Gold World News Flash |
- Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Almost 7% and 8% on the Week
- Financial Panic Sweeps Europe As The Head Of The IMF Warns Of A “1930s Depression”
- Enron Scandal Marked End of Innocence
- Striking Portfolio Balance with Gold Stocks
- Listen to Sinclair!
- SIPC Covers 800 Stock Investors Wiped Out By MF Global–Will The SIPC Collapse During the Next Financial Crisis?
- Why the Gold Price is Falling Far and Fast
- Peter Schiff: Gold, Inflation, Paul Krugman Challenge
- DOLLAR Bubble and WAR in Europe?
- Debt is Endemic In Our System... And the Deleveraging Will be Brutal For Businesses and Investors Alike
- Capital Account: With Guest, Lew Rockwell – Dollars, Defense and Drones…is time to head for the Farm? (12/16/11)
- Gold Price Rose $21 Today, Lost 6.8% This Week, Silver and Gold Remain in a Primary Uptrend With 3 to 10 Years to Run
- From The Desk of Peter Grandich
- Gold on Verge of Move into Bubble Phase
- Kyle Bass on the Fate of the World
- Risk Focus Reverts From FX To Stocks/Credit With Weak Ending
- Man for All Seasons
- Grandich Quoted in MarketWatch
- These are the Good Old Days
- Gold Daily and Silver Weekly Charts - A Bounce in Bullion and Miners on Quad Witching
- Dexter Woo
- Stock Market Report: For What It's Worth!
- Net EUR Short Position Soars To All Time Record, Implies "Fair Value" Of EURUSD Below 1.20, Or Epic Short Squeeze
- Net EUR Short Position Soars To All Time Record, Implies "Fair Value" Of EURUSD Below 1.20, Or Epic Short Squeeze
- Rick Rule - I Personally Bought Over $10 Million This Week
- More Proof That The Gold Sell-Off Was Manipulated
- In The News Today
- GOLD IS ON THE VERGE OF MOVING INTO THE BUBBLE PHASE OF THE BULL MARKET
- More Upside for Gold as Government Spending Continues Unabated
| Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Almost 7% and 8% on the Week Posted: 16 Dec 2011 04:00 PM PST Gold rose over 2% to $1600.90 by a little before 8AM EST before it fell back to $1583.05 by midmorning in New York, but it then rallied back higher into the close and ended with a gain of 1.96%. Silver rose to as high as $29.92 before it slipped back to $29.285, but it still ended with a gain of 2.38%.
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| Financial Panic Sweeps Europe As The Head Of The IMF Warns Of A “1930s Depression” Posted: 16 Dec 2011 02:58 PM PST from End of The American Dream:
Are we on the verge of another Great Depression? Christian Lagarde, the head of the IMF, said this week that if dramatic action is not taken immediately we could actually see conditions "reminiscent of the 1930s depression" and that no country on earth "will be immune to the crisis". Right now, financial panic is sweeping across Europe, but most Americans are not too concerned about it because they simply don't understand how important the EU is. The truth is that the EU has a much larger population than the United States does. The EU has an economy that is nearly as large as the economies of the United States and China combined. The EU has more Fortune 500 companies that the United States does, and the banking system of Europe is substantially larger than the banking system of the United States. Anyone out there that believes that a massive financial collapse in Europe would not dramatically affect the rest of the globe is being delusional. The European debt crisis is one of the biggest stories that we have seen in a long, long time and the coming financial meltdown is going to permanently change the global economy. So far, politicians in Europe have held 19 high-level emergency meetings in an attempt to solve this crisis. Read More @ EndOfTheAmericanDream.com
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| Enron Scandal Marked End of Innocence Posted: 16 Dec 2011 02:55 PM PST from WealthCycles:
Energy giant Enron was the poster child of the go-go '90s; it miraculously racked up billions in profits and earnings as it expanded into scores of new ventures unrelated to its core business. But in late 2001, the company suddenly crumbled, and in the wreckage it was revealed it had been a house of cards along, daisy chains of shell partnerships that allowed the company to conceal the fact it was drowning in debt.
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| Striking Portfolio Balance with Gold Stocks Posted: 16 Dec 2011 02:51 PM PST By Frank Holmes CEO and Chief Investment Officer U.S. Global Investors It wasn’t a pretty week for gold prices. The eurozone’s epic endeavor to conquer its sovereign debt issues forced some institutional investors to liquidate profitable gold positions to meet a rising need for liquidity. In addition, falling confidence in the euro and other global currencies pushed investors tumbling toward the relative safety of the U.S. dollar. As we outlined for you last week, the key phrase is “relative safety” because we know that it could only take a slight breeze to blow the dollar’s house down. Back on August 22, I wrote that gold was due for a correction and that it would be a non-event to see a 10 percent drop in gold. I wrote, “This would actually be a healthy development for markets b...
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| Posted: 16 Dec 2011 02:22 PM PST by Andrew Hoffman, MilesFranklin.com:
It's still Thursday afternoon, and my wife is teaching so I figured I'd get started on Friday's RANT. LOTS of interesting things to tell you, and show you, starting with the fact that for the second straight day, Miles Franklin has been very busy with buyers taking advantage of the 100% PAPER-driven Cartel attack. In fact, thanks to the Cartel's dramatic gold takedown below its 200 DMA, as well as rising fears of imminent market collapse, Miles Franklin has seen, for the first time in two years, a dramatic increase in the amount of gold sold, relative to silver. Silver is by far the cheaper metal, but I expect many investors to associate what is on the near-term horizon with what happened in late 2008 – wherein silver declined more dramatically than gold – and thus are opting for heightened near-term caution. Either way, BOTH metals are going up, and investing in EITHER will PROTECT you from the upcoming chaos. Based on what I have read about the MF Global collapse, last week's emergency Fed "swap facility," and deterioration of the European Union, I could not be more certain GLOBAL MELTDOWN II commenced in November. I believe the END GAME would have switched to terminal mode two weeks ago if "the system" had not self-injected the WORLD'S LARGEST CRACK DOSE, to avert the MOTHER OF ALL WITHDRAWAL SYMPTOMS.
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| Posted: 16 Dec 2011 01:56 PM PST from Tekoa Da Silva's Bull Market Thinking: I just got off the phone with an agent at the Securities Investor Protection Corporation (SIPC). What I learned was very surprising, and it's time for every stock investor in the U.S. to be on high alert. To start out with, the SIPC was initially formed by congress, however, it functions as a private corporation which funds itself through member firm annual dues. It creates a fund which promises to "replace missing stocks and other securities that may be missing where it is possible to do so" (source). Additionally, they promise to cover up to $500k in missing securities, and up to $250k in missing cash. Since the SIPC is private they do not open their books to the public to show everyone how much they can cover in losses. In my conversation with the person at their firm, I was told, "the fund reserve usually remains in the $1 billion area," and it is further, "covered by up to a $2.5 billion backstop by the U.S. Treasury." What's interesting here, is that all it takes to tap out the $1B SIPC fund completely, is a total of 2,000 investors who lose accounts in excess of $500k in securities. Additionally, all it takes is 5,000 investors who lose in excess of $500k in securities to complete tap out the backstop offered by the U.S. treasury. Read More @ BullMarketThinking.com
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| Why the Gold Price is Falling Far and Fast Posted: 16 Dec 2011 01:00 PM PST Having fought a stalwart battle above $1,700 and having seen over $1,900 this year, gold has not done as so many analysts have believed it would and risen through $2,000. Instead, here we're headed down towards $1,500 to who knows where? The stress in the financial markets has not stimulated safe-haven gold buying but has instead weakened the euro and indirectly helped drag gold lower. Prices have fallen to a point where investors with longstanding positions are liquidating some of their holdings to secure profits and momentum-driven traders are selling heavily. At the same time stresses continue to be seen in the European interbank lending market as USD funding has become even more expensive as the year closes.
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| Peter Schiff: Gold, Inflation, Paul Krugman Challenge Posted: 16 Dec 2011 12:50 PM PST |
| DOLLAR Bubble and WAR in Europe? Posted: 16 Dec 2011 12:49 PM PST from Fabian4Liberty: In this video I cover gold and silver prices, the possibility of war in Europe and multi bubble economy that is the global financial ponzi scheme. Thanks for watching and please help me get past 4,000 subs by spreading my video to your subs. Also check out the poster to my new film "The Liberty Option."
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| Posted: 16 Dec 2011 12:44 PM PST Debt is absolutely endemic in our financial system. The average non-financial corporation in the US is sitting on a debt to equity ratio of 105%. Bank leverage while relatively low compared to Europe (13 vs. 25) is still high enough that an 8% drop in asset prices wipes out ALL capital.
The situation is even worse for the US consumer. During the housing boom, consumer leverage rose at nearly twice the rate of corporate and banking leverage. Indeed, even after all the foreclosures and bankruptcies, US household debt is equal to nearly 100% of US total GDP.
To put US household debt levels into a historical perspective, in order for US households to return to their long-term average for leverage ratios and their historic relationship to GDP growth we'd need to write off between $4-4.5 TRILLION in household debt (an amount equal to about 30% of total household debt outstanding).
Going into this recession, total US credit market debt was at its highest level of all time: over 350% of GDP. In comparison, during Roosevelt's New Deal during the Great Depression we hit only 300% of total GDP.
This is why what's happening in the US today is not a cyclical recession, but a h. And it's why 99% of commentators and pundits are unable to grasp the significance of this: it doesn't fit in their economic models which only go back to the post_WWII era.
Here's duration of unemployment. Official recessions are marked with gray columns. While the chart only goes back to 1967 I want to note that we are in fact at an all-time high with your average unemployed person needing more than 20 weeks to find work (or simply falling off the statistics).
Here's the labor participation rate with recessions again market by gray columns:
Another way to look at this chart is to say that since the Tech Crash, a smaller and smaller percentage of the US population has been working. Today, the same percentage of the US population are working as in 1980.
Here's industrial production. I want to point out that during EVERY recovery since 1919 industrial production has quickly topped its former peak. Not this time. Despite spending TRILLIONS in stimulus industrial production is well below the pre-Crisis highs.
Again, what's happening in the US is NOT a garden-variety cyclical recession. It is a STRUCTURAL SECULAR DEPRESSION. And the reason is that we are currently witnessing the collapse of the greatest debt bubble of all time.
Indeed, 2008 was the first round of this. We're now heading into the second round in which entire countries will go bust. Remember, stocks were the last to "get it" in 2008. They're the last to "get it" today too. And when they finally DO "get it," we're going to see some REAL fireworks.
If you're looking for specific ideas to profit from this mess, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.
Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008).
Best of all, this report is 100% FREE. To pick up your copy today simply go to: http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.
Good Investing!
Graham Summers
PS. We also feature four other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it's my proprietary Crash Indicator which has caught every crash in the last 25 years, or how to stockpile food (where to get it, what to buy, and how to store it) our reports cover this information in great detail.
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| Posted: 16 Dec 2011 11:40 AM PST from CapitalAccount: Welcome to the Capital Account with Lauren Lyster. Sanctions on Iran's central bank slide through in a 660 billion dollar defense spending bill headed for the president's desk. The sanctions could cause oil prices to rise — hitting consumers while possibly benefiting Iran. So, are you willing to eat higher oil prices for the promises of some politicians? Maybe not, but what choice do Americans have? Do the leaders we elect to the white house or congress make any difference? We will talk to Chairman of the Ludwig von Mises Institute, Lew Rockwell, for his thoughts. And…the SEC is suing the former heads of Fannie Mae and Freddie Mac for misleading investors about risky mortgages. So what about members of congress and previous administrations who pressured thee GSE's into buying riskier loans? We'll discuss if the SEC should be going after them with Cato's budget analyst Tad DeHaven. And…shutdown averted. Congress negotiated a Trillon dollar spending agreement a little more than 24 hours before a shutdown. We've seen this threat of a shutdown several times already. You know what? JUST DO IT ALREADY…
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| Posted: 16 Dec 2011 11:01 AM PST Gold Price Close Today : 1,595.60 Gold Price Close 9-Dec : 1,712.80 Change : -117.20 or -6.8% Silver Price Close Today : 2961.5 Silver Price Close 9-Dec : 3217.3 Change : -255.80 or -8.0% Gold Silver Ratio Today : 53.878 Gold Silver Ratio 9-Dec : 53.237 Change : 0.64 or 1.2% Silver Gold Ratio : 0.01856 Silver Gold Ratio 9-Dec : 0.01878 Change : -0.00022 or -1.2% Dow in Gold Dollars : $ 153.66 Dow in Gold Dollars 9-Dec : $ 147.05 Change : $ 6.61 or 4.5% Dow in Gold Ounces : 7.434 Dow in Gold Ounces 9-Dec : 7.114 Change : 0.32 or 4.5% Dow in Silver Ounces : 400.50 Dow in Silver Ounces 9-Dec : 378.71 Change : 21.79 or 5.8% Dow Industrial : 11,860.94 Dow Industrial 9-Dec : 12,184.26 Change : -323.32 or -2.7% S&P 500 : 1,219.26 S&P 500 9-Dec : 1,255.19 Change : -35.93 or -2.9% US Dollar Index : 80.177 US Dollar Index 9-Dec : 78.632 Change : 1.545 or 2.0% Platinum Price Close Today : 1,417.10 Platinum Price Close 9-Dec : 1,516.30 Change : -99.20 or -6.5% Palladium Price Close Today : 622.30 Palladium Price Close 9-Dec : 683.20 Change : -60.90 or -8.9% It was as painful a week as the GOLD PRICE and the SILVER PRICE have seen in a long stretch. Silver lost 8%, gold lost 6.8%, and lots of folks who were thinking they were going to retire on their silver and gold profits have trimmed their plans back to working an hour less every day. Today the GOLD PRICE gold rose $21 to close Comex at $1,595.60. SILVER gained 39c to close at 2961.5c. These are not significant gains, just dead cat bounces at the end of the week where people pull out profits so they can go home to Long Island and drink martinis all weekend with a clear conscience, unworried about what markets will do on Monday. Gold's low this week came yesterday at $1,563.90, etching the chart with what appears to be a bottom at $1,560 -- well, better "support" than "bottom," and overhead resistance at $1,600. 'Tis always important to fade the crowd's enthusiasm. Right now nobody can see anything but silver and gold falling forever, extrapolating present conditions out into the future forever, world without end. Don't make sense. After this hard a fall, metals will at least stage a little rise in correction. And I've been cogitating most earnestly where they might go. Searching thereafter, I came across the moving averages, and staring at those leaves me thinking that bottoms will come sooner rather than later, although this whole correction might torture us all the way to June 2012. It all depends on the European crisis, whether it explodes or not, and I don't know. If it doesn't, you won't see gold drop below $1,535. Otherwise, it could drop to $1,250, even $950 where the long term trend line comes in. Y'all want promises, don't you? Sorry, life doesn't work that way. It breaks my heart, but you marry and then your wife dies. You have children and lose them. The only alternative to such terrifying risks is, never to love, never to try, never to risk, and take your bones to the grave in perfectly safe boredom. Yes, you might lose, but I'd rather throw the dice once and lose than die wondering what they would have come up. One last detail: silver has posted at bottom at 2809.8 yesterday. Above is resistance at 3000c. If it breaks 2800c 'twill drop to 2700c. Possible is 2000c, maybe lower. Listen! Silver and gold remain in a primary uptrend (bull market) with another 3 to 10 years to run. Don't be sucked in by Talking Heads promising the gold bull market has ended. They're wrong. Stick with your silver and gold, buy more. Scoreboard for the week stores up pain for everyone: stocks down, silver and gold down blisteringly, US dollar index up, up, up. All the gurus are guruing that it's the end for silver and gold, but I reckon that's a MITE previous. Really only one question remains: whether the 2011 European bank solvency crisis will explode into a crisis as bad as the 2008 American bank solvency crisis. Everything else is like a killdeer flying up in front of your face. She's NOT the action, she's just flying away from her nest to distract you from the real action, the nest. Any time I mention the GOLD/SILVER RATIO, I get a flurry of emails asking me what I am talking about. I think it's simple, but then I've been thinking about it for 30 years. The gold/silver ratio is gold divided by silver. That's a fraction, and when the fraction's numerator (the top number) increases, the fraction's value increases. When the fraction's bottom number (the denominator) increases, the fraction decreases. 4/4 is greater than 2/4. 1/2 is greater than 1/4. That means that the more gold rises (increases) against silver, the higher the ratio rises. The more silver outperforms gold, the lower the ratio sinks (decreases). At high ratios we swap gold for silver, because then silver is cheap relative to gold. At low ratios we swap silver for gold, because then gold is cheap relative to silver. Right now the ratio is relatively -- high compared to where it's been in the last six months -- but I expect it will go higher still. Why? Because silver is more volatile than gold, so when both metals are swinging up, silver rises faster. When both metals are dropping, silver drops faster. Whichever direction the metals are moving, gold plods and silver jumps in seven league boots. (Remember, though, that they don't move this way every single day, and that silver usually waits until a rally has been running some time before it begins outpacing gold.) Put that way, I guess it is pretty complicated. Y'all will find the swapping strategy explained at http://www.the-moneychanger.com/articles_files/mmm_files/silver_files/silver_will_outperform.php Stocks sank nearly 3% this week. Today the Dow closed at 11,860.94, down a tee-tiny 3.51 or 0.29%. S&P 500 rose 5.21 (0.73%) to 1,219.26. Dow is hovering above its 50 day moving average (now 11,808), having already dropped through its 200 day moving average and turned its momentum unarguably down, down, down. Falling through that 50 dma will be like stepping off a cliff into the dark, toward the rocks below -- WAY below. Maybe a lot of y'all don't really catch why I am so much more negative on stocks than I am on silver and gold. Aren't both dropping? Didn't silver and gold drop even more than stocks this week? Yes, but you are missing the most important consideration: AGAINST WHAT BACKDROP? Stocks are in a primary bear market, a downtrend that will last 15 - 20 years from when it began in 2000, while silver and gold are in a primary Uptrend that will last 15 - 20 years from its 2001 beginning. Y'all get it now? No matter how good stocks look for the nonce, no matter how sorry gold and silver, makes no difference cause the PRIMARY TREND will determine the ultimate outcome. US DOLLAR INDEX rose two percent this week. Here's a guess, only a guess: the Nice Government Men have been working day and night round the clock since last summer to suppress the dollar. Had they not, the flight out of the euro would have driven the dollar to 92 by now. Don't make no difference. Dollar today closed down 14.4 basis points (0.19%) on its way to 83 and higher. Count on it. Euro closed 1.3035, up 0.17%, on its way to 1.2000. Japanese Yen closed up 0.1% at 128.56c/Y100 (Y77.78/$1), on its way nowhere. Y'all enjoy your weekend! 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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| From The Desk of Peter Grandich Posted: 16 Dec 2011 10:52 AM PST The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! December 16, 2011 02:52 PM Trying to have some sort of vacation but: [LIST] [*]I’m scheduled to be on Fox Business News with Stuart Varney Tuesday between 9:30AM -10:00AM [*]Any harness horse lovers out there can come to Chester Raceway this Sunday (Dinner Guest) *and Monday (Orange Bigi) and maybe get a picture or two with me in the Winners Circle (or have a drink at the bar drowning our sorrows on why we’re not in the Winners Circle!) [*]The following beaten down companies appear attractive as speculative (gambling) bounces into 2012 at the following prices or better (and would be added to “Tracking List” if that occurs): [/LIST]ATAC Resources – ATC-TSX-V @ $2.25 East Asia Minerals – EAS-TSX @ $.45 Evolving Gold – EVG-TSX @$.25 Geologix Explorations – TSX @ $.20 Golden Predator Resources -TSX @ ...
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| Gold on Verge of Move into Bubble Phase Posted: 16 Dec 2011 10:07 AM PST Gold Scents
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| Kyle Bass on the Fate of the World Posted: 16 Dec 2011 09:55 AM PST by Cris Sheridan, FinancialSense.com:
If you're not already familiar with the hedge fund celebrity Kyle Bass, you should be. His first claim to fame came by investing millions on the collapse of the subprime mortgage market after warning many financial executives of an impending collapse. Their response: "I hope you're wrong". Since then his keen predictions of major market events and how they'll unfold has gained him a large cult following across the financial blogosphere, not to mention countless interviews on what'll happen next. Here are two interviews (parts 1 and 2) he gave on BNN a few days ago on the U.S., China, Japan, and Europe. Oh, he also makes a brief positive mention on Canada, which after watching this interview you may want to move to afterwards. I've transcribed the most relevant portions below. Read More (and Watch the Videos) @ FinancialSense.com
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| Risk Focus Reverts From FX To Stocks/Credit With Weak Ending Posted: 16 Dec 2011 09:19 AM PST A roller-coaster week ended on a negative note as equities and credit ended the day only modestly lower but having sold off relatively decently from the highs just after the open. Equities spurted out of the gate in the day session, not followed by credit (or HYG) or broad risk assets (CONTEXT), only to revert quite quickly and then push notably lower as the Fitch news broke. Equities overshot to the downside relative to broad risk assets - though we note that TSYs were bid all day long, ending the day at their lowest yield and flattest curve levels. The afternoon then saw HYG (the high yield bond ETF) pull higher and higher as equities and credit spreads stagnated, with a weak close in stocks and strong high volume close in HYG (well above VWAP) as credit flat-lined. Gold and Silver managed solid gains on the day, extending the recovery but closing under the psychologically important $1600 and $30 respectively. FX 'wiggled' around today but ended with a small bearish USD bias by the close as the pre-European close action dominated once again ( as we note the $20bn in custodial bonds sold this week in more repatriation flows). It seems attention has shifted back from FX to bonds and stocks (with intraday stock vol picking up quite notably today) as the week rolled on and that sentiment is less than positive despite some technicals (from the forthcoming CDS roll) - even as HYG remains in a world of its own.
There was relatively decent agreement between ES (the e-mini S&P futures contract) and IG (investment grade) and HY (high yield) credit derivatives today. Equities overshot to the upside on each of the upswings - which maybe suggests a little what the path of least resistance is but we note that we ended the day on a sour note (and obviously Belgium's downgrade won't help). HYG (the high-yield bond ETF) performed its typical flow-driven magic, ignoring any sense of underlying value (which we suspect it pushed back to recent NAV premium highs today) and ending at the highs of the day after pulling to VWAP on volume and then with significant end of day volume (on what was a relatively weak volume day overall). We suspect the technical flows from the CDS roll next week (and arbs), as we discussed earlier this morning, are impacting but the sync with stocks suggests a similar risk attitude - which is clearly not in sync with HYG.
Treasuries also were in a significant risk off mode for the latter part of the week - despite the repatriation flows - and ended at the low yields of the week. We also note that 2s10s30s suggested a lower ES close today - even as FX carry and commodities suggested more positive close. CONTEXT was generally a lot less volatile than ES today - especially this afternoon.
Metals have staged quite a bounce off the Gartman bottom-calling exit liquidation flush mid-week. Silver is up 5% off midweek lows and Gold 2% (as copper outperformed gold off the lows). Oil continued to slide lower - tracking a similar path to stocks on the week. All of this as the USD basically flatlined from mid Thursday onwards.
There was a mild drift lower in the USD from midweek, as GBP rallied and JPY stabilized - bucking the more sideways EUR movement. There was plenty of vol but it was very much in bursts with significant reversion.
One final note of caution, implied correlation is once again bearishly diverging from index vol (VIX) the last two days suggesting dealers happy to buy systemic protection - in a similar vein to credit. All-in-all, not a very inspiring end to a poor week. European sovereign spreads leaked off into the close, credit and equity closed the week much closer to the week's lows, and the pull back in Gold/Silver and the strength in Treasuries suggests some more safe-haven flows was beating out risk seekers. IG credit outperformed HY (as we point out that both closed wider today than their wide prints from Wednesday while ES remained above those lows) as up-in-quality dominated credit and correlations dominated equities for the latter half of the week. Chart: Bloomberg
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| Posted: 16 Dec 2011 09:00 AM PST The Daily Reckoning has no voice in the US presidential elections. But we will nevertheless declare a preference. Were he to toss his hat in the ring, we would line up behind former Senator Jon Corzine. The ex-Goldman chief has the experience that America needs. He has been a front-runner in politics…and in the world of finance, what he doesn't know about front running is probably not worth knowing. Presuming, however, that Corzine will be too busy fending off lawsuits or jail sentences, our next choice is Republican Newt Gingrich. Of course, we find him completely repulsive, who wouldn't? But we believe he's the man of the hour. History needs him, to carry on the work of Bush and Obama, hustling the great nation on its way to Hell. It is rare for a decent man to seek public office. He is ashamed of pandering. He is embarrassed by the stupidity of his own slogans. He is appalled by the low-lifes and quasi criminals with whom he must associate and from whom he must beg support. They are all swarming around Newt Gingrich now. The handlers, pollsters, word polishers, idea chiselers, fund raisers, donors, hangers on, groupies, roadies — carpet-bagging rascals every one of them. Now they've got the scent in their nostrils. Their chests heave. The hearts pump. If they can just keep their man Newt from blowing himself up they'll be in high cotton for at least 4 years. One will head a commission or a cushy seat at the UN. Another will get a contract to provide the pentagon with new ID badges. Another will ride into a remote Congressional seat on Newt's coattails. Power. Money. If Newt wins, they win. Newt's women will think themselves smarter and prettier. The men among them will feel their most private part growing bigger. American presidential candidates generally fall into three categories. Those who are obviously incompetent. Those who are scalawags. And those who are jackasses. The job of the voters is to choose the defect most suited to the time. Winston Churchill was a disaster as First Lord of the Admiralty during WWI; the Gallipoli campaign was his doing. Then, on how to deal with the Iraqi insurgents, circa 1920, he offered this advice: Use chemical weapons "against recalcitrant Arabs as an experiment," he suggested, adding, "I am strongly in favour of using poisoned gas against uncivilised tribes to spread a lively terror." Later, as Chancellor of the Exchequer, he put Britain back on the gold standard, but at a level that was bound to cause trouble. It came, in 1929. He may have been incompetent. He may have been a big-mouth imperialist. But Churchill was the man Britain needed in 1940. When times are good, the public generally prefers a scalawag. Clinton was the perfect president for the '90s boom years. Warren Harding would have been a great fit with the boom of the '20s. He drank. He played cards. He snuck out of the White House to go to girlie shows. Otherwise, he left people alone. But he was a little early. Most of the "Roaring Twenties" boom happened during the Coolidge administration. On the surface, Coolidge was a mismatch. Straitlaced. A bit of a scold. But he minded his own business and — like Clinton during the dotcom bubble or Bush during the property bubble — he let speculators ruin themselves without raising an objection. The trouble with Herbert Hoover was that he was too much of a nuts and bolts engineer. The public turned him out. They preferred Roosevelt's confident malarkey. They wanted a man with a plan. No matter that the plan was claptrap. They'd never figure that out. That's the problem with Obama. He has no plan. He doesn't know what is going on, or what to do about it. Which at least marks him as more intelligent than most of his challengers, who have the wrong idea on both counts. But neither brains nor competence is what the public wants now. In an emergency it wants Churchill, not Chamberlain. A Roosevelt, not a Hoover. It wants a bold liar. A hearty delusional. Gingrich is their man. A letter in The Financial Times compared him to Churchill. He compares himself to de Gaulle. Both are correct, in our view. He is as humble as de Gaulle and at least as competent as Churchill. He is a cad who reportedly told his second wife that she was too old and too ugly to be a president's wife. He is a scoundrel who took $1.8 million from zombie mortgage lender, Freddie Mac. He makes angels weep; the gods get their backs up. So cometh Newt Gingrich to the Republican race. If you're dumb enough, you think he's smart. If you're corrupt enough, you think he is honest. If you compare him to the field of candidates, he doesn't seem any more asinine than the rest. He is incompetent, scalawag and jackass all in one package. A man for all seasons. Most importantly, he is committed to keeping America on course to its own destruction. The US already runs the biggest deficits in the developed world. Gingrich would add to them — by about $850 billion, according to one estimate. He hopes Reagan-era growth will eventually balance the books. He also thinks an Electro-Magnetic Pulse is one of the biggest dangers America faces. And he believes in American exceptionalism — as if the nation can dodge fate with some special math that applies to it alone. But if you begin asking questions about Newt's pensee you are missing the point. America's empire is decadent and degenerate. It needs a man like Newt to help it on its way… to where all exceptional empires end up — on the scrap heap of history. Regards, Bill Bonner Man for All Seasons originally appeared in the Daily Reckoning. The Daily Reckoning is published by Agora Financial and provides over 400,000 readers economic news, market analysis, and contrarian investment ideas.
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| Grandich Quoted in MarketWatch Posted: 16 Dec 2011 08:50 AM PST The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! December 16, 2011 01:02 PM Commodities Corner Dec. 16, 2011, 12:01 a.m. EST Silver's a bargain under $30, but watch volatility By Myra P. Saefong, MarketWatch [url]http://www.grandich.com/[/url] grandich.com...
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| Posted: 16 Dec 2011 08:43 AM PST December 16, 2011 [LIST] [*]Consumer prices "steady," we're told. Even if it were true, Michael Pento and Dan Amoss have two reasons they won't be next year [*]Gold begins to recover: Top-drawer fund manager on why now's the time to add to your stash [*]The beginning of the end? Social media IPO fails to dazzle: Greg Guenthner reads the signals [*]SEC prepares Fannie and Freddie wrist slaps... Hugo Chavez discovers markets... a reprieve for the incandescent bulb... and more! [/LIST] Consumer prices neither rose nor fell last month, in the skewed estimation of the Bureau of Labor Statistics. Year over year, CPI is up 3.4%. Notably, food prices are up 4.6%... and if you've cut back on dining out, the cost of sustenance is even higher. The category "food at home" is up 5.9%. Meanwhile, the core CPI rate, that statistical wonder reflecting the cost of living for people who don't eat or drive, is up 2.2% — on the high end of the Federal Reserve's inflationary...
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| Gold Daily and Silver Weekly Charts - A Bounce in Bullion and Miners on Quad Witching Posted: 16 Dec 2011 08:32 AM PST |
| Posted: 16 Dec 2011 08:21 AM PST Synopsis: Signs that the euro has further to fall, another nail in the coffin for US civil liberties, and why smart investors follow the lead of the "Dexter Woos" of the world... Dear Reader, Before I get to the article I planned to write today, I feel compelled to share with you the contents of an email I received from a well-connected correspondent in Washington D.C. I'd rather be writing about something else, but per this column last Friday I feel both a moral and ethical obligation to include a prologue to this edition on a topic that many of you are well aware of… the Defense Authorization Act of 2012 that is about to be signed into law. When it does, it will codify rendition for the purpose of torture and indefinite military detention without trial, of anyone, anywhere, solely for being suspected of supporting whatever is considered terrorism at the moment. Wait, the bill only identifies the targets as al-Qaeda and associated groups, so no problem, right? Hardly, because it – along with recent Supreme Court rulings – sets hard legal precedents that can then be applied without breaking a sweat to whichever group is next identified as constituting a threat, whether that threat is real or imagined. Today, it is the radical Islamists. Tomorrow? The easy thing to do, now that the bill has passed Congress and the administration has dropped its objections, is to shrug and move on. After all, that news is so "yesterday," and today we have the latest no-calories media eye candy to gobble up. But before moving into the ever more uncertain, Constitution-free future, I for one want the record on this bill to be entirely clear. To that end, here are the items from the email I received. The first is a transcript of a floor speech made by Senator Carl Levin (D-Michigan), a co-sponsor of the worst parts of the legislation along with Sen. Lindsay Graham (R-South Carolina) and Sen. John McCain (R-Arizona). In his speech, Levin discusses how the final language for clauses 1031 and 1032 was shaped. I was going to excerpt his comments, but you have to read the whole transcript to get the full understanding.
I will, however, give you a brief preview. Essentially, Levin demonstrates his remarkable talents as a master politician by talking out of both sides of his mouth, almost simultaneously. From one side of his gob, he says the laws don't apply to Americans, but immediately out of the other confirms that it does. And he goes to great pains to explain that the laws simply further echo recent Supreme Court rulings and accepted practices when it comes to tromping on what may be the single most important of all the rights proscribed by the founding fathers – the right to a fair and speedy trial. He then informs us that the offending wording was requested by the administration. The second item is a video showing the same Senator discussing detainees and the White House intervention during committee deliberations. Again, you will see that Levin rationalizes the totalitarian language as being okay because it was requested by the administration, trying as he does to sound like an innocent bystander. If he were not on their side, then why did he and a sizable majority of Congress grant what are essentially dictatorial powers to the administration and all that follow them?
Do I think Obama is going to start ordering wholesale military detentions? No. But there is no question that this is yet another plank in the gallows that is being constructed for American civil liberties, a gallows that is now fully assembled and ready for use following the next 9/11-scale "event." Such an event may not happen next year, and maybe not for ten years… but unless and until the US government stops its aggressive meddling, it is all but certain. And when it does happen, per my comments a moment ago, the definition of terrorism, which is vague at best, will instantly be shaped to suit the occasion. Even Senator Rand Paul, on hearing that the president dropped his veto threat, said, "I think we fought the good fight on it. ... We lost the overall battle." And so it is that we slip into the long, dark night with hardly a whisper. I can assure you that my personal plans for international diversification are now accelerating. Now, it's back to our regularly scheduled programming.
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| Stock Market Report: For What It's Worth! Posted: 16 Dec 2011 08:16 AM PST An awful lot is being written about gold and most of it comes from the mouths of individuals who simply don't know what they are talking about. Here's a perfect example of "news" that came across Reuters this morning. Read More...
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| Posted: 16 Dec 2011 08:09 AM PST It was only a matter of time before the bearish sentiment in the European currency surpassed the previous record of -113,890 net non-commercial short contracts. Sure enough, the CFTC's COT report just announced that EUR shorts just soared by over 20% in the week ended December 13 to -116,457. This is an all time record, which means that speculators have never been more bearish on the European currency. Yet, the last time we hit this level, the EURUSD was below 1.20. Now we are over 1.30. In other words, the fair value of the EURUSD is about 1000 pips lower, and has been kept artificially high only due to massive repatriation of USD-denominated assets by French banks (as can be seen in the weekly update in custodial Treasury holdings, which just dropped by another $21 billion after a drop of $13 billion the week before). This means that the spec onslaught will sooner or later destroy the Maginot line of the French banks, leading to a waterfall collapse in the EURUSD, which due to another record high in implied correlation will send everything plunging, or if somehow there is a bazooka settlement, one which may well include the dilution of European paper, the shock and awe as shorts rush to cover will more than offset the natural drop in the EUR, potentially sending it as high as the previous cycle high of 1.50. If only briefly. Three main FX pairs spec exposure:
And correlating the EURUSD and the net non-commercial spec position:
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| Posted: 16 Dec 2011 08:09 AM PST
It was only a matter of time before the bearish sentiment in the European currency surpassed the previous record of -113,890 net non-commercial short contracts. Sure enough, the CFTC's COT report just announced that EUR shorts just soared by over 20% in the week ended December 13 to -116,457. This is an all time record, which means that speculators have never been more bearish on the European currency. Yet, the last time we hit this level, the EURUSD was below 1.20. Now we are over 1.30. In other words, the fair value of the EURUSD is about 1000 pips lower, and has been kept artificially high only due to massive repatriation of USD-denominated assets by French banks (as can be seen in the weekly update in custodial Treasury holdings, which just dropped by another $21 billion after a drop of $13 billion the week before). This means that the spec onslaught will sooner or later destroy the Maginot line of the French banks, leading to a waterfall collapse in the EURUSD, which due to another record high in implied correlation will send everything plunging, or if somehow there is a bazooka settlement, one which may well include the dilution of European paper, the shock and awe as shorts rush to cover will more than offset the natural drop in the EUR, potentially sending it as high as the previous cycle high of 1.50. If only briefly. Three main FX pairs spec exposure:
And correlating the EURUSD and the net non-commercial spec position:
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| Rick Rule - I Personally Bought Over $10 Million This Week Posted: 16 Dec 2011 08:05 AM PST  With gold stabilizing near the $1,600 level and silver below $30, today King World News interviewed one of the most street smart pros in the resource sector, Rick Rule, Founder of Global Resource Investments. Rule had some fascinating things to share with KWN, but in particular with regards to what he is doing with his own money right now. When asked about the recent plunge in the price of gold, silver and the mining shares, Rule replied, "For a lot of the financial interests in gold, they've had their credit lines cut, they can't hold it. We saw that in 2008 also. Because of recent weakness in the euro, the dollar has become the safe haven trade. So there has been strength in the dollar, hence the weakness in gold."
This posting includes an audio/video/photo media file: Download Now |
| More Proof That The Gold Sell-Off Was Manipulated Posted: 16 Dec 2011 07:57 AM PST This will be a quickie today. Kudos to the commenter who alerted me that the OCC - Office of the Comptroller of the Currency - released its quarterly report on bank trading and derivative activity for the 3rd quarter of 2011 today. Here's the LINK Please note that the "precious metals" category is primarily silver derivatives. So the report is largely about gold and silver. There is very little if any trading in platinum and palladium OTC derivatives. It has been documented by over time that a large increase in the amount of gold and precious metals derivatives outstanding for the 5 largest banks is highly correlated with a big price "correction" in gold and silver. Interestingly, JP Morgan and HSBC are considered to be the primary metals market manipulator in this country Even more interesting, you can see from the latest OCC report that over 99.6% of the precious metals OTC derivatives positions held by all banks is attributable to JP Morgan and HSBC. Hmmm... Looking at the quarter-end end outstanding amount from Q2 to Q3 this year, you'll see that the JP Morgan's gold and precious metals OTC derivatives positions increased from Q2 to Q3 by 15.2%. Even more interesting, JPM's gold derivatives position with a maturity of less than 1 year increased by 28.5%. HSBC's derivatives position in gold and precious metals increased by 24.8%. It's needless to say - but I'll say it anyway - JPM and HSBC made millions for their proprietary trading positions on their derivatives postions in gold and silver in the last two weeks. Please note that the OTC derivatives market, thanks to Robert Rubin, Bill Clinton, Alan Greenspan and the current Treasury Secretary Tim Geithner is largely unregulated and unsupervised and is riddled with a high degree of illegal activity. There's not much more to say about this other than the fact that this high correlation between large increases in the derivatives positions in gold and silver derivatives by JPM and HSBC and the extreme downward price movements in gold and silver has persisted for a long time. Anyone who looks at this data and does not admit that the big market corrections we experience in gold and silver are the product of illegal manipulation is an idiot. Eventually the sheer force of demand in the physical gold and silver markets will prevent JPM and HSBC from manipulating the market using paper securities. That's when the real fun begins for those us of who truly understand what is going on and own a lot of gold and silver. When this does happen, GLD and SLV won't be of help as they will perish in fraud. Having traded and lived through several other manipulated market sell-offs like this over the last 11 years, I can say with conviction that the counter-move to this manipulated sell-off will be new highs in both gold and silver within 12 months. Have a good weekend. Go Broncos... 
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| Posted: 16 Dec 2011 07:48 AM PST
Jim Sinclair's Commentary John Williams' www.ShadowStats.com speaks the truth. - Consumer Financial Distress Hampered Retail Sales and Production - Nonsensical Hype Over Regularly Mis-Adjusted Jobless Claims - High Oil Prices Still Inflating Broad Economy - November's Annual Inflation: 3.4% (CPI-U), 3.8% (CPI-W), 11.0% (SGS) - Gold Remains the Ultimate Hedge www.ShadowStats.com
Continue reading In The News Today
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| GOLD IS ON THE VERGE OF MOVING INTO THE BUBBLE PHASE OF THE BULL MARKET Posted: 16 Dec 2011 07:40 AM PST By Toby Connor, Gold Scents However, all of the conditions necessary to launch the bubble phase are now in place. Gold is in the process of putting in an intermediate degree bottom. That bottom, which is only days away if it didn't already happen today, is going to be the single greatest buying opportunity, probably of the decade. Gold sentiment is at multiyear lows. Retail traders that bought at $1900 have gotten wiped out. The media is full of stories calling for the death of the gold bull. Institutional traders from John Paulson, George Soros, and Dennis Gartman have all gotten knocked off the bull. Breadth in the universally hated mining sector is back down to levels that have only been exceeded during the crash in 2008. 
This sector has consolidated for so long that no one believes in mining stocks anymore. This is exactly the same sentiment that was prevalent in the silver market in the fall of 2010.
Up until now my expectation has been that we would see gold consolidate for probably the better part of a year before the next C-wave breaks out to new highs. 
The public is already starting to become aware of the gold bull. All we need at this point to start the flood is for gold to recover quickly from this selloff. If gold quickly shoots back up and tags, or penetrates that big psychological $2000 number I expect it will be the siren call that draws the public into the bull market. And it is the public coming into a market that triggers the bubble phase. During this phase of the bull I expect we will see the normal ABCD wave pattern break down as gold starts to accelerate into what will almost certainly be the most incredible parabolic advance, maybe in history. By the fall of 2014 I expect we will see gold somewhere between $7,000 and $20,000 an ounce. I think tonight's premium report is important enough that I'm going to reopen the $1 trial subscription for two days. You will have access to the entire site for the next two days for the price of one George Washington. You can either keep your subscription and it will convert to a monthly at the end of the trial period or cancel it and you won't be charged another dime. Either way you will get access to a report that I think is important for every gold investor to read. If you decide to cancel do so by following the directions on the home page of the website. Please allow one day to process your one dollar payment before canceling. Click on the link above to go to the premium website and then click the subscribe link on the upper right side to link to the subscription page.        Toby Connor A financial blog primarily focused on the analysis of the secular gold bull market. If you would like to be added to the email list that receives notice of new posts to GoldScents, or have questions, email Toby.
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| More Upside for Gold as Government Spending Continues Unabated Posted: 16 Dec 2011 07:39 AM PST Have yourself a merry little depression. Dow up 45 points. Gold down $9. We're still waiting for a major correction in the gold market. Each time one begins, it seems to run out of steam before doing any real damage. At yesterday's closing price, $1,577, gold is still solidly ahead for the year. So, where's the soft spot? Where's the test? Where will it come from? When? Don't worry, dear reader, Mr. Market will test us. He'll throw his curve ball. We have to be ready. What if… …instead of testing us on the downside, he tests us on the upside? This is not a prediction. Just a thought. What if gold suddenly shot up…and looked like it was going to the moon. What would we do? Citigroup's metals expert puts a $3,400 price on gold "in the next year or two." Jim Rogers makes a similar forecast. What if they're right? We only mention it because The Trickster has more than one trick up his sleeve. And he's perfectly capable of running the price up to $3,500 BEFORE testing us. We could get giddy, watching the price of gold hit record after record. And then, just when we think it is ready to scale its final peak, gold could turn tail and run for the valley. We wouldn't believe it. We would hold on. We would wait for it to go back up. And then…wouldn't we feel stupid, if we'd taken that ride all the way to over $3,000…and then rode it all the way back to today's level? Wouldn't we be put out with ourselves, if we sold out then…thinking gold had put in its final top and we missed it? According to the 50% principle…it could hit $3,000…collapse to barely $1,500…and then soar again…possibly going to $5,000…or even $10,000. That's what we'll get in the final 'crack up' boom that is coming. Who knows? But what we see is more upside than downside for gold. Because the motor pulling gold up still has a lot of gas in the tank. In the US the feds spend $1.60 for every dollar they raise in taxes. In Europe, the euro-feds prepare to bail out their banks and sovereign debtors. And guess how much the feds have already spent? They were so desperate to avoid a debt crisis…or a depression…that they threw the throttle wide open on the biggest rescue effort the world has ever seen. Bloomberg calculated that $7.7 trillion were put to work. Our estimate was higher — about $10 trillion, we guessed. Well…we were both way off. Here's the news report: As part of the Ford Foundation project "A Research and Policy Dialogue Project on Improving Governance of the Government Safety Net in Financial Crisis," Nicola Matthews and James Felkerson have undertaken an examination of the data on the Fed's bailout of the financial system — the most comprehensive investigation of the raw data to date. The extraordinary scope and magnitude of the recent financial crisis of 2007-09 required an extraordinary response by the Fed in the fulfillment of its lender-of-last-resort function. The bottom line: a Federal Reserve bailout commitment in excess of $29 trillion. Whoa! The feds put at risk an amount equal to 200% of US GDP. And for what? So that a depression wouldn't knock 5% off GDP? Even the Great Depression of the '30s only set the US back by 30% of GDP. A similar setback today would cost the economy less than $5 trillion. Do you see what we see? Even if it worked — which it didn't — the feds' efforts would have been a disaster. Who would spend $29 trillion to save $5 trillion? But wait. There's more. This assumes that a depression is unnecessary…or that it doesn't do any good. We know that's not true. A depression does a lot of good. It wipes out bad investments and eliminates bad speculators. It forces capital into more productive, more profitable uses. It kills off zombie industries. It retires worn-out industries…and reduces costs so that new industries can arise. It's the 'destruction' that Schumpeter's 'creative destruction' needs. The more we think about it, the more we're beginning to like depressions. After scammy bailouts and bogus recoveries, a depression would be something to look forward to. Bill Bonner More Upside for Gold as Government Spending Continues Unabated originally appeared in the Daily Reckoning. The Daily Reckoning is published by Agora Financial and provides over 400,000 readers economic news, market analysis, and contrarian investment ideas. More articles from The Daily Reckoning….
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Do you remember how shocked everyone was about Enron? The recent 10-year anniversary of the Enron scandal has inspired a rash of near-nostalgic essays looking back at the roots of what was then the largest bankruptcy in history and its impact on the lives of investors and employees. Today, jaded by trillion-dollar tax-funded bailouts of failed firms easily as culpable as Enron execs, one would scarcely raise an eyebrow were another Enron to occur.
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