Gold World News Flash

Open Thread
Fed?s Actions Are a Path to Ruin NOT Prosperity! Here?s Why
Today's (quote-unquote) "Gold"
MUST HEAR! Ranting Andy Hoffman: $1,000 – $4,000 SILVER & the Demise of the Bankster Cartel
Pierre Lassonde & Richard Russell: Epic Gold Buying & Inflation
Gold Seeker Closing Report: Gold Gains While Silver Soars Almost 3%
Gold to Assault November High
The Federal Reserve's Explicit Goal: Devalue The Dollar 33%
Preparing for the Collapse of the Petrodollar System, Part 2
Preparing for the Collapse of the Petrodollar System – Part 2
$15,OOO,OOO,OOO,OOO FRAUD EXPOSED in UK House of Lords
An Undervalued Gold Stock That Could Double In Price
Impartial Analysis Finds Only Ron Paul Would Cut US Debt Burden
1980 Was A Warm-up, Gold To Trade In A Range Of $400 A Day And More
Harvey Organ's Daily Gold & Silver Report
Biderman's Daily Edge 2/23/2012: Finding Success While World Economies Shrink
Guest Post: The Greek Tragedy And Great Depression Lessons Not Learned
The Largest Gold-Accumulation Plan of All Time
Public won't notice gold until another record high, Embry tells KWN
NYPD – “I DID NO MORE THAN YOU LET ME DO”
Unintended Consequences
Gasoline Prices Are Not Rising, the Dollar Is Falling
Embry - Fending Off Collapse & Next Move for Gold, Silver, Oil
Eric Sprott On Unintended Consequences
Leniency sought in sentencing of Liberty Dollar founder
Grandich Client Geologix Explorations
Grandich Client Sunridge Gold
Gold Price is Climbing up the December Low and Should Break Above it Tomorrow
India Silver Imports May Top 5,000 Tonnes in 2012
Commodities Market Wrap, Gold, Silver, U.S.D.

Posted: 23 Feb 2012 08:37 PM PST

See you later tonight. Go Silver.

Fed?s Actions Are a Path to Ruin NOT Prosperity! Here?s Why

Posted: 23 Feb 2012 06:00 PM PST

Currency wars arise when a country steals growth from trading partners by cheapening its currency to promote exports. The new currency war began in 2010 when President Obama declared in his State of the Union address that it was the policy of the United States to double exports in five years. Since the U.S. would not become twice as productive in five years, the implication was the U.S. would severely cheapen its currency to achieve this goal. [Let me expand upon this.] Words: 666 So says Jim Rickards in edited excerpts from the original article* as posted on Seeking Alpha which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity – see Editor’s Note at the bottom of the page. (This paragraph must be included in any article re-posting to avoid copyright infringement.) Rickards*goes on to say, in part: Why Cheapen The USD? The Federal Reserve set about trying to cheapen the dollar through policies such as...

Today's (quote-unquote) "Gold"

Posted: 23 Feb 2012 05:32 PM PST

There were a few great discussions going on in the last thread and I thought I'd rejuvenate it with a fresh count! Early on in the thread Hawks5999 quoted me and OG from Yo Warren B, you are so OG! and then asked a question: FOFOA: "Gold would not be valuable if one person owned all of it. It is most valuable in its widest distribution possible, the wealth reserve, which requires a much

MUST HEAR! Ranting Andy Hoffman: $1,000 – $4,000 SILVER & the Demise of the Bankster Cartel

Posted: 23 Feb 2012 05:09 PM PST

Here's my new exclusive interview with writer and financial pundit 'Ranting Andy' Hoffman from Miles Frankiln precious metals. In Part 1 we talk about the fall of Greece at the hands of the IMF banksters and Silver to $50 by summer (which will help to break the backs of the criminal banking cartel). And don't miss Part 2: $6 Trillion in seized bonds and $1,000 – $4,000 SILVER!

Part 1:
Eurozone Nightmare, $50 Ag By Summer & End of the Cartel

Part 2:
MUST HEAR! $1,000 – $4,000 SILVER

Pierre Lassonde & Richard Russell: Epic Gold Buying & Inflation

Posted: 23 Feb 2012 04:09 PM PST

Today King World News wanted to pass along a little information from two of the great ones, Pierre Lassonde and Richard Russell. Lassonde gets KWN readers up to speed regarding his thoughts on what is currently happening, but first, the Godfather of newsletter writers, Richard Russell, had this to say: "I watched 60 Minutes last night, and the first segment was about people who haven't been able to find a job in over a year (in some cases three years). The situation is distressing and actually very scary."

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

Gold Seeker Closing Report: Gold Gains While Silver Soars Almost 3%

Posted: 23 Feb 2012 04:00 PM PST

Gold traded mostly slightly lower in Asia and London, but it then rose to as high as $1787.15 in New York and ended with a gain of 0.05%. Silver surged to as high as $35.592 and ended with a gain of 2.82%.

Gold to Assault November High

Posted: 23 Feb 2012 03:51 PM PST

courtesy of DailyFX.com February 22, 2012 06:31 PM Daily Bars Prepared by Jamie Saettele, CMT “Gold’s break higher shifts focus to the November high at 1813.30, the 61.8% extension of the 1527.30-1764 rally at 1853.85 and ultimately the September and all time high at 1932.60.” Near term structure remains bullish with the recent pullback probably composing a small 4th wave. 1773 is support. Bottom Line – Higher...

The Federal Reserve's Explicit Goal: Devalue The Dollar 33%

Posted: 23 Feb 2012 03:12 PM PST

The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.

But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the "dollar" in 2032 will be worth one-third less (100/150) than what we call a dollar today. Read more.....

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

Preparing for the Collapse of the Petrodollar System, Part 2

Posted: 23 Feb 2012 02:38 PM PST

The Same Game with a New Name: "Dollars for Oil" Replaces "Dollars for Gold"

by Jerry Robinson, FTMDaily.com:

In the early 1970s, the final vestiges of the international gold-backed dollar standard , known as the Bretton Woods arrangement, had collapsed. Many foreign nations, who had previously agreed to a gold-backed dollar as the global reserve currency, were now having serious mixed feelings toward the arrangement. Nations like Britain, France, and Germany determined that a cash-strapped and debt-crazed United States was in no financial shape to be leading the global economy. They were just a few of the many nations who began demanding gold in exchange for their dollars.

Despite pressure from foreign nations to protect the dollar's value by reining in excessive government spending, Washington displayed little fiscal constraint and continued to live far beyond its means. It had become obvious to all that America lacked the basic fiscal discipline which could prevent a destruction of its own currency.

Read More @ FTMDaily.com

Preparing for the Collapse of the Petrodollar System – Part 2

Posted: 23 Feb 2012 02:19 PM PST

Maintaining the petrodollar system is the American empire's primary goal. Everything else is secondary.

$15,OOO,OOO,OOO,OOO FRAUD EXPOSED in UK House of Lords

Posted: 23 Feb 2012 02:13 PM PST

Lord James has spoken in the House of Lords holding evidence that a transaction of 750,000 metric tonnes of gold and has called for an investigation.

An Undervalued Gold Stock That Could Double In Price

Posted: 23 Feb 2012 02:10 PM PST

Leveraged earnings gains from rising gold prices have historically resulted in gold stocks outperforming gold bullion. From 2000 to the highs of 2008, the PHLX Gold/Silver Index (XAU) rose by 345% compared to a 252% increase in the price of gold. Over the past two years, the out performance of gold stocks has come to [...]

Impartial Analysis Finds Only Ron Paul Would Cut US Debt Burden

Posted: 23 Feb 2012 01:35 PM PST

from ZeroHedge:

When one puts aside all the histrionics, all the melodrama, all the irrelevant secondary bullshit such as appearance, charisma, ability to tele-evangelize, all the irrelevant policies such as what planet the US should colonize or how women should procreate, and focuses on just one thing: which presidential candidate (not to mention president) will do the right thing for America, which is to make sure that it doesn't collapse under a record debt load, there is just one answer. And it is not even ours: it comes from the impartial Committee for a Responsible Federal Budget Project, aka US Budget Watch ("U.S. Budget Watch neither supports nor opposes any candidate for office. Its reports are intended to promote understanding and discussion of the federal budget and how specific policy proposals would affect the deficit") which today released an analysis on debt sustainability titled "The GOP Candidates and the National Debt." The answer is in the chart below.

Read More @ ZeroHedge.com

1980 Was A Warm-up, Gold To Trade In A Range Of $400 A Day And More

Posted: 23 Feb 2012 01:26 PM PST

Dear Friends, Today legendary trader and investor Jim Sinclair told King World News that movements in gold will become so violent that gold will become untradable to individuals. Sinclair also said that gold will be the last great bubble as it goes into a geometric uptrend. Here is what Sinclair had to say about what we can expect to see going forward: "Liquidity, it's as simple as that. All of this is the event that's taken place many times in history. Many times in history there has been an inflation caused by volatility in currencies called currency induced cost push inflation." Jim Sinclair continues: "The younger generation has no concept of this. They look at inflation as ebullient business and they look at deflation as being a breadline. They don't recognize that during a period of extremely difficult business conditions, (you see) some of the highest rates of inflation. It's a question of whether our indicators will ever show inflation agai...

Harvey Organ's Daily Gold & Silver Report

Posted: 23 Feb 2012 12:41 PM PST

silver imports into India/Greece/Bank of America mortgage putbacks/Sprott silver arrives/

Biderman's Daily Edge 2/23/2012: Finding Success While World Economies Shrink

Posted: 23 Feb 2012 12:35 PM PST

TrimTabs President & CEO Charles Biderman gives advice on how to improve your portfolio amid tough economic times, Gold, Silver & more

Guest Post: The Greek Tragedy And Great Depression Lessons Not Learned

Posted: 23 Feb 2012 12:20 PM PST

By Nomi Prins

The Greek Tragedy And Great Depression Lessons Not Learned

Greece has been the most pillaged country in Europe this Depression, among other reasons, because no one in any leadership position seems to have learned lessons from the 1930s. Plus, banks have more power now than they did then to call the shots.

Despite no signs of the first bailout working – certainly not in growing the Greek economy or helping its population - but not even in being sufficient to cover speculative losses, Euro elites finalized another 130 billion Euro, ($170 billion) bailout today. This is ostensibly to avoid banks' and credit default swap players' wrath over the possibility of Greece defaulting on 14.5 billion Euros in bonds.

Bailout promoters seem to believe (or pretend) that: bank bailout debt + more bank bailout debt + selling national assets at discount prices + oppressive unemployment = economic health. They fail to grasp that severe austerity hasn't, and won't, turn Greece (or any country) around. Banks, of course, just want to protect their bets and not wait around for Greece to really stabilize for repayment.

Prior to the Great Depression, the Greek economy experienced years of growth, a healthy commercial activity spree, and like today, a stark increase in (less-leveraged) bank loans to finance it. When the Depression struck, banks and local businesses faced unpayable loans and declining asset values. (Stop me when this sounds familiar).

Credit constricted immediately, choking internal economic activity. In 1928, the Greek Drachma was tied to the gold standard, but pegged to the British pound. When Britain devalued its pound in 1931, the Greek government responded by raising public investments and pegging the Drachma to the US dollar.

But by early 1932, central bank reserves had fallen so much that they only backed 40% of Greek bonds. Even without the slow drip of rating agency downgrades to highlight this leveraged debt situation (which is nothing compared to say, today's US reserves vs. debt leverage), the lack of reserves caused foreign speculators to fleece the Drachma/dollar exchange rate. Bond yields blew out. Borrowing costs shot up.

So in March 1932, the League of Nation's (the precursor bank bailout entity to the ECB/IMF) agreed to provide a loan to service Greece's debt in return for – wait for it - austerity measures. Unlike today, the government said 'hell no.' Instead, in April, 1932, it floated the Drachma - which devalued quickly. It also declared a public debt moratorium, and increased infrastructure spending to strengthen its economy. It negotiated repayment terms with creditors for overdue interest. By 1934, agriculture and industrial production rose, the currency was more stable, employment increased, and the budget balanced.

The situation is different now. Though national Greek banks registered relatively few domestic loan losses in 2009 ( a fact unrecognized by the bailout supporters), they did begin taking losses in their trading books due to various international bets. Their borrowing and margin costs rose sharply and quickly with each rating downgrade which increased their trade losses, and kept them from extending or renegotiating loans locally, which caused more economic pain for the population.

Greece would have been better off, had it not suffered a rapid series of downgrades and been pulverized by subsequent hot-money flight and pressure. Despite a clear warning from the Central Bank of Greece in late 2009 (when Greece was critical, but breathing) that it could sustain its costs if they didn't rise egregiously, Moody's (and later others) cut Greece's sovereign debt rating from A1 to A2 in December, 2009. From that point on, the international banking community went into ravage mode, fast.

Moody's cut Greece's debt again, to A3 in April, 2010, to Ba1 (junk) in June, 2010, and to B1 in March, 2011. Three months later, Greece's rating was cut to Caa1. By September, 2011 the six biggest Greek banks were downgraded to Caa2, a smidge above default levels, crushing national credit flow to the population.

When any country is downgraded from single A to junk within 18 months, it has to issue more expensive debt to stay even, which by definition, makes the credit-worthiness of its bonds decline. As in any country, Greece's banks are big buyers of its government bonds. They also use those bonds as collateral for other borrowing and trades - with each other – and with international banks.

As Greek banks weakened and borrowing costs soared, their ability to buy Greek bonds from their own government diminished, which weakened the value of government debt. Circularly, Greek banks took further hits for holding the devalued Greek bonds and thus become weaker - further reducing their ability to sustain local needs.

That is why the Greek government wants to bolster its now junk-rated banks (in addition to the money that banks are getting directly from bailout-for-austerity loans) and foreign ones, at the cost of hurting the population. But since the economy (even at its healthiest level ever) can't sustain its bailout borrowing costs (as opposed to its operating costs which would have been payable without the increased rates and bailout principle mixed in), this is an unstoppable downward spiral.

Greece's GDP has contracted 13% (by 7% in the last quarter of 2011) from a late 2008 record high. (By comparison, the United Kingdom's GDP has fallen by 20% in the same period, and though its unemployment rate has risen, its borrowing costs remain manageably low, making it cheaper to sustain its banks.) Greece's savings rate at 7.5% is at three decade lows (but still higher than that of the US).

Meanwhile, Greece's debt to GDP ratio is 160%. (It hovered around 100% from 1994 through 2008.) The unemployment rate at 20.9%, and the youth unemployment rate at 48%, has doubled since January 2008. There is nothing to indicate it won't keep rising.

Money continues fleeing Greek banks, bonds, and stocks, as citizens try to preserve what they can, and foreign speculators play a game of chicken with bailout providers. The Greek stock market stands at just one-fifth of its January 2008 level. Ten year government bond yields are at 33%, compared to 5% just two years ago.

The speed and intensity of Greece's decline reflects nothing short of an international mafia-style hit.

The majority of Greek workers didn't break the government's back, even if a very small subset strained it. Further, the more bailout measures forced on Greece, the more its economy will be ravaged to repay them. After four rounds of austerity, nationwide protests, $110 billion Euros in IMF and ECB bailouts, escalating interest rates driving borrowing costs higher and choking credit, a downgrade to junk, a Prime Minister replacement, and now another big bailout, Greece's tragedy is just beginning.

Yet lessons from the Great Depression exist. By floating the Drachma (the equivalent of leaving the Euro), negotiating individually with creditors (telling banks to back off), and increasing internal public focus (the opposite of what's going on now) Greece was able to stabilize more quickly than larger European countries. It's not entirely too late to try again: but it requires the currently unimaginable: a political will that is population – rather than bank – oriented.

The Largest Gold-Accumulation Plan of All Time

Posted: 23 Feb 2012 12:19 PM PST

By Porter Stansberry Thursday, February 23, 2012 For more than 30 years, since the start of the country's "Reform Era" in 1978, China has been selling (exporting) more goods than it has imported. That's allowed the nation to stockpile trillions of dollars – more money than our entire monetary base totaled before the recent financial crisis. The way it works is simple to understand. When a Chinese business earns dollars by selling overseas, the law requires the company to hand those dollars over to the country's central bank, the People's Bank of China (PBOC). In return, the business gets Chinese currency (called either the "yuan" or the "renminbi") at a fixed rate. There's nothing fair about this. The Chinese people do all the work, and the Chinese government keeps all of the money. But that's the way it goes. At first, the dollar inflow was small because trade between the two countries was tiny. In 1980, for example, China's foreign currency res...

Public won't notice gold until another record high, Embry tells KWN

Posted: 23 Feb 2012 12:18 PM PST

8:15p ET Thursday, February 23, 2012

Dear Friend of GATA and Gold:

Sprott Asset Management's John Embry tonight tells King World News that gold's rise this month would have been greater except for the continuing efforts to suppress it. He is confident that more money printing is inevitable, and thus higher prices for gold, but he doesn't think the public will start paying attention until gold makes another record high. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/2/23_Em...

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

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NYPD – “I DID NO MORE THAN YOU LET ME DO”

Posted: 23 Feb 2012 12:17 PM PST

THE HANGMAN By Maurice Ogden Into our town the hangman came, smelling of gold and blood and flame. He paced our bricks with a different air, and built his frame on the courthouse square. The scaffold stood by the courthouse side, only as wide as the door was wide with a frame as tall, [...]

Unintended Consequences

Posted: 23 Feb 2012 11:55 AM PST

by Eric Sprott & David Baker, Sprott.com:

2012 is proving to be the 'Year of the Central Bank'. It is an exciting celebration of all the wonderful maneuvers central banks can employ to keep the system from falling apart. Western central banks have gone into complete overdrive since last November, convening, colluding and printing their way out of the mess that is the Eurozone. The scale and frequency of their maneuvering seems to increase with every passing week, and speaks to the desperate fragility that continues to define much of the financial system today.

The first major maneuver took place on November 30, 2011, when the world's G6 central banks (the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank [ECB], the Swiss National Bank, and the Bank of Canada) announced "coordinated actions to enhance their capacity to provide liquidity support to the global financial system".1 Long story short, in an effort to avert a total collapse in the European banking system, the US Fed agreed to offer unlimitedUS dollar swap agreements with the other central banks. These US dollar swaps allow the other central banks, most notably the ECB, to borrow US dollars from the Federal Reserve and lend them to their respective national banks to meet withdrawals and make debt payments. The best part about these swaps is that they are limitless in scope – meaning that until February 1, 2013, the Federal Reserve is, and will be, prepared to lend as many US dollars as it takes to keep the financial system from imploding. It sounds absolutely great, and the Europeans should be nothing but thankful, except for the tiny little fact that to supply these unlimited US dollars, the Federal Reserve will have to print them out of thin air.

Read More @ Sprott.com

Gasoline Prices Are Not Rising, the Dollar Is Falling

Posted: 23 Feb 2012 11:47 AM PST

Unfortunately, the talking heads that are trying to explain the reasons for high oil prices are missing one tiny detail.

Embry - Fending Off Collapse & Next Move for Gold, Silver, Oil

Posted: 23 Feb 2012 10:59 AM PST

"Silver has moved above $35 and that's a big number. If silver can hold $35 and move on from there then I think we can challenge the old highs fairly quickly.

Eric Sprott On Unintended Consequences

Posted: 23 Feb 2012 10:31 AM PST

By Eric Sprott and David Baker of Sprott Asset Management

Unintended Consequences (pdf)

The first major maneuver took place on November 30, 2011, when the world's G6 central banks (the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank [ECB], the Swiss National Bank, and the Bank of Canada) announced "coordinated actions to enhance their capacity to provide liquidity support to the global financial system".¹ Long story short, in an effort to avert a total collapse in the European banking system, the US Fed agreed to offer unlimitedUS dollar swap agreements with the other central banks. These US dollar swaps allow the other central banks, most notably the ECB, to borrow US dollars from the Federal Reserve and lend them to their respective national banks to meet withdrawals and make debt payments. The best part about these swaps is that they are limitless in scope - meaning that until February 1, 2013, the Federal Reserve is, and will be, prepared to lend as many US dollars as it takes to keep the financial system from imploding. It sounds absolutely great, and the Europeans should be nothing but thankful, except for the tiny little fact that to supply these unlimited US dollars, the Federal Reserve will have to print them out of thin air.

Don't worry, it gets better. Since unlimited US swap lines weren't enough to solve the problem, roughly three weeks later, on December 21, 2011, the European Central Bank launched the first tranche of its lauded Long Term Refinancing Operation (LTRO). This is the program where the ECB flooded 523 separate European banks with 489 billion euros worth of 3-year loans to keep them going through Christmas. A second tranche of LTRO loans is planned to launch at the end of February, with expectations for size ranging from 300 billion to more than 1 trillion euros of uptake.² The good news is that Italian, Portuguese and Spanish bond yields have dropped since the first LTRO went through, which suggests that at least some of the initial LTRO funds have been reinvested back into sovereign debt auctions. The bad news is that the Eurozone banks may now be hooked on what is clearly a back-door quantitative easing (QE) program, and as the warning goes for addictive drugs - once you start, it can be very hard to stop.

Britain is definitely hooked. On February 9, 2012, the Bank of England announced another QE extension for 50 billion pounds, raising their total QE print to £325 billion since March 2009.³ Japan's hooked as well. On February 14, 2012, the Bank of Japan announced a ¥10 trillion ($129 billion) expansion to its own QE program, raising its total QE program to ¥65 trillion ($825 billion).⁴ Not to be outdone, in the most recent Fed news conference, US Fed Chairman Bernanke signaled that the Fed will keep interest rates near zero until late 2014, which is 18 months later than he had promised in Fed meetings last year. If Bernanke keeps his word, by the end of 2014 the US government will have enjoyed near zero interest rates for six years in a row. Granted, extended zero percent interest rates is not nearly as satisfying as a proper QE program, but who needs traditional QE when the Fed already buys 91 percent of all 20-30 year maturity US Treasury bonds?⁵ Perhaps they're saving traditional QE for the upcoming election.

All of this pervasive intervention most likely explains more than 90 percent of the market's positive performance this past January. Had the G6 NOT convened on swaps, had the ECB NOT launched the LTRO programs, and had Bernanke NOT expressed a continuation of zero interest rates, one wonders where the equity indices would trade today. One also wonders if the European banking system would have made it through December. Thank goodness for "coordinated action". It does work in the short-term.

But what about the long-term? What are the unintended consequences of repeatedly juicing the system? What are the repercussions of all this money printing? We can think of a few.

First and foremost, without continued central bank support, interbank liquidity may cease to function entirely in the coming year. Consider the implications of the ECB's LTRO program: when you create a loan program to save the EU banks and make its participation voluntary, every one of those 523 banks that participates is essentially admitting that they have a problem. How will they ever lend money to each other again? If you're a bank that participated in the LTRO program because you were on the verge of bankruptcy, how can you possibly trust other banks that took advantage of the same program? The ECB's LTRO program has the potential to be very dangerous, because if the EU banks start to rely on the loans too heavily, the ECB may find itself inadvertently attached to the broken EU banking system forever.

The second unintended consequence is the impact that interventions have had on the non-G6 countries' perception of western solvency. If you're a foreign lender to the United States, Britain, Europe or Japan today, how comfortable can you possibly be in lending them money? How do you lend to countries whose sole basis as a going concern rests in their ability to wrangle cash injections printed by their respective central banks? Going further, what happens when the rest of the world, the non-G6 world, starts to question the G6 Central Banks themselves? What entity exists to bailout the financial system if the market moves against the Fed or the ECB?

The fact remains that there are few rungs left in the financial confidence chain in 2012, and central banks may end up pushing their printing schemes too far. In 2008-2009, it was the banks that lost credibility and required massive bailouts by their respective sovereign states. In 2010-2011, it was the sovereigns, most notably those in Europe, that lost credibility and required massive bailouts by their respective central banks. But there is no lender of last resort for the central banks themselves. That the IMF is now trying to raise another $600 billion as a security buffer doesn't go unnoticed, but do they honestly think that's going to make any difference?⁶

When reviewing today's macro environment, we keep coming back to the same conclusion. The non-G6 world isn't blind to the efforts of the Fed and the ECB. When the Fed openly targets a 2 percent inflation rate, foreign lenders know that means they will lose, at a minimum, at least 2 percent of purchasing power on their US loans in 2012. It therefore shouldn't surprise anyone to see those lenders piling into alternative assets that have a better chance at protecting their wealth, long-term.

This is likely why China reduced its US Treasury exposure by $32 billion in the month of December (See Figure 1).⁷ This is also why China, which produced 360 tonnes of gold internally last year, also imported an additional 428 tonnes in 2011, up from 119 tonnes in 2010.⁸ This may also be why China's copper imports hit a record high of 508,942 tonnes in December 2011, up 47.7 percent from the previous year, despite the fact that their GDP declined at year-end.⁹ Same goes for their crude oil imports, which hit a record high of 23.41 million metric tons this past January, up 7.4 percent year-over-year.¹⁰ The so-called experts have a habit of downplaying these numbers, but it seems pretty clear to us: China isn't waiting around for next QE program. They are accelerating their move away from paper currencies and into hard assets.

Figure 1: China Hong Kong Gold Imports vs. US Treasury Holdings

Source: US Treasury, UBS

China is not alone in this trend either. Russia has reportedly cut its US Treasury exposure by half since October 2010 (See Figure 2). Not surprisingly, Russia was also a big buyer of gold in 2011, adding approximately 95 tonnes to its gold reserves, with 33 tonnes added in the fourth quarter alone.¹¹ It's not hard to envision higher gold prices if the rest of the non-G6 countries follow-suit.

Figure 2: Russia US Treasury Holdings ($BN)

Source: Zerohedge.com

The problem with central bank intervention is that it never works out as planned. The unintended consequences end up cancelling out the short-term benefits. Back in 2008, when the Fed introduced zero percent interest rates, everyone thought it was a great policy. Four years later, however, and we're finally beginning to appreciate the complete destruction it has wreaked on savers. Just look at the horror show that is the pension industry today: According to Credit Suisse, of the 341 companies in the S&P 500 index with defined benefit pension plans, 97 percent are underfunded today.¹² According to a recent pension study by Seattle-based Milliman Inc., the combined deficit of the 100 largest defined-benefit plans in the US increased by $236.4 billion in 2011 alone.¹³ The main culprit for the increase? Depressed interest rates on government bonds.¹⁴

Let's also not forget the public sector pension shortfalls, which are outright frightening. In Europe, unfunded state pension obligations are estimated to total

$39 trillion dollars, which is approximately five times higher than Europe's combined gross debt.¹⁵ In the United States, unfunded pension obligations increased by $2.9 trillion in 2011. If the US actually acknowledged these costs in their deficit calculations, their official 2011 fiscal deficit would have risen from the reported $1.3 trillion to $4.2 trillion.¹⁶ Written the long way, that's a deficit of $4,200,000,000,000,… in one year.

There is unfortunately no economic textbook to guide us through these strange times, but common sense suggests we should be extremely wary of the continued maneuvering by central banks. The more central banks print to save the system, the more the system will rely on their printing to stay solvent - and you cannot solve a debt problem with more debt, and you cannot print money without serious repercussions. The central banks are fueling a growing distrust among the creditor nations that is forcing them to take pre-emptive actions with their currency reserves. Individual investors should take note and follow-suit, because it will be a lot easier to enjoy the "Year of the Central Bank" if you own things that can actually benefit from all their printing, as opposed to things that can only be destroyed by it.

1 Board of Governors of the Federal Reserve System (November 30, 2011) "Coordinated central bank action to address pressures in global money markets".
http://www.federalreserve.gov. Retrieved February 15, 2012 from: http://www.federalreserve.gov/newsevents/press/monetary/20111130a.htm
2 Jenkins, Patrick and Oakley, David (January 30, 2012) "Banks set to double crisis loans from ECB". Financial Times. Retrieved February 15, 2012 from:
http://www.ft.com/intl/cms/s/0/09ab9542-4b6d-11e1-b980-00144feabdc0.html
3 Telegraph Staff (February 9, 2012) "Bank of England restarts QE with £50bn stimulus". The Telegraph. Retrieved February 16, 2012 from:
http://www.telegraph.co.uk/finance/economics/9071622/Bank-of-England-restarts-QE-with-50bn-stimulus.html
4 Fujikawa, Megumi and Ito, Tatsuo (February 14, 2012) "Bank of Japan Surprises by Easing, Setting Price Goal". Wall Street Journal. Retrieved February 17, 2012 from:
http://online.wsj.com/article/SB10001424052970204883304577222063451464968.html?_nocache=1329249611524&user=welcome&g=id-wsj
5 Zeng, Min (February 10, 2012) "Fed's 'Operation Twist' Tangles Treasury Trade". Wall Street Journal. Retrieved February 15, 2012 from:
http://online.wsj.com/article/SB1000142405297020331580457721130304241603...
6 Wroughton, Lesley and Hughes, Krista (January 18, 2012) "IMF seeks more funds". Reuters. Retrieved February 14, 2012 from:
http://www.reuters.com/article/2012/01/18/us-imf-resources-idUSTRE80H0VU20120118
7 Mackenzie, Michael (February 15, 2012) "China anticipates Fed quantitative easing". Financial Times. Retrieved February 16, 2012 from:
http://www.ft.com/intl/cms/s/0/27a221be-57e4-11e1-b089-00144feabdc0.html#axzz1mSKyDrxw
8 Hook, Leslie (February 7, 2012) "China gold imports from HK surged in 2011". Financial Times. Retrieved February 14, 2012 from:
http://www.ft.com/intl/cms/s/0/d26cd2d6-518d-11e1-a99d-00144feabdc0.html#axzz1mH8V3yyg
9 Hook, Leslie (January 10, 2012) "China's copper imports hit record". Financial Times. Retrieved February 15, 2012 from:
http://www.ft.com/intl/cms/s/0/e8e76eda-3b68-11e1-a09a-00144feabdc0.html#axzz1mSKyDrxw
10 Bloomberg News (February 20, 2012) "China January Oil Imports Rise to Record 23.41 Million Tons". Bloomberg. Retrieved February 20, 2012 from:
http://www.businessweek.com/news/2012-02-13/china-january-oil-imports-rise-to-record-23-41-million-tons.html
11 World Gold Council (February 16, 2012) "Gold Investment Trends". World Gold Council. Retrieved February 17, 2012 from:
http://www.gold.org/investment/research/regular_reports/gold_demand_trends/
12 Scheyder, Ernest and Mincer, Jilian (January 26, 2012) "Analysis: Pension shortfalls a stark corporate challenge". Reuters. Retrieved February 15, 2012 from:
http://www.reuters.com/article/2012/01/26/us-corporate-pensions-idUSTRE80P03720120126
13 Milliman, Inc. (January 6, 2012) "Milliman analysis: Bad year for pensions ends badly". Milliman, Inc. Retrieved February 15, 2012 from:
http://www.milliman.com/news-events/press/pdfs/pfi-december-2011.pdf
14 Philips, Matthew and Campbell, Dakin (February 2, 2012) "Banks, Pensions are Squeezed as Fed's Low Rates Erode Profits". Bloomberg. Retrieved February 16, 2012 from: http://www.bloomberg.com/news/2012-02-02/banks-pensions-are-squeezed-as-fed-s-low-rates-erode-profits.html
15 Christie, Rebecca and Woodifield, Peter (January 11, 2012) "Europe's $39 Trillion Pension Risk Grows as Economy Falters". Bloomberg. Retrieved February 16, 2012 from: http://www.bloomberg.com/news/2012-01-11/europe-s-39-trillion-pension-threat-grows-as-regional-economies-sputter.html
16 Lawrence, Bryan R. (December 28, 2011) "The dirty secret in Uncle Sam's Friday trash dump". Washington Post. Retrieved February 14, 2012 from:
http://www.washingtonpost.com/opinions/the-dirty-secret-in-uncle-sams-friday-trash-dump/2011/12/28/gIQArtWMNP_story.html

Leniency sought in sentencing of Liberty Dollar founder

Posted: 23 Feb 2012 10:30 AM PST

It has been almost a year since a federal court jury in North Carolina convicted Liberty Dollar founder Bernard von Not Haus of what seems to be considered a sort of counterfeiting for issuing his own gold and silver coins and advocating their use as currency. The U.S. attorney prosecuting von Not Haus called him a "terrorist." Hyperbolic as that was, federal authorities lately are hurling that term at anyone who contemplates gold's use as currency.

Grandich Client Geologix Explorations

Posted: 23 Feb 2012 10:21 AM PST

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! February 23, 2012 01:54 PM * With a New Resource Estimate Pending, Geologix Heightens Tepal Project Growth Potential with Geophysical Results Today Geologix Explorations Inc. (TSX: GIX) announced results from a property-wide airborne geophysical survey completed late last year at its 100% owned Tepal Project in Mexico. Results of the survey have identified multiple new prospective exploration targets that the Company expects to drill later this year. Highlights of the survey include: [LIST] [*]Seven strong geophysical targets identified throughout project area [*]Three priority targets with coincidental gold, copper, silver, and molybdenum in geochemical or drilling results [*]Multiple anomalies located within the same structural corridor as the North, South, and Tizate zones [*]Follow-up evaluation being conducted over several targ...

Grandich Client Sunridge Gold

Posted: 23 Feb 2012 10:21 AM PST

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! February 23, 2012 01:57 PM * Yesterday, Sunridge Gold announced an updated resource calculationfor the high grade Adi Nefas zinc-gold-copper deposit on their Asmara Project in Eritrea. The new resource which is part of a current Prefeasibility Study includes 1.8 million tonnes with very impressive grades; *10.05% zinc, 3.3 g/t gold, 1.78% copper, and 115 g/t silver. Adi Nefas is one of 4 deposits on the Asmara Project and included in the Prefeasibility Study and it*should provide a high grade feed to the large 70 million tonne Emba Derho copper-zinc-gold deposit located nearby. Sunridge has now updated 3 of the 4 resources on the Asmara Project as part of the current study and* the 4th, Gupo gold deposit is expected to be updated in the next few weeks. All 3 so far demonstrate very strong resource number in terms of grade and size and the to...

Gold Price is Climbing up the December Low and Should Break Above it Tomorrow

Posted: 23 Feb 2012 10:07 AM PST

Gold Price Close Today : 1784.90
Change : 14.90 or 0.84%

Silver Price Close Today : 35.556
Change : 1.300 cents or 3.79%

Gold Silver Ratio Today : 50.200
Change : -1.470 or -2.85%

Silver Gold Ratio Today : 0.01992
Change : 0.000567 or 2.93%

Platinum Price Close Today : 1724.10
Change : 1.75 or 0.10%

Palladium Price Close Today : 716.80
Change : -5.65 or -0.78%

S&P 500 : 1,363.45
Change : 5.79 or 0.43%

Dow In GOLD$ : $150.38
Change : $ (0.71) or -0.47%

Dow in GOLD oz : 7.275
Change : -0.034 or -0.47%

Dow in SILVER oz : 365.20
Change : -12.51 or -3.31%

Dow Industrial : 12,984.91
Change : 46.24 or 0.36%

US Dollar Index : 78.65
Change : -0.565 or -0.71%

Surprise! the GOLD PRICE rose $14.90 (0.84%) to $1,784.90. The SILVER PRICE did not punish my impatience in buying yesterday, but confirmed my suspicions with a 130c jump through the 300 DMA to 3555.6c, up 3.9%!

This broke the GOLD PRICE through the fan-line drawn from the September high to the February high, a fan-line already raised from the November high. Gold is climbing up the backside of the uptrend line from the December low, and should break above it tomorrow. In fact, it should hit $1,805 (November high) tomorrow. From there we either get a correction (or maybe a rise to $1,825 and then a correction) or the ride gets wild indeed. (today's high came at $1,787.18).

Stepping back and looking at a three-year chart, the GOLD PRICE peak in early September at $1,923.70 appears to have completed an A-B-C correction, so unless gold gainsays that will a fall through its 150 day moving average, I will work on that presupposition.

I don't know what was holding silver back, but nothing could hold it today. After it hit 3559c, it dropped only pennies to close at 3555.6c

This is textbook stuff now. SILVER has punched through its 50, 20, 300, and 200 DMAs. Momentum is nearly as UP as it gets. It also broke through internal resistance about 3440. What can go wrong?

Only this: Silver's Relative Strength Indicator is at 72.11, well above the 70 overbought mark. Also, the MACD appears to be topping.

Still, hard to see how silver will not reach 3950c before it pauses for a correction.

Every news item about gold is not a cause for hysteria or proof of a conspiracy, although many internet writers view them so. Take for instance the Zero Hedge article today, "PROJECTED PIIGS PILLAGE: 3233.5 Tons of Gold TO BE CONFISCATED BY INSOLVENT EUROPEAN BANKS."

Ahh, first of all when a lender reclaims property from a borrower it's not called "confiscate" but "foreclose."

Second, when the country voluntarily makes its gold reserves liable to seizure for debt default, it stretches vocabulary to call that a confiscation.

Third, the Greek population is not about to lose its gold, as the article claims, since the individuals of the population do not own the gold, the government or the central bank does, quite different persons. Individual Greeks, I feel sure, will hold on to their gold quite tightly.

The article claims that the Greek sellouts -- the technocrats installed to engineer the bank bailout -- are making or have made changes to the Greek constitution that allows the creditor banks to "plunder" the Greek gold," amounting to 111.6 tonnes (3.583 million oz.)

Tyler Durden then bootstraps off all these claims to aver with "100% certainty" that the other PIIGS countries will be plundered of their 3,234 tonnes of gold (103 mn oz).

But where is the surprise, and where is the confiscation? These borrowers made themselves slaves to the lender, the banks, who control their respective governments and the EU. Did anyone believe that the banks would not strip these lands of every asset, private and public, when they couldn't repay? What is as cold as a banker's heart?

And when you lose the collateral, it's not confiscation it's bankruptcy and foreclosure.

What is truly surprising and grotesque here is not that the bankers are sucking Greece dry and impoverishing the people, making debt slaves of the nation. Rather, it is surprising that the Greeks so mildly accepted the technocrat(s) the bank imposed on them as their government and that they don't rise up in arms to overthrow them all. Now that is truly amazing.

But what do I know? I can barely operate a computer and am still not too hot at tying shoes.

The euro today surged on better than expected German economic data. That took the euro above the last high (1.3322s) and sets it up to retrace at least 50% of its November - January fall, targetting 1.3435.

That news was enough to panic folks out of the US Dollar. The dollar index lost 56.5 basis points, a hefty 0.73%, to end at 78.646. Alas, for you dollar holders, that took the dollar below its 20 DMA (79.11) and bends momentum downward. Don't write the Samolean off just yet, though. As long as it abides above 78, it holds the hope of higher prices. It is drawing nigh its last low (78.36), though, where it must either buy a ticket or get off the bus.

As I suspected, the yen rallied 0.39% off its close yesterday to end at 125.09c/Y100 (Y79.94/US$1). It could rally to fill several gaps all the way up to 128.6. That ought to end its downward bias for a while.

This stock thing causes pain in the watching. Today the Dow reached 12,996 -- almost, but not quite that 13,005 high of Tuesday. I suspect a lot of people, stuck with losing stock positions, view 13,000 as their flashing Green light to get out of stocks.

Dow rose 46.24 (0.36%) to 12,984.91, but notice that the Dow In Gold Dollars fell again. Nor did the S&P500 reach its Tuesday glory, but closed up 5.79 (0.43%) to 1,363.45.

Folks get antsy when they look only at stocks and see how much they've climbed since March 2009, overlooking that silver and gold have climbed much, much more. When you view the Dow divided by silver or gold you can see stocks' steady downward trend.

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.