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Thursday, February 9, 2012

Gold World News Flash

Gold World News Flash

Well hello there China

Posted: 08 Feb 2012 05:17 PM PST

Anyone see China's official Gold imports and demand? Well come on in chappy.


Gold Awaits Resolution to Volatile Range

Posted: 08 Feb 2012 05:17 PM PST

courtesy of DailyFX.com February 07, 2012 04:27 PM Daily Bars Prepared by Jamie Saettele, CMT Gold was down over $10 today after rallying over $20 on Tuesday. The decline from the 2/3 high and subsequent recovery may compose waves 1 and 2 of a larger bear leg. A bearish is valid against 1765.90 (daily key reversal last Friday). A drop below 1712.60 would shift focus to the January congestion zone at 1647/85. Bottom Line – short, stop 1765.90, target open...


Gold Seeker Closing Report: Gold and Silver Fall Slightly

Posted: 08 Feb 2012 04:00 PM PST

Gold climbed up to $1751.63 in Asia, but it then fell back off for most of trade in New York and ended near its early afternoon low of $1725.00 with a loss of 0.68%. Silver rose to $34.51 in Asia, but it then fell to as low as $33.647 in New York and ended with a loss of 0.64%.


What If The Economy Crashes? - The First 12 Hours after the US Dollar Collapse

Posted: 08 Feb 2012 03:54 PM PST

The first 12 hours after the U.S. dollar collapse
With the ongoing economic turmoil that is taking place world wide [although mainstream media would like you to believe the issue is only in Greece], there is much worry among those seeing the writing in the world. Many have even gone on record stating that the dollar's collapse is a mathematical certainty, and it is.

On a long enough time-line, EVER single fiat currency that has ever existed has failed. The dollar will be no different. When that day comes, will you be prepared? Do your own due diligence.

We cannot afford to lack preparation when the signs are so obvious. Read more.....


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

The Silver Bullet and the Silver Shield – Part 11. The Three Demands of Silver

Posted: 08 Feb 2012 03:40 PM PST

Waiting to Pounce on Precious Metal Profits

Posted: 08 Feb 2012 02:52 PM PST


GoldMoney. The best way to buy gold & silver



Let me start by re-iterating that I am a secular permabull on physical precious metals, particularly Gold. When you're dealing with the end of the road for the current international monetary system (a la the 1930s and the 1970s), there's only one asset that is a complete no-brainer to own. As a hint, that asset is shiny and owned by every central bank in the world "just in case."

However, I also like to trade. When trading, I would sell or buy anything if I though there was a profit to be had. For example, my subscribers and I have been short senior Gold stocks as a "scalp" trade over the past week. Does this make me a traitor? I don't think in those terms, as I am a more practical Gold bug/bull. The more paper I make, the more metal I can buy.

However, once the current short-term correction finishes, it is back to bull mode. Gold, silver, and Gold and silver stocks - they're all going to go higher. The only real conundrum is which of these items to buy as a bull trade once the correction is complete. In another week or so, we'll hit bottom and find out which of these items will outperform.

I like the prospects for the entire precious metals patch. From a trader's perspective, I think silver has an obvious minimum target when using the SLV ETF. Here's an 8 month daily chart of the SLV ETF thru today's close to show you what I mean:





Once we correct a little (likely in a scary fashion over a few days for silver and senior Gold stocks, as they both seem to enjoy volatility as much as Bernanke likes creating money out of thin air), a decent 15-20% move higher is likely. After that, we'll have to see. All precious metal bulls know that we'll ultimately make new highs in silver above $50/oz., but the exact timing is uncertain from a trader's perspective. This is why it is best to simply buy physical metal and hold on for the volatile ride. However, some of us like to speculate with a portion of our capital and this message is for you fellow punters out there in the PM patch.

Now, the senior Gold stocks are the basket case of the PM sector. All this crap about Gold stocks leveraging the price of Gold and having bullish fundamentals doesn't mean anything if they won't perform here and now. And I'll be honest, I'm very concerned about their recent performance. That doesn't mean there isn't money to be made trading the senior Gold stock indices like the GDX ETF, but I am not impressed with the move off the late December bottom so far. Here's an $HUI:$GOLD ratio chart to show you what I mean:





A permabull will tell you that any minute now, Gold stocks are going to blast higher and if you don't buy right now (yesterday, in fact), you're going to miss out on a quadrillion dollars. Me, I don't think so. I think this warning signal should be taken seriously. It means that the senior Gold stocks could be headed for something like this over the next few months (2 year daily chart of GDX thru today's close):





This is not a prediction, by the way, but if senior Gold stocks don't start outperforming Gold soon, don't be surprised if something like this happens. I trade Gold stocks, I don't own them. I prefer to own physical metal and then speculate in stocks and paper metal (as well as anything else that looks like it might be good for a winning trade). Investing and trading are very different and require a different type of focus and attitude. With physical Gold, I never worry about the price on a day-to-day or week-to-week basis (unless I am looking to buy more). Why? Because I understand the secular bull market in Gold and why it won't be over for some time. I never lose sleep or worry if Gold drops 10 or 20% when priced in my local currency (i.e. US Dollars). Wake me when the Dow to Gold ratio gets to 2 (and we may well go below 1 this cycle).

The bottom line is that we're going higher in the PM sector. Exactly how we get there, only Mr Market knows for sure. But I believe there are profits to be made speculating in the paper markets. After calling the exact day of the bottom in the PM patch for my subscribers and I in late December, we sold our long trading positions in senior Gold stocks 2 weeks ago in anticipation of the current correction. We went short senior Gold stocks on February 2nd, catching the high that day. In a week or so, we will be going long again in the PM sector. If you'd care to join us in the dark jungle known as the paper markets, a one month trial subscription is only $15. But please, don't even think about subscribing until you've secured a core investment in actual physical metal held outside the banking system.



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Michael Pento On Gold, Inflation, and Interest Rates

Posted: 08 Feb 2012 02:43 PM PST

One of the few sane economists out there is Michael Pento of Pento Portfolio Strategies (formerly of Peter Schiff's Euro Pacific Capital).

Here is an interesting interview he did with Bloomberg back in December where he discusses his typical range of topics: Gold, Inflation, and Interest rates

 

Notable comments:

  • Half of the DXY is against the EURO, so that's the headwind for gold, but the tailwind for gold still is the fact that we have negative real interest rates & they probably won't rise for a very long time
  • M2 is up 10% YOY
  • QE3 will come in Q2 FY'12, which will be another tailwind for gold
  • Nominal GDP is rising, you take out a legitimate rate of inflation, and we are in a recession
  • U.S. and Europe = Stagflation
  • How long can an investor accept a negative real return after interest and taxes? A buyer strike of an Auction and you'll see yields rise just as they did in Greece and Italy. It's going to happen in this country
  • People are always talking about the tremendous amount of cash on the corporate balance sheets. What about the tremendous amount of debt on corporate balance sheets? They have $7.6 Trillion dollars of debt on their balance sheets. What happens to that debt when interest rates rise & they have to roll over that debt

 

US To Settle Fraudclosure For $25 Billion Even As It Channels Fake Tough Guy In Meaningless Lawsuit Against Very Same Banks

Posted: 08 Feb 2012 02:08 PM PST

Remember robosigning and the whole fraudclosure scandal? In a few days you can forget it. Because in America, the cost of contractual rights was just announced, and it is $25 billion: this is the amount of money that banks will pay to settle the fact that for years mortgages were issued and re-issued without proper title and liens on the underlying paper, courtesy of Linda Green et al. Why is this happening? Because staunch hold outs for equitable justice (at least until this point), the AGs of NY and California folded like cheap lawn chairs (we can't wait to find what corner office of Bank of America they end up in), but not before the one and only intervened. From the WSJ: "The Obama administration made a full-court press over the past four days to secure the support of key state attorneys general, including those from Florida, California and New York." Nothing like a little presidential persuasion to help one with overcoming one's conscience. Because in America the push to abrogate the very foundation of contractual agreements comes from the very top. But wait, there's more - just to wash its hands of the guilt associated with this settlement which shows once and for all that the Democratic administration panders as much if not more to the banking syndicate as any republican administration, as it announces one settlement with one hand, with the other the US will sue banks over the mortgage reps and warranties issue covered extensively here, in the most glaringly obtuse way to distract that it is gifting trillions worth of contingent liabilities right back to the banks, not to mention discarding the whole concept of justice. From the WSJ: "Federal securities regulators plan to warn several major banks that they intend to sue them over mortgage-related actions linked to the financial crisis, according to people familiar with the matter. The move would mark a stepped-up regulatory effort to hold Wall Street accountable for its sale of bonds linked to subprime mortgages in 2007 and 2008. At issue is whether the banks misrepresented the poor quality of loan pools they bundled and sold to investors, the people said." Wait, let us guess -that particular lawsuit will end up in a... settlement? Ding ding ding. We have a winner. All today's news succeed in doing is finally wrapping up any and all legal loose ends, so that banks can finally wrap all outstanding litigation overhangs at pennies on the dollar. And if at the end of the day, they find themselves cash strapped, why the US will simply loan them more cash of course.

First, here is the WSJ, on the banks that will benefit from the fraudclosure settlement:

Government officials are on the verge of an agreement worth as much as $25 billion with five major banks, capping a yearlong push to settle federal and state probes of alleged foreclosure abuses by lenders.

 

The deal would represent the largest government-industry settlement since a multistate deal with the tobacco industry in 1998.

 

The agreement covers five banks: Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co., and Wells Fargo & Co. Together, the five handle payments on 55% of all outstanding home loans, or around 27 million mortgages, according to Inside Mortgage Finance.

These are the banks benefitting from Uncle Sam's decision to finally unclog the foreclosure pathway, as banks will no longer have to prove in court they are in fact the title owners.

But just in case popular outrage at this act is a little much, at the same time banks sued over fabricating Reps and Warranties will be: "Ally Financial Inc., Bank of America Corp., Citigroup Inc., Deutsche Bank AG and Goldman Sachs Group Inc." What an odd coincidence: gift with one hand, and take away with the other from virtually all the same banks.

Only it is not really taking away: it is merely putting the wheels in motion that will ultimately result in the same type of settlement that will make a mockery of the legal process in the US, and expose all the state Attorneys General as banker puppets, doing the bidding of the highest bidder... and of Obama of course.

Some more, on the "gifting"

The planned pact would involve around $5 billion in cash penalties, payable to borrowers, states and the federal government. That includes $1.5 billion in cash payments to borrowers who went through foreclosure between September 2008 and December 2011. Borrowers could receive $1,500 to $2,000 each, with the actual amount paid depending on the number of borrowers filing a claim.

 

The agreement is expected to call on the banks to provide $20 billion in other aid—by cutting loan balances for tens of thousands of homeowners and by refinancing thousands of borrowers who are current on their loans but owe more than their homes are worth.

 

Officials say the deal will help provide immediate benefits to around one million homeowners, while raising accountability for banks that work with borrowers facing foreclosure. The foreclosure process has been snarled since late 2010, after allegations that banks had serially submitted bogus mortgage documents when attempting to repossess homes from delinquent borrowers.

Why the push now?

The bank payments would unlock a large new source of housing funding at a time when Congress doesn't appear likely to approve new spending measures to tackle lingering problems facing housing markets, such as a refinance program that President Obama unveiled last week.

30 pieces of silver? Or a corner office.

The three key states overcame misgivings about the plan in recent days, people familiar with the situation said. The inclusion of California is especially important: People familiar with the discussions say the banks would have been willing to pay just $19 billion without the participation of the nation's most-populous state.

 

The office of California Attorney General Kamala Harris declined to comment. A spokeswoman for Florida Attorney General Pam Bondi said that "while Attorney General Bondi has not yet joined the settlement, she is hopeful that a resolution will be reached soon."

The beneficiaries:

"It is frankly a headline victory for both banks and attorneys general with a modest impact on the housing market," said Joshua Rosner, managing director of investment firm Graham Fisher & Co.

 

"It's not new money. It's all soft dollars to the banks," said Paul Miller, a bank analyst at FBR Capital Markets.

And of course, the president, who ends up buying a few cheap votes for $2000 a pop:

Borrowers
could receive $1,500 to $2,000 each, with the actual amount paid
depending on the number of borrowers filing a claim.

This is also the cost per individual to rescind in perpetuity any actual claims about one's mortgage paperwork. Will Americans go for it? You betcha.

As for the so-called punishment:

In a meeting with reporters last month, Robert Khuzami, the SEC's enforcement chief, said the agency's mortgage-bond investigation was looking for evidence that firms "failed to disclose important information when selling these securities."

 

Mr. Khuzami declined further comment on the investigation.

 

The planned regulatory actions come at a critical juncture. The SEC, Justice Department and state prosecutors are pushing to complete a number of financial-crisis cases by the end of this year, partly to avoid having enforcement action curbed by statutes of limitations, the people said.

In reality all this action will do is provide a benefit for private plaintiffs against banks like Bank of America, such as MBIA, whose case that banks have misrepresented terms of sold securities, will be strengthened. The ultimate cost, however to banks, will be miniscule compared to the fact that the foreclosure pathway will again be unclogged, and the banks are allowed to deficiency mark houses sold from REO, and use fungible excess reserves to plug the difference.

All in all, just a day's work for the administration as it does everything in its power to push the housing market higher at all costs, and further and further away from equilibrium pricing, which is what should be for a true and normal price appreciation to occur... something which will never happen of course as it would take far longer than the 4 years allotted to the president. If the process entails bending the law beyond recognition, so be it.

Brokers suspended in LIBOR manipulation inquiry

Posted: 08 Feb 2012 01:56 PM PST

By Caroline Binham, Brooke Masters and Megan Murphy
Financial Times, London
Wednesday, February 8, 2012

http://www.ft.com/intl/cms/s/0/7021cdb4-527a-11e1-ae2c-00144feabdc0.html

More than a dozen traders and brokers in London and Asia have been fired, suspended, or put on leave by their employers as a multinational probe into alleged manipulation of crucial global lending rates accelerates.

Regulators have been investigating US and European banks that help set interbank lending rates in London and Tokyo since late 2010, in an intensive profile inquiry that spans three continents and involves at least nine separate enforcement agencies.

In the last few months, officials have also expanded their enquiries to both hedge funds that place big bets on movements in those rates, and the interdealer brokers that serve as go-betweens with the banks, according to people familiar with the probe.

... Dispatch continues below ...


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

Company Press Release
January 17, 2012

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

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

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

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

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


Icap, the world's largest inter-dealer broker, has suspended one employee and put two more on administrative leave in the past six weeks. Icap, based in London, declined to comment beyond noting that it was "co-operating fully" with authorities and had disclosed the official requests for information late last year.

According to people familiar with the probe, traders have also been suspended, fired, or placed on leave in recent months at Deutsche Bank, JPMorgan Chase, Royal Bank of Scotland, and Citigroup. All four banks declined to comment.

Regulators are seeking to determine whether banks colluded to set the overnight lending rates known as Libor, Tibor, and Euribor, and whether traders within the banks and their clients improperly used information on what future rates would be to place profitable trades. The rates, which serve as a benchmark for $3.5 trillion worth of financial products worldwide, are set by a daily poll of a panel of banks in each region.

US and UK regulators have sought information from the three interdealer brokers that dominate the rates market -- Icap, Tullett Prebon, and RP Martin. People familiar with the matter said they were looking at information-sharing among brokers, hedge funds and banks.

An RP Martin spokesman said the firm was not under investigation and declined to comment on suspensions. A Tullett Prebon spokesman said the firm had not suspended any employees.

Earlier this week UBS said it had been granted conditional immunity from the Swiss Competition Commission relating to its submissions for certain rates. The Swiss group was granted similar immunity by the US Department of Justice last year because it is co-operating with the probe.

"Derivative traders working for a number of financial institutions might have manipulated these submissions by co-ordinating their behaviour, thereby influencing these reference rates in their favour," said a statement published by Switzerland's Competition Commission last week. "Moreover, derivative traders might have colluded to manipulate the difference between the ask price and the bid price [spread] of derivatives based on these reference rates to the detriment of their clients."

Barclays, which is already being investigated over alleged improper communications between traders and back office staff over its rates submissions, declined to comment on whether any employees have been suspended in London.

* * *

Join GATA here:

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Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

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

From a Company Press Release
November 22, 2011

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

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

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

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

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

Norcini and Hathaway interviewed at King World News

Posted: 08 Feb 2012 01:45 PM PST

9:45p ET Wednesday, February 8, 2012

Dear Friend of GATA and Gold:

Futures market analyst Dan Norcini tells King World News that Federal Reserve Chairman Ben Bernanke has given the lie to the latest U.S. jobs report and that zero interest rates are keeping a strong bid under gold. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/2/8_Nor...

Also at King World News, Tocqueville Gold Fund manager John Hathaway concurs on the fraudulence of the jobs data and summarizes the factors that he sees as making gold ownership a necessity:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/2/8_Hat...

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


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Join GATA here:

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

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

Support GATA by purchasing 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:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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

Greece / S&P Threatens USA with Another Downgrade

Posted: 08 Feb 2012 01:22 PM PST

by Harvey Organ:

Good evening Ladies and Gentlemen:

As promised gold and silver languished today with gold falling by $17.10 to $1729.30
Silver fell by 50 cents to $33.67. It was quite clear that the bankers orchestrated their raid starting yesterday. The signal was sent yesterday morning as gold/silver equity shares were pummeled despite the rising price of the metal. The crooks covered many of their shorts today on the equities as the metal fell due their massive supply of non backed paper. These crooks have been performing this collusive trading for almost a decade now and it is getting monotonous. It works quite well when you have the regulators in your back pocket.

Let us head over to the comex and assess the damage today.

Read More @ HarveyOrgan.Blogspot.com

Platform Technologies Promise Big Payoffs: Juan Sanchez

Posted: 08 Feb 2012 01:01 PM PST

The Life Sciences Report: Have any of the proposals from the U.S. Food and Drug Administration's (FDA) Critical Path Initiative begun to collapse timeframes or make drug development more efficient and less capital-intensive? Juan Sanchez: When the FDA's Critical Path Initiative first came out in 2004, it made a lot of sense. Back then, there were conversations on Wall Street about different parties and the FDA working together. That led to unique collaborations and kind of a different culture. But I'm not sure you can quantify the success of an initiative like that because you are, after all, at the mercy of biology as well as higher regulatory standards. The FDA is still approving 22–30 new drugs every year, and I think it was 30 new ones in 2011. The fact that this continues to be the case when clinical trials are becoming so much more complicated and so much more difficult, and when the low-hanging fruit of drugable targets has already been taken, tells us something important when...


Silver Suppression Explained [Regardless of What They're Selling, This is Pretty Good]

Posted: 08 Feb 2012 12:35 PM PST

from moneymappress.com:

Most people have little idea what's been going on behind the scenes in the silver market.

But as a global resource specialist, I've been rubbing shoulders with the speculators… miners… traders… and "insiders" who set and move the price for metals like silver for over 30 years.

The event I'm about to tell you about is so outrageous, it will raise the hairs on the back of your neck.

Yet it's creating an opportunity of unprecedented size — at a time when few opportunities exist.

It stems from a massive scheme that appears to involve traders… investment banks… and, as some suggest, even the COMEX and the federal government itself.

It's so big, it could put the Hunt Brothers attempt in 1973 to actually "corner" the silver market to shame.

Once you see the details of this current event, you'll understand just how big this opportunity is.

And it was all triggered by a trader named Andrew Maguire… his testimony to the CFTC… and a class-action complaint against the biggest financial players in the silver market.

It was filed as Case No. 8157…

This situation could be ripped from the pages of a Hollywood thriller, except for one difference. This story is not fiction… and it's happening now.

Listen @ moneymappress.com

SILVER: The Illegitimate Child Of The Commodities Family

Posted: 08 Feb 2012 11:30 AM PST

Since January 1980 the values of US Commodities have been affected by growing demand and the price increasing effects of inflation. All commodities have enjoyed price increases�ALL EXCEPT SILVER, which is virtually flat�even though the demand for the white metal has been explosive in recent years. The chart below shows the nominal (actual) price increases during the past 32 years (since January 1980 to close of February 3, 2012):


Collapse Confirmation News 2/7/2012

Posted: 08 Feb 2012 10:58 AM PST

Guest Post: Introducing The Government’s Newest Unpaid Spy: YOU

Posted: 08 Feb 2012 10:40 AM PST

Submitted by Simon Black of Sovereign Man

Introducing The Government's Newest Unpaid Spy: YOU

One of the most terrifying aspects of George Orwell's seminal work 1984 was his description of how society had turned into one giant police agency. People were encouraged to rat each other out, groomed since childhood to be unpaid government spies:

"[Children] adored the Party and everything connected with it… All their ferocity was turned outwards, against the enemies of the State, against foreigners, traitors, saboteurs, thought-criminals. It was almost normal for people over thirty to be frightened of their own children."

The Department of Homeland Security's "If you see something, say something…" is not too far off from this paradigm– encouraging citizens to rat each other out to the police for the mere suspicion of potential wrong-doing.

DHS Secretary Janet Napolitano even made a special appearance at last Sunday's Super Bowl to get the message out about 'public vigilance,' and ensure that the entire city of Indianapolis was blanketed with advertisements from her Big Brother campaign.

DHS Introducing the governments newest unpaid spy: YOU

The IRS has been encouraging this type of behavior for years, rewarding citizens with a share of collections for anyone who snitches on potential tax cheats. Last year the agency upped its reward payout for tax informants, topping out at a full 30%.

A few months ago, the Mayor of Newark, NJ announced a similar program designed to reward citizens for snitching on gun owners. According to the mayor, "We don't even have to have a conviction," for an informant to get paid a cool $1,000 cash. Rat out your neighbor, get paid. Simple.

(As an aside, police in neighboring East Orange, NJ have rolled out a new pre-crime surveillance system. In the words of Police Chief William Robinson, "The police are observing you. The police are recording you. And the police are responding." Big Brother is clearly watching.)

In the financial system, there are droves of civilian agencies that have been coerced into becoming government spies. As we discussed a few weeks ago, everyone from bankers to brokers to gold dealers are obliged to submit 'suspicious activity reports' to the federal government. They even have minimum quotas.

What's more, these so-called "SARs" must remain top-secret. It's a crime for your banker to inform you that you were the subject of a suspicious activity report.

Yesterday, the Financial Crimes Enforcement Network (FinCEN), the federal agency which oversees the legions of unpaid government spies, added a few more businesses to the list. Now non-bank mortgage lenders and originators must 'assist law enforcement' by submitting suspicious activity reports.

The rule will take effect in the spring. What's ambiguous is whether or not it will apply to -individuals- who hold and issue private mortgages.

Despite 50 pages of new regulations, the definition of 'residential mortgage lender' remains unclear. This is common with laws and regulations… they take up a lot of space, but they're incredibly vague. Based on the published text:

  • Individuals who finance the sale of their residence are exempt.
  • Individuals who finance an investment property/properties that they own may be subject to the rule.
  • Businesses who own and finance investment properties are more than likely subject to the rule.
  • Individuals and businesses who finance properties that they do not own are subject to the rule.
  • Individuals and businesses who accept a residential mortgage application are subject to the rule.

In other words, if you loan money to someone to buy a house, you might just become the next unpaid government spy. Congratulations.

What's incredible is that FinCEN came up with this rule all on its own. There was no Constitutional legislative progress. Nothing was submitted for debate on the House floor, or for the President's signature.

This is not a law. It's simply a new policy that a federal agency decided to impose, in its sole discretion. And it happens every single day across the hundreds of federal agencies in Washington– a sort of 'self-legislation' which creates thousands of pages of new regulations that each and every American is obliged to obey.

Not exactly what the Founding Fathers had in mind…

In the case of FinCEN, the agency has conjured a rule creating (by their estimate) 31,000 new unpaid government spies. You might be one of them. And in the coming months, you can expect more rulings that will apply to other professions– real estate agents, pawn brokers, and just about anyone who deals in cash.

Have you reached your breaking point yet?

Ira Epstein's Weekly Metal Report

Posted: 08 Feb 2012 10:02 AM PST

Currently gold is trading off events created by the ongoing Greece financial drama. Behind the scenes there's the possibility of quantitative easing programs coming back into play, not only here in the US, but abroad as well. England may announce one as soon as tomorrow.


A Miner Key – Turd's Latest Thinking on Gold and Silver Miners

Posted: 08 Feb 2012 09:28 AM PST

from TFMetalsReport.com:

I've received quite a few requests lately for some technical analysis of some of our favorite miners. Fortunately, today, I finally had some time to actually do the work necessary to write one. Here you go!

Of course, there's a lot more to evaluating the miners than simply TA. Production costs, provable reserves and hedging practices are all fundamental measurements for mining companies and anyone willing to invest considerable sums of money into these shares must be willing to do this additional homework. For those of you too bored or too lazy to go to all of this trouble, I present the charts below.

Read More @ TFMetalsReport.com

Dan Norcini: Continued Dollar Selling to Keep a Firm Bid for Gold

Posted: 08 Feb 2012 09:22 AM PST

from King World News:

With continued volatility in global markets, today King World News interviewed legendary Jim Sinclair's chartist Dan Norcini. When asked about the chaotic, whipsaw trading action in the markets, Norcini stated, "Yesterday was the Bernanke rally in the commodity markets. It was all about Bernanke reinforcing the view that the global economy, but particularly the US economy, is in such a condition that it's going to require a very low interest rate environment for at least the next 18 months and possibly out to the year 2014."

Dan Norcini continues: Read More @ KingWorldNews.com

Gold Prices Driven Higher by Europe and China: Greg Weldon and Grant Williams

Posted: 08 Feb 2012 09:14 AM PST

The Gold Report: Recent headlines continue to focus on the debt crisis in Europe as more countries are having their debt downgraded. Greg, you have diagnosed the problem as credit addiction and said that the European Union won't be able to recover until leaders take painful measures necessary to kick their addiction. What does this mean for commodities and commodity equities? Greg Weldon: It's critical for asset prices across the globe. It is a debt addiction, debt refinancing and deficit financing problem, not only in Europe, but also in the U.S. and Japan. Austerity is the real answer to the fact that there is too much debt, and austerity measures in an economic sense are not positive. My fear is that it's going to be very difficult to see how economies in Europe, the U.S. and Japan can stand on their own two feet without the assistance of central banks debasing currency through debt monetization. I liken it to filling the sink halfway up with water and pulling the plug out of the...


The High Cost of 0% Rate

Posted: 08 Feb 2012 09:14 AM PST

08-Feb (24hGold) — The interminable extension by the US Federal Reserve on the 0% rate into 2014 represents history in the making. It is the adoption of pure heresy in monetary policy, making it mainstream. Worse, it forces foreign central banks to adopt the same destructive policy in the Competing Currency War. Once upon a time, the highest priests from the central bank would admit in a guiding tone that accommodation on interest rates must be temporary. Nowadays it is engrained in the market mindset and permanent in monetary policy. The chronic 0% means the entire financial and monetary system is totally irreparably broken. The old pendulum where the tilt was toward bonds during recession, then toward stocks during recovery, that is all gone, shattered by the endless financial crisis. One must incorporate a new thinking, that the entire financial and monetary system is totally irreparably broken, then adapt in fierce defense. Larry Fink of Blackrock private equity firm made news today by suggesting that 0% bond yields offer no return on investment. How true! He did not offer any accurate reflection of reality that the financial structures are broken, nor that all attempts at remedy were flimsy and misdirected. He gave the ALL IN signal for buying stocks in 2012, thus putting on the risk trade. The immediate ancillary signal is to back up the truck and load up with GOLD also.

[source]

Gold Price Lost $17.10 Today a Close Below $1,710 Will Drag Gold Further Down

Posted: 08 Feb 2012 09:08 AM PST

Gold Price Close Today : 1729.30
Change : (17.10) or -0.98%

Silver Price Close Today : 3367.30
Change : 49.20 cents or -1.44%

Gold Silver Ratio Today : 51.356
Change : 0.239 or 0.47%

Silver Gold Ratio Today : 0.01947
Change : -0.000091 or -0.47%

Platinum Price Close Today : 1663.50
Change : 13.20 or 0.80%

Palladium Price Close Today : 713.75
Change : 6.30 or 0.89%

S&P 500 : 1,349.96
Change : 2.91 or 0.22%

Dow In GOLD$ : $154.01
Change : $ 1.59 or 1.04%

Dow in GOLD oz : 7.450
Change : 0.077 or 1.04%

Dow in SILVER oz : 382.62
Change : 5.68 or 1.51%

Dow Industrial : 12,883.95
Change : 5.75 or 0.04%

US Dollar Index : 78.61
Change : 0.037 or 0.05%

Both the GOLD PRICE and the SILVER PRICE fell back from the top of their recent trading ranges, gainsaying all yesterday's showy performance. GOLD PRICE fell $17.10 to a Comex close at $1,729.30 and silver tumbled right along with it, losing 49.2% to settle at 3367.3c.

GOLD PRICE jaws were slapped by a $1,751.50 high. It wasn't hit hard enough to fall below $1,725, but today argues that it will sink further. A close below $1,710 will drag gold much further down, and it remains plumb on its uptrend line, a precarious perch.

SILVER PRICE fell back to the 3360c support/resistance, leaving behind a pattern that looks awfully top-heavy and that has broken its uptrend line. Silver closed at 3367.3, near the day's low at 3362c.

If silver could punch through that 300 day moving average overhead at 3453c, then it could fly. However, the 300 DMA seems to be winning this wrestling match. A close below 3290c will confirm that silver is being thrown.

Got to be honest here, if a bit anxious. Silver has already made two bottoms at 2615c, and triple bottoms don't exist. Therefore t'would ease anxiety if silver dropped no further than its 50 DMA (3104c), then resumed climbing.

But we watch and wait for the market to tell us -- we don't tell the market. Surprises like today's, a sharp drop after a muscular climb, remind us of humility, and that markets can do whatever they want. Hence it is NOT unthinkable that silver might turn tomorrow and break upwards through the 300 DMA. I reckon a failure in the Great Greek Debt Deal might send money scurrying into gold unexpectedly. Given the euro's strength today, markets clearly expect the Greeks to buy the deal. If they do, it will be time to sell the euro again, because It Won't Get Any Better Than That for a while.

Well, once again today, a Greek Debt Deal is Near. Near, as in the comparative form of "nigh", meaning that it is more nigh that it was a week ago. Or, at least a default draws nigher.

Last on the euro is 1.3263, up 0.03% although no Debt Deal has yet been inked. 'Twould be a nasty awakening for all those folks who have gone long euros should the Greeks balk and the deal fall through.

US dollar index is holding its breath today, too. Rose a piddling 3.7 basis points (0.05%) to 78.613. Interesting that the dollar index still mulishly evades a decisive and plainspoken break through 78.50.

The yen, on the other ocean, had no problem sinking through its 20 DMA (130.15c) to 129.9c/Y100 (Y76.98/US$1), down 0.29%. Psychologically any close through a round number like "130c" smashes investor morale. Bottom of this range enters about 129.35c, the 50 DMA. Below that the range's bottom boundary crosses about 127.75c.

Stocks were displeased that the Greek Debt Deal drew no nearer, as they had been waiting on it all day. Dow ended up 5.75 points after spending most of the day lower, sort of like saying, "Well, look on the bright side -- at least your submarine didn't SINK." Dow closed at 12,883.95. S&P500 rose 2.91 to close at 1,349.96.

Pretty amazing that little Greece could discombobulate mighty Wall Street. Does that hide in its bosom a message?

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.

Epic Collapse For Phil Falcone Whose Harbinger Is Forced To Pay 15% Interest On Secured Loan

Posted: 08 Feb 2012 08:52 AM PST

And so the legend of the once invincible "hedge fund titan" Phil Falcone, often the target of mockery and ridicule on the pages of Zero Hedge, ends, after his now irrelevant hedge fund which peaked in the tens of billions back in 2006/2007 is forced to borrow a secured loan from Jefferies at a 15% rate. The reason - the firm's all in gamble in satellite communication company LightSquared, which is also pretty much finished following today's announcement by airline carriers who said that LightSquared would "ruin US aviation." That, and pretty much everything else that Falcone invested in in the past 5 years. Check and mate. This also answers our question from August 2010 "Is Phil Falcone's Mega Bet On [LightSquared] Going To Be His Last?" It is.

From Bloomberg:

Billionaire Phil Falcone's hedge fund, which tumbled by almost half last year because of a troubled wireless venture, is paying a 15 percent interest rate for a $190 million loan, almost triple what the riskiest corporate borrowers pay, said two people with knowledge of the loan. The loan is backed by all of the fund's assets, according to the people. In addition to LightSquared, they include a 27 percent stake in Ferrous Resources Ltd., an iron-ore producer in Brazil, and a 54 percent stake in Spectrum Brands Holdings Inc., a Madison, Wisconsin-based manufacturer of batteries and pet food. If any assets are sold, Jefferies gets paid first, according to the people, and the lender has the right to help sell some of the assets at an agreed upon minimum price.

 

Falcone borrowed the money from Jefferies Group Inc. after paying off a $400 million loan from UBS AG on Jan. 30. Falcone received $160 million from New York-based Jefferies after fees, and will pay an annualized rate of 15 percent on the loan, which matures on Oct. 31, according to the people, who asked not to be identified because the fund is private. Interest on the loan will be paid monthly.

 

The premium Falcone's hedge fund must pay to borrow money illustrates just how risky lenders view his biggest wager. His main Harbinger Capital Partners Master Fund I has more than 60 percent of its assets invested in LightSquared Inc., a Reston, Virginia-based firm that plans to build out a network offering high-speed data service to as many as 260 million people.

 

LightSquared is awaiting final clearance from the Federal Communications Commission as regulators weigh test results that show the service's signals disrupt global-positioning system equipment used by cars, tractors, boats and planes.

 

LightSquared argues that technical solutions exist to resolve the interference and GPS manufacturers should have planned to accommodate the firm's use of the spectrum.

Things could always be worse though: Phil could be paying 500%, the same as Greece. For that however, he would have to pledge, most sternly, that LightSquared would be profitable as soon as 2013 though... And of course, Phil still has the missus.

Hathaway: ‘People Are Right to be Scared & Gold is a Necessity'

Posted: 08 Feb 2012 08:41 AM PST

With gold and silver consolidating recent gains, today four decade veteran John Hathaway told King World News that many of his clients are scared because of what is happening in the economy and the global financial system.  Hathaway is the prolific manager of the Tocqueville Gold Fund and he has achieved a 5-star rating from Morningstar.  Here is what Hathaway had to say:  "People are scared on a number of different fronts.  It's economic, the fact that the economy is basically going nowhere.  The policies of the administration.  We have no solution to the fiscal issues in site.  You know people are right to be scared.  The direction of public policy in this country is dreadful."

John Hathaway continues:

"If you look at Europe, that's a farce.  I've given up watching what's going on in Greece.  If they have an agreement, you can bet it will fall apart within a month of them signing it.  Europe hasn't been solved.  So anybody with liquid assets in this world, given this macro climate where financial repression is the avowed policy of treasury departments and central banks around the world, you've got to think about gold.  And gold is not a trade.  You don't do it to make money, you do it to protect capital.

Continue

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Gold Daily and Silver Weekly Charts

Posted: 08 Feb 2012 08:08 AM PST


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

Norcini - Continued Dollar Selling to Keep a Firm Bid for Gold

Posted: 08 Feb 2012 07:44 AM PST

With continued volatility in global markets, today King World News interviewed legendary Jim Sinclair's chartist Dan Norcini. When asked about the chaotic, whipsaw trading action in the markets, Norcini stated, "Yesterday was the Bernanke rally in the commodity markets.  It was all about Bernanke reinforcing the view that the global economy, but particularly the US economy, is in such a condition that it's going to require a very low interest rate environment for at least the next 18 months and possibly out to the year 2014."


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

In the Bullring With Gold

Posted: 08 Feb 2012 07:29 AM PST

06-Feb (USFunds) — After prices fell 10 percent in December, many investors wondered if the bull market in gold was running out of steam. That was before Federal Reserve Chairman Ben Bernanke swooped in with a "red cape" and fired the bulls back up. Since the Fed reassured the world that interest rates will remain at "exceptionally low levels" for another two years, gold has jumped more than three percent.

UBS described the situation simply, "if investors needed a (further) reason why they should be long gold now, they got it yesterday … a more accommodative policy is a very good foundation for gold to build on the next move higher."

To gold bugs, two more years of near-zero, short-term interest rates means negative real interest rates are here to stay, and this has historically been a strong driver for higher gold prices.

…One of the main weapons central bankers have employed is money supply, which has created a ton of liquidity in the global system. Global money supply rose 8 percent year-over-year in December, or about $4 trillion, according to ISI.

[source]

A New Reason Gold Stocks Will Soar

Posted: 08 Feb 2012 07:00 AM PST

There are a number of reasons why many of us believe gold stocks will shoot for the moon before this bull market is over – they've done so many times in the past… the gold price still has a long way to climb… and producers are generating record revenue and profits. But I think there's another reason why gold stocks will soar – one that hasn't dawned on many in the industry yet.


US Dollar Bulls Your Turn to Rock and Roll

Posted: 08 Feb 2012 06:59 AM PST

Well its crunch time for the US dollar bullish trend (unless of course we get a real nasty shake out), its time for the bulls to show up and rock the trend higher. Read More...



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