Gold World News Flash |
- Leeb: Spain Flirts With Disaster As Europe Ready To Blow Apart
- Gold at Trendline Resistance
- Gold Seeker Closing Report: Gold and Silver Gain About 1%
- Ultimate Irony- Major Life Insurance Firms Settle with State AG’s
- John Butler On How To Get To $10,000 Gold
- Gold Coil About to Pop.
- Behind The Curve! The Fed's Influence on Gold and the Dollar
- The long-feared credit crunch has mutated instead into a collapse in DEMAND for loans.
- Ben Bernanke’s Paper Dollar Embodies Systemic Risk
- In one of the highest predictions yet made by an investment bank analyst, Bank of America's MacNeil Curry sees gold prices hitting $7000/oz before ending the uptrend.
- The Gold Price Closed up $18.20 at $1,659.60 Silver up too with an 85 cent Gain
- Collapse of the EU a “Realistic Scenario”
- Agenda 21 – It’s Your World, We Just Want To Own You. Part 1
- Gold, Recession, and Why Britain's Winning the Currency War
- The Fed and their Influence on Gold and the US Dollar, Behind The Curve!
- CPM Group's Jeff Christian Makes the Case for $359/oz Silver!
- Guest Post: Social Security Has A Real Problem
- S&P Downgrades Spain from A to BBB+, Outlook Negative
- Musings on the Work of Harry Browne
- Gold Will Win Money War
- The Silver Megathrust
- Five Years of The 5
- Oil Producers Starting To Dump US Dollars
- Greek Anti-Austerity Vote Poses Eurozone Danger
- Reuters, Russia Today interview gold standard prophet John Butler
- Gold Daily and Silver Weekly Charts - Gold to $10,000 oz. - Walkin' On the Sun
- The Permanent Portfolio…Revised
- Not Everyone Who Writes About Mining Knows About It
- Shove This Up Your Ass, Warren...
| Leeb: Spain Flirts With Disaster As Europe Ready To Blow Apart Posted: 26 Apr 2012 05:15 PM PDT from KingWorldNews:
Stephen Leeb continues @ KingWorldNews
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| Posted: 26 Apr 2012 05:03 PM PDT courtesy of DailyFX.com April 26, 2012 02:56 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.” Currently testing trendline resistance, this bounce offers a chance to short against the April high. Bottom Line (next 5 days) – topping?...
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| Gold Seeker Closing Report: Gold and Silver Gain About 1% Posted: 26 Apr 2012 04:00 PM PDT Gold saw modest gains in Asia and London, but it then accelerated even higher in New York and ended near its early afternoon high of $1660.90 with a gain of 0.84%. Silver surged to as high as $31.29 and ended with a gain of 1.2%.
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| Ultimate Irony- Major Life Insurance Firms Settle with State AG’s Posted: 26 Apr 2012 03:39 PM PDT Ultimate Irony- Major Life Insurance Firms Settle with State AG'sCourtesy of Dr. Paul Price (at Real Money) MetLife, Prudential and John Hancock agreed to pay $40 MM, $17 MM and $12 MM respectively to make a multi-state probe go away. These companies were routinely cross-checking Social Security death records to prevent recurring annuity benefit payments going out to deceased policy holders. That seems fair and logical. In fact, SS itself has been criticized for wasting huge sums sending out checks to dead people. What was the focus of the probe then? These companies did not voluntarily use this same data to offer death benefits to heirs of life insurance policies. Benefits were paid only if a claim was filed. That was standard operating procedure and perfectly legal, if not a really savory business practice. Do you pay your personal bills if they are never presented to you? Florida's insurance commissioner said it was a landmark settlement in terms of the amount of money ($400 MM) being paid out to consumers. Now that the largest firms have settled, many smaller companies are being targeted for the same practice. Here's where the irony comes in. The Wall Street Journal said the probes started when an ambitious, minor league auditing firm approached several cash-strapped states with the idea that they could seize these unclaimed life policies as 'abandoned property'. 35 states signed up for this cash grab, contracting with Verus Financial LLC and promising them a cut of their eventual take. The states, now calling out the insurance companies for failing to seek out rightful beneficiaries, were looking to take these unpaid death benefits for themselves- not consumers. It is unclear when the decision to switch up to the more altruistic purpose was made. Perhaps someone involved finally grew a conscience. ******************************** Government agencies looking to confiscate other people's money apparently are not at all unusual in today's world. I was surprised to find clauses in the fine print of every on-line bank account telling depositors that if they didn't access their accounts for just 12 consecutive months that the entire balance would be turned over to their home state under that same abandoned property clause. It's easy to think that savers, especially those with multi-year CDs would have no reason to keep checking on their accounts. Heirs of account holders that died might not even know these accounts existed. Poof, all your money could be taken away without notice by either your bank or your home state. Similarly, many states are now confiscating unused gift or prepaid card balances as soon as two years after purchase. AMEX and some other firms are rebelling against New Jersey's requirement to have buyers of their prepaid cards give zip codes- allowing NJ to lay claim to any dollar amounts not used promptly. It appears that governments can take consumer value without hesitation even as they accuse private industry, and extort fines from them, for doing exactly the same thing.
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| John Butler On How To Get To $10,000 Gold Posted: 26 Apr 2012 03:34 PM PDT Interesting video clip on how any particular country may decide to back their currency with gold, such as Russia, leading to a run on other currencies. See video clip here.
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| Posted: 26 Apr 2012 02:58 PM PDT Greyerz – Bankrupt Nations Desperate to Save Financial System Technically it looks as though gold has made a bottom. I said we had made and bottom in January and now gold made a higher low yesterday. We have seen the … Continue reading
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| Behind The Curve! The Fed's Influence on Gold and the Dollar Posted: 26 Apr 2012 02:52 PM PDT STOCK MARKET REPORT April 26, 2012 "Any so-called material thing that you want is merely a symbol: you want it not for itself, but because it will content your spirit for the moment." I am not surprised to see that the Federal Reserve on Wednesday stood pat on interest rates and said economic growth will remain moderate over coming quarters and then only pick up gradually. The decision to make no changes was expected. Economists think the Fed will wait for more data before deciding how to proceed next. Recent data, such as the monthly jobs report from the Labor Department, point to a slowing pace of economic growth. In a statement, the Fed announced that it will leave its target range for its federal-funds rate unchanged at 0 to 0.25% — as it has for every meeting since December 2008. The central bank also did not change the forecast that "exceptionally low rates" will be here until late 2014. Richmond Fed President Jeffrey Lacker cast the lone dissent, cont...
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| The long-feared credit crunch has mutated instead into a collapse in DEMAND for loans. Posted: 26 Apr 2012 02:31 PM PDT Europe faces Japan syndrome as credit demand implodes Julian Callow from Barclays Capital said there is no almost no historical precedent for the sort of deleveraging under way in the EMU periphery. Demand for housing loans fell 70pc in Portugal, … Continue reading
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| Ben Bernanke’s Paper Dollar Embodies Systemic Risk Posted: 26 Apr 2012 02:15 PM PDT by Charles Kadlec, DailyReckoning.com:
04/25/12 The paper dollar is now the single most important source of systemic risk to the financial system, the world economy, and the security of the American people. That is the lesson of the past 100 years that Federal Reserve Chairman Ben Bernanke did not teach during his four lectures at George Washington University's Graduate School of Business. Instead, he celebrated the importance of the extraordinary powers he and his fellow governors have to manipulate interest rates and the value of the dollar in the name of economic growth and stability. In so doing, he ignored completely that the ever growing need for heroic interventions by the Fed is itself being created by the paper dollar system he celebrates. Read More @ DailyReckoning.com
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| Posted: 26 Apr 2012 02:04 PM PDT Gold to hit $7000/oz: Bank of America According to MacNeil, commodity bull markets end with a massive speculative blow off and they don't end quietly. If gold was topping out, the daily ranges would have span around $200/oz and we … Continue reading
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| The Gold Price Closed up $18.20 at $1,659.60 Silver up too with an 85 cent Gain Posted: 26 Apr 2012 02:01 PM PDT Gold Price Close Today : 1659.60 Change : 18.20 or 1.11% Silver Price Close Today : 31.207 Change : 0.851 cents or 2.80% Gold Silver Ratio Today : 53.180 Change : -0.891 or -1.65% Silver Gold Ratio Today : 0.01880 Change : 0.000310 or 1.68% Platinum Price Close Today : 1567.10 Change : 22.70 or 1.47% Palladium Price Close Today : 671.90 Change : 13.65 or 2.07% S&P 500 : 1,399.98 Change : 9.29 or 0.67% Dow In GOLD$ : $164.48 Change : $ (0.37) or -0.23% Dow in GOLD oz : 7.957 Change : -0.018 or -0.23% Dow in SILVER oz : 423.13 Change : -8.11 or -1.88% Dow Industrial : 13,204.62 Change : 113.90 or 0.87% US Dollar Index : 78.93 Change : 0.070 or 0.09% Yesterday I said that the GOLD PRICE drop to a new low for a move and sharp recovery showed strength. Shut my mouth if it didn't gain $18.20 today to dazzle the Comex with a $1,659.60 close, above $1,640 and $1,650 resistance. High touched $1,660.55, low never fell below $1,645.72. Here's the good news and the bad news. Bad is that gold is forming a rising wedge, and could still drop down to the bottom boundary thereof, right now about $1,590. Good news is that the GOLD PRICE cracked that upper boundary today, but hold on! Won't confirm an upside breakout and rally until it closes ABOVE $1,683, resistance AND the 150 day moving average. My darling SILVER leapt 85.1 cents today to clear 3100c and close Comex grinning at 3120.7c like a jackass eating sawbriars. That was close to the 3127c high, and a LONG ways from the 3064.4c low. Today's close landed silver slap on the upper boundary of the falling wedge. Bear in mind that silver must make good this escape by closing higher tomorrow, and might yet touch the other side of that falling wedge, now about 3000c. It MAY BE that the SILVER PRICE and the GOLD PRICE today have opened the door to that rally we've awaited so long. Both must confirm with respectably higher closes tomorrow. Sideways markets are tough to parse. When they seem just about to break out, they fall back. Often to the bottom of a long, narrowing triangle. I think that's what's taking place with stocks. They rose today. That's why y'all are getting this lecture. Dow was up 113.9 (0.87%) to 13,204.62 and the S&P500 rose 9.29 (0.67%) to 1,399.98, one mouse burp away from 1,400. What meaneth this uproar? Still appears to me stocks are painting a head and shoulders top, right now finishing the right and final shoulder. It would take a close above 13,300 to change my mind. This "rally" strikes me as bait for suckers. Curioser still is the Dow in Gold Dollars (DiG$). This has formed a diamond since mid-March, which usually marks a top. For the past two weeks the DiG$ has skidded along atop its 20 DMA (now G$163.10 or 7.890 oz.) but never climbing higher than G$164.90 (7.977 oz). Stability like that makes little sense. I mean, it won't stay there much longer. To escape the diamond upside the DiG$ must close above G$165.37 (8.000 oz) then quickly rise over G$168.12 (8.133 oz), the last high. More likely is that the DiG$ will fall out of the triangle gravity-ward when it bereaks G$160 (7.740 oz). Lo! How are the mighty fallen! Tell it not in Gath, that the US dollar index today fell below 78 and now tradeth at 78.931. True, that's lower by only 7 basis points (a measly 0.09%), but it is painfully symbolic for the dollar. In aftermarket trading it's trying to rise, so maybe today marked the dollar's low. It better have, else it falls out of a long triangle and loses 300 basis points. Must hold 79. The Euro went nowhere, closing today at $1.3221 against yesterday's $1.3225. Too little to count, call it unchanged. Yen gapped up -- sigh, again -- today to 123.51c, 0.37% (Y80.97/US$1). Never mind the theatrics, yen must climb above 124.54 even to raise a suspicion it is changing its downward trend. 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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| Collapse of the EU a “Realistic Scenario” Posted: 26 Apr 2012 01:08 PM PDT Wolf Richter www.testosteronepit.com “Over the past months, we experienced a worrisome trend towards re-nationalization and ‘summitization,’” said Martin Schulz, President of the European Parliament and member of the German opposition SPD, to a forum of the European Commission on Wednesday. His complaints went to the heart of democracy at the European level. Government leaders were becoming “more arrogant” and made decisions “behind closed doors, in violation of the community method.” They were attempting “to create a fiscal union outside the control of parliament, bypassing the EU Commission.” Calls for reintroduction of border controls within the Schengen area were “an extremely dangerous development” because “any attack on the freedom of movement is an attack on the foundation of the European Union.” And so, he said, the collapse of the EU was a “realistic scenario.” Even at the highest levels, the can of worms has now been acknowledged as open—just as the rift that zigzags through the Eurozone has become deeper and wider: according to information the Süddeutsche Zeitung obtained, the ECB and a group of Eurozone countries are trying to make it possible for the permanent bailout fund, the ESM, to bail banks out directly. The countries remained unnamed but, given the nature of the topic, would have to include Spain. Any such effort would violate the two fundamental principles of the ESM—that a country will get bailed out if, and really only if, it commits to the reforms necessary to make its economy competitive and to reduce its deficit; and that only countries will receive funds, regardless of what they do with them, and not banks. The goal was to alleviate the causes of the debt crisis—high deficits and uncompetitive economies. It was how German parliamentarians had been persuaded to vote for the bailout packages. Nevertheless, a working group will determine over the next two weeks—lightning speed by EU standards where progress is measured in months and often years—how, not if, banks could receive bailout funds directly from the ESM. Cause for the rush: Spain. Spanish banks have been ravaged by the implosion of a real-estate bubble that they themselves caused with their reckless lending practices. Now they needed an immediate injection of at least €50 billion, and much more later, as bad loans and collapsing real-estate values on their books would finally have to be dealt with. Bailing out banks directly through the ESM would accomplish two things for the debt-sinner government: allow it to escape painful reforms and deficit reduction programs; and free it from having to bail out its own banks, highly unpopular when “austerity” is simultaneously being imposed on the citizens. This just happened in Greece where banks reported €28.2 billion in losses. 13% of GDP! But €25 billion in rescue funds had already been transferred to the government—to bail out the banks, not the Greeks themselves. Yet, it's almost over. Read.... “Drachma Clauses” For Greece’s Exit from the Eurozone. Spain could have asked for bailout funds long ago, but it didn’t want to do that because, hampered by a mind-boggling unemployment problem, it didn’t want to subject itself to the painful reforms that had been imposed on Greece, Ireland, and Portugal. It would be much easier if the banks could get bailed out directly. And it’s not just Spain. “Once Spain sits under the bailout umbrella, the markets will focus on Italy,” said an unnamed representative of one of the unnamed countries. And there aren’t enough means to bail out both. So keeping Spain from getting officially bailed out has now become one of the more bizarre strategies in solving the debt crisis. Alas, Germany is categorically opposed to direct loans from the ESM to banks. Finance Minister Wolfgang Schäuble declared that he wouldn’t even discuss it. The treaties didn’t allow it, and that would remain so. Bundesbank President Jens Weidmann said that as long as Member States were responsible for oversight and regulation of their banks, they would also be responsible for bailing them out. “Liability and control must remain in balance,” he said. The Netherlands, Austria, and Finland also rejected it. But Germany no longer controls the ECB. It is now run by Mario Draghi, an Italian, who appears to have a sympathetic ear for the plight of Spain and Italy. And so on Thursday, he pushed Germany to the sidelines once again and made similar noises by calling on politicians to create a new European fund charged with bailing out the banks. Vitor Constancio, Vice President of the BCE, and Portuguese, called for going as far as possible towards a pan-European solution to the crisis. “The crisis is finished,” French President Sarkozy had said a few weeks ago. “There is no more risk that the euro will implode,” thanks to his leadership, he declared two days before the election last weekend. However, François Hollande, the socialist challenger and likely winner, has a prescription for fixing the very crisis Sarkozy declared finished. For how his ambitious plan might lead to an expedited break-up of the Eurozone, read.... Pushing the Euro to the Brink.
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| Agenda 21 – It’s Your World, We Just Want To Own You. Part 1 Posted: 26 Apr 2012 12:07 PM PDT by Redmond Weissenberger, Dollar Vigilante:
Throughout the 20th century, when socialism was ascendant across the entire world, the abolition of private property and the socialization of the means of production in the hands of the state was key to the transformation of society into the murderous dystopias that made up the eastern bloc.
According to the National Socialists, the German Volk required Lebensraum, in order to create the perfect eco-friendly, sustainable world. Read More @ DollarVigilante.com
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| Gold, Recession, and Why Britain's Winning the Currency War Posted: 26 Apr 2012 11:26 AM PDT Depending on how you look at it, the Bank of England's doing its job brilliantly... PRELIMINARY data released this week show that Britain has fallen back into recession. UK GDP shrank for the second consecutive quarter in the first three months of the year, meaning Britain's first "double-dip" recession since that 1970s. In truth, this was not unexpected. Nor was this week's other news that UK government debt continued to rise in the year to March, hitting 66% of GDP according to the Office for National Statistics.
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| The Fed and their Influence on Gold and the US Dollar, Behind The Curve! Posted: 26 Apr 2012 11:21 AM PDT I am not surprised to see that the Federal Reserve on Wednesday stood pat on interest rates and said economic growth will remain moderate over coming quarters and then only pick up gradually. The decision to make no changes was expected. Economists think the Fed will wait for more data before deciding how to proceed next. Recent data, such as the monthly jobs report from the Labor Department, point to a slowing pace of economic growth. In a statement, the Fed announced that it will leave its target range for its federal-funds rate unchanged at 0 to 0.25% — as it has for every meeting since December 2008. The central bank also did not change the forecast that “exceptionally low rates” will be here until late 2014. Richmond Fed President Jeffrey Lacker cast the lone dissent, continuing a trend at all three meetings this year. Lacker, one of the more hawkish regional Fed presidents, has argued against the 2014 rate forecast.
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| CPM Group's Jeff Christian Makes the Case for $359/oz Silver! Posted: 26 Apr 2012 10:20 AM PDT by Bix Weir, Road to Roota:
5 Billion Ounces of Gold… His main argument in this article is that there is an astounding amount of gold out there available for sale. He tries to back this up by showing us how his historical numbers are derived. This is the first time I've heard him tell the world where his historical gold numbers come from and I find it fascinating that the origins come from the 1960′s estimates commissioned by Harry Oppenheimer. I'll save that analysis for another day but what I find most interesting in the CPM report is that in their burning desire to trash the gold psyche they state… "On 17 May CPM Group will release its Silver Yearbook 2012. In that report we will show that cumulative world silver production is estimated to have surpassed 50 billion ounces in 2011, ten times as much as gold. In stark contrast to gold, about 46% of the silver mined throughout history is estimated to be lost or undetermined in its location. People will lose silver, or use in it an industrial or household application from which it does not get recovered(e.g. mirrors). People tend not to lose gold. So if we are to believe Christian when he claims that there is 23B ounces of silver above ground (50B x 46%) and 5B ounces of gold above ground then the silver-gold price ratio should be 4.6-to-1 rather than the 53-to-1 current price ratio. With gold currently trading at $1,650 isn't Christian making a case that silver is MASSIVELY UNDERVALUED at $31/oz? According to his own data, available above ground silver should be trading at a ratio of 4.6-1 of the fair market value of gold or $359/oz. Maybe he'd like to have a "DO-OVER" of last year's Silver Manipulation debate! Of course we know there is not even close to 23B ounce of silver available but you get the idea. Silver, even according to the Banking Cabal's mouthpiece Jeffery Christian, is MASSIVELY UNDERVALUED! Load up while you still can. May the Road you choose be the Right Road.
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| Guest Post: Social Security Has A Real Problem Posted: 26 Apr 2012 10:19 AM PDT Submitted by Lance Roberts of Street Talk Live, The Social Security Administration made an alarming announcement recently that they will exhaust their funding capability by 2033 which was several years earlier than originally projected. According to a recent article from Reuters: "Unless Washington politicians, who have been at war with each other over government spending priorities and federal budget deficits, can decide how to put Social Security on a sound footing, retirees' pension checks would start running out in 2033, according to an annual report.
The baby boomers - those 78 million Americans born between 1946 and 1964 - started retiring last year. With 10,000 of them expected to retire every day for the next 19 years, according to the Pew Research Center, they will increasingly strain Social Security." As millions of baby boomers approach retirement more strain is put on the fabric of the Social Security system. The exact timing of this crunch is less important than its inevitability. The problem that Social Security has is "real" employment. I say "real" employment simply to sidestep the ongoing arguments about the validity of government employment survey's from the Bureau of Labor Statistics. The question we want to know is if we are creating jobs and what types of jobs are we creating? The answer to those questions tells us much about the strength of the underlying economy. The Federal Government receives income from the Social Security "contribution" from employee's paychecks. The chart above shows the annual levels of employment as reported by the BLS versus the receipts of social security contributions. As you can see while there has been a negligible increase in the number of non-farm employees - social security "contributions" have decreased sharply by almost $70 billion from its peak. This is due to two factors. The first is that the number of "real" employees, while growing, is in lower income producing and temporary jobs. Since social security contributions are calculated as a percentage of income - lower income levels produce lower contributions. We have written about this previously on the "real" employment situation. However, in a recent interview Richard Yaramone spoke specifically to this issue stating "I'm fortunate enough to travel and speak to chambers of commerce with 300 to 500 people in the audience. They all tell me, 'Hey, listen, I am letting go of workers. I'm hiring them back at a fraction of what I used to pay them. You hear from the other side, 'Hey, I finally got a job after two years of being unemployed. I used to make $100,000 (each year), now I'm making $45,000 or now I'm working part time.' Or (you hear), 'I used to make $500,000 and now I'm making $200,000 or making $125,000.'...." Here is the key statement and something that we address often in regard to the NFIB survey's: "So you are actually seeing this collapse, contracting on a real basis, of real disposable personal incomes. If you don't have the money, you can't facilitate expenditures. So that's the core of the problem. That's what's really going on in the US economy. You don't listen to what all of these bigger numbers coming across the screen tell you. You talk to the people who are running the country. 99.7% of all employer firms in this country are small businesses. So when they speak, you have to listen." The second factor is that a larger share of personal incomes is made up of government benefits which does not affect social security contributions. The chart tells the tale in this regard. Since the financial collapse government support of personal incomes spiked from just over 25% of incomes to almost 35%. This also does not include the 45 million plus Americans also collecting nutritional assistance, or "food stamps", from the government.
The dependency upon government for financial support is a long term economic problem because it reduces economic prosperity. However, the problem that Social Security faces is that the program's annual cash surplus continues to shrink due to lower receipts from working American's. The problem for Social Security, and the U.S. in general, comes long before 2033. In 2017 or 2018, just 5 to 7 short years from now, Social Security will begin paying out more in benefits than it receives in taxes. It could come even sooner. As the cash surplus is depleted, which is primarily government I.O.U.'s, Social Security will not be able to pay full benefits from its payroll and other tax revenues. It will then need to consume ever-growing amounts of general revenue dollars to meet its obligations--money that now pays for everything from environmental programs to highway construction to defense. Eventually, either benefits will have to be slashed or the rest of the government will have to shrink to accommodate Social Security. As millions of baby boomers begin to retire another problem emerges as well. Demographic trends are fairly easy to forecast and predict. (My friend Doug Short has done some excellent work in this area) Each year from 2008, when those born in 1946 reach Social Security's early retirement age of 62, until 2025 we will see successive rounds of boomers reach the 62 year-old threshold. There is a twofold problem caused by these successive crops of boomers heading into retirement. The first is that each boomer has not produced enough children to replace themselves which leads to a decline in the number of taxpaying workers. It takes about 25 years to grow a new taxpayer. We can estimate, with surprising accuracy, how many people born in a particular year will live to reach retirement. The retirees of 2070 were all born in 2003, and we can see and count them today. The second problem is the employment problem. The decline in economic prosperity, that we have discussed extensively, caused by excessive debt, reduction in savings, declining income growth due to productivity increases and the shift from a manufacturing to service based society will continue to lead to lower levels of taxable incomes in the future. Furthermore, with unemployment in the U.S. remaining stubbornly high, the longer that all-important 25-35 year old person remains unemployed the related loss in relevant job skills leads them to becoming unemployable.
This employment conundrum is critical. Back in 1950, as the baby boom was just beginning to start, each retiree's benefit was divided among 16 workers. Taxes could be kept low. Today, that number has dropped to 3.3 workers per retiree, and by 2025, it will reach--and remain at--about two workers per retiree. Each married couple will have to pay, along with their own family's expenses, Social Security retirement benefits for one retiree. In order to pay promised benefits, either taxes of some kind must rise or other government services must be cut. The chart shows this relationship between social benefits paid out in total (including social security, Medicaid, Medicare, etc.,) and the burden upon each non-farm employee. Back in 1966 each employee shoulders $555 dollars of social benefits. Today, each employee has to support $17,387 of benefits. The trend is obviously unsustainable unless wages or employment begins to increase dramatically and based on current trends that seems highly unlikely. The entire social support framework faces an inevitable conclusion and no amount of wishful thinking will change that. The question is whether our elected leaders will start making the changes necessary sooner, while they can be done by choice, or later when they are forced upon us.
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| S&P Downgrades Spain from A to BBB+, Outlook Negative Posted: 26 Apr 2012 10:14 AM PDT from Silver Doctors:
NEW YORK (Standard & Poor's) April 26, 2012–Standard & Poor's Ratings Services today said it lowered its long-term sovereign credit rating on the Kingdom of Spain to 'BBB+' from 'A'. At the same time, we lowered the short-term sovereign credit rating to 'A-2′ from 'A-1′. The outlook on the long-term rating is negative.
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| Musings on the Work of Harry Browne Posted: 26 Apr 2012 09:30 AM PDT After a quick whistle-stop tour through Chicago and Atlanta, your California editor's Pullman screeched to a halt in Denver, Colorado last night. Upon arrival, he stepped down from his Pullman, which bore an uncanny resemblance to a Boeing 757, hailed a porter, which bore an uncanny resemblance to a conveyor belt, climbed into his awaiting Packard Phaeton, which bore an uncanny resemblance to a Ford Fiesta rental car…and rolled down the motorway to his father's house. Your California editor's father turns 88 years old in one week, so your editor took the occasion to stop in and wish Dad an early Happy Birthday! But let's not let these modest festivities stand in the way of our daily reckonings… A few weeks back, your team here at The Daily Reckoning highlighted the groundbreaking work of Harry Browne, creator of the Permanent Portfolio. "A few decades ago," we remarked, "a guy named Harry Browne devised an investment strategy he dubbed the 'Permanent Portfolio.' The idea was so simple it seemed almost moronic. And yet, with the passage of time we have discovered that his idea was pure genius. "He suggested building an investment portfolio out of only four components: gold, bonds, stocks and cash.
"The idea was that at any given time, two or three of these four components might underperform — but the other portfolio components would perform so strongly, you'd get an overall gain that would outpace any increase in the cost of living. Incredibly, this simple strategy has delivered some surprisingly strong investment results." After providing more detail about the history and underlying philosophy of the Permanent Portfolio, we invited our Dear Readers to ask themselves the following questions: 1) Is Harry Browne's original allocation still ideal for today's macro-economic environment? We called this little exercise the Daily Reckoning Group Research Project and as usual, our Dear Readers responded with some fascinating suggestions. Several readers struggled to comply with the rules of the Group Project. For example, some readers could not stop themselves from recommending specific companies; others argued that some of the very best Permanent Portfolio allocations do trade on a public exchange. One such reader suggested buying grazing land as part of his Permanent Portfolio. Another recommended buying a house. And a third named potash as one of his allocations. We sympathize with these readers who "drew outside the lines." The financial markets do not possess a monopoly on attractive investment opportunities. We also sympathize with those readers who could no longer stomach the idea of buying Treasury bonds as a "risk free" allocation. "Mr. Browne's formula was based on the idea of a functioning and fair government and not a criminal enterprise," writes a reader named Kent. "I would bet he would eliminate most government bonds since today they really are nothing more than counterfeit and would substitute ammunition, food or fuel." A reader from Buenos Aires (not Joel) offers a similar observation. He points out that the Permanent Portfolio mutual fund (PRPFX) has held a large position in both US Treasuries and Swiss bonds. "[This allocation] has been great so far in this über bond bubble. But will it stand the test of time?… I looked at the permanent portfolio's performance in this century, which yields an increase of about 130%… However, looking at its performance from 1996 to 2002 is quite disappointing. Moving around like a cork on the water's surface, just bouncing around in the waves. It takes off in 2002, when Greenspan lit the fuse beneath the bond bubble. What will happen when the bond bubble ruptures?" Not surprisingly, most of the folks who had no use for Treasuries had plenty of use for hard assets. "Dear Harry (RIP). Things are different now while the dollar is dying," writes a reader named Susan. "It's all 'risk on' as the world hangs in the balance… You must have your own grocery store at home… I want to be able to put my hands on at least a few of the things I need. All the clouds out there storing my stuff for me make me very nervous and I hope to end up with more than vapor and fumes at the end of the day." "There might have been a time when the permanent portfolio idea may have worked," writes a reader named Ken, "but I believe that time has passed, which is why we avoid most bonds and buy gold and silver." A reader named Carl concurs. "I do not believe in a 'permanent' portfolio," he writes, "because things work in cycles as you surely know… We are in our sixties and plan to stay conservative and just continue to buy silver bullion each month (dollar cost average). We have had more than a few of our stocks go to zero but we know that gold and silver, especially today, will never even approach that point… Mundus vult decipi, ergo decipiatur. ('The world wants to be deceived, so let it be deceived')" Hard assets were not the only crowd favorites, however. Many readers suggested investing in real estate investment trusts (REITs) and other types of high-dividend-paying stocks. Biotech stocks also seemed to be a favorite. So without further ado, here is a sampling of the Permanent Portfolios you submitted in response to the latest Daily Reckoning Group Research Project… Eric Fry Musings on the Work of Harry Browne originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".
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| Posted: 26 Apr 2012 09:03 AM PDT By Greg hunter's USAWatchdog.com Dear CIGAs, It was recently reported that countries like China and India are going to buy Iranian oil with gold. Jim Sinclair of JSMineset.com said this week, "The implications of China paying for Iranian oil in gold is the most important event in the modern history of gold." He also Continue reading Gold Will Win Money War
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| Posted: 26 Apr 2012 08:47 AM PDT Between 1970 and 1979, the silver price was increasing steadily from $1.50 to $6, before taking off in September 1979 from $10 to $50 within 5 months. During that bull cycle, demand for silver did not increase but actually declined (sharply in 1979). It was as late as 1983 when demand increased confidently from 12,000 to 27,000 tons per year until 2000 – yet the silver price was in a 20 year bear market during that time.
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| Posted: 26 Apr 2012 08:46 AM PDT April 26, 2012 [LIST] [*]Dow 13K then, Dow 13K now... Marking five years of The 5... [*]Fed suddenly concerned about inflation? Amoss on the dollar-oil link, Mayer on the China factor, King on a resource crisis you haven't started to worry about [*]Freedom of movement: Patrick Cox on promising and potentially profitable research into healthy new cartilage cells [*]A mock trade update... why you can't "work your way through school" anymore... the last word on Apple (for now)... a free-market solution to government's grassy mess... and more! [/LIST] It was a Thursday. It was the 26th of April. "The Dow punched through 13,000 yesterday," Addison wrote. Today is a Thursday. It's the 26th of April. And we can write, with total accuracy, "The Dow punched through 13,000 yesterday." With that, we kick off our fifth-anniversary episode of The 5. There's something special in it for you, something we've never done before. Read on... Not everything is the same as i...
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| Oil Producers Starting To Dump US Dollars Posted: 26 Apr 2012 08:43 AM PDT Find attached a great article from Casey Research highlighting how several countries are starting to drop US dollars for trade. One has to wonder what event will trigger Saudi Arabia to go it alone and take its chances with its own protection, in exchange for flexibility in the currencies it accepts… See article here.
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| Greek Anti-Austerity Vote Poses Eurozone Danger Posted: 26 Apr 2012 08:27 AM PDT 26-Apr (MNI) — After France and the Netherlands, is it Greece's turn to raise an angry fist toward Brussels? Greek voters go to the polls on May 6 to choose a government to succeed that of the technocrat Lucas Papademos. Opinion polls suggest the vote could be another cry of protest — after the surge in the extreme right in the first round of French presidential elections and the collapse of the Dutch government — against the austerity-dominated policies that have driven most of the Eurozone in recession. But the Greek election poses a much greater danger, most of all for Greece itself. If voters see it as a chance to take revenge on the governing parties who accepted the austerity measures in return for two successive bailouts, then Athens could well be pushed out of the euro. "For the first time in Greece, the main divisions in this election have nothing do with left and right," said Costas Panagopoulos, of the Athens-based polling agency ALCO. "The major divisions have to do with the loan agreement, those that are for it and those who are against." [source]
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| Reuters, Russia Today interview gold standard prophet John Butler Posted: 26 Apr 2012 08:19 AM PDT 4:15p ET Thursday, April 26, 2012 Dear Friend of GATA and Gold: Reuters television today interviewed Amphora Capital founder John Butler, author of a new book, "The Golden Revolution," who predicts that the world soon will return to a gold standard, perhaps prompted by the resentment of developing nations about being pawns in the dollar system. The interview is five minutes long and can be watched here: http://www.reuters.com/video/2012/04/26/gold-standard-inevitable-10k-oz-... But it turns out that Lauren Lyster of Russia Today's "Capital Account" program did a far more comprehensive and interesting interview with Butler on April 2. It's 21 minutes long and can be viewed at Russia Today here: http://rt.com/programs/capital-account/currency-standard-butler-trillion... 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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| Gold Daily and Silver Weekly Charts - Gold to $10,000 oz. - Walkin' On the Sun Posted: 26 Apr 2012 08:12 AM PDT |
| The Permanent Portfolio…Revised Posted: 26 Apr 2012 08:09 AM PDT Tim writes: My choice of investments: SPDR Gold Shares ETF (GLD), SPDR Dow Jones Industrial Average ETF (DIA), Vanguard REIT ETF (VNQ), US Aerospace and Defense ETF (ITA), and DJ-UBS Commodity ETN (DJP). JP Writes: Equal allocations to the Nasdaq 100 Index ETF (QQQ), MSCI Emerging Market ETF (EEM), DJ Real Estate ETF (IYR), Barclay's 20+ Year Treasury Bond ETF (TLT), and SPDR Gold Shares ETF (GLD). Keith writes: My suggestion would be for a five-asset combination with all assets equally weighted. This would consist of commodities, gold, real estate, stocks and bonds. 20% in the PowerShares DB Commodity ETF (DBC), 20% in the SPDR Gold Shares ETF (GLD), 10% in the SPDR DJ International Real Estate ETF (RWX), 10% in the Vanguard REIT ETF (VNQ), 20% in the Vanguard Total World Stock ETF (VT) and 20% in the PIMCO 25 Yr Zero Coupon US ETF (ZROZ). Because of globalization and the desire for maximum diversification, I would suggest a global approach. Obviously commodities and gold are global assets, so this means selecting stock and real estate ETF's that are global in nature. For stocks this is simple, all one needs is Vanguard's VT which represents world stocks. For real estate, one could use VNQ for United States REITS and RWX for world REITS excluding the United States. The last asset, bonds, is a bit more interesting. Instead of using plain vanilla 10-year Treasuries, I would suggest Pimco's 25 year zero coupon US Treasuries ETF — ZROZ. First, this is the only asset [in my recommended portfolio] that is US-centric…Second, I consider this the most important asset of the group. It has the highest negative correlation to the other assets and therefore acts as a hedge. Also, the interesting thing is the high volatility of the stripped zero coupon bonds leads to lower volatility and draw down of the overall portfolio. If you were to use a regular bond fund with lower volatility then the overall volatility and draw down of the equally weighted five-asset portfolio would rise. Rich writes: A suggested portfolio for the next 10 years, allowing yearly, or sooner if necessary, tweaking: 15% in Gold & Silver 20% in diversified, foreign & domestic high current income fund (MIN) 60% in mutual funds and/or stocks in health-related and commodity sectors: General — (DLHAX), Biotech — (FBIOX, FBDIX), Medical delivery & equipment (FSHCX, FSMEX, SHSCX), Healthcare REITS — (HCN, NHI), Energy & Natural resources — (SSGDX, FSENX, FSESX, FRNRX), Gold & precious metals — (FKRCX, FSAGX), Agriculture ETF — (MOO) 5% in aggressive or speculative stocks with chances for high returns. This is the section that keeps it from getting boring, makes it exciting and maintains your anticipation that something exceptional could happen. With some good luck, this section could make you more money than all of the above. Alex writes: How about these five? 1) "Buy a House!" With inflation around the corner, the point is to keep away from cash, especially the USD. So the tangible asset of a home will be just fine. Rent it out. Do leverage with a mortgage, because the real principle amount borrowed will become smaller and smaller (making repayment a breeze) as inflation erodes the borrowed dollar value. Even if the interest rate eventually will rise, rent will keep up with inflation and should cover the mortgage payments. Oh and don't forget to factor in property taxes on the cost side. OK and if the rules are to list a public security or index, then Vanguard's REIT "VNQ" should do. 2) Precious metal: silver "SLV" iShares Silver Trust. Why silver and not gold? Perhaps silver has more upside potential than gold (then again, perhaps the silver market really is rigged and we outsiders have no chance at this game?). And although arguments in favor of gold are irrefutable (I'm a DR disciple, after all), the rumors of fake gold bullion in circulation are scary: the gold-plated tungsten bars that masquerade as 400-ounce "Good Delivery" gold bars. Even "GLD" can't assure that the gold bars backing their ETF really are genuine. Heck, perhaps all gold in Fort Knox is fake! 3) Energy: Vanguard's 'VGENX'. This is an essential component of our portfolio, whether we're bullish (peak oil) or bearish (worldwide economic recession) on energy, our homes need to be heated and our wheels need to keep turning. 4) Agriculture, PowerShares DB Agriculture "DBA" because the world's growing population needs to be fed; 5) Australian $ bond Currency bond other than USD, EUR or CHF. I like Australia's healthy economy, 19% of which is mining-related and feeds Asian demand. Lastly, Ian writes: As I am a survivalist, I put the greater emphasis on surviving, than on getting rich, and that may be evident in my choice of investments below. 50% grazing land in a low-population-density region. I'd choose grazing land over farmland as there is a reasonably high possibility of very high costs for diesel and fertilizer [in the future], which would adversely impact more so on farming than on grazing. I would also have a good supply of stock (i.e. preserved food etc) kept there, on location. 30% Gold. This is the store of wealth. It's the bridge that gets us from here to there. I'd keep small denominations that could be used for trading purposes. 10-gram and 25-gram pieces would be my choice. 10% silver. My reason is similar to that for gold. It also diversifies the precious metal portfolio. Again, I'd keep small denominations suitable for trading. 25-gram and 50-gram would be my choice. 10% Cash. Mostly in interest bearing deposits that I can easily and quickly get at. I'd spread it between three different banks in order to spread risk in the event of a bank crash. I'd also keep some cash on hand (about $10,000) at all times as well. Cash is what is needed in an emergency — and that's what it's for. Well, that's how I'd do it. Basically it's a case of, prepare for the worst. Regards, Your Fellow Reckoners, The Permanent Portfolio…Revised originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".
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| Not Everyone Who Writes About Mining Knows About It Posted: 26 Apr 2012 06:40 AM PDT Jim Sinclair's Mineset Jim, Just came across this (below) re esp. "dilution" exposure. Do you think you have this covered or should it be a big future concern for us as stockholders? Thanks and take care, CIGA Ted Dear CIGA Ted, Many people write crap that know nothing whatsoever about mining. The payback can be so fast on development loans that there are project lenders in the private markets. There are not at risk gold sale deals where the bank selling get $25 dollar per ounce sold, limited in time, as part of making the loan. There are royalty companies that love to finance projects after definitive feasibility. Also, there are quasi-government institutions that are socially minded, eager to make development loans if the transaction is sensitive to the needs of the host nation. I did the first 45%/55% deal under my management with a country, a transaction with many friends at quasi-government lending institution I have visited with. ...
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| Shove This Up Your Ass, Warren... Posted: 26 Apr 2012 06:36 AM PDT Reuters' McGeever acknowledges how the "gold market is tiny" compared to "trillions and trillions of dollars worth of cash and assets sloshing around the world financial system." He asks how can countries back "all of that" against such a "tiny and finite amount of gold?" Butler responds by saying that "the amount of gold is finite by weight or volume, it is not finite by price - article linked belowI will get to the article which is the source of the above quote below. But first I wanted to link a speech given to the NY Fed by a guy named Robert Wenzel, who authors the Economic Policy Journal blog. In this speech, he highlights the failure of Ben Bernanke's policies, why they are failing and why Government intervention in the economy leads to failure. He does a brilliant job of translating basic economic laws and theories into layman terms. With regard to the fact that Government "helps" the unemployed by taking taxpayer money and giving to the unemployed, he states rhetorically: In present day America, the government focus has changed a bit. In the new focus, the government attempts much more to prop up the unemployed by extended payments for not working. Is it really a surprise that unemployment is so high when you pay people not to work?I've made this comment to friends and colleagues many times. He also cites work done by the recipients of the 2010 Nobe Prize in economics for work which shows that Government interference (transfer payments, regulations, etc) causes a higher rate of unemployment. Here's the LINK. If you only have time to read that today, stop reading this blog and read that. On the quote at the beginning. Goldcore.com posted an essay today making the argument that one of the BRIC countries is likely to introduce a gold-backed currency at some point in the near future that will replace the dollar. I have always believed - and I have posted my theory in the past - that China would be the likely candidate for this once it had accumulated enough gold to enable it to make the claim as having the largest gold stock in the world. The U.S. used that claim after WW2 in order to back its move to make the dollar the reserve currency per Bretton Woods. If this does indeed occur, the dollar will likely collapse. Of course, the other interesting aspect to this would be that China/Russia would likely force the U.S. to make good on its claim that it still owns 8,100 tonnes of gold. In that regard, Mr. Wenzel from above had this point to make: I am very confused by the response of Chairman Bernanke to questioning by Congressman Ron Paul. To a seemingly near off the cuff question by Congressman Paul on Federal Reserve money provided to the Watergate burglars, Chairman Bernanke contacted the Inspector General's Office of the Federal Reserve and requested an investigation [12]. Yet, the congressman has regularly asked about the gold certificates held by the Federal Reserve [13] and whether the gold at Fort Knox backing up the certificates will be audited. Yet there have been no requests by the Chairman to the Treasury for an audit of the gold.This I find very odd. The Chairman calls for a major investigation of what can only be an historical point of interest but fails to seek out any confirmation on a point that would be of vital interest to many present day Americans.Clearly, the gold investing community is not the only one which would be interested to see an open, legitimate, independent audit of the U.S. gold inventory - something which has not been legitimately undertaken since Eisenhower was the President. The Fed/Bernanke has jumped up and down like a lunatic promoting its new policy of "transparency." How about making good on it rather than relying on the tenuous concept of "full faith?" At any rate, this essay on Goldcore is another must-read: LINK, as it responds with the free market, capitalist answer to the concern that there's not enough gold in the world to make a gold standard practical. To that, the correct response is, "why not?" The value of the gold is the key variable. Value is calculated by the product of quantity and price. If the quantity is relatively fixed, and there needs to be more "value," then the price has only one way to go... Given that enormous amount of paper fiat currency in circulation globally that has been printed up since the last time gold was used to back money, it is understandable that from a value standpoint, that the price of gold is significantly undervalued....Warren Buffet can take my last statement there and shove it up his ass. 
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On the heels of the S&P downgrade of Spanish debt, today King World News interviewed acclaimed money manager Stephen Leeb
The latest release from the Banking Cabal's more than bizarre egomaniacal mouthpiece, Jeffrey Christian of CPM Group, inadvertently makes a rather strong case for $359/oz silver while trying to trash gold. I'm sure that it was not his intention to promote silver as his release was clearly designed to pour cold water on any hopes for gold to take off but true to form – he put his foot in his mouth again!
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