Gold World News Flash |
- These 5 Apocalyptic Engines Causing Hyperbolic Growth in US Money Supply
- True Money Supply Is Already Hyperinflationary! What?s Next?
- Using vaults to store gold and silver
- Jan 17 1980 : Silver reaches its all time high - H.L. Hunt and the Circle K Cowboys
- Real Risks to the Gold Price
- Gold Trendline Resistance Near 1680
- Gold Seeker Closing Report: Gold and Silver Gain About 1% Again
- Silver, Liberty & Ron Paul – What Could Be Better?
- Warning Signs That We Should Prepare For The Worst
- The Economic Collapse is Accelerating
- 2012: The Year Of Consequences For Actions
- Defending the Last Free Place on Earth
- Small Canadian Mining Shares Index Flirts with Important Breakout
- Gold clears $1650; looks firm
- When Will Gold Reach a New High?
- In The News Today
- Manufacturing Supercars in America
- When Should You Sell Your Gold?
- Believe It or Not: Only 1 Fund Has Outperformed Physical Gold Since 2007!
- JP Morgan Chase Accused of ‘Brazen Bankruptcy Fraud'
- The Indian Gold Market decline and its impact
- IMF In Need For One Trillion Dollars / The Private Greek Bond Fiasco / Goldman Sachs Earnings Abysmal
- The Gold Price Job for Tomorrow is to Move Ahead Toward $1,680 and to Breach That $1,667 Barrier
- Numbers Cited By SOPA Supporters May Be Fictitious
- Post Credit Crisis Performance Update for Silver
- The Producers and the Parasites
- "No Deal" - Greek Bondholders Do Not Think Agreement Can Be Reached Before "Crunch Date"
- Listen Up, Class: Here's How to Profit
- Volume Only Underperformer As Euphoria Catches On
- Derisking Gold Juniors, Step by Step
| These 5 Apocalyptic Engines Causing Hyperbolic Growth in US Money Supply Posted: 18 Jan 2012 07:13 PM PST I recently wrote an article showing how the U.S. True Money Supply (TMS) appeared to be growing at a hyperbolic rate [see here], and that gold was also on a hyperbolic course…Hyperbolic growth in the quantity of money ends with hyperinflation… [and] both TMS and the dollar price of gold are pointing to a hyperinflationary outcome. This article explains why this might be so. Words: 764 * There are five apocalyptic engines pushing the growth in US money supply: [*]the government's budget deficit, [*]the government’s debt trap, [*]the financial condition of the banks, [*]the delusion of Keynesian solutions and, lastly, [*]simple compounding arithmetic. 1. The U.S. government collects only 55c in taxes for every dollar spent. It is relying on economic recovery to reduce welfare payments and increase tax revenue to close the gap. This prospect is receding and establishment economists advise against cutting government spending. 2. The US gove...
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| True Money Supply Is Already Hyperinflationary! What?s Next? Posted: 18 Jan 2012 07:13 PM PST Economists are telling central banks to accelerate monetary growth even faster…to avoid a bank balance sheet implosion with all the deflationary consequences that implies. [As such,]*the prospects for 2012, and thereafter, are for*Total Money Supply*to continue its hyperbolic trend – and when such a trend becomes established it becomes almost impossible to stop because*the whole debt-based economy and the banking system would collapse. [Let me explain further.] Words: 550 So says Alasdair Macleod ([url]www.FinanceAndEconomics.org[/url]) in edited excerpts from his original article*. [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!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The article's views and conclusions are unaltered ...
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| Using vaults to store gold and silver Posted: 18 Jan 2012 06:00 PM PST Goldmoney
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| Jan 17 1980 : Silver reaches its all time high - H.L. Hunt and the Circle K Cowboys Posted: 18 Jan 2012 05:30 PM PST Silvertrading
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| Posted: 18 Jan 2012 05:10 PM PST by Adrian Ash BullionVault Wednesday, 18 January 2012 Pending the big downturn in gold, here's 3 near-term risks to beware... IF YOU'VE BEEN paying attention, then you'll remember how gold can make financial crises fun. Gold bulls were so short of things to keep them awake at night, in fact, many will no doubt be grateful for the 20% plunge of late 2011. Y'know, just to keep their hand in. "We think the peak would be towards the end of this year or maybe some time in the first half of next year," says Neil Meader, research director for Thomson-Reuters' 2011 acquisition, the GFMS precious metals consultancy. The trigger for gold's final top and decline? "Anything that really signals to the market that the structural imbalances and the various problems affecting the strength of various currencies are moving behind us, that we are moving beyond this current financial crisis situation," says , speaking to TheStreet after launching GFMS's latest Gold Survey Update ...
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| Gold Trendline Resistance Near 1680 Posted: 18 Jan 2012 05:00 PM PST courtesy of DailyFX.com January 18, 2012 02:54 PM Daily Bars Prepared by Jamie Saettele, CMT Like the AUDUSD, gold carved out an inside day at its 2nd standard deviation band, which presents a reversal opportunity. Price has also remained under the 50% retracement of the decline from the November high. There is additional resistance from a trendline (off of September, November, and December highs) at about 1677 today. A drop below 1625 would confirm a reversal. Bottom Line – short against 1685, target new lows...
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| Gold Seeker Closing Report: Gold and Silver Gain About 1% Again Posted: 18 Jan 2012 04:00 PM PST Gold climbed $8.38 to $1659.38 in Asia before it fell back to $1642.67 by a little after 10AM EST, but it then rose to as high as $1662.17 in early afternoon New York trade and ended with a gain of 0.67%. Silver slipped to $29.75 in Asia, but it then rose to as high as $30.583 in New York and ended with a gain of 1.53%.
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| Silver, Liberty & Ron Paul – What Could Be Better? Posted: 18 Jan 2012 03:58 PM PST [If you love silver, liberty and Dr. Ron Paul, you've come to the right place. Now let's pull em all together: Buy physical silver, crash JP Morgan. Elect Ron Paul, end the Reign of the Banksters. Win, win. Thanks to our pal Troy for bringing these "honorable" .999 silver rounds to our attention. Check em out, link below. ~SGT] See them @ providentmetals.com
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| Warning Signs That We Should Prepare For The Worst Posted: 18 Jan 2012 03:35 PM PST from The Economic Collapse Blog:
The warning signs are all around us. All we have to do is open up our eyes and look at them. Almost every single day there are more prominent voices in the financial world telling us that a massive economic crisis is coming and that we need to prepare for the worst. On Wednesday, it was the World Bank itself that issued a very chilling warning. In an absolutely startling report, the World Bank revised GDP growth estimates for 2012 downward very sharply, warned that Europe could be on the verge of a devastating financial crisis, and declared that the rest of the world better "prepare for the worst." You would expect to hear this kind of thing on The Economic Collapse Blog, but this is not the kind of language that you would normally expect to hear from the stuffed suits at the World Bank. Obviously things have gotten bad enough that nobody is even really trying to deny it anymore. Andrew Burns, the lead author of the report, said that if the sovereign debt crisis gets even worse we could be looking at an economic crisis that could be even worse than the last one: "An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09." Burns also stated that the "importance of contingency planning cannot be stressed enough." In other words, Burns is saying that it is time to prepare for the worst. So are you ready? But of course it isn't just the World Bank that is warning about these things. The chorus of voices that is warning about the next great financial crisis just seems to grow by the day. Read More @ TheEconomicCollapseBlog.com
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| The Economic Collapse is Accelerating Posted: 18 Jan 2012 03:33 PM PST  My views on the accelerating economic collapse in both the U.S. and Europe. I discuss the power elite using a corrupt political system to attack constitutional rights, criminal bankers stealing from taxpayers, the hopelessness of many unemployment, the destructive war on drugs and much more. Read more...... 
This posting includes an audio/video/photo media file: Download Now |
| 2012: The Year Of Consequences For Actions Posted: 18 Jan 2012 03:31 PM PST by Jim Sinclair, JSMineset.com:
2011 was a year of confusion among financial leadership, many conversations, much speculation, spectacular MOPE and no action. Europe almost talked the euro to death while the media carefully avoided the epic debt of Great Britain and the insolvency of US States. 2012 is going to be year of action and consequences. Today action by the IMF simply throws more money at the problem, which is treating symptoms. The question now is where are these funds coming from? The US Fed has already provided more than $600 billion via swaps with the ECB, who in turn lend this money to the Euro banks, who in turn buy Euro debt. It is international debt monetization, a thinly bearded global QE3. You can be certain that the creation of funds for the IMF's eventual one trillion in financial aid will be created as thinly bearded global QE3. Before 2012 is out, political pressures in the US will bring the Fed out of the closet and full-blown QE3 will actively be pursued in daylight. Rather than a collapsing euro there will be a collapsing dollar. The economic effect of QE3 will bring on extremely complex factors of monetary science. A contraction in general business activity will be contrary to what will be anticipated. Original Source @ JSMineset.com
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| Defending the Last Free Place on Earth Posted: 18 Jan 2012 03:28 PM PST from DollarVigilante.com:
Today was the day the internet went semi-dark. Sites like Reddit, Wikipedia and thousands of others went dark in protest of the latest attempt at a violent terrorist attack on the internet, the so-called Stop Online Piracy Act (SOPA). Here at The Dollar Vigilante (TDV) we didn't go dark. We figure we'd be one of the first sites taken offline if/when SOPA is enacted so why give them what they want. And what is it they want? They want to heavily regulate the internet and have the power to shut down any website. It's a cyberwar going on, says Joseph Lieberman in this interview. Well, yes, there is a war, but it was one started by the US Government. Surprise, surprise. But was there a cyberwar before valiant Joseph Lierberman rode up on the scene? Has anyone been shot? Did your laptop explode in your hands? What's the worst thing that's ever happened to you on the internet? Spam? Read More @ DollarVigilante.com
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| Small Canadian Mining Shares Index Flirts with Important Breakout Posted: 18 Jan 2012 02:16 PM PST HOUSTON – The S&P TSX Venture Exchange or CDNX grabbed a tiny amount of chart real estate just above one important technical line in the trading sand on Wednesday, January 18. With a modest 12-point advance to 1,550 the index, which tracks a basket of some of the smaller, less liquid and more speculative junior miners and explorers, mostly based in Canada, managed to peek just above the 50-day moving average which is currently crossing 1,530.
Continued… The 2011 47% correction for the CDNX is the second largest correction for The Little Guys index, ever, second only to the horrific 2008 Crash which ended in December of that year and loped off a bone-crushing 79.9% of the CDNX value. Volume remains subdued, as it has for most of the correction. However, in late December and a couple of days last week there were days where the volume perked up a little, to over 100 million shares per day as shown in the CDNX graph above. What has our undivided interest at the moment is that the CDNX has turned in at least the possibility of a higher turning low (1,398 in December), up about 7% from the nasty panic-inspired capitulation spike in October as low as 1,305. What makes that a bit more impressive than usual is that the modestly higher low occurred into the teeth of a very strong tax loss selling season. Recall that we recently posted a group of charts of some of the micro-cap issues we follow showing their improvement since the end of that artificial tax loss negative liquidity (see January 13 post). In order for the newest low to qualify in our own 'rule book' as a turning low, the CDNX still has to print a higher high from the relief bounce to 1,675 in early November. Merely re-crossing the 50-day alone is not enough and at these beaten up levels is not really all that impressive – yet. We, and probably a lot of people like us, will become more convinced of a change in trend if the CDNX manages to show a higher high than the November specimen. So far, so good, but The Little Guys have a lot of work to do as we go into the winter conference season just ahead. We note that the CDNX is within striking distance (about 35 points or 2.3%) of moving above a 10-month downtrend line with origins in March of last year. Since that October nadir, the CDNX has been consolidating in a tightening triangular pattern and the higher December low, with the support of the momentum indicators, adds to our near-term guarded anticipation. Having said that, we note optimistically that The Little Guys have been outperforming their larger, better capitalized cousins represented by the AMEX Gold Bugs Index, or HUI just recently, as the graph below reveals.
When the smaller, more speculative juniors are outperforming the Big Boys of the mining biz, that's usually a very bullish sign. Out of an abundance of caution, however, we have to note that the HUI has been held back just recently by significant, high percentage toe-stubs by Hecla and Kinross, representing 4.14% and 3.85% of the HUI Index respectively. So the performance results are a little better than they would otherwise have been, probably. Still, we have to be optimistic when we look at the U.S. counterpart to the CDNX, the Market Vectors Junior Gold Miner's Index ETF or GDXJ (which also happens to be our 2012 Top Pick for Steven Halpern's TheStockAdvisors.com portal on MSN, chosen in December). The late December low of $22.58 represents a 44% correction for that new vehicle, but Wednesday's close of $27.04 actually crossed two technical lines in the trading sand – just above the 50-dma and a peek above an August – December downtrend line.
Note the positive divergence in the MACD from October through December. Today we learned though multiple sources that we were joined on the long side in GDXJ by Mr. David Einhorn, who manages the Greenlight Capital investing empire he created. Mr. Einhorn mentions the Market Vectors Gold Miners Index (GDM, for the larger gold companies) in his year-end letter but multiple sources confirm he also took a considerable stake in The Little Guys via GDXJ. We consider that as being in good company. Welcome aboard, David. Don't be a stranger. That is all for now, but there is more to come.
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| Posted: 18 Jan 2012 02:05 PM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Gold has now managed two consecutive closes above chart resistance near $1650 and is looking firm at this hour. It has a very good shot at testing resistance at $1675- $1680 where it should experience some fairly heavy selling. If the bulls can break through that line, we should see a handle of "17" in front of the metal. Weakness in the Dollar is aiding the progress of the metal higher. Downside support comes in near $1640 - $1635 initially followed by $1620. Silver is benefitting from risk trades being put back on as it and copper are both seeing decent inflows of investment money from hedgies. This is the first close ABOVE $30 for silver in over a month. Follow through in tomorrow's session should see it make a run towards the $32.50 level, which is what stands between it and a push to $35. ...
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| When Will Gold Reach a New High? Posted: 18 Jan 2012 01:59 PM PST By Jeff Clark, Casey Research Some investors are frustrated and a few are worried that gold seems stuck in a rut. This stall in price has happened before, of course, but since 2001 it's always eventually powered to a new high. Unless one thinks the gold bull market is over, it's natural to wonder how long might we have to wait before seeing another new high. Absent some sort of global shock that sparks another rush into gold (easily possible in today's climate), I think the answer may lie in examining the size and length of past corrections and how long it took gold to reach new highs afterward. It makes sense that big corrections would take longer to reach new highs than small ones, but I wanted to confirm that assumption with the data. I also wanted to determine if there were any patterns in past recoveries that would give us some clues that we can apply to today. Gold set a record on September 5 at $1,895 an ounce (London PM Fix) and to date has fallen as low as $1...
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| Posted: 18 Jan 2012 01:47 PM PST Jim Sinclair's Commentary One upsmanship! A $2M Bet on Gold Jan 18, 2012 The Grandich Letter's Peter Grandich argues that gold will continue to rise based on lower value of global currencies. Click here to watch the Continue reading In The News Today
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| Manufacturing Supercars in America Posted: 18 Jan 2012 01:33 PM PST Wolf Richter www.testosteronepit.com Supercar enthusiasts went into a tizzy when Honda announced at the Detroit auto show that it would bring its Acura NSX back to life. And not only that. Design would be shifted from Japan to Honda's Center of Research and Development in Ohio. Manufacturing would be shifted to Ohio as well. And a portion of the production would be exported. While the NSX won't add much volume to Honda's production in the US, it will be a technology showcase. And another precursor that the math of manufacturing in America is changing. The mid-engine NSX was built by hand in Japan from 1990 to 2005. Of the 18,000 units produced during its 15-year production run, half landed on our shores. It won accolades from the automotive press, including "Best sports car ever built" by Motor Trend in 1991—though it had a smallish engine by supercar standards and wasn't as fast as some of its brethren. Honda also built racing versions, the NSX-R and NSX-R GT. And in an epic product placement success, the NSX was featured in the 1994 movie Pulp Fiction. Now the next generation will be designed and built in the US. There have been other recent examples of automakers announcing that they would shift export-oriented production to the US—for two-edged economic reasons. The weak dollar. It's particularly alluring for Japanese manufacturers as they're struggling with the strong yen. In that respect, the war that the Fed has waged on the dollar is paying off, so to speak, though it made life more expensive for Americans by inflating prices of imports, including oil and consumer products. Even the euro, despite its gargantuan crisis, is hovering in the middle of its trading range against the dollar. Low wages. Since 2000, inflation-adjusted wages have declined by around 10%. Even the White House came out with a paper that bragged about declining wages as a force that would boost manufacturing. The paper was addressed to the business community, obviously, and not to the rank and file who bore the brunt of the declining wages. Read.... When The White House Touts Falling Wages. The logic: American wages in a globalized economy will have to be competitive with wages in low-wage countries. The impact: 49.1 million Americans live in poverty, more than ever, according to the supplemental Census test. The decline of manufacturing in the US has been a horrid multi-decade saga. Since 2000, another six million manufacturing jobs were lost. The hope is that it bottomed out in 2010, when only 8% of all jobs were still in manufacturing. This graph is from the White House paper. Note the tiny hook at the bottom. That's the recent upswing.
So maybe the hook is a turning point. Auto manufacturing costs in the US—especially if transportation and other costs are included—have been competitive with those in Europe, Japan, and Korea for a long time, and most major automakers have large production plants in the US. But the new competition isn't Europe or Japan. Or even Mexico. It's China. Which begs the question: to what banana-republic levels will real wages still have to sink? Yet, Honda's decision to transfer design and manufacturing of its showcase supercar from Japan to the US is significant. The NSX will be produced in small numbers—if history is any guide, between 1,000 and 2,000 vehicles a year. Much of the assembly will be done by hand and will require a highly skilled, productive, and flexible work force. Honda's decision is a vote of confidence. By contrast, Honda announced last August that it would build a plant in Mexico able to produce 200,000 subcompacts per year. Nissan made a similar announcement last week. The lure of cheap labor elsewhere is still strong. Apparently, American wages aren't quite there yet. And for Japan, the NSX decision is another detail in a somber scenario in which the pace of offshoring is gaining momentum. But life goes on in its crazy manner. A convoy of 20 supercars was speeding down the Ch?goku Expressway and entered a left-hand bend at 90–100 mph. The posted speed limit was 50 mph. The highway was wet. And the rest was very expensive.... Superlative Supercar Pileup (with video).
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| When Should You Sell Your Gold? Posted: 18 Jan 2012 01:02 PM PST The question most often asked of gold bulls is, "At what price will you take your profits?" It is a question that betrays a lack of understanding about why anyone should [want to] own gold [in the first place]. Nevertheless, the simple answer must be, "When paper money stops losing its value". This response should alert anyone who asks this question to the idea that owning fiat cash is the speculative position, not ownership of precious metals. [Let me explain.] Words: 1184* So says Alasdair Macleod*([url]www.FinanceAndEconomics.org[/url]) in edited excerpts from his original article*. [INDENT]Why spend time surfing the internet looking for informative and well-written articles on the health of the economies of the U.S., Canada and Europe; the development and implications of the world's financial crisis and the various investment opportunities that present themselves related to commodities (gold and silver in particular) and the stock market when we do it for you. We...
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| Believe It or Not: Only 1 Fund Has Outperformed Physical Gold Since 2007! Posted: 18 Jan 2012 01:02 PM PST Out of the 7,500 separate [mutual] funds available, and with 22,000 shares classes to choose from, only 1 fund – just ONE fund – actually managed to achieve a greater percentage return than gold bullion since the alarm bells rang out at the turn of 2007! [That being said, are you still one of the 99% of investors who, for whatever reason (are you foolishly listening to the "advice" provided by your stock broker/securities salesman going under the guise of a financial "advisor"), is still without any physical gold or silver?] Words:*395** *So says Adrian Ash ([url]www.BullionVault.com[/url])in edited excerpts from his original article*. [INDENT]Why spend time surfing the internet looking for informative and well-written articles on the health of the economies of the U.S., Canada and Europe; the development and implications of the world's financial crisis and the various investment opportunities that present themselves related to commodities (gold and silv...
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| JP Morgan Chase Accused of ‘Brazen Bankruptcy Fraud' Posted: 18 Jan 2012 01:01 PM PST [Ed. Note: Related.] from Jesse's Café Américain:
Maybe this was their warm up for the shenanigans in the MF Global bankruptcy case. Or their long term manipulation of the silver market. If these allegations are true, why doesn't the California Attorney General or the Justice Department investigate this criminal conspiracy to abuse the legal system? (rhetorical question). The only presidential candidate that the bankers fear and respect is Ron Paul. Read More @ JessesCrossRoadsCafe.Blogspot.com
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| The Indian Gold Market decline and its impact Posted: 18 Jan 2012 10:58 AM PST The Indian jewelery demand falling off the cliff... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
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| Posted: 18 Jan 2012 10:45 AM PST by Harvey Organ: Good evening Ladies and Gentlemen: Gold closed up $4.30 to 1659.00. Silver however was the star of the day rising by 41 cents to close at 30.52. The bankers tried to suppress the metals in the wee hours of the morning but failed somewhat as the metals rallied. After the London fix they tried again as they knocked gold down by 6 dollars. That failed miserably as demand is too great for physical gold and that caused the paper boys to cover quickly. Let us head over to the comex and assess trading, open interest on the front delivery months, inventory movements, and the amount of physical metals standing for delivery. The total gold comex OI rose by a huge 7,554 contracts as investors try to secure metal any which way they can. The bankers were the obvious suppliers of the non backed paper. The front options expiry month of January saw the OI fall from 71 to 31 for a loss of 40 contracts. We only had 13 delivery notices so we lost 27 notices to cash settlements. The paper fiat must have been too good to pass up, courtesy of Blythe Masters of JPMorgan. The front delivery month of February is less than two weeks away as we are witnessing rollovers to April. The February OI rests tonight at 164,237. The estimated volume at the gold comex today was 166,309 which is below normal for the rollover period. The confirmed volume yesterday came in at 216,485. Read More @ HarveyOrgan.Blogspot.com
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| The Gold Price Job for Tomorrow is to Move Ahead Toward $1,680 and to Breach That $1,667 Barrier Posted: 18 Jan 2012 10:34 AM PST Gold Price Close Today : 1659.50 Change : 4.30 or 0.3% Silver Price Close Today : 3051.40 Change : 40.80 cents or 1.4% Gold Silver Ratio Today : 54.385 Change : -0.594 or -1.1% Silver Gold Ratio Today : 0.01839 Change : 0.000199 or 1.1% Platinum Price Close Today : 1524.20 Change : 3.70 or 0.2% Palladium Price Close Today : 668.90 Change : 20.00 or 3.1% S&P 500 : 1,308.04 Change : 14.37 or 1.1% Dow In GOLD$ : $156.69 Change : $ 0.82 or 0.5% Dow in GOLD oz : 7.580 Change : 0.040 or 0.5% Dow in SILVER oz : 412.24 Change : -2.37 or -0.6% Dow Industrial : 12,578.95 Change : 96.88 or 0.8% US Dollar Index : 80.51 Change : -0.668 or -0.8% The GOLD PRICE advanced respectably today, as did the SILVER PRICE, but noticeably slower than the last few days. GOLD rose 4.30 to $1,659.50 on Comex. Silver added 40.8c to 3051.4c. The GOLD PRICE almost reached $1,662, but had not strength to break through. Low was $1,650.95, so it closed at least near the top of its range. Yesterday's high was higher, at $1,667.30. Gold's feet are getting heavier as it nears the top of the $1,680 mountain. That this sloth struck on a day the dollar dropped markedly causes one of my eyebrows to twitch. Plainly, gold's job tomorrow is to move ahead toward $1,680, and to breach that $1,667 barrier. Call me a worrier, but I am not easy with the SILVER PRICE chart. Today's high was 3057c, yesterday's was 3056c. Silver's stalled dead at 3056c. On the 5-day chart this leaves a double top, which SILVER must break through or pay the consequences. If silver falls through 2980c, it will fall another 40c in a heartbeat, then to 2850c. That would set silver up for a trip to 2600-ville. Remember those rising wedges in both gold and silver I fretted about yesterday. They abide there still, until contradicted by higher prices. Today I've been thinking about all the reasons the bull market in metals has not yet ended, despite all the Wise Persons opining so. Here's yet another. At the bull market peak, the Wise Persons and all media headlines will be screaming about a New Era of Perpetually High Silver and Gold Prices. Doubt it not, nor doubt that ne'er a bull market hath ever ended amid widespread doubts it will go higher. Bull markets climb a wall of worry. They end when the worrying stops. Act 87, Scene 1 opened in the European Financial Crisis Farce today, and the audience swallowed it like a big bass nailing a minnow -- hook, line, and sinker. IMF "announced" it would be seeking another $300 million in funding for bailing out Europe. This is, mind y'all, pie in the sky -- no agreements, no approvals, no plans, no money, just the "want-to"s. (Besides, being bailed out by the IMF is like having your life saved by a surgeon who amputates all your arms and legs to cure your hangnail.) (By the way, if you believe the timing of this IMF announcement was accidental, talk to me about some great bargains on Florida swamp land.) That was all the euro needed, since it was way oversold to begin with. Everybody in the world expects it to drop to 1.2000, so "everybody" has already sold it and there are no new sellers to drive it down further. Scrofulous euro rose 0.94% to 1.2856 at the close. This pokes thru, but barely, the downtrend line. Before you pop a cork, remember that the euro did the same on the first trading day in January, then promptly fell to new lows. Thus this doubter needs to see a three day close above that downtrend line. 20 DMA stands at 128.99, not far above. The Japanese yen stood flat-footed today, up a squeenchy 0.4% to 130.23c/Y100 (Y76.79/US$1). Of course the scabby US dollar index paid thru the nose for the scrofulous euro's rise. Dollar lost 0.86% (66.8 basis points) to 80.514. Closing below 80.50 will make the dollar look brown around the edges; below 80 sends the dollar testing its parachute. Today's low came at 80.47. No confirmation yet, but clouds are lowering over the dollar's future. Taking enthusiasm from the IMF announcement, stock investors send stocks back up to their resistance ceiling. Dow rose 96.88 (0.78%) to close at 12,578.95, just below that 12,600 resistance. S&P 500 closed at 1,308.04, up 1.11% or 14.37 points. Doesn't matter what I or anybody else thinks about the future of stocks, some patterns always hold true. One is the "Three Strikes and You're Out." Stocks challenged this level in May and July, and now knock upon that same door. A failure this time seals their fate, just as a significant penetration of 12,600 would send them much higher. By the by, that July failure sent stocks to 10,600 in a few weeks. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. 
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| Numbers Cited By SOPA Supporters May Be Fictitious Posted: 18 Jan 2012 10:16 AM PST Ignoring, momentarily, that the U.S. has already adopted international law which seeks to curtail online piracy (see, e.g., DMCA), and that these new bills seek to do little more than enact what amounts to police powers over foreign companies, it looks like the studies cited in support of piracy-gone-rampant may have never have existed. Julian Sanchez, a researcher at the Cato Institute, did his level best at tracking down the research behind the near-absurd numbers (the industry claims nearly $250B lost in revenues a year, and 750,000 lost jobs), but instead found only circular references. So then, you may be asking yourself: how much does piracy actually cost the entertainment industry? $89MM. What's the U.S. Taxpayer cost to enact new legislation (SOPA)? $47MM, by Sanchez's estimates. That's 52.8 cents of U.S. Taxpayer money spent for every dollar in private enterprise saved, if the system works (which it won't), when there already likely exists a private remedy (private action in the host country). From the GAO:
See Kevin Fogerty's piece at IT World for more.
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| Post Credit Crisis Performance Update for Silver Posted: 18 Jan 2012 10:02 AM PST Mark J. Lundeen [EMAIL="Mlundeen2@Comcast.net"]Mlundeen2@Comcast.net[/EMAIL] 17 January 2012 Just to let everyone know how the post-credit crisis recovery has been coming along, here's a chart for gold, silver and the Dow Jones indexed to 1.00 from their lows of 2008-09. Gold and silver bottomed in October 2008, while the Dow Jones took another five months to hit its bottom (March 2009). This by itself is a remarkable indication of the strength in precious metals, especially silver. Remember, at silver's credit crisis low, it had declined by 58% while the Dow Jones bottomed 54% from its October 2007 high. Silver and gold has gone on to make new, and significant highs after their October 2008 bottom, while the Dow Jones has yet to exceed it last all-time high of October 2007. That seems an important fact to me. As is evident in the chart above, anyone who purchased silver before August 2010 has done substantially better than those who purchased gold or ...
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| The Producers and the Parasites Posted: 18 Jan 2012 09:51 AM PST January 18, 2012 [LIST] [*]Wikipedia, 7,000 other sites go dark in a showdown between Washington, D.C., and the only major industry it hasn’t managed to kill off [*]Debt ceiling theater tries for a revival, while consumer indebtedness proves a sleeper hit [*]Prices jump as demand falls: What the heck’s going on with oil? Rick Rule spies a factor few are talking about [*]Byron King’s 2012 rare-earth outlook, plus the sector he says could prove as lucrative as rare earths in 2009-10 [*]Patrick Cox’s 3-D observations from the Consumer Electronics Show... a reader inquiry about gold stocks... and more! [/LIST] It’s hard to crawl the Internet today without running across something like this... Wikipedia and several other sites are “blacked out” to protest the Stop Online Piracy Act, or SOPA — an odious piece of legislation that would allow domain names to be erased from the web without due process of law. Acc...
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| Posted: 18 Jan 2012 09:48 AM PST Five minutes before market close yesterday, Bloomberg came out with an "exclusive" interview with Marathon CEO Bruce Richards, who may or may not be in the Greek bondholder committee any longer, in which the hedge fund CEO said that the Greek creditor group had come to an agreement and that the thorniest issue that stands between Greece and a coercive default (and major fallout for Europe) was in the bag, so to say. To which we had one rhetorical comment: "Well as long as Marathon is talking for all the possible hold outs..." As it turns out, he wasn't. As it further turns out, Mr. Richards, was just a little bit in over his head about pretty much everything else too, expect for talking up the remainder of his book of course (unsuccessfully, as we demonstrated earlier - although it does beg the question: did Marathon trade today on the rumor it itself spread, based on information that was material and thus only afforded to a privileged few creditors, especially if as it turns, the information was false - we are positive the SEC will be delighted to know the answer). Because as the supposed restructurng expert should know, once you have a disparate group of ad hoc creditors, which is precisely what we have in the Greek circus now, there is nothing even remotely close to a sure deal, especially when one needs a virtually unanimous decision for no CDS trigger event to occur (yes, ISDA, for some ungodly reason, you are still relevant in this bizarro world). Which also happens to be the fascination for all the hedge funds, whom we first and then subsequently repeatedly noted, are holding Europe hostage, to buy ever greater stakes of Greek bonds at 20 cents on the dollar. Because, finally, as the FT reports, the deal is nowhere in sight: "Several hedge fund managers that hold Greek debt have said they have not been involved in the talks and will not be agreeing with the "private sector involvement" (PSI) deal – which centres on a 50 per cent loss on bondholders' capital and a reduction in the interest they receive... Even members of the committee concede the process is unlikely to succeed in time for the crunch date: a €14.5bn bond repayment falling due on March 20." But, wait, that's not what Bloomberg and Bruce Richards told us yesterday, setting off a 100 point DJIA rally. Time to pull up the Einhorn idiot market diagram once again. Once again: here is why one should never trust the media, especially when it is serving ulterior conflicted interests. From the FT:
Punchline in 3...2...1...
And here is why naive Bloomberg reporters should not report anything and everything they hear hook, line and sinker:
The story from here on is familiar to all who have been following our narrative on this matter since June:
Translation: subordination cometh. But we will touch upon this topic in two months, when everyone else is talking about it and/or is an expert on it. And since everyone is now at least a broad bankruptcy expert, or very soon will be, here, courtesy of FT's Sam Jones, is a refresher on bankruptcy negotiations game theory, and why one pretty much never gets what one wants, absent spending 4-7 years in bankruptcy court first:
And with numbers like $500 billion, $1 trillion and even $10 trillion flying around, to make sure the firewall in advance of the Greek default is at least half full, if not half empty, we can guarantee readers that the repricing won't be higher. But it will take stocks the usual 6-8 weeks to grasp what is patently obvious to anyone who has put in even 10 minutes of work in analyzing the complete fall out from Europe that is about to hit.
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| Listen Up, Class: Here's How to Profit Posted: 18 Jan 2012 09:10 AM PST The Barron's Roundtable sees trouble in Europe, but bargains in the U.S. and emerging markets. Marc Faber and Oscar Schafer share their 2012 investment picks.Inflation. Deflation. Rehypothecation. Bad rap lyrics, or the poetry of finance? You can judge for yourself when you finish this first installment of Barron's 2012 Roundtable, a verbal free-for-all that features high-falutin' words, scary predictions and, yes, some sound advice on how to prosper in the year ahead. After a year of political turmoil in the U.S. and debt-fueled chaos in Europe, it's no wonder the 10 investment experts whom Barron'sassembled last Monday at the Harvard Club of New York were eager to dissect the big picture: how the U.S. should gets its house in order (the Senate, too), whether Greece will get booted from the euro, why central bankers might print money until the world's ink supply runs dry, and, not least, when World War III will erupt (sooner than you think). To a one, these leading lights of Wall Street agreed that the world is a lot more dangerous than it was 10 or 20 or 30 years ago, when investors worried more about return on their capital than return of it. That said, most Roundtable members also think pessimism equates with opportunity — in this case, the opportunity for gains in 2012 in relatively undervalued U.S. stocks. Fred Hickey, our resident expert in all things tech, even allowed that the 12-year bear market in technology shares could be ending, which really would be something to celebrate. You'll note a new face at this year's Roundtable, that of Brian Rogers, chairman and chief investment officer of Baltimore money-management powerhouse T. Rowe Price. He takes the seat long occupied by Archie MacAllaster, who sadly passed away in 2011. Archie likely would be pleased to know that Brian too is an optimistic sort; he lives by several upbeat maxims, including that the world doesn't end often. Try to remember that when you read the downbeat stuff in the pages that follow. Marc Faber, who describes himself as the world's No. 1 pessimist, is responsible for much, though not all, of it. He lives in Thailand but roams the globe, and starts off the stock-picking portion of this year's Roundtable. Not surprisingly, perhaps, he remains a fan of emerging markets and thinks they will offer ample rewards to long-term investors, especially after their shellacking in 2011. Most of all, he believes in diversification — into equities and fixed income, real estate and gold — in a world where it is hard to fathom what policymakers might do next. Hedge-fund manager Oscar Schafer, of New York's O.S.S. Capital, also takes his star turn in this first of three Roundtable issues, making the case for a quartet of misunderstood companies with deceptively bright prospects for the new year. His attention to industry dynamics, capital-allocation strategies and valuations helps explain why he has not merely survived but thrived for decades on the Street. Want the details? Please read on. Barron's: Let's not dwell on last year's mistakes, because all of you have taken vows to pick nothing but winners now. So we'll start with the economy and interest rates, and even Europe, which called so much of the tune in 2011. Oscar, what's ahead? Schafer: The U.S. economy will continue to bumble along. The stock market will do all right if we avoid the "fat tail" outcomes of either hyperinflation or deflation that Bill Gross recently wrote about. Joe Rosenberg [chief investment strategist of Loews] said in a Barron's interview last month that you can't have good news and cheap stocks at the same time. We might have not-so-great news but cheap stocks, so I'm pretty optimistic. Last year was strange, with the Standard & Poor's 500 ending exactly where it started. Within the year there was huge volatility, however, which is hurtful to individual investors. Leveraged ETFs [exchange-traded funds], which deliver two or three times the market's return, could be to blame for the huge upswings and downswings at the end of the day, as they need to rebalance their positions by buying or selling more stock before the close. (9 pages long)
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| Volume Only Underperformer As Euphoria Catches On Posted: 18 Jan 2012 08:52 AM PST The slippery slope of lower volume continued today in the NYSE (cash/stock trading markets) despite ES (the e-mini S&P futures market) seeing its 2nd highest volume since 12/16 as that futures market has only seen 1 day of the last 11 with a negative close-to-close change. Driven seemingly by yet another rumor that the Greek PSI deal is close (yet GGBs are lower?), risk assets broadly went into overdrive and while ES held 1300 (on very large average trade size and volume as broke that stop-heavy level), the shifts in commodities, FX, and Treasuiries all helped sustain the euphoria into the close where we stabilized at yesterday's pre-market highs. Copper, Silver, Gold, EURUSD (and all FX majors aside from JPY), Treasury yields (and 2s10s30s) all closed at their highs of the day and while oil dropped early (around the Keytsone news?) it also limped back higher to $101 by the close. Equity markets were slight leaders on the day but credit caught up into the close. We do note that while the high-yield credit index has rallied dramatically but worry that the optical compression of spreads (bullish) is hiding the bear flattener in 3s5s that is seemingly dominating flow for now (relative to underlying credit).
NYSE volumes have trended down since the USA downgrade - today was average for the weakness of the year to date (even as euphoric behavior was evident everywhere).
As far as ES volume, it was solid right at its 50DMA but under the surface there was a huge surge in average trade size around the break of 1300 as well as into the close - these peaks have been increasing recently as have tended to occur at broader turning points (exhaustion buying is the term that comes to mind). What should also be notable from the chart above is the proximity of the crossover between the 50DMA and 200DMA (blue and purple lines above) which have the feel of a trap given these spikes in average trade size but standing in front of that crossover may be hard (smaller unit size maybe?).
Equities (blue) lead credit (light/dark red) most of the day but into the close ES stabilized as credit pushed on to new multi-month highs (low spreads). HYG maintained its composure with ES as a late day surge helped it not underperform.
The rally in HY credit 5-year risk is impressive (green) and we note that it is now very rich to its intrinsic (or fair-value). The lower pane shows that since very early January when the skews (the difference between the index and the value that the underlying names in the index would suggest is correct) compressed to zero (black dotted oval) - after blowing out as managers reached for index protection en masse into the holidays rather than sell into an illiquid market. Since then we have seen 5Y spreads compress (and stay in sync with - or even support - equity's performance), while 3Y (purple lines) has underperformed (becoming 'cheap' or wide relative to its fair value). The point is that this flow (which is seemingly much more index-driven given the shifts relative to fair-values) is a 3s5s flattener - a position that is quite frankly much more bearish-biased. While optically 5Y has been compressing, the front-end of the credit curve has become more concerned with risk. Financials went from biggest loser to almost winner today as GS results (and a belief in the IIF's 99th press release) sent them from -0.6% to +1.53% by the close helped by the majors all ripping, especially MS and GS (though BAC did not let the side down). Interestingly Energy outperformed on the day despite oil being well off overnight highs.Utilities were the only underperforming sector of the day managing a marginal -0.03% close to close.
Broadly speaking, the ES rally was well supported by risk assets (as medium-term CONTEXT above and short-term here indicates) and correlation held up rather well into the close. It is evident though that ES is a little rich to CONTEXT overall but there is no specific driver that stands out as a factor to watch for give-back (except perhaps AUDJPY or 10Y TSY). Away from all that excitement EURUSD rallied up to over 1.2850 (near its highs of 1/13) though we note that JPY is still underperforming (only major down against the USD this week). AUD strength continues to help fund carry which makes us smirk a little as the huge compression in AUS bond yields (and rise in AUD) seem much more about safe-haven flows seeking AAA refuge and yet the AUD rally is implicitly helping to drive (via carry correlations) the rise in risk assets overall.
Commodities rallied as the USD sold off with Copper now up 3.5% YTD and Gold and Silver inching towards the highs of the week once again as the former held above $1660 into the close. Oil surged back from earlier lows as risk took off and as we write is over $101 once again. Treasuries did what they are supposed to and sold off as stocks rallied. 2s10s30s rallied and the curve steepened with 30Y now 4.5bps higher on the week (7bps off this morning's low yields). Charts: Bloomberg
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| Derisking Gold Juniors, Step by Step Posted: 18 Jan 2012 08:42 AM PST If you're among the many who consider investing in the junior resource sector nothing more than a crapshoot, look into Ahead of the Herd Publisher Rick Mills' steps to derisk the inherently risky business of investing in junior resource companies. In this exclusive interview with The Gold Report, Mills spells out the steps involved in the derisking process and discusses what features put a junior ahead of the herd.
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