Gold World News Flash 2

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Precious Metals Buyers' Guide, Part II: When To Sell
Book Review: 'Corporate Governance Failures'
Goldcorp's Greenstone Gateway To Gold
Gartman - Regional Banks Breakout
Monetary Velocity And Dollar Hoarding
How Gold, Silver & Platinum Will Respond
Hubert Moolman: The Dow and Gold in 2012
The Trouble With Inverse ETFs (And Other Structured Securities)
Gold And Silver; Looking At The Other Side Of The Coin
Jim Sinclair: The gold panic and what to expect in 2012
Silver Update: “SLV Shenanigans”
Canada hunts for rare earth metals as China cuts back
An astonishing Christmas comparison you've got to see
Ned Naylor-Leyland Tells CNBC Europe That Gold is a Rigged Market
Gold market manipulation losing force: Peter Grandich
Precious Metals 2012: Bullish and Bearish Arguments
Rick Rule - Here is What Investors Need to Look for in 2012
In near-bankrupt Greece, crisis spurs gold fever
A Christmas Message From America's Rich: Matt Taibbi
Gold & Silver Market Morning, December 23, 2011
The Fed, The ECB, and Gold
WATCH: Inside Hecla's ‘Lucky Friday’ Silver Mine
More MSM Criticism of Obama “Nothing Illegal Here, Move Along” Stance on Foreclosure Fraud
Iranians rush to buy gold, dollars as sanctions tighten
Mining Boom in Quebec: Alain-Jean Beauregard
World’s Largest Gold Producer Must Pay $140,000 for Death of Miner
Buying & Selling Gold Using Momentum Indicators Generated a 39.6% Return in 2011! Heres How
"Thin Holiday Trade" Sees Gold Flat as Euro Stocks Rally…
Whats Up with Gold Mining Stocks?
Riders On The Gold and Silver Storm

Precious Metals Buyers' Guide, Part II: When To Sell

Posted: 23 Dec 2011 04:32 AM PST

By Kevin McElroy:

Continued from A Gold and Silver Buyer's Guide, Part I.

I've had some people write in and ask, "How much gold should a person buy, as a percentage of their wealth?" Some people say that you should own 5% and sometimes 10% of your net worth in precious metals. I wouldn't put such a hard and fast number on it; instead I'll give you a simple metric that will help you decide if you have the bare minimum of gold or silver that you might need in a worst-case-scenario.

After all, we're not buying gold and silver necessarily because we 100% believe that a currency crisis is inevitable, or that our dollars will be rendered worthless, no ifs, ands, or buts.

I buy gold and silver because of the increasing likelihood of that event, but I'm not absolutely certain that such an event will come to pass. If I was

Complete Story »

Book Review: 'Corporate Governance Failures'

Posted: 23 Dec 2011 04:03 AM PST

By CFA Institute:

By Martin S. Fridson, CFA

Corporate Governance Failures: The Role of Institutional Investors in the Global Financial Crisis. 2011. James P. Hawley, Shyam J. Kamath, and Andrew T. Williams, eds.

In August 2007, the head of AIG's financial products division stated, "It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar" in any credit default swap (CDS) transactions. Five months later, AIG disclosed that it had lost not $1.00 but $5 billion on its CDS exposure. This turn of events is just one example of sophisticated financial institutions' hugely misjudging the risk of "financial weapons of mass destruction." The reasons for their systematic failure deserve thoughtful and rigorous study.

Some clues emerge in Corporate Governance Failures: The Role of Institutional Investors in the Global Financial Crisis, a multi-author work edited by James P.

Complete Story »

Goldcorp's Greenstone Gateway To Gold

Posted: 23 Dec 2011 04:00 AM PST

By Thomas Brigandi:

Goldcorp Incorporated (NYSE:GG) - TSX:G, is one of the fastest growing and lowest cost producers of gold in the world. As of Q3 '11, gold cash costs for the company, on a co-product basis were $551/oz and on a net of by-product basis were $258/oz. Goldcorp, headed by the venerable Ian Telfer has, through M&A and internal exploration and development, secured a premium gold portfolio positioned to profit from today's gold prices.

Some of Goldcorp's most lucrative mines are found in Archaean greenstone belts that can contain large, high grade gold deposits. Goldcorp currently controls 4 reserves that can be mined within the Canadian Archean greenstone belts of Abitibi, Red Lake and Flin Flon. In addition Goldcorp mines for copper and other minerals and exploits two other sources of gold, epithermal and porphyry deposits.

Goldcorp's Archean Greenstone Reserves Chart

Goldcorp's Archean Greenstone Reserves (from Goldcorp 2010 Annual Report)

Greenstone Belts

Complete Story »

Gartman - Regional Banks Breakout

Posted: 23 Dec 2011 03:36 AM PST

Popular newsletter writer, Mr. Dennis Gartman, called attention to a breakout attempt underway in his daily notes today. The unusual thing about that is the breakout attempt is in U.S. regional bank equities. We thought we would post our own charts of the banks to "confirm" Mr. Gartman's observation. Just below are the charts for the Regional Bank ETF (KRE) and the Philly Bank Index (BKX) for consideration. The notes on our charts are self-explanatory. Merry Christmas.

Regional Banks

Continued...

Large Banks

How interesting that the regional banks held their ground and even outperformed as the news turned very dire in November and early December. We thought then and still think now that was a "tell."

Merry Christmas and happy holidays from the entire team at Got Gold Report.

Monetary Velocity And Dollar Hoarding

Posted: 23 Dec 2011 03:24 AM PST

By Hale Stewart:

Velocity is the speed at which money flows through the economy. Think of it this way:

Complete Story »

How Gold, Silver & Platinum Will Respond

Posted: 23 Dec 2011 03:00 AM PST

How Gold, Silver And Platinum Will Respond To ECB's Money Printing

by Avery Goodman, SeekingAlpha.com:

Today, about 490 billion euros ($637 billion) worth of ultra-low interest "loans" will be delivered to European banks. This cash has been provided courtesy of the ECB, which denies that it will ever engage in printing money, like the Americans, Britons and Japanese have now done for many years. The "loans" are for a 3-year period. In return for the cash, the ECB accepts various forms of "collateral," which includes the debt of insolvent southern European sovereigns. This is the largest uptake of cash in the history of the European Union, including the cash given out by the ECB after the collapse of Lehman Brothers.

Read More @ SeekingAlpha.com

Gold prices will eventually respond directly to monetary liquidity increases, no matter how much central bank price suppression intervention there may be right now. With huge euro injections, alongside significant quantitative easing in the UK and the USA, gold will rise stronger than ever, at least over the next three years. Silver, which responds both to monetary liquidity and to commercial demand, is going to rise even faster, especially as commercial demand increases in Europe, and those that "feed" Europe, like China.

Hubert Moolman: The Dow and Gold in 2012

Posted: 23 Dec 2011 02:43 AM PST

from hubertmoolman.wordpress.com:
I must admit that I do not prescribe to the 2012 end of the world or end of an era phenomenon; however, my recent analysis suggests that 2012 could indeed be a very significant year.

I have been following a fractal (pattern) on the Dow chart for the last couple of years. I have written about it before, in a previous article. Basically, the Dow chart is forming a similar pattern to that which was formed in the late 60s to early 70s.
If this pattern continues in a similar manner to that of the late 60s to early 70s pattern, the Dow could indeed have an annus horribilis (horrible year)

If the current fractal continues its similarity to that of the late 60s to early 70s fractal, the Dow could have a horrible drop for most of 2012. I do not wish to speculate as to how low it will go; however, if it stays exactly true to the past fractal (fractals do not always stay exactly true), it could drop to 6000.
Since my other analysis suggests that we are at the end of era (an era of the corrupt debt-based monetary system), I would really expect the worst-case scenario. That means that a drop to 1000 is very possible (not necessarily in 2012), even though it appears highly unlikely.

The Dow's inflated value, relative to the value of gold, was brought about by this debt-based monetary system. It follows naturally that in the event of the debt-based monetary system collapsing (it will eventually); the Dow gold ratio could go back to levels prior to the introduction of this system. This level could be anywhere between 0.2 and 1, in my opinion. Therefore, it is possible to have a gold price of $5000, with the Dow at 1000. I do not say that we will have these levels, but it is certainly possible. All I am saying is that we have to be prepared for extremes never before seen in our lifetime.

The Trouble With Inverse ETFs (And Other Structured Securities)

Posted: 23 Dec 2011 02:04 AM PST

At Mercenary Trader, we consistently get emails from readers with great questions regarding position structuring, market expectations, and trading theory. Unfortunately, we're restricted from answering many of these questions directly as our legal counsel is concerned with "offering individual investment advice."

Occasionally, these questions lead into great concepts for discussion with the broad Mercenary Community – and responding to these questions in a public post keeps us from saying anything that could be construed as "individual" advice…

Live Feed subscriber Ken O. had a question related to our recent article on the Euro Engame…

I don't have access to FOREX trading (and don't fully understand it), so I am looking at some alternatives…

Given the fact that it might take a little time for the scenario to play out, I am reluctant to look at an inverse ETF on the Euro (EUO) because I have read that they have inherent structure problems if held over any period of time beyond a day.

Many individual AND professional investors don't have the ability to trade currencies directly because of regulatory restrictions or account structure. For many Registered Investment Advisers (RIAs) and even hedge funds, it is impossible to trade the FOREX market without placing your firm under the CFTC (as well as the SEC).

But that doesn't mean these managers can bypass their fiduciary duties to manage currency risk – and in some cases to take advantage of currency trading opportunities. There are still a number of alternatives available to these traders, but it's important to understand the characteristics of these securities.

To begin with, let's take a look at inverse ETFs and figure out exactly why they make poor long-term securities. We'll also take a look at some of the other "structured ETFs" – leveraged funds and inverse leveraged funds and see how they perform in different environments.

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Daily Rebalancing Creates Compounding Issues

For inverse ETFs, the compound math creates some interesting issues. On the surface, inverse ETFs actually "do what they're supposed to do" for the most part. And even holding these securities for a few days or a few weeks may still be a viable option. But investors should realize that as the fund manager rebalances the fund on a regular basis, the natural tendency to buy high and sell low eventually takes its toll.

To see how this process works, let's take an extreme volatility example and see how it affects the price action of a "perfectly run" ETF. For this example, we're going to assume there are no capital contributions or distributions. So the manager is simply rebalancing the fund based on how the price action affects the fund assets.

Below is a table for a theoretical currency pair with extreme volatility. On the left, the currency pair decreased by 30%, but the ETF only gain 28.6%. The returns are still close, but the fund slightly lags the performance one would have expected if he took a direct bearish position in the currency.

On the right, the currency pair increased by 30% over the period, but a perfectly run inverse ETF would have decreased by a full 36.5% – much more than a manager would have lost by taking a direct short position in the currency.

The reason the math works out this way is that the ETFs are built to reflect the inverse daily percentage gain or loss of the underlying security. So when the security shows a loss (creating a profit for the ETF) the manager must reinvest the profits by taking a larger short position in the underlying security. Essentially, he is "selling low"

Conversely, when the security appreciates, the manager must reduce his short position in the underlying security. The value of the fund has decreased, and so the manager must also decrease his nominal exposure. In this case, the manager is "buying (to cover) high."

Obviously, the example is magnified by using an extremely volatile example, but the math works the same (just less magnitude) for securities with more normal price swings.

An interesting way to play this phenomenon is to consider shorting an inverse ETF to take a bullish position. The natural tendency is for this ETF to decline in value – and if you tack that on top of a good bullish market call it can accentuate your returns.

Leveraged ETFs – Another Layer of Complexity

Leveraged ETFs also get a bum rap because of their compound interest characteristics. A number of articles have been written about how these securities are poor investments when held for any extended period of time, but often these arguments fail to explain the whole story.

The truth about leveraged ETFs is that they work phenomenally well during trending periods, but they are poor vehicles to hold during mean reverting periods. Once again, the concept comes into play when managers must rebalance the ETF exposure on a daily basis.

Take a look at the table below. On the left is a leveraged bullish fund during a trending period. Notice how the returns are actually well above double the return of the underlying security. This is because a leveraged fund actually reinvests the profits into a margined position in the underlying security.

On the right side, however, you can see that volatility decreases the expected return. This is because the fund rebalances by buying more exposure after a rally, and then takes a larger loss when the security reverts back. The same is true for selling after a decline.

So for leveraged ETFs, the bad rap is only deserved for volatile periods. The industry dubs this underperformance "volatility decay" and it's basically the negative effects of compound returns on a leveraged position. That compound math works in our favor when positions are trending.

For choppy periods like we experienced in 2011, one of the best trading strategies for leveraged ETFs is to short the leveraged ETF that seeks returns in the opposite direction of your market call. In this case, the volatility decay works in your favor, along with what is hopefully an accurate market call.

Note: Leveraged and inverse ETFs are often hard to borrow for a number of brokerages and trading platforms. We have had good success in locating shares using TradeStation Prime Services. They have access to a very large book of accounts, which makes it easier for their short desk to locate shares.

Direxion Mutual Funds Offer Rebalancing Solution

For IRAs and investment pools that don't have the ability to short securities, the Direxion family of mutual funds may offer a helpful alternative.

The Direxion mutual funds are engineered to rebalance on a monthly basis – keeping volatility decay to a minimum. The monthly rebalancing creates some unique challenges because if you invest in one of these funds mid-month, your exposure level may be different than you expect.

For instance, if you are investing in a leveraged long ETF after the market has dropped significantly, your exposure will be more than 2X the underlying security. The market has already decreased the value of the fund, and the manager has not rebalanced the fund to decrease the nominal number of shares (or nominal exposure to the index).

Direxion helps investors adjust the size of their purchase or sale, by offering calculators that are tied in with the fund's exposure level and can tell you exactly how much to buy or sell based on your desired exposure level.

Since mutual funds only trade on an "end of day" basis, investors don't have the ability to take advantage of intra-day moves. For sophisticated traders, it may make sense to use the leveraged or inverse ETFs on a daily basis – and then enter Market-On-Close orders to exit the ETF position at the end of the day – while simultaneously entering the Direxion mutual fund.

Getting back to the euro discussion, the Direxion Monthly Dollar Bull 2X Fund (DXDBX) may be a good proxy for shorting the euro. Obviously, the correlation isn't perfect as the dollar bull fund will trade against a basket of currencies. But the euro / US dollar exposure makes up a material portion of the fund's exposure – and at this point most currency pairs are correlated to this relationship.

Ultimately, the most efficient way to short the euro is to directly trade in the FOREX market. But there are some very attractive alternatives for traders with restricted access to these markets.

Gold And Silver; Looking At The Other Side Of The Coin

Posted: 23 Dec 2011 01:35 AM PST

The fundamental view

Jim Sinclair: The gold panic and what to expect in 2012

Posted: 23 Dec 2011 01:30 AM PST

Silver Update: “SLV Shenanigans”

Posted: 23 Dec 2011 12:01 AM PST

from BrotherJohnF:
Brother John discusses Ted Butlers latest public piece and silver shorting 12.22.11 Silver Update.

Got Physical ?

~TVR

Canada hunts for rare earth metals as China cuts back

Posted: 22 Dec 2011 10:57 PM PST

Canada hunts for rare earth metals as China cuts back
By Gaetan Pouliot | AFP – Wed, Dec 21, 2011

In a picture taken in 2010 a man driving a front loader shifts soil containing rare …

A steep decline in Chinese exports of rare earth metals used in many hi-tech gadgets has forced a global search for new crucial supplies and hopes are high for major finds in Canada, analysts say.

"Everyone has started to search for rare earth elements (REE)," Michel Jebrak, a mineral resources specialist at the University of Quebec in Montreal, told AFP.

"The Japanese are desperately searching all over. Europe has a new strategic plan to secure rare earth elements too. It all started with concerns over China's monopoly, triggering a race to find new deposits and mine them."

Rare earth metals are a set of 17 chemical elements that despite their name are abundant in the Earth's crust, but very dispersed and rarely found in economically exploitable concentrations.

China currently produces, mostly in Inner Mongolia, almost 95 percent of the rare earth elements used in cellular telephones, hybrid cars, wind power generators, flat screen televisions, MP3 players, computers and other devices.

The main obstacle is finding high enough concentrations of the metals to cope with growing demand and break the West's reliance on China for supplies.

It is also thought that China could undermine efforts to bring new supplies online by flooding the international market with cheap REEs and making new mines uneconomical, Jebrak warned.

"It's a brave new world, and that's a problem," he said. "The sector just exploded over the past year but could just as quickly collapse."

China ordered a cut in REE exports in late 2010 in order to keep supplies for its own burgeoning high tech industry, to bolster prices and to encourage foreign firms to set up plants in China to access its restricted supply.

But the move by Beijing provoked anger in Japan, Germany and the United States -- already concerned that current supplies might not meet an expanding demand for REEs -- before export quotas were raised this year.

Western nations have since had to consider ways to break China's monopoly and this led to the launch of dozens of mining exploration sites for REEs -- one-quarter of them in Canada.

Toyota announced last week plans for a joint venture with Canadian junior mining company Matamec to develop a rare earth elements mine in Quebec to obtain supplies for the automaker's hybrid and electric vehicles.

"Companies like Toyota fear Chinese export quotas will be reduced again in 2014 or 2015 and so they want to secure new REE supplies as soon as possible," said Matamec chief executive Andre Gauthier.

If the Matamec deposit is proven to be economically exploitable, Toyota will finance the dig and buy all of its output for use in its hybrid vehicles.

According to Jean-Marc Lulin, head of the Quebec Mining Association, several junior mining companies are rummaging for REEs in Canada's outback and predicted that within a few years the country could begin exporting REEs.

Australia and the United States are also vying to become major producers, he added.

http://news.yahoo.com/canada-hunts-r...182814315.html

An astonishing Christmas comparison you've got to see

Posted: 22 Dec 2011 10:53 PM PST

From Mark J. Perry's Carpe Diem:

...Pictured above are some color TVs from the 627 page 1964 Sears Christmas Catalog, available here at WishbookWeb, along with many other Christmas catalogs from 1933 to 1988.

The original prices are listed ($750 for the Sears color TV console and $800 for the more expensive one), and those prices are also shown converted to today's 2010 dollars using the BLS Inflation Calculator: $5,300 for the basic console TV model and $5,650 for the more expensive model ($5,473 and $5,838 in 2011 dollars).

To put that in perspective, the pictures below illustrate what $5,300 in today's dollars would buy in the 2010 marketplace...

Read full article (with photos)...

More Cruxallaneous:

The great Richard Russell issues a super-bearish warning

If you've ever been curious about Austrian free-market economics, you're in luck

Forget the selloff... New data suggest gold could be starting its greatest rally in history

Ned Naylor-Leyland Tells CNBC Europe That Gold is a Rigged Market

Posted: 22 Dec 2011 09:05 PM PST

¤ Yesterday in Gold and Silver

With trading winding down for the season, the lack of activity yesterday came as no surprise. The gold price traded between $1,615 and 1,600 spot the entire day...and closed at $1,605.40 spot, down $9.60. Volume was a rather anemic 94,000 contracts.

The price action in silver was a bit more exciting, but only just. Silver's low, close to $29 spot, came at 9:00 p.m. in Hong Kong...and then rallied sixty cents to its high of the day shortly before 9:00 a.m. in London.

From there, every tiny rally got sold off, with the low of day coming about 10:15 a.m. in New York. From that point it traded quietly into the close. Silver closed at $29.13 spot...down 19 cents on the day. Net volume was around 20,000 contracts.

The US dollar index traded right at the 80 cent mark until 2:00 a.m. Hong Kong time, before heading lower. The low of the day came at 8:30 a.m. in London...and by 9:00 a.m. in New York, had regained its 30 basis point loss. From there, the dollar faded a hair into the close.

I guess it's fair to say that the gold price followed the dollar move pretty closely. Silver did as well, but its 50 cent rise...followed by a 40 cent decline...was out of all proportion to the dollar move itself.

A question I keep asking myself these last few days is whether the precious metal prices are following the dollar naturally, or are they being 'assisted' in that regard?

Although the gold stocks never made it into positive territory yesterday, they did follow the general pattern of the Dow chart far more closely than what was going on with the gold price itself. The HUI turned in a small loss of 1.01%.

The large cap silver producers did just about the same as the gold stocks...and Nick Laird's Silver Sentiment Index closed down 0.86%. And as a group, most junior silver producers got hit harder than that.

(Click on image to enlarge)

I was expecting a rather insignificant set of numbers when I checked the CME's Daily Delivery Report. I was surprised to see that 577 gold and 4 silver contracts were posted for delivery next Tuesday. The silver number was no surprise, but the gold number certainly was.

The big short/issuer was a surprise as well...Goldman Sachs. It's pretty late in the delivery month for the likes of them to be showing up. I wonder why they waited so long? They will be delivering 559 contracts. The big long/stopper was no surprise, as it was JPMorgan. They will receive 415 of these contracts in their proprietary [house] trading account...and 99 contracts in their client account. A very distant second was the Bank of Nova Scotia with 54 contracts. The action is worth a quick glance...and the link is here. [I have more on this in 'The Wrap' section further down]

For the second day in a row, the GLD ETF had a withdrawal. This time it was 427,842 troy ounces. Since the end of November...1.41 million ounces of gold has been withdrawn from GLD...and about 820,000 of that occurred yesterday and Wednesday.

The SLV ETF went the other direction, as they reported taking in a very tiny shipment of 48,621 troy ounces.

The U.S. Mint had a small sales report yesterday. They sold 4,500 one-ounce 24K gold buffaloes and 100,000 silver eagles. Month-to-date they have sold 65,000 ounces of gold eagles...20,000 one-ounce 24K gold buffaloes...and 2,009,000 silver eagles.

Wednesday was a busy day over at the Comex-approved depositories, as they reported receiving 1,195,568 troy ounces of silver...and shipped only 108,856 ounce of the stuff out the door. The link to that action is here.

DUBAI --- or DO SELL?

Reader Bill Downey over at GoldTrends.net sent me the following e-mail that he received from a contact that has been in the Dubai gold industry for twenty years...and has an office there.

Bill asked him to comment on the 'Gold Buying in Dubai' article that I had posted in my column very recently...and this is what his contact had to say. This gentleman's first language is obviously not English...and I've cleaned it up as best I could...and what I really didn't understand, I just left unedited...

"Bill this is b.s..... Today i literally went around [to] help my staff in retail to sell... As u know, the jewellery business here is dominated by men salesmen. Since the demand is almost zero in wholesale, i decided to go out to the retails and make a tour there [to] catch the clients by myself and try to convince them to buy. The clients are all pessimistic about gold. I feel that crash from $1,900 made lots of them lose trust in buying jewellery.... The sidewalks are empty. Before people use to walk in the road because the sidewalks were full...no space to walk. All these almost from 100 walk-in customer, 75 will buy.... Each person minimum was about 50 grams to 100. Now from 100 not even 5 buy...and the grams dropped dramatically to 15 grams, meaning each retail cannot cover the cost even by the end of the month...because gold is charged as gold...and manufacturing charges is a different premium. I'm starting to feel very negative. This is one of the biggest jewellery markets after hong kong...it's the center of old dubai. Where are the jewellery were from 30-50 years. But it's hopeless. If the market is good, it's good for all...and when the market is bad, it's bad for all."

"On the bullion side, it's true there is a good demand.... But still less, less, less than before by large mostly speculative positions which they are going to exit after any bounce or spike....and physical bullion is picking up, but there is no comparison compared to the quantities in the beginning of the year the market is down by 80 percent or more..."

Yep, blood is definitely running in the streets...and a major bottom is in when you hear gold dealers talking like that, regardless of what language they speak, or what culture or country they're from.

Sun-grazing Comet Lovejoy was photographed shortly before sunrise on December 21st by Colin Legg of Mandurah, Western Australia. A short exposure with was sufficient to reveal the comet's reflection in the waters of the Mandurah Estuary. [Photo courtesy of spaceweather.com]

I'm delighted to report that I don't have that many stories today, but the ones I do have are all worth your time, if you have some to spare.

One thing I did notice in the preliminary report was another big jump in gold open interest in the December delivery month...up 539 contracts.

Coins in your pocket..."safety cookies" - Terry Coxon. Gold market manipulation losing force: Peter Grandich. In near-bankrupt Greece, crisis spurs gold fever.

¤ Critical Reads

A Christmas Message From America's Rich: Matt Taibbi

It seems America's bankers are tired of all the abuse. They've decided to speak out.

True, they're doing it from behind the rope line, in front of friendly crowds at industry conferences and country clubs, meaning they don't have to look the rest of America in the eye when they call us all imbeciles and complain that they shouldn't have to apologize for being so successful.

But while they haven't yet deigned to talk to protesting America face to face, they are willing to scribble out some complaints on notes and send them downstairs on silver trays.

Matt is at the top of his game in this blog posted over at Rolling Stone magazine yesterday. Once you've read it, you'll come to understand why the CEO of BlackRock probably doesn't give a flying #&!@ about the short position in SLV...as he's probably in on the rig job just like the rest of them.

This is a must read commentary...and is Roy Stephens first offering of the day. It's a little on the long side, but well worth it...and the link is here.

View full GSD edition

Sir Gus O'Donnell: The UK faces break-up

Britain's most senior civil servant Sir Gus O'Donnell has publicly questioned whether the United Kingdom will still exist in a few years' time.

Writing in The Telegraph, Sir Gus O'Donnell asks whether the Union can survive increasing pressure for Scottish independence.

Sir Gus, who is the head of more than 440,000 civil servants in England, Scotland and Wales, says the future of the Union is one of several "enormous challenges" facing the political establishment in the coming years.

The admission from such a senior non-political figure that the break-up of Britain is now a real possibility is likely to push the issue up the political agenda.

This story appeared in The Telegraph late Wednesday night...and is Roy Stephens second offering of this column. The link is here.

View full GSD edition

London Brokers Shrink as Debt Crisis Bites

London's stockbrokers are shrinking as Europe's sovereign debt crisis and competition from international firms squeezes revenue and fees.

"This isn't just a blip, this is much worse," said Tim Linacre, who is stepping down as chief executive officer of Panmure Gordon & Co., a 135-year-old brokerage. "It's a desert for activity, which is why you are seeing some firms throw in the towel."

There's nothing in this Bloomberg story that should come as a shock to anyone. It was filed from London yesterday...and I thank Matthew Nel for sharing it with us. The link is here.

View full GSD edition

Avery Goodman: Euro zone gets vast bond monetization through the back door

This GATA posting is prefaced by a very long introduction by Chris Powell, that's just too long to cut and paste. The above headline pretty much spells out the direction of this story, but Chris Powell's preamble is a must read as well. The link to the GATA release is here.

View full GSD edition

Sir Mervyn King: debt crisis is causing a dangerous 'dependence on central banks'

Just a day after the European Central Bank (ECB) provided a record €489bn (£407bn) of cheap loans to banks, the Governor of the Bank of England said the crisis had been made worse by "negative inter-linkages". He added: "Dependence on central banks has risen and signs are intensifying that stressed financial conditions are passing through to the real economy." Sir Mervyn was speaking in Berlin following a meeting of the European System Risk Board.

His comments were taken as a view on the ECB's radical refinancing operation unleashed on Wednesday. The action, which saw 523 banks borrow nearly half a trillion euros, is known as the "Sarko trade" after French leader Nicolas Sarkozy said the liquidity would allow each state to "turn to its banks" for finance. Economists have warned that making banks buy risky sovereign debt will not help the crisis.

This story was posted late last night in The Telegraph...and is Roy Stephens third offering in this column. The link is here.

View full GSD edition

In near-bankrupt Greece, crisis spurs gold fever

Not all Greek myths are ancient.

In rural towns and villages, where millennia-old pottery shards and broken classical masonry are sometimes found, shepherds and farmers have similar tales to tell.

They cite the

Gold market manipulation losing force: Peter Grandich

Posted: 22 Dec 2011 09:05 PM PST

Gold market manipulation losing force: Peter Grandich

Interviewed by Kevin Michael Grace at Resource Clips about the year in gold, market analyst and mining company consultant Peter Grandich, who spoke at GATA's Gold Rush 2011 conference in London in August, hopes for a shift from the paper to the physical market and notes that manipulations in the paper market, whose effects used to last for months, now may have much impact only for days or even hours.

The interview is headlined "Grandich on 2011" and it's posted at the resourceclips.com website. I thank Chris Powell for providing the headline and the introduction. It's worth reading...and the link is here.

Precious Metals 2012: Bullish and Bearish Arguments

Posted: 22 Dec 2011 09:05 PM PST

Precious Metals 2012: Bullish and Bearish Arguments

After the sharp drop in precious metals recently, many people (including me) wonder what will happen next with Gold & Silver (& other PM's).

To be honest, I don't know where gold will be in 1 week or a 1 month from now. However, there are some facts that are compelling, which can help us in our decision-taking process.

In this article, I will describe both the Bullish & Bearish arguments for Gold, Silver and PM Stocks.

Rick Rule - Here is What Investors Need to Look for in 2012

Posted: 22 Dec 2011 09:05 PM PST

Rick Rule - Here is What Investors Need to Look for in 2012

"It's going to be an interesting time, Eric. This is going to be a really good year for gold and silver stock speculators and for gold and silver owners. I think the gold price goes higher and the silver prices goes higher over the next two years, but I think it goes higher in extremely choppy fashion."

Eric King sent me this Rick Rule blog last night...and it's certainly worth your time. It's posted over at the King World News website...and the link is here.

In near-bankrupt Greece, crisis spurs gold fever

Posted: 22 Dec 2011 09:05 PM PST

In near-bankrupt Greece, crisis spurs gold fever

Not all Greek myths are ancient.

In rural towns and villages, where millennia-old pottery shards and broken classical masonry are sometimes found, shepherds and farmers have similar tales to tell.

They cite the buried golden sow with its seven golden piglets (which made a poor farmer rich), the coin hoards guarded by dragons from the times of Alexander the Great or the Byzantine emperors, the gold plunder squirreled away by long-dead Turkish pashas or fleeing Nazi officers. All it takes, they say, is a lucky thrust of a shovel.

Legends like that have taken on a new life in debt-crippled Greece.

A Christmas Message From America's Rich: Matt Taibbi

Posted: 22 Dec 2011 09:05 PM PST

A Christmas Message From America's Rich: Matt Taibbi

It seems America's bankers are tired of all the abuse. They've decided to speak out.

But while they haven't yet deigned to talk to protesting America face to face, they are willing to scribble out some complaints on notes and send them downstairs on silver trays.

Gold & Silver Market Morning, December 23, 2011

Posted: 22 Dec 2011 09:00 PM PST

The Fed, The ECB, and Gold

Posted: 22 Dec 2011 07:22 PM PST

The Fed vs The ECB – Presenting "The Correlation Of 2012″ And What It Means For Gold

from ZeroHedge:

If there is one cross asset correlation that defined 2011 (and the greater part of 2010), it was that of the Euro-Dollar (EURUSD) currency pair and the S&P 500, which have correlated with near unison nearly all of the time. And yet, the stability of this correlation may be getting unglued, because as Goldman insinuated in its market roundup note from yesterday, it is "reasonable to think that the … reflexive relationship between EURUSD and SPX…will take some time to break,but this correlation should start to fray." Why? Because, "like the FED before them, the ECB is aggressively expanding their balance sheet." Which brings us to the point of this article: much to the dismay of the armies of disgruntled bankers and investors demanding that the ECB print right now, the ECB has in fact been printing, as shown the other day. Only it has not done so in the conventional sense where it assumes an "asset" on its balance sheet while expanding a monetary liability, but indirectly through shadow conduits, such as repo and other liquidity backstops, also as shown yesterday, where no new currency actually enters the system, yet whereby the balance sheet expands just as efficiently (and in doing so, dilutes the underlying currency). It is well known that it has been our contention that in this centrally planned world the only thing that matters is the global provisioning of liquidity by the monetary authority, as the ultimate marginal determinant of Risk On behavior (and inversely Risk Off), is how much ZIRPy cash do speculators (and more importantly Prime Brokers) have at their possession (for outright and (re)hypothecated purchasing purposes). So here we would like to make a distinction: it is not so much how much cash one global monetary central planner will provide to markets, but how much the various standalone central banks will inject, in whole or in part. We contend that for 2012 the key qualifier will be "in part" with the ECB and the Fed printing (either outright or via repo) in staggered regimes, and thus the primary determinant of "risk", the EURUSD, will be the relative ratio of the two balance sheets. This can be seen on the charts below, the first of which shows just how dramatic the ECB expansion has been in the past 6 months, and the second showing the correlation between the EURUSD and the ratio of the Fed to the ECB.