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Thursday, February 2, 2012

Gold World News Flash

Save Your ASSets First

Gold World News Flash

SBSS 8. The REAL Silver High

Posted: 01 Feb 2012 08:00 PM PST

Un-Seasonal Expectations

Posted: 01 Feb 2012 05:37 PM PST

Nichols on Gold


Fiat Money and the Gold Problem

Posted: 01 Feb 2012 05:30 PM PST

Mises.org


Gold Next Resistance is December High

Posted: 01 Feb 2012 04:35 PM PST

courtesy of DailyFX.com February 01, 2012 03:29 PM Daily Bars Prepared by Jamie Saettele, CMT January’s rally was the 4th largest since 2000 and largest since August (2011). Of course, the metal plunged the following month (September). One has to go back to November 2009 to find the next best month (13.21%). Guess what? Gold plunged in December 2009. The December high at 1770.50 is the next resistance. A drop under 1735 would shift focus to 1717 and 1706. Bottom Line – flat...


Eveillard - Central Banks & Investors Crush Gold Technicals

Posted: 01 Feb 2012 04:10 PM PST

Today legendary value investor, Jean-Marie Eveillard told King World News central banks and investors have been overwhelming technicals in the gold market. But first, Eveillard, who oversees $50 billion at First Eagle Funds, had this to say about the bond market, "This is another instance of the Fed printing money like there is no tomorrow.  The Fed is obviously not very optimistic about the economy.  The Fed, the Bank of England and other central banks have been printing money now for several years.  The strange thing is investors in government bonds in the UK and the US don't seem to be worried about it."


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

Gold Seeker Closing Report: Gold Gains While Silver Surges

Posted: 01 Feb 2012 04:00 PM PST

Gold dropped to $1732.78 in Asia before it climbed up to $1751.40 in London and then fell back to $1739.84 by about 10AM EST, but it then bounced back higher midday and ended with a gain of 0.27%. Silver slipped to $33.118 in Asia, but it then climbed to as high as $34.004 in New York and ended with a gain of 1.66%.


Alf Field Sees Silver Reaching $158.34 Based on His $4,500 Gold Projection!

Posted: 01 Feb 2012 03:53 PM PST

This article was prompted by a question enquiring what the silver price might be if my gold forecast of $4,500 proved to be correct [see my article entitled "Alf Field: Correction in Gold is OVER and On Way to $4,500+!" and I have settled on] a target price of $158.34 for silver. [Let me explain how I came to that specific price.] Words: 850 So says Alf Field in edited excerpts from his original article*. [INDENT] Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyrigh...


Harvey Organ's Daily Gold & Silver Report

Posted: 01 Feb 2012 03:28 PM PST

Illinois' unpaid bills to reach $9.2 billion/Portuguese bonds fall in price,rise in yield/


Is The CBO Merely Another Manipulated Front For Wall Street To Dictate Washington Policy?

Posted: 01 Feb 2012 03:26 PM PST

In the past, when discussing the goalseeking C-grade excel jockeys at the Congressional Budget Office (or CBO), we have not been technically full of reverence. After all when one uses a phrase such as this one: "What do the NAR, Consumer Confidence and CBO forecasts have in common? If you said, "they are all completely worthless" you are absolutely correct", it may be too late to worry about burned bridges. We do have our reasons: as we pointed out last year, following the whole US downgrade fiasco when the Treasury highlighted the CBO's sterling work in presenting a US future so bright, Timmy "TurboTax" G had to wear shades, we said "according to the same CBO back in 2001, net US indebtedness in 2011 would be negative $2.436 trillion, the ratio of debt held by the public to GDP would be 4.8%, total budget surplus would be $889 billion, and GDP would be $16.9 trillion." As we know now they were off only by a modest $17.5 trillion on that debt forecast. Yet we never attributed to malice and bias and outright corruption, what simple stupidity and gross incompetence could easily explain. Until today that is, when following a WSJ article, we are left wondering just how deep does the CBO stench truly go and whether its employees are far more corrupt than merely stupid?

As a reminder, the CBO is "a nonpartisan arm of Congress—employs analysts and economists who are charged with trying to estimate the potential financial impact of proposed policies and legislation." So far so good - they also happen to be beyond worthless at their job, and if they were in the private sector they would be fired with extreme prejudice. Of course, they are government workers, so anything goes. Which is where the problem arises: because while as the WSJ says, the CBO should be impartial, it turns out it is anything but.

Republican staffers on three Senate committees are pressing a congressional office that scrutinizes federal budget issues and proposed legislation over how its assessments are compiled. The inquiries of the Congressional Budget Office, which haven't been made public, concern the CBO's analyses of some of Washington's most complex and controversial measures, including bills on financial regulation, health care, small-business lending and efforts to aid the housing market, said people familiar with the matter.

 

As part of the inquiries, some Republican committee staffers are examining whether CBO officials adequately monitored and disclosed the role of Wall Street banks, academic researchers with government ties and other outside advisers, the people said. They are pushing for greater transparency in the CBO's dealings with advisers, to shed light on the role of outside interests in shaping the office's views, the people said.

Realistically, it is true that the CBO can be the target of either party if and when its conclusions do not resonate with proposed policy.

The CBO regularly comes under fire from members of both political parties—particularly when their goals for proposed legislation are undermined by the agency's analysis. It is "an easy target" because of its role in shaping legislative debates, said John Wonderlich, policy director for the nonpartisan Sunlight Foundation, a nonprofit focused on government transparency. He said the CBO should be more open with the economic models it uses, and should produce documentation detailing its use of outside advisers. "That oversight is entirely appropriate," Mr. Wonderlich said.

... As is precisely the case now:

Republican Budget Committee staffers are questioning the CBO about disclosures of details related to projected costs of health-care legislation and broader economic policies, say people familiar with the matter. People close to the matter say the CBO in recent months has resisted efforts by Republican staffers to obtain documents and communications stemming from the office's views on a long-term care provision. Administration officials in mid-October declared the provision not viable, after previously supporting it.

 

"The Budget Committee has been engaged in routine conversations with the Congressional Budget Office over how best to estimate the fiscal impact of the President's health law," and hasn't been pursuing an inquiry into the CBO's "professional conduct," said a spokesman for the committee's Republican staff.

So far so good: incompetence, with a dose of politics, explains all of the above.

Yet what is not explained anywhere is the following revelation:

In another inquiry, investigators working for Sen. Charles Grassley, the top Republican on the Senate Judiciary Committee, are probing allegations made privately to the investigators by a former CBO economist that she was fired for producing work at odds with Wall Street research favored by her supervisors, according to people familiar with the matter and documents related to the inquiry.

 

The ex-employee, Lan T. Pham, alleges she was terminated after 2½ months for sharing pessimistic outlooks for the banking and housing sectors in 2010, according to correspondence and other documents related to the inquiry, reviewed by The Wall Street Journal, and her lawyer, Gary J. Aguirre. Ms. Pham, 40, alleges supervisors stifled opinions that contradicted economic fixes endorsed by some on Wall Street, including research from a Morgan Stanley economist who served as a CBO adviser. As part of the review, Sen. Grassley's staff is examining whether Wall Street firms or others exert influence that compromises the office's independence, say people familiar with the matter.

And here we were thinking that only John Paulson fired his analysts for being too bearish (true story). But that is not the issue: what is most troubling is if indeed the CBO is nothing but merely another front for Wall Street to work its propaganda magic on the administration. Because at the core of every policy are numbers, usually with dollar signs in front of them, numbers which have to make sense and have to be projected into the future, no matter how grossly laughable the resultant hockeystick. And it is only logical that the grossly incompetent CBO "analysts" will lick the boots of Wall Street's "strategists" only to get a glimpse of those complicated (if also utterly worthless models: remember that Goldman call for a new US renaissance by Jan Hatzius in December 2010, roundly mocked by Zero Hedge, and which even Goldman subsequently apologized for?) models which always paint a rosier picture, as is necessary in a ponzi scheme which, like a shark, must always be moving, every higher, or else the house of cards collapses. It also means that Wall Street's means of peddling influences are far more insidious than originally thought, and that they have penetrated the very number crunching machinery that while merely a front, is a critical component of every legislation.

Alas, none of the above is surprising: just like the SEC, where the dregs of the analytical and legal world end up, praying that one day the very people they prosecute will hire them (at a salary multiples higher than what they get paid currently), so the CBO workers will do all in their power to come up with some results which appear at least modestly objective yet are entirely driven by neither the Democrat nor Republican agenda, but that emanating from the financial region in New York.

And just to put a final nail in the objectivity of anything to have come out of the CBO in the past decade, and probably ever, here is another chart by John Lohman which shows that just like the BLS, which probably also one day will be discovered to get its financial "tips" from Wall Street, the CBO does nothing better than hope for the best, and prepare for the even better.

Finally anyone wishing to listen to the boss of this latest infiltrated by Wall Street political organization stammer, can do so tomorrow: "Mr. Elmendorf will testify at a Senate Budget Committee hearing Thursday on the budget and economic outlook." We are quite confident he will have only glowing things to say about the future.

Shocking Collapse Of World Economy Warned Is Underway

Posted: 01 Feb 2012 03:09 PM PST

But for those who know the truth, the time is nearing an end for preparing…it will come much sooner than anyone will believe.


Jim Willie CB: Corruption in Fascist Business Model

Posted: 01 Feb 2012 02:56 PM PST

"The system will collapse and files from regulators and law enforcement will be destroyed during the collapse.


Trim Tabs, Biderman's Daily Edge 2/1/2012: Gold & SIlver ETFs Getting New Money Again

Posted: 01 Feb 2012 02:34 PM PST

Biderman outlines why he endorses silver & discusses new money going into gold & silver ETFs. (ed. note we only endorse Physical, but you get the idea.


Entering the Intervention Zone

Posted: 01 Feb 2012 02:16 PM PST

Entering the Intervention Zone

Courtesy of Bruce Krasting 

One Around Two

We are near the edge on a few situations in the FX markets. I'm watching the EURCHF and the USDYEN. The market traded EURCHF to a low of 1.2032 today. It closed at a (slightly) safer 1.2044. I would not be surprised to see this cross trade very close to the official peg of 1.20 in the not too distant future.

 

There is no doubt in my mind that the Swiss National Bank (SNB) will be involved when and if the EURCHF hits the 1.2000 mark. My guess is that 99% of everyone else who "votes" in this market believes the same. This begs a question.

"If everyone knows the cross can't go below 1.20, then why in hell is it sitting 44 lousy pips away from the peg?"

The EURCHF is a very good funding currency for a carry trade. Yields on French and Italian bonds make it attractive, given that Swiss money can be had through the swaps with a negative Vig. It seems like the market wants to trade the EURCHF very close to the peg for the time being. That's odd, given that it's a "100% sure thing" that the SNB will protect the downside.

The Dollar is a sideshow for the Swissie. I doubt many are trading USDCHF these days. It's worth noting that the Dollar got beat up for five big figures against the Euro the past week or so. Normally when you see Euro strength versus the dollar, you also see it in the EURCHF cross. Not this time around. It does make me go Hmmmm.

I think there are scenarios where the EURCHF could trade to the peg. If, by surprise… the Greek deal fell apart, money would move into the Franc. It could be something subtler. A reminder of just how fragile the Euro system is these days might do it. For example, this headline from the WSJ that came out after the NY close may scare the crap out of many people with bank accounts in the EU.

 

If the EURCHF does test the peg, it will probably happen during European trading hours. I expect the SNB's new boss, Thomas Jordan, will stand up and bid 1.1999 for all the Euros the market has on offer.

A side story to this is what happens if the cross breaks the peg outside of Euro trading hours. What if some hedge-fund types lean on it at 3 PM on a Friday in NYC? The same question arises during Asian hours. If Monday morning, in Australia, the cross is offered at 1.1997, without a bid, it will create a big splash. That "100% sure thing" will immediately come into question. Mr. Jordan doesn't want that.

There are only two possibilities for intervention outside of the Euro time zone:

1) The SNB can rely on the Central Banks of Australia, Japan and the USA. Those CB's would act on behalf of the SNB during their respective market hours.

But, realistically, there is no chance in hell for this. The US Fed can't play in this sandbox. For the Fed to participate in an effort to weaken the Franc would make it (and Tim Geithner) look silly. The USA has been threatening China with all manner of sanctions over China's policy of maintaining an artificially weak currency. The Fed simply can't help Switzerland do the same thing.

2) The SNB will give "resting" orders to commercial banks. The most likely name for this would be UBS. It would not surprise me if one of the other big banks had a turn at doing the SNB's calling. JPM and Bank of Tokyo are likely candidates, Barclays may get put on the list if persistent intervention was required. The resting order might be:

To: Bank of Tokyo, Tokyo - FX Department

Firm order, good till cancelled. SNB offers to purchase up to Euro 200 million versus CHF at 1.1999. Call Hans -immediately- if the first E50mm is executed.

With this, we get the EURCHF trading "one-around-two" (one pip around 1.200 or, 1.1999 – 1.2001).

A few thoughts about resting orders from CBs.

*The information always leaks.

*The bank operating for the SNB will be named.

*A bank that has a large resting order from a CB has a huge tactical advantage against other market players. (I know, I played this game.)

*A move into the intervention zone will rile other markets, most notably in the Euro funding markets. 

 

A Yen for a Yen Trade

The USDYEN is dangerously close to becoming an issue (again). The NYC low was 76.08. Anything under 76.00 might bring in the Bank of Japan (BOJ). The last time we were here was on 10/27. The chart:

 

Japan desperately needs a stimulus. It has gone to the cupboard for more ZIRP and deficit spending too many times. At 220% debt-to-GDP, its credit card is maxed out. My reading of the Japanese press is that more debt as a stimulus is not a viable alternative. (They are talking about doubling the VAT to 10%, to cover a portion of the deficits. Given that painful effort, they are not going to turn around and borrow more.)

The only option left is to fiddle with the FX rate. It would make a very big difference if the USDYEN was 85. The Japanese Finance Ministry folks must be looking at the SNB's actions with envy. A 15% devaluation off the low, coupled with a future exchange rate that was (somehow) pegged to the USD, or a basket of currencies, would be just the ticket.

Here again, I don't think this will happen. The boys at the BOJ know that they would have to absorb a trillion in additional reserves if they drew a line in the sand with a currency peg. That doesn't mean that they are not thinking about it. Some "Peg Talk" by some MITI types might get the ball rolling.

I think we'll see a break of 76.00 soon. The sparks will fly somewhere around 75.60. Given the deteriorating conditions in Japan since the October intervention, I do wonder if the BOJ might be somewhat more aggressive this time around.

 

Gold Report interviews Turk, who sees great deals on gold and silver

Posted: 01 Feb 2012 01:45 PM PST

9:45p ET Wednesday, February 1, 2012

Dear Friend of GATA and Gold:

Interviewed today by Karen Roche of the Gold Report, GoldMoney founder and GATA consultant James Turk explains why he finds gold and silver cheap at the moment, why he expects gold and silver mining shares to outperform this year, and why he expects hyperinflation. The interview is headlined "Great Deals on Gold and Silver: James Turk" and it's posted at the Gold Report here:

http://www.theaureport.com/pub/na/12455

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Golden Phoenix Receives Inferred Gold Resource Estimate
For Santa Rosa Mine in Panama: 669,000 Oz. Gold, 2.1 Million Oz. Silver

Company Press Release
January 3, 2012

Golden Phoenix Minerals Inc. (OTC: GPXM) reports that on behalf of Golden Phoenix Panama S.A., the joint venture entity that owns and operates the Santa Rosa gold mine in Panama, it has received from SRK Consulting (U.S.) an initial resource estimate for Mina Santa Rosa.

The Santa Rosa project is a volcanic-hosted epithermal gold-silver deposit previously operated as an open pit-heap leach operation. Production ceased in 1999 in part because of low gold prices.

SRK Consulting reports an in-situ inferred resource at the former Santa Rosa and ADLM pits totaling 23.1 million metric tonnes at 0.90 grams/tonne gold, for a contained 669,000 ounces of gold at a 0.30 g/t gold cutoff. The resource also contains an average grade of 2.87 g/t silver for a contained 2.1 million ounces of silver.

John Bolanos, Golden Phoenix's vice president of exploration, remarks: "In addition to SRK's inferred resource estimate of 669,000 contained ounces of
gold, the Santa Rosa project has an additional unspecified volume of mineralized material on former heap leach pads throughout the property. We expect to begin assessing this additional material in the near future."

For the company's full statement, including a table detailing the resources at Santa Rose, please visit:

http://goldenphoenix.us/press-release/golden-phoenix-receives-initial-ni...


Join GATA here:

California Investment Conference
Saturday-Sunday, February 11-12, 2012
Hyatt Grand Champions Resort
Indian Wells, California, USA

http://cambridgehouse.com/conference-details/california-investment-confe...

Support GATA by purchasing a silver commemorative coin:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


ADVERTISEMENT

Be Part of a Chance to Discover
Multi-Million-Ounce Gold and Silver Deposits in Canada

Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada.

Check out the exploration program on our Allco gold/silver project :

-- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit.

-- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries.

-- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited.

To learn more about the Allco property or Northaven's other gold and silver projects, please visit:

http://www.northavenresources.com

Or call Northaven CEO Allen Leschert at 604-696-3600.


Gold in a bubble? Not in Europe, where public can't sell fast enough

Posted: 01 Feb 2012 01:22 PM PST

Italy's Top Gold Scrap Buyer Sees Booming Business

By Svetlana Kovalyova
Reuters
Wednesday, February 1, 2012

http://www.reuters.com/article/2012/02/01/us-italy-gold-idUSTRE81020H201...

MILAN, Italy -- OroCash, Italy's biggest buyer of used gold jewelry, expects business to flourish this year with the opening of 150 new collection points in Italy and abroad as high gold prices and unfolding economic crisis prompt people to sell family assets.

Recycled gold accounts for more than a third of global gold supply and is a major driving force on precious metal markets. Gold scrap volumes in Europe jumped 12 percent to record highs in 2011 on the back of rising metal prices, according to data from metals consultancy Thomson Reuters GFMS.

"People are no longer so emotionally attached to their old jewelry as in the past. Jewelery has become an accessory. People buy and sell it as easily as they buy and sell shoes," Marco Agostoni, OroCash commercial director, said on Wednesday.

... Dispatch continues below ...

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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit:

http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf


OroCash, which opened its first collection point for used jewelery in 2000, estimates that volumes of its gold business rose by at least 15 percent in 2011 from 6 tons in 2010, its top managers told Reuters in an interview.

"Of course, the crisis has helped" to boost business "but it is not the main reason. Gold prices are high and people sell jewellery they have accumulated over the years and no longer need," Agostoni said.

About 20-25 percent of people who sell their gold jewellery do it because they are forced by dire economic circumstances, up from about 15 percent before the crisis, OroCash managers said citing their internal statistics.

"People get divorced and they want to free themselves from old memories. Or they inherit jewelery that they don't want to keep," Agostoni said, brushing off estimates by some sector analysts that most available gold scrap has already hit the market after a prolonged period of high prices.

OroCash which operates 350 collection points in Italy and about 100 shops in Spain, Portugal, Ireland, and Austria, plans to open about 150 new shops this year on its home turf and abroad betting on people's desire to cash on high gold prices.

Countries favored by the group are often referred to as weak links in Europe. Italy, the euro zone's third-biggest economy, has been struggling to stave off a debt crisis which is engulfing Greece and forced Portugal and Ireland to seek international bailouts.

Gold prices rallied on Wednesday adding to an 11 percent rise in January, the largest one-month gain since August 2011 and the largest for the month of January since 1980, thanks the weak U.S. dollar and central bank purchases.

Used gold jewelery collectors, known as "Compro Oro" shops, have mushroomed in Italy since 2000 when the country liberalized its gold market allowing private operators to trade in precious metals.

The number of Italian Compro Oro shops is estimated at 5,000-8,000 at present with an annual turnover of 2-3 billion euros, while total volume of gold scrap in the country is estimated at 85-90 tons in 2010, according to the Italian goldsmiths' federation Federorafi.

OroCash refines its precious metal scrap in Switzerland, which has high-quality refining facilities, its managers said.

* * *

Join GATA here:

California Investment Conference
Saturday-Sunday, February 11-12, 2012
Hyatt Grand Champions Resort
Indian Wells, California, USA

http://cambridgehouse.com/conference-details/california-investment-confe...

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


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Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study
for the 600-MW Chandgana Power Plant in Mongolia

Company Press Release
January 17, 2012

VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels.

The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year.

Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation.

For the complete statement from the company, including maps and charts, please visit:

http://www.prophecycoal.com/news_2011_jan17_prophecy_receives_power_plan...

Mises Institute's Doug French reviews Rickards' 'Currency Wars'

Posted: 01 Feb 2012 11:57 AM PST

7:57p ET Wednesday, February 1, 2012

Dear Friend of GATA and Gold:

Doug French, president of the Ludwig von Mises Institute, joins the readers who have found the new book by James G. Rickards, "Currency Wars," to be a compelling tale of past international economic conflicts and a valuable outline of possible resolutions of the current conflict. Rickards spoke at GATA's Gold Rush 2011 conference in London last August. French's review is posted at the Mises Institute's Internet site here:

http://mises.org/daily/5897/Currency-Wars

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


ADVERTISEMENT

Be Part of a Chance to Discover
Multi-Million-Ounce Gold and Silver Deposits in Canada

Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada.

Check out the exploration program on our Allco gold/silver project :

-- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit.

-- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries.

-- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited.

To learn more about the Allco property or Northaven's other gold and silver projects, please visit:

http://www.northavenresources.com

Or call Northaven CEO Allen Leschert at 604-696-3600.


Join GATA here:

California Investment Conference
Saturday-Sunday, February 11-12, 2012
Hyatt Grand Champions Resort
Indian Wells, California, USA

http://cambridgehouse.com/conference-details/california-investment-confe...

Support GATA by purchasing a silver commemorative coin:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


ADVERTISEMENT

Golden Phoenix Receives Inferred Gold Resource Estimate
For Santa Rosa Mine in Panama: 669,000 Oz. Gold, 2.1 Million Oz. Silver

Company Press Release
January 3, 2012

Golden Phoenix Minerals Inc. (OTC: GPXM) reports that on behalf of Golden Phoenix Panama S.A., the joint venture entity that owns and operates the Santa Rosa gold mine in Panama, it has received from SRK Consulting (U.S.) an initial resource estimate for Mina Santa Rosa.

The Santa Rosa project is a volcanic-hosted epithermal gold-silver deposit previously operated as an open pit-heap leach operation. Production ceased in 1999 in part because of low gold prices.

SRK Consulting reports an in-situ inferred resource at the former Santa Rosa and ADLM pits totaling 23.1 million metric tonnes at 0.90 grams/tonne gold, for a contained 669,000 ounces of gold at a 0.30 g/t gold cutoff. The resource also contains an average grade of 2.87 g/t silver for a contained 2.1 million ounces of silver.

John Bolanos, Golden Phoenix's vice president of exploration, remarks: "In addition to SRK's inferred resource estimate of 669,000 contained ounces of
gold, the Santa Rosa project has an additional unspecified volume of mineralized material on former heap leach pads throughout the property. We expect to begin assessing this additional material in the near future."

For the company's full statement, including a table detailing the resources at Santa Rose, please visit:

http://goldenphoenix.us/press-release/golden-phoenix-receives-initial-ni...

We're On the Cusp of a Gold-Backed Dividend Boom

Posted: 01 Feb 2012 11:42 AM PST

By Matt Badiali, editor, S&A Resource Report Wednesday, February 1, 2012 On December 31, 2001, gold owners celebrated a historic year. It was on that day that gold closed out the year at a higher price than where it started. Its closing price was $276.80 per ounce. Every year since then, gold has closed the year at a higher price than where it started. It's the greatest, most consistent bull market anyone alive has ever seen. Still, gold is the target of one critical complaint – it pays you no income. A gold position isn't like a corporate bond or a share of dividend-payer Johnson & Johnson. It's just a lump of metal. It pays you no interest or dividends. And gold mining is such a capital-intensive business, most gold miners haven't had enough cash flow pouring in to pass along to shareholders in the form of dividends. This is why many folks say, "Why would I own gold and earn no income on my savings when I can place it in bonds and earn 5% or 10%?" But ...


Corruption In Facist Business Model

Posted: 01 Feb 2012 11:35 AM PST

by Jim Willie CB February 1, 2012 home: Golden Jackass website subscribe: Hat Trick Letter Jim Willie CB, editor of the "HAT TRICK LETTER" Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy. Few can define fascism. Many cannot recognize it. History provides shocking stories of its past episodes. But its root structural feature i...


Business Insider says “Savers and Retirees should stop Whining about those Lousy Rates!”

Posted: 01 Feb 2012 10:54 AM PST

from CapitalAccount:

Mitt Romney won the Republican Florida primaries last night. Not only did he win, he developed magical powers. He promises to balance the budget without raising taxes and without any real cuts. Give us a break! When are these politicians going to finally be held accountable for their actions? What is going to bring this economy back to a place of sustainable growth and low unemployment? Economist Dean baker says that the missing piece is a competitive dollar, but if that means devaluing the Greenback — just who benefits from that wealth transfer? Who loses from it? And with not just manufactured snow globes but with R&D and logistics made in China, how can we be sure that a single job would come back to the US anytime soon? It took 40 years to gut out manufacturing sector in the United States, it's not going to just return overnight.

And savers of the world unite! Joe Weisenthal of Business Insider created quite the stir today with a post pounding the saver and retiree as a "whiner" who should just stop complaining. We think that, contrary to Joe, the saver is not the problem. The saver has been repressed, forced to accept artificially low rates of interest by a federal reserve that has, under greenspan and bernanke, met every recession with lower and lower rates of interest keep them there longer and longer.

Illinois' Unpaid Bills to Reach $9.2 Billion / Portuguese Bonds Fall in Price, Rise in Yield

Posted: 01 Feb 2012 10:45 AM PST

by Harvey Organ:

Good evening Ladies and Gentlemen:

Gold closed up today up $11.10 to finish the session at $1747.10 Silver paid no attention to the knockdown yesterday and shot right back up to close at $33.78 gaining 70 cents on the day. The gold and silver shares were lagging the price again which suggests another raid tomorrow which of course is prior to the jobs reports. These crooks continue to use the same modus operandi as they have no other way to orchestrate their collusive raid. Let us head over to the comex and assess trading, inventory movements and amounts of physical metal standing.

Read More @ HarveyOrgan.Blogspot.com

This Week in Money

Posted: 01 Feb 2012 10:35 AM PST

from Silver-Investor.com:

Listen to:

David Morgan – Silver update.

Danielle Park – Fund manager changes direction.

Warren Pollock – Real State of the Union.

Click Here to Listen to the Interview


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

Great Deals on Gold and Silver: James Turk

Posted: 01 Feb 2012 10:32 AM PST

The Gold Report: Given the volatile 2011 market and the fact that gold trades at seasonally lower prices in the summer, James, what led you to say you believe we've already hit the low for the gold price in 2012? James Turk: We started this year in an unusual position. Normally, we see seasonal strength in the last quarter. We didn't get it. We'd been in a correction since the high in silver back in April 2011. The high in gold came during the summer, which was very unusual, but basically both metals have been moving sideways. Starting from the end of a correction, value is more important than seasonality. Clearly, gold and silver both represent good, undervalued assets at the moment. The other factor is continuing problems in the financial system. The European banks are still on the brink and many American banks are in a similar situation. Questions about the currency—whether the euro will survive—and the ongoing sovereign debt issue will cause people to look at the precious metals....


The Silver and Gold Price Enjoyed a Profitable Day With Gold Busting Through it's Resistance Closing at $1,747.10

Posted: 01 Feb 2012 10:29 AM PST

Gold Price Close Today : 1747.10
Change : 9.30 or 0.54%

Silver Price Close Today : 3377.80
Change : 54.50 cents or 1.64%

Gold Silver Ratio Today : 51.723
Change : -0.568 or -1.09%

Silver Gold Ratio Today : 0.01933
Change : 0.000210 or 1.10%

Platinum Price Close Today : 1617.20
Change : 35.40 or 2.24%

Palladium Price Close Today : 697.75
Change : 12.40 or 1.81%

S&P 500 : 1,324.09
Change : 11.67 or 0.89%

Dow In GOLD$ : $150.46
Change : $ 0.20 or 0.14%

Dow in GOLD oz : 7.279
Change : 0.010 or 0.14%

Dow in SILVER oz : 376.47
Change : -3.66 or -0.96%

Dow Industrial : 12,716.46
Change : 83.55 or 0.66%

US Dollar Index : 78.93
Change : -0.356 or -0.45%

The SILVER and GOLD PRICE both enjoyed a profitable day. Gold busted clean through the $1,740 barrier and closed at a new high for the move, $1,747.10, up $9.30. Gold also posted a new intraday high, $1,750.77, but couldn't clear that $1,750 wall.

The GOLD PRICE Relative Strength Indicator has now reached the "Shur-nuff Overbought" level, but little else hints this rally will end any time soon. Above stands $1,800, which without question will pull out a big knobkerrie and pound gold about the head and shoulders. But that's $50 higher.

SILVER gained 54.5c today and closed Comex at a new high, barely, 3377.8c, but it didn't manage to clear the next resistance, 3400c. That hurdle just stands there, rock solid for the moment.

Thus although today silver encouraged us, it didn't reach in its pocket and put any real money on the table. We are left looking at the same range, 3300c to 3400c, and until silver breaks out of that prison, nothing has happened.

Y'all are going to look back one of these days and tell your children, "You know, once upon a time I had a chance to buy silver at thirty-four dollars!" They'll look at you in wonderment, and then ask, "Grandpappy, what's a dollar?"

Good thing about writing these commentaries is that every day that dawns brings a new chance to be wrong.

I was not, however, wrong to suspect silver and gold were about to jump, based on that one-slightly- down-other-slightly-up rule. But more below.

Okay, y'all, a Greek Debt Deal Is Near. Don't forget that. What kind of person would I be if I didn't remind y'all?

The US dollar, Laughingstock Of Fiat Currencies, only slightly less ridiculous than the euro and yen, shed 35.6 basis points (0.46%) today to land at 78.932. Yesterday's Big W resolved into a triple top, and obligingly fell lower than Friday's lows, to 78.623, relieving our minds of the worry that it might suddenly rally. Still, give the devil his due. Until the dollar clearly violates that 78.60 level, it's liable to do anything. Well, we all know that over time it can only do one thing -- slowly evaporate -- but I mean in the short run.

The scruffy and disgusting euro is flagging at the 62 day moving average, today 1.3209. Euro closed up 0.58% at 1.3158. Looks like it won't punch through, but will fall again for some sort of double bottom.

Did I mention that a Greek Debt Deal Is Near? Don't forget that. That will really help the euro by, uh, by, uh, well, I'm sure it will help Greece, at least. We won't talk about all the other bankrupt countries because one of them begins with an F.

On the other side of the globe pretty much nobody knows what they're doing, because they bid up the doomed yen 0.07% to 131.32c/Y100 (Y76.20/US$1). It's still rallying -- why is anybody's guess, given the fundamentals. Never mind, don't expect anything to make sense in a fiat money world.

Okay, stocks hung me on my own words, and sure's this world did manage to peck through 12,700. Dow rose 83.55 (0.66%) today and closed at 12,716.46. S&P500 rose through my strict 1,320 to 1,324.08, gaining 11.67 (0.89%).

As that notorious wit and indefatigable wag, Queen Victoria, used to quip, "We are not amused." Nor are we enthused. Stocks may simply be setting up for a little double top below 12,850, whence they will sink like your car keys when they were in your shirt pocket and you leaned over to get a better view of Hoover Dam. BICBW.

Anyway, who would want to own stocks and undergo all that fatigue of trying to pick the right one and do all that worrying when you can just buy gold or silver, stick it in the safe, and wait until Ben Bernancubus and the US Gov do what they do best: destroy the dollar.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.

The Bernanke Effect

Posted: 01 Feb 2012 10:00 AM PST

by Jeff Nielson, Bullion Bulls Canada:

With the precious metals sector having been in the grip of another bankster-induced "silly season", I was very unsure about how the market would "react" to the latest shenanigans of B.S. Bernanke. Put another way, I was uncertain as to whether the actual fundamentals would be allowed to assert themselves – even to a small degree.

In fact that is precisely what we have seen: a "small" reaction to yet more monetary insanity. As I have written previously, the U.S.'s 0% interest rates are the economic equivalent of hooking someone up to a defibrillator. Shock someone continuously with a defibrillator for 3+ years, and it is safe to say that we will not end up with a "patient in recovery" – but merely with a badly-charred corpse.

Thus it is with the U.S. economy. Three-plus years of continuous, maximum stimulus has produced nothing except a steady stream of ever more-absurd statistical lies, attempting to delude the sheep into believing this badly-charred corpse is "recovering". Are the Wall Street market-pumpers who reside at the Federal Reserve ready to admit defeat?

Read More @ BullionBullsCanada.com

Ron Paul: America’s Greatest Man

Posted: 01 Feb 2012 09:58 AM PST

by Andrew Hoffman, MilesFranklin.com:


TUESDAY AFTERNOON WRAP-UP 1/31/2012

Another crazy day, for both the market and myself. It's not often I get to see an icon (and personal idol) speak, which is precisely what occurred this afternoon at Ron Paul's Denver campaign stop. One of the most inspirational speeches I've ever heard, as espoused in today's RANT topic.

As for the market, more of the same. Perhaps I sound like a broken record at times, but there's a method behind my madness. Back on Wall Street, I learned the importance of being concise, focusing on the key points, and repeating prominent themes. I may write a lot of words each day, but only a handful of messages – unerringly consistent and patently memorable. Even a casual RANT reader understands PAPER gold is suppressed at four KEY ATTACK TIMES each day, the Dow supported with equal vigilance, PHYSICAL gold and silver are not investments but MONEY, and that one should PROTECT THEMSELVES from what's coming, NOW.

Read More @ MilesFranklin.com

Egon von Greyerz: Alf Field Calls for $158 Silver & Swiss Look to Gold

Posted: 01 Feb 2012 09:41 AM PST

from King World News:

Today Egon von Greyerz told King World News he received an email from his good friend Alf Field predicting silver would move quickly to the $158 level. Von Greyerz also discussed the initiative in Switzerland to get the Swiss franc backed by 20% gold. Egon von Greyerz is founder and managing partner at Matterhorn Asset Management out of Switzerland. Here is what von Greyerz had to say about Alf Field's call for $158 silver: "Eric, overnight I received an email from my good friend in Australia, Alf Field. To his amazement he found the silver chart, from an Elliott point of view, runs in parallel to the gold chart. His count is now very clear that silver will, in the next move reach $158."

Egon von Greyerz continues: Read More @ KingWorldNews.com

Doug Casey on the Coming War with Iran

Posted: 01 Feb 2012 09:38 AM PST

Author: 
Doug Casey
Synopsis: 

If tensions escalate between the US and Iran, WW III could be triggered… and where do you think the price of gold will go then?

(Interviewed by Louis James, Editor, International Speculator)

L: Doug-Sama, I've heard you say you think the US is setting Iran up to be the next fall guy in the wag-the-dog show – do you think it could really come to open warfare?

Doug: Yes, I do. It could just be saber rattling during an election year, but Western powers have been provoking Iran for years now – two decades, really. I just saw another report proclaiming that Iran is likely to attack the US, which is about as absurd as the allegations Bush made about Iraq bombing the US, when he fomented that invasion. It's starting to look rather serious at this point, so I do think the odds favor actual fighting in the not-too-distant future.

L: Could they really be so stupid?

Doug: You know the answer to that one. We're dealing with criminal personalities on both sides, and criminals are basically very stupid – meaning they have an unwitting tendency to self-destruction. One thing to remember is that most of those in power in the West still believe the old economic fallacy that war is good for the economy.

L: The old broken-window fallacy. Paraphrasing Arlo Guthrie, it's hard to believe anyone could get away with making a mistake that dumb for that long. Our friends at IHS put together a great, brief video debunking the fallacy.

Doug: People like those in power still suffer the delusion that it was World War II that ended the Great Depression for the US. Actually, it was only after the end of the war that the depression ended, in 1946. In his book World Economic Development: 1979 and Beyond, Herman Kahn documented long-term growth throughout the 20th century. Between 1914 to 1946 – a very tough time, with WW I, the Great Depression, and WW II – the world economy still grew at something like 1.8%. I believe real growth would have been several times as great, were it not for the state and its products. But people still believe that spending money on things that explode and kill and destroy is somehow good for the economy.

L: I suppose they think it's okay if it creates jobs here and destroys lives and livelihoods "over there." But aside from the fact that it's not safe to assume today's enemies are not capable of bringing the battle onto US soil, it still ignores the fact that you're spending money on stuff that gets destroyed – like broken windows – and that impoverishes us all. Worse, the cost is not just economic.

Doug: That's right. This coming war with Iran has the potential to turn into something resembling WW III, with enormous consequences.

Now, it's hard to speak with any certainty on such matters, because most of what we have to go on are press reports. Governments keep most really critical facts on their doings to themselves, and what you read in the press is as likely as not just a warmed-over government press release – in other words, propaganda. Meaningless, if not actively deceptive. It is correctly said that in war, truth is the first casualty.

L: But we do have the Internet these days, with indie reporters offering coverage ignored by the talking heads in the mainstream media.

Doug: True; it doesn't keep the chattering classes honest, but it does provide some diversity of spin, from which we can try to infer what's really going on. And from all the various sources – mainstream and alternative, Western and from within the Muslim world – I have to say that it appears to me that the Iranians are not actually developing nuclear weapons.

L: Then why do they act in such aggressive and bombastic ways?

Doug: Western powers are pushing them around, telling them what they can and cannot do, and treating them like children or mental incompetents with no right of self-determination. How else would you expect them to react? They may have a collectivist theocratic regime, but it's also a proud and ancient culture.

Now, as you know, I don't think there should be any countries at all – not in the sense of the modern nation-state, and I'm certainly no fan of the Tehran regime, but Iran is a sovereign state. The Iranians resent people from other countries assuming the right to tell them what they can and cannot do with their uranium enrichment program, just as people in the US would if Iranians told them what to do with… well, anything.

L: Do you have specific data to substantiate your view that Iran is not focused on creating nuclear weapons?

Doug: I was just reading about an official report that says that Iran is still not able to enrich uranium to the level needed to make nuclear weapons.

Uranium occurs in two isotopes with half-lives long enough to make it possible to find reasonable amounts of them in the earth's crust: U235 and U238. Most of it is U238 – 99.3% – but it's the U235 that's fissile, meaning, it's the one you want for making nuclear reactors and weapons. So you have to enrich your uranium – to about 20%-30% U235 to make reactor fuel and 90% or better to make weapons.

L: That's why the Russians are able to sell "downblended" uranium from decommissioned nuclear weapons for use as reactor fuel. So, you're saying the reports indicate that Iran is not capable of enriching uranium beyond the level needed for reactors?

Doug: Yes. But again, I have to stress that reliable information is very hard to come by. Remember when the US accused Iraq of having a program to develop so-called weapons of mass destruction? Apart from the fact that, except for nuclear weapons, that term is a complete misnomer, they had no such thing. It was either lousy intelligence or outright fabrication – and I suspect the latter. So how can we trust what they tell us today? Only a fool would be so naïve.

L: Indeed.

Doug: In any event, why shouldn't Iran have nuclear weapons? I wish none of these countries had them, but they do. No one stopped China, no one stopped North Korea, Pakistan, Israel, India, France, nor any of the others in the disreputable club that have them.

L: Wasn't it too late to intervene by the time those countries announced their nuclear capabilities?

Doug: I don't think so. Israel was friendly, so Western powers looked the other way. North Korea was too rabid, so they were left alone. The other countries are too big. The cat's out of the bag at this point; any country can develop nuclear weapons, if it really wants to. But it's easier and cheaper to bribe a general – or maybe just a supply sergeant – in India, Pakistan, or Russia to get what you want.

Moreover, with the US on the rampage, prosecuting its counterproductive and unwinnable War on Terror, a lot of governments, especially ones unpopular in the West, have got to be thinking about acquiring nuclear capabilities. If Saddam had actually had nukes, the US would have left him alone, just as they've left the Kims to rot in the workers' paradise they've made out of North Korea. It makes sense for a country stricken from the US's official "nice" list and moved over to the "naughty" category to have some nukes. Everyone needs and wants a slingshot to keep the bully of the block at bay.

If you oppose nuclear proliferation, your first target should be US foreign policy, which is the biggest impetus behind the scramble to arms.

L: What about the argument that Iran would use nuclear weapons on Israel, if it had them?

Doug: That's ridiculous. It's true that just one or two nukes would turn most of Israel to glass, but it's a matter of mutually assured destruction (MAD), just as the détente between the US and USSR was. Israel is reported to have about 200 nuclear weapons, and the Iranians know it. Even if they launched a successful first strike against Israel, they would get wiped off the face of the earth in response. The regime in Iran is repressive and borderline lunatic, but they aren't that stupid. No way are they going to attack Israel with nukes. They not only cannot, but should not, be singled out for exclusion from the nuclear club.

L: But they're part of the axis of evil, don't you know?

Doug: Speaking of evil, it's evil to initiate the use of force or fraud. If Iran enriches uranium or even builds tools for war, that's not evil per se. But using force to stop them from doing something that is not in itself wrong is wrong, and that would make Iran's attackers the axis of evil.

In my mind, the US is the biggest threat to peace in the world today. I can easily imagine those in power in the US starting a war over any silly pretext, real or imagined. It could easily happen by accident at this point. Things go wrong. Maybe some young hotheads in Iran's Revolutionary Guard decide to take a boat out and attack a US frigate – launch a few RPGs at it before they're blown out of the water. Then the US feels it needs to mete out some punishment and launches a strike against the base the boat came from – which would be attacking the Iranian mainland – and the thing spins completely out of control. Could happen at the drop of a hat. Maybe the commander of a US ship has a streak of General Jack D. Ripper from Kubrick's Dr. Strangelove in him. Maybe the Russians or the Chinese – who are aiding the Iranians – mount a false flag incident, because they want to see the US get involved in another tar baby.

L: So… another case of not just doing the wrong thing, but the exact opposite of the right thing, with economic, political, and ultimately physical world consequences.

Doug: That's right. Just look at what they're doing now, trying to isolate Iran from the world with an embargo. That could be seen as an act of war.

L: Well, wait a minute. A blockade is regarded as an act of war, but if Western countries decide to harm their own economies by not trading with Iran, that's unfriendly, but not force or fraud.

Doug: Well, it would be forcing citizens in those Western countries to pay higher prices for things, denying them the choice of buying oil from Iran if they wanted to. But I agree; that's more a matter of criminal tyranny and stupidity than an act of war. Still it sure is prodding Iran, throwing rocks at the hornets' nest, as the US did with Japan before WWII. The Japanese basically have no domestic oil production and were getting their oil from the US and the Dutch East Indies. The US cut off both supplies, backing them into a corner, leaving them little choice but an aggressive response.

At any rate, I think all of this could backfire on the US. Since the Iranians apparently can't clear deposits through New York, where international dollar trades clear, they've made a very commonsense move to cut the US out of the middle and sell their oil directly to India, without using dollars. I think other countries will follow – and then what? Iran isn't going to want bushels and bushels of rupiah or yen or whatever. I think the odds favor them turning to gold. It's said that's one of the means of payment the Indians will be using.

Gold is the logical choice and the next step in the demise of the US dollar as the world's reserve currency. There's a lot of demand for the dollar to buy and sell oil. If countries stop using it, demand for the dollar would fall, at the very time the US is greatly increasing the supply of dollars. The day is coming when trillions of dollars outside the US will only be spendable inside the US. At that point it's game over for the dollar.

L: You've talked about the world going back onto a gold standard before. What do you say to the people who say that gold is a barbaric relic from the past that doesn't work in a modern economy – they can't go around with pockets full of doubloons to buy cars or chests full of treasure to buy houses…

Doug: Such people are not thinking rationally and are economically ignorant. As always, we should start with a definition: what is money? The short answer is that it's a store of wealth and medium of exchange. For reasons we've discussed and as Aristotle outlined over 2,000 years ago, gold is simply the best form of money ever adopted. And in our modern world, you don't have to physically cart the stuff around. You can, but you can also transfer ownership of physical gold electronically, through services like GoldMoney.com.

L: Note: We do endorse GoldMoney.com as a convenient and reliable way to own, trade, and transfer gold, but readers should be advised that Doug is an investor in GoldMoney.com.

Doug: Right. I like to put my money where my mouth is.

L: Okay, so you see this trend being bullish for gold, clear enough. But most of the gold ever produced in the world still exists in purified form in various vaults around the planet. Gold doesn't get used up like silver does, so there's plenty of supply. So, would the physical need for gold as money really impact the price of gold and related equities, or would that be more a function of governments further debasing their currencies?

Doug: Well, it's estimated that there are some six billion ounces of refined gold in human possession around the world, or, somewhat less than one ounce per person. Global gold production is said to be about 80 million ounces a year, or about a 1.3% annual increase in the supply of gold. That would be the steady, "natural" rate of inflation if we were on a gold standard. The amount of various currency units in the world is increasing at a much, much faster pace than 1.3%. Nobody really knows, not even the Fed, but depending on how you define the money supply, it would take $10,000 to $50,000 – or more – per ounce to back all of the dollars in existence with gold. Whatever the correct number is, I expect gold's price in dollars to increase dramatically as the world moves closer to and eventually adopts a gold standard.

L: So, any investment implications beyond the obvious? Buy gold and silver for prudence and protection, buy gold stocks for speculative leverage?

Doug: That's the basic recipe. And diversify your holdings internationally. You can never tell when the government of your home country will have a psychotic break.

L: What do you say to the people afraid that in a world so traumatized as to go back onto a gold standard, the risk of owning any paper asset, including gold stocks, would be too high? No one will trade gold stocks for a can of dog food in a Mad Max world…

Doug: That's a valid concern. You can't eat paper, and even owning shares in a gold mine may not be of much use in a real economic cataclysm – the US government shut down gold mining during WW II as a nonessential industry. It could happen again. But that's why, as you said, we own gold for prudence, and the stocks are strictly speculative vehicles.

But let's have some perspective. The security of your stock portfolio may become the least of your concerns if the US starts a war with Iran that touches off WW III. If that happens, the US government and population will both turn hysterical, and the whole country will be locked down like a prison. What was once America will become even more of a police state than it is now. Who knows where that would end?

So, one of the most intelligent things you can do is as I've been saying for years: diversify your assets and your physical presence internationally. Having some place you like to spend time off the beaten track, where you can ride the storm out, should be top priority for everyone who can afford it. Preparing for the worst at home should be top priority for those who can't.

L: Would you care to put odds on open war between the US and Iran?

Doug: I'd say it's highly probable within the next two to four years – say, between 50% and 75% – that an actual shooting war will break out.

L: Not much time to prepare. I sure hope all our readers are doing what they can.

Doug: Me too.

L: Right then. Thanks for your thoughts and guidance, Doug.

Doug: You're welcome. We'll talk again soon.

[The best speculative leverage for gold and silver comes from the companies that are perfectly poised for big wins. Learn how to identify these companies so that you can be among those who profit.]

What about Silver ?

Posted: 01 Feb 2012 08:55 AM PST

Alf Field


“Very clear that silver will, in the next move reach $158.”

Posted: 01 Feb 2012 08:54 AM PST

Greyerz – Alf Field Calls for $158 Silver & Swiss Look to Gold  


Time-Wasters, Money-Wasters

Posted: 01 Feb 2012 08:37 AM PST

February 1, 2012 [LIST] [*]800 million teeny-boppers wasting time on Facebook: Is each one really worth $125 to an investor? The hottest IPO ever, seen through the prism of The 5... [*]Iran, Venezuela, China... A laundry list of "strategic threats" loading up on gold [*]Trillion-dollar deficits forever... and that's not even the scariest thing to come out of a new congressional report [*]Using your cellphone like a credit card... Ray Blanco on investing in the advent of "mobile payment technology" [*]Russia as more business-friendly than the U.S... an inquiry about gold confiscation and gold stocks... the profitable way to overcome euro-boredom... and more! [/LIST] Stocks are up today. The major indexes have jumped 1%... for no obvious reason. There's talk of a halo effect from the pending IPO of Facebook, which could file the paperwork as early as today. Oy... Talk about "riding on a smile and a shoeshine," to borrow from Death of a Salesman. "You have ...


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