Gold World News Flash |
- You Won't Believe How Hard it is to Find & Refine Silver!
- GLD: Technicals
- Martin Armstrong - Money is Not Safe Here, Buffett’s Silver Play
- World Dollar Collapse
- The U.S. National Debt and How It Got So Big
- Investors safer in Britain than U.S., Armstrong tells King World News
- Chart of the Week: Gold in a Bear Market?
- Really interesting video on ‘scrap gold'
- U.S. Dollar: Stronger Short-Term, Weaker Long-Term
- Gene Arensberg on gold's testing its 200-day moving average again
- Psssst France: Here Is Why You May Want To Cool It With The Britain Bashing - The UK's 950% Debt To GDP
- Fed May Inject Over $1 Trillion To Bail Out Europe
- How The Bankers Drive Up Bullion Prices, Part I
- Alasdair Macleod: Money supply explosion will lead to accelerating inflation
- Fed to aim to put inflation premium on top of GDP, Rickards tells King World News
- House Approves US Marshals Service Coins in Gold, Silver and Clad
- Eldorado Gold to acquire European Goldfields in friendly bid for C$2.5 bn
- Gold bull market still intact – technical analysis
- Why gold has been falling. Is this an engineered phenomenon?
- OK given for Goldcorp to up Cerro Negro gold mine throughput by more than 2x
- The Glory Hole
- Gold Tests of 200 Day Moving Average
- Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global
- Goldman's Take On TARGET2 And How The Bundesbank Will Suffer Massive Losses If The Eurozone Fails
- Is Britain About To Scuttle The Last Ditch "Plan Z" European Bailout?
- Euro Collapse Crisis Sledgehammer Pounds Into Stock Market Santa Rally
- Sol Sanders | Follow the money No. 97 | A pipeline to …well, almost …eternity
- Silver Analysis W/ David Morgan ‘$60 Silver And $2,500 Gold For 2012′
- Gold Market Update
- Gold Downtrend Looks Like the Direction Ahead, Projections for 2012
| You Won't Believe How Hard it is to Find & Refine Silver! Posted: 18 Dec 2011 05:13 PM PST [Ed Note: Watching this makes me appreciate every ounce of .999 Ag I have, a great deal more.] From a episode of "How It's Made" featuring a segment on silver mining. The mining company is clearly shown, First Majestic Corp. of Canada (their active mines are in Mexico, however). Their refined bullion bars are shown at the beginning, but the segment focuses on the mining and silver extraction process. And from the looks of it, it's ain't easy.
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| Posted: 18 Dec 2011 04:44 PM PST In previous articles, I provided fundamental and some technical evidence that not only is the gold bull market intact, but that the fundamentals for higher price appreciation remain strong as well. Yes, there has been some technical damage, and yes, it is enough to warrant caution. On the other hand, investors need to remain alert as these kind of buying opportunities don't come along all too often in a bull market. In this article, I will take a look at the technicals of the SPDR Gold Trust ETF (symbol: GLD) utilizing long term monthly charts. In follow up articles, I will drill down on the weekly charts to determine where the stress points will be and where a buying opportunity might develop. Figure 1 is a monthly chart of the GLD. Since 2008, GLD has been in a strong uptrend, and price still remains within the uptrend channel. 5 months ago, price did try to break out of the channel (blue up arrow) and go parabolic, but that failed move (red down arrow) led to the current price action. Figure 1. GLD/ monthly
Figure 2 is another monthly chart of GLD, and this time I have added some negative divergence bars (pink labeled). In this instance, these are negative divergences between price, which is heading higher, and an oscillator used to measure price, which is headed lower. While negative divergences are often seen at market tops, their presence does not guarantee a market top. (Read the last sentence again because most technical analysts types don't understand that concept.) My research shows that negative divergence bars imply slowing upside momentum, and the highs and lows of the negative divergence bar will often serve as the highs and lows of a range that follows the negative divergence bar. So you get a negative divergence bar; price momentum slows; subsequent prices are contained within the highs and lows of that price bar until you get a break out from that range. And this is what I have tried to convey with the gray boxes on figure 2. Figure 2. GLD/ monthly
Several caveats. Look closely at the 8 negative divergence bars on this monthly chart. In 7 out 8 instances, the lows of the negative divergence bar were tested but price never closed below those lows on a monthly closing basis. The recent negative divergence bar has a low of 154.19, and it would be my expectation that prices will close above this level by month's end. The high of the second most recent negative divergence bar is 151.86; this would be considered a support level. Last week's sell off low: 151.71. Going forward, it is my expectation, based upon the failed breakout and the clustering of multiple negative divergences, that GLD will remain in a range bound period for a while. If prices fall out of the trend channel line or below 150 ~ ish, then all bets are off. If this analysis is wrong, then bull market is really over. On the other hand, I really do like the fact that the fundamentals for gold have not changed, and prices are sitting at support as defined by a long term rising trend channel line and by the highs and lows negative divergence bars. TheTechnicalTake offers a FREE e-newsletter:
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| Martin Armstrong - Money is Not Safe Here, Buffett’s Silver Play Posted: 18 Dec 2011 04:01 PM PST  With growing concerns about the safety of the US financial system, today King World News released an interview with internationally followed Martin Armstrong, founder and former head of Princeton Economics International Ltd.. At one point Armstrong's firm rose to be perhaps the largest multinational corporate advisor in the world. Here are a few snippets about what Armstrong had this to say to investors who have been asking him about where to put their money: "At the conference that I just gave, one of the number one questions people were asking, 'What happens now with this MF Global stuff. I don't know what to tell them. I cannot, in good conscience say your money is safe in New York anymore. We were looking at, largely, where to put your money."
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| Posted: 18 Dec 2011 03:56 PM PST  how to prepare for Economic Collapse using gold as currency this how we can beat the fed at their own game protect yourself and make extra money at the same time follow the link and open a free account no obligation, this is one of the greatest opportunities!! Read more....... 
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| The U.S. National Debt and How It Got So Big Posted: 18 Dec 2011 03:32 PM PST The U.S. debt is over $14.5 trillion, and is the sum of all outstanding debt owed by the Federal Government. Nearly two-thirds is the public debt, which is owed to the people, businesses and foreign governments who bought Treasury bills, notes and bonds. The rest is owed by the government to itself, and is held as Government Account securities. Most of this is owed to Social Security and other trust funds, which were running surpluses. These securities are a promise to repay these funds when Baby Boomers retire over the next 20 years. The Size of the U.S. Debt: The U.S. debt is the largest in the world. How did it get so large? Purchasers of Treasury bills still reasonably expect the U.S. economy to recover enough to pay them back. For foreign investors like China and Japan, the U.S. is such a large customer it is allowed to run a huge tab so it will keep buying exports. (Source: CIA World Factbook) Even before the economic crisis, the U.S. debt grew 50% between 2000-2007, ballooning from $6-$9 trillion. The $700 billion bailout helped the debt grow to $10.5 trillion by December 2008. The U.S. Debt Level: The debt level is the debt as a percent of the total country's production, or GDP, which was $14.7 trillion in 2010. The debt nearly 100% of GDP, up from 51% in 1988. Interest on the debt was $414 billion in Fiscal Year 2010, higher than the $383 billion in FY 2009, but lower than its peak of $451 billion in FY 2008. That's because of lower interest rates. The interest on the debt is the fifth largest Federal budget item, after Defense and Security spending ($890 billion), Social Security ($730 billion) and Medicare ($490 billion). (Source: U.S. Treasury, Interest) How Did the Debt Get So Large?: Government debt is an accumulation of budget deficits. Year after year, the government cut taxes and increased spending. In the short run, the economy and voters benefited from deficit spending. Usually, however, holders of the debt want larger interest payments to compensate for what they perceive as an increasing risk that they won't be repaid. This added interest payment expense usually forces a government to keep debt within reasonable limits. The U.S. also has a debt ceiling, which attempts to limit the debt. However, Congress usually raises the ceiling to prevent the negative consequences of a debt default. The most recent budget forecast from the Office of Management and Budget (OMB) showed the FY 2011 budget deficit at $1.3 trillion, more than the $1.17 trillion deficit for FY 2010, but down from the $1.7 trillion deficit for FY 2009. This was a result of the economic stimulus package, the 2008 government bailout measures and the roughly $800 billion a year defense/security spending. The deficit is also caused by reduced income from the recession, as well as the EGTRRA and JGTRRA tax cuts and the Alternative Minimum Tax patch. The U.S., however, has been the beneficiary of two unusual factors. First, the Social Security Trust Fund took in more revenue through payroll taxes leveraged on Baby Boomers than it needed. Ideally, this money should have been invested to be available when the Boomers retire. In reality, the Fund was "loaned" to the government to finance increased deficit spending. This interest-free loan helped keep Treasury Bond interest rates low, allowing more debt financing. However, it's not really a loan, since it can only be repaid by increased taxes when the Boomers do retire. Second, foreign countries increased their holdings of Treasury Bonds as a safe haven, also keeping interest rates low. These holdings went from 13% in 1988 to 31% in 2011. During the recession, countries like China and Japan increased their holdings of Treasuries to keep their currencies low relative to the dollar. Even though China warns the U.S. to lower its debt, it keeps buying more Treasuries. For more, see How China Affects the U.S. Economy. Of the total foreign holdings ($4.49 trillion), China owns $1.1 trillion and Japan owns $900 billion. The U.K. owns $300 billion, while Brazil, the oil exporting countries, Hong Kong, Russia and Canada own between $100-$280 billion each. The Bureau of International Settlements suspects that much of the holdings by Belgium, Caribbean Banking Centers and Luxembourg are fronts for more oil-exporting countries, or hedge funds, that do not wish to be identified. (Source: Foreign Holding of U.S. Treasury Securities, April 2011; U.S. Treasury report "Petrodollars and Global Imbalances", February 2006) How The U.S. Debt Affects the Economy: Over the next 20 years, the Social Security funds must be paid back as the Baby Boomers retire. Since this money has been spent, resources need to be identified to repay this loan. That would mean higher taxes, since the high U.S. debt rules out further loans from other countries. Unfortunately, it's most likely that these benefits will be curtailed, either to retirees younger than 70, or to those who are high income and therefore theoretically don't need Social Security. Second, many of the foreign holders of U.S. debt are investing more in their own economies. Over time, diminished demand for U.S. Treasuries could increase interest rates, thus slowing the economy. Furthermore, anticipation of this lower demand puts downward pressure on the dollar. That's because dollars, and dollar-denominated Treasury Securities, may become less desirable, so their value declines. As the dollar declines, foreign holders get paid back in currency that is worth less, which further decreases demand. The bottom line is that the large Federal debt is like driving with the emergency brake on, further slowing the U.S. economy. Source: http://useconomy.about.com/od/fiscalpolicy/p/US_Debt.htm 
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| Investors safer in Britain than U.S., Armstrong tells King World News Posted: 18 Dec 2011 02:44 PM PST 10:40p ET Sunday, December 18, 2011 Dear Friend of GATA and Gold (and Silver): Market analyst Martin Armstrong tonight tells King World News that investors are safer with brokers in Britain than in the United States because Britain has a single market regulator, the Financial Services Authority, that isn't afraid to ask questions and insist on getting answers, while the United States has several regulatory agencies that are cowed by the companies they are supposed to regulate. An excerpt from the Armstrong interview as well as its full audio are posted at King World News here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/19_M... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Drills 384.9 Meters Grading 0.623 g/t PGM+Au, Company Press Release VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the final drill results from 2011 drilling at the company's fully owned Wellgreen platinum group metals, nickel, and copper project in the Yukon Territory. Borehole WS11-192 intercepted 384.9 meters of 0.45 percent nickel equivalent starting from 9.45 meters depth. Included in this greater interval of continuous mineralization is a platinum group metals-rich zone with a combined platinum-palladium-gold grade of 1.358 grams per ton over 19.23 meters (nickel equivalent 0.74%). The final drilling results for 2011 have shown the Wellgreen Central-East and Central-West deposits to be one contiguous body, whereby there is good potential to broaden significantly the Central-West resource base, which currently contributes only about a quarter of the current 43-101 compliant resource at Wellgreen. Overall the drilling program met with good success in expanding the resource to the east and south. The long drill intercepts suggest the deposit remains very much open in those directions. For the complete drilling results and the full company statement, please visit: http://prophecyplat.com/news_2011_dec08_prophecy_platinum_wellgreen_dril... Join GATA here: Vancouver Resource Investment Conference http://cambridgehouse.com/conference-details/vancouver-resource-investme... California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| Chart of the Week: Gold in a Bear Market? Posted: 18 Dec 2011 02:34 PM PST Whenever one gets a huge washout breakdown day, as was experienced in the gold market on December 14, the gold bears come out of the closet declaring that the gold bull is dead. Read More...
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| Really interesting video on ‘scrap gold' Posted: 18 Dec 2011 02:32 PM PST
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| U.S. Dollar: Stronger Short-Term, Weaker Long-Term Posted: 18 Dec 2011 02:32 PM PST The rise of the dollar could continue for the first part of 2012. Nonetheless, the longer-term picture is bearish for the greenback. Read More...
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| Gene Arensberg on gold's testing its 200-day moving average again Posted: 18 Dec 2011 02:24 PM PST 10:20p ET Sunday, December 18, 2011 Dear Friend of GATA and Gold: Gene Arensberg of the Got Gold Report gets out his chart tonight and notes that this is far from the first time in the last decade when gold has tested its 200-day moving average. Arensberg doesn't seem terribly frightened about it. His commentary is headlined "Gold Tests of 200-Day Moving Average" and you can find it at the Got Gold Report here: http://www.gotgoldreport.com/2011/12/gold-tests-of-200-day-moving-averag... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Be Part of a Chance to Discover Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600. Join GATA here: Vancouver Resource Investment Conference http://cambridgehouse.com/conference-details/vancouver-resource-investme... California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing a silver commemorative coin: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT The United States Once Again Can Establish Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, has released a plan to restore economic growth through a stable dollar. The plan, titled "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies," responds to the recurrent economic crises of the last century and outlines a detailed proposal for America's leadership on "how we get from here to there." That is, how we get from the present unstable paper dollar to a stable dollar as good as gold. James Grant, author and editor of Grant's Interest Rate Observer, says of the Lehrman plan: "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman the country has finally found him." To learn more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: http://www.thegoldstandardnow.org/gata
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| Posted: 18 Dec 2011 01:43 PM PST While certainly humorous, entertaining and very, very childish, the recent war of words between France and Britain has the potential to become the worst thing to ever happen to Europe. Actually, make that the world and modern civilization. Why? Because while we sympathize with England, and are stunned by the immature petulant response from France and its head banker Christian Noyer to the threat of an imminent S&P downgrade of its overblown AAA rating, the truth is that France is actually 100% correct in telling the world to shift its attention from France and to Britain. So why is this bad. Because as the chart below shows, if there is anything the global financial system needs, is for the rating agencies, bond vigilantes, and lastly, general public itself, to realize that the UK's consolidated debt (non-financial, financial, government and household) to GDP is... just under 1000%. That's right: the UK debt, when one adds to its more tenable sovereign debt tranche all the other debt carried on UK books (and thus making the transfer of private debt to the public balance sheet impossible), is nearly ten times greater than the country's GDP. To call that "game over" is an insult to game overs everywhere. So here's the bottom line: France should quietly and happily accept a downgrade, because the worst that could happen would be a few big French banks collapsing, and that's it. If, on the other hand, the UK becomes the center of attention (recall this is the same UK that allows unlimited rehypothecation of worthless assets, and the same UK that unleashed the juggernaut known as AIG-FP's Joe Cassano - after all there is a reason why the UK has 600% its GDP in financial liabilities - financial innovation always goes there where it is least regulated), then this island, which far more so than the US is the true center of the global banking ponzi scheme, will suddenly find itself at the mercy of the market. At that point the only question is whether the vigilantes will dare to take down the UK, as said take down will result in an implosion in the very fabric of modern finance, much more so than what even a full collapse of France could ever achieve, or if due to the certain Mutual Assured Destruction that would follow a coordinated UK onslaught, the market will simply very quietly proceed to ignore the elephant in the room.
Source: Anthony B. Sanders testimony to Congress, December 15, 2011
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| Fed May Inject Over $1 Trillion To Bail Out Europe Posted: 18 Dec 2011 01:21 PM PST As first reported here, two weeks ago European banks saw the amount of USD-loans from the Fed, via the ECB's revised swap line, surge to over $50 billion - a total first hit in the aftermath of the Bear Stearns failure prompting us to ask "When is Lehman coming?" However, according to little noted prepared remarks by Anthony Sanders in his Friday testimony to the Congress Oversight Committee, "What the Euro Crisis Means for Taxpayers and the U.S. Economy, Pt. 1", we may have been optimistic, because the end result will be not when is Lehman coming, but when are the next two Lehmans coming, as according to Sanders, the relaunch of the Fed's swaps program may "get to the $1 trillion level, or perhaps even higher." As a reference, FX swap line usage peaked at $583 billion in the Lehman aftermath (see chart). Needless to say, this estimate is rather ironic because as Bloomberg's Bradely Keoun reports, "Fed Chairman Ben S. Bernanke yesterday told a closed-door gathering of Republican senators that the Fed won't provide more aid to European banks beyond the swap lines and the discount window -- another Fed program that provides emergency funds to U.S. banks, including U.S. branches of foreign banks." Well, between a trillion plus in FX swap lines, and a surge in discount window usage which only Zero Hedge has noted so far, there really is nothing else that the Fed can possibly do, as these actions along amount to a QE equivalent liquidity injection, only denominated in US Dollars. Aside of course to shower Europe with dollars from the ChairsatanCopter. Then again, before this is all over, we are certain that paradollardop will be part of the vernacular. Historical ECB swap line usage with the Fed, and projected assuming $1+ trillion in use. Just to put it all into perspective.
For all those lamenting the ECB's lack of willingness to print, fear not: the almighty Chairsatan has vowed to valiantly take his place when needed. As in 2 weeks ago. From Bloomberg:
For those wondering what all this means, we remind you that there was a roughly $6.5 trillion synthetic (duration mismatch) USD short as of 4 years ago, as we reported at the time. That short has gotten substantially larger following a 4 year regime of the USD as a funding currency courtesy of ZIRP. Which means that any time the liquidity shortage threatens to collapse the system, the first thing to go stratospheric will be the USD as the global financial system scrambles to cover its short. It also means that anything the Fe and/or ECB can do from a pure printing standpoint will be peanuts compared to the utter carnage unless the dollar short is not preserved. Which naturally means that it is up to the Fed to continue drowning the world in either nominal dollars, or swapped ones, such as under the form of a USD-EUR swap, which is nothing but a forward operations. In essence, with the FX swap lines, the Fed engages in the ultimate currency warfare tool: it sells dollars to the entities most needy. And it does so, because if it doesn't, said needy entities will implode, and the hollow financial dominoes will topple, leading to a mess that not even infinite synthetic or real printing of binary of paper dollars, euros, or anything else will do to fix. Which is why all those wondering if gold should be bought now or the second after the ECB starts printing, we have one piece of advice: just look at the chart above. It says all one needs to know. Lastly, since the Sanders testimony is worth a read in and of itself, we recreate it below. Some of the choice selections:
Full testimony:
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| How The Bankers Drive Up Bullion Prices, Part I Posted: 18 Dec 2011 01:06 PM PST By Jeff Nielson, Bullion Bulls Canada Regular readers are excused for being confused by this title, or perhaps even suspecting a misprint. After all, having written numerous commentaries documenting the activities of the bullion banks in suppressing bullion prices, at first glance the title appears nothing less than perverse. At the same time, I have previously observed that what the banksters are able to accomplish in depressing prices over the short-term must lead to a boomerang higher in prices over the longer term. In our markets we see yet another example of the principles of economics mirroring the laws of physics: for every action, there is an equal and opposite reaction. There is a particular reason for me to raise this issue at this particular time. While the predatory actions of the bankers in the bullion market are frequently highlighted by precious metals commentators, much less often discussed is the even more rabid suppression of the gold and silver miners. To understand why the bankers are terrified of seeing gold and silver miners valued at fair multiples, we must first understand what those rational valuations imply. First of all as I have explained in previous commentaries, commodity producers provide natural leverage on the price of the commodity they produce (for better or worse). A rising price makes these companies more profitable in multiples of the increase in the price of the commodity, and similarly decreasing prices exert a greater than 1:1 impact on the way down as well. Thus with gold prices having risen by roughly a factor of six from their absolute bottom, and silver prices having risen by roughly a factor of ten; we should see these miners sporting fantastic valuations to reflect their record (and rising) profitability. In reality, at current valuations many of these miners have not even matched the rate of increase in bullion prices – and in fact there are plenty of actual laggards. Because of the fact that commodity-producers provide natural leverage on the price of the commodity they produce, rising prices for the producers are seen as a bullish indicator for the sector. Immediately we see the primary basis for the bankers' hatred of the miners: allowing them to rise to their fair market value would be like a neon sign for investors, highlighting the stellar returns from investing in gold and/or silver. Instead, despite the fact that precious metals has been the #1 sector over the past decade, it represents approximately 1% of the holdings of the average investors' portfolio. Arguably, there has never been such perverse under-ownership of an asset class in market history. Readers should note that this is also an absolute rebuttal to all the nonsensical babble of "gold bubbles" and "silver bubbles". Obviously a sector cannot be in a "bubble" (which by definition is a market mania) when the asset class remains a secret and/or mystery to the vast majority of the investment community. As the predatory/parasitic conduct of the banking crime syndicate nears the point of completely destroying our economies, however; a second and even more imperative motive has arisen for the banksters to focus all of their power and malice on sabotaging this sector: their fear of the inevitable decoupling between gold and silver miners and all other equity classes. As I have detailed in dozens of commentaries focusing on the larger macroeconomic picture; there can be no argument that Western economies are on the verge of a catastrophic meltdown. Thanks to the Ponzi-scheme financing in which all of these governments have been ensnared by the banksters, there will be a "domino effect" as these economies crumble – with the inevitable result being an economic depression unprecedented in modern history. Unfortunately that is literally only half the nightmare. The bankers' predatory conduct in all commodity markets is simultaneously pushing us toward numerous supply crises. Shorting and all price-suppression have an inevitable effect on all commodity markets. Artificially low prices simultaneously stimulate over-consumption and discourage production. As a matter of arithmetic, the only possible long-term result is the total collapse of inventories. Empirical evidence shows this is precisely where we are headed. More articles from Bullion Bulls Canada….
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| Alasdair Macleod: Money supply explosion will lead to accelerating inflation Posted: 18 Dec 2011 01:06 PM PST GATA 11:40a ET Sunday, December 18, 2011 Dear Friend of GATA and Gold: Economist and former banker Alasdair Macleod, writing at GoldMoney, reports on a study that finds the U.S. dollar's "true money supply" going parabolic and carrying the price of gold with it. Macleod's commentary is headlined "Money Supply Explosion Will Lead to Accelerating Inflation" and it's posted at GoldMoney here: http://www.goldmoney.com/gold-research/alasdair-macleod/money-supply-exp… CHRIS POWELL, Secretary/Treasurer Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
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| Fed to aim to put inflation premium on top of GDP, Rickards tells King World News Posted: 18 Dec 2011 01:06 PM PST GATA 11:31a ET Sunday, December 18, 2011 Dear Friend of GATA and Gold: Geopolitical analyst James G. Rickards tells King World News he expects the Federal Reserve to start aiming for a certain level of "Notional Gross Domestic Project," which is just to put an inflation premium on top of the lousy ordinary Gross Domestic Product, and that this will send the gold price flying. An excerpt from the interview as well as full audio of the interview can be found here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/18_J… Meanwhile in the weekly precious metals review at King World News, Bill Haynes of CMI Gold and Silver reports a buying of the dips and futures market analyst Dan Norcini says gold and silver mining shares have remained in their long-running trading range despite their recent fall: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/12/17_… And resource stockbroker Rick Rule tells King World News that he put his money where his mouth is last week, buying millions of dollars worth of mining shares: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/16_R… CHRIS POWELL, Secretary/Treasurer Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
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| House Approves US Marshals Service Coins in Gold, Silver and Clad Posted: 18 Dec 2011 01:05 PM PST On Thursday, December 15, 2011, legislation passed in the US House of Representatives that would authorize the United States Mint to strike up to 1.35 million gold, silver and clad commemorative coins in calendar year 2015 to celebrate the 225th anniversary of the founding of the United States Marshals Service. Introduced on March 2, 2011 by [...]
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| Eldorado Gold to acquire European Goldfields in friendly bid for C$2.5 bn Posted: 18 Dec 2011 01:04 PM PST Eldorado Gold and European Goldfields have announced a friendly C$2.5 billion cash-and-shares plan of arrangement.
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| Gold bull market still intact – technical analysis Posted: 18 Dec 2011 01:04 PM PST Despite a fall through its 200 day moving average, chart analysis suggests that gold's bull market probably remains in place
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| Why gold has been falling. Is this an engineered phenomenon? Posted: 18 Dec 2011 01:04 PM PST Stress in the financial markets has not stimulated safe-haven gold buying but has indirectly helped drag gold lower.
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| OK given for Goldcorp to up Cerro Negro gold mine throughput by more than 2x Posted: 18 Dec 2011 01:04 PM PST With new permits in hand a key driver of Goldcorp's future growth – Cerro Negro in Argentina – can now open as a 550,000 ounce gold a year mine.
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| Posted: 18 Dec 2011 01:01 PM PST In alluvial gold mining, a glory hole refers to an eroded out depression in old river beds or those formed at the base of ancient waterfalls. Gold, being 18 times heavier than water, sinks to the bottom of these depressions near bedrock. This concave geometry is known to be ideal for concentrations of gold and these types of deposits are always in strong demand. In 1874 in Northern Idaho, legend has it that an old prospector named Sam discovered a glory hole of gold buried 100 feet beneath the erosive soils of an old waterfall. He mined it for several months, gathering hundreds of nuggets. As winter approached, he camouflaged the workings intending to return the following year. Regrettably, he fell ill and was never able to return. Today, its hidden location is still there, seen by many but recognized by few. [CENTER]Glimmers of Hope[/CENTER] The current waterfall decline in gold, silver and XAU is indeed depressing. In particular, the performance of the XAU has been less than st...
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| Gold Tests of 200 Day Moving Average Posted: 18 Dec 2011 12:07 PM PST One of our GGR members who happens to hail from Sweden posted a comment in our recent VultureInReview piece about Rick Rule. "Johan" also posted a link to a Sunday Reuters story on gold by Frank Tang, which suggested that gold was heading below $1,500 the ounce based on a survey Reuters conducted of 20 hedge fund managers. Our response to Johan is below, unedited, and we thought now would be a good time to revisit the long term chart for gold along with it. The chart is below the response. Continued... Response to "Swedish Vulture" Sunday, December 18.
Short term just about anything can happen. I was laughed at in New Orleans this year (in October) when I said in a panel discussion that I wouldn't be surprised if gold tested $1,250 at some point, but before I could mention the context of that idea, the discussion moved on. I expected to be challenged on that comment, but instead it was scoffed at as being ridiculous. The point was in the event we got into another major rush to liquidity, like in 2008, I thought there could be that much volatility, depending on the degree of panic. At the time gold was near $1,700 but it had been rising up off the $1,535 test in September. Perhaps the same comment today might not be laughed at quite as hard. The point I should have made then, in retrospect, was that if we saw enough panicky volatility to drive gold as low as $1,250 then people ought to use that opportunity wisely by converting other assets, other resources into gold as they can. Just for the record, calling an all time top in gold merely because it has crossed the 200-dma (for something like the eighth or ninth time in this bull) is unlikely to be the correct call looking ahead. For that to be true, it has to mean that global confidence in fiat currencies (and the governments that print them) will have to be in a new bull market (global confidence in politicians to show restraint in debasing their currencies will have to be increasing), and that I view as being highly unlikely. Indeed, I think I am on fairly solid ground in the notion that confidence in fiat currencies and in the governments that print them is much more likely to erode further looking ahead, not improve. Once it becomes crystal clear to the general public that governments have chosen to deflate their debts by massively inflating their currencies even further, there are few choices for wealth to hide. Gold and silver are two of them, so, right or wrong, I want a portion of my wealth reside in metals that can't be "printed" with a computer keystroke at the U.S. Fed, the ECB, the BoJ, the… you get the idea. It's a shame that Mr. Tang, in that Reuters article, misrepresents Mr. Gartman's stance on gold. By clipping Gartman's quote he gives the opposite view of Gartman's longer term views on the metal in my opinion. So, is it time to move to the "other side of the boat" as you mentioned? Perhaps, but I would feel more comfortable doing so if gold manages to almost retest the Sept lows ($1,530s), but then holds firm and shows us a sign of strength then. Absent a global collapse of the banking system, absent a world devolving into chaos, we can expect the central planning politicians and central bankers to continue to do exactly what has caused the value destruction for fiat currencies up to now. The problem is that they sincerely believe the answer is more of the same medicine, just in different bottles and larger doses. And that is the kind of thinking that gives us unshakable confidence in precious metals looking longer term. Expect higher volatility ahead, but don't be frightened by it, if possible, is our view. End of comment. We invite readers to view the remainder of the comments and a test posting of (and comments about) the long term chart below. Part of our comments, as they originally appeared in the VultureInReview section, are reprinted below. Just below is a long term gold chart we have published before, but it didn't reduce to posting size all that well in the past. We are going to use this graph in a short piece later this evening (Ed. This piece) or tomorrow and we wanted to see if it will reduce to viewable size before using it (using a different technique for reduction - it is a huge sized chart to start with). Thus the test below. Oh, by our count this is more like the fifteenth challenge of the 200-dma. There have been nine challenges to the 300-dma. That is all for now." End of comments. With that, just below is the long term chart showing previous challenges of the 200-day moving average (blue arrows) and challenges of the 300-day moving average (red arrows).
Instead of dragging out those past bearish calls by the gold bearish camp, however, we are going to quietly get back to our holiday vacationing. We suppose this could be the beginning of a protracted gold bear market. It could be in the sense that anything is possible, but it won't be merely because gold has crossed a moving average line it has crossed 15 times before. Come to think of it, the gold market has not respected the 200-dma all that well since Day One. It has routinely made fools of those who mechanically trade via moving averages and so-called "death crosses" in the decade prior. Why on earth we should start thinking it will respect them now, is … well, it's just kind of a "cry-wolf" kind of thing, is it not? Oh sure, some day the wolf will actually come and end up eating the sheep of the people who become complacent, but we'd wager that day is a long way off and most likely won't arrive until sentiment for gold is very strongly bullish, not sickly and fearful as it is today. We'll see. Happy holidays from Got Gold Report.
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| Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global Posted: 18 Dec 2011 11:43 AM PST from Jesse's Café Américain:
Although the details and the individual perpetrators are yet to be disclosed, what is now painfully clear is that the CFTC and CME regulated futures system is defaulting on its obligations. This did not even happen in the big failures like Lehman and Bear Sterns in which the customer accounts were kept whole and transferred before the liquidation process. Obviously holding unallocated gold and silver in a fractional reserve scheme is subject to much more counterparty risk than many might have previously admitted. If a major bullion bank were to declare bankruptcy or a major exchange a default, how would it affect you? Do you think your property claims would be protected based on what you have seen this year? Read More @ JessesCrossRoadsCafe.Blogspot.com
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| Posted: 18 Dec 2011 11:22 AM PST Two weeks ago in "Has The Imploding European Shadow Banking System Forced The Bundesbank To Prepare For Plan B?" we suggested that according to recent fund flow data, "the Bundesbank wants slowly and quietly out." Out of what? Why the European intertwined monetary mechanism of course, where surplus nations' central bank continue to fund deficit countries' accounts via an ECB intermediary. We speculated that according to the recent ECB proposal, the primary beneficiary of direct ECB intermediation in fund flows, as Draghi has been pushing for past month, would be to disentangle solvent entities like the Bundesbank, allowing it to prepare for D-Day without the shackles of trillions of Euros in deficit capital by virtually all of its counterparties. Today it is the turn of Goldman's Dirk Schumacher to pick up where our argument left off, and to suggest that it is indeed a possibility that the Buba would suffer irreparable consequences as a result of Eurozone implosion, and thus, implicitly, it is Jens Wiedmann's role to accelerate the plan of extracting the Buba from the continent's rapidly unwinding monetary (and fiscal) system. From Goldman:
Adn the conclusion:
Needless to say, the possibility that a European country can leave at will, as the European Nash Equilibrium finally fails, is something the Bundesbank not only knows all too well, but is actively preparing for: here is what we said on December 6: "we may be experiencing the attempt by the last safe European central bank - Buba - to disintermediate itself from the slow motion trainwreck that is the European shadow banking (first) and then traditional banking collapse (second and last). Because as Lehman showed, it took the lock up of money markets - that stalwart of shadow liabilities - to push the system over the edge, and require a multi-trillion bailout from the true lender of last resort. The same thing is happening now in Europe. And the Bundesbank increasingly appears to want none of it." After all, Germany has been sending the periphery enough messages to where only the most vacuous is not preparing to exit. The question is just how self-serving is Germany being, and whether once Buba is fully disintermediated, Germany will finally push the domino, letting the chips fall where they may? In other words forget about printing: Europe will be lucky if it maintains the Bundesbank within the existing framework of the ECB. Which means the only European bailout rescue recourse continues to come from just one palce - that of the subbasement deep under the Marriner Eccles in Washington, DC. From Goldman Sachs' Dirk Schumacher TARGET2 balances: A shock absorber for the Euro area, not an amplifier The so-called TARGET2 balances between Euro area national central banks have, by acting as a safety valve, prevented a disorderly correction of the imbalances in the region. By moderating the adjustment, they have bought policymakers time to address the underlying causes of these imbalances. Thus, the rising net claims of 'core' vis-à-vis 'peripheral' central banks in the Euro area should be seen as symptoms—rather than a cause— of the crisis. TARGET2 imbalances reflect peripheral countries' continuing need for external financing and are therefore complementary to the persistent large current account deficits seen in the periphery. However, these imbalances do not per se represent an additional risk for national central banks beyond that already stemming from the ECB's very generous liquidity provision. Only if one or several countries were to decide to leave the Euro area would these imbalances reflect a genuine new risk for those central banks that have acquired net claims vis-à-vis other central banks. Another ECB mandate: Smooth operations of payment systems
But the EU treaty also obliges the ECB "to promote the smooth operation of payment systems", which implies "facilitating the circulation of money in a country or currency area".1 The ECB plays a crucial role in the Euro-zone's payments system through the so-called TARGET2 system2, which allows banks to settle payments between each other. Around 866 credit institutions currently participate directly in TARGET2 and some 3,585 participate indirectly through subsidiaries. The daily average turnover of the system in 2010 was 343,380 payments, representing a total average value of €2.3trn. Strong increase in imbalances One characteristic of the ECB's TARGET system is that payments from one bank to another bank in a different Euro-zone country are processed through the respective national central banks. If, for example, money is An important feature of the TARGET2 system is that claims among national central banks resulting from crossborder payments are not necessarily balanced. The payment from country A to country B therefore leaves, all else equal, central bank B with a claim vis-à-vis the central bank of country A. If the payments predominantly flow in one direction—always from A to B, without any offsetting flows—the receiving central banks' claims will continue to rise, creating ever-growing imbalances in the TARGET2 system.
But while there are now substantial imbalances in the TARGET2 system at the level of central banks' accounts, it is less obvious how these imbalances should be interpreted. The macro view of TARGET2 imbalances Before we explain in more detail the mechanics of the TARGET2 system, and how cross-border flows between core and periphery are processed in the system, it is worth looking at the macroeconomic story underlying the imbalances. This should make it easier to follow the economics behind the accounting that we present below. Countries in the periphery ran partly very sizable current account deficits, which were financed through borrowing from core countries, mainly through the banking system. These loans were privately funded and, although processed through the TARGET2 system, did not lead to imbalances. As banks in the core economies were no longer willing to extend credit to peripheral banks, central banks in the periphery stepped in and refinanced peripheral banks. Consequently they financed the current account deficits of peripheral countries. It is this replacement of privately lent money through central bank funding that led to the rise in net claims of central banks in the core against peripheral central banks. The mechanics of TARGET2 We now explain the mechanics of TARGET2, starting with a simple example showing the money flow of a payment between banks within a single country. If a client of bank A transfers money from her account to another account at bank B to pay a bill, her account at bank A is debited with that amount in the first step of that transaction. The settlement between bank A and bank B then takes place through the exchange of central bank money. For this, the account of bank A at the central bank is debited with the respective Euro amount, while the account of bank B is credited with that same amount. Note, that the balance sheet of the central bank has not changed in this transaction, as it simply transferred central bank reserves from one account to another, without any change to the overall liabilities or claims to the commercial bank sector. We now look at the same transaction but assume that bank A and bank B are located in different countries, with bank A ('bank periphery' henceforth) domiciled in the Euro-zone periphery and bank B ('bank core') sitting in the core Euro-zone.
Table 1 shows the stylised balance sheets of all four institutions involved in the transaction. We assume that bank periphery and bank core have made loans to corporates in their respective countries worth €100, and that these loans are financed through deposits and the issuance of bank debt; we abstract from any equity capital. Each bank also has deposits at the central bank and liabilities of that same amount. The central banks in turn have claims against the commercial banks and Cross-border transaction We now assume that a corporate in the periphery wants to buy a machine worth €10 from a producer based in the core. For this, the corporate borrows €10 from bank periphery and asks the bank to transfer the €10 to the account of the producer of the machine at bank core. Again the settlement of the payment takes place via the central bank. But, given that the banks are located in two different countries, the central banks of periphery and core are involved in this transaction. At the first stage of the transaction, the claims of central bank periphery against bank periphery will increase by €10. The liabilities of central bank periphery will increase by the same amount as the money is passed on to central bank core; implicitly the claims of central bank core against central bank periphery increase by €10. Furthermore, central bank core credits the account of the producer of the machine with €10. However, the question remains of how bank periphery has funded the loan to the corporate. One possibility is that bank periphery issues debt worth €10 in order to fund this loan. Bank core would be, in our little model economy, the natural buyer. As its deposits have now increased by €10, it may want to invest somewhere. Thus, bank core buys the bond issued by bank periphery by wiring €10 back through the central bank system. As a consequence of the reversal of the payment, the claims of central bank core against central bank periphery are reduced to zero again, as are the liabilities of central bank periphery against central bank core.
Core stops lending to bank We now assume that the funding situation of bank periphery deteriorates and that bank periphery finds it increasingly difficult to finance the loans on its balance sheet. These difficulties could stem from the fact that bank core is unwilling to roll the bond issued from bank periphery, for example. The sequencing of the flows starts with bank periphery shifting €50 to its account at central bank periphery as bank core is unwilling to re-finance the debt that is maturing, and is demanding that its money be wired back. Central bank periphery then transfers the money to central bank core, which results in the liabilities of central bank periphery against central bank core increasing by €50. Finally, central bank core credits the account of bank periphery with €50 and bank core credits the account of the depositors from the periphery—who have now opened an account with bank core in order to shift their deposits from periphery to core—with €50. The crucial question is how bank periphery is financing its loans, as the asset side of bank periphery is now longer than the liability side (€110 in loans plus €10 in central bank reserves against €60 in deposits/debt). Assuming that bank periphery is not able to issue any new debt or increase its deposits, there are only three possible scenarios at this stage. First, the bank could try to reduce its asset side as well by pulling credit lines or selling off loans. If this is not possible, bank periphery could try to refinance its loan book at central bank periphery. If this is not possible either, the only option left for bank periphery is a default. The scenario depicted in Table 3 assumes that bank periphery refinances its loans after the withdrawal of deposits by pledging its loan as collateral to central bank periphery. Another possible scenario leading to funding strains for bank periphery is if deposits are withdrawn and transferred to bank core as depositors question the solvency of bank periphery. The underlying flows in this 'capital flight' scenario are identical to what is displayed in Table 3, and central bank core again acquires in that scenario a claim on central bank periphery, i.e., aTARGET2 imbalance opens up. No change in the current account deficit, but the deficit is funded differently now
Note in that respect that there is no limit to the claims/liabilities between central banks created through the TARGET2 system. The only real binding limit is the amount of eligible collateral that peripheral commercial banks can pledge to their national central banks. ECB funding of peripheral banks has increased sharply, while German banks show little interest The previous section showed that TARGET2 imbalances can arise simply by a tightening of funding conditions for banks that led to a stronger reliance on the central bank as a funding source. We now look at the extent to which the scenario described in Table 3 is consistent with the rise in TARGET2 imbalances. For this, we first look at the funding of banks in peripheral and core countries through the ECB (Chart 2). The dependence on the ECB as a funding source has increased significantly over the last two years—particularly in the case of Greece, Ireland, and Portugal—and the rising share of banking system assets are re-financed at the ECB. Note that these numbers under-represent the actual reliance on the ECB as they do not include lending under the so-called Emergency Liquidity Assistance (ELA), which in the case of Ireland, for example, reflects around 15% of outstanding loans of Irish credit institutions. Chart 3 shows another development that is consistent with the shift of funding from peripheral countries to the core, and in particular Germany. While German banks represented around of 50% of the ECB's refinancing operations before the crisis, this share has declined to almost zero. The decline in the share of German banks at the ECB's refinancing operations also reflects the tendency of German banks to play an intermediary role, which they ceased doing after the crisis led to a mutual loss of confidence among banks. At the same time, deposits as a share of loans to the private sector have continued to increase over the past couple of years in Germany (see Chart 4).
As far as the drying up of private funding sources for peripheral banks is concerned, there is evidence that German banks have significantly reduced their lending to peripheral banks. Given that it is the Bundesbank that has seen its net claims rising strongly against peripheral central banks, the reduced funding of German banks is simply the counterpart to the TARGET2 imbalances. Finally, we can also observe that deposits in Greece have declined sharply over the last two years, although deposits in the other peripheral countries have remained broadly stable so far (Chart 6). TARGET2 smoothes the adjustment in current account deficits, but does not prevent it Some commentators have argued that the existence of the TARGET2 imbalances would prevent an adjustment of the current account deficit. As Chart 7 shows, this is not necessarily the case as the current account deficits in the periphery are declining. Moreover, private-sector deleveraging also remains strong (Chart 8) and bank lending has generally declined (Chart 9).
A genuine TARGET2 risk only in the event of a Euro area break-up By increasing its liquidity provision to Euro-zone banks, the European System of Central Banks (ECB plus national central banks) also inevitably increased the credit risk it faces, despite the various haircuts the ESCB applies to the collateral that is pledged. As the ECB has increased its funding to peripheral banks in particular, the risks the ESCB faces is also more concentrated in that region. The losses the ESCB might face, however, are distributed among the national central banks regardless of where they materialise. This is the case whether there are significant TARGET2 imbalances or not. The rise in TARGET2 imbalances has increased the risk for core central banks only to the extent that without these imbalances the liquidity provision of peripheral banks would have been smaller. But it is not clear to what extent the liquidity provision to peripheral banks would have been any smaller without the TARGET2 imbalances. After all, it is the repo operations (whether full allotment or not) and the collateral regime that decide on the size of the liquidity provision. Put differently, it was the decision to replace private funding through central bank liquidity that increased the risk the ESCB faces and not the fact that TARGET2 facilitated transfers from peripheral countries to the core. As long as peripheral central banks are able to replace private funding—and the limiting factor here is the amount of collateral that can be pledged—there is no additional risk due to TARGET2 imbalances. However, central banks in the core countries face one specific risk |
| Is Britain About To Scuttle The Last Ditch "Plan Z" European Bailout? Posted: 18 Dec 2011 10:02 AM PST As is by now well known, it was the British refusal to budge and thus agree to the fiscal compact from the December 9th summit, that led to the realization that the European bailout is now further away than ever before. And as reported earlier, tomorrow European finance ministers will sit down to finalize the terms of a €200 billion IMF injection, funded by various European governments, which is the last ditch rescue effort now that the EFSF and ESM have both failed to convince the market of a long-term solution. Enter Britain. Again. Because as the Telegraph reports, it will be up to Britain to fund not just any portion of the upcoming €200 billion payment, but the second largest one, a commitment which David Cameron and the majority of Britain will likely balk at. "Figures suggest European Union officials expect British taxpayers to be the second largest contributor. The Prime Minister has repeatedly promised not to provide any extra funding for the IMF for the specific purpose of saving the euro and Britain is already liable for £12 billion of loans and guarantees to Ireland, Greece and Portugal...An EU official said Britain was still expected to contribute €30.9 billion (£25.9 billion), leaving the country as the second biggest contributor to the new IMF fund behind Germany and equal with France." So ten days after British obstinacy to "on the fly" European bailout plans led to the EURUSD dropping to 2011 lows, will it be the Albion that once again leads to another step down in the European currency, as it now becomes clear that the last ditch Plan Z "IMF Bailout" plan is now worthless? We will find out shortly, although we are confident that anyone hoping that Britain will do an about face and revert on its controversial position, will be disappointed. From the Telegraph:
The British solution: let the dominos fall.
In the meantime, Britain is edging ever closer to its own parlimentary crisis:
Though one thing is certain: without England involved, hopes of a European bailout are a pipedream, becase all its takes is for one or two Americans to realize that if Britain is not bailing out Europem, why should the US?
And if that wasn't enough, we now learn that the Foreign Office is actively preparing for a fall out collapse of Europe:
We leave with a piece of advice for the French (that means you Noyer): bitching at the UK is great for political brownie points, but all else equal, the UK can print all it wants, and devalue its currency at will (which it is, and will), without destroying its financial system. This is much more than we can say about France and the rest of Europe. So perhaps in the great war of words, it is about time France finally admit defeat, and realize just who holds the trump cards.
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| Euro Collapse Crisis Sledgehammer Pounds Into Stock Market Santa Rally Posted: 18 Dec 2011 10:01 AM PST Santa's Late! The stock market as measured by the DJIA closed the week down at 11,866, showing significant deviation from the santa rally script with barely a week remaining, the lack of progress to the upside has been as a consequences of the increasing mass of unserviceable debt out of the euro-zone where politicians repeatedly show themselves to be ignorant of the facts and what to do to get out of the hole that the euro-zone is sinking deeper into an economic depression each day.
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| Sol Sanders | Follow the money No. 97 | A pipeline to …well, almost …eternity Posted: 18 Dec 2011 08:33 AM PST A version of this column is scheduled for publication Monday, Dec. 19, 2011, in The Washington Times -- Chris Follow the money No. 97 | A pipeline to …well, almost …eternity Sol Sanders solsanders@cox.net Camouflaged by Congressional political badminton and Pres. Barack Obama's demagoguery, the Keystone XL Pipeline Project represents solutions to economic and security issues far exceeding its general appreciation. Half truths on all sides have obscured the project's underlying fundamentals. Some are only emerging as additional research and technology is applied – most of it, for a change, good news in that it boosts estimates of access to available North American new fossil fuels reserves even if at higher prices. Contrary to claims of Congressional proponents, the project is not an immediate positive economic bonanza. Like all natural resource development projects, construction employment will be temporary and jobs minimal when the pipeline is actually functional. Of course, given the current environment, any new jobs of any duration not added to the public payroll -- the project is funded privately at something over $7 billion -- is a godsend. Its importance lies in its contribution to what should be a longer term U.S. energy strategy, a consideration often missing in heated partisan debate. First of all, direct access to the Canadian tar sands affords fallback access for the almost bottomless U.S. energy maw – developing rapidly long- term whatever the short-term diminished demand of a temporarily crippled economy. Scandal after scandal is proving the Obama Administration's so-called green energy strategy corrupt as well as wasteful and ineffectual. Keystone, on the other hand, would put crude into the Texas petrochemical refinery complex already absorbing Venezuela's similar heavier oil – those reserves recently reestimated upward with spectacular finds on the Orinoco River. That would give the U.S. not only an emergency alternative to the Venezuelan crude, fourth largest of our import sources, but leverage against the machinations of gringo-baiting Venezuelan Pres. Hugo Chavez. Given that country's long troubled history, necessary insurance is needed even in a post-Chavez Venezuela [soon perhaps with reports the fiery demagogue may soon fall victim to cancer largely untreated so he could continue exercising his one-man rule]. The expanded pipeline proposal also now would pick up on its way the more attractive sweet crude from the Bakken strike in North Dakota, already one of the largest in U.S. history and apparently linked by new successful prospecting and new shale recovery technologies to huge neighboring regional deposits. With Bakken already having added an estimated 10% to American reserves, these could turn into the largest petroleum find in U.S. history. As the pipeline travels south, it also aims at untangling a crude gathering traffic jam in Oklahoma and expanding the tanker delivery scene on the Texas coast. But radical environmentalists had chosen – with the help of the usual Hollywood suspects assuaging their guilt for their gratuitously huge earnings – to make Keystone a major test. That was despite three years research by experts for the State Dept. had not turned up sufficient environmental issues to block the project. When local interests in Nebraska– ignoring the relatively clean record of the country's vast pipeline networks – argued spills might threaten a critical local aquifer, the Canadian company countered with a $100-million-dollar detour around it. Washington rumors are Sec. of State Hillary Clinton was not only not consulted but not forewarned when Pres. Obama, anticipating the 2011 election, threw a bouquet to enviromentalistas who had been increasingly jaundiced at his 2008 promises. But with even normally loyal trade unionists joining the outcry against the White House postponement to go ahead until after next year's election, it was inevitable the issue would become a cudgel for the Republicans. Canadian threats to transfer their affections to the Chinese market might have some validity – although even Chavez is arranging swaps with Iran for his Chinese sales with Venezuelan crude supposedly sold to Beijing flowing into Texas. But level-headed Canadian Prime Minister Stephen Harper – an economist and native of Canada's provincial giant oilwell, Alberta– may have overestimated American common sense. [Recent hints suggest Ottawa feels it is dealing with an overburdened, troubled U.S. and has to demonstrate inordinate patience for both their sakes. One has to wonder what the two chief executives talk about in frequent and what appear to be pleasant meetings!] But, in fact, Canada's role as No. 1 foreign energy supplier to the U.S.– something forgotten in much of the talk about "American energy independence" – probably, rightfully, isn't going away in the near future. The Republicans may be seeing to that.
sws-11-16-11
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| Silver Analysis W/ David Morgan ‘$60 Silver And $2,500 Gold For 2012′ Posted: 18 Dec 2011 08:18 AM PST |
| Posted: 18 Dec 2011 08:00 AM PST Last week saw a severe breakdown in the Precious Metals sector that is now viewed as marking the start of a bearmarket, and that means the onset of a deflationary episode that is likely to prove more serious than that we witnessed in 2008, because it will involve countries going bust rather than "just" banks and large corporations as was the case in 2008.
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| Gold Downtrend Looks Like the Direction Ahead, Projections for 2012 Posted: 18 Dec 2011 05:53 AM PST Ouch, that hurts. I could see a negative move in the works but I don’t think anyone expected a plunge like this past week. Friday upside move was very unimpressive so, although we might get a bounce here, the downside still looks like the direction ahead.
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The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt. In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation.
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