Gold World News Flash |
- Silver Vaults in Chaos
- Iran’s Currency War Heats Up, And The People Rush to Metals
- NFTRH172 Excerpt Gold Stocks
- Global Economic Collapse?
- Louise Yamada - Gold & Silver Closing in on Bullish Breakouts
- Gold Seeker Closing Report: Gold and Silver Gain Roughly 1%
- In a Focus on Gold, History Repeats Itself
- Sinclair interviewed on currency market rigging and gold's monetary role
- Europe's "Great Deleveraging" Has Only Just Begun
- NYTimes patronizes gold, whitewashes fiat, overlooks the big questions
- Gold, U.S. Equities and Earnings, and Economic Insight – Borthwick, Merk, Gartman, Ortel
- The Gold Price Gained $9.70 to Close at $1,756.80
- Nichols: Expect to See $2,750 ? $3,000 Gold By June 2013 ? Here?s Why
- Morgan Stanley Cuts EURUSD Forecast From 1.20 To 1.15 On Upcoming ECB Easing
- Mr. Gold Himself, Jim Sinclair, Presented By Metallwoche.de
- Greece PSI Still Nowhere In Sight / SLV Short 26million Oz / China Heading For Hard Landing / MFglobal On The Missing Funds
- Gold Daily and Silver Weekly Charts – Clawing Up the Wall of Worry One Brick at a Time
- Destroy markets and you destroy economies, Arnott tells King World News
- Bond King Bill Gross Likes Gold
- What Lies In Store For The "Cradle That Rocks The World" - A History Lesson In Crisis
- Taking Back Habeas Corpus
- Pre-QE Trade Remains Only Beacon As Gold, Silver Outperform, Financials At October Highs
- Euro Gold comments
- The Gold Market reaction to Bernanke testimony on Capitol Hill
- Down the Groundhog Hole
- Gold Daily and Silver Weekly Charts - Clawing Up the Wall of Worry One Brick at a Time
- As we predicted would happen… The 1%, after having looted what they could, are leaving America…
- Gold Doesn’t Care!
- The 5 Stages of Collapse: Where Are We Currently?
- TSX Movers and Shakers
| Posted: 02 Feb 2012 06:00 PM PST Been a while since we have seen this, its getting pretty obvious that the COMEX is running like scrammbled eggs...
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| Iran’s Currency War Heats Up, And The People Rush to Metals Posted: 02 Feb 2012 05:41 PM PST The EU and the United States have implemented fresh sanctions against Iran targeting its oil exports. The tough measures are intended to curtail Iran’s nuclear program that Western nations believe is aimed at making nuclear weapons, while Iran claims that their nuclear program is for peaceful energy generation purposes instead. The sanctions were met with an increasingly intense currency war as Iran and Russia plan to replace the U.S. Dollar with their own currencies for bilateral trade. The replacement of the U.S. Dollar for Iran’s trade with Russia was agreed upon after Iran had already replaced the Dollar in its oil transactions with India, China and Japan, according to the Iranian state run Fars news agency. Making yet another case for holding gold and silver is that the European Union nations have been banned from trading in gold, silver, diamonds and petrochemical products with the Iranian central bank and with eight other entities to be named on J...
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| Posted: 02 Feb 2012 05:41 PM PST Biwii
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| Posted: 02 Feb 2012 04:39 PM PST  You cant shield yourself from a whole continents collapse. Europe is too big of a market. US is already in bad enough shape, them crashing is highly likely to crash us. Russia, china, and some other countries have deals and are in good shape, so they would likely survive, but we wont likely fair so well. But we like to always think we are immune from everything. Of course Russia and China have their own problems growing, but its another topic. Read more..... 
This posting includes an audio/video/photo media file: Download Now |
| Louise Yamada - Gold & Silver Closing in on Bullish Breakouts Posted: 02 Feb 2012 04:02 PM PST  With gold breaking above $1,750 level and silver over $34, today King World News is pleased to share with readers a piece of legendary technical analyst Louise Yamada's "Technical Perspectives" report. This information is not available to the public and we are grateful to Louise for sharing her incredible work with KWN readers globally.
This posting includes an audio/video/photo media file: Download Now |
| Gold Seeker Closing Report: Gold and Silver Gain Roughly 1% Posted: 02 Feb 2012 04:00 PM PST Gold rose to $1753.40 in Asia before it fell back to $1741.00 by a little before 8AM EST, but it then climbed to a new session high of $1760.95 in New York and ended with a gain of 0.85%. Silver fell to as low as $33.455 in London, but it then climbed to as high as $34.39 in New York and ended with a gain of 1.75%.
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| In a Focus on Gold, History Repeats Itself Posted: 02 Feb 2012 03:40 PM PST by Michael Cooper, New York Times:
The 1980 presidential election was fought by a Democratic incumbent weakened by a poor economy amid worries that the United States had lost its ability to compete in the world. Gold prices had risen to unprecedented levels as the election approached, and the Republican nominee hinted he might propose a return to a gold standard. That Republican, Ronald Reagan, won the election and soon appointed a commission to study the role of gold in monetary systems. To gold bugs, it appeared to be the best chance in decades to move the country toward gold and away from what they like to call "fiat money," a currency anchored by nothing more than government dictates.
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| Sinclair interviewed on currency market rigging and gold's monetary role Posted: 02 Feb 2012 03:37 PM PST 11:35p ET Thursday, February 2, 2012 Dear Friend of GATA and Gold: Gold mining entrepreneur, trader, and market analyst Jim Sinclair this week gave two interviews to the German Internet site Metallwoche, one with the freelance journalist Lars Schall, in which he concurs with GATA's view of currency market rigging and gold's role as money, and another in which he argues that China and the Federal Reserve are pretty much managing the value of the euro. Audio of the interviews is posted here: http://www.metallwoche.de/mr-gold-himself-jim-sinclair-presented-by-meta... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Join GATA here: California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels. The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year. Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation. For the complete statement from the company, including maps and charts, please visit: http://www.prophecycoal.com/news_2011_jan17_prophecy_receives_power_plan...
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| Europe's "Great Deleveraging" Has Only Just Begun Posted: 02 Feb 2012 02:42 PM PST While Europe's financial services sector equity prices have retraced almost half of their May11 to Oct11 losses as we are told incessantly not to underestimate the impact of the LTRO, Morgan Stanley points out the other side of the balance sheet will continue to sag. While short-term liquidity (at least EUR-based liquidity as USD FX Swap lines are back at record highs this week) may have seen some of its risk culled, the real tail risk of the 'Great Deleveraging' has only just begun. As MS notes, we may have avoided a credit crunch but European banks could delever between EUR1.5 and EUR2 Trillion over the next 18 months as the unwind is far from over. History suggests that over a longer time-frame, around five to six years - the deleveraging could reach EUR4.5 Trillion assuming zero deposit growth and the LTRO will slow but not stop the process. As we discussed last night, this deleveraging will inevitably lead to continued contraction in European lending to the real economy (no matter how much liquidity is force-fed to the banking system) which will most explicitly impact Southern and Peripheral Europe and the Emerging Markets of Central and Eastern Europe.
Deleveraging has indeed a long way to go if history is any guide.Morgan Stanley sees four broad buckets of bank deleveraging likely:
In the meantime, we assume the Central Banks of the world will do the only thing they know, print and funnel liquidity to these increasingly zombified financial institutions; and while Dicky Fisher was calming us all down this evening on our QE3 expectations (given Gold and Silver's recent price action), it seems perhaps even the Fed is getting nervous at just how little surprise factor they have left given such a ravenously hungry deleveraging and insatiable need to maintain the market/economy's nominally positive appearances.
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| NYTimes patronizes gold, whitewashes fiat, overlooks the big questions Posted: 02 Feb 2012 01:29 PM PST In a Focus On Gold, History Repeats Itself By Floyd Norris http://www.nytimes.com/2012/02/03/business/in-rise-of-gold-bugs-history-... As it was in 1980, could it be again in 2012? The 1980 presidential election was fought by a Democratic incumbent weakened by a poor economy amid worries that the United States had lost its ability to compete in the world. Gold prices had risen to unprecedented levels as the election approached, and the Republican nominee hinted he might propose a return to a gold standard. That Republican, Ronald Reagan, won the election and soon appointed a commission to study the role of gold in monetary systems. To gold bugs, it appeared to be the best chance in decades to move the country toward gold and away from what they like to call "fiat money," a currency anchored by nothing more than government dictates. Last month, Newt Gingrich, seeking to widen his support in the days leading up to the South Carolina primary, promised that he would appoint a new gold commission. "Part of our approach ought to be to re-establish something Ronald Reagan did in 1981 and that is to have a commission on gold to look at the whole concept of how do we get back to hard money," he said in a speech. ... Dispatch continues below ... ADVERTISEMENT Be Part of a Chance to Discover Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600. "Hard money is a discipline," he added. "It is very important for us to understand in finance that the entire contraption that has been built up over the last 30 or 40 years has so much paper in it, so much debt, so much leverage, that we probably have a fifteen- or twenty-year period of working our way out of it. And yet, the alternative is to get sicker and sicker and sicker." That call may have helped him in South Carolina, where he scored a victory over Mitt Romney, but it did not do much for him in Florida, where he finished a distant second in this week's primary. His strategy now is to present himself as the only conservative with a chance, and thereby persuade supporters of Rick Santorum and Ron Paul to unite behind him. Support for a gold standard is a major part of Mr. Paul's platform. Mr. Gingrich, it should be noted, did not promise to support a gold standard, only to appoint a commission. If he is serious about following Mr. Reagan's precedent, there may be little chance of a move to gold even if Mr. Gingrich does win the Republican nomination and the November election. In office, Mr. Reagan showed no inclination to buck the collected wisdom of most economists, whether Keynesian or monetarist. The 1980 Republican platform denounced "the severing of the dollar's link with real commodities in the 1960s and 1970s," which it blamed for inflation. "One of the most urgent tasks in the period ahead will be the restoration of a dependable monetary standard," it added. As Anna Schwartz, an economist who served as the gold commission's staff director, later wrote, that section could be seen as a "veiled reference to a prospective return to a gold standard." Under a gold standard, the dollar would be valued at a certain number of grams of gold, and the government would be ready to buy or sell gold to anyone based on that value. The commission's report was delayed and when finally released called for a continuance of the monetary status quo, albeit with the possible issuance of American gold coins to compete with the South African krugerrand. The platform plank turned out to have no real meaning, and gold bugs were outraged. The commission, Murray N. Rothbard, a libertarian economist, later complained, was "overwhelmingly packed with lifelong opponents of gold who buried any call for a hard currency." Ms. Schwartz noted that Treasury Secretary Donald T. Regan, who was the commission's chairman, and Murray Weidenbaum, a member who was Mr. Reagan's top economic adviser, "did not tip their hands until the final two meetings of the commission." Mr. Gingrich did send a signal that his commission would be different. He said the co-chairmen would be Lewis Lehrman, the author of a recent book titled "The True Gold Standard," and James Grant, the editor of Grant's Interest Rate Observer. "The fundamental conclusions of a Lehrman-Grant commission to consider a gold standard may be foregone: We're for it," Mr. Grant wrote in the latest issue of his publication. Mr. Lehrman, in fact, was one of the two dissenters to the Reagan commission report. The other dissenter was a Texas congressman named Ron Paul. More than almost any other dispute in economics, gold often seems to be a matter of theology. To supporters, gold has been money for thousands of years, and a return to it is the only way to keep politicians from debasing currencies. To most current economists, gold is a commodity, subject to the normal fluctuations of supply and demand. To them, the supply of money should be controlled based on economic principles. With a gold standard, the amount of gold available to back money could grow only at the same rate that gold stocks increased, something that depends on mining successes, not on the needs of an economy. The University of Chicago last month asked a panel of 40 economists, including former advisers to both Democratic and Republican presidents, if they agreed that "price-stability and employment outcomes would be better for the average American" if the dollar's value were tied to gold. Every one of them disagreed, some with more than a little incredulity that such a question was worthy of discussion. "Why tie to gold?" asked Richard Thaler, a University of Chicago professor. "Why not 1982 Bordeaux?" "Eesh," responded Austan Goolsbee, a Chicago colleague and former adviser to President Obama. "Has it come to this?" Even economists with some sympathy to gold opposed the idea. "The gold standard adds credibility when a country lacks discipline," said Edward Lazear of Stanford, who served as chairman of the Council of Economic Advisers under President George W. Bush. "The cost is monetary policy flexibility. The trade-off is unclear in the U.S." Nowhere was the chasm in perception about gold clearer than at a congressional hearing in July, when Mr. Paul asked Ben S. Bernanke, the chairman of the Federal Reserve Board, "Do you think gold is money?" The Fed chairman appeared to be surprised by the question and paused for a few seconds before replying, "No." Then why, asked Mr. Paul, did central banks hold gold reserves? Why not diamonds? "Well," Mr. Bernanke replied, "it's tradition." It is no coincidence that gold is back as an issue now, more than 30 years after its last significant appearance in presidential politics. It was the vanquishing of inflation by the Federal Reserve in the early 1980s under Paul A. Volcker that led to a collapse in the price of the precious metal and to the widespread belief in the wisdom of central bankers. That reputation suffered badly in recent years. There is little doubt that the Fed, under Alan Greenspan, helped bring on the housing bubble through a combination of easy money and loose regulation of banks. But to most economists, the fact that central banks can err does not prove they should be replaced by an inflexible gold-based regime, which many think contributed to the Great Depression. "A gold standard would have avoided the policy mistakes of the 2000s," conceded Daron Acemoglu of MIT in his response to the Chicago survey. But, he added, "discretionary policy is useful during recessions." At the congressional hearing in July, Mr. Paul pointed out that the gold price had doubled over the previous three years. "When you wake up in the morning," he asked Mr. Bernanke, "do you care about the price of gold?" "I pay attention to the price of gold," the Fed chairman replied, "but I think it reflects a lot of things. It reflects global uncertainties. I think the reason people hold gold is as a protection against what we call tail risk -- really, really bad outcomes -- and to the extent that the last few years have made people more worried about the potential of a major crisis, then they have gold as a protection." Mr. Bernanke has a point. The price of gold in recent decades has been a reflection of the waxing and waning of fears of "really, really bad outcomes." When the Reagan gold commission issued its report in March 1982, the economy was in a severe recession but gold cost about half what it had gone for when the 1980 Republican platform was being written. The country was regaining its confidence. In the current cycle, gold peaked at $1,900 an ounce last fall amid worries that the American economy was headed for a double-dip recession and that the euro zone would collapse. Those fears have since receded, although gold has climbed back over $1,700 since Mr. Gingrich called for a gold commission. You don't have to be a conventional economist to hope that gold prices are going to decline over the next few years, just as they did after the 1980 peak. Join GATA here: California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing a silver commemorative coin: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Golden Phoenix Receives Inferred Gold Resource Estimate Company Press Release Golden Phoenix Minerals Inc. (OTC: GPXM) reports that on behalf of Golden Phoenix Panama S.A., the joint venture entity that owns and operates the Santa Rosa gold mine in Panama, it has received from SRK Consulting (U.S.) an initial resource estimate for Mina Santa Rosa. The Santa Rosa project is a volcanic-hosted epithermal gold-silver deposit previously operated as an open pit-heap leach operation. Production ceased in 1999 in part because of low gold prices. SRK Consulting reports an in-situ inferred resource at the former Santa Rosa and ADLM pits totaling 23.1 million metric tonnes at 0.90 grams/tonne gold, for a contained 669,000 ounces of gold at a 0.30 g/t gold cutoff. The resource also contains an average grade of 2.87 g/t silver for a contained 2.1 million ounces of silver. John Bolanos, Golden Phoenix's vice president of exploration, remarks: "In addition to SRK's inferred resource estimate of 669,000 contained ounces of For the company's full statement, including a table detailing the resources at Santa Rose, please visit: http://goldenphoenix.us/press-release/golden-phoenix-receives-initial-ni...
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| Gold, U.S. Equities and Earnings, and Economic Insight – Borthwick, Merk, Gartman, Ortel Posted: 02 Feb 2012 01:27 PM PST from pdaillie: A compilation of the week 4/5, 2012 leading [unconventional] commentary – Week 4, January 2012 – Thought leaders Faros Trading's Douglas Borthwick, Axel Merk, Dennis Gartman, and Newport Partners Charles Ortel, share their interesting and well informed insights on Gold, US Earnings, and the U.S. Dollar.
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| The Gold Price Gained $9.70 to Close at $1,756.80 Posted: 02 Feb 2012 01:05 PM PST Gold Price Close Today : 1,756.80 Change : 9.70 or 0.6% Silver Price Close Today : 3415.00 Change : 37.00 cents or 1.1% Platinum Price Close Today : 1,627.30 Change : 6.70 or 0.4% Palladium Price Close Today : 707.25 Change : 10.95 or 1.5% Gold Silver Ratio Today : 51.44 Change : -0.29 or 0.99% Dow Industrial : 12,716.46 Change : 83.55 or 0.7% US Dollar Index : 78.92 Change : -0.39 or -0.5% Franklin Sanders has not published any commentary today, if he posts commentary later in the day it will be posted here. 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. 
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| Nichols: Expect to See $2,750 ? $3,000 Gold By June 2013 ? Here?s Why Posted: 02 Feb 2012 12:53 PM PST The interim peaks in gold*have been*spaced 21 months apart over the past 6 years and have*seen gains*from 80.2% to 97.3%. As such, given the fact that the low of this last correction came in at $1,524 four months ago, we can expect gold to reach a new peak price of $2,750 to $3,000 in*17 months*time (i.e. June/July 2013). [Let me explain in more detail.] Words:*976 So says David Nichols ([url]www.fractalgoldreport.com/[/url]) in*paraphrased remarks*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 ...
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| Morgan Stanley Cuts EURUSD Forecast From 1.20 To 1.15 On Upcoming ECB Easing Posted: 02 Feb 2012 12:14 PM PST Stop us when this sounds familiar: 'While we expect central banks globally to continue to provide liquidity, it is the ECB's position that has changed the most dramatically. The relative expansion of the ECB's balance sheet is EUR bearish in our view....the liquidity being generated by the ECB is to a large extent absorbed by the bank refinancing process, hence the large deposits at the ECB. Although there is clear evidence that some of the funds have been used in the peripheral bonds markets, helping to stabilise sovereign yield spreads, lending into the real economy remains constrained. We believe that the relative performance of money multipliers will be a significant driving force for currency markets in the coming year. We see the ECB liquidity as a negative for the EUR" At this point the preceding should remind our readers, almost verbatim, of this Zero Hedge post from January 31, "Reverting back to our trusty key correlation of 2012, namely the comparison of the Fed and ECB balance sheet, it would mean that absent a proportional Fed response, the fair value of the EURUSD would collapse to a shocking 1.12 as the ECB's balance sheet following this LTRO would grow from €2.7 trillion to €3.7 trillion." And the reason why the latter extract should remind readers of the former is because it is the basis for the just released conclusion by Morgan Stanley cutting its EURUSD price target from 1.20 to 1.15. MS' forecast chart on the pair:
As for the basis of our assessment, we used the following chart showing the relative and projected sizes of the ECB and Fed balance sheets as the basis of EURUSD correlations:
And here is the Morgan Stanley comp:
Some more on the MS thesis:
Needless to say, a collapse in the EURUSD will evoke an inevitable and violent response by the Fed, something we noted before, and something which MS also, wink wink, has realized:
It is our view, that once the EUR implodes, the Fed will have no choice but to intervene yet again, thereby sending the USD plunging and the EURUSD back to 1.50 or so, but everything in its course. Markets which have a tendency to frontrun everything, and which have now priced in the global central bank put in perpetuity may want to remember tha absent a 20% correction in either stock market monetization just ain't going to happen. Or rather, it will one way or another, only it will be far more violent. Finally, now that MS openly disagrees with Goldman once again, it bears reminding that the last time Morgan Stanley was on the other side of the trade from Tom Stolper, MS was proven right in about 48 hours. It will be proven right one more time.
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| Mr. Gold Himself, Jim Sinclair, Presented By Metallwoche.de Posted: 02 Feb 2012 12:04 PM PST Courtesy of http://www.metallwoche.de Dear CIGAs, Today on Metallwoche.de we present to you an interview with Jim Sinclair in two parts. In the first part Lars Schall spoke to Jim about some interesting remarks Chris Powell from GATA had to say about gold in front of the Fed building in Washington D.C. Furthermore Lars asked Continue reading Mr. Gold Himself, Jim Sinclair, Presented By Metallwoche.de
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| Posted: 02 Feb 2012 11:24 AM PST by Harvey Organ: Good evening Ladies and Gentlemen: Gold finished higher by $11.40 to $1758.50. At first, gold had been repelled from the banker's strong resistance $1750 line in the sand early in the European session. However it then recovered to pierce this resistance and finish well above the resistance to close at its high. The fact that gold did this prior to the jobs report is definitely an extremely bullish sign. Silver finished higher by 43 cents to $34.15. Tomorrow is the jobs report and as always the bankers monkey around with the gold and silver metal prior to its release. Expect a big revision from the adjustments to the B/D model which occur in the January month and announced always on the first Friday of February. Let us head over to the comex and assess trading, inventory movements and amounts of metal standing. Read More @ HarveyOrgan.Blogspot.com
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| Gold Daily and Silver Weekly Charts – Clawing Up the Wall of Worry One Brick at a Time Posted: 02 Feb 2012 11:17 AM PST from Jesse's Café Américain:
When I hear the spokesmodels on financial television talking about the need for austerity and 'tough love' for the rest, I always listen carefully to see if I can hear one word about reform, and the curtailing of the financial sector imbalances and excesses that brought the world economy to where it is today. And if I do not hear it, then I know they are just spinning out more propaganda for the monied interests, who have taken their loot, privatized the gains, and now wish to continue to socialize the losses, the public and the country be damned. One way to protect your wealth from this ongoing plunder and confiscation is to stay as far away as is possible from the Wall Street and London money centers, the heart of the Anglo-American banking cartel, and to keep some portion of it safely in hard assets with high liquidity. Read More @ JessesCrossRoadsCafe.Blogspot.com
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| Destroy markets and you destroy economies, Arnott tells King World News Posted: 02 Feb 2012 10:09 AM PST 6p ET Thursday, February 2, 2012 Dear Friend of GATA and Gold: Fund manager Rob Arnott tells King World News today that central bank intervention is destroying markets and thus national economies as well. Arnott says: "The three major developed economy centers are all pursuing a process of cranking the printing press to suppress natural market response and natural market interest rates. It represents a powerful distortion for the capital markets. It represents a powerful impetus for people to do one of two things: take risks they might not otherwise have been willing to take, creating the risk-on trade, or take their money off the table altogether. Think of gold as an example -- it's a way of taking money out of circulation." An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/2/2_Rob... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels. The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year. Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation. For the complete statement from the company, including maps and charts, please visit: http://www.prophecycoal.com/news_2011_jan17_prophecy_receives_power_plan... Join GATA here: California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| Bond King Bill Gross Likes Gold Posted: 02 Feb 2012 09:16 AM PST In his February newsletter, Bill Gross of PIMCO surmises that from now on central bankers will target nominal GDP growth in their fight to prevent a systemic financial collapse. Nothing new there, but Gross believes the threat of stagflation could be with us for a lot longer than investors expect. The Bond King stated he believes that the "Fed provides assurances that short and intermediate yields will not change," which therefore invites investors fearful of a total loss into an arrangement with the U.S. Treasury whereby the return of investors' capital is "assured" but at the cost of declining purchasing power of their capital. And for how long will this arrangement between investor and the Fed be extended? "We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time," Gross wrote, as he expects 30-50 years of leveraged capital to continue to unwind for many years to come. So the Fed's plan is to trap fearful investors into a real loss for as long as they can tolerate it. Then, at some point, the pain of rising living expenses and no end to sluggishness economic conditions reaches a point of investors taking action. Austrian economist Ludwig von Mises (1881 – 1973) explains the reaction of investors to the "liquidity trap" the Fed has faced since Lehman and for an additional "long, long time." "Inflation can be pursued only so long as the public still does not believe it will continue," wrote von Mises. "Once the people generally realize that the inflation will be continued on and on and that the value of the monetary unit will decline more and more, then the fate of the money is sealed. Only the belief, that the inflation will come to a stop, maintains the value of the notes."
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| What Lies In Store For The "Cradle That Rocks The World" - A History Lesson In Crisis Posted: 02 Feb 2012 09:12 AM PST With the world ever more lethargic daily, as if in silent expectation of something big about to happen (quite visible in daily trading volumes), it is easy to forget that just about a year ago the Mediterranean region was rife with violent revolutions in virtually every country along the North African coast. That these have passed their acute phase does not mean that anything has been resolved. And unfortunately, as BMO's Don Coxe reminds us, it is very likely that the Mediterranean region, flanked on one side by the broke European countries of Greece, Italy, Spain (and implicitly Portugal), and on the other by the unstable powder keg of post-revolutionary Libya and Egypt, will likely become quite active yet again. Only this time, in addition to social and economic upheavals, a religious flavor may also be added to the mix. As Coxe says: "Today, the Mediterranean is two civilizations in simultaneous, rapidly unfolding crises. To date, those crises have been largely unrelated. That may well be about to change." Coxe bases part of his argument on the same Thermidorian reaction which we have warned about since early 2011, namely the power, social and economic vacuum that is unleashed in the aftermath of great social change. But there is much more to his argument, which looks much more intently at the feedback loops formed by the divergent collapsing economies that once were the cradle of civilization, and this time could eventually serve as the opposite. To wit: "The eurocrisis has been front and center for nearly two years, during which time the economic and financial fundamentals have continued to deteriorate. "The Arab Spring" came suddenly, in a series of outbursts of optimism. It may have come at the worst possible time for the beleaguered nations of the North Shore. The Mediterranean has entered one of the stormiest periods in recorded history. It is the major contributor to risk in global equity markets. It is too soon to predict how these crises will end. The Cradle of Civilization is rocking amid an array of winds and storms. "The Arab Spring" ...may have come at the worst possible time for the beleaguered nations of the North Shore." From Don Coxe The Mediterranean in History History buffs would argue that it is impossible to understand the effects on the world from a Mediterranean roiled by crises occurring simultaneously within both the eurozone and the Arab nations today without looking back to the Mediterranean in history. The "Arab Spring" has focused the world's attention on the South Shore of the Mediterranean. However, most commentators on the successive revolutions supply maps of each of the states, but almost never a map of Mediterranean civilization. This is both non-historical and misleading.
Because none of the city states or countries bordering on the Mediterranean was self-sufficient in everything necessary for a secure and civilized existence—food, wine, weaponry, tools, clothing, papyruses with texts of literature, poetry, military strategy, and agriculture, and the best artefacts for praising the gods—trade was a necessity. Since ancient times, the states and empires of the Mediterranean region have not just fought and conquered each other—but have traded with, and influenced each other. The Cradle of Western Civilization—Then and Now For nearly two millennia, such significance as Greece enjoyed internationally was mostly for its beautiful isles and ruins, and the Romantic dream that the gods, heroes and geniuses embodied in "The Glory That Was Greece" somehow lingered in Olympus, Delphi, and Athens. Recently, it became the source of the Olympic Flame. Even more recently, it became the first of the overindebted underachievers to go broke because of its own profligacy. In the six centuries before the Christian era, Greece was the leading intellectual and cultural force of the Northern Mediterranean. Alexander the Great spread that influence as far East as the borders of India. His legacy also proved decisive for Egypt. The Ptolemy dynasty which continued to Egypt after his death until the suicide of Cleopatra, staked its claim to divinity through descent from his mother. In the three centuries of Ptolemaic rule, Alexandria became the intellectual and artistic capital of the Mediterranean and, in its library, the pre-eminent storehouse of Greek culture. When Julius Caesar's nephew Octavian was given the title of Emperor Augustus, there were three major culture centers—Athens, Alexandria and Rome—of which Rome was the least distinguished. His rule ended the Hellenistic era which had begun with Alexander—the golden age of Grecian cultural dominance of the Mediterranean. The Romans called the Mediterranean "Mare Nostrum" (Our Sea)—both as an assertion of Rome's ability to project military power across it, and their hope that Poseidon would treat Roman shipping favorably—the Mediterranean being notably storm-tossed, particularly during the winds of winter. Julius Caesar conquered Britain and Gaul, but could hardly wait to come to Egypt, staying in Alexandria for nearly two years. It was not only the near-divine cultural center of the Mediterranean—but was Rome's biggest grain supplier. Rome hadn't been able to feed its citizens and legions for centuries. It relied on conquests and trade—and trade was usually more reliable. Rome annexed Egypt when Octavian won the sea battle over Antony and Cleopatra's fleet at Actium in 31 BC. Until then, Rome had to form shifting alliances with the powers in Egypt and the Near East. Prior to the rise of Islam, the Mediterranean was the center of the known world, and could be described as one huge—albeit diverse—community, which included citizens resident across the region. That was how Saint Paul saw it: when captured, he announced, "Civis Romanus Sum"—gaining the right to trial in Rome. The Catholic Church became the great unifying force across the region when Rome entered decline. Then Islam swept through the South shore, and West and East shores, being thrown back only after centuries of struggle. Today, the Mediterranean is two civilizations in simultaneous, rapidly unfolding crises. To date, those crises have been largely unrelated. That may well be about to change. On the North and West shores, it is a nominally Christian community in which the church is a declining force. On the South and East shores, apart from Israel, it is an Islamic community in which religion is a stronger political and social force than at any time since the Ottoman Empire entered decline. An equally important divide is demography. Europe is in the middle stages of demographic collapse on the Japanese model, with a fertility rate of approximately 1.3 babies per female—far below the replacement rate of 2.1—each new generation is roughly 60% of its predecessor, making the third generation roughly 40% the size of the first. That loss of the basic dynamism of human progress is an insuperable force for declining economic activity: GDP is output per worker multiplied by the number of workers. During and after the Baby Boom years, this meant annual growth in the number of potential workers and first-time home buyers. Today, that shrinking and aging population is a downward drag on real estate prices and employment opportunities, since home building and servicing are such huge job contributors. For many years, tourism was the most reliable source of income of Mediterranean PIIGS as their economies became less competitive, but the demographic decline among the Northern European nations and the strong euro have proved painful for hotels, tour operators, sailboat charterers and restaurants. La dolce vita rests on reliable cash flows. The third major divide within the Mediterranean region is education. On the North shore, literacy is near-universal and higher education trains millions of young people for the jobs global economic growth offers. That so many millions of them are unemployed is due to slow economic growth, guild and union laws, and other over-regulation that stultifies competition and progress. In the South, education is a double-edged scimitar. Illiteracy is widespread, which means a huge percentage of the population is destitute or on the edge of economic disaster—like the poor Tunisian street vendor whose self immolation launched the most dramatic geopolitical developments in the Mediterranean since a Serbian anarchist killed Austria's Grand-Duke. However, most of the Arab revolutions were launched by educated young people who could not find worthwhile employment in their largely dysfunctional economies. Cell phones and computers are ubiquitous, but there are few new manufacturing and service industries emerging. Young people envy the fast-developing prosperity of their generation across so many emerging economies, and blame their sclerotic regimes for their lack of opportunities. Paradoxically, the biggest political winners from the sacrifices of the local youthful educated elites are the parties with no coherent economic growth agenda, just the mantra that "Islam is the answer." These parties were minor contributors to the miracles of Tahrir Square and its neighboring countries. But the dedication and organization of the Islamist parties, including the 8th Century purist version called Salafists, has meant that the divisions among the varying liberal or moderate factions have given power to them in Egypt. In the Egyptian elections, the Islamists won 72% of the votes, with the Muslim Brotherhood receiving 47% and the Salafists 25%. Although the Brotherhood insists it is pluralist and tolerant, its highest-profile liberals who were so visible in its rise to power are now, according to numerous press reports, losing ground to hard-liners. As we wrote in Basic Points while enthusiasm for the Arab Spring was running high across the world, the record for autocratic regimes toppled by idealistic liberals includes all too many tragedies. Examples: the Girondistes and their liberal allies in France lost power—and, in many cases, their heads, to the Jacobins, who were succeeded by Napoleon, who became Emperor; the Mensheviks and other liberals in Russia who seized power from the tsars in February 1917 were deposed in October by Lenin and his Bolsheviks, and were systematically annihilated thereafter. Among the most conspicuous Egyptian victims of the Fall of Mubarak are the Coptic Christians (nearly 10% of the population), who were well-established in Egypt centuries before Islam was born, and who form a disproportionately large percentage of the educated and business-oriented citizenry. Their churches have been burnt—sometimes with worshippers inside. They have been brutalized by mobs while soldiers watched placidly. The brazen attack on the Israeli embassy in Cairo also appeared to have been organized with support from elements in the army: soldiers stood by until the mob had broken through all the external barriers. Predictable effect: tourism, Egypt's biggest foreign-currency earner, is collapsing. Foreign direct investment—heavily tourist-oriented—is on hold. Despite its massive problems, Egypt had been making modest economic progress until the army arrested Mubarak and embarked on an erratic program of crisis management, which has triggered double-digit inflation and a sharp fall in the nation's modest forex reserves. Its decision to reject an IMF loan in June, because the terms were "insulting" has forced the interim government to borrow locally, thereby draining liquidity from the economy. The new Muslim Brotherhood government talks of modernizing the economy, but long-range planning and investment cannot be implemented in a crisis. The Salafists were elected by the poorest of the poor, and they are adamant that the food and energy subsidies that are draining the treasury must continue. Remarkably, the other big divide between North and South is faith in democracy. The unifying cry across the South Shore has been the demand for democracy, for which thousands of mostly young and mostly liberal people suffered imprisonment, torture or death. Such idealism is at bay on the North Shore: the two cradle nations of Mediterranean democracy—Greece and Italy—which were democratic while Spain and Portugal were still dictatorships, have been forced by the eurocrisis to forsake rule by elections. They have fired their top political leaders in favor of elite Eurocrat replacements acceptable to the European Central Bank and Brussels. Even when Alexander the Great was conquering the eastern Mediterranean and Southern Asia, the lives and fortunes of most people on earth were unaffected. Not today. The so-called "Cradle of Western Civilization" is rocking amid strong winds from both sides of the sea; if it falls, the economic and geopolitical effects will be enormous. Conclusion The eurozone's problems and the Arab Spring have, to date, been discussed in the media as discrete occurrences. However, for the first time since the Second World War, most of the nations in the region face crises simultaneously, which suggests huge potential instability. The key reason Italy broke its long, lucrative Libyan relationship, and enthusiastically supported the NATO attacks was the flood of Libyan refugees pouring into Italy. Libya's cash flow problems could be temporary, because its substantial production of light crude oil should shortly resume, but in its attempts at nation-building it faces the same internal conflicts between liberals and Islamists as Egypt. Already, pro-Gadhafi supporters have taken over one town and proclaimed a rebellion. Sadly, it is almost inevitable that the North Shore will soon face serious refugee problems as the non-oil South Shore nations are torn with internal divisions the dictators had suppressed, and their fragile, uncompetitive economies implode. Iran managed to survive as a brutal Shia theocracy because it inherited a society of well-educated men and women—with a strong agricultural and trading base in which entrepreneurialism flourished—and because of its immense reserves of oil and gas. (Fortunately, Iran is unlikely to be a major meddler in the Mediterranean crises, because the populations are largely Sunni.) Beleaguered governments frequently resort to distracting their citizenry by blaming foreign enemies. Israel has been blamed for nearly all Mideast problems for decades—by Arab propagandists and by the global Left. It has peace treaties with two neighbors—Jordan and Egypt. The Egyptian Army rulers were careful not to suggest that the Israel treaty should be torn up, as some of the candidates for office were demanding, partly because of American aid. However, it was to be "reviewed". We saw Jordan's King Abdullah being interviewed on US TV and he expressed concern about demands from radicals to revoke the Israel treaty, but said that it was crucial that Israel re-start its negotiations with the Palestinians, because the one issue uniting "all Arabs" was insistence on settling that question for once and for all. Good luck with that. The eurocrisis has been front and center for nearly two years, during which time the economic and financial fundamentals have continued to deteriorate. "The Arab Spring" came suddenly, in a series of outbursts of optimism. It may have come at the worst possible time for the beleaguered nations of the North Shore. The Mediterranean has entered one of the stormiest periods in recorded history. It is the major contributor to risk in global equity markets. It is too soon to predict how these crises will end. The Cradle of Civilization is rocking amid an array of winds and storms.
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| Posted: 02 Feb 2012 09:08 AM PST "I'm a little Ron Paulish," declared bond king Bill Gross to CNBC. Recall from yesterday's 5 that in his monthly letter, Gross groused that near-zero interest rates would hamstring developed economies and even "give a rise to commodities and gold as store of value alternatives when there is little value left in paper." In a follow-up interview, Gross was asked to pick between Obama and Romney in a hypothetical general election matchup. He begged off the question, and then proceeded to turn the name of the good doctor into an adjective. His attempt to elaborate was thin on specifics, but interesting: "I think both parties have basically done the same thing… Both parties have followed a policy that hasn't promoted long-term investment in the United States. And I think, ultimately, we need to produce things, as opposed to paper." Say it ain't so… From Washington state, we see the emergence of a group of rogue legislators whose activities might be worth watching. Reps. Matt Shea and Jason Overstreet are sponsoring a bill affirming the legal tender status of gold in the Evergreen State. That alone isn't remarkable. Similar moves are afoot in other states, and it's now the law in Utah… although as we noted at the time the practical effect is limited. What really got our attention is that Messrs. Shea and Overstreet are among five sponsors of a bill standing up to the National Defense Authorization Act — or as it's come to be known around our office, the Repeal of Habeas Corpus Act. The Washington State Preservation of Liberty Act condemns the law's provision for detention of terrorism suspects indefinitely and without charge. And it goes a step further, prohibiting state and local employees — including Washington National Guardsmen — from cooperating with federal officials enforcing the law. We have no idea whether the bill will pass or, if it did, what the practical impact would be. But in another strange item getting our attention this morning, we have a good idea what the worst-case scenario would look like. "In the next couple of years," writes our friend John Robb at Global Guerrillas, "the number of advances in technology, deployments, use cases and awareness of drones will be intense. "In five years, they will be part of everyday life. You will see them everywhere. Not just one or two drones. SWARMS of drones. Tens. Hundreds. Thousands. Millions (potentially if the cost per unit is small enough)." Mr. Robb then points us to this video of "experiments performed with a team of nano quadrotors at the GRASP Lab, University of Pennsylvania." Imagine a swarm of these descending on the Washington state Capitol building… Using drones, "A small number of people in Washington, D.C.," writes Mr. Robb, "can control/operate a vast 24/7 killing field for very few $$. "Even a mildly radical post to a blog, Facebook or Twitter (particularly if it could lead to a flash mob or an Occupy-style protest) would invite inclusion on the drone assassination list (in that case, the occasional flash of a car being blown up by a drone patrolling a highway and IDing a listed driver will become common)." Bill Gross and the rogue legislators in Washington are on notice. Addison Wiggin Taking Back Habeas Corpus originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.
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| Pre-QE Trade Remains Only Beacon As Gold, Silver Outperform, Financials At October Highs Posted: 02 Feb 2012 09:04 AM PST Equity and credit markets eked out small gains on the day as Treasuries limped a few bps lower in yield (with 30Y the notable underperformer) and the EUR lost some ground to the USD. ES (the e-mini S&P futures contract) saw its lowest volume of the year today at 1.35mm contracts (30% below its 50DMA) as NYSE volumes -10% from yesterday but average for the month. Another small range day in almost every market aside from commodities which saw significant divergence with Silver (best today) and Gold surging (up around 1.15% on the week) while Oil and Copper dived (down 2.6-3% or so on the week) with the former managing to scramble back above $96 into the close. ES and the broad risk proxy CONTEXT maintained their very high correlation as Oil and 2s10s30s compression dragged on ES but AUDJPY and TSYs post-Europe inching higher in yields helped ES. HYG underperformed all day (often a canary but we have killed so many canaries recently). Energy names outperformed on the day (as Brent and WTI diverged notably) but financials did well with the majors now back up to the late October (Greek PSI deal) highs. All-in-all, eerily quiet ahead of NFP but it feels like something is stirring under the covers as European exuberance didn't carry through over here (except in ZNGA and FFN!). ES volumes were the lowest ex-holiday in two months and 30% below the 50 day average volume.
Investment Grade credit just outperformed (on a beta basis) its high yield and equity peers today as HYG leaked lower in the face of the slow push higher in stocks (back up to their VWAP once again).
The commodity complex split into economically-sensitive and fiat-fiasco flows today as Gold and Silver just kept pushing to new recent highs (coordinated monetary policy and realization that LTRO doesn't solve insolvency - as Greece becomes farce) and Copper and Oil fell (global growth concerns?). With the USD up modestly on the week the outperformance is even more impressive and the fact that stocks are still nominally tracking gold and silver suggests the reality of their USD-numeraire is perhaps dawning on many.
Financials have had an incredible year-to-date with BofA up 34% for instance and Morgan Stanley a stomach-churning +29%. What is interesting though is that we have now stabilized at the late October highs which is when the European leaders decided on the Greek PSI deal (striking a deal that banks and insurers would accept a 50% haircut on GGBs). Citigroup remains the underperformer from these highs while more domestically focused WFC is outperforming. 30Y yields rose just over 1bp while 10Y was unch and 5s to 7s compressed 1-2bps in a lackluster day for Treasuries. This leaves 10Y as the week's outperformer (-7bps on the week) with 2Y actually +1bps on the week and the 30Y -5bps. The USD rallied in early going after a miss in the Spanish auction (yes it was a miss no matter what certain TV chaps want to tell you) and a meet in the French auction. After US opened, the USD reversed and sold off and then as Europe closed the USD bottomed and leaked higher for the rest of the day. Once again FX markets reversed on market opens and closes. The EUR is down around 0.6% on the week (and the worst performer of the majors) though well off its worst levels from Tuesday. JPY is the best performer against the USD today and on the week as it has gained 0.6% (hence EURJPY has not been a big carry driver this week - though AUDJPY has seen renewed interest). The USD (proxy DXY) is up a modest 0.17% on the week.
Correlation between ES and broad risk assets continues to be high here (even as realized correlation within the equity indices actually drops to multi-month lows). Risk is indeed on or off only and today's lack of volume push to new highs combined with financials back at what appears critical event highs and HYG's underperformance are a little more worrisome than normal but with NFP tomorrow, perhaps it is merely an example of fewer and fewer traders willing to participate. Charts: Bloomberg and Capital Context
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| Posted: 02 Feb 2012 08:51 AM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Once again, as has been the recent pattern in the gold market, gold priced in terms of the Euro, or "EuroGold", is putting in a very strong showing in today's trading session. If you note on the weekly chart, it has moved to within about 32 euros of its former all time high in price. Many traders/investors may be dismissing European Sovereign debt issues, but the gold market certainly has one eye on it. I want to see how this market acts now that we are moving into these regions as this will be a decent barometer of sentiment towards the woes surrounding Europe. Any further escalation of issues associated with those problems will carry this market to the all time high. The flip side becomes if traders feel that the worst is over and is behind them. I should point out that as gold nears this all time high in euro terms, it is also moving into a region where I expect it to encounter signif...
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| The Gold Market reaction to Bernanke testimony on Capitol Hill Posted: 02 Feb 2012 08:38 AM PST The Fed chairman's testimony on Capitol Hill... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
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| Posted: 02 Feb 2012 08:34 AM PST Addison Wiggin – February 2, 2012
"It was built to accomplish a social mission — to make the world more open and connected… We don't wake up in the morning with the primary goal of making money, but we understand that the best way to achieve our mission is to build a strong and valuable company." Hmmm… This sounds awfully familiar. It's as if we've lived through this before. As if it were… well, Groundhog Day.
We noted this remark in Financial Reckoning Day, explaining he meant the company focused on the customer, instead of on making a profit or even a product. At the time Bezos said this, the market valued his firm at over $80 a share.
The share price had collapsed to less than $12.50. Amazon turned out to be a pretty good buy at that price. A dollar invested in AMZN then would be more than $14 today. Facebook might turn out to be a pretty good buy as well. But not right now.
 Some things are so bizarre, they're best left alone. But others cry out for additional comment. And on this Groundhog Day, one bizarre item after another is coming to our attention. Is something in the water? Are the sunspots acting up? Is there a collective realization that the "epic rematch" of the Super Bowl four years ago might not live up to expectations? Whatever the case, let's dive in…
Recall from yesterday's 5 that in his monthly letter, Gross groused that near-zero interest rates would hamstring developed economies and even "give a rise to commodities and gold as store of value alternatives when there is little value left in paper." In a follow-up interview, Gross was asked to pick between Obama and Romney in a hypothetical general election matchup. He begged off the question, and then proceeded to turn the name of the good doctor into an adjective. His attempt to elaborate was thin on specifics, but interesting: "I think both parties have basically done the same thing… Both parties have followed a policy that hasn't promoted long-term investment in the United States. And I think, ultimately, we need to produce things, as opposed to paper." Say it ain't so…
Reps. Matt Shea and Jason Overstreet are sponsoring a bill affirming the legal tender status of gold in the Evergreen State. That alone isn't remarkable. Similar moves are afoot in other states, and it's now the law in Utah… although as we noted at the time the practical effect is limited. What really got our attention is that Messrs. Shea and Overstreet are among five sponsors of a bill standing up to the National Defense Authorization Act — or as it's come to be known around our office, the Repeal of Habeas Corpus Act. The Washington State Preservation of Liberty Act condemns the law's provision for detention of terrorism suspects indefinitely and without charge. And it goes a step further, prohibiting state and local employees — including Washington National Guardsmen — from cooperating with federal officials enforcing the law. We have no idea whether the bill will pass or, if it did, what the practical impact would be. But in another strange item getting our attention this morning, we have a good idea what the worst-case scenario would look like.
"In five years, they will be part of everyday life. You will see them everywhere. Not just one or two drones. SWARMS of drones. Tens. Hundreds. Thousands. Millions (potentially if the cost per unit is small enough)." Mr. Robb then points us to this video of "experiments performed with a team of nano quadrotors at the GRASP Lab, University of Pennsylvania." Imagine a swarm of these descending on the Washington state Capitol building…  Using drones, "A small number of people in Washington, D.C.," writes Mr. Robb, "can control/operate a vast 24/7 killing field for very few $$. "Even a mildly radical post to a blog, Facebook or Twitter (particularly if it could lead to a flash mob or an Occupy-style protest) would invite inclusion on the drone assassination list (in that case, the occasional flash of a car being blown up by a drone patrolling a highway and IDing a listed driver will become common)." Bill Gross and the rogue legislators in Washington are on notice. And maybe Steve Cooksey, too.
Mr. Cooksey is a type 2 diabetic who got his blood sugar under control, getting off insulin and medication entirely, through a low-carbohydrate diet. He in the vanguard of the "primal" or "paleo" or "ancestral" diet movement that emphasizes meats and vegetables, and excludes grain. His website, Diabetes Warrior, includes suggested meal plans and recipes. Thus, he has been advised by the North Carolina Board of Dietetics/Nutrition that he is providing dietary and nutritional advice without a license. If he does not remove the offending posts, he's been warned he will be taken to court. The disturbing thing is that the call from the Board of Dietitians came two weeks after Cooksey attended a nutritional seminar and spoke his heresy. Someone looked him up, found his site and snitched on him. He was informed by the director of the board that "even IF convicted, it would only be a misdemeanor but typically these cases end without litigation, if the person agrees to change their behaviors or websites." On second thought, liberty might not need swarms of drones to kill it. Just an army of bureaucrats already mobilized and awaiting orders.
The four-week moving average continues to edge down… and it's still nowhere near levels consistent with a "normal recovery." Stand by for The 5's usual deconstruction of the Labor Department's monthly jobs report tomorrow.
"Data provided by the Association of American Railroads (AAR) points to generally sluggish demand growth across most commodity groups through Jan. 21," according to a new report from Fitch. The year-over-year growth comes out to only 1.1%. Volumes have been growing since they bottomed out three years ago, but that growth slowed appreciably during the second half of last year. Shipments of autos and petroleum products are up — some of that aided by the energy revival Byron King's been writing about — but shipments of coal, chemicals and grain are down.
Silver continues to knock on the door of $34, but still isn't being let in.
A federal appeals court in Atlanta has ruled against Odyssey's claim to $500 million in gold and silver coins from a Spanish vessel sunk in the Atlantic in 1804. Shortly after Odyssey announced the discovery in 2007, the government of Spain filed suit in the United States, claiming the treasure for itself. Thus began five years of intrigue and backroom dealing between the U.S. and Spanish governments, revealed in part by WikiLeaks and chronicled in our documentary-in-progress, Risk! "With the ruling by the appeals court," declared Spain's Culture Ministry, "the process begins to recover all of the coins taken illegally." Odyssey's only recourse now is the U.S. Supreme Court. "Currently," says a statement from the company, "no final order has been issued in the case and it would be premature to comment at this time."
The firm has signed an agreement with Great Britain giving Odyssey the rights to recover and document artifacts from the HMS Victory, a warship sunk in the English Channel during a storm in 1744. Said artifacts include gold coins worth up to $1 billion.  Odyssey discovered the wreck in 2008. Under the deal signed with two British government agencies, Odyssey will keep 80% of the proceeds for "items used primarily in commerce" — e.g., the coins — and 50% of other objects, like the weapons on board. "We've come up with the model that everybody's been looking for," our friend and Odyssey CEO Greg Stemm announced. Good on them.
The 5: It is interesting. Long term, it's probably also irrelevant.
"I say the reason was mania euphoria, which the Fed has been working very hard for the last couple of years to build back up again. The Fed has no choice — an economy can't be kept going forever, contrary to the Fed's assumption, so the only way it can keep things going is to build up enthusiasm to a higher and higher level in order to prevent it from going down. The problem with this is that the higher enthusiasm goes before things can't be held up anymore, the worse the consequences will be." "First they did it with the stock market in the 1990s in support of the law against recessions. That caused the stock market to go exponential by the end of the 1990s. An exponential is as high as something can go in the big picture for a long time, so they could not do it with the stock market again." "So they did it with real estate — but then that went bust too. So now they are trying to do it with the stock market again — but under the following actual circumstances, probably unbeknownst to them. During the first big bounce of a bear market, enthusiasm tends to go nearly as high as during the bull market itself, and sometimes even higher." "I think that is what is being pushed to an extreme this time by the central bank, in part because the central bank does not believe in such a dynamic to begin with. The result is that the harder the central bank pushes, the larger the increase in enthusiasm along the way, and the worse the consequences will be." "We'll have to see how far they can push it before things fall apart." Regards, Addison Wiggin P.S. Spaces are filling up quickly for The Rancho Santana Sessions — our exclusive, first-of-its-kind briefing for readers interested in parking their assets offshore. The inspiration came to us during our Chill Weekend at the ranch back in December… as more than one Reserve member in attendance asked about investing IRA holdings overseas. With that in mind, we've gathered a panel of experts to answer a wide range of questions about the legal and logistical hurdles — everything from retirement accounts to estate planning. For the dates, a list of expert speakers and the chance to receive an invitation, please give this a look… and know that we have room for only 30 people.
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| Gold Daily and Silver Weekly Charts - Clawing Up the Wall of Worry One Brick at a Time Posted: 02 Feb 2012 08:29 AM PST |
| As we predicted would happen… The 1%, after having looted what they could, are leaving America… Posted: 02 Feb 2012 08:28 AM PST Cameron Fleeing America To Escape Collapse?
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| Posted: 02 Feb 2012 08:01 AM PST The Unpunctured Cycle STOCK MARKET REPORT February 01, 2012 Pocket all your knowledge with your watch and never pull it out in company unless desired. - Lord Chesterfield The media is all excited about the announcement of the Facebook IPO, treating it as if it's the second coming of sliced bread. At its anticipated IPO later this year, Facebook will be three times more expensive than Google was at its IPO — and nearly 40 times more expensive than the average large IPO of the last four decades. The valuation metric that some analysts chose to focus on is the price-to-sales ratio (PSR). Of course, it's too early to know for sure what Facebook's will be when it comes to market, since its offer price hasn't been set. But, based on the early reports that Facebook will be valued at its IPO at as much as $100 billion, and 2011 revenues of $3.8 billion, Facebook's PSR will be around 26. In order to produce a profit stream that is great enough to support a prayer of it...
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| The 5 Stages of Collapse: Where Are We Currently? Posted: 02 Feb 2012 06:50 AM PST In light of the unfolding global sovereign debt fiasco that has turned out to be less of a waterfall and more of an avalanche [than anticipated I present below a description of the 5 stages of collapse and discuss our preparedness. If you haven't read it yet, perhaps you should.]*It has been read by 70,000+ people so far – and is still being read by an average of 1,500 people each month – on my site alone. Words: 2525 The above*edited excerpts*are from an article**at*[url]www.cluborlov.blogspot.com[/url]. * [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 th...
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| Posted: 02 Feb 2012 06:41 AM PST by James West on February 2, 2012 Mid-week action in Canada confirms a strengthening willingness on the part of sidelined capital to venture forth on to the Venture exchange, as the S&P TSX Venture index moves upward again for a 30 day gain of 13.8%., outperforming the senior TSX board, which has moved up only 2.5% in the same time frame. A mantle of indifference would appear to be the most significant development among resource investors as concerns the gong show in Europe, which we are now to understand will be treated with the same remedy as the U.S. debt blowout – by printing, fabricating, conjuring, or otherwise creating from nothing endless amounts of currency. Reality need not apply to the macro picture any longer, as the Fed and Treasury have now succeeded in position the U.S. dollar as the least toxic currency for bond investors to hold. For us resource investors, that means we have what looks like at least a 6 month bu...
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As it was in 1980, could it be again in 2012?
"Facebook was not originally created to be a company," declared founder Mark Zuckerberg yesterday in his firm's IPO filing with the Securities and Exchange Commission.
"We are a customer store," declared Amazon founder Jeff Bezos to Playboy in February 2000.
Two years later, on Jan. 23, 2002, 
"Bernanke to Congress: Don't Cut Deficit Too Quickly" reads a news alert that just crossed our iPad.
"I'm a little Ron Paulish," declared bond king Bill Gross to CNBC.
From Washington state, we see the emergence of a group of rogue legislators whose activities might be worth watching.
"In the next couple of years," writes our friend John Robb at Global Guerrillas, "the number of advances in technology, deployments, use cases and awareness of drones will be intense."
Mr. Cooksey has offended a legion of dietitians… enough that his humble blog has been deemed illegal by the State of North Carolina.
Major U.S. stock indexes are drifting today. The Dow and S&P are down slightly. The Nasdaq and Russell 2000 are up slightly.
First-time unemployment claims clocked in this morning at 367,000 — down 12,000 from the previous week.
In one of those lesser-noticed economic indicators we like to follow, rail traffic is off to a weak start this year.
Gold is cresting $1,750 for the first time in two months, the spot price currently $1,753.
It's been the best of times and the worst of times, all in a 24-hour span, for our friends at Odyssey Marine.
Odyssey has learned its lesson about dealing with covetous governments: Thus, the same day the ruling came down, it could also announce a huge triumph.
"I find it interesting," a reader writes, "that during the period that Chavez was having all that gold brought back to Venezuela, starting in August 2011 and gold was taken off the market and with all the buying by other participants in the markets, the price of gold and gold stocks went down."
"You say the market went up 1% for no reason yesterday" a reader begins his discourse, taking our levity way too seriously.| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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