Gold World News Flash |
- The End of the Pier Show
- Even Six-Figure Salaries Don’t Attract Men to Care Work
- Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week
- By the Numbers for the Week Ending April 27
- Why Is It Necessary For The Federal Government To Turn The United States Into A Prison Camp?
- Gold and Silver Disaggregated COT Report (DCOT) for April 27
- Silver Acts Industrial in an Uncertain Market
- Why The Euro Is So Strong, Or Why The Market Expects $700bn Of Fed QE3
- Eric Sprott and David Baker: When fundamentals no longer apply, review the fundamentals
- Big commercials don't see metals going lower, Arensberg reports
- Empty Sack
- Invest in Africa Now: Nana Sangmuah
- The Gold Price Broke Out and is Moving Higher Closing up 1.3 Percent for the Week at $1,664
- Madrid cries for help – is anyone listening?
- Michael Krieger On The Rebirth Of Barter
- Jim Sinclair Has Something to Say – Q&A From The May Issue of Futures Magazine
- John Williams: Recovery faked by phony government numbers
- The Most Important Development Since The MSM/MOPE Assault On Euroland Began
- A Return To Real Money
- Good News - the Impending Gold & Silver Launch
- Should We Kill The Politicians Before They Kill Us?
- Mad Cow Futures and Silver Fundamentals
- Golden Day As Stocks Slip And Silver Still Leads YTD
- Dismal Metals Sentiment — Just What Dr. Bernanke Ordered
- Gold and Silver Disaggregated COT Report (DCOT) for April 27
- Eric Sprott: "When Fundamentals No Longer Apply, Review the Fundamentals"
- 2008 was Lehman. 2012 is…
- The Implications of a European Economic Recovery
- Robert Wenzel's 'David' Speech Crushes Federal Reserve's 'Goliath' Dream
| Posted: 27 Apr 2012 06:21 PM PDT Bullion Vault
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| Even Six-Figure Salaries Don’t Attract Men to Care Work Posted: 27 Apr 2012 04:57 PM PDT  Until these jobs are given the respect they deserve, they will continue to turn men off and be paid less than they're worth.Adam Davidson's recent New York Times Magazine article "The Best Nanny Money Can Buy" introduced readers to the "bizarre microeconomy" of New York's highly paid nannies. The first nanny Davidson introduces earns $180,000 a year, plus a Christmas bonus and an apartment on Central Park West. Davidson's economy is indeed bizarre. As Bryce Covert pointed out in Forbes recently, the average New York nanny makes $37,076 a year. Childcare providers, home health care aids, and others are paid far too little for the incredibly important work they do. In the U.S., median pay for a childcare worker in 2010 was about $9 an hour. Care work jobs have historically been paid poorly. Jobs associated with the work women traditionally did as wives and mothers have not been conceptualized as real work and have generally paid far less than traditionally male work. This was partially a result of the way laws were written. Until the 1970s, domestic workers were not included in the Fair Labor Standards Act that mandated a federal minimum wage, among other things. Read more...... 
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| Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week Posted: 27 Apr 2012 04:00 PM PDT Gold fell $7.13 to $1650.47 in Asia before it shot up to $1667.30 in New York and then pared its gains a bit in the last few hours of trade, but it still ended with a gain of 0.28%. Silver surged to as high as $31.435 and ended with a gain of 0.61%.
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| By the Numbers for the Week Ending April 27 Posted: 27 Apr 2012 03:49 PM PDT This week's closing table.
That is all for now, but there is more to come.
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| Why Is It Necessary For The Federal Government To Turn The United States Into A Prison Camp? Posted: 27 Apr 2012 03:17 PM PDT Why Is It Necessary For The Federal Government To Turn The United States Into A Prison Camp?Courtesy of Michael Snyder of Economic Collapse
But today we are told that we have to give up our liberties and our freedoms and our privacy for increased security. But is such a trade really worth it? Just think of the various totalitarian societies that we have seen down throughout history. Have any of them ever really thrived? Have their people been happy? Unfortunately, the U.S. federal government has decided that the entire country needs to be put on lock down. Nearly everything that we do today is watched and tracked, and personal privacy is rapidly becoming a thing of the past. Many of the things that George Orwell wrote about in 1984 are becoming a reality, and that is a very frightening thing. The United States is supposed to be the land of the free and the home of the brave. Sadly, we are rapidly becoming the exact opposite of that. I don't know about you, but I never signed up to live in North Korea. When I was growing up I was taught that repressive regimes such as North Korea are "the bad guys" and that America is where "the good guys" live. So why do we want to be just like North Korea? When they put in the naked body scanners at U.S. airports and started having TSA agents conduct "enhanced pat-downs" of travelers, I decided that I was not going to fly anymore unless absolutely necessary. Then I heard about how "random bag checks" were being conducted at Metro train stations in the Washington D.C. area, and I was glad that I was no longer taking the train into D.C. anymore. But now the TSA is showing up everywhere. Down in Houston, undercover TSA agents and police officers will now "ride buses, perform random bag checks, and conduct K-9 sweeps, as well as place uniformed and plainclothes officers at Transit Centers and rail platforms to detect, prevent and address latent criminal activity or behavior." So now I have another thing to add to my list of things that I can't do anymore. No more riding buses for me. But the truth is that you can't escape this expanding security grid no matter how hard you try. In fact, TSA "VIPR teams" conduct approximately 8,000 "unannounced security screenings" every year at bus terminals, train stations, ports and highway rest stops throughout the United States. Look, every society needs some level of security. There are always bad guys out there that want to harm innocent people. But in the United States we must demand that those in charge of our security do their jobs in a way that does not compromise our dignity, our liberties or our freedoms. Does having TSA thugs touch the private parts of old women and young children before they get on their flights keep us any safer? Of course not. But it does move our country in a very dangerous direction. The reality is that this "Big Brother control grid" that is being constructed all around us is expanding in a thousand different ways. For example, a new bill before the U.S. Congress would require black box data recorders to be installed in all new vehicles starting in 2015. These black box data recorders will be able to constantly transmit data about everything that your car is doing to the government and to the insurance companies. The following is from a recent article by Eric Peters....
Even when you are sitting at home you are still being watched and monitored in countless ways. For example, every single call you make on your cell phone is intercepted and monitored by the government. Your Internet activity is tracked and monitored by a whole host of government agencies as well. If you doubt this, just read this article. Now CISPA would expand government surveillance of the Internet even further. The following description of CISPA comes from the Electronic Frontier Foundation website....
Frightening stuff, eh? I want you to imagine a scenario for a moment. Imagine that the government assigned two "watchers" to you that followed you everywhere you went and stared directly into your face the entire time. Would you feel comfortable? Why not? You don't have anything to hide, do you? Well, of course the truth is that none of us would like having our privacy constantly invaded. It is not pleasant to constantly feel like you are being watched. That is why all of these new "security measures" are so alarming. A system is being set up where all of us are being constantly watched and monitored 24 hours a day. And most Americans have no idea how fast the transition to full martial law could potentially be. Barack Obama recently updated an old executive order that has been around for decades that would enable him to take charge of all food, all energy, all health resources and all transportation resources in the United States with the stroke of a pen. This new update would allow him to do it even in "non-emergency" situations. The following is what U.S. Representative Kay Granger recently had to say about this executive order....
Later on in her letter, Representative Granger even used the phrases "martial law" and "government takeover" to describe the power that Barack Obama potentially has under this executive order....
Do you trust Barack Obama with that kind of power? Unfortunately, considering the really bad decisions that all of our government officials regularly make, it is really hard to trust any of them to do the right thing at this point. The American people need to let their voices be heard on these issues. If not, the federal government will continue to strip away our privacy, our liberties and our freedoms until everything is gone. Do you want your children to grow up in a country that has been turned into a giant prison camp and that more closely resembles North Korea than it does the nation that our forefathers originally founded? If not, please do what you can to speak out against these abuses. The truth is that the federal government does not really even care about our national security anyway. If they did, they would secure our borders. Just today I read that the National Guard is withdrawing 900 troops from the U.S.-Mexico border. Our border security is already a total joke and now it is going to be even worse. Over the past several decades, tens of millions of people have crossed that border illegally. Every single day, terrorists, drug dealers, gang members, sexual predators and a whole host of other "bad guys" could be crossing that border and we would never even know about it because we aren't doing anything to stop it. For nearly 60 years, the U.S. government has successfully protected the border between South Korea and North Korea, but the U.S. government flatly refuses to protect our own borders. Until the federal government decides to do what the U.S. Constitution requires them to do and start protecting our borders, then the federal government should not be asking any of us to make a single sacrifice in the name of "security". The truth is that we can have a reasonable level of security in this nation without giving up the liberties and the freedoms that millions of Americans have shed their blood to protect. We do not need to turn the United States into a giant prison camp. America is supposed to be the land of the free, and we need to work hard to get that dream back. .
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| Gold and Silver Disaggregated COT Report (DCOT) for April 27 Posted: 27 Apr 2012 02:19 PM PDT from Got Gold Report:
In the DCOT table below a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter.
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| Silver Acts Industrial in an Uncertain Market Posted: 27 Apr 2012 01:21 PM PDT by Michelle Smith, Silver Investing News:
A prime example of silver trading like classic physical commodities is the severe negative reaction the metal had to Flash PMI manufacturing data that showed weakness in Europe and China. This news prompted a terrible start to the week as prices on Monday fell to the lowest levels seen since January 20. Read More @ SilverInvestingNews.com
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| Why The Euro Is So Strong, Or Why The Market Expects $700bn Of Fed QE3 Posted: 27 Apr 2012 01:15 PM PDT The question puzzling currency markets is why the EUR is so strong. While we have argued that during the risk-off period of the last month or so post-LTRO2 (before Tuesday) EURUSD strength appeared to be driven by repatriation flows and balance sheet reduction, new information over the last couple of weeks driving the expectation that growth will be weak enough in the US to keep US policy very stimulative for a nice long time, we tend to agree with Steven Englander of Citigroup who argues that it looks very much as if QE3/Fed-stimulus anticipations are behind the EUR relative strength recently. Indeed the recent USD weakness is pretty much across the board, suggesting that it is less EUR attractiveness than USD unattractiveness that is driving the EUR's gains. That said, I think the buzz around various euro zone measures to help out banks and ease the rigidities of the fiscal compact is also helping support the EUR by reducing tail risk, but right now the USD/Fed is the bigger story. Back of the envelope math based on the Fed/ECB balance sheets and EURUSD implies the market expects around $700bn of QE3 and given swap-spread differentials there appears to be little liquidity premium to reduce this expectation. The current EURUSD rate implies a Fed/ECB ratio of around 1.2x which infers that the market expects around $700bn of liquidity from the Fed relative to the ECB in the short-run...
And there is little additional liquidity premium (over interest rate differential models) as swap-spreads and EURUSD begin to correlated more highly and also with risk...
Consider first the evidence that the EUR is positively correlated with risk (Figure 1).
The chart above presents the euro's beta on changes in other measures of risk appetite. The chart is scaled so that a positive value shows a risk-positive correlated and we use two-day changes to mitigate the impact of different closing times in different markets. What it shows is that the underlying correlation of the euro with risk is positive. It is not clear why this is the case, although I would argue that a risk-positive environment makes investors more willing to tolerate tail risk than a risk off environment and the reserves accumulation/diversification cycle probably is more intense when risk is on. Investors may be wrong in trading the EUR with a positive risk correlation but it is hard to argue that they do not do so. Now consider the charts below. In each case the blue line represents the S&P, the yellow line US two year yields and the green line EUR. What we see are episodes in March/April; 2009 and Aug/Sep 2010 when US 2 year yields fell and the S&P rallied. Presumably these are period when growth was disappointing (i.e. investors drop their expectations of policy rate hikes) but equity markets and the EUR rally because the low rates support valuations even in a low top-line growth environment. As a colleague expressed it, even a tiny stream of returns is worth a lot when the discount factor is close to zero. So we have a series of episodes in which risk is bid, and the euro with it, despite economic disappointment.
Now consider Figure 4 which shows the most recent moves in 2yr yields,the S&P and the EUR. We see a similar pattern – 2yr yields drifting down and the S&P and EUR running up. The scale of the rallies is not as big as in the other episodes but the family resemblance is there. For the USD risk-on is a negative and low rates are a negative, and that is what the market is focused on.
Now consider Figure 5 below which presents the EUR, the S&P and 2yr Treasury yields from 2009 to the present (hard as it is to believe that 2yr Treasuries were yielding 0.80% just over a year ago). The big picture is that the recovery has disappointed everyone except investors. Going back to 2009 and even early 2011, the fixed income market thought there was an imminent recovery that would enable the Fed to tighten – since mid-2011 that expectation has disappeared. The trend in equity prices suggests that there has been a stream of surprises either top-line on expected profits, or in terms of the rate used to discount this stream of returns. The low discount factor to be applied to the expected stream of profits may have been especially important over the last couple of quarters when profit growth has eased.
Bottom line for the last three years is that risk appetite can be positive on the whole, even with disappointing economic performance and this positive risk appetite and asset market environment supports the euro. From Figure 4 it is clear that the degree to which the EUR is positively correlated with risk diminished in H2 2011 when the sovereign debt crisis spread to Italy and Spain. However, no correlation that we run with respect to any indicator of risk (US S&P, EM MSCI, VIXC etc)shows a negative correlation of the euro and risk – the correlations show a diminished but still positive beta (back to Figure 1) and this is true whether the correlations are over shorter or longer spans.
What can go wrong? It seems to me that the market bias to buying EUR in periods of risk appetite can easily disappear if it looks as if European policymakers have lost control over the euro crisis. I would stress that recent experience suggests that investors do not care much how the euro zone deals with the tail risk as long as they find a mechanism for doing so. If not the euro and the euro zone could easily fall. It is also the case that if the euro situation becomes sufficiently dire, there will be a negative global impact both on activity and risk appetite. Our betas may not change but we can have positive betas as asset markets collapse, as easily as when they rise. To be sure the Fed has not announced, let alone implemented, an additional easing round so it is possible that the new found positive asset market environment will fade, taking the euro down with it. Net, net I would argue that the new information over the last couple of weeks is the expectation that growth will be weak enough in the US to keep US policy very stimulative for a nice long time. Whether you like it or not, the euro remains sufficiently correlated with risk for this to be a plus. As a footnote, earlier this week, I presented some evidence that in H2 2012, balancing sheet cutting and repatriation of foreign assets may have also helped the euro. The two explanations are not necessarily inconsistent, but I would argue that in a positive risk environment the dominant factor would be investors risk appetite, provided that the sovereign debt crisis was not in an acute stage.
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| Eric Sprott and David Baker: When fundamentals no longer apply, review the fundamentals Posted: 27 Apr 2012 01:10 PM PDT 9p ET Friday, April 27, 2012 Dear Friend of GATA and Gold: The U.S. and European economies are still sinking, money is rushing out of Spain's banking system, and demand for physical gold is exploding and will blow up the paper gold market before long, Eric Sprott and David Baker of Sprott Asset Management write today in the company's "Markets at a Glance" commentary. Sprott and Baker write: "We have written at length about the disconnect between the paper gold price and the physical gold market. If the demand changes stated above applied to any other market, the investing public would lose their minds. Could you imagine, for example, if the demand shifts described above were applied to the global oil market? What would happen if a single country came in from nowhere and increased its oil purchases by a factor equivalent to 30% of the world's annual oil supply? We are students first and foremost of the physical market, and the numbers stated above speak for themselves. We remain confident about gold for the simple reason that the demand we are now seeing for physical is completely unsustainable without higher prices, and we do not see that demand abating in the coming months." The Sprott-Baker commentary is headlined "When Fundamentals No Longer Apply, Review the Fundamentals" and it's posted at the Sprott Internet site here: http://www.sprott.com/markets-at-a-glance/when-fundamentals-no-longer-ap... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Golden Phoenix Discusses Royalty Mining Growth Strategy Golden Phoenix Minerals Inc. has discussed its royalty mining growth strategy on the Fox Business Network program "21st Century Business" with host Jackie Bales. Golden Phoenix's director of corporate communications, Robert Ian, told how the company narrows its focus to project generation and future royalty streams. He explained why Golden Phoenix believes it's better to own joint-venture interests in several producing mines instead of full exposure to just one project. "21st Century Business" has been airing for 15 years. Previous hosts have included Gen. Alexander Haig, Gen.l Norman Schwarzkopf, and Secretary of Defense Caspar Weinberger. Golden Phoenix appeared as paid programming on this broadcast. To view the program with Golden Phoenix, please visit Golden Phoenix's Internet site here: http://www.goldenphoenix.us/company-videos.html 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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| Big commercials don't see metals going lower, Arensberg reports Posted: 27 Apr 2012 12:54 PM PDT 8:50p ET Friday, April 27, 2012 Dear Friend of GATA and Gold: In his Got Gold Report bulletin tonight, Gene Arensberg reports that the big commercial traders have greatly cut back their short positions in gold and especially in silver, indicating that they don't expect the monetary metals to move lower. Arensberg's report is headlined "Gold and Silver Disaggregated COT Report for April 27" and it's posted at the Got Gold Report's Internet site here: http://www.gotgoldreport.com/2012/04/gold-and-silver-disaggregated-cot-r... 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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| Posted: 27 Apr 2012 12:51 PM PDT by Andy Hoffman, MilesFranklin.com:
Throughout the annuls of history, no fiat currency has ever survived – EVER. Moreover, in nearly all cases, 40 years has been the longest period before either a major devaluation or collapse has occurred. in fact, the vaunted United States has already lost two currencies, nearly three, and shortly the 41-year old post gold standard dollar. The U.S. Continental and Confederate Dollar were hyperinflated to pay for the Revolutionary War and the South's Civil War costs, while Abraham Lincoln's Greenback was within months of the same fate when the Civil War ended.
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| Invest in Africa Now: Nana Sangmuah Posted: 27 Apr 2012 12:41 PM PDT The Gold Report: Gold consultancy GFMS, which is now owned by Thomson Reuters, recently published its 2012 Gold Survey. GFMS predicts that before the end of 2012, the yellow metal will likely reach above its all-time nominal high of $1,920/ounce (oz) in September 2011. The catalysts include inflation concerns and sovereign debt problems in Europe, especially Spain. What are your thoughts on these predictions and conclusions? Nana Sangmuah: I agree with those predictions and the drivers. One thing that has been missing from the gold rally is inflation hedge demand. With the significant monetary easing that has occurred to drive a global recovery, inflation is definitely going to be an issue at some point. We haven't seen inflation trade come into gold throughout these 10+ years. That's the strong headwind that is going to move gold to another level. TGR: The survey reported that mine production hit a record high in 2011, rising 2.8% year over year to reach 2,818 metric tons (mt). Th...
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| The Gold Price Broke Out and is Moving Higher Closing up 1.3 Percent for the Week at $1,664 Posted: 27 Apr 2012 11:22 AM PDT Gold Price Close Today : 1,664.00 Gold Price Close 20-Apr : 1,642.10 Change : 21.90 or 1.3% Silver Price Close Today : 3134.7 Silver Price Close 20-Apr : 3164.4 Change : -29.70 or -0.9% Gold Silver Ratio Today : 53.083 Gold Silver Ratio 20-Apr : 51.893 Change : 1.19 or 2.3% Silver Gold Ratio : 0.01884 Silver Gold Ratio 20-Apr : 0.01927 Change : -0.00043 or -2.2% Dow in Gold Dollars : $ 164.33 Dow in Gold Dollars 20-Apr : $ 164.02 Change : $ 0.31 or 0.2% Dow in Gold Ounces : 7.950 Dow in Gold Ounces 20-Apr : 7.935 Change : 0.02 or 0.2% Dow in Silver Ounces : 422.00 Dow in Silver Ounces 20-Apr : 411.75 Change : 10.25 or 2.5% Dow Industrial : 13,228.31 Dow Industrial 20-Apr : 13,029.26 Change : 199.05 or 1.5% S&P 500 : 1,403.36 S&P 500 20-Apr : 1,378.53 Change : 24.83 or 1.8% US Dollar Index : 78.748 US Dollar Index 20-Apr : 79.144 Change : -0.396 or -0.5% Platinum Price Close Today : 1,570.50 Platinum Price Close 20-Apr : 1,577.40 Change : -6.90 or -0.4% Palladium Price Close Today : 681.60 Palladium Price Close 20-Apr : 675.00 Change : 6.60 or 1.0% Overview of the silver and GOLD PRICE this week says that they completed those falling wedges, made final bottoms for this move, and have begun moving higher. GOLD PRICE today rose $4.40 to $1,664.00 while silver gained 14 cents to 3134.7c. Notice that this week (a) gold never closed below $1,630 and (b) silver spent only 3 days below 3100c. Yesterday GOLD cracked the upper boundary of that falling wedge -- "broke out" -- and confirmed that today with a higher close. Yet once burned, twice shy, so I want to see gold clear $1,682 resistance to PROVE it has turned up, then keep marching right along and climb over that 200 DMA at $1,698.17. Looks good, but I'm holding my breath. Why? Because it still might drop back to the bottom boundary of that wedge, now about $1,600. The SILVER PRICE was taken behind the bar and beaten so bad you'd have thought she couldn't stand up. Think again. 5 Day chart shows a spike bottom on Wednesday, followed by a surge through 3060c resistance, and a continuing advance clean to 3140c. Today SILVER closed at 3134.7c, not far from the 3142c high. On the longer term chart silver yesterday halted at the upper boundary of that falling wedge. Today she cleared it. In front of silver -- and needful to confirm a rally -- stands 3250c. Appears that the SILVER and GOLD PRICE made their final lows this week for the correction that began off the March high. A lot of sideways frustration will likely follow, but trending upward. Big breakouts may not come till fall, but worst has passed. Biggest winner for the week was the S&P500, up 1.8%, with gold not far behind at 1.3%. Not surprising, dollar index lost half a percent. If this was any sort of sane world where everybody and his brother didn't have his thumb on the scale and his hand in the till, that US dollar index would have dropped like a big boy hit on the head with a large-size pipe wrench. Rather, it broke down from its two-month-a-building triangle and jes' sorta stumbled 40 basis points (0.51%) to 78.748, instead of dropping straight down like a low-flying mallard hit with #2 shot. Where will this take the US dollar index? It has broken support stretching back to the late October low, so "lower" is the first answer. Second, there's an internal support line right about 78.50, beneath which lies air. Doesn't seem to be any particular reason -- that is, an announcement from the Bernancubus that he's going to debase the dollar faster -- for this slide, but maybe it's the NGM working together trying to float the euro. Speaking of the euro, how'd you like to live in Spain, where admitted (Governments always lie) unemployment is 24.4% and half the folks under 25 have no jobs? Foreclosures rising, banks sinking, deficit booming. This saith not much for the euro's future. Today it rose 0.35% to 1.3253, which carries it only to the 32.8% correction level of its November - January drop. Yes, 'tis above its nested 20, 50, and 62 day moving averages, which points it higher, but if you put a .44 magnum to my head and asked me why, I reckon you'd just have to blow my brains out cause I could give you ne'er a reason. Yen is on a tear, rose 1.04% today to 124.7c/Y100 (Y80.19/US$1). Climbing above that 124.5-ish level will send it flying, and I reckon y'all will see that. Some of y'all may have marked that I NEVER have anything good to say about stocks, and I confess, that's no accident. Wake up! The US is mired to the wheel wells in depression, and the only thing government and the Fed can do is haul more barrels of water to thin the mud. Some few companies may prosper, but the vast majority of the US economy will keep on suffering because the Resplendent Ones Who Run Our Lives will not allow the economy to purge bad investments and bankrupt firms. mostly because their cronies own them. More than that, stocks entered a primary downtrend in 2000, and will not significantly exceed that inflation-adjusted 11,722 high until the bear market ends, say 3 - 10 years hence. At present the Dow Industrials have traced out a head and shoulders that may signal on a breather, a consolidation before moving higher, or a top. If the Dow can break through 13,300 -- IF -- then it might reach for 14,905 and the government and Wall Street shills will be singing sweet halleluiahs, but 'twill be the biggest bull trap of all time, for twill collapse thereafter to ignominious lows. Teeth will gnash, wailers will wail, hair will be pulled. If the Dow breaks say 12,100 sooner, then the gnashing, wailing, and hair-pulling will start sooner. No matter, either way the gnashing, etc. will come. Wait for it, it will come. Today the Dow rose, with great labor, to 13,228.31, up 23.69 (0.18%) while the S&P500 climbed over 1,400 to 1,403.36 (up 3.38 or 0.24%). Y'all enjoy your weekend! 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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| Madrid cries for help – is anyone listening? Posted: 27 Apr 2012 10:23 AM PDT 27-Apr (Financial Times) — When Mariano Rajoy was elected prime minister of Spain last autumn, it looked like a silver lining had appeared in the dark clouds over the eurozone. Despite his repeated support for austerity, Mr Rajoy had sent the people of Spain a message of hope for the future. His big election win suggested significant popular support for his reform agenda. Five months on, this sense of hopefulness has all but disappeared in Madrid. With unemployment approaching 25 per cent and yields on 10-year bond rates stuck near 6 per cent, politicians' rhetoric has changed too. Speaking on the radio this week, the foreign minister, José Manuel García-Margallo, admitted the government's near-despair when he said that "Spain is undergoing a crisis of enormous proportions". [source]
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| Michael Krieger On The Rebirth Of Barter Posted: 27 Apr 2012 09:46 AM PDT Via Michael Krieger of 'A Lightning War For Liberty' blog,
The Rebirth of Barter
Thus, the leadership in America in its infinite stupidity has actually accelerated the demise of the U.S. dollar as the world's reserve currency. After its "kinetic action" in Libya succeeded in toppling the regime there, Washington's geopolitical hubris grew and it has attempted to muscle Iran into a corner. Instead, all it has done is alienated our "allies" that need Iranian oil to survive and in the process quickened a move away from the dollar to settle certain transactions. Read Gordon's article here. In a similar move on a more micro level, the government of Spain in a similar desperation has banned the use of cash transactions above 2,500 euros (read this great article here on it). How do you think citizens are going to respond to this? People are already in the streets. They are not pleased with what is going on. Then the government is going to tell them they can't use cash amongst themselves so that the authorities can track every single thing they do and bleed them with taxes until they are slaves on a banker plantation. Everything is going to go black market and to a barter system. It will happen country by country as governments get increasingly desperate and the authoritarian clamp down continues. It will happen on an increasing level until all of these house of cards bureaucratic states fail and something new is reborn. In case you haven't seen it yet, this one town in Greece is already leading the way. This story outlines what will be a mega trend globally over the next decade.
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| Jim Sinclair Has Something to Say – Q&A From The May Issue of Futures Magazine Posted: 27 Apr 2012 09:22 AM PDT Jim Sinclair Has Something to Say -Q&A from the May issue of Futures magazine By Daniel P. Collins April 27, 2012 • Jim Sinclair is not simply a gold bug; he successfully has called every major move in the precious metal — both up and down — over a generation. But he Continue reading Jim Sinclair Has Something to Say – Q&A From The May Issue of Futures Magazine
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| John Williams: Recovery faked by phony government numbers Posted: 27 Apr 2012 09:19 AM PDT 5:15p ET Friday, April 27, 2012 Dear Friend of GATA and Gold: Writing at King World News, ShadowStats editor John Williams argues that evidence of economic recovery in the United States turns bogus when government-doctored inflation data is discarded and real inflation data is used. Williams predicts that more debt monetization will be employed to prop up banks while being portrayed as economic stimulus. Williams' comments are headlined "The Recovery Faked by Phony Government Numbers" and it's posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/27_Jo... 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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| The Most Important Development Since The MSM/MOPE Assault On Euroland Began Posted: 27 Apr 2012 09:17 AM PDT My Dear Extended Family, Do not discount this. It has the potential of being the most important positive development in the euro since the beginning of the USA and GB's MSM/MOPE assault on Euroland's problems. This I am told is the reason behind the Euro holding above $1.30 no matter how much the US and GB MSM/MOPE is thrown at it. This is another economic war taking place under the radar of the sheeple between the USA and GB on one side and Euroland on the other. Russia and China might make the euro their reserve currency of selection if Hollande can pull off this plan. I might go to France to vote for him twice. He knows what the euro's real problem is and will work to cure it. This is extremely important in the dollar equation. It may be the most important swing factor in the political scene of gold and the US dollar. Hollande could be the political figure of this century for the upcoming euro block. It is possible. Do not discount this. Resp...
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| Posted: 27 Apr 2012 09:11 AM PDT from Gold Seek:
As a general rule, the most successful man in life is the man who has the best information. On the night of November 22, 1910 a delegation of the nation's leading financiers, led by Senator Nelson Aldrich, left New Jersey for a very secret ten day meeting on Jekyll Island, Georgia. After the Jekyll Island visit the National Monetary Commission wrote the Aldrich Plan which formed the basis for the Federal Reserve system. After several failed attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President.
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| Good News - the Impending Gold & Silver Launch Posted: 27 Apr 2012 09:10 AM PDT Deepcaster
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| Should We Kill The Politicians Before They Kill Us? Posted: 27 Apr 2012 08:56 AM PDT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mad Cow Futures and Silver Fundamentals Posted: 27 Apr 2012 08:54 AM PDT The U.S. Department of Agriculture recently confirmed the country's fourth known case of Bovine Spongiform Encephalopathy or BSE, which is popularly known as Mad Cow Disease. The highly publicized BSE case was discovered during a random test of a dairy cow carcass that was located at an animal rendering facility owned by Baker Commodities Inc., a business which removes dead animals from farms for processing into animal byproducts. The discovery was announced on April 23rd and was widely cited as a notable negative factor in U.S. cattle related futures, which fell sharply on the news as several countries expressed concerns about the safety of the U.S. beef and dairy industry. Deadly Mad Cow Disease Also Infects Humans Mad Cow Disease had received considerable publicity after an outbreak in the United Kingdom due to its apparent ability to be transmitted to humans and the fact that it could survive the cooking process. The disease is thought to be related to the ...
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| Golden Day As Stocks Slip And Silver Still Leads YTD Posted: 27 Apr 2012 08:54 AM PDT When even Pisani is questioning the fundamental-less QE3-addicted rally, it is perhaps self-evident that volumes were lagging today and stocks gave up most of their gains to end fractionally higher in the S&P 500 e-mini futures. Stocks peaked at the open of the US day-session after an overnight ramp that started in the depths of the overnight session (3amET) as auctions and data became so bad that traders adjusted their odds of a central-banker injection which seemed to spur wholesale buying of gold, stocks, selling of the USD (but also selling of US Treasuries - which did not fit with the QE meme). Gold continued its debasement rally after the US day-session as stocks sold back off as GDP composition weakness became clear. As we pushed into the European close, stocks rallied back to catch up with Gold's performance on the day and then sagged for a quiet low volume afternoon that saw the ES drop back below 1400, below its opening levels as Gold held above $1660. Treasuries limped around in another narrow range day ending a fraction lower in yield but off their best levels of overnight (where 10Y got down to 1.88%). Whether it is discounting Fed easing or EUR repatriation, USD weakness was broad today but JPY and AUD strength was relatively equal providing little carry-driven strength to support stocks. VIX warbled above and below 16% but ended back above as the term structure of vol continues to leak flatter. A solidly green week for stocks, accompanied by falling volumes and average trade size has seen the nominal value of the S&P 500 almost overtake Silver for best-performing asset YTD (after Silver's post LTRO2 collapse). Copper outperformed Gold and Oil on the week - though they managed to more than double the implied move from USD's weakness (-0.5% on the week). The lack of financials in today's push along with only modest energy, industrials, and materials follow through suggests investors are losing hope rather quickly with the QE chatter and the slide into the close did nothing to stay anxiety. Just your standard 3%-plus 50 point almost-linear lower-and-lower volume melt-up in the US' broad equity index...
From 3amET, risk-assets soared as the USD was sold broadly. Gold and stocks (blue) meandered along with one another and each time stocks caught up to Gold (orange arrows), stocks leaked back...
S&P sectors have moved in a generally highly correlated, liquidity-hope-fueled way this week but lagged a little towards the end of today...
Silver's loss since LTRO2 has dragged it down to only a slight outperformer YTD as ES manages to leak higher in the last four days...
Correlations remain very noisy as QE-on and QE-off plays havoc but the week's moves in FX seem much more about USD weakness than EUR strength per se - as we try to highlight below the moves all seem very broad-based USD selling (as we suspect Fed action is being priced in over ECB or BoJ action)...
USD weakness heped gold rally but silver did not benefit as much this week and remains a decent underperformer on the week and the month...
But as our proxy for risk-assets suggests, equities seem a little full of hope right now that Ben will deliver...
Charts: Bloomberg
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| Dismal Metals Sentiment — Just What Dr. Bernanke Ordered Posted: 27 Apr 2012 08:53 AM PDT Since the dramatic drops the silver market saw in May and September of last year, prices in the precious metals market have been suffering from an excess of negative sentiment. This adverse perception is weighing on metal prices and keeping investor demand at bay. Furthermore, although investors have continued to buy physical silver, the overall quantity being purchased has declined significantly, resulting in reduced support for the metal's price. Nevertheless, the supply of silver is naturally limited by the quantity existing in the Earth's crust, despite ever growing industrial applications for the metal and rising price inflation. This key combination of factors still provides a strong fundamental basis for continuing to hold silver over the long term. Could Weak Silver Sentiment be Conveniently Manufactured by Central Bankers? Interestingly, this depressed silver market sentiment picture seems to be the perfect political tool needed during a U.S. election ye...
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| Gold and Silver Disaggregated COT Report (DCOT) for April 27 Posted: 27 Apr 2012 08:52 AM PDT • Also this week, Legacy Combined Commercial COT (LCNS) HOUSTON -- This week's Commodity Futures Trading Commission (CFTC) disaggregated commitments of traders (DCOT) report was released at 15:30 ET Friday. Our recap of the changes in weekly positioning by the disaggregated trader classes, as compiled by the CFTC, is just below. This week we also include the graphs and changes for the combined commercial net short positioning or LCNS, the "Legacy COT" report. In the DCOT table below a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter. All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report.
Continued… Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday evening (around 18:00 ET). As a reminder, the linked charts for gold, silver, mining shares indexes and important ratios are located in the subscriber pages. In addition Vultures have access anytime to all 30-something Vulture Bargain (VB) and Vulture Bargain Candidates of Interest (VBCI) tracking charts – the small resource-related companies that we attempt to game here at Got Gold Report. Continue to look for new commentary directly in the charts often. Combined (legacy, not disaggregated) Commercial Net Short Position for Silver, then Gold below. Source CFTC for COT, Cash market for gold and silver. Combined Commercial Net Short positioning (LCNS) for silver futures (including Swap Dealers) fell a quite large 4,144 lots to a very low 22,353 contracts net short (111.8 million ounces), a reduction of 15.6% w/w, as silver declined 86-cents or 2.3% from $31.67 to $30.81 Tuesday to Tuesday.
The LCNS as a percentage of all silver contracts open (LCNS.TO) fell to an extremely low and potentially contrary bullish 18.27% - the lowest since January 3 (14.9% then).
Note that the combined commercials (the entities whose job it is to hedge metal inventory on hand or managed for others, metal sold/bought forward, metal for delivery, metal in shipment/transit, metal anticipated to be needed and metal backing a myriad of financial derivatives), are very near their lower limits of net short positioning relative to the past three years of previous trade. To us that suggests that the Big Hedgers are not, repeat not, positioning as though they expect gold and silver to move materially lower. To the contrary, if the Big Hedgers thought that gold and silver were heading much lower we would expect them to be positioning for it with higher, not extremely low net short positions. (Edit at 19:40 CT.) Speaking of the open interest for gold futures we find it remarkable and very interesting that the COMEX open interest for gold futures has declined for eight consecutive weeks, reflecting an apparent spec migration from gold futures elsewhere. From February 28 to April 24 the gold open interest fell 83,655 lots from 479,044 to 395,389 contracts open, a reduction of 17.5%.
Gold closed February 28 at $1,783.83 and fell $109.85 or 6.2% the following week to $1,673.98. The open interest plunged 35,795 contracts that week also, and has continued to decline another 47,860 lots in the seven weeks since. But instead of breaking down with the evaporating open interest in gold futures, gold has found willing bidders (likely including some central banks) above the $1,600 level. Indeed, as measured on COT reporting Tuesdays, gold has remained in a $1,640 to $1,680 trading range since March 6 as the open interest fell. We believe that is an indication there have been and likely still are substantial and determined bidders for gold on most any significant dip. That is all, carry on. Gene Arensberg for Got Gold Report ***
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| Eric Sprott: "When Fundamentals No Longer Apply, Review the Fundamentals" Posted: 27 Apr 2012 08:46 AM PDT By Eric Sprott And David Baker of Sprott Asset Management When Fundamentals No Longer Apply, Review the Fundamentals This may not come as a surprise, but we're still not seeing it. We're not seeing a US recovery. Here we are, well into 2012, and the fact remains that the US housing situation is still a bust. There is simply no housing recovery happening in the United States. US New Home Sales fell for the fourth time in a row month-overmonth in March, representing a seasonally-adjusted annual rate of 328,000, down from 353,000 in February.1 Do you know what the annual rate of New Home Sales was back in 2006? About 1.21 million.2 No recovery there. Same goes for US Existing Home Sales, which fell unexpectedly by 2.6% in March to an annual rate of 4.48 million units.3 Again - would you care to know where they were in the same month back in 2006, before the financial system fell apart? Approximately 6.92 million units.4 No recovery there either. Then there's unemployment. Judging by all the recent earnings-release cheerleading, March's jobs numbers seem to have been forgotten, but they were plainly weak. The US Labor Department showed US hiring slowing to a mere 120,000 new jobs in March, below expectations of 200,000+.5 That's not a recovery. That's simply weak data. Same goes for the most recent jobless claims numbers, which have been running above 380,000 for the last two weeks, above the 375,000 threshold that supposedly signals future unemployment increases.6 Again - this is not positive data, this is weak data. How high will it have to go before the economists admit that it's weak? 400,000? 425,000? We're asking - we'd like to know. Then there are US tax receipts, which continue to point in the same direction. If the US is recovering so strongly, then why are employment tax receipts only up 2%? ($484 billion fiscal year-to-date as of March 2012 vs. $475 billion over the same period to March 2011).7 A 2% increase is explainable by inflation alone, which was last reported running at 2.7% according to the Bureau of Labour Stastics.8 Shouldn't the tax receipts be much higher than that? Wasn't unemployment down so far this year? As the Associated Press plainly states, "The unemployment rate has fallen to 8.2% in March [2012] from 9.1% in August [2011]. Part of the drop was because people gave up looking for work. People who are out of work but not looking for jobs aren't counted among the unemployed."9 Oh! Sorry,… now the numbers make more sense. There hasn't been any net new employment at all. Question: if everyone "gives up" looking for work next week, will the US unemployment rate go to zero? We're asking - we'd like to know. Other economic indicators exhibit the same downward momentum that the pundits are loath to acknowledge. For example, the Economic Cycle Research Institute's (ECRI) Weekly Leading Indicator index, which had been rising from its 2011 lows earlier this year, has resumed its downtrend in April.10 More recently, US Durable Goods Orders were revealed to have dropped 4.2% in March, representing the largest decline since January 2009.11 To top it all off, China's most recent Purchasing Managers Index (PMI) indicated that China's manufacturing activity has now been in contraction for six months in a row.12 FIGURE 1: SPANISH BANKS - DEPOSIT AND EUROSYSTEM FUNDING (% OF TOTAL ASSETS),
Note: Deposits of domestic ex credit institutions in Spanish MFIs. Eurosystem borrowing Eurosystem funding via Open Market Operations Source: Bank of Spain, ECB and Citi Investment Research and Analysis Meanwhile, the situation in Europe continues to worsen. There's no point in mincing words: Spain is a complete disaster. This past week, the Spanish government managed to pull off two separate bond auctions, only to have the yield on their 10-year government bond shoot right back up the moment the second auction closed. Everyone's nervous because the Spanish banking system is up to its eyeballs in approximately €143.8 billion worth of delinquent loans, and the private sector is unwilling to lend Spanish banks the money to weather the potential write-downs.13 As we've seen before, the real culprit plaguing the Spanish banks is customer deposit withdrawals. It is estimated that €65 billion of deposits left Spanish banks this past March alone.14 People are taking their money out of the Spanish banking system, and without the help of the generous European Central Bank (ECB), the Spanish banks would likely be in a full collapse today (see Figure 1).15 As it stands, the Spanish banks have now borrowed a massive €316.3 billion from the ECB in order to meet the withdrawals and maintain the illusion of solvency. Perhaps it's Euro-crisis fatigue, or maybe just plain denial, but the equity markets appear unwilling to acknowledge how close we are now to yet another round of Eurozone upheaval. Spain's economy is almost five times that of Greece. Spain also has over four times the amount of externally-held nominal debt outstanding.16 If the bond vigilantes choose to punish the Spanish 10-year bond (currently trading precariously close to a 6% yield), we could soon be back where we were this past September, only with a problem four times as large. The rest of Europe isn't looking so hot either. Italy's bond market is in a similar situation to that of Spain, with the Italian 10-year bond trading perilously close to the 6%-yield threshold. Recent data showed the European Purchasing Managers Index (PMI) falling to 47.4 in March, well below the 50 mark which signals growth in industrial activity.17 German PMI recently confirmed this move with its April release of 46.3, down from 48.4 in March, representing the fastest rate of contraction since July 2009.18 These declines in economic activity, combined with the austerity measures most Euro countries are currently attempting to impose, almost guarantee more printed money will be pumped into the European bond markets before the year is over. It's simply a matter of time. As expected, the powers that be are busy parading around in preparation for the next round of Eurozone panic, with the IMF using the renewed concerns as an opportunity to re-establish its relevance as a firewall provider. The IMF most recently secured $430 billion worth of new "pledges" from various G20 member countries to increase its potential lending capacity to $700 billion in the event of further problems in the Eurozone.19 Not unsurprisingly, the BRICS countries have expressed irritation at the disproportionate voting power held by Western powers within the IMF at the expense of themselves and the other developing nations. In prepared remarks at an IMF press conference, Brazil's finance minister criticized the skewed quotas that dictate voting power, stating that, "The calculated quota share of Luxembourg is larger than the one of Argentina or South Africa… The quota share of Belgium is larger than that of Indonesia and roughly three times that of Nigeria. And the quota of Spain, amazing as it may seem, is larger than the sum total of the quotas of all 44 sub-Saharan African countries."20 This unbalance used to make sense when the IMF was designed to help fund ailing third world and developing countries through economic crisis. But that is clearly no longer the IMF's main purpose. It must be difficult for the BRICS countries today. On one hand, they continue to jockey for respect among the Western powers, insisting on participating in quasi-European bailout funds like the IMF. On the other hand, they are also clearly aware of the Western nations' continuing efforts to surreptitiously devalue their domestic currencies, and the pernicious effect that has had on them as exporters and as lenders of capital. In that vein, it was interesting to note that during the latest BRICS Summit held this past March in New Delhi, the main topic of discussion centered on the creation of the group's first official institution, a so-called "BRICS Bank" that would fund development projects and infrastructure in developing nations. Although not openly discussed, reports suggest what they were really talking about was creating a type of BRICS central bank - an institution that could facilitate their ability to "do more business with each other in their local currencies, to help insulate from U.S. dollar fluctuations…"21 Given the incredible scale of western central bank intervention over the past six months, the BRICS' increasing frustration with their printing efforts should be a given by now. The real question is what they're doing about it, and what assets they're accumulating to protect themselves from the inevitable, which brings us to gold. Although the paper gold price has been range-bound over the past month, the physical gold market has been undergoing staggering change. Earlier this month it was revealed that Hong Kong gold imports into China totaled nearly 40 tonnes in the month of February, representing a 13-fold increase over the same month last year (see Figure 2).22 40 tonnes annualized equates to 480 tonnes per year - a massive number in a market that only produced 2,810 tonnes of mine supply in 2011.23 FIGURE 2: CHINA'S GOLD IMPORTS FROM HONG KONG If there's one thing we now know for certain, it's the fact that the market has completely missed the importance of the demand-side changes currently taking place in the physical gold market. China has now imported 436 tonnes of gold through Hong Kong over the past eight months.24 This compares to imports of a mere 57 tonnes over the same eight month-period a year earlier (July 2010 - February 2011). The net new demand implied by this increase is 379 tonnes, which when annualized equates to 568 tonnes of new demand in a market that supplies 2,810 tonnes per year in mine production. These are astounding numbers. Recent IMF data also shows that at least 12 countries increased their physical gold reserves by 58 tonnes in the month of March, with Mexico, Turkey, Russia and Kazakhstan making sizeable purchases.25 58 tonnes annualized equates to 696 tonnes of demand per year. We know that central banks bought 439.7 tonnes of gold in 2011, and if the pace of recent central bank purchases continues, it will equate to another 256 tonnes of net new change in the physical gold market. The significance of this demand shift is striking. If we combine China's implied net change of 568 tonnes with the central banks' net change of 256 tonnes, we're left with a demand shift of over 824 tonnes vs. an annual mine supply of 2,810 tonnes. That represents close to a 30% net change in the physical gold market in 2012. If we remove the portion of global gold production produced by China and the other non-G6 central bank gold buyers (like Russia and Mexico - because we know they're not sellers), we're now dealing with over 824 tonnes of demand change hitting an annual global mine supply of a mere 2,170 tonnes - representing a 38% shift.26 Although we have been continually reminded that 'fundamentals don't matter' in today's marketplace, there isn't a physical market on earth that can withstand that type of demand increase without higher prices over the long-run, and the gold market is no different. There are no sellers of physical gold that we know of who can satiate that scale of new demand, and global gold mine supply has been virtually flat for over the last ten years. Even if we incorporate the estimated 1,600 tonnes of "recycled gold" that the World Gold Council insists on including in its annual gold supply estimates, the numbers above still suggest a net change of 19%.27 Who is going to give up their gold purchases to make room for this scale of new demand? Where is the gold going to come from? We ask because we don't actually know. We have written at length about the disconnect between the paper gold price and the physical gold market. If the demand changes stated above applied to any other market, the investing public would lose their minds. Could you imagine, for example, if the demand shifts described above were applied to the global oil market? What would happen if a single country came in from nowhere and increased its oil purchases by a factor equivalent to 30% of the world's annual oil supply? We are students first and foremost of the physical market, and the numbers stated above speak for themselves. We remain confident about gold for the simple reason that the demand we are now seeing for physical is completely unsustainable without higher prices, and we do not see that demand abating in the coming months. The US recovery is not happening. Europe is poised for yet another full-fledged economic crisis, and the BRICS countries continue to aggressively convert to hard assets like gold in order to protect themselves from currency debasement. The paper market for gold can continue its charade, but demand in the physical market will soon overpower it through sheer momentum - there's only so much physical to go around, and it appears that there are some very large buyers that are eager to take it.
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| Posted: 27 Apr 2012 08:39 AM PDT Dave Gonigam – April 27, 2012
Considering he delivered his readers 462% gains on Lehman as it circled the bowl in 2008, it was hard not to pay attention.
It delivered a gut punch… followed by a swift kick… to Spain's government debt. The agency downgraded the kingdom not by one, but two notches, from A to BBB+.
"The situation in Spain is very similar to Ireland in 2008. Ireland had low sovereign debt until it decided to recapitalize its banks." The rest is history: Ireland racked up huge debts, and it still didn't do the banks any good. Today, Irish taxpayers are being drained faster than a pint of Smithwick's.
Barring a miracle, GDP numbers due Monday will indicate the country is back in recession.
"The banks," he explains, "are just starting to recognize long-delayed loan losses. As they do, they will need fresh equity injections to remain solvent. Many depositors are fleeing Spain because they are worried that the banks are insolvent, and not addressing their capital shortfalls." "If the EU and IMF want to prevent Spain from sparking a 'Lehman Bros.' panic in the European banking system, they will perform triage to rebuild confidence in bank depositors." That is, depositors will be made whole first… followed by the holders of assorted derivatives instruments. Shareholders? They'll be holding the bag. "Spanish bank shareholders," Dan concludes, "are going to be left with little to no claim on bank assets when this is all over." Dan — our resident stock market vigilante — has identified a way to profit from this certainty. He has a knack for this. Not only did he spot a way readers could make more than five times their money on a failing Lehman in 2008, he delivered a 95% gain in 2011 as American Airlines sank into Chapter 11. At the moment, the only way new readers can access Dan's premium research is through membership in the Agora Financial Reserve. To celebrate The 5's five-year anniversary, we're offering Reserve membership on a trial basis — something we've never done before. It's an extraordinary offer, and it expires at midnight tonight. Addison lays out the details here.
At last check, the dollar index had slipped to 78.7, the lowest in two months. The euro has improbably strengthened to $1.327.
The Bank of Japan will pursue 5 trillion yen in additional "asset purchases" — i.e., shoring up the banks' balance sheets and printing money to do so. The yen has weakened to 80.446… but that keeps it well within the range of Abe Cofnas' demonstration trade this week. Recall he expected the yen to close the week somewhere between 79.75-82.75. This will be good for gains of 6.9% and 10.4%… not bad for a week's work. And it makes Abe 8 for 9 on the sample trades we started following in The 5 two months ago.
"We have had, essentially, the S&P making a new high in early April at 1,422," he explains to CNBC India. "But most of the other markets in the world didn't exceed the May 2011 highs. So if you would build an advance/decline line of all stock markets in the world, it would be in a downtrend. "From the recovery highs, in early May, we could easily see a 20% decline." Dr. Faber is coming back to our annual gathering in Vancouver this year. Through next Wednesday only, you can secure admission at hundreds of dollars off the regular fee.
During the previous four-month span, it actually fell. "The price indexes of grains, fats and oils and other foods all increased in each month since January 2012," says the World Bank report. Blame it on rising oil prices, strong Asian demand and poor weather in parts of Europe and the Americas. And it all underscores the need for a critical commodity that Chris Mayer has tracked down in his extensive travels — phosphate. "I call it 'white gold,'" he writes in a new report for readers of his premium advisory Mayer's Special Situations. "While it is a rock, it is not a precious metal at all. Instead, it's something much more valuable to the world. It helps solve the growing number of hungry mouths. And the price of this rock has risen faster than the price of gold itself." "A few years back, the price spiked 700% in just a short time frame. There is no substitute for 'white gold.' It's crucial to the world's food supply. And most of the world's mines are in decline. Foreign Policy magazine recently called it 'the gravest resource shortage you've never heard of.' This critical commodity has a hand in 40% of the world's food supply." His favorite play in the sector has solid management, he tells us, "and they seem to have a pair of world-class deposits in hand in what is fast becoming a strategic resource." [Ed. Note: For only a few more hours, you can access Chris' premium research... and Abe's trading guidance... and Dan's recommendations... and free admission to Vancouver... at an extraordinary trial rate. Indeed, members of the Agora Financial Reserve get lifetime access to everything we publish... and now you can give it a test-drive. We're doing it to celebrate five years of The 5... and this offer is open only to readers of The 5. For a comprehensive list of the privileges and benefits of membership, and all the details of this trial offer... please give this invitation your attention. We've never made the Reserve this accessible... which is why we're keeping the offer open for less than 48 hours. It expires tonight at midnight.
As we mentioned on Wednesday, the Labor Department proposed bringing all manner of farm chores under the child-labor laws. After howls of protest prompted by a story at The Daily Caller, the plan has been dropped. "This regulation will not be pursued for the duration of the Obama administration," says a press release from the department. Thus, we have a rerun of last year's incident, in which anyone who drives a farm vehicle would have had to get a commercial driver's license. The Transportation Department had to back off that one too. But every time public opposition makes the bureaucrats back off, you can count on them to come back with something different... or perhaps stealthier.
SOPA would have given government the authority to vaporize websites from the Internet without due process. After scores of popular sites protested by going dark for a day, Congress got the message.  Enter CISPA, or the Cyber Intelligence Sharing and Protection Act. "The previous bills," Internet activist Aaron Swartz explains, "were about giving the government the power to censor the Internet. And this is more like a Patriot Act for the Internet." CISPA permits companies ranging from Verizon to Facebook "to hand over your private communications to government officials without a warrant," says Rep. Ron Paul, "circumventing well-established federal laws like the Wiretap Act and the Electronic Communications Privacy Act." "Basically," sums up the tech-news website Techdirt, "it says the Fourth Amendment does not apply online, at all." The bill was rushed to a vote last night — so quickly Dr. Paul couldn't make it back to Washington in time. The Senate might follow up by the time you read this.
It is undoubtedly less well-known in the 21st. Which brings us around to our new project. It's not a newsletter or a trading advisory. At the same time, it's not a political movement. If anything, it's more subversive... heh. Jeffrey Tucker, who heads it up, calls it "the first comprehensive, digital-age society of big ideas. As a member, you'll have everything you need to cultivate learning and living a free life. And best of all, everything included with the club comes to you for free with your membership, potentially saving you hundreds of dollars in expenses." Today, charter members of the club are getting a free e-book of Rose Wilder Lane's 1943 classic The Discovery of Freedom. It's not available in e-book form anywhere else. They also have the opportunity to exchange ideas in a private forum that's members-only. Under CISPA, Dr. Paul says it's not too far-fetched to have "government-approved employees embedded at Facebook, complete with federal security clearances, serving as conduits for secret information about their American customers." By contrast, our project is small enough to fly under Uncle Sam's radar. Membership comes with a host of benefits we can't begin to list here — seriously, give it a look — and right now, we're offering an extra incentive to make it worth your while. But only through midnight tomorrow.
"Some manufacturers have in some cases redesigned the toilets so they flush adequately with the lower water quantity, but as usual, the government failed to consider that older homes with terra cotta waste pipes underground (consider the joints) cannot pass along the wastes without the greater water flow offered in older toilets." "One work-around is that on a regular basis it's necessary to dump an entire bucket of extra water with the flush to keep the pipes under the concrete basement clear. The law of unexpected consequences strikes again! And thus what became of water conservation?" "Check out electric trimmers: Why do the newer ones fail to work?" "How about washers and dryers that have doors opening on the side instead of on the top? Why do they require replacing more often than the older models? Could it be the plastic hub bearings wearing out?" "We know that the government has a new way to calculate the CPI based upon technological improvement, but do they now adjust for the 'effectiveness failure' of products due to regulations? I am sure not!" "Keep up the good work, folks!" The 5: Yes, the law of unintended consequences is enforced every day in little ways around your home. Which is what makes Jeffrey's special report so valuable. It's called Hack Your Showerhead: Plus, Nine Other Ways to Get Big Government out of Your Home. Together, they make up 10 simple, subtle, even sneaky ways to stick it to Uncle Sam. Best of all, they're completely legal — at least for now. This report is only one element in a whole bunch of goodies that comes with our new project, the Laissez Faire Club. To learn about the rest, check this out. Please note: This offer expires at midnight tomorrow. Have a good weekend, Dave Gonigam P.S. Final reminder, exclusive to readers of The 5: Trial memberships in the Agora Financial Reserve are available only through midnight tonight. If you've ever thought you'd like to join but the upfront cost was a deal killer, you have no excuse now. Here's where to act.  Preparing for the launch of the Laissez Faire Club took the better part of four months, and the involvement of everyone from Addison to Jeffrey Tucker to Agora Inc. founder Bill Bonner to Whiskey & Gunpowder's Gary Gibson. One of the biggest challenges: Identifying the essential volumes to make up a box set we call "Economics in One Library." In the end, the group settled on four books. Today, Jeffrey tells the story of the volume that's the oldest, the slimmest... and in its own way, the most important. What Is or Should Be the Law?by Jeffrey Tucker It seems that the president is frustrated with Congress. What kind of legislature is this, he asks, that fails to immediately enact the will of the executive? The executive has been using a slightly different approach these days: He uses an executive order. Forget all that stuff you have read in the civics texts about checks and balances and the branches of government. The executive order bypasses them all. The White House even has a name for this: "We Can't Wait." There is even an official dot-gov website. Hey, if you are going to shred the Constitution and pass laws like a dictator, the best approach is to do it out in the open. "If Congress refuses to act," he says, "I'll continue to do everything in my power to act without them." To be fair, he is hardly the first. The president before him did it, and the president before that and so on back to World War I and before. Every new guy cites the precedent of the old guy, as if that alone provides justification. Defying the Constitution has a long tradition, don't you know. But you know what this tells me? What this country needs is a good theory of law. We even lack the language to talk about what is happening to us. One party denounces the other but only in ways that exempt itself from criticism. As a result, the "man on the street" is not even prepared to talk about fundamental questions. Example: Where did law come from, and what should it do? Sure, people get annoyed at the police, irritated by the TSA or startled to read about periodic injustices of public policy. One party gets annoyed when the other party's president enacts laws without regard to any constitutional conventions. But what is the law, and what should it be? These are the bigger questions that are not part of public consciousness. The same was true in the time of Frederic Bastiat (1801-50). At the very end of his life, he wrote an impassioned plea on the topic. He tried to get people to think hard about what was happening and how law had become an instrument of plunder, rather than a protector of property. He writes:
This is from Bastiat's The Law, one of the great political essays to emerge from the whole Continental world of the 19th century. it vanished into obscurity in France, was resurrected in late 19th century English, and then disappeared again, only to reappear in the United States in the 1950s, thanks to the efforts of the Foundation of Economic Education. This essay asks fundamental questions that most people go through life never having thought about. This book is part of Laissez Faire Books' set of new works that seeks to find what is essential in the literature and distribute it in new ways. The book comes free to you (both physical and digital) with a membership in the Laissez Faire Club. The problem is that most people accept the law as a given, a fundamental fact. As a member of society, you obey or face the consequences. It is not safe to question why. This is because the enforcement arm of the law is the state, that peculiar agency with a unique power in society to use legal force against life and property. The state says what the law is — however this decision was made — and that settles it. Bastiat could not accept this. He wanted to know what the law is, apart from what the state says it is. He saw that the purpose of law is, most fundamentally, to protect private property and life against invasion, or at least to ensure that justice is done in cases in which such invasions do take place. This is hardly a unique idea; it is a summary of what philosophers, jurists and theologians have thought in most times and places. Then he takes that next step, the one that opens the reader's eyes as nothing else. He subjects the state itself to the test of whether it, the state itself, complies with that idea of law. He takes notice, even from the first paragraph, that the state itself turns out to be a lawbreaker in the name of law keeping. It does the very thing that law is supposed to prevent. Instead of protecting private property, it invades it. Instead of protecting life, it destroys it. Instead of guarding liberty, it violates it. And as the state advances and grows, it does this ever more, until it becomes a threat to the well-being of society itself. Even more tellingly, Bastiat observes that when you subject the state to the same standards that the law uses to judge relations between individuals, the state fails. He concludes that when this is the case, the law has been perverted in the hands of the governing elites. It is employed to do the very thing that the law is designed to prevent. The enforcer turns out to be the main violator of its own standards. The passion, the fire, the relentless logic have the power to shake up most any reader. Nothing is the same. This is why this monograph is rightly famous. It is capable of shaking up whole systems of government and whole societies. What a beautiful illustration of the power of the pen. But take notice of Bastiat's rhetorical approach here. His conclusion is at the beginning. Why? He did not have that much time (he died not long after writing The Law). He knew that the reader didn't, either. He wanted to raise consciousness and persuade in the most-effective way. Even from a stylistic point of view, there is much to learn from his approach. Laissez Faire Books is honored to give new life to this remarkable document in this edition, which revives the translation by Dean Russell. It also includes an introduction by Bill Bonner, who gets my vote for the most-underrated voice in defense of old-style liberalism in the world today. He explains how Bastiat's essay opened his eyes to see the world in a new way. It is a habit of every generation to underestimate the importance and power of ideas. Yet the whole world that we live in is built by them. Nothing outside pure nature exists in this world that did not begin as an idea held by human beings. This is why a book like this is so powerful and important. It helps you see injustices that surround us, which we are otherwise inclined to ignore. And seeing is the first step to changing. That's why it continues to be printed and circulated and why every living soul should read it. If we are to see a renewed appreciation of the idea of liberty in our lifetimes, this monograph written so long ago in a country so far away will deserve a great deal of the credit. Jeffrey Tucker P.S. Today we release the first-ever digital edition of one of my favorite books ever: The Discovery of Freedom by Rose Wilder Lane, with an introduction by Wendy McElroy. It will later be available for purchase for $9, or get a copy free alongside all members of Laissez Faire Club! Here's how. [Ed. Note: If you act before midnight tomorrow, you get one free month of membership in Laissez Faire Club. Take advantage at this link.]
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| The Implications of a European Economic Recovery Posted: 27 Apr 2012 08:23 AM PDT Synopsis: What to expect from a European recovery, how defense contractors cheat the system, and nine ways political journalists subtly bias their writing. Dear Reader, Vedran Vuk here, filling in for David Galland. Today, I'll discuss the scenario of a European recovery. Would one mean that we're finally out of the woods? I have a couple of other interesting pieces along with the Friday Funnies, so let's get started.
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| Posted: 27 Apr 2012 08:08 AM PDT In perhaps the most courageous (and likely must-read for future economists) speech ever given inside the New York Fed's shallowed hallowed walls, Economic Policy Journal's Robert Wenzel delivered the truth, the whole truth, and nothing but the truth to the monetary priesthood. Gracious from the start, Wenzel takes the Keynesian clap-trappers to task on almost every nonsensical and oblivious decision they have made in recent years. "My views, I suspect, differ from beginning to end... I stand here confused as to how you see the world so differently than I do. I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality." and further... "I scratch my head that somehow your conclusions about unemployment are so different than mine and that you call for the printing of money to boost 'demand'. A call, I add, that since the founding of the Federal Reserve has resulted in an increase of the money supply by 12,230%." But his closing was tremendous: "Let's have one good meal here. Let's make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It's the moral and ethical thing to do. Nothing good goes on in this place. Let's lock the doors and leave the building to the spiders, moths and four-legged rats." The Full Speech is below:
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The 
Forget the market machinations utilized to put lipstick on yesterday's FOMC pig, and the MSM's brain-dead "take" on Fed policy. Forget the gold plunges and Dow surges, calls for an "end to QE," and – conversely – its expansion to "INFINITY." Instead, consider what the Fed has done – and ALL Central banks throughout history – what they are doing now, and what options they have for the future. 
"If Greece was Bear Stearns, Spain is Lehman Bros." said the alert one week ago today from Dan Amoss.
After the U.S. close yesterday afternoon, Standard & Poor's affirmed this outlook.
"S&P is subtly warning Spain that its banking system needs more capital," says Dan, digging for the story the financial media aren't onto yet.
While Spain lies doubled over from S&P's pummeling, the nation's keepers of statistics kicked sand in its face this morning: They announced Spain has reached record unemployment at 24.4%.
"With a worsening recession, 24% unemployment and a government on the verge of being shut out of the private credit markets," says Dan, "Spanish banks have run out of time.
U.S. stocks have shrugged off the pain in Spain, to say nothing of a U.S. GDP number that missed expectations this morning. All the major indexes are up, however slightly.
First-quarter GDP rang in at an annualized 2.2%. The "expert consensus" was looking for 2.6%. The number in the previous quarter was 3.0%. Not good by any measure.
Currency traders, perhaps sensing the GDP number will drive the Fed to do something stupid, are pulling the dollar down this morning.
Japan's central bank moved overnight to affirm Einstein's definition of insanity.
Gold is taking its cue from the sinking dollar as the weekend approaches. The spot price has perked up again to $1,664. Silver has firmed to $31.38.
"I think that the markets for the next one-two months will be going lower," says the inestimable Dr. Marc Faber with his take on global stocks.
Food prices are back on the rise, according to new figures from the World Bank. Its food index rose 8% between December and March.
For the second time in a year, the feds have backed off a proposed regulation that would have throttled the few remaining family farms.
Thus, after popular opposition killed the "Stop Online Piracy Act" three months ago... perhaps even worse legislation has now passed the U.S. House.
"Eternal vigilance is the price of liberty," goes the expression. It's often attributed to Thomas Jefferson... and while Jefferson scholars can't find evidence of that, they tell us, "This quotation was well-known in the 19th century, and was, in fact, used by a number of famous figures, including Frederick Douglass."
"We know," a reader writes after Jeffrey Tucker's overtime briefing yesterday, "that toilets are now regulated in the flush water allowed."
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