Gold World News Flash |
- Jim Sinclair: The Supremacy Of The US Dollar Is Behind Us
- The Supremacy Of The US Dollar Is Behind Us
- Gold Confiscation, Inflation, And Suddenly Virtuous Central Bankers
- U.S.: Debt Remains a Challenge
- Silver Manipulation Caught in the Act; HFT Swamps NASDAQ with 75K SLV Sell Orders Per Second
- Silver Update 3/25/12 Illusionary Recovery
- Richard Russell - Gold & Silver Being Bought Up By Billionaires
- Richard Russell – Gold & Silver Being Bought Up By Billionaires
- The U.S. Prison-Cell Economy
- Butler On Business Interviews David Morgan 3/23/12
- An Annotated Paul Brodsky Responds To Bernanke's Latest Attempt To Discredit Gold
- The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent
- Market Report: Precious Metals
- Previewing Next Week's Events
- South Africa this week will take some initial steps to unseat the US dollar as the preferred worldwide currency for trade and investment in emerging economies.
- Jim Sinclair: “Swift” Kick To The US Dollar
- GATA: BRICs and South Africa move to unseat dollar as trade currency
- Tungsten-Filled 1 Kilo Gold Bar Found In The UK
- GGR examines disgust with mining shares, notes big commercial shorts are covering
- HUI Breakdown Attempt - Got Gold Report
- “Everyone should own a little Silver.” Is this even possible given today’s tight supplies?
- BRICs and South Africa move to unseat dollar as trade currency
- Saudi Arabia: House of Saud, Falling House of Cards
- Manipulation of the "Paper Gold" Market, "Worthless" Paper versus Physical Gold
- MF Global Financial Collapse is Obama's Hurricane Katrina
- Gold and SIlver Elliott Wave Trading
- Calling Another Bottom in Gold and Silver Stocks Sector
| Jim Sinclair: The Supremacy Of The US Dollar Is Behind Us Posted: 25 Mar 2012 07:30 PM PDT Expect the formation of a competitive SWIFT system in three blocks. The dollar will test .7200 USDX and fail on the third tap.
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| The Supremacy Of The US Dollar Is Behind Us Posted: 25 Mar 2012 05:23 PM PDT Dear CIGAs, Brazil, Russia, India China and South Africa are meeting next week because of the use of SWIFT as a weapon of war. Expect the formation of a competitive SWIFT system in three blocks. The dollar will test .7200 USDX and fail on the third tap. There will be an audio interview on Continue reading The Supremacy Of The US Dollar Is Behind Us
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| Gold Confiscation, Inflation, And Suddenly Virtuous Central Bankers Posted: 25 Mar 2012 03:17 PM PDT Wolf Richter www.testosteronepit.com When the world's major central bankers get together, as they did at the Fed conference in Washington this weekend, ironies abound. Off to the side was Turkey’s government that had just floated a plan to get its people to turn in their physical gold in exchange for “certificates,” a first if still voluntary step in what may become a process of gold confiscation. In the background was the Fed, which in January had promised to keep interest rates at record lows through 2014, after having purchased $2.3 trillion in bonds. And in the foreground were the money printers of Japan and Europe. “If low interest rates induce investment projects that are only profitable at such interest-rate levels, this could have an adverse impact on productivity and growth...,” said Masaaki Shirakawa, Governor of the Bank of Japan, the champion of deficit monetization and ultra-low interest rates. He was worried, he said, about “side effects” such as rising commodity prices—a non sequitur after he'd announced in mid-February that the BOJ would plow another ¥10 trillion ($128 billion) into asset purchases, having already done three waves of asset purchases in 2011. And then we learned that board members fretted that this might be considered monetization of Japan's deficit. Um, yes. Not to be outdone, Jean-Claude Trichet, ex-President of the ECB, did his own fretting. Under him, the ECB had purchased crappy Eurozone sovereign bonds despite a treaty that prohibits it. And now he worried that these bond purchases by central banks have become part of a new “permanent regime,” and that it could create “behavioral contagion”—something that has already happened. “I think we have to reflect on that,” he said belatedly. Back to Turkey: it found a different solution for its own out-of-control budget deficit. Like that of Japan, the US, and other countries, Turkey’s deficit, at 10% of GDP, has become part of the “permanent regime.” But rather than deal with it the hard and honest way—cut spending and increase tax collections—Turkey is grasping for alternatives. Hence the plan to bamboozle its citizens into handing over their hidden stashes of physical gold in return for what would certainly be pretty certificates. And as an additional incentive, gold-deposit accounts would earn interest. When I was in Turkey in 1997, pocket money was a wad of Turkish lira that included 1,000,000-lira notes. Even beggars could be millionaires. And those who spent their last million on gold (jewelry was a favorite) would never forget how smart that decision was. Not only would the price of gold, at the time around $300 per ounce, start rising again, but also the value of the lira would dissipate into hyperinflation. On January 1, 2005, the government revalued the currency at 1,000,000 lira to 1 New Turkish lira and issued new banknotes and coins. Then, on January 1, 2009, the government again put new banknotes and coins in circulation but without New in the name. They looked different, and omitting New would certainly inspire confidence and help people forget the fiasco of the old lira. Inflation in February was 10.4%. Yield on two-year bond is near 10%. And last year, the lira plummeted 20% against the dollar. No wonder Turks don’t trust their paper money, regardless of how the government dresses is up. So they doubled their purchases of physical gold in 2011, according to the World Gold Council. Their savings rate is at a 30-year low. They’re borrowing and spending lira, and they’re buying gold for safekeeping in their homes. A lot of it. $150 - $300 billion, according to government estimates—savings that are not part of the "savings rate." If the government got its hands on, say, $200 billion of its people’s gold, it could transfer it into the international market and kick the deficit can down the road. And if push came to shove, it could do with the certificates what Greece did with its bonds. Which makes people wonder who the advisor on the project was? Goldman Sachs? But Turks saw what happened next door: “We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos after the bond swap, a default that had whacked private sector investors with a 72% loss. While everyone other than the bondholders was applauding, Greece’s economic horror show continued in its relentless manner. For that whole debacle, read..... “A harder Default To Come.”
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| U.S.: Debt Remains a Challenge Posted: 25 Mar 2012 03:03 PM PDT The U.S. debt is a problem that nobody wants to face. The U.S. dollar should fall again, despite current equilibrium. Read More...
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| Silver Manipulation Caught in the Act; HFT Swamps NASDAQ with 75K SLV Sell Orders Per Second Posted: 25 Mar 2012 02:48 PM PDT by Chris Sheridan, Financial Sense:
Here's a chart of the second by second market activity in SLV where you can see the massive lightning-quick spike occurring at 13:22:33. Ted Butler Explains the Whole Process
"What's happening is that these commercials [or large traders], through HFT, can set the price suddenly down. It didn't go down because there was massive selling from the commercials, they just set the price down. They know how to do it with their computers by putting in actual orders, and faking it, and spoofing, canceling them right away; but what happens is when the price moves down then the selling comes, which is the intended effect and result. Commercials basically put the price down in order to set off stops because everybody seems to be some type of technical trader in the market that reacts to prices." Read More @ FinancialSense.com
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| Silver Update 3/25/12 Illusionary Recovery Posted: 25 Mar 2012 01:59 PM PDT |
| Richard Russell - Gold & Silver Being Bought Up By Billionaires Posted: 25 Mar 2012 12:57 PM PDT Technically, both the US & Europe are dead broke, it will end with central banks churning out junk fiat inflation-adjusted money to service debts.
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| Richard Russell – Gold & Silver Being Bought Up By Billionaires Posted: 25 Mar 2012 11:55 AM PDT from King World News:
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| Posted: 25 Mar 2012 11:38 AM PDT by Jeff Nielson, Bullion Bulls Canada:
Every month, the U.S. propaganda machine plays the same game in the housing sector. It announces "new home starts". Then a few days later it announces "new home sales". But it never, ever, ever talks about the two numbers in the same news item. There is a very good reason for this: the two numbers have absolutely no connection in the real world. Month after month the U.S. government announces new home sales bouncing around a little above 300,000 units. Read More @ BullionBullsCanada.com
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| Butler On Business Interviews David Morgan 3/23/12 Posted: 25 Mar 2012 11:34 AM PDT |
| An Annotated Paul Brodsky Responds To Bernanke's Latest Attempt To Discredit Gold Posted: 25 Mar 2012 11:31 AM PDT Last week, Bernanke's first (of four) lecture at George Washington University was entirely dedicated to attempting to discredit gold and all that sound money stands for. The propaganda machine was so transparent that it hardly merited a response: those away from the MSM know the truth (which, simply said, is the "creation" of over $100 trillion in derivatives in just the first six months of 2011 to a record $707 trillion - how does one spell stability?), while those who rely on mainstream media for the news would never see an alternative perspective - financial firms are not among the top three sources of advertising dollars for legacy media for nothing. Still, for those who feel like the Chairman's word need to be challenged, the following extensive and annotated reply by QBAMCO's Paul Brodsky makes a mockery of the Fed's full on assault on gold, and any attempts by the subservient media to defend it. To wit: "Has anyone asked why so many powerful people are going out of their way to discredit an inert rock? We think it comes down to maintaining power and control over commercial economies. After professionally watching Fed chairmen cajole, threaten, persuade and manage sentiment in the markets since 1982, we argue this latest permutation is understandable, predictable and, for those willing to bet on the Fed's ultimate success in saving the banking system (as we are), quite exciting.... Gold is no longer being ignored and gold holders are no longer being laughed at. "The Powers That Be" seem to have begun a campaign to discredit gold." From QBAMCO BB Gun "First they ignore you, then they laugh at you, then they fight you, then you win." As gold holders with fairly comprehensive views of global monetary policies and central banking we were asked to comment about the first of four installations of Ben Bernanke's lecture series at George Washington University, entitled "The Federal Reserve and the Financial Crisis". Despite thinking the lecture was woefully incomplete, diversionary and oftentimes quite disingenuous, our initial reaction about responding was to let it go. We think our anticipated macroeconomic outcome will be ignored and denied by public policy makers up until the time they are forced to adopt it and take ownership of it. The math and political expediency behind significant inflation, policy administered hyperinflation, and maybe even conversion to a new monetary system are too compelling to ignore. However, while our business is not to debate publicly, especially the powerful Fed Chairman who represents and must navigate among multiple constituencies with various dissenting social, economic and political views, we take seriously false claims that serve to undermine our business. In our opinion the consensus view of the forces behind the general price level borne from misconceptions about money and banking is fundamentally wrong. Mr. Bernanke went out of his way last Monday to perpetuate such myths. (That the myths happen to be self-serving for central banks, including the Fed, and for the global banking system cannot be ignored.) Mr. Bernanke's lecture series is being delivered under the guise of reaching out to the public to explain better how central banks work and, we presume, how their policies help promote the public good. This is an assertion we think is contrary to the empirical facts. Most of the public believe central banks take the rough edges off unadulterated capitalism where greed, fear and inequitable resource distribution would otherwise dominate. Chairman Bernanke promoted central banking, implied it is more powerful than natural economic functions, and spent quite a bit of time implying gold has no place in a sophisticated and nuanced global economy that demands thoughtful monetary policies. We presume promoting the notion of providing an economic security blanket must be the rationale behind very smart people saying very dumb things in public. Chairman Bernanke's first lecture in the series included a long discussion of gold. This is as it should be because up until forty years ago global money was always backed in some way, shape or form with precious metals. Since 1971 the Fed and other central banks have been the monopoly issuers of currencies that have not been exchangeable into gold. We will not spend time here recounting what we have already taken 150,000 words over the last five years to discuss. Suffice to say US dollars and all the world's currencies are backed by the full faith and credit of treasury ministry authority to have their central banks manufacture even more money. The question before us today is: how many new paper currency units are necessary to secure banking systems and protect against deflation? To which we answer: probably somewhere around 15 trillion new dollars and about 75 trillion new dollar-equivalent currencies across the world. Our business, as fiduciaries, is allocating capital based on relative value within the macroeconomic environment we see as likely. In our opinion Mr. Bernanke's lecture last Monday perpetuated bad or unimportant data, implied impossible outcomes, and was quite self-serving in its conclusions. His description of history was incomplete, his extrapolations were baseless, and his arguments were quite weak. (Ultimately we believe Fed policy will migrate -- or be suddenly reversed -- to meet the consequences of its current policies.) As we pointed out only a few weeks ago following Warren Buffett's unsolicited gold comments, ("Golden Boy"), and in December 2009 following Nouriel Roubini's assertion that a gold bubble was about to pop ("Roubini Rebuttal"), gold is simply money - a savings (not investment) vehicle, a means of storing purchasing power in a time of paper money dilution. That's it. Central banks compete directly with gold ownership because they manufacture competing savings vehicles in the form of baseless paper money. For the past twelve years global wealth holders have been converting their savings in increasing amounts from paper media of exchange (or financial assets denominated in them) to gold and natural resources. Why? Because central banks must dilute the purchasing power of their currencies to de-leverage the global banking system. They can't dilute gold. Has anyone asked why so many powerful people are going out of their way to discredit an inert rock? We think it comes down to maintaining power and control over commercial economies. After professionally watching Fed chairmen cajole, threaten, persuade and manage sentiment in the markets since 1982, we argue this latest permutation is understandable, predictable and, for those willing to bet on the Fed's ultimate success in saving the banking system (as we are), quite exciting. Gandhi's quote above rings true. Gold is no longer being ignored and gold holders are no longer being laughed at. "The Powers That Be" seem to have begun a campaign to discredit gold. Tour de Farce The quotes below were taken from Ben Bernanke's slide presentation.
We take issue with the following: BB: (Slide 6) "A central bank is not an ordinary bank, but a government agency." QB: As we understand it, a central bank is neither an ordinary bank nor a government agency. It is a privately-held for-profit bank (owned by its member banks, not funded with tax revenues) that has the exclusive power to print unlimited quantities of currency and take unlimited amounts of assets onto its balance sheet. BB: (Slide 7) "All central banks strive for low and stable inflation; most try to promote stable growth in output and employment….Central banks try to ensure that the nation's financial system functions properly; importantly, they try to prevent or mitigate financial panics or crises." QB: In the current baseless monetary system central banks actually create inflation and there is no other entity or economic dynamic that can create it. Increasing aggregate demand relative to supply does not create a sustainable increase in the general price level. Only an increase in the stock of money does. That central banks may "strive for low and stable inflation" implies central banks strive for low and stable money creation. Fair enough, but their consistent performance shows they do not abide by their objectives. Indeed, they have been quite negligent. By maintaining easy credit within the banking system for decades, central banks promoted bank asset accumulation (and economy-wide debt accumulation) that would someday have to be serviced and paid-down with money that these same central banks did not yet create. A cynic could argue quite compellingly that central banks exist to help banks profit from issuing unreserved credit to the public and to governments and then to manufacture enough money to cover naked currency shorts embedded in bank loan books and government accounts. Current events support this idea. As for financial panics, they can only arise from systemic credit deterioration. Systemic credit deterioration can only occur following a great systemic credit build-up. A great systemic credit build-up can only occur through the banking system, which the central bank regulates. Thus, trying "to prevent or mitigate financial panics or crises" implies central banks try to prevent their own contemporaneous negligence and then try to mitigate the consequences of that negligence through…money creation, which is necessary to offset credit deterioration. BB's logic is quite circular. BB: (Slide 8) ""In normal times, central banks adjust the level of short-term interest rates to influence spending, production, employment, and inflation… Central banks provide liquidity (short-term loans) to financial institutions or markets to help calm financial panics, serving as the lender of last resort."" QB: By "normal times" BB is referring to a credit build-up in which the banking system creates and promotes its own assets in the form of credit, which is also systemic debt. The tertiary consequences of this process are the credit build-up's impact on the commercial economy, including the levels of consumption, production and employment (and the general price level). As we can see presently, central banks provide systemic liquidity to financial institutions or markets but not directly to the commercial economy. Finally, yes, central banks are lenders of last resort; however, central banks do not advertise that they are also buyers of last resort. As we are witnessing today, the Fed is buying dubiously-marked assets from banks. BB: (Slide 11) "Financial panics are sparked by a sudden loss of confidence in one or more financial institutions, leading the public to stop funding those institutions, for example, through deposits….Panics can cause:
QB: And what "sparks" a sudden loss of confidence financial institutions?! We would argue financial panics are caused by the realization by a quorum of the population that there is not enough money in existence to back outstanding credit. (What "sparks" this realization is of secondary concern.) BB's implication is that financial panics and sudden losses of confidence are always unwarranted. We disagree. As for the consequences of financial panics that BB cites, please note his reference to access to depositor "funds" – not to depositor money. Over 80% of bank deposits in the US are not money but electronic credits. Money (bank reserves) would have to be created anew if all depositors wanted to withdraw their funds. Further, by being the source of financial panics (through promoting easy credit conditions), and by listing economic contractions as a negative consequence of financial panics, BB is implicitly (and properly) indicting central banks as the source of the "economic cycle" (in reality the credit cycle). Rather than titling his presentation "The Federal Reserve and the Financial Crisis" we think BB should have considered a more apt title: "How the Federal Reserve Caused the Financial Crisis." BB: (Slide 13) "Short-term loans from the central bank replace losses of deposits or other private-sector loans, preventing the failure of solvent but illiquid firms." QB: Short-term loans made by central banks to depository institutions may be rolled over, in perpetuity, by central banks because in aggregate they have no balance sheet constraints (and their balance sheets are not audited). If BB's use of the phrase "short term" was used to imply "temporary funding", logic and evidence shows this to be not true. Central banks continue rolling overnight loans and the possibility that they will be able to extinguish them, which would hit bank reserve ratios (not to mention bank earnings, share re-purchase plans and dividend policies) seems remote. It would also be inconsistent with the Fed's treatment of its member banks to impose restrictive policies. Overnight repurchase agreements increased consistently over 12% per year from 1994 to 1996 (and of course the economy-wide debt accumulation and bank system funding mismatch this promoted would be soon felt.) Finally, bank illiquidity is the same as bank insolvency. There is no asset illiquidity at the market clearing prices of "illiquid" bank assets (there is always a price for everything). Thus, central banks promote term-credit creation by targeting overly accommodative overnight funding rates, then, when the stuff hits the fan (as it must), provide funding for over-valued bank assets resulting from that mismatch. This perpetual overnight funding gums-up the real economy because banks are loath to lend to debtors who are not being equally subsidized (quite rational). Ultimately, central banks must provide a balance sheet on which preferred banks may sell their over-valued assets, and they must create new money with which to buy them. BB: (Slide 16) "If financial firms can borrow freely from the central bank, using their assets as collateral, they can pay off depositors, avert "fire sales" of their assets, and restore the confidence of their depositors." QB: In a fractionally reserved banking system, maintaining depositor (and bank shareholder) confidence is necessary at all times, whether or not the assets and future income of banking institutions warrant such confidence. A reasonable person should conclude that executives of banking institutions, central bank representatives like Chairman Bernanke, and politicians charged with overseeing financial and economic matters will unite in trying to promote public confidence and funding for financial institutions in times of great stress (including at times just prior to sudden systemic credit de-levering). Thus, it makes complete sense that The Powers That Be would become less concerned with intermediate and long term consequences of monetary policy and more concerned with perpetuating short-term public confidence. The question becomes; "can they succeed even if commercial and consumer incentives do not warrant such confidence?" BB: (Slide 20) "Financial panics in 1873, 1884, 1890, 1893, and 1907 led to bank closings, losses by depositors and investors, and often to broader economic slowdowns… The 1907 financial panic led Congress to consider the creation of a central bank." QB: The repeated financial panics from 1873 to 1907 were discrete and contained within the banking system. They did not lead to broad or lingering economic contractions. Banks that leant too much over their reserves or that made poor loan judgments failed. In 1907, credit deteriorated and banks stopped lending. The broader economy was threatened with less credit, but that would have been resolved quickly once bad banks failed, new or solvent banks offered new credit collateralized by the very same assets marked down from the values at which they were held by the bad banks. Quickly finding market clearing prices would have solved the problem. Instead, J.P. Morgan – the man -- led a syndicate that injected new money into the banking system. This calmed public fears, avoided runs on the largest banks, (including his), and kept bank loans books valued too high relative to the real economy. As for bank depositors, they used to care about the creditworthiness of bank balance sheets and they sought to save at banks they thought had adequate reserves. This, and the fact that bank failures tended to bankrupt bank owners, served as a discipline on bank balance sheet leverage. As for depositor protections provided by central banks, most people today do not understand that a central bank still cannot insure the purchasing power of bank deposits. (Depositor insurance, such as the FDIC, is unfunded and so the Fed would have to manufacture currency that the FDIC would then credit to bank balances). Central banks can only backstop the nominal balances of depositors. Thus, in the US, most of the $9.7 trillion of bank deposits supported by $1.6 trillion in bank reserves are nominally safe; however, these figures imply the purchasing power guaranteed to depositors could be as low as 16.5% of what it is today ($1.6 / $9.7). A reasonable person would conclude that a system where a saver could diversify her savings among deposits in a few solidly-reserved banks would be far safer in real terms than holding one's savings in one banking system that is insolvent in real terms and for which the central bank must create more money to keep it solvent in nominal terms. BB: (Slide 22) "The gold standard sets the money supply and price level generally with limited central bank intervention." QB: More accurately, in the gold standard BB is referencing, the government sets a fixed exchange rate of its economy's media of exchange to an ounce of gold. This fixed exchange rate forces banking systems to be more careful about issuing unreserved credit denominated in the media of exchange. It also makes governments less able to deficit-spend. Extreme unreserved credit issuance or deficit spending would give incentive to holders of the paper media to exchange it for gold, which would not be diluted. [It is important to understand that BB's definition of the gold standard, while an accurate portrayal of past gold standards, is not market-based because the government is setting the fixed exchange rate. A true gold standard would treat gold as the collateral for all media of exchange, which in turn would be exchangeable at an exchange rate set by the markets. This would differ from today's regime in that physical gold would be considered "money", (the collateral for paper money and Visa credit cards), and so would not be subject to taxes of any kind. Additionally, there would be no gold futures markets, as there are today, in which issuers of the competing baseless currencies could potentially suppress the "floating" exchange rate (i.e. gold price) without limit.] BB: (Slide 23) "The strength of the gold standard is also its weakness too: Because the money supply is determined by the supply of gold, it cannot be adjusted in response to changing economic conditions." QB: This makes no sense at all. It is true that the supply of money could not be adjusted in response to changing economic conditions. However, in a gold standard system with a floating gold exchange rate the price of money would adjust in response to changing economic conditions. In other words, the value of money – determined by both its quantity and price (exchange rate to media) – would accommodate any economic environment. BB chose to pick on a government-priced and managed gold standard. Frankly, this is a straw man argument the Chairman seems to be using to mislead. BB: (Slide 24) "All countries on the gold standard are forced to maintain fixed exchange rates. As a result, the effects of bad policies in one country can be transmitted to other countries if both are on the gold standard." QB: Exactly who would force countries to maintain fixed exchange rates? Governments. In a gold standard with floating gold exchange rates, governments would compete for money with the private sector. They would not be able to have central banks create money from thin air and so they would have to tax citizens to pay for government projects, wars, and any debts they may accrue. This inherent discipline would likely give great incentive to politicians to solicit the will of taxpayers more earnestly. (It would be naïve to think that governments in liberal democracies would allow the private sector to control the terms of commercial and financial exchange. This is probably the reason gold advocates have developed a reputation as being politically conservative – even whacko anarchists. However, as we will show shortly, it seems obvious that maintaining government control over economies by giving banking systems priority over commerce has begun to be quite regressive -- not in the best interest of the vast majority of populations.) BB: (Slide 25) "If not perfectly credible, a gold standard is subject to speculative attack and ultimate collapse as people try to exchange paper money for gold. The gold standard did not prevent frequent financial panics." QB: BB offered a gold standard that was not credible because it had a fixed exchange rate and was further accompanied by fractional reserve banking. As he suggests, it was (and would be) subject to speculative attack. This is no different than the current baseless monetary system, which is not credible and is, as we are seeing today, also subject to speculative attacks. The only reason today's baseless currencies did not collapse in 2008 (or before) is because central banks can manufacture money, which delays systemic de-leveraging (de-leveraging = reconciliation between the amount of systemic credit/debt denominated in that currency and the amount of base money in that currency). Only credit deterioration or money creation can de-lever balance sheets. Finally, it is true that fixed-exchange rate gold standards did not prevent frequent financial panics; however, they did repair them far more quickly and with far less damage to broader commercial economies. Wage earners and savers benefitted. Creditors suffered. BB: (Slide 26) "Although the gold standard promoted price stability over the long run, over the medium run it sometimes caused periods of inflation and deflation." QB: Really? This implies BB thinks the raison d'être of central banks is to avoid periods of inflation and deflation in the "medium run" that might occur "sometimes"? This is certainly inconsistent with past and current policies, which show an overwhelming emphasis on solving for short-term crisis management. And please recall that the general price level may be a discrete function of the supply and demand for goods and services, BUT ONLY IF THE STOCK OF MONEY AND CREDIT DOES NOT RISE OR FALL (inflate or deflate) MORE, in which case the supply of money determines the GPL. Blaming gold for inflation and deflation is, well, either sloppy or a pre-meditated deception. BB: (Slide 27) "In the second half of the 19th century, a global shortage of gold reduced the U.S. money supply and caused deflation (falling prices)." QB: There cannot be a global shortage of gold because everything is relative. There can only be a shortage of gold at a certain exchange rate to government-issued media. If the gold price were to have risen then the value of the stock of gold would have risen and the U.S. money supply would have risen in sync. There would have been no shortage of gold. (The elegance and obviousness of this logic makes one question the institutionalized intelligence of, or motivations behind, contemporary economics.) Demand for food and other inelastic items remained relatively constant throughout the second half of the 19th century. Falling prices were caused by consumers starved of money and credit and suppliers starved of working capital. (We can understand why banking systems and governments do not like fixed exchange rate gold standards. We cannot understand why wage earners at all levels do not demand floating rate gold standards. Actually, it probably has something to do with lectures like these from economic icons.) BB: (Slide 28) "William Jennings Bryan ran for President on a platform of modifying the gold standard." "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." -William Jennings Bryan, July 9, 1896 QB: We agree that the gold standard, as practiced, was a political construct, as is the current monetary system. (We would also agree that politicians tend towards drama and populism, if that was BB's point in including this frame.) However, if Mr. Jennings Bryan were alive today we are quite sure he would declare the following: "You shall not press down upon the brow of labor this yolk of debt, you shall not shackle mankind to serve the banks." -The Ghost of William Jennings Bryan, 2012 Bryan was a populist and we would argue that the vast majority of populations in developed economies are not being served well by the current debt-based global monetary system. In today's baseless monetary system labor cannot save its wages because banks may issue infinite credit that raises the general price level (GPL) above where it would naturally gravitate. Economy means "thrift" (think home economics) and economies are organisms that work towards increasing affordability. Prices would naturally fall, not continually rise, in economies with population growth, innovation, economies-of-scale, and productivity improvements. This would benefit all wage earners because a lower GPL would make wages more competitive vis-à -vis the goods, services and assets available for purchase. Affordability would rise for all economic participants, and would be especially beneficial to those at the lower end of the wage scale. Obviously this is not the monetary system we have, which is premised on continually rising prices and policies that seek to ensure that. The current monetary regime issues credit and creates systemic debt. In this system asset price growth can outpace wage growth for long stretches of time. Asset prices, however, may be driven higher by the availability of credit, not rising demand or productivity. The debt build up that goes hand-in-hand with the credit build up creates a drag on demand and productivity. Unemployment rises. Debt cannot be serviced or repaid easily through wages. Central banks must ultimately dilute the purchasing power of their currencies by manufacturing more currency with which debtors can repay their debts or with which creditors can extend new credit to debtors so they can roll over their debts. Any saved wages lose their purchasing power if held in t
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| The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent Posted: 25 Mar 2012 11:02 AM PDT from Zero Hedge:
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| Market Report: Precious Metals Posted: 25 Mar 2012 10:56 AM PDT The metals made a decent move on Friday and potentially could have started the next stage higher. Back in the beginning of this month, I had penciled in a target range of $1620 target for gold and $30.80 for silver ... Read More...
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| Previewing Next Week's Events Posted: 25 Mar 2012 10:52 AM PDT Next week will be relatively light in economic reporting, and with no HFT exchange IPOs on deck, and the VVIX hardly large enough to warrant a TVIX type collapse, it may be downright boring. The one thing that will provide excitement is whether or not the US economic decline in March following modestly stronger than expected January and February courtesy of a record warm winter, will accelerate in order to set the stage for the April FOMC meeting in which Bill Gross, quite pregnant with a record amount of MBS, now believes the first QE hint will come. Naturally this can not happen unless the market drops first, but the market will only spike on every drop interpreting it for more QE hints, and so on in a senseless Catch 22 until the FRBNY is forced to crash the market with gusto to unleash the NEW qeasing (remember - the Fed is now officially losing the race to debase). For those looking for a more detailed preview of next week's events, Goldman provides a handy primer. From Goldman Sachs The data releases last week were a bit mixed, with strong export orders in Taiwan and continued strong US Jobless claims, but weaker flash PMIs in Europe and China. In contrast to the PMI, the French business confidence survey improved in March. In the coming week, it will be interesting to watch if German IFO index also contradicts the surprisingly weak Flash Eurozone PMI, similar to the INSEE already. In Europe, the focus will also be on the Euro area flash CPI, where we expect some moderation to 2.5%yoy as the decline in non-core components will likely continue. Aside from the inflation numbers, there will be an informal EcoFin Meeting on Friday and Saturday, where an increase of the ESM is likely to be discussed again. In terms of US activity data, the focus will be on the Chicago PMI, Durable Goods and Personal Income. Though we do expect a technical rebound in the durable good orders after the weakness in the previous report, we think the Chicago PMI could slip by more (to 60 from 64) than consensus expects. Overall, the message from US activity data may therefore remain mixed outside the still-strong labour market data. In terms of Asian activity data, the end of the week will be important. The official China PMI for March will be interesting after the weakness in the Flash PMI. Korean trade is the first non-survey based activity indicator published globally that is published for the previous month. Both are due next Sunday. In terms of FX markets, we will remain quite focused on the Yen, partly because of our recommendation and partly because of the fiscal year-end in Japan and related possible last-minute volatility. The IP number for February could be important as the main data release for Japan in the upcoming week. Given the focus on rate differentials for $/JPY, but also more broadly for the Dollar, three speeches by Chairman Bernanke on Monday, Tuesday, and Thursday could be relevant. The upcoming week is very heavy on Fed speeches with at least one scheduled every day. Finally, there are central bank meetings in Turkey (watch for any references to Lira weakness), Hungary, Czech Republic, and South Africa. Monday 26 March Germany IFO (Mar): Consensus expects 109.7 after 109.6 in February. Singapore IP (Feb): Consensus expects 4.1%mom after 303% in January. Israel CB Meeting: We expect no change from 2.50%, in line with consensus. Argentina GDP (Q4): We expect 7.8%yoy vs consensus of 7.5% after 9.3% in Q3. Ben Bernanke Speech Draghi Speech Tuesday 27 March US Consumer Confidence (Mar): Consensus expects 70.4 after 70.8 in February. GS: 71.0 S&P Case Shiller Home Price Index (Jan): Consensus expects -0.3%mom after -0.5 in December. GS: +0.2% Turkey CB Meeting: We expect no change from 5.75%, in line with consensus. The focus will be on the guidance from the central bank with respect to the tighter liquidity conditions to manage money market rates in face of continued Lira depreciation pressure. Hungary CB Meeting: We expect no change from 7.00%, in line with consensus. Ben Bernanke Lecture Italian Bond Auction (2/10yr) Wednesday 28 March Germany Flash CPI (Mar): Consensus expects 0.4%mom after 0.9% in February. US Durable Goods Orders (Feb): Durable goods orders likely rebounded smartly in February after a sharp drop at the start of the year. Consensus expects 2.9%mom after -4.0% in January, GS: +3.5%. Sweden NIER Survey (Mar): Consensus expects -1.5 after -3.2 in February. ECB's Weidmann Speech Also interesting: France/UK Q4 GDP (3rd) Thursday 29 March Japan Retail Sales (Feb): Consensus expects -0.2%mom after 4.1% in Januray. US GDP (Q4 3rd): We expect no change from the second reading of 3.0%qoq ann, in line with consensus. South Africa CB Meeting: We expect no change from 5.50%, in line with consensus. Czech Republic CB Meeting: We expect no change from 0.75%, in line with consensus. Italian Bond Auction (5/10yr) Friday 30 March UK Consumer Confidence (Mar): Consensus expects no change from -29 in February. Japan CPI (Feb): Consensus expects 0.0%yoy after 0.1% in January. Euro area flash CPI (Mar): We expect 2.5%yoy after 2.7% in February, in line with consensus. Switzerland KOF (Mar): Consensus expects 0.1 after -0.12 in February. Canada GDP (Jan): Consensus expects 0.1%mom after 0.4% in December. US Chicago PMI (Mar): Consensus expects a moderate decline to 63 from 64 in Feb. We see the risk skewed to a bigger decline to 60. EU finance minister meeting (informal EcoFin) Also interesting: South Korea Q4 GDP (3rd), Chile/Mexico Central Bank Minutes, US Mar Chicago PMI, Japan/South Korea Feb IP Saturday 31 March India Current account balance (3QFY12): We expect the current account deficit to rise to US$20.1 bn (4.4% of GDP) in 3QFY12 from the US$16.9 bn (3.8% of GDP) previously, on a higher trade deficit. Coupled with capital outflows due to the European crisis, this is expected to keep the BBoP in deficit. Sunday 1 April China Official PMI (Mar): We expect the March official PMI to be largely stable. The flash reading of the HSBC/Markit PMI fell by more than 1 percentage point from its January-February average, which suggests weak growth. However, loan supply has been picking up recently which may raise the final reading and seasonal patterns also suggest a slightly stronger March reading in the official PMI. Korea Trade Balance (Mar): We expect exports to maintain a positive sequential momentum following weaknesses in January and early-February. High frequency data suggests that daily exports in March could have increased around 5% yoy (0% yoy on the headline) if the recent trends continue. Korean trade data is globally the most timely activity indicator not based on surveys.
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| Posted: 25 Mar 2012 09:01 AM PDT BRICs and South Africa move to unseat dollar as trade currency
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| Jim Sinclair: “Swift” Kick To The US Dollar Posted: 25 Mar 2012 08:59 AM PDT majority view that the US is gaining take off speed economically. It is not. It will not & QE will go to infinity, about that there is no question.
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| GATA: BRICs and South Africa move to unseat dollar as trade currency Posted: 25 Mar 2012 08:35 AM PDT The move is set to challenge the supremacy of the US dollar. experts say, is the latest salvo in the greatest worldwide currency war since the 1930s
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| Tungsten-Filled 1 Kilo Gold Bar Found In The UK Posted: 25 Mar 2012 08:02 AM PDT Attached are photographs of a legitimate Metalor 1000gm Au bar that has been drilled out and filled with Tungsten
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| GGR examines disgust with mining shares, notes big commercial shorts are covering Posted: 25 Mar 2012 06:34 AM PDT 2:31p ET Sunday, March 25, 2012 Dear Friend of GATA and Gold: Gene Arensberg's latest issue of the Got Gold Report, posted in the clear today, examines disgust with the precious metals mining shares and reports that the big commercial shorts in gold have been covering their positions heavily even as the gold price seemed to be moving in their direction. The GGR issue is headlined "HUI Breakdown Attempt" and it's posted here: http://www.gotgoldreport.com/2012/03/hui-breakdown-attempt-got-gold-repo... 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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| HUI Breakdown Attempt - Got Gold Report Posted: 25 Mar 2012 04:57 AM PDT
SOUTHEAST TEXAS (Got Gold Report) -- With the HUI approaching and challenging its technical support, we thought it might be interesting to see which of the gold miners in the AMEX Gold Bugs Index (HUI) were responsible for dragging down the index of 15 gold and silver producers. In just a moment we share a chart montage of all of the HUI components for the last two years, weekly. It's not very difficult to see which of the companies is causing the index to move lower, under pressure, but first, here's a 5-day 30-minute view showing two breakdown gaps lower, both of which were soon reversed by the market. That is important because so far the HUI breakdown of its falling wedge pattern has failed to get additional downside traction.
Continued... *** The HUI is flirting with a technical breakdown of a normally bullish falling wedge pattern in our own view of the current setup. Here's a graph showing as much. We recently commented to subscribers that breakdowns of the HUI are less important to us than technical breakdowns of individual issues and we went on to say why. In another, related topic, we have noted in the past that the vast majority of the "damage" sustained by smaller miners has usually already occurred by the time of an HUI support breakdown.
Greener Pastures? What does the broad based weakness in the Big Miners mean? We think it means that liquidity has been exiting the miners at the margin (and in some cases wholesale, with urgency). That suggests to us that people have grown tired of the precious metals stocks, and some must be convinced that the gold bull market has "peaked." Do we think they are right? No, we do not think so. They may be "right" very short term, but longer term the miners will begin to reflect the substantial cash flow and high profit margins that are accruing to them now in our humble opinion. In addition, some of the liquidity leaving the miners has been moving into the Big Markets to chase companies like Apple and Bank of America, and after the dismal performance of the mining companies over the past while, who can blame people for looking for 'greener pastures.' We track the HUI for more than one reason, but one reason is that it can be a bellwether, a window into what so-called Big Money believes is in store for the price of gold and silver. When the HUI is weaker, such as it is now, it makes metals traders believe that Big Money is not enthusiastic about the prospects for gold and silver. Reactionary traders are influenced by the mining share indexes. To some of them the underperformance by the HUI is a signal, a klaxon blaring that gold is about to plunge in price. (We have actually heard from some of our colleagues precisely that, by the way. Their comments sound something like: "The HUI is pricing in a gold top!" That, and other similar fear-based commentary which we find interesting on an intellectual level, but don't believe for a minute.) Having said that, this is not the first time the HUI has looked gimpy and weak in this 10-year bull market for gold. One example occurred in the summer of 2007 as gold struggled to get through a $700 barrier it first eclipsed a year earlier. Late that summer the HUI broke down and sold off harshly as low liquidity, disgust and exhaustion all came together. That short-lived breakdown bear trap event is visible in the chart below. HUI with CDNX, since 2005, weekly. Back on point: The 2007 HUI breakdown was spectacular, but very brief, reversing and racing higher as gold managed to break back through the $730 previous pinnacle on its way up to $1,000 for the very first time in early 2008 (just before the 'wheels came off' and worldwide fear of a banking collapse became dominant for a time). It should be obvious, but we are of the opinion we are in a similar period of investor exhaustion with gold, silver, the bigger mining stocks and especially The Little Guys. Periods of investor exhaustion are times for buying in the Great Gold Bull, not times for selling in our opinion. They are times of opportunity for those willing to tough through a negative liquidity period and those with the courage of their convictions. Of course everyone can and should make up their own mind about such things. COMEX Commercial Traders in Hurry to Reduce Shorts in Gold On another note, we have finished our weekend updates to the linked technical charts located on the subscriber pages, including commentary on the changes in the CFTC commitments of traders report (COT) for gold and silver. As just one example of the commentary, we reproduce below the 'shorthand' comments from one dialog box in one of our charts for gold.
Gold, 1-year, daily. One of twelve technical charts for Got Gold Report Subscribers for gold, silver, mining shares, important ratios and the USDX. Vultures have access to all our technical charts 24/7. Take a look at the graph below which tracks the nominal net short positioning of the combined commercial traders (LCNS) of gold futures on the COMEX, division of the CME. Notice, please, the rapid pace of commercial net short positioning reduction over the past three reporting weeks as gold declined $133.43 or 7.5%. Traders the CFTC classes as "commercial," the natural hedgers including bullion banks and the largest dealers, have taken this sell-down opportunity to get a lot "smaller" in their collective net short positioning. Indeed, as of Tuesday they are the least net short gold of 2012.
The simple takeaway of the above graph is that people who have to hedge gold inventory, either in hand or coming, or gold positions for long-term passive investment, or a myriad of gold derivatives, were a great deal more motivated to hedge with gold near $1,800 than now with gold having just tested $1,630s as of Tuesday. One has to wonder why the largest, best funded and presumably the best informed commercial futures traders are in such a big hurry to reduce their net short exposure when the price of gold has been generally heading 'their way' (lower) since late February. Could it be they (the best informed gold traders on the planet) believe that the current direction (lower) for gold is very temporary? We have also made numerous comments in our thirty-something technical charts of various guru-recommended small miners and explorers over the past week, including one issuer undergoing a non-fatal disappointment selling mega-spike which we have decided to game from the long side. Non-Fatal Shareholder Disappointment Selling (NFDS) is one of our favorite setups here at GGR, because of its tendency to strongly overshoot to the downside in fairly predictable ways. It has been very, very good to us in the past, by the way, but it does take a certain kind of Real Vulture patience and discipline to game - so it is definitely not for the ADD infected momentum crowd, or for widows, orphans and a majority of others. We absolutely LOVE buying the disgust and panic of others at panicky, way too cheap levels, how about you? It is a company with an amazing gold deposit well north of 4 million ounces of decent to high grade material that has very quickly become "on sale" and is getting close to fire sale pricing. this will be our third foray with that particular company in eight years, the last play resulting in a sure-enough '10-bagger,' so we are favorably inclined to the company and its management. (Vultures will find it in the Vulture Bargain Candidates of Interest (VBCI) section, nestled between Great Panther Silver and Kaminak Gold.)
For readers and Vultures who are interested in bass fishing, that 19-inch, 3.7 pound largemouth bass is only two years old, having been introduced into a 9-acre impoundment in May of 2010 as a 3 or 4-inch, roughly 1-ounce minnow. With ideal conditions and ample forage in our fishing lake on the ranch, this specimen has increased his/her length by 375% and mass by three orders of magnitude in just UNDER two years. We believe that to be a truly phenomenal growth rate. We have had a terrific spawn this year and it occurred quite early (beginning in early February) thanks to warmer than normal weather. We are delighted to say that there are literally hundreds of small, baby bass already prowling the shorelines looking for stuff to eat. Dragon fly larvae, aquatic bugs, worms and tiny minnows are in big trouble! The great spawn means we can now begin removing some of the larger bass from time to time and they are fine table fare. If we seem a little scarce just ahead, cut us some slack. Fishing and lake management are important too! Courtesy Got Gold Report Due to the nature of this particular issue of the Got Gold Report we have decided to share it in the public domain the same day it is being sent to our subscribers as a courtesy to our now large and rapidly growing GGR readership. If deemed worthy, kindly share it with friends and colleagues by copying and pasting the link in your browser. Thanks very much for investing your time with us today.
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| “Everyone should own a little Silver.” Is this even possible given today’s tight supplies? Posted: 25 Mar 2012 03:31 AM PDT
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| BRICs and South Africa move to unseat dollar as trade currency Posted: 25 Mar 2012 03:30 AM PDT By Thandeka Gqubule and Andile Ntingi http://www.citypress.co.za/Business/News/Brics-move-to-unseat-US-dollar-... South Africa this week will take some initial steps to unseat the US dollar as the preferred worldwide currency for trade and investment in emerging economies. Thus the nation is expected to become party to endorsing the Chinese currency, the renminbi, as the currency of trade in emerging markets. This means getting a renminbi-denominated bank account, in addition to a dollar account, could be an advantage for African businesses that seek to do business in the emerging markets. The move is set to challenge the supremacy of the US dollar. This, experts say, is the latest salvo in the greatest worldwide currency war since the 1930s. ... Dispatch continues below ... ADVERTISEMENT Golden Phoenix Discusses Royalty Mining Growth Strategy Golden Phoenix Minerals Inc. has discussed its royalty mining growth strategy on the Fox Business Network program "21st Century Business" with host Jackie Bales. Golden Phoenix's director of corporate communications, Robert Ian, told how the company narrows its focus to project generation and future royalty streams. He explained why Golden Phoenix believes it's better to own joint-venture interests in several producing mines instead of full exposure to just one project. "21st Century Business" has been airing for 15 years. Previous hosts have included Gen. Alexander Haig, Gen.l Norman Schwarzkopf, and Secretary of Defense Caspar Weinberger. Golden Phoenix appeared as paid programming on this broadcast. To view the program with Golden Phoenix, please visit Golden Phoenix's Internet site here: http://www.goldenphoenix.us/company-videos.html In the '30s, several nations competitively devalued their currencies to give their domestic economies an advantage over others. And this led to a worldwide decline in overall trade volumes at the time. The north will be pitted against the entire south in a historic competitive currency battle -- whose terrain has moved to the Indian capital, New Dehli -- where the Brics (Brazil, Russia, India, China, and South Africa) nations will assemble next week. China seeks to find new markets for its currency and to lobby to internationalise it throughout the Brics states. For China this is not a new game. In 2009 senior Chinese banking officials issued a statement that the international monetary system was flawed owing to an unhealthy dependence on the US dollar, and they called for a "super-sovereign" international reserve currency. Experts say Beijing's first step is to internationalise its currency (by expanding its reach beyond China), liberalise it (to allow its value to be determined by the market instead of actively managing it as they currently do), and then make it a reserve currency for many nations in the developing world. Africa's largest bank, Standard Bank, says in a research document: "We expect at least $100 billion (about 768 billion rand) in Sino-African trade -- more than the total bilateral trade between China and Africa in 2010 -- to be settled in the renminbi by 2015." The bank anticipates that the use of the renminbi will lower transaction costs in Africa, thus lowering the barriers to doing business. It also says that the Chinese will be more successful in transacting in renminbi in Africa than anywhere else because most currencies are weak and somewhat localised. Not only will the US dollar be challenged, but also the entire international financial regime -- led by the World Bank and the International Monetary Fund -- which has been dominant since the end of World War II. South Africa's place in the emerging international financial regime is set to be enhanced. Zou Lixing, vice-president of the Institute of Research of the China Development Bank, told the Brics preparatory meeting recently that "although the economic aggregate of South Africa is small relative to the Brics, South Africa provides a gate for the Brics to get access to the huge African market." The five-member nations have collectively called for an end to the tacit agreement between the US and Europe that ensures that the head of the World Bank is an American citizen and the International Monetary Fund head is European. They have proposed that an emerging-market candidate be fielded when the term of the current World Bank head, Robert Zoellick, expires in three months. Fundacao Vargas, a member of the Brazilian delegation, said Brics could confront "existing governance structures" and seek to strengthen the blocs' influence in established institutions like the World Bank and the International Monetary Fund, while creating alternatives. The demand for greater political say in international affairs dovetails with China's expected rise as a financial superpower in the next eight years. Vargas showed the preparatory meeting projections indicating that China's economy will have eclipsed that of the US by 2020, hence the promotion of the renminbi as the preferred currency of the south. The renminbi has traditionally traded at a deliberately lower exchange rate, which gave a huge boost to China's domestic economic sectors and enabled its booming industrialisation and growth. The US and other trading partners have long accused China of being a "currency manipulator." Last week Brazil declared its commitment to keep its own currency -- the real -- low. Its finance minister, Guido Mantega, reiterated his November 2010 declaration that a global currency war has broken out. He said: "We do not want to lose our manufacturing sector. We will not sit back and watch while other countries devalue their currencies." Brazil and China cried foul last year when, through a slew of initiatives dubbed QE2 -- Quantitative Easing 2 -- the US indirectly devalued its currency by pumping about $600 billion into its economy to protect the economy from sliding back into recession. South African economists were in two minds about the moves to extend the influence of the renminbi. Economist and academic Peter Draper told City Press recently that the decision to establish a Brics development bank and to enlarge the renminbi's sphere "is political and related to the current political dynamics within the World Bank" and the established international financial system. Tom Wheeler of the South African Institute of International Affairs said developments in India were "giving substance to the previously and loosely arranged economic bloc." 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 Be Part of a Chance to Discover Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600.
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| Saudi Arabia: House of Saud, Falling House of Cards Posted: 25 Mar 2012 01:15 AM PDT Saudi rulers are struggling to contain a new wave of public protests that has erupted across the Arabian kingdom as security forces open fire on unarmed civilians. The big question: is the House of Saud finally beginning to collapse like the fragile house of cards that this creaking, ruling monarchy represents?
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| Manipulation of the "Paper Gold" Market, "Worthless" Paper versus Physical Gold Posted: 25 Mar 2012 12:07 AM PDT We have been in and around the gold markets for 53 years and conditions have certainly changed, driven mainly by market manipulation of all markets as a result of the Executive Order, which created the “President’s Working Group on Financial Markets.” Those who doubt that are either on the government payroll one way or the other, or you are just too dumb to understand what is really going on. In spite of these machinations and ignorant naysayers the bull markets in gold and silver are still alive and well. What you are seeing are paper markets and the use of derivatives to effect short-term pricing, especially when negative events are about to occur.
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| MF Global Financial Collapse is Obama's Hurricane Katrina Posted: 24 Mar 2012 11:32 PM PDT Bill Black is interviewed on the Capital Accounts Show on RT. I would be glad to show a video of Bill Black discussing important financial matters such as this on a mainstream US video program but there don't seem to be any.
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| Gold and SIlver Elliott Wave Trading Posted: 24 Mar 2012 11:15 PM PDT The metals made a decent move on Friday and potentially could have started the next stage higher. Back in the beginning of this month, I had penciled in a target range of $1620 target for gold and $30.80 for silver and was working a number of ideas, readers of the newsletter and members have been tracking this along with me, gold and silver have slowly made their way lower.
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| Calling Another Bottom in Gold and Silver Stocks Sector Posted: 24 Mar 2012 09:09 PM PDT The last time I called an important bottom in the precious metals sector was on December 29, 2011 (as documented here). Well, it's time for another important bottom. I believe the late December lows in the precious metals (PM) sector were THE lows for the metals, for the GDXJ ETF (a rough representation of the junior Gold mining sector) and for silver stocks (as represented by the SIL ETF). The current bottom is much more important for those seemingly perpetual laggards, the senior Gold mining stocks.
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ronically, just days after noted analyst Ted Butler 
With gold remaining in a trading range below the $1,700 level, the Godfather of newsletter writers, Richard Russell, had this to say about what is happening with regards to gold, silver, stocks, inflation and the Fed: "Technically, both the US and Europe are dead broke, and their GDPs would have to run wild on the upside to make the debt to GDP ratio more acceptable. How will it all end? It will end with the central banks churning out junk fiat inflation-adjusted money in order to service the debts. Meanwhile, the precious metals and other tangibles are being bought up by millionaires and billionaires as they await their turns to feast on the remnants."
Back in late 2006 and early 2007 a few (soon to be very rich) people were warning anyone who cared to listen, about what cracks in the subprime facade meant for the housing sector and the credit bubble in general. They were largely ignored as none other than the Fed chairman promised that all is fine (see | You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
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