. BM: The Super Committee was totally illegal and unconstitutional in the first place and it was totally ineffective. They couldn't reduce spending by $1.5 trillion over a 10-year period. Give me a break. TGR: Okay. Moving on. . .Unemployment remains at about 9%. BM: You say 9%? I don't think so. How about 23%? TGR: The list goes on. Occupy Wall Street protests have sprouted up all over the country. And of course, Newt Gingrich is the leading Republican candidate. BM: That anyone could even consider Newt Gingrich for anything above the role of dog catcher is pretty terrifying. TGR: There's more. We've seen riots in Europe, with the epicenter in Greece. We've got a weak German bond market. BM: Wea...
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| Hitler Hears About The Collapse Of The Eurozone Posted: 08 Dec 2011 09:04 AM PST
It was only a matter of time... Needless to say, this is obviously so wrong on so many levels, but what can you do. At this point the endgame is in play so at least we can all laugh about it.
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| 15 More Days Left For Santa Claus Rally Posted: 08 Dec 2011 08:35 AM PST
S&P futures fell 3.25% from high (early Draghi) to low (close) on the worst close to close drop in over two weeks as the S&P 500 lost its YTD gains, down almost 2% now. Financials were the clear laggards with the majors crushed. Broad risk assets were in negative mode all day from the moment Draghi slapped traders into reality and lead ES lower and lower. Some late day rumor-denial did little - aside from try and fail to ramp ES back to VWAP - but wherever you look there is blood. Commodities crashed lower - now down 2-3% on the week - but most of the commodity and FX weakness had peaked as Europe closed, and we note that Gold is outperforming other commodities on the week now. It was equities that slowly but surely on a decent volume day in futures (given the roll) leaked lower and lower - now clinging precariously to the edge of the 11/30 4% overnight rampfest levels. Stocks underperformed credit on the day but all ended at the lows/wides as TSYs closed at their low yields of the last 10 days. It seems the implied correlation-VIX divergence signal was flagging caution correctly once again.
CONTEXT and ES were in sync as they rose and fell on Draghi's every word this morning (red oval) but as we crossed into the US day session (orange oval), broad risk assets (CONTEXT) deteriorated rapidly and lead stocks lower all day. Some convergence mid-afternoon then saw TSYs lead stocks lower once again into the close - even with the rumor-denial-snap.
While ES (the e-mini S&P 500 futures contract) rolled today, it is clear from the Dec11 contract that today's selloff has dragged us back to the top of the 4.8% overnight-session ramp-fest on 11/30.
Financials were a disaster. The majors most notably so. Remember we pointed out last night that despite the denial retracement of the rumor ramp, financials ended the day at their highs, well Morgan Stanley is over 9% off those highs into the close last night! Citi is almost 7.5% off those levels with GS, JPM, and BofA all snug together around 5-6% lower.
Gold is now outperforming its commodity/PM peers on the week as today's 'liqudiations' stand out like a sore thumb as like equities they saw the largest drop in over two weeks. Charts: Bloomberg
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| Gold Slips on Disappointment Over ECB Moves Posted: 08 Dec 2011 08:32 AM PST 08-Dec (The Wall Street Journal) — Gold slumped as investors sought safety in the U.S. dollar after the European Central Bank's latest efforts to shore up the euro-zone financial system fell short of market hopes. The contract for December delivery fell $31.10, or 1.8%, to settle at $1,709.80 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since Nov. 25. Futures climbed early Thursday after the ECB cut its benchmark interest rate and announced a new set of crisis-fighting measures, steps viewed as easing the risk of a credit crunch in the currency union. But gold gave up those gains after ECB President Mario Draghi said at a news conference that the central bank wouldn't buy unlimited quantities of the debt of distressed European countries. Mr. Draghi also said the ECB would respect a treaty that prevents it from giving monetary financing to governments. …In the long term, the ECB's moves could be supportive to gold prices, analysts said. [source]
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How do you decide whether you are wealthy or not? Do you determine that by how much money you spend at the stores? Of course not. You can tell if you are wealthy or not by comparing your assets (the money in your bank account, equity in your home, etc.) to your liabilities (your mortgage, credit card debt, student loan debt, etc.). Well, a lot of Americans seem to believe that just because a lot of money is circulating in our economy that it must mean that we are a wealthy nation. But that is simply not true. To tell whether or not America is a wealthy nation, you need to look at the balance sheet numbers. And when you look at the balance sheet numbers, a very sobering story emerges. Over the past three decades, government debt, business debt and household debt have absolutely exploded, but our assets have not. That means that we are getting poorer as a nation. Hopefully the shocking charts and statistics in this article will help a lot of Americans to wake up. Yes, we once were the wealthiest nation on earth, but today America is no longer a wealthy nation.
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