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Kevin Kerr Sees Breakout Year For Gold And Wheat
Michael Kors Holdings' Growth Potential Supports Its P/E Ratio
Analyzing Monday's Noteworthy Insider Buys And Sells In Technology Sector
Gold up up 10 ytd and speculators are yet to join the party
Gold Cars And Gas Stations
Erstes Halbjahr 2012 - Die Dezimierung der Bankenprofite
First semester 2012 - The decimation of bank profits
The Gold Standard Debate
WATCH: Tekoa DaSilva On Gold
The Federal Reserve’s Explicit Goal: Devalue The Dollar 33%
WATCH: Webster Tarpley In Iran
Indian Investor Interest in Silver Surging
Gold Prices Hit 2-Week Low with Greece ‘On Edge of Default’
The Federal Reserves Explicit Goal is to Devalue The Dollar 33%
NYT reveals Obama administration is allowing the big banks to repeatedly break the law
Net Asset Value Premiums of Certain Precious Metal Funds - Sprott Places Gold Offering at Premium
Where a Nation’s Gold and Your Gold Should be Held – Part I
My Favourite Way to Buy Silver
The New Reason Gold Stocks Will Soar
Morning Outlook from the Trade Desk - 02/07/12
Fed's Money Supply Splurge Spurs Gold's Rally
Richard Russell: Watch Gold...2012 Fated to be a Monster Year
Alasdair Macleod: Gold and silver price shakeout
Get some assets outside the banking system, von Greyerz tells King World News
Gold & Silver Market Morning, February 07 2012
Silver Update: “Moose Poll”
The Demise Of The dollar
Common Misconceptions About Gold
Was Fridays Price Action in Gold Signaling a Top in the SP 500?
How to stop the Depression

Kevin Kerr Sees Breakout Year For Gold And Wheat

Posted: 07 Feb 2012 05:44 AM PST

By Hard Assets Investor:

Analyst, trader sees wheat's potential in Russian shortcomings and new influx of gold investors.

Kevin Kerr is president of Kerr Trading International and a senior analyst at UncommonWisdomDaily.com, a resource website for traders that is owned and operated by Weiss Research. HAI Managing Editor Drew Voros caught up with Kerr, who splits his time between Florida and Estonia, to talk about his perspective on natural gas, Russia and Eastern Europe, and why he thinks gold and grains are the place for investors to be in 2012.

HardAssetsInvestor: Since you live part of the year in the region, can you give us a little insight on Russia in terms of commodities. What are some of the commodity shortages in Russia right now? What are some of its abundances?

Kevin Kerr: Russia has an abundance of pretty much every commodity, except in the agriculture sector. The biggest things they're missing are technology

Complete Story »

Michael Kors Holdings' Growth Potential Supports Its P/E Ratio

Posted: 07 Feb 2012 05:43 AM PST

By Benjamin Goldman:

As someone who lives in Manhattan and works on 5th Avenue, I like to tell myself that I know a lot about fashion through osmosis. Michael Kors Holdings (KORS), one of the most popular luxury brands nowadays, had a notably successful IPO in December and since its first day of trading, shares have soared 37.47 percent at the close of February 6th. With a market cap of $6.32 billion, the company's value trumps the likes of Abercrombie & Fitch (ANF), Urban Outfitters (URBN), and American Eagle Outfitters (AEO) and has elevated Michael Kors' net worth to around $200 million. Unlike these companies, which trade at P/E ratios between 14.5 and 20.13. Currently, KORS trades at 73.52 times earnings. In this article, I explain why KORS is still a good buy for now.

From a strategy standpoint, Michael Kors has struck gold. It has become an acceptable brand for both men

Complete Story »

Analyzing Monday's Noteworthy Insider Buys And Sells In Technology Sector

Posted: 07 Feb 2012 05:08 AM PST

By Ganaxi Small Cap Movers:

Insiders reported on Monday that they bought and sold stock in over 400 separate transactions in over 210 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime after mid-week last week. We culled through these 400 or so insider buys and sells (based on SEC Forms 3, 4, and 5 filings), as part of our daily and weekly coverage of insider trades, and present here the most notable trades reported on Monday in the technology sector; notable based on the dollar amount sold, the number of insiders selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):

AT&T Inc. (T): AT&T is a global telecommunications services provider, offering local exchange,

Complete Story »

Gold up up 10 ytd and speculators are yet to join the party

Posted: 07 Feb 2012 04:17 AM PST

Gold Cars And Gas Stations

Posted: 07 Feb 2012 03:49 AM PST

Erstes Halbjahr 2012 - Die Dezimierung der Bankenprofite

Posted: 07 Feb 2012 03:40 AM PST

- Auszug GEAB N°58 (17. Oktober 2011) -

Erstes Halbjahr 2012 - Die Dezimierung der Bankenprofite

Einnahmen rückläufig, Verluste ansteigend, Profite abstürzend: So sieht die Lage der Banken der westlichen Staaten zum Jahresende 2011 aus. Und dabei nutzen die Banken zur Zeit noch enorme buchhalterische Freiheiten: Sie bewerten in ihren Bilanzen ihre Aktiva nicht danach, für wie viel sie sie aktuell verkaufen könnten, sondern nach den Regeln der "hold to maturity " oder "fair value ". Aber selbst solche Tricks dürften in einem oder zwei Quartalen nicht mehr funktionieren – und zwar tatsächlich wegen Griechenlands und Eurolands. Griechenland und der Euro sind also doch reelle Gefahren für das Bankenmodell der letzten Jahrzehnt. Aber nicht so, wie Wall Street und City es gerne die Welt glauben machen würden. Sie sind nicht eine Gefahr, weil in einem griechischen Staatsbankrott die Banken Eurolands zusammenbrächen und Banken weltweit mit in den Abgrund zögen (1). Vielmehr stellen Griechenland und Euroland einen Gefahr dar, weil die Regierungen Eurolands unter dem Druck der Krise die Besitzer von Staatsanleihen dazu verpflichten wollen, ihre Verluste, die sie durch Kursverluste von in ihrem Besitz befindlichen Staatsanleihen erlitten haben, in ihren Bilanzen auszuweisen; sie wollen die Banken dazu zwingen zuzugeben, dass sie bereits erhebliche Verluste erlitten haben. 2008 war versäumt worden, die Buchhaltungsregeln entsprechend zu ändern. Wäre es dazu gekommen, wären heute griechische Anleihen mit einer Wertberichtigung von 50% in den Bilanz auszuweisen. Aber Griechenland ist nur ein Tropfen im Ozean der zukünftigen weltweiten Bankenverluste: Das gesamte Bankensystem der westlichen Staaten schwimmt in einem Meer aus zweifelhaften Forderungen.

In erster Linie setzen sich diese faulen Forderungen aus US-Immobilienkrediten zusammen, die zumindest mit einem Abschlag von 50% zu bewerten sind und die aller Voraussicht nach auch vor 2020 nicht wieder im Wert steigen werden (2). Viel besser sieht die Lage auch auf dem irischen, spanischen (3) und portugiesischen (4) Immobilienmarkt nicht aus, nur ist das Volumen der faulen Forderungen bei weitem nicht so hoch. Weiterhin bestehen sie aus Hypotheken auf dem Markt für Gewerbeimmobilien, auf dem mit weiteren Preiskorrekturen zu rechnen sein wird, wenn sich erst bestätigt, dass die Weltwirtschaft sich in einer Rezession und USA und Großbritannien in einer Depression befinden. Dann gibt es unter den faulen Forderungen noch die Anleihen von Staaten und sonstigen Gebietskörperschaften, die eigentlich schon bankrott sind („munis" in den USA (5) und sonstige öffentliche Anleihen in Europa (6)). Und zu guter Letzt verbleibt noch eine ganze Reihe von Forderungen, deren Wert eigentlich nur noch auf dem Papier steht, wie z.B. die Verbraucherkredite (7), die in Zeiten hoher Arbeitslosigkeit (8), dauerhafter Rezession (9) und zahlreicher Unternehmensinsolvenzen von den Schuldner nicht mehr bedient werden.

Das sind die 15.000 Milliarden Dollar an Scheinvermögen, die sich im Laufe der letzten sechs Monate in Luft aufgelöst haben. Und es sind die tausenden Milliarden Dollar (noch können die Summen nicht näher präzisiert werden) an CDS, die ein ganz wesentliches Geschäftsfeld mehrerer großer Banken in den westlichen Staaten sind (und die für die City und Wall Street schon seit Jahren Riesenprofit abwerfen), die im nächsten Jahr ebenfalls abgeschrieben werden müssen. Die intransparenten Verbindungen zwischen den großen Banken der westlichen Staaten, den Hedge fonds, die seit Sommer 2011 um ihr Überleben kämpfen (10) und der „dunklen" Seite der globalen Finanzmärkte, des sogenannten dark pool, verhindern, dass sich Aufsichtsbehörden und noch viel mehr die politischen Entscheidern einen Überblick über das Ausmaß des sich vorbereitenden Bankencrashs machen können (11).

Hinsichtlich einer Sache hegen wir keine Zweifel mehr: Angst wegen der Lage der Banken in der westlichen Welt haben in erster Linie deren Vorstände, Direktoren und Leitenden Angestellten. Sie wissen nicht mehr, wie sie sich aus der tödlichen Falle befreien sollen, in die sie sich in ihrer Arroganz, für alle Eventualitäten gerüstet zu sein, ihrer Überzeugung, die Politik für ihre Dienste einspannen zu können (12), und ihrem Glauben, dass Zentralbanken ihnen jeden Dienst erweisen würden (13), selbst manöveriert haben. Heute verweigern ihnen sogar die Politiker die Hilfe, die gerade mit Blick auf ihre Manipulierbarkeit auf den Schild gehoben wurden. Nicht einmal der französische Präsident Nicolas Sarkozy ist heute noch in der Lage, die Interessen der französischen Banker (14) auf europäischer Ebene zu verteidigen (15). In dieser Situation ist für die Banken jede Hoffnung verloren, ihre üblichen Profitvorgaben zu erreichen. Denn ihre Ertragslage ist von allen Seiten Angriffen ausgesetzt: Verstärkte Regulierung der besonders ertragreichen Geschäftsfelder, Wirtschaftskrise und daraus resultierender rückläufiger globaler Warenhandel, verstärkte Konkurrenz zwischen den Banken und auch zwischen den Banken der verschiedenen Regionen in den westlichen Staaten (16), schwindender Einfluss in Politik, Medien und den öffentlichen Meinungen wegen rückgängiger Mitarbeiterzahlen, schwindender Finanzkraft und Bilanzen, die immer mehr in Richtung Überschuldung weisen (17).

----------
Noten:

(1) Bis zum heutigen Tag können sich nur Banken der Wall Street und der City damit brüsten, das Bankensystem beinahe in den Abgrund gerissen zu haben. Der Absturz konnte nur – vorübergehend - vermieden werden, weil die Staaten den Steuerzahlern tief in die Tasche griffen. Dabei wurde nach Wildwestmethode vorgegangen: Ein Schuss aus der Hüfte, ohne großes Nachdenken oder auch nur den Ansatz einer parlamentarischen oder gesellschaftlichen Debatte. Und heute wirft Washington Euroland vor, sich Zeit zu nehmen, um in sicherlich schwierigen und langwierigen Beratungen unter verschiedenen Optionen die beste auszuwählen.

(2) Quelle: CNBC, 01/10/2011

(3) In Spanien hat sich die Immobilienkrise inzwischen zu den Banken durchgefressen. Quelle: New York Times, 22/09/2011

(4) 46 von 50 US-Bundesstaaten sind insolvent und die Zahl der von Bankrott bedrohten Gemeinden und Kreisen wächst rapide. Letztes illustres Beispiel ist die Hauptstadt Pennsylveniens Harrisburg. Quellen: Economic Policy Journal, 12/09/2011; Washington Post, 13/10/2011

(5) Die « toxischen » Kredite haben mehr als 5500 Gemeinden und Gebietskörperschaften in Frankreich « vergiftet ». Ähnlich sieht die Lage in Belgien und Luxemburg aus. Als direkte Folge musste die Bank Dexia zerschlagen werden, wobei die einzelnen Teile verstaatlicht oder ihre Schulden von den Staaten garantiert wurden. Quelle: Le Monde, 21/09/2011; Irish Times, 11/10/2011

(6) Die Insolvenz des US-Verbrauchers ist immer noch eine Tatsache: Der Verschuldensgrad des durchschnittlichen Amerikaners liegt bei 154% seines Jahreseinkommens. Damit ist ausgeschlossen, dass die US-Wirtschaft und ihre Banken wieder einmal durch die Konsumfreudigkeit der US-Verbraucher gerettet werden. Vielmehr das Gegenteil ist richtig. Denn inzwischen werden immer mehr Verbraucherkredite von den Schuldnern nicht mehr bedient. Quellen: USAToday, 02/10/2011; MarketWatch, 05/10/2011

(7) Insbesondere in den USA, die nur ein sehr schwaches Netz an sozialer Sicherheit kennen, ist jeder Arbeitslose mehr auch sofort ein Konsument weniger. Angesichts der Tatsache, dass zum Jahresende für 6 Millionen Arbeitslose die Arbeitslosenhilfe ausläuft, wobei vor dem Hintergrund der Pattstellung im Kongress ausgeschlossen sein dürfte, dass die Bezugsdauer noch einmal verlängert wird, wird der Privatverbrauch in den USA, der schon jetzt schwächelt, noch weiter zurückgehen. Gleichzeitig planen die US-Arbeitgeber für die nächsten Monate noch weitere Kündigungswellen. Sogar in Deutschland schwächelt nun die Wirtschaft, was natürlich das Wachstum und damit auch die Ertragslage der Banken in Mitleidenschaft ziehen wird. Quellen: CNNMoney, 12/10/2011; Los Angeles Times, 06/10/2011; Deutsche Welle, 15/10/2011

(8) Es ist geradezu ein Symbol der Depression in den USA: Die Marke GAP hat gerade bekannt gegeben, 20% ihrer Geschäfte in den USA zu schließen. Gleichzeitig öffnet sie neue in China. Die Entwicklung der Einkommen der Privathaushalte in den USA lässt keinen Spielraum für positive und optimistische Interpretationen: Seit dem offiziell verkündeten Ende der Rezession im Juni 2009 und Juni 2011 gingen diese Einkommen um 6,7% zurück. Die deutschen Investoren schätzen inzwischen den US-Markt als riskanter ein als den im Nahen- und Mittleren Osten und den in Latein-Amerika; weiterhin gehen sie davon aus, dass derzeit keine Wachstumsperspektiven bestehen. Solche Informationen findet man jedoch nicht in den großen Medien, obwohl es sich hierbei um eine Studie handelt, die von Goldman Sachs in Auftrag gegeben wurde. Quellen: USAToday, 15/10/2011; New York Times, 09/10/2011; New Khabrein, 21/09/2011

(9) Quelle: Reuters, 11/10/2011

(10) Sogar der « King » der Hedge funds, John Paulson erlitt riesige Verluste Quelle: CNBC, 11/10/2011

(11) Es gibt ein Kriterium, das ermöglicht, sich eine Vorstellung von den Verbindungen zwischen diese beiden Seiten der Finanzindustrie zu machen, so intransparent sie auch sein mögen: Die Massenentlassungen, denen sie beide ausgesetzt sind. Entlassungen von Mitarbeitern von Finanzinstituten, die nicht im Scheinwerferlicht der Finanzindustrie stehen, werden natürlich von den Medien nicht so beachtet wie solche in Banken, die jeder kennt. Aber auch bei diesen unbekannteren Banken beschleunigt sich der Rythmus der Entlassungen und zeigt, dass das Geschäftsmodell des gesamten Finanzsektors zusammengebrochen ist. Sowohl in der City als auch an der Wall Street findet gegenwärtig ein wahrer Aderlass an Jobs im Bankensektor statt. Quellen: « More jobs expected to go in the Square Mile », Financial Times, 14/10/2011; Le Monde, 11/10/2011

(12) « Kontrollierbar » sollten Politker sein, wei ein bekannter Banker einmal sagte.

(13) Nicht einmal die US-Zentralbank ist noch in der Lage, die Banken durch ein Anwerfen der Notenpresse zu retten. Dafür fehlt ihr heute einfach die Macht und vor allen Dingen das Vertrauen der Märkte in diese Macht. Vgl. insofern die vorhergehenden Ausgaben des GEAB. Die EZB schwankt zwischen ihrer Affinität zu den Banken und dem wachsenden Druck der Politik, die weiß, dass eine erneute Bankenrettung auf Kosten der Steuerzahler in der öffentlichen Meinung katastrophal aufgenommen würde. Da hilft es auch nicht, wenn Jean-Claude Trichet, von dem man eigentlich besseres gewöhnt ist, sich dazu hinreißen lässt, bei den Politikern einen Angstreflex auslösen zu wollen und von Europa als dem Epizentrum der Krise und einer systemischen europäischen Krise spricht. Wenn man alles und egal was zusammen wirft, erzeugt man vielleicht Panik, aber ganz sicher nicht Verständnis. Aber genau diese Strategie verfolgen die Banken und ihre Lobby seit nunmehr drei Jahren. Wir erinnern uns aber sehr genau daran, dass wir die Verantwortlichen der EZB schon im ersten Halbjahr 2011 darauf hingewiesen haben, dass man nicht in aller Ruhe 2013 abwarten könne, um den europäischen Rettungsfonds zu institutionalisieren und auszuweiten, sondern dass man diese Aufgabe sofort angehen müsse, um sie im Herbst 2011 abgeschlossen zu haben. Vor anderthalb Jahren glaubte die EZB, noch über ausreichend Zeit zu verfügen. Sie hat sich aber geirrt. Wir aber konnten die richtige Voraussage treffen, weil es für uns offensichtlich war, dass die sich schnell verschlechternde wirtschaftliche, finanzielle, haushälterische, soziale und politische Lage in den USA ab Sommer 2011 eine Reihe von Schocks auslösen würde, die das Vertrauen der Investoren noch weiter erschüttern würden. Dadurch würden die USA und Großbritannien gezwungen, um jeden Preis zu versuchen, das Unvermeidbare noch hinauszuschieben, sei es auch auf Kosten der europäischen „Verbündeten". Es gibt also nur ein Epizentrum der gegenwärtigen Krise. Und das sind die USA, wie wir seit 2006 nicht müde werden zu schreiben. Diese Erkenntnis ist das entscheidende Element unserer Fähigkeit, die Entwicklung der Krise vorherzusehen. Auch wenn es sehr wohl eine systemische Krise in Europa gibt, so ist sie doch nachrangig zu der, die in den USA wütet. Denn die systemische Krise in Europa ist in der fehlenden Institutionalisierung Eurolands begründet, die ermöglicht hätte, demokratisch legitimierte politische Entscheidungen für die Mitglieder der Eurozone zu treffen. Statt dessen wurde ausschließlich (und wenig effizient) an der Integration der EU 27 gearbeitet, deren Entscheidungsmechanismen vollkommen ungeeignet sind, um die Probleme Eurolands zu meistern. Allerdings kann seit nunmehr 18 Monaten festgestellt werden, dass sich die Lage für Euroland bessert, dass Versäumtes nachgeholt wird. Was die systemische Krise im Entscheidungsprozess der EU angeht, wäre die Erklärung von J-C Trichet 2007/2008 hilfreich gewesen, wenn er damals gefordert hätte, Euroland mit Entscheidungsstrukturen auszustatten, die es in die Lage versetzen würden, sich für kommende Krisen zu wappnen. Heute wirkt er eher wie jemand, der „Feuer" ruft, nachdem die Feuerwehr eingetroffen ist.

(14) Bei deren Streit über die Höhe der erforderlichen Rekapitalisierung der französischen Banken die Intransparenz des Bankensektors in vollem Umfang erkennbar wird. Quelle: La Tribune, 07/10/2011

(15) Es gelingt ihm nur noch, die Erarbeitung von gemeinsamen Positionen mit Deutschland und den anderen Euroland-Mitgliedern schwieriger zu gestalten und zu verlangsamen.

(16) Die Banken Eurolands sind inzwischen in einen offenen Krieg mit ihren angelsächsischen Konkurrenten eingetreten. Anlass dafür war die von letzteren organisierten Versuche, die ersteren von der Dollarversorgung abzuschneiden. 2012 werden sich zwischen den Banken neue Fronten eröffnen: Zum einen zwischen der City und der Wall Street, wenn in einem schrumpfendem Markt im globalen Finanzsystem kein Platz mehr sein wird für zwei große angelsächsische Bankenzentren, zum anderen zwischen City und Wall Street auf der einen und den Eurolandbanken auf der anderen Seite, wenn letztere, mit Unterstützung ihrer Regierungen, anfangen werden, ihre Geschäfte nicht mehr in Dollar, sondern hauptsächlich in Euro abzuwickeln. Diese Umstellung wird letztendlich sogar den Handel mit Rohstoffen, einschließlich Rohöl, betreffen. In massiven und brutalen Krisen zählt die Nostalgie für vergangene Partnerschaften nicht mehr viel. Damit wird die nachhaltige Zerstückelung des Finanzmarkts der westlichen Staaten und auch eine der letzten Etappen auf dem Weg Eurolands zu einer selbständigen politischen Entität eingeleitet. Sie fügt auch den Finanzinstituten, die ihr Geschäftsmodell auf die enge transatlantische Finanzpartnerschaft gegründet haben, einen tödlichen Schlag zu. Wir werden auf diesen sehr wichtigen Aspekt in der nächsten Ausgabe des GEAB im Rahmen unsere Analyse über die Zukunft der USA und Eurolands näher eingehen.

(17) 2012 wird zeigen, dass Banken fast nur noch in der Finanzierung der Realwirtschaft und im Privatkundengeschäft Geld verdienen können.

First semester 2012 - The decimation of bank profits

Posted: 07 Feb 2012 03:25 AM PST

- Excerpt GEAB N°58 (October 16, 2011) -

First semester 2012 - The decimation of bank profits

Falling revenues, increasing losses, profits adrift: this is the Western banking background in late 2011! And yet all this is happening in a very favorable context for banking institutions' balance sheets who continue to assign their own prices to their assets (using the accounting tricks of « hold to maturity » (1) – or « fair value »). But even this may not last more than a further quarter or two ... because of Greece and Euroland! And yes, they really are the causes of something very damaging to the banking model of recent decades, but not in the sense that Wall Street and the City would want to believe, i.e. because the Euroland banks would collapse dragging down the whole world with them (so far, only Wall Street and the City in 2008 gave us a banking system collapse, sealed off - for a time - by a raid on taxpayers' money (2)). No, if there really is Greek and Euroland responsibility, it's in Euroland's willingness to require creditors to include the losses in their balance sheets, putting pressure on the banks to take on a substantial portion of these losses. This wasn't done in 2008. Greek debt is now at a 50% discount. But Greece is but a drop in the ocean of coming bank losses: the entire Western banking system floats on a sea of more than doubtful debts.

Primarily US residential property, which is at a 50% discount at least, and which will be unlikely to see any increase in prices before 2020 (3). Then we have the Irish residential property, Spanish (4), Portuguese, all at the same level, but obviously in smaller numbers overall. Then commercial real estate, which will plunge again with the confirmation of the global recession and the current US and UK depressions. Then, there are local and national authority insolvencies which, de facto, depreciate the banks' true balance sheets even more ("Munis" in the United States (5), public debt in Europe (6)). Finally, we come to the core of a multitude of financial assets (including consumer credit (7) in a context of unemployment (8) and an unremitting recession (9) and business failures (10)), most of which are worth nothing at all because, in fact, they have no real counterpart. These are the 15 trillion USD of ghost-assets going up in smoke during this half year and during 2012 it will be the trillions (difficult to quantify exactly) of CDS which are at the heart of many major Western banks' markets (which has been one of Wall Street and the City's cash cows for years). The closely hidden connections between the major Western banks, hedge funds, in complete disarray since the summer of 2011 (11) and the "black" side of global financial markets (dark pools ) prevent regulators and policy makers even more from assessing the extent of the bank shock in the making (12).

One thing is certain for our team: If the Western banks provoke fear today, it is primarily in their own leaders who no longer know how to get out of the death trap in which they themselves are caught, believing that they were able to "manage" all events, with "tractable" (13) politicians and controlled in their service, and crony central banks (14). Yet this time, politicians, even chosen for their docility, are showing reluctance. Even the French President Nicolas Sarkozy is no longer able to defend French banking interests (15) at a European level (16) on a permanent basis. Under these conditions, there is no longer a way for banks to contemplate a preservation of their profits pared on all sides: increased regulation affecting the most profitable areas, an economic crisis reducing classic business activity, increased competition between institutions and between regions even at the West's core (17), reduction of their socio-political "weight" because of reduced staff, funding capacity at half-mast, and balance sheets sinking more and more sharply into the "red" (18).

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Notes:

(1) The longer the crisis lasts, the greater the maturity value becomes a problem for bank balance sheets (as well as other financial players) because the continuing recession and falling asset values involves a balance sheet collapse. And these are not "playground" comparisons to see who has the biggest reserves that will make the difference in this area given the gulf that separates these reserves from the recapitalization needs generated by the unremitting collapse in the value of assets held by the banks.

(2) A hold-up done in a hurry, without taking the time to think, with neither parliamentary nor democratic debate. This same time that Euroland is supposed to "lose" in its laborious path towards common decisions, full of all-out discussions on the relevance and effectiveness of the likely options.

(3) Source: CNBC, 01/10/2011

(4) In Spain the real estate crisis has begun to catch up with the banks. Source: New York Times, 22/09/2011

(5) 46 out of 50 American States are insolvent and the risks of city bankruptcies are growing rapidly, like the recent bankruptcy of the Pennsylvania capital, Harrisburg. Sources: Economic Policy Journal, 12/09/2011; Washington Post, 13/10/2011

(6) Thus "toxic" loans have infected more than 5,500 local authorities in France, as well as Belgium and Luxembourg. This has led directly to the breakup of Dexia, with a takeover or guarantee by the public. States cannot "afford" more than one or two failures of this type. Sources: Le Monde, 21/09/2011; Irish Times, 11/10/2011

(7) The US consumer's insolvency remains topical with an average rate of indebtedness of 154%. The salvation of the US economy and its banks will be not, therefore, come from household consumption. On the contrary for the banks, since the non-repayment of loans are rising. Sources: USAToday, 02/10/2011; MarketWatch, 05/10/2011

(8) In the United States in particular, the weakness of the social safety net literally throws out the unemployed from the status of consumer. With six million unemployed reaching the end of their benefits in 2012, in a context of political deadlock in Congress to extend their benefits, US household spending, already faltering, will sink further into negative territory. Meanwhile, US employers expect a sharp increase in layoffs in the coming months. But in Germany as well, the economy has broken down with the inevitable consequences for growth and the banks.Sources: CNNMoney, 12/10/2011; Los Angeles Times, 06/10/2011; Deutsche Welle, 15/10/2011

(9) Symbol of the enduring depression in the United States, the GAP brand has just announced the closure of 20% of its US stores ... whilst it's opening new ones in China. And changes in US household income is clear-cut. Between the official "end" of the recession in June 2009 and June 2011, US household incomes fell 6.7%! Besides German investors now believe that the US market is riskier than those in the Middle East and Latin America and it has no growth prospects. Yet it's information that you won't find in mainstream media headlines while the study was financed by Goldman Sachs.Sources: USAToday, 15/10/2011; New York Times, 09/10/2011; New Khabrein, 21/09/2011

(10) Source: Reuters, 11/10/2011

(11) Even the « pontiff » of hedge funds, John Paulson, has ended up with huge losses. Source: CNBC, 11/10/2011

(12) A parameter for distinguishing these opaque but real links between the two faces of the financial sector: the layoff epidemic that now affects them. The laying off of the financial sector secondary players is more low profile news-wise than that of the big banks, but it's accelerating and reflects a collapse of the entire sector's business model. Wall Street, like the City is currently the scene of a growing jobs purge in this sector. Sources: « More jobs expected to go in the Square Mile », Financial Times, 14/10/2011; Le Monde, 11/10/2011

(13) According to an eminent banker.

(14) The Fed is now out of ammunition and paralyzed in terms of an exit via a massive printing of dollars. See previous GEAB issues. The ECB oscillates between its mandate, its "bancophilia" and increasing political pressure, particularly sent by public opinion against any new illicit bank rescue. Even if Jean-Claude Trichet, who has had better inspiration, is trying to play off a reflex of fear at European political leader level, calling Europe the epicenter of the crisis and a European systemic crisis . By mixing anything and everything, we create panic, but no understanding: it's a feature of the strategy followed by the Western banking lobby for the last three years. Our team remembers, however, that it pointed out to ECB officials in the first half of 2011 that the crisis couldn't wait quietly for 2013 for the EFSF to be strengthened and made permanent and in fact it would have to be done by autumn 2011. At the time, not that long ago, the ECB thought it could wait, and it was wrong. If we could anticipate this development, it's because it seems clear to us that the accelerated deterioration of the economic, financial, budgetary, social and political situation in the United States from the summer of 2011 would trigger a series of shocks undermining investor confidence even further and reinforcing the absolute necessity to "buy time" for the United States and the United Kingdom, including at the expense of the "European ally." There is in fact one epicenter of the current crisis: it's the United States as we have analyzed since 2006, a key element of our ability to anticipate changes in the crisis. And if there really is a European systemic crisis it's a second-rate event which is due to the maladaptation of Euroland's current institutional and political process which has been ignored for ten years to the benefit of the mechanisms of the EU 27, totally ineffective to deal with Euroland problems. On this subject, there has been an undeniable systemic improvement for the last 18 months. As regards the systemic European decision-making crisis, such a statement by Mr. Trichet in 2007/2008 would have been helpful. Now it's rather like yelling fire after the fire-fighters have arrived.

(15) For which the battle of numbers on the recapitalization issue shows the sector's complete opacity. Source: La Tribune, 07/10/2011

(16) It just manages to complicate and slow the definition of common positions with Germany and the rest of Euroland.

(17) Euroland banks are now at open war with their Anglo-Saxon counterparts, against a background of orchestrated attempts by the latter to destabilize and / or suffocate them. And 2012 will see a new front opening between the City and Wall Street on the one hand, because the market will continue to shrink, making it impossible to keep "two Anglo-Saxon hearts" at the core of the global financial system, and between the City, Wall Street and Euroland on the other hand, because the Euroland banks, pushed by their governments, will gradually cease to lend in US Dollars to concentrate on loans in Euros, including the trade in raw materials (oil included). The violent and sharp crises leave no room for the nostalgia of past partnerships. This will be the start of the Western financial market's final fragmentation, one of the last stages of Euroland's development and a new fatal blow to financial institutions having built their business model on the transatlantic financial partnership. We'll return to this very important point in GEAB N ° 59 regarding the United States and Euroland's future.

(18) In fact, apart from retail banking, 2012 will show that there is virtually no profitable segment for the banking sector.

The Gold Standard Debate

Posted: 07 Feb 2012 03:12 AM PST

by Pater Tenebrarum, Acting-Man.com:

Euro Area Credit Market Charts
It has turned out that Ron Paul's critique of the Federal Reserve has caught on. Polls have revealed that voters (especially Republican voters) are actually partial to the idea of going back to a gold standard. This was revealed in a Rasmussen poll in early January, which characterized the gold standard debate as a 'sleeper issue' that 'could tip the scales of the race'.

Phone interviews with 501 likely caucus-goers were conducted in Iowa in mid-November. The potential respondent was screened to ensure a. registration to vote in Iowa b. registration as a Republican and c. self-described as "definitely" or "probably" going to participate in the caucuses to select the Republican nominee for president. The survey has an overall margin of error of 4.4 points at the 95 percent confidence interval.

"A majority (57 percent) of those surveyed are favorable to the United States returning to a gold standard and over one-quarter is 'very' favorable to the idea," reports pollster Erin Norman. "Only 17 percent are unfavorable to this idea, which equates to a better than three-to-one favorability ratio among likely Iowa Republican Caucus goers. These are remarkably high numbers given that the question contained no information about the gold standard specifically."

Translated out of pollsterese? The gold standard drives votes both in the caucuses and primaries and in the general election.

¤ Yesterday in Gold and Silver

It was ultra quiet in the gold world yesterday, as it seemed that all the New York traders were recovering from the Super Bowl parties. The only activity of note were the two minor sell-offs shortly after London opened. Whether they were caused by a long holder selling...or new short positions being placed...is impossible to tell.

After that, it was a real yawner.

Gold closed at $1,719.90 spot...down $6.00 from Friday's close. Despite the quiet price activity, net volume was an amazingly high 131,000 contracts...and I would bet that a huge chunk of that would have been of the high-frequency trading variety.

The silver price, as it always is, was far more 'volatile'. The low of the day [$32.90 spot] came at precisely 8:30 a.m. Eastern time...ten minutes after the Comex opened. By 11:40 a.m., the price had recovered about 70 cents before trading sideways into the close of the New York Access Market at 5:15 p.m.

The silver price closed at $33.68 spot up one whole penny. Volume, net of all roll-overs out of the March delivery contract, was only 28,000 contracts.

The dollar index started off just below the 79 cent mark...and rallied about 55 basis points and stayed there between 4:00 a.m. and 9:00 a.m. Eastern time. Then 50 basis points of those gains disappeared by about 12:15 p.m. New York. From there the dollar index traded flat into the close.

The gold stocks pretty much followed the gold price yesterday...and the HUI closed down a small fraction of a percent.

Most of the large cap silver stocks also finished a bit lower...and Nick Laird's Silver Sentiment Index closed down a small fraction as well...0.54%.

(Click on image to enlarge)

The Comex Daily Delivery Report showed that 262 gold and 41 silver contracts were posted for delivery tomorrow. JP Morgan was the short/issuer of all the gold contracts...and they, along with Deutsche Bank and the Bank of Nova Scotia, were the long/stoppers.

In silver it was the same three players as usual. Jefferies was the short/issuer of all 41 contracts...and JPMorgan was the biggest stopper, with the Bank of Nova Scotia showing up as a bit player this time. The Issuers and Stoppers Report is worth a quick peek...and the link is here.

There were no reported changes in GLD yesterday...but over at SLV the 'authorized participants' added 485,925 troy ounces.

The U.S. Mint had a sales report on Monday. They sold 4,500 ounces of gold eagles...and 375,000 silver eagles. February is off to a slow start, as only 5,500 ounces of gold eagles...and 470,000 silver eagles have been sold so far.

The Comex-approved depositories only reported receiving 44,163 ounces of silver on Friday...and shipped nothing out the door. But they also reported a big transfer between depositories as well, with 1,703,557 ounce being shipped out of HSBC USA...and stuck into Scotia Mocatta. I don't remember the last time that there was a transfer between warehouses. If there ever was, it was years ago. The link to Friday's action is here.

In my Saturday column I ran a Daily Mail story about the 4,600 tonnes of gold stored in the Bank of England's vaults. I mentioned that I would ask James Turk for his opinion on this story...and here's what he had to say: "There's no way of knowing whether the numbers are accurate. You either believe the BoE or you don't. But I am curious, though...why publish this PR piece now? I'm sure it was planted by the BoE, but why now? I don't have any answer."

Technical analyst and long-time contributor to this column, Scott Pluschau, has posted commentary on his blog that's headlined "Volume Indicator in the Dollar Index are Screaming Bearish"...and the link to that blog is here.

Silver analyst Ted Butler had a few things to say in his weekend review to his paying subscribers and, once again, I've stolen three paragraphs...

"In fact, I had predicted, as I have done on prior occasions, that JPMorgan would never again increase its concentrated COMEX silver short position after having successfully reduced it to near 13,000 contracts towards the end of December. I considered that a magnificent and manipulative feat that JPM reduced its position from more than 40,000 contracts at its peak a couple of years ago. Obviously, there can be a big difference between prediction and fact. Not for the first time or the last, I was wrong. My guess is that JPMorgan is now net short around 18,000 COMEX silver contracts, with next week's release of the monthly Bank Participation Report helping to clarify. If my guess is correct, JPMorgan added 5,000 net silver short contracts, the equivalent of 25 million oz, over the past month and on the $7 increase in price. What gives?"

"The most plausible explanation for JPMorgan increasing its silver short position is that they felt that they had no choice. With silver prices rising strongly, despite strong raptor selling (more than 10,000 net contracts since Dec 27), it doesn't take a rocket scientist to conclude that prices would have risen much faster and higher were it not for JPM's short selling of an additional 5,000 contracts. I can only conclude that JPMorgan didn't want silver prices to rise faster or higher than they did climb. My guess that JPM might aggressively buy from the raptors on higher prices to completely eliminate its short position was particularly wide of the mark. But in my defense, it should be clear that had JPMorgan, instead of selling an additional 5,000 silver contracts short, bought 5,000 or 10,000 contracts in an attempt to close out the entire short position, silver prices would have truly exploded. When a market boils down to the behavior of one participant, it is safe to say that market is manipulated and that participant is the manipulator."

"What is JPMorgan thinking? Perhaps it thinks that if it just ignores the allegations of manipulation, the allegations will disappear. It doesn't seem to be playing out that way. It is now more than three years since I first revealed that JPMorgan was the big COMEX silver short, having inherited that position from Bear Stearns. It was never my intention to libel or harm JPMorgan in any way, as I was just trying to end what I saw as a serious market crime in progress. Three years after my revelation, I am absolutely amazed at the universal knowledge and contempt on the Internet (definitely not in the mainstream media) that JPMorgan is held as result of being the big COMEX silver short. Reputation is everything to a financial institution and my take is that JPM, in matters related to silver, could not possibly be held in lower esteem."

Nick Laird sent me a chart of the U.S. M3 money supply on Saturday...and it's not the healthiest looking critter, is it? The next round of QE can't be that far off with a chart that looks like this.

(Click on image to enlarge)

Here's a chart that Australian reader Wesley Legrand obviously 'borrowed' from the SovereignMan.com website. It's titled "America's Vanishing Workforce"...and requires no further embellishment from me.

(Click on image to enlarge)

Reader Julius Adams sent me this photo off of Jim Rickards' Twitter page...whatever that is. It shows the back of an airline ticket that has the insurance denominated in SDRs. The photo is below...and the link to the Twitter page in question, is here.

(Click on image to enlarge)

THE RISE OF THE HFT MACHINES

And last, but certainly not least, is this little goody that Casey Research's own John Grandits sent around to all the CR writers late last night. It's a link to a GIF display that chronicles the rise of the HFT Algo Machines from January 2007 through January 2012. You'll need a pretty fast computer and an up-to-date browser to make this run properly. ITS AN ABSOLUTE MUST WATCH...and the link is here.

I have a whole stack of stories today...and I'll post as many as I can before I run out of time.

It was a nothing sort of day on Monday...and virtually all the volume in both metals was of the high-frequency trading variety.

Murray Pollitt's final commentary: Money Mountain. Alasdair Macleod: Gold and silver price shakeout. Jeff Clark: The New Reason Gold Stocks Will Soar.

¤ Critical Reads

MF Global Trustee Finds That Company "Did Not Always Record Cash Movements"

The MF Global Trustee has just released their preliminary report on the progress in uncovering where the vaporized cash went. Bloomberg notes that 1] MF Global didn't always record cash movements, 2] Trustee says MF had shortfall in commodities funds starting October 26th. 3] MF brokerage trustee traced $105 billion in cash movement, 4] MF computers couldn't track volume in final days, trustee says.

This very long story showed up posted over at the zerohedge.com website yesterday...and I thank reader 'David in California for bringing it to our attention. The link is here.

View full GSD edition

Price Instability: Credit Bubble Bulletin - Doug Noland

Doug's weekly column over at Prudent Bear is a must read for me every Friday night. Last week's report is particularly excellent...and is just about the only must read out of all the stories I have for you today. The link is here.

View full GSD edition

Alasdair Macleod: The fallacy of economic growth

Economist and former banker Alasdair Macleod, who spoke at GATA's Gold Rush 2011 conference in London last year, argues in commentary published yesterday that gross domestic product increasingly measures government intervention in an economy rather than actual production of useful goods and services. He makes a compelling case for restoring free markets, which is what GATA is largely about.

I obviously lifted this commentary from a GATA release yesterday...and I thank Chris Powell for wordsmithing the preamble. It's posted over at the financeandeconomics.org website...and the link is here.

View full GSD edition

Murray Pollitt's [R.I.P.] final commentary: Money Mountain

GATA has received word of the death on Sunday of our friend, Murray H. Pollitt, president of the Toronto brokerage house Pollitt & Co...and longtime advocate of gold's monetary functions. His final market commentary, distributed last week, "Money Mountain," predicted that infinite money creation by central banks would inevitably flow into equities.

This GATA release, including Murray's last commentary is another must read...and the link is here.

View full GSD edition

SEC Is Avoiding Tough Sanctions for Large Banks

Even as the Securities and Exchange Commission has stepped up its investigations of Wall Street in the last decade, the agency has repeatedly allowed the biggest firms to avoid punishments specifically meant to apply to fraud cases.

By granting exemptions to laws and regulations that act as a deterrent to securities fraud, the S.E.C. has let financial giants like JPMorganChase, Goldman Sachs and Bank of America continue to have advantages reserved for the most dependable companies, making it easier for them to raise money from investors, for example, and to avoid liability from lawsuits if their financial forecasts turn out to be wrong.

An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions. Those instances also include waivers permitting firms to underwrite certain stock and bond sales and manage mutual fund portfolios.

This story was posted in The New York Times on Friday...and showed up as reprint over at the cnbc.com website yesterday. It's a real interesting read...and there's not a

Alasdair Macleod: Gold and silver price shakeout

Posted: 06 Feb 2012 09:22 PM PST

Alasdair Macleod: Gold and silver price shakeout

Economist and former banker Alasdair Macleod writes tonight at GoldMoney that gold's price adjusted for the explosion in the money supply is only around $360. "Conventional portfolio managers have missed this point entirely, being hampered by the legacies of portfolio management theory and Keynesian economics," Macleod writes. "But there is a growing band of private individuals around the world who do get it and are accumulating physical gold and silver. They are beginning to understand that paper money is falling rather than gold and silver rising."

Get some assets outside the banking system, von Greyerz tells King World News

Posted: 06 Feb 2012 09:22 PM PST

Get some assets outside the banking system, von Greyerz tells King World News

Swiss fund manager and gold advocate Egon von Greyerz today told King World News yesterday that central bankers may not be able to save every big bank and that investors should keep a portion of their financial assets outside the banking system.

This is, of course, not news to everyone who is a Doug Casey fan...as he's been advocating this for a lot longer than I've know him. The blog is headlined "Gold Price to Hit $5,000 in 24 Months and Silver $166." The link to the KWN blog is here.

Gold & Silver Market Morning, February 07 2012

Posted: 06 Feb 2012 09:00 PM PST

Silver Update: “Moose Poll”

Posted: 06 Feb 2012 08:52 PM PST

from BrotherJohnF:
BJF with Au & Ag analysis and thoughts on the news moose in the 2.6.12 Silver Update.

Got Physical ?

~TVR

The Demise Of The dollar

Posted: 06 Feb 2012 08:39 PM PST

New Concerns About Non-USA Nations Trading In Other Currencies.

"In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading" -Robert Fisk 10-6- 2009

"In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese Yen and Chinese Yuan, the Euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar."

"Secret meetings have been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years."

"This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves."

Your Editor's View Is Slightly Different. While this thesis seems plausible, we see some things differently. The Yen is strong now but will go weaker on manipulation and critical and true value. The Yuan will be affected by Chinese markets' problems similar to those commonly seen today in Europe and the States. The Euro is sinking faster and while it may not die for 3-5 years we see it fading faster. Crude oil providers will take these currencies as long as they can use them for something else. We say they are skidding to the basement over time on inflation and values just like the dollar.

We think stronger trading between non-USA nations using hard goods for oil is increasingly more likely. A fiat currency is a fiat currency. Yes, they can be used for a time, but paper is paper and the smart ones want the hard goods. Oil gets used up but gold is forever. Gold buyers for the most part will hold the metal and not use it for trading. They might lease it out but will hold the metal and not be net sellers. The USA has been battered around and it gets a whole lot worse, but the Americans still have an icy grip on numerous powerful factors; even the power to print al lot more bonds and currency if confidence remains.

The end is in sight but we say it takes a lot longer than you think to get there. Further, the USA has the power to crank-up conflicts and wars at will. Those have nothing to do with democracy…that's a fairy tale. Wars are the ultimate jobs program for both the military work and all of those selling defense products. So the outcome says, there is a big war ahead in later 2013 or 2014. That battle will be over oil between Russia and USA.

This is the nastiest and ultimate jobs program. Producers of defense products and bankers could give a rip less if your kids get killed in war…just as long as their kids stay home and profit from it. Same for bankers…they just want to be war profiteers similar to the Rothchild's Bank in France. They financed both sides of the Napoleonic Wars to make money. They are at it again.

This oil trading in other currencies can have some effects but is not a disaster; and it will fade.

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

Common Misconceptions About Gold

Posted: 06 Feb 2012 05:03 PM PST

Below is an excerpt from a commentary originally posted at www.speculative-investor.com on 5th February 2012.

When reading stuff about the pros and cons of investing in gold we regularly come across two misguided assertions, the first being that changes in gold's price in terms of a currency do little more than offset changes in the currency's purchasing power. To put it another way, the first misguided assertion is that gold's purchasing power is roughly constant over time, meaning that changes in its price are almost solely due to changes in the purchasing power of the money in which the price is denominated.

The following monthly chart of the inflation-adjusted (IA)* US$ gold price disproves the notion that gold's purchasing power (pp) is roughly constant over time. In particular, it is clear from this chart that there was a huge increase in gold's pp during 1971-1980, a huge decrease in gold's pp during 1980-2001, and another huge increase in gold's pp during 2001-2011. It's likely that most of our readers were already aware of these 10-20 year swings in gold's pp, but what is less widely appreciated is that gold's pp is in a much longer-term upward trend. This ultra-long-term trend dates back to the severing of the last official link between the US$ and gold in 1971.

The fact is that an ounce of gold has about eight times more purchasing power today than it did when the final US$-gold link was severed in 1971. Furthermore, even if we make the not-unreasonable assumption that the first major leg of the gold rally of the 1970s was primarily a reaction to the gold price having been pegged at an artificially low level for a couple of decades, we still arrive at the conclusion that gold's pp is in an ultra-long-term upward trend. The reason is that if we take the top of the 1971-1974 rally as our starting point we find that gold's pp more than doubled over the intervening period.

*Our method of adjusting for inflation was outlined in an article in December of 2010. We make the assumption that over the long term the percentage decrease in the dollar's purchasing power will be approximated by the percentage increase in its supply minus the percentage increase in the combination of population and productivity.
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