saveyourassetsfirst3 |
- 5 Warren Buffett Stock Picks Now On Sale
- Light Gold in Them Thar Hills
- A Free Nation Very Deep in Debt
- RNN: Internet, Gold Smuggling, & Greek Default
- EndlessMountain: Silver & Dow Retracement
- The ‘Perils’ of a Gold Standard?
- Gold To Surpass $2,000 An Ounce In 2012: Survey
- Gold Rises for Fourth Day - IMF $500 Billion Hopes Create Concerns
- The Gold Must Flow
- Fox Business interviews Grandich about $2 million gold price bet
- Morning Outlook from the Trade Desk - 01/19/12
- The U.S. dollar could be warning of an imminent stock selloff
- This is when gold could break out to new all-time highs
- Gold Price Holding Firm Above Resistance Level
- Warning Signs That We Should Prepare For The Worst
- LISTEN: John Butler – The Golden Revolution
- G. Edward Griffin: Stand Up
- Vince Lanci: Charting It
- Gold Rebounds
- Silver Update: “Capital Controls”
- The Intrinsic Value of the Dollar and Gold
- The End Is Near, Embry Warns Gold Price Riggers
- New York Sun: Gingrich goes for gold
- Gold & Silver Market Morning, January 19, 2012
- Gold Price 2012: Three Real Risks
- Greece Faces Disorderly Default by March
- Zombie Europe
- Using vaults to store gold and silver
- Gold Ignores Indian Tax Hike, Rises "Because of China" as Stocks & Commodities Jump
- The Broke Bailing Out The Bankrupt
| 5 Warren Buffett Stock Picks Now On Sale Posted: 19 Jan 2012 05:52 AM PST By Dividend Kings: Warren Buffett is the world's most brilliant investment mind, amassing a $50 billion fortune over his lifetime and placing him among the richest men in the world. Buffett firmly believes in using the constant fluctuations of the market to his advantage while simultaneously seeking a safe position with acceptable risk. It is no surprise that the world pays attention to his investment decisions as it would be unwise not to glean what knowledge we can from the Berkshire Hathaway (BRK.A) chairman and apply it to our own investment strategies. The following stocks are all currently found in Warren Buffett's portfolio and are trading at a discount to fair value. U.S Bancorp (USB) is one of the only banks to thrive in the financial meltdown and see its stock rebound in an extremely unfavorable environment for banks. Much of U.S Bancorp's success is due to smart underwriting and forward thinking in Complete Story » |
| Posted: 19 Jan 2012 04:28 AM PST The serious money is in Hi-Tech if you can find it. Lightwave Logic, Inc (LWLG) is going nuts for a reason. Big break thru invention in how light is used / controlled in a bunch of applications. The technicals a bit difficult to understand but apparently it is for real. Relatively thin float stock. Going up in huge bunny jumps everday now. Don't ask me how much it is worth, probably a lot. Just wish I had bought a lot more at $.66. Makes Real Gold feel a bit old fashion. Not just Gold, a whole lot of things. |
| A Free Nation Very Deep in Debt Posted: 19 Jan 2012 04:16 AM PST Record-high debt, record-low debt servicing costs, and a clear signal for gold... |
| RNN: Internet, Gold Smuggling, & Greek Default Posted: 19 Jan 2012 03:24 AM PST from ReachWest News Network: ~TVR |
| EndlessMountain: Silver & Dow Retracement Posted: 19 Jan 2012 03:12 AM PST EM's examines silver and Dow Fibonacci retracement in his 1.19.11 analysis. Got Physical ? |
| The ‘Perils’ of a Gold Standard? Posted: 19 Jan 2012 02:47 AM PST Among my own list of "pet peeves", near the very top are systemic flaws in analysis. Put another way, I am infuriated by seeing analytical mistakes which "everyone" makes, because when the supposed "experts" in our society insist on repeating flawed analysis again and again they teach flawed thinking to those exposed to this defective logic. At the top of the list of "mistakes made by everyone" is the complete incapacity of commentators (in virtually all fields) to properly analyze the analytical principle known as "causation". One could write an entire book on this one subject, because there are so many different variations of this flawed analysis. I will focus on a single example – the inability to distinguish between "causation" and "correlation" – for two reasons. First of all this is (by far) the single largest category of flawed analysis on the subject of causation and because it is essential to understand this distinction/principle in order to debunk one of the central myths which has been perpetuated about a "gold standard". Let's begin with the general principle. The reason why virtually no one in our society engages in competent causation analysis is because this term is so poorly understood. To illustrate this defect in thinking (as always) we must start with definition of terms. Sadly few analysts have more than a vague understanding of the word "correlation". Once one understands this term/principle correctly it becomes much harder to continue to make the same mistakes in causation analysis. A correlation is nothing more than the simultaneous occurrence of two events. In short, correlation suggests nothing more than "coincidence", and (most particularly) correlation implies nothing about causation. To comprehend this, I must repeat one of the earliest lessons I learned while studying economics. To illustrate the complete absence of any connection between correlation and causation, economists provide the example of the "high correlation" between economic booms and sunspot activity. The "joke" among economists (who aren't exactly the wittiest group) is that economists are still trying to determine whether economic booms "cause" sunspots; or whether sunspots "cause" economic booms. Hopefully the general principle here is now evident to readers: by itself, a correlation is an entirely meaningless piece of data – and most importantly correlation never implies causation. "Coincidences" do occur in our universe, with economic booms and sunspots being only one of an infinite list of examples. This brings us to defining causation. Here the general understanding of this term is almost invariably simplistic. When we say that "A caused B", what we are directly implying with that statement is that nothing else (in the entire universe) could have "caused B". When we (properly) understand the magnitude of what causation implies, we realize that in the vast majority of cases when any individual in our society asserts that "A caused B" that they are most likely engaging in a hyperbolic statement – which they are not capable of supporting conclusively with facts. Sadly, the conceptual understanding of the absolute nature of causation in our society now only exists in the realm of science, and even there we see practitioners regularly "bending the rules" when engaging in such analysis. Because of this failure to observe the rules of causation, we are continually being bombarded with erroneous assertions/conclusions – even from otherwise astute commentators. A perfect illustration of this comes at the 45-minute mark of a lengthy interview of Professor Webster Tarpley, an academic for whom I have considerable respect. However Tarpley too is guilty of the aforementioned defect in logic when he briefly passes judgment on the wisdom of returning to a gold standard. What makes this such a perfect example is precisely because it is so simplistic. |
| Gold To Surpass $2,000 An Ounce In 2012: Survey Posted: 19 Jan 2012 01:57 AM PST |
| Gold Rises for Fourth Day - IMF $500 Billion Hopes Create Concerns Posted: 19 Jan 2012 01:42 AM PST |
| Posted: 19 Jan 2012 01:36 AM PST |
| Fox Business interviews Grandich about $2 million gold price bet Posted: 19 Jan 2012 01:23 AM PST |
| Morning Outlook from the Trade Desk - 01/19/12 Posted: 19 Jan 2012 01:05 AM PST Gold hit the $1,670 resistance level in overnight trading and finds itself nicely stuck in the middle of the range this morning. Euphoria continues as the two worst indexes in 2011 are so far the best performing in 2012: the financials and home builders. Confirmation that we have turned the corner will need to come from the bond market. Interest rate yields must begin to rise for confirmation. If not, it indicates lack of confirmation in the equity markets. I still believe this is a short term trade in the equities. The economic realities still portend a recession in Europe this year, which should impact earnings. The metals are treading water. They should be moving higher if the trend from last year is still in place, where the metals move in tandem with the equity markets. If they have de-coupled, the short term may be a difficult period for gold to outperform. The industrial metals should close the gap with gold on a ratio basis. Note: An industry colleague of mine is seeking user feedback for an exciting new web application he is developing. The app allows users to track the performance of their precious metals. A free demo is available here: https://www.bulliontracking.com/en/try/ Candid feedback is welcome! |
| The U.S. dollar could be warning of an imminent stock selloff Posted: 19 Jan 2012 12:09 AM PST From The TSI Trader: I was looking at the U.S. Dollar Index ($DXY) four-hour chart this evening with my favorite True Strength Index (TSI) indicator set to (7,4) and I began to notice the occasional but very severe down spikes in the TSI over the past eight to nine months. These unusually severe readings are, of course, temporary periods in time when the U.S. Dollar Index has come under extreme selling pressure and downward momentum is incredibly and unsustainably intense. But just looking at this chart really did not tell me much more. Then I got to wondering. How do these down spikes compare with a chart of the S&P 500? I mean, is there any correlation between the two? Could these extreme and unusual selling episodes in the U.S. Dollar Index possibly tell us something about the movement of the stock market? So, being the researcher type that I am, I dutifully wrote down the meanest looking down spikes noting their dates, hour, and TSI reading. Then I began to locate these dates on a daily chart of the S&P-500 -- then I recalculated the stock market's daily cycles. Somewhat to my amazement, there it all was in one easy to grasp picture... Read full article... More on the U.S. dollar and stocks: Two important charts to keep an eye on now Watch this for clues on the market's big trend Top manager Hussman: Beware a "whipsaw trap" in stocks |
| This is when gold could break out to new all-time highs Posted: 19 Jan 2012 12:09 AM PST From Jeff Clark, Senior Precious Metals Analyst, 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 $1,531 (December 29), a decline of 19.2%. In order to determine how long it might take to breach $1,895 again, I measured how long it took new highs to be mounted after big corrections in the past. The following chart details... Read full article... More on gold: This gold story could change your life Richard Russell: "PLEASE MOVE INTO GOLD" The best gold-buying opportunity of the year could be coming soon |
| Gold Price Holding Firm Above Resistance Level Posted: 19 Jan 2012 12:01 AM PST from GoldMoney.com:
Yesterday's big economic news in America was the Obama administration's rejection of TransCanada Corp.'s Keystone XL pipeline deal. This pipeline would have transported crude oil from "tank farms" at Hardisty, Alberta down to refineries on the US Gulf Coast. Pressure from environmental activists has scuppered the deal, however. This could turn into a major election issue come November. Read More @ GoldMoney.com |
| Warning Signs That We Should Prepare For The Worst Posted: 18 Jan 2012 11:57 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. |
| LISTEN: John Butler – The Golden Revolution Posted: 18 Jan 2012 11:51 PM PST
John Butler's upcoming book, The Golden Revolution could be a blockbuster. Unlike many of today's commentators and newsletter writers, John goes the extra mile and dares to see a world where fiat currencies have gone the way of the phonograph record. He's certain that plans are currently afoot to implement a new metallic money standard. It's clear that US monetary policy, besides being an abject failure, is destabilizing the world economic system. Many countries have come to this conclusion and understand that it is in their interest to come up with an alternative system, which will act as a store of value and will facilitate international trade. John refuses to lay out a timetable for this eventuality, as he knows from history that dying systems can continue on longer than anyone believes possible. Predicting the time of death for the dollar has proven an exercise in futility and isn't really very useful. The key is to grasp the reality that it is going to happen, and then plan your affairs accordingly. While worrying about tomorrow is a pointless endeavor, preparing for it is only proper. John's publisher Wylie has fast-tracked his book, and we look forward to its release. Watch for it on www.Amazon.com Much more @ KerryLutz.com or @ 347.460.LUTZ |
| Posted: 18 Jan 2012 11:42 PM PST
G. Edward Griffin joined us today. For those not familiar with his work, he wrote the definitive book on the Federal Reserve–The Creature From Jekyll Island, which details the shady dealings that went on to pass the Federal Reserve Act through Congress. Unfortunately too few people are familiar with this tale. Griffin has remained active in the debate and believes that everything that's going on right now is a prelude to The New World Order and universal totalitarianism. When faced with the decision to Get out of Dodge or to fight to restore the greatness of America, Griffin believes that there is nowhere to run to and nowhere to hide. He likens our contemporary struggle to that of the early founders of America. They didn't run off to Canada or Mexico, they stayed and claimed their heritage. And he doesn't propose violent resistance, which is doomed to failure, but rather a campaign of enlightenment and increasing the public's awareness of the mass criminality and ulterior agendas of those in power. He believes it only takes one percent of the country to lead the movement that can take back America. And he's not talking about Occupying Wall Street either. He is hopeful that the tide can be reversed. The Internet is the great equalizer, which allows vast amounts of knowledge and truth to be imparted at the speed of light. And this is exactly why the government and the shadowy powers are trying to restrict your access and freedom to communicate on it. Much more @ KerryLutz.com or @ 347.460.LUTZ |
| Posted: 18 Jan 2012 11:39 PM PST FMX Connect's Vince Lanci joins Kitco News for this latest installment of "Reset" from Jan 18, 2012.
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| Posted: 18 Jan 2012 11:38 PM PST Returns to Highest in Five Weeks Gold futures ended at a five-week best Wednesday, staging a comeback as traders looked at wholesale prices and saw potential for inflation, and as the dollar extended losses. by Claudia Assis and Virginia Harrison, MarketWatch.com:
U.S. wholesale prices declined in December, but stripped of energy and food costs, the measure of inflation rose more than expected. "There was a hint of inflation" in the Labor Department figures, said Bill O'Neill, a principal at Logic Advisors in New Jersey. More broadly supportive of gold, there was a "strong run" for gold from London dealers and Asian demand continues to be strong, he said. "The rebound today is quite impressive," with the market showing so much resilience despite weakness late last year that "we are seeing some new buying coming to the market," O'Neill added. Read More @ MarketWatch.com |
| Silver Update: “Capital Controls” Posted: 18 Jan 2012 11:20 PM PST from BrotherJohnF: ~TVR |
| The Intrinsic Value of the Dollar and Gold Posted: 18 Jan 2012 10:36 PM PST The Intrinsic Value of the Dollar and Gold Michael Pento Pento Portfolio Strategies Posted Jan 19, 2012 If you ask most investors what is the main driver for the price of gold they are likely to tell you that it's the direction of the U.S. dollar. Therefore, the only due diligence most investors perform is a perfunctory glance at the Dollar Index (DXY). While it is true that the purchasing power of the dollar is a key metric to judge the direction of gold prices, the DXY will only tell you what the dollar is doing against a basket of 6 other flawed fiat currencies. The main component of the Dollar Index is the Euro Currency, which represents a 58% weighting in the basket of currencies. It logically follows, if the Euro is tanking, the Dollar Index could increase regardless of the fundamental condition of the U.S. dollar. In order to truly access the intrinsic change in the value of the dollar you must first determine; the level and direction of real interest rates, the rate of growth in the money supply and the fiscal health of the government. When analyzing the dollar using those metrics, it is clear that the intrinsic value of the dollar is eroding in an expedited manner. The Ten year Treasury note is now yielding 1.85%, which is down in yield from 3.34% a year ago today. Meanwhile, the year over year increase in Consumer Price Inflation jumped to 3.4% in November, up from 1.1% in the twelve months prior. Therefore, real interest rates are not only negative but are falling. Falling real interest rates reduces investors' appetites to hold dollars and increases their willingness to buy gold. Negative real interest rates cause consumers, businesses and governments to borrow more money. When more money is borrowed into existence, the supply of money grows. Increasing money supply growth reduces the value of dollars already in existence. The YOY change in M2 money supply growth is near 10%. Since U.S. economic output is around 2%, the supply of goods and services is growing far below the rate of money supply growth. This causes aggregate prices to rise and reduces the value of the dollar, while boosting gold prices. Finally, our government just requested permission for yet another $1.2 trillion increase in the debt ceiling. U.S. debt stands at over $15.2 trillion and is now estimated to be larger than America's entire economic output in 2012. The proposed increase would boost the debt ceiling to $16.4 trillion and would only be sufficient to last only until the end of this year. U.S. debt and deficits are running over $1 trillion per annum and amount to over 700% of Federal revenue. And just last week, we learned that the monthly budget deficit climbed to $85.97 billion in December, from $78.13 billion in the same month a year earlier. The only relief from such debt will be a default on the part of the United States. A sovereign U.S. default would be pernicious for the dollar and massively bullish for gold. The simple truth is the U.S. dollar is under increased assault from negative real interest rates, increased counterfeiting from the Fed and a national debt the government is attempting to inflate away -- that truth isn't made less painful just because a European vacation may be getting cheaper. Since the intrinsic value of the dollar continues to deteriorate, long-term investors would do well to ignore the dollar's temporary and beneficial measurement against the Euro and focus on its true fundamentals, which are forcing investors towards gold. ### Jan 17, 2012 Michael Pento President: Pento Portfolio Strategies (O) 732-203-1333 (M) 732-213-1295 email: mpento@pentoport.com website: www.pentoport.com http://www.321gold.com/editorials/pe...nto011912.html |
| The End Is Near, Embry Warns Gold Price Riggers Posted: 18 Jan 2012 09:23 PM PST ¤ Yesterday in Gold and SilverNote to all GSD readers: Because of the gold conference in Vancouver this weekend, I will probably NOT have a column on Saturday...but if I do, it will be very brief. Ed It was another nothing sort of day in the gold market on Wednesday, with the gold price trading in a fifteen dollar price range everywhere on Planet Earth...a range of less than one percent. Gold closed at $1,658.90 spot...up $7.30 on the day...and net volume was decent at 128,000 contracts, a lot of which would have been of the high-frequency trading variety.
Silver had a bit more direction. It got sold off at the London open...and you can see from the Kitco chart below that every rally attempt, no matter how tiny, ran into a not-for-profit seller. The high price tick of the day [$30.73 spot] came at 12:45 p.m. Eastern time...and then basically traded sideways from there. Silver closed at $30.52 spot...up 46 cents on the day. It obviously would have done better if it hadn't run into a determined seller every time it attempted to move higher. Silver had an intraday price move of almost three percent. Volume was pretty heavy at 39,000 contracts...about a 40% increase from Tuesday.
The U.S. dollar index had an almost straight-line decline of 55 basis points yesterday...and since midnight on Monday night, the dollar is down 1.1 cents. That's a lot. It's obvious from the Kitco gold chart, that neither the gold nor silver price have been allowed to respond in the manner that they normally would. Here's the 3-day dollar index.
The gold stocks were up about a percent by 1:30 p.m. Eastern time before they mysteriously got sold off a percent during the following hour. But once that bout of selling stopped, the shares managed to crawl back into positive territory just before the close...and the HUI finished up 0.28%. Even though the gold price is up a bit more than a percent this week so far...the gold stocks are down a bit more than a percent. You'll excuse me for thinking that someone is dicking with the gold price...and the shares.
The silver shares finished mixed...and Nick Laird's Silver Sentiment Index closed up 1.31% yesterday.
(Click on image to enlarge) The CME's Daily Delivery Report showed that 58 gold and 23 silver contracts were posted for delivery on Friday. In silver, it was the Jefferies, Bank of Nova Scotia, JPMorgan 3-ring circus once again...with Jefferies the short/issuer...and the two bullion banks as the long/stoppers...as per usual. It's been like that all through January. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in either GLD or SLV yesterday. But there was another sales report from the U.S. Mint. They sold another 16,000 ounces of gold eagles...along with 50,000 silver eagles. Month-to-date the mint has sold 106,000 ounces of gold eagles...9,500 one-ounce 24K gold buffaloes...along with 5,172,000 silver eagles. I'm only speculating here, but it's my belief that a lot of this product is ending up in Europe. The Comex-approved depositories did not report receiving any silver on Tuesday...but they did ship 464,284 troy ounces of the stuff out the door. Silver analyst Ted Butler had his mid-week commentary to paying clients yesterday...and here are a couple of paragraphs about the Sprott Silver ETF [PSLV] Offering that closed yesterday... "The important takeaway is that a decent size chunk of physical silver will be taken off the market. It's an open speculation as to what impact this will have on the price of silver, both short and long term. My guess is that while it certainly can't be considered negative in any way, there are obvious forces that would prefer to make it look like it has no effect. These forces will do what they can to mute the impact of a fairly large physical purchase. Unfortunately, these commercial crooks may have built up some physical reserves over the past six months or so and may be able to accommodate Sprott's physical purchase without too much difficulty. A couple or a few more similar-sized purchases would have a big price impact, in my opinion." "I hope I'm wrong, but my sense is that Sprott is likely to get fairly quick delivery of whatever silver it purchases so as to avoid a repeat of the delivery delays that occurred the last time they purchased a chunk of silver. Eric Sprott has become an outspoken advocate of silver and antagonist against the silver manipulation...and I doubt the suppliers will risk delivery delays to his fund and give him the opportunity to point to tightness. I think that tightness is there, just that the sellers will be able to hide it a bit longer." John Embry called me yesterday...and he said that by the time the smoke clears, the fund should be looking to purchase about ten million ounces of silver, which is around 10,000 good delivery bars. He said they would have sold a lot more silver if the shares hadn't been sold at such a high premium [12.5%] to the spot price. Here's the press release on that, which I dug up over at the marketwire.com website yesterday. About two hours after I wrote the above paragraph, Nick Laird advised me that the PSLV website has updated their silver stock by 9,258,000 troy ounces. I don't have a lot of stories today, which suits me just fine. If you think these two graphs are spectacular, wait until the see the one that I'll be posting in this space tomorrow. Chris Whalen - We Have Panic Right Now & Flight Into Gold. The Great Silver Market Myth! Is Bullion Back?...'Gold Is Still In a Super Bull Market'. Kung Fu Girl interviews Louis James. ¤ Critical ReadsSubscribeIn MF Global, JPMorgan again at center of a financial failureIn late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help. His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global's primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds. Corzine phoned Barry Zubrow, then JPMorgan's chief risk officer, to question the slow payments. Corzine also called William Dudley, president of the Federal Reserve Bank of New York, to update him on MF Global's status and told him that payments were slow to arrive from JPMorgan and others. Dudley said he'd monitor the situation. This must read Reuters story was posted on their website late last night..and I thank Roy Stephens for his first offering of the day. The link is here.  Ron Paul's NDAA Speech YesterdayCongressman Paul has introduced a bill to repeal Section 1021 of the National Defense Authorization Act...and here is his speech from yesterday. He compares the U.S. today to Russia over twenty years ago. The speech only lasts 3:35...no matter what the youtube.com time counter says. Australian reader Wesley Legrand sent me this video yesterday...and the link is here.  Treasury dips into pension funds to avoid debt limitThe Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills. "I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress. The House of Representatives is expected to vote on Wednesday on the Obama administration's request to raise the country's legal debt limit to $16.394 trillion. This Reuters story from Tuesday was picked up by news.yahoo.com...and I thank Scott Pluschau for sending it along. The link is here.  China's Treasury Holdings Fell in NovemberChina, the largest foreign lender to the U.S., reduced its holdings of Treasuries in November for a second month as yields on the debt approached lows of the year and total foreign demand accelerated. China's U.S. government securities ownership shrank by 0.1 percent, or $1.5 billion, in November to $1.13 trillion, according to Treasury data released yesterday. The Communist nation's bill holdings fell 12 percent to $2.3 billion. China's holdings of U.S. debt have fallen 2.4 percent this year through November to $1.13 trillion, the least since July 2010, when they totaled $1.12 trillion, from $1.16 trillion at the end of 2010, Treasury data show. This Bloomberg story from yesterday is courtesy of West Virginia reader Elliot Simon...and the link is here.  Greece fails to reach agreement with creditorsThe Institute of International Finance (IIF), which is representing hedge funds and banks in the tortuous process, confirmed the first day of the resumed talks had failed to reach a conclusion. A spokesman for the group said: "A lengthy meeting was held today with Greek Prime Minister Lucas Papademos and with Finance Minister Evangelos Venizelos and discussions will continue tomorrow." Greece is under intense pressure to get its private bondholders, which hold billions of euros of Greek debt, to agree to voluntary losses of at least 50pc. This story was posted late last night on The Telegraph website...and I thank Roy Stephens for sending it along. The link is here.  Vampire Hedge Funds Are Sucking Greece DryWho are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well being. If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone. The sharks at this very moment are circling Greece, waiting to devour that nation's resources. To understand this attack we need to enter into the rotting innards of our financial system. This 2-page article over at alternet.org website is also courtesy of Roy Stephens. It's certainly worth the read in my opinion...and the link is here.  |
| New York Sun: Gingrich goes for gold Posted: 18 Jan 2012 09:23 PM PST  Growing discussion in the Republican Party about returning the United States to a gold standard is noted by yesterday's editorial in the New York Sun, which cites the prescription outlined by businessman, historian, and gold advocate Lewis Lehrman in his new book, "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies -- How We Get From Here To There." I stole the above introduction...from a GATA release yesterday. The Sun's editorial is headlined "Gingrich Goes for Gold" and it's posted here. |
| Gold & Silver Market Morning, January 19, 2012 Posted: 18 Jan 2012 09:00 PM PST |
| Gold Price 2012: Three Real Risks Posted: 18 Jan 2012 08:49 PM PST Looking forward to the end of this Gold Price bull market...? |
| Greece Faces Disorderly Default by March Posted: 18 Jan 2012 08:35 PM PST "Greece's new PM is now openly threatening a disorderly Greek default by March if they are not given better terms on their (next) bailout." "ATHENS 1-5-12 (Dow Jones)–Greece faces the risk of a disorderly default in March if it doesn't complete negotiations for the country's second bailout starting later this month, Prime Minister Lucas Papademos said Wednesday. In a copy of his comments made in meetings with employer and employee groups, Papademos said the coming weeks and months are "exceptionally crucial" for the country as Greece needs to secure funding from European peers and the International Monetary Fund. Among the financial pressures faced by the heavily indebted government are (the) EUR14.5 billion of bonds expiring." Editor: "Greece is broke and they can only hope the ECB gang comes with the next bailout. We can now see the ECB's hesitation about writing their next bad check on accounts that are empty. Rather, now that the UN's IMF gang is getting control, watch for Greece to get a fiat money loan only if they put-up their remaining central bank gold as collateral. If Greece was smart, they would stiff the bankers and the ECB while exiting the Euro and go back to their old currency the Drachma. This is the direction of Ireland and some other Eastern European nations that trade in Euros, or are in reality a Euro-land member. Germany is laying plans to go out the Euro-land door and back to the old Mark currency. If this Greek loan is made they are trading fiat paper for real value; gold. Their stupid commie leaders on the take will probably do it."         This posting includes an audio/video/photo media file: Download Now |
| Posted: 18 Jan 2012 06:51 PM PST By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness. One of the major themes that I have been discussing in Europe for a long period of time is the simple failure of logic in which the European periphery is being instructed to push deflationary policy onto their economies, yet at the same time expected to meet their existing, and growing, debt obligations. In the most extreme case this has led to what you now see in Greece, but I don't think Portugal or Spain are far behind. This failing policy is leading to the 'zombification' of nations, in which they can't grow out off their debts yet aren't being allowed to fail on them either. Kept alive by an ever-growing lifeline of foreign aid when the real solution is to let the beast die and re-build from the ashes. I think if we compare Iceland to Ireland we are beginning to get a clear picture of the benefits of writing off the debts and starting anew. As I have also spoken about over the last month or so, what is happening in the real economies of Europe is being replicated in the banking system. This is most apparent in the interbank market, as I said:
If this is correct then appears that the banks themselves have already decided that there are some "Zombies" in the system. Under these circumstances what should occur is that these banks are identified, assessed and broken up in a structured way in order to purge the financial system of entities that are no longer solvent. Yes, this would mean that investors in those entities would be out of pocket, but that is the risk of investing which is why you get paid a premium. "Dividends" I believed they are called ! However, as I have stated numerous times, the Europeans appear to believe that the normal tenants of investing need not apply on their continent so we continually see policies implemented across Europe to keep the poison in the patient. The ECB's 3-year LTRO is the latest incarnation of the band-aid to cover the ever-growing wound. Instead of properly stress testing the financial institutions to determine which ones are insolvent and in need of removal, we have an operation by the central bank to provide massive amounts of excessive liquidity. The hope is that this will stabilise the the interbank market and therefore banks will go on their merry way doing what banks do, that is providing credit to the private sector within the bounds of monetary policy. This approach appears to be failing as, even Mr Draghi has admitted, the interbank market is still frozen. However, even if this wasn't the case I doubt very much whether periphery banks would be falling over themselves to lend because:
In their downgrade of the EuroZone, S&P supported this assessment as they listed credit tightening as their number one reason why they took the downgrade action: Today's rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone. In our view, these stresses include:
So how can this be? How is it that the ECB can provide the banking system with so much money, yet there is still a credit squeeze and therefore a deflationary tendency in the periphery ? Obviously S&P's point 3 plays a part with government austerity driving an already stressed private sector to save over borrow. I will also note that banks aren't really ever constrained by reserve liquidity, it is capital and credit worthy clients that they need, however that is also not the full story either. As I stated above, the financial policies of Europe appear to be that insolvent financial entities must be kept alive at all costs, and in this regard the LTRO is playing its part. One clue to how this is occurring is available from the actions of the Italian government just before the 3-year LTRO commenced:
In the lead up to the 3-year LTRO the Italian banks created billions of euros worth of bonds and got their government to rubber stamp them. These bonds were never actually issued to the market, they were simply tossed over to the ECB as collateral to get a 1% loan. So how much did the Italian banks get ?
So now the Italian banks have an additional 40.4 billion euros with which to purchase government paper, created from nowhere, and backstopped by the very sovereign that would later be the recipient the loan. The ECB's mandate says that they can't fund sovereigns directly, but it appears it is fine as long as there is a commercial bank acting as an intermediary and taking their "carry trade" cut. That technical point aside, what this shows is that banks now have a way to re-capitalise independent of the state of their other assets and liabilities. For Italy, with its private sector in relatively good shape, its banking system may be able to weather the storm. In this particular case this operation is probably more about re-capitalising the banks after their exposures to other periphery nations and about funneling money to the government. However, what you will note is that the banking system can now profit independent of its loan book. So why would it bother taking the risk of lending? In an environment of increased capital requirements and a slowing economy it is far more likely that banks will use this additional capital as a buffer as they shrink down their asset base. In short, more consumption of fresh brains. Given the relative strength of Italy it is doubtful that these operations were about avoiding the collapse of the commercial banks. That, however, may not be the case for somewhere like Spain. The Spanish banking system still has hundreds of billions of dollars in outstanding loan exposure to its now defunct housing market. Under these circumstances you would expect the Spanish banks to require a significant purging. However, once again, the LTRO prevents this occurring. Spanish banks only need to package up these non-performing loans in some type of eligible vehicle ( possibly with a sovereign rubber stamp ) and present them to the ECB for a 1% loan. The definition of a zombie banks is:
I believe that definition fits in this case. The problem for the periphery nations and also the ECB in regard to the transmission of monetary policy is that , as Japan can attest to, zombie banks don't lend. The irony for Germany and its push to raise the performance of peripheral countries is not lost on me.
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| Using vaults to store gold and silver Posted: 18 Jan 2012 05:00 PM PST |
| Gold Ignores Indian Tax Hike, Rises "Because of China" as Stocks & Commodities Jump Posted: 18 Jan 2012 04:51 PM PST |
| The Broke Bailing Out The Bankrupt Posted: 18 Jan 2012 04:25 PM PST The end point is near. The only thing keeping both Europe and the US afloat is massive money printing by the ECB and the Fed. The world has reached the point where markets are increasingly unwilling to purchase government debt. Downgrades by S&P of European countries, as usual, are behind the curve of what markets [...] |
Precious metals continue to trade in tandem with stocks and commodities – and inverse to the US dollar. Yesterday saw the gold price again post another finish above resistance at $1,650, while silver futures again finished the Comex pit session above $30.50. Platinum and palladium also recorded gains, as did copper and crude oil. The copper price is a reliable bellwether as far as general market sentiment is concerned, with strength in copper indicative of growing bullishness and optimism about the economy.
Gold futures for February delivery rose $4.30, or 0.3%, to $1,659.90 an ounce on the Comex division of the New York Mercantile Exchange. That was gold's highest settlement since Dec. 13.
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