Gold World News Flash |
- Bank Closings Signal Coming Collapse
- Silver Update 3/28/12 Gresham's Law
- Debt has overwhelmed world's productive capacity, Sprott tells King World News
- Paul Mylchreest: Gold price suppression caught red-handed
- The 'Recovery' Has No Clothes
- Gold at 52 Week Average
- Global economic collapse and one-world government by 2012, says evangelist
- Gold Seeker Closing Report: Gold and Silver Fall Again
- Restore national sovereignty: Repatriate all gold reserves
- Eric Sprott - Mainstream Bashes Gold, But New Highs Coming
- The Got PHYZZ? Report 3/28/12
- 20 Signs That We Are Witnessing The Complete Collapse Of Common Sense In America
- Eric Sprott and David Baker: Who would dump all that metal so fast?
- Speedometer Check – The SPDX Formula
- "Filling the hole"
- The Latest Sprott Newsletter
- US Debt Ceiling D-Day: September 14, 2012
- Guest Post: Renewable Technologies And Our Energy Future - An Interview With Tom Murphy
- Durable Goods and The Stock Market, with The Fed In The Driver's Seat
- Is High Yield Credit Echoing 2011's Equity Nightmares?
- Gold Price Lost $27 Today to Close at $1,657.90 With a Low of $1,656.70
- Fatal Flaws and Opportunities in Gold Investing: Brent Cook
- Don?t Expect New Highs In Gold This Year
- Paul Mladjenovic: Economists Exhibit Lunacy and Confusion over the Gold Standard
- What Does “the Market” Mean to You?
- Trouble, Trayvon, and Three Flashpoints
- Caught Red Handed: Manipulation in Gold Market Since the US Lost AAA Rating
- Gold Daily And Silver Weekly Charts - Jeff Christian Calls 'The Top' In Gold
- The Gold Groundhog Grind
| Bank Closings Signal Coming Collapse Posted: 28 Mar 2012 05:14 PM PDT by Paul Drockton, Money Teachers: Here are the March, 2012 Bank Closings and their cost to the Federal Deposit Insurance Fund: Premier Bank, Wilmette, Illinois: $64.1 million. Covenant Bank & Trust, Rock Spring, Georgia: $31.5 million New City Bank, Chicago, Illinois: $17.4 million Metro City Bank, Doraville, Georgia: $17.9 million Total Cost to FDIC: $131 million How Much Money Is in The Fund? "The unaudited DIF balance — the net worth of the fund — rose to $9.2 billion at December 31 from $7.8 billion at September 30… The contingent loss reserve, which covers the costs of expected failures, fell from $7.2 billion to $6.5 billion during the quarter. Estimated insured deposits grew 3.1 percent in the fourth quarter." (Source) Banks pay into the fund based on assets. American taxpayers will cover the rest. The above list of banks are small players, yet, 12 months of similar failures would cost 1.5 billion dollars. This is why the FDIC contingent loss reserve fell from 7.2 billion to 6.5 billion in the last quarter of 2011 alone. They spent over a billion in January 2012.
| ||||
| Silver Update 3/28/12 Gresham's Law Posted: 28 Mar 2012 05:04 PM PDT | ||||
| Debt has overwhelmed world's productive capacity, Sprott tells King World News Posted: 28 Mar 2012 05:00 PM PDT 1a ET Thursday, March 29, 2012 Dear Friend of GATA and Gold: Interviewed yesterday by King World News, Sprott Asset Management's Eric Sprott said the world's productive capacity can no longer carry its debt burden. Governments and central banks are posing as if everything is OK, Sprott said, but it isn't, and the merits of gold are growing ever stronger. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/29_Er... CHRIS POWELL, Secretary/Treasurer 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... 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 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
| ||||
| Paul Mylchreest: Gold price suppression caught red-handed Posted: 28 Mar 2012 04:51 PM PDT 12:44a ET Thursday, March 29, 2012 Dear Friend of GATA and Gold: Financial writer Paul Mylchreest's latest Thunder Road Report, titled "Caught Red-Handed," documents the last seven months of the gold price suppression scheme as a function of computer trading algorithms operating worldwide but most heavily in the London and New York markets. Mylchreest writes: "The gold price on Reuters/Bloomberg screens is not really the gold price since the 'gold market' is not a market for physical gold per se. Instead, the price on your screen is a hybrid price of some physical gold that is heavily diluted in the price-discovery process (deliberately) by a far larger amount of 'paper' gold in several forms, notably unallocated LBMA accounts, Comex futures and options, many exchange-traded funds (I would exclude Sprott and the Central Fund of Canada, both of which trade at premiums to net asset value), and billions of dollars of OTC gold derivatives." Mylchreest's report draws heavily on and credits GATA's work and is posted in PDF format at our Internet site here: http://www.gata.org/files/ThunderRoadReport-03-28-2012.pdf 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...
This posting includes an audio/video/photo media file: Download Now | ||||
| Posted: 28 Mar 2012 04:49 PM PDT Sprott Asset Management - Sprott Asset Management By: Eric Sprott & David Baker " I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by members of the public, and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act (CEA) have taken place in silver markets and that any such violation of the law in this regard should be prosecuted." - Bart Chilton, Commissioner, U.S. Commodity Futures Trading Commission (CFTC), October 26th, 20101 What a difference a month makes. Now that Greece has been papered over, the bulls are back in full force, pumping up the equity markets and celebrating every passing data point with positive exuberance. Let's not get ahead of ourselves just yet, however. Very little has actually changed for the better, and it's certainly too early to start cheerleading a new bul...
| ||||
| Posted: 28 Mar 2012 04:34 PM PDT courtesy of DailyFX.com March 28, 2012 02:33 PM Weekly Bars Prepared by Jamie Saettele, CMT Bigger picture, the rally and decline from the December low may compose the base that propels gold to all-time highs. When viewed in the proper context, price action since September appears as nothing more than consolidation within a secular bull market. Resistance is 1700/25 and a drop below last week’s low should trigger losses towards 1600. Bottom Line (next 5 days) – ?...
| ||||
| Global economic collapse and one-world government by 2012, says evangelist Posted: 28 Mar 2012 04:29 PM PDT  Revealed for the first time: The truth about Angels from Heaven … Armageddon … Israel's Role in Prophecy … The Y2012 Crisis … The Rapture … The Mark of the BeastTHE world as we know is vanishing and will disappear in an earth-shaking series of Year 2012 events that are clearly laid out in prophecies appearing in the Holy Bible for everyone to see. And contrary to what many clergymen have told their flocks, that God frowns on fortune-telling and has hidden the future from us, an increasing number of religious experts - from Pope Benedict XVI and the Rev. Dr. Billy Graham to hometown ministers from coast to coast - are taking a closer look at Bible passages, prophecies and symbols and using them to predict with startling precision what they are convinced is the shape of things to come. "This isn't the time to quibble over what God wants us to know and what He doesn't want us to know," Detroit, Michigan-based Dr. Roger Philpen, who is widely believed to have been the first Christian minister to have preached the gospel via short-wave to people in every country on Earth, told me exclusively. "If God didn't want us to predict the future and act on it, why did He use over one-third of the Bible to map the future in finely-detailed warnings and prophecies that predict our future? Read more..... 
This posting includes an audio/video/photo media file: Download Now | ||||
| Gold Seeker Closing Report: Gold and Silver Fall Again Posted: 28 Mar 2012 04:20 PM PDT Gold edged up to $1684.26 in Asia, but it then fell back off for most of the rest of trade and ended nearly its early afternoon low of $1654.90 with a loss of 1.08%. Silver slipped to as low as $31.756 and ended with a loss of 1.41%.
| ||||
| Restore national sovereignty: Repatriate all gold reserves Posted: 28 Mar 2012 04:16 PM PDT 12:17a ET Thursday, March 29, 2012 Dear Friend of GATA and Gold: Some of gold's friends in Europe have started a campaign called "Repatriate Our Gold" to persuade all nations to call their gold reserves home from custodial nations and banks that do not have the owners' interests at heart. Repatriating reserves of the monetary metal is a prerequisite of regaining national sovereignty and liberating the world's currency markets. GATA's executive officers are among the initiators of the campaign and we urge all our friends to learn about it here: http://www.gold-action.de/campaign.html And to become part of it here: http://www.gold-action.de/action-sign-up.html CHRIS POWELL, Secretary/Treasurer 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 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.
| ||||
| Eric Sprott - Mainstream Bashes Gold, But New Highs Coming Posted: 28 Mar 2012 04:07 PM PDT  Today billionaire Eric Sprott told King World News the central planners are desperately trying to convince the masses that everything is okay. Sprott, who is Chairman of Sprott Asset Management, also said the mainstream media continues to bash gold. But first, he had this to say about the global economy: "I think it's safe to say we've hit that 'Minsky moment' where the productive capacity of the country is not capable of paying off the debt. All we're trying to do is push it down the road so maybe there is some luck and these economies will come to life."
This posting includes an audio/video/photo media file: Download Now | ||||
| Posted: 28 Mar 2012 02:28 PM PDT by Marshall Swing, Silver Doctors: The Got PHYZZ? Report Silver increased $+0.78 this past reporting period and gold ended up $+37.90 but do you know how they got there? Let's look under the hood…! Here are the CME Daily Bulletin reports from yesterday, ending the Commitment of Traders reporting period of March 21st – March 27th. For Gold: For Silver: Notice the Most Active Volume Month (MAVM) is red and the 2nd Most Active Volume Month (2MAVM) is green. In gold, the MAVM is April and the 2MAVM is June, with the month of May in between them. In silver the MAVM is May and the 2MAVM is July, with no month between them on the report.
| ||||
| 20 Signs That We Are Witnessing The Complete Collapse Of Common Sense In America Posted: 28 Mar 2012 02:22 PM PDT from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
| ||||
| Eric Sprott and David Baker: Who would dump all that metal so fast? Posted: 28 Mar 2012 02:22 PM PDT 10:22p ET Wednesday, March 28, 2012 Dear Friend of GATA and Gold (and Silver): In their new market commentary, Eric Sprott and David Baker of Sprott Asset Management in Toronto remark at length on the manipulation of the gold and silver markets through paper trading grossly disproportionate to the amount of real metal likely to be available. Sprott and Baker write: "Looking back at the trading data on February 29, the selloff in gold and silver appears to have been an exclusively paper-market affair. We were surprised, for example, to note that between the hours of 10:30 and 11:30 a.m., the volume of the Comex front-month silver futures contracts equaled the paper equivalent of 173 million ounces of physical silver. Keep in mind that the world produces only 730 million ounces of physical silver per year. The problem from a pricing standpoint is the simple fact that the parties who were on the selling side of those 173 million paper ounces couldn't possibly have had the physical silver to back up their sell orders. And the way the futures markets are designed, they don't have to. But if that's the case, how can the silver price be smashed by sell orders that don't involve any real physical? 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. "Looking at this issue from a broader perspective, we've discovered that silver is indeed in a unique situation from a paper-market standpoint. We compared the daily paper-market futures volume of various commodities against their estimated daily physical production. We discovered that silver is disproportionately traded 143 times higher in the paper markets versus what is produced by mine supply. The next highest paper market commodity is copper, which is traded at roughly half that of silver on a paper market volume basis. "We don't know why the paper market for silver is so huge, but we have our suspicions. Silver is obviously a much, much smaller market than that for copper, gold, or oil. It could very well be that paper market participants like silver because they don't need as much capital to push it around. The prevalence of paper trading in the silver market is what makes the drastic price declines possible by allowing non-physical holders to sell massive size into a relatively small market. It's not as if real owners of 160 million ounces of physical silver dumped it on the market on February 29, and yet the futures market allows the silver spot price to respond as if they had. "Same goes for gold. Although gold paper-trading isn't as lopsided as silver's, it too suffers from the same paper-selling issue. Indeed, as we discovered for February 29, it appears to be one large seller of gold that single handedly downticked the spot price by $40 per ounce in roughly 10 minutes. The transaction represented approximately 1.8 million ounces, representing roughly $3 billion dollars' worth of the metal. Who in their right mind would even contemplate dumping $3 billion of physical gold in so short a time span?" Oh, come on, guys -- we all know who! The Sprott-Baker commentary is titled "The [Recovery] Has No Clothes" and it's posted at the Sprott Internet site here: http://sprott.com/markets-at-a-glance/the-[recovery]-has-no-clothes/ CHRIS POWELL, Secretary/Treasurer 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 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
| ||||
| Speedometer Check – The SPDX Formula Posted: 28 Mar 2012 02:18 PM PDT Let me say up front, the bull market in Gold, Silver and the XAU is not over. If it were over, someone, somewhere, somehow reinvented the economic wheel of true values. Regrettably, the TDI (Trend Directional Indicator) for Gold, Silver and the XAU is clearly down in all major time frames, as detailed here. Important trend changes, however, always start first in the daily charts before potentially moving on to higher time frames. [CENTER]Speedometer Formula[/CENTER] Let's take a look at the daily SPDX, the "speedometer index" for the XAU. The primary purpose of the daily SPDX is to show the exact location, direction and speed of the primary TDI indicator. Currently, the SPDX has declined down to .59 (0-100 MPH) level indicating the TDI is nearing an important crossroads and junction. XAU - SPDX Indicator You can read more about the SPDX here. Particular attention should be paid to the section on Context and Setting. These comments also apply to the Gold and Silver m...
| ||||
| Posted: 28 Mar 2012 01:48 PM PDT Commentary from GATA's Bill Holter at http://lemetropolecafe.com Telling it like it is... ______________________________________________ "Filling the hole" To all; Jim Sinclair posted this on his site yesterday. It is brilliant because it is so simple! In the most simple nutshell in history, he is 100% CORRECT! "Gold goes as high as the debt hole goes low."  This concept is so easy to understand by anyone no matter how their mind works, whether they are mathematically, artistic, musically, medically, capitalistic, socialistic or WHATEVER inclined or oriented. If you understand that all currencies on the planet are "debt based" and backed by the full faith and "credit" of whomever the issuer is, Gold, pure and simple will "grow" in value equal to however much debt is issued by each currency divided by how much (collectively) Gold that central bank has (or says they have). When all is said and done, Gold does not "grow", it does not "go up", the only thing it does (and has to do in a fiat system) is "fill the hole!". Think of it this way, if you "owe", someday you must "pay". You must pay with something real, it can be Gold, or oil, or wheat or Cracker Jacks or whatever. This is in a real world, the world we live in today is simply not "real". I say this because in today's global fiat system, "debts" are paid by issuing more of the same currency (created by issuing more debt). "Settlement", never occurs! When this episode is over, Gold will "fill these holes" that are being created (and applauded) on a daily basis. QE this or LTRO that, debt, and more debt, is being created every day. Nevermind that no economy can grow fast enough to pay existing debts, more debt gets created every single day and digs "the hole" deeper and deeper. Said simply, each and every day, the world's paper currencies are "worth" less and less because they are being created faster and faster (surely faster than their economies are or even CAN grow). Simple math or logic then tells you that each day, the "worth" or "value" of Gold priced in these currencies goes higher and higher. The reality is, because even the existing debt cannot be paid back (without creating more debt through monetizing), the debt will ultimately (because it intrinsically already is) be valued at "zero", ...and the opposite of "zero" is? Recently Ben Bernanke and other "really smart people" have been on a Gold bashing campaign which they are terming "transparency". Why now? Well, because they have to. They have to because as "the debt hole" gets deeper and deeper, more and more people understand that it can never be paid back and their minds begin to "wander". The central banks of the world just don't want these "wandering minds" to end up coming to the conclusion that their "money" really isn't money at all. So Gold gets bashed with untruths and a smear campaign (not to mention the millions of fake paper contracts) so as to divert the wandering minds (as many as possible) from the truth. We have heard forever (at least my entire lifetime) that there isn't enough Gold in the world to sustain economies much less grow them. THIS is total bullshit! Let us assume that over 5,000 years that only one single ounce had been mined and only 1/2,500th of an ounce is mined per year (2% increase), if this ounce was priced at whatever number (maybe $500 Gazillion Bazillion), there would be enough. The truth is, they are correct, there is not enough Gold in the world to support a banking and currency system ...AT THESE PRICES! At some price (I do not profess to know), the current Gold in existence (and purported to be held by central banks), the entire system could be 100% backed, this is a fact. "Filling the hole" is exactly what Gold WILL eventually do. "Filling the hole" is exactly the same concept that I have probably bored you to death with over the years, it is "revaluation" in simpler terms. After what we have been through since 2007, you should probably now understand "why" ..."they" don't want Gold in the system. Gold, takes actual effort, machinery, (real capital) to produce, it is rare. Politiciians and central bankers would be precluded from handing out "free money" to friends, cronies etc. at a whim. Bankruptcies would...well...be bankruptcies and "bailouts" wouldn't exist. They couldn't! Think about it, who would be stupid enough to give away something that is real, rare and valuable to save someone else? Surely not any of the greedy scum who run the show now, no, failures should simply fail and capital would be "cared for" and risk actually avoided. In this manner, capital would "efficiently" find it's way to investment and the AIG's, Fannies and Freddies, Solyndra's, GM's, and "bridges to nowhere" would not exist, be built or even contemplated. Please, if you do not understand this concept that Gold must fill the global debt hole, spend some quiet time and think about it until it makes some sense to you. This is the most important concept in finance, and I might add, it has ALWAYS been the most important concept. Commerce, and thus society...requires real "settlement", without "real" settlement, everything is false and fraud becomes the new norm. How can anyone think that a banking system that is based on fraud could breed anything other than...fraud? Yes folks, we have certainly arrived and already entered frauds front door! Regards, Bill H. 
| ||||
| Posted: 28 Mar 2012 12:47 PM PDT from TF Metals Report:
Please take the time to read this. (Note that I've added my own emphasis to a few points.) If you'd like to subscribe for yourself, click the link below: http://www.industrymailout.com/Industry/View.aspx?id=354938&q=441919911&qz=624e3f The [Recovery] Has No Clothes "I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by members of the public, and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act (CEA) have taken place in silver markets and that any such violation of the law in this regard should be prosecuted." - Bart Chilton, Commissioner, U.S. Commodity Futures Trading Commission (CFTC), October 26th, 2010 What a difference a month makes. Now that Greece has been papered over, the bulls are back in full force, pumping up the equity markets and celebrating every passing data point with positive exuberance. Let's not get ahead of ourselves just yet, however. Very little has actually changed for the better, and it's certainly too early to start cheerleading a new bull market. Read More @ TFMetalsReport.com
| ||||
| US Debt Ceiling D-Day: September 14, 2012 Posted: 28 Mar 2012 12:39 PM PDT from Zero Hedge:
| ||||
| Guest Post: Renewable Technologies And Our Energy Future - An Interview With Tom Murphy Posted: 28 Mar 2012 12:20 PM PDT Submitted by James Stafford of OilPrice.com Renewable Technologies And Our Energy Future - An Interview With Tom Murphy Rising geopolitical tensions and high oil prices are continuing to help renewable energy find favour amongst investors and politicians. Yet how much faith should we place in renewables to make up the shortfall in fossil fuels? Can science really solve our energy problems, and which sectors offers the best hope for our energy future? To help us get to the bottom of this we spoke with energy specialist Dr. Tom Murphy, an associate professor of physics at the University of California. Tom runs the popular energy blog Do the Math which takes an astrophysicist's-eye view of societal issues relating to energy production, climate change, and economic growth. In the interview Tom talks about the following: Why we shouldn't get too excited over the shale boom Oilprice.com: Whilst you have proven that no renewable energy source can replace fossil fuels on its own. Which source is the most promising for providing cheap, abundant, clean energy? Oilprice.com: Bill Gates has stated that innovation in energy can take 50-60 years to take effect. How then do you believe that that the ARPA-E's short term objectives for projects can be helpful for solving current energy problems? Tom Murphy: I applaud any effort that takes our energy challenge seriously, and gets boots on the ground chasing all manner of ideas. If nothing else, it raises awareness about our predicament. At the same time, I worry about our technofix culture with a tendency to interpret news clips about ARPA-E projects to mean that we have loads of viable solutions in the hopper. Many of the ideas are just batty. And right - to the extent that implantation of innovation can take decades, we may find ourselves in a squeeze - wondering where all those funky news blurbs went. Oilprice.com: What do you think is the most exciting energy science or energy technology being researched at the moment? Tom Murphy: As cautious as I am about techno-giddiness, I do have the giggles for artificial photosynthesis. Combining universally available sunlight (in my own backyard) with a liquid fuel that can support personal and commercial transportation on land, sea, and air with minimal changes to infrastructure is too juicy for me to resist. More so than thorium breeders or even fusion, this is a real game-changer. The catch is that our finite periodic table may not avail itself to our wishes. Groups are now shaking the periodic table by its ankles, hoping that some new and unappreciated catalysts clank to the floor. I'm rooting for them, but at the same time advocate not relying on its realization. Oilprice.com: A recent report stated that replacing all coal based power stations with renewable energy, would not affect climate change, and in fact after 100 years the only difference would be a change of 0.2 degrees Celsius. What are your views on climate change? Tom Murphy: I see climate change as a serious threat to natural services and species survival, perhaps ultimately having a very negative impact on humanity. But resource depletion trumps climate change for me, because I think this has the potential to effect far more people on a far shorter timescale with far greater certainty. Our economic model is based on growth, setting us on a collision course with nature. When it becomes clear that growth cannot continue, the ramifications can be sudden and severe. So my focus is more on averting the chaos of economic/resource/agriculture/distribution collapse, which stands to wipe out much of what we have accomplished in the fossil fuel age. To the extent that climate change and resource limits are both served by a deliberate and aggressive transition away from fossil fuels, I see a natural alliance. Will it be enough to avert disaster (in climate or human welfare)? Who can know - but I vote that we try real hard. Oilprice.com: Do you think that the shale gas boom will lead/has led to reduced investment in alternative energy, and could therefore limit the advancement of alternative energy and its mainstream implementation? Tom Murphy: I do worry about the sentiment that "our problems are solved" based on a very short history of tapping low-hanging shale-gas fruit. David Hughes presented a sobering report to put these claims in perspective. Even though it is clear that shale gas will contribute to our net energy demands in an unanticipated way, I worry that A) extrapolations based on the "gusher" equivalents is risky; B) natural gas is not a direct answer to a liquid fuels shortage; and C) the associated exuberance can stifle the imperative that we have an all-hands-on-deck response to the looming challenges. Oilprice.com: What are your thoughts on Biofuels? Will they ever be able to compete with fossil fuels? If you were to pick one that you think has the best potential which would it be? Tom Murphy: The scale of our fossil fuel use prohibits replacement by biofuels at a substantial level. They certainly can and do play a role, which I anticipate will increase with time - up to a point. The energy return on energy invested (EROEI) tends to be pretty poor (less than 10:1) even for the best examples like sugar cane. And it's a heck of a lot of year-in-year-out work to manage harvests - much depending on the increasingly erratic weather. Of the biofuels, I am most intrigued by algae: mainly because it can be grown and moved about as a liquid medium in sealed tubes. That said, I worry about gunking up the works with bio-sludge, the algae contracting disease, and the fact that we have not yet found/created a viable hydrocarbon-excreting critter. Oilprice.com: Following the Fukushima disaster many have been calling for the end of nuclear power. What are your views? Should we abandon nuclear power? Are we in a position to abandon it? Tom Murphy: I don't think Fukushima should be seen as a reason to abandon nuclear. True, nuclear has its challenges, its risks, its hazardous wastes. But it's one of the few things we know how to do that can scale. Of course conventional nuclear again stares right down the barrel of limited resources, which is a déjà-vu we would rather not experience. So next-generation concepts - particularly thorium - are preferable. Then again, we are not prepared to execute such schemes this moment, so they are not much help in a near-term crisis. And ultimately, like so many things, nuclear is yet another technique to create electricity. That's not where the pinch will come. I think nuclear will remain part of our energy mix in any case, so I don't think Fukushima spells an end. Oilprice.com: What are your thoughts on the Keystone XL Pipeline? Is it vital for America's energy security? Tom Murphy: Canada produces something like 1 million barrels per day (Mbpd) of oil from tar sands. This is about 5% of U.S. demand. Ambitious plans call for 5 Mbpd production, but even this does not amount to half of our current oil imports. So could it play a role in America's energy security? Possibly. Will it guarantee it? Not likely. We should remember that Canada is a separate country. In a global petroleum decline scenario, how much of that oil will Canada sell to the U.S.? How much will China pay for it? How much of this precious lifeblood will Canada decide to keep for themselves? I won't say that I'm opposed to the pipeline, but like every other "solution" out there, it's complicated, and not a crystal clear win. Oilprice.com: I've come across many comments and articles online about human ingenuity and that we shouldn't be too concerned with peak oil and fossil fuel depletion because our scientists are surely close to an energy breakthrough. Although this thinking is dangerously naive i was hoping to get your opinion on which technology you think is closest to providing this possible breakthrough? Tom Murphy: I worry about the strength and pervasiveness of faith in science and technology to fix our problems. And I say this as a scientist who is no stranger to high-tech design and development. We deserve better than blind hope that someone somewhere will pull off a transformative energy miracle. Some things peak. We should acknowledge that once our inheritance is spent, we may not live like the kings we want to be. I can hope along with the rest of us that this isn't true. But I don't feel like gambling: I'm the type to cash out when I'm a bit ahead, rather than keep betting my purse that the next hand will hit paydirt. More concretely, I can say that most physicists I meet in departments around the country are not aware of peak oil and associated challenges. Hardly anyone I meet is working on the problem. No one (i.e., funding) has told us this is a real problem that deserves our full attention. And I sense that it would be political suicide to do so. So which technology do I think will save our bacon? Most ideas on the table provide electricity, which does not address our most critical need. As I said before, artificial photosynthesis hits the sweet spot, and batteries are tremendously important. But let's also prepare a plan B that may be less about techno-fixes and more about behaviors and attitudes. Oilprice.com: Giant batteries the size of a football pitch are being constructed in order to store energy from renewable sources and release it during times of low power production, for a more consistent supply. Do you think this is the future for renewable energy, or would we be better served creating a giant grid, linking many different renewable sources together so that they can cover for each other? Tom Murphy: Batteries work, we know. I think we absolutely should be gaining experience on the practical issues/economics of giant batteries. Making large-scale storage more practical resolves the single-biggest technical barrier to widespread solar and wind deployment. I am sceptical about giant grids especially the global variety based on the simplistic notion that "It's always sunny somewhere." I am more attracted to resilient local solutions. Transmission loss today tends to be less than 10% on an old, dumb grid. High-voltage DC would reduce this loss somewhat, and the science fiction superconducting grid would eliminate loss (until the inevitable cryogenic failure vaporizes the lines; and let's not ignore the considerable energy investment needed to keep the lines at cryogenic temperatures). On a moderately ambitious scale, a continental grid will reduce the need for storage, but it will not eliminate it. We still benefit from super-sized batteries. Oilprice.com: What do you think about the idea that it would be more useful improving the efficiency of current power systems, rather than researching new types of energy production? Tom Murphy: Efficiency is a lovely thing, and it has always been seen as a lovely thing. Because of this, efforts to improve efficiencies of the big stuff like power plants have been continuous. And we have seen improvements at the level of 1% per year. In rare instances, One can get dramatic leaps via co-generation strategies, but that relies on power plants being situated near demand for waste heat. So realistically, I think incremental efficiency improvement does not have nearly enough bite to "solve" our problem, and in any case tends to be limited to factor-of-two level changes even in the long term. We need much more than that, in the end. I have found behavioural modification to be far more effective, achieving factors of 2, 3, 5, etc. in short order without grossly changing lifestyles. Oilprice.com: Oilprice.com published an article a few months ago on space-based solar plants. Do you think that constructing space-based power plants could be a valuable option in the future? Tom Murphy: I have to admit to being somewhat baffled by the concept. Why make solar power even more expensive with exorbitant launch costs (which only increases as energy costs increase), placing the equipment in an unserviceable, hostile space environment (cosmic rays, debris) while only gaining a factor of five in night/weather avoidance? The microwave link is no joke either. The required dishes are huge for both diffraction and ground safety reasons. I have just made a detailed post on Do the Math on Spaced based Solar. But let's think about storage, and save ourselves absurd machinations. Oilprice.com: Despite the rather public failure of Solyndra and other less well known companies investments in green energy are growing. Which sectors would you be willing to invest in and do you feel offer the greatest potential to investors? Wind, solar, wave, geothermal? Or none of the above? Tom Murphy: I am not myself an investor, but I would surely like to see more funding for battery research and development, and for anything that can synthesize liquid hydrocarbons using a non-fossil input. Investors want to make money, but I'd rather tackle the important problems. Sometimes timescales make these two goals incompatible. Can you make money on wave or geothermal? Possibly. I'll leave that for others to determine. But I'm not too excited about niche solutions, which may distract us from the real prizes - to the extent that they exist. Tom Murphy: I'd sooner have smart people than a smart grid, deciding that it's in our collective interest to scale back energy use at a personal level. Failing that, a smart grid helps distribute demand in such a way that intermittent renewables are more easily accommodated (using energy when it's available). Some things may work well like this, but I don't think this is a realistic way to hide variable energy supply from the consumer. They may be irked that they lose control over when the laundry decides to start - possibly resulting in clothes smelling of mildew, or that they are not present to fold clothes at 2 AM when the dryer is finished. Loss of control may not play well. If, instead, informed people accepted limitations of future energy supplies, and modified their own behaviour accordingly under their own control, we would break the habit of people taking energy for granted: an attitude that the smart grid attempts to preserve. We want greater personal awareness of energy, not less. Oilprice.com: Cold Fusion (or LENR) has been deemed impossible for many years, yet Andre Rossi claims to have mastered it. However he won't let anyone examine his E-Cat machine, and some believe that it may be a fraud. Where do you stand? Do you believe that he has mastered an "impossible" science, or that the claims of fraud have merit? Tom Murphy: This appears to be outside the domain of known physics, so I'll not comment further. Oilprice.com: The Kardashev scale is a method of measuring an advanced civilization's level of technological advancement. A Type I civilization has achieved mastery of the resources of its home planet, Type II of its solar system, and Type III of its galaxy. Whilst just a bit of fun, do you think that in the future, whether it be millennia or eons, we will ever reach Type I or Type II, or do you believe it impossible? Tom Murphy: I think it is fallacious to think that humans will master the energy flow and resources even of Earth. Successful examples of long-term sustainable living tend to see people living as part of the energy/resource flow, but not as masters of it. We are only good at mastery in our fertile imaginations. The real world tends not to care what we can imagine. Titanic hubris. I would rather see humans try to live in equilibrium with natural services, rather than attempt foolhardy domination. Our attempts thus far are not very impressive: we're failing to hold it all together even now. Oilprice.com: Popular focus is on the global energy crisis, but an equally important crisis is looming. Rock phosphate is vital for creating fertiliser, which in turn is necessary for producing large quantities of today's food. It is depleting at a rate similar to crude oil, which could soon mean that the world will experience food shortages. How do you believe this problem could be solved? Should more media attention be focussed on the potential food shortage of the future? Tom Murphy: Sigh. Another problem we must "solve." How about this solution: one billion people on Earth would obviate many of our problems. Any takers? Any acceptable path to this state? The original question does remind us that our problems are numerous. It is no surprise that the phenomenal surge in population and living standards/expectations in the last few hundred years - both a direct consequence of exploiting our fossil fuel inheritance - should be exposing fault lines every which way. Aquifers, soil, forests, fisheries, coral, ice pack, and species counts are in decline. The very simple answer staring us in the face, yet somehow unthinkable, is to consume far fewer resources and aim to reduce population. Hopefully we can do this in a more controlled way than nature may enforce if we ignore the myriad warnings. This "solution" will no doubt offend many, but just because we want to continue growth does not mean we can. We need to take control of our destiny, and that starts with us as individuals. Decide to reduce; mentally abandon the growth paradigm. Let's maximize our chances of preserving our accomplishments by easing off the gas for a bit. Oilprice.com: Oil companies are mainly driven by the aim of pleasing shareholders, which generally means pursuing large dividends and high share prices. Surely this profit seeking mentality is detrimental to the advancement of green energy technologies, as the companies have little incentive to seriously invest in new types of energy whilst old, cheaper types still exist. What are your views? Is there any way to change this dynamic? Tom Murphy: I sense that plenty of people are waiting to cash in on green energy, and investment begins to flourish when energy prices soar. But as soon as high energy prices trigger recession, demand flags, prices crash, and the volatility wipes out many green efforts. A year or two of high prices is simply not long enough for a transformation, which takes decades to accomplish. I hope that we can tolerate smoothly and continuously escalating energy prices for conventional sources, but those high prices hurt large segments of the (conventional) economy and self-generate volatility. In principle, governments could "artificially" keep energy prices high enough to maintain the impetus for developing alternatives, pumping the revenue into a national alternative energy infrastructure. But governments are bound by voters who simply don't want sustained high energy prices. I don't know how to evade this dynamic in a functioning democracy, except via education about the challenges we face - including a sober confrontation of the fact that failure is a likely result of our not bucking up to the challenge. Oilprice.com: How would you best describe the current situation with oil reserves? Do you believe we have reached Peak oil or are pretty close to it? Tom Murphy: The simple observation that a peak in global discovery in the 1960's must be followed by a peak in production some decades later is unassailable. So we know the decline is coming, as most major oil-producing countries have experienced already. That part is easy, it's the when that is always hard. The fact that the current petroleum production plateau has hardly budged through factor-of-three price fluctuations is very suggestive that no one has spare capacity at the ready. If we can maintain high prices without re-experiencing a spike and crash like we did in 2008, we might see sub-prime production come online fast enough to maintain the plateau. But A) this might not happen, and B) it's not a resumption of production growth. So I would not at all be surprised if a decline makes itself clear by the end of this decade. I, would, on the other hand, be surprised to see a 5% increase of conventional petroleum production over recent (plateau) levels. But in the decline case, volatility, deliberate withholding, recession, unemployment, wars, etc. can stir in enough complexity to hide the physical truth from us for years. Will it be obvious to the world when we pass into the land of inexorable decline? Thank you Tom for taking the time to speak to us. For those who wish to see more of Tom's work please take a moment to visit his blog: Do the Math
| ||||
| Durable Goods and The Stock Market, with The Fed In The Driver's Seat Posted: 28 Mar 2012 12:07 PM PDT I asked Lee, "Why is it the Fed's job to be propping up the stock market? Doesn't it make the whole market a Fed-controlled game, rather than what it started as - a mechanism for companies to raise money and people to invest in public companies?" Lee answered: "Bernanke has made no bones about it. He sees the stock market as a legitimate instrument of policy manipulation. It's his biggest tool, much bigger than the ones between his ears and his legs. The Fed works for the banks, and the capital markets exist as a means for 'capitalists' to extract wealth from the public. Stock markets weren't started for the purpose of enriching the public, that's for sure... The Fed has two clients, the US Treasury, and the banking system. It operates to make sure that they stay in business." Lee also noted that the history of the Fed is replete with a variety of programs where it tried to manipulate something. "The stock market manipulation is relatively new as an overt policy tool, but the Fed can't manipulate indefinitely. Eventually the unintended consequences will rise up and bite it in the ass." Durable Goods and The Stock Market, with The Fed In The Driver's SeatCourtesy of Lee Adler of the Wall Street Examiner Durable goods orders rose 8.7% In February versus January on a nominal, not seasonally adjusted basis. The mainstream media reported only the 2.2% seasonally massaged increase, which missed the consensus expectation of 2.9%. The actual, unadjusted increase was the best February gain since February 2004, so the actual data could hardly be read as disappointing. Last February, the month to month increase was only 0.90%, and the gain in February 2009 was only 2.8%. The average February gain over the past 10 years was 5.2%. Any way you slice it, this was a very strong increase. Once again, the use of seasonal adjustments obscures the truth and sends the market racing to the wrong conclusion in the knee jerk reaction. In nominal terms, durable goods orders are now up 17.8% year over year. The rate of increase has actually been increasing lately. In real, inflation adjusted terms the increase was "only" 14.4%. That's still a huge jump. The problem is in the big picture. While durable goods orders have had a strong cyclical increase, they have only recovered 60% of the loss incurred during the recession. The idea of US manufacturing making a comeback is a myth. This myth may have arisen because the rest of the world is doing worse under austerity than the US is doing under ongoing stimulus spending and Fed propping. No doubt if the Federal government ever decides to actually reduce the deficit, the meager growth the US economy has shown would stop dead and reverse. Furthermore, if US companies really are moving production back home and adding to capacity in the process, based on the long term trend of orders, they are headed for another bust. It's only a question of when.  Real Durable Goods vs. Stock Prices Chart - Click to enlarge The chart shows just how sick the secular trend of the US manufacturing economy is. However, that does not matter to the stock market, which is perfectly capable of increasing its margin away from the trend of manufacturing in the US due to the financialization of the economy. Durable goods orders are at best a concurrent indicator of stock market trends. Orders lagged the downturn in stocks 2007-08. In fact, this measure of manufacturing did not collapse until after the Federal Government and the Fed panicked in 2008 and pulled $700 billion out of the economy in raising TARP and funding it through debt sales, which the Fed then funded through a variety of propping programs that were themselves funded by the Fed pulling cash out of Primary Dealer trading accounts. The Fed's withdrawals of dealer funding precipitated the stock market collapse, and the economy followed. As I have shown throughout the 10years I have been directly tracking this, the Fed has near absolute control over both the US stock market and the economy based on how much cash it pumps into Primary Dealer trading accounts. This indicator is a proprietary measure of the amount of money the Fed pumps through Primary Dealer accounts. The data is all available from the Fed in various places. I just accumulate it and publish it weekly in the Wall Street Examiner Professional Edition Fed Report.  The Fed and the Stock Market- Click to enlarge When the Fed buys securities from the dealers it pumps cash into their trading accounts, the market rises and the economy tags along. When the Fed drained money from dealer accounts, especially in the face of the Treasury selling $700 billion in new debt over the same time window, the economy collapsed. I'm well aware that correlation doesn't imply causation. In this case, the cause and effect are easily observed. The effects of the Fed's actions are completely predictable now, just as they were in 2008, when I warned that what the Fed was doing would precipitate a crash. While the mainstream gives Bernanke credit for averting an even worse fate, the facts clearly show that his and Henry Paulson's panicked actions (not to mention then NY Fed President Tim Geithner) triggered a far more precipitous break than might otherwise have occurred. Here's an all in one chart that uses a slightly different measure of Fed actions that doesn't capture all of the impacts of the nuances of various Fed policy measures, but it's clear enough to give you the idea.  The Fed, Stock Market and Durable Goods Chart- Click to enlarge Had the Fed not pulled cash from the SOMA in 2008, it is highly likely that the market would not have crashed and the economy would not have collapsed. The glide path would have been much smoother. Once the Fed realized its error and resumed direct pumping to the Primary Dealers, the market and economy recovered to the trend level it would have been on. As long as the Fed keeps the Primary Dealers flush with cash, the market and the economy will respond in kind. Financial assets and commodities will continue to rally and the economy will follow along in a slow growth path. At some point, however, inflation will tie the Fed's hands. Will it be this summer, when the Fed's MBS purchase program ends? Then what? A wide variety of inflation measures, including especially commodity prices, which the Fed pretends to ignore, will hold the key to whether the Fed can continue to artificially drive up asset prices in a way that promotes false and otherwise unsustainable economic growth.
Get regular updates the machinations of the Fed, Treasury, Primary Dealers and foreign central banks in the US market, in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Click this link to try WSE's Professional Edition risk free for 30 days! © Copyright 2012, The Wall Street Examiner Company Inc. All rights reserved.
| ||||
| Is High Yield Credit Echoing 2011's Equity Nightmares? Posted: 28 Mar 2012 11:27 AM PDT For the last month or so, despite ongoing fund inflows, high-yield credit's performance has been generally muted. Compared to the exuberance of the equity market it has been downright flaccid and given how 'empirically' cheap it is on a normalized spread basis through the cycle (and the fortress-like balance sheets we hear so much about) some would expect it to be the high-beta long of choice in the new-new normal rally-to-infinity. However, it is not (and has not been since late January). There are some technical factors including a bifurcated HY credit market (between really 'good's and really 'bad's and illiquids and liquids), low rate implications on callability and negative convexity affecting price but the lack of share creation in the HYG (high-yield bond) ETF also suggests a lagging of support for high-yield credit. This is a very similar pattern to what was seen in Q1/Q2 last year as equity kept rallying away from a less sanguine credit market only to eventually collapse under the weight of its own reality-check. European credit and equity markets are much more in sync together as they have fallen recently but financials in the US exaggerate this credit-signaling-ongoing-concerns trend while equity goes on about its bullish business. Another canary dead? High-Yield Credit vs Stocks in 2011...
High-Yield Credit vs Stocks 2012...
HYG (the high-yield bond ETF) has seen shares outstanding stagnate for over a month (no new creation suggesting less demand)...
and its not just yield-based HYG but spread-based HY17 (the credit derivative index for high yield credit) that has been relatively stable (and note the divergences and convergences - especially recently as HY17 headed into its index roll)...
and US financials remain extremely exuberant relative to credit (as opposed to European financials which have reconnected with reality)...
Charts: Bloomberg
| ||||
| Gold Price Lost $27 Today to Close at $1,657.90 With a Low of $1,656.70 Posted: 28 Mar 2012 10:41 AM PDT Gold Price Close Today : 1657.90Change : (27.00) or -1.60%Silver Price Close Today : 3181.60Change : 78.5 cents or -2.41%Gold Silver Ratio Today : 52.109Change : 0.427 or 0.83%Silver Gold Ratio Today : 0.01919Change : -0.000158 or -0.82%Platinum Price Close Today : 1635.50Change : -18.30 or -1.11%Palladium Price Close Today : 649.15Change : -9.20 or -1.40%S&P 500 : 1,405.54Change : -6.98
| ||||
| Fatal Flaws and Opportunities in Gold Investing: Brent Cook Posted: 28 Mar 2012 10:32 AM PDT The Gold Report: In the late 1990s, when the gold price was falling steadily lower, you vetted companies for Rick Rule's company, Global Resource Investments. Could you give us a comparison of what this space was like then versus what it's like now? Brent Cook: During 1997–2002, we were probably in the most unloved sector in the whole investment world. Gold had collapsed to less than $250/ounce (oz), copper was under $0.85/pound (lb) and anything that didn't have a dot-com to its name didn't get much respect. The idea of blowing up rocks to make metal out of them was an archaic concept clung to by the remnants of the industrial revolution; it was a brave new world. By contrast, today gold is over $1,600/oz, copper is $3.80/lb and iron ore has gone from $12/ton (t), to $140/t; we're in the 10th year of a commodities boom. Back then, it was very difficult for mining companies to raise money. Working with Rick, I was fortunate. He'd put together two funds of about $14 million (M), so w...
| ||||
| Don?t Expect New Highs In Gold This Year Posted: 28 Mar 2012 10:21 AM PDT Gold has been in a bull market for over a decade, posting positive returns for 11 years in a row. However, there are good reasons to believe that gold will retreat in 2012 and disappoint a lot of gold bugs. [Let me explain.] Words: 725 So says Robert Hallberg ([url]http://www.contrarian-investor.com/[/url])* in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com*has further edited below for length and clarity – see Editor's Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement. Hallberg*goes on to say, in part: Secular bull markets typically last between 15 to 20 years, with 17 years being the average. Historical data support the idea that equities and commodities go from a bull market to a bear market in equally long intervals. For example, a bull market in commodities has typically meant a bear market in equities and vice versa. However, the 13th year of a bull market has typically b...
| ||||
| Paul Mladjenovic: Economists Exhibit Lunacy and Confusion over the Gold Standard Posted: 28 Mar 2012 10:21 AM PDT [/CENTER] So says Paul Mladjenovic ([COLOR=#0000ff]www.mladjenovic.blogspot.ca) *in edited excerpts from an article*[/COLOR] which Lorimer Wilson, editor of www.munKNEE.comhas further edited below for length and clarity – see Editor's Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement. Mladjenovic goes on to say, in part: Some conventional and well-known economists have expressed the idea that a gold standard is a bad idea and that the gold standard was a major (and possibly THE major) catalyst for the Great Depression. One well-known fellow surmises that an equivalent of the gold standard is the reason why today's European financial crisis is going on. In due course, I am sure that they will blame the gold standard for global warming and probably the heartbreak of psoriasis… The point that critics make is that the gold standard "removes financial flexibility" when a system-wide financial crisis unfolds. T...
| ||||
| What Does “the Market” Mean to You? Posted: 28 Mar 2012 10:13 AM PDT What's new in the markets? More importantly, what kind of market are we talking about…and why does it matter to you? We'll get to that in a second. First, here's a conventional response to the question, one you'd expect to find in your morning paper or on the evening news: Stocks in the US were down this morning after yesterday afternoon's selloff snapped a two-day winning streak for the thirty bluest chip companies. The Dow closed at 13,197 points yesterday, down 44 points for the session, though still up roughly 8% on the year. Investors sold shares across the board in early morning trading today after a weaker than expected durable goods report. All twelve sectors, from Capital Goods to Utilities were down at time of print with Energy and Basic Materials off the most, down 1.7 and 1.8% respectively. Zzzzzzzzz…..Zzzzzzzzzz…. There. Now what does that tell you? Nothing. A bunch of slack-jawed gibberish best suited to helping your screaming toddler fall asleep of an evening. We almost dozed off just writing it. Not that intellectual fatigue and drone-like data regurgitation are sufficient disincentives to ward off embarrassingly enthusiastic prognostications from the mainstream press, mind you. Here are a couple of actual, real life headlines we chanced upon this morning: "US Stock Futures Pare Gains After Disappointing Durable Goods" — the WSJ. "Wall Street opens flat after durables data" — CNBC. Sheesh. We even saw one daily claiming to know the unknowable in the form of the following headline: "Why the Dow Fell Today." We didn't subject our pre-caffeinated, A.M. state of mind to the omniscient diatribe beneath that offending claimline, but we imagine it contained plenty of candidate material for Chris Mayer's "You Can't Make This Stuff Up" file, which he delivers to attendees of our investment symposium in Vancouver each year. "News is systematically misleading," observed Chris in a recent Daily Reckoning contribution, "reporting on the highly visible and ignoring the subtle and deeper stories. It is made to grab our attention, not report on the world. And thus, it gives us a false sense of how the world works, masking the truer probabilities of events." Chris quoted an essay by Swiss entrepreneur, Rolf Dobelli, unambiguously titled, Avoid News: "We don't know why the stock market moves as it moves. Too many factors go into such shifts. Any journalist who writes, 'The market moved because of X'… is an idiot." Which brings us back to our second question of the day; what does "the market" mean to you? Generally, when inch-filling columnists talk about "the market," they are referring to a bunch of stocks you may or may not own that trade on dubious fundamentals you may or may not care about and that move in ways we almost certainly cannot predict or understand. "Dow up on ABC," says one paper. "Euro markets rattled after XYZ" chimes another. But how does this actually affect you? In what way does this news impact your life? Does the movement of this particular market determine what happens on Main Street, or simply reflect the general "sentiment" of automated machines and high-frequency trading desks on Wall Street? And should you care either way? There are many factors at work here. In yesterday's issue, for example, Aussie DR editor, Dan Denning, reckoned on the consequences of Ben Bernanke's deflation phobia. The Fed Head has a fear of declining asset prices, wrote Dan, something he and his credulous acolytes mistakenly define as deflation. (In fact, deflation — as with its ugly stepsister, inflation — is, as Milton Friedman correctly observed, "always and everywhere a monetary phenomenon." The rise and fall of asset prices are symptoms of inflation and deflation, not causes.) Spurious definitions notwithstanding, Bernanke believes that by stomping on interest rates, printing truckloads of new money and otherwise fiddling with the levers and pulleys at the Fed, he can discourage and punish savers to the extent that they will be forced to put their money in stocks…thereby buoying the indexes he and his central planner friends point to as measures of the health and vitality of the economy. For reasons that Dan went into yesterday, this is at least as absurd as it sounds. Artificially manipulated interest rates do not encourage healthy investment…instead, they spawn malinvestment based on compromised information and market distortions. "It's a shame he can't understand that the US rate policy is unsound," wrote Dan. "And since the rest of the world more or less keys off from US interest rates, an unsound US monetary policy leads to an unsound global monetary policy. By 'unsound' we mean a policy that keeps interest rates too low, leads to asset price inflation, and a giant boom in debt." Given the many and varied forces — both natural and unnatural — pressuring stocks this way and that, is there any practical benefit in quoting stock averages or, worse still, attributing causal agents to their largely unpredictable trajectories…and then only after the fact? There's much more to it than that. For instance, what if shares of Google rise to $1,300 each — a roughly 100% gain — by year's end? And what if the whole market does likewise, racing to enormous paper gains over the coming months. In a context vacuum, this might appear to be a good thing. You can write the headlines today: Google Rallies, Leads Market to All Time High! Dow Doubles, Wall Street Hails Hero Bernanke! But what if the value of money depreciates to such an extent over the same time that it costs $100 to buy a loaf of bread? A single share of Google would then be worth a (baker's) dozen loaves of bread. The headlines above are at least meaningless and, more to the point, downright deceptive. What things are valued in is at least as important as the number preceding them. One million dollar per ounce gold means nothing if it's denominated in Zimbabwean dollars…except insofar as it indicates the Zim bucks are worth next to nada. "The market," in any case and as it pertains to most people, is less likely to be the Wall Street Casino variety of leveraged buyouts, inside (the 495 Beltway) trading and high frequency, automated jockeying and, rather, more likely to be the local market…the market for goods and services people buy, sell and trade on a daily basis. And there are, believe it or not, markets that are springing up — flourishing, even — that exist very much outside the relatively narrow spectrum of activity crawling across the bottom of the CNBC news screen. The vapid neckties appearing on that show, and their like, don't report on these markets because they aren't supposed to exist. We're talking, of course, about what the state dysphemistically refers to as the Black Market. Now, before discounting this unregulated sector of the economy as a gun running, drug smuggling bastion of hedonistic activity, consider that, as reported in these pages before (here and here), this is an economy that will employ roughly two thirds of the world's workforce by 2020. (Consider too that the drug- and gun-running businesses are only made profitable/possible by a state that outlaws them or, rather, that monopolizes these markets for its own sick and tragic ends.) Instead, "System D," as Robert Neuwirth, author of Stealth of Nations, describes this community of free and unregulated entrepreneurs… "…is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of "l'economie de la débrouillardise." Or, sweetened for street use, "Systeme D." This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy." Today, System D is estimated to be worth about $10 trillion, the second largest marketplace in the world. Its companies appear on no exchanges and are, thus, monitored by no index averages…or SEC-like wolves and/or incompetents. Its workers are subject to no oppressive labor laws and are free to contract with whomever they wish and at a price mutually agreed upon. It is dynamic, unrestricted by petty bureaucracy and, as such, is able to adapt at lightning speed to the varied demands of a rapidly and increasingly evolving global environment. It asks permission from no politician and, as you might expect, it is by far the fastest growing economy in the world. A recent column that appeared on Forbes.com went all the way to synthesizing two aspects of this market that your editor has addressed in these pages before: System D as a market itself and Bitcoin, the bare-knuckeled cyber-cryptocurrency tapped by adherants as the answer to the tyranny of central banking, as a viable currency to carry and facilitate transactions within it. Both topics are relatively new; Bitcoin is barely 3 years old and, although System D has been around since people first began contracting and exchanging goods and ideas — or rather, since people claiming the right to do so began trying to regulate and tax them — Neuwirth's book, published just last year, is the first real effort at quantifying it. Expect more on these rapidly developing, highly adaptive markets as debt-laden states around the world struggle to catch their dying breaths and mainstream indexes and markets are increasingly stifled by their burdensome regulations. The answer to the above question, What is the market?, is simple: It is people. And people are beginning to notice they don't need arbitrary regulations imposed on them by self-serving lawmakers and central planners in order to trade and interact peacefully with one and other. Instead, they are coming to realize the power of free and open markets. And they are joining a growing chorus each and every day. Joel Bowman What Does "the Market" Mean to You? 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.
| ||||
| Trouble, Trayvon, and Three Flashpoints Posted: 28 Mar 2012 09:19 AM PDT March 28, 2012 [LIST] [*]Andrew Wordes (ignored) vs. Trayvon Martin (hyped): What both say about the coming chaos... [*]Three flashpoints this spring and summer for trouble in the streets... and the crackdown that will catch the innocent in its net [*]Africa's largest economy becomes the latest to opt for alternatives to the U.S. dollar... [*]Chris Mayer describes "the world we're moving toward"... with a chart that looks back 2,000 years... [*]Jawboning the oil market down... what's really going on in the world of social media... an unlikely gated community... on our lifetime list of must-reads... and more! [/LIST] Andrew Wordes shed his mortal coil in a blaze of... well, it's hard to call it glory. For the past seven years, he'd been fighting city fathers in Roswell, Ga., over his desire to keep chickens in his backyard. He hired lawyers. It got expensive. So expensive he couldn't keep up his mortgage payments. Monday morning, shortly before police showed up...
| ||||
| Caught Red Handed: Manipulation in Gold Market Since the US Lost AAA Rating Posted: 28 Mar 2012 08:19 AM PDT Stacy Summary: This is a report just published by Paul Mylchreest, who used to be at Chevreux where he wrote one of the first bank reports confirming manipulation in the gold market.
| ||||
| Gold Daily And Silver Weekly Charts - Jeff Christian Calls 'The Top' In Gold Posted: 28 Mar 2012 08:11 AM PDT | ||||
| Posted: 28 Mar 2012 08:00 AM PDT A very important objective change has taken place in the gold market. Its price is not moving above the resistance established in the 1600 to 1900 wide berth range. Its price is not moving below support in the same wide permitted range. When the gold price has approached the 1800 level recently, all manner of naked soldiers emerge with imaginery swords to whack the price down, to bring it under heel. The ruse has a high cost in the real world though, as the gold cartel has been forced to shed an enormous supply of gold as punishment for each naked short episode.
|
| 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 |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment