Gold World News Flash |
- Are Gold And Silver Bullion Sales Reported To The IRS? Tips For Keeping Bullion Sales Private
- Stephen Leeb: Precious Metals Investors Need to Hang in There!!
- China, central banks and ETFs underpin demand for gold
- David Morgan's SILVER PRESENTATION at The Las Vegas MoneyShow
- Louise Yamada - We Now Have Massive Tops on Global Markets
- Silver Update 5/16/12 Tinfoil Hat
- Biderman Sees Post-Facebook Euphoria Rally Fading Quickly To Dysphoria
- MELTDOWN UPDATE: The JP Morgan Derivatives Book is Blowing Up – Bix Weir
- Gold Bouncing from Support in Asian Trade
- Remember To Stay Balanced
- Vulture Bargain Road Kill Chart for Riverstone Resources - RVS
- The Gold Price Down and Monstrously Oversold as Euro Crisis Looms Must Rally Soon
- Quantifying The Plan Z Dry Powder - This Is The Greek ELA Borrowing Capacity
- Hedge funds are taking my advice and shorting JP Morgan. Let's really pile on the losses for JPM by taking physical delivery of silver (the paper price is meaningless; except as a giveaway price for the SLA).
- Recovery Via Shared Sacrifice: Lacy Hunt
- Chris Martenson: "We Are About To Have Another 2008-Style Crisis"
- The Yemen Exception
- “The Yemen Exception”
- Silver Corzined, Stocks Einhorn'd, Financials/HYG Iksil'd
- Guest Post: The Fabled Greek Mega-Bailout
- Gold Seeker Closing Report: Gold and Silver End Lower Again
- What Investors Need to Know About Gold & the Mining Shares
- Gold Daily and Silver Weekly Charts - Facebook, Greece, and the Hollow Men
- I Forget What You Did Last Summer
- Austerity Offers Europe their Only Hope
- Gold Not In A Bubble
- Gold: Like Summer 2011 Never Happened
- “Jon Corzine – What’s Going On?”
- Gold slides 20pc into bear market
- Japanese Pension Fund Switches To Gold
| Are Gold And Silver Bullion Sales Reported To The IRS? Tips For Keeping Bullion Sales Private Posted: 16 May 2012 05:58 PM PDT Long term gold and silver investors who have gradually accumulated physical precious metals over the years have seen the value of their holdings increase substantially when measured against the value of the paper dollar. Astute investors realize that a large part of the "gains" on their precious metals have merely preserved purchasing power compared to [...]
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| Stephen Leeb: Precious Metals Investors Need to Hang in There!! Posted: 16 May 2012 05:24 PM PDT If investors step back and look at this from a longer-term perspective, they will realize that politicians feel the only way out of this mess is to print more money. After the money printing will come the inflation. It will be higher inflation than anything we've seen in the post-World War II period and it will send gold, silver and all commodities skyrocketing. So says*Stephen Leeb*in edited excerpts from an interview with King World News as provided by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!). This paragraph must be included in its entirety in any re-posting to avoid copyright infringement. Leeb*goes on to say, [you can read the full article here] in part: You may see a situation where gold is at $1,400, and then two months later it's at $2,500. That's just one of many possible scenarios. We don't know the bottom for sure right now, but one thing is certain, you are going to see new highs in gold. Investors, just need to hang in there! [INDENT][...
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| China, central banks and ETFs underpin demand for gold Posted: 16 May 2012 05:00 PM PDT
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| David Morgan's SILVER PRESENTATION at The Las Vegas MoneyShow Posted: 16 May 2012 04:21 PM PDT |
| Louise Yamada - We Now Have Massive Tops on Global Markets Posted: 16 May 2012 04:01 PM PDT  With continued turmoil in global equity markets, gold trading near $1,540 and silver around $27, today King World News interviewed legendary technical analyst, Louise Yamada, of LYA Advisors, to see where she sees stocks, gold, silver, oil and the US dollar headed. Yamada's service had been correctly bearish stocks at the top. When asked how she knew global markets would take a hit, Louise replied: "Well, first of all, this has been a very slow erosion over a period of one year. We got the long-term 'sell' signals on these markets in the spring of 2011. We then had the steep decline in 2011. After the big move off the lows, demand suggested we did not have what it took to take the markets higher, and then we began to see distribution."
This posting includes an audio/video/photo media file: Download Now |
| Silver Update 5/16/12 Tinfoil Hat Posted: 16 May 2012 03:12 PM PDT |
| Biderman Sees Post-Facebook Euphoria Rally Fading Quickly To Dysphoria Posted: 16 May 2012 03:02 PM PDT Supply and Demand are what drive share prices in the stock market and Chrales Biderman of TrimTabs takes to task the plethora of complicating factors that are run in front of our eyes day after day on why we should be buying stocks. While he is short-term bullish, expecting a 2-3% jolt to stocks on post-Facebook IPO euphoria (as selling positions to fund the IPO allocation will fade), he remains medium-term bearish with an eye for being short stocks and long gold. His discussion of Stock Trading 101 is noteworthy and fits somewhat with our incessant annoyance at the money-on-the-sidelines ignorance that remains among so-called professionals who seem to remain ignorant of the closed-loop nature of buyers and sellers in the financial markets - leaving the important driver of market movements not earnings or macro-data explicitly but the buybacks (or lack thereof) of corporations (and money flow). An interesting alternate perspective.
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| MELTDOWN UPDATE: The JP Morgan Derivatives Book is Blowing Up – Bix Weir Posted: 16 May 2012 02:36 PM PDT
Greetings friends. This is a breaking meltdown update with Bix Weir. Bix's website is RoadToRoota.com. Reacting to the ongoing precious metals smash and JP Morgan's cascading Derivatives issues Bix says, "This is what the end game looks like… JP Morgan can literally computer rig this thing to zero and shut down the market. I say let em. The trick is to stay out of their system."
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| Gold Bouncing from Support in Asian Trade Posted: 16 May 2012 01:21 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] After what seems like a nearly vertical fall in the gold price over the last 7 or 8 days, gold is finally getting a bit of a reprieve this evening as it enters Asian trade. The interesting thing about this most recent selloff is that reports of physical offtake have indicated good buying of the metal down here at these levels. Thas has been swamped by hedge fund liquidation and some fresh short selling as some in this category are moving onto the short side. As you can see on the chart, gold fell nearly right to the very bottom of this 8 month long trading range before bouncing higher. It is not unexpected to see this sort of thing as those who instituted some fresh short positions a couple of weeks ago have made a very healthy profit and it never hurts being prudent and taking a bit of money off of the table after these kinds of gains. We also probably have some bargain hunting and some bo...
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| Posted: 16 May 2012 12:09 PM PDT My Dear Extended Family, Please make an effort to stay balanced. Greed is a condition of lack of balance similar to fear. Fear is being fanned from within the gold community as much or more than from outside. When people who know gold is seriously under priced talk temporary bear, they kick good people Continue reading Remember To Stay Balanced
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| Vulture Bargain Road Kill Chart for Riverstone Resources - RVS Posted: 16 May 2012 11:30 AM PDT By request we share the same chart for Riverstone Resources (TSX:RVS.V or RVREF) we first shared at the New Orleans Investment Conference in October of 2011 just below (updated through today, Wednesday, May 16). In this buyer's strike/panic selldown for mining shares, like many of the issuers we track, Riverstone has moved into what we call "The Blue" on our long term monthly charts – the area we consider as a Vulture Bargain Road Kill level. (An area where the panic-assisted price (as opposed to "value") has become extraordinarily compelling looking longer term, if one believes the world will not fall into a global deflationary abyss.) We also update readers on our own scheduling just ahead. It takes a market as petrified and paranoid as the current example to drive a high quality advanced explorer like Mike McInnis's Riverstone Resources to such a low level as we see in the chart above. Notice, however, that the last three monthly trading bars, which have loped the share price of RVS down from the $0.70s to the low $0.30s have occurred on relatively low volume. Yes, the current price for RVS has been pummeled, but not because Riverstone did anything wrong or had really bad luck. To the contrary, by our reckoning, with the exception of some slow lab turnaround time for thousands of pending drill samples, the company has been hitting on all its exploration cylinders. RVS has already proved up 2.7 million shallow, relatively easy to mine ounces of gold in Burkina Faso, West Africa. Riverstone is just another victim of the brutal buyer's strike and rush to liquidity underway and at this point sellers are either forced to sell or panicked into selling. No one would intentionally or voluntarily sell RVS at these Ridiculous Cheap prices in our own opinion.
Not that we think RVS would agree to a takeover anywhere near the current mark. That would be crazy. These are times of exceptional opportunity – for investors/speculators and for the mining companies that have to replace resources to survive and grow.
That's if one believes the world is not about to end and the market will return to a more normal state in the near future. - We do not believe the world is about to end, by the way. Everyone can and should make up their own mind about such things of course. Riverstone will have something upwards of 50,000 meters of new, successful drilling to include in the next NI-43-101 resource estimate later this year (likely in Q3) leading up to a feasibility study scheduled for after that. We believe that the well managed company is on its way to proving up between 3 million and 4 million ounces at their Karma project in Burkina. Due diligence a must!
Gone Fishing!
The usual tables we publish on Friday evenings will be delayed this week until either late Sunday or Monday and we will likely be exceptionally slow in answering emails over the next three weeks. With that, we set the sea anchor, batten down the hatches and rig for stormy weather, but we won't be abandoning ship just because people are getting scared again. They won't be scared forever.
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| The Gold Price Down and Monstrously Oversold as Euro Crisis Looms Must Rally Soon Posted: 16 May 2012 09:45 AM PDT Gold Price Close Today : 1536.20 Change : (20.60) or -1.32% Silver Price Close Today : 2717.00 Change : 88.4 cents or -3.15% Gold Silver Ratio Today : 56.540 Change : 1.047 or 1.89% Silver Gold Ratio Today : 0.01769 Change : -0.000334 or -1.85% Platinum Price Close Today : 1422.90 Change : -36.00 or -2.47% Palladium Price Close Today : 589.30 Change : -10.50 or -1.75% S&P 500 : 1,324.80 Change : -5.86 or -0.44% Dow In GOLD$ : $169.53 Change : $ 1.82 or 1.08% Dow in GOLD oz : 8.201 Change : 0.088 or 1.08% Dow in SILVER oz : 463.69 Change : 13.42 or 2.98% Dow Industrial : 12,598.55 Change : -33.45 or -0.26% US Dollar Index : 81.44 Change : 0.180 or 0.22% The GOLD PRICE made a low at $1,527.70, practically on my target. Silver posted its low at 2676 c, not far off 2615c support. Both the silver and GOLD PRICE are coasting along on their bottom Bollinger Bands, something that hasn't happened since fall 2008. Implication? Silver and gold are monstrously oversold, and will shortly come roaring back with a rally, even if only a temporary one. End of this decline ought to come within a week at most, but that euro crisis hangs over everything, scaring everyone to death, much like the 2008 panic in the US. Against moving averages the SILVER PRICE has moved to its percentages posted at the December low, and a little further. This must stop soon, or suffer another big slide. I am voting for "stopping soon", because the ECB has pumped massive new money into banks, and should the euro crisis threaten contagion, Ben the Bernancubus will start printing money as if he were Ben Franklin and his own picture was on the bills. GOLD/SILVER RATIO continues to rise, closed today at 56.540. If you swapped silver for gold within the last 18 months, right now you ought to be swapping back. Today I am finishing my monthly Moneychanger newsletter for paid subscribers, so have very little time. US Dollar index continued to gain today, more evidence that fear is strangling markets. Hang on, don't lose your head. One of these days all this pain will be past. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 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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| Quantifying The Plan Z Dry Powder - This Is The Greek ELA Borrowing Capacity Posted: 16 May 2012 09:37 AM PDT We already posted a full run down from JPM on what the immediate costs from a Greek EMU exit would be (starting at €400 billion and going higher), but one point that bears repeating is just how much borrowing capacity Greece has under the ELA in the aftermath of today's news that the ECB is leaving Greek banks to fend for themselves until such time as the Greek recapitalization payment is wired over to Greece, which the ECB has defined simply as "soon." The answer: woefully inadequate, and certainly not enough to backstop the remaining Greek deposits of €170 billion as of the end of March (likely far less now), at €65 billion. And that's an upside estimate: as JPM says "The true maximum amount that Greek banks can borrow via ELA is likely though to be significantly smaller because not all loans are accepted as collateral via ELA." Remember: this is all just one giant game of chicken - Greece's Syriza has bet the farm that the cost from a Greek fallout is just too big to Europe and the terms of the hated "Memorandum" will be adjusted, while to Europe, on the other hand, the outcome to Greece, at least according to Europe and the IIF's Dallara will be "between catastrophic and armageddon." So... Who blinks first? From JPM:
Once TARGET2 starts unwinding, with a massive €644 billion claim on the Eurosystem by the Bundesbank, and the realization that an imploding heretofore "contingent" and suddenly all too real liability amounting to 25% of German GDP means an in-kind collapse in living standards, then the simmering German anger will go truly parabolic. One thing is certain: at least JPM is "hedged."
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| Posted: 16 May 2012 09:35 AM PDT Hedge funds eye further profits from JPMorgan losses
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| Recovery Via Shared Sacrifice: Lacy Hunt Posted: 16 May 2012 09:22 AM PDT The Gold Report: In January, the Federal Reserve's extension of a near-zero rate interest policy to the end of 2014 stunned a good many investors. Unless the Fed changes its mind again, that will mean six years of artificially low rates. You've indicated that interest rates have nothing to do with the Fed and that they're really governed by the velocity of money and the health of the economy. Would you elaborate on that? Lacy Hunt: To clarify, the Fed can control the short-term rates, but the long-term rates are in the hands of the marketplace. The Fed's influence there is very minuscule. Some may think the Fed has produced the low interest rates today and a long yield market. I don't think its influence has been that important. It is a reflection of the economy's poor performance. The U.S. didn't have a Federal Reserve and the country was on the gold standard when it experienced a tremendous debt build-up in the 1860s and 1870s. Brought on by building the railroads and the industrie...
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| Chris Martenson: "We Are About To Have Another 2008-Style Crisis" Posted: 16 May 2012 09:18 AM PDT Submitted by Chris Martenson Get Ready: We're About To Have Another 2008-Style Crisis
Alas, all good things come to an end, and a crisis rooted in 'too much debt' with a nice undercurrent of 'persistently high and rising energy costs' was never going to be solved by providing cheap liquidity to the largest and most reckless financial institutions. And it has not. Forestalled is Not ForegoneThe same sorts of signals that we had in 2008 are once again traipsing across my market monitors. Not precisely the same, of course, but with enough similarities that they rhyme loudly. Whereas in 2008 we saw breakdowns in the credit spreads of major financial institutions, this time we are seeing the same dynamic in the sovereign debt of the weaker European nation states. Greece, as expected and predicted here, is a right proper mess and will have to leave the euro monetary system if it is to have any chance at recovery going forward. Yes, all those endless meetings and rumors and final agreements painfully hammered out by eurocrats over the past year are almost certainly going to be tossed, and additional losses are going to be foisted upon the hapless holders of Greek debt. My prediction is that within a year Greece will be back on the drachma, perhaps by the end of this year (2012).
There really is no choice for Greece but to leave the euro, and the sooner, the better. Even then, there is a lot of hardship coming their way. But in my estimation, that's better than the imposed austerity that is a guaranteed torture chamber. The institutions that avoided taking losses on their Greek debt on the first pass through, due to their preferred status in the process (the ECB among them), are almost certainly going to eat big losses this time, perhaps a full 100% of them. Leaving the euro is going to be quite a process, and the ripple effects are going to be large and somewhat unpredictable. I found this description of what will happen within Greece and its banking system to be well on the mark:
The Greek banking system will be destroyed immediately upon Greece's exit from the euro, but the banking system there is already all but dead anyway. Best just to sweep the floor clean and start over. The idea is easy enough to understand; if your bank is about to go under, it is best to get your money out before that happens. The only mystery to me is why so many people have left their money in the Greek banks this long. I suppose they were waiting for a clearer signal? Well, it would seem that the signal has now been sent and received:
Again, the real mystery to me is who still has 165 billion euros in Greek banks at this stage of the game? Also a mystery is why Greece has not yet imposed a withdrawal moratorium and capital controls? It is only a matter of time, perhaps days, before they do. Of course, it is the contagion effect that most worries the market, because the same dynamic of utter insolvency leading to the intractable nature of Greece's dilemma applies to Spain, Portugal, and Italy. Indeed, the market is already adjusting to this possibility, as evidenced by the spikes in the yields of those country's bonds:
The worry and the carnage are both running deep. And they should. Everything is now interlinked to such a degree that there is no possible way for a run on Greek banks or continued declines in the value of sovereign debt to be anything other than exceptionally destructive. Everybody owes everybody, and there's not enough productive economy to mask the insolvency of the system any longer. We saw this as Spain's sovereign yields vaulted, Spanish bank shares plunged, a not-so-happy linkage courtesy of the LTRO funding which enabled (and encouraged) Spanish banks to load up on Spanish debt. A virtuous circle morphed into a vicious spiral, each element weakening the other all the way down. That the US stock market is only down less than 5% from recent highs is a testament to the power of the liquidity that the Fed and US banking system have directed at keeping things elevated. However, this cannot last, at least not without another big quantitative-easing (QE) injection from the Fed. Without such an infusion, I am calling for another 2008-2009-style market rout of at least -30% but possibly as much as -50%. QE, stat!The reason we need another QE injection is that the same dynamic of debt destruction is again stalking the markets. As expected, the Fed has been waiting for a clear signal that it is time for more thin-air money, and again they are going to wait too long to prevent more damage from occurring. This time I am expecting a coordinated central bank action that will involve most or all of the major central banks of the OECD: Japan, UK, US, and Europe. One day, we will wake up to find some global message about the need for a coordinated response to a major crisis, and each of the central banks will be issuing some massive new amount of thin-air money. Of course the programs will be called something fancy that will require shortening to an acronym and will involve buying some form of debt (sovereign debt, but maybe also bank debt), and we'll track this via central-bank balance-sheet expansion. Perhaps we'll see this line go up a little steeper, or perhaps the same trajectory will be maintained a little longer:
Regardless, more printing is on the way, because the alternative is the utter collapse of the entire Western banking system. And quite probably a few governments, too. To me, that is an unthinkable outcome, and one that I have every faith will be avoided at any every cost. It is the main reason that I am quite content to hold onto all of my gold at this juncture. Anybody selling physical gold here is either broke (and needs the money) or is just not paying attention. To drive the point home, consider this picture posted on Zerohedge taken from a German television production purported taken of the Ministry of Finance in Athens. A picture is worth a thousand words:
(Source) By the time the Ministry of Finance is storing records in garbage bags and shopping carts, perhaps, just maybe, one might become a little concerned about loaning money to the Greek government. One hopes. If You Think Greece is BadGreece, of course, is tiny compared to Spain or Italy. The situation in Spain -- which is big enough to matter -- is truly dire, very large, and getting worse. Spain has been playing fast and loose with the numbers, and that fact has now been revealed to the world. It's not a pretty picture.
And this is just the losses that Spanish banks face on their real-estate portfolios. They are also now facing losses on all the Spanish sovereign debt that they bought with their LTRO funding as well. Very simply, Spain now needs a massive rescue, and soon. Meanwhile German citizens are all done with helping their southern neighbors. Merkel has used up all of her political capital on the rescues performed to date, and it is far from clear that any more help is politically doable here. The only way that I can see such help coming is under some terms other than drawing upon the savings of Germany's citizens. Printing, perhaps, but even that is a dicey political proposition here. If Spain drops here, then you can just set an egg timer for when Italy will go. And then France. The dominoes will rapidly fall from there. Why I Am Nervous These DaysIn describing JPMorgan's recent $2 billion (or is it $20 billion…or more?) trading losses and Jamie Dimon's (the CEO of JPM) awkward explanation of how certain hedging operations went wrong, the author of this next piece asks the obvious question:
We still don't know the exact dimensions of JPM's losses here (my expectation is that more bad news will follow soon enough), but we can be sure that the big banks have not learned from the mistakes of the past and are still engaged in risky practices involving derivatives. Whatever JPM was up to (and I am still not entirely clear on what that was), it was not classic hedging, which serves to minimize losses, but something far more speculative. The reason this gives me such cause for concern is that it once again exposes a small portion of the derivative monster that will certainly be awakened when the European situation goes into full meltdown over the Greek, then Spanish, the Portuguese, then Italian situations. While derivatives are, in theory, a zero-sum game, and therefore could, in theory, be forgiven and forgotten in a pinch, the reality is that they've been used to pretend that risk did not exist and therefore losses don't exist. The ugly truth here is that we are at the tail end of a most unfortunate credit bubble -- four decades of global excess by the OECD countries -- and there are massive losses to account for. Just as the offsetting counterparties involved in the subprime CDO and CDS mortgage crisis did not zero out because the losses they were allegedly papering over were all too real, the same will prove true of the derivative paper allegedly covering sovereign and corporate debts. Remember, the biggest holder of derivatives is the company that just demonstrated that it doesn't really understand the concept of hedging.
(Source) Overall derivatives, especially interest-rate-linked derivatives, have increased by over $100 trillion since the crisis began. As JPM just evidenced, and as hinted at by the interminable hand-wringing over allowing Greece's paltry $78 billion in credit-default swaps to be triggered, real dangers lurk here. I wish I could analyze the situation better than the rest of the crowd that either screams catastrophe looms or coos that everything is safe, but I cannot. The situation is too opaque, too convoluted, and too complex to tease apart. I simply don't know what the true nature of the risk really is -- and the truth is, nobody really does. You might as well ask these analysts to tell you the exact size and shape of the first ten waves that will hit Laguna Beach exactly one year from now beginning at 12:05 p.m. Instead, what I can offer to you is the idea that instead of reducing (let alone eliminating) risk, all that derivatives have done is mask risk. This means that whatever losses are resident in a system with four decades of debt-fueled malinvestment and overconsumption are still there just waiting to be realized. It is this certainty that the losses remain, the risk is masked, and the bets have only grown larger that makes me very nervous these days as I contemplate the possible implications and repercussions of a Greek exit from the euro. To Sum Up Part IGiven this environment of massive, rapidly-accelerating, and obfuscated risks, the prudent among us are undoubtedly wondering, How the heck is this going to play out? And how do I prepare for it? In Part II: What To Do When the Central Banks Blink, I lay out my forecast for how low asset prices will sink before the central banks once again attempt to ride to the rescue with gargantuan liquidity measures. But this next time won't work as it did in 2008, in my estimation. I see central banks being near the end of their ability to influence developments at this point. More liquidity will affect different asset classes differently, and for the first time raise real (and valid) concerns about the widescale debasement we are witnessing across the world's major fiat currencies. Putting your capital into those resources best positioned to appreciate most as the result of money printing and hold or increase their purchasing power in such an environment should be a top priority for every concerned investor. Click here to access Part II (free executive summary; paid enrollment required for full access).
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| Posted: 16 May 2012 09:01 AM PDT May 16, 2012 [LIST] [*]Watch your language: The unlikely offense that could get your bank account frozen [*]Greek bank run: Addison on how the entire euro experiment is "in jeopardy" [*]Dollar jumps... for now. But what about your purchasing power? [*]Come on Eduardo, there's no shame in it: Facebook co-founder's savings from giving up his U.S. citizenship [*]Soros' latest gold move... a grim economic indicator from NASCAR nation... preparing for a zombie apocalypse in Vancouver (uh-oh)... and more! [/LIST] "Apparently," writes journalist Jeremy Scahill, "the First Amendment had an exception about Yemen in it that I missed." Violate that exception as of today and the federal government might deny you access to your bank account. Seriously. This is of no small interest to us here: More than two years ago, Addison wrote in Apogee Advisory about how the place is a tinderbox. Nearly half the population is under 16. Nearly half is in poverty. There's almost no arable land. "...
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| Posted: 16 May 2012 08:49 AM PDT Dave Gonigam – May 16, 2012
Violate that exception as of today and the federal government might deny you access to your bank account. Seriously. This is of no small interest to us here: More than two years ago, Addison wrote in Apogee Advisory about how the place is a tinderbox. Nearly half the population is under 16. Nearly half is in poverty. There's almost no arable land. "Oil, which accounts for 75% of government revenue, will likely run dry by 2020," he noted. Sure enough, the place blew up during the Arab Spring last year. The longtime U.S.-backed dictator Saleh was chased from office, agreeing to a U.S.-brokered "transition." As part of that "transition" a Saleh stooge named Hadi won an election in which he was the only candidate. Having pronounced the election "successful," Secretary of State Hillary Clinton ensures that Hadi, like Saleh before him, collects beaucoup bucks and weapons to do Washington's bidding. Yemenis, realizing they were had, are restive.
Included are "acts that obstruct the implementation" of the "transition" agreement. "In other words," writes Salon's civil liberties blogger Glenn Greenwald, "the U.S. government will now punish anyone who is determined — in the sole discretion of the U.S. government — even to 'indirectly' obstruct the full transition of power to President Hadi." As part of this transition, the U.S. military has carried out more drone strikes in Yemen this month than in the preceding 10 years combined. Yemen is also the place where last fall, a U.S. drone summarily executed a U.S. citizen — with no trial or other vestige of due process, merely the president's say-so. Would criticism of these policies constitute an act that "directly or indirectly threaten[s] the peace, security or stability of Yemen"? Probably not. Not yet, anyway. But if you're the sort of person who doesn't like the government freezing his assets, we pass this along as a public service.
Of course, by the close yesterday, all those gains were wiped out, and then some — thanks, we're told, to "news" of a bank run in Greece. We put "news" in quotation marks because even now, nearly 24 hours later, nobody has a clue what's going on. Here's a sampling of media coverage…
From this we can deduce that ordinary Greeks withdrew a large but indeterminate sum of money sometime in the last 10 days. Maybe. Don't be surprised if there's a repeat of yesterday's late-day drop: The wild card this afternoon could be the release of minutes from the Federal Reserve's meeting last month.
"The differences between the fiscal trajectories of the various eurozone states are of degree only, not direction. In this game, we'd put our bets that Germany — the last AAA standing — will call the shots. And they could well kick Greece or one of the other paltry PIIGS outta the union."
The dollar index — of which the euro makes up 57% — is up to 81.24. The "DXY" has risen for 13 straight days, something it's never done before.  Thus it stands at the high end of the range where it's traded since Fed chief Ben Bernanke gave a wink to the world in Jackson Hole, Wyo., in August 2010 and all but said "QE2" was in the bag.
"They've got prejudices and working theories, but remember, there's nothing hard about the 'science of economics.'" "If you hear CNBC or Bloomberg declare: 'Prices are up 10% over the past year.' don't just switch off the TV and shrug." "Instead, acknowledge that 'last year's dollar is worth 90 cents today' and work on what you can do about it when it comes to your own wallet and your bank account." The book has ample guidance to help you do so. In fact, our publisher Joe Schriefer counts 47 solutions. (He shares five of them with you right here.) Some are easier to implement than others. But no matter your net worth or your income, you'll find plenty of take-aways you can put to work the moment you set the book down. And for a limited time, Joe's worked out a way to get you a copy of the book — free. Learn how to get your own — on us — at this link.
At last check, the spot price was $1,540 — below its low set at the end of last year. Silver, for the moment, is holding above its year-end 2011 low… barely… at $27.42.
His stake of 85,000 GLD shares during Q4 2011 grew to 320,000 at the end of March. That's still a far cry from the 4.67 million shares Soros held at the end of 2010. He dumped almost all of it in the following three months… when gold still traded between $1,340-1,440. Even at today's "relatively" depressed price, that looks like a bad trade. Soros also loaded up on J.P. Morgan Chase during the first quarter. Yeah, that's working out really well right now.
Permits — a better indicator of future activity — fell 7%, largely offsetting an 8.8% increase the month before. Activity was strongest in the South, weakest in the Northeast.
Bloomberg figures it this way: Saverin owns 4% of the company, which has 1.9 billion shares outstanding. When he surrendered citizenship last September, shares were privately auctioned for $32.10. The IPO this week could be as high as $38. The difference between the last two values works out to $448 million. Apply 15% capital gains tax — which goes up at the end of this year — and you get $67 million. A Saverin spokesman challenges Bloomberg's methodology and sticks to his story that came out this weekend: "His motive had nothing to do with tax and everything to do with his desire to live and work in Singapore." We're not sure why Saverin and his minions are so determined to downplay the tax angle. "The United States is the only developed country taxing its citizens regardless of where they live," Addison writes in The Little Book of the Shrinking Dollar. No matter: Saverin's move has inspired much weeping and gnashing of teeth. "Rather than paying back, he is moving on," complains Yale law professor Bruce Ackerman in the Los Angeles Times. "I don't agree," Addison says via email this morning, "with Ackerman's assertion that Saverin should 'pay back' anything. Rather, the U.S. should have a tax system that makes it attractive for him to want to stay." Imagine that…
The 5 has been on zombie alert going back more than 18 months. More recently, we took note of a course at Michigan State instructing students in "Surviving the Zombie Apocalypse." Now comes a new section on the website of British Columbia's Emergency Management office: Evidently, it's Zombie Preparedness Week in Canada's westernmost province. "The threat of zombie attack is a popular phenomenon around the globe," the site says, "and with it comes the message to 'be prepared.'" "Earthquakes, tsunamis, floods, landslides, avalanches, interface fires, severe storms and hazardous material spills are some of the dangers that could threaten lives and cause extensive damage in British Columbia," it goes on. "And while the chance of zombies a-knockin' on your door is pretty slim, we do believe that if you're ready for zombies, you're ready for any disaster." The site includes links to several YouTube clips of preparedness steps, produced by the agency. They must be seen to be believed: We're finally starting to understand some of the mock public-service announcements those Canucks on SCTV were doing 30-odd years ago…  We're reasonably sure zombies will leave us untroubled in Vancouver the week of July 24. There's still time to register and come join us for our best lineup of speakers ever, listed here. You'll want to move quickly, though: We expect to be full up before the end of the month.
"Sadly, the current crop of Towson students seem as ignorant and misinformed about business, economics and finance as the Grade 8 kids I taught." "For example, a multiple choice exam asked my kids what the profit was when McDonald's sells a $1.00 hamburger. All of them selected either 90 cents or $1.00 as their answer. They were shocked when I explained what it costs to make that hamburger and the few pennies left for profit after all costs are paid." "Most of the kids in my class were from upper-income families whose parents were either business people, professionals or well-paid skilled workers. Yet they knew nothing about business, the economy or finance. Nothing." "It is truly scary that my Grade 8 kids in Canada and Addison's university students in the USA were so ignorant about what makes the world go round, and such ignorance is deeply embedded in our education systems." "But at least this explains why voters keep demanding their governments and unions do things that are sure to lead to economic and social ruin (Greece is a prime and current example)." "If only we could force them all to read The 5 starting when they are in diapers." The 5: Hmmm….
"I have been doing this for over 10 years and never had a vacancy until last year. The one race that was run this year had the lowest attendance ever and I had nearly a third of my yard empty. Since I haven't raised my camping rate ever, it all has to do with the economy and gas prices." "So I'll believe in a recovery when the fans are back in my yard."
"I was shocked to learn that six months earlier, the case of Barnes v. Indiana had gone almost unmentioned. As Indiana is my home, I was especially moved to prevent this ruling from taking hold." "Fortunately, despite the downplay given by the media, many of us here, myself included, objected loudly. Our state senators and representatives heard from us, and agreed, using words like 'shocked' and 'appalling' in reference to the ruling in their replies to me." "As a result of our efforts, Senate Bill 1 of 2012 was written to overturn the ruling; passed by an overwhelming majority; and, effective July 1, 2012, will become law, handing back the right of the individual to defend his or her home and property against unlawful entry by the police, using force if necessary." "I wanted to thank you for calling this incredible breach of justice to our attention. It was your action that informed me and doubtless many other Indiana residents of what was happening in our state. Thanks in part to you, we have stopped the court from stripping Indiana residents of a basic right. Others may complain of the nonfinancial content that we find in The 5 from time to time. I am not one of them." "Thanks for the financial advice, political heads up and always entertaining read." The 5: You're welcome. And we invite you to join kindred spirits, wherever they might live, at the Laissez Faire Club. Cheers, Dave Gonigam P.S. Congratulations to the segment of our readership who as of yesterday were up 54% in a little over a week as financial shares took a beating… and 71% in less than two months on a stumbling tech giant. Just goes to show there are gains to be had whether the market's up or down. Want to claim some for yourself? Here's where to start.
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| Silver Corzined, Stocks Einhorn'd, Financials/HYG Iksil'd Posted: 16 May 2012 08:24 AM PDT S&P 500 e-mini futures closed at their day-session lows, below yesterday's day-session lows, and heading for overnight lows rapidly - once again giving up some decent early gains amid much heavier volume into the close. Markets were a mess today. Risk-assets in general had the highest intra-correlation in a long-time - with FX, credit, rates, curves, and stocks moving in almost lockstep all day (up then down). Equities were smashed left, right, and center by comments from the Ira Sohn conference (as it seems people have given up reading hedge fund 13Fs) with Einhorn's comments in particular showing up just how fragile and thin the real liquidity picture is so many stocks. Silver plunged just after the European close (margin/collateral calls?) and dragged the rest of the commodity complex down with it as stocks basically turned on a dime after hitting yesterday's closing VWAP this morning. Treasury yields rose and plunged in the same pattern - ending the day marginally lower than overnight low yields at the long-end but marginally higher at the short-end (post FOMC minutes). Financials were the worst performer again, down around 1.5%, with the majors in particular now starting to catch up to credit market's long-held conviction on these names (with MS -10.5% YTD and BofA plunging today but still +27.8% YTD). Gold remained relatively stable getting a lift post-FOMC (along with silver as the inevitability of QE was clear - but an equity plunge necessary before it can occur). Credit markets are not done worrying yet - and that weighed on JPM (-2%) as IG9 pushed above 150bps offered for the first time this year and HYG (the high-yield bond ETF) collapsed along with HY credit spreads. Still doesn't feel capitulative as overnight nerves for Greece remain high. HYG plummeted today, its biggest drop in over 2 months and nearing its 200DMA and to its lowest in 4 months 9amid its highest volume in 4 months!) - catching up to HY18's dismal performance as credit overall continues to lead stocks lower...
HYG is seeing escalating volume, multiple sigma price drops, and multi-month low prices (there's a reason high-yield bonds are well high-yield...)...
BUT note that HYG merely plummeted to catch up with SPY's recent deterioration - and is now massively cheap to intrinsics (real bond-based fair-value). What worries us now is that this will cause the PMs to start selling the HY bonds in the underlyng portfolio should we see redemptions and into an illiquid falling market...
Silver dominated the moves in commodities today - with a post-Europe close plunge that recovered some in the afternoon as we suspect liquidations continue...
Which is interesting as we note the Gold/Silver ratio is now back to unchanged YTD and sitting at what seems to be an important historical level...
Financials continue to mean-revert to reality...
Intraday, credit markets led stocks lower (mainly HYG and VXX driven - upper left chart below) but across broad risk-assets, CONTEXT and ES were in almost perfect sync all day (right hand side charts) with correlation extremely high and systemic (lower right chart). VIX pushed higher again (as expected) and tracked with equity/credit implied fair for much of the afternoon (lower left chart)...
Charts: Bloomberg and Capital Context
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| Guest Post: The Fabled Greek Mega-Bailout Posted: 16 May 2012 08:20 AM PDT Submitted by John Aziz of Azizonomics The Fabled Greek Mega-Bailout In a truly eyebrow-raising CNBC interview, Matthew Lynn alleges that Europe shall be saved! (As if by the grace of God!).
Who else would publish this? (That's a redundant question — who else, besides J.P. Morgan and maybe a few government agencies, wouldn't have fired Jim Cramer after what he said about Bear Stearns?) At various stages in the last two years everyone from China, to Germany, to the Fed to the IMF, to Martians, to the Imperial Death Star has been fingered as the latest saviour of the status quo. And so far — in spite of a few multi-billion-dollar half-hearted efforts like the €440 billion EFSF — nobody has really shown up. Perhaps that's because nobody thus far fancies funnelling the money down a black hole. After Greece comes Portugal, and Spain and Ireland and Italy, all of whom together have on the face of things at least €780 billion outstanding (which of course has been securitised and hypothecated up throughout the European financial system into a far larger amount of shadow liabilities, for a critical figure of at least €3 trillion) and no real viable route (other than perhaps fire sales of state property? Sell the Parthenon to Goldman Sachs?) to paying this back (austerity has just led to falling tax revenues, meaning even more money has had to be borrowed), not to mention the trillions owed by the now-jobless citizens of these countries, which is now also imperilled. What's the incentive in throwing more time, effort, energy and resources into a solution that will likely ultimately prove as futile as the EFSF? The trouble is that this is playing chicken with an eighteen-wheeler. While Draghi might be making noises about "continuing to comply with the mandate of keeping price stability over the medium term in line with treaty provisions and preserving the integrity of our balance sheet" (in other words, not proceeding with the fabled "mega-bailout" even if it fractures the Euro), we may well see a full-blown financial meltdown (and of course, the ramifications of that on anyone who is exposed to the European banking system) unless someone — whether it is the ECB, or the Fed, or the IMF — prints the money to keep the banks going. There are really two layers to bailing out the insolvent nations: the real bailout is of the banks who bought the debt, and the insolvent nations are just an intermediary. Should the insolvent nations become highly uncooperative, it seems more likely that the insolvent nations will just be cut out of the loop (throwing their citizens into experiencing a forced currency redenomination, bank runs, and even more chaos) while policymakers continue to channel money into "stabilising" the totally broken global financial system — because we know for sure that a big disorderly default will likely cause some kind of default cascade, and that is something I am sure that (based on past form) policymakers will seek to avoid. How close to the collapse we will come before the money gets printed is another matter. Given that it is predominantly Germans who are in charge of Europe for the moment — with their unusual (at least in the West) post-Weimar distaste for Keynesianism — it seems to me like we will see quite a lot of chaos (read: Euro exits) before the money printing begins in earnest. And the money printing may be far more ad hoc and decentralised than 2008 (read: The Fed may be on the hook for American exposure). Just as we have seen so far, the money will come at the last minute, and will just keep things ticking over rather than actually solving anything. And ultimately, I think it is the social conditions — particularly unemployment levels — that matter more than whether or not the financial system survives. If the attendant cost of ad hoc bailouts (in the name of pretending to stick to the ECB mandate) is a continued depression, and continued massive unemployment and youth unemployment then politicians are focusing on the wrong thing. The problem is that as conditions continue to fester and as solutions seem distant and improbable that Europe's problems may become increasingly political. As the established (dis)order in Europe continues to leave huge swathes of people jobless and angry, their rage and discomfort will be channelled toward dislodging the establishment. As we have seen in Greece and France, that has already produced big lifts for both the Far Left and Far Right. We already know, I think, that in Greece's upcoming election the outsider parties will crush the establishment, with SYRIZA most likely emerging on top. A key metric for me in the next few weeks will be Golden Dawn's proportion of the vote. Let's not forget history:
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| Gold Seeker Closing Report: Gold and Silver End Lower Again Posted: 16 May 2012 08:14 AM PDT Gold fell almost 1% to a new 2012 low of $1527.32 in Asia before it rallied back to $1552.03 at about 10:25AM EST, but it then fell back off again into the close and ended with a loss of 0.19%. Silver slipped to $27.202 in Asia before it climbed back to $27.97, but it then dropped to a new low of $26.78 in early afternoon trade and ended with a loss of 1.77%.
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| What Investors Need to Know About Gold & the Mining Shares Posted: 16 May 2012 07:48 AM PDT  With continued volatility in gold and silver, today King World News interviewed 25 year veteran Caesar Bryan. Gabelli & Company has over $31 billion under management and Caesar Bryan has managed the gold fund since its inception in 1994. Caesar addressed the mining shares, but first, here is what Caesar had to say about what is happening with gold: "You know we've seen these type of corrections in this gold bull market before, Eric. This reminds me a little bit of 2008, in the sense that there was this selling of quality assets across the board, in an effort to raise dollars."
This posting includes an audio/video/photo media file: Download Now |
| Gold Daily and Silver Weekly Charts - Facebook, Greece, and the Hollow Men Posted: 16 May 2012 07:30 AM PDT |
| I Forget What You Did Last Summer Posted: 16 May 2012 07:28 AM PDT Gold just gave back the last of its big surge from summer 2011's big crisis... So the price of gold keeps falling, and it keeps falling despite the imminent failure of Greece's Euro membership, the looming collapse of ... Read More...
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| Austerity Offers Europe their Only Hope Posted: 16 May 2012 06:20 AM PDT The prevailing view amongst Keynesians is that the austerity measures being taken in Europe to prevent a complete currency and bond market collapse is the cause of their current recession. But blaming a recession on the idea ... Read More...
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| Posted: 16 May 2012 06:20 AM PDT A Cliff Kule Exclusive - Cliff Kule interviews John Embry, Chief Investment Strategist of Sprott Asset Management .. Embry: "Gold is probably as far away from being a 'bubble' as any asset on the planet." Read More...
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| Gold: Like Summer 2011 Never Happened Posted: 16 May 2012 06:05 AM PDT |
| “Jon Corzine – What’s Going On?” Posted: 16 May 2012 05:56 AM PDT It pays to be rich, powerful and a Democrat with friends in Washington. While Anna Gristina, a Connecticut mother accused of being a New York "madam" sits in a cell on Riker's Island, Jon Corzine, the former CEO of MF Global sits at home in his New Jersey mansion. MF Global had been a publically traded securities firm with $40 billion in assets, but with liabilities even larger, filed for bankruptcy late last year, after being accused of co-mingling customer funds with its own, a flagrant violation of securities law. As we all know, prostitution is illegal. Ms. Gristina has been charged with providing attractive young women to testosteronic men for money — a crime, but largely victim-less. Nevertheless, she has already spent two months on Riker's Island, awaiting a June 21st hearing. Bail for her was set at $2 million in a bond, or $1 million in cash. Despite the misappropriation of an estimated $1.6 billion, Mr. Corzine has yet to be charged. Yet 36,000 clients had their money appropriated under his watch. It is hard not to believe that his status as a former Senator from and Governor of New Jersey, and major bundler for President Obama's campaign has not provided him special privileges. Is not justice supposed to be blind? It is hard to imagine that Ms. Gristina, whose business was to introduce consenting adults, could be an enormous risk to society. On the other hand, a wealthy and powerful man who appears to have cheated his clients is a fraud and a menace. MF Global was a public company, until it became the nation's 8th largest bankruptcy when it filed last October. Thus, not only are customers, for whose funds Mr. Corzine had a fiduciary responsibility, out their money, but shareholders of MF Global lost their investment as well. Of course, it is perfectly possible that the morally challenged Mr. Corzine was unaware that embezzling is a crime. However, as CEO he is responsible for financial transgressions within his firm. It is unfortunate that he is not man enough to admit it. Mr. Corzine testified before Congress, and claimed not to have been aware that anything amiss was going on. "I simply do not know where the money is." What a whopper! Keep in mind this is a man who had been senior partner of Goldman Sachs, so not a naïf when it came to financial matters. Until the bankruptcy, Mr. Corzine was on President Obama's short-list to replace Timothy Geithner as Secretary of Treasury. He was not only the CEO of MF Global, Mr. Corzine, according to some reports, was chiefly responsible for the bets on European bonds that got them into trouble in the first place. An e-mail from MF Global's assistant treasurer appeared to implicate Mr. Corzine in the wrongful transfer of $200 million to JP Morgan, a transfer which included customer funds. But when Ms. O'Brien was asked questions at a Congressional hearing she pleaded the fifth. Why? Was she afraid of Mr. Corzine? Did she feel threatened by the prosecutors? Surely she did not transfer funds of that amount without some higher-ups' approval. A lot of us would like the answer to a question recently asked by a reporter for The Financial Times: why wasn't she granted immunity from prosecution, in exchange for her testimony? Are the prosecutors concerned as to where the answers might lead? This is not the first time that rich, powerful and politically connected Wall Street types have walked away from prosecution. Prosecutors also took passes on Angelo Mozilo, former chairman and CEO of Countrywide and Richard Fuld, former CEO of Lehman Brothers. Both men disgraced their companies and their industries, while losing millions of dollars for investors who had entrusted their savings with them. Crony capitalism does not only lead to criminal behavior, it reflects a moral decay that threatens our capitalist system and the democracy that underlies it. When the defense uses what Matt Taibbi of Rolling Stone calls a "Wizard of Oz" defense — that the stealing was not deliberate; the misplacement of client funds was due to the chaos that attended the firm's last few days — it's obvious the perpetrators, with help from their attorneys, are obfuscating the truth. Regulatory bodies spend millions of our tax dollars every year supposedly supervising those they are charged with overseeing. The events that led to the financial crisis did not happen because of a lack of regulation; it was a lack of enforcement of existing rules. The response in Washington was, of course, to create new rules, not to punish regulators who did not regulate. The Obama Administration is not afraid of lawsuits and charges. Look at the legal problems his Environmental Protection Agency (EPA) is causing the energy industry. But it is telling that this administration, theoretically so friendly to the poor and defenseless, has not sent one person to jail for the near collapse of the financial system four years ago. They could start by looking at Congress. When it comes to investigating the true causes of the near-financial collapse, this administration is the antithesis of Teddy Roosevelt — talk loudly and carry a wiffle bat. As insulting, has been the response of the Trustee, James W. Giddings. The role of a Trustee is political in the sense that they are awarded by the courts. And they are meaningful in terms of compensation. For example, Irving Picard, Trustee of what is left of the Madoff Ponzi scheme, through last October had billed $225 million. Mr. Giddings' firm, Hughes Hubbard, has billed $168.7 million thus far for the Lehman bankruptcy. With that sort of money on the table there is plenty of room and opportunity for shenanigans. Mr. Giddings acknowledged that $1.2 billion has gone missing and that a commingling of customer accounts and corporate funds did take place. But it was, in his opinion, at least in part, due to "sloppy" bookkeeping, and computers and employees who could not keep up. That sounds to me like a "Wizard of Oz" defense. Sloppy bookkeeping! Give me a break! This was stealing. Incredibly, no one has been arrested. Republican Congressman Michael Grimm from New York City has asked for an independent counsel to take over the federal criminal probe being conducted by the Department of Justice (DOJ.) James Koultas, the leader of the Commodity Customer Coalition, an advocacy group for former MF Global clients recently noted the obvious: "I don't think the DOJ is going to go up against one of the President's biggest bundlers without an independent counsel being appointed." The near-collapse of the financial system four years ago spooked investors. Taxpayers are already rightfully concerned about the cost to them caused by a few rogue traders, who saw millions in personal profits, and lawmakers whose concern about re-election overcame any worries about the consequences of their legislation. When the guilty go unpunished, crime only increases. Joe Nocera, writing a couple of weeks ago in The New York Times, put it this way: "Giving the big guys a pass isn't good for the financial markets. And it isn't good for democracy either." It is the inverse of James Q. Wilson's "broken windows" theory that says if broken windows are repaired immediately the incidence of crime will decline. When criminal activities such as these go unpunished, the crime rate goes up. Everyday small time criminals get busted — drug pushers, hookers, purse snatchers and small-time robbers — but wear a white shirt, steal a few million dollars and have friends in high places, and you can stay at home. It is crony capitalism at its worst. Court appointed lawyers get rich; politicians, who have become wealthy, pay back their friends and remain in office. Very few bad guys go to prison. It is a terrible message, if we want to restore faith and confidence in our markets. Democracy is based on property rights and the rule of law. When property is not protected, the law is meaningless. What really is going on with Mr. Corzine? Regards, Sydney Williams, "Jon Corzine – What's Going On?" 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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| Gold slides 20pc into bear market Posted: 16 May 2012 05:45 AM PDT Gold has lost a fifth of its value since its record peak last year, as fears that Greece will exit the euro prompt investors to move into cash. 
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| Japanese Pension Fund Switches To Gold Posted: 16 May 2012 05:37 AM PDT The IMF (announced $2.3 billion gold purchase), Soros, Pimco, Texas Teachers Retirement fund - anyone see a definitive trend starting here? From the Financial Times (Mark at Strategic Energy Research gave me the heads up): Okayama Metal & Machinery has become the first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in paper currencies...With institutions warming to gold, too, demand could grow further. Not much I can add to this article. Here's the LINK. You'll need to register for a free password. The FT is worth the effort. What I will add to this is that we are seeing Central Banks, large institutions and wealthy global investors openly converting paper money into gold. Please contrast this with bubbleheads and financial idiots in this country (like CNBC, Bloomberg and Dennis Gartman) who continually pump and promote a fiat, paper currency system in collapse. 
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Well, my hat is off to the global central planners for averting the next stage of the unfolding financial crisis for as long as they have. I guess there's some solace in having had a nice break between the events of 2008/09 and today, which afforded us all the opportunity to attend to our various preparations and enjoy our lives.
"Apparently," writes journalist Jeremy Scahill, "the First Amendment had an exception about Yemen in it that I missed."
So the president issued an executive order this morning — authorizing the Treasury Department to freeze the U.S.-based assets of anyone the feds believe "engaged in acts that directly or indirectly threaten the peace, security or stability of Yemen."
In a rerun of yesterday, the major U.S. indexes are up a bit — traders having set aside their worries about Greece.
"The whole experiment is in jeopardy," Addison writes of the euro in 
As this forecast unfolds in real-time, hot money is again fleeing for the greenback. The euro is down this morning to $1.274.
"The best wool that the feds can pull over your eyes is that they have all this under control," writes Addison in 
Gold is sinking further toward 
George Soros quadrupled his gold exposure in the first quarter, according to his latest 13-F filed with the SEC.
The morning's read on the housing market: Meh. The Commerce Department says housing starts grew 2.6% last month… essentially offsetting a 2.6% drop the previous month.
There's now a number on the savings Facebook co-founder Eduardo Saverin will achieve by giving up his U.S. citizenship: $67 million.
Heads up if you're joining us in 
"Addison's discussion about debt to GDP ratios with finance students at Towson University," a Canadian reader writes, "reminded me of a class I taught many years ago (being a businessman, I volunteered with Junior Achievement to teach business basics to school kids)."
"I have been using NASCAR attendance to tell me the truth about the supposed recovery for several years now," a reader writes after yesterday's episode, "since I live within half a mile of Bristol Motor Speedway and rent out space in my yard for campers.
"In November of last year," writes a reader with a follow-up, "I read in The 5 that the Indiana Supreme Court had just shredded the basic right of its citizenry to defend themselves in their own home — a right dating back to the 13th century and the Magna Carta."
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