Gold World News Flash |
- Rick Rule - Gold & Silver Plunge Has Quality Assets on Sale
- Gold Seeker Closing Report: Gold and Silver Fall About 2% and 3%
- The 'second Great Depression' saviour myth
- Silver Update: 3/6/12 Sovereign Wealth
- The Impending Bottom in Gold and Silver
- Ben Bernanke Says That His Son Will Graduate With $400,000 Of Student Loan Debt
- Gold Tests 200 day Average as Support
- The Face of Volatility
- What Is the Best Way to Save for College?
- Some Observations On Recent Gold (And Silver) Volatility
- Chris Duane's Take On Andrew Maguire's Silver Arrow
- The Real ‘Price' Of Gold
- Netherlands Looking for Euro Exit as Supercomputer Prepares for Financial Judgement Day
- As usual, central bank intervention and bullion bank stampeding, Norcini says
- Rushing for the Exits
- Jim Sinclair: ‘Save the World by Saving Yourself'
- Canadian Government “Ready to Talk” About Iceland Adopting Our Currency?
- Have Wall Street Bonuses Become Too Big To Fall?
- Ranting Andy Explains the Latest Gold/Silver Raid and Smashdown 03-06-2012
- The Gold Price Dropped 1.9% Today to $1,671.40 and May Fall to Near $1,600
- Low Volume Moves Often Reversed, HUI in Falling Wedge
- Gold, Stocks, and Manipulation Issues
- Seeking to Explain the Market’s Dour Mood
- Ron Hera is Standing by Gold and Silver 03-08-2012
- Norcini - Gold & Silver Smashed as Bullion Banks Cover Shorts
- Gold Daily and Silver Weekly Charts - Remembering
- James Turk: A perspective on money from Howard and Warren Buffett
- Unintended Consequences
- A Clear And Present Danger
| Rick Rule - Gold & Silver Plunge Has Quality Assets on Sale Posted: 06 Mar 2012 04:16 PM PST  With extraordinary volatility in gold and silver, today King World News interviewed Rick Rule, CEO of Sprott USA. Rule spoke with KWN about the recent action in gold and silver and what readers should focus on going forward. Here is what Rule had to say: "If you want to be long gold and silver, if you like real currencies as opposed to fiat currencies, you have to like days when you can buy it cheaply. I've been around this type of action for 35 years and I suspect, before I shed my mortal coil, I will purchase much more physical gold and silver bullion."
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| Gold Seeker Closing Report: Gold and Silver Fall About 2% and 3% Posted: 06 Mar 2012 04:00 PM PST Gold fell $41 to as low as $1664.30 in early New York trade before it bounced back higher at times, but it still ended with a loss of 1.83%. Silver slipped to as low as $32.46 and ended with a loss of 3.15%.
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| The 'second Great Depression' saviour myth Posted: 06 Mar 2012 03:36 PM PST  We're told that Fed officials and the Obama administration saved us from another 1930s-style slump. NonsenseAs President Obama's re-election campaign heats up, there are several new accounts of his track record finding their way into print. One item for which he is – undeservedly – given credit is saving the country from a second Great Depression. The political elites believe in the salvation from the second Great Depression myth with the same fervency as little kids believe in Santa Claus. And it has just as much grounding in reality. While the Obama administration, working alongside Ben Bernanke at the Fed, deserves credit for preventing a financial meltdown, a second great depression was never in the cards. The first Great Depression was brought about not only from misguided policies at the onset of the financial crisis, but also from an inadequate policy response. Read more...... 
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| Silver Update: 3/6/12 Sovereign Wealth Posted: 06 Mar 2012 02:56 PM PST | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Impending Bottom in Gold and Silver Posted: 06 Mar 2012 02:26 PM PST from TFMetalsReport.com:
What a difference a week makes! Just last Tuesday, this site was aflutter with expectation and hope. Silver appeared to have won its "Battle Royale" and was threatening to take gold along with it through stout Cartel resistance. Ehhh….not so much. So here we are, one short week later, and despair reigns supreme, replete with frustration and fears that our precious precious metals are about to swoon to levels not seen since 2010. I'm here to tell you that that is complete nonsense. First of all, a little something I've got to get off my chest. Since this little endeavor began 17 months ago, I have never been anything but upfront and honest with you. In one of my very first posts, I explained the reason why my version of technical analysis works. Namely, because the PM "markets" are so grossly manipulated, basic TA can direct you to buy signals and sell signals, resistance zones and support levels. So simple, even a Turd can do it. Read More @ TFMetalsReport.com
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| Ben Bernanke Says That His Son Will Graduate With $400,000 Of Student Loan Debt Posted: 06 Mar 2012 02:24 PM PST from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
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| Gold Tests 200 day Average as Support Posted: 06 Mar 2012 01:15 PM PST courtesy of DailyFX.com March 05, 2012 06:15 PM Daily Bars Prepared by Jamie Saettele, CMT Gold’s slipped below the 200 day average today but held resistance from January (1/12 high) I’ve no confidence in the larger pattern but will note that gold has traded in roughly a $300 range since September (if you must trade gold, then play the range) and that intramonth seasonality favors the downside against the first day of the month high (1730). 1683 and 1693 are resistance. Bottom Line (next 5 days) – sideways / lower?...
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| Posted: 06 Mar 2012 12:55 PM PST By Jeff Clark, Casey Research On February 29, gold dropped 4.8% and silver 6.2% (based on London fix prices). That's quite the fall for one day. We've seen prices that have risen that much, too. But as I'm about to show, these ain't nothin', baby. Based on our experience, we've been saying for some time [...]
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| What Is the Best Way to Save for College? Posted: 06 Mar 2012 12:36 PM PST Presented without comment - Yale tuition in grams of Not Money
Pretty sure Big Ben wishes he invested in gold before his son went to college. Yay fiat money.
h/t NihilarianZH
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| Some Observations On Recent Gold (And Silver) Volatility Posted: 06 Mar 2012 12:12 PM PST Submitted by Jeff Clark of Casey Research The Face of Volatility On February 29, gold dropped 4.8% and silver 6.2% (based on London fix prices). That's quite the fall for one day. We've seen prices that have risen that much, too. But as I'm about to show, these ain't nothin', baby. Based on our experience, we've been saying for some time that volatility will increase as the markets fight their way to the mania phase of this cycle – and that once there, the gyrations will jump even higher. This call doesn't exactly require one to go out on a limb; it makes sense since more investors will be crowding in – and volatility was high in the 1979-'80 mania. First, let's put last Wednesday's big plunge in perspective. Here's a picture of the daily changes in the gold price since 2003, based on London fix prices. (This chart is very busy, but I want to show the bulk of the bull market in one visual.)
(Click on image to enlarge) A 4.8% decline is one of gold's bigger one-day movements over the past nine-plus years. But as you can see, there have been a number of days where gold rose or fell more than 5%. And it exceeded 6% on five occasions. Here are the data for silver.
(Click on image to enlarge) Last Wednesday's decline of 6.2% was one of the metal's bigger one-day movements. However, it's exceeded 10% on 14 occasions, 15% three times, and rose an incredible 20.06% on September 18, 2008. You might think this kind of volatility is high – and it's true. Worse – or better, depending on how you see things – the volatility in the underlying commodity is magnified in the related company stocks. This is why Doug Casey calls mining stocks, especially the juniors, "the most volatile stocks on earth." But the thing is, metals volatility has been higher in the past, particularly during a mania. Here's what I mean. The following chart documents gold's daily price changes from 1976 through the end of 1980. Take a look at the jump in volatility in 1979-'80.
(Click on image to enlarge) Volatility became the norm in 1979 and especially 1980. Fluctuations of 4% or more were not uncommon. Here's the same chart for silver. The metal's volatility during the 1979-'80 period became extreme.
(Click on image to enlarge) Daily price movements of 6% or more didn't occur once prior to 1979 – but then they became commonplace. I wanted to take a closer look at the biggest price fluctuations during this period, so I ferreted out the largest days of volatility for each metal. For gold, I selected daily movements of greater than 5%.
(Click on image to enlarge) During this five-year period, gold saw fluctuations greater than 5% on 38 days (19 up, 19 down). Not surprisingly, more "up" days occurred leading up to gold's peak of January 21, 1980, and more down days came after it. And yes, gold rose an incredible 13.3% on January 3, 1980. As it turned out, that biggest one-day rise was only 18 calendar days away from the very peak of the market. And the biggest decline of 13.2% on January 22, 1980 was the signal that the top was in. For silver, I used one-day movements of 10% or more, all of which occurred in 1979 and 1980.
(Click on image to enlarge) The silver price had fluctuations of 10% or more on 34 days (17 up, 17 down). They occurred over a period of only 15 months, an average of more than two per month. And yes, silver really did rise a whopping 36.5% on September 18, 1979. So while last Wednesday's price movements for gold and silver were big, we simply haven't seen this kind of volatility in our current bull market. Now let's have some fun. Let's say we match the most volatile days from 1979-'80 at some point before the current bull market is over. If we use gold's biggest up day (13.3%) and biggest down day (13.2%), here's what would happen to prices from various levels. Remember, these are one-day gains and retreats:
Imagine gold jumping from $1,800 to $2,039.40 in one day! However, unless you think $1,800 is the level from which the mania starts, it's more likely we'd see a 13.3% advance (or something similar) from a higher starting point. We'd thus probably see gold jumping to $5,665 from $5,000, for example. And further, that would probably signal we're near the top. Keep in mind that volatility worked both ways during the mania, so dropping from $4,000 to $3,472 or something similar is likely to occur as well. Here's the same table for silver, with its biggest up day of 36.5% and down day of 18.5%.
Can you imagine silver starting the day at $80 and hitting $109.20 before you go to bed that night? Something like that will probably happen at least once before this bull market is over. As with gold, though, that kind of movement is more likely to take place from a higher level, such as $100 or $125 (or higher?). And a fall like $100 to $81.50 will probably be part of the trend as well. There are some definite conclusions we can draw from the historical picture:
What can an investor do with this information? Prepare yourself for bigger daily swings – in both directions. And buying on those outsized drops is probably a good strategy… Because we now know what volatility looks like.
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| Chris Duane's Take On Andrew Maguire's Silver Arrow Posted: 06 Mar 2012 12:00 PM PST | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Real ‘Price' Of Gold Posted: 06 Mar 2012 11:59 AM PST by Chip Krakoff, SeekingAlpha.com: It can be difficult to grasp that under a gold standard there is no "price" of gold. We're used to gold being expressed in dollars but what if a dollar was gold? What if you wanted to buy wheat or steel with gold? If dollars were gold these things would be valued not in dollars but in terms of gold. We wouldn't care about the price of gold; we would instead want to know how much our gold could buy. The price of goods, commodities and services would all be valued in relation to gold and a "dollar" would simply be another word for a specified amount of gold. Gold is always worth what it can buy. To ask what the price of gold is in terms of dollars is redundant under a gold standard. If a dollar were defined as, let's say 1/2000th of an ounce of gold, we would then need to know how much of any given commodity 1/2000th of an ounce, or a dollar of gold would buy. Under a gold standard that would be determined by the marketplace-as it was for centuries. Only under a dollar standard has the "price" of gold become an issue. Why? The dollar depreciates. Since we went off the gold standard the dollar has experienced an almost 100% devaluation. In 1913 an ounce of gold could be bought for $20.67, soon after it cost $35 for an ounce, and today an ounce of gold costs almost 2,000 dollars.
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| Netherlands Looking for Euro Exit as Supercomputer Prepares for Financial Judgement Day Posted: 06 Mar 2012 11:51 AM PST from CapitalAccount: "We will keep all options — including military action — on the table to prevent [Iran] from obtaining a nuclear weapon," Secretary of Defense Leon Panetta told America's Pro-Israel lobby AIPAC today. Swiss money manager and Gloom Boom Doom Report publisher Marc Faber isn't waiting for war. He said in an interview he thinks "sooner or later, the U.S. or Israel will strike Iran – it's almost inevitable." Faber recommends a formula of 25% cash, 25% equities, 25% gold, and 25% real estate or real estate equities as a formula to provide some safety against these financial headwinds. We ask Mike Shedlock, Investment Advisor for Sitka Pacific Capital and author of the popular Global Economic Analysis blog what he thinks. Meanwhile, more trouble brews in Euroland as Eurostat reports that the eurozone did contract 0.3% as estimated in the fourth quarter from the third quarter. Meanwhile, Greece tries to get investors on board with its debt swap deal by the Thursday deadline. As for bondholders taking the haircut, Greece's Finance Minister Evangelos Venizelos said in an interview, "this is the best offer because this is the only one, the only existing offer." Meanwhile a detailed 73-page report is circulating called "The Netherlands and the euro," and it shows the Netherlands would benefit by leaving the eurozone. Mike "Mish" Shedlock talks about it and explains why Italy, Greece, Portugal and Spain are going to need lots more money and Germany and the Netherlands will end up footing the bill. Meanwhile, Super Tuesday has voters heading to the polls in Republican primaries as the presidential election campaign season gains more steam. The auto bailouts have driven some of the debate recently with Mitt Romney's race in Motor City home state Michigan and also with attack ads including one lampooning the Chevy Volt, targeting Barack Obama and GM. You've heard the horse race partisan analysis, so we look at what may really be behind criticism of the auto bailouts from the same people who supported bailouts for the banks (e.g. Mitt Romney). Is it because Wall Street wants the bailouts for themselves but bankruptcies for everyone else so they can benefit off buying them up? And we debate Watson, the computer jeopardy champion, going to work on Wall Street, and whether or not guilty people are harder workers as a study finds.
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| As usual, central bank intervention and bullion bank stampeding, Norcini says Posted: 06 Mar 2012 11:05 AM PST 7p ET Tuesday, March 6, 2012 Dear Friend of GATA and Gold: Futures market analyst Dan Norcini tells King World News today that last week's smashdown of gold was prompted by central bank intervention and accelerated by bullion bank selling, which, as usual, panicked hedge funds and others, whose selling allowed the banks to begin covering their short positions. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/6_Nor... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT A Rare Opportunity with Collectible Gold Coins Sovereign debt problems in the United States as well as Europe will worsen this year. The mainstream financial media may never report about the likely inflationary consequences of bailouts and "quantitative easing," nor are they likely ever to recommend tangible assets for financial protection. But at Swiss America Trading Corp. we believe that it is no longer a luxury to own gold and silver coins but rather a necessity. At the moment the public is showing little interest in Double Eagle U.S. $20 gold coins, so the price premiums above the intrinsic melt values (.9675 ounce of gold in each coin) are historically low. The ratio of price to bullion content for these coins has been 2:1 but today it is only about 1.25:1. This is a real opportunity. So give us a call or e-mail and we will be glad to discuss the potential of these coins and how to use a ratio strategy to increase your gold ounces without money out of pocket. In the January edition of his Early Warning Report, Richard Maybury writes: "As they are inherently in very limited supply, I believe that high-quality numismatics will become tulips, eventually rising a thousand percent or more in real terms, when money velocity goes into mid-second stage. In late stage, who knows -- 2,000 percent? 3,000?" All inquiries will receive without charge (while supplies last) our latest book, "The Inflation Deception," as well as our newsletter "Real Money Perspectives." -- Tim Murphy, trmurphy@swissamerica.com -- Fred Goldstein, figoldstein@swissamerica.com Telephone: 1-800-289-2646 Swiss America Trading Corp., 15018 North Tatum Blvd., Phoenix, AZ 85032 Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Free Month Subscription to Market Force Analysis for GATA Supporters Market Force Analysis is a unique, patent-pending approach to commodity market analysis. An algorithm has been developed to extract supply and demand weightings from futures market data. The difference between supply and demand is the market imbalance that is called "market force," so named because it is what drives price. It brings clarity to past market action and predicts market trends. Because it is derived from accurate futures market data it is not subject to the errors inherent in macro-level estimates of supply and demand. Learn more here: https://marketforceanalysis.com/About_MFA.html Market Force Analysis focuses on short-term (15 days) and medium-term price predictions to help both short-term traders and long-term investors understand market moves and benefit from the generated prediction of prices. To read subscriber comments that show how much the service is appreciated, visit: https://marketforceanalysis.com/Testimonials.html The MFA service has been pioneered by market analyst and Gold Anti-Trust Action board member and researcher Adrian Douglas. The Market Force Analysis premium service provides: -- A bi-weekly report. -- Access to the MFA hot list of junior mining stocks derived from analysis of more than 800 mining stocks. The MFA hot list consistently outperforms well-known mining share indices like the HUI, GDX, and GDXJ. -- E-mail alerts about actionable trades. -- E-mail updates with important information. To obtain your 1-month free trial subscription to the Market Force Analysis letter, e-mail info@marketforceanalysis.com and put "MFA Free Trial" in the subject field.
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| Posted: 06 Mar 2012 11:01 AM PST March 6, 2012 [LIST] [*]Return of the safety trade: Three reasons for today's sell-off at least as plausible as Greece (yawn).... [*]Fed blowback: Everyone who got out of CDs and Treasuries gets hammered today... [*]The case against Apple: As iPad buzz grows, Chris Mayer shouts, "Sell!" in a crowded theater... [*]Faber on how low gold could go before it's all over... readers fire back "no question" gold is manipulated... [*]A new weight challenge: gold versus tulips... Abe's mock trade update... the sassy lure of "high-performance" computing... and more! [/LIST] Well, well... it's a "risk-off" day in the markets. Let's look at some quick numbers: [LIST] [*]All the major U.S. stock indexes are down at least 1%. According to Bespoke Investment Group, the last time the S&P opened down this much was Nov. 21 [*]Gold is down another 2%, to $1,671. Silver's back below $33 [*]Oil is down to $104.83, a two-week low [*]The dollar index is back to a three-week high at 79.8...
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| Jim Sinclair: ‘Save the World by Saving Yourself' Posted: 06 Mar 2012 11:00 AM PST Probably the most experienced, inspiring gold investor of the last decade(s) has posted his latest Q&A with investors here This is a must see
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| Canadian Government “Ready to Talk” About Iceland Adopting Our Currency? Posted: 06 Mar 2012 10:51 AM PST Iceland has been desperate to replace its krona with a more stable currency since its banking collapse of 2008. But instead of the obvious choices — the American dollar, the British pound or the euro — it seems Icelanders are eyeing our loonie. According to an article in the Globe and Mail, several Icelandic business leaders and some political parties have actually approached the Canadian government about adopting the Canadian dollar as their national currency. "Canadian ambassador to Iceland Alan Bones had planned to deliver remarks to a conference on the future of the Icelandic krona, making it clear that if Iceland decided to adopt the Canadian dollar, with all its inherent risks, Canada was ready to talk," the article notes. However, Bones' Saturday speech was cancelled abruptly. "Once we got wind of [the speech] and it went through the approval channels … The decision was made that it's not an appropriate event for him to speak at," Joseph Lavoie, Foreign Minister John Baird's press secretary, told the Globe. Iceland was one on the hardest hit economies affected by the international financial crisis of 2008. The country's three top banks collapsed as the global credit crisis struck, triggering a deep recession, high unemployment and a wobbly currency. Adopting the strong and stable Canadian dollar could certainly help with Iceland's recovery. "There's a compelling economic case why Iceland would want to adopt the Canadian dollar," notes the Globe. "It offers the tantalizing prospect of a stable, liquid currency that roughly tracks global commodity prices, nicely matching Iceland's own economy, which is dependent on fish and aluminum exports." From the Canadian point of view, sharing currencies with Iceland would likely multiply our rather minuscule trade volume with the North Atlantic island nation. The Canadian government refused to comment further. "Ottawa also said it doesn't comment publicly on other countries' currencies," the Toronto Star reports. Source: Yahoo
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| Have Wall Street Bonuses Become Too Big To Fall? Posted: 06 Mar 2012 10:39 AM PST For all the drama surrounding Wall Street bonuses in a year in which Wall Street profitability was cut in half to just $13.5 billion, the worst since the collapse and bailout of 2008 and 2009 (and compared to $27.6 billion in 2010 and $61.4 billion in 2009), one would think that the average banker would see zero bonus in 2011, or in some cases, especially if they worked at a Greek bank, be told to pay for the privilege of working. The truth is that according to official data from the NY City Comptroller, the average bonus dipped by just 13% in 2011, declining modestly from $138,940 to $121.150. In fact, while a number of large firms announced reductions in cash bonuses for 2011 (with several firms reporting reductions in the range of 20 to 30 percent), personal income tax collections indicate a smaller decline in the overall cash bonus pool. A big reason for this is deferred bonuses from prior years hitting this year's payroll and thus smoothing the impact. Still, bankers being forward looking people, are looking forward and probably not liking what they see. Yet while 2011 data for comprehensive pay is still not available, in 2010 the average salary rose by 16% to $361,180 as more firms shifted to a base-heavy comp structure. Indicatively, the average Wall Street salary is 5.5 times higher than the rest of the private sector at $66,100. And no matter how one feels about them, one thing is true: the New York economy would founder without taxes paid by bankers: "the securities industry in New York City accounted for 23.5 percent of all wages paid in the private sector despite accounting for only 5.3 percent of all private sector jobs" and more importantly, "each job created (or lost) in the securities industry leads to the creation (or loss) of almost two additional jobs in other industries in the City. OSC also estimates that each new Wall Street job creates one additional job elsewhere in New York State, mostly in the City's suburbs." Hence - Wall Street's bonuses have become "Too Big Too Fall", as the entire economy of NY City and the state is now held captive by Wall Street's exorbitant bonuses. Below is a chart of the average Wall Street salary since 1985:
That said, all of the above is mostly noise: the only thing driving banker pay is the amount of leverage in the system. As it surges, banker compensation is merely an "externality" of all the newly oozing cash as shown here.
Here is comptroller DiNapoli's remarks on the matter: And some more observations: "Cash bonuses were down in 2011, reflecting a difficult year on Wall Street," DiNapoli said. "Profits were down sharply and securities firms in New York City resumed downsizing in the second half of the year. The securities industry, which is a critical component of the economies of New York City and New York State, faces continued challenges as it works through the fallout from the financial crisis and adjusts to regulatory reforms." The Comptroller also estimates that profits for the broker/dealer operations of New York Stock Exchange member firms, the traditional measure of profitability for the securities industry, did not exceed $13.5 billion in 2011, which would be less than half of the $27.6 billion earned in 2010. This would be the second year in a row that profits dropped by more than half. While the industry had a strong first half with profits of $12.6 billion, it lost $3 billion during the third quarter. Underlying profitability at the large firms was even weaker than reported because profits were boosted by accounting adjustments. The industry earned a record $61.4 billion in 2009 with the benefit of federal assistance after losing a record total of $53.9 billion over the course of 2007 and 2008. While a number of large firms announced reductions in cash bonuses for 2011 (with several firms reporting reductions in the range of 20 to 30 percent), personal income tax collections indicate a smaller decline in the overall cash bonus pool. This is likely due to the payment of bonuses that had been deferred from earlier years. The increased use of deferred compensation should create a pipeline of bonuses that will be paid in future years, which will reduce volatility in industry tax payments. DiNapoli also reported that:
And concluding the discussion is this rather curious piece appearing in Bloomberg of all places, which asks why anyone with a sense of personal morality go into finance? We have some ideas and they revolve around $320,00 bottle of champagne, and the externalities associated with that particular feature.
Read on here.
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| Ranting Andy Explains the Latest Gold/Silver Raid and Smashdown 03-06-2012 Posted: 06 Mar 2012 10:30 AM PST "Ranting" Andy joins us again this week to reassure you the Leap Day violation on gold and silver was as blatant of an attack as you could possible see in the paper markets. Andy reiterates that short term charts are meaningless, and he explains what we're seeing today is simply follow-through operation. The 200-day moving average of the precious metals, gold and silver, has been very consistent over the past eleven years; these are commodities that have rarely been under their 200-day moving average. Effectively, Da Boyz are not only painting the charts, they are trying to take your money! They are manipulating the charts to make the market look like its behaving in a way that it's really not. The long term chart patterns speak for themselves! Please fill out the subscription box at KerryLutz.com to receive your free Financial Survival Toolkit & weekly gold and silver newsletter.
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| The Gold Price Dropped 1.9% Today to $1,671.40 and May Fall to Near $1,600 Posted: 06 Mar 2012 10:28 AM PST Gold Price Close Today : 1671.40 Change : (31.60) or -1.86% Silver Price Close Today : 32.741 Change : (0.910) cents or -2.70% Gold Silver Ratio Today : 51.049 Change : 0.441 or 0.87% Silver Gold Ratio Today : 0.01959 Change : -0.000171 or -0.86% Platinum Price Close Today : 1610.40 Change : -49.60 or -2.99% Palladium Price Close Today : 670.00 Change : -37.00 or -5.23% S&P 500 : 3,274.10 Change : -20.97 or -0.64% Dow In GOLD$ : ($1.13) Change : $ (2.49) or -182.29% Dow in GOLD oz : (0.054) Change : -0.121 or -182.29% Dow in SILVER oz : (2.78) Change : -6.13 or -183.02% Dow Industrial : (91.00) Change : -203.66 or -180.77% US Dollar Index : 79.83 Change : 0.529 or 0.67% The GOLD PRICE dropped 1.9% today, down $31.60 to $1,671.40 on Comex. It was already rolling down the slope in Europe and had reached $1,685 when the US opened and the selling began in earnest, taking gold to the day's low at $1,663.40 by 9:30. Gold then recovered the rest of the day to move sideways between $1,675 and $1,670. Bad news doesn't stop there. GOLD PRICE dropped out of a flag pattern and fell through its 50 DMA ($1,688.42) and even its 200 DMA ($1,674). The proverb holds that flags always fly at half staff. If so, gold will fall to near $1,600, and relatively fast. Let's watch it for a day or two. In European trading the SILVER PRICE broke below 3350c, but although it suffered through the day, dropping 91c (2.7%) to close Comex at 3274.1c, it never suffered any big fast drop like gold's. Ohh, that 3300c barrier will be tough to break through on the way back up. Today SILVER caught and held at 3245.7c, but when that 3250-ish area give way, silver will give back another 50c very fast, and could fall to 3065c. Touching the 50% correction (of the December through March rally) at 3183c is a virtual certainty. 50 DMA stands at 3224c, and that will offer weak support, but silver has further to fall. The GOLD/SILVER RATIO has risen sharply since 1 March at 48.331 (remember, the ratio FALLS when metals are rallying, and RISES when metals are falling.) Today it closed at 51.049. The ratio has broken out to the upside and if we are ever to hit our 57.5:1 target, it ought to be on this move up in the ratio. Awww, come on, now! All y'all that wrote yesterday because I typed "2012" instead of "1558" for the year Francisco Fernandes introduced smoking tobacco into Europe, y'all already knew that, right? As I was saying yesterday, "Should the Dow break 12,880 (yesterday's low), wave bye-bye. Quickly." Did y'all remember to wave? Stocks were in trouble from their 12,958.65 open, dropping like your daddy's borrowed pocketknife down the well. They caught briefly just above 12,800, then eroded the rest of the day to end at 12,759.15, down 203.66 points or 1.57%. Owch. S&P fell in lock step with the Dow, down 20.97 or 1.54% to 1,343.36. I may be no more than a natural born fool from Tennessee, but even I know that when you see one of them wedgey looking thangs pointing up on the chart, the market's about to hit the skids. I don't see any support much before 12,250. Might pause a bit at the 50 day moving average, now 12,678, but the 200 DMA looks the more likely target at 12,012. BWDIK? The news tells us that stocks fell on apprehensions about the Greek Debt Deal (y'all remember that?) falling apart. Seems it really ISN'T a done deal after all, and some bondholders are dodging the barber shop, holding out to trade a haircut on Greek bonds to full payment from Credit Default Swaps. Apparently the news has never looked at a stock chart. That US dollar index was just marking time yesterday, planning to spurt 52.9 basis points today, 0.68%, to 79.829. 80 lies in its future, and higher, I suspect. Y'all can imagine that fear about the Greek Debt Deal really helped the euro today, right? It fell a hefty 0.79% to $1.3112. The euro appears to have resumed its downward course against the dollar. Yen, on the other hand, rose 0.84% to 123.66c/Y100 (Y80.87/US$1), and appeared to make a spike bottom - again -- and bounced up. Surely that must be the last of its decline. I have a favor to ask y'all. My wife Susan is having troubles with her heart again, after she had her mitral valve repaired in September 2008. I would deeply appreciate your prayers for her. She's awfully bossy, but we've been married since we were 12, so I'm used to her. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. 
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| Low Volume Moves Often Reversed, HUI in Falling Wedge Posted: 06 Mar 2012 10:17 AM PST HOUSTON -- Argus Metals (TSX:AML.V or ARGXF) is a pretty good representative example of the low-volume nature of the current sell down for the Little Guys. Just below is our volume candle chart for AML.V for reference.
Continued… Our views about The Little Guys are in the context of this next chart, which may not be a popular view among our colleagues. As of today we can make a case that the HUI is putting in a falling wedge into known support.
We've seen accounts from other analysts calling the current HUI condition a "Rounding Top" or a "Fishhead Consolidation" or a "Diamond Reversal" (and more), but for now we prefer to "see" a falling wedge which is now moving into an area of expected support. Our own view of falling wedge patterns is that they tend to resolve in the direction of the prevailing trend sooner or later and more than not. The thoughts above are in the context of the chart below showing the CDNX, which gapped lower today along with most of the resource sector. Keeping in mind that we gauge an uptrend by a series of rising highs and lows, what are the odds that the CDNX puts in the second higher low since the October 2011 nadir?
As of today, Tuesday, March 06, 2012, we'd have to give it a better than even chance the next turning low for the CDNX is higher than the December '11 example. Incidentally, that October 2011 low for the CDNX was the tag end of the second largest correction for the CDNX ever (-47%), second only to the 2008 massacre (-79.9%). It really hasn't rallied all that much since then so The Little Guys remain on the cheap side and still have a great deal of "work" to do in our way of looking at things. That is all for now, but there is more to come.
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| Gold, Stocks, and Manipulation Issues Posted: 06 Mar 2012 09:58 AM PST We would like to begin today's essay with a discussion of points from a few e-mails that we received after publishing our previous essay entitled Gold Downside Targets and Manipulative Excuses. Read More...
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| Seeking to Explain the Market’s Dour Mood Posted: 06 Mar 2012 09:24 AM PST Well, well… it's a "risk-off" day in the markets. Let's look at some quick numbers:
The financial media are explaining away the sell-off with… [shaking the Magic 8 Ball]… Greece! Yes, that's it! Private holders of Greek bonds have to decide by Thursday whether to go along with a "voluntary" haircut amounting to 53.5%. Never mind this deadline's been looming for weeks. The Financial Times at least wasn't buying it: "There was little in the way of fresh catalysts on Tuesday that explained the market's dour demeanour." The market does seem to have a sixth sense twitching this morning. Something wicked this way comes. Consider…
What happens when the guys in uniforms have to hold back the guys in suits from doing foolish things? Hmmnn… The problem with days like this, if you're a Federal Reserve governor, that is, is your entire strategy of punishing savers by forcing them to seek capital gains in the stock market gets called into question. "A healthy economy with good returns," Fed chairman Ben Bernanke proclaimed before Congress last week, "is the best way to get returns to savers." Specifically, Mr. Bernanke was asked what a saver should to do when a 10-year Treasury yields less than 2%. "Clearly," says Lifetime Income Report's Jim Nelson, "Bernanke thinks the income reductions savers and conservative retirees have faced on in their savings accounts, bank CDs and U.S. Treasuries are fine." "They should be betting on growth stocks anyway." "Au contraire. We'd be willing to bet that there are plenty of retirees and near-retirees hoping they don't have to load up on Apple or Facebook to fund their golden years." Addison Wiggin Seeking to Explain the Market's Dour Mood originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.
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| Ron Hera is Standing by Gold and Silver 03-08-2012 Posted: 06 Mar 2012 09:11 AM PST Ron Hera took time out today, 3/6/12, to review the latest action in gold and silver as well as the mining stocks. Ron's unfazed by the latest smack-downs. The first slam-down was certainly sponsored, and the current decline was most likely dollar related. What happens next is really the issue, however, Ron sees tremendous value in a number of mining shares that have been beaten up in the recent market action. According to its latest filings, there's a company that's sitting on 6 million ounces. Ron also explained why the mining sector is not for the faint of heart. There's a tremendous amount of technical knowledge required to effectively judge a mining company's prospects. There are also the valuation issues that require the ability to judge how difficult the ore is to get at it, the feasibility of the mine and the management's ability to tie it all together. Therefore, while the market may usually be efficient, it often misses mining stocks that have great potential. We'll check in with Ron next month and see where it's all heading. Please fill out the subscription box at KerryLutz.com to instantly receive your free Financial Survival Toolkit & weekly gold and silver newsletter.
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| Norcini - Gold & Silver Smashed as Bullion Banks Cover Shorts Posted: 06 Mar 2012 08:45 AM PST  With gold and silver plunging, along with stock markets and crude oil, today King World News interviewed legendary Jim Sinclair's chartist Dan Norcini. Norcini told KWN what we are seeing today in the gold and silver markets is not what most people think: "People will tend to blame this takedown in gold and silver on the bullion banks. Interestingly, I don't think that's the case this time, Eric. I think what happened last Wednesday was bullion bank selling related to central bank intervention, when we had that big takedown, which was timed with Bernanke's Congressional testimony."
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| Gold Daily and Silver Weekly Charts - Remembering Posted: 06 Mar 2012 08:22 AM PST | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| James Turk: A perspective on money from Howard and Warren Buffett Posted: 06 Mar 2012 08:16 AM PST 4:15p ET Tuesday, March 6, 2012 Dear Friend of GATA and Gold: GoldMoney founder and GATA consultant James Turk has replied to renowned investor Warren Buffett's recent disparagement of gold by quoting Buffett's father, Howard; by noting that gold accumulation embodies the virtue of saving; and by asserting the age-old connection between gold money and liberty. Turk's commentary is headlined "A Perspective on Money from Howard and Warren Buffett" and it's posted at the GoldMoney Internet site here: http://www.goldmoney.com/goldmoney-foundation/essays/a-perspective-on-mo... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum (TSXV: NKL) and Ursa Major Minerals Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) and Ursa Major Minerals Inc. have signed a binding letter of agreement for a business combination through a proposed all-share transaction. In doing so Prophecy and Ursa have acted at arm's length and the transaction has been negotiated at arm's length. Prophecy will issue one common share in exchange for every 25 outstanding common shares of Ursa. Ursa options and warrants will be exchanged for options and warrants of Prophecy on an agreed schedule. Prophecy's offer represents a value of about $0.15 per each common share of Ursa based on Prophecy's share price of $3.70 as at March 1, representing a premium of 130 percent to Ursa's March 1 closing price of $0.065. Prophecy is to subscribe for $1 million common shares of Ursa by way of private placement financing at $0.06 per share, subject to regulatory approval. Upon placement completion, John Lee and Greg Hall, current Prophecy directors, will be appointed to Ursa's board. Prophecy thus will become a mid-tier resource company with a robust and -- The fully permitted open-pit Shakespeare PGM-Ni-Cu mine close to Sudbury, Ontario, infrastructure with near-term production capabilities. -- The flagship Wellgreen (Yukon) PGM-Ni-Cu project with more than 10 million ounces of Pt-Pd-Au inferred resource. Drilling is under way and a preliminary economic assessment study is pending. -- Manitoba's Lynn Lake Ni-Cu project with more than 262 million pounds Ni and 138 million pounds Cu measured and indicated. For the complete announcement, please visit Prophecy Platinum's Internet site here: http://www.prophecyplat.com/news_2012_mar02_prophecy_platinum_ursa_major...
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| Posted: 06 Mar 2012 08:00 AM PST 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". Long story short, in an effort to avert a total collapse in the European banking system, the US Fed agreed to offer unlimited US 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. 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. 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). 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? 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? 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). 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. 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. 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. 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.
China is not alone in this trend either. Russia has reportedly cut its US Treasury exposure by half since October 2010. 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. It's not hard to envision higher gold prices if the rest of the non-G6 countries follow-suit.
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. 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. The main culprit for the increase? Depressed interest rates on government bonds. 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. 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. 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. Regards, Eric Sprott and David Baker Unintended Consequences originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.
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| Posted: 06 Mar 2012 07:58 AM PST However Greece unwinds, the other PIIGS are even bigger problems that will have to be dealt with. Unfortunately, GS and JPM will be the last ones to take any pain from this because ultimately they are in control of the political decision-makers. The corruption is beyond mind-blowing. I also think it's a bad signal that the war rhetoric toward Iran is escalating quickly. The elitists are losing control and whenever they lose control, they start a war.I got a call from a buddy of mine who is in the process of moving his family out of the country. He's here for a bit and stated that he had a bad feeling that something ugly was getting ready to happen in the markets. Coincidentally, or maybe not, I had just been thinking about the how the war rhetoric toward Iran was escalating to a pretty terrifying level. Of course, it might be just the rhetoric of bluffing. But please make no mistake about it. The elitists are losing control. If Greece defaults and goes bust, it will set off a much bigger daisy-chain of financial nuclear explosions throughout the PIIG consortium and its financiers. Historically, without any variance, when the elitists lose control they start a massive war. Got gold? GLD and SLV will be useless and worthless when the real fireworks go off... 
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Who ever imagined that Ben Bernanke would become a poster child for the student loan debt problem in America? Recently Bernanke told Congress that his son will graduate from medical school with about 
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