Gold World News Flash |
- GOLD'S B-WAVE BOTTOM
- The Silver Reverse Bubble of 2012
- John Hathaway: Financial Repression to Continue Even Under the Most Optimistic Scenarios
- Gold Rally Fails Before 20 Day Average
- Reasons for Optimism on the U.S. Economy -- We're the King of the World!
- Gold Seeker Closing Report: Gold and Silver End Near Unchanged
- MF Global: The Untold Story of the Biggest Collapse Since Lehman - Reckless Disregard
- Gene Arensberg: The mining share gods must be crazy
- $1.6 billion in missing MF Global funds traced
- 'Real' trading in U.S. markets is down to 16 percent; the rest is machines
- Countdown to Comex Default
- The activists brought a huge inflated rat with dollar bills sticking out of a pocket, and held signs saying “99 percent take over, topple the 1 percent” and “Up with the people, down with the bankers.”
- “… The growth of gold as a collateral asset to debt-heavy markets is inevitably in the cards and is de-facto occurring. Gold is stepping up to the plate as ‘good’ collateral in a world of bad collateral. … What we are witnessing is a sea change
- Simon Black : Most Favorable Era For Gold Prices In Our Lifetime
- Asia To Deploy Stunning & Massive QE – Caesar Bryan -
- The Mining Share Gods Must be Crazy!
- Why Gold Is Still My Favorite Asset
- Missouri's Sound Money Bill
- Sinclair – Shorts Now Trapped & Gold Could Gap Up to $3,000
- After Apple, Three More Sells
- Governments Are To ?Blame? for Gold?s Present High ? and Future Much Higher ? Price
- The Gold Price Rose $11.10 to Close $1,643 Needs to Rise to $1,655 Awaiting FOMC Meeting Tomorrow
- Immigration and the Housing Quagmire
- Mexico, Russia, Turkey, Kazakhstan raised gold reserves in March
- Asia to join West with QE, Gabelli's Bryan tells King World News
- Will you help GATA spread the word in Asia?
- Caesar Bryan - Asia To Deploy Stunning & Massive QE
- China: GOLD IS MONEY
- Gold Daily and Silver Weekly Charts - Winding Winding...
- Gold chart and some comments
| Posted: 24 Apr 2012 06:16 PM PDT Over the last several days volatility in the gold market has collapsed forming what is known as a coil.  I think the Fed announcement tomorrow will probably break gold out of this holding pattern. But contrary to popular belief about 70% of the time the initial move out of a coil ends up being a false move that is reversed by a more powerful and durable move in the opposite direction. In this case if gold breaks lower out of the coil it is late enough in the intermediate cycle that the move be unlikely to last more than a few days before forming what would presumably be an intermediate cycle and B-Wave bottom.  I suspect many gold bugs are going to get knocked out of their position if this scenario plays out tomorrow. However if this does turn out to be a B-Wave bottom like I think it will, the next couple of days are going to be the single best buying opportunity for the rest of this secular bull market. That doesn't mean that gold will reverse and head straight up immediately. I expect we will probably see a volatile consolidation with several tests of the all-time highs above $1900 but no breakout for the rest of the summer.  Traders are going to be looking for the next trend once the stock market bottoms. I doubt that tech stocks are going to resume the leading role that they've enjoyed since last October. More likely liquidity will find its way into a beaten up sector. Like I always say, liquidity will eventually flow into undervalued assets. There is no sector as undervalued and as unloved as the mining stocks right now. Sentiment in this sector has reached levels of pessimism capable of generating triple digit returns over the next couple of years, and I wouldn't even be surprised to see a 25 - 50% gain during the next intermediate cycle alone. I think the next momentum move is about to begin in the sector most overlooked and least expected by investors, the mining stocks. For the rest of the week I will offer a $10 trial subscription for anyone who would like to sample the premium newsletter. Click here to link directly to the subscription page.       
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| The Silver Reverse Bubble of 2012 Posted: 24 Apr 2012 04:46 PM PDT by Paul Mladjenovic, SilverSeek.com
As you know by now, a "bubble" is when an asset reaches an unsustainably high level due to artificially stimulated demand. In 2004, I wrote that housing was entering a historic bubble because government policies such as excessively (artificially) cheap credit inflated the price of real estate to nose-bleed levels. The real estate mania was everywhere in 2004-2006 as buyers were going berserk.
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| John Hathaway: Financial Repression to Continue Even Under the Most Optimistic Scenarios Posted: 24 Apr 2012 04:45 PM PDT “In our view, monetary policy has been boxed in by previous actions, election year politics (and even more broadly by the dynamics of the contemporary state of democracy), and the slowdown in global forex accumulation. The result, we expect, will be a continuation of financial repression under the most optimistic of scenarios. At the very least, returns on liquid capital could remain negative for many years to come. Under such circumstances, demand for the protection offered by gold should remain strong. Should the presumed economic recovery falter, we anticipate that the calls for renewed QE will be deafening.” So says John Hathaway ([url]www.tocqueville.com[/url]) in an excerpt from an article, complete with eight excellent graphs,*that [COLOR=#0000ff]King World News has been given exclusive distribution rights to post.[/COLOR] Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) is pleased to provide you with*a link to the article where it can be read ...
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| Gold Rally Fails Before 20 Day Average Posted: 24 Apr 2012 04:30 PM PDT courtesy of DailyFX.com April 24, 2012 12:46 PM Daily Bars Prepared by Jamie Saettele, CMT “Price is testing a long term trendline that extends off of the 2008, 2010, and December 2011 lows. A break of such a well-defined trendline would signal a significant shift. The downside is favored below the April high of 1683.35.” A short term bear flag appears complete and price is pressured by the 20 day average. Bottom Line (next 5 days) – lower...
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| Reasons for Optimism on the U.S. Economy -- We're the King of the World! Posted: 24 Apr 2012 04:25 PM PDT  Putting aside the fact that conventional wisdom on the economy has generally been pessimistic for four years running; putting aside the competition among media commentators and journalists to be the first to call the next financial meltdown; and putting aside ideological trading patterns and media commentary designed to talk down the economy until the November election so as to hurt President Obama's re-election chances -- the facts show a solid case that the U.S. is now the best-positioned large scale economy in the world just now.Almost all commentators and journalists, of course, missed calling the 2007-2009 "Great Recession" much less the housing market and housing finance collapse that triggered it, so it's understandable that they would have bias toward predicting the next meltdown. And over the past three spring trading seasons we have heard plenty of worst case scenarios promoted as base case scenarios in order to qualify for the Cassandra Sweepstakes on cable TV. Greece was going to leave the Euro and have a disorderly default; Germany was going to get fed up and go back to the Deutschmark; the euro itself was going to fall in value to arithmetic parity with the U.S. dollar (it still stands at about 1.31 as this is written); then the U.S. was going to default; now its Spain, Italy, France! Read more........ 
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| Gold Seeker Closing Report: Gold and Silver End Near Unchanged Posted: 24 Apr 2012 04:00 PM PDT Gold climbed up to $1649.07 by a little after 10AM EST before it fell back off into the close, but it still ended with a gain of 0.18%. Silver rose to as high as $31.127 before it also fell back off midday and ended with a loss of 0.13%.
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| MF Global: The Untold Story of the Biggest Collapse Since Lehman - Reckless Disregard Posted: 24 Apr 2012 03:56 PM PDT |
| Gene Arensberg: The mining share gods must be crazy Posted: 24 Apr 2012 03:34 PM PDT 11:31p ET Tuesday, April 24, 2012 Dear Friend of GATA and Gold: Surveying the gold and silver mining shares again, the Got Gold Report's Gene Arensberg concludes cinematically that "the gods must be crazy." He concludes: "As we have said in the past and say again today, one of the best times to be adding shares of our faves is when the people selling no longer care about price." Arensberg's commentary, with a clip from the movie whose title he quotes, is posted at the Got Gold Report here: http://www.gotgoldreport.com/2012/04/the-mining-share-gods-must-be-crazy... 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 diversified pipeline of platinum nickel projects, including: -- 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... Join GATA here: Las Vegas Money Show Committee for Monetary Research and Education Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum New Orleans Investment Conference * * * 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
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| $1.6 billion in missing MF Global funds traced Posted: 24 Apr 2012 03:30 PM PDT by James O'Toole, CNN Money:
But just how much of those funds can be returned to the firm's clients, and who will be held responsible for their misappropriation, remains to be seen. James Giddens, the trustee overseeing the liquidation of MF Global Inc, told the Senate Banking Committee on Tuesday that his team's analysis of how the money went missing "is substantially concluded." "We can trace where the cash and securities in the firm went, and that we've done," Giddens said.
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| 'Real' trading in U.S. markets is down to 16 percent; the rest is machines Posted: 24 Apr 2012 03:29 PM PDT 'Real' Investors Eclipsed by Fast Trading By Telis Demos http://www.ft.com/intl/cms/s/0/da5d033c-8e1c-11e1-bf8f-00144feab49a.html NEW YORK -- Trading by "real" investors is taking up the smallest share of US stock market volumes in more than a decade, according to a recent study. The findings highlight how US trading activity is increasingly being fuelled by fast turnover of shares by independent firms and the market-making desks of brokerages, many using high-frequency trading engines. Though many argue that such trading lowers costs by narrowing spreads, critics insist that it makes it more difficult for institutional investors to trade larger positions, in turn fuelling a rise in the use of off-exchange "dark pools" and more complex algorithmic trading techniques. ... Dispatch continues below ... ADVERTISEMENT Golden Phoenix Discusses Royalty Mining Growth Strategy Golden Phoenix Minerals Inc. has discussed its royalty mining growth strategy on the Fox Business Network program "21st Century Business" with host Jackie Bales. Golden Phoenix's director of corporate communications, Robert Ian, told how the company narrows its focus to project generation and future royalty streams. He explained why Golden Phoenix believes it's better to own joint-venture interests in several producing mines instead of full exposure to just one project. "21st Century Business" has been airing for 15 years. Previous hosts have included Gen. Alexander Haig, Gen.l Norman Schwarzkopf, and Secretary of Defense Caspar Weinberger. Golden Phoenix appeared as paid programming on this broadcast. To view the program with Golden Phoenix, please visit Golden Phoenix's Internet site here: http://www.goldenphoenix.us/company-videos.html The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions, and brokerages, referred to as "real money" or institutional investors, accounted for just 16 per cent of total market volume in the form of buying, and 13 per cent via selling in the final quarter of last year, according to analysis by Morgan Stanley's Quantitative and Derivative Strategies group. That has fallen from an average of 27 per cent for institutional buys from 2001 to 2006, and 20 per cent for sells over the same period. The highs were at the beginning of 2001, as far back as Morgan Stanley's analysis goes, when buys and sells were some 35 per cent and 25 per cent, respectively. Morgan Stanley's analysts, Charles Crow and Simon Emrich, used 13-F filings, which are public disclosures of position changes by institutions, to measure the proportions. The analysts said that the data may be clouded by more rapid turnover by institutions, as a result of high market volatility, which does not necessarily show up in data reported at the end of the quarter. "Matching of 'real' buyers and sellers is more challenging in a market where there are fewer of them," they wrote. Though overall US trading volumes have risen since 2004, when average daily volumes were some 4 million trades, they have fallen in the past two years from their peak of 12 million at the end of 2009 to about 6 million. The share of stock trading taking place away from US exchanges also hit record levels in the first quarter of this year, at 34 per cent. Join GATA here: Las Vegas Money Show Committee for Monetary Research and Education Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Be Part of a Chance to Discover Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600.
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| Posted: 24 Apr 2012 03:21 PM PDT The Silver Door Is Closing
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| Posted: 24 Apr 2012 03:14 PM PDT Arrests as Occupy slams mortgage bankers in San Francisco
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| Posted: 24 Apr 2012 03:12 PM PDT Are markets arranging a de-facto return to the gold standard? The price to clear the global derivatives market and set the stage for a gold backed reserve currency is gold north of $10,000.
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| Simon Black : Most Favorable Era For Gold Prices In Our Lifetime Posted: 24 Apr 2012 01:50 PM PDT "Most Favorable Era For Gold Prices In Our... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
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| Asia To Deploy Stunning & Massive QE – Caesar Bryan - Posted: 24 Apr 2012 12:30 PM PDT from KingWorldNews:
With continued volatility in gold and silver, today King World News interviewed 25 year veteran Caesar Bryan. Gabelli & Company has over $31 billion under management and Caesar Bryan has managed the gold fund since its inception in 1994. Caesar told KWN that we are about to see massive QE from Asia. He also said investors should expect the rest of the central banks around the world to follow suit because none of them wants a strong currency. Here is what Caesar had to say about the situation: "Well, the actual gold price is holding up quite well. The backdrop for gold is solid. As an example, in Japan they have a meeting on Friday, the Bank of Japan does, and it seems they are setting themselves up for a stunning, major, new accommodative move." Caeser Bryan Continues @ KingWorldNews
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| The Mining Share Gods Must be Crazy! Posted: 24 Apr 2012 12:21 PM PDT HOUSTON -- From the Chart Book. The current market for junior miners and explorers reminds us of the 1980 South African comedy movie The Gods Must be Crazy. For anyone who has not had the pleasure of viewing that film, trust us when we say that it is the kind of movie that sticks with someone for life (in a good way). Just below is the trailer to the movie as a reminder to those who have seen the film. Those that haven't seen it ought to and it is widely available. Continued next page with movie trailer and our chart.
People who have seen the film understand instantly the metaphoric meaning of the phrase The Gods Must be Crazy – it means that there is something widely and horribly wrong but all hope is not lost. We might have a journey ahead of us though – before all is set right again and the gods are once again placated. Mining Share Gods Crazy? We present it as-is and it is more or less self-explanatory. With the CDNX pricing in something like $400 gold or less; with the HUI now answering the CDNX to the downside and pricing in something like $800 gold or less; and with a "towel storm" underway (as in lots of people throwing in the towel), darn if it doesn't feel like the mining share gods have gone crazy! As we have said in the past and say again today, one of the best times to be adding shares of our Faves is when the people selling no longer care about price. Have a good one. Gene Arensberg for Got Gold Report
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| Why Gold Is Still My Favorite Asset Posted: 24 Apr 2012 11:49 AM PDT by Detlev Schlichter, Whiskey and Gunpowder:
I hate to give personal investment advice. So please do me a favour and do not treat the following as investment advice. I am expressing my personal opinion here. I do so with honesty and conviction, without a personal agenda – I am not trying to sell you anything. Nobody knows what the future will bring. I don't know what will happen to the gold price in the next week, the next month or for the rest of this year. I don't even know what 2013 will bring. But please remember, neither do all the 'experts' out there who are much less squeamish about giving investment advice than I am. When you invest your wealth you are alone. You have to make up your own mind. And accept the consequences of your decisions. Read More @ WhiskeyAndGunpowder.com
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| Posted: 24 Apr 2012 11:41 AM PDT from Jesse's Café Américain:
Perhaps the good professor has never heard of Gresham's Law, or seen The Hunger Games. But it does fit my model that most economists' understanding of current economic events has a lag of about ten years. That is why so many of them missed the build up to the financial collapse. Read More @ JessesCrossRoadsCafe.Blogspot.com
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| Sinclair – Shorts Now Trapped & Gold Could Gap Up to $3,000 Posted: 24 Apr 2012 11:34 AM PDT from KingWorldNews:
On the heels of of the disclosure that China will buy oil from Iran using gold, legendary trader and investor, Jim Sinclair, told King World News that the massive paper gold shorts are now trapped and may see gold gap up to $3,000 if a vacuum in the physical market develops. Sinclair described this event as "historic." But first, here is what Sinclair had to say about the recent trading action in gold: "You have seen in the last month, a phenomena. If you have eyes in your head, you have to know when the gold banks enter into the gold market, offering more for sale than would be mined in the next five years, they are not in there to sell anything. They are in there to manipulate the price." "Mr. Gold" Jim Sinclair Continues @ KingWorldNews
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| Posted: 24 Apr 2012 11:09 AM PDT April 24, 2012 [LIST] [*]When the jobs are no longer there: Flood of immigration from Mexico dammed up [*]Housing time machine turned back five more months... while Social Security's doomsday is moved up three more years [*]After his "Sell Apple" call, Chris Mayer suggests three more things best kept out of your portfolio [*]Central banks take advantage of gold's pause to buy up more... [*]Well-traveled reader reinforces our warnings of a centuries-old conflict... a new volley fired on the "shut up about politics" front... the shocking volatility in a forgotten corner of the commodities market... and more! [/LIST] How bad is it in the United States these days? No one wants to come here from Mexico. "The largest wave of immigration in history from a single country to the United States has come to a standstill," says the Pew Hispanic Center. The researchers crunched numbers from both the U.S. and Mexican governments and concluded the northward flow of immigration ...
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| Governments Are To ?Blame? for Gold?s Present High ? and Future Much Higher ? Price Posted: 24 Apr 2012 10:36 AM PDT Is gold still cheap? No, gold left bargain territory long ago [but] we remain bullish on gold, not because we think gold is still cheap, but because we expect it to get a lot more expensive. [Why?] Because the world’s most important central banks and governments remain committed to a course that ends in catastrophe for their economies and currencies. [Let me explain further.] Words: 565 So says Steve Saville ([url]www.speculative-investor.com[/url]) in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has 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. Saville*goes on to say, in part: [To express it another way,] gold may well be expensive relative to the current economic backdrop but it is cheap relative to what the economic backdrop will be 5 years from now if the current policy course is mai...
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| The Gold Price Rose $11.10 to Close $1,643 Needs to Rise to $1,655 Awaiting FOMC Meeting Tomorrow Posted: 24 Apr 2012 10:20 AM PDT Gold Price Close Today : 1643.00 Change : 11.10 or 0.68% Silver Price Close Today : 3074.60 Change : 21.5 cents or 0.70% Gold Silver Ratio Today : 53.438 Change : -0.013 or -0.02% Silver Gold Ratio Today : 0.01871 Change : 0.000004 or 0.02% Platinum Price Close Today : 1542.90 Change : -13.40 or -0.86% Palladium Price Close Today : 665.00 Change : -5.75 or -0.86% S&P 500 : 1,371.97 Change : 5.03 or 0.37% Dow In GOLD$ : $163.58 Change : $ (0.15) or -0.09% Dow in GOLD oz : 7.913 Change : -0.007 or -0.09% Dow in SILVER oz : 422.87 Change : -0.54 or -0.13% Dow Industrial : 13,001.56 Change : 74.39 or 0.58% US Dollar Index : 79.37 Change : 0.180 or 0.23% The GOLD PRICE rose $11.10 today to $1,643 and the SILVER PRICE rose 21.5 cents to 3074.6 cents. Truth is, this doesn't tell us very much. Yes, both the silver and GOLD PRICE left behind little spike bottoms yesterday, but without a rise above 3140c in silver or $1,655 in gold, nothing is resolved. And hanging over the market like a big question mark is the FOMC meeting tomorrow. Only my opinion, but yesterday may have taken the silver and GOLD PRICE down as low as they will go. Too early to tell yet, but likely. If it wasn't for bad economic news, there wouldn't be any news at all. Case-Shiller home price index today recorded housing prices declined 3.5% from a year earlier. Home prices haven't been this low since November 2002. But I reckon this is still the best of all possible economies. More confusion is added because the Great Ones of the Federal Open Market Committee meet tomorrow, and none of the tea-leaf readers know exactly which they will jump. If they sound tough on inflation (no QE for you, Bad America!) then the dollar will rise and stocks and metals will suffer. If they sound easy on inflation (Buck up, America -- we have more monetary meth for you!) then the dollar will suffer and stocks and metals should rise. So ridiculous as it is, markets await the pronouncements of 17 people who don't know any more than the rest of us, but have their hands on the monetary spigot forbidden to the rest of us. That means the dollar is key to where markets move next. The dollar since November 2011 has been trading into a long even- sided triangle. It sitteth square upon the bottom boundary thereof, and should it break that limit, should fall clean to the 200 day moving average (77.88). However, the dollar remains - by the hair on its green paper chin -- in an uptrend. That means the market is biased in favor of an upward outcome. Truth to tell, I watch these events and can seldom parse how the public and the Wise Ones Commenting will take the Fed's moves. I'd have as much luck trying to parse a Roman haruspex reading the guts of sacrificed sheep. None of it makes a lick of sense. That's why I fall back on the fundamental set up of government and fed, where the institutional imperative is "Inflate or die!" Never mind what soothing words they drool, they most assuredly will inflate, sooner or later. Back to currencies. Yen today dropped 0.2% to 122.96c/Y100 (Y81.33/US$1). It stands above its 50 DMA and 20 DMA, but with a gappy, jumpy pattern that makes little sense. Resembles recent pointless trading in the euro. Euro rose 0.32% today to $1.3197. This is a likely time for the Nice Government Men to manipulate the bejabbers out of the market, given the skittishness in Europe and woes in Japan. Dow Jones Industrial Average closed over 13,000 today -- just barely, at 13,001.56, up 74.39 or 0.58%. S&P500 rose 5.03 (0.37%) to 1,371.97. Dow's five day pattern is directionless to weak, up and down but blocked by 13,100 the way Kryptonite blocks Superman. S&P500 looks about the same, but weaker still. Stocks are ready to fall off a cliff, unless some central bank deus ex machina saves them. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't. 
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| Immigration and the Housing Quagmire Posted: 24 Apr 2012 10:02 AM PDT Wolf Richter www.testosteronepit.com Pundits who announced the imminent turnaround in housing over the last few years have been disappointed once again by the S&P/Case-Shiller 20-city composite for February which declined 0.8% from January and 3.5% from last year—despite a historically warm winter. The composite has fallen past the low point of the financial crisis to a level last seen in October 2002. Since that time, inflation as measured by headline CPI has eaten up another 27% (CPI calculator), which would take the composite back to the 1990s on an inflation adjusted basis. Seasonal upticks in home values are likely as are upticks in areas with unique economic conditions—Silicon Valley with an IPO bubble, for example. Yet a long-term recovery is unlikely until a fundamental part of the housing market has healed: vacant inventory. The housing bubble construction boom, which peaked in January 2006 with 2.3 million housing starts (annual rate), left behind a housing glut. How many vacant homes there were remains uncertain. The Census Bureau counted 18.8 million units in 2009. Others estimated it at 11 million units. Whatever the number, new housing construction, though it adds to GDP, simply knocks back the healing process. For that conundrum, read.... Construction Spending And The Housing Quagmire. And home sales are just noise. Someone who buys a home and sells the old one, then moves, triggers two transactions. But the move vacated the old home. Hence, a zero-sum event for vacant inventory. Only household formation can mop that up. But household formation has been slow. Even though it recovered a bit in 2011, only 600,000 households were formed, a far cry from a range of one to two million a year in prior decades. Studies blame demographic changes, including the growth of multi-generational households—in part the result of economic hardship. Then there are the college graduates, the very generation we’re counting on to mop up the vacant inventory. But they may not buy a home for a long time as skyrocketing tuition has saddled them with mountains of student loans. Read.... Next: Bankruptcy for a whole Generation. And there is another trend that contributed significantly to household formation before and during the housing bubble. But now, it has reversed—according to the Pew Research Center, whose report, released yesterday, doesn’t beat around the bush:
According to the report, Mexican immigrants make up 30% of all immigrants living in the US—and 58% of illegal immigrants. The second largest group, Chinese immigrants (including Hong Kong and Taiwan) amount to only 5% of all immigrants. Of the estimated 11.2 million illegal immigrants living in the US last year, 6.1 million were from Mexico. But that's down from 7 million in 2007. Legal immigrants from Mexico rose slightly from 5.6 million in 2007 to 5.8 million in 2011. Net effect: 700,000 fewer Mexican immigrants (legal and illegal) in the US. The report points at a number of factors, including the collapse of housing construction where many Mexicans worked. Thus, household formation from Mexican immigrants, after decades of explosive growth—which created demand mostly at the lower end of the housing spectrum—has reversed and is now contributing to vacant inventory. But, but.... The US remains by far the most desired country, according to Gallup, which once again excelled in reading the minds of people from around the world. While immigration from Mexico is on the wane, 150 million adults worldwide still dream the American Dream and would still like to move to the US. That’s 1 in 30 adults! By contrast, 45 million people would like to move to the second most desired country, the UK, 42 million to Canada, 32 million to France, and 31 million, yes, to Saudi Arabia. Only 6 million people would like to move to Russia. However nervous these astounding numbers may make us, it’s good to know that the US is still and by far the most desired country in the world. So, with the housing market not allowing for much optimism, I will end on a cheerier note, and with a truly American phenomenon: scrappy outfits going after multinational and foreign giants in the utterly morose beer industry. For the astounding fight of the winners, read.... The Beer War on American Soil.
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| Mexico, Russia, Turkey, Kazakhstan raised gold reserves in March Posted: 24 Apr 2012 09:53 AM PDT By Nicholas Larkin http://www.bloomberg.com/news/2012-04-24/mexico-raised-gold-reserves-in-... LONDON -- Mexico added 16.8 metric tons of gold valued at about $906.4 million to its reserves in March as nations including Turkey, Russia, and Kazakhstan increased their holdings of the metal, International Monetary Fund data show. Mexico raised its reserves to 122.6 tons last month when gold averaged $1,676.67 an ounce, data on the IMF's website showed. Turkey added 11.5 tons, Kazakhstan 4.3 tons, Ukraine 1.2 tons, Tajikistan 0.4 ton, and Belarus 0.1 ton, according to the IMF. The data shows Russia boosted gold reserves by about 16.5 tons after its central bank said on April 20 they were higher. The Czech Republic reduced bullion reserves by 0.1 ton. Central banks are expanding reserves after the metal climbed the past 11 years and holdings in exchange-traded products are about 0.7 percent below last month's all-time high. The banks added 439.7 tons last year, the most in almost five decades, and may buy a similar amount in 2012, the London-based World Gold Council estimates. Gold reached a record $1,921.15 in September. ... Dispatch continues below ... 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. "We expect that the recent trend of the official sector being a net buyer will continue in the medium and long term," said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. "Gold will continue to be a preferred central bank reserve asset. It is currency protection and stabilization." Gold for immediate delivery traded at $1,637.50 by 8:27 a.m. in London for a 4.7 percent gain this year. The Standard & Poor's GSCI gauge of 24 commodities climbed 4.6 percent and MSCI All-Country World Index of equities rose 7.5 percent. Treasuries rose 0.2 percent, a Bank of America Corp. index shows. Turkey's central bank increased the proportion of required reserves that commercial banks can deposit in gold last year. The changes have increased the amount of bullion the country, which owns 209.6 tons, declares in its official reserves. Russia cut its holding in February for the first time in five years. Its reserves are at about 895.7 tons, the IMF data show. Gold accounts for about 3.9 percent of Mexico's total reserves and 9.7 percent of Russias, according to the World Gold Council. That compares with more than 70 percent for the U.S. and Germany, the biggest bullion holders, the data show. Join GATA here: Las Vegas Money Show Committee for Monetary Research and Education Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum New Orleans Investment Conference * * * 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
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| Asia to join West with QE, Gabelli's Bryan tells King World News Posted: 24 Apr 2012 09:42 AM PDT 5:38p ET Tuesday, April 24, 2012 Dear Friend of GATA and Gold: Gabelli Gold Fund manager Caesar Bryan today tells King World News that massive money creation will soon come out of Asia even as it will continue in Europe and likely resume in the United States as well. Bryan notes that central banks are buying gold and he expects that to continue. Disappointing as the performance of gold mining shares has been, Bryan is for sticking with them. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/24_Ca... CHRIS POWELL, Secretary/Treasurer 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. Join GATA here: Las Vegas Money Show Committee for Monetary Research and Education Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum New Orleans Investment Conference * * * 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
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| Will you help GATA spread the word in Asia? Posted: 24 Apr 2012 09:13 AM PDT 5:18p ET Tuesday, April 24, 2012 Dear Friend of GATA and Gold: GATA plans a month of secular missionary work in Asia in June, as your secretary/treasurer will speak at the Standard Chartered and Beacon Events financial conferences in Hong Kong -- http://www.standardcharteredsignatureevents.com/earths-resources/welcome... http://www.hkgoldinvestmentforum.com/ -- and has been booked for a live interview on a major television network, among other appearances. We're especially hopeful about the prospects in Asia since audiences and news organizations there are open-minded or even sympathetic in regard to gold while Western audiences tend to be clueless and most Western news organizations are as devoted to suppressing the gold story as Western central banks are devoted to rigging the gold market. And, of course, Asia, with its foreign-exchange surpluses, is where most gold buying and most gold-buying potential are. But GATA's expedition will involve much travel and lodging expense, and GATA hasn't done much to build up its treasury in the last few months. So if you think we're advancing the cause of free and transparent markets in the monetary metals and agree that some strong blows in support of that cause can be struck in Asia, please consider helping us financially now, especially if you have not done so before. The World Gold Council is said to have an annual budget of more than $60 million drawn from assesments against a few major mining companies, and for all that money the council does little more than redistribute misinformation supplied by central banks and proclaim how nice gold jewelry looks on slinky fashion models, as if we didn't know that already and as if those models might not look good without any jewelry at all. By contrast GATA manages with whatever is provided by those few people around the world who aren't afraid to risk being on the wrong side of central banks. If we could raise about $20,000, the cost of our Asian expedition might be covered. If you're inclined to help, please visit our donation information page here: 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 diversified pipeline of platinum nickel projects, including: -- 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... Join GATA here: Las Vegas Money Show Committee for Monetary Research and Education Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum New Orleans Investment Conference * * * 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
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| Caesar Bryan - Asia To Deploy Stunning & Massive QE Posted: 24 Apr 2012 08:38 AM PDT  With continued volatility in gold and silver, today King World News interviewed 25 year veteran Caesar Bryan. Gabelli & Company has over $31 billion under management and Caesar Bryan has managed the gold fund since its inception in 1994. Caesar told KWN that we are about to see massive QE from Asia. He also said investors should expect the rest of the central banks around the world to follow suit because none of them wants a strong currency. Here is what Caesar had to say about the situation: "Well, the actual gold price is holding up quite well. The backdrop for gold is solid. As an example, in Japan they have a meeting on Friday, the Bank of Japan does, and it seems they are setting themselves up for a stunning, major, new accommodative move."
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| Posted: 24 Apr 2012 08:25 AM PDT "Gold is officially replacing the US dollar June 28th. The cat is out of the bag." -Jim Sinclair, April 23, 2012 I have a question for Ben Bernanke. What if Gold really is money? From Dave In Denver, The Golden Truth The Gold Standard Shuffle What we are witnessing is a sea change in which market forces are driving a de facto return to the gold standard. All that is missing for this to be a de jure gold standard is some regulatory and legal recognition and one has been proposed. The Basel Committee for Bank Supervision, the maker of global capital requirements is studying making gold a bank capital Tier 1 asset. - Professor Lew Spellman, University of Texas from The Spellman Report (link below). The source of that quote is a must-read essay written by Lew Spellman, who is a professor of finance at the University of Texas of business school. He has also served as Assistant to the Chairman of the President's Council of Economic Advisors and as an economist at the Federal Reserve. It is the latter two prestigious roles which make it both surprising that Professor Spellman would have written this essay and, yet at the same, thereby reinforces its validity. You will not find this piece mentioned in ANY mainstream media news source in this country. Spellman lays out the case for for the subtle, systemic manner in which gold is slowly creeping back into use by the banking system as an asset being used to back paper currencies and financing transactions. Those of us who study the precious metals markets on a daily basis, in the context of the overall global financial system, have been pointing to this dynamic for a while now. For instance, Spellman links the announcement in which the Basel Committee is studying making gold a Tier 1 banking asset. This was announced several months ago and remarked upon widely in the precious metals community. I doubt anyone's financial adviser called them up to point this out. The market, along with the massive Central Bank accumulation of gold by China, Russia and several of China's strategic allies - like the other BRIC countries - is starting to force this transformation. I say "the market" because most of the collateral that has been pledged to secure paper financial transactions has been pledged/rehyopothecated (see MF Global, Lehman, Madoff). This is especially true in the repo market where sovereign paper/Treasuries was historically the only asset to be used. Now Central Banks have stretched the range of credibility and extended collateral status to everything except the Brooklyn Bridge (who knows how many times that's been rehypothecated...). The last man standing is gold and it is being forced by the market back into the system as a paper anchor by necessity. Eventually gold will remain as the bastion of "flight to safety" because of its ultimate utility for that purpose. Everyone needs to read this essay and make sure they understand what is happening and why. Here's the LINK For me, this essay has "seminal" status because it was written by a former "insider" to elite circles - the elite circles which constantly denigrate and revile gold - and because it will likely expose a wider circle of market observers to a systemic dynamic that is taking place with little or no acknowledgement by 99.5% of all market participants. _______________________ Maybe Ben Bernanke knows Gold is money, but is afraid to admit it. I hope Mr. Spellman sent him a copy of his post below. Gold just may be the ONLY REAL MONEY we have left. Warren Buffet and the New Calculus of Gold There has long been a disconnect between gold and institutional investors. The instincts of these managers of large sums are typically tied to the generation of cash flows to feed the monster — that is, the institution's cash flow needs. Alternative emphasis is given to growth, especially if obligations are long duration and not fixed. This is usually true for pension funds, endowments, some insurance companies or individuals investing for retirement. For these investors, the preferred investment habitat tends to be a blend of income-generating fixed income and equity type investments that are thought to contain the potential for growth. Because gold, as an investment class, provides neither steady income nor systematic growth, it succeeds in only providing emotional discomfort for these investors. Warren Buffet's recent article in Fortune is a reflection of this sentiment. First on the list of asset categories to consider are bonds or, more generally, fixed income. His analysis is instructive. From his point of view, over the relevant time frame of the 47 years he has been at the helm of Berkshire Hathaway, continuous rolling short term Treasuries bills would have averaged 5.7% annually. But if an investor paid income taxes at a rate averaging 25%, the return is reduced by 1.4 points. Buffet then goes on to point out that the return is then further reduced in real terms by the invisible inflation "tax" which would have devoured the remaining 4.3%. Hence rolling short-term Treasuries would have yielded nothing in real terms. If one held long maturity Treasuries over this period — which included 30 years of general Treasury bond price appreciation — the investment outcome is questionable if you take into account the declining purchasing power of goods in U.S. dollar terms. It is even worse when compared to a market basket of goods from around the world. In Buffett's terms, fixed-dollar investments have fallen a staggering 86% in real dollar value since 1965 during his tenure at Berkshire Hathaway. He points out that today it takes no less than $7 to buy what $1 did when he arrived in Omaha. He concludes with the recommendation that fixed dollar income investments should come with warning labels advising you that they're bad for your financial health. What if contractual steady income doesn't perform well? Asset categories outside the normal preferred habitat need to be examined. That's where gold comes in, especially considering that for the first time in our monetary history the central bank has adopted positive inflation as a policy goal. Nonetheless, the institutional sale is a hard one, not just because it's not been a member of the preferred habitat, but according to Buffet it has other fatal defects. After conceding in a backhanded way that gold has performed well, with reference to its near $10 trillion in market capitalization, he argues that it doesn't qualify to be in his preferred investment habitat because it doesn't produce a growing revenue stream — and if it doesn't grow, it doesn't compound. Rather, he states that his preference would be to employ his capital with growth commodities such as farmland or businesses that will continue to grow its bread-and-butter capacity that can be sold in real terms. That is to say, he rejects gold because it doesn't produce gold sprouts. Gold is just inert, lying in neatly stacked bars in a subterranean vault. It has but limited use in electronics, jewelry, dentistry and few other applications. Buffett then goes on to compare the rising price of the sprout-less gold to a Ponzi scheme, which depends upon finding a bigger fool to pay yet a higher price for the same subterranean inert matter. This is apparently proving easier to do by the day as the developed world continues to run outsized fiscal deficits and then compels its central banks to purchase its paper. Instead, Buffett prefers investments such as Coca-Cola or See's Candy, which have the ability to sell more candy in the future at the prevailing price level as a means to produce real growth. That's where I depart from the Sage of Omaha. While not arguing with the ability of See's Candy to deliver and the American sweet tooth to be unaffected by the growing concerns for obesity, I believe he fails to see the new product that gold represents and its growing sales potential. This is "the new calculus of gold." In a wealth-accumulating economy there is always demand for an ultimate store of value for wealth preservation. In finance terms, there is always a demand for some asset for which an investor takes no default risk, nor inflation risk, and can be obtained and sold on liquid markets. For decades, U.S. Treasury debt took over from gold as the market's preferred store of value. Treasury bonds mythically had no default risk and little inflation risk when central banks were not under pressure to be concerned about unemployment, lending to insolvent banks, or propping up the value of government debt. Moreover, U.S. dollar-denominated Treasuries served not only as the store of value but also sprouted interest payments. But all that has changed, perhaps not forever but likely for the next four decades, as developed world democratic governments will be under pressure from their constituents to make good on the social contracts of social security and comprehensive health care to the bulging baby boomer population. And, if need be, they will recapture the central banks (by legislative changes if necessary) if they fail to support U.S. Treasury prices. Given the debt and monetary growth ramifications of these pressures, investors will seek an alternative embodiment of a store of value other than fixed dollar denominated assets, especially sovereigns. With all other developed countries in similar straits and emerging market countries exposed to inflation generation from developed country central banks, their currencies and sovereigns also fail to qualify. Hence, gold has reemerged to play the role of the store of value, despite its sprout-less property. Sprouts are the icing on the cake but not the cake itself — and many gold admirers remember Mark Twain's old saw: 'I am more concerned with the return of my money than the return on my money.' The New Calculus of Gold has much more to its story than merely the market-designated good for inflation and default protection, with or without sprouts. We are at a historic point in time when both consumer and government debt have grown dramatically relative to income, which is our underlying economic problem (See Roadblocks to Recovery: An Interview with Dr. Lacy Hunt). In the great debt run-up of the last few decades, lenders or bond investors underwrote debt or loans based on either the borrower's cash flow to service the debt or based on the borrower's collateral, or both. But debt has a maturity, and when the maturity is reached, borrowers seek to go back to the well and roll the debt over. From the easy lending days of the turn of the 21st century, the value of what has traditionally been accepted by the lender as good collateral has declined in market value as well as market esteem. That includes residential houses and commercial real estate for mortgages, mortgages for mortgage-backed securities, and mortgage-backed securities for CDOs. Even government securities and guarantees have been questioned especially from abroad when collateral value is set by the credit rating of the collateral. By that measure even U.S. Treasuries and government guarantees fail the test of good collateral given rating downgrades. Hence, the great corollary of over indebtedness is the relative scarcity of good collateral to support the debt load outstanding. This imbalance of debt to collateral is impacting the ability of banks to make loans to their customers, for central banks to make loans to commercial banks, and for shadow banks to be funded by the overnight Repo market. Hence the growth of gold as a collateral asset to debt heavy markets is inevitably in the cards and is de facto occurring. Gold is stepping up to the plate as "good" collateral in a world of bad collateral. As described in the accompanying news story (J.P. Morgan to Accept Gold as Collateral), gold is now being accepted (or more likely demanded) as collateral for bank loans, which increases the demand for gold. Furthermore the scarcity of collateral has spread to Europe, where debt is now being priced according to the value of its collateral, and clearing houses are accepting gold as collateral and for exchange settlement. Furthermore in this environment of collateral scarcity, clearing houses that service the shadow banking repo loan closures are closing loans despite the arrival of the collateral (prosaically called settlement fails) but it doesn't stop the loan from being closed without any collateral, either good or bad and is now causing a regulatory backlash to tighten up actual collateral. In addition to the demand for gold as collateral to back private debt, there are growing instances of commercial banks and central banks stocking up on gold as assets to meet the perception of depositors that banks or currencies are financially healthy. In this regard there is a shifting of foreign exchange reserves of world central banks away from foreign currency (dollars) into gold as shown in the Figure.  Most importantly, China, in its not so secret desire for the Yuan to be a world reserve currency, is accumulating domestically produced gold as it bans exportation, and at the same time it is shifting its foreign exchange reserves from currency into gold. If the Yuan has a chance to have reserve currency status it likely would require gold backing. A gold-backed Yuan would make a big dent in the U.S. market for the dollar and Treasuries as the world's store of value asset. A gold-backed Yuan would be the equivalent of gold certificates in a warehouse and denominated in a currency that would be on the upswing and very desirable as compared to developed country sovereigns or currency. It might even be more appealing than gold certificates stored in a Swiss warehouse, denominated in a currency that is not allowed by its central bank to appreciate.We have entered an environment with elevated debt to collateral and elevated currency to goods, and gold is again demanded by market forces to enhance the value of debt paper and otherwise fiat currency. What we are witnessing is a sea change in which market forces are driving a de facto return to the gold standard. All that is missing for this to be a de jure gold standard is some regulatory and legal recognition and one has been proposed. The Basel Committee for Bank Supervision, the maker of global capital requirements is studying making gold a bank capital Tier 1 asset. This implies banks would be regulatory blessed to operate with less equity capital than is normally required of banks if they held more gold as an asset. Basically, regulators would allow banks to be more leveraged, meaning the banks would not suffer as much equity dilution to recapitalize after sovereign and mortgage write downs. Not only would gold then be backstopping debt and currency but also be backstopping bank equity capital. So the realm of gold is expanding to fill the void of other "money good" assets and elevating its demand. The world has gravitated from one gold-backed paper currency to another before, and it likely is happening again. It would depend on whether investors in liquid, default-free, inflation-free paper prefer gold-backed Chinese Yuan to Swiss warehouse receipts or deposits from large international banks with large gold positions that operate with lots of leverage. This is a market choice that will determine the gold linked paper store of value, but the point is that all the paper contenders derive value from the gold backing, and thereby expands the demand for the shiny metal. This is the new calculus of gold. This state of affairs is likely to remain until developed world governments no longer reach for the unreachable and pressure their central banks to finance it. If you enjoy this blog, please forward it to others who may be interested. _______________________ Clearly Ben, Gold has been and will soon again be MONEY. In many ways the entire WORLD can thank you, Ben, for returning Gold to it's rightful place as an "honest" store of value and the lone insurance mechanism of wealth. Ben, those IOUs you call Federal Reserve Notes have been hoot. It's been all fun and games... until now. What happens when all that paper money of yours falls into the "abyss of worthlessness"? Guest Post: What Happens When All The Money Vanishes Into Thin Air? From ZeroHedge It's easy to expand the money supply and difficult to expand the actual production of real goods in the real world. Expanding the money supply and issuing debt that lacks collateral is just like printing quatloos on the desert island: you can print a million quatloos but that doesn't create a single additional coconut. If you print enough quatloos, then people will no longer accept them in exchange for coconuts. You will actually need a real coconut to exchange for fish. This is why Greek towns are reportedly reverting to barter, the exchange of real goods for other real goods. We can anticipate that silver and gold will soon enter the barter as means of exchange that can't be counterfeited or printed by wise-guys (central bankers).This is what happens when abstract representations, i.e. "money," vanish into thin air. Alternative systems of exchanging goods and services arise: actual goods are exchanged via barter, tangible concentrations of value that cannot be counterfeited such as gold and silver are used as a means of exchange, letters of credit or equivalent are traded and settled with tangible goods or gold/silver, and eventually, a means of exchange ("money") that is backed by tangible goods in the real world that can be trusted to actually represent the value being traded might enter the market. That which is phantom will vanish into thin air, while the real goods and services remain to be traded in the real world. Please read more _______________________ Jeepers Ben! What will happen if all your "money" vanishes into thin air? How will people buy the things they NEED? Like energy for instance. Could they possible buy Oil with Gold instead of your "money"? The Best Reason in the World to Buy Gold By Gordon G. Chang Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China's imports of the metal are already large, and you can guess what additional purchases are going to do to prices. On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012. The NDAA, as it is called, attempts to reduce Iran's revenue from the sale of petroleum by imposing sanctions on foreign financial institutions conducting transactions with Iranian financial institutions in connection with those sales. This provision, which essentially cuts off sanctioned institutions from the U.S. financial system, takes effect on June 28. The NDAA gives the president the power to waive the sanctions depending on the availability and price of supplies from non-Iranian sources. He can also exempt financial institutions from countries that have significantly cut back purchases of Iranian petroleum. Last month, the State Department announced waivers for Japan and ten European countries. China, which has received American waivers in the past under other Iran legislation, is now Tehran's largest oil customer and investor as well as its largest trading partner. Given the new mood in Washington, Beijing cannot count on getting more exceptions in the future. As the Wall Street Journal noted in early January, the sanctions are "an attempt to force other countries to choose between buying oil from Iran or being blocked from any dealings with the U.S. economy." The strict measures put Chinese officials in a bind. They apparently believe their geopolitical interests align with those of Tehran, but their economy is becoming increasingly reliant on America's. So how can Beijing keep both Iran's ayatollahs and President Obama happy at the same time? Simple, the Chinese can avoid the U.S. sanctions through barter. China has already been trading its produce for Iran's petroleum, but there is only so much gai lan and bok choy the Iranians can eat. That's why Iran is also accepting, among other goods, Chinese washing machines, refrigerators, toys, clothes, cosmetics, and toiletries. The barter trade works, but Iran needs cash too. As it is being cut off from the global financial system, the next best thing is gold. So we should not be surprised that in late February the Iranian central bank said it would accept that metal as payment for oil. Last year, China imported $21.7 billion in Iranian oil and exported $14.8 billion in goods and services. As the NDAA goes into effect, look for Beijing to ship gold to Iran to make up the difference. Please read more _______________________ The Implications Of China Paying In Gold April 23, 2012, at 5:09 pm by Jim Sinclair Dear CIGAs, The implications of China paying for Iranian oil in gold is the most important event in the modern history of gold 1. It is reasonable to assume that China has been threatened with total or at least selective exclusion from the SWIFT system if it pays in any currency for Iranian oil. 2. Gold has been decided by China as the means of making payment for massive international purchases free of the SWIFT system. 3. Other Asian and Middle Eastern nations will now see the gold they hold as money free of Western economic interference. 4. Gold now is not only money free of liability, but also free from interference regarding settlement by the long arm of Western influence. 5. The SWIFT system is becoming ever more a weapon of Western international political will. 6. In case of war anywhere, it is now demonstrated for all to see that only gold will buy the materials required. Paper currencies are under the SWIFT system's control in settlement. 7. Far from being a barbaric relic, gold is now clearly the money of state survival in every sense. 8. It is reasonable and possible for the supply of physical gold to fall far behind the size of the massive short positions now common to algorithm and hedge fund paper shorts. That will make an effective cover at a reasonable price as compared to a certain day's close impossible the following day on an exogenous event. 9. It may not be possible to use TA of any nature to determine a price of overvaluation for gold. Should the USA decide to take on China in full out economic war with the physical market totally illiquid, such as through isolation from the SWIFT system, consider the gold price that might result. _______________________ For more on the SWIFT electronic payments system: Society for Worldwide Interbank Financial Telecommunication From Wikipedia, the free encyclopedia _______________________ April 24, 2012, at 12:17 am by Jim Sinclair Dear CIGAs, To better understand what China offers to gold, lets reverse the situation. Let us say that China has a means of interfering with the USA's trade cash settlement mechanism and has threatened to use this interference in order to influence the United States to take such action that the USA does not necessarily wish. The United States announces that on June 28th, more than likely a deadline China has given in this reverse scenario, that the USA will settle all our imported energy costs from Saudi Arabia in gold rather than any other currency. Consider how important that would be to gold. Think what this means to confidence in the fiat currency. We are not talking about a small meaningless country; we are talking about the two economic giants on the planet Earth. This is China versus the USA with the thrust being the SWIFT system and the parry being gold bullion. This is history in the making. This is monetization of gold brought on as a parry to the trust of economic attack via the weapon, the SWIFT system. This is certainly economic war. It may well be an aggressive act that will change the economic world as we know it. It may be Phil that you have not thought out the implications of using the SWIFT system as a weapon. There is a huge backfire probable at a most unwelcome time in economic history. _______________________ Recall this news flash back in January of this year? China is NOT the only country interested in paying for Iranian Oil with Gold: |
| Gold Daily and Silver Weekly Charts - Winding Winding... Posted: 24 Apr 2012 08:05 AM PDT |
| Posted: 24 Apr 2012 08:03 AM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Gold remains in a sideways trade above strong support emerging below $1630 and continuing down towards $1620 and below. As suspected from the price action and the inability of the paper shorts to break through this support, we learned that several foreign Central Banks have been very active buyers of the metals on these breaks in price. I see nothing on the horizon that would lead me to believe that anything has changed in regards to these Central Banks and their desire to acquire gold during these periodic bouts of weakness. I repeat for the sake of emphasis - Central Banks do not CHASE GOLD PRICES HIGHER - they buy when prices drop and only when prices are moving lower. It is only the brain dead hedge fund managers who are servants to their gods, the computer algorithm, who sell gold as it moves lower hoping to profit from momentum based moves. In many markets this strategy works relatively...
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In late 2008, when silver was massacred in the futures pit and saw its price fall from over $20 to under $10, I told my readers at that time that silver entered into a "reverse bubble". I know it sounds odd, but let me re-visit the concept.
Another Federal Reserve official is speaking out against Too Big to Fail policies. Investigators probing the collapse of bankrupt brokerage MF Global said Tuesday that they have located the $1.6 billion in customer money that had gone missing from the firm. 
"I don't think this has any practical implications," says David Rapach,
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