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Sunday, January 29, 2012

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Moolman: Gold Stocks To Rally

Posted: 29 Jan 2012 03:58 AM PST

Gold Stocks To Rally Like During The Great Depression And Early 70s

from hubertmoolman:
Below, is an extract of my Gold Mining Fractal Analysis Report.

"He answered and said unto them, When it is evening, ye say, It will be fair weather: for the sky is red. And in the morning, It will be foul weather to day: for the sky is red and lowering."- Jesus Christ

During the Great Depression, at a certain point, gold stocks started a massive rally. While most things were going down in price, gold stocks made significant gains, becoming one of the best performing sectors during that time.

It was no coincidence that gold stocks performed as well as they did. Like all goods, gold stocks will thrive under the ideal conditions. During the Great Depression, those ideal conditions were present.

The purpose of this editorial is to look at what those conditions were, and identify a pattern that was present before and during those rallies. If we are able to identify those circumstances and pattern, we could look to see if they are present today, or in the future, in order to know when to expect a massive gold stocks rally. — end of extract.

I then go on to identify those ideal circumstances and patterns that were present before and during the great gold stocks rally. The conditions today are very similar to then, and is an ideal set-up for a most spectacular gold stocks rally over the coming months. Here, I would like to illustrate, by way of a chart, how the conditions were similar.

The gold stock rally of the 1930s coincided with major economic decline, as well as a significant increase in the real price of gold. Below, is a chart (from planbeconomics.com) of the long-term Gold/Oil ratio:

Read the full article HERE

Got Physical ?

~TVR

5 Cash-Rich Income Plays

Posted: 29 Jan 2012 02:28 AM PST

By Takeover Analyst:

What follows is an analysis of some of the most liquid income plays. The companies below have current ratios above 3 and dividend yields above 2%. They cover a variety of industries: mining, semiconductors, biotechnology and consumer goods. Freeport McMoRan (FCX) is the most favored on The Street, followed by Amgen (AMGN).

Freeport McMoRan

Freeport is rated a "strong buy" on The Street and trades at a respective 9.7x and 8.2x past and forward earnings, with a dividend yield of 2.2%. The current ratio stands at 3.4, while the beta is 2.

Consensus estimates for Freeport's EPS forecast indicate that it will decline by 11.6% to $4.28 in 2012 and then grow by 28.3% and 3.5% in the following two years. Of the 17 revisions to estimates, 16 have gone down, for a net change of -9.3%. Assuming a multiple of 11x and a conservative 2013 EPS of $5.35, the


Complete Story »

Silver breaches 100-day average, aims higher

Posted: 29 Jan 2012 02:25 AM PST

Exposing Silver Mythology, Part III

Posted: 29 Jan 2012 02:24 AM PST

In Parts I and II, we were presented with a shocking perspective on the silver market. The principal record-keepers for the silver sector, and the largest single regulator of the silver market both display not only an abysmal level of ignorance concerning the silver market, but the seeming incapacity to even understand basic arithmetic operations.

The result of this display of ineptitude is that the mainstream data and analysis which reaches the market from these official and quasi-official sources has absolutely no basis in reality. It is precisely this sort of vacuous nonsense which is relied upon by mainstream silver bears when they spew their negative drivel.

And one cannot say the words "negative drivel" in connection with precious metals without immediately thinking of Kitco's Jon Nadler – the man who has gone through a 10+ year bull market for gold without ever once stating that today was a good day to buy it. Apparently his banker biases simply run too deep. Speaking of Nadler's biases, they were clearly on display in a recent hatchet-job on silver by the Globe & Mail which was so shoddy that it didn't even rank as good fiction. First the context:

Some market watchers are warning that silver faces a vicious bear market that could eventually take the price to the mid-teens…

Well, we know what the silver-hater who wrote this piece thinks about the silver market. What we don't know is what planet he is writing about, because it obviously has nothing to do with the planet Earth. The near-total depletion of inventories, and the imminent default-event which that portends, suggest nothing other than that the upward move in the price of silver has just begun.

What clearly identifies this as propaganda, and not even an attempt at journalism is the following passage:

…the problem with the bullish case for silver, at least over the near term, is the threat of growing supplies.

A key industry figure highlights the problem. According to the trade association the Silver Institute, the average cash costs at silver mines…worked out to a mere $5.27 an ounce in 2010…

Note that this sleazy shill talks about "the threat of growing supplies" without being able to muster even the tiniest kernel of data about actual growing supplies. The implication that the current profitability of silver mining will thus flood the market with silver "over the near term" is the precise opposite of reality.

1) Despite a ten-fold increase in the price of silver off of its 600-year low (spread over a 10+ year period) we have seen no more than a 1% to 2% annual increase in silver production throughout that period. This means there is absolutely zero empirical evidence to support the fraudulent assertion of this writer.

2) The approximate time to bring a new mine into production typically falls into the range of 5 – 10 years. Thus the profitability of silver mining today couldn't possibly have a significant impact on silver production until (at least) the middle of this decade. This means that the ridiculous assertion of a surge in supply "over the near term" isn't even theoretically possible.

Gold climbed more than $100 last week and silver more than $2...

Posted: 29 Jan 2012 02:23 AM PST

Solar Stocks Are Prepared For A Breakout

Posted: 29 Jan 2012 01:34 AM PST

By Kevin Quon:

Two announcements rocked the solar market last week, one for the worse and one for the better. The first was news in Germany that suggested that lawmakers were planning on cutting back subsidies to the market that was beginning to overheat. The German market had added a new record of 7.5 gigawatts of capacity through solar panel installations, which was more than double the target for the year. This was initially taken as bad news, as the solar industry is heavily reliant on subsidies in order to maintain a profitable operation.

Yet the silver lining of this announcement still lies in the fact that the German market, the largest consumer market of solar power, is incredibly strong. Some of this pent up demand might have been, in part, due to the government's plans to completely phase out nuclear energy by the year 2022, 14 years ahead of its previous plans.


Complete Story »

Gold Stocks To Rally Like During The Great Depression And Early 70s

Posted: 29 Jan 2012 01:23 AM PST

Below, is an extract of my Gold Mining Fractal Analysis Report. "He answered and said unto them, When it is evening, ye say, It will be fair weather: for the sky is red. And in the morning, It will be foul weather to day: for the sky is red and lowering."- Jesus Christ During the [...]

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

Year-To-Date Performance: Silver, Gold, SP 500, and the Dollar - Fitch Downgrades Europe

Posted: 29 Jan 2012 01:11 AM PST

Weekly Market Movers: Jan. 30- Feb. 3

Posted: 29 Jan 2012 12:01 AM PST

The US dollar made a big retreat for a second week in a row. Will it continue falling? The Non-Farm Payrolls release is the highlight of a very busy week, which includes many figures from the US. Here is an outlook on the main market-movers coming our way.

Ben Bernanke weakened the dollar with an extended pledge for low rates: until late 2014. and a hint about the possibility of a third round of QE. While the US economy grew at a higher pace than in previous quarters, the pace is still moderate and seems insufficient for convincing the Federal Reserve to stop easing. PMIs and job figures are also an important part of the composition of the decision, and we'll get fresh data now. Let's start:

  1. Canadian GDP: Tuesday, 13:30. Canada's gross domestic product was flat in October, after a four month climb. Wholesale trade and tourism dropped while

Complete Story »

Gold Will Finally Break $2,000 In 2012

Posted: 28 Jan 2012 11:43 PM PST

By Parsimony Investment Research:

As we assess government and central bank responses to the global sovereign debt crisis, we remain bullish on gold and we believe that Gold will finally break $2,000 in 2012.

Global central banks are in a race to debase their currency in order to export their way out of the crisis. The world suffers from an aggregate demand problem, which is being exacerbated by austerity measures in the developed world. While the timing is difficult to pinpoint we believe QE3 is inevitable as the recovery remains weak. Unemployment remains at elevated levels and 2012 will likely be met with reductions in government spending. Our view is that gold remains a strong asset as the U.S. dollar debases long-term.

The chart below highlights that gold and CPI respond to increases in the monetary base.

Gold Valuation

Gold is difficult to value as it earns and yields nothing. Many gold bulls point


Complete Story »

First Majestic Is Ready To Run With A New Plant, New Mine

Posted: 28 Jan 2012 11:39 PM PST

By David White:

On Jan. 24, 2012 First Majestic Silver Corp. (AG) announced the inauguration of the new La Parrilla floatation/cyanidation plant in the State of Durango, Mexico on Jan. 18. The new plant has a total capacity of 2,000 tpd (1,000 tpd in the flotation circuit and 1,000 tpd in the cyanidation circuit). It is expected to be operating at full capacity in February 2012. It is currently operating at 1,500 tpd. Once completed, annual production from La Parrilla mine is estimated to be approximately 3.0 million ounces of pure silver, 6.0 million pounds of lead, and 4.3 million pounds of zinc. AG is now set to grow EPS by 73.10% in 2012. This is great news for investors, and it should provide a springboard for AG's stock price to move significantly upward.

This is just one of First Majestic Silver's many projects. It has three 100% owned and operated producing mines


Complete Story »

Bernanke Rocks The World...Again: El Nino To Continue Following Post Earnings Blues

Posted: 28 Jan 2012 10:46 PM PST

By Keith Springer:

Bernanke's comments, last Wednesday, that the Fed is dissatisfied with the pace of the recovery is evidence that there is further weakness ahead. Their immediate action of announcing zero interest rates through 2014 is essentially the beginning of Quantitative Easing 3 (QE3). They realize that the economy is looking stronger than it really is because we are still feeling the positive effects of QE2, and if they wait until it runs out before acting, there will be too much lag time.

Up until now, El Niño has been bringing tepid temperatures and creating a beautifully warmer winter to most of the nation this year, and it's spilling over to the stock market. Just as the majority of Americans braced for the harshness of winter this year, most investors were expecting the bear market to again rear its ugly head. In reality, neither makes any sense. Winter is as usual winter,


Complete Story »

WATCH: Mayan Silver Unboxing

Posted: 28 Jan 2012 10:13 PM PST

This bloke has a nice lens and is able to capture Ag's beauty. giddyup.

~TVR

Silver Update: “Junk Silver II”

Posted: 28 Jan 2012 09:43 PM PST

from BrotherJohnF:
BJF on interest rates and junk silver production in the 1.28.12  Silver Update.

Got Physical ?

~TVR

Kondratiev & Gold

Posted: 28 Jan 2012 04:00 PM PST

Causes And Consequences Of Kondratievs Long-Wave Cycle

Posted: 28 Jan 2012 04:00 PM PST

Gold University

A Shrinking Trust Horizon — And Hard Times In The City

Posted: 28 Jan 2012 02:07 PM PST

Nicole Foss, who under the pen name Stoneleigh co-edits the Automatic Earth website, just did a long-form interview with an Italian magazine where she she lays out her peak energy, societal collapse thesis in the coherent, accessible way that fans of her writing have come to expect. One part was especially interesting:

When you have economic contraction you also have a substantial contraction of the trust horizon. This deprives political institutions at the national and international level of the trust that would give them political legitimacy. They become stranded assets from a trust perspective. People no longer internalize the rules that those institutions are attempting to impose. The response is typically surveillance, coercion, and repression. This picture basically suggests that it is pointless to look for solutions from the top down. It is not solutions that will come from the top down but more problems.

So politicians typically make a bad situation worse as expensively as possible. The systems that we have established have become sclerotic and unresponsive, hostage to vested interests with no ability to adapt quickly to give people abilities to cope with rapid change. I don't look for solutions from them. The people who are part of that system are typically the people who have gained significant amounts from the status quo. These are the last people who are likely to change things, so I don't look for political actions.

In many parts of the world, especially in parts of Europe, people always ask me if they should take political action, change their policies at a national level to solve these problems. And I tell them unfortunately not because there isn't any mechanism for these large bureaucratic institutions to offer anything that would realistically help, and that they're far more likely to try to maintain their own existence by sucking even more resources out of the periphery in order to maintain the center.

This is a bit like when a body becomes hypothermic, not enough heat. It shuts off circulation to the fingers and toes in order to preserve the body temperature of the core. That's what we can expect politicians and political systems to do. Unfortunately for us, we are the fingers and toes and we have to look after ourselves. Nothing is coming from the top.

My solutions, such as they are, are grassroots solutions. We have to build things from the bottom up. Our centralized life support systems will fail over time because they're critically dependent on tax revenues that won't be there and cheap energy that won't be there. These centralized systems won't be able to deliver the goods and services we've come to rely on.

What we need are alternatives that come from the bottom up. The reason these work is because they operate within the trust horizon. They don't have to stay small. They can grow to whatever size the trust supports and that can be different in different places. The crucial thing is that they come from the bottom up, they're small and responsive and not bureaucratic, they make the best use of very small amounts of resources because they don't have enormous administrative overhead.

It's amazing what can be done at a very small scale. It wouldn't replace what the centralized services have given us, but we can cover the basics. The key point is that we have to do it right now because we don't have much time before we start to see centralized systems failing to deliver what they have delivered in the past. The amount of money in the system can contract very quickly. That undercuts what these centralized systems are capable of delivering in the next few years. So we must start right now building grass roots initiatives, and community is crucial to that.

We need to begin at the individual level because if we are on a solid foundation ourselves we can then help others. If we are not then our attempt to help others is fundamentally weakened. So we have to get our own house in order but then we have to think much more broadly. We must build community. Relationships of trust are the foundation of society. So we need to work with our neighbors, we need to know our neighbors and we need connections with family and community so we're less dependent on money.

In many parts of the world where people really don't have any money anyway, their society functions on barter and gifts, working together, exchanging skills. This works as a model. It doesn't get you a large fancy sophisticated industrial society because it doesn't scale up that well. But it works very well at a small scale, and this is the kind of structure that we need to rebuild.

In some parts of the world there's a lot more of that than in other parts. So it's actually interesting to think that it's not necessarily the places that are the wealthiest at the moment that will do best in the future.

The analogy I use is that if you're going to fall out of a window how much it hurts when you hit the ground depends on how many floors up you were at the time. If you were on the hundredth floor and you do nothing to prepare before you fall it's going to be fatal. If you're much further down it's less painful. If you fell out of a ground floor window you might not even notice. You just pick yourself up, dust yourself off and not very much has changed.

So the places that will do best are the places where there is already a lot of trust at the foundational level, where people are used to working together, where people are not that far removed from the land. Places where there's an enormous disconnect between resources that are available in that area and what resources that are actually used, where societies are highly atomized and used to a very high standard of living, those places will see enormous shock to the system because those people don't have any skills or connection to land or family to fall back on.

Some thoughts
Viewed through a "trust horizon" lens, a lot of global and national institutions are indeed becoming "stranded assets". Who outside of the New York Times editorial department trusts the European Union or the Federal Reserve these days? How many people still think the companies selling processed food or advertising prescription drugs on TV have their customers' welfare at heart? virtually no one who can read.

If you need an excuse to get to know your neighbors or generally get involved in the local community, this is it.

Big modern cities are the 100-story windows in Foss' analogy. Life there is going to get very hard very fast if her systemic failure predictions come true. Conversely, small towns with thriving farmers markets and lots of roof-top solar panels will find the next couple of decades relatively less stressful. As Foss says later in the interview, "If you psychologically prepare for a much lower material standard of living in advance, it doesn't have to be anywhere nearly as painful."

Here's the full interview:

Murdoch's Staff Arrested - Tabloid Scandal Spreads To 2nd Newspaper

Posted: 28 Jan 2012 11:19 AM PST

Rupert Murdoch's Staff Arrested As Tabloid Scandal Spreads To Second Newspaper
By JILL LAWLESS 01/28/12

Attachment 14905

LONDON -- The criminal investigation into British tabloid skullduggery turned full force on a second Rupert Murdoch publication Saturday, with the arrest of four current and former journalists from The Sun on suspicion of bribing police.

A serving police officer was also held, and authorities searched the newspaper's offices as part an investigation into illegal payments for information.

The arrests spread the scandal over tabloid wrongdoing – which has already shut down one Murdoch paper, the News of the World – to Britain's best-selling newspaper.

London police said two men aged 48 and one aged 56 were arrested on suspicion of corruption early in the morning at homes in and around London. A 42-year-old man was detained later at a London police station.

Murdoch's News Corp. confirmed that all four were current or former Sun employees. The BBC and other British media identified them as former managing editor Graham Dudman, former deputy editor Fergus Shanahan, current head of news Chris Pharo and crime editor Mike Sullivan.

A fifth man, a 29-year-old police officer, was arrested at the London station where he works.

More:
http://www.huffingtonpost.com/2012/0...n_1238980.html
Attached Images

Silver: Epic Reversal

Posted: 28 Jan 2012 10:36 AM PST

On January 11th, we expected the US Dollar to top as Sentiment was uber-bullish, which would lead to a nice rally for Gold, Silver, and (Mining) stocks. That day, the USD index closed at 81.35, Silver at $29.89, and Gold at $1,641. (Click HERE for the article)

Today, the USD stands at 78.90, Silver at $33.89 and Gold at $1,733.50, so we got what we expected.

On January 9th, we posted the following chart, which compares the current silver "bubble" to the Nasdaq Bubble a decade ago:

(Click HERE for the entire article)

Now let's see where we are today.

Just like the Nasdaq, Silver has set a lower/equal low, accompanied by a higher low of the MACD index, and has now rallied quite sharply:

Compare this to the Nasdaq:

An overlay of both charts shows us where we are today:

If we zoom in a bit:

If the pattern holds, we should be about halfway the "Bull trap", as many will view this as the Return to "normal".

If the pattern doesn't hold, and silver blasts through $40, it's probably on it's way to the all-time high. In that case, the next big move would be to the upside, with potential targets of $70 and potentially tripple digit silver prices.
As long as the pattern holds, I would be careful if silver hits $38.

For more Analyses and Trading Update, please visit www.profitimes.com!

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Related posts:

  1. Silver going vertical
  2. Why I am leaving silver for what it is…
  3. Silver price: Hey Silver Bugs, You Cryin' Yet?
  4. Silver vs Palladium – Update
  5. Technical Analysis – Reversal Patterns II

Short URL: http://profitimes.com/?p=12130

This past week in gold

Posted: 28 Jan 2012 09:50 AM PST


01/28/2012

GLD – on buy signal.
SLV – on buy signal.

GDX – on buy signal.
XGD.TO – on buy signal.
CEF – on buy signal.

Summary
Long term – on major buy signal.
Short term – on buy signals.
Gold cycle has bottomed and we began cost average buying last week.

Disclosure
We do not offer predictions or forecasts for the markets. What you see here is our simple trading model which provides us the signals and set ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion.
We also provide coverage to the major indexes and oil sector.

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