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- Bob Chapman - Discount Gold & Silver Trading - 23 Dec 2011
- Bob Moriarty - Next week is the Bottom
- 50 Top Holdings Of 4 Equal Weighted Popular Dividend ETFs
- Gold Tilts Towards a Short-term Move Up
- Turkey Sharply Increases Its Gold Reserves
- The Death Certificate Of The Paper Dollar: Where To Next?
- New Thunder Road Report denounces market intervention, cites GATA
- Gold Deleveries Record Level/Central banks purchase Record Levels of Gold
- Guns, Gold and Gasoline
- The Legend of Chief Namekagons Lost Silver Mine
- By the Numbers for the Week Ending December 23
- WATCH: Max Keiser on Capital Account
- Gold Could See Five Digits in 2012
- Gold price set for hyperbolic increase
- Holiday Short Squeeze & Oil Trade Idea
- 6 Things Governments Might Do To You This Christmas
- “Christmas Week Rally” Spied in Gold as ECB Member Sees “No Reason” Not to Use Q.E.
- LISTEN: Andy Hoffman on Metals & Manipulation
- A Very Scary Christmas And An Incredibly Frightening New Year
- Friday Options Recap
- A great round-up of last-minute gift ideas
- Futures Trade Desk- Chasing The JPY Dragon
- This could bePorter Stansberry's most outrageous interview ever
- LISTEN: Stella on Silver in 2012
- Silver Futurist: Silver Eagles and 2012
- QE to Infinity and Beyond
- LISTEN: Greg Hunter on Kitco News
| Bob Chapman - Discount Gold & Silver Trading - 23 Dec 2011 Posted: 24 Dec 2011 05:28 AM PST Bob Chapman - Discount Gold & Silver Trading - 23 Dec 2011 , Bob Chapman... [[ This is a content summary only. Visit my blog http://www.bobchapman.blogspot.com for the full Story ]] This posting includes an audio/video/photo media file: Download Now |
| Bob Moriarty - Next week is the Bottom Posted: 24 Dec 2011 03:29 AM PST The proprietor and founder of the very popular 321Gold.com, Bob Moriarty, one of the Small Resource Company Gurus we admire here at Got Gold Report, begins a December 23 essay to his huge and growing flock: "When I am at home or even on the road if I have the time, I may read 50-60 different articles a day trying to figure out what pieces to post. It does get boring to read the same thing again and again and again. There is so little original thinking out there from anyone. On occasion I read something truly exceptional, an actual original piece well buttressed by facts and logic rather than rehashed plagiarism. I came across such a piece today and just had to post it, notwithstanding the fact that I happen to totally agree with it. The piece is so well backed up with facts, logic and even charts that I think every reader owes it to themselves to consider it. And I think he's got it exactly right. This has been a fairly good year for my predictions and shares. I'm only down about 50% and that's damned good considering that John Paulson is down some 52% and was personally responsible for gold crashing $105 in a single day in September due to a margin call. Gene Arensberg has written a piece he titled, "Why We Remain Bullish on Small Mining Shares." He has posted the piece on his website with charts explaining why he feels that way. The article is brilliant and certainly worth a must read. And I think he's exactly right. So regardless of the Euro crashing, and I think it will, and regardless of the banking system being on the point of a total collapse, and I think it will, gold shares are cheaper than they have ever been. That won't last long. Tax loss selling ends next week and gold shares are going a lot higher than anyone but Gene and I anticipate." – Mr. Moriarty's comprehensive piece continues at the link below and we strongly urge our Vulture readership to read his sage comments as well as visit Bob's 321Gold.com often, as we do. Source: 321Gold.com http://www.321gold.com/editorials/moriarty/moriarty122311.html Comment: Thanks very much Bob, you're a class act, and one of a select few we hope will be around for a long time to come. – Gene Arensberg |
| 50 Top Holdings Of 4 Equal Weighted Popular Dividend ETFs Posted: 24 Dec 2011 02:10 AM PST  By Richard Shaw (QVM Group): Four of the most popular dividend ETFs are S&P 500 Dividend Aristocrats (SDY), Dow Jones Dividend Select (DVY), FTSE High Dividend Yield (VYM) and Vanguard/Mergent Dividend Achievers (VIG). If you hold all four, you have positions in 486 unique underlying stocks. In an equal weighted holding of the four ETFS, the top 50 account for just over 57% of total assets. The top 30 stocks account for about 43.5% of total assets, and the top 10 account for just under 22% of total assets. For those who may be interested in owning the underlying stocks, instead of the ETFs, this table presents the 50 stock holdings along with several facts about each that may be of help. click image to enlarge: The table is ordered according to the weight of the stocks in the combined underlying assets from holding the four ETFs in equal dollar amounts. Explanation of columns in Complete Story » |
| Gold Tilts Towards a Short-term Move Up Posted: 24 Dec 2011 01:00 AM PST SunshineProfits |
| Turkey Sharply Increases Its Gold Reserves Posted: 24 Dec 2011 12:47 AM PST ¤ Yesterday in Gold and SilverIt was a very quiet trading day everywhere on Planet Earth yesterday. The gold price was up about nine bucks or so during Far East trading, but most of that tiny gain was taken away once trading began in London...and then later in New York. Gold closed at $1,607.00 spot...up $1.60. Net volume was only 40,000 contracts.
Silver's price action was only a little more exciting. The price was up a bit more than 30 cents by 10:00 a.m. in London...it's high tick of the day...and all of that gain disappeared by the London silver fix at 12:00 o'clock noon local time. Then silver gained back that 30 cents by 9:30 a.m. Eastern time...and that was its New York high. From there it drifted lower until just before lunchtime, when a willing seller peeled two bits off the price in just a couple of minutes. Silver closed at $29.13...the same price it closed at on Thursday. Net volume was only 9,500 contracts.
The dollar didn't do much. It dropped about twenty basis points between the Friday open and around 2:30 p.m. Hong Kong time...then around 8:00 a.m. in New York, the dollar rallied back to the 80 cent level, closing basically flat on the day.
The gold stocks spent the entire day in the black, but just barely...and the HUI closed almost on its 'high' of the day...up 0.68%
The large cap silver stocks turned in a flat performance...and Nick Laird's Silver Sentiment Index reflected that...closing down 0.02%. However, a fair number of the junior silver companies did much better than that.
(Click on image to enlarge) It was a quiet day in the CME's Daily Delivery Report on Friday, as only 35 gold and 12 silver contracts were posted for delivery next Wednesday. The GLD ETF reported no change yesterday...but over at SLV, there was a rather large withdrawal of 3,014,397 troy ounces. Considering the flat silver price action over the last six trading days...plus the fact that around 48,000 ounces of silver were added to SLV on Thursday...this withdrawal suggests that this silver was needed more urgently elsewhere. There was no sales report from the U.S. Mint yesterday...and there was no report from the Comex-approved depositories, either. Well, the Commitment of Traders Report for positions held at the close of trading on Tuesday, December 20th was more than I expected in silver...and less than I expected in gold. Despite the fact that the gold price got pounded well below its 200-day moving average [for the first time in almost three years] during the last reporting period, there wasn't as much of a decline in the Commercial net short position as I was hoping for. It declined by only 21,663 contracts or 2.17 million ounces...dropping it back to 16.5 million ounces. The Commercial net short position was lower than that back in late September and mid October when the gold price was quite a bit higher than it is now. I think the main reason is that after gold hit its new low for the this move down during the Thursday trading day on December 17th, there was about a $70 rally in the gold price over the rest of the COT reporting period that skewed the final number...as the rally obviously didn't involve any short covering. But there's no doubt in my mind that on Thursday, December 17th, the net Commercial short position in gold hit a low that it hadn't been seen since December 2008. And there's also no doubt that the Commercial net short position in gold has deteriorated since that December 17th low. It's a matter of how much there was...and how quickly that the Commercial traders will move to reverse this rally and cover the short positions they just put on. The four largest Commercial traders are short 12.7 million ounces of gold...and the '5 through 8' traders are short 4.8 million ounces. So the eight largest Commercial traders are short 17.5 million ounces, which is a bit over 100% of the entire Commercial net short position in gold. Well, if gold was a bit of a disappointment, silver was the exact opposite. The Commercial net short position declined by a whopping 5,480 contracts...and is now down to 14,825 contracts, or 74.1 million ounces...a low not seen since sometime in 2001...ten years ago. The net long positions in both the Non-commercial and Nonreportable categories are just about the lowest on record as well. This is blood-out-of-a-stone territory on a massive scale. One has to wonder just how much room there's left to the downside. The four largest traders in silver hold a short position of 140.1 million ounces...and the '5 through 8' traders are short 38.4 million ounces. So the largest commercial traders in the Commercial short category are short 178.5 million ounces. That represents 189.1% of the Commercial net short position in silver. That's concentration in spades! I don't have a lot of stories today...and a couple that I am posting, I've been saving for this Saturday column either because of content or length. What impressed me the most was the huge cleanout in silver in yesterday's Commitment of Traders Report. The Death Certificate Of The Paper Dollar: Where To Next? New Thunder Road Report denounces market intervention. SLV has 3 million ounce withdrawal. COT silver surprise. ¤ Critical ReadsSubscribeRetailers Are Slashing Prices Ahead of the HolidayAggressive last-minute deals in the days before Christmas are good for procrastinators, but they could be an alarm bell for the retail industry. While scattered markdowns are standard every year, discounts across entire stores — which analysts say are more widespread than last year — suggest merchants are stuck with too much merchandise. Many retailers entered the season "with pretty optimistic plans" that shoppers would rush into stores and pay full price, Mr. Bassuk said. But that did not pan out, and the final days before Christmas have retailers being "much more aggressive in terms of promotions being offered," he said. This story was posted in the Thursday edition of The New York Times...and I borrowed it from yesterday's King Report. The link is here.  Former State Senator Says 'Goodbye, Illinois'Former State Senator and Republican Cook County Board President candidate Roger Keats and his wife Tina left Illinois to live in Texas. They bid farewell to their Illinois friends in a Wilmette Beacon article, and with this letter, saying they're "voting with their feet and their wallets." As we leave Illinois for good, I wanted to say goodbye to my friends and wish all of you well. I am a lifelong son of the heartland and proud of it. After 60 years, I leave Illinois with a heavy heart. BUT enough is enough! The leaders of Illinois refuse to see we can't continue going in the direction we are and expect people who have options to stay here. I remember when Illinois had 25 congressmen. In 2012 we will have 18. Compared to the rest of the country we have lost 1/4th of our population. Don't blame the weather, because I love 4 seasons. I feel as if we are standing on the deck of the Titanic and I can see the icebergs right in front of us. I will miss our friends a great deal. I have called Illinois home for essentially my entire life. But it is time to go where there is honest, competent and cost effective government. We have chosen to vote with our feet and our wallets. My best to all of you and Good luck! The entire letter that he had printed in the Wilmette Beacon is well worth the read. It's another story that I 'borrowed' from yesterday's King Report...and the link is here.  Bankruptcy Filing Raises Doubts About Jefferson County, Alabama Bond Repayment PledgePeople who own what is considered the safest type of municipal bond may be in for a surprise. This safe debt, called a general-obligation bond, is said to be the next strongest thing to Treasuries because it is backed by a "full faith and credit" pledge. That means the government that issued it will pay it on time, no matter what. But now Jefferson County, Ala., has stopped paying such debt, breaking with convention and setting up a fundamental test of what full faith and credit truly means. This is no surprise considering what JPMorgan did, along with the help of corrupted government officials in that county. This story appeared in The New York Times yesterday...and I thank reader Phil Barlett for sending it along. The link is here.  The Fascist Threat - Lew Rockwell, Jr.Everyone knows that the term fascist is a pejorative, often used to describe any political position a speaker doesn't like. There isn't anyone around who is willing to stand up and say: "I'm a fascist; I think fascism is a great social and economic system." But I submit that if they were honest, the vast majority of politicians, intellectuals, and political activists would have to say just that. Fascism is the system of government that cartelizes the private sector, centrally plans the economy to subsidize producers, exalts the police State as the source of order, denies fundamental rights and liberties to individuals, and makes the executive State the unlimited master of society. This describes mainstream politics in America today. And not just in America. It's true in Europe, too. It is so much part of the mainstream that it is hardly noticed any more. This is a speech that Lew delivered at the Doug Casey conference..."When Money Dies"...in Phoenix on October 1, 2011. It's a must read in my opinion...and I thank Casey Research's own Doug Hornig for digging it up on our behalf. The link is here.  Asia growth downgrade hits recovery hopesHopes that the emerging economies of Asia will come to the West's rescue next year have been dealt a blow after Fitch Ratings downgraded its growth forecasts for the region in 2012 from 7.4pc to 6.8pc. Asia has long been seen as the best hope the heavily indebted countries of the West have to climb out of their economic torpor. Growth rates in China and India have been almost 10pc for a number of years, but they are now expected to cool. Fitch said that although growth prospects for the region "remain relatively favourable", it is "not immune from problems elsewhere in the world. The cut in its forecast for "emerging Asia" was in part because of the crisis in the eurozone and the sluggish US recovery. This story was posted in The Telegraph late in the afternoon yesterday...and is Roy Stephens first offering of the day. The link is here.  ECB's €489bn will 'buy valuable time' but is no eurozone debt bazookaAmid a fresh raft of poor eurozone economic data, Scott Bugie, head of S&P's financial institutions division doused the key cause for pre-Christmas optimism. Although he agreed Wednesday's long-term refinancing operation was a "big deal", Mr. Bugie told Reuters: "It is not solving the fundamental issues though... It's kicking the can a long way down the road rather than just a little bit, but in the end it is still kicking the big old can down the road." He said the action did not "change the fundamental picture but it does buy valuable time". He added: "The move in itself will not lead to any improvement in (banks') credit ratings." This story was posted in The Telegraph yesterday evening...and is another Roy Stephens offering. The link is here.  The Death Certificate Of The Paper Dollar: Where To Next? Posted: 24 Dec 2011 12:47 AM PST  The world dollar standard's death certificate arrives in the mail this week. The Bank of England — "the Old Lady of Threadneedle Street" — one of the most staid, cautious, and dignified entities in the world of monetary policy — signals that the fiduciary currency standard ushered in on August 15, 1971 is, empirically measured, far inferior to the (dilute form of the) gold standard erected at Bretton Woods. Fellow Forbes.com columnist Charles Kadlec thoroughly reprises and analyzes the facts submitted to a candid world by the Bank of England in a paper to be officially published December 20, 2011. |
| New Thunder Road Report denounces market intervention, cites GATA Posted: 24 Dec 2011 12:47 AM PST  Paul Mylchreest's Thunder Road Report always makes for fascinating reading...and his take on the global economy, gold and silver is frightening and disturbing. Read, learn and inwardly digest. This report was posted in a GATA release on Monday. But at fifty-two pages, there was no way that it was going to go in a weekday edition of this column, as I'm sure few readers would have the time or the patience to go through it on a busy pre-Christmas weekday. Now that it's the Christmas weekend, it may meet the same fate, but an article of this size belongs in my Saturday missive. |
| Gold Deleveries Record Level/Central banks purchase Record Levels of Gold Posted: 23 Dec 2011 11:52 PM PST |
| Posted: 23 Dec 2011 09:06 PM PST A very interesting infographic on guns, gold and gasoline is available at Zerohedge. It shows the price changes by year from 2001 forward for these items. Did gold outperform the other two? What do these prices suggest about inflation? Share/Save |
| The Legend of Chief Namekagons Lost Silver Mine Posted: 23 Dec 2011 05:00 PM PST Atthecreation |
| By the Numbers for the Week Ending December 23 Posted: 23 Dec 2011 02:48 PM PST COMEX combined commercial futures traders least net short silver in a decade. See remarkable chart below. 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 23, 2011. We also add a remarkable graph of the lowest combined commercial net short position for COMEX silver futures since December 4, 2001 (lowest in a decade).
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, December 26. Please also note a larger than normal number of changes and new notations in our linked Vulture Bargain (VB) and Vulture Bargain Candidates of Interest (VBCI) charts. We intend continue these unusual notations until tax loss selling season is officially over next week. We have enjoyed a number of "hits" in our lower-than-low bid ladders, but we have to note that some of the issues are already firming and quite a few are beginning to see bids filing in underneath. Several saw material moves to the upside this week as well, although not aggressively yet. 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 for Friday, December 23, for data as of the close on Tuesday, December 20. Source CFTC for COT data, Cash Market for gold and silver.) Once again, note the record high net long position for the Swap Dealer commercial traders in silver futures of 17,988 contracts net long on the COMEX. That is in part why the combined commercial net short position for silver futures (the legacy COT report) shows a remarkably low commercial net short position. COMEX Silver Commercial Net Short Position Lowest in Ten Years As silver fell $1.21 or 3.9% COT reporting Tuesday to Tuesday, the COMEX combined commercial traders reduced their collective net short positioning (LCNS) by a very large 4,940 contracts or 25%, from 19,765 to 14,825 contracts net short. This is the lowest combined commercial net short positioning in silver futures since December 4, 2001 (13,179 contracts then) with silver then trading at $4.20 the ounce.
*** We will have more in the linked technical charts for Vultures by Monday evening.*** |
| WATCH: Max Keiser on Capital Account Posted: 23 Dec 2011 12:16 PM PST Capital Account: Max Keiser America Runs the "Special Olympics for Financial Fraud" (12/23/11) from CapitalAccount: US congress today approved an extension of the payroll tax cut for two months…putting off a tax increase for millions of workers. So, after much partisan politicking, they did it — saving face for the moment, but could it hurt their stock price headed into the 2012 elections? You heard me right. We'll talk about the political derivatives market a Chicago exchange is betting on. Would it be a continuation of a climate on wall street that encourages special treatment that our guest, fiancial journalist and inventor of the virtual specialist technology, Max Keiser, calls "the special olympics for financial fraud." And speaking of derivatives, those bets added fuel to the fire that engulfed the financial markets in 2008…most famously seen in the explosion and bailout of AGI (backdoor bailout of the big banks like goldman sachs, jp morgan, bank of america, etc.). More recently, MF Global customer money used to trade on these exchanges went missing. So where do futures exchanges come from and where have they gone wrong? From Ancient Greece to MF Global we'll break it down. And, heading into 2012 — will it be a happy new year for the US economy? Maybe not. Economists predict sluggish 2 percent growth, an economy held down by housing troubles, government budget cuts, and a lousy job market. That didn't stop hoards of people from lining up at malls and waiting all night for a chance to buy the 175 dollar "IT" Air Jordans. We'll show you what happened. |
| Gold Could See Five Digits in 2012 Posted: 23 Dec 2011 12:11 PM PST
Continue reading @ KingWorldNews.com |
| Gold price set for hyperbolic increase Posted: 23 Dec 2011 11:00 AM PST I recently posted an article for GoldMoney showing how US True Money Supply (TMS) appeared to be growing at a hyperbolic rate, and that gold was also on a hyperbolic course. The difference between ... |
| Holiday Short Squeeze & Oil Trade Idea Posted: 23 Dec 2011 10:27 AM PST
Typically, the week before Christmas, stocks and commodities drift higher due to the lack of participants. Light volume favours higher prices, which is why stocks want to rise going into the holiday season. The big money players, like hedge fund managers, are finished for the year. They're sitting on the sidelines enjoying the holiday season while waiting for their year-end bonus checks. Let's take a quick look at how the week finished… Friday was an interesting session as stocks and oil reached some key resistance levels. Below are my thoughts, charts, and a possible trade idea for next week. Gold & Silver Thoughts:Looking at the long term charts of gold and silver, I feel they could head much lower in the first quarter of 2012. The inverse relationship between the dollar index and gold makes me think this is a high probability scenario. The weekly dollar index chart remains strong at this point and could start another very strong rally any day. Once the dollar starts heading higher, expect precious metals to move down along with equities. SP500, Dollar and Volatility IndexBelow are three charts stacked on top of each other. They are marked with my analysis and thoughts for next week. Personally, I don't feel shorting stocks is a safe play. The last week of the year, we can see the volatility index (VIX), and the dollar, rise without putting pressure on stocks. So be aware of that.
TRADE IDEA – View Chart:Crude oil looks like a great low risk opportunity (a real "Christmas" present!) from Mr. Market. SCO would be the ETF for US based traders. HOD, which is listed on the TSX, is good for Canadians. I favour this setup because I don't feel that oil will be as affected from the holiday bulge as will American equities.
Pre-Holiday Trading Conclusion:I was planning on avoiding the market Friday, but the charts were calling my name… The session ended with what looked to be a short squeeze. The remaining short positions didn't get their expected drop in price. Consequently, when the traders all started to cover their shorts (buy) just before the close, it caused a strong surge higher. I do not recommend shorting stocks next week because of the light volume. However, oil looks good to me. Just thought I would share my end of the week thoughts, and wish you a Merry Christmas! Cheers! Chris Vermeulen - HOLIDAY SPECIAL - |
| 6 Things Governments Might Do To You This Christmas Posted: 23 Dec 2011 09:00 AM PST If it weren't for the time difference, children in Germany would have their presents already. That's because the Christkind (Christ Child) comes on the evening of the 24th in Germany. Unless you've been naughty. Then St. Nick's farmhand Knecht Ruprecht gives you a lump of coal or beats you with a bag of ashes. That's what investors can expect this Christmas. Europe's debt mess has to come to a head eventually. The break over Christmas is a pretty convenient time for politicians to spring something unexpected on you. Well, unexpected for those who don't read the Daily Reckoning, that is. So here is a list of things the governments of the world might unleash on you and your portfolio over the holidays: 1. Sovereign Default Even if austerity is the 'right' thing to do, it may simply be too late. The short-term pain of reducing government spending to a level that the private sector can support in taxes might just make the debt burden completely unmanageable in the eyes of investors. Why? Government spending adds to GDP. So reducing it decreases GDP. That in turn increases the debt-to-GDP ratio - something debt markets look at closely. This is a little ignorant considering that only the private sector's share of GDP really pays the bills in the end. That's why some people think government spending should be subtracted from GDP, not added to it. A much better way of thinking about sovereign debt would be to look at tax revenue relative to debt.  The Americans have the lowest debt/GDP ratio, but the highest debt/revenue ratio. Their true debt burden is higher than Greece's. The most important thing to understand about sovereign debt is that, if austerity doesn't work in places like Greece, it could trigger a big enough ripple to bring down other countries' efforts. Even German austerity could - probably would - buckle under defaults in Italy or Spain. This is because the German economy makes a lot off imports within the Eurozone. So even a small sovereign debt default - one that isn't carefully engineered by the IMF - could see all hell break loose in share and bond markets all around the world, including Australia. Not to mention the effect on economies of Europe. A rather odd side note on this is whether a default has already happened as far as the markets are concerned. This idea may seem confusing at first, but it's quite straight forward. If the price of Greek sovereign debt say halves, that more or less implies a 50% default is expected. Give or take interest payments. The market will have factored in the chance of a 50% default by adjusting the price of the debt. The loss would already be recognised by people who value the bonds at their market price. Don't think that solves the problem as far as banks and governments are concerned. You see, the banks hold lots of sovereign debt that is not marked to market - the price recorded on their balance sheet is not the market price. They have yet to recognise the loss. Secondly, governments need to continue funding their deficits with more debt. That's difficult to do when the market is signalling it expects a default. To illustrate how this plays out in our 50% example above, the Greek government would have to issue the debt at 50% of par. This means it would issue bonds for $100, but only receive $50 from investors for each bond. When the bond comes due, the full $100 is owed. All this is simplified. But you can see the nature of the issue. Banks and governments cannot operate for very long once markets lose faith in sovereign debt. Something has to give. And Christmas is the season for giving. 2. Bank failures
The chances of a simultaneous default of two or more banks in the next two years, which were practically zero at the start of 2007, now stand at around one in four, the ECB calculated in a new Financial Stability Review. The crisis of 2008 was one of bank rescues. This time around, there won't be enough money to do the rescuing with. Unless more is created. We'll get back to that. A lot of investors learnt some harsh lessons in 2008. But not many bank depositors actually lost money. This time could be different. Governments aren't in a financial position to do much bailing out. Unless they get their central banks to pay for it with new money. Of course, we're talking about European banks here. At least at first. Whether a crisis in the European banking system means some sort of rush of deposits to Australian banks, or a rush of deposits out of the Aussie banking system, we're not sure of. Australia might be seen as safe. Low government debt - compared to Europe - might make bailouts feasible. On the other hand, Aussie banks are very interconnected with Europe - it's a major source of funds for them. And they face a popping housing bubble too. No matter what happens, you can expect Aussie bank stocks to plummet if their European comrades fail. Dare we suggest a buying opportunity in the making? [Since writing this, Zerohedge reported on Italian banks possibly running out of collateral to post with the ECB for emergency funding. This is how Lehman Brothers and Bear Stearns failed, kicking off the crisis of 2008. If Zerohedge is right about the collateral, Italian banks are highly likely to fail within the next few weeks, if not days.] 3. Sovereign Debt Downgrades Less dramatic than a default, further sovereign debt downgrades could be the opening act of 2012. Belgium's downgrade saw Aussie stocks plummet on Monday. So it's pretty clear what our market would think of more of them. What's funny about Belgium's downgrade is that it comes in lieu of the country finally forming a government. It's probably a coincidence, but the idea that a government is the problem of governments spending too much makes some sense. That's why a hung parliament (where no party has the majority) is the best possible outcome in a democracy. And to think we got so close last time around here in Australia! Anyway, sovereign debt downgrades would force even the most ignorant fund managers to wind down their holdings of sovereign debt. That adds to the selling pressure and price falls, escalating the problem. But hold on. Ratings agencies aren't part of the government. So why are they included in our list of things governments could do to you? Well, firstly, ratings agencies react to government debt levels. It's the spending that's the problem, not the people pointing out the problem. Secondly, the politicians enshrined ratings agencies into law. Bank capital adequacy standards, for example, factor in debt ratings. That means banks which hold safer assets need, by law, less reserves backing them up. Back when sovereign debt was rated 'risk free', using ratings agencies to implement their rules made a lot of sense to politicians. It ensured the 'safe' debt governments issued would be in demand by banks trying to sure up their balance sheet for regulators. But now the bonds politicians issue to pay for their hair brained schemes are the victims of downgrades. Their bonds are no longer the assets favoured by the ratings agencies and are therefore shunned by the banks looking for safe assets. This is a wonderful dose of karma, but if ever there was a perfect scapegoat for politicians to pick on, it's the ratings agencies. If the war of words between Fitch, Moody's, S&P and governments turns into actions, that could leave banks and debt markets in a regulatory no-man's land. A void that would have to be filled with something. 4. Eurozone breakup How's this for foresight from the Iron Lady (Margaret Thatcher, not Angela Merkel) back in 1990:
'...this Government has no intention of agreeing to the imposition of a single currency. That would be entering a federal Europe through the back-Delors. [Jacques Delors was the President of the European Commission at the time.] Any such proposal involves a loss of sovereignty which Parliament would not accept. As the more enlightened members of the blogosphere keep pointing out, the Euro is about politics, not economics. It's about creating jobs for politicians and bureaucrats, keeping peace in Europe, and rubbing shoulders with the US and China. The Europeans can only do the latter by banding together. The problem with being bound together is that nationalism rears its ugly head when times are bad. That is, at the worst possible time for a political union. So when things start getting nasty between nations, there will be political tension to leave the Euro - not just economic reasons. This negates the main argument in favour of keeping the Euro - the high cost of leaving it. In other words, the Euro is the least worst option in terms of economics. But this view makes the same error as the one we mentioned above - it sees the Euro as an economic matter, not a political one. If the politics of Europe break down into irrational nationalism, the cost of leaving the Euro won't matter. Especially to the French. Already the edges of Eurozone unity are fraying. The Danish closed their borders a few months ago. The English have drawn up evacuation plans for Brits living in Spain. This kind of thing can get out of hand. 5. Wealth Confiscation A reader asked us to comment on the following: 'Der Besitz von materiellem Gold und das Risiko, dass der Staat (In Australien oder anderswo) es einem auf fiese Art und Weise wieder wegnimmt.' In other words, what is the risk of gold confiscation, in Australia and elsewhere? Here's the part of the reader's email, quoting from the blog Gold Chat, that will make you look twice:
Australian law already has a mechanism in place to require delivery of gold to the Reserve Bank of Australia (RBA) - Part IV of the Banking Act 1959. There is no need for the Government of the day to have to rush new legislation through that may attract public comment or opposition. All that is required is the Governor General to proclaim that Part IV shall come into operation. Notice how your gold must be delivered to the RBA, not the Treasury. Here is the wording of the Act in case you don't believe the blogosphere.
...a person who has any gold in the person's possession or under the person's control, shall deliver the gold to the Reserve Bank, or as prescribed, within one month after the gold comes into the person's possession or under the person's control or, if the gold is in the person's possession or under the person's control on any date on which this Part comes into operation, within one month after that date. We've excluded from the quote the exemptions for rare coins, and gold 'used by that person in connexion with the person's profession or trade'. The second exemption is the one we're banking on as newsletter writers. Here's another interesting twist: Section 115 of the Australian Constitution says 'A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts.' To be honest, Australia's monetary history is a bungled mess of private currencies, British currencies, pegged currencies, precious metals, and the Australian dollar nearly ended up being called the Royal or Dinkum. Add to this the right of the government to confiscate gold and the constitutional kerfuddle about gold and silver, and you get complete confusion. Of course, it's pretty unlikely that Quentin Bryce will decide to confiscate your gold over Christmas. At least this year. Here's what's important. Government's are willing to confiscate wealth. Historically it has often been gold. This time around in Europe, it's just as likely to be something else. When property rights are violated, that can change the nature of investing completely. Something worth thinking about. One way this issue might rear its head in Australia is the way it did initially in the US and much of Europe. There, governments have already raided the pension funds and retirement savings of their people. Usually by forcing those funds to buy government bonds. Could the same happen here, where the Australian government forces you to 'save' 9% of your income? 6. QE European Central Bank President Draghi has made it clear it would be illegal for him to buy government bonds directly from governments. So he's a hard money kinda guy then? Unlike his American counterpart in crime, Ben Bernanke? Ha! Actions speak louder than words. And Draghi has been busy. Get this, from Zerohedge: '...the ECB's balance sheet is not only far greater than the Fed, at $3.2 trillion compared to $2.9 trillion for Ben Bernanke, but at 30x leverage, has the same risk as Lehman did at its peak.' Draghi and his predecessor have staged what people are calling a 'back door QE'. It's quantitative easing (creating more money) by buying government bonds from banks, who in turn buy more government bonds with the new cash they get from Draghi. Because there is no direct link between the ECB and governments, it's allowed. So now you know Europe has been busy with QE on a massive, but hidden, scale. This fits into the narrative of James Rickards' Currency Wars. He suggests that what is really going on is a devaluation battle between the US, Europe and China. All three want an export-led recovery now that the Keynesian solution of more spending is flailing. They are trying to devalue their currency in an effort to stimulate exports - something that Rickards argues ends badly. They do this by creating more of their own currency, decreasing its value. The Europeans, with their backdoor QE, have made the latest move. Now it's the Americans' turn. The Euro is at the low levels that Rickards identifies as a likely spot for Bernanke to begin more QE. Tuesday's American Daily Reckoning pointed out that Bank of America shares are at the level that previously brought the Fed into action. Improving economic data in the US probably reduces the chances of QE somewhat. But it would only take a worsening crisis in Europe to give Fed Chairman Bernanke an excuse. 6 Things You Can Do About Political Risk Is cash really a safe place to keep your wealth in the long term? We're not so sure. The risks above add weight to the idea that our money is not living up to its purposes: Safety, practicality and stability. If governments fail, what will happen to their control of the currency? Will they confiscate wealth to keep the machinery of state running? If banks fail and don't get bailed out, what will happen to the money you keep with them? If currency wars break out, what will happen to exchange rates? If the EU fails, what will happen to the Euro and the currencies that replace it? If QE - the creation of more money - is the solution to all these problems, what will happen to the value of the existing money? None of these are an endorsement of cash. At least not in the sense of cash being safe. So what are the alternatives? Remember, money in the form we know it came into existence in a long protracted process. Once upon a time, every coin was a precious metal. Since then, trust in currency has been abused by bankers and governments. Step by step the connection with precious metals was lost. Now money is nothing more than what governments declare it to be. This would never have been accepted if declared from the outset. The fraud must come to an end eventually. It will only take a loss of faith in money for it to die. Back to the alternatives to paper money for parking your wealth. In the opinon of Dr Alex Cowie, who used to write the Daily Reckoning Weekend Edition, you want to hold what the world will turn to for real value. And holding shares in the companies that produce those items of real value. He's found six stocks that meet his strict list of demands. Similar Posts: |
| “Christmas Week Rally” Spied in Gold as ECB Member Sees “No Reason” Not to Use Q.E. Posted: 23 Dec 2011 08:39 AM PST Fri 23 Dec., 09:45 EST "Christmas Week Rally" Spied in Gold as ECB Member Sees "No Reason" Not to Use Q.E. WHOLESALE PRICES to buy gold were little changed in London on Friday, ending the short pre-Christmas session at $1607 per ounce, some 0.6% higher against the Dollar from last week's finish. Silver prices also held flat, moving in a tight range below $29.50 per ounce and recording a London Fix almost 1.9% down for the week at midday. Thursday's series of attacks in the Iraqi capital Baghdad, which killed perhaps 200 people, were followed today by the murder of 40 people by two suicide car bombers in Damascus, Syria – blamed by the government on al-Qaeda. But global stock markets ticked higher overall in what equity dealers called "very thin" trade. US crude oil prices extended their strongest week since October, up more than 6.5% from last Friday. "Our Hong Kong office observes that the gold price has gone up during the period between Christmas and New Year in eight of the last nine years (2004 being the exception)," said Mitsui's London note today, "[rising] by just over 2% on average. Dealing in London's bullion market will re-open Wednesday after the Christmas and Boxing Day holidays. "If [the] trend continues," says Mitsui, "gold would stand around $1,650 by the year's end." "[But] the 200-day moving average, currently at $1624, continues to provide strong resistance," says Russell Browne at Scotia Mocatta in New York. "We still stress the vulnerability of precious metals to a tightening of Eurozone money market liquidity," says Standard Bank's London team, "which might result from the region's sovereign debt problems." European Central Bank member Lorenzo Bin Smaghi – who leaves the ECB this month to avoid "over representation" of Italy after Mario Draghi became president in November – says in a Financial Times interview today that he sees "no reason" not to use quantitative easing "if the economic outlook deteriorated and deflation became a risk." Spanish and Italian government bonds ticked lower in price on Friday, nudging the interest rate on 10-year debt above 5.4% and 7.0% respectively. The ECB should "use as much constructive ambiguity as possible" Bin Smaghi says, adding that the ECB "has a duty of action" to help struggling governments where the issue is liquidity, not solvency. Meantime in India – the world's No.1 physical gold consumer – "A sharp drop in the gold price is required to boost the demand," MoneyControl today quoted a Chennai-based wholesaler, as the Indian Rupee gold price continued to hold near historic highs thanks to the currency's record low exchange rate. "Jewellery demand is very weak…gold investment demand is also weak," the Reuters news agency quotes a spokesperson in Ahmedabad for Zaveri and Co, one of India's largest jewelry retail chains, who attributes low sales to the current period of Kharmas observed by some Hindu calendars, when there are no "auspicious" festivals or events. Across in Tehran, however, "Iranians are rushing to buy gold and Dollars," reports Bloomberg, "sending the national currency plunging." The Rial has lost some 15% vs. the Dollar this month, and bureau de change are charging 15,300 Rials per Dollar, says Bloomberg – almost 39% above Tehran's official rate. "State television this week showed lines of people camped out overnight in front of state banks, with sleeping bags and blankets, saying they were waiting to buy gold coins," the newswire goes on. Faced with new US and EU sanctions – plus inflation running near 20% per year – the Central Bank of Iran suspended deliveries of gold coins on Dec. 20, imposing what it calls a "just distribution" system by delaying settlement of new purchases by four months. Adrian Ash Gold price chart, no delay | Buy gold online at live prices Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is head of research at BullionVault – winner of the Queen's Award for Enterprise Innovation, 2009 and now backed by the World Gold Council market-development and research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees. (c) BullionVault 2011 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.
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| LISTEN: Andy Hoffman on Metals & Manipulation Posted: 23 Dec 2011 07:49 AM PST from TFMetalsReport.com:
Yesterday, I had an opportunity to speak with Andy Hoffman of Miles Franklin Precious Metals Investments. If you not already a fan of the daily "Ranting Andy" blogposts from Miles Franklin, you likely become one after you've listened to this forty-minute podcast. Brash, bold and insightful, Andy combines his expert analysis with a New York, tell-it-like-it-is attitude. The result is some of the consistently best PM analysis on the internet. Much More @ TFMetalsReport.com |
| A Very Scary Christmas And An Incredibly Frightening New Year Posted: 23 Dec 2011 06:20 AM PST 
Despite unprecedented efforts by the European Central Bank, the yield on 10 year Italian bonds is nearly up to 7 percent again. Keep an eye on the yield on 10 year Italian bonds. That is going to be one of the most important financial numbers in the world in the coming months. But Italy is not the only problem. The reality is that several European governments are teetering on the verge of default right now. Meanwhile, confidence in the European financial system has been absolutely shattered and a devastating credit crunch has set in. Nobody (other than the ECB) wants to loan money to the banks and the banks are massively cutting back on loans to businesses and consumers. This is causing the money supply to fall. The ECB is trying to hold things together with chicken wire and duct tape, but it isn't going to work. In major financial centers such as the City of London, this is a very scary Christmas and the outlook for the new year looks very frightening. Because financial activity has dried up so dramatically, a number of firms are already shutting down. The following comes from a recent Bloomberg article....
Many out there are wondering if we are about to face another crisis like the one we saw back in 2008. Unfortunately, none of the underlying problems that caused that crisis were ever really fixed. We did not learn from history so now we are in for another round of pain. In fact, Chris Martenson believes that this next crisis will be even worse than 2008....
Frightening stuff. A couple of months ago, I wrote about the coming derivatives crisis that could potentially wipe out the entire global financial system. When the next great financial crisis strikes, there is going to be a lot of focus on derivatives once again. Top global financial authorities such as Ben Bernanke continue to insist that derivatives are perfectly safe. But there are other voices in the financial world that are warning that we are heading for financial armageddon. For example,just check out what Mark Faber is saying....
That is very strong language. Faber also believes that the stock market is going to get hit really, really hard during the coming crisis....
Some of the top financial officials in the entire world have also used some very scary language in recent weeks. The head of the International Monetary Fund, Christian Lagarde, recently stated that we could soon see conditions "reminiscent of the 1930s depression" and that no country on earth "will be immune to the crisis"....
But most people are so busy opening up the cheap plastic presents under their Christmas trees (that were mostly made overseas) that they aren't even paying attention to these warnings. Look, when the money supply falls significantly it is almost impossible to avoid a recession. Just look at the historical numbers. Unfortunately, money supply numbers all over Europe are falling dramatically right now as an article in the Telegraph recently noted....
Confidence in the banking system in Europe has never been this low in the post-World War II era. Sadly, most people simply do not understand how bad things have gotten for major European banks. One Australian news source recently put it this way....
The outlook is very ominous. Financial professionals all over the globe are telling us what is coming if we are willing to listen. The following comes from a report recently produced by Credit Suisse's Fixed Income Research unit....
The first six months of 2012 are going to be a very key time. National governments and big European banks are scheduled to roll over huge mountains of debt. But if they can't find any takers that could bring the global financial system to a moment of great crisis very quickly. The following is how former hedge fund manager Bruce Krasting recently described the problem that Italy is facing....
But even if we don't see a formal default by a major European nation such a Italy, that doesn't mean that major European banks are going to make it through the crippling recession that has now begun in Europe. Charles Wyplosz, a professor of international economics at Geneva's Graduate Institute, is absolutely convinced that we are going to see some major European banks collapse....
Authorities in Europe are saying the "right things" publicly, but privately they are preparing for the worst. As the Telegraph recently reported, the British government is now making plans based on the assumption that a collapse of the euro is only "just a matter of time"....
Yes, we are heading for a huge financial collapse and massive economic trouble. So enjoy the good times while we still have them. They are not going to last too much longer. |
| Posted: 23 Dec 2011 06:12 AM PST By Frederic Ruffy: Sentiment Trading is slowing ahead of the holiday weekend. The day's economic news was mixed. A report released early Friday showed Personal Incomes and Spending both increasing by .1 percent in November. Economists were expecting to see gains of .2 percent and .3 percent, respectively. However, Durable Goods unexpectedly rose 3.8 percent during that time (vs. 2 percent consensus) and New Home Sales improved to a better-than-expected annual rate of 315K (vs. 310K consensus). Trading was uneventful across the Eurozone and market action in the commodities pits is lackluster as well. Crude oil edged up 19 cents to $99.72 and gold dipped $2.5 to $1608. The Dow Jones Industrial Average is up 94 points and the tech-heavy NASDAQ has added 16. CBOE Volatility Index (.VIX) continues its grind lower and is down another .18 to 20.98. With two hours left to trade, total options volume is a light 3.8 million Complete Story » |
| A great round-up of last-minute gift ideas Posted: 23 Dec 2011 05:47 AM PST From The Big Picture: Those of you who are still shopping — you are fast running out of time. If you order anything online today, you are unlikely to get it shipped in time (and at Best Buy — you may never get it!). For those of you still with some jingle-burning holes in your pockets, have a looksee at our holiday shopping ideas... Read full article... More Cruxallaneous: Protect your wealth now: A step-by-step guide anyone can follow The surprising reason we celebrate Christmas on December 25 Forget the selloff... New data suggest gold could be starting its greatest rally in history |
| Futures Trade Desk- Chasing The JPY Dragon Posted: 23 Dec 2011 05:44 AM PST By The LFB: The post-credit crisis rule book has been re-written, and as the ink dries on another central bank debt program there are plenty of nuances to learn in the new-generation global market arena, and old habits to kick. One of the most vaulted terms used from 2005 through to 2009 was the Carry Trade, as in; "Traders unwound the carry trade today," or "Positive trading saw the carry trade get built into today." However, the carry trade has become a distant memory, but what has happened to the carry trade and its Jpy/S&P correlation? Understanding what makes up cross pair trading values on the Japanese yen offers an insight into what happened to the Carry Trade. The value of the Japanese yen strengthened from a low against the US dollar in June 2007, to a high in March 2011, because for the first time in decades it became as cheap to Complete Story » |
| This could bePorter Stansberry's most outrageous interview ever Posted: 23 Dec 2011 05:36 AM PST From The S&A Digest: As many of our readers who follow Alex Jones know, the voice of Porter's End of America commercial is no stranger to controversy… We saw that first-hand as station after station refused to run our ads simply because of that voice. If you want to hear more of Alex Jones at his most controversial... and his most candid... you don't want to miss the latest episode of Stansberry Radio. In the program we've released today, Porter welcomes Alex to the show. We guarantee you haven't heard Alex like this before. He shares several interesting and provocative ideas on government control... where he invests his own money... and Ron Paul and the upcoming elections. We expect this episode will be one that's listened to by hundreds of thousands of people. You can listen to the show for free by clicking here. And to make sure you don't miss future episodes, including upcoming guest Steve Forbes, please subscribe to the show on iTunes by visiting www.StansberryRadio.com. More from Porter Stansberry: Three terrible lies you need to know about gold Porter Stansberry: Get ready... The worst is yet to come Porter Stansberry: The buying opportunity of a lifetime is approaching |
| LISTEN: Stella on Silver in 2012 Posted: 23 Dec 2011 04:38 AM PST John Stella with his 2012 silver predictions. ~TVR |
| Silver Futurist: Silver Eagles and 2012 Posted: 23 Dec 2011 04:36 AM PST Silver Futurist and Jackie O on Silver Eagle minting and 2012 silver prices. ~TVR |
| Posted: 23 Dec 2011 04:31 AM PST from GoldMoney.com:
"Today the ECB provided a nearly half trillion euro loan to European banks. More than 500 European banks took this 3 year loan at 1% interest. The ECB plans to do another 3 year loan offer early next year (maybe February). In exchange, banks are supposed to buy Sovereign Debt from European countries. Banks can pocket the huge differential in interest! What a Christmas present! Jim, you said it first. Western governments are into QE to infinity!" Given European banks deleveraging needs, however, sovereign bonds may not receive the bids that some had hoped. Reuters notes that bank analysts expect no more than €100 billion of these loans to be used to purchase more sovereign debt from the likes of Italy and Spain. Morgan Stanley estimates some €20-50 billion euros of Italian bonds could be bought. To put this in context, Italy must refinance about €150 billion of government debt from February-April alone. Likewise, French banks are expected to use the new loans to increase private sector lending and slow their deleveraging, rather than as a means of buying more sovereign debt. Read More @ GoldMoney.com |
| LISTEN: Greg Hunter on Kitco News Posted: 23 Dec 2011 04:25 AM PST Greg Hunter talks with Daniella Cambone on Kitco News From 12.23.11. ~TVR |
On the heels of legendary trader Jim Sinclair's interview regarding the current panic in the gold market, today KWN wanted to speak with the firm that is calling for $10,000 gold to get their take what readers should be focused on at this point. Paul Brodsky, who co-founded QB Asset Management Company, had this to say to KWN readers globally, "I think it's important to keep gold in perspective when we look at gold and how much central banks own vs what is out there in the private sector. It totals less than 20%. Yet, clearly, treasury ministries around the world and central banks that control the flow in the stock of global currencies continue to hold gold and are becoming net purchasers of gold."
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