Gold World News Flash |
- International Forecaster January 2012 (#6) - Gold, Silver, Economy + More
- Subordination 101: A Walk Thru For Sovereign Bond Markets In A Post-Greek Default World
- Silver’s Surge
- Money Supply to Hit $24 Trillion, More Bubbles & Higher Gold
- Silver Breaks Downtrend, Junior Miners Outperforming Majors
- Will the Fed Bring Clarity or Confusion?
- This Will Be a Dangerous Collapse and End Game: James Dines
- Martin A. Armstrong: The Evolution of the US Dollar
- India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees
- Tekoa Da Silva: China Gold Accumulation Plans, India Post Office Gold Coins, Silver & More
- Harvey Organ's Daily Gold & Silver Report
- China Gold Accumulation Plans, India Post Office Gold Coins, Silver & More
- The coming 1 Trillion dollar QE3 extremely good news for the Gold and Silver Market
- In The News Today
- In KWN weekly review, Norcini sees bullish signs for silver
- Jim Sinclair: ‘There Will Be a Run on Gold Stored in the US'
- James Turk: Using vaults to store gold and silver
- Intervention in Libya was largely about gold, Rickards tells Future Money Trends
- Silver tracking the CCI - risk trade measurement
- Politicians and the Global Financial Crises
- Euro, Gold on the Move
- This Past Week in Gold
- Gold Confiscation, a Reality? Part III
| International Forecaster January 2012 (#6) - Gold, Silver, Economy + More Posted: 22 Jan 2012 04:28 AM PST If the entire financial system does not come down upon our heads and if we do not have another war, global growth is going nowhere in the year's ahead. We had a mini-recovery, but it cost $1.8 trillion. We had a second recovery and that cost $1.5 trillion. We are entering a third of what is becoming yearly recoveries that will probably cost $1.3 trillion. In other worlds without these massive injections of money and credit we would probably be in a deflationary depression.
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| Subordination 101: A Walk Thru For Sovereign Bond Markets In A Post-Greek Default World Posted: 21 Jan 2012 07:04 PM PST Yesterday, Reuters' blogger Felix Salmon in a well-written if somewhat verbose essay, makes the argument that "Greece has the upper hand" in its ongoing negotiations with the ad hoc and official group of creditors. It would be a great analysis if it wasn't for one minor detail. It is wrong. And while that in itself is hardly newsworthy, the fact that, as usual, its conclusion is built upon others' primary research and analysis, including that of the Wall Street Journal, merely reinforces the fact that there is little understanding in the mainstream media of what is actually going on behind the scenes in the Greek negotiations, and thus a comprehension of how prepack (for now) bankruptcy processes operate. Furthermore, since the Greek "case study" will have dramatic implications for not only other instances of sovereign default, many of which are already lining up especially in Europe, but for the sovereign bond market in general, this may be a good time to explain why not only does Greece not have the upper hand, but why an adverse outcome from the 11th hour discussions between the IIF, the ad hoc creditors, Greece, and the Troika, would have monumental consequences for the entire bond market in general. But before we proceed with the analysis, we should point out one minor nuance: Salmon, and thus the WSJ's Fidler, are correct that Greece has all the leverage in the world, in the same way that a suicidal person has all the leverage to take their own life as they stand on the ledge of a skyscraper. Because from a strategic standpoint, the reality is that over the past 2 years, the entire financial establishment has done everything in its power to mask the fact that Europe is currently undergoing a stealthy restructuring, without it actually being represented as a restructuring. The reason for this is that while an ex-event of default status quo allows the world's financial establishment to continue marking sovereign debt, even highly impaired one (remember: central planners are always right, markets - always wrong in pricing risk, or so the central planners say), at whatever prices it desires (recall that one of the very first things to happen in the post-Lehman collapse was the elimination of the Mark-to-Market statute, thus affording banks a plethora of gimmicks to mark 'assets' on their books at any valuation that excel spews out based simply on input assumptions, which in some cases are openly fraudulent), a case of sovereign default will very likely make mark to market unavoidable, thus exposing the proverbial nudity of the emperor. It also has implications for the ECB, for CDS triggers, and other consequences, but those are of secondary importance for the time being. Most importantly, the Nash Equilibrium at least until now, had afforded creditors, who in many cases have known very well that they have 'weak protections' on their sovereign holdings (more on this in a second), the myth that they are not subject to subordination, or seniority claims on their holdings, and thus the sovereign market was uniform, or pari passu. The outcome of the Greek negotiations, should Greece indeed use the "nuclear option" and force a coercive cramdown on any one, or all, bondholder classes, would do away with this myth in the blink of an eye, and instantaneously create a split between what will hence be perceived as senior and subordinated sovereign bonds. These are all considerations that the ECB, that European banks, and most importantly European sovereigns (and Greece) are all too aware of, and since the need to fund future deficits will only rise, any impairment of the sovereign funding apparatus is not only suicide for Greece, but for Europe, and eventually for the rest of the developed world. Additionally Salmon ignores a simple tactical observation, one which the hedge funds are all too aware of, namely that while the bulk of Greek bonds are issued under Greek-law (a fact we first observed back in June, when we made the assessment of just who it is that really holds the reins in the default process) and while lacking collective action clauses, can be 'crammed down' retroactively, a smaller portion, which is estimated to be between €25 and €40 billion, has been issued under foreign, primarily UK-law, with strong creditor protection, and with Collective Action Clauses, which require that anywhere between 66% and 75% of all creditors agree to a given process, in this case the ongoing Greek prepack exchange offer (more later), for it to occur. It also means that bondholders in all other European countries are carefully watching if contract rights of "strong" UK-indentures are abrogated either in Greece or elsewhere, which would be a signal that there is no sovereign debt in circulation that is safe any longer from future attempts to strip positive and negative covenants, or explicitly stated bondholder rights. This is especially topical, as with Greece about to proceed with a prepack (non) bankruptcy, all eyes will turn to Portugal which is next, and after that Ireland, Spain and Italy. In this regard, what happens in Greece, under the advice of Cleary Gottlieb's Lee Buccheit, will be seen as a framework for all future bankruptcies that Europe will undergo. And if Greece does proceed with what Salmon indicates is its "upper hand" course of action, what it will be doing, again going back to game theory, is defecting first, in the process forcing a broad sell off of weak, and potentially, strong indentures bonds of the other PIIGS nations, eventually leading to the collapse of demand for European paper, and the complete loss of confidence in the ECB, which has become a defacto source of equity for the PIIGS, an outcome which will eventually lead to the elimination of all funding for Greece itself. Which is why we said that Greece has as much leverage as one about to commit suicide... but at least it will be first - the line after it long and dignified. Greek Bankruptcy 101 Before we get into the implications of what a scorched earth strategy by Greece would be, we would like to explain the process as it stands in Greece. Greece, has over the past nearly two years, been the functional equivalent of an insolvent corporation. The hundreds of billions in Troika bailout funding provided so generously to Greece is nothing but a prepetition Debtor in Possession (DIP) loan, with a first lien and collateral protection. The IMF may get paid back, but Greece will say goodbye to half its islands and historical monuments in the fire-sale that precedes. Furthermore, the ECB which as recently estimated by Barclays, has bought about €36 billion of Greek debt, is in effect a provider of equity financing. While this requires a tangential analysis, the ECB does not act as a Greek creditor, whose primary focus is to be repaid. No, the ECB would be more than happy to hold all the Greek debt, as it does not care one bit whether or not it gets paid interest - after all it can just print cash to fund its undercapitalized status should Greek bonds finally be recognized as worthless. If that were the case, Greece would be able to proceed with any debt transaction it desires, as any impairment at the ECB level would be promptly internalized, even if the ECB were to change its charter, which it probably very easily can, to make a Greek event of default a non-event from an accounting standpoint. Yes - the ECB's credibility will be greatly impaired, but how "credible" was it to begin with? Of course, Germany will hardly be pleased that Draghi is about to foot the bailout of an otherwise insolvent country, and monetize hundreds of billions; yet this would be spun that in doing so, the ECB would be assuring that continuation of the existing way of life... if only modestly longer. In short, this means that the ECB has been acting as a proxy debtor pari passu to Greece, even though it owns Greek debt. Said otherwise, the ECB has been conducting a quiet Greek debt-for-equity exchange, which would have had far greater success if, paradoxically, the market deterioration had persisted after the summer of 2010, when however the Fed proceeded with QE2, and stabilized credit markets (briefly). Of course: Europe can't devalue its currency alone - Bernanke will not be happy. The point is that if that ECB held all of the Greek sovereign debt, there would be absolutely no difficulties in getting the current "creditor" deal done as the ECB would have agreed to any terms. Especially since the ECB cares not one bit, if its Greek "equity" is impaired all the way to zero. So we have a DIP lender, and we have continuing debt-for-equty (which has not converted nearly enough debt into equity). What is missing? Why an exchange offer and an actual fresh start balance sheet of course. Which is where the so-far-failing IIF negotiations come into play. Here the moving pieces are most fluid, and the adversaries are Greek bondholders on one hand, primarily hedge funds who have bought Greek bonds in recent weeks and months and who seek as high a cash payout as is possible, and the IMF on the other, which is trying to make the "fresh start" Greek balance sheet as viable as possible. Because even at a 120% debt/GDP ratio post "reorg" it is hardly a leap of faith to assume that Greece will be insolvent again, and that quite quickly, especially with the country paralyzed by daily strikes, and where the deficit is now well into the double digits. At last check, the negotiations had stalled with private bondholders offered 30 year "post-petition" (said in gest - if Greece gets its agreement, there will be no actual bankruptcy petition, but for all intents and purposes there is) bond with a 4% coupon, which however, the FT just announced, would be cut to 3.5% on IMF demands, making the deal even less palatable for hedge funds. To sweeten the deal, the creditors would also be offered a 15% recovery on par in the form of short-term EFSF bonds, but no actual cash. We leave it up to our readers imagination what happens to the EFSF bond's price when all the Greek bondholders proceed to dump their allocations at the same time. Needless to say, this is the stage where the leverage shifts from Greece to the creditors. Because while Greece and the IMF can demand that bondholders suffer 100% losses (even if that means a complete wipe out of Greek pension funds holding Greek bonds - a totally separate topic which we are confident the Greek media will have fun with on its own), exchange offers are never a sure thing, which is why it has never been branded as one for popular consumption, as failure would mean that the creditors have won and that a freefall bankruptcy is imminent. This is also the stage where the broader media is confused (whether objectively so, or by representing the interests of conflicted hedge funds) as evidenced by the Reuters conclusion. The reality is that in order for an exchange offer to be binding, some majority of bondholders have to agree with the transaction. The problem is that the bulk of Greek bonds do not have what is known as a Collective Action Clause, or a framework which says what percentage of favorable votes is needed to enforce a decision, all have to agree. However, this opens the door for changing the rules. As Citi explained some time ago, "Greek law bonds have no Collective Action Clauses (CACs) which mean that voluntary restructurings require 100% of investors to accept the new terms in order to avoid triggering a default, an almost impossible hurdle." Which is why the Greek negotiation process implicitly requires the retroactive imposition of CAC, one which on one hand will facilitate the "exchange offer", yet on the other will create great distrust of any bonds issued under domestic law in other European countries. Yet where the process falls squarely on its face, is the fact that Greece also has issued a modest amount, somewhere over €25 billion face, in bonds issued under UK-law. These are bonds which already have Collective Action Clauses and which as Stephen J. Choi and Mitu Gulati explain, come in two flavors: "Those that were issued prior to 2004 contained CACs that allow holders of 66% or more of an issue to modify payment terms in a manner that would bind all other holders. The bonds issued after 2004 require the consent of holders of 75% or more of an issue." Incidentally, this is where the Greece has the upper hand argument fails because while Greece can force local-law bondholders to do pretty much anything, it has no chance of doing that if a given hedge fund cartel has already built up a blocking stake in the UK-bonds. Choi and Gulati go on to state the obvious: "Obtaining approvals from between 66% and 75% of the bonds is likely to be difficult." And this is where the game gets interesting, because while the bulk of the bonds, or what is now becoming obvious is the junior class, can be impaired with impunity (pardon the pun), it is the UK-law, or the non-domestic indenture, bonds, which are the de facto fulcrum security. And since the notional outstanding here is tiny, it is quite easy to build up a blocking stake in the bonds and to obtain full control of the process, especially since the ECB appears to have been building up its own stake in local-law bonds. Blocking Stake As anyone who has ever overseen or participated in a bankruptcy process, the biggest trump card one can attain is to build up a blocking stake in a fulcrum security (just ask Carl Icahn) . Because it does not matter who has a majority. What matters is who has 33% + 1 of the vote to block any consensual deal. This is what is also known as "nuisance value" because in exchange for their votes, those blocking stake holders can demand anything, and be virtually assured of getting it, in order to allow the restructuring process to continue. This is precisely what the hedge fund hold outs, who started accumulating a block stake in the UK bonds some time in October, figured out in mid- to late-2011. And the fact that the ECB did not, back in 2010 when it was actively buying Greek bonds did not, only made it easier. In a seminal paper by the IMF's Manmohan Singh titled "Recovery Rates from Distressed Debt -Empicial Evidence from Chapter 11 Filings, International Litigation, and Recent Sovereign Debt Restructurings", he does a far better job of explaining the holdout precedent than us:
And there is the entire Hedge Fund hold out strategy in a nutshell. Since as we already know the local-law bonds are in effect a junior class to the UK-bonds (and only senior to the ECB's bonds which are effectively a worthless equity tranche), the bargaining power of the process is now with the one or more hedge funds who control the UK-bond blocking stake. Because while Greece can force the local law bonds to agree to anything, and thus enact a coercive "cram down", it has no such control over UK-law bonds. At least not explicitly, but more on that in a second. As it so happens, the bulk of the UK-law bonds have a 2016 maturity as the following Chart from Citigroup shows. In fact, of all vintages, this one is most evenly spread between Greek and UK-law.
So how does the active build up of a blocking stake look like from a pricing standpoint? It looks as follows: in this chart one can easily see the preferential accumulation of a UK-law bond over its less "protected" cousin in recent months as this strategy was being implemented by one or more hedge funds.
As can be seen the price for this preference is as high as 10 cents over the proposed "recovery" value for the entire bondholder class as a whole according to recent IIF leaks. Would one pay 43 cents for a bond unless there was something up their sleeve? Obviously not. Which brings us to a whole new topic of "sovereign litigation arbitrage" (prepare to hear this phrase much more in the future). But before we get there, there is one more open question: is it possible that the ECB does in fact hold the trump card, and can negate a blocking stake in the UK-bonds? Again we turn to Choi and Gulati:
It may not be trivial, but it certainly is not sufficient. Because when one thinks that of the €25 billion in calculated face non-local bonds out there (of which some are non-UK law), the hold outs have to merely control a third plus one or just under €9 billion. At recent prices this is about €3 billion. A €3 billion investment to control the restructuring of a €240 billion (excluding the Troika's DIP loan) balance sheet? Not bad at all. So now that we know more or less what the hedge fund strategy is, what happens if one does in fact assume that Greece has the upper hand, and that it is willing to proceed with terminal game theory defection and blast contract law into smithereens only to get a short-term respite? First, as a reminder, here is how JP Morgan's Michael Cembalest described the potential next steps if indeed Europe proceeds with the scorched earth, aka, strip all UK-covenants, process.
A couple of points here: Cembalest is correct that those pursuing an Orphan Bond option (more on this later) will likely see an uphill climb. However, it is also true that as Singh points out, some of the best recoveries in all distressed work outs come precisely from orphan bonds. Litigation arbitrage gamesmanship aside, however, the JPM Pvt Wealth CIO has nothing to say about UK-bonds, because if the CACs of those indentures are stripped, and overriden with a new set of CACs, which is explicitly what would need to happen for a Greek pari passu fresh start bond market. then all bets are off, as it would mean that the very premise behind indenture protection is now at the mercy of lawmakers on a case by case basis. And just like MF Global being caught red handed commingling client funds was an event that crushed many investors' confidence in the stock market, so a strong-indenture cram down would have a comparable effect on the bond market. Incidentally, here is Singh on Orphan Bonds and why they themselves can be so appetizing to distressed investors:
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| Posted: 21 Jan 2012 06:04 PM PST We had a super week in regard to swing trading as markets and stocks did what the charts said they were going to, now it looks like we need at least a few days of correcting and backing and filling before we attempt a new move higher but it was very nice to see the S&P move beyond 1,300.
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| Money Supply to Hit $24 Trillion, More Bubbles & Higher Gold Posted: 21 Jan 2012 05:20 PM PST  Today Michael Pento alerted King World News that banks can now expand the M2 money supply to a staggering$24 trillion. Pento, who runs Pento Portfolio Strategies, writes for King World News to warn about this dangerous situation and how it will create more bubbles and higher gold. Pento had this to say: "The plain and sad truth is that America continues to repudiate its foundation of free-market capitalism and is instead gravitating towards the economic tenets of a banana republic. One such tenet we have adopted, with alacrity, is the belief that debt and inflation are to be tolerated in superfluous fashion."
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| Silver Breaks Downtrend, Junior Miners Outperforming Majors Posted: 21 Jan 2012 02:49 PM PST On January 3, 2012 I wrote to my readers that silver would begin outperforming gold similar to what we saw in 2010. On Friday we saw a major gain in silver of close to 5%, breaking the 50 day moving average for the first time since the Operation Twist decline in September. This was an attempt by the Federal Reserve to manipulate commodity prices lower while artificially inflating U.S. dollars and bonds. It appears that this temporary fix may be reversing to the benefit of undervalued junior miners of both precious and industrial metals. On January 3rd, 2012 Barron's wrote an article based on the premium report I sent to subscribers. "Silver has corrected by roughly 50% from its highs, while gold has fallen less than 20%, Gold Stock Trades' Jeb Handwerger reminded clients on Tuesday. He traced much of the previous downward move in precious metals to the fluctuations in the U.S. dollar. An index comparing the greenback to a basket of other major currencies was at last glance down 0.7% on the day at a 79.63 valuation. The ICE U.S. Dollar Index touched its lowest level since Dec. 21. "The U.S. dollar is reaching key resistance at 81, while gold, silver and the miners test support at oversold conditions indicative of a major rebound move," Handwerger said in an interview. "In addition, silver — which up to now has been an orphaned child — is making up for lost time outpacing gold and equities." Big end-of-year bets against gold and silver by speculators are likely to start reversing as managers try to cover their short positions, he believes. That should fuel an even more expansive run, says Handwerger, who has been cautious on silver since April and gold since September. He changed his tone considerably Tuesday:
Handwerger is now viewing silver — with duel roles as an industrial and precious metal — as especially well-positioned for an upturn as manufacturing demand picks up. "Silver has a much bigger upside than gold at this point in the cycle," Handwerger said. He added:
Silver, which has more industrial uses than gold, jumped Tuesday on stronger manufacturing data from India and China, which are leading consumers of precious metals. Silver for March delivery rose 5.9% to settle at $29.57 an ounce, continuing a rebound after futures last week touched their lowest levels in 13 months. February gold, the most active contract on the Comex, rose 2.2% to settle at $1,600.50 an ounce. Meanwhile, Handwerger figures that the so-called January Effect — in which stocks get a boost from investors and managers refreshing their portfolios at the start of a new year — could be another underlying factor fueling miners. He noted that small-caps in particular seem to get a bump during this time of year (averaging around 4.4% over the past 32 years), which could bode well for GDXJ. "Today, the junior miners are off to the races, outperforming the larger gold miners and moreover surpassing bullion," Handwerger observed." Read the full article at Barron's by clicking here… On another note, the Euro is sinking into new lows, which has benefitted the dollar momentarily. Paradoxically, a cheap Euro attracts foreign capital seeking to acquire European natural resource assets inexpensively. We have witnessed the acquisition by Eldorado Gold (EGO) of the Greek European Goldfields as well as the recent $150 million merger between Astur Gold and Gold Ore Resources. This indicates that European mining is gaining attention and moving in the right direction. One company we have featured is sitting on a very attractive asset in mining friendly Spain, which is desperate for jobs and mines. We believe that 2012 may be a significant year for this company which is only valued at $30 million! As they advance a full feasibility on the project, major miners may gain interest to enter an undervalued European mining asset as Eldorado did in Greece. Click here to subscribe to my free 30 day trial of my premium service by clicking here to read the full reports.
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| Will the Fed Bring Clarity or Confusion? Posted: 21 Jan 2012 01:45 PM PST Will the Fed Bring Clarity or Confusion?Next Wednesday, between 12:30 and 2PM, we will get a ton of new information to digest and analyze. The Federal Reserve will make a series of statements while unveiling its new communication effort. A portion of the new information will be contained in the revised Summary of Economic Projections (SEP). The Fed has worked long and hard on its new communication policy. The question is, "What will people think and how will the markets react?" I believe that there is a very good possibility that the Fed's plan will add to uncertainties regarding monetary policy. Contrary to its objectives, the new "openness and clarity" may end up causing the confusion. The Fed will provide information regarding member's thinking on the future size of the Fed's balance sheet (BS). This is critical. We might see a consensus view that the Fed's balance sheet will grow another 25% over the next 18 months. That would bring this headline:
Fed Signals Another $1T Of QE Stocks rise sharply. Oil, copper, gold see largest one-day rise in two years TIPs spreads widen to 2.5%
We could just as easily get a consensus opinion that the Fed's BS will remain unchanged for the foreseeable future. That would also be a shocker:
Fed Forecasts End of QE Global stocks in broad retreat. Next move is to tighten?
The Fed will provide information regarding its thinking on GDP, inflation and the timing of an increase in the Federal Funds rate (new info). This is all potentially explosive data. The Fed's most recent read (November) on the economy painted a somewhat upbeat picture. Almost all of the data since then has been on the positive side. While I doubt the Fed will signal that happy days are here again, it would appear likely that a +2.0% growth forecast for GDP is in the cards. How is the Fed going to square this (relatively) upbeat economic assessment with a loose monetary policy that is currently at biblical historic levels? The answer is, "It can't".
Fed Predicts Improvement. To Keep Monetary "Pedal on the Metal" Global Central Bankers Critical, OECD head says, "Reckless" Dollar in rout, Gold rises $65
For the Fed to continue ZIRPing, Twisting and QEing, it has to support the policy with a bleak assessment on the economy. A negative outlook is the only scenario that justifies maintaining, let alone expanding, the existing "emergency" monetary measures. I think the Fed will hint that monetary contraction is in our future (about a year away, if not sooner). To me, the only circumstance that would avoid this conclusion is if the Fed were to come out with some decidedly disappointing expectations for growth and unemployment for the next 36 months. This too would make for headlines:
Fed Downgrades Expectations Three More Years of Sub-par Growth
A downbeat assessment would influence the Congressional Budget Office (CBO). On January 30, the CBO will release its ten-year economic outlook. This is what they said a year ago:
The CBO forecasts for 2011 were off the mark. I think they will have to significantly downgrade their expectations for 2012 and 2013. The CBO numbers are the basis upon which long-term estimates for future deficits and the financial status of Social Security (and other big entitlement programs) are made. The Office of Management and Budget (OMB) uses these numbers to craft legislation for the White House. I find it interesting that the forecast that would best serve Ben Bernanke's desire to maintain and expand monetary policy is exactly the opposite forecast that the CBO "wants" to use in evaluating America's macro economic outlook. On Friday, Morgan Stanley's David Greenlaw commented on prospects for the Fed's announcements this week:
Mr. Greenlaw is assuming that the Fed will produce an economic forecast that will force a conclusion that further easing is off the table. We may get that. The alternative is that the Fed downgrades its collective assessment for growth, inflation and interest rates. Should it do that, the folks at the CBO will have to either scramble to adjust their own expectations, or face severe criticism for presenting a rosy view of the future while the Fed is singing a different tune.
What will we get next week? Will it be clarity?
Or confusion?
Either way, I can't wait.
Note: This is a Banksy. What original oil painting is this from?
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| This Will Be a Dangerous Collapse and End Game: James Dines Posted: 21 Jan 2012 11:47 AM PST "Yesterday was a real head-scratcher. Gold turned in a decent performance...but the shares closed down. Silver soared, and silver shares barely budged." [COLOR=#7f4028] Yesterday in Gold and Silver The gold price did nothing until London opened yesterday morning...and then it promptly got sold down about thirteen bucks, with the low coming of the day coming at the Comex open around 8:20 a.m. Eastern time. From there, a rally developed which added twenty bucks to the gold price. This rally lasted until 12:15 p.m. in New York, before basically trading sideways for the rest of the day. Gold closed at $1,667.00 spot....up $10.30 on the day. Net volume was pretty light...around 101,000 contracts. The silver price basically followed gold's price track...but the rally that started ...
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| Martin A. Armstrong: The Evolution of the US Dollar Posted: 21 Jan 2012 10:37 AM PST The United States dollar has been one of the most misunderstood issues of all time. There has been far more at stake in the Rise & Fall of the dollar
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| India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees Posted: 21 Jan 2012 08:45 AM PST "India and Iran have agreed to settle some of their $12 billion annual oil trade in rupees, a government source said on Friday
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| Tekoa Da Silva: China Gold Accumulation Plans, India Post Office Gold Coins, Silver & More Posted: 21 Jan 2012 08:30 AM PST
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| Harvey Organ's Daily Gold & Silver Report Posted: 21 Jan 2012 08:17 AM PST Raid on gold and silver rebuffed/silver rises above $32.00 in access market/No deal on Private Greek debt
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| China Gold Accumulation Plans, India Post Office Gold Coins, Silver & More Posted: 21 Jan 2012 07:49 AM PST |
| The coming 1 Trillion dollar QE3 extremely good news for the Gold and Silver Market Posted: 21 Jan 2012 07:16 AM PST The coming 1 Trillion dollar QE3 is going to be... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
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| Posted: 21 Jan 2012 06:46 AM PST "Sathyam Vada, Dharmam Chara" –The Upanishads Jim Sinclair's Commentary Here is the present Western nuclear non-proliferation strategy. Jim Sinclair's Commentary Here is a rare picture of an internet gold share basher identified with 927 nicknames and 3098 rented IP address. It is hard to tell from the picture, but his nose Continue reading In The News Today
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| In KWN weekly review, Norcini sees bullish signs for silver Posted: 21 Jan 2012 06:17 AM PST 11:16a PT Saturday, January 21, 2012 Dear Friend of GATA and Gold (and Silver): The weekly precious metals review at King World News may be most interesting for futures market analyst Dan Norcini's remarks about bullish trading indications for silver. The review is 22 minutes long and it's posted at the King World News Internet site here: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2012/1/21_K... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Join GATA here: Vancouver Resource Investment Conference http://cambridgehouse.com/conference-details/vancouver-resource-investme... California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels. The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year. Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation. For the complete statement from the company, including maps and charts, please visit: http://www.prophecycoal.com/news_2011_jan17_prophecy_receives_power_plan...
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| Jim Sinclair: ‘There Will Be a Run on Gold Stored in the US' Posted: 21 Jan 2012 05:59 AM PST With gold remaining firm above $1,650, today King World News interviewed legendary Jim Sinclair, to get his take on where things are headed. Sinclair surprised KWN by telling us there would be a run, by European countries, on the gold they have stored at the New York Fed. Here is what Sinclair had to say when we asked him if the IMF would be selling any gold: "No. The role of gold has changed and gold is moving more toward the central bank then away from it. On top of that you have seen a significant amount of media attention towards, 'Where is our gold?' This is taking place in the European press."
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| James Turk: Using vaults to store gold and silver Posted: 21 Jan 2012 05:51 AM PST 10:50a PT Saturday, January 21, 2012 Dear Friend of GATA and Gold: GoldMoney founder James Turk argues that gold and silver owners need professionally managed vaults and diversification in storage locations for their metal to protect against geopolitical risk. Turk's commentary is headlined "Using Vaults to Store Gold and Silver" and it's posted at GoldMoney's Internet site here: http://www.goldmoney.com/gold-research/james-turk/using-vaults-to-store-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Be Part of a Chance to Discover Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600. Join GATA here: Vancouver Resource Investment Conference http://cambridgehouse.com/conference-details/vancouver-resource-investme... California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing a silver commemorative coin: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Golden Phoenix Receives Inferred Gold Resource Estimate Company Press Release Golden Phoenix Minerals Inc. (OTC: GPXM) reports that on behalf of Golden Phoenix Panama S.A., the joint venture entity that owns and operates the Santa Rosa gold mine in Panama, it has received from SRK Consulting (U.S.) an initial resource estimate for Mina Santa Rosa. The Santa Rosa project is a volcanic-hosted epithermal gold-silver deposit previously operated as an open pit-heap leach operation. Production ceased in 1999 in part because of low gold prices. SRK Consulting reports an in-situ inferred resource at the former Santa Rosa and ADLM pits totaling 23.1 million metric tonnes at 0.90 grams/tonne gold, for a contained 669,000 ounces of gold at a 0.30 g/t gold cutoff. The resource also contains an average grade of 2.87 g/t silver for a contained 2.1 million ounces of silver. John Bolanos, Golden Phoenix's vice president of exploration, remarks: "In addition to SRK's inferred resource estimate of 669,000 contained ounces of For the company's full statement, including a table detailing the resources at Santa Rose, please visit: http://goldenphoenix.us/press-release/golden-phoenix-receives-initial-ni...
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| Intervention in Libya was largely about gold, Rickards tells Future Money Trends Posted: 21 Jan 2012 05:43 AM PST 10:42a PT Saturday, January 21, 2012 Dear Friend of GATA and Gold: In a 23-minute interview geopolitical analyst James G. Rickards tells Dan Ameduri of Future Money Trends that the recent Western intervention in the civil war in Libya was likely in large part about gaining control of that nation's gold reserves and that the Federal Reserve won't let the U.S. dollar get too much stronger than the euro: http://futuremoneytrends.com/jamesrickards.html CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels. The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year. Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation. For the complete statement from the company, including maps and charts, please visit: http://www.prophecycoal.com/news_2011_jan17_prophecy_receives_power_plan... Join GATA here: Vancouver Resource Investment Conference http://cambridgehouse.com/conference-details/vancouver-resource-investme... California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| Silver tracking the CCI - risk trade measurement Posted: 21 Jan 2012 05:42 AM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] One look at this tells you all you need to know about whether or not silver is going to perform. If risk is in and hedge fund money flows are coming into the commodity complex in general, it will move higher. When it does, silver goes right along with it. When risk is out and money flows OUT of the commodity complex, silver sinks like a lead brick. Notice that chart pattern is almost identical between the two. ...
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| Politicians and the Global Financial Crises Posted: 21 Jan 2012 05:23 AM PST Political System The seeds of the global financial crises which were triggered by the collapse of Lehman Brothers in the USA in 2008 had been sown during the last number of decades. The basic reason for the emergence of the crises is the manner in which we select our leaders or politicians in our society. The politicians are the key persons responsible for laying down rules and regulations which the population of the country are expected to follow. The strict, severe and swift penalties for not adhering to the rules and regulations are supposed to act as deterrent for people from breaking the law. In the current system of elections there are some inbuilt weaknesses which do not allow the politicians to follow their basic responsibilities.
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| Posted: 21 Jan 2012 04:37 AM PST Purely from a technical perspective, let's notice that the Euro/US Dollar hit a one-week high this morning at 1.2985 off its low at 1.2620 (+2.85%). It has since corrected and turned up from 1.2890, which happens to be the recent upside breakout plateau of a two-week base-like formation that projects to 1.3080-1.3120.
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| Posted: 21 Jan 2012 04:28 AM PST Summary: Long term - on major buy signal. Short term - on buy signals. Gold cycle has bottomed and we have new buy signals. Gold stock ETFs are pulling back and can see set ups soon. Read More...
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| Gold Confiscation, a Reality? Part III Posted: 20 Jan 2012 06:22 PM PST Gold Forecaster
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