saveyourassetsfirst3 |
- 7 Headline-Making Stocks That Are Poised To Move
- Gold and silver rise again/Greece/Italy/Portugal/Spain all in turmoil as Fitch downgrades
- The Overnight Gold Trade That's Up 1,700% Since 2001
- Volcker confirms central bank need to suppress gold to stabilize exchange rates at 'critical point'
- India open to all mechanisms to buy Iranian oil
- ECB Bank President Draghi’s Rate Cuts Fail to Boost Confidence
- Links 01/28/12
- Central-Bank Gold: Joining the Dots
- The Anti-Gold Gospel according to Kaletzky
- The Supply of Oxen at the Federal Reserve
- By the Numbers for the Week Ending January 27
- The Silver Singularity Is Near
- Recent Performance Review For 7 Canadian Oil & Gas Equities Trading In The U.S.
- Silver: Masters Loses Control
- Friday ETF Roundup: UNG Surges On Production Cuts, UUP Falls On Lackluster GDP
- Bob Chapman - Financial Survival 27 January 2012
- 16 Statistics Which Show That The Number Of Americans Dependent On The Government Is At An All-Time High
- How the United States could "become rich" again
- Can the Schneiderman-Infused Financial Fraud Unit Prosecute Vikram Pandit?
- The Stock Market and the Dollar Sustain the Bullish Environment for Precious Metals
- SilverFuturist: Can Anybody Beat Silver?
- Silver Will Knock Repeatedly on $50/oz
- Gold Been Given New Lease on Life?
- Central Banks’ Determination to Inflate
- LISTEN: Chris Duane – “Don't Sell Your Silver”
- LISTEN: Jason Burack on Gold & Silver
- Gold “Has Foundation to Build Next Move Higher” Following FOMC “Catalyst”, Slow Physical Demand “Explains Gold’s Resistance at $1730″
- The Fed, the S&P 500, & Why Gold Is Shining Bright
| 7 Headline-Making Stocks That Are Poised To Move Posted: 28 Jan 2012 06:31 AM PST By Cameron Kaine: The fourth week of trading officially ended Friday with some disappointment. Unlike the previous three weeks of the New Year, the Dow capped its first weekly loss in the month - which leads many investors to wonder if indeed the so called "January effect" ended last week. Friday brought some profit taking as several of the indices ended lower. It appears that investors seemed undecided of which course to take and how to digest the news that the U.S. economy grew more slowly than expected in the last three months of 2011. But to me, the silver lining is that it is indeed growing again. But I appreciate that not all investors have the "glass-half-full" mentality - as evident by the market's reaction on Friday. The economy grew a modest 2.8% in the fourth quarter of 2011. However, many economists caution that the pace was unlikely to last and that Complete Story » |
| Gold and silver rise again/Greece/Italy/Portugal/Spain all in turmoil as Fitch downgrades Posted: 28 Jan 2012 01:58 AM PST This posting includes an audio/video/photo media file: Download Now |
| The Overnight Gold Trade That's Up 1,700% Since 2001 Posted: 28 Jan 2012 01:19 AM PST ¤ Yesterday in Gold and SilverI'm happy that Thursday was a quiet day in the gold market, as not much happened...and it was much the same yesterday up until shortly after the Comex opened in New York at 8:20 a.m. There was a small sell-off between 8:30 and 9:00 a.m. Eastern time that cancelled the smallish gain that occurred during London's early Friday trading session. But once the New York low was in at 9:00 a.m...gold rallied quietly for the rest of the day...and ended the day virtually on its high. Gold closed at $1,737.30 spot...up $16.80 spot. Gross volume on Friday was beyond immense...around 344,000 contracts...with virtually all of it roll-over and spread related. Volume on Thursday was equally huge.
On Thursday, the silver price was much more 'volatile'...or much more managed, if you prefer that description. On Friday it traded within 20 cents of $33.50 through all Far East and early London trading, right up until midmorning in New York...and from that point it moved quietly higher, closing right on its high of the day at $33.99 spot...up 52 cents from Thursday's close. Volume on Thursday was about 37,500 contracts...and on Friday it dropped down to 29,500 contracts.
But, according to Kitco, there was a time when silver spiked up to $34.10...and if it really did, it had to be on one of the price spikes in morning trading in New York. Here's the New York Spot Silver [Bid] chart on its own.
The dollar and the gold and silver prices were pretty much joined at the hip all through yesterday's trading day...with their respective trading charts almost the exact opposites of each other. The dollar index closed down 56 basis points on the day.
Here's the 6-month dollar chart. Since its top on January 16th, the dollar is down three full cents...and its 50-day moving average is in tatters.
The stocks rallied smartly at the open...and by 11:30 a.m. in New York had pretty much topped out...and then traded sideways for the rest of the Friday session. The HUI finished up 2.41% on the day...9.4% on the week...and 10% year-to-date.
The silver stocks did even better...and Nick Laird's Silver Sentiment Index closed up 3.55%.
(Click on image to enlarge) Just as a point of interest, the HUI finished up 0.94% on Thursday...and the SSI finished up 0.29%. The CME Daily Delivery Report on Thursday showed that 6 gold and 52 silver contracts were posted for delivery on Monday. In silver, it was the usual Jefferies, Bank of Nova Scotia, JPMorgan trio once again. Friday's Daily Delivery Report from the CME showed that 6 gold and 30 silver contracts were posted for delivery on Tuesday. In silver, it was Jefferies as usual as the short/issuer...and JPMorgan was one of the long/stoppers. But the Bank of Nova Scotia was a no show...and it was UBS as a stopper this time. Now we're up to 1,243 silver contracts delivered in a non-traditional delivery month. The link to yesterday's delivery action is here. I spoke to Ted Butler about this yesterday morning...and he's been watching this show as well. Like me, he doesn't know what to make of it. On Thursday, the GLD ETF showed another increase. This time it was a smallish 48,601 troy ounces. There were no reported changes in SLV once again. On Friday, the GLD ETF took in another chunk of gold. This time it was a monstrous 320,763 troy ounces...a whisker under 10 tonnes. As usual, there was no silver reported received by the SLV ETF. Here's some more incredible news regarding GLD and SLV. Since the end of December, the GLD ETF has added 531,087 troy ounces of gold. The SLV ETF has had 3.06 million ounces of silver withdrawn over the same period of time. Since the close of trading on December 30th...gold is up about $170...a bit over 10%. Silver is up about $6 from the close of the year. That's well over 20%. GLD has added over a half a million ounces of gold since then...and SLV has had more than 3 million ounces withdrawn??? Something stinks to high heaven. Ted Butler also mentioned yesterday that the short position in SLV had risen by 6.71% over the past two weeks. Over at the shortsqueeze.com website they're showing that traders are now short 26.57 million ounces of silver, an increase from 24.90 million ounces. That's 8.7% of the entire SLV ETF. That's outrageous...and is probably much worse since the increase in price this week. It appears obvious that there's no physical silver about, so the authorized participants have to short the shares in lieu of buying the metal itself. Can you imagine, dear reader, if these authorized participants had to go into the market and buy the physical metal to make good on these short positions, what the price of silver might be? That 26.57 million ounces is two weeks worth of world silver production...and then add the more than 5 days of world silver production that Eric Sprott just bought last week as well. Even the short position in GLD shares is a very high 4.8% of GLD's physical gold stash. The U.S. Mint sold 100,000 silver eagles on Thursday...and that was it. On Friday they reported selling 6,500 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and no silver eagles. Month-to-date the mint has sold 121,000 ounces of gold eagles...11,000 one-ounce 24K gold buffaloes...and 5,697,000 silver eagles. The Comex-approved silver depositories were busy on both Wednesday and Thursday. On Wednesday they reported receiving 1,348,827 ounces of silver...and shipped 960,057 ounces of the stuff out the door. On Thursday they received 1,251,791 troy ounces...and shipped a tiny 7,044 ounces out the door. The link to Thursday's action is here. I'm just guessing here...and Ted Butler would know the exact numbers...but in the last six weeks or so, it appears that the Comex-approved depositories have taken in about 20 million ounces of silver...and the question that just begs to be asked, is the following...How come this silver is ending up in the Comex...and not in JPMorgan's vaults in London where SLV's silver is stored? Not only has 3 million ounces of silver been withdrawn from SLV since the beginning of the year...but the short position in SLV is now north of 26 million ounces. Something just doesn't compute. The Commitment of Traders Report [for positions held at the close of trading on Tuesday, January 24th] showed that the Commercial net short position in silver increased by 4,639 contracts...and now sits at a smidgen over 25,000 contracts, or 125 million ounces. That's about 55 million ounces off rock bottom, but still a bullish number. Ted said that all the increase in the Commercial net short position came from the raptors [small traders] selling their long positions to the technical funds [Non-Commercials] for a profit as prices rose. The thing that pleased Ted the most was that there was very little technical fund buying on the price break above the 50-day moving average on Friday, January 20th. That may have changed since the Tuesday cut-off, but we'll have to wait until next Friday's COT report to know for sure. It was a similar circumstance in gold...but the Commercial net short position only increased by a smallish 6,792 contract which, considering the price move over the period, wasn't a heck of a lot. But, like silver, we'll have to wait and see what happened after the Tuesday cut-off to know who did what during the surprise Wednesday trading day, which occurred the day after the cut-off. And all this enormous volume we've had since the Tuesday cut-off will also be in next week's report...plus all the volume and open interest data right up to [and including] the January 31st First Day Notice for delivery into the February gold contract. So next Friday's COT report should be a sight to see...and will hopefully tell us a lot. Ted Butler's report on the COT in his report to paying subscribers today will be definitive, of course...and I'll steal what I can for my Tuesday column. I have a lot of stories today...and I hope I'm well enough to post them all. All the precious metals have clearly broken out to the upside...and it just remains to be seen how long these rallies last, or are allowed to last. Hedge Fund Guru Sees Gold Price Soaring. James Turk: Fear Index shows gold is undervalued. Volcker confirms central bank need to suppress gold to stabilize exchange rates at 'critical point' ¤ Critical ReadsSubscribeSkipping the Political PompTim Thomas is the All-Star goaltender for the Boston Bruins, winners of the National Hockey League's 2011 Stanley Cup — which "was won by defense as much as by offense," President Barack Obama said on Monday at a White House event honoring the team: Tim Thomas posted two shutouts in the Stanley Cup finals and set an all-time record for saves in the postseason, and he also earned the honor of being only the second American ever to be recognized as the Stanley Cup playoffs MVP. But Thomas wasn't there to hear the president's praise. He chose not to attend. This story has been around a few days, but I had no room for it in my weekday column, so here it is now. It takes gonads the size of basketballs to do what he did...and I salute him for it, as he did the right think in my opinion. The story was posted over at the thisiscommonsense.com website...and I thank Casey Research's own Doug Hornig for passing it along. The link is here.  Dow Highest Since May 2008? Maybe Not?The headlines are crowing of the magnificent CAT earnings (channel stuffing?) which in turn is helping the Dow reach its highest point since May 2008 (CAT is responsible for 27 of the Dow's 30 point gain today alone). This must be the signal that we-the-consuming-people need to borrow-and-spend again right? Well, no. Unfortunately, as many already know, the process of indexing is implicitly flawed in many ways - most importantly survivorship bias. If we compare the performance of the components of the Dow at the start of 2008 to the actual Dow index performance, there is a very significant divergence of around 7% (or around 900 points). This is actually understating the difference (as it is an average) as we note that 5 of the 30 names from 2008 have lost more than 70% of their value (GM, AIG, C, BAC, and AA) since January 2008 (averaging -88% among those). This zerohedge.com story is well worth your time...and even if you only skim it, it's an eye-opener. I thank Australian reader Wesley Legrand for sending it...and the link is here.  Central bank policy is obscuring market values, Warsh tells Stanford audienceCentral banks are now so heavily influencing asset prices that investors are unable to ascertain market values, former Federal Reserve Board of Governors member Kevin M. Warsh told the Stanford University Institute for Economic Policy Research tonight. This influence is especially evident, Warsh said, with the Fed's purchase of government bonds, which has made it impossible for investors to use bond prices to learn anything about markets. Warsh, who disclosed during GATA's freedom-of-information litigation with the Fed in 2009 that the central bank has secret gold swap arrangements with foreign banks, added that the Fed is trying to do too much and the rest of the government not enough to encourage economic growth. While he said nothing explicitly about gold, Warsh seemed to come pretty close to GATA secretary/treasurer Chris Powell's observation almost four years ago that there are no markets anymore, just central bank interventions. This GATA release is worth the read...and the link is here.  Fed disinformation hides greater inflation, Rickards tells King World NewsGeopolitical analyst James G. Rickards told King World News yesterday that the Federal Reserve is engaged in a massive disinformation campaign about its intentions, which are far more inflationary than believed. Rickards adds that the U.S. economic embargo of Iran may hasten the move of other countries away from the dollar as a trading currency. This must read KWN blog is linked here...and I thank Chris Powell for providing the introduction.  U.S. Problem Bank List Hits 15-Year HighThe number of problem banks jumped by 36% in the second quarter, hitting 416, while assets held by such banks also saw a whopping increase, rising 36% to $300 billion, the FDIC said Thursday. The story is posted at the americanbanker.com |
| Posted: 28 Jan 2012 01:19 AM PST  Yesterday, former Federal Reserve Chairman Paul Volcker defended government intervention in the gold market to counter "exchange rate instability at a critical point." Volcker's comments came in response to inquiry from the German freelance journalist Lars Schall, who noted GATA's reference to Volcker's expression of regret, recorded in his memoirs, about the failure of Western central banks to intervene to suppress gold prices during a currency revaluation in 1973. Volcker's support of gold price suppression was cited by GATA's Chris Powell in his address to the Vancouver Resource Investment Conference last Saturday: |
| India open to all mechanisms to buy Iranian oil Posted: 28 Jan 2012 01:19 AM PST  Unfazed by the US and EU sanctions, India on Thursday said that it is open to all mechanisms for payment, "whatever it takes," to buy Iranian oil as it contributes around 12 per cent of New Delhi's oil imports and it's difficult to find replacement on this scale. It could include a mix of options that will enable India to buy Iranian oil without violating the UN sanctions, highly-placed government sources told a day after an Israeli website suggested that India has agreed to pay Iran in gold for oil purchases. Sources added that India is confident of finding "a way out" to buy Iranian oil without being seen as breaker of UN sanctions. |
| ECB Bank President Draghi’s Rate Cuts Fail to Boost Confidence Posted: 27 Jan 2012 08:59 PM PST Italy dodges an economic bullet as their Dow Italy Stock Index coils in a continuation triangle to rise or fall depending upon the news January 27, or from the meeting in mid-March signaling the down trend for Europe. Will ECB credit levitate and strain on-ward, or crash and burn like Greece? "Euro is losing its relationship with riskier assets that underpinned the currency in 2011 as the deepening sovereign debt crisis reduces creditworthiness of even the biggest economies in the region." "The 17-nation currency has fallen -8.6% against the dollar since October, while the Standard & Poor's 500 Index has gained +2.4 percent, and the correlation between the two dropped to 58% from a record 91% in November, according to Bloomberg. The Euro had moved almost in lockstep with investments linked to growth, including stocks and the Australian dollar, since January, 2011." "This decoupling is taking place as European Central Bank President Mario Draghi cuts interest rates and promises banks unlimited cash for three years to rein in soaring borrowing costs for governments ranging from Italy to Spain to France, which lost its AAA credit rating last week. The infusion drove the Euro to a 20-month low of $1.2624 last week. Strategists also anticipate more losses as the U.S. economy improves while the Euro zone shrinks, driving international investors away from the region's assets. At the same time, European officials led by German Chancellor Angela Merkel are taking steps to contain the crisis and sovereign borrowing costs eased last week." "The Euro is the worst performer this year among the 10 currencies tracked by the Bloomberg Correlation-Weighted Indexes, falling -1.7%. Major peers that have appreciated the most against the dollar are Brazil's real, Mexico's peso and New Zealand's dollar, currencies with a traditionally high correlation to U.S. equities and the favorites of speculators seeking riskier bets, according to Bloomberg. "Investors should be short the currency now and we're concerned that Friday's mass downgrades of Euro-zone countries by S&P is not fully priced yet," Mansoor Mohi-uddin, Singapore-based chief foreign-exchange strategist at UBS, said in a January 14 report." "The escalating Euro -zone sovereign debt crisis is both raising concerns over the long-run growth outlook for the Euro-zone, sustainability of the currency bloc, and solvency of some members," Lee Hardman , a currency strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London, said in a January 11 e-mail." "A growing divergence between Europe and the rest of the world is driving away investors as ECB interest-rate cuts remove one of the Euro's pillars of support. The currency appreciated as much as +6.6% between January and May, 2011 as Jean-Claude Trichet, who stepped down as head of the ECB in October, raised the central bank's main rate twice, to 1.5% from 1%." "Draghi has undone those increases and foreign holders sold the greatest amount of Euro zone assets in October since February, 2000, according to ECB data released last month. He has signaled more cuts may come, saying at a January 12 press conference in Frankfurt that there are "substantial downside risks" to the economy and policy makers stand "ready to act." -Catarina Saraiva 1-16-12 Bloomerg.net Our Forecast Remains Intact. Greece Exits Euro Currency And Euro-land. After the dust settles on that one, then we see Portugal follow; then Italy? Others planning to enter Euro-land will stay out; especially in Eastern Europe. "Ambrose Evans-Pritchard: 2012 could be the year Germany lets the Euro die. So we enter Year IV of the Long Slump, the cruellest, yet though not the most acute." "There will be no Chinese credit explosion this time, no real help from post-bubble India or over-stretched Brazil. It will be a global downturn on all fronts, aborting what remains of recovery even before industrial output in the OECD bloc has regained its pre-Lehman peak." "The second wave will hit with youth unemployment already at 45% in Greece and 49% in Spain; and with the US labor participation rate already at depression levels of 64%. We will hear more about Italy's Red Brigades, Greece's Sect of Revolutionaries, and America's militia groups, and how democracies respond. Proto-fascism in Hungary is our warning." "China's surgical soft-landing will slip control, like a Fed tightening in 1929 and 2007, or Japan's squeeze in 1990. Once construction has run amok, bears will have their way." – Ambrose Evans-Pritchard International Business Editor The Telegraph 1-2-12 Editor: He is correct Chickens come home to roost in Europe. They will not be alone as it spreads to parts of South America, Asia and finally North America. Key dates coming quickly: The January 27 preliminary meeting in Europe was cancelled. They have to deal with Greece first who will default on an $18 Billion bond payment due on January 20, 2012. An orderly default is best. A disorderly one could have dire consequences spreading messes over southern Europe very quickly. I think it's orderly.         This posting includes an audio/video/photo media file: Download Now |
| Posted: 27 Jan 2012 08:25 PM PST Dutch Zoo Fits Elephant With Contact Lens (furzy mouse) Der Spiegel. Government censorship makes pandemic research harder, won't hinder bad actors Nature. What could go wrong? Pentagon to position floating base in Persian Gulf Pravda. What could go wrong? Fifteen minutes out of Damascus in the burbs, tension everywhere RT photo essay. Flush With Oil From Alberta, Canada Prepares For Inevitable U.S. Invasion (Valissa) Smew. Tim Hortons imposes sharia law! Also, too, their water. Irishman makes "billion-euro home" of shredded notes Reuters. "I wanted to create something from nothing." "People will accept austerity if we also talk about growth," Danish Prime Minister Helle Thorning-Schmidt said. Wisdom from Davos. Germany wants Greece to give up Cliff diving in the Baltic? (max424) Financial News. Capacity? Chinese New Year? Shrug? But what about HARPEX? "Dropping the stuff from helicopters is more effective since it does what it says on the tin: it instantly unleashes demand" Simon Jenkins, Guardian. Being sovereign in your own currency means never having to say you don't have a helicopter. "At one extreme of opacity, financial intermediaries simply steal everybody else's wealth. That's no good" Steve Waldman. No, it isn't. Champs and chumps Abigail Field. Survey of state AGs on bankster-driven accounting control fraud. Champs: Biden, Masto, Harris, Coakeley. And if Schneiderman doesn't deliver, he's not a chump but a tool. "It's weird that Summers, who loves debate, generally refuses to sit down in some public forum and answer serious, informed questions about the legacy of his tenure at Treasury…" Felix Salmon. It is? Why? Locals help deliver Walker recall petitions to Madison Pierce County Herald. Awesome. Acting democratically can make people joyful. I mean, who knew? Occupy: Spectacle or mass movement? Oakland Occupier Boots Riley on Faceborg (sorry). Thank The Godd(ess)(e)(s) Of Your Choice, If Any that the scorps are off covering the 2012 olds. The Occupations are news. How the Norwegians tamed the 1% using nonviolent tactics (MS) Indypendent. "Moderate" Ds deep-six CA Medicare for All proposal McClatchy. Shocker. High-level overview of the merger of state and corporation on the internet Monthly Review. Caution: Socialist source may not be work-safe. FBI issues RFP for pre-crime targeting using social media (MS) Daily Mail. Socializing bandwidth hoggery with Siri WaPo. On copyright, why not a return to the commercial scale standard for criminal infringement? (LT) Social Science Research Council. "…full of plans and promises that don't have a sick wife's chance with Newt Gingrich of ever being passed into law…" Esquire. Pierce on the SOTU. Dogs against Romney. Featured in People. Squirrel. It's what's for dinner (MS) Daily Mail. Urban forager digs that Depression-era cookbook out of grandma's attic! The dark side of K-Pop Al Jazeera. Antidote du jour (hat tip bluegrass aficionado furzy mouse). Total Awwwww! at 1:30.
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| Central-Bank Gold: Joining the Dots Posted: 27 Jan 2012 05:55 PM PST |
| The Anti-Gold Gospel according to Kaletzky Posted: 27 Jan 2012 04:00 PM PST |
| The Supply of Oxen at the Federal Reserve Posted: 27 Jan 2012 04:00 PM PST Gold University |
| By the Numbers for the Week Ending January 27 Posted: 27 Jan 2012 03:18 PM PST HOUSTON -- Just below is this week's closing table followed by the CFTC disaggregated commitments of traders (DCOT) recap table for the week ending January 27, 2012.
Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday evening (by 18:00 ET). As a reminder, the linked charts for gold, silver, mining shares indexes and important ratios are located in the subscriber pages. In addition Vultures have access anytime to all 35 of our Vulture Bargain (VB) and Vulture Bargain Candidates of Interest (VBCI) tracking charts – the small resource-related companies that we attempt to game here at Got Gold Report. Continue to look for new commentary often. This was a good week for many of our "Faves." Remember that the linked charts on the subscriber pages are always the first place to look for new commentary at GGR. In the future we intend to rely more on the charts to communicate, especially when it comes to our own trades. Please note changes to our stop levels for our silver and GDXJ trades underway on Sunday evening also. Gold and Silver Disaggregated COT Report (DCOT)
All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report.
*** We will have more about the COT in the linked technical charts for Vultures by Sunday evening, including a large reduction in the Swap Dealer net long positioning which skewed the legacy silver LCNS, making it look like the commercials added a large number of new shorts. To the contrary, as shown above the Producer/Merchants added 1,678 lots net short, the Swap Dealers DECREASED their net longs by 2,961 lots - which is the bulk of a 4,639 lot increase in the combined commercial net short position or LCNS. The open interest actually declined for the COT week, that occuring ahead of the FOMC ann0ouncement. We do not view the COT as bearish … not yet. Indeed we see the signs of moderate short covering instead. More in the linked charts for subscribers… *** That is all for now, but there is more to come.
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| The Silver Singularity Is Near Posted: 27 Jan 2012 12:37 PM PST By Mike Scully: Price, as they say, is determined on the margins. This is especially true for inelastic goods. If 100 Tickle Me Elmo dolls exist in Walmart on Christmas eve, and 100 people absolutely need to have them, you don't have a problem. The price will be some reasonable markup on the cost of production. However, if one more person walks in fearing the wrath of his child if there's no Elmo under the tree, Walmart (WMT) can quickly turn into a war zone. In Walmart, this supply shortage might be settled by shoving and hair pulling. In a civilized market, this supply, demand inequity is settled with price. In the case of Elmo in 1996, some dolls were reportedly sold in aftermarkets for $1500. This is an important concept to keep in mind when evaluating the silver market. Silver is interesting because it is actually two different markets. On one hand, Complete Story » |
| Recent Performance Review For 7 Canadian Oil & Gas Equities Trading In The U.S. Posted: 27 Jan 2012 11:37 AM PST By Zvi Bar: Canada is the largest foreign supplier of energy to the United States. 2011 was a year of considerably diverging equity performance for Canadian oil and gas companies traded within the United States. Several Canadian petroleum companies appreciated in the double digits, some while also providing above-average dividends. Others depreciated by a comparable level. Canadian-based companies pay their dividends in Canadian currency, which is natural resource-backed. Over the last two quarters, the Canadian dollar weakened versus the U.S. dollar, as various commodities reduced in price. Previously, the Canadian dollar has been strong against the dollar since the 2008 meltdown, as have its natural resources such as petroleum, metals and many other basic materials. Below is a recent performance table for seven Canadian oil and gas equities that trade within the United States (listed in alphabetical order): Baytex Energy Corp. (BTE), Cenovus Energy Inc. (CVE), Enbridge Inc. (ENB), Enerplus Corporation (ERF), Pengrowth Complete Story » |
| Posted: 27 Jan 2012 10:13 AM PST
from tfmetalsreport: ~MV |
| Friday ETF Roundup: UNG Surges On Production Cuts, UUP Falls On Lackluster GDP Posted: 27 Jan 2012 10:12 AM PST By Jarred Cummans: Today saw markets finish off relatively flat as traders mulled over the news of the most recent GDP results. While last quarter saw one of the biggest economic expansions in over a year, it failed to meet expectations, creating an environment of mixed emotions on the Street. Today watched both the euro and gold make steady gains, with gold nearing $1,750/oz. reigniting the debate as to whether or not this asset is truly worth what it trades for, or if is under/overvalued. Markets have also welcomed the news that Facebook may file for an IPO by Wednesday of next week. With a potential valuation topping $100 billion, it would be the largest initial public offering in history. This week also saw Fitch hop in on the downgrading trend, despite its long upholding of many nations around the world. "Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Complete Story » |
| Bob Chapman - Financial Survival 27 January 2012 Posted: 27 Jan 2012 10:03 AM PST Bob Chapman - Discount Gold and Silver Trading 27 January 2012 : Iran is not... [[ This is a content summary only. Visit my blog http://www.bobchapman.blogspot.com for the full Story ]] This posting includes an audio/video/photo media file: Download Now |
| Posted: 27 Jan 2012 08:30 AM PST 
Some people out there want to blame the poor for the statistics that you are about to read, but that is a mistake. Yes, there are a lot of people out there that are abusing the system, and that needs to be stopped. But many Americans that are dependent on the government are in that situation because there simply are not enough jobs in this country. And unfortunately, the Obama administration and the U.S. Congress continue to pursue the same job-killing policies that have gotten us into this mess in the first place. So millions of Americans that have learned to survive as government dependents are not being given the opportunity to break out of that cycle. When there is a shortage of decent jobs, it is easy to give up. Many tend to become more and more comfortable being dependent on the government as time goes by. Once you become addicted to getting a government check in the mail, it can be very difficult to give that up. There are some that get trapped in a life of government dependence for years or even decades. The following are 16 statistics which show that the number of Americans dependent on the government is at an all-time high.... #1 According to the Census Bureau, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government. #2 The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House. #3 The number of Americans receiving Social Security disability benefits has increased by 10 percent since Barack Obama first took office. #4 Back in 1990, the federal government accounted for 32 percent of all health care spending in America. Today, that figure is up to 45 percent and it is projected to surpass 50 percent very shortly. #5 The number of Americans on food stamps recently hit a new all-time high. It has increased by 3 million since this time last year and by more than 14 million since Barack Obama first entered the White House. #6 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps. This is unprecedented in American history. #7 In 2010, 42 percent of all single mothers in the United States were on food stamps. #8 Back in 1980, government transfer payments accounted for just 11.7% of all income. In 2010, government transfer payments accounted for 18.4% of all income, which was a new all-time high. #9 By the end of 2011, approximately 55 million Americans received a total of approximately 727 billion dollars in Social Security benefits. As the retirement crisis becomes much worse, that dollar figure is projected to absolutely skyrocket. #10 According to the Congressional Budget Office, the Social Security system paid out more in benefits than it received in payroll taxes in 2010. That was not supposed to happen until at least 2016. #11 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls. #12 The U.S. government now says that the Medicare trust fund will run out five years faster than previously anticipated. #13 The total cost of just three federal government programs - the Department of Defense, Social Security and Medicare - exceeded the total amount of taxes brought in during fiscal 2010 by 10 billion dollars. #14 It is being projected that entitlement spending by the federal government will nearly double by the year 2050. #15 Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent. #16 When you total it all up, American households are now receiving more money directly from the federal government than they are paying to the government in taxes. Once again, I am not blaming the poor. Almost all of us know of someone that is on government assistance. Most of them are not dependent on the government because they are lazy or because they want to cheat the system. Most of them have just had their dreams crushed by this horrible economy and need a helping hand. It is incredible how anyone can run around claiming that the U.S. economy is heading in the right direction with all of this going on. Yes, things are going fairly well for the boys and girls down on Wall Street, but for the vast majority of Americans things are looking quite bleak. For example, things have gotten so bad that the state of Florida is actually considering using ballparks and sports stadiums as shelters for the homeless. But when it comes to so many people being financially dependent on the federal government, there is a major problem. The problem is that the federal government is absolutely drowning in debt. So why don't our politicians just explain to the American people that we need to start cutting back and reducing the size of some of these programs? Well, if any of our politicians try to do that they won't get elected next time around. The truth is that the American people are deeply addicted to government money. Any politician that proposes significant cuts to Social Security or Medicare is a goner. Every poll or survey that is done on this subject shows that the American people are overwhelmingly against cuts to programs like Social Security and Medicare. So politicians will just keep spending money like there is no tomorrow, and the American people will just keep sending them back to Washington. But just like we saw in Greece, a day of reckoning comes eventually. There will come a time when the federal government will not be able to steal 150 million dollars an hour from our children and our grandchildren. There will come a time when there will not be enough money for all of these growing social programs. So once the government checks stop rolling in, what is going to happen then?
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| How the United States could "become rich" again Posted: 27 Jan 2012 07:51 AM PST From OilPrice.com: It's a strategy that works for individuals, and can work for the entire nation as well. If you can figure out a way to find resources whose value in their current use is not very great -- in other words, if you buy low -- and redeploy them somewhere else where their value is much greater -- in other words, sell high -- then you will not only add to your personal wealth, you will be creating new wealth for society as a whole. The process of allocating resources to their most efficient use is the heart of what drives economic growth. The fact that individuals have a strong personal incentive always to be looking for better ways to do that is the primary factor responsible for the standard of living that we enjoy today. Let me give a concrete example of what I'm talking about. On Friday, you could buy... Read full article... More Cruxallaneous: A fail-proof retirement plan for the "unwealthy" Shocking gold story suggests the "End of America" has begun Obama's Keystone Pipeline rejection: Guess who's making out like a bandit |
| Can the Schneiderman-Infused Financial Fraud Unit Prosecute Vikram Pandit? Posted: 27 Jan 2012 07:37 AM PST By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at@matthewstoller. There are two underlying structural problems with the new(ish) Federal task force on financial fraud. One, it is the policy of the administration to protect the banking system's basic architecture, which means the compensation structure and the existing personnel who run these large institutions. Any real investigation into the financial collapse will inevitably lead to the collapse of this architecture. Thus, any real investigation will be impeded when it begins to conflict the basic policy framework of the Obama administration. And this framework is set by Obama. It's what he believes in. He made this clear in his first State of the Union, when he said a priority of the administration was to ensure that "the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times." Two, Obama personally believes in the legitimacy of the existing banking institutional framework and he strongly suspects that no crimes were committed. He has hired a raft of people – including Jack Lew, Tim Geithner, Eric Holder, Larry Summers, and so on and so forth – who agree, and has implemented policies such as Dodd-Frank that assume as much. His administration genuinely believes that mortgage fraud has been a top priority of theirs, as I showed this morning. These people aren't stupid, they aren't without principles, and they aren't electorally driven. They are ideologues. They really believe in a neoliberal political economy, where government throws money at the economy through private channels and private channels do with it whatever they think best. As Jonathan Alter, who is as close as you can get to the administration's emotional spokesperson, explains in a column titled "For Obama, Pro-business Populism is no Oxymoron":
The Obama administration's posture is not passive because Obama is weak, it is passive because President Obama and his administration believe passivity towards business interests is the appropriate role of government. Schneiderman does not believe this, he wants to govern. And that's why he wants this Federal task force, because the Federal government has more resources and tools (including legal authority, personnel, jurisdiction, and documents) that he needs to do a reasonable job explaining to the country through the use of the Justice system what happened in the multi-trillion theft and why. But he is coupled, as co-Chair, with several of these people who, as Matt Taibbi puts it, might "in an ideal world… be targets of their own committee's investigation." This makes it very difficult to consider how they could possibly work well together, with such misaligned interests. There is a possible a collision coming, because the two parties have contradictory objectives. For now, the administration probably believes that this is a good political talking point, and nothing more. Perhaps the task force will go after a few mid-level people, or not, but it isn't really going to cause any major problems for them. Schneiderman for his part has already said he'd walk away publicly if he is impeded in his investigation, as Dave Dayen noted in his terrific series of articles on the whole episode. As just one example, Jonathan Weil keeps wryly pointing out that Vikram Pandit at Citigroup may be guilty of violating Sarbanes-Oxley.
The statute seems pretty clear to me, though I'm not a lawyer. The criminal statute says that CEOs must certify financial statements of their companies, and "that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer". If a CEO certifies false statements it's a million dollar fine and up to 10 years in jail. If a CEO willfully certifies false statements it's a five million dollar fine and up to 20 years in jail. There are many details of the task force that are as of yet not public, so it is not clear to me that doing a case like this is possible. But it's quite obvious that mega-bank officials and regulators lying about the perilous state of various financial institutions to the public was a key part of the crisis, and that accountability on this front is probably critical to restoring faith in the system. It would certainly be a big statement upfront if this is what this task force attempted to take on. Will it? That's a very good question, and one I hope we get answers to, soon.
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| The Stock Market and the Dollar Sustain the Bullish Environment for Precious Metals Posted: 27 Jan 2012 07:17 AM PST
This week marked the Year of the Dragon in the Chinese calendar, and according to Chinese mythology, Dragon years bring powerful changes and optimism representing imperial power, prosperity and good luck. This year is supposed to be even more auspicious since it's a Water Dragon year, something that occurs once every 60 years. We admit that we don't yet use the Chinese Horoscope as a technical indicator, and who knows, perhaps we should. One thing is certain—the Year of the Dragon began with an auspicious move for precious metals. The dragon that breathed fire into precious metals prices was the Federal Reserve which announced this week that it is planning to keep interest rates at rock bottom for some years and hinted at further economic stimulus measures. Gold prices hit 6-1/2 week highs on Thursday as stock markets, commodities and the euro all rallied. This followed Wednesday's biggest one-day rise in three months after the Fed said it might consider further monetary easing through bond purchases (creating fiat currency out of thin air) and pushed back the likely timing of an eventual interest rate hike to late 2014.
Since many view a U.S. rate hike as a kiss of death to the gold bull market (we disagree), the news that it won't happen for at least three more years prompted those on the sidelines to join the ride. Gold closed above its 100-day moving average, a technical factor that further boosted confidence. The Fed said in a statement that the economy had expanded "moderately" in recent weeks, but that unemployment remained at a high level, the housing sector remained in a deep depression, and the possibility of a new financial crisis in Europe continued to threaten the domestic economy.
Usually after the Asian gold buying binge for the Lunar New Year gold demand tends to drop along with winter temperatures. We have reasons to believe that will not be the case in the short term. Generally, central bank demand is not subject to seasonality (although one could argue about the business and election cycles impact). Accumulation by countries has removed several hundred tons of gold from the market in each of the past two years and there is no reason to think that this year will be different. Central banks use periods of price weakness to step up their buying which reduces downside risk for all of us while setting the stage for sizable snap-backs. Central banks around the world added 157 tons to their holdings in the six months through November, recent World Gold Council data show.
The gold accumulated by Chinese for the Year of the Dragon is not likely to go back into the world market since most Chinese savers and investors buy gold as long-term, quasi-permanent holdings. That coupled with buying by central banks whose holding periods can be measured by decades, means that there is less supply and any rise in demand for jewelry is likely to have a greater effect on the metal's price than might have been the case several years ago.
To see if the Year of the Dragon will be as auspicious as millions of Chinese believe it will be, let's turn to the technical part with the analysis of the USD Index. We will start with the very long-term chart (charts courtesy by http://stockcharts.com.)
Our first chart today is the very long-term USD Index chart. There has been virtually no change within the past week, but we can clearly see that the recent breakout above the long-term resistance line is being verified or invalidated at this time. The latter is more likely (70% probability or so) since the recent breakout was not confirmed. A reversal to the downside is more probable and likely underway already.
In the short-term Euro Index chart, we see a confirmation of the recent breakout. Recently, we have discussed the lack of a confirmation and a possible breakout in the Euro Index. Several days of closing prices above the support line without any significant moves to the downside not only confirm the breakout, but they also point to strength in the Euro Index at this time – actually that's more likely weakness in the dollar that we're seeing here, as currency exchange rates are ultimately relative valuations of currencies against each other and the recent statement from the Fed did not help to boost confidence in the greenback.
In the long-term S&P 500 Index chart, the self-similar pattern which we've been discussing for a few months with our subscribers has continued to play out well. If this goes on, the next local top will probably be close to the level of the 2011 high. The recent trading pattern has been consistent with the period leading up to the local top in 2010-11. In October-November 2010, declining prices were seen for a few weeks but were quickly followed by a continuation of the rally. We may have a similar situation here.
RSI levels should be looked at as well and are also indicating that a rally is likely ahead. It appears that it could last for two to four weeks as the RSI level will then likely be close to 70. This has coincided with local tops in the past.
A brief explanation of how the Correlation Matrix works is to be found in our last essay on the US dollar's influence on gold. Significant changes have been seen here this week. The short-term correlation between the USD Index and the precious metals is rather weak and can be attributed to the strong European demand for gold. The yellow metal's price has rallied in all currencies and the correlation between the dollar and gold's price has therefore weakened.
A declining USD Index is medium-term bullish for gold and the precious metals, and the coefficient in the 90-day, medium-term column indicates this. The precious metals and the general stock market both have bullish outlooks at this time and several of their coefficients reflect this although the relationship cannot be described as strong. It seems best at this time to look directly at the precious metals themselves in order to analyze their likely short-term and long-term trends as we do in our full analysis.
Summing up, the breakout in euro above the short-term declining resistance line has been confirmed, which is bullish for euro and bearish for dollar. The situation for the general stock market is a bit unclear for the next few days, but the outlook remains bullish for the weeks and months ahead. Based on correlations, these factors do not disrupt our bullish view on the precious metals sector.
Thank you for reading. Have a great and profitable week! P. Radomski * * * * *
Sunshine Profits provides professional support for Gold & Silver Investors and Traders.
All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments. By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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| SilverFuturist: Can Anybody Beat Silver? Posted: 27 Jan 2012 06:17 AM PST Depending on the timing… silver or gold is the asset to beat over the last decade. ~TVR |
| Silver Will Knock Repeatedly on $50/oz Posted: 27 Jan 2012 05:54 AM PST David Morgan: Silver Will Knock Repeatedly on $50/oz. This Year Before Breaking On Through from Silver-Investor.com:
Hard Assets Investor: Silver is starting out 2012 strongly. Is it following gold or is it blazing its own path? David Morgan: Silver is following gold, but if you study silver carefully, there are times when silver leads and gold lags. A quick example was last year. We saw silver basically double from around the $25level to $48, in a matter of months. That ended about May 1. Gold did a similar parabolic move, but not quite the percentage gain that silver outlined, but it did it later in the year. So who went parabolic first, silver or gold? Well, in this case, silver did. Read More @ Silver-Investor.com |
| Gold Been Given New Lease on Life? Posted: 27 Jan 2012 05:51 AM PST Has the Fed Given Gold's Safe Haven Appeal a New Lease on Life? The latest FOMC statement puts currency debasement arguments squarely back on the table but, is this enough to win back investors after last year's volatility. by Geoff Candy, MineWeb.com: GRONINGEN – The start of the new year brought with it a renewed level of optimism among gold bugs. But, while they were positive on the metal's prospects they remained fairly circumspect after the metals 10% fall over the last quarter of the previous year. This week, however, that optimism went from cautious to bubbly as the US Fed vowed to keep rates at ultra low levels. According to Bloomberg, "Gold traders are bullish for a fourth consecutive week, betting that the Federal Reserve's pledge to keep interest rates low until late 2014 will extend the metal's best start to a year in more than three decades. As UBS points out, "More accommodative policy is a very good foundation for gold to build on the next move higher. And as the Fed slowly becomes more open about the idea of further stimulus and as European QE remains a possibility, there are significant upside implications for gold." Read More @ MineWeb.com |
| Central Banks’ Determination to Inflate Posted: 27 Jan 2012 05:50 AM PST from GoldMoney.com:
Certainly there have been times over the last few months when nascent stock market and commodity rallies have been snuffed out early following a burst of initial optimism – notably in late October last year, following signs that Europe's leaders had arrived at a plan for restructuring Greece's debts. The situation is different this time, however, in that the markets are stating to adjust to the fact that the world's monetary authorities are not going to "deflate the bubble" (to coin a technical term). Read More @ GoldMoney.com |
| LISTEN: Chris Duane – “Don't Sell Your Silver” Posted: 27 Jan 2012 05:48 AM PST
Chris is selling his living and dining room furniture, and he's buying silver. He started buying years ago, but now he's arbitraging the furniture; selling the old stuff for cash, using the cash to invest in silver, and buying new stuff on interest-free credit with small payments. While we can't, in good faith, recommend this move to investors, it does open up limitless possibilities. Perhaps stripping the copper out of your home's walls, selling it for scrap and putting it into gold and silver makes sense. Or, stripping your auto for parts–most cars are worth more dead than alive–and selling them off. You get the point, you're sitting on items that you're not using or don't want. Those items could be sold for cash, with the proceeds invested in silver or gold. Look around your home! Whether it's tools, clothes, or furniture, go on eBay or CraigsList and get rid of them now. Take the cash you get and put it to work for you. We all have vast resources that we are not aware or conscious of. The time to become aware is now. Much more @ KerryLutz.com or @ 347.460.LUTZ |
| LISTEN: Jason Burack on Gold & Silver Posted: 27 Jan 2012 05:29 AM PST
Jason Burack is a very savvy economic analyst who's got his hand on the market's pulse. He's been following the markets for years, and he knows when a breakout is ready to occur. Jason has dedicated his life to helping you avoid getting taken by the Street. He created his company, Wall Street For Main Street, to empower the individuals and families of Main Street. He won't hand your money over to Wall Streeters and other money managers; Burack is dedicated to teaching you how Wall Street manages money through research, risk management, and fundamental as well as technical analysis. Armed with this knowledge, you'll be able to level the playing field while taking your own best advice. This is going to be a rocky time for all investors. However, if you've got the right strategy and truly understand exactly what's going on and what that means for your investment returns, you will not only survive, but you'll thrive in the New Economy. Much more @ KerryLutz.com or @ 347.460.LUTZ |
| Posted: 27 Jan 2012 05:26 AM PST Friday 27 January 2012, 08:30 EST Gold "Has Foundation to Build Next Move Higher" Following FOMC "Catalyst", Slow Physical Demand "Explains Gold's Resistance at $1730″ WHOLESALE MARKET gold prices were headed for their biggest one-week rise since the start of December Friday lunchtime in London, climbing back through $1720 an ounce – a weekly gain of over 3%. Silver prices meantime hovered around $33.60 per ounce – 4.2% up on last week's close – while other stocks and commodities were broadly flat and US Treasury bond prices slipped. A day earlier, gold prices hit a 7-week high at $1730 per ounce before easing in Friday's Asian session. "Lack of physical demand partly explains the inability of gold to make a sustained move beyond the $1730 level," says Standard bank commodities strategist Marc Ground, citing this week's Chinese Lunar New Year holiday as impacting demand from China, Singapore, Malaysia and Indonesia. "[But] while slowing physical demand might provide some resistance during price rallies, we do not feel that it would be the cause of prices moving significantly lower." "The [physical] market has been like a yo-yo," one Singapore dealer tells newswire Reuters. "Maybe it's better to wait until Monday," reckons another Singapore dealer. "The Chinese market reopens and [we will] see whether they will buy some more gold or they will take profits." Based on PM London Fix prices, gold by Friday lunchtime looked set for its biggest weekly gain since the week ended December 2 last year. That week saw gold's biggest single-day Fix-to-Fix gain of recent months, when gold prices rose 2.5% on 30 November last year. Between that day's AM and PM Fix, six of the world's central banks announced a co-ordinated move lower the cost of Dollar funding for to the banking system. This week meantime saw the Federal Reserve's Federal Open Market Committee begin publishing members' interest rate projections on Wednesday. The majority of FOMC members expect rates to remain at or below 1% until at least the end of 2014. "The market attitude towards gold for most of January could be summed up in two words: cautious optimism," says the latest precious metals note from UBS. "Investors were reluctant to add to positions aggressively as memories of the disappointment in Q4 lingered…A fresh catalyst was needed and we think the FOMC outcome on Wednesday fit the bill. More accommodative policy is a very good foundation for gold to build on the next move higher." That rise in gold prices coincided with reports that European policymakers were preparing a move to recapitalize the continent's banks – though the reported proposals were not adopted. European leaders meantime are "just about to close a deal on private sector involvement between the Greek government and the private-sector community," European commissioner for economic and monetary affairs Olli Rehn said Friday, speaking at the World Economic Forum in Davos, Switzerland. A Greek deal would pave the way for Greece's second bailout, agreed last October and worth €130 billion – without which Greece will not be able to repay €14.5 billion of maturing debt on March 20. Iran – which was earlier this week hit by fresh sanctions on oil, diamond and gold dealing – has said that it may immediately halt its oil exports to Europe to pre-empt a European Union ban due to come into force July 1. Greece is thought to import around one third of its oil from Iran. Two weeks after ratings agency Standard & Poor's downgraded them to junk status, yields on 10-Yeat Portuguese government bonds hit their highest levels since the crisis began Friday morning when they traded at 15.4% – almost double the yield on equivalent Irish debt. Portugal's 5-Year bond yields breached 20%. "It makes it impossible for Portugal to access debt markets in 2013," says JPMorgan rate strategist Nikolaos Panigirtzoglou. "It's a country that still relies on the official sector in terms of financing its current account deficit and repayments and this makes it certain that we're going to get a second bailout for Portugal later this year." "The market is asking whether Portugal is really just like Greece," adds Richard Batty, strategy director at Standard Life Investments. A survey published this morning by British free newspaper Metro finds that 68% of British people believe the Euro will collapse. French bank Societe Generale's latest Hedge Fund Watch also finds that hedge funds are shorting the single currency "like never before", the Financial Times Alphaville blog reports. The Euro however rallied against the Dollar Friday morning, breaking back through $1.31. Euro gold prices were flat Friday morning, holding above €42150 per kilo (€1310 per ounce) – still a 1.7% gain for the week. Ben Traynor Gold value calculator | Buy gold online at live prices Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. (c) BullionVault 2011 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
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| The Fed, the S&P 500, & Why Gold Is Shining Bright Posted: 27 Jan 2012 04:34 AM PST "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." ~ Thomas Jefferson ~ Well here we are, caught between resistance in the S&P 500 around the 1,330 area and support around the 1,300 price level. My last two articles have discussed why I was expecting a top in the coming days and weeks ahead, but prices just continued to work higher. One of the things that I pride myself in as a person who trades and writes about financial markets in public is that I am always honest. If I blow a call I fess up and admit it. When I have made mistakes in the past, I always try to learn something new from them and I discuss losing trades publicly with readers and members of my service. This time is different. I honestly do not know if I am going to be right or wrong. The price action in the S&P 500 Thursday was certainly bearish short term, but a back test of 1,300 or possibly even 1,280 could give rise to a Phoenix. Granted, the Phoenix is nothing more than Ben Bernanke's pet, but that is a topic for a different time. I have scanned through my list of indicators which discuss sentiment based on momentum, put/call ratio, the advance/decline line, Bullish Percent Indicators, and several ratio based indicators and they are all SCREAMING that a top is near. The interesting thing about the previous statement is that it would have been true a week ago and mostly true two weeks ago, yet prices have continued to climb. The daily chart of the S&P 500 Index demonstrates the recent price action that has continued to climb the "Wall of Worry" for several weeks: S&P 500 Daily Chart
The culmination of the massive run higher for the S&P 500 was the dovish comments coming from Ben Bernanke during Wednesday's press release and press conference. The U.S. & European Central Banks are seemingly in a perpetual race to debase their underlying fiat currencies. The race will not end well. In fact, this type of situation smells like a Ponzi scheme where Ben Bernanke and Mario Draghi (ECB President) are the wizards behind the curtains. Their loose monetary policies and forced reflation are synthetic drugs that juice risk assets higher and ultimately Mr. Market will have his vengeance in due time. At this point, it seems like Ben Bernanke will do anything to juice equity prices higher. I think his hope is that they will be able to artificially keep the game going until the recovery is on a more sound footing. However, when the entire recovery is predicated on cheap money and liquidity and is not supported by organic economic growth it just prolongs the inevitable disaster. As an example, the daily chart of the Dow Jones Industrial Average is shown below. I would point out that that Dow came within 35 points (0.27%) from testing the 2011 highs. Furthermore, the Thursday high for the Dow was only 1,356 points (10.55%) from reaching the all-time 2007 October high. Dow Jones Industrial Average Daily Chart
I have argued for quite some time that the economy and the stock market are two different things. If Bernanke and his cronies succeed in reflating the financial markets and the Dow reaches its October 2007 high in the near term, more retail investors will regard equity markets as being rigged. Who could blame them for viewing financial markets as a giant rigged casino that stands to win while they continue to lose their hard earned capital? We all recognize that the current economy is nowhere near as strong as it was in 2007. But alas, the regular retail investor does not recognize that the stock market and the economy do not portray the same meaning. One specific underlying catalyst that has gone largely unnoticed by most of the financial media during this sharp run higher in stocks is the total lack of volume associated with the march higher. The NYSE volume over the past 2 months has been putrid when compared to historical norms. As a trader, I am forced to take risk through a variety of trade structures. However, the idea that a crash could be coming seems hard pressed as long as Big Bad Ben is at the wheel. If the Russell 2000 drops 10%, I am convinced that Ben will be out making announcements that the Fed stands ready to intervene with all of the supposed tools they have at their disposal. Let's be honest here, they really have one tool comprised of 3 separate functions which are all a mechanism to increase liquidity in the overall system. To express this liquidity, the following chart from the Federal Reserve shows the M2 money supply levels: Current M2 Money Supply
The 3 functions are the printing of currency, the monetization of U.S. Treasury debt (QE, QE2, QE2.5, Operation Twist), and exceptionally low interest rates (ZIRP) near 0 for an "extended period of time (2014)." Since monetary easing is all that the Federal Reserve has done since the financial crisis began, it begs to reason that the Federal Reserve has no other solutions or tools available. If they did, they seemingly would have used them by now. The first bubble they created due to loose monetary policy was the massive bubble in oil in 2008. Fast forward to the present, and they are currently supporting another bubble in U.S. Treasury obligations. The bubble that they will create in the future when the game finally ends will be in precious metals. The precious metals bubble will be building while the Federal Reserve and the U.S. Treasury attempt to keep the Treasury Bond bubble from bursting. At this point in time, if we continue down this path stocks will not protect investors adequately from inflation should the Treasury bubble burst. I would argue that the central planning and monetary policy we have seen the past few years continues in the United States and Europe that gold, silver, and other precious metals are likely to begin their own bubble of potentially epic proportions. As the weekly chart of gold futures illustrates below, gold has recently pulled back sharply and has broken out. I will likely be looking for any pullbacks in gold as buying opportunities as long as support holds. Gold Weekly Chart
In closing, for longer term investors the stock market might have some serious short term juice as cheap money and artificially low interest rates should juice returns. However, eventually equities will start to underperform. At that point, gold will be in the final stages of its bubble and the term parabolic could likely be applied. If central banks around the world continue to print money there are only a few places to hide. Precious metals and other commodities like oil will vastly outperform stocks in the long run if the Dollar continues to slide. The real question we should be asking is who will win the race to debase, Draghi or Bernanke? By: Chris Vermeulen – Free Weekly ETF Reports & Analysis: www.GoldAndOilGuy.com |
David Morgan, publisher of The Morgan Report, a monthly newsletter that covers economic news, currency and precious metals, believes that silver will be persistent this year in trying to break through its resistance of $50 an ounce. A tightly held silver supply, continued sovereign debt concerns in Europe and a strong appetite for the white metal at the start of the year are factors that he says will make silver a leader in the commodity sector in 2012. HAI Managing Editor Drew Voros recently caught up with Morgan to discuss what's in store for the silver market this year.
Gold and silver moved further up the price chart yesterday, with the most-actively traded Comex gold contract (February) gaining $26.60 (1.6%) to settle at $1,726.70 per troy ounce. Silver for March delivery gained 62 cents (1.9%), settling at $33.74 per troy ounce. The HUI Index of gold and silver mining stocks put in a good showing following the FOMC news on Wednesday and continued higher early in the session yesterday. However, later on yesterday the shares faltered, which as 
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