saveyourassetsfirst3 |
- The Best 8 Stocks For High Growth And Dividends
- Why Silver Wheaton Could Rise 20% In 3 Months
- Banks' Scare Tactic: 'Disorderly' Greek Default
- 2 Coal Kings To Consider, 2 To Avoid In 2012
- Inflation “Tying Hands” of ECB as Rates Unchanged in Eurozone and UK, Fed Reaction “Key to Precious Metals Case”
- Dollar At A Critical Juncture
- Gold Remains in Consolidation
- Inflation Ahead: Buy Gold or Buy Stocks?
- ECB: gold and gold receivables remain unchanged
- Bernanke Spooks Gold
- Select Gold, Silver Mid Caps for Near-Term Action: Bo Chew
- Asia Focuses on Gold’s Value and Buys Dip – West Focuses on Price and Sells
- Jim Grant – Fed ‘Manhandling’ Markets
- Morning Outlook from the Trade Desk 03/08/12
- Loaded Guns and an Empty Fort Knox
- Loaded Guns and an Empty Fort Knox, by Gary North
- ECB's 'Hands Are Tied' as Euro & UK Rates Unchanged
- How Germany could start a run on gold
- Must-see interview with legendary advisor Jim Grant
- Asia Focuses on Gold’s Value and Buys Dip
- Iraq aims to increase gold production
- Proof, Bullion and Specimen – What’s the Difference?
- Gold and silver prices encounter solid buying support
- Fed Loaning Out German Gold?
- Switzerland Wants Its Gold Back
- LISTEN: Jim Rogers talks with Chris Waltzek
- Links 3/8/12
- Gold Forecast 2012: Gold Market Update
- Concerns in Germany About Its Gold at the NY Fed, London, and Paris; German Gold Off Limits
- Agitation in Switzerland and Germany to Bring Their Gold Home From the U.S.
| The Best 8 Stocks For High Growth And Dividends Posted: 08 Mar 2012 06:25 AM PST By Avi Morris: The ultimate goal for investors is growth from higher stock prices and dividends. Growing dividends are important because they are paid from rising EPS and also provide current income. Dividend Aristocrats, 51 companies selected by S&P which have raised annual dividends for a minimum of the last 25 years, are an excellent source of investment ideas. Many began their streaks in the 1970s (or before), continuing through good times and recessions. Dividends were increased through the financial meltdown 3 years when a number of highly regarded companies (including Dividend Aristocrats) had to cut dividends. Some Dividend Aristocrats have yields above 3%, a few are even above 4%. Income is welcome, especially during difficult times and by retirees. However others with low yields, around 1-2%, have had excellent capital appreciation over the last 10 years. Below are 8 of the best: 1. CR Bard (BCR) is a leading multinational developer and Complete Story » |
| Why Silver Wheaton Could Rise 20% In 3 Months Posted: 08 Mar 2012 06:20 AM PST By Simit Patel: Silver Wheaton (SLW) is a favorite of the precious metals crowd, as it has been one of the top performing silver stocks since the financial crisis made its presence known in Q4 of 2008. The chart below, from their latest presentation, illustrates. SLW currently has the highest market capitalization per employee of any U.S.-listed company, which shows the power of its streaming model; the firm is basically a venture capital firm for the silver industry, and thus is able to earn huge profits from investing -- not through the costly process of managing mining operations. Mining royalty stocks like SLW are an outstanding opportunity, as I've noted before; I think they are Complete Story » |
| Banks' Scare Tactic: 'Disorderly' Greek Default Posted: 08 Mar 2012 06:05 AM PST By Avery Goodman: The Institute of International Finance (IIF) is a bank-owned and controlled entity that proffers opinions on economic events. It recently published a report which warns against the alleged catastrophic consequences of a overt and honest Greek default. According to the IIF, allowing Greece to default will cause the virtual implosion of the world's banking system. This type of fear-mongering is not new. In 2008, former Goldman Sachs Chairman and Bush Administration Treasury Secretary Henry Paulson succeeded in frightening the US Congress into passing a $800 billion dollar bailout of banks that later became known as "TARP." He even went so far as to try to get complete discretion over how and to whom the money would be handed out! Congressmen and Senators, being deficient in economic knowledge, after a bit of resistance, were duly frightened out of their wits by threats of martial law and and ended up doing as Complete Story » |
| 2 Coal Kings To Consider, 2 To Avoid In 2012 Posted: 08 Mar 2012 05:19 AM PST By Investment Underground: By Robert Gordon Six months ago, most thought major coal producers would be doing well. What many did not foresee was a collapse in coal prices. There are two broad types of commonly mined coal: Thermal, which is usually used for energy production; and metallurgical coal, typically used in the steel making process. Historically cheap natural gas, EPA rulings and environmental concerns are turning U.S. energy production increasingly toward natural gas, causing thermal coal prices to fall. Europe's economic struggles have limited |
| Posted: 08 Mar 2012 04:42 AM PST
Inflation "Tying Hands" of ECB as Rates Unchanged in Eurozone and UK, Fed Reaction "Key to Precious Metals Case" SPOT MARKET prices to buy gold were hovering around $1700 per ounce Thursday lunchtime in London, following the latest interest rate announcements from the European Central Bank and the Bank of England. Silver prices meantime were hovering around the $34 an ounce mark Thursday lunchtime. Earlier in the day, gold, silver, the Euro, stocks and commodities all rallied in early European trading, as reports suggested that enough Greek bondholders should agree to the bond swap by this evening's deadline. The bond swap would see private sector creditors take losses estimated at some 70%. "[A bond swap failure] could trigger a default, resulting in contagion and a crippling credit squeeze," warned Swiss precious metals refiner MKS on Wednesday. "When equities drop," adds one trader, speaking to newswire Reuters, "the pool of available funds for investing in commodities will shrink and gold will be in a bad position…gold is a very risky asset… when gold becomes volatile, it becomes much more volatile than currency or bond markets." The ECB's Governing Council decided to keep its main policy interest rate at 1% Thursday. "With energy prices rising, inflation is likely to stay above the 2% target throughout 2012," said ECB president Mario Draghi at today's press conference. "That's tying their hands on rates for now," reckons said Klaus Baader, London-based chief Euro-area economist at Societe Generale, speaking before the decision. Here in the UK, the Bank of England's Monetary Policy Committee today also voted to leave interest rates on hold, keeping them at 0.5%, where they have been since March 2009. The MPC left the size of its quantitative easing asset purchase program at £325 billion, after extending it by £50 billion at last month's meeting. "Businesses running final salary pensions are being clouted by QE," says Joanne Segars, chief executive of the UK's National Association of Pension Funds. "Deficits that were already big now look even bigger because of its artificial distortions." NAPF estimates that lower yields on government bonds have added £90 billion to Britain's pensions shortfall. BullionVault meantime calculates that the average British wage earner has seen the purchasing power of their income eroded by the equivalent of £1410 since QE began in March 2009. The US Federal Reserve meantime may now have too low a policy rate according to a long-standing monetary policy indicator, the latest commodities note from Standard Bank says. The Taylor Rule, which signals where the Fed funds rate should be given prevailing inflation and unemployment, is indicating the current policy rate is too low notes commodities strategist Walter de Wet. "Whether this is a bearish signal for precious metals in general and gold specifically depends on how the Fed reacts relative to what the Taylor Rule suggests," says De Wet. "Should the Fed start raising rates, it could mean a rise in real interest rates, which would be negative for investment demand. However, should the Fed keep rates lower than what the Taylor Rule would suggest, we believe that the bullish case for gold especially remains intact." The latest US Nonfarm payroll data, showing the number of private sector non-agricultural jobs added last month, are due to be released tomorrow. German industrial productivity meantime rose more than expected last month, climbing 1.6% from December, official figures published Thursday show. German politicians meantime are to review the Bundesbank's management the country's gold bullion reserves, much of which are vaulted abroad, following criticism of the central bank's inventory controls by the Federal Audit Office, German tabloid Bild reported Wednesday. Switzerland's central bank announced a 2011 profit of SFr 5.4 billion on its gold bullion holdings Friday. The Swiss National Bank's total profit for the year was SFr13.5 billion, following a SFr19.2 billion loss in 2010. Last September, following a period of Swiss Franc appreciation, the SNB announced it would peg its currency to the Euro at a rate of no lower than SFr1.20. Then SNB chairman Philipp Hildebrand stepped down in January after it emerged that his wife made a profit on a currency trade initiated before the peg announcement. Israel has asked the US to supply it with so-called bunker-busting bombs and refueling planes, which "could improve its ability to attack Iran's underground nuclear sites", Reuters reports. The size of the net long position of oil futures traders – which measures the difference between bullish and bearish contracts – "implies that we've already priced in a nine-month outage from Iran," reckons Citigroup oil analyst Tim Evans. Ben Traynor Gold value calculator | Buy gold online at live prices Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. (c) BullionVault 2011 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
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| Posted: 08 Mar 2012 04:40 AM PST As we go through the first significant pullback in the market for 2012, the dollar seems to be at a turning point that should influence market trends for the next few months. Going all the way back to 2002, there has been a strong inverse correlation between stocks and commodities, and the U.S. dollar. For the most part, the dollar has been falling during this period, which has helped drive cyclical bull markets in stocks and commodities. More recently, the stock market panic of 2008 and the first Euro crisis of 2010 drove significant countertrend rallies in the dollar, and corrections in stocks and commodities. Almost one year ago in April of last year the dollar put in another significant bottom and has been rallying ever since. The stock market and commodities suffered while the dollar moved higher in 2011, until the stock market put in a bottom in October. Since October, the dollar and stocks have been rallying together, and commodities finally put in a bottom in December 2011. And so far in 2012, we've seen a marginally lower dollar, and moves higher in stocks and commodities.
Now that we are at this pullback point in the market, the dollar clearly has a couple choices: 1) either go on to make new highs and most likely drive a deeper correction in stocks and commodities, or 2) fail to make new highs, and stoke a continued rally in stocks and commodities. Looking at a weekly chart of the dollar, from a Stage Analysis perspective the dollar is still rising above a rising 30-week moving average, which is bullish for the dollar. But momentum is clearly slowing to the upside, and both previous major rallies in the dollar failed when the TRIX momentum indicator rolled over to the downside on the weekly chart. Notice too that if the dollar rally were to fail here or close to here, each successive dollar rally since the panic in 2008 has carried less momentum to the upside.
Another upcoming test for the dollar is whether it can get back into "bull mode" according to the 14-day RSI. The 14-day RSI is used by some technicians as a bullish or bearish indicator depending on whether it oscillates in a 80-40 range (bullish) or 60-20 range (bearish). This essentially is a representation of the strength of the trend. In a market strongly trending higher overbought readings above 70 occur more frequently and oversold readings rarely get below 40. Conversely in a bearish trend the market typically can't get above 60 on a rally and spends more time oversold on the 14-day RSI with readings in the 20s or lower. On the current daily chart of the dollar you can see that the dollar was in bull mode up until the end of last year. But since then it hasn't been able to get back above 60 on the 14-day RSI. A failure to retake that level on the RSI would be another signal of a weakening dollar.
Going back multiple decades the 80 level on the dollar index has been a key level from a technical standpoint. Obviously the makeup of the dollar index has changed during this time period, but it would be pretty interesting if 80 held as resistance for the dollar here since support tends to turn into resistance once it is penetrated. There is also a confluence of resistance around the 85 level that repelled both the 2008 and 2010 dollar rallies.
Switching gears a little, it's often constructive to look at other markets to see if they provide corroborating evidence when formulating an opinion. Both of the charts of brent and west texas intermediate crude oil still look bullish, with recent breakouts on high volume. They both have also consolidated into tight flag patterns on the recent pullback.
Finally certain currencies such as the Australian dollar are trying to stay in "bull mode" with an upcoming test of the 40 level on the 14-day RSI. The Aussie is also poised to breakout to new highs if it can get back above 108 and stay above it.
Follow me on Twitter: @nextbigtrade The original article and much more can be found at: http://www.nextbigtrade.com The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.
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| Posted: 08 Mar 2012 03:58 AM PST With Gold's failure at $1800, it should be obvious that the market is in a protracted consolidation. This is actually similar to 2006-2007 and it is something we wrote about in a missive in early January. At the time, Gold had bottomed and had the luxury of very strong support nearby. We believed Gold would be range bound, but because it was emerging from support, it would have an upward bias. With Gold's failure at $1800, now we can say range-bound with a downward bias. Before we get to today, I wanted to look at the 2006-2007 consolidation once again. Note that Gold had a nice rally from point C to point D. After a more than 50 retracement, Gold rallied from point E to point F. The lows were clearly in but the consolidation continued for several more months. A similar pattern to 2006-2007 continues to unfold. If the pattern continues then Gold should bottom at point E, which is slightly above the 300-day moving average. The same happened in early 2007. Judging from the price action and moving averages, Gold should have very strong support at $1600-$1650. After a rip roaring two year period in which Gold advanced from about $950 to $1900, the metal is in consolidation and digestion mode. After strong advances a market needs time to attract new buyers and new demand. Profits are taken and resistance emerges. This is why and how a consolidation develops. Then the market moves back and forth between supply and demand. Gold has been consolidating for six months. That is hardly enough to digest a 24 month move. At a minimum, we'd expect three more months of consolidation and perhaps five. Fear not gold investor. You should appreciate these consolidations. They will make you a better investor. You will learn how to buy lows and not get excited near highs. Buying lows is exactly what you should focus on. Gold has strong support at $1600-$1650 and that is an area to accumulate. Make a short list of your favorite companies and evaluate potential high reward/risk target prices. Now is the time to focus on your favorites and get ready to buy. Not when the market is surging to new highs. If you'd be interested in professional guidance in this endeavour then we invite you to learn more about our service. Jordan Roy-Byrne, CMT
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| Inflation Ahead: Buy Gold or Buy Stocks? Posted: 08 Mar 2012 03:08 AM PST Inflation – everyone's worried about it. Central bankers worry there isn't enough, drivers worry there's way too much at the pump, and Wall Street's bag carriers worry they only see it in private-school fees, not in their pay packets. |
| ECB: gold and gold receivables remain unchanged Posted: 08 Mar 2012 02:50 AM PST |
| Posted: 08 Mar 2012 02:40 AM PST Sharp movements on little news. |
| Select Gold, Silver Mid Caps for Near-Term Action: Bo Chew Posted: 08 Mar 2012 01:44 AM PST |
| Asia Focuses on Gold’s Value and Buys Dip – West Focuses on Price and Sells Posted: 08 Mar 2012 01:36 AM PST |
| Jim Grant – Fed ‘Manhandling’ Markets Posted: 08 Mar 2012 01:17 AM PST Editor and publisher of Grant's Interest Rate Observer, Jim Grant says the U.S. Federal Reserve is "manhandling the structure of interest rates to the end of achieving what it takes to be desirable macro outcomes." Grant asks rhetorically: "By pressing down interest rates, by repressing interest rates, the Fed is in effect dulling the risk sensors of the entire marketplace. Is this good?" Asked about the Fed's latest trial balloon of "sterilizing" new bond purchases, Mr. Grant replies: "I am distinctly uncomforted, Kelly. The Fed is creating, if not inflation, it is creating distortions. What has the fed got against the price mechanism? It has gotten this country a long way over 200 years, suddenly, wherever the market sells off, we somehow have to have a fed interjection of money?" – Jim Grant Somehow we are not comforted by Grant's assertion that the U.S. is a "piker" compared to what the ECB is doing, but we agree wholeheartedly with his proposed solution - sound money. Much more in the video below. Worthy of sharing.
Source: CNBC |
| Morning Outlook from the Trade Desk 03/08/12 Posted: 08 Mar 2012 12:45 AM PST Was attending the PDAC in Toronto the last few days. Over 30,000 mining types invaded TO.. what a show it was! Here's a recap of my thoughts for the last two days: Yesterday... Hard to be excited . dealers tightening their spreads, Government Mints indicating low volumes, stock markets drop 200 points, its OVER. the market is finished. Everyone has left the party even the bartender is cleaning up. Still sitting on the couch sipping my diet coke. Its lonely, but I'll have a good view of the dance floor when the music begins again. Greek deadline for the debt swap is tomorrow, which continues to weigh on sentiment. Most have signed on but not everyone "yet." ADP numbers out this morning. Ironically bad numbers may be good for metals as it will be seen as a reason for more accommodation. Still in the camp that Global easing is in the cards for the balance of this year if not beyond, which underpins the metals. If you're a short term trader and missed the sell at resistance these markets will wear you down. The reasons to hold a percentage of metals in your portfolio have never been stronger. This morning... Fed looking at repos to add more liquidity. Europe happy with evolution of Greek debt swap. Equities up everywhere. Metals up. My diet coke is tasting better by the moment. |
| Loaded Guns and an Empty Fort Knox Posted: 08 Mar 2012 12:39 AM PST Loaded Guns and an Empty Fort Knox by Gary North Long article here: http://www.lewrockwell.com/north/north1102.html |
| Loaded Guns and an Empty Fort Knox, by Gary North Posted: 08 Mar 2012 12:38 AM PST http://www.lewrockwell.com/north/north1102.html All guns are loaded. Never forget this. I never knew my great uncle Gerald. That's because he was killed in an accident. His son shot him. Uncle Gerald was a hunter in Oregon. He had taught his son to regard every gun as loaded. He always was careful to unload his gun whenever he came in from hunting. But one day he forgot. His son, knowing that his father was meticulous about such things, for some reason pulled the trigger. In my household, I was taught that every gun is loaded until it is examined to see if it is unloaded. This is the #1 rule for gun safety. The reverse rule applies to every warehouse. Every officially full warehouse is empty until it is shown to be full. This is #1 rule for storage safety. FORT KNOX IS EMPTY This rule applies to Fort Knox, where the nation's gold is said to be stored. According to the United States Mint, which is officially in charge of the nation's gold, here are the facts. Amount of present gold holdings: 147.3 million ounces. The only gold removed has been very small quantities used to test the purity of gold during regularly scheduled audits. Except for these samples, no gold has been transferred to or from the Depository for many years. The gold is held as an asset of the United States at book value of $42.22 per ounce. The Depository opened in 1937; the first gold was moved to the depository in January that year. This ends the entry: "The Depository is a classified facility. No visitors are permitted, and no exceptions are made." We are assured that there are "regularly scheduled audits." By whom? Reported where? This is all that I have been able to find. In 1974, after the US closed the gold window, congressional support grew for inquiring into the US gold stock. The Mint and the GAO were sanctioned to audit a portion of the Treasury's gold. Three out of thirteen compartments at Fort Knox were audited for inventory and samples were assayed and compared to records currently held by the Mint. Following this partial audit the Treasury created the Committee for Continuing Audits of the United States Government-owned Gold in 1975 to annually inspect the accuracy and adequacy of the Mint's records and internal procedures. These inspections involved auditing about 10% of the US Mint's gold annually in an attempt to cycle through the whole gold stock. By 1986, the Treasury's Inspector General managed to halt the audits under the notion that most of the Mint's gold had already been audited, about 92%, and sealed and no significant issues were yet found. The costs of the procedures were also a stated concern in the halting of continuing audits. Since then, starting in the 90's under 31 U.S.C. 3515[2], the audits were mostly indirect efforts as the Mint's financial statements and Custodial Schedule are annually audited by public accountants at KPMG. There still existed some audit-work that was partially direct up until 2008 by the Treasury OIG as their annual assessments of the mint's Custodial Schedule statement included direct checks of statistical samples, using a 95% confidence criterion, to verify the number of gold bars in each melt, the melt number for each gold bar, and the fineness stamped on each gold bar. But what of the official annual audits of the Federal Reserve System, conducted by accounting firms hired by the Federal Reserve System and conducted under rules established by the FED? By 2008, the Treasury OIG proclaimed that all 42 of the Mint's gold compartments, or 100% of the Mint's gold, were audited and sealed. As a result, all audits since 2008 only involved checking that the joint seals remain intact. None of the audits by KPMG, GAO or the Treasury OIG include an inventory or assay of any of the 5% of the Treasury's total gold that is stored at the Federal Reserve Bank of New York, or the Treasury's working stock of gold. The extent to which the US Treasury attempts to verify their gold holdings in the Federal Reserve Bank of New York involves annually requesting a confirmation from the Federal Reserve regarding the status of US gold reserves held by the FRBNY. Furthermore none of the audits that occurred in the past fully assess the Treasury's compliance with outstanding legislation with regard to their use of their gold. Congress doesn't want to know the details of all this. It does not insist that the Government Accountability Office conduct an ongoing annual audit with random ingot testing. Why not? Congress doesn't say. Ron Paul has called for a full audit of the gold in Fort Knox. This has fallen on deaf ears. WHY NOT SELL IT? What does it matter whether the gold is there? It is kept on the books at $42.22 per ounce, an economically irrelevant figure. The gold is not redeemable. No one can present a legal claim to have a specified amount of gold delivered at a legally fixed price. It does not circulate. It is not sold or leased, we are assured by the Federal Reserve System. It just sits there, unused. It has no economic purpose. Why not sell it? What if the Mint minted it into American tenth-ounce gold eagle coins? American voters should demand that they, as citizens, be given the right to buy tenth-ounce American eagles at $42.22 per ounce. That would restore power to the people. It would also be a nice bonus for being an American citizen. You would have to have a proof of citizenship to order your coins at this price. The Mint sells these coins to wholesalers. I can visualize this late-night cable TV ad. Act now! The supply is limited! Only ten tenth-ounce coins for each American citizen. Call our toll-free number: 1-800-"BUYRELIC." Or go here: www.BarbarousRelics.com This would drive down gold's market price for a while, but not by much and not for long. It is generally estimated that all central banks hold less than 20% of all the mined gold. (http://bit.ly/GoldHoldings) The United States government's share of central bank gold is about 26% (http://bit.ly/GoldHoldingsCentralBanks) So, the US government holds 5% of the world's available gold. But it would take several years for the Mint to mint all of this gold into coins. So, the effect on the price of gold would be minimal and temporary. I favor the "for sale at $42.22 to Americans only" sales program. But what if the government just sold all of the gold at a fire sale in the available bars? Asians would rejoice. Americans would not buy much of it at a market price. Why would this damage the U.S. government? The gold is not held as a reserve for the money supply. The dollar's price domestically in goods and services is not tied in any way to gold. Why would this damage the American people? Most Americans own no gold. It would drop the price of gold for a time, harming present investors in gold. Why would that bother anyone inside the Washington Beltway? It would help gold users. It would help reduce the government's debt. The money generated could be used to pay off the federal debt. Unlikely? Then at least reduce the federal deficit. In short, why is there resistance to such a move? If gold is a barbarous relic, as John Maynard Keynes insisted, then why not transfer the confiscated gold back to the people who have good uses for it? ARE CENTRAL BANKERS IRRATIONAL? Central banks still hold gold, despite the fact that it pays no rate of interest – rather like U.S. Treasury bills today. The textbooks insist that such behavior is irrational. What is the reason for this seemingly irrational behavior? It gets even more irrational. Central banks are widely believed to lease (sell) their gold to profit-seeking large banks, called bullion banks, so that these banks can profit on the interest rate spread. The bullion banks keep billions of dollars of profits that central banks could have received by selling the gold and investing the currencies. This policy makes sense only on this presupposition: central banks are the operational agents of the largest commercial banks. Central banks are there to make money for bullion banks. Do central banks lease their gold in this way? It is hard to say. Gold is still held by central banks, at least officially. So, they may have leased it to bullion banks, but the textbooks never mention this possibility. Alan Greenspan did, but only once, and only briefly. "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise." The Federal Reserve has asserted that gold swaps are legal. See page 69. Central banks keep IOUs from bullion banks on the books as if the gold were there. The International Monetary Fund has authorized this form of accounting. In a series of emails between the Gold Anti-Trust Action Committee (GATA), the IMF representative admitted this in 2001. 4. Why does the IMF insist that members record swapped gold as an asset when a legal change in ownership has occurred? This is not correct: the IMF in fact recommends that swapped gold be excluded from reserve assets. (See Data Template on International Reserves and Foreign Currency Liquidity, Operational Guidelines, para. 72: http://dsbb.imf.org/guide.htm (The link which the IMF official supplied is no longer online at the IMF site.) So, it is possible that the gold in Fort Knox was swapped by the Federal Reserve to foreign central banks, which in turn leased the gold to private bullion banks at 1% per year or less, enabling those banks to sell the gold, get any currency, and invest it at six percent or more. If this seems far-fetched, consider the other reason for storing all that gold. GOLD IS NOT SO BARBAROUS AFTER ALL Central banks hold gold. Why? In every textbook used in colleges, whether Keynesian, monetarist, or public choice, we are given reasons why gold is not necessary or advisable as a monetary metal. The Party Line of the economics departments of all stripes is this: (1) central banking is not really a cartel, even though it looks like one; (2) every economy needs a central bank to protect the people from politicians, who would inflate; (3) gold is a liability as a monetary metal because it keeps central banks from inflating. The textbook Party Line is simple to summarize: "Central banking is reliable; politicians and the general public are not." Then why hold gold at all? Why not sell it and buy Treasury bills or bonds? Why not buy the bonds of lots of other nations? The bonds pay interest. Could it be because the economic return on these bonds is risky? Could it be that central bankers never did trust PIIGS debt. Could it be that they regard the long-term value of gold as more stable than the long-term value of other currencies? This would indicate that the experts in charge of monetary policy have adopted ideas not discussed in textbooks. 1. Gold is more reliable than fiat money. 2. Gold functions as money for central banks. 3. Gold is not a barbarous relic. 4. Central banks with gold reserves are trusted. 5. Gold is a symbol of central bank reliability. Any of these answers would apply just as well to a commercial bank. They would apply to private citizens. The textbooks ridicule such a suggestion. But the textbooks also avoid asking this question: "If gold is just another commodity, then why do central banks hold it as a legal reserve?" There is no gold redeemability. No central banks pay gold on demand to anyone, including other central banks. They did prior to August 1, 1914 (the start of World War I), but not today. What is it about central bankers? Have they lost their ability to think through the principles of economics that they were taught in America's best universities? Have they not adopted the logic of economics? It is clear that they have not bought into the textbook Party Line. Neither should anyone else. HOW TO EMPTY FORT KNOX If the gold is in Fort Knox, we should ask: "Why?" By the standards of modern economics textbooks, this hoard of gold is irrational. It is the holdover of pre-Keynesian, pre-monetarist economic theory. It is a barbarous relic – in the thinking of central bankers. The presence of gold in Fort Knox would testify to the fact that the senior central bankers of the most powerful nation on earth have never bought into the Party Line of the textbooks. Why did Nixon close the gold window in 1971? To preserve the remaining supply of the government's gold, or at least preserve the illusion of this gold. Why didn't he just let central banks buy all of it? At least the government would have gotten $42.22 per ounce. If voters want the gold in Fort Knox to stay in Fort Knox, then we should conclude one of three things: (1) they are economically irrational or ill-informed; (2) the textbook writers are economically irrational or ill-informed; (3) they haven't spotted a deal: buying gold at $42.22 per ounce. CONCLUSION It's time to sell tenth-ounce gold eagles to Americans at $42.22 per ounce. At $42.22 per ounce, a barbarous relic is a very good deal. I think Americans have better uses for the gold than the government does. If Fort Knox isn't empty, here is a great way to save all those storage fees. Soon. |
| ECB's 'Hands Are Tied' as Euro & UK Rates Unchanged Posted: 08 Mar 2012 12:31 AM PST Dollar prices to buy gold were struggling to stay above $1,700 an ounce Thursday lunchtime in London, following the latest monetary policy announcements from the Bank of England and European Central Bank. |
| How Germany could start a run on gold Posted: 08 Mar 2012 12:15 AM PST From Economic Policy Journal: German lawmakers are to review Bundesbank controls of and management of Germany's gold reserves. Parliament's Budget Committee will assess how the central bank manages its inventory of Germany's gold bullion bars that are believed to be stored not only in Frankfurt, but at locations outside Germany, according to German newspaper Bild. What's most interesting about all this is that Germans may follow in Hugo Chavez's footsteps and repatriate their gold to Germany so as to have direct possession of and ownership of their gold reserves. It's really the only way to protect a central bank's gold ownership, since by simply going in and asking the New York Fed to show Germany "their" gold, the Fed can walk them in and show them a pile of gold and tell them that it is theirs. The next day they can walk Chinese officials in and show the Chinese the exact same pile of gold and tell them that the gold is theirs. Possession is the only sure protection. Germany's huge gold reserves – 3,396.3 tonnes of gold are some 73.7% of Germany's national foreign exchange reserves, and are held not only in Germany but at the New York Fed, in London, and in Paris. Dumb. What kind of pressure will... Read full article... More on gold: Report suggests the "selloff" in gold could already be over Why you should prepare for extreme volatility in gold and silver "Dr. Doom" Marc Faber: The U.S. government will confiscate gold |
| Must-see interview with legendary advisor Jim Grant Posted: 08 Mar 2012 12:10 AM PST From Zero Hedge: Jim Grant is simply brilliant in this must-watch interview with CNBC's Maria Bartiromo, which we won't spoil with commentary, suffice to provide the following pearl of an exchange: Maria Bartiromo: "What are the alternatives?" Jim Grant: "Capitalism is an alternative for what we have now. I highly recommend it." Maria: "We all do." Grant: "No we don't..." Read full article... More from Jim Grant: Jim Grant: The world is abandoning the U.S. dollar Jim Grant: I'd give the Obama administration an F-minus Legendary advisor Jim Grant: Huge round of money-printing coming soon |
| Asia Focuses on Gold’s Value and Buys Dip Posted: 07 Mar 2012 11:56 PM PST Gold is gaining ahead of the Greek government's debt acceptance deadline and European interest rate decisions later today. Market participants expect that central banks will continue to maintain ultra-loose monetary policies to promote growth. |
| Iraq aims to increase gold production Posted: 07 Mar 2012 11:35 PM PST |
| Proof, Bullion and Specimen – What’s the Difference? Posted: 07 Mar 2012 11:31 PM PST Perth Mint Blog |
| Gold and silver prices encounter solid buying support Posted: 07 Mar 2012 10:30 PM PST The gold price has, as expected, encountered strong buying support on the recent forays below $1,700. Silver has again performed impressively after looking yesterday as though it might fall below ... |
| Posted: 07 Mar 2012 10:24 PM PST Fears Fed is Loaning German Gold Savings, Germany to Repatriate Reserves from GoldSilver.com:
Other central banks will follow Hugo Chavez's "mission accomplished" (detail here), and now Germany's footsteps in bringing home – repatriating – their gold, retaining direct possession of and therefore true ownership, not multiple paper promises of ownership (re-hypothecated). Read More @ GoldSilver.com |
| Switzerland Wants Its Gold Back Posted: 07 Mar 2012 10:19 PM PST From The New York Fed from ZeroHedge:
Read More @ ZeroHedge.com |
| LISTEN: Jim Rogers talks with Chris Waltzek Posted: 07 Mar 2012 10:03 PM PST
About Gold Seek Radio: More interviews @ radio.goldseek.com |
| Posted: 07 Mar 2012 09:55 PM PST Second Biggest Flare Of the Solar Cycle NASA (hat tip Lambert). Really cool, and it should be hitting just as I am composing this post. Nanotrees harvest the sun's energy to turn water into hydrogen fuel PhsyOrg (hat tip reader Robert M) Monsanto's Roundup Shown to be Ravaging Butterfly Population Nation of Change (hat tip reader furzy mouse) 'She was the mom next door': Banker who 'worked with Manhattan madam' defends woman accusing of making $10MILLION from selling call girls to the rich and famous Daily Mail (hat tip reader May S). Ooh, this trial could be fun. I've always wondered what the economics of a high end brothel were. How to completely, utterly destroy an employee's work life Washington Post (hat tip Lambert). Huh? This is the amateur version. Public humiliation is a much faster way to this end. U.S. Warns Apple, Publishers Wall Street Journal. Huh? This case strikes me as backwards. Amazon is selling below cost. That's generally called predatory pricing, since the only way it makes sense is if you kill enough of your competitors that you attain monopoly power. But instead it is going after the parties that tried to find a response. And before you tell me you want your cheaper e-books, authors need to be paid, and the pay for writing books sucked even before this race to the bottom. Facebook reveals 'fake' user accounts Financial Times. Lambert thinks 5% to 6% is low…. Lei Feng in the age of the microblog Danwei (hat tip Lambert) China offers other Brics renminbi loans Financial Times. Who with an operating brain cell would borrow money in a currency expected to appreciate (although it is possible the RMB will rise less than other BRICs currencies) Intractable Afghan Graft Hampering U.S. Strategy New York Times (hat tip Lambert and Mark H. who called it "Pravda Irony Alert") And by dint of synchronicity: Afghan Air Force Probed in Drug Running Wall Street Journal US will ensure Israel's "military superiority": Panetta Al Akbar (hat tip reader May S) Minimum wage to be frozen for 20-year-olds Independent Finally, Spain Paul Krugman Euro Crisis Fuels South Tyrolean Separatist Dreams Der Spiegel (hat tip Lambert) The Disruptive Rise of Niche Unions in Germany Der Spiegel (hat tip Lambert) U.S. sees Vatican as potential money laundering hub Raw Story Violence Stoked Fear to Fuel Putin's Strong-Arm Rise to Power: Book Review Bloomberg (hat tip Lambert). Quelle surprise! So, Eric Holder, we should just trust that the president won't assassinate us? Guardian (hat tip reader May S) The cost of America's police state Salon (hat tip reader May S) Congress Votes to End Protesters' Rights Alternet (hat tip reader furzy mouse) As Usage Rises, Libraries Struggle to Stay Open Atlantic (hat tip reader May S) Houston's County Joins Texas Suit Seeking $10 Billion From MERS, Banks Bloomberg (hat tip reader Paul T) Tax treatment of private equity: Questions over a quirk Financial Times 'Officers, Why Do You Have Your Guns Out?' New York Times (hat tip Damian) Not So Encouraging Michael Panzner 35 Shocking Statistics That Prove That Things Have Gotten Worse In America The American Dream (hat tip reader May S) Police: Kidnapped MoveOn.org Staffer's "Please Help" Emails Went Completely Ignored Onion (hat tip Lambert) Antidote du jour (hat tip reader Valissa):
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| Gold Forecast 2012: Gold Market Update Posted: 07 Mar 2012 09:54 PM PST Below, is an extract of my Gold Premium Update for 23 January 2012: Gold is at a "sweet spot" at a moment; pullbacks should be aggressively bought. It just needs a trigger to launch it for the most spectacular rally since the late 70's. I believe that trigger is likely to be the crash (or [...]  This posting includes an audio/video/photo media file: Download Now |
| Concerns in Germany About Its Gold at the NY Fed, London, and Paris; German Gold Off Limits Posted: 07 Mar 2012 09:26 PM PST |
| Agitation in Switzerland and Germany to Bring Their Gold Home From the U.S. Posted: 07 Mar 2012 09:06 PM PST ¤ Yesterday in Gold and SilverNot a lot happened in the gold market yesterday. It was quiet throughout all of the Far East trading day...and a smallish rally began just before 9:00 a.m. in London. That lasted until the London a.m. gold fix at 10:30 a.m. GMT...and then the gold price went into a quiet decline right up until a few minutes before 11:00 a.m. in New York. Then, in the space of about fifteen minutes, the gold price popped about ten bucks...and proceeded to trade sideways for the rest of the Comex trading session and the electronic session that followed. Gold closed at $1,684.30 spot...up $9.70 on the day. Gross volume was 187,610 contracts, but once all the roll-overs and spreads were netted out, net volume came in around 127,000 contracts...give or take.
It was virtually an identical chart pattern in silver...and at first glance the gold and silver charts look the same. Silver closed at $33.43 spot...up 48 cents on the day. Net volume was reasonably high at 38,000 contracts...but most would be of the useless HFT variety.
The dollar index didn't do much either...trading within a 15 basis point range of 79.75.
The standout feature on the HUI was that ten dollar price move in gold that began shortly before 11:00 a.m. Eastern time...as it certainly put a bid under the shares. But after that, nothing much happened...and the HUI finished virtually flat...up 0.09% on the day.
Despite the fact that silver had a decent day yesterday, the associated equities only outperformed their gold cousins by a small amount. Nick Laird's Silver Sentiment Index closed up 0.33% on the day.
(Click on image to enlarge) The CME's Daily Delivery Report was even less exciting on Wednesday than it was on Tuesday, as only 8 gold and zero silver contracts were posted for delivery on Friday. According to the CME's Daily Volume Report, there are only about 40 gold contracts left to deliver in March...along with about 475 silver contracts. There's no guarantee that all these contracts holder will take delivery, as they still have a way to get out of taking physical delivery, even though they stood for delivery on February 29th. So the rest of March could be pretty quiet on the delivery front. As I've said in the space several times over the years, no physical metal ever leaves the Comex-approved depositories on these CME deliveries...it just changes racks [and owners] in the warehouse. Sometimes they don't even change racks, as both Kyle Bass and Eric Sprott have said that quite a few of the bars they saw had little "Post-It" notes on them saying who the new owners are. How's that for high tech? There were no reported changes in either GLD or SLV yesterday, putting icing on the cake that the 5-day smack-down in the precious metals that started on February 29th, was all a Comex paper affair. The U.S. Mint had another tiny sales report. They sold 6,500 ounces of gold eagles...and that was the extent of it. Over at the Comex-approved depositories they did not report receiving a single ounce of silver on Tuesday. But they shipped out an eye-watering 3,172,266 troy ounces of the stuff...and 99% of that came out of Brink's, Inc. Here's the link to the action. It's this silver that comes and goes from the Comex-approved depositories that you should be watching...as this is the physical metal itself that's on the move. One has to wonder where this 3.17 million ounces of silver is going to end up...but it's obvious that its new [or existing] owner had a more urgent need for it elsewhere, or why go to the trouble [and expense] of moving it? Those ounces add up to just under five semi tractor-trailers full...and, depending on how those trucks have to be loaded, there could have been more than five. Silver analyst Ted Butler had his mid-week comments for his paying subscribers yesterday...and here are two free paragraphs... "Here's a head's up and preview of tomorrow's COT report. It promises to be significant because all of the high volume and vicious sell-off at this point occurred precisely within the reporting week. This is somewhat rare, as there is usually an overlap in big price moves over several reporting weeks. I don't remember such a sharp move in the past being so clearly confined in one reporting week. The collusive commercial crooks smacked the price of gold and silver starting last Wednesday (the first day of the reporting week) and kept the pressure on through yesterday's cut-off. I can't say that the deliberate price smash is over for sure, but it might be." "What I can say is that we should get big reductions in the speculative net long and commercial net short position in both gold (by tens of thousands of contracts) and silver (by many thousands of contracts). At least, that is my expectation. The real question will be how much the raptors bought in each market versus the big 4 and 8. I would think that JPMorgan should have been able to reduce its concentrated short position in silver down from 24,000 contracts, but by how much depends upon how much buying competition came from the raptors. At the very least, it should be an interesting COT report." Here's a zerohedge.com chart that Washington state reader S.A. sent my way yesterday. It shows the total OTC derivatives as of the end of June 2011. As you can see, they total a bit over $700 TRILLION. Soon the word 'quadrillion' will be dusted off for the first time...and it wasn't that very long ago that the trillion number first came on the scene...and as far as OTC derivatives are concerned, that number will soon pass into the history books.
(Click on image to enlarge) It was a reasonably quiet news day yesterday...and I've managed to edit the list down to what I believe is a manageable number. At these prices there are very few legitimate short sellers to be found in the precious metal markets Gold and silver smash-down only spurred buying of real metal, London trader says. Pat Heller: Liberty Dollar's von Not Haus did nothing wrong or unusual. Doug Casey on Cashless Societies. ¤ Critical ReadsSubscribeJim Grant: "Capitalism Is An Alternative For What We Have Now"This absolute must watch CNBC interview between Mr. Grant and Ms. Bartiromo is imbedded in this zerohedge.com story from yesterday. I thank reader Phil Barlett for sending it along...and the link to this 8:52 interview is here.  Jim Sinclair: Monetary doubletalk beyond MOPEMarket analyst and mining entrepreneur Jim Sinclair talked back to a news story apparently planted by the Federal Reserve to suggest that it can do and undo "quantitative easing" at the same time to cancel any inflationary implications of bond monetization. The Fed's story, Sinclair writes, "is total gobbledygook to deflect the fact that QE is going to infinity." Sinclair's commentary prefaces a MarketWatch.com account of the Fed-planted story, is headlined "Monetary Doubletalk Beyond MOPE" -- that's "Management Of Perspective Economics" -- and it's posted at JSMineSet.com website...and the link is here. I thank Chris Powell for providing the introduction.  Doug Casey on Cashless SocietiesThis week's edition of Conversations With Casey is well worth your time...and it starts out with the following question from Louis James: "Doug, we've had a lot of questions from readers about the apparent push governments are making to go to paperless currency - all electronic, no cash. Do you think that's likely, and what would be the implications?" Doug: I think it's probably inevitable. It's not just cash, but the whole world is becoming increasingly digital. Credit cards already work very well all around the world, and everyone in the world, it seems, will soon have a Smartphone - or at least everyone who might have any cash. But it's not just a question of evolving technology. Governments hate cash for lots of reasons, starting with the fact it costs a couple of cents to print a piece of paper currency, and they have to be replaced quite often. As the US has destroyed the value of the dollar, they've had to take the copper out of pennies, and soon they'll take the nickel out of nickels. Furthermore, with modern technology, counterfeiters - including unfriendly foreign governments - can turn out US currency that's almost indistinguishable from the real thing. And the stuff takes up a lot of space if it's enough to be of value. So sure, governments would like to get rid of tangible currency. They'd like to see all money kept in banks, which are today no more than arms of the state. But it's not so simple: increasing numbers of people trust neither banks - most of which are insolvent - or currencies - most of which are on their way to their intrinsic values. It's a long interview, but a must read in my opinion...and the link is here.  China boosts domestic security budget to face growing unrestChina will spend 111.4 billion dollars on public security, which includes police and state security forces, in the coming year — an amount that exceeds even the defense budget. This is according to a report presented by the Ministry of Finance on Monday, at the start of the annual session of the National People's Congress (NPC), the top legislative body. Military spending for 2012 was announced a day earlier at 106.4 billion, marking the second consecutive year in which the internal security budget has surpassed the outlay on national defense. The boost to internal security comes amid recent unrest in Tibet and Xinjiang. On Monday, a Tibetan teenager and a widowed mother of four were reported by overseas groups to have set themselves on fire to protest religious policies in Gansu and Sichuan provinces. At least 25 self-immolations by monks and nuns have been reported in the past year while Tibetans have clashed with police forces in Sichuan, resulting in the deployment of additional security across many Tibetan areas in western China. Xinjiang has also seen intermittent ethnic unrest, with at least 20 people killed in violence near Kashgar last month. Nothing terrifies the ruling elite in the Chinese communist party more than civil unrest, as everything starts to come unglued when the economy finally does implode. I thank Casey Research's own Louis James for sharing this article with us. It was posted over on the mercopress.com website on Tuesday...and the link is here.  China Moves To Further Marginalize Dollar: Offers CNY-Denominated BRIC LoansIn a further step confirming that China is rapidly encroaching on the "reserve" status of the sacrosanct USD, the FT writes that China intends to extend renminbi loans to other BRIC nations in "another step toward the internationalisation of its currency." To those following the stealthy Chinese incursion into currency markets as a dollar alternative, this is not news: already we know that China and Japan have bypassed the dollar entirely and now engage in direct bilateral trade using JPY and CNY (even as most other nations in Asia have developed bilateral agreements to transact in a non dollar basis). This is merely the latest incremental step which will see China become the dominant player in the currency arena, and further puts to doubt the fate of the US Dollar as the default currency. This zerohedge.com posting is another offering from Phil Barlett...and the link is here.  |
The German Federal Audit Office has criticized lax Bundesbank controls of and management of Germany's 3,396.3 tons in gold reserves. It is believed that some 60% of Germany's gold is stored outside of Germany and much of it in the Federal Reserve Bank of New York, to facilitate payment and trade, according to German newspaper 
Earlier today, 
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