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Tuesday, January 3, 2012

Gold World News Flash

Gold World News Flash

Obama's NDAA Signing Statement, Collapse of Society & More

Posted: 02 Jan 2012 04:12 PM PST

On this first live show of 2012, Alex takes a large number of your calls and talks about the latest news, including the Iowa caucus tomorrow and Ron Paul's chances as the Republican establishment plots against him and pushes the script-reading warmongers Mitt Romney and the recently come-from-behind candidate Rick Santorum, who has proposed air strikes on Iran.

Alex also talks about the concerted effort by the corporate media to fiddle with poll results in order to downplay Ron Paul's obvious lead in the eleventh hour before the caucus. Alex takes a look at the police state NDAA legislation signed into law by Obama, who promises he will not send the military to arrest American citizens and strip them of their rights under the Fourth Amendment. Read more.....


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

Michael Pento - Gold is The Last Reserve Chute to Be Deployed

Posted: 02 Jan 2012 04:02 PM PST

With trading commencing for 2012, today Michael Pento, of Pento Portfolio Strategies, writes for King World News to explain that as currencies continue to crash, the only reserve chute left will be gold: "With gold selling off about 20 percent in the last few weeks, there appears to be much confusion as to what, if anything, has changed for the bullish scenario. But the truth is not much. Gold is now and always has been a hedge against a falling dollar, which is the result of an inflationary monetary policy."


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

Trade Ideas for Early 2012

Posted: 02 Jan 2012 03:01 PM PST

Chris Vermeulen has a new article entitled "Five best ideas for the next two weeks" which is an informative, educational and a good read. Chris is generally very accurate with indexes, commodities (including gold/silver) and the dollar and is well followed. I personally disagree with his current assessment but I could be wrong. That is what makes a market. In any event, he also running a 50% off special for the subscription part of his service which might be of interest for those who are in need more frequent updates. You can review the free article and offering here. Word has it the 50% special will be extended to Wednesday PM. Happy New Year! ...


2012 Will Be More Difficult Than 2011

Posted: 02 Jan 2012 02:37 PM PST

from The Economic Collapse Blog:

Do you believe that 2012 will be more difficult for the global economy than 2011 was? Well, that is what German Chancellor Angela Merkel believes. The woman that has become the most important politician in Europe recently declared that 2012 "will no doubt be more difficult than 2011″. The funny thing is that she has generally been one of the most optimistic public figures in Europe throughout this debt crisis. But now even Merkel is openly admitting that 2012 is going to be a really, really bad year. Sadly, most Americans simply do not understand how important Europe is or how interconnected the global financial system has become. The United States actually has a smaller population and a smaller economy than the EU does. In fact, the EU has an economy that is nearly as large as the economies of the United States and China combined. The EU also is home to more Fortune 500 companies that the U.S. is, and the European banking system is far larger than the U.S. banking system. Anyone that does not believe that a financial collapse in Europe will have a devastating impact on the U.S. economy is living in a fantasy world. Americans better start paying attention to what is going on over there, because we are about to be broadsided by a massive financial tsunami originating out of Europe.

Read More @ TheEconomicCollapseBlog.com

There Is No Joy In Muddlethroughville: World's Biggest Hedge Fund Is Bearish For 2012 Through 2028, And Is Long Gold

Posted: 02 Jan 2012 02:33 PM PST

That Ray Dalio, famed head of the world's largest (and not one hit wonder unlike certain others) hedge fund has long been quite bearishly inclined has been no secret. For anyone who missed Dalio's must see interview (and transcript) with Charlie Rose we urge you to read this: "Dalio: "There Are No More Tools In The Tool Kit." For everyone who is too lazy to watch the whole thing, or read the transcript, the WSJ reminds us once again that going into 2012 Dalio's Bridgewater, which may as well rename itself Bearwater, has not changed its tune. In fact the CT hedge fund continues to see what we noted back in September is the greatest threat to the modern financial system: a debt overhang so large, at roughly $21 trillion, that one of 3 things will have to happen: a global debt restructuring/repudiation; global hyperinflation to inflate away this debt, or a one-time financial tax on all individuals amounting to roughly 30% of all wealth. That's pretty much it, at least according to mathematics. And according to Bridgewater. From the WSJ: "Bridgewater Associates has made big money for investors in recent years by staying bearish on much of the global economy. As the new year rings in, the hedge fund firm has no plans to change that gloomy view...What you have is a picture of broken economic systems that are operating on life support," Mr. Prince says. "We're in a secular deleveraging that will probably take 15 to 20 years to work through and we're just four years in." So basically scratch everything between 2012 and 2028? But, but, it was that paragon of investment insight Jim "Bloody Ridiculous Investment Concept" O'Neill keeps telling us stocks will go up by 20%... stocks will go up by 20%....stocks will go up by 20%...

From the WSJ:

Robert Prince, co-chief investment officer at Bridgewater, and his managers at the world's biggest hedge fund firm are preparing for at least a decade of slow growth and high unemployment for the big developed economies. Mr. Prince describes those economies—the U.S. and Europe, in particular—as "zombies" and says they will remain that way until they work through their mountains of debt.

 

In Europe, "the debt crisis is [a] long ways from over," he says. The economic and financial morass will mean interest rates in the U.S. and Europe will essentially be locked at zero for years.

 

In this bleak environment, Mr. Prince says stocks remain vulnerable to "air pockets" from shocks, such as bad news out of Europe. But for longer-term investors looking out over the next decade, he says, equities may be a good buy. There is even money to be made in U.S. Treasurys, despite interest rates near record lows, and gold is likely to resume its climb as central banks print money to bolster their economies. Mr. Prince says

Unlike Paulson, who would have been best advised in the beginning of 2011 to park his money with these "bears", and has lately become a running watercooler joke, what Bridgewater says is actually relevant:

The views of Bridgewater are keenly watched by other investors, given the firm's elevated status in the competitive world of hedge-fund investing. Bridgewater's flagship Pure Alpha Strategy fund is considered one of the top funds in the world. As of the end of November, it was up 25% since the start of the year, according to people familiar with the situation. The average macro fund had lost 3.7%, according to Hedge Fund Research.

Also, don't tell spam-loving party animal econ professors, but the $122 billion hedge fund, is long gold.

Currently, the fund is positioned for higher gold prices, stronger Asian emerging-market currencies and lower yields across high-quality government bond markets, Mr. Prince says.

And for all those marrionettes who parrot the release of patently manipulated and fraudulent data such as anything out of the BLS or the NAR, here is what is really driving those "better than expected" recent numbers, which goes to the core of our argument that the US has not decoupled - not by a long shot - it is merely sustaining as consumers deplete every last bit of savings. Another words for which, of course, is lagging.

Recent better-than-expected news on the U.S. economy is unlikely to be the start of a healthy expansion, he says. The uptick in economic growth has been fueled by a decline in the savings rate, which, without material income and employment gains, is unlikely to be sustainable as long-term credit growth also remains weak, he says.

 

The problem for the U.S, says Mr. Prince, is that it is on the wrong side of a long-term debt cycle.

 

"We were in a leveraging-up period for 60 years, from the early 1950s to 2008," he says. This debt bubble was self-reinforcing on the way up, and "when it tipped over, it set about a self-reinforcing process on the way down."

 

As evidence for the long slog facing the U.S economy, he notes that the level of leverage, as measured by comparing household income to net worth, is still higher than it was before 2008.

Which means what?

Against this backdrop, the Federal Reserve will need to do more quantitative easing—buying of government bonds—but Mr. Prince says the purchases will probably be sporadic.

 

Gold prices should resume a rally amid continued printing of money by the Fed and other central banks, Mr. Prince says. Those efforts effectively devalue those countries' currencies compared with gold.

Bingo, and thus for all the (completed redemption driven) year end gold dumping, we have just one question: when is John Paulson's Q4 13F coming out (that's rhetorical - we know not only when it is coming out, but what is in it - stay tuned).

As for the cataclysm across the Atlantic:

"You've got insolvent banks supporting insolvent sovereigns and insolvent sovereigns supporting insolvent banks," he says.

We could not have said it better ourselves.

Michael Pento: Gold is The Last Reserve Shoot to Be Deployed

Posted: 02 Jan 2012 02:18 PM PST

from King World News:

With trading commencing for 2012, today Michael Pento, of Pento Portfolio Strategies, writes for King World News to explain that as currencies continue to crash, the only reserve shoot left will be gold: "With gold selling off about 20 percent in the last few weeks, there appears to be much confusion as to what, if anything, has changed for the bullish scenario. But the truth is not much. Gold is now and always has been a hedge against a falling dollar, which is the result of an inflationary monetary policy."

Michael Pento continues: Read More @ KingWorldNews.com

30 Statistics That Show That The Middle Class Is Dying Right In Front Of Our Eyes As We Enter 2012

Posted: 02 Jan 2012 02:13 PM PST

30 Statistics That Show That The Middle Class Is Dying Right In Front Of Our Eyes As We Enter 2012

Courtesy of Michael Snyder of Economic Collapse

Once upon a time, the United States had the largest and most vibrant middle class that the world has ever seen. Unfortunately, that is rapidly changing.  The statistics that you are about to read prove beyond a doubt that the U.S. middle class is dying right in front of our eyes as we enter 2012. 

The decline of the middle class is not something that has happened all of a sudden.  Rather, there has been a relentless grinding down of the middle class over the last several decades.  Millions of our jobs have been shipped overseas, the rate of inflation has far outpaced the rate that our wages have grown, and overwhelming debt has choked the financial life out of millions of American families.  Every single day, more Americans fall out of the middle class and into poverty.  In fact, more Americans fell into poverty last year than has ever been recorded before.  The number of middle class jobs and middle class neighborhoods continues to decline at a staggering pace. 

As I have written about previously, America as a whole is getting poorer as a nation, and as this happens wealth is becoming increasingly concentrated at the very top of the income scale.  This is not how capitalism is supposed to work, and it is not good for America.

Today I went over to Safeway and I was absolutely appalled at the prices.  I honestly don't know how most families make it these days.  I ended up paying over 140 dollars for about two-thirds of a cart of food.  That was after I "saved" 67 dollars on sale items.

When the cost of the basic things that we need - housing, food, gas, electricity - go up faster than our incomes do, that means that we are getting poorer.

Sadly, if you look at the long-term numbers, some very clear negative trends emerge....

-The number of good jobs continues to decrease.

-The rate of inflation continues to outpace the rate that our wages are going up.

-American consumers are going into almost unbelievable amounts of debt.

-The number of Americans that are considered to be "poor" continues to grow.

-The number of Americans that are forced to turn to the government for financial assistance continues to go up.

After you read the information below, it should become abundantly clear that the U.S. middle class is in a whole heap of trouble.

The following are 30 statistics that show that the middle class is dying right in front of our eyes as we enter 2012....

#1 Today, only 55.3 percent of all Americans between the ages of 16 and 29 have jobs.

#2 In the United States today, there are 240 million working age people.  Only about 140 million of them are working.

#3 According to CareerBuilder, only 23 percent of American companies plan to hire more employees in 2012.

#4 Since the year 2000, the United States has lost 10% of its middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.

#5 According to the New York Times, approximately 100 million Americans are either living in poverty or in "the fretful zone just above it".

#6 According to that same article in the New York Times, 34 percent of all elderly Americans are living in poverty or "near poverty", and 39 percent of all children in America are living in poverty or "near poverty".

#7 In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger.  Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.

#8 Since the year 2000, incomes for U.S. households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you adjust for inflation.

#9 The total value of household real estate in the U.S. has declined from $22.7 trillion in 2006 to $16.2 trillion today.  Most of that wealth has been lost by the middle class.

#10 Many formerly great manufacturing cities are turning into ghost towns.  Since 1950, the population of Pittsburgh, Pennsylvania has declined by more than 50 percent.  In Dayton, Ohio 18.9 percent of all houses now stand empty.

#11 Since 1971, consumer debt in the United States has increased by a whopping 1700%.

#12 The number of pages of federal tax rules and regulations has increased by18,000% since 1913.  The wealthy know how to avoid taxes, but most of those in the middle class do not.

#13 The number of Americans that fell into poverty (2.6 million) set a new all-time record last year and extreme poverty (6.7%) is at the highest level ever measured in the United States.

#14 According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.

#15 According to U.S. Representative Betty Sutton, America has lost an average of 15 manufacturing facilities a day over the last 10 years.  During 2010 it got even worse.  Last year, an average of 23 manufacturing facilities a day shut down in the United States.

#16 Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.

#17 Most Americans are scratching and clawing and doing whatever they can to make a living these days.  Half of all American workers now earn $505 or less per week.

#18 Food prices continue to rise at a very brisk pace.  The price of beef is up9.8% over the past year, the price of eggs is up 10.2% over the past year and the price of potatoes is up 12% over the past year.

#19 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

#20 The average American household will have spent a staggering $4,155 on gasoline by the end of 2011.

#21 If inflation was measured the exact same way that it was measured back in 1980, the rate of inflation in the United States would be well over 10 percent.

#22 If the number of Americans considered to be "looking for work" was the same today as it was back in 2007, the "official" unemployment rate put out by the U.S. government would be up to 11 percent.

#23 According to the Student Loan Debt Clock, total student loan debt in the United States will surpass the 1 trillion dollar mark at some point in 2012.  Most of that debt is owed by members of the middle class.

#24 Incredibly, more than one out of every seven Americans is on food stamps and one out of every four American children is on food stamps at this point.

#25 Since Barack Obama took office, the number of Americans on food stamps has increased by 14.3 million.

#26 In 2010, 42 percent of all single mothers in the United States were on food stamps.

#27 In 1970, 65 percent of all Americans lived in "middle class neighborhoods".  By 2007, only 44 percent of all Americans lived in "middle class neighborhoods".

#28 According to a recent report produced by Pew Charitable Trusts, approximately one out of every three Americans that grew up in a middle class household has slipped down the income ladder.

#29 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

#30 The poorest 50 percent of all Americans now collectively own just 2.5%of all the wealth in the United States.

Sadly, this article could have been much, much longer.  There are so many other statistics about the middle class that could have been included.

For even more insane economic numbers that show just how dramatically the U.S. economy is declining, just check out this article: "50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe".

What is even more frightening is that this is about as good as things are going to get.

We have already had "the economic recovery", such as it was.

Now we are heading for another major financial crisis.  Just like back in 2008, the entire world is going to feel the pain.

But we never recovered from the last financial crisis.  We are like a boxer that is not ready to handle another blow.

And who is going to get hurt the most?  It will be those at the bottom of the food chain of course.  Tens of millions of Americans that are living in poverty will experience a massive amount of pain, and millions more Americans will fall out of the middle class and will join them.

If you have a good job, do your best to hang on to it.  If you don't have a job, do your best to get one while you still can. Jobs will become very precious in the years ahead.

But also try to do what you can to become less dependent on the system.  Almost anyone can find ways to make some extra money on the side.  Yes, it will likely cut into your television time.  If someday you were to lose your job you don't want to be left with zero income.

Right now, the U.S. economy is slowly dying and as time goes by the number of middle class Americans it will be able to support will continue to decrease.

Yes, it is like a perverse game of musical chairs, but this is where we are at.

I encourage all of you to think about how you plan to make it through the collapse that is ahead.

Sticking our heads in the sand and pretending that everything is going to be okay is not going to help anyone.

But if we all start planning for the storm that is ahead, and if we get others around us to wake up as well, that is going to do a great deal of good in the long run. 

Silver Update: 1/2/12 Possible Bottom

Posted: 02 Jan 2012 02:11 PM PST

Presenting 2011's Top 10 Most Corrupt American Politicians

Posted: 02 Jan 2012 01:25 PM PST

When it comes to corruption, cronyism and general muppetry in Washington D.C., the only real question is 'where does one start?' Yet one has to start somewhere to conclude with a list of the ten most corrupt and despicable marionettes in D.C. Which is precisely what JudicialWatch has done in its annual compilation of the "Top 10 Most Corrupt Politicians in Washington D.C." for 2011. And confirming what everyone knows, that both the left and right are merely irrelevant names for the same general social affliction, or should we call it by its true name - wealth pillage - the split is even between democrats and republicans. In no particular order, the winners of 2011 are...

  • Rep. Spencer Bachus (R-AL)
  • Former Senator John Ensign (R-NV)
  • Rep. Alcee Hastings (D-FL)
  • Rep. Laura Richardson (D-CA)
  • Rep. David Rivera (R-FL)
  • Rep. Maxine Waters (D-CA)
  • Rep. Don Young (R-AK)
  • Rep. Jesse Jackson, Jr. (D-IL)

And of course:

  • Attorney General Eric Holder
  • President Barack Obama

While a detailed look is really not necessary as we are quite familiar with everyone on ths list, here it is nonetheless?

Spencer Bachus (R-AL): He has become the face of a congressional "insider trading" scandal that has rocked the Washington establishment as 2011 draws to a close. Rep. Spencer Bachus, Chairman of the House Financial Services Committee, was one of the principal targets of a  60 Minutes investigative report on the scandal, which aired on CBS in September 2011.

The report was based, at least in part, on the book Throw Them All Out by author Peter Schweizer, which outed a slew of members of Congress who allegedly profited in the financial markets by trading on insider information. Bachus was not the only congressman cited by 60 Minutes – others included Speaker of the House John Boehner and House Minority Leader Nancy Pelosi – but the Alabama Republican stood out for his remarkable "good fortune" in shorting the stock market.

According to the allegations made by Schweizer and 60 Minutes, Congressman Bachus, at the time the ranking Republican on the Financial Services Committee, traded short-term stock options in 2008 after receiving a private briefing for congressional leaders by Secretary of the Treasury Hank Paulson and Federal Reserve Chairman Ben Bernanke. The subject of the briefing: the pending meltdown in the global economy. Those privileged to attend the meeting reportedly sat around a table in Pelosi's office, having left their cell phones outside the room to avoid leaks.

Congressman Bachus's aggressive trading practices, in which he was able to benefit by betting on falling stock prices, reportedly earned him substantial profits from some of the 40 trades placed during the months of July through November 2008, many of the trades occurring after the September meeting.

In the wake of the congressional insider trading scandal, legislation banning insider trading is under consideration in Congress. The Senate Homeland Security and Government Affairs Committee advanced a bill banning insider trading on December 14, 2011. Similar legislation (pushed by Rep. Bachus himself, obviously to deflect criticism) has stalled in the House. Critics have suggested, and so has the House Ethics Committee, that the law already prohibits insider trading by members of Congress.

 

Former Senator John Ensign (R-NV): John Ensign, former U.S. Senator from Nevada and former Chairman of the Senate Republican Policy Committee, was forced to resign from office in May 2011 as the result of an investigation by the Senate Ethics Committee. In a scandal that first broke in 2009, Senator Ensign publicly admitted to an affair with the wife of long-time staffer Douglas Hampton. Ensign then allegedly tried to cover up the affair by bribing the couple with lucrative gifts and political favors.

According to The New York Times, after Hampton discovered the affair involving his wife Cynthia, the senator bought his silence by giving him "a strong boost into a lobbying career." Ensign asked political backers to find Hampton a job. "Payments of $96,000 to the Hamptons also were made by Senator Ensign's parents, who insist this was a gift, not hush money. Once a lobbying job was secured, Senator Ensign and his chief of staff continued to help Mr. Hampton, advocating his clients' cases directly with federal agencies."

These lobbying activities seemingly violated  the law related to the Senate's "cooling off" period for lobbyists. According to Senate rules, former Senate aides "may not lobby the Member for whom he worked or that Member's staff for a period of one year after leaving [their] position." Hampton began to lobby Ensign's office immediately upon leaving his job on Capitol Hill.

In November 2010, the Federal Election Commission dismissed a complaint that Ensign had violated campaign-finance laws, and in December, the Obama Department of Justice announced that it would file no criminal charges against the senator. Ensign, however, was unable to avoid the ongoing investigation by the Senate Ethics Committee. In May 2011, the Senate Ethics Committee issued a devastating report that summarized the evidence against Ensign and made the extraordinary recommendation that the Justice Department reopen a criminal investigation.

 

Attorney General Eric Holder: Attorney General Eric Holder now operates the most politicized and ideological Department of Justice (DOJ) in recent history. And revelations from the Operation Fast and Furious scandal suggest that programs approved by the Holder DOJ may have resulted in the needless deaths of many, including a federal law enforcement officer.

Fast and Furious was a DOJ/Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) "gun-running" operation in which guns were sold to Mexican drug cartels and others, apparently in hopes that the guns would end up at crime scenes. This reckless insanity seems to have resulted in, among other crimes, the murder of Border Patrol Agent Brian Terry, who was killed in a shootout with Mexican criminals in December 2010. Fast and Furious guns were found at the scene of his death.

The Fast and Furious operation by itself should have resulted in Holder's resignation, but it is the cover-up that has prompted serious calls for Holder's ouster.

On May 3, 2011, in a House Judiciary Committee hearing chaired by Rep. Lamar Smith (R-TX), Holder testified: "I'm not sure of the exact date, but I probably heard about Fast and Furious for the first time over the last few weeks." Newly released documents show he was receiving weekly briefings on Fast and Furious as far back as July 5, 2010. It appears Holder lied to Congress. (Judicial Watch sued the DOJ and the ATF to obtain Fast and Furious records. The Judicial Watch investigation continues.)

Unfortunately, when it comes to Holder corruption and abuse of office, Fast and Furious is just the tip of the iceberg.

On February 23, 2011, Attorney General Eric Holder announced that DOJ lawyers would no longer defend the constitutionality of Section 3 of the Defense of Marriage Act (DOMA), as applied to homosexual couples. DOMA had passed Congress by a vote of 85–14 in the Senate and a vote of 342–67 in the House. President Clinton signed the act into law on September 21, 1996.

Judicial Watch filed two Freedom of Information Act (FOIA) lawsuits against the DOJ (including one on behalf of the Family Research Council) for records related to this pro-homosexual marriage decision. This failure to defend this federal law is unprecedented and raises serious questions as to whether President Obama and Eric Holder are upholding their oaths of office and following the Constitution's command to "take care that the laws be faithfully executed."

The DOJ continues to stonewall the release of information regarding Supreme Court Justice Elena Kagan's participation in Obamacare discussions when she served as Solicitor General. In addition to forcing Judicial Watch to file a lawsuit to obtain this information, Holder's DOJ thumbed its nose at Congress by failing to release this material to the Senate Judiciary Committee during Kagan's judicial confirmation hearing. Holder continues to personally resist requests from Judicial Watch and Congress for additional information on this controversy. Kagan's role in these discussions is especially significant now that the U.S. Supreme Court has announced it will consider challenges to the constitutionality of Obamacare in Spring 2012.

New revelations emerged in 2011 about the DOJ's Black Panther scandal. Judicial Watch uncovered evidence that the liberal special interest group National Association for the Advancement of Colored People (NAACP) may have had an inappropriate amount of influence on the DOJ's decision to drop its voter intimidation lawsuit against the New Black Panther Party for Self Defense. This comes on the heels of sworn testimony that the Civil Rights Division of the Holder DOJ makes enforcement decisions based upon race.

Most recently, Judicial Watch obtained shocking documents suggesting the Holder DOJ is conspiring with scandal-ridden Project Vote (President Obama's former employer and ACORN front) to use the National Voter Registration Act to increase welfare voter registrations. One former ACORN employee (and current Project Vote Director of Advocacy), Estelle Rogers, is even helping to vet job candidates for the Justice Department's Voting Rights Division! (ACORN and Project Vote have a long record of voter registration fraud.)

Seeming to affirm ACORN's hijacking of the DOJ, Holder recently said in a speech that he plans to use "the full weight" of the agency in 2012 to attack states that are enforcing laws that protect against fraud in the voting booths. This speech ended the pretense that the DOJ is independent from the Democratic National Committee and the Obama campaign – as it repeated almost verbatim the partisan arguments made by the Democratic Party against voter ID laws.

Holder must go. Pick your reason – Black Panthers, race-based decision making, abandoning the Defense of Marriage Act, Fast and Furious killings and lies, or turning the DOJ into an arm of the radicalized left – but Holder must go.

 

Rep. Alcee Hastings (D-FL): In a year full of shocking congressional sex scandals, perhaps none is more serious than that involving Florida Rep. Alcee Hastings, who allegedly sexually harassed a female government employee and then engaged in a cruel campaign of retaliation when she rebuffed his advances. (On March 7, 2011, Judicial Watch filed a lawsuit against Hastings on behalf of the victim, Ms. Winsome Packer.)

The alleged harassment and retaliation began in 2008 when Hastings (formerly an impeached federal judge) served as Chairman of the United States Commission on Security and Cooperation in Europe. Ms. Packer served as his employee. According to Judicial Watch's complaint, "Mr. Hastings' intention was crystal clear: he was sexually attracted to Ms. Packer, wanted a sexual relationship with her, and would help progress her career if she acquiesced to his sexual advances."

These advances included: Making multiple demands that Ms. Packer allow Rep. Hastings to stay in her apartment while she served as the Commission's lead staff representative overseas; subjecting Ms. Packer to unwanted physical contact, including hugging her with both arms while pressing his body against her body and his face against her face; inviting her on multiple occasions to accompany him alone to his hotel room; making sexual comments and references to Ms. Packer; and asking Ms. Packer humiliating and inappropriate questions in public, such as "What kind of underwear are you wearing?"

In addition, Hastings seems to have abused his office by using government travel as a cover for sightseeing and by soliciting gifts and campaign contributions from congressional staff.

On November 28, 2011, The House Ethics Committee announced that it will take an additional 45 days to determine whether to launch a full investigation into the allegations against Hastings.

 

Rep. Jesse Jackson, Jr. (D-IL) and the Blagojevich Co-Conspirators: It took more than two years and two trials, but disgraced former Illinois Governor Rod "Blago" Blagojevich was finally brought to justice on June 27, 2011, for a number of crimes, including his efforts to "sell" President Obama's vacant Senate seat to the highest bidder. He became the state's fourth governor, and one of at least 79 Illinois public officials, to be found guilty of a crime since 1972, proving that Illinois has certainly lived up to its reputation as a cesspool of corruption.

As the trial unfolded, it became clear that many hands were dirty in the Blago scandal. (See Chicago Mayor and former Obama Chief of Staff Rahm "Rahmbo" Emanuel, who was finally forced to testify during this second Blago trial – for a whopping five minutes – and President Obama himself, who was interviewed by the FBI in the scandal even before he took office.)

But all of the focus now seems to center on Rep. Jesse Jackson, Jr.

The House Ethics Committee announced on December 2, 2011, that it will continue its investigation into allegations that "Rep. Jesse Jackson Jr. or someone acting on his behalf offered to raise campaign cash for then-Gov. Rod Blagojevich in exchange for a Senate appointment in 2008….The committee also released an initial report from the Office of Congressional Ethics that said there was "probable cause" to believe that Jackson either directed a third party or had knowledge of a third party's effort to convince the since-convicted Blagojevich to appoint Jackson Jr. in exchange for campaign cash.

The evidence suggests Jackson, Jr. attempted to bribe his way into the U.S. Senate. And it will take a monumental lack of attention on the part of the House Ethics Committee to overlook the Illinois Congressman's role in this serious scandal.

 

President Barack Obama: President Obama makes Judicial Watch's "Ten Most Wanted" list for a fifth consecutive year. (The former Illinois Senator was also a "Dishonorable Mention" in 2006.) And when it comes to Obama corruption, it may not get any bigger than Solyndra. Solyndra was once known as the poster child for the Obama administration's massive "green energy" initiative, but it has become the poster child for the corruption that ensues when the government meddles in the private sector. Solyndra filed for bankruptcy in September 2011, leaving 1,100 workers without jobs and the American taxpayers on the hook for $535 million thanks to an Obama administration stimulus loan guarantee.

Despite the Obama administration's reticence to release details regarding this scandal, much is known about this shady deal. White House officials warned the president that the Department of Energy's loan guarantee program was "dangerously short on due diligence," nonetheless the Obama administration rushed the Solyndra loan through the approval process so it could make a splash at a press event. The company's main financial backer was a major Obama campaign donor named George Kaiser. While the White House said Kaiser never discussed the loan with White House officials, the evidence suggests this is a lie. And, further demonstrating the political nature of the Obama administration's activities, the Energy Department pressured Solyndra to delay an announcement on layoffs until after the 2010 elections. Despite the public outrage at this scandalous waste of precious tax dollars, President Obama continues to defend the indefensible and has refused to sack anyone over the Solyndra mess.

President Obama continues to countenance actions by his appointees that undermine the rule of law and constitutional government:

  • Despite a ban on funding that Obama signed into law, his administration continues to fund the corrupt and allegedly defunct "community" organization ACORN. In July 2011 Judicial Watch uncovered a $79,819 grant to AHCOA (Affordable Housing Centers of America), the renamed ACORN Housing which has a long history of corrupt activity. In absolute violation of the funding ban, Judicial Watch has since confirmed that the Obama administration has funneled $730,000 to the ACORN network, a group that has a long personal history with President Obama.In 2011, JW released a special report entitled "The Rebranding of ACORN," which details how the ACORN network is alive and well and well-placed to undermine the integrity of the 2012 elections – evidently with the assistance of the Obama administration.
  • Barack Obama apparently believes it is his "prerogative" to ignore the U.S. Constitution and the rule of law when it comes to appointing czars. According to Politico: "President Barack Obama is planning to ignore language in the 2011 spending package that would ban several top White House advisory posts. Obama said this ban on "czars" would undermine "the President's ability to exercise his constitutional responsibilities and take care that the laws be faithfully executed." In other words, Barack Obama believes he must ignore the U.S. Constitution to protect the U.S. Constitution. Many Obama administration czars have not been subject to confirmation by the U.S. Senate as required by the U.S. Constitution. In 2011, JW released a first-of-its-kind comprehensive report on the Obama czar scandal, entitled "President Obama's Czars."
  • In an historic victory for Judicial Watch and an embarrassing defeat for the Obama White House, a federal court ruled on August 17, 2011 that Secret Service White House visitor logs are agency records that are subject to disclosure under the Freedom of Information Act. U.S. District Judge Beryl Howell issued the decision in Judicial Watch v. Secret Service. The Obama administration now will have to release all records of all visitors to the White House – or explain why White House visits should be kept secret under the law. The Obama White House continues to fight full disclosure and has stalled the release of records by appealing the lower court decision.(Judicial Watch gave Obama a "failing grade" on transparency in testimony before Congress in 2011. (Read the testimony in full as well as additional congressional testimony during a hearing entitled "White House Transparency, Visitor Logs and Lobbyists."))
  • In 2011, the Obama National Labor Relations Board sought to prevent the Seattle-based Boeing Company from opening a $750 million non-union assembly line in North Charleston, South Carolina, to manufacture its Dreamliner plane. Judicial Watch obtained documents from the National Labor Relations Board (NLRB) showing this lawsuit was politically motivated. Judicial Watch uncovered documents showing NLRB staff cheerleading for Big Labor, mouthing Marxist,

Criminals Determine Gold’s Future

Posted: 02 Jan 2012 11:45 AM PST

by James West, MidasLetter.com:

According to faulty interpretations of Mayan calendars, 2012 is supposed to bring with it the demise of humanity. Fortunately for us, this apocalyptic myth, like so many, is based on a superficial interpretation of the Mayan calendar. Like many stories based on a lie, this one nonetheless gains traction in the popular imagination thanks to our fascination with anything apocalyptic.

Besides Mayan disinformation, there are many commentators who advise selling all gold, while acknowledging that gold is going higher in 2012. The lunacy of such advice is self-evident to me, and I presume, to the vast majority of readers. But lets not dwell on mainstream financial media: the credibility of that institution is non-existent going into 2012, and most intelligent people understand that story assignments originate in board room conversations and on golf courses, and filter down through editorial management. Thus, whose who sit on the boards of directors of banks and media conglomerates are easily able to transmit their requirement for negative sentiment towards precious metals easily and without public scrutiny.

Read More @ MidasLetter.com

Keep Your Eye On The Ball Of Gold Fundamentals

Posted: 02 Jan 2012 11:41 AM PST

by Jim Sinclair, JSMineset.com:

On this first business day of the 2012 New Year, let us keep our eye on the ball of gold fundamentals.

Nothing yet has occurred that would reverse the Formula given to you years ago. Government spending, call it monetary stimulation or entitlements, continues to grow.

Business struggles to perform as people drop off the jobless count, still without jobs. Governments have gambled all on business improvements to offset the loss of revenue versus spending. They have lost.

Nothing has changed and nothing is changing. The best economic figures are bottom bouncing or provided by the problem itself, large lending to those with weak credit, such as in autos.

The din of gold voices is at best confused. The hedge funds have won a battle, but will surely lose the war.

Stay focused, hunker down and stay the course. This is hardcore stuff.

Just like Conrad Colman, the 28 year old sailor who raced around the world in sailboats since he was 16, won his around the world leg into port in his home country of New Zealand, persistence when you have the right stuff brings home first place. We will persist through the mindless algorithms and evil plans of the winderkun master of the universe, the hedgies.

Read More @ JSMineset.com

2011: Dud or Springboard?

Posted: 02 Jan 2012 11:34 AM PST

by Alena Bialevich and Jeff Clark, Casey Research:

2011 was remarkable in many ways for the precious metals markets. Gold soared to new highs in early September, hitting at an intraday record of $1,920/ounce on the fifth. Silver screamed to within a hair of $50 on April 28. Corrections ensued, and the metals ended the year on a disappointing note for silver and an underwhelming note for gold. Equities for the sector were down, to way down for junior ventures, logging their worst annual return since 2008.

Here's a table of 2011 returns from most major asset classes:

Read More @ CaseyResearch.com

Iceland: Success through failure

Posted: 02 Jan 2012 09:47 AM PST

on Iceland, Ireland, and Latvia

via TVR:


Iceland fared better by letting banks fail

by Thomas Molloy of Irish Independent:

Iceland pursued better policies than Ireland or Latvia when the three countries' economies collapsed in 2007 because the Reykjavik government allowed banks to fail, according to a new report by the influential Bruegel think tank.

The report by economist Zsolt Darvas looked at the response of the three small and open economies. The three countries all initially allowed the credit boom to fuel property speculation and investment imbalances. As the crisis began, property prices fell, banks went bust and all three countries had to turn to the International Monetary Fund (IMF) for help.

The governments then introduced fiscal austerity programmes, structural reforms and reforms of the banking system. These similarities allow economists to compare the different responses in an attempt to determine what worked best.

"The experience with the collapse of the gigantic Icelandic banking system suggests that letting banks fail when they had a faulty business model can be the right choice," the report notes.

"The banking sector suffered meltdown in Iceland and foreign lenders to banks suffered massive losses. Yet, the crisis impact was much more benign in Iceland than Latvia."

Mr. Darvas notes that it was the last Fianna Fail-led government's decision to issue a bank guarantee to Irish-based banks [that led to the crisis deepening] but adds that Ireland then came under pressure from the European Central Bank to keep the guarantee in place.

"While socialising bank losses in Ireland was initially an Irish decision, later, when the Irish government wanted to change course, European institutions barred it primarily in the name of financial stability in the euro area and beyond," he writes.

The report is sceptical that a collapse in the Irish banking sector would have harmed the rest of the eurozone.

"Little is known about what would have happened to financial stability outside Ireland in the event of letting Irish banks default, but one thing is clear: other countries have benefited from the Irish socialisation of a large share of bank losses, which has significantly contributed to the explosion of Irish public debt," it adds.

Regulation

The only way to avoid potential cross-country spillovers of national bank collapses would be to centralise the regulation and supervision of European banking along with the system for bailing out insolvent lenders, the report concludes.

"There is a strong case for a banking federation," states the report.

Iceland has suffered least among the three countries. Latvia has suffered most since the economic crisis began — seeing a bigger collapse in output than any other country in the world, the report notes.

Ireland has endured the fifth worst economic contraction, while Iceland's was the seventh worst. Latvia has also suffered the worst declines in employment. Iceland came out from the crisis with the smallest drop in employment .

The good news for all three countries is that recovery has begun in each economy. Latvia is seeing the fastest improvements, although this has not yet generated many jobs. Both Latvia and Iceland have returned to the bond markets.

Criminals Determine Gold's Future

Posted: 02 Jan 2012 08:29 AM PST

According to faulty interpretations of Mayan calendars, 2012 is supposed to bring with it the demise of humanity. Fortunately for us, this apocalyptic myth, like so many, is based on a superficial interpretation of the Mayan calendar. Like many stories based on a lie, this one nonetheless gains traction in the popular imagination thanks to our fascination with anything apocalyptic. Besides Mayan disinformation, there are many commentators who advise selling all gold, while acknowledging that gold is going higher in 2012. The lunacy of such advice is self-evident to me, and I presume, to the vast majority of readers. But lets not dwell on mainstream financial media: the credibility of that institution is non-existent going into 2012, and most intelligent people understand that story assignments originate in board room conversations and on golf courses, and filter down through editorial management. Thus, whose who sit on the boards of directors of banks and media conglomera...


Grand Bazaar's gold merchants turn to Bloomberg

Posted: 02 Jan 2012 08:24 AM PST

Gold sellers in the Grand Bazaar of Istanbul have been conducting business in the same way for more than 550 years, carefully weighing out quantities of the precious metal and swapping it for currency.


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

Case for Sustained $100 Oil

Posted: 02 Jan 2012 08:18 AM PST

By Frank Holmes CEO and Chief Investment Officer U.S. Global Investors In 2011, oil was one of the top performing commodities among those we track, with Brent rising more than 13 percent. Geopolitical risk and unexpected non-OPEC supply losses caused oil to rise significantly in early 2011. By October, we saw the black gold sink to a low of $80 per barrel before rising to its current level of nearly $108 a barrel. This year’s unrest demonstrated how major oil-producing regions can significantly affect oil prices. As I’ve previously stated, according to PIRA, the Middle East accounts for over 70 percent of OPEC oil production and, along with North Africa, more than 95 percent of the cartel’s capacity growth. A disruption of the supply chain can also influence oil prices....


How to Trade 2012 For Major Profits

Posted: 02 Jan 2012 08:06 AM PST

Chris Vermeulen shows you what is next for stocks, gold, silver, oil and the dollar index. Depending on your trading abilities you will see this as huge opportunity or very sobering video. Read More...



Silver: A Look At Different Time Frames

Posted: 02 Jan 2012 08:06 AM PST

In this article, we will have a look at different time frames for Silver.

Long term charts (which are important for investors) may reveal a completely different story than short term charts (which are important for traders and speculators). However, I think it's smart to have a look at both pictures from time to time…

Now that 2011 is behind us, we can start with the Yearly chart.
This doesn't look too good, as we now have a bearish inverted hammer candle, which was also trading COMPLETELY outside the Bollinger Bands, which is often a sign that a change in trend is near.

When we look at the Quarterly chart, we can see 3 exhaustion candles in a row, which is not a good sign either.
If this bull market is to be continued, I would like to see a bullish hammer like the one I have drawn in the chart below.

Silver closed below the middle Bollinger Band in December (on a monthly basis), which is not a good sign either. It needs to recapture this level for me to become more bullish about Silver.
A faillure to do so, would probably lead to a further drop in price towards $19-$20.
When I laid out possible scenarios for silver back in april 2011 (when silver was trading near $50), I got many emails from readers who said I was a fool when I said silver could be headed towards $22 and lower. Now that silver is trading around $26-$27, it doesn't look all that crazy anymore, does it?

On a weekly basis, the RSI has set a lower low last week, which is bearish. However, silver MIGHT set a double bottom at those levels. If it doesn't drop below the recent low, we might get a very nice rally from current levels.
The MACD is oversold, but can stay that way for quite some time…

This is an updated chart which I posted back in March and April 2011. I took the low of 1993 ($3.50) as the bottom of this Bull market (instead of the lows of 2001-2002 like most people do), as this is the "real" bottom after the 1980 Bull Market.

When we draw the Fibonacci Levels on each parabolic rise, we can see that silver ALWAYS retraced at least 50% of its parabolic rise, and in 2 out of 3 previous cases, it dropped as much as 61.80% (towards the 38.20% Level).
This could mean that silver has either bottomed recently (as it reached the 50% level), or that silver will drop towards the low $20, which would be the 38.20% level.
I expect that we would see very strong support at those levels (around $19-20), as that was the breakout level of last year, but also the last uptrend support line of this entire bull market. I think we should buy with both hands IF price gets to those levels. (Remember that IF it does get that far, silver would have dropped more than 60% since its peak in April 2011!)

Charts above courtesy Prorealtime.com

Sentiment for Silver is UBER bearish right now (which is Bullish for those who believe in prices going higher), which doesn't "justify" silver to drop towards $20 immediately, but think about this:

Why wouldn't it be possible for sentiment to remain depressed for quite some time (while price continues to drop), just like sentiment stayed Bullish (while price continued to rise)?


Chart courtesy Sentimentrader.com

For more Articles, Analyses and trading updates, visit www.profitimes.com!

Investor Kyle Bass discloses his discussion with a senior Obama admin about how this economic crisis is going to play out

Posted: 02 Jan 2012 07:54 AM PST

"We Are Going To Kill The Dollar"

Here's what GATA accomplished in 2011; please help us do more in 2012

Posted: 02 Jan 2012 07:11 AM PST

We proved that, contrary to its many protests that it hardly has anything to do with gold, the Fed in fact has many gold secrets that it is determined to keep, and we pried two big secrets out of the central bank -- that it has gold swap arrangements with foreign banks and that it was represented at the secret April 1997 meeting of the G-10 Gold and Foreign Exchange Committee, at which central bankers conspired to coordinate their gold market policies:


2011: Dud – or Springboard?

Posted: 02 Jan 2012 07:00 AM PST

Synopsis: The Fed's $100 billion currency swap at the end of 2011 is just the latest reason why investors will soon be clamoring for more exposure to gold and gold stocks. Dear Readers, A quick note here to wish you a very happy and extremely profitable 2012. If 2011 brought you red ink, please do not think I'm being ironic, nor merely hopeful: if you want to buy low to later sell high, major corrections such as we saw in 2011 are exactly what's needed. For more on this, Alena Bialevich and Jeff Clark of the metals team have worked up a great review of 2011 and a look forward to 2012. This article needs no help; however, Bud Conrad has the latest on Federal Reserve action that has not yet made headlines, so we thought we'd add that into the mix. Both articles say just about all that needs to be said at present – Bud's provides data that underpin Alena's and Jeff's thinking – so I will simply bow out and let them get to it. ...


munKNEE.com?s Most Read ?Best of the Best? Articles in 2011

Posted: 02 Jan 2012 05:41 AM PST

[RIGHT]*[/RIGHT] This post initiates what I hope will become a multi-year tradition of listing what, according to*munKNEE.com readers, were the most read articles*from a longer term perspective which makes all of them still VERY relevent today. Interestingly, the 12 most*popular articles as determined by you, the visitor, covered the full spectrum of what munKNEE.com covers, i.e. the Economy; the Financial Crisis; the U.S. Dollar and the future of*Gold and Silver. Introductory paragraphs and links to each article are provided in descending order of popularity. Enjoy! [INDENT]Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and*www.munKNEE.com (Your Key to Making Money!) searches the internet on a daily basis and selects the absolute best (i.e., most informative and well written) articles which he then edits for the sake of clarity and brevity to ensure you, the reader, as fast and easy read and then posts them in an edited ...


How Did Gold and Silver Perform in 2011?

Posted: 02 Jan 2012 05:01 AM PST

By Eric McWhinnie, Wall St. Cheat Sheet

On Friday, gold (NYSEARCA:GLD) prices managed to climb $25.90 higher, breaking its six-day losing streak.  Although gold has been in a slump during the final months of the year, gold continued its 11-year winning streak.  Gold prices finished 2011 at $1,566.80, representing a 9.3 percent annual increase.

Investor Insight: Should Gold Investors Worry About Euro Currency Weakness?

As the chart below shows, gold prices bottomed in February and experienced another record-breaking year.  In September, gold prices reached a new all-time nominal high above $1,900 per ounce.  In the following months, gold declined as liquidity concerns dominated the market.  The fundamentals still remain in tact, and gold is currently finding support near its 300-day moving average.  "Given the ongoing debt problems facing many economies and record low interest rates, we still expect the bull-run in gold to continue with the metal to rebound across 2012," said James Moore, an analyst at TheBullionDesk.com.

Silver (NYSEARCA:SLV) prices also climbed higher on Friday to end the final trading day of 2011 on a positive note.  However, silver prices finished 2011 at $27.92, representing a 10.7 percent annual decrease.  The silver market is a lighter volume market than gold, and is more susceptible to wild price swings.  Furthermore, silver has an industrial component that was hindered by global slowdown fears.  The MF Global bankruptcy also shattered confidence and many traders faced margin calls or lost access to their gold and silver positions, dampening interest in silver contracts.

As the chart above shows, silver prices peaked near $50 in late April.  In the following months, it was a bumpy ride as markets were driven more by euro zone headlines than fundamentals.  Silver experienced a sharp sell-off in September, but found support near $26 per ounce.  Silver found support again near $26 in December.  Although silver underperformed gold in 2011, the fundamental reasons to hold silver remain in tact as well.  Legendary commodities investor Jim Rogers believes governments will continue to print more money when the economy fails to improve.  "When things don't get better they are going to print a lot of money, Rogers explained. "When they print money, you have to own silver, you have to own rice and you have to own real things."  If Rogers had to buy just one precious metal, he would go with silver "because silver is more depressed."

If you would like to receive more professional analysis on equity miners and other precious metal investments, we invite you to try our premium service free for 14 days.

To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

Get Your FREE Special Report: 4 Things You Must Know About the US Economy Now!

Lessons Learned in 2011 and Implications for 2012

Posted: 02 Jan 2012 04:58 AM PST

By Jordan Roy-Byrne, CMT, The Daily Gold 

2011 certainly was a difficult year for gold bugs. Gold barely held onto its gains for the year while Silver went parabolic and eventually fell to negative on the year. Mining stocks? Don't ask. The large caps (gdx) are currently down 17% on the year while the mid-tiers (gdxj) are down 41% and the explorers (gldx) are down 44%. In our last commentary we discussed the equities with respect to investing and speculating. By now, you should know that most mining stocks are speculations and do not perform consistently, even in a raging bull market.

The often hyped "juniors" have been a disaster unless you've been extremely patient and selective while getting lucky with your timing. The juniors are an excellent tool for speculation and only speculation. They cannot be bought and held. They have to be timed nearly perfectly. Ironically, many advisors who are "doom and gloom" types favor the juniors. Some of these types are super bearish on the USA. They've expatriated, waiting for the collapse of the USA while holding juniors. This foolhardy strategy has helped them sell newsletters but hasn't been too profitable.

Below we show a chart of the CDNX next to the S&P 500. They appear nearly identical which means that the juniors do well when the overall market does well and they perform poorly when the overall market is falling.

We should have learned a few things by now. If you are really bearish then you want to concentrate your investments in Bonds, cash and Gold and completely avoid all speculative mining stocks. If you are more optimistic then look to buy quality companies and speculate in some of the juniors. We should also have learned that the dollar is not going to collapse and the US is not going collapse or go into hyperinflation. Anytime you hear this talk, get as far away as you can. This talk is romantic, enticing and can be powerful but it is never profitable. It is entertainment and fantasy. We are seeing what will be a slow motion transformation of the monetary and financial system.

Pertaining to Gold we hear nonsense that you should avoid the equities because they are rigged or shorted by hedge funds. We recently explained why the shares are under-performing. How timely is this frustration from the gold bugs? Last we heard it, it was late 2008 and a tremendous buying opportunity.

All this being said, now is the time to be optimistic and aggressive on the mining stocks and even the juniors. Various sentiment indicators, if not comparable to 2008 lows are nearing 2002 lows. The coming bottom in the sector will certainly be a major bottom. Technically, the large cap gold stocks have broken down but interestingly, this breakdown occurred with a bullish percent index (% of stocks on a P&F buy signal) of 10%. Back in 2008, the equities began to breakdown with a BPI of 30%. The October decline began with a BPI near 70%. By the time the BPI fell to 10%, the sector had bottomed.

Traders, investors and speculators need to be a bit more patient as the market bottoms. It could be a few days or perhaps a few weeks but it should be clear one month from now. Most stocks are likely to have big rallies. How do we find the ones which will outperform? Those trading near highs with strong bases are likely to have substantial breakouts provided the fundamentals are there. Many juniors have been beaten badly but the ones with substantial cash positions, tight share structures and promising prospects have a chance to explode off their bottoms. We were cautious and neutral for most of 2011 but we are bullish on 2012. If you'd like professional guidance in navigating what lies ahead, while managing risk, consider learning more about our premium service.

Good Luck!

Jordan Roy-Byrne, CMT
Joran@TheDailyGold.

Peter Schiff : Central Banks have a lot of Gold to buy

Posted: 02 Jan 2012 03:56 AM PST

Peter Schiff : ...it's not necessarily default....

[[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]]


Goldman On The Five Key Questions For 2012

Posted: 02 Jan 2012 03:53 AM PST

As US markets remain in hibernation for a few more hours, Goldman picks out the five critical questions that need to be considered in the context of 2012's economic outlook. Jan Hatzius and his team ask and answer a veritable chart-fest of crucial items from whether US growth will pick up to above-trend (and remain 'decoupled' from Europe's downside drag), whether inflation will find its Goldilocks moment this year and if the US housing market will bottom in 2012 (this one is a stretch). Summarizing all of these in a final question, whether the Fed will ease further, the erudite economist continues to expect an expansion of LSAP (focused on Agency MBS) and an official re-adjustment to an inflation targeting environment. Their view remains that a nominal GDP target combined with more (larger) QE improves the chances of the Fed meeting its dual mandates (unemployment target?) over time but expectations for this radical shift remain predicated on considerably worse economic performance in the economy first (as they expect growth to disappoint). We feel the same way (worse is needed) and recall our recent (firstly here, then here and here) focus on the shift in the balance of power between the Fed and ECB balance sheets (forced Fed QE retaliation soon?).

 

Goldman Sachs: 5 Questions For 2012.

Today's focus article discusses what we see as the 5 most important questions facing the US economy in the coming year.

First, will US growth pick up to an abovetrend pace? We think not. Underlying growth is probably considerably weaker than implied by our 3.3% tracking estimate for Q4 GDP growth; tight oil supplies act as a "speed limit" for global growth; fiscal policy remains a drag on growth; and the spillovers from the European recession are likely to increase.

Second, how much will the European crisis - the biggest downside risk - subtract from US growth? Our baseline estimate is 1 percentage point, but the uncertainty is large. On the one hand, we have not seen much impact yet...

On the other hand, a failure of peripheral European economies to stabilize due to a "paradox of thrift" situation in both the public and private sectors poses a downside risk for Europe and ultimately also the United States.

Third, will the US housing market bottom in 2012? We think yes. With excess supply diminishing gradually...

...and valuations back to "equilibrium," we expect the house price decline to end in 2012H2, although the recovery is likely to look very U-shaped.

Fourth, will inflation be too high or too low by late 2012, relative to the Fed's target? Too low, in our view. The commodity price impulse is waning and there is still plenty of excess capacity. We expect core inflation to fall back to 1¼% by yearend, clearly below the Fed's implicit target.

Fifth, will Fed officials ease further? We think yes, probably via purchases of agency MBS (and perhaps Treasuries) announced in the first half of the year. We also expect Fed officials to provide a forecast path for the funds rate and adopt an official inflation target at the January 24-25 FOMC meeting.

We expect Fed officials to ease anew in the first half of 2012 via purchases of agency mortgage-backed securities, either on their own or combined with Treasuries. This forecast is based on our expectation that real GDP growth will slow to a below-trend pace and inflation will fall to a below-target rate in the course of 2012. With the level of output still far below potential, we believe that this would be a sufficient signal for Fed officials to decide to ease further. At a minimum, we believe Fed officials would be loath to end their securities purchases at the conclusion of "operation twist" in mid-2012, and additional purchases essentially require a balance sheet expansion.

In addition, we also expect the FOMC to provide forecasts for the federal funds rate in the Summary of Economic Projections (SEP) published four times per year, starting at the January 24-25 meeting. More likely than not, the FOMC will also move from its current all-but-official inflation target of "2% or a bit less" to an outright inflation target of 2%. These moves are somewhat independent of the shift to renewed QE.

We view the funds rate forecasts as a sensible step, because they are likely to enhance the communication of the Fed's reaction function to incoming information. We are less sure about the inflation target because it might be misinterpreted as a shift away from the employment part of the dual mandate.

To counteract this impression, Fed officials are likely to emphasize that the inflation target is "flexible" and applies to the medium term, and also that unemployment remains far above their estimate of the structural rate. Although they are unlikely to go as far as to complement the official inflation target with an outright target for the unemployment rate, they might decide to state even more clearly that they aim for an unemployment rate in line with their estimate of the structural rate over the medium term.

Our own view remains that a move to a nominal GDP level target, complemented with potentially large amounts of QE, would provide a greater chance to achieve the Fed's dual mandate over time. But while we would not rule out such a move if the economy performs significantly worse than our forecast, we do not expect Fed officials to embrace such a seemingly radical option anytime soon.
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