Gold World News Flash |
- Uses And Sources Of Gold – Where Gold Comes ...
- Gold as Money in Utah?
- Your Trepidatious Turd
- The Financial Crisis Of 2008 Was Just A Warm Up Act For The Economic Horror Show That Is Coming
- Q&A with Alan Boyce: Freddie Mac and Inverse Floaters
- 'Confiscation' page added to GATA's Internet site
- Things That Make You Go Hmmm - Such As The Global Central Planning Groundhog Day
- Lars Schall: No more gold answers from Volcker
- David Morgan sees $2,500 GOLD FOR 2012
- SBSS 9. Gold is the Gut Reaction, Silver is the Smart Decision
- Calandra on Vancouver and California conferences and some of his favorites
- Pento - Bond Bubble to Destroy US Dollar & Restore Gold
- U.S. Unemployment Rate Drops, Should You Sell Gold?
- Time To Hedge
- Yet Another Make-Or-Break Week For Europe
- DANGEROUS TIMES AHEAD
- International Forecaster February 2012 (#2) - Gold, Silver, Economy + More
- The Heist Known as Fed Accommodation
- GATA London conference DVD sets on sale now
- Precious stones massively underperform precious metal prices
- Turk: Corrective Action in Gold is Prelude to Bullish Explosion
- U.S. States Prepare for Hyperinflation
- Is gold in a bubble?
| Uses And Sources Of Gold – Where Gold Comes ... Posted: 05 Feb 2012 06:00 PM PST Perth Mint Blog
|
| Posted: 05 Feb 2012 02:30 PM PST Iacono Research
|
| Posted: 05 Feb 2012 01:52 PM PST from TFMetalsReport.com:
Before we begin the new week, we must wrap up the old week. First of all, one final review of the preposterously manipulated BLSBS numbers from Friday. Once again, all you really needed to know was presented by ZH. It is imperative that you take the to read this summary. You must understand that Friday's employment report "beat"…which was used as the rationale to gun stocks and slaughter gold…was nothing but fabricated, statistical nonsense. Read More @ TFMetalsReport.com
|
| The Financial Crisis Of 2008 Was Just A Warm Up Act For The Economic Horror Show That Is Coming Posted: 05 Feb 2012 01:51 PM PST from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
|
| Q&A with Alan Boyce: Freddie Mac and Inverse Floaters Posted: 05 Feb 2012 12:58 PM PST Further to my earlier post, Freddie Mac Mortgage Predator | Alan Boyce on Inverse Floaters <http://www.zerohedge.com/contributed/freddie-mac-mortgage-predator-alan-..., below is a Q&A prepared by Alan Boyce, CEO of The Absalon Project, on the uproar regarding the way that Freddie Mac manages its portfolio. Absalon is a joint venture between George Soros and the Danish financial system. Previously, Mr. Boyce was the senior managing director for investment strategy at Countrywide Financial Corporation, where he was responsible for secondary markets, the hedging of mortgage servicing rights, and the balance sheet for Countrywide Bank and Balboa Insurance. -- Chris Q&A with Alan Boyce: Freddie Mac and Inverse Floaters 1. Isn't it meaningless to look at the inverse floaters in isolation? To assess risk, shouldn't we look at the entire portfolio held by Freddie Mac? Analyzing Freddie Mac's portfolio as whole would be the best way to measure its risk, but the enterprise has never disclosed the securities that it is holding, nor has it announced any intentions to change this practice. Without full information, analysts can only look at what Freddie Mac is forced to disclose, which is precisely what led to the discovery of these highly levered inverse floaters. To truly evaluate the risk of the firm, analysts would need to understand the composition of the entire portfolio, the hedges and liability structure. However, until this occurs, commentators must use the information that is available. The US mortgage market represents $10 trillion, with the vast amount of outstanding loans being callable, 30 year, fixed rate notes. Most of these loans are securitized into Agency MBS. Thus we have a very large bond market that is exposed to long-term interest rate risk and prepayment risk. As a holder of $650 billion of mortgage loans and MBS (both straight pass-throughs and structured REMIC parts), Freddie Mac is heavily exposed to long-term interest rate and prepayment risk. While hedging interest rate risk is possible through the mortgage market, there is insufficient market depth for Freddie Mac or any other large market participant to hedge its exposure to prepayment risk. Over the last two decades, hedges have been done in the US Treasury and Dollar interest rate swap markets, which are just large enough to help. In at least 29 separate transactions over a 6-month period, Freddie Mac provided the MBS collateral and took back an Inverse IO position. This inverse IO position concentrates long exposure to prepayments. In none of these deals did Freddie Mac disclose taking back a straight PO or deeply discounted bond, which might have provided a hedge against prepayments. These transactions do not appear to satisfy any standard types of hedging demand for a large holder of long-term mortgages such as Freddie Mac. Some have suggested that the agency may have in fact been over-hedged in swaps and swap options, and thus increased exposure to prepayments would actually reduce it risk. Even assuming that Freddie Mac could have over-hedged its massive position, this argument would not make sense. Instead of investing in inverse floaters, Freddie Mac could simply sell the excess hedges and book the profit. Another principle of risk management is to retain liquidity whenever possible. As noted below, these transactions converted liquid MBS into illiquid and highly leveraged debt instruments. This was what traders would call a "Texas Hedge". 2. Did Freddie Mac have any choice besides keeping these inverse floaters? Aren't they difficult to sell off because the bond market sees them "toxic waste?" Yes, Freddie Mac had a very simple alternative to retaining these inverse floaters: sell the original collateral on the deep, liquid market that already exists for MBS. Freddie Mac instead voluntarily undertook transactions that transformed billions of liquid MBS into floaters and inverse floaters. These inverse floaters were not the small leftovers of a larger securitization; the vast majority of the transactions referenced in the report did not involve the creation of any "vanilla" MBS, only floaters and inverse floaters. Freddie Mac appears to have gone out of its way to create an illiquid, levered position for itself that pays off when refinancing does not happen. While these securities were not originally "toxic waste," Freddie Mac would now find it exceedingly difficult to sell them. In part, such sales would cause the market to suspect that the agency has inside information on the collateral prepayment speeds. These deals were done after the agency was in conservatorship and had a mandate to shrink its portfolio. The creation of illiquid assets likely complicates future portfolio reduction. 3. $5 billion of inverse floaters are only a small component of Freddie Mac's $653 billion mortgage portfolio. Could such a small portion of the portfolio be a factor in determining policy? While $5 billion is technically correct, the par, market, or book value of derivative securities is not the right measure of exposure to risk. Inverse floaters are highly levered securities, and their value thus depends more on how many mortgages are underlying the securities than the current value of how much the inverse floaters are worth. The $3.4 billion of inverse floaters referenced by NPR and ProPublica were levered at approximately 6:1, containing the effective risk of $19.5 billion in MBS. It is not clear how the reported $5 billion of inverse floaters are valued or the value of the underlying mortgages. If the leverage on the $5 billion of inverse floaters is similar, it might represent the equivalent risk of approximately $30 billion in MBS. While this still might not appear to be a large component of Freddie's overall portfolio, consider that agency MBS accounts for $257 billion of the $653 billion total. Under the Preferred Stock Purchase Agreement (PSPA) governing Freddie Mac's conservatorship, the enterprise must reduce its mortgage-related investment portfolio by 10% annually. By transforming $30 billion of MBS on the balance sheet into $5 billion of inverse floaters, Freddie Mac would have reduced its MBS holdings by nearly 10% with almost zero net change in exposure to prepayment risk. It is unclear whether the sale of mortgage principal while retaining prepayment risk is consistent with Congress's intent when it mandated portfolio reduction. It is clear that Congress did not intend for Freddie Mac to enter into transactions that would maintain economic exposure while significantly impairing its liquidity. In regards to policy, Freddie Mac only started investing in inverse floaters on a large scale in October 2010, the same month it began tightening credit on refinancings, and the month before it imposed new post-settlement delivery fees to further restrict refinancings. Announcements of these policies were not made publicly, unlike Fannie Mae which publishes its fees on its website. Fannie Mae did not appear to invest heavily in inverse floaters based on its disclosures, and it did not impose the same lending restrictions at the same time. In the HARP 2.0 guidelines announced in November 2011, Freddie Mac tightened credit relative to its own rules, adding new restrictions on refinancing mortgages with loan-to-value ratios below 80 percent. Fannie Mae did not add the same restrictions. About one-half of mortgages with an interest rate above 6% have a loan-to-value ratio below 80 percent. Many such mortgages have second liens or are taken out by borrowers with credit challenges that might make refinancing impossible, but for whom a refinanced mortgage would significantly reduce default risk. 4. Are there remaining concerns if Freddie Mac stopped making these transactions at the request of the FHFA? The FHFA halting these transactions is certainly a step in the right direction but does not explain the existence of at least 29 such deals. If there are risk concerns about these deals, analysts might question the role of the FHFA, as the equivalent of the CEO of Freddie Mac, in effectively overseeing and managing risk. 5. Hasn't the FHFA publicly stated that decisions related to Freddie Mac's post-settlement delivery fees and other such policies are made without regards to the agency's retained portfolio? The FHFA has said this on record, but this does not provide an explanation for why Freddie Mac's refinancing policies are stricter than those of Fannie Mae under HARP 2.0. In November 2011, when the GSEs announced their guidelines for HARP 2.0, Freddie Mac imposed harsher restrictions on refinancing than Fannie Mae did for borrowers with an LTV ratio below 80%. Such a move appears to have been in contradiction to one of the primary motives of the conservator, who has vowed to better align policy across the two agencies. As well, the conservator has stated that the enterprises were tasked with creating refinancing plans without regard to their retained portfolios. From the perspective of default risk, the enterprise would appear to be strictly better off by encouraging as many refinancings as possible. Even borrowers with LTV ratios below 80% face default risk, especially borrowers with high CLTVs or with other credit impairments. So it is unclear why Freddie Mac would impose additional restrictions on refinancing if it were following a mandate to ignore its portfolio in setting standards for refinancing under HARP 2.0. Nonetheless, from a portfolio perspective, based on the positions with the inverse floaters and any other retained MBS, a policy restricting refinancing might make sense. About half of all mortgages with an interest rate greater than 6.5% have an LTV ratio below 80%, so investors in high-coupon MBS directly benefit if these borrowers cannot refinance. This is not an isolated example. In November 2010, just before Freddie Mac began investing heavily in inverse floaters, the agency announced a substantial increase in its post-settlement delivery fees (a.k.a. PSDFs), which borrowers must pay up-front in order to refinance. If the portfolio were not a consideration, then it would have made more sense to impose a smaller annual fee on top of the mortgage rate. This would have increased cash flows to Freddie Mac and simultaneously reduced the risk of mortgages that it already guarantees. However, the agency instead chose to impose large up-front fees that impair refinancings by credit-constrained borrowers. 6. Why should Freddie Mac help borrowers like the Silversteins? Aren't poor credit controls what got us into this mess in the first place? Everyone agrees that better risk management in the run-up to the crisis would have been beneficial, but this is a separate issue from setting restrictions to refinancings. Freddie Mac already bears the credit risk of the Silversteins' mortgage. The Siversteins were prevented from refinancing by a new rule established by Freddie Mac in October of 2010. Prior to this, short sales were encouraged by the GSEs as the most efficient way to remove a homeowner from a house. By putting long lasting penalties upon the willing participants of a short sale, the GSEs have done great damage to one of the few mechanisms that could help resolve the shadow inventory facing the US housing market. If the Silversteins (or any other constrained borrower with a Freddie Mac guaranteed loan) stop making their mortgage payments, Freddie Mac is legally obligated to buy back the loan from an MBS pool at par. Taking into account legal fees and other transactional costs involved with foreclosure, it can be difficult to recover even half the value of the original mortgage. A policy that allowed homeowners such as the Silversteins to refinance into a more affordable mortgage might have eliminated hundreds of thousands of defaults, potentially saving American taxpayers tens of billions of dollars. Ignoring the impact of refinancings on the portfolio, lower mortgage payments for borrowers are a windfall for Freddie Mac, dramatically reducing its liability for mortgage guarantees. 7. Freddie Mac points out that it has undertaken more than 4.3 million refinancings over the past three years, with refinanced mortgages making up as much as 80 percent of its new originations. How could Freddie Mac be refinancing so many mortgages if it were really taking steps to inhibit refinancings to benefit its portfolio? Mortgage refinancings appear to make up a large portion of Freddie Mac's recent business. Nonetheless, it is possible for Freddie Mac to refinance mortgages for relatively high credit quality borrowers, often with lower mortgage rates, while simultaneously inhibiting refinancing for some borrowers whose mortgages are in the inverse floaters or are held on Freddie Mac's portfolio. According to the NPR/ProPublica story, the average mortgage rate in the pools of inverse floaters was around 6.5 percent. Such mortgages were likely taken out prior to 2008, when credit standards became markedly tighter. As well, Freddie Mac has said that the mortgage securities underlying the inverse floaters were already in its portfolio. Such MBS were likely purchased before 2008, when Freddie Mac was put in conservatorship and apparently stopped buying new MBS. The first attached figure reports constant prepayment speeds (CPRs) for Freddie Mac pools of 30-year fixed-rate mortgages based on the coupon in the pool for September-November 2011. The figure splits prepayments based on whether they were voluntary (typically a refinancing) or involuntary (bought out of a pool by Freddie Mac). As is apparent in the chart, refinancing speeds peak for mortgages with mortgage rates around 5 percent. Mortgages with rates of 6 percent or higher appear to refinance at much slower speeds. The second figure examines the coupon breakdown between mortgages originated prior to the crisis those originated since 2008 and plots the volume of voluntary refinancings. The results are clear: the vast majority of current refinancings are going to borrowers paying relatively low interest rates who have already been able to obtain a mortgage during the credit crunch of the past three years. This finding matches recent research from Lender Processing Services that shows that prepayment speeds are especially fast for mortgages originated in 2008, 2009, and 2010. In other words, many of the 4.3 million borrowers who have refinanced are likely relatively recent borrowers who have mortgages with already low rates are those who are refinancing at the highest CPRs. Even borrowers with very recent mortgages from 2010 are refinancing at higher CPRs than borrowers with mortgages from 2007. Recent borrowers also tend to have very good credit and would not need help from programs such as HARP and HARP 2.0 to refinance their mortgages. Putting the facts together, it is possible for Freddie Mac to do a large amount of business refinancing recent mortgages (sometimes more than once) while also benefitting its portfolio. Mortgage refinancings for recent vintage mortgages would not impact its portfolio much, since Freddie Mac appears to have stopped purchasing new MBS since 2008. At the same time, older mortgages and those with especially high mortgage rates appear to be refinancing at much lower CPRs. These are the same mortgages that likely make up the bulk of Freddie Mac's retained portfolio of MBS and also are concentrated in the inverse floaters where Freddie Mac would have large losses if prepay speeds were to pick up. Figure 1: Voluntary and Involuntary Prepayment Speeds by Bond Coupon Freddie Mac 30-Year Fixed-rate Mortgages Figure 2: Projected Balance Voluntarily Prepaid by Bond Coupon and Vintage Freddie Mac 30-Year Fixed-rate Mortgages Figure 3: Voluntary and Involuntary Prepayment Speeds by Bond Coupon Freddie Mac 30-Year Fixed-rate Mortgages, Originated in 2006 or Later
|
| 'Confiscation' page added to GATA's Internet site Posted: 05 Feb 2012 12:11 PM PST 8:12p ET Sunday, February 5, 2012 Dear Friend of GATA and Gold: Because of recurring interest in the issue, GATA has added an indexed page at its Internet site devoted to the possibility of government confiscation of gold and silver. The page is now the first listed in the "Articles" section in the left column of our home page. At the moment the page has one entry, our dispatch from October 2007 reposting our correspondence with the U.S. Treasury Department two years earlier, in which the department's chief counsel for the Office of Foreign Assets Control explains candidly that, upon proclamation of an emergency by the president of the United States, the department claims the power, under the Trading with the Enemy Act of 1917 and the International Emergency Economic Powers Act of 1977, to seize or freeze not only privately owned gold and silver but any privately owned financial asset: This statement from the Treasury Department remains the most definitive we've seen. It strongly suggests that, despite the stirring last lines of all four verses of "The Star-Spangled Banner" -- http://www.usa-flag-site.org/song-lyrics/star-spangled-banner.shtml -- gold and silver investors in the United States might want to place some of their assets somewhere else, in a free country. 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 DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html 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 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...
|
| Things That Make You Go Hmmm - Such As The Global Central Planning Groundhog Day Posted: 05 Feb 2012 12:09 PM PST Grant Williams submits his latest weekly thoughts on the big picture. February 2012 finds the world in its own timeloop as we remain trapped in our very own Groundhog Day watching politicians try endless new and inventive ways to 'fix' a simple problem of way, WAY too much debt. It isn't complicated. The world grew fat and happy on the sugar rush provided by a decades-long injection of cheap and easy credit and now it's time for the crash diet. Trying to avoid the 'crash' seems to be uppermost in everybody's mind. ... Since 2008 and the bursting of the great credit bubble, central banks have been printing money hand over fist in a desperate attempt to generate the inflation they feel is necessary to drag the world out of a perceived deflationary spiral. The chart (left) shows the growth in 'assets' of G-3 Central Banks over the last 17 months alone, during which time, they have increased by 32%.
To date, the level of the various benchmark CPI indicators would suggest there have been no deleterious effects, but just because the results aren't showing up where those in charge of measuring them are LOOKING, doesn't mean they aren't showing up at all. Look at food prices across Asia. Look at housing prices in Hong Kong. Look at fuel prices in Nigeria. Look at heating costs in the UK. Look at gold. Targeting inflation is a dangerous game to play because - well, because it is impossible. You cannot target 'inflation' per se, only a specific measure of a specific collection of items, and the wider that collection of items is, the harder you make it for yourself. But despite what seems fairly obvious to many - namely that 'inflation' cannot be finely controlled by setting interest rates (though, if caught in time and tackled aggressively enough it can sometimes betamed as Paul Volcker demonstrated), the minds in charge of setting policy have a peculiar attitude towards something that is so imprecise and so multi-faceted. The general level of certainty surrounding interest rate policy, quantitative easing and inflation amongst Central Bankers is a constant source of amazement to me. The playbook for the game we are playing now was drawn up a long time ago and we can't say we weren't shown what lay between the covers. As far back as November 2002, when Bailabankout Ben made his seminal speech to the National Economists' Club, we were told how this was going to play out. Firstly, the title: Deflation: Making Sure "It" Doesn't Happen Here 'Sure'? Hard to see how you can be 'sure' Ben, but OK. Secondly, this famous nugget with which most of you are no doubt familiar:
'Always'. 'Basic economic reasoning'. Thirdly, the big one:
And finally, this little nugget
Three quotes. Three uses of the word 'always'. If something is 'always' guaranteed to work, you just keep doing it until you get the result you expected, right. Right? The inflation warning light that is built into the gold price has been flashing non-stop for eleven straight years and, after the short-lived and, yes I'll say it, somewhat suspicious-looking correction in December, gold has resumed its inexorable march higher this year amidst a wave of predictions for both high and higher prices and further inflationary action by the ECB in the form of the LTRO along with consistent and concerted talk of the need to generate inflation by the world's other Central Banks. (Incidentally, the recent announcement by the FOMC that they would keep their low rate policy for ANOTHER year - out to 2014 - struck me as incredibly strange. The only possible reason for doing that, in my mind at least, would be to fire a shot across the bow of other Central Banks hell-bent on debasing their currencies in the face of a strengthening dollar. That is NOT something Bailabankout Ben is about to sit quietly and let happen. In fact, a case could be quite easily made for QE3 being not necessarily triggered by poor economic numbers, but by a strengthening dollar - but more of that another time). Gold is most certainly NOT signalling a nice 2% rise in inflation as its gains since 2000 demonstrate. Full latest TTMYGH report below (pdf):
|
| Lars Schall: No more gold answers from Volcker Posted: 05 Feb 2012 11:13 AM PST 7:13p ET Sunday, February 5, 2012 Dear Friend of GATA and Gold: Our friend the German freelance journalist Lars Schall reports tonight that former Federal Reserve Chairman Paul Volcker seems to have had enough of answering questions about U.S. government involvement in the gold market. Schall's commentary is headlined "No More Answers from Mr. Volcker" and it's posted at his Internet site here: http://www.larsschall.com/2012/02/05/no-more-answers-from-mr-volcker/ CHRIS POWELL, Secretary/Treasurer 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. Join GATA here: California Investment Conference http://cambridgehouse.com/conference-details/california-investment-confe... Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html 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 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...
|
| David Morgan sees $2,500 GOLD FOR 2012 Posted: 05 Feb 2012 10:57 AM PST David Morgan - This week in Money interview with... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
This posting includes an audio/video/photo media file: Download Now |
| SBSS 9. Gold is the Gut Reaction, Silver is the Smart Decision Posted: 05 Feb 2012 08:31 AM PST
|
| Calandra on Vancouver and California conferences and some of his favorites Posted: 05 Feb 2012 07:24 AM PST 3:21p ET Sunday, February 5, 2012 Dear Friend of GATA and Gold: Financial writer Thom Calandra today wraps up the recent Vancouver Resource Investment Conference, introduces next weekend's California Investment Conference in Indian Wells, in which GATA will be participating (see the link below), and gossips a bit about mining companies he likes. Calandra's commentary is headlined "Eyeball This 'Intel' On Metals Melt-Up" and it's posted at his blog here: http://babybulltwits.wordpress.com/2012/02/04/eyeball-this-intel-on-meta... 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 DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html 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 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
|
| Pento - Bond Bubble to Destroy US Dollar & Restore Gold Posted: 05 Feb 2012 07:20 AM PST since the end of 2007, the amount of publicly traded debt has increased by nearly $6 trillion; that's over 100 percent!
|
| U.S. Unemployment Rate Drops, Should You Sell Gold? Posted: 05 Feb 2012 05:59 AM PST On Friday, the U.S. jobless rate dropped unexpectedly in January to 8.3 percent, the lowest level since February 2009. According to the Labor Department, the economy added 243,000 jobs. Furthermore, today’s report includes revisions adding a total of 60,000 jobs to payrolls in November and December. The Labor Department also revised December’s gains to 203,000, from an initially reported 200,000.
|
| Posted: 05 Feb 2012 05:38 AM PST
Since the summer of 2010, the way gold was viewed and used by the overall market has changed. For much of the period from Jan 1, 2008 until June 30, 2010 for example, gold (GC) has had an inconsistent relationship, in correlation terms, relative to the S&P 500 (SPY). There were times during this period when it moved in the opposite direction, but much of this time it moved in the same direction as the market. This can be seen in the first chart shown.  Toward the end of 2010, however, the relationship of gold relative to the stock market has changed somewhat. Gold started to become a more active instrument for investors looking to hedge themselves against downside risk in the market. This isn't unprecedented by any means, rather the use of gold as a hedging tool simply seemed to escalate during this time versus the past couple of years. Gold consequently moved to consistently be more negatively correlated with the market over the past 12 months. This can be seen in the following chart.  Where does this leave us? It means that at least in the current environment the VIX volatility index should not be viewed as a stand alone measure. It makes intuitive sense to us to combine both gold and the VIX into one series to properly reflect both investors who wish to hedge with gold, and those who wish to accomplish it through the VIX. We've put this into ratio form (GC/$VIX) in the following chart. The first takeaway here, is that if you're looking to hedge, the VIX may be your best bet at this point in time as a rising ratio as shown on the chart implies the VIX is cheap relative to gold.  Last, since the absoutute level of both Gold and the VIX are well known to the market, we prefer to view this as a slow MACD (24,52,18). A MACD gives you a much better visual of the accelearations and decelerations of a data series. So created a weighted series using 50% Gold and 50% VIX, and then converted this into a slow MACD. See chart below. As you can see, some of these spikes up and down have turned out to be very prescient bottoms and tops in the market. Our read right now, is that the MACD (blue line) has just crossed above the MACD AVG (red line), and in the past that has been the prelude to a market correction. Once we see the MACD really spike above the MACD AVG, that would be the point to remove hedges and become more short-term constructive on the market again.  This purpose of this model is not just to try and time the market, rather to identify entry and exit points of our hedges. Judging by the above, it's a good time to hedge, and the instrument of choice should be the VIX.
|
| Yet Another Make-Or-Break Week For Europe Posted: 05 Feb 2012 05:05 AM PST Nobody expects Greece to default on its debt and leave the eurozone. But Greek leaders do seem to be squeezing as much drama as possible from the bailout process:
Recordings of these conference calls would be instant YouTube hits. And with all the threats flying around you'd think that Greece would have long since been cowed into submission and forced to accept German control over its budget in return for credit it needs to cover its short-term debts. That they're holding out implies that they're really not that worried and believe they can get better terms, which in this case means smaller cuts in domestic spending, less of a decline in local wages, and more cash from the ECB. They're probably right. Over the past few months major brokerage houses have been churning out reports on what would happen if Greece or another eurozone country leaves the currency union and reverts to its old money. And without exception the predictions are apocalyptic. Here's a general scenario: Greece can't come to terms with the IMF, ECB, Germany, et al, and announces that it's leaving the euro and returning to the drachma. Instantly, everyone with a Greek bank account empties it and moves the proceeds out of the country. Greek banks close, oil imports stop, the national health ministry runs out of pharmaceuticals, etc., etc. Chaos leads to depression and, probably, to some sort of authoritarian government. So far, this sounds like Greece's problem, and a damn good reason to accept a bailout on pretty much any terms. But what happens next changes everything. The minute Greece announces that it's leaving, investors instantly start looking around for the next domino, decide that pretty much all the PIIGS countries qualify, and pull money out of their banks, causing them to collapse and sending those economies into free-fall. Then, since French and German banks have lent hundreds of billions of euros to those now-bankrupt countries, and are on the hook for untold trillions of credit default and currency swaps, they fail as well. The entire continent is plunged into chaos, with no obvious exit. The eurozone dissolves, all because one tiny country decides to leave. Greece, of course, has read these reports and understands the its own power — and knows that Europe's leaders understand it too. So the Greek finance minister spending his time campaigning rather than waiting by the phone for yet another conference call should be seen as a classic bargaining tactic. Like George Bush Sr. going on vacation as the first Gulf War ramped up, he's saying that he's not worried, that this is the other guy's problem and that by the time he gets back to the office the other guy should have some nice answers waiting. Given the stakes, expect a deal more to Greece's liking next week. Enter Portugal In the end, so runs the analyst consensus, the only alternative will be a "fiscal union" where Germany and a handful of other core countries assume the debts of the periphery, in the same way that Washington absorbed Fannie Mae and Freddie Mac's $5 trillion of mortgage paper. The ECB meanwhile, will have no choice but to finance the whole mess by buying ten or so trillion euros of low-grade paper with newly-created currency. The euro will fall versus the dollar, yen and yuan, which will be great for German exports and Greek tourism, but bad for the eurozone's trading partners. They'll respond with inflation of their own, and so on, as the currency war really gets going. In this scenario it's hard to see an upside limit for gold and silver.
|
| Posted: 05 Feb 2012 05:05 AM PST Friday's big rally on the better than expected employment report has now generated the kind of euphoria that often creates intermediate degree tops. This coming week will be the 18th week of the current intermediate cycle. As you can see in the chart below the intermediate cycle runs on average 18-25 weeks from trough to trough.  The time to buy "anything" is when the stock market puts in one of these intermediate degree bottoms. It's way too late in the intermediate cycle, especially with the NASDAQ stretched 9% above its 50 day moving average, for anyone to be buying now. Now is the time for investors to be taking profits. And by taking profits I don't mean selling short. I mean moving to cash.  The simple fact is that selling short is a fool's game designed to take money away from retail investors. The only people that will ever make any consistent long-term gains by selling short are the very elite traders of the world, or big funds with massive research departments that can ferret out and find sick or failing companies. What most traders who try to sell short fail to understand is that markets go down differently than they go up. This fact makes it very difficult to make, and more importantly keep, any profits garnered by selling short. First off, tops are often a long drawn out process. They tend to whipsaw short-sellers to death before finally rolling over. I would say we have seen a very good example of that over the last four weeks. Then even if one does manage to catch the top the intraday moves are often so violent that they knock one out of their positions. And finally, if you mistime the bottom you will give back most if not all of your meager profits during the first couple of days of the new rally. All in all, the best position for 99% of traders is to go to cash when a correction is due. As you can see by that first chart a correction is now due. That doesn't mean that it will begin Monday morning or even this week. What it does mean is that it is now too dangerous to continue playing musical chairs with a market that is at great risk of a sharp corrective move. The fact is that ever since the dollar put in its three year cycle low in May, trading conditions have changed. Trades have had to become much shorter in duration and profits taken much more quickly. Until the dollar's major three year cycle tops this trading condition isn't going to change. As you can see in the chart below we still have no confirmation of a major trend reversal yet. The dollar is still making higher highs and higher lows. It's still holding well above a rising 200 day moving average and hasn't even turned the 50 day moving average down yet.  Once the stock market begins moving down into its intermediate cycle low it will almost certainly force another rally in the dollar, possibly (probably) back to new 52 week highs. That should, at the very minimum, pressure gold to retest the December lows, and if the selling pressure from the stock market is intense enough we could see another marginal new low somewhere in the high $1400s to low $1500 level.  I should point out that gold still has not broken the pattern of lower lows and lower highs despite the powerful rally out of the December 29 bottom. Technically, gold is still in a down trend. That down trend may be reconfirmed when the stock market drops down into its intermediate degree bottom.  I know we all want gold to immediately return to the days of strong trending moves, long trade durations, and easy money. It's only natural for investors to long for the good old days. It's what causes investors to chase (in vain) the last bull market. Think of all the investors that are still chasing the tech bubble of 2000, or the millions of investors still trying to pick the bottom of the housing market, or more recently energy investors struggling to figure out why solar and oil service stocks have underperformed so badly for the last three years. These are bubbles that have already had their day. They are never going to see those glory days again. Living in the past never made anyone rich. The people that get rich are the ones that figure out early where the next bull market is going to be. That being said, gold is most certainly not in a bubble yet. But the last massive C-wave obviously topped in September. That was the largest and longest C-wave of this entire secular bull market. Once something like that tops it takes months if not a year or more to consolidate those gains before the next leg up can begin.  Analysts that are predicting $2000 plus gold for this year are just kidding themselves. Gold is almost certainly going to be locked in a very choppy, extended trading range till at least the fall and probably into next spring before the next C-wave can breakout to new highs. As distasteful as it is, investors need to accept the fact that it's going to be very hard to make money in the precious metals sector this year, and the only way to do so will continue to be with short-term trading strategies until we have confirmation that the dollar's three year cycle has topped. At the moment precious metal investors have the guillotine of the stock market hanging over them just like everyone else. Historically the selling pressure from an intermediate degree decline in the stock market will force an average decline of about 19% from peak to trough in mining stocks. Right now the mining sector is in a weakened state with the HUI holding below a declining 200 day moving average. That's not exactly the best position to weather the intense selling pressure generated by an intermediate degree decline in the stock market. My advice for precious metals investors is the same as it is for everyone else. Go to cash and be prepared to buy when the stock market puts in an intermediate bottom in late February to mid-March.       
This posting includes an audio/video/photo media file: Download Now |
| International Forecaster February 2012 (#2) - Gold, Silver, Economy + More Posted: 05 Feb 2012 03:55 AM PST The creation of the euro zone may have given participants one currency, but it created other problems as well. One interest rate was supposed to fit all. Those sovereigns on the financial periphery of the 17 nations found low interest rates too good to be true. As a result, the borrowed funds they shouldn't have borrowed to finance current debt, was thrown off by the economy.
|
| The Heist Known as Fed Accommodation Posted: 05 Feb 2012 03:39 AM PST Fed Chairmen often speak of "accommodation" as if it's the magic needed to solve economic problems. But what happens when the Fed "accommodates" us by increasing the stock of money? First, it reduces the value of the dollar. More dollars means each one buys less, putting upward pressure on prices. Technology and improvements in production tend to push prices downward, but because of inflation fewer people can afford admission to the market's bounty.
|
| GATA London conference DVD sets on sale now Posted: 05 Feb 2012 03:33 AM PST Video of GATA's two-day Gold Rush 2011 conference at the Savoy Hotel in London last August is now available in attractive boxed sets of four DVDs that include every presentation -- and all of them remain immensely relevant to today's market conditions.
|
| Precious stones massively underperform precious metal prices Posted: 05 Feb 2012 03:19 AM PST Diamonds are not an investor's best friend. The chart below gives a picture of price movements over the past five years. You can see that diamond prices are up 20-40 per cent from the lows of 2009 – a low that lasted more than two years – but compare that to gold and silver over the same period.
|
| Turk: Corrective Action in Gold is Prelude to Bullish Explosion Posted: 05 Feb 2012 02:47 AM PST With gold trading roughly $35 lower, silver down nearly $1, today King World News interviewed James Turk out of Spain. Turk told King World News that this corrective action in gold and silver is healthy and a prelude to a major bullish move to the upside. Here is what Turk had to say about money on the sidelines and where gold and silver are headed: "Sooner or later that money is going to realize the train is pulling away from the station. Whether this money comes in next week or the week after, I do very much like this trading action. I'm very bullish here short-term on gold and silver, it looks very, very good." James Turk continues
|
| U.S. States Prepare for Hyperinflation Posted: 05 Feb 2012 02:30 AM PST CNN reports that 13 states seek approval to issue money in preparation for a U.S. dollar collapse. "In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System … the State's governmental finances and private economy will be thrown into chaos," stated North Carolina Representative Glen Bradley in a bill he drafted in 2011. Sign-up for my 100% FREE Alerts Sensing that the Europe's crisis has bought the Fed and U.S. Treasury some time, for now, State legislators have already begun to prepare for the eventual rejection of the U.S. dollar as a viable means for exchanging goods and services. According to the U.S. Constitution, Article 10, Clause 1 (Contract Clause), States can issue their own money as long as they are in the form of gold and silver coins. Article 10, Clause 1 (Contract Clause) No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility. How much time the U.S. dollar has left as a trusted currency is unknown, but the countdown has begun.
|
| Posted: 04 Feb 2012 12:00 PM PST Every once in a while a bubble forms in a market. Bubbles can occur in any market, whether stocks, commodities, real estate or as we know from history, even tulip bulbs. Market bubbles are, as the ...
|
There is a lot going on today and this promises to be a very volatile week. Greece, Syria and Iran all combine to create a noxious stew of cross-currents. All will impact the PMs this week. While it is nearly impossible to precisely forecast how the week will play out, there are a number of items that have me nervous and cautious as the week begins.
The people out there that believe that the U.S. economy is experiencing a permanent recovery and that very bright days are ahead for us should have their heads examined. Unfortunately, what we are going through right now is simply just a period of "hopetimism" between two financial crashes. Things may seem relatively stable right now, but it won't last long. The truth is that the financial crisis of 2008 was just a warm up act for the economic horror show that is coming. Nothing really got fixed after the crash of 2008. We are living in the biggest debt bubble in the history of the world, and it has gotten even bigger since then. The "too big to fail" banks are larger now than they have ever been. Americans continue to run up credit card balances like there is no tomorrow. Tens of thousands of manufacturing facilities and millions of jobs continue to leave the country. We continue to consume far more than we produce and we continue to become poorer as a nation. None of the problems that caused the crisis of 2008 have been solved and we are even weaker financially than we were back then. So why in the world are so many people so optimistic about the economy right now?
| 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 |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment