Gold World News Flash |
- Gold Standard
- Gold Records 11th Annual Gain, Ends 2011 Up 11% as World Stocks Drop 8%
- Europe’s Future
- Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Almost 3% and 5% on the Week
- 30 Statistics That Show That The Middle Class Is Dying Right In Front Of Our Eyes As We Enter 2012
- A Picture is Worth Your Retirement Savings
- Richard Russell - We are Watching Market History in Gold
- Avoiding the Danger Zones in the Year Ahead
- By the Numbers for the Week Ending December 30
- Calling the Bottom in Precious Metals
- Gold Confiscation, a Reality?
- David Morgan : Gold back to $1900 in 2012
- Paul cites 'shenanigans' with loaned gold
- Jim's Mailbox
- Monthly Gold Charts - December 2011
- The Gold Price Rose 9.2% in 2011 Bull Market in Gold and Silver Has Not Ended
- Gold Bounce Confirms Bull Market Intact on Its Way to $3,000 ? $10,000
- Guest Post: 2011 - Catch-22 Year In Review
- Richard Russell: We are Watching Market History in Gold
- NTR and RVS Volume Candle Charts Show End of Tax Loss Selling Pressure
- The Cheapest Way to Buy Silver
- How'd We Do in 2011?
- US to Go to War With Iran, Oil & Gold to Spike: Jim Rickards
- LGMR: Gold Records 11th Annual Gain, Ends 2011 Up 11% as World Stocks Drop 8%
- Lessons Learned in 2011 and Implications for 2012
- Gold Daily and Silver Weekly Charts - Gold Finishes Eleventh Straight Year Higher
- Open Thread: 2011 Closes....Down
- Ex-Fed Governor Warsh again confirms gold price suppression
- How’d We Do in 2011?
- Junior-Gold Carnage
| Posted: 30 Dec 2011 06:56 PM PST
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| Gold Records 11th Annual Gain, Ends 2011 Up 11% as World Stocks Drop 8% Posted: 30 Dec 2011 06:22 PM PST Bullion Vault
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| Posted: 30 Dec 2011 04:40 PM PST by Alasdair Macleod, GoldMoney.com:
The thoughtful soul to solitude retires. The Rubaiyat of Omar Khayyam We are at the threshold of a New Year and accordingly should accept Omar Khayyam's recommendation, and as our thoughtful souls turn to Europe we might observe two entwined problems – economical and political. The economic problem is that spendthrift Europeans have run out of money, and their ability to print more is broadly restricted to saving the banking system. The political problem is that the whole future of the European Union has been thrown into doubt by the debt crisis. Starting with economics, we see European budget deficits that are now likely to increase further as the mirage of economic recovery fades. Furthermore, there are large amounts of government debt maturing in the coming months, which need to be rolled over by persuading holders not to redeem existing bonds. According to UBS, in the next three months eurozone sovereign funding will total €234bn. The support from the banks is bound to be limited, since they face their own lethal debt trap of bank runs and maturing loan liabilities. This is the primary reason the European Central Bank made funds available to the banks through the long-term refinancing operation (LTRO), not as some thought to allow the banks to simply refinance sovereign debt.
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| Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Almost 3% and 5% on the Week Posted: 30 Dec 2011 04:30 PM PST Gold climbed $35.34 to as high as $1581.14 by late morning in New York before it fell back off a bit in afternoon trade, but it still ended with a gain of 1.12%. Silver surged to as high as $28.472 by late morning in New York, but it then fell back off into the close and ended with a loss of 0.65%.
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| 30 Statistics That Show That The Middle Class Is Dying Right In Front Of Our Eyes As We Enter 2012 Posted: 30 Dec 2011 04:24 PM PST from The Economic Collapse Blog:
Once upon a time, the United States had the largest and most vibrant middle class that the world has ever seen. Unfortunately, that is rapidly changing. The statistics that you are about to read prove beyond a reasonable doubt that the U.S. middle class is dying right in front of our eyes as we enter 2012. The decline of the middle class is not something that has happened all of a sudden. Rather, there has been a relentless grinding down of the middle class over the last several decades. Millions of our jobs have been shipped overseas, the rate of inflation has far outpaced the rate that our wages have grown, and overwhelming debt has choked the financial life out of millions of American families. Every single day, more Americans fall out of the middle class and into poverty. In fact, more Americans fell into poverty last year than has ever been recorded before. The number of middle class jobs and middle class neighborhoods continues to decline at a staggering pace. As I have written about previously, America as a whole is getting poorer as a nation, and as this happens wealth is becoming increasingly concentrated at the very top of the income scale. This is not how capitalism is supposed to work, and it is not good for America. Read More @ TheEconomicCollapseBlog.com
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| A Picture is Worth Your Retirement Savings Posted: 30 Dec 2011 04:21 PM PST by Chris Horlacher, MapleLeafMetals.ca:
Also keep in mind that during the collapse of MF Global, a number of accounts got raided and the futures contracts on gold that they possessed were apparently stolen. Take, for instance, the case of Gerald Celente who publishes the Trends Journal, a popular investment newsletter. He had an account with MF and was set to take delivery on a December contract at a rate of about $1,450/oz. Given the current spot price, this would have been an incredible bargain for him. During the collapse of the firm though, his future appears to have been replaced by a future contract with a rate of about $1,780/oz. Now obviously Mr. Celente won't be sending another dime to MF and won't be buying any gold this month at $1,780/oz but SOMEONE is buying Gerald's gold at $1,450/oz. Coupled with the fact that they can sell an equal amount of gold at the current spot price of over $1,550/oz and these banking criminals will be having a great month at the expense of MF's gold-buying client base. Read More @ MapleLeafMetals.ca
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| Richard Russell - We are Watching Market History in Gold Posted: 30 Dec 2011 04:02 PM PST  With mounting fears over the recent plunge in gold and silver and continued volatility in markets globally, the Godfather of newsletter writers, Richard Russell, had this to say in his latest commentary: "This year's close for gold marks the 11th year for higher year end gold closing. To my knowledge this is the longest bull market of any kind in history in which each year's close was above the previous year. This fabulous bull market will not end with a whisper and a fizzle. I continue to believe that the upside gold crescendo of this bull market lies ahead. We are watching market history."
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| Avoiding the Danger Zones in the Year Ahead Posted: 30 Dec 2011 03:00 PM PST Bill Bonner View the original article. December 30, 2011 12:01 PM And here we are at the end of the week…and the end of the year. And we're no surer of what is going on than we were at the beginning of it. The Dow rose 135 points yesterday. But gold kept going down. It is looking more and more like gold intends to make its big correction now… It's been down for 6 days in a row. We've been waiting for it. We've been hoping for it. We've been counting on it. Is it here yet? We don't know. Gold is edging down towards $1,500. But it is still solidly ahead for the year! What kind of bull market correction is that? Who knows? Maybe 2012 will give us a better opportunity to buy more gold… We hope so… In the meantime, the markets are fairly quiet. The politicians are keeping their mouths closed too. Here at The Daily Reckoning Christmas headquarters we're drinking eggnog, eating fruitcake and wondering what 2012 will bring. We've given up trying to actually loo...
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| By the Numbers for the Week Ending December 30 Posted: 30 Dec 2011 02:56 PM PST We initiate new silver trade for the first time in over a year. HOUSTON -- Just below is this week's closing table followed by the CFTC disaggregated commitments of traders (DCOT) recap table for the week ending December 30, 2011.
Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by Monday evening, January 2. Please also note our new trade comment in the linked silver chart, which was entered early Thursday morning, but should not have come as any surprise to Vulture members, as our green box has been in the same locale for months. As a reminder, the linked charts are always the first place to look for new commentary at GGR. In the future we intend to rely more on the charts to communicate, especially when it comes to our own trades. Continued… Gold and Silver Disaggregated COT Report (DCOT) In the DCOT table below a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter. All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report.
*** We will have more in the linked technical charts for Vultures by Monday evening.*** We bid 2011 farewell and look forward with great anticipation to 2012. Happy New Year everyone.
Image courtesy of: http://www.smashingmagazine.com/2009/12/30/stunning-fireworks-photos/
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| Calling the Bottom in Precious Metals Posted: 30 Dec 2011 01:45 PM PST
 Now that my subscribers and I are fully into bullish positions in the precious metals sector, I hope they won't mind me telling you that I called for the bottom in Gold stocks on Thursday morning (12/29). I believe the bottom is in for silver, Gold and their respective stocks, although the metals may need a re-test of the bottom while I think Gold or silver stocks (as sectors) will only make higher lows on any corrective action. There are some major bells ringing in the sentiment department for the PM sector that should not be ignored. First up, a chart from Guy Lerner (link to article pasted onto the chart), which plots the Market Vane sentiment (i.e. percentage of bulls, bottom of chart) against the price plot of Gold:  Since this chart was published, according to Richard Russell via a blog post on King World News (I don't subscribe to Market Vane, so I'll take Sir Richard and King World News at their word), the number has dropped further down to 56%. As the chart above shows, major bottoms in Gold have been formed in the 50s range on this sentiment indicator. We are there. Next up, a chart I created in Excel for the Rydex Precious Metals Mutual Fund using the net asset value of the fund, which measures the flow of money into and out of the fund. When the plot in the chart covering the last 5 years below is low, the herd is bearish (i.e. bullish from a contrarian perspective):  The persistent multi-month malaise in this sentiment indicator I think is indicative of the lethargy in the Gold stock bull camp. Gold stocks have sucked over the past year or so, let's be honest. "Gold up, Gold stocks down" is not the way to build enthusiasm among Gold stock investors, to be sure. But these sentiment indicators tell us that the time to be bullish on the precious metals sector is at hand. Furthermore, Gold and silver have complete-looking corrections to me using both time and price. The late September swoon in the metals (Gold to low 1500s and silver to low 26 level in USD terms) was enough price damage, but the current re-test satisfies a time dimension that was needed to reset the sentiment in the sector. Now that we have re-tested the lows, all the experts have intelligent and coherent reasons for why the PM sector will continue to decline. I wish them well, but I am betting against them with everything I've got. I am now 100% long Gold stocks in my trading account and my physical metal stash has been improved by some timely holiday gifts of silver from Mrs. Claus. And how about that COT report for silver? It was bullish last week and this week added a sliver of further bullishness to the picture. See prior post and here's the current COT report courtesy of Software North:  Meanwhile, the Dow to Gold ratio is stretched to the upside like it has been only a few times in the past decade (14 year log scale chart of $INDU:$GOLD follows), indicating a significant reversal has likely already begun this week:  The Gold stocks tend to rise when the Dow to Gold ratio is falling (outside of meltdowns/crashes like in 2008) and who hasn't seen a chart of the Gold stocks to Gold ratio telling us that Gold stocks are cheap on a relative basis (12 year log scale chart of Philadelphia Gold and Silver Mining Index to Gold price ratio [$XAU:$GOLD]):  While others are bearish on Gold, silver and Gold and silver stocks, I am staunchly bullish here. And please keep in mind that I have been bearish on Gold stocks since August. See my late August post that elicited hate-type email from Gold stock bulls. And now that we reached the low 20s in the GDXJ ETF as predicted in late August, I am very bullish on the GDXJ ETF and all Gold stock indices. In my subscription service, I send out weekly updates as well as interim updates when indicated and email trading alerts when I think it is time to pull the trigger on a trade. Here is the interim update I sent out to subscribers Wednesday night (12/28/11), which was followed up by an email trading alert Thursday morning advising subscribers to buy Gold stocks (as well as metal, although I think the metal stocks will outperform this cycle): Gold Versus Paper December 28 2011 - Interim Update Only time will tell if my call for the bottom Thursday morning was right. If you are interested in analysis like this consider giving my low-cost subscription service a try. I am a secular permabull when it comes to Gold, but I am pragmatic in my paper trading account and will go long or short any sector (including shorting the PM sector) if I think there is opportunity there. Right now, the opportunity is in the precious metals sector from the long side and I think my subscribers and I are going to make lots of money to start 2012.  ![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif) 
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| Posted: 30 Dec 2011 01:00 PM PST Many of the leading fund managers in the U.S. and elsewhere are expecting that governments will confiscate their citizen's gold. This will not be for the same reasons used in 1933. It will be to facilitate loans, swaps lower interest rates, and shore up international confidence in the turbulent, stressed paper-currency world in which we live. Each nation issues paper as money, dependent on the trust that nation can engender at home and abroad. But is this going to be sufficient, moving into an ever more turbulent 2012?
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| David Morgan : Gold back to $1900 in 2012 Posted: 30 Dec 2011 12:27 PM PST The Silver Guru David Morgan sees pretty good... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
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| Paul cites 'shenanigans' with loaned gold Posted: 30 Dec 2011 12:22 PM PST Paul Wants to Check Fort Knox for Gold By James Hohmann http://www.politico.com/blogs/burns-haberman/2011/12/paul-wants-to-check... ATLANTIC, Iowa -- Ron Paul said Thursday that he's eager to find out how much gold the United States really owns. A supporter at a town hall meeting asked about Fort Knox: "Would you reveal as president whether there's actually gold there?" Here is Paul's full response: "Yes, and if I couldn't accomplish that then there's big trouble in this country. I may need to get some help for you. I tried for years to do this. ... I never went to Fort Knox. I made a request when the gold commission came up in the early 1980s. We had a study of the role of gold in the monetary system. There were 17 members, and I couldn't get one other person to endorse the principle that we ought to go to Fort Knox and find out if there's gold. ... Dispatch continues below ... ADVERTISEMENT Sonora Aims to Follow First Majestic's Success Sonora Resources (OTCBB: SURE) is a silver mining exploration company focused on the development of prospective opportunities in Mexico. The company president and CEO is Juan Miguel Rios Gutierrez, who helped build First Majestic Silver Corp., which began trading for pennies and today is at more than $16 per share. Gutierrez was the fourth person to join First Majestic Silver, originally as general manager, then manager for new business initiatives and strategic planning. He left First Majestic Silver to work with Sonora Resources and yet maintains strong contacts with First Majestic. In fact, First Majestic is a large shareholder in Sonora and has a joint venture with the company. For more information about Sonora Resources, please visit: http://www.SonoraResources.com "Gold is in more places than Fort Knox. There's some in New York City, as well as at West Point. And there's already admission by our government: 'Well, that gold in New York City, we haven't been able to verify that for a long time.' And we all know, and that's why the audit of the Fed is important, because there's a lot of shenanigans that go on. They'll loan the gold, and they'll use it as collateral on these international transactions. So there's so much that we have to know about. But that should be on high priority. So I will continue to do that. I think I'll have a little more clout as president, and I thank you for the question." Many in the crowd of about 150 at the community center applauded energetically. Crusading for the gold standard helped boost the Texas congressman politically, but of late he's been trying to broaden his message to appeal to more traditional Republican voters ahead of the Jan. 3 caucuses. So the answer took him a little off message and reminded voters of his unorthodox views on issues other than Iran. 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 Golden Phoenix Signs Definitive Agreement Company Press Release SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation. Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher. Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine. Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status." For Golden Phoenix's complete statement, please visit: http://goldenphoenix.us/press-release/golden-phoenix-signs-definitive-ac...
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| Posted: 30 Dec 2011 12:20 PM PST Hi Jim, Iran is heating up. They're going to test fire long-range missiles tomorrow. Wonder if that's why gold was up today? The New Year should be quite eventful! New Years Greetings, CIGA Black Swan Iran to fire long-range missiles in drill-agency Fri Dec 30, 2011 9:45am EST By Parisa Hafezi TEHRAN, Dec Continue reading Jim's Mailbox
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| Monthly Gold Charts - December 2011 Posted: 30 Dec 2011 11:58 AM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] ...
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| The Gold Price Rose 9.2% in 2011 Bull Market in Gold and Silver Has Not Ended Posted: 30 Dec 2011 11:27 AM PST Gold Price Close Today : 1,565.80 Gold Price Close 23-Dec : 1,604.70 Change Day: -38.90 or -2.4% Change Year: 144.70 or 9.2% Silver Price Close Today : 2787.5 Silver Price Close 23-Dec : 2904.6 Change Day: -117.10 or -4.0% Change Year: -303.5 or -10.9% Gold Silver Ratio Today : 56.172 Gold Silver Ratio 23-Dec : 55.247 Change Day: 0.93 or 1.7% Change Year: 10.197 or 18.2% Silver Gold Ratio : 0.01780 Silver Gold Ratio 23-Dec : 0.01810 Change Day: -0.00030 or -1.6% Change Year: -0.00395 or -22.2% Dow in Gold Dollars : $ 161.30 Dow in Gold Dollars 23-Dec : $ 158.37 Change Day: $ 2.93 or 1.8% Change Year: $-7.05 or -4.4% Dow in Gold Ounces : 7.803 Dow in Gold Ounces 23-Dec : 7.661 Change Day: 0.14 or 1.8% Change Year: -0.341 or -4.4% Dow in Silver Ounces : 438.30 Dow in Silver Ounces 23-Dec : 423.26 Change Day: 15.04 or 3.6% Change Year: 63.88 or 14.6% Dow Industrial : 12,217.56 Dow Industrial 23-Dec : 12,294.00 Change Day: -76.44 or -0.6% Change Year: 644.14 or 5.3% S&P 500 : 1,257.60 S&P 500 23-Dec : 1,265.33 Change Day: -7.73 or -0.6% Change Year: 0.08 or 0.0% US Dollar Index : 80.205 US Dollar Index 23-Dec : 79.999 Change Day: 0.206 or 0.3% Change Year: 1.032 or 1.3% Platinum Price Close Today : 1,393.30 Platinum Price Close 23-Dec : 1,424.10 Change : -30.80 or -2.2% Palladium Price Close Today : 649.50 Palladium Price Close 23-Dec : 662.60 Change : -13.10 or -2.0%  Gold Price Performance Percentage Annual Change for the Past 10 Years  Silver Price Performance Percentage Annual Change for the Past 10 Years *These tables are both available on the front page of goldprice.org and update daily The GOLD PRICE and SILVER PRICE staged a rally today all out of proportion to the US dollar's meager drop. Gold gained $25.90 to close Comex at $1,565.80 while silver added 60.1c to close 2787.5c. Sure, maybe that jump arose out of folks closing out short position before the long weekend, but maybe not. Remember that silver closed higher yesterday while the GOLD PRICE fell. It's way to early to say definitively, but we may have seen gold's bottom at $1,522 (intraday) yesterday. Silver might continue to struggle. For the new year, silver and gold may move sideways in frustration until mid-February, or at worst, late May. I'm basing this on their behaviour when they previously crossed below their 300 and 200 DMAs in correction. This much I am sure of. Unless the European bank solvency crisis breaks out into a delirium and frenzy (daily a possibility), I was wrong to wax so bearish on metals at mid-December. We will NOT see huge drops in silver and gold unless a financial panic breaks out in Europe. But panic or not, silver and gold will be higher this time next year than they are now, because THEIR BULL MARKET IS NOT OVER. Look at 10 year charts of silver or gold to prove it to yourself. And neither in price nor in time have they fulfilled their bull market promise yet. What would signal trouble? SILVER PRICE breaking below 2600c and gold below $1,500. Only way I know to deal with this is to buy and keep on buying as they step down, or if they step down. For this special year end edition I have added two columns to show the end-2010 close and % change from 2010 to 2011. By the way, y'all print out a copy of today's commentary and keep it so you can calculate what your silver and gold portfolio was worth at end-2011. Looking at the 2010-2011 results, this was not a year for commodities. Platinum and Palladium, down 26.9% and 23.5%, took the biggest hits this year, and silver lost 10.9%. Yet in the teeth of all that, gold rose 9.2%. Hmmmm. The GOLD SILVER RATIO gained 18.2% in 2011, so we made the right move selling the ratio (swapping silver into gold) early last year. We have now come in the last two days to within a gnat's eyebrow of our 57.5 trigger point to swap back from GOLD into SILVER, but market has not hit that yet. If it ever comes, it ought to come very soon. In the Potemkin economy, stocks finished the year blowing hot and cold out of both sides of their mouth. Dow gained 5.3%, but the Dow comprises only 30 giant stocks. The broader S&P500 gained -- nothing. Virtually identically flat, from 1,2547.52 to 1,257.60. Nasdaq lost 1.8% for the year; Nasdaq 100 gained 2.7%, while the very, very broad Wilshire 5000 lost 1.3%. Banner year, huh? 'Twasn't really a year for the US dollar, either, which gained a meager 1.3%. However, the dollar is now rallying. If it can penetrate 80.50, it will run very hard in the first quarter for 83.50, maybe much higher (88.50). One thing you must keep foremost in your mind: THE BULL MARKET IN SILVER and GOLD HAS NOT ENDED. It will run another three to ten years. No harbinger flits above the horizon signaling that the economy will get better next year, or that governments and central banks have yet learned their lessons, namely, they cannot efficiently control the economy or the money supply, and that inflating the currency will not cure a depression caused by inflating the currency and government economic interference. In other words, they are all dead as do-do birds, along with their system, but they refuse to recognize it, lie down, and die without torturing the rest of the world several more years. Eventually they will be abolished, but how many more tears and years will be needed? Today the Dollar lost a meaningless 13.6 basis points (0.17%) to 80.361. It remains in its uptrend. However, the Japanese yen flashed out its sword and cut my head off. Just about the time I thought it was going nowhere, it jumped 0.96% to 130.06c/Y100 (Y76.89/$1). The yen has vaulted over its 20 day moving average (128.49) and its 50 DMA (129.08). Unless the yen backs off immediately, it has its eye on 131 or higher. On 30 December 1861 the US government and banks stopped paying out gold for gold obligations. Not much new, is there? They've been cheating us for centuries, banks and governments. God bless you all in 2012 and always! 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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| Gold Bounce Confirms Bull Market Intact on Its Way to $3,000 ? $10,000 Posted: 30 Dec 2011 11:10 AM PST With what is happening*in the price of gold these past few*weeks/months it is imperative to take a look at the big picture and in doing so it shows that we are still very much in a long-term bull market. Let’s take a look at some charts that clearly outline where we are currently and where we could well be going. Words: 925 So says Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com* (A site for sore eyes and inquisitive minds). Please note that this paragraph must be included in any article reposting with a link* to the article source to avoid copyright infringement. As the graph below shows,*the 70s experienced 2 major bull markets and an 18 month bear market in between while continuing to trend upwards. Right now, we are at a period not unlike late 1976 when gold had bottomed just before taking off in a parabolic move. Gold dropped to $1,549 on December 29th slightly above its 65 week moving average as seen i...
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| Guest Post: 2011 - Catch-22 Year In Review Posted: 30 Dec 2011 10:55 AM PST Submitted by Jim Quinn of The Burning Platform 2011 - Catch-22 Year In Review "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." - Mark Twain
I published my predictions for 2011 on January 3, 2011 in my article 2011 – The Year of Catch-22. Humans evidently enjoy being embarrassed by how pitiful they are at predicting the future, because we continue to do it year after year. The mainstream media pundits don't dare look back at their predictions or the predictions of the Wall Street shills that parade on CNBC and get quoted in the Wall Street Journal, eternally predicting 10% to 15% stock market gains. The multi-millionaire Wall Street strategists like the spawn of the squid, Abbey Joseph Cohen, have used all of their Ivy League brain power to predict at least a 10% stock price gain every year since 1999. The S&P 500 stood at 1,272 on January 6, 1999. As of this writing it currently stands at 1,261. ZERO appreciation over the last twelve years. The Wall Street mantra of stocks for the long run is beginning to get a little stale. If Abbey Joseph Cohen had been right for the last twelve years, the S&P 500 would be 4,000. For this level of accuracy, she is paid millions. Her 2011 prediction of 1,500 only missed by16%. The S&P 500 began the year at 1,258 and hasn't budged. The lowest prediction from the Wall Street shysters at the outset of the year was 1,333, with the majority between 1,400 and 1,500.
The same Wall Street clowns are now being quoted in the mainstream media predicting a 10% to 15% increase in stock prices in 2012, despite the fact we are headed back into recession, China's property bubble has burst, and Europe teeters on the brink of dissolution. They lie on behalf of their Too Big To Tell the Truth employers by declaring stocks undervalued, when honest analysts such as Jeremy Grantham, John Hussman and Robert Shiller truthfully report that stocks are overvalued and will provide pitiful returns over the next year and the next decade. I will take my chances with a few predictions for 2012 after reviewing my lack of foresight regarding 2011. I declared 2011 the year of Catch-22 because no matter what happened, it would not translate into a positive result for the American people. This was my thesis: The United States and its leaders are stuck in their own Catch 22. They need the economy to improve in order to generate jobs, but the economy can only improve if people have jobs. They need the economy to recover in order to improve our deficit situation, but if the economy really recovers long term interest rates will increase, further depressing the housing market and increasing the interest expense burden for the US, therefore increasing the deficit. A recovering economy would result in more production and consumption, which would result in more oil consumption driving the price above $100 per barrel, therefore depressing the economy. Americans must save for their retirements as 10,000 Baby Boomers turn 65 every day, but if the savings rate goes back to 10%, the economy will collapse due to lack of consumption. Consumer expenditures account for 71% of GDP and need to revert back to 65% for the US to have a balanced sustainable economy, but a reduction in consumer spending will push the US back into recession, reducing tax revenues and increasing deficits. You can see why Catch 22 is the theme for 2011. My predictions for 2011 were as follows:
The payroll tax cut, extension of unemployment benefits and Bernanke's gift to Wall Street criminal banks did nothing to help real Americans in the real world. The government manipulated GDP has languished between 0.4% and 1.8% in the first three quarters of 2011. Using a true measure of inflation, as detailed by John Williams at www.shadowstats.com, GDP has remained at a recessionary level of -2% to -3%.
Easy Ben accomplished his goal of pumping up the stock market with his QE2 gift to Wall Street bankers during the first six months of 2011, with the S&P 500 peaking at 1,364 in late April. The market began to fall the second Ben stopped handing Jamie Dimon and his friends $4 billion per day, with the market dropping 18% in three months. The market has risen back near the breakeven level for the year based on Ben's promise to keep interest rates at zero forever and the hope of QE3.
The brainless twits on CNBC will dutifully report the number of completed foreclosure sales plunged by 24% in 2011, giving the impression to their non-critical thinking viewership that all is well on the housing front. What they will fail to point out is that the number of foreclosures in process went up in 2011 and now stands 59% ABOVE the level in 2009 at the height of our recession. The reason that completed foreclosures have fallen is twofold. The criminal Wall Street banks can't prove they hold the mortgage notes on hundreds of thousands of homes and they have a few legal issues related to the massive robo-signing fraud they committed. Kicking old ladies and Iraq War veterans out into the street using fraudulent documentation has caused the Wall Street Too Evil To Believe Banks some public relations issues. Secondly, the Wall Street Plutocrats have these mortgage loans valued at 100% on their balance sheets due to the FASB gift of mark to fantasy accounting rules. Foreclosing actually reveals their assets to be overvalued by at least 50%. This may explain why millions of Americans are still in their homes after not making a mortgage payment for two years, as detailed by economist Tom Lawler: Given the number of loans either seriously delinquent or in the process of foreclosure at the beginning of the year, the number of completed foreclosure sales in 2011 is almost absurdly low, reflecting the complete screw-up of the mortgage servicing industry, and the resulting dramatic slowdown in foreclosure resolutions. As of the end of October, 2011 LPS estimated that there were 1.759 million seriously delinquent loans with the average number of days delinquent at 388 (compared to 192 days in January 2008), and there were 2.210 million loans in the foreclosure process that had been on average delinquent for 631 days.
The concerted effort to not complete foreclosures did nothing to slow the continued descent in home prices. As you can see in the chart below from http://www.calculatedriskblog.com/, real home prices will have fallen another 5% in 2011. Obama and his minions threw $50 billion of your tax dollars at the housing market in 2009 – 2010 with tax credits, loan modification programs, homebuilder tax loss carry-backs, and a myriad of other Keynesian claptrap solutions. They succeeded in pissing your tax dollars down the toilet as prices have declined another 12% in the last 18 months. Prices have fallen 42% nationally since 2006. I wonder who missed the boat on that development? "We've never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit." – Ben Bernanke – July 2005
There are approximately 48.5 million homes with mortgages in the United States and 10.7 million of them have negative equity. Another 2.4 million have less than 5% equity. Considering it costs more than 5% in closing costs to sell a house that means 27% of home occupiers with a mortgage are trapped like rats in a cage. With 2.2 million foreclosures still in the pipeline and a looming recession, home prices will continue to fall another 10% to 20% over the next two years and one third of all home occupiers will be underwater. That sounds like a recipe for 10% to 15% stock market gains.
Bennie and his Inkjets did a bang up job in 2011. He was able to expand his balance sheet from $2.47 trillion to $2.95 trillion in twelve short months. According to Ben and his Federal Reserve friends, increasing your balance sheet by $480 billion isn't really printing money out of thin air and handing it to their Wall Street owners for free, so they can prop up the stock market and enrich their executives. Ben is now leveraged 57 to 1. He should move to Europe, where this level of leverage is commonplace. In comparison, Lehman Brothers and Bear Stearns were leveraged 40 to 1 when they went belly up.
There is absolutely no way that Ben Bernanke could ever reduce the Federal Reserve balance sheet to the pre-crisis level without destroying the U.S. economy. He knows that and will never sell off those toxic mortgage assets. Not only won't he reduce the Fed balance sheet, but by mid-2012 he will institute QE3 and buy another $600 billion of mortgage debt. His hubris knows no bounds, as his reckless illegal actions thus far have not driven interest rates sky high – YET. He has only destroyed the finances of senior citizens, savers and people who eat food and use gasoline. He will surely go down in history, but not the way he envisions.
As Bernanke printed like a drunken sailor during the first six months of 2011, the USD fell by 9% and the price of oil did exactly as expected, rising to a peak above $125. The NATO "intervention" in Libya also added a few bucks to the price of a barrel of sweet crude. DXYThe complete implosion of Europe and the ensuing weakness of the Euro have given the false impression that the U.S. dollar is a safe haven. The USD has regained its losses and will end the year exactly as it started versus a Euro heavy basket of world currencies. With annual deficits equaling 10% of GDP, a national debt now exceeding 100% of GDP, and Ben Bernanke in perpetual printing mode, the USD is destined to reach its intrinsic value of zero. With Brent crude still above $108 a barrel, employment still weak, and double digit food and energy inflation slowing consumer spending, the ECRI knows a recession during 2012 is baked in the cake.
It seems I was wrong about Europe. It turned out to be much worse than anyone envisioned, with Italy now the likely fuse that blows the whole thing sky high. The ECB has made Ben Bernanke look like a lightweight by increasing their balance sheet by 44% to over $3.5 trillion in a futile effort to solve a debt crisis with more debt. It seems central bankers are programmed to print until the very end (see Weimar). The European Union will not survive 2012. Too many countries, too much government debt, too many zombie banks, too many bureaucrats, too much austerity rammed down the throats of citizens, and not enough honesty or reality based solutions.
State and local governments have laid off 535,000 workers since 2008. With borrowed Federal government stimulus handouts evaporating into thin air during 2011 – 2012, this total will reach 800,000 by the end of the next year. The U.S. Postal Service will do their part by cutting 28,000 jobs in 2012, even though they need to cut 100,000. States and municipalities based their budgets on the revenues produced by the fake debt driven housing boom from 2003 – 2007. The tax revenue dried up, but the union jobs added are a gift that keeps on costing taxpayers billions. States and localities can't print, so layoffs will continue.
According to official government statistics China's economy continued to boom in 2011. But, of course Chinese government reports make the BLS look honest. The fact is the Chinese stock market has fallen 28% since April as the property bubble deflates. If their economy has truly grown at an annual rate of 8% to 10% over the last five years, why is their stock market down 62% from its 2007 high? SHANGHAI INDEXThe price inflation in food and energy prices, along with the property bubble bursting has led to breakouts of civil unrest across China. China's two biggest markets – Europe & the United States – are in or near recession and are buying less of their crap. They can only build so many vacant cities and shopping malls to create the appearance of growth. The hard landing is about to get harder in 2012.
It seems I got the timing wrong on this prediction, but the August showdown was a doozy. The threat of a government shutdown resulted in the stock market collapsing by 18% in a matter of weeks in August. Our beloved politicians then came up with another bullshit non-solution by creating a commission which, after months of negotiations, failed to do anything. The $1.2 trillion of automatic spending cuts will never happen. The slime that inhabit the hallowed halls of Congress will pretend to cut, while actually increasing spending. And so it goes. The stock market has risen from its October low based on Easy Ben's assurances to keep interest rates at zero forever and the anticipation of QE3 in the new year.
Corporate profits did rise, mostly due to Ben Bernanke providing free money to the Wall Street Mega-Banks so they could generate risk free profits on the backs of senior citizens getting .15% on their savings. It also helps when the same Wall Street banks can make accounting entries declaring that future loan losses will be minimal and the toxic mortgages on their books aren't really worthless. Who knew accountants could do so much for America? Abbey Joseph Cohen only missed her stock market projection by a smidgeon. The S&P 500 is essentially unchanged for the year, while the NASDAQ and Russell 2000 will finish in the red. The country did not add 2 million new jobs. It added 1.4 to 1.5 new jobs. Too bad the working age population went up by 1.7 million people. But our friends at the BLS, when they aren't manipulating away the inflation that real people in the real world experience every day, have the gall to declare the unemployment rate has fallen from 9.8% to 8.6% in the last twelve months. How could this be you might ask, since the working age population went up by more than the number of people who found jobs. Easy if you are a BLS government drone. Everyone knows that things are so good out in the real world that 1.8 million Americans decided to kick back and enjoy the good life by leaving the workforce. It wasn't because they gave up looking for the jobs that were shipped to the Far East by the mega-corporations making record profits and paying record bonuses to their executives. It's just a rumor that those long lines at food banks around the country have a few of these "lucky" non-members of the workforce in them. The housing recovery is just around the corner. Larry Yun, chief liar for the National Association of Realtors, assures us that it's the best time to buy. We all know that the NAR is a bastion of honesty and truth. Just because they reported 3 MILLION more home sales than actually occurred between 2007 and 2010, you can't scorn, ignore and treat everything they say as a bald faced lie. If Larry says the housing recovery has arrived, it must be true.<
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| Richard Russell: We are Watching Market History in Gold Posted: 30 Dec 2011 10:46 AM PST from King World News:
Richard Russell continues: Read More @ KingWorldNews.com
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| NTR and RVS Volume Candle Charts Show End of Tax Loss Selling Pressure Posted: 30 Dec 2011 09:45 AM PST Tax loss selling is officially over. In the previous VultureInReview post, we mentioned that "apparently Greg Hayes, NTR's CEO decided in December that shares of Northern Tiger had been unfairly abused after it had fallen from the C$0.60s to under $0.15. According to Ink Research, Mr. Hayes was on the bid and purchased 668,000 shares December 20 – 22 at prices between $0.13 and $0.14." Obviously insiders are stepping in to buy their own shares on NTR (and other companies we follow) which shows they believe their company's share prices are too low. Insiders sell for all kinds of reasons, but they only buy, in size, in the open market (using their own hard-earned-after-tax rersources), for one reason - they think the share price is cheap and going materially higher. With tax loss selling coming to a date-certain close today, not to mention the heavy insider buying evident for NTR, and with a good number of our "Faves" firming up as if reacting to lighter tax loss selling, we thought we would share our own short-term Volume Candle charts for Northern Tiger Resources and Riverstone Resources (as they may be showing the effects of the removal of tax loss selling pressure).
Note with NTR that selling pressure appears to have peaked near the middle of the month, as expected. As previously disclosed we were actually on the bid at the same time as Mr. Hayes, although we didn't know it at the time. We only discovered he was on the bid when we checked insider activity this morning. Riverstone actually held up better than most of its peers during the very harsh negative liquidity event of 2011 (for good reasons!), but there was definitely some tax loss selling pressure, which also seemed to peak about the middle of the month, although it failed to mark a new low then. We would say that these charts are not "the exception" and instead are representative of a large number of the issues we follow and share with Vultures on our linked tracking charts. At least for the past two weeks we can point to a general firming of prices and a lessening of overt selling pressure. Will that continue into 2012? We'll see soon enough, but we could be in the process of repeating the 2008-9 end-of-negative-liquidity-event period we mentioned in our piece titled "Why Remain Bullish on Small Mining Shares." In that article, which we shared on the blog on December 21, is a chart of the Canadian Venture Exchange Index (CDNX) showing the end of the terrible 2008 negative liquidity event, which occurred abruptly in the last week of 2008 and the first week of 2009. Just below is the current CDNX chart for reference. Is that the first higher turning low trying to form already? It's not exactly as compelling as the reversal in 2008-9 was - so far, but at the very least it is moving in the "right" direction again. Drilling down into the data a bit further, just below is a very short term chart that compares the small miner tracking CDNX with gold metal via GLD. It has been quite a while since "The Little Guys" have outperformed gold.
Happy New Year Everyone Disclosure: Riverstone Resources is a Vulture Bargain Candidate of Interest (VBCI) and is our fully fledged Vulture Bargain #3. Members of the GGR team are actively accumulating shares of RVS.V or RVREF and continue to hold a speculative long position in the company.
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| The Cheapest Way to Buy Silver Posted: 30 Dec 2011 09:26 AM PST By Dr. Steve Sjuggerud Friday, December 30, 2011 "What's the best way to buy silver?" Over lunch, I asked the guy who would know… my longtime friend Michael Checkan of Asset Strategies International. I've personally relied on Michael for his straight-up opinions since we first met in the 1990s. He's been a dealer of precious metals and foreign currencies for the last 44 years. So who would know the best way to buy silver better than Michael? One of Michael's favorite ideas today is "junk silver." You buy junk silver for the low price and the convenience. Junk silver isn't junk, really… It's simply U.S. silver coins minted before 1965 that have no collector's value today. They were widely circulated and exchanged hands thousands of times, so they show a lot of wear. Some have estimated there are more than 13 billion of them around the country. Junk silver is just valued for their metal content. It doesn't matter if it's dimes, nickels, or quarters in a b...
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| Posted: 30 Dec 2011 09:21 AM PST December 30, 2011 [LIST] [*]Forecasts fulfilled? A look back on our calls for 2011 [*]Mayer on a “wrecking ball” in emerging markets... Amoss on the squeeze for U.S. businesses... Nelson on a sector that made out very well [*]Gold already recovering some of this week’s losses... Egon von Greyerz with a bold call for 2012 [*]“Tallulahnomics” to help revive the gold standard? How a long-dead actress might change the economic dialogue in 2012 [*]“Right on”... or “ignorant”? Readers chime in on Jeffrey Tucker’s “Generation Disillusioned” [/LIST] Greetings and welcome to the day that wasn’t... at least for our Samoan readers. The island nation in the South Pacific shifted time zones today... and jumped the international date line. One moment it was 11:59 p.m. on Dec. 29. The next, it was 12:00 midnight on Dec. 31. It’s not a mere curiosity: It’s another sign of the great glo...
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| US to Go to War With Iran, Oil & Gold to Spike: Jim Rickards Posted: 30 Dec 2011 09:18 AM PST "One thing is for sure, we are at all-time record lows in every category in the COT for silver. This is way beyond blood-out-of-a-stone territory." [COLOR=#7f4028] Yesterday in Gold and Silver The gold price didn't do much until shortly after 1:00 p.m. Hong Kong time during their Thursday afternoon. Then it developed a negative bias and began to roll over shortly after 9:00 a.m. in London. The low of the day, around $1,520 spot, came at precisely 12 o'clock noon in London...which just happened to coincide with the London silver fix. Once that low was printed, a smallish rally began that lasted until minutes after 2:00 p.m. in the New York Access Market...and from there it traded more or less sideways into the 5:15 p.m. Eastern close. The gold price ...
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| LGMR: Gold Records 11th Annual Gain, Ends 2011 Up 11% as World Stocks Drop 8% Posted: 30 Dec 2011 09:15 AM PST London Gold Market Report from Adrian Ash BullionVault Fri 30 Dec., 05:55 EST The PRICE OF PHYSICAL gold crept higher early Friday, recovering half of this week's 5% loss to near 6-month lows as the Euro currency rallied from 12-month lows and world stock markets held flat. The last London Gold Fix of 2011 came in at $1574.50 per ounce – some 11.6% higher from the end of 2010, and recording gold's 11th year of consecutive gains. US crude oil neared year-end just shy of $100 per barrel, also 11% up on 2010. The MSCI index of world stock markets has lost 8% in 2011. Silver bullion lost almost 9% against the US Dollar this year, recording near all-time highs in April just shy of $50 per ounce but retreating Thursday as low as $26.25. "People close their profitable positions to cash out before the year-end, " says Nick Trevethan, ANZ Bank's senior commodity strategist. "Gold is still up on the year and there are relatively few markets moving in the positive territor...
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| Lessons Learned in 2011 and Implications for 2012 Posted: 30 Dec 2011 08:42 AM PST 2011 certainly was a difficult year for gold bugs. Gold barely held onto its gains for the year while Silver went parabolic and eventually fell to negative on the year. Mining stocks? Don't ask. Read More...
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| Gold Daily and Silver Weekly Charts - Gold Finishes Eleventh Straight Year Higher Posted: 30 Dec 2011 08:27 AM PST | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Open Thread: 2011 Closes....Down Posted: 30 Dec 2011 08:24 AM PST With the S&P 500 cash index closing 2011 down for the year (admittedly down 0.003181% is just 0.003181%, but it is also down), we look across asset classes and notable markets as we reflect on an increasingly intervention-driven and gap-heavy uber correlated global investing framework. UK Gilts, 10Y Treasuries, Gold, and Oil outperformed (rebased to USD terms) while Greek bonds, Copper, Emerging Market stocks, and Asia Ex-Japan stocks underperformed. The Dollar closed almost 1% higher on the year, the EUR down 2.6% versus the USD as the CRB Commodity Index closed -6.67% for the year. Japanese stocks and bonds had a tough year. US investment grade bonds outperformed high yield bonds. There is much to discuss and we open the thread for any and all discussions... Global markets compared...(click to enlarge)...
An important grouping that many paid attention to is Gold vs TSYs vs Stocks...
Comparing Gold to other commodities...
Global Stock Indices...YTD performance...
While the S&P managed to close marginally down for the year, the sectors' performance was very diverse...
FX markets saw plenty of vol but ended with convergence as the all-powerful USD moved everything - except for the JPY which gained 8.1% YTD (and obviously swissy had the craziest of runs in the year)...
European AAA Sovereign spreads exploded and dispersed as clearly France and Austria are being priced 'differently'...
And evidently the desperate need for USD liquidity is highlighted best with the now ubiquitous EUR-USD basis swap spread...
Of course comparing VIX (actually the 3rd month VIX futures contract here) with implied correlation gives us a sense for the demand for macro protection versus micro protection...its clear that while VIX has dropped recently (as is its tendency at year-end) it is considerably elevated from a year ago and implied correlation is hugely higher signaling a demand for protection remains high as fear is still here.
but maybe security-of-the-year goes to...BTPs - certainly as much a pivot trade as any other in the latter half of the year...
But we end with the clear message that we discussed many times - the market is broken - it broke when S&P downgraded the USA and made the impossible possible...
The explosion of volatility in the financials post the USA downgrade, coupled with the markets absolute schizophrenia (risk-on / risk-off) are very clear when pictured above and below...
The S&P 500 traveled a marvelous 3240 total points close to close while amassing the 0.003181% loss it achieved on the year...
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| Ex-Fed Governor Warsh again confirms gold price suppression Posted: 30 Dec 2011 08:11 AM PST 4:13p ET Friday, December 30, 2011 Dear Friend of GATA and Gold: When, in September 2009, as he denied GATA's request for access to the Federal Reserve's records involving gold, did Fed Governor Kevin M. Warsh really mean to acknowledge that the Fed has gold swap arrangements with foreign banks that must remain secret? Did Warsh, who left the Fed this year, not understand that, in acknowledging these gold swap arrangements, he was confirming the U.S. government's long-running gold price suppression scheme? Warsh's letter from 2009 denying access to the Fed's gold records is here: http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf We always had thought that Warsh's admission was inadvertent. But in an essay published this month in The Wall Street Journal, Warsh compounded that admission. He wrote that "policy makers are finding it tempting to pursue 'financial repression' -- suppressing market prices that they don't like." He added, "Efforts to manage and manipulate asset prices are not new." Indeed: GATA has documented U.S. government efforts to manipulate the gold price going back more than 50 years: http://www.gata.org/taxonomy/term/21 Thus Warsh's essay will be added to GATA's "Documentation" archive. It's appended. CHRIS POWELL, Secretary/Treasurer * * * The 'Financial Repression' Trap In Capitals Worldwide, Policy Makers Deliberately Obscure Market Prices and Prevent Informed Judgments By Kevin M. Warsh http://online.wsj.com/article/SB1000142405297020477040457708018138491792... Financial markets are in a precarious place, with European banks and sovereign balance sheets in the cross-hairs. Bank regulators are becoming increasingly aggressive, and euro-zone borrowing costs are rising as the debts of years past are coming due. In this environment, policy makers are finding their authority, credibility and firepower being tested. In turn, they are finding it tempting to pursue "financial repression" -- suppressing market prices that they don't like. But this is bad policy, not least because it signals diminished faith in the market economy itself. Markets are not always efficient, but the market-clearing prices for stocks, bonds, currencies and other assets (like housing) are critical to informing judgments, in good times and bad. Market-determined asset prices often reveal inconvenient truths. But the sooner the truth is revealed, the sooner judgments can be rendered and action taken. ... Dispatch continues below ... ADVERTISEMENT Sonora Aims to Follow First Majestic's Success Sonora Resources (OTCBB: SURE) is a silver mining exploration company focused on the development of prospective opportunities in Mexico. The company president and CEO is Juan Miguel Rios Gutierrez, who helped build First Majestic Silver Corp., which began trading for pennies and today is at more than $16 per share. Gutierrez was the fourth person to join First Majestic Silver, originally as general manager, then manager for new business initiatives and strategic planning. He left First Majestic Silver to work with Sonora Resources and yet maintains strong contacts with First Majestic. In fact, First Majestic is a large shareholder in Sonora and has a joint venture with the company. For more information about Sonora Resources, please visit: http://www.SonoraResources.com By contrast, government-induced prices send false signals to users and providers of capital. This upsets economic activity and harms market functioning. Markets that rely on governmental participation will turn out to be less enduring indicators of value. In environments of financial repression, businesses are keener to retrench than recommit their time, energy, and capital to new projects. Trillions of dollars of private capital remains on the sidelines. And the private-sector engine that drives prosperity sputters. Consider a few recent examples of this policy in practice: In Europe, share prices are falling among the largest banks, but these prices are little more than a symptom. European banks suffer from a lack of capital to offset future losses, and a lack of transparency that makes it futile to try to judge their financial wherewithal. The bank problem is not some unfounded attack by greedy speculators, so a leading proffered solution -- extending the ban on short-selling shares in big banks -- obfuscates rather than informs. It also delays the necessary private-sector recapitalization. Second, when firms buy insurance to reduce risks in their portfolio, the insurance has to be worth the bargain or else hedging becomes unreliable and risks are exacerbated. That's what happened with the negotiated settlement in the Greek market for credit-default swaps, when negotiators "voluntarily" agreed on principal reductions. Such policies give rise to default by another name. Counterparties aren't fooled. Neither should policy makers be. Firms' exposures to their counterparties require more transparency and better tools for risk-reduction. Third, ratings agencies have been rightfully criticized for assigning higher ratings to various financial products than were justified by their fundamentals, yet now we see a dangerous irony: Governments are trying to persuade ratings agencies to assign higher ratings to sovereigns than deserved or justified by market prices. Blaming the ratings agencies for the dysfunction in funding markets will not lower funding costs. After all, the largest global economies do not have debt-rating problems. They have debt problems. Financial repression is sometimes the effect of policy even if it is not the intent. It manifests itself, for example, when policy makers react more forcefully to declines in asset prices than to increases. Price increases tend to be treated with benign indifference. But declines often lead policy makers to respond with force, deploying fiscal stimulus and monetary accommodation. Market participants then conclude that governments have their backs. Consider the fiscal trajectory of the United States. However well-intentioned, the Federal Reserve's continued purchase of long-term Treasury securities risks camouflaging the country's true cost of capital. Private investors are crowded out of the market when the Fed shows up as a large and powerful bidder. As a result, the administration and Congress make tax and spending decisions -- with huge implications for our standard of living—with heightened risks around future funding costs. As measured against the administration's budget, every 1-percent increase in interest rates above the current baseline would translate into another $1 trillion of debt service over 10 years. And with financial repression at play, we risk missing early warning signs from markets that our debt burden is intolerable. Efforts to manage and manipulate asset prices are not new. But history provides little comfort that these practices work. Interfering with market prices occasionally buys time, but rarely do policy makers seize the window of opportunity to enact structural reform. Financial repression embeds the wrong incentives -- obfuscation begets delay, and a robust recovery becomes unattainable. The path to prosperity requires taking the long road. It requires policy reforms that make the economy less reliant on the preferences of government and more responsive to the market. That means prioritizing long-term growth over fleeting market stability, and giving precedence to structural reforms over temporary stimulus and market manipulation. Financial repression is a tactic that may help get us through the week or month or year. But it will come at a substantial cost to our long-term prosperity. ----- Mr. Warsh, a former Federal Reserve governor, is a distinguished visiting fellow at Stanford University's Hoover Institution and a lecturer at its Graduate School of Business. 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 Golden Phoenix Signs Definitive Agreement Company Press Release SPARKS, Nevada -- Golden Phoenix Minerals Inc. (OTC Bulletin Board: GPXM) has signed a definitive agreement to acquire a 60 percent interest, with an option to buy an additional 20 percent interest, in the Santa Rosa gold mine in Panama, now owned by Silver Global S.A., a Panamanian corporation. Santa Rosa produced more than 100,000 ounces of gold from 1996 to 1998 before being closed in part to low gold prices, which are now more than five times higher. Golden Phoenix intends to acquire its initial 60 percent interest in Santa Rosa by acquiring 60 percent of the share capital of a recently created company under the name Golden Phoenix Panama S.A., formed to hold and operate the mine. Tom Klein, CEO of Golden Phoenix says: "The agreement establishes a solid framework from which we can advance Mina Santa Rosa to production-ready status." For Golden Phoenix's complete statement, please visit: http://goldenphoenix.us/press-release/golden-phoenix-signs-definitive-ac...
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| Posted: 30 Dec 2011 08:07 AM PST Dave Gonigam – December 30, 2011
The island nation in the South Pacific shifted time zones today… and jumped the international date line. One moment it was 11:59 p.m. on Dec. 29. The next, it was 12:00 midnight on Dec. 31. It's not a mere curiosity: It's another sign of the great global shift. "The government felt that in the new millennium we're making a lot of business with New Zealand and Australia," explains Samoan journalist Autagavaia Tipi, "and also Japan and China. Very little business with the United States." So after 119 years in sync with North America, "I think it's about the right time for us to move to the original side that we were of the international date line." Conveniently, this brings us to a tradition on the final trading day of the year: Instead of a forecast, a review of the leading forecasts and profitable themes from our writers and editors during the year gone by.
Only a week later, skyrocketing food prices were among the factors that launched the revolution overthrowing Mubarak in Egypt. Meanwhile Chinese inflation topped 6% this year, and that's the official figure. "On-the-ground" estimates from our contacts there ran north of 10%. And that at least tapped the brakes on China's economy as year-end approached. "The world's second-biggest economy faces a deeper slowdown," Bloomberg reported on Dec. 14. Meanwhile, "India's economy is looking decidedly less flashy these days," The Wall Street Journal said 11 days ago. And according to the Financial Times on Dec. 7, "Economists have started bandying around a word rarely associated with fast- growing Brazil — recession."
Like the ISM number in the United States, 50 is the dividing line between growth and shrinkage. The December number is 48.7. China's stock market is set to close the year down 22%… at a level last seen in March 2009.
2011 began with one of 2010's red-hot sectors looking shaky… and many names collapsed. Industry darling Molycorp has been cut down by two-thirds in eight months. "All of the publicly traded investment ideas — even the best of them, and some are quite good — are speculative ventures on future output," Byron warned. Days earlier, he got readers of Energy & Scarcity Investor out of Molycorp for 178% gains in four months. Is there still any life in the sector at year-end? Absolutely… if you look for "heavy rare earths" — so called because of their atomic weights. "Light rare earths are fairly abundant in terms of volumes," says Byron. Those are used mostly in magnets. "Heavy rare earths are far less abundant," and that's the stuff that goes into electronics, like your mobile phone. "Look for companies with ore bodies that are rich in heavy rare earths."
The move "is unlikely to stem the nearly six-month slide in prices of the crucial elements," according to the Financial Times, "but could cause shortages of critical 'heavy' rare earths." "Industry executives," reports the salmon-colored rag, "say the separate quota for heavy rare earths — a category that makes up 15% of the overall quota compared with 85% for light rare earths — will ultimately make heavy rare earths more scarce." Byron has two favorite plays rich in the "heavy" stuff. "I track these guys very closely," he says. "I've visited the plays. I've met the technical staff and the whole line of management. I expect good, positive news to flow from the companies as 2012 gets under way." And the best part? They're "way underpriced," he says. Much more here.
He also said not to expect much in the way of capital gains from stocks this year. Regular readers know this forecast was borne out by the chart we shared three days ago. It's worth another look. 
Nailed it. The year-over-year change in wholesale prices topped out above 7% in late summer and early fall. Companies faced the wrenching decision of whether to eat their rising costs, pass them along to customers, cut expenses or some combination thereof. This is the "margin squeeze" we've been writing about for more than a year. Look for it to show up in quarterly earnings reports… starting in mid-January.
What's more, "lower home prices will send more mortgages under water and force many more homes into foreclosure." This is a forecast that in hindsight looks like a slam-dunk. It was, in fact, an outlier at the time. But a year later, the Case-Shiller home price index is 3.4% lower than it was at the time of Mr. Pento's forecast. Meanwhile, "the U.S. housing market must digest more than 14 million distressed properties…before the foreclosure crisis will subside," according to a Bloomberg account of RealtyTrac's latest monthly figures. Forecasts like these — standing against the wind and proving out right in the end — are one of the reasons we brought Mr. Pento on board.
Understand that Abe calls things very short term. At that moment, the dollar index was a bit above 79. On Jan 7, it topped 81. Abe's trading strategies this year bore the most fruit in calling the swings of Germany's big stock index, the DAX. Time after time, he saw traders overreacting to rumors on Monday morning — delivering big gains to his readers by Friday afternoon. Among those gains… 161%, 72%, 120%, 125%, 117% and 66%.
The most actionable of those forecasts will go exclusively to members of the Agora Financial Reserve. Reserve membership is our ultimate package deal. The high-end services from only three of the above-mentioned editors — Chris, Byron and Dan — cost more than $3,500 every year. Add in Patrick Cox's Breakthrough Technology Alert and you're looking at $5,500. For not much more than that, you can pay only once and secure lifetime access to nearly everything we publish. Within a year, you might be sending us emails like these…
"Still," this reader adds, "I worry that nothing keeps 'working' indefinitely if it gets big enough. I hope you can resist the temptation to expand to the point that your letter writers start majorly 'making markets' and begin to lose their niche effectiveness. This is a real danger and (I suspect slowly) would become a huge disappointment to your longest-time subscribers." No worries about that. We know that's in no one's best interests… so we limit membership to no more than 1% of our total readership. And we open the Reserve to new members only a couple of times a year. The current membership drive expires at midnight next Wednesday… and the membership fee might well go up the next time around. You can secure membership now — and receive our entire team's 2012 forecasts and recommendations as soon as they're ready — by acting here.
Assuming those numbers hold by the close, the S&P 500 will end the year four or five points higher than it began… with a lot of stomach-churning moments along the way.
"It's easy for anyone who wants to intervene to push the price down even further in a thin market," he tells radio host Eric King. "So I think that's what's happening and I wouldn't worry the slightest bit. "Gold is up for the year in all currencies and 2012 will be another fantastic year. I wouldn't be surprised to see several thousand dollars (for gold), let's say $3,000-5,000."
"Nobody, but nobody," says Mr. Benko, "has ever put economic policy better than… Tallulah Bankhead. This siren of the silver screen… said all there is to say about economic policy: 'I've been rich and I've been poor. Believe me, honey, rich is better.'"  Mr. Benko is calling for the presidential candidates to start "evangelizing Tallulahnomics." But short of that, he proposes a celebration built around Ms. Bankhead's birthday… which is Jan. 31. [Ed. Note: Our fact-checking team has discovered this quotation is more commonly attributed to Ms. Bankhead's contemporary, Sophie Tucker. "Sophie Tucker Day isn't nearly as fun," Addison muses via instant message. Her birthday comes up even sooner — Jan. 13.]
"Sticky, hard to breathe during the summer due to the huge amount of tar lying on the ground, etc. He then went on to describe what it was like after the ground had been reclaimed." "I would think that the various oil companies would be well advised in putting some money into a publicity general fund kitty and have a documentary made (Hint: maybe by someone who has made a documentary before?) on what is really taking place there instead of the lies the environmentalists are trying to shove down the public's throat."
"Then sit a bunch of eco-freaks in front of them and ask them to tell you which one did Mother Nature create and which one did man create." "This type of drill would be good for the average person out there too so that they might get a bit more educated on the fact that man can get oil and gas from the earth and make the land better than it was before. You might throw in some good coal reclamation projects too."
"Couldn't agree with you more: My working from age 12-17 did a lot more for me than four years of college."
"These are very bright kids with top education and serious work ethics. Businesses today are looking for people they can exploit, not for creative, independent thinkers. It sucks." "My kids will eventually do fine in spite of the current bizarre job market. And it will be a great loss for the companies that are using current circumstances to game the system."
"Tell him to read up on children's role in industry prior to the passage of those laws." The 5: "The national law against child labor," Mr. Tucker replies, "didn't pass until the Great Depression — in 1938, with the Fair Labor Standards Act. It was the same law that gave us a minimum wage and defined what constitutes full-time and part-time work." "By the time this legislation passed, however, it was mostly a symbol, a classic case of Washington chasing a trend in order to take credit for it. Youth labor was expected in the 17th and 18th centuries — even welcome, since remunerative work opportunities were newly present. But as prosperity grew with the advance of commerce, more kids left the workforce." "By 1930, only 6.4% of kids between the ages of 10-15 were actually employed, and three out of four of those were in agriculture, and the law didn't even cover them." "In wealthier, urban, industrialized areas, child labor was largely gone, as more and more kids were being schooled. Cultural factors were important here, but the most important consideration was economic. More developed economies permit parents to 'purchase' their children's education out of the family's surplus income — if only by foregoing what would otherwise be their earnings." "The law itself, then, forestalled no nightmare, nor did it impose one. In those days, there was rising confidence that education was the key to saving the youth of America. Stay in school, get a degree or two and you would be fixed up for life. Of course, that was before academic standards slipped further and further, and schools themselves began to function as a national child-sitting service. Today, we are far more likely to recognize the contribution that disciplined work makes to the formation of character."
"On this — the day before the last trading day of the year… I just wanted to thank you for all the wonderful, informative, exceptionally interesting (superlatives could go on for a while) newsletter." "Tomorrow… for the S&P 500 — I'm looking for (the expected) U.S. government/Fed reserve intervention to keep the S&P 500 in positive territory for the year. It's touch and go right now; it won't take much to make it happen." "Cheers, and Happy New Year to all of you at Agora Financial… and looking forward to Vancouver!!!" The 5: We look forward to seeing you there. Free admission to the Vancouver conference is among the many perks that come with Reserve membership. If you've ever thought about joining yourself, you have the long weekend to mull it over… but not much beyond that. The offer expires at midnight next Wednesday. Please review your invitation here. Cheers, Dave Gonigam P.S. U.S. and Canadian markets will be closed on Monday. The 5 returns on Tuesday. Happy New Year!  For one of our editors, this has been a week of extracurricular activity. Byron King has been on the road engaging his interest in everything from rocketry to supercomputers. But as you'll see in the musings below, it's still relevant to his metier of resource investing… I'm putting my "week off" from writing to good use. I hit the road, and made some well-planned calls. I was fortunate to receive guided tours of the NASA Marshall Space Flight Center in Huntsville, Ala., and the Oak Ridge National Laboratory in eastern Tennessee. At Marshall, I spent many hours walking and talking with a couple of old NASA hands, making our way through the history of U.S. rocketry and manned spaceflight. We started by tracing the DNA of U.S. rocket engines, from their genesis in the captured German V-2 program of World War II all the way through the Apollo program and the truck-sized nozzles of the Saturn V booster. Indeed, Huntsville has two Saturn V examples — one stacked up outside, 360 feet tall, in all its glory, and another restored, museum-quality Saturn V lying on its side in a shed that's half the size of an aircraft carrier. We also spent much time discussing the space shuttle, and the many other orbiting satellites with which people gather so much critical data about the Earth — including data that's essential to energy and mineral exploration and development. One of the purposes of the visit was to get a sense of the scope of effort, and depth of industrial base, required to accomplish large, complex projects. I was quite taken by the comparisons between the overall complexity, and unforgiving nature, of both the space program and deep-water energy development. At Oak Ridge, I toured the National Center for Computational Sciences, home of the nation's most powerful supercomputer — at least, the most powerful device that the U.S. government admits to owning. The immense banks of parallel processors cover just under 6,000 square feet of floor space on each of two floors. The Oak Ridge system is called "Jaguar," and for a time it was the fastest supercomputer in the world. Then the Chinese and Japanese each built one that's faster. But the Oak Ridge scientists have plans for the next step ahead. Supercomputers are critical to modern science and engineering. In the old days, the "scientific method" was basically a process of hypothesis and experimentation. Today, at the cutting edges, it's a process of hypothesis and simulation. After you refine things by crunching the numbers, then you might take a shot at building something for an actual experiment. The big point here is that modeling is critical to future energy systems, material systems, environmental modeling and much more. I also got inside the Oak Ridge Spallation Neutron Source — a one-of-a-kind facility in the world. There, Oak Ridge personnel accelerate protons to 90% the speed of light and slam them into a vat of mercury. The speeding protons knock out neutrons, which then fly into a variety of channels where purpose-built instruments allow scientists to perform all manner of experiments on a wide array of materials. Again, this kind of fundamental physics, as applied to materials science, is how people will invent the human future. Then I visited the historic X-10 reactor, the world's second graphite-moderated nuclear reactor (the first was Enrico Fermi's reactor, under the old football stadium at the University of Chicago). The X-10 was built in a rush during World War II, and was key to proving that it was possible to mass-produce nuclear materials. After X-10 proved the concept, a series of other programs followed up with more nuclear materials — including the nuclear materials of the first
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| Posted: 30 Dec 2011 07:40 AM PST Zealllc
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Now the New Year reviving old desires,
With the year coming to a close we are seeing what appears to be massive profit-taking by funds and other institutional investment firms. There has been no real news of anything in the political scene as far as printing, twisting and swapping so this is what appears to be a real sell off. The only thing I can imagine driving this is that the firms are looking to post a profit for the year and in order to do that, they need to realize their gains in something. This is done by selling assets that have accrued gains since you bought them and anyone buying gold these past few years has accrued massive gains. Stocks have done quite poorly in 2011, barely breaking even whereas gold has finished the year up over $150/oz.
With mounting fears over the recent plunge in gold and silver and continued volatility in markets globally, the Godfather of newsletter writers, Richard Russell, had this to say in his latest commentary: "This year's close for gold marks the 11th year for higher year end gold closing. To my knowledge this is the longest bull market of any kind in history in which each year's close was above the previous year. This fabulous bull market will not end with a whisper and a fizzle. I continue to believe that the upside gold crescendo of this bull market lies ahead. We are watching market history."
Greetings and welcome to the day that wasn't… at least for our Samoan readers.
"The year 2011 is the year when inflation will play the role of wrecking ball" in emerging markets, declared Chris Mayer on Jan. 18. "The basics like food and energy are like brakes on these economies."
As if to further bear out Chris' forecast, HSBC's measure of Chinese manufacturing activity is out this morning… and it reveals a second straight month of contraction.
"You could make a lot of money investing in rare earths," said Byron King on Jan. 19, "if you can handle a lot of risk. And I mean a LOT of risk."
Another news item from China today buttresses Byron's thesis: The Middle Kingdom — still the producer of 97% of rare earths — is revamping its export quotas.
"Dividends will play a major role in investor's portfolios in 2011," declared our income specialist Jim Nelson on the first trading day of 2011.
"For 2011, my No. 1 prediction is a rise in the Producer Price Index," declared our stock market vigilante Dan Amoss, also on Jan. 3.
"Home prices, which were already headed lower before this recent spike in mortgage rates, are set to take another tumble downward," forecast Michael Pento on Dec. 13, 2010.
"Get ready… the bulls are coming back to the U.S. dollar," said Abe Cofnas on Jan. 3.
On this day last year, we pronounced 2010 "both tumultuous and profitable for the better part of the collective portfolio" here at Agora Financial. 2011 turned out to be more of both. And for 2012? We release our New Year's forecasts next week.
Stocks are drifting on the final trading day of the year. The major indexes are down fractionally.
Gold has regained a good chunk of its losses from the last two days. At last check, the spot price is $1,574. Silver has recovered to $28.29.
Gold's swoon this week is "just manipulation and panic in a paper market at the year-end," says 
"Can we just skip the lectures and get down to vibrant job creation via the gold standard?" asks Ralph Benko from the American Principles Project… who proposes a novel idea we plan to take up one month hence.
"I very much enjoyed yesterday's 5 with the individual who wrote in and said that he too had worked at the Alberta tar sands and it was as a previous commenter described."
"What would be nice," writes another, "would be to have a collection of pictures of the oily landscape and a bunch of pictures after a reclamation project."
"Right on," a reader writes in reply to Jeffrey Tucker's Overtime Briefing yesterday, "Generation Demoralized."
"For as much as I disagreed with Tucker's first article for you guys," writes another, "this one is dead center. How do I know? I have two 20-something kids who cannot find work."
"Mr. Tucker is ignorant of history, among other areas," writes someone who disagrees, "when he urges repeal of child labor laws as a means of getting the economy back on its feet."
"I love The 5," an enthusiastic | You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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