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- Chart: The Top Commodity of 2011 Is... Milk?
- What Really Caused The Recession?
- Silver Prices Under Pressure
- Chinas central bank looking to buy more gold
- How Silver is Mined ?
- Looking At Silver With A Longer Term Perspective
- Iranians flee to gold
- Matt Stoller: Why Ron Paul Challenges Liberals
- Bullish & Bearish Arguments For Precious Metals in 2012
- Morning Outlook from the Trade Desk - 12/29/11
- GOLD'S D-WAVE CONFIRMED
- Tocqueville's Hathaway Sees 'Panic Liquidation' in Gold
- The Fed's covert bailout of Europe: Gerald P. O'Driscoll
- 2012 will be harder for metals price suppression, Embry tells King World News
- U.S. Mint says has enough gold, silver Eagles coins
- Gold Posts Longest Slump Since 2009, Silver Drops on Europe Woes
- Gold bulls ravaged by angry bears
- Links 12/29/11
- Platinum: Fire Sale on the Rich Man’s Gold
- Gold Near-Term Outlook 2012
- WATCH: The Fed is Secretly Bailing Out Europe
- Physical Gold & Silver Tight
- Gold & Silver Market Morning, December 29, 2011
- Silver Update: “The Final Smackdown”
- Protecting Yourself against the Creature from Jekyll Island
- More Economic Recovery Evidence (NOT!)
- “Summer” Rerun: Why Big Capital Markets Players Are Unmanageable
- South India accounts for 40% of gold purchases
- London Precious Metals Catch Up with Indian Slump, China Ban, Fall to 2-Week Low
- Protected: Subscriber Update: Gold Stocks & Gold
| Chart: The Top Commodity of 2011 Is... Milk? Posted: 29 Dec 2011 07:04 AM PST By Investment U: By Ryan Fitzwater Go and ask your friends and colleagues what the best-performing major commodity in 2011 was… unless they're commodity experts, I bet they won't guess milk. That's right, milk. The delicious liquid that you pour into your crappy office coffee and drown your cereal in every morning was able to outperform cattle, gold and crude oil all thanks to increasing U.S. exports. In 2011, U.S. dairy exports hit a new record, making milk the top-performing commodity for the year: Milk futures in 2011 shot up 41 percent to $18.66 per 100 pounds on the Chicago Mercantile Exchange, crushing feeder cattle, which rose 21 percent and was the top performer of the 24 commodities listed on the Standards and Poor's GSCI Index. Jerry Dryer, the chief economist for Rice Dairy LLC based in Chicago, stated that increasing milk demand and prices can be attributed to export growth in the Complete Story » |
| What Really Caused The Recession? Posted: 29 Dec 2011 06:34 AM PST By Cullen Roche: David Beckworth has an interesting piece up regarding the cause of the recession. He and the other market monetarists have long questioned whether the housing bubble actually caused the current recession. They have also stated that the idea of the balance sheet recession is "inadequate". They further state that the true cause of the recession was merely a lack of action by the Fed to stabilize nominal spending. He says:
Complete Story » |
| Posted: 29 Dec 2011 05:25 AM PST by Roman Baudzus, GoldMoney.com:
Indian silver prices usually follow the developments at the global markets, which lately have been in a downward trend. Leading Asian markets such as Singapore saw the silver price drop as low as $26.74 (1,5%). Declining demand at the spot markets has also had a negative effect on the development of the silver price. During the Indian festival season in October and November Indian demand for physical silver was strong, but according to local dealers now purchases have decreased. According to a report from the research company Karvy Private Health, India's four southern states show the highest demand for precious metals such as gold and silver. Indian citizens are well known for their fondness of physical precious metals in form of jewellery, bars or coins, and the southern states account for 40% of global Indian demand. Indian demand for silver and gold exchange-traded funds (ETFs) has also boomed in recent years. Read More @ GoldMoney.com |
| Chinas central bank looking to buy more gold Posted: 29 Dec 2011 03:49 AM PST |
| Posted: 29 Dec 2011 03:41 AM PST |
| Looking At Silver With A Longer Term Perspective Posted: 29 Dec 2011 03:35 AM PST The fundamental View |
| Posted: 29 Dec 2011 03:23 AM PST |
| Matt Stoller: Why Ron Paul Challenges Liberals Posted: 29 Dec 2011 02:52 AM PST By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. The most perplexing character in Congress, ideologically speaking, is Ron Paul. This is a guy who exists in the Republican Party as a staunch opponent of American empire and big finance. His ideas on the Federal Reserve have taken some hold recently, and he has taken powerful runs at the Presidency on the obscure topic of monetary policy. He doesn't play by standard political rules, so while old newsletters bearing his name showcase obvious white supremacy, he is also the only prominent politician, let alone Presidential candidate, saying that the drug war has racist origins. You cannot honestly look at this figure without acknowledging both elements, as well as his opposition to war, the Federal government, and the Federal Reserve. And as I've drilled into Paul's ideas, his ideas forced me to acknowledge some deep contradictions in American liberalism (pointed out years ago by Christopher Laesch) and what is a long-standing, disturbing, and unacknowledged affinity liberals have with centralized war financing. So while I have my views of Ron Paul, I believe that the anger he inspires comes not from his positions, but from the tensions that modern American liberals bear within their own worldview. My perspective of Paul comes from working with his staff in 2009-2010 on issues of war and the Federal Reserve. Paul was one of my then-boss Alan Grayson's key allies in Congress on these issues, though on most issues of course he and Paul were diametrically opposed. How Paul operated his office was different than most Republicans, and Democrats. An old Congressional hand once told me, and then drilled into my head, that every Congressional office is motivated by three overlapping forces – policy, politics, and procedure. And this is true as far as it goes. An obscure redistricting of two Democrats into one district that will take place in three years could be the motivating horse-trade in a decision about whether an important amendment makes it to the floor, or a possible opening of a highly coveted committee slot on Appropriations due to a retirement might cause a policy breach among leadership. Depending on committee rules, a Sub-Committee chairman might have to get permission from a ranking member or Committee Chairman to issue a subpoena, sometimes he might not, and sometimes he doesn't even have to tell his political opposition about it. Congress is endlessly complex, because complexity can be a useful tool in wielding power without scrutiny. And every office has a different informal matrix, so you have to approach each of them differently. Paul's office was dedicated, first and foremost, to his political principles, and his work with his grassroots base reflects that. Politics and procedure simply didn't matter to him. My main contact in Paul's office even had his voicemail set up with special instructions for those calling about HR 1207, which was the number of the House bill to audit the Federal Reserve. But it wasn't just the Fed audit – any competent liberal Democratic staffer in Congress can tell you that Paul will work with anyone who seeks his ends of rolling back American Empire and its reach into foreign countries, auditing the Federal Reserve, and stopping the drug war. Paul is deeply conservative, of course, and there are reasons he believes in those end goals that have nothing to do with creating a more socially just and equitable society. But then, when considering questions about Ron Paul, you have to ask yourself whether you prefer a libertarian who will tell you upfront about his opposition to civil rights statutes, or authoritarian Democratic leaders who will expand healthcare to children and then aggressively enforce a racist war on drugs and shield multi-trillion dollar transactions from public scrutiny. I can see merits in both approaches, and of course, neither is ideal. Perhaps it's worthy to argue that lives saved by presumed expanded health care coverage in 2013 are worth the lives lost in the drug war. It is potentially a tough calculation (depending on whether you think coverage will in fact expand in 2013). When I worked with Paul's staff, they pursued our joint end goals with vigor and principle, and because of their work, we got to force central banking practices into a more public and democratic light. But this obscures the real question, of why Paul disdains the Fed (and implicitly, why liberals do not), and the relationship between the Federal Reserve and American empire. If you go back and look at some of libertarian allies, like Fox News's Judge Napolitano, they will answer that question for you. Napolitano hates, absolutely hates, Abraham Lincoln. He sometimes slyly refers to Lincoln as America's first dictator. Libertarians also detest Woodrow Wilson, and Franklin Delano Roosevelt. What connects all three of these Presidents is one thing – big ass wars, and specifically, war financing. If you think today's deficits are bad, well, Abraham Lincoln financed the Civil War pretty much entirely by money printing and debt creation, taking America off the gold standard. He oversaw the founding of the nation's first national financial regulator, the Office of the Comptroller of the Currency, which chartered national banks and forced them to hold government debt to back currency they issued. The dollar then became the national currency, and Lincoln didn't even back those dollars by gold (and gold is written into the Constitution). This financing of the Civil War was upheld in a series of cases over the Legal Tender Act of 1862. Prior to Lincoln, it was these United States. Afterwards, it was the United States. Lincoln fought the Civil War and centralized authority in the Federal government to do it, freeing slaves and transforming America into one nation. Libertarians claim that they dislike Lincoln because he centralized authority in the Federal government. Of course, there is a long reconstructed white supremacist strain that hates Lincoln because he was an explicitly anti-racist President, and they hate the centralized authority and financing power that freed the slaves and turned America increasingly into more racially equitable society. This strain can be exploited by the creditor class, who also disliked how slavery – which they saw as a property right rather than a labor and human rights issue – was destroyed by state power. History, of course, has a nasty way of mocking us about long-held fights we thought were over. The conflict between labor/human rights and property rights continues today. Or as Carl Fox said in the movie Wall Street, "The only difference between the Pyramids and the Empire State Building is the Egyptians didn't allow unions." Without even getting into globalization, prison labor legally makes body armor, as well as products for victoria's Secret, Starbucks, and Microsoft. State centralized power can prioritize labor rights over property rights, and for this reason, creditors are wary of it. On to Woodrow Wilson. Wilson signed the highly controversial Federal Reserve Act in 1913; originally, the Federal Reserve system was supposed to discount commercial and agricultural paper. Government bonds were not really considered part of the system's mandate. But what happened the next year? Yes, World War I. And Wilson, who ran on the slogan "he kept us out of war" in 1916, started a long tradition of antiwar Democratic Presidents who took America to war (drawing the ire of among others Helen Keller, but garnering the support of union leader Sam Gompers who argued it was a "people's war"). Wilson also implemented a wide variety of highly repressive authoritarian measures, including the Palmer Raids, the Espionage Act of 1917, and the use of modern PR techniques by government agencies. For good measure, Wilson was an unreconstructed white supremacist (even a bit out there for the time) and sent many antiwar opponents to jail. In the monetary arena, Wilson's new Federal Reserve system began discounting government bonds. Like Lincoln, he had set up a tremendous war financing vehicle to centralize capital flows and therefore, political authority. In many ways, Wilson set up the rudiments of America's police state, and did so arguably to help a transatlantic Anglo-American banking elite. Here, one can argue that libertarians are wary of centralized financing and political authority for liberal reasons – the ACLU was founded after the Palmer raids. And finally, we come to Franklin Delano Roosevelt. Roosevelt's Fed is a bit more complex, because he did centralize monetary authority using wartime emergency powers, but he did so in peacetime. FDR abrogated gold clause contracts, seized the domestic supply of gold, and devalued the currency. He constrained banks with aggressive regulation and seizures of insolvent banks, saving depositors with the Reconstruction Finance Corporation. He also used the RFC to set up much of what we know today as the Federal government, including early versions of disaster relief, small business lending, massive bridge and railroad building, the FHA, Fannie Mae, and state and local aid. Eventually, the government used this mechanism to finance college and housing for veterans with the GI Bill. Since veterans were much of the population right after World War II, effectively this was the first ever near-national safety net. FDR also fused the liberal and union establishments with the corporate world, creating the hybrid "military-industrial" complex that is with us to this day. Later, this New Deal financing apparatus was used to finance the munitions industry and America's role in World War II. At one point, the RFC owned eight war material producing subsidiaries, including the synthetic rubber industry. Importantly, FDR had the Fed working for him. The Fed kept interest rates pegged at an interest rate set by Treasury, and used reserve requirements to manage inflation. This led to a dramatic drop in inequality, and unemployment sank to 1% during World War II. In 1951, the Fed, buttressed by what Tom Ferguson calls "conservative Keynesian" corporate leaders, broke free of this arrangement, under the Treasury-Fed Accord, leading to the postwar monetary order. That accord is where the vaunted "Federal Reserve Independence" came from. Now, if you're a libertarian, and you believe that centralized power is dangerous, then it's obvious that state control over finance and mass mobilization of social resources for warfare or other ends are two sides of the same coin. If you fear social spending, you could also be persuaded to believe that any financing mechanism for mass social spending is problematic. Creditors might just dislike the possibility of any state power centers that could challenge their hegemony and privilege labor/human rights over their property rights, though they do support captive state systems they control. If you are a white supremacist, centralized power can easily be viewed as a threat to racial homogeny, since historically it has acted as such in the past. But if you are against war, or you believe that a centralized state is likely to act in an unjust or repressive manner (as it also has in the past), then war financing is a reasonable target. Modern liberalism is a mixture of two elements. One is a support of Federal power – what came out of the late 1930s, World War II, and the civil rights era where a social safety net and warfare were financed by Wall Street, the Federal Reserve and the RFC, and human rights were enforced by a Federal government, unions, and a cadre of corporate, journalistic and technocratic experts (and cheap oil made the whole system run.) America mobilized militarily for national priorities, be they war-like or social in nature. And two, it originates from the anti-war sentiment of the Vietnam era, with its distrust of centralized authority mobilizing national resources for what were perceived to be immoral priorities. When you throw in the recent financial crisis, the corruption of big finance, the increasing militarization of society, Iraq and Afghanistan, and the collapse of the moral authority of the technocrats, you have a big problem. Liberalism doesn't really exist much within the Democratic Party so much anymore, but it also has a profound challenge insofar as the rudiments of liberalism going back to the 1930s don't work. This is why Ron Paul can critique the Federal Reserve and American empire, and why liberals have essentially no answer to his ideas, arguing instead over Paul having character defects. Ron Paul's stance should be seen as a challenge to better create a coherent structural critique of the American political order. It's quite obvious that there isn't one coming from the left, otherwise the figure challenging the war on drugs and American empire wouldn't be in the Republican primary as the libertarian candidate. To get there, liberals must grapple with big finance and war, two topics that are difficult to handle in any but a glib manner that separates us from our actual traditional and problematic affinity for both. War financing has a specific tradition in American culture, but there is no guarantee war financing must continue the way it has. And there's no reason to assume that centralized power will act in a more just manner these days, that we will see continuity with the historical experience of the New Deal and Civil Rights Era. The liberal alliance with the mechanics of mass mobilizing warfare, which should be pretty obvious when seen in this light, is deep-rooted. What we're seeing on the left is this conflict played out, whether it is big slow centralized unions supporting problematic policies, protest movements that cannot be institutionalized in any useful structure, or a completely hollow liberal intellectual apparatus arguing for increasing the power of corporations through the Federal government to enact their agenda. Now of course, Ron Paul pandered to racists, and there is no doubt that this is a legitimate political issue in the Presidential race. But the intellectual challenge that Ron Paul presents ultimately has nothing to do with him, and everything to do with contradictions within modern liberalism. |
| Bullish & Bearish Arguments For Precious Metals in 2012 Posted: 29 Dec 2011 01:34 AM PST Bullish & Bearish Arguments For Precious Metals in 2012 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. Fundamentally, the outlook for precious metals has never been better: the crisis seems to be far from over, and a lot of money needs to be printed. This should bode well for precious metals. Also, the fact that we haven't had a "mania" fase in Precious Metals yet (perhaps we had some of it earlier this year with Silver) is also supportive for the PM sector. Short term, sentiment in Gold is pretty bearish, as the charts from Sentimentrader show us: Sentiment is below the green dotted line. Those charts use a relative measure of extreme, that being 1.5 standard deviations from a one-year moving average. So when Public Opinion moves above the red dotted line or below the green dotted line in the chart, it means that compared to other readings over the past year, we're seeing a statistically extreme value. However, back in 2008, Public Opinion on Gold was even more bearish, which should hold us back from concluding that we are at the bottom for Gold. more here: http://profitimes.com/free-articles/...etals-in-2012/ |
| Morning Outlook from the Trade Desk - 12/29/11 Posted: 29 Dec 2011 12:33 AM PST 12/29/11 Euro broke 1.30 and selling accelerated. Year end capital loss and gain selling is adding to the momentum. Short term looks overdone but still a full day of trading today. Looks like this could become the trend as mentioned yesterday, but still believe this week may be an aberration. $1,520 should hold, but a break would suggest $1,480 and then $1,450 in a hurry. Thin panicky markets sometimes present excellent opportunities. 2012 beckons. If you were long the metals in the last few months the Mayans may look like a pretty good option right about now. |
| Posted: 29 Dec 2011 12:17 AM PST With the move below $1535 this morning gold has confirmed that it is still moving down into a D-Wave bottom. There has been some question as to whether or not the D-Wave had bottomed in September. The penetration of that intermediate low this morning confirms that the D-Wave did not end during the overnight selloff on September 26. In the chart below I have marked with blue arrows the last several yearly cycle lows. As you can see they tend to occur in January or February. The timing band for the next cycle low should occur sometime in early to mid January. That should mark the bottom of this D-Wave decline with the slight possibility that there could be one more short daily cycle down, bottoming in early February. This will almost certainly be dependent on whether the dollar cycle has one or two more daily cycles higher before rolling over into an intermediate decline. Current sentiment levels on the dollar index are suggesting only one daily cycle higher, which should signal a final bottom in the gold market sometime in the next 2-3 weeks.  If gold can make it back to the 50% retracement in the next couple of weeks I would probably be inclined to call a yearly cycle low at that point. If however gold holds above $1500 at the next daily cycle low due in early to mid-January then I would be wary of one more daily cycle down to test the 2010 consolidation zone and 50% retracement ($1400) sometime in early February.  The combination of the dollar rally out of its three year cycle low, gold's yearly cycle low, and a D-Wave decline are going to produce a very sharp correction in the gold bull market. Before this is over most analysts will declare the gold bull dead. On the contrary, sometime early next year you are going to get the single best buying opportunity we will ever have to reenter the secular gold bull in preparation for the bubble phase that should top in late 2014 or early 2015. As a matter of fact, now that we have confirmed that this is an ongoing D-Wave decline, once its bottom has formed it will generate a violent A-wave advance that should test the 1800 the $1900 level rather quickly later this spring.  Serious money will be made during the A-wave advance. One just needs the patience to wait for the D-Wave to bottom before jumping back into the pool.        This posting includes an audio/video/photo media file: Download Now |
| Tocqueville's Hathaway Sees 'Panic Liquidation' in Gold Posted: 28 Dec 2011 11:51 PM PST ¤ Yesterday in Gold and SilverThe gold price drifted about ten dollars lower during Far East trading during their Wednesday, with the London low coming about 10:00 a.m. local time. From there, the price began to rally...and was back to Tuesday's closing price by 9:00 a.m. in New York. Then the selling began in earnest...and the gold price headed for the nether reaches of the earth. Gold's low price tick of the day [$1,548.80 spot] came at precisely 3:30 p.m. Eastern time in the New York Access Market, where only the big U.S. bullion banks are allowed to play. From that low, gold recovered about five bucks going into the close of electronic trading at 5:15 p.m. Gold closed at $1,556.30 spot...down $36.00 on the day. Holiday trading volume was a monstrous 122,000 contracts compared to only 49,000 contracts on Tuesday.
The silver price was pretty flat all through the Far East and London sessions...and was only down about a dime when Comex trading began at 8:20 a.m. Eastern time in New York. The silver price didn't start heading south until 9:25 a.m...and within thirty-five minutes was down a buck...and then slowly sold off some more from there, with the absolute low of the day [$26.78 spot] coming a few minutes before 4:00 p.m. in electronic trading. From that point, silver gained back about two bits going into the close. The silver price closed at $27.15 spot...down $1.58...or 5.50%. Wednesday's volume was a very robust 32,500 contracts...compared to a miniscule 12,500 contracts on Tuesday.
According to Kitco's numbers, gold closed down 2.26%, silver was down 5.50%, platinum down 2.94%...and palladium closed down 3.19%. As is almost always the case, it's silver that gets in the neck, as the big commercial traders attempt to cover as many short positions as they can. The dollar traded sideways in very quiet trading until about 9:10 a.m. Eastern time, when a huge rally came out of nowhere...and by 11:30 a.m. the dollar had gained about 85 basis points...a bit over one percent. Although this dollar rally coincided with the fall in gold prices quite nicely, the dollar was down 40+ basis points before someone decided that silver's price should also be going lower...which it did about fifteen minutes after the gold price headed south. Once the top of the dollar 'rally' was in at 11:30 a.m...the dollar traded sideways for the rest of the day.
If I had to bet a dollar, it would be that this 'surprise' dollar rally...and the subsequent smashing of the precious metal prices...was an engineered event as there was absolutely no news of any type to substantiate what happened. The gold stocks got hit pretty hard...and by around 11:45 a.m. in New York, all the losses were in...and the HUI traded sideways from there, even though the gold price continued to decline for the rest of the day. The HUI finished down 3.58%.
It was the same story in silver...and Nick Laird's Silver Sentiment Index closed down 4.91%.
(Click on image to enlarge) One thing I did check yesterday was the current short interest in SLV that's posted every two weeks over at the shortsqueeze.com website. It showed that the short position in SLV declined by 3.2 million units/ounces over the last couple of weeks. SLV's short position is down to 22.0 million ounces, which is still preposterously higher for a hard metal fund. The CME's Daily Delivery Report showed that 88 gold and 4 silver contracts were posted for delivery tomorrow...and that does it for the December delivery month. First Day Notice for January delivery should be posted later today, but I'm not expecting there to be much, as January is not a big delivery month in either gold or silver. There were no reported changes in either GLD or SLV yesterday...and the U.S. Mint only reported selling 2,000 one-ounce 24K gold buffaloes. It was a busy day over at the Comex-approved depositories on Tuesday, as they reported receiving 1,300,864 troy ounces of silver on Tuesday...and didn't ship a single ounce out the door. Silver analyst Ted Butler had his mid-week commentary for his clients yesterday...and I've borrowed a few paragraphs from it... "It's no fun for silver investors to have to live through the current slam down in prices. Knowing that the sell-off is intentional makes the pain more acute. The sell-off this week, in particular, has taken on the characteristics of an historic bottom. Since the predominance of the evidence indicates that silver is oversold on an absolute basis and relative to just about everything else, the most logical investment approach is to treat it as a bottom. A deliberately created bottom, but a bottom nevertheless. That means holding or buying, not selling." "There is only one thing that could possibly account for the stunning price collapse, namely, the tremendous change in net holdings on the world's largest silver futures exchange, the COMEX (owned by the CME Group). As indicated in the COT report of September 6, when the price of silver was around $42, the total commercial net short position was 47,300 contracts. In the most recent COT report for positions held as of December 13, the total commercial net short position declined to 14,800 contracts (with further reduction likely in Friday's new report and beyond, given the continued decline in price since the last report). The commercials were able to reduce their total net short position by 32,500 contracts on the 35% price collapse. That's the equivalent of 162.5 million ounces of silver." Reader Scott Pluschau sent me this technical analysis he did on the silver price movements over the last little while. The TA work is excellent but, as I always tell Scott, the '8 or less' commercial traders can paint any chart pattern they want...and that's probably what they did here. Here's the link to Scott's short piece, which is worth the read...and contains two terrific graphs. I have the usual number of stories for you today, so I hope you will be able to skim most of them without taking up too much of your day. The rally that follows this clean-out in silver should be something to see...especially with the short-side fuel that's been added during the last few weeks. 2012 will be harder for metals price suppression, John Embry tells Eric King. U.S. Mint says has enough gold, silver Eagles coins. Gold Posts Longest Slump Since 2009, Silver Drops on Europe Woes? ¤ Critical ReadsSubscribeWhistleblower documents illuminate case against B of NY MellonConfidential whistleblower documents that helped spark a massive state and federal investigation into how Bank of New York Mellon Corp charged pension funds for currency exchange, provide a rare window into how a bank insider aided a lawsuit against the bank. The information provided by whistleblower Grant Wilson, who worked at BNY Mellon, included a detailed analysis of how the bank allegedly provided "fictitious" foreign-currency costs for pension funds. The analysis included a step-by-step guide to how currencies were traded and internal profits generated by the bank, according to documents seen by Reuters. A memo detailing fellow employees also was provided. This Reuters story was picked up by finance.yahoo.com late yesterday afternoon...and is Elliot Simon's first contribution to today's column. It's a must read for sure...and the link is here.  S.E.C. Wins Delay in Citigroup Fraud CaseA federal appeals court granted an emergency ruling late Tuesday that temporarily halted proceedings in the Security and Exchange Commission's case against Citigroup. The decision will allow the court to consider an appeal of a lower court's decision to throw out a $285 million fraud settlement between the commission and Citigroup. The United States Court of Appeals for the Second Circuit, based in New York, ruled that further action in the case would be delayed until at least Jan. 17, giving it time to rule on whether it would grant an expedited hearing of the appeal and whether the two sides should have to simultaneously prepare for a trial. Judge Jed S. Rakoff of Federal District Court in Manhattan threw out the settlement in November and ordered the agency and Citigroup to prepare for a trial in July. Although Citigroup and the S.E.C. have jointly appealed Judge Rakoff's decision, he said the underlying case should proceed, with the two sides continuing to prepare for court hearings in the case. This story appeared in Tuesday's edition of The New York Times...and I thank Phil Barlett for sending it along. The link is here.  The Fed's covert bailout of Europe: Gerald P. O'DriscollThe Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland, and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing. Why are the Fed and the ECB doing this? The Fed could, after all, lend directly to U.S. branches of foreign banks. It did a great deal of lending to foreign banks under various special credit facilities in the aftermath of Lehman's collapse in the fall of 2008. Or the ECB could lend euros to banks and they could purchase dollars in foreign-exchange markets. The world is, after all, awash in dollars. The two central banks are engaging in this roundabout procedure because each needs a fig leaf. The Fed was embarrassed by the revelations of its prior largess with foreign banks. It does not want the debt of foreign banks on its books. A currency swap with the ECB is not technically a loan. This story showed up in The Wall Street Journal yesterday...and is posted in the clear in this GATA release...and the link is here.  JPMorgan's Swaps Occupying Cassino Prove Curse Like World War IIWorld War II's Battle for Cassino leveled the Italian town and its hilltop abbey. Now, the 33,000 residents are digging out from the rubble left by Wall Street. Six decades after U.S.-led forces ousted the Nazis from Cassino, a new generation is grappling with the fallout from the debts of postwar rebuilding -- borrowings that grew because of a derivative that backfired. Soaring costs forced Cassino, 80 miles southeast of Rome, to settle an interest-rate swap with JPMorgan Chase & Co. in 2009, leaving the town unable to pay for daycare for 60 infants and services for the poor. It sounds like JPMorgan pulled a "Jefferson County" in Cassino, Italy...and I'm sure there are lots more example of this floating around that we haven't heard of yet. I thank Australian reader Wesley Legrand for digging up this businessweek.com story from late last night...and it's certainly worth the read...and the link is here.  Argentina tango lessons: Europe's turn for financial danse macabre?Argentina was used as a testing ground by the global power elite to learn how a full-scale financial, monetary, banking and economic collapse can be controlled and its social consequences suitably engineered to ensure that, with time: (a) the bankers came out unharmed, (b) "democratic order" is re-instated and the new government imposes another sovereign debt mega-swap, balance their numbers, and calm the people down (or else!), and (c) put big smiles back on bankster faces…Business as usual! The lessons learned in Argentina in 2001/3 are today being used in Greece, Ireland, Spain, Italy, Iceland, the UK and the US. So, "Occupy Wall Street" demonstrators, lend me your ears! You haven't got a chance! The global money masters already made their financial war game exercise in Argentina. This is a very interesting article is posted over at the asalbuchi.com.ar website. I consider it a must read...and I thank Roy Stephens for sharing it with us. The link is here.  UK jobs outlook is the 'worst for 20 years'The Fed's covert bailout of Europe: Gerald P. O'Driscoll Posted: 28 Dec 2011 11:51 PM PST  The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland, and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing. |
| 2012 will be harder for metals price suppression, Embry tells King World News Posted: 28 Dec 2011 11:51 PM PST  Sprott Asset Management's John Embry told King World News that the fundamentals supporting gold and silver as insurance against monetary debasement remain in place, that Asian demand for the metals is strong, that the market manipulators have an easy time pushing futures prices down during the holiday week, and that he expects 2012 to bring lots more "quantitative easing" and sharply rising metal prices. This is a must read...and I thank Chris Powell for providing the preamble. The link to the KWN blog is here. |
| U.S. Mint says has enough gold, silver Eagles coins Posted: 28 Dec 2011 11:51 PM PST  The United States Mint said on Wednesday it has enough American Eagle gold and silver bullion coins to meet demand and does not expect to allocate them in early 2012. Sales of the U.S. gold and silver bullion coins have slowed in the fourth quarter as precious metals prices retreated from record highs, bucking a trend earlier this year when investors flocked to physical gold and silver as safe havens. "As we plan on having sufficient quantities of all coins available, we do not anticipate having to allocate the initial release," U.S. Mint spokesman Michael White said in a note. |
| Gold Posts Longest Slump Since 2009, Silver Drops on Europe Woes Posted: 28 Dec 2011 11:51 PM PST  Gold fell, capping the longest slump since October 2009, and silver tumbled to a three-month low as Europe's deepening debt crisis drove commodities and stocks lower. This Bloomberg story was posted over at the businessweek.com website yesterday...and if you believe these reasons why gold and silver 'fell' all of a sudden starting at 9:00 a.m. Eastern time yesterday, then I have some swamp land that I want to sell you real cheap. |
| Gold bulls ravaged by angry bears Posted: 28 Dec 2011 10:00 PM PST Gold and silver bulls endured another tough day yesterday, as silver sunk below the $28 mark, while the gold price fell towards the mid $1,500s. The lack of liquidity in the futures market at the ... |
| Posted: 28 Dec 2011 09:55 PM PST Matt Stoller is a fellow at the Roosevelt Institute. You can follow him on twitter at http://www.twitter.com/matthewstoller. China Eclipses US as Top IPO Venue (Financial Times) American banks sad. Aww. Euro Swan Dive Splashes Santa (Credit Writedowns) American banks even sadder. Successful Italy bond auction lifts mood (Financial Times) American banks happy again! Cocaine for everyone! Why America Can't Afford Its Military (Counterpunch) h/t May S MF Global Scrutinized on Money Moves (NYT Dealbook) Rare Asian Bird Takes "Wrong Turn", Lands in Tennessee (Reuters h/t May S) Putin Softens Stance Towards Protesters (Financial Times) Someone's taking active listening courses. Vladimir, is that you? Middle-aged borrowers piling on student debt (Reuters, h/t Robert) Big Funds Build Case for Housing (Wall Street Journal) Some big hedge funds are beginning to bet on a housing turnaround. Calculated Risk notes that residential investment was a net positive to GDP in 2011. And I'm seeing more and more pretty charts on the interwebs showing that there has been population growth and no home building for three or four years, so maybe there's pent up demand ready to rock and roll. On the other hand, there was essentially no homebuilding from 1931 all the way to 1945, which is, let me see, 14 years (I can add, take THAT economists.) And then pent up demand really exploded, but that was also because of the massive new liquidity of the American middle class and rising wages. It's not just new household formation, guys. But then, you knew that, else you wouldn't be billionaire hedge fund managers, right? Except for you, John Paulson. Go sit in a corner. Lure of Chinese Tuition Squeezes Out Asian-Americans (Bloomberg) Foreigners are paying a ton to study at American universities, crowding out space that should go to Americans. Wow, where to start? There's so much wrong with [head explodes] US shells out record for peanuts (Financial Times) Yeah, that headline is perfect. I can now die and say I lived a full life. Why Is Finance So Complex? (Interfluidity) I don't really agree with the premise, but it's interesting and that is one of my absolute favorite blogs. Why You Shouldn't Curse at Work (Bloomberg Businessweek) The 99% Choir Goes Christmas Caroling (Firedoglake) Rick Santorum Support Triples in Iowa (The Guardian) And auction 2012 continues… The Same Picture of Dave Coulier Every Day (Tumblr) Not political or finance-related, just hilarious. Chavez: U.S. May Be Behind Leaders' Cancer (Bloomberg) Apparently a bunch of Latin American leaders have been getting odd forms of cancer.
What a passive aggressive way to accuse the US of giving you cancer! Come on, you can do better than that as foreign policy villain du jour. Oh wait, today that's the Iranian mullahs. Never mind, you're just an amusing sideshow. Chavez, you are adorable! You just stamp your wittle feet and blame your cancer on the American State Department or CIA or whoever. The Fat Trap (New York Times) Next up for sale in Florida: the naming rights to public school cafeterias? (The Buzz) I grew up in Florida, and I've always been impressed by the level of both greed, incompetence, and tackiness the state's politicians can cook up. This one's right up there. You go Florida, hold your head up high. Spanish mortgage market continues to collapse (Trust Your Instincts) At this point austerity is like a guy who says "GuyWhoWantsToBePunchedInTheFaceSaysWhat". And of course you say what. And by "you", I mean all of Europe. And by, ok, this is a terrible metaphor. Let's move along. 20% of Irish mortgage holders behind on their payments (Trust Your Instincts) More proof that austerity works, this time with a cute Irish accent. Don't tell me you are super-depressed and behind on your mortgage, sing me a limerick! January 16, Occupy Plans to Honor Martin Luther King by Occupying Federal Reserve Banks (OWS News) The Era of the Ron Paul Newsletters Isn't Even Past (Rortybomb) Alan Grayson Speaks Up for… Mitt Romney? (Dailykos) Caught On Tape: Clerk Punches, Knocks Out Armed Robbe: Clerk Then Makes Suspect Clean Up His Own Blood (WYFF 4) Ewww. But you will click. The coming war on general computation (28C3, h/t BoingBoing) Iran unlikely to block oil shipments through Strait of Hormuz, analysts say (Washington Post) Pentagon trimming ranks of generals, admirals (Washington Post) Women Laughing "Alone" With Salad, the Halloween Costume (The Hair Pin) My Political Prediction for 2012: It's Obama-Clinton (Bob Reich) - Yeah, ok, Bob. Reich's one of those people I call "bad good guys". He seems like he's on your side, but his work in the 1990s to push NAFTA through was absolutely devastating to the middle class, and the roots of his thought are essentially neoliberal in nature (especially the globalization crap). I could be persuaded otherwise on Reich, but I've never seen him admit his support for NAFTA was wrong. And the antidote du jour
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| Platinum: Fire Sale on the Rich Man’s Gold Posted: 28 Dec 2011 09:20 PM PST What Makes Platinum Precious Enough to be Called Rich Man's Gold
About 2000 years ago, Aristotle explained why gold remained the ideal choice of money throughout major nations and civilizations. In words that are just as relevant today, he said "Gold is durable, not like wheat, divisible, not like diamonds, convenient, not like lead, constant, not like real estate, and best of all, as jewelry, it has intrinsic value". Among the most rare, valuable and sought after metals on Earth, platinum shares these same characteristics with gold. Platinum Guild International names platinum as the "most precious" of the precious metals based on its relative scarcity as well as for the following reasons: (1) The annual supply of platinum is only about 6.4 million oz. – which is equivalent to only 7.4% of the annual gold production and 0.87% of silver's annual mine production. Read More @ Prophecyplat.com |
| Posted: 28 Dec 2011 09:17 PM PST by Peter Grant, USAGold.com:
That's pretty impressive given the dramatic delveraging sell-off from the 1920.50 record high we saw in September, which prompted all manner of commentary proclaiming the end of gold's decade-long rally. More recently — amid another bout of deleveraging associated with rising uncertainty about the fate of European Union — the yellow metal retested the September low at 1534.06 along with important channel support. While much was made of the technical damage done by the recent move below the 200-day moving average, gold continues to display good resilience, underpinned by solid fundamentals. Read More @ USAGold.com |
| WATCH: The Fed is Secretly Bailing Out Europe Posted: 28 Dec 2011 09:14 PM PST A former Fed official says in the Wall Street Journal that the Federal Reserve is covertly bailing out Europe. Insight with Gerald O'Driscoll Cato Institute senior fellow, who says the Fed operated a "temporary U.S. dollar liquidity swap arrangement." ~TVR |
| Physical Gold & Silver Tight Posted: 28 Dec 2011 09:12 PM PST John Embry: Physical Gold & Silver Tight Because of Eastern Buying from King World News:
Continue reading @ KingWorldNews.com |
| Gold & Silver Market Morning, December 29, 2011 Posted: 28 Dec 2011 09:00 PM PST |
| Silver Update: “The Final Smackdown” Posted: 28 Dec 2011 08:58 PM PST from BrotherJohnF:
~TVR |
| Protecting Yourself against the Creature from Jekyll Island Posted: 28 Dec 2011 08:19 PM PST Jay Taylor discusses the Creature from Jekyll Island and how you can protect yourself from it. Who is the Creature? It's the Fed, whose unpopular creation was clandestinely planned by some of the most powerful banking families on earth at Jekyll Island in 1910. Once you understand why the Fed was created and by whom, the recent bailouts of the wealthy and the impoverishment of the middle classes in America are not difficult to understand. We can hope and pray for Ron Paul's victory at the polls and a return to implementing the U.S. Constitution. Jeff Deist, Ron's Chief of Staff, talked with us about those prospects. But short of a return from our current fascist policies, how can we best protect ourselves from loss of wealth to the ruling elite? That answer always takes us back to real money, gold and silver. Nolan Watson, the CEO of Sandstorm Gold, one of your host Jay Taylor's favorite gold stocks, tells us how he is building wealth for his shareholders. This Week's Audio
        This posting includes an audio/video/photo media file: Download Now |
| More Economic Recovery Evidence (NOT!) Posted: 28 Dec 2011 07:45 PM PST Our economy continues to deteriorate. From The Economic Collapse comes this evidence: In the middle of this "economic recovery" that Obama keeps talking about a staggering number of retail stores are closing up shop. The following is a list of store closings in 2011 that I recently found. The first number represents the total number of [...] |
| “Summer” Rerun: Why Big Capital Markets Players Are Unmanageable Posted: 28 Dec 2011 05:00 PM PST This post first appeared on July 8, 2009 John Kay comes perilously close to nailing a key issue in his current Financial Times comment, "Our banks are beyond the control of mere mortal" in that he very clearly articulates the problem very well but then draws the wrong conclusion: At Oxford university, I often hear people say there is nothing wrong with the system: the problem is the vice-chancellor/master/bursar/ university officials. And, in a sense, they are right. If the vice-chancellor had the wisdom of Socrates, the political skills of Machiavelli and the leadership qualities of Winston Churchill, not to mention the patience of Job, he or she would be very likely to be able to fulfil the conflicting demands of the post. But such paragons are few and far between. In the meantime we must try to find structures that can be operated by ordinary mortals. The problem is Kay is applying traditional managements structures to investment banking, Even though these entities may have substantial retail arms and bank charters, the area that poses the management challenge is the capital markets businesses. And he makes a dangerous, erroneous assumptions: that mere mortals, meaning generalists, can run these businesses. That is bogus. What makes capital markets businesses different from any other form of enterprise I can think of is the amount of discretion given of necessity to non-managerial employees, meaning traders, salesmen, investment bankers, analysts. In pretty much any other large scale business, decisions that have a meaningful bottom line impact (pricing, new sales campaign, investment decision) are deliberate affairs, ultimately decided at a reasonably senior level. The discretion that customer-facing staff have in pretty much any business in limited. At what level does someone have the authority to negotiate a contract? And even then, how many degrees of freedom do they have? By contrast, think how many decisions traders and salesmen in capital market firms make in a day, and their potential bottom line impact (though experiment: how much damage could a truly vindictive trader do in a day or a week, if he decided to blow up his employer?) Investment bankers work over longer time frames, and like many normal businesses, have a lot of things routinized so as to make them more efficient, but it also limits their latitude (standard forms for many types of client agreements, standard pitch book formats, etc). However, unlike "normal" businesses, a frequent activity in investment banking is creating new products, often in a very ad-hoc way, with teams with relevant skills thrown together to try to push something through. The politics are often sharp-elbowed, but people are too pragmatic to let turf issues interfere with getting a new deal launched). The approach for managing these businesses in the days of partnerships, when the owners were personally liable for losses, was to have small units with partners running them who knew the business and could oversee it properly. Effectively you had four layers: associate/analyst (the college kids, the analysts, did pretty much the same stuff the associates did, who usually had MBAs, except the MBAs got to go to client meetings more often), VPs, and partners, but some of the more senior partners were department heads in units that also had partners (who'd manage either people on their desks, if traders of salesmen, or if in investment banking, had accounts and various VPs and associate types working on each client). But those department heads had also grown up in the business, and were still active in it. Heads of significant departments in turn would be on an executive committee, a part-time role. The problem with this model is it starts to come under strain when the partner group gets too large. And OTC markets have strong network effects, so having bigger market share confers a competitive advantage. And now there are high minimum scale requirements for being in the business. You need to be in all major times zones with a pretty broad product array. all kinds of back office support, all kinds of IT for risk management, communications, position management… So the scale of operation required to be competitive is too large for it to be managed by player-coaches who had deep expertise, and like the Dimon example, were more expert than the people working for them. But the normal corporate/commercial banking management structure, with more managerial layers, and the top brass having broader spans of control, was devised in earlier stages of industrial organization, when you had factories or service business with a great deal of routinization of worker and middle manager tasks. Traditional commercial banks are on the same factory format. They handle large volumes of very simple, standard transactions with a high degree of control and oversight. That's a big reason why it took commercial banks over 15 years to make meaningful headway against investment banks. Although regulations were an issue, the bigger barrier was the radical difference between the two management cultures. There was no regulatory barrier to commercial banks offering mergers & acquisitions, for instance, but they were lousy at that for a very long time. So Kay is effectively asking for a traditional commercial banking model, businesses "that make the most of the ordinary talents of ordinary people". There are businesses like that in banking, but they are mainly in retail banking and corporate lending. If you want that world, you need a far more radical change in the industry than anyone is contemplating now. You'd need to go to the world that Taleb advocates, From a list of his ten suggestions: 4. Do not let someone making an "incentive" bonus manage a nuclear plant – or your financial risks. Odds are he would cut every corner on safety to show "profits" while claiming to be "conservative". Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards. If we can't shut down credit default swaps, which the more I dig, the more I see they had a very direct role in the meltdown CDS on subrprime mortgages started in 2004, and there is a longer form gloss as to how that played a major role, if not the key role, in the superheated demand for "product" particularly subprime, in the manic phase of the credit bubble), we will never get to a world like the one Kay wants to see, or at least not until we hopelessly break the one we have now. |
| South India accounts for 40% of gold purchases Posted: 28 Dec 2011 02:39 PM PST |
| London Precious Metals Catch Up with Indian Slump, China Ban, Fall to 2-Week Low Posted: 28 Dec 2011 02:07 PM PST Weds 28 Dec., 07:00 ESTLondon Precious Metals Catch Up with Indian Slump, China Ban, Fall to 2-Week Low THE PRICE OF physical gold bullion fell again as London re-opened Wednesday after the Christmas and Boxing Day holidays, dropping to two-week lows against all major currencies in what dealers called a "very quiet session". London dealers returning to work caught up with a 1.4% drop for the week so far, plus news of falling industrial output in Japan, seasonally low jewelry demand in Indian – the world's No.1 gold buying nation – and also a new edict from the People's Bank of China, banning all non-official gold trading exchanges in the world's No.2 gold consuming country. Silver prices also hit a 2-week low, dropping 2.1% from London's last session, while Asian stock markets closed Wednesday lower – tracking industrial commodities down – following a raft of weak economic data from Japan. But European equities ticked higher as Italy successfully raised more than €10 billion in new loans. Buyers of Rome's new 6-month bonds demanded an average annual interest rate of 3.25%, down from 6.50% at a sale in November. Commercial banks in the 17-nation Eurozone last night parked a record €452 billion on deposit with the European Central Bank, beating the previous day's record of €412bn, and more than €187bn larger than before the ECB lent the banks €489bn in 3-year money at a cost of just 1% last week. "The Rupee has gone down considerably," says a Mumbai-based Gold Dealer quoted by the Economic Times of India, "and general feeling among consumers is that gold will fall from the current [high Rupee-price] levels. "That's why demand is not improving." The Rupee has sunk to all-time lows on the foreign exchange market in 2011, despite the strongest interest-rate hikes since the Great Depression of the mid-1930s. The Bombay Bullion Association said Tuesday that December's imports of gold bullion to India – which has no domestic gold mining output – will likely stand 50% below the level of Dec. 2010. "Inflation is too high and buying is not very aggressive," says Prithviraj Kothari, president of the BBA, adding that gold needs to fall back to 25,000 Rupees per 10 grams to "spur some buying interest" after rising more than 30% and hitting new records above Rs29,000 earlier this month. Tuesday also saw the People's Bank of China order the closure of all Gold Trading platforms and services outside the Shanghai Gold Exchange and Shanghai Futures Exchange, which – as it notes – are "approved by the State Council. "Since 2001," the PBoC said in a press release accompanying the edict, "China's gold market has developed very rapidly…[as part of] the financial market system in which it plays an important role. "The impact of enthusiastic investors in recent years…highlights the problem of illegal trading exchanges." China's move comes seven months after the United States banned leveraged commodities and gold trading by "retail" investors outside the recognized investment exchanges such as Comex. At the official-sector level, "The Chinese government should…further optimize its foreign-exchange portfolio and purchase gold assets when the gold price shows a favorable fluctuation," says Zhang Jianhua, director of a research bureau affiliated with the PBOC, writing Tuesday in Beijing's Financial News, which is also run by the central bank. It is now almost 3 years since the PBoC last updated its official gold bullion holdings, announcing a 75% uplift from 2003 at 1054 tonnes. That took China to No.5 in the world league table of national central-bank gold holders. As a proportion of total reserves however, China stands at No.65, holding just 1.6% of its $3.2 trillion forex hoard in physical gold bullion. 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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| Protected: Subscriber Update: Gold Stocks & Gold Posted: 28 Dec 2011 01:08 PM PST
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In recent weeks the rupee silver price has been in a downward trend. In today's trading at Indian futures markets, silver contracts dropped by an average of 1,115, rupees down to 50,651 rupees per kilo. At the Multi Commodity Exchange, futures for May delivery – one of the most actively traded contracts – dropped by 2.2%.
Gold is consolidating below $1600 as we enter the last week of the year. The last London gold fix of 2010 was $1405, so barring any dramatic price changes in the last week of the year, the yellow metal is on-track for yet another double-digit gain of about 14%.
With near panic in the gold and silver markets, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management to get his take on where he sees gold, silver and the mining shares headed. When asked about the action in gold, Embry said, "It's disappointing in the sense that it shouldn't be happening. I can't say that I'm totally surprised, you are in the quietest period of the year. These guys (manipulators) are sociopaths. They've basically taken the opportunity here to just take gold and silver to the cleaners in the paper market in an extraordinarily quiet period."
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