saveyourassetsfirst3

Ted Butler: The Long View
Gold and Stocks Possibly on the Brink of Going Up
A Big Uranium Deposit, and a Big Debate on Mining It
Huge Gold deliveries/Low Silver OI/Job report/More Fallout MFGlobal
Human Freedom Rests on Gold Redeemable Money: Howard Buffett
Strange COT report/extreme lows in silver OI/massive increase in gold oz standing
Euro Sinks As Dollar Rises In “Go To” Trade
Fooled Again!
Dollar Reappraisal : Gold Vanishing into Private Hoards
By the Numbers for the Week Ending December 2
London Gold Market Report
BrotherJohnF: Silver Update – “Top 5 Coins 1oz Coins”
Here is the Key Level for a Massive Gold Breakout
NBC coming hatchet job on gold
Big Picture Analysis for Gold, Silver, and Stocks
U.S. Jobs-Lies Exposed
Let’s Talk About Silver
LISTEN: Interview Gary Wagner of GoldForecast
Sinclair ~ Clearing Houses Are The Mechanism Of All Markets‏
Currency swaps – the beginning of a 'solution'?
Friday ETF Roundup: XLF Posts Another Big Gain, GDX Tumbles On Weak Canadian Jobs
Friday NIght SilverFuturist Double Header
What's Under Bernanke's Kilt?
Saving Gold
Today In Commodities: Oil Also Positive For Week
Legg Mason Details First ETF, Global X Looks To Add Nasdaq Funds
The Secret Bailout Commences
This is the most outrageous Jim Rogers interview you've ever heard
Gold Seeker Weekly Wrap-Up: Gold and Silver Gain About 4% on the Week
India Markets Friday Wrap-Up: A 7% Gain For The Week

Posted: 03 Dec 2011 02:20 AM PST

Ted Butler: The Long View

by Cameron H. (News), Gold & Silver Staff

With more financial uncertainty in the world than in memory and with price volatility going through the roof, it's hard to think about the long term. The only problem is that our lives are still measured in the long term. In financial terms, starting families, raising and educating children, preparing for retirement and preserving hard-earned wealth are not day to day considerations; we are forced to look ahead. In looking and planning ahead, there is no crystal ball; no guarantee that things will turn out as we expect. All we can do is to make assumptions based upon what we now know and then try to position ourselves for what may come.

Imagine that you are going on a journey for ten years and will be out of touch for that time. With no short term trading allowed, what assets would you choose to invest in until your return? Silver is an asset that can offer spectacular returns and preserve value with low risk. It is a vital resource and essential industrial material in addition to being a precious metal. And because so few investors are familiar with the real silver story, it is a near certainty that silver will become more appreciated over time.

There are limitations on the future supply of silver. Every metal resource in the world becomes more expensive to produce each year. That's due to the growing cost of extraction and because ore grades have declined (the biggest and cheapest deposits have already been found and exploited). The grades for silver ounce per ton of ore 150 years ago at the Comstock Lode were hundreds of times richer than grades being discovered today. It takes greater effort and expense to extract metals from the earth, to say nothing of new environmental restrictions.

The world population now stands at seven billion. Over the next ten years, the world will add another 750 million and perhaps a billion people on top of that over the twenty years. That's six times the equivalent of the current population of the U.S. That will most likely be accompanied by an increase in the standard of living throughout the world. One measure of an increased standard of living includes greater use of electrical appliances and electronic devices of all types, from TV's, refrigerators, washing machines to computers and cell phones. Since silver is the best conductor of electricity it is sure to be in greater demand. Plus silver has other important attributes. It's the best reflector of light, the best transfer agent for heat and has important biocide properties, making it indispensible to modern life.

Silver performed better than any other asset over the past decade. But don't buy silver because it did well, buy it for the new forces in place in the world. Ten years ago, there was no net investment in silver. Only in the last five years has the world taken to investing in silver. Over that time, over 600 million ounces of silver have been bought in Exchange Traded Funds (ETFs), with hundreds of millions of additional ounces of silver bought in coins and bars. Five years in a worldwide investment movement is a very short time frame. In per capita terms, the world only bought one-tenth of an ounce of silver per person. It would be accurate to suggest that a worldwide movement towards investing in silver is in its infancy.

There is more investment capital today than ever before. Between the banks, large investment pools, and hedge funds, that capital base is more concentrated than ever. We are talking about many trillions of dollars. All the silver bullion in the world is valued at less than $35 billion. Despite silver's great investment performance over the past 5 and 10 years, it has yet to attract investment from these big concentrated pools of wealth. It is only a matter of time before the really big guys wake up and make a move into the metal. Considering how little silver exists to accommodate them, the effect on price when it occurs should be explosive.

One thing that didn't exist ten years ago is the growing unease over government debt. For the first time in living memory, sovereign debt in the developed nations has come to be questioned and shunned. This is not going to go away or be resolved easily. It is not hard to imagine the distrust of paper growing. A distrust of paper is a distrust of someone else's promise to pay. The only escape route is to switch to assets not dependent on someone else's promise or ability to pay. Silver is a premier example of such an asset. The kicker with silver is that without any rush from paper assets it will still be great.
The growing distrust of European sovereign debt is occurring at the same time there has been a rush to deposit money in government paper obligations and insured bank accounts. Given volatile stock markets, a troubled real estate market and broad economic malaise, people are voting for safety, despite historically low returns on deposits. Investors are flooding the banks with deposits that earn little or no interest. Money is piling up on the sidelines like never before. In due course, it will seek better investment returns than the near zero returns currently offered on insured deposits. Silver will attract some of this money. Either we'll come out of this economic mess and all the money currently flooding into the banks will increase industrial demand for silver; or we'll slide into further distrust of paper which could set off a buying panic in silver. In either outcome, it's hard to see how silver won't be the place to be.

The outlook for silver looks better than ever. There are important regulatory changes afoot that promise to powerfully impact the price. There will also be closure to the current CFTC investigation of wrongdoing in the silver market. The manipulation to the downside in silver has many times the awareness that it did a decade ago and there are fewer counterarguments to explain it. Take advantage of the current low prices to establish a long term position in silver; I doubt you'll regret it. As unsettling as financial events may be, they are actually quite positive for silver.

The reason for recent price drops rests with a group of around 20 commercials on the COMEX, including JPMorgan, that know how to suddenly rig prices lower (usually in the middle of the night or at some other thinly traded time). Knowing that this will scare some people into selling and keep others from buying, this small group of commercials then sits back and waits to buy what they can scare others into selling. I call this financial terrorism because it causes fear among investors. The proof is that government data consistently reveals that these commercials are always the big buyers on any sharp sell-off in silver. No exceptions. Some might call this just luck on the part of these commercials. I call it manipulation and financial terrorism.

[SIZE=\"3\"]It's ironic that most silver and gold investors originally bought precious metals as protection against exactly the type of financial crisis we are going through now. In other words, the price of gold and silver should be soaring based upon current conditions. Instead, the manipulation is so pronounced that the crooked commercials on the COMEX have managed to convince the market that a flight from paper assets is somehow bad for precious metals. That's preposterous and you should not be fooled by their crooked games. The proof is that these commercials crooks are buying hand over fist on the contrived sell-offs. You should do exactly the same. These rigged price drops are an opportunity like no other. The fact that it is being artificially suppressed means you are getting a chance to buy it much cheaper than it would be in a free market. That has to change and when it does it will be like a sling shot in the other direction. The facts are more bullish than we can fully comprehend.
[/SIZE]
For subscription info please go to www.butlerresearch.com

http://goldsilver.com/news/ted-butler-the-long-view/

Gold and Stocks Possibly on the Brink of Going Up

Posted: 03 Dec 2011 01:00 AM PST

SunshineProfits

A Big Uranium Deposit, and a Big Debate on Mining It

Posted: 03 Dec 2011 12:26 AM PST

A Big Uranium Deposit, and a Big Debate on Mining It
Travis Dove for The New York Times

CHATHAM, Va. — Atop Coles Hill, a crown of oak trees encircle an old plantation house from which generations of Coles have looked down gently sloping lawns to fields that once grew tobacco.

Today, enormous uranium deposits below the estate's rolling hills and pastures have set off a bitter fight over mining in this community 30 miles north of the North Carolina border.

The battle lines over Coles Hill were first drawn three decades ago, but now a long-awaited report from the National Academy of Sciences on the safety of uranium mining is expected to rekindle that debate. Its release in early December will mark the start of a crucial new stage in Virginia's debate over whether to end the state's 1982 moratorium on mining uranium, which is used as reactor fuel.

The moratorium remained in place after interest in the deposit waned. A separate report this week from a consulting company retained by the state found that a mine could support more than 1,000 jobs and have a net economic impact of about $135 million in economic benefits annually. But the study also warned that a mine could bring a stigma. And environmentalists worry about possible contamination of the state's water supply.

The deposit — which could yield an estimated 119 million pounds of so-called yellowcake — has been described by experts as the nation's richest untapped source of uranium oxide. If the mine goes forward in Chatham, it will be the only uranium mine in the eastern United States.

The proposal is expected to be one of the most contentious issues in next year's session of the state legislature, thrusting Virginia into a national debate over energy security, nuclear power and the environment.

"The country needs uranium," said Walter Coles, 73, standing in a cow pasture atop one of two deposits on the property. "We need it for our ships, we need it for our nuclear power utilities. It's better that we exploit our own natural resources as opposed to importing it."

Mr. Coles's company, Virginia Uranium Inc., has pressed a muscular campaign to overturn the moratorium, spending more than a half million dollars on lobbying and public relations since 2007, according to state records and the Virginia Public Access Project, which tracks money in politics. It has made its case at festivals and craft shows, and flown lawmakers to mine sites in France and Canada.

Residents and environmental groups have also campaigned vigorously, but to keep the moratorium in place. Antimining signs pepper the roads that wind through Pittsylvania County, as well as lawns and pastures.

"This is going to affect everybody that lives in these communities," said Phillip Lovelace, 60, a ninth-generation farmer who paced and chain-smoked as he spilled facts and figures about the project. "This is a no-brainer. This is something you leave alone."

A geologist first detected uranium at the site in the 1950s, Mr. Coles said. In the 1970s, the Marline Uranium Corporation leased the land, and in 1982 it formed a partnership with Union Carbide to mine it.

But the General Assembly passed the moratorium that year, and the pall from the Three Mile Island nuclear accident doomed the project. The mineral rights then reverted to the Coles family.

Interest flared anew as uranium prices soared several years ago. Mr. Coles formed Virginia Uranium in 2007; he is a majority owner with his neighbor Henry Bowen, and Canadian investors hold a minority stake. The company owns about 2,300 acres around the 1,200-acre family estate.

Once a top uranium producer, the United States had only about nine operating uranium mines in 2010, and it imports more than 90 percent of the yellowcake for the nation's 104 nuclear power reactors. The estimated two million pounds of uranium that would be mined annually at Coles Hill over 35 years would be a significant increase in domestic production, experts say.

But opponents say that lifting the moratorium would endanger the environment and health, threaten the livelihood of farmers and open up the state to mining outside of Pittsylvania County.

"The record here in the United States — mostly in the western United States — has been a long and tragic legacy of environmental contamination," said Caleb A. Jaffe, senior lawyer for the Southern Environmental Law Center.

more here:
http://www.nytimes.com/2011/12/02/bu...e&ref=business

Huge Gold deliveries/Low Silver OI/Job report/More Fallout MFGlobal

Posted: 02 Dec 2011 11:39 PM PST

Human Freedom Rests on Gold Redeemable Money: Howard Buffett

Posted: 02 Dec 2011 11:35 PM PST

¤ Yesterday in Gold and Silver

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

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

Well, we found out.

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

Here's the New York Spot [Bid] chart...and you can see how the price got 'walked' down during the Comex trading session. For the third day in a row, the gold price was not allowed to close about $1,750 spot.

Silver's price path was mostly similar to gold's, but was more 'volatile'. As usual, the silver price got hit much harder than gold. Silver's New York high tick was $33.81 spot...and it's N.Y. low was $32.24 spot...a price swing of $1.57...or about 5%. The high tick was at precisely 8:30 a.m...and the low tick came at precisely 1:30 p.m...the close of Comex trading. I just love free markets in action. How about you?

Silver closed down 9 cents from Thursday at $32.64 spot. Volume was in the 35,000 contract range. For the third day in a row, silver wasn't allowed to close above $33 the ounce.

The dollar didn't do much of anything until shortly before lunch in Hong Kong, then it began to slide south slowly and quietly. The low of the day came minutes after 7:30 a.m. Eastern time...and then blasted higher, topping out about 11:10 a.m. in New York. From low to high, the dollar tacked on 70 basis points...and finished up 34 basis points on the day.

Any real co-relation between the gold price and dollar vanished at 7:30 a.m.

The gold shares started in the black when the equity markets opened at 9:30 a.m. Eastern, but there were willing sellers at the ready...and by the close of trading at 4:00 p.m. the HUI was down 3.30%. The shares gave back almost half of their Thursday gains, even though the gold price finished unchanged on the day. You can think what you like, dear reader, but I have my suspicions which I will not utter here.

It wasn't much different with the silver stocks...and Nick Laird's Silver Sentiment Index closed down 2.10%.

The CME's Daily Delivery Report for Day 4 of the December Delivery month showed that 546 gold and 61 silver contracts were posted for delivery on Tuesday. All the usual suspects were there in gold. In the first four days of the delivery month there have been 17,100 gold contracts delivered, or posted for delivery...but only 708 contracts in silver. The link to yesterday's Issuers and Stoppers Report is here.

The SLV ETF showed a tiny withdrawal of 127,821 troy ounces, which might have been a fee payment of some kind...and there were no reported changes in GLD.

For the second day in a row, there were no reported sales from the U.S. Mint. This is really unusual, as [except for January] November and December are normally the biggest silver eagle sales months of the year...and I know from first-hand experience that retail silver bullion sales are not that slow.

The Comex-approved depositories reported no change in their inventories, either in or out, for the first day of December.

The Commitment of Traders Report for positions held at the close of trading of Tuesday, November 29th wasn't quite what I was expecting. Yes, there was improvement in the short position of the Commercial traders in silver...down 1,043 contracts, but I was expecting more. For the second COT report in a row, the technical funds [Non-Commercials] did not increase their short position by any major amount.

The Commercial net short position in silver now sits at 103.4 million ounces, which is a very small number. The '4 or less' traders are short 153.9 million ounces of silver...and the '5 through 8' traders are short an additional 38.1 million ounces. The other 32 Commercial traders [the raptors] left in this category are short around 3.3 million ounces each. Any questions as to which traders control the price?

The standout feature of silver was the huge drop in total open interest on the week...down 9,589 contracts...all of it spread related as traders exited the December contract. Silver open interest is below 100,000 contracts for the first time in many, years...and the long positions of the Non-Commercial and Nonreportable traders are almost microscopic. The small Commercial traders [Ted Butler's raptors] are still very net long silver...and will probably be taking profits when prices begin to rise. I wonder who the buyers will be when they finally do sell...if they sell.

In gold, there was virtually no change in the net short position in the Commercial category. The total Commercial net short position is 19.35 million ounces. The '4 or less' Commercial traders are short 13.3 million ounces of that...and the '5 through 8' Commercial traders are short 4.0 million ounces. Ted says that this is the smallest short position that the 'big 4' traders have had in gold since January of 2008. Total open interest in gold is now down to 423,176 contracts.

The total short position of the eight largest Commercial traders in gold is 2.05 million ounces less than the total net Commercial short position in gold... or 89.4% of the total. But in silver, the eight largest traders in the Commercial category are short 192.0 million ounces of silver...and the Commercial net short position in silver is only 103.4 million ounces. The eight largest Commercial traders in silver are short 185% of the Commercial net short position!!! Silver has to be the most rigged market on planet earth. These traders, led by JPMorgan, control the silver price...period.

I have a lot of material for you today...and, since it's Saturday, almost everything left over from the week that was, is posted here.

Well, no matter where I look...and over what time horizon...I see disaster. Black swans in all quadrants.

Ted Butler: The Long View. Michael Kosares: For nine years gold has yielded 8.5% annually after inflation. Greg Weldon predicts the magic number for gold's breakout.

¤ Critical Reads

Key Charts from the NFP Report: Records in Jobless Duration, and People Who Want a Job as Civilian Labor Force, Plunges

Tyler Durden has a field day with yesterday's jobs numbers. He posts four most excellent graphs that shows that the numbers published yesterday were a real sleight of hand. There's only one paragraph of text...and the four graphs. It's worth a minute of your time...and I thank Australian reader Wesley Legrand for sending them along. The link to this short zerohedge.com piece is here.

View full GSD edition

Detroit's Broken-Down Buses Strand Riders

Detroit lost a quarter of its population in the past decade, it may go broke by April and fall under state control, and Frances Lockett has a hard time getting to her job 10 miles from home.

She rises at 4:45 a.m. to get to work by 7:30 cleaning homes in suburban Grosse Pointe Park. It's a 20-minute car ride that takes her 90 minutes on two buses, with a half-hour wait between. A few years ago buses ran more often, she said.

"It wears on you," said Lockett, 62. "Some times it's worse than others."

The reliable unreliability of public transit -- on average one-third of the 305 scheduled buses are off the road for repairs each day -- exemplifies the crisis that threatens the 18th-largest U.S. city with bankruptcy or state takeover. Lost revenue from plunging property values and a dwindling, poorer population have nearly broken its ability to deliver basic services in a city receding amid swaths of vacant land.

This Bloomberg story from Thursday was sent to me by reader Matthew Nel...and the link is here.

View full GSD edition

Kyle Bass Explains the New World Order - Panel Presentation

Reiterating how critical the psychology of today's situation, Bass goes on to debunk the optimism of globalization (at least for the Western world), destroy the myth of a 50% greek write-down solution, Japanese xenophobia and savings losses, structural versus cyclical implications for US equity deterioration, US deficits and housing's bottom, global debt saturation and how this tearing at the social fabric of the world will lead to - war.

This very long video runs 1:06:54...and I haven't had a chance to watch it myself. I thank West Virginia reader Elliot Simon for digging this up on our behalf. It's posted over at zerohedge.com...and the link is here.

View full GSD edition

New York Sun: Bernanke's Forgotten Footnote

Yesterday, The New York Sun noted that Federal Reserve Chairman Ben Bernanke remarked nine years ago that the Fed had promised Congress that it would not bail out foreign governments, even as the Fed now seems to have undertaken to do just that and become central bank to the world. This is, the Sun says, a pretty big policy question, in which Congress, except, of course, for Ron Paul, seems oblivious.

I borrowed the story...and the introduction...from a GATA release yesterday. The Sun's editorial is headlined "Bernanke's Forgotten Footnote" and the link is here.

View full GSD edition

James Turk: The Transatlantic Panic

As more debt is offered as the only solution to impossible indebtedness, GoldMoney founder and GATA consultant James Turk reflected this week on what he called "The Transatlantic Panic." With negative interest rates and bailouts stretching ahead as far as the eye can see, Turk writes, gold's bull market has just as far to go.

This is another story I borrowed from a GATA release yesterday...along with Chris Powell's introduction. The story is posted over at the goldmoney.com website...and the link is here.

View full GSD edition

China Vice-Finance Minister Warns Crisis Worse than 2008

The world economy is facing a worse crisis now than in 2008 and stimulating growth should be a priority for global policymakers, a Chinese vice finance minister said on Thursday.

The comments by Zhu Guangyao marked the latest grim warning from a Chinese official over the state of the world economy. Vice Premier Wang Qishan said in November that a chronic global recession was certain.

"At that time (in 2008), the world economy maintained overall growth and the governments, especially G20 countries, were still able to implement fiscal and monetary stimulus measures," Zhu told a forum.

"But now, to be honest, some countries have very difficult fiscal situations, and there is limited room to adjust monetary policies."

This Reuters story came from yesterday's edition of the King Report...and the link is here.

View full GSD edition

Strange COT report/extreme lows in silver OI/massive increase in gold oz standing

Posted: 02 Dec 2011 11:35 PM PST

Euro Sinks As Dollar Rises In “Go To” Trade

Posted: 02 Dec 2011 08:07 PM PST

Cash has to go somewhere. If traders and investors flee the sinking Euro and Eurobonds, they buy U.S. Dollars and bonds. Most all global paper is trash except for German Bunds but even they are sinking as traders fear Germany goes down with the Euroland ship.

Euroland Offers No Answers and The USA Doesn't Either.

We have long reported Europe would sit and hand-wring in utter despair unable to decide how to proceed to save its Euro-land Union. This less than a decade long union has turned into dis-union as most of the immediate world wants Germany to roll-over, and hand-over all their hard-earned cash. The German courts have said, Germany cannot lend under these circumstances. Almost 70% of German citizens do not want any lending aide, and further, would perfer to exit the Euro and Euro-land's mandate. Meanwhile, new fights have broken out between Germany and the U.K. as Cameron wants Germany to pony-up the loans as he would like to join in this dis-union having the U.K. enjoy the spoils from Germany. He is really stupid considering today's shaky Euroland status.

To make it all even worse, clowns on the USA Super Committee have no agreement with a deadline looming this week. They knew this would happen and have no intention of any Trillion-Plus-Cuts in mandatory reductions either, according to prior agreements.

Perennial Bull Fund Manager Barton Biggs told investors to cut stock holdings from 80% to 40% based on this non-action, and expectations of a recession in the first half of 2012.

"You're looking at a potential double whammy," Barry Knapp, the New York-based head of U.S. equity strategy at Barclays Plc, said in a telephone interview. "The bigger problem is that a deal in the super-committee was expected to pave the way to extend the stimulus that is in the system. If you don't get a deal, which is probable, you get a big hit to the economy in the first quarter right at the point when the economic fallout from the European debt crisis is hitting." -Rita Nazareth 11-21-11 Bloomberg.net

All of this back-door maneuvering sets-up congress to NOT EXTEND the Bush tax cuts. This was one of the deliberate key points in offering the super committee plan and then letting it fail on purpose.

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

Fooled Again!

Posted: 02 Dec 2011 06:41 PM PST

Dollar Collapse

Dollar Reappraisal : Gold Vanishing into Private Hoards

Posted: 02 Dec 2011 04:30 PM PST

By the Numbers for the Week Ending December 2

Posted: 02 Dec 2011 02:20 PM PST

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 2, 2011.

If the images are too small click on them for a larger version.

Continued…

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 the usual time on Sunday (18:00 ET).

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.

(DCOT Table from Friday, December 2, for data as of the close on November 29. Source CFTC for COT data, Cash Market for gold and silver.

***

London Gold Market Report

Posted: 02 Dec 2011 02:20 PM PST

Bank of England Gives "Systemic Crisis" Warning, Germany's Merkel says Eurozone "Will Take Years" to Solve Debt Problem, South Korea Adds to Gold Reserves

U.S.DOLLAR Gold Bullion prices eased back from a week's high of $1760 an ounce Friday lunchtime in London – straight after the publication of US jobs data – before appearing to bounce off $1750.

Silver prices also fell back, after hitting a week's high of $33.67 per ounce.

Nonfarm payroll data published by the US Bureau of Labor Statistics Friday show that the US economy added 120,000 jobs in November – exactly in line with market expectations.

The US unemployment rate meantime fell to 8.6% – down from 9.0% in October.

Stock markets opened strongly on Friday morning – with the FTSE 100 in London up around 1.6% by lunchtime and Germany's DAX gaining 2.0% – while commodities also gained and US Treasury bond prices fell.

"Recent US data have been slightly more optimistic than what has been factored into the market," said Neil Jones, London-based head of European hedge-fund sales at Mizuho Corporate Bank, speaking before the nonfarm payroll release.

"That's helping risk…the market is in the process of reducing its risk-off positions."

Despite its slight drop following the nonfarm release, gold bullion looked on course for its biggest weekly gain since October – having risen nearly 4% since last week's close.

"The market is betting on some kind of announcement from Europe," reckons Saxo Bank analyst Ole Hansen.

"[Investors are] looking for the liquidity button in Europe to be pressed. That will mean high inflation, and that is giving gold the impetus it has been lacking of late."

German chancellor Angela Merkel however, in a speech to the Bundestag this morning, repeated her objection to the notion that the European Central Bank might follow the Bank of England and the Federal Reserve by embarking on quantitative easing.

"The European Central Bank has a different task from that of the US Fed or the Bank of England," Merkel said, adding that resolving the Eurozone crisis "is a process and this process will take years."

Merkel also again rejected the idea of jointly-issued 'Eurobonds'. European Union leaders are due to meet next Friday to discuss their next steps.

Elsewhere in Germany, bakery chain Wiener Feinbaecker is advertising a 5-Year bond at 7%, the Financial Times reports – noting that it is an "eloquent sign" that we could be entering another credit crunch.

"When a thriving business with profits growing at 30% a year resorts to this kind of financing, it is a pretty sure sign that banks are not fulfilling their traditional role," the FT report says.

Bank of England governor Mervyn King yesterday warned banks to prepare for a "systemic crisis".

"An erosion of confidence, lower asset prices and tighter credit conditions are further damaging the prospects for economic activity and will affect the ability of companies, households and governments to repay their debts," he said.

Banks should "give serious consideration to raising external capital in the coming months" warned the BoE's Financial Stability Report yesterday. The report suggests that one way banks could boost cash reserves is reduce the amount they pay in dividends and bonuses.

Although the report encouraged banks "to improve the resilience of their balance sheets", it also cautioned against "exacerbating market fragility or reducing lending to the real economy".

A closely-watched indicator of banking system stress is the gap (or spread) between the London Inter-Bank Offered Rate (the rate at which banks lend to other banks) and the Overnight Index Swap rate (determined with reference to a published overnight rate such as the Federal Reserve's federal funds rate).

Since the start of August, the 3-Month LIBOR-OIS spread has risen from around 12 basis points (0.12 percentage points) to more than 42 basis points. It remains, however, significantly below the levels reached immediately following the Lehman's collapse, when a credit market seize-up sent 3-Month LIBOR-OIS above 350 bps.

Korea's central bank bought 15 tonnes of gold bullion last month – adding to the 25 tonnes it bought earlier in the year.

The Bank of Korea added to its gold bullion reserves "in a bid to diversify its portfolio of foreign exchange reserves," said Lee Jung, head of investment strategy for the BoK's Reserve Management Group.

"South Korea has huge reserves," says Arne Lohmann Rasmussen, head of rates, foreign-exchange and commodities strategy at Danske Bank.

"When they are buying gold, it's supportive for the market."

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

BrotherJohnF: Silver Update – “Top 5 Coins 1oz Coins”

Posted: 02 Dec 2011 02:08 PM PST

from BrotherJohnF:
Brother John talks 1K silver, silver counterfeiting, price stability, and his five favorite coins in the 12.2.11 Silver Update.

Got Physical ?

~TVR

Here is the Key Level for a Massive Gold Breakout

Posted: 02 Dec 2011 02:01 PM PST

from King World News:

With gold trading near the $1,750 level, today King World News interviewed Greg Weldon, Head of Weldon Financial to ask him about the recent central banks actions and what level gold needs to pierce to have a major breakout. Weldon has a global following of some of the wealthiest investors in the world including individuals, institutions and financial firms. Before we get to his key breakout level on gold, this is what he had to say about the coordinated actions of the various central banks, "It's a massive war right now. The big battlefield is right in front of us. It's a massive war between central banks, which are now dangling that monetary carrot in front of the markets, that they are going to do whatever it takes to make sure that reflation is renewed as the dominant macro influence on markets."

Continue reading @ KingWorldNews.com

NBC coming hatchet job on gold

Posted: 02 Dec 2011 02:00 PM PST

Looks like NBC plans to air show and demonize gold. Similar to blood diamonds ....wonder who is paying NBC for this negative light on gold. No doubt there are people/children panning for gold. Locals are do try to find gold. Why not. But I'm sure they will not focus on the companies that invest in the local area. Get ready to b demonized for wanting real metals.

Big Picture Analysis for Gold, Silver, and Stocks

Posted: 02 Dec 2011 01:58 PM PST

The Currency War Big Picture Analysis for Gold, Silver & Stocks

by Chris Vermeulen, TheGoldAndOilGuy.com:

I think you will admit that we are in the middle of one major crazy financial mess. The part that makes things really crazy is that it's not just in the United States anymore but rather serious global problem which if not handled properly could change the way we live our lives going forward or possibly even spark some type of war, hopefully things don't get that crazy… But I do know one thing. Fear is the most powerful force on the planet and people do some crazy things when they are backed into a corner.

Anyways, on a more positive tone… today China decided to help provide more liquidity for the financial system along with the central banks. This news triggered a monster rally in overnight trading making the market gap up sharply at the opening bell. This news did hit the US dollar index hard sending it sharply lower but the question remains "Will today's news be a one week hiccup in the market?" If Euroland starts printing money it will likely send the dollar higher and stocks lower for 6- 12 months.

Read More @ MilesFranklin.com

LISTEN: Interview Gary Wagner of GoldForecast

Posted: 02 Dec 2011 01:38 PM PST

From KerryLutz.com:

Gary Wagner has been a trader and a market technician for over 25 years. In early in 2009 he began to focus his attention on one market: Gold. The yellow metal, gold, began to rally in 2008, but Gary knew the best was yet to come. He believed that gold was poised for an incredible and explosive upside move. Thus the GoldForecast was born. Gary's daily video newsletter is always interesting and often profitable. He uses a combination of fundamental and technical analysis.

We talked about the invention of paper money by the Chinese in the 10th century and their invention of inflation in the 14th century. Perhaps history doesn't always repeat itself, however, it is rhyming in many chords at the present time. Too many promises have been made without any regard to the abilities of governments to honor them. Gary is by his own admission, A half full kind of guy, and he believes that humanity will find a way to avert out and out global economic, social and political disaster. However, he believes that the solution will be hard won and very difficult to attain and will be done in the face of disaster.

Hopefully, Gary is correct in his assessment, but he's still intent in his belief that everyone should be buying to gold as it will continue to dramatically appreciate in price.

Much more @ KerryLutz.com or @ 347.460.LUTZ

Sinclair ~ Clearing Houses Are The Mechanism Of All Markets‏

Posted: 02 Dec 2011 11:12 AM PST

My Dear Extended Family:

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

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

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

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

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

Are you safe even in a custodial account if the clearing mechanism can erase assets across the board as a product of insolvency for any reason?

The system is in a critical seizure.

It may take some time, but even the financial sheeple are going to worry about their own funds. God help you if you hit gold right on a paper exchange with the wrong clearing facility.

You are wholly dependent on the ability of the clearing house to pay into your account the winnings by deducting those funds from the loser. You are wholly dependent on the ability of the clearing house to guarantee the safety and security (are T Bills securities?) beyond SIPC levels. SIPC is underfunded but would be made whole by funny paper.

God help all the exchange traded funds that are nothing more than houses of derivative paper requiring a sound clearing system to have even an excuse for existing.

If the clearing system fails then you have nothing whatsoever. God help you if you are a farmer hedging your crop or livestock if you the farmer have nothing whatsoever due to a broken clearing house. You are insolvent regardless of the fact that your hedge may have been perfect for the needs of your operation.

Unless MF clients are made whole in every way the system is broken.

People did not realize then and some even now that the failure of Lehman broke the technical procedures (mechanism) for the functioning of the OTC derivative and for that reason broke the Western world's financial system for which we are paying dearly today.

MF is a Lehman Brothers, but worse. OTC derivatives have always been a fraud but could have, before Lehman failed, been globally netted to practically zero.
The lack of faith in the clearing house system breaks the mechanism of the marketplace, even for legitimate transactions. This leaves gold in your possession as the asset of last resort. This is quietly driving the gold price towards Alf's objective of $4500.

For your sake immediately take delivery of your gold and silver.
For your sake immediately take paper delivery of your gold and silver shares from those very few companies still willing to facilitate that kind of transaction.
For your sake immediately make your general securities positions "direct registration" as a second best method of protection the asset against failure of your clearing facility.

You all have clearing facility dependence even if you do not know it. Unless MF clients are made whole in every way, the system is broken.

This is no time to take any unnecessary risk.
This is no time to be lazy.

If you do not know how to do direct registration, get paper securities or take delivery of paper gold and silver, ask me.

Respectfully,
Jim

Currency swaps – the beginning of a 'solution'?

Posted: 02 Dec 2011 11:00 AM PST

By far the most important event of the week was the joint announcement by the world's leading central banks that they were extending existing US dollar swap agreements and lowering the swap ...

Friday ETF Roundup: XLF Posts Another Big Gain, GDX Tumbles On Weak Canadian Jobs

Posted: 02 Dec 2011 10:07 AM PST

By Jarred Cummans:

Today saw markets finish out their best week in nearly three years, though the day remained relatively flat. Friday started off on a strong note as U.S. unemployment came in surprisingly low, but markets ended up falling as profit-taking ensued. But it's hard to blame anyone for selling out after the massive week we have seen; there was certainly plenty to go around. All in all, the Dow finished out the day with a 61 point loss while the S&P dipped by just 30. Gold and oil both saw decent gains as crude finished out its week above $101/barrel, marking a massive gain over the past few months for the important fossil fuel.

After putting such a strong week in the books many investors are anxiously awaiting to see if this was just a fluke, or if we really are on the right track. By all accounts, the U.S. economy

Complete Story »

Friday NIght SilverFuturist Double Header

Posted: 02 Dec 2011 09:45 AM PST

Happy Friday night.
The always entertaining and educational silverfuturist on bull markets and Eric Sprott from 12.2.11.
We hope you learned something.

SF on bull markets

SF on Sprott

~TVR

What's Under Bernanke's Kilt?

Posted: 02 Dec 2011 09:00 AM PST

Our Australian friend Joel Bowman over at Daily Reckoning America put together this display of metaphorical brilliance:

Investors have been suffering through a dazzling display of mixed signals lately. One minute they think the market's got the hots for them...the next minute it's throwing cold water in their face. It comes on strong...then plays coy. Shows some leg...then slaps a cheek. Last week investors got whacked. This week they're all doe- eyed again. They think they're in love.

Most folk don't like all the games. "A simple 'Yes' or 'No' would do us just fine," they say. "Think of all the time and money a straight-forward answer would save if the market would just pick a path and stick to it!"

Ah...but where's the fun in that, Fellow Reckoner? Where are the lessons along the way...the travails of the journey...the hardships to look back on through the rose-colored glasses of retrospect...the glory days to romanticize at some distant date in a far off future?

More importantly, what would we have to write about all day if everyone already knew the headlines of tomorrow's papers? Who'd bother asking any questions? Not us.

Fortunately, that's not the way markets work. The relationship is far more complex than that.

Harsh words. Harsh but true.

Let's stick with the flirtatious metaphor. On Wednesday, perverted central bankers went well beyond showing the markets some leg to tempt investors into buying. Instead, Bernanke and his prurient friends at the central banks of Europe, Japan, Switzerland, England and Canada full on flashed investors. It had the desired effect with indices up the most in one day since March 2009.

But if anyone had looked more closely, they would have been disappointed. The announcement was about the puniest intervention central bankers have come up with so far. It wasn't quantitative easing. It wasn't even an interest rate cut. It was an interest rate cut on emergency lending that takes place via something called a currency swap. In other words, they made US dollar borrowing cheaper for foreign central banks and thereby the banks they lend to in 'emergencies'.

Peter Tchir, from a firm called TF Market Advisors reckons "...more people just bought stocks than know what a central bank swap line is."

Strategic Short Report editor Dan Amoss explained the reason for the intervention: "... there has been a shortage of U.S. dollars available to borrow in Europe. U.S. money market funds have basically stopped lending to European banks... So the Fed is stepping in, offering generous loans to the European Central Bank, which is, in turn, relending those dollars to European banks."

This is not an improvement. It is a simply preventing a further deterioration ... for now.

And here's the big problem with the latest interventionist 'solution': Lowering swap rates doesn't solve any of the problems festering on banks' balance sheets. We wrote about them last week in our article about the banking crisis. The crisis is not about banks' ability to earn cash. It's a solvency problem, not a liquidity problem. The assets of banks are deteriorating relative to their liabilities. This is much the same as a person owing more on their house than it's worth. Giving them more cash doesn't solve the issue.

Of course, solvency problems eventually turn into liquidity problems. That's how they come to a head - a climax. And that's where those raunchy central bankers come in. When banks can't borrow from the private sector to pay off maturing debt, they either go bankrupt, or go begging for favours from central banks.

But central banks require collateral to be posted with them for certain types of emergency lending. Like the swaps that all the hubbub has been about this week. So the Bear Stearns and Lehman Brothers of the world can in fact fail if they don't have enough quality assets to cough up as collateral. And the crash alert flag was raised to half mast on Wednesday when changes to collateral requirements began making news.

According to the Financial Times' regular video discussion, central banks eased collateral requirements on Wednesday, '...reducing the amount of collateral that's initially needed against foreign currency loans.' Reuters reported the opposite, saying there was no change yet. Finance professionals quoted ad nauseam in this Telegraph article reckon changes to collateral are in the works.

The changes that either have been made, or are about to be made, will relax what and how much central banks will accept as collateral in lending agreements. This will make it easier for banks holding dodgy assets to borrow money. But the assets are still dodgy.

The fact that the collateral rules are being changed indicates something is wrong. Someone has too many dodgy assets.

The Financial Times video also points out the policy of lowering currency swap interest rates hasn't worked in the past. The change leads to a short lived stock market rally at best. So the central bankers have come up with a short term fix for a long term problem. Like painting dirty walls before selling a house. With any luck, it will be someone else's problem.

Then why did markets rally so hard? Firstly, it was a coordinated intervention by a group of central banks. Financial markets like this in the same way female gorillas like to see their alpha male beat his chest. Secondly, the intervention buys time for any bank that is really desperate for funding.

But the market is getting ready to slap some cheeks now that so many investors are in the market with their heart on their sleeve. So here is our financial advice: You should play very hard to get. Don't let an attractive pair of legs fool you. That skirt is really a kilt.

But if you do want to join in the fun and get in the market, do it in the right places. Conventional investment wisdom thinks financial markets are safe because infinite amounts of cash can be created by central banks to paper over any problems. What could possibly go wrong?

Of course, common sense says holding things that cannot be created infinitely is the only safe investment strategy in times of fiat money creation.

Nickolai Hubble.
The Daily Reckoning Weekend Edition

Save Your ASSets First

Saturday, December 3, 2011