Gold World News Flash |
- Jim Cramer Is Predicting Bank Runs In Spain And Italy And Financial Anarchy Throughout Europe
- Indonesia imposes 20% export tax on Gold, Silver and Platinum
- Ben Bernanke Goes Back to School
- Gold COT Report (CFTC – Commitment of Traders) for Period 5/9-5/15/2012
- By The Time Operation Twist 1 Is Over, The Fed Will Have Quietly Completed 40% Of Operation Twist 2 As Well
- GoldSeek.com Radio: President / CEO of Northern Gold Mining, Martin Shefsky, Arch Crawford, and your host Chris Waltzek
- Germans Shaking About Their Foreign Gold Reserves
- Gold COT (CFTC - Commitment of Traders) for Period 5/9 - 5/15/2012
- Silver COT (CFTC - Commitment of Traders) for Period 5/9 - 5/15/2012
- SELL YOUR SILVER AND INVEST IN GERMAN MARKS
- Transcript of the 1st Quarter Wrap-up & Precious Metals Market Report Available to Subscribers
- By the Numbers for the Week Ending May 18
- Europe's Firewall Is Insufficient - A One Chart Explanation
- David Rosenberg: "Despair Begets Hope"
- John Embry & James Turk on The Gold Market Attack
- Alasdair Macleod details the mechanics of gold price suppression
- Podcast with Chris Martenson
- Policymakers Are Getting Margin Calls
- Gold and Silver Disaggregated COT Report (DCOT) for May 18
- Join GATA at the Vancouver Resource Investment Conference in two weeks
- Is this the beginning of the end for gold?
- Campaign urges Britain to restore its gold reserves
- GoldMoney's Turk interviews Sprott's Embry on gold's bullish future
- John Embry and James Turk on why the Gold Bull Market isn't Over [Video]
- John Embry and James Turk on why the Gold Bull Market isn't Over
- Doug Casey asks Precious Metals Market Manipulation? - GATA Responds
- Small Cap Gold Resources Investing, An Extraordinary Time to Be in the Driver's Seat
- Economic Recovery Is an Illusion When Adjusted or Inflation
- Peter Grandich "Mother of All Gold Markets"
| Jim Cramer Is Predicting Bank Runs In Spain And Italy And Financial Anarchy Throughout Europe Posted: 20 May 2012 02:42 PM PDT from The Economic Collapse Blog:
Posted below is a clip of Jim Cramer making his bold predictions during his appearance on Meet The Press. He is obviously very, very disturbed about the direction that Europe is heading in…. Read More @ TheEconomicCollapseBlog.com
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| Indonesia imposes 20% export tax on Gold, Silver and Platinum Posted: 20 May 2012 02:34 PM PDT from Bullion Street:
A total of 65 mineral categories has been included in the list which is expected to provide the government an additional revenue up to $2 billion. The minerals include antimony, bauxite, chromium, copper, , iron ore, iron sand, lead, manganese, molybdenum, nickel, and tin apart from gold, silver and platinum. Indonesia's Finance ministry said the regulation would assist the government in properly listing and managing mining export performance in the country.
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| Ben Bernanke Goes Back to School Posted: 20 May 2012 02:33 PM PDT [Note: A version of this article is available as a video commentary.] In the opening chapter of his book Essays on the Great Depression, Fed chairman Ben Bernanke tells readers, "I am a macroeconomist rather than a historian." Though the book was published in 2000, his recent statements about the classical gold standard and the origins of the federal reserve suggest the vast revisionist literature pertaining to U.S. economic history is still largely unknown to him.[1] His comments, in fact, sound like they were pulled uncritically from a public high school teacher's manual: Why did the government institute a central bank? To rein in the gold standard, which was creating crises. This approach proved not to be a problem, though, when he lectured George Washington University students on March 20, 2012 about the Fed and gold. On that day he told the class that in the period after the Civil War until World War I and really all the way into the '30s, the United States was on a gold standard. [28:43]Never mind that there were two different gold standards before and after World War I, and never mind that both functioned under the thumb of government in vastly different ways. Bernanke, the macroeconomist, aggregated them both into one category, calling it "a gold standard." He continued: There was more volatility in the economy, year to year, under a gold standard than there has been in modern times. So, for example, movements in output variability was much greater under a gold standard, and even year-to-year movements in inflation, the volatility was much greater under a gold standard. [31:56]Earlier, he defined a gold standard as a monetary system in which the value of the currency is fixed in terms of gold. So for example by law, in the early twentieth century, the price of gold was set at $20.67 an ounce. . . [Though central banks managed the gold standard to some extent,] a true gold standard creates an automatic monetary system. [29:38]On this last point he's correct, a true gold standard is "automatic" in the sense that it works without, and only without, government intervention, [Mises, p. 280] though that's a distinction that somehow eluded him. Even Milton Friedman, never a champion of monetary freedom, admitted that, If a domestic money consists of a commodity, a pure gold standard or cowrie bead standard, the principles of monetary policy are very simple. There aren't any. The commodity money takes care of itself. [Salerno, p. 356; emphasis added]A monetary system that "takes care of itself" would have no need of a Fed or a Fed chairman. Central bank employees would have to find some other way to generate income. Bernanke could always go back to being a college professor, but maybe not. Who and what would he teach? Thanks largely to Ron Paul, the Fed is suffering by far the worst criticism in its history, which was the main reason Bernanke was holding class at GWU. If the Fed is abolished, it will put a huge blot on the resumes of FOMC members. It's one thing to lose one's job because of shifting demand among consumers, but quite another to lose it because your policies caused major economic crises and helped put millions of those consumers out of work. Over the centuries, people have chosen gold and silver as their preferred medium of exchange when these metals were available. As economist Jörg Guido Hülsmann points out, there is a tendency in the market for the best monies to emerge. [p. 76] Market participants would not select a money that was "unstable." If they did, they would switch to a more stable money, provided they were free to do so. Yet, Bernanke suggests that the alleged volatility of the market under the government-tainted gold standard, and the periodic crises that emerged, means the market had made a bad choice and had no way of correcting it voluntarily. Was there no better money available? Is that why we ended up with paper as money and a board of bureaucrats determining how much of it we should have? The public was told, in effect, that it was necessary to remove money from the monetary system to get it to work. Why? The Fed functions as a lender of last resort, and the Fed can't lend something it doesn't have. It can't lend money, so it lends printed pieces of paper or their digital equivalents and calls that money. Whether we agree with this or not is irrelevant; we're forced to use it or abandon the enormous benefits of indirect exchange. We know that money created from nothing allows the user of the money to get something for nothing. Paper money, therefore, acquires a new trait: no longer just a medium of exchange, it becomes a medium for wealth transfer. Since the transfer lacks transparency for most people, it becomes the ultimate political tool. Most monetary economists regard this arrangement as a good idea. Of course, most of them have income arrangements with the Fed, as well. [Hulsmann, p. 16] What do we know about paper money regimes? Rothbard notes that they "were considered to be both ephemeral and disastrously inflationary." [p. 353] But he was referring to the days of yore - what about modern times? Bernanke's predecessor delivered a now-famous speech in 2002 pointing out what happened to prices when the dollar was no longer anchored to gold domestically. In the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent overissuance of money.If you're going to balloon welfare, if you want to fund unpopular or undeclared wars, if you want to buy votes, buy the media, buy the economists, if you want to establish a massive military-security state, if you simply love power and pomp, then there's no substitute for a central bank's printing press. Along the way it debilitates the middle class, creates a dependent, credulous electorate, makes moral hazard commonplace, eats away the economy's capital structure, makes perpetual war the norm, and ultimately destroys the social order. None of this, of course, was mentioned in Bernanke's lecture. Gold and prices Instead, he tried to make the case that a gold standard is not the wealth guardian its proponents believe it is. One of the strengths that people cite for the gold standard is that it creates a stable value for the currency. It creates a stable inflation, and that's true over very long periods. But over shorter periods, maybe up to five or ten years, you can actually have a lot of inflation, rising prices, or deflation, falling prices, in a gold standard. [36:56]A sudden discovery of gold such as occurred in California in 1848 will, to the extent the new gold is used as money, reduce the effectiveness of each monetary unit. However, unlike the paper dollars the Fed proliferates in abundance, gold has highly-valued nonmonetary uses competing with its monetary employment. On the market, the production of money, like the production of all goods, is regulated by profit and loss, as economist Jeffrey Herbener pointed out to a House subcommittee recently. As the demand for money increases, the value of monetary gold would increase. If demand is strong enough, profit opportunities arise in mining and minting. As profits increase the resources used in mining and minting rise because of increased demand for those resources. As the price of resources increases, profits dissipate, and so does production. Thus, a gold standard, because of market mechanisms, will not allow a "perpetual overissuance of money." A "shortage of gold" might lead to deflation, but what does that mean? Price deflation results when the production of nonmonetary goods increases at a faster rate than the production of money, or when the demand to hold money increases. But are falling prices an economic evil? Herbener reports that two of the periods of most rapid economic growth in US history were from 1820–1850 and 1865–1900. In each of these periods, the purchasing power of the dollar roughly doubled [meaning prices dropped].A gradual decline in prices is the norm for a free market economy. It encourages people to save, which builds up the economy's capital structure. It also encourages consumption because goods get cheaper. The electronics industry today is probably the best example of how falling prices allow more people to enjoy the market's bounty. Herbener refers to the 2004 paper of Andrew Atkeson and Patrick J. Kehoe in which they examined evidence for empirical links between deflation and depression across 17 countries for a period of 100 years. Atkeson is an economics professor at UCLA, and Kehoe is an economist with the Federal Reserve Bank of Minneapolis. Their conclusion: A broad historical look finds more periods of deflation with reasonable growth than with depression, and many more periods of depression with inflation than with deflation. Overall, the data show virtually no link between deflation and depression. [emphasis added]In a speech given in November, 2002, a month before Greenspan's talk about the Fed's inflation habit, Bernanke promised an audience that the Fed would make sure deflation wouldn't happen here. He made that promise because as a supposed expert on the Great Depression, he believes the Fed followed a deflationary policy that deepened and prolonged the crisis. But there are serious problems with this analysis. For the countries for which they had data (all except Chile), Atkeson and Kehoe report that In 1929—34, all 16 countries had deflation, 8 had deflation and depression, and the other 8 had deflation but no depression.That alone makes the deflation charge suspect. But even worse, as economist Robert Murphy has written, if deflation (as a fall in prices) is so harmful, how do we explain U.S. prosperity of the period 1926-1928 in which consumer prices fell 2.2, 1.1, and 1.2 percent, respectively? True, the deflation of the early 1930s was far greater but it was still less than the deflation of a decade earlier. Murphy: From their peak in June 1920, prices fell 15.8 percent over the next twelve months, a one-year deflation that was 50 percent more severe than any 12-month fall during the Great Depression. And yet, the 1920–1921 depression was so short-lived that most Americans today are unaware of its existence. [emphasis added]Fractional-reserve banks are prone to runs In the 19th century, notes and demand deposits issued without gold backing created bubbles that alarmed note holders and depositors. When they came to the banks in large numbers to claim their property, and the banks were unable to deliver, a crisis resulted. Bernanke cites the movie It's a Wonderful Life as an example of what happens during a bank run. [15:27] In the story Jimmy Stewart owns a bank and finds the lobby filled with townspeople clamoring for their money. Problem: His bank doesn't have nearly enough money to pay them off. Why not? Bernanke: No bank holds cash equal to all their deposits. They put that cash into loans. So the only way the bank can pay off its depositors, once it gets through its minimal cash reserves, is to sell or otherwise dispose of its loans. [17:13]"Minimal cash reserves"? Why is the bank making loans with funds it promised to make available on demand? Does that not qualify as embezzlement? The people asking for their money were depositors, not creditors. If they had loaned the bank money by opening a savings account at interest or purchasing a CD, there would be no obligation to redeem their accounts in full on demand. But as depositors, they had the right to expect their money to be there when they came to get it, and the bank should've been charging them a fee for safeguarding it. Jimmy Stewart's bank was solvent, he says, but merely illiquid. [20:10] But is this true? The deposits the bank held were liabilities due on demand. An institution is solvent if it is "able to pay all debt obligations as they become due." As we see in the film, Jimmy Stewart's bank could not pay all obligations as they became due. His bank, as with all fractional-reserve banks, was insolvent. But Bernanke doesn't see it that way. He blames the depositors, calling their run a "self-fulfilling prophecy." [17:32] If only they had believed and never lost confidence, the bank's fraud would never have been exposed. Bernanke goes on about how a central bank could've spared Jimmy Stewart much grief by loaning him the funds to pay off the depositors [20:00] - "funds," of course, meaning printed bills, not gold, since no bank can conjure gold into existence. But having a central bank as a rescuer is a moral hazard, a way of keeping insolvent banks operating while postponing the calamity that results from fractional reserve banking. Conclusion The gold standard has been blamed for problems that in fact were caused by government meddling in the monetary system. Fractional-reserve banks should've been allowed to fail, but instead government often came to their rescue by allowing them to suspend specie redemption while permitting them to stay in business and collect debts owed to them. In supporting fractional-reserve banks, the government was guaranteeing moral hazard and future crises. The public was misled into believing the gold standard was unstable and that a central bank was the path to monetary deliverance. With gold as the scapegoat, it was fairly easy to get rid of it. History and theory tells us that abandoning gold means embracing inflation and big government, while putting liberty and sustainable prosperity on the chopping block. Ben Bernanke should be back in school, but not as a teacher. Notes: 1. See for example Gabriel Kolko's Triumph of Conservatism and Murray Rothbard's The Case Against the Fed. 
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| Gold COT Report (CFTC – Commitment of Traders) for Period 5/9-5/15/2012 Posted: 20 May 2012 02:00 PM PDT from Silver Doctors:
The CFTC knows exactly what these producer/merchants are doing to these speculators, right now, killing them, and these commissioners have placed their full blessing upon this rampant destruction of speculator long positions. For your convenience, if you would like to contact the CFTC and express your views to them, I have provided you their phone numbers and I hope earnestly that you fill up their phone lines: http://www.cftc.gov/Contact/
ggensler@cftc.gov Chairman Gensler bchilton@cftc.gov Commissioner Chilton
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| Posted: 20 May 2012 01:36 PM PDT By the time Operation Twist (1) ends in just over 40 days time, on June 30, Fed Chairman Ben Bernanke, according to his previously announced "loose" target, will hope to have extended the average maturity of all bonds in the System Open Market Account (SOMA) to a record of roughly 100 months from 75 month at the onset of the program in October 2011. After all the sole purpose of Twist was to load up the Fed's portfolio with duration, forcing the rest of the market to shift its investing curve even further into risky assets, as the Fed will have effectively onboarded the bulk of securities in the 3-4% return interval. Now as we showed back in early April, hopes that the Fed will simply continue with Operation Twist 2 after the end of "season" 1, as suggested by some clueless "access journalists" who merely relay what they are told by higher powers, are completely misguided as the Fed simply does not have enough short-term securities (1-3 years) to sell, and would have at most 2 months of inventory for a continued sterilized operation. Which however, does not mean that the Fed can not be quietly ramping up its operations in the ongoing Twisting episode. Because as Stone McCarthy demonstrates, as of the past week, the Fed has already surpassed its 100 month maturity target of 100 months, and is at 102.82 months as of May 16. And this is with 6 more weeks of Twist to go: at the current rate of SOMA purchases, the Fed will have a total portfolio average maturity of just shy of 110 months by June 30! Which means that contrary to market expectations of what the Fed's own stated goal may have been, Bernanke will have gobbled up nearly 40% more long-dated Flow relative to estimates! In other words, Ben does not need to do a full blown Operation Twist 2 episode: by the time Twist 1 is over, he will have attained nearly 40% of the goals of the next potential sterilized operation.
Why is this important? Well, recall that over a month ago Goldman Sachs itself admitted what we have been saying for over 3 years: it is not stock that matters... it is flow. Recall the Goldman punchline:
And there you have it. What the finding above means is that the Fed has been ramping risk assets, read the S&P even more than where it should have been, based on simple flow models, and that contrary to market expectations, the S&P500 should have been about 40% lower compared to where it will be on June 30 if the Fed has pursued its stated goal, and targeted solely a 100 month average maturity. Which has a rather scary implication for the stock market: if and when Ben announces that Twist ends on June 30 with no successor program, stocks will immediately react, and realize that the Fed's SOMA account holds well more than the expected long-end, and that without further "flow" forcing more 30 year paper into the gaping maw of Bernanke, stocks will have no reason at all to maintain their prior epic surge (all else equal, whcih it won't be). It also means that unless Bernanke is willing to see the stock market plunge ahead of the Obama re-election, which he isn't, or at least the President most certainly isn't, that the June Fed statement will be quite interesting, as not only will Bernanke have to maintain a program which is now uncovered to have been monetizing the long-end at a rate 40% higher than estimated, but will still have just two more months of capacity left for any potential future sterilized market propping experiments.
Which only leaves the Fed with one option: that of making Bill Gross, and all those others who are loading up on duration-sensitive securities which will benefit from an LSAP based episode, very, very happy. Of course, the list of such assets most definitely includes gold.
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| Posted: 20 May 2012 01:00 PM PDT Show Highlights: Headline news & the Market Weatherman Report. Spotlight Stock Picks. GUESTS: Arch Crawford Stockmarket Cycles Martin Shefsky - CEO / President, Northern Gold Mining
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| Germans Shaking About Their Foreign Gold Reserves Posted: 20 May 2012 12:19 PM PDT by Francis Tawiah, Modern Ghana:
Germany has gold reserves of 3,400 tons, which is the second largest reserves in the world after the United States. Much of that is in the safekeeping of central banks outside the country, mostly in the US Federal Reserve in New York. It's clear that with such a valuable worth around €133 billion ($170 billion), the German government would want to keep a close eye on its whereabouts. A dispute has therefore broken out between different German institutions over how closely the reserves should be checked.
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| Gold COT (CFTC - Commitment of Traders) for Period 5/9 - 5/15/2012 Posted: 20 May 2012 12:11 PM PDT Gold COT: The commercials are working their way out of their massive short positions they have accumulated, over the years since 2010, and those positions have not been there for window dressing. Read More...
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| Silver COT (CFTC - Commitment of Traders) for Period 5/9 - 5/15/2012 Posted: 20 May 2012 12:09 PM PDT Silver COT: Large speculators got suckered out of -757 long contracts and covered a minute 332 shorts for a net long position of 57,370,000 ounces, a decrease in their net long position of almost over 5,000,000 ounces from the ... Read More...
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| SELL YOUR SILVER AND INVEST IN GERMAN MARKS Posted: 20 May 2012 11:26 AM PDT [Ed. Note: Happy Sunday from SGTreport and the King of satire Billy Joe, whom I happen to know owns A TON of physical silver.] from HouseOfTheMoon: [Ed. Note: Too many folks don't appreciate (or understand) good satire. Today Billy Joe shows off some cool high-denomination German Mark notes...and at the same time gives you an idea about where the Euro and the Dollar could be headed.]
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| Transcript of the 1st Quarter Wrap-up & Precious Metals Market Report Available to Subscribers Posted: 20 May 2012 10:04 AM PDT A transcript of the 1st Quarter Wrap-up and Precious Metals Market Report is available to Subscribers! From the transcript: Catherine: After we cover the precious metals markets and your questions on gold and silver, Franklin and I will review the overall trends, including: - Overview: the Top Trends
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| By the Numbers for the Week Ending May 18 Posted: 20 May 2012 09:04 AM PDT This week's closing table.
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| Europe's Firewall Is Insufficient - A One Chart Explanation Posted: 20 May 2012 08:52 AM PDT Unlike Eurocrat rhetoric, which is increasingly full of lies (thank you Jean Claude), prevarications, and half-truths, math is simple and binary. There either are enough numbers, or there aren't. In the case of the European firewall, there aren't (and that is even assuming the IMF somehow manages to convert all the money pledged for a European bailout bailout into money available for disbursement... because there is a world of difference between the two).
Source: Deutsche Bank
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| David Rosenberg: "Despair Begets Hope" Posted: 20 May 2012 08:22 AM PDT Presenting the best weekly self-contrarian segment from everyone's favorite Gluskin Sheff-based skeptic - David Rosenberg: DESPAIR BEGETS HOPE ... Over half of the 2012 price advance has been reversed in barely over a month as the broad market drifts down to its lowest level since February 2nd. The Financial Times makes the point that the 10-day relative strength index at 29.2 is deeply into oversold territory. The Canadian TSX index is officially in bear market terrain, having declined 21% from its cycle high (posted in April last year) and is back to levels prevailing on October 2011. Fading risk appetite is also underscored in the credit markets where BB-rated corporate spreads have widened to 450 basis points from the recent low of 420bps. Until we see some resolution to the latest round of euro area angst, one can reasonably expect spreads to widen further, but we would look at this as a nice buying opportunity as the link between the problems there and corporate default rates here is extremely loose. The fact that gold and other commodities are slipping while core government bond markets — gilts, bunds and Treasuries — are rallying strongly suggests that deflation risks are getting repriced into various asset classes. Greek bonds are trading at pennies right now and implicit probabilities in peripheral bond markets are highly discounting exits from the monetary union by year-end. Spanish bond yields have blown through 6% (Italy getting closer too) and 10-year spreads off Germany have hit a new record high of 485bps. This is where the LTRO has proven to have actually been a dismal failure. Domestic banks used the program as a carry trade to play the yield curve and are now choking on losses on the sovereign government bonds they were enticed to buy. So thanks a lot, Mr. Draghi — ECB policies are at least partly responsible for why it is that euro area bank shares have sunk all the way back to March 2009 lows. Non-domestic investors have been dumping the peripheral government bonds just as the Italian and Spanish banks have been loading up — these foreign entities, we see in the FT, have been net sellers of Italian government bonds to the tune of 200 billion euros in the past nine months and 80 billion of Spanish debt over the same time frame. And guess what? They can unleash even more supply damage because they still own roughly 800 billion euros worth of combined bonds of both basket-case countries. The most bizarre quote we have seen in quite a while came from a strategist in the FT. Get this:
I can replace that with this real-life comment:
How utterly lame. If the Greeks want to stay in the eurozone, it's probably because they know they can continue to suck at the teat of the Troika. More bailouts please and on easy terms since "austerity" is the new dirty nine-letter word globally. The best lines actually came from the FT Lex column:
Now that is a thoughtful comment. There was another really good zinger in the Markets and Investing section. To wit:
That was from an executive at a U.K. bank. Arvind Subramanian penned a truly brilliant piece in the FT as well, titled Why Greece's Exit Could Become the Eurozone's Envy. In a nutshell, Greece's challenge is that it is woefully uncompetitive and as such needs wages and prices to adjust sharply lower. You either do that organically or you devalue the currency — which then sharply boosts exports and fosters import substitution. Of course, the initial impact is recessionary and deflationary, but only for one to two years, if history is a guide, followed by a boom. This is exactly what happened to Asia a decade ago. As Arvind concludes, "the ongoing Greek tragedy could yet turn out not too badly for the Greeks. But tragedy it might well be for the eurozone and perhaps the European project". Indeed, the cost estimates I have seen published for the euro area would be in the neighbourhood of 400 billion euros — in terms of immediate direct financial losses. Second round impacts are far more difficult to assess, but would be enormous. While there are a myriad of legal complexities surrounding a Greek departure, it is not an impossible task. The bigger issue would be how the ECB would manage to ring-fence the banks in Portugal and Spain and prevent a contagion. But let's talk about what we do know with some certainty. We also know that Angela Merkel this far is not being swayed by her party's recent electoral setbacks — at least that is the indication we are getting from her latest rhetoric. So how does all this play out?
All the while, the Eurozone recessionary pressure continues unabated — highlighted by the 0.3% sequential decline in March industrial production, dragging the YoY trend to -2.2%. This was the worst performance since December 2009. It is against this backdrop that austerity is falling by the wayside across Europe. The FT is filled with headlines like these:
Even Canadians are getting in on the act, with the Globe and Mail running with a lead front page story that says Quebec Student Revolt Boils Over (And these students pay just about the lowest tuition fees in the world! But hey — this is my entitlement!). I have to admit that when I see this land in the WSJ —Brown Warns Californians: Taxes or Cuts — I sense that America is moving out of denial and much more quickly into acceptance than the Europeans are on the road to fiscal reforms. Jerry Brown is talking about a doubling in his planned spending cuts (remember, he is a Democrat) and an increase in top marginal income tax rates and sales taxes too. He needs to close a budget gap projection that has widened to $15.7 billion from $9.2 billion in January with draconian measures. Guess what? Despite the unpopularity of these belt-tightening proposals, the polls show that 54% of the Golden State residents are willing to accept them with a stiff upper lip. Hopefully, this will resonate at the federal level before long. Look, we are talking about Governor Brown proposing cuts to welfare, health care for the elderly and social services. At the same time, he is imposing extra taxes on the "wealthy". Everyone is going to feel the austerity to varying degrees. And listen to what he said to his detractors:
This, from a true blue Democrat. It would seem safe to say that the U.S.A., and California for that matter, is not Greece, Spain, Portugal or Italy. Denial is no longer an option and austerity is not some dirty nine-letter word. But make no mistake, as any Canadian who endured the fiscal squeeze of the 1990s — it's no fun to go on a debt diet but you sure feel healthier once it's over. In the interim, very weak economic growth Will be in store for an extended period of time. Adding to all this fragility is the latest softening in the Chinese data flow. Electricity consumption in April was basically flat from a year ago — it was +7.2% in March and +11.7% in April 2011, so talk about a sudden slowdown. Yikes. The growth in rail cargo volumes has been sliced in half compared to a year ago and residential construction has fallen 4.2% from year-earlier levels. Import growth has vanished —just +0.3% YoY in April versus consensus estimates of +11%. Again, however, a silver lining — with Chinese growth clearly tailing off, oil prices have come down and with that ... gasoline. Nobody's talking about four or five dollars at the pumps any more. As I said, Americans are out of denial even as the Europeans begin to shun the painful road towards fiscal probity. An overwhelming 71% of U.S. citizens polled rated economic conditions as being "poor" in a just-published USA Today/Gallup poll. But a 58% plurality are bullish on the future. And so am I. Change occurs at the margin and generally begins at the political level. The grass roots at the state and local government realm are leading the charge. Whether or not you agree with or even like Jerry Brown is immaterial. When you unveil a tough fiscal plan that displeases everyone — well, that's called leadership. Whoever the next president is — interestingly, the poll shows Romney's favourable-unfavourable rating at 50-41% which is in line with Obama's 52-46% comparable reading — he should take a feather out of Jerry Brown's hat. Spending cuts, means-testing entitlements, tax increases (a sales tax makes great economic sense), raising retirement ages for Social Security, and closing the myriad of tax breaks — all are in order. Note that after being tied in February, the GOP are now up six points (50% to 44%) in terms of Congressional support. Interestingly, 55% also said the economy would get better in the next four years if Romney got elected (27% said worse) while 46% said the same about President Obama (37% said worse). So if the election does turn out to be more about the economy than a debate about what sort of bully Mr. Romney was when he was a kid, then perhaps there is a legitimate shot that we will see a one-party-take-all come November which may well be what it takes to get things done and done quickly in Washington. The days of gridlock being good are long gone. Go back to the Canadian experience with one party rule in the 1990s — it was time for decisive action, not checks and balances. I've said it once and I'll say it again. And believe me, this is no intent to wrap myself up in stars and stripes. But there is a strong possibility that I see a flicker of light come November. The U.S. has great demographics with over 80 million millennials that will power the next bull market in housing, likely three years from now. After an unprecedented two straight years of a decline in the stock of vehicles on the road, we do have pent-up demand for autos. I coined the term "manufacturing renaissance" back when I toiled for Mother Merrill and this is happening on the back of sharply improved cost competitiveness. Oil production and mining services are booming. Cheap natural gas is a boon to many industries. A boom in Chinese travel to the U.S. has triggered a secular growth phase in the tourism and leisure industry. The trend towards frugality has opened up doors for do-it-yourselfers, private labels and discounting stores. As tough as the near-term outlook may be, start to think that it is 1979 again — dark days with inflation excess (today it's deflation), heavy regulation (in industry then, banking today), unionization (today it's a fragile labour backdrop), geopolitical uncertainties (Iran then ... and Iran now), global debt crises (Latin America then, Europe now), high unemployment (then and now), and depressed investor sentiment ('Death of Equities' found its way to the BusinessWeek cover that year...and while the ultimate low was in the Fall of 1982, scaling in was not really a bad idea at all for long-term investors, considering what happened for the next 18 years. I mention that because of the lead editorial in yesterday's New York Times which was titled End of the Affair? Burned and Mistrustful, Americans are Falling Out of Love With Stocks). To be sure, sentiment is not yet at such a depressed low, neither are valuations (nor dividend yields as high). Be that as it may, it was a huge mistake to have superimposed the awful 1966-1982 period of economic sclerosis and secular bear market (when Japan. who "borrowed" — more like "stole" — U.S. technology and hence garnered global export market share as a result ... sort of sounds like China for much of the past decade) into the ensuing 16 year period because let's face it, the 1980s and 1990s ended up belonging to America. Few folks saw it at the time. But it's worth remembering, especially now as we face this latest round of economic weakness and market turbulence. It is exactly in periods of distress that the best buying opportunities are borne...and believe it or not, when new disruptive technologies are formed to power the next sustainable bull market and economic expansion. Something tells me that we are just one recession and one last leg down in the market away from crossing over the other side of the mountain. And believe me, nobody is in a bigger hurry to get there, than yours truly. At the risk of perhaps getting too far ahead of myself, but you may end up calling me a perma-bull (at that stage, I must warn you, folks like Jim Paulsen will have thrown in the towel).
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| John Embry & James Turk on The Gold Market Attack Posted: 20 May 2012 08:21 AM PDT John Embry -- Chief Investment Strategist at the... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
This posting includes an audio/video/photo media file: Download Now |
| Alasdair Macleod details the mechanics of gold price suppression Posted: 20 May 2012 06:46 AM PDT 2:52p ET Sunday, May 20, 2012 Dear Friend of GATA and Gold (and Silver): This week our friend the British economist Alasdair Macleod presented what he modestly called two "lectures" about gold at the Hard Assets Investment Conference in New York. The "lectures" are actually the equivalents of state papers -- the latter one a masterful and detailed description of the mechanics of the gold price suppression scheme. A few excerpts from that lecture: It is the leasing activities and other unannounced interventions that are not reflected in central bank gold accounts, the former because in a leasing agreement ownership remains with the lessor so it is not reported, and the latter because they are hidden by the sight account system. The logical conclusion is that 30 years of supplying gold to the market to keep gold well below its free-market value has depleted official gold reserves to a significant degree. And since central banks refuse to discuss the matter, we have no idea how much of the officially declared gold actually exists. The International Monetary Fund's gold is likely to be held on a sight basis in its entirety. When the IMF disposed of 400 tonnes between 2009 and 2010, they turned down bids from the private sector, selling only to other central banks. I believe this gold was in sight accounts (that is, did not actually exist), so a condition of sale was that it could be transferred and held only between central banks and supra-national government organisations. This certainly seems likely, but the sale terms were never actually made public. ... Dispatch continues below ... ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf So, to summarise: The central banks at the heart of price manipulation have had the means to sell substantial amounts of bullion without having to account for it. ... * * * London Bullion Market Association members strongly encourage clients to hold unallocated accounts by charging little or no fees for the privilege. They discourage clients from holding allocated accounts by charging high storage and custody fees. There are very good reasons why this is so. They are unable to make use of allocated gold, whereas every ounce of unallocated gold is used to back the LBMA members' dealings in the market. The disadvantage to the client is that he is exposed to counter-party risk. Now if you have looked recently at the balance sheets of some of the European banks, you may not wish to take that risk. So while there has never been a bankruptcy in the market (though there have been some covert rescues -- for example, the one I mentioned earlier which [former Bank of England Governor] Eddie George talked about), implying that unallocated accounts are safe, for many clients this is not an assumption they are prepared to accept anymore. * * * The money in the [gold] market is always unbalanced in favour of the commercial bullion banks. They have lots of money, even your money as a taxpayer if they are too big to fail, and can always bluff anyone not prepared to put up funds for delivery. This is because the non-commercials and speculators have geared positions, which will magnify their losses. We see this happening time and time again. The big commercial bullies wait for the punters to build up their long positions and then they whack it hard. They know that by doing so they will trigger all those stop-losses. In an afternoon they can make $100 an ounce this way. They make lots more money trading this way than they lose from being continually short in a bull market. You have been warned! * * * In the chart above I have derived from disaggregated data the net positions of the swap dealers. Two years ago they were short a net 120,000 contracts, which is the equivalent of 373 tonnes of gold. Since March 2011 they have reduced their net shorts from -110 thousand to zero give or take at the peak of the gold market last September. At the same time open interest fell from a peak 650,000 in November 2010 to the 420,000 level. Why were the swaps short? The only logical reason has to be that the central banks were supplying the market with physical. It is that extra physical that was being hedged two years ago. And what is interesting is that at that time Portugal was rumoured to have given its gold up as collateral to the Bank for International Settlements. The amount that actually showed up in the BIS accounts was 349 tonnes, and the date was late 2009. Fits perfectly! Put another way, Portugal's entire gold stock appears to have been sold and absorbed into the market. * * * The balance of power has shifted to Asia, particularly China, and central to that power is control of real money, the money that society chooses for itself, not that enforced by government as a monopoly upon us. Untold amounts of gold have disappeared from the advanced economies' central banks, and the London Bullion Market is exposed to a sharp rise in the gold price. With this knowledge, anyone who does not take steps to protect him or herself from the increasingly certain event, a collapse in paper money, a fundamental change in our whole economic paradigm, is nuts. * * * The first part of Macleod's lecture, explaining gold's central position in economic theory, is posted at his Internet site, Finance and Economics, here: http://financeandeconomics.org/Articles%20archive/2012.05%20Economic%20s... The second part, quoted above, about the mechanisms of gold market rigging, likely to be of more immediate interest, is here: http://financeandeconomics.org/Articles%20archive/The%20gold%20bullion%2... Because of their supreme importance Macleod's two papers will be posted in the "Documentation" section of GATA's Internet site and should be distributed by gold's advocates as widely as possible. CHRIS POWELL, Secretary/Treasurer Join GATA here: Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference 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 Prophecy Platinum (TSXV: NKL) and Ursa Major Minerals Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) and Ursa Major Minerals Inc. have signed a binding letter of agreement for a business combination through a proposed all-share transaction. In doing so Prophecy and Ursa have acted at arm's length and the transaction has been negotiated at arm's length. Prophecy will issue one common share in exchange for every 25 outstanding common shares of Ursa. Ursa options and warrants will be exchanged for options and warrants of Prophecy on an agreed schedule. Prophecy's offer represents a value of about $0.15 per each common share of Ursa based on Prophecy's share price of $3.70 as at March 1, representing a premium of 130 percent to Ursa's March 1 closing price of $0.065. Prophecy is to subscribe for $1 million common shares of Ursa by way of private placement financing at $0.06 per share, subject to regulatory approval. Upon placement completion, John Lee and Greg Hall, current Prophecy directors, will be appointed to Ursa's board. Prophecy thus will become a mid-tier resource company with a robust and diversified pipeline of platinum nickel projects, including: -- The fully permitted open-pit Shakespeare PGM-Ni-Cu mine close to Sudbury, Ontario, infrastructure with near-term production capabilities. -- The flagship Wellgreen (Yukon) PGM-Ni-Cu project with more than 10 million ounces of Pt-Pd-Au inferred resource. Drilling is under way and a preliminary economic assessment study is pending. -- Manitoba's Lynn Lake Ni-Cu project with more than 262 million pounds Ni and 138 million pounds Cu measured and indicated. For the complete announcement, please visit Prophecy Platinum's Internet site here: http://www.prophecyplat.com/news_2012_mar02_prophecy_platinum_ursa_major...
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| Posted: 20 May 2012 06:40 AM PDT The following is an introduction to a podcast I did with Chris Martenson yesterday. The podcast can be found here. Alasdair Macleod: All Roads In Europe Lead To Gold
Submitted by Chris Martenson Alasdair Macleod: All Roads In Europe Lead To Gold This week we bring back Alasdair Macleod, publisher ofFinance and economics.org, because, as he puts it "every horror that we discussed last time we spoke is coming about". Especially scary since our previous conversation with him was less than three weeks ago... Today's interview continues building on his excellent synopsis from last month that detailed the origins of the Eurozone crisis. The fundamental shortcomings warned of at the Euro's creation in 1997, combined with the excessive sovereign debts run up since then, have finally expressed themselves at a scale too large to be contained any longer. Today, Alasdair details in-depth the huge and serious challenges facing Greece and the major Eurozone countries, and the likely impacts of the fast-dwindling options left remaining. He sees no happy ending to this story, no outcome in which serious pain and permanent behavior change can be avoided. And for those looking for shelter from the unfolding economic storm, he sees few options besides the precious metals (which he believes are severely under priced at the moment): GreeceThe Greek situation is entirely predictable: when you force enormous pressures on an economy and try and raise taxes from the private sector -- a private sector which isn’t used to paying taxes because usually they find away around it -- you start cutting pensions, you start cutting this, cutting that, and the people revolt. They haven’t a clue what they are doing, but we get the revolt nonetheless. It looks like nobody there can form a government; and it looks like there will be another election probably in June. That won’t resolve anything unless by some miracle, some sense gets knocked into people’s heads. The other thing, which nobody has mentioned, is that there are about 90 billion dollars in derivative contracts involved in the Greek economy. This is not just government, but also local governments and towns and cities and all the rest of it. The counterparties to this $90 billion must be getting a bit worried about that, I would think because that looks as if it will default. The people who have been most active in getting these derivative contracts going over time have been people like Deutsche Bank, Goldman Sachs and I suppose JP Morgan -- so you can see the problems aren’t just limited to the government and some unfortunate Greek citizens who are caught in the middle of this. We are looking at potentially up to ninety billion dollars worth of derivatives which one side of those transactions is going to default. One side: it is not a balanced figure is it? I don’t know that it is necessarily as bad as that, but it is a problem that needs to be dealt with, addressed and contained. I think what they have to do as much as possible, is to try to work for a sensible outcome in this, which probably will involve Greece leaving the Eurozone, but maybe obtaining help from the ECB to set up a currency board. The reason I say that is that I think for Greece to return to the drachma would be complete destruction. You would have a situation where people who owe money in Euros would still owe money in Euros. If the Greek government tried to change that by law, for starts, that could only apply to loans taken out in Euros in Greece; whereas a lot of these have been taken out in Euros elsewhere in the European Union. In any event, I think if they tried to do a law on this, it would be a retroactive, which would be open to legal challenge. Meanwhile, if you have deposits in a Greek bank, you can be sure the Greek government would say we are going to re-designate those into New Drachmas, which would impoverish the depositors. When it comes to trade, I think everybody would just stay well clear. To go back to a New Drachma, I think is the most destructive path Greece can have. Now, they could do that on the basis that, if the European Union wanted to make an example of Greece, then this is a way in which they could just let them go hang. The importance of that would be that the situation for Greece should be so bad that no other member of the Eurozone would contemplate leaving the Eurozone. That is a possibility. But I think that is less likely than coming to terms in such a way to give Greece an exit. But if they do get an exit, again, they’ve got to have an exit in such a way that it hurts enough and anybody else who wants to take that exit would see, well it is actually probably more painful than staying where we are. It is a very difficult balance to achieve. The people who will do this, I don’t believe are the politicians. It would have to be the sensible people in the ECB and perhaps some of the more backroom boys who could put together some sort of face-saving mechanism without this becoming too much of a political hot potato. It is very, very tricky, it really is, and quite honestly, the way political governance has been going in Europe, the chances of them getting some sort of orderly withdraw in the interest of continuing relationships, et cetera, I think are actually probably slim. That is what we are up against: this is not easy. There is no precedence for this at all and I know that lots and lots of people are saying it has got to return to the Drachma; I just think that a New Drachma would collapse almost immediately. I think that a currency board in the Euro is actually a more sensible result given where we are. FranceFrance is a mess. They have outstanding debt of 1.3 Trillion Euros, something like that. Their debt/GDP is around about 85-90% going on a hundred quite rapidly. That is a very liquid and nasty situation. Unemployment is running close to ten percent. It is almost impossible to employ anyone in France because the taxes are so high. Do you know the total tax that you pay as an employer, more than doubles the salary that you pay an individual? This is absolute craziness, but it is been like that in France forever and a day. The result is an awful lot of the market is black market. Spain & ItalySpain is a worse situation. Government debt alone is just under a trillion. A trillion dollars equivalent, I should say, and that is a lot of money. That is a lot of money. Italy is over two trillion dollars. That really is a very, very big one, so this contagion must not be allowed to happen. GermanyTheir economy is performing reasonably well, but it is not performing well because they are doing well for Europe; they are doing well because they are selling the most cars, machine tools and everything else to China, to Brazil, to Russia. Africa’s a great growth area. Europe, as far as Germany is concerned is dead. Which of course brings us on another question; that is why should Germany continue to support all these bust Europeans? There is a sort of conscience if you like about the last two world wars, but there is going to come a point where that wears pretty thin I would have thought. The trouble is that it is all very well, everyone turning around and saying, Germany has to help. Actually, what they are saying is that Germany’s citizens should give up their savings, their hard won savings to rescue a project, which is obviously dead or deceased. I think Germany really should bust out as soon as possible and I am sure that there are an increasing number of businessmen and bankers in Germany who are beginning to feel that way. On GoldPeople who have gold or silver, I think actually had a very rough ride over the last couple of months. A lot of them are wondering what on Earth is going on because every time you get good news, gold seems to rally along with equities, but every time there’s bad news and gold actually should be giving you some protection, it goes down the swanny. I think the problem there is that the whole system is run by people who went to college and were taught keynesian economics. In my day, when I first went into the stock market and I enjoyed that first bull market in gold when it went from thirty-five bucks to eight-fifty, the traders and investment managers were all practical people. They all cut their teeth, all learned their trade the hard way. Some of them had degrees in college, but generally it would have been something like classics or history or something like that. If they got a degree in economics, they probably would have left because they never would have understood it in those days. But now it has changed. Everybody who is employed has a degree and if they are anything to do with investment strategy, or the investment business, it is all economics degrees. So they have been brainwashed in the keynesian thing. This sort of neoclassical approach where gold is yesterday’s story, paper money is the future. They really do believe it and it is the opinions of these people who drive the markets in the short term. The result is that gold and silver have become very, very seriously mispriced. I don’t think I have seen a stretch like this as I can remember; by stretch, the difference between perhaps where it should be. We must be careful not to tell the market what the price should be, but it is so underpriced at a time of enormous systemic stress, that I think when gold and silver snap back into a more sensible, logical valuation relationship with the markets, the move actually could be very, very sharp and quite large. If gold ran up through the $2,000 level very quickly, which I think is a very strong possibility, because it is been held down so much, that could bring other problems. The central banks, who might have sold gold and not told us about it will find that they are embarrassed. I think also the bullion banks in London who operate a fractional reserve system with gold, exactly the same way as to do with any paper currency, will be hurt very, very badly on the run. Any shorts in the futures market equally could be hurt very, very badly. We have a situation, where there is a potential for a huge run in gold and I personally wouldn’t be surprised to see it. 
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| Policymakers Are Getting Margin Calls Posted: 20 May 2012 06:29 AM PDT Market history is poised for the start of the next stage of a lengthy bull market for the gold sector and within a global recession - an even more compelling condemnation of policymaking. Read More...
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| Gold and Silver Disaggregated COT Report (DCOT) for May 18 Posted: 20 May 2012 06:00 AM PDT SOUTHEAST TEXAS -- 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.
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 sometime on Monday, Tuesday at the latest. 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.
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| Join GATA at the Vancouver Resource Investment Conference in two weeks Posted: 20 May 2012 05:57 AM PDT 1:54p ET Sunday, May 20, 2012 Dear Friend of GATA and Gold: The glorious summer World Resource Investment Conference in Vancouver, British Columbia, Canada, is only two weeks away -- Sunday-Monday, June 3 and 4 -- and it will feature not only GATA's Bill Murphy and Ed Steer and your secretary/treasurer but many GATA-friendly speakers, including financial writer Thom Calandra, GoldSeek.com proprietor Peter Spina, Peter Grandich of the Grandich Letter, Jeff Berwick of the Dollar Vigilante, U.S. Global Investors CEO Frank Holmes, financial letter writer Jay Taylor, Al Korelin of the Korelin Economic Report, and David Morgan of Silver-Investor.com. Dozens of resource companies will be exhibiting and the conference has arranged discounted rates for conference participants at the two beautiful hotels adjacent to the Vancouver Convention Centre East, where the conference will be held. At the conclusion of the conference, from 5:30 to 7:30 p.m. Monday, June 4, GATA's delegation will greet friends at the Lions Pub, just a couple of blocks from the convention center at 888 West Cordova St. We'll have some free snacks and a cash bar and hope to be celebrating the resumption of gold's and silver's rise. If not, we'll find something else to celebrate -- like a summer evening in Vancouver. For there may be no more beautiful city in the world in June, and the Vancouver conference never disappoints. Its Internet site with registration and hotel reservation mechanisms is here: http://cambridgehouse.com/event/world-resource-investment-conference CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum (TSXV: NKL) and Ursa Major Minerals Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) and Ursa Major Minerals Inc. have signed a binding letter of agreement for a business combination through a proposed all-share transaction. In doing so Prophecy and Ursa have acted at arm's length and the transaction has been negotiated at arm's length. Prophecy will issue one common share in exchange for every 25 outstanding common shares of Ursa. Ursa options and warrants will be exchanged for options and warrants of Prophecy on an agreed schedule. Prophecy's offer represents a value of about $0.15 per each common share of Ursa based on Prophecy's share price of $3.70 as at March 1, representing a premium of 130 percent to Ursa's March 1 closing price of $0.065. Prophecy is to subscribe for $1 million common shares of Ursa by way of private placement financing at $0.06 per share, subject to regulatory approval. Upon placement completion, John Lee and Greg Hall, current Prophecy directors, will be appointed to Ursa's board. Prophecy thus will become a mid-tier resource company with a robust and diversified pipeline of platinum nickel projects, including: -- The fully permitted open-pit Shakespeare PGM-Ni-Cu mine close to Sudbury, Ontario, infrastructure with near-term production capabilities. -- The flagship Wellgreen (Yukon) PGM-Ni-Cu project with more than 10 million ounces of Pt-Pd-Au inferred resource. Drilling is under way and a preliminary economic assessment study is pending. -- Manitoba's Lynn Lake Ni-Cu project with more than 262 million pounds Ni and 138 million pounds Cu measured and indicated. For the complete announcement, please visit Prophecy Platinum's Internet site here: http://www.prophecyplat.com/news_2012_mar02_prophecy_platinum_ursa_major... Join GATA here: Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| Is this the beginning of the end for gold? Posted: 20 May 2012 05:30 AM PDT Drama in the gold market this week. The metal was at one point trading around 20pc below its summer peak, sparking warnings that the traditional "safe haven" is now in a bear market. 
This posting includes an audio/video/photo media file: Download Now |
| Campaign urges Britain to restore its gold reserves Posted: 20 May 2012 05:30 AM PDT 1:26p ET Monday, May 20, 2012 Dear Friend of GATA and Gold: Our friends at the Real Asset Co. in London have started a campaign urging the United Kingdom to buy back the gold reserves it sold at what is derided as "Brown's Bottom" starting in 1999. The campaign's Internet site page is here: http://therealasset.co.uk/buy-britains-gold-back/ CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum (TSXV: NKL) and Ursa Major Minerals Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) and Ursa Major Minerals Inc. have signed a binding letter of agreement for a business combination through a proposed all-share transaction. In doing so Prophecy and Ursa have acted at arm's length and the transaction has been negotiated at arm's length. Prophecy will issue one common share in exchange for every 25 outstanding common shares of Ursa. Ursa options and warrants will be exchanged for options and warrants of Prophecy on an agreed schedule. Prophecy's offer represents a value of about $0.15 per each common share of Ursa based on Prophecy's share price of $3.70 as at March 1, representing a premium of 130 percent to Ursa's March 1 closing price of $0.065. Prophecy is to subscribe for $1 million common shares of Ursa by way of private placement financing at $0.06 per share, subject to regulatory approval. Upon placement completion, John Lee and Greg Hall, current Prophecy directors, will be appointed to Ursa's board. Prophecy thus will become a mid-tier resource company with a robust and diversified pipeline of platinum nickel projects, including: -- The fully permitted open-pit Shakespeare PGM-Ni-Cu mine close to Sudbury, Ontario, infrastructure with near-term production capabilities. -- The flagship Wellgreen (Yukon) PGM-Ni-Cu project with more than 10 million ounces of Pt-Pd-Au inferred resource. Drilling is under way and a preliminary economic assessment study is pending. -- Manitoba's Lynn Lake Ni-Cu project with more than 262 million pounds Ni and 138 million pounds Cu measured and indicated. For the complete announcement, please visit Prophecy Platinum's Internet site here: http://www.prophecyplat.com/news_2012_mar02_prophecy_platinum_ursa_major... Join GATA here: Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| GoldMoney's Turk interviews Sprott's Embry on gold's bullish future Posted: 20 May 2012 05:23 AM PDT 1:20p ET Sunday, May 20, 2012 Dear Friend of GATA and Gold: Interviewed by GoldMoney founder James Turk, Sprott Asset Management's John Embry remarks that "if you're negative on gold, you must be bullish on curency, and I don't see how anyone can make that argument." The comment is part of a conversation about how the bull market in gold is far from over. Video of the interview is 33 minutes long and you can watch it at the GoldMoney Internet site here: http://www.goldmoney.com/video/john-embry-and-james-turk-on-why-the-gold... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Join GATA here: Vancouver World Resource Investment Conference Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference 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 Prophecy Platinum (TSXV: NKL) and Ursa Major Minerals Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) and Ursa Major Minerals Inc. have signed a binding letter of agreement for a business combination through a proposed all-share transaction. In doing so Prophecy and Ursa have acted at arm's length and the transaction has been negotiated at arm's length. Prophecy will issue one common share in exchange for every 25 outstanding common shares of Ursa. Ursa options and warrants will be exchanged for options and warrants of Prophecy on an agreed schedule. Prophecy's offer represents a value of about $0.15 per each common share of Ursa based on Prophecy's share price of $3.70 as at March 1, representing a premium of 130 percent to Ursa's March 1 closing price of $0.065. Prophecy is to subscribe for $1 million common shares of Ursa by way of private placement financing at $0.06 per share, subject to regulatory approval. Upon placement completion, John Lee and Greg Hall, current Prophecy directors, will be appointed to Ursa's board. Prophecy thus will become a mid-tier resource company with a robust and diversified pipeline of platinum nickel projects, including: -- The fully permitted open-pit Shakespeare PGM-Ni-Cu mine close to Sudbury, Ontario, infrastructure with near-term production capabilities. -- The flagship Wellgreen (Yukon) PGM-Ni-Cu project with more than 10 million ounces of Pt-Pd-Au inferred resource. Drilling is under way and a preliminary economic assessment study is pending. -- Manitoba's Lynn Lake Ni-Cu project with more than 262 million pounds Ni and 138 million pounds Cu measured and indicated. For the complete announcement, please visit Prophecy Platinum's Internet site here: http://www.prophecyplat.com/news_2012_mar02_prophecy_platinum_ursa_major...
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| John Embry and James Turk on why the Gold Bull Market isn't Over [Video] Posted: 20 May 2012 04:02 AM PDT They discuss recent volatility and panic in the gold and silver markets. According to John Embry markets are now highly oversold. He mentions the "leap day slaughter" and the counterintuitive situation in which gold and silver prices went down on the backdrop of negative economic news and money printing. Natural selling followed forced selling.
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| John Embry and James Turk on why the Gold Bull Market isn't Over Posted: 20 May 2012 03:00 AM PDT This conversation between James Turk and John Embry was recorded on Friday 18 May.They discuss recent volatility and panic in the gold and silver markets. According to John Embry markets are now ...
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| Doug Casey asks Precious Metals Market Manipulation? - GATA Responds Posted: 20 May 2012 02:15 AM PDT In an essay posted Thursday. May 17, 2012 at GoldSeek, financial writer Doug Casey of Casey Research asks for evidence of gold market manipulation and some explanation of its purpose. "I'm not at all disinclined to believe tales of manipulation of markets by the state; I expect it, and as a speculator I relish it. But I like to see evidence for everything. And extraordinary claims demand extraordinary evidence. I've read the stuff these guys have written for years and have seen nothing but strident assertions and accusations. I'm completely willing to believe central bankers are capable of any kind of nefarious foolishness, but I'd like to see proof. I'm constantly reading assertions of how "the boys" come along at "precisely" 1p.m. or 2 p.m. or perhaps "precisely" 11:37 a.m. or 12:16 p.m. and, on a purely not-for-profit basis, decide to "smack down" the market for gold or silver or both. Meanwhile the market has been hitting new highs for a dozen years." To read the entire essay and Doug's direct questions follow the link below: http://news.goldseek.com/GoldSeek/1337282313.php GATA responds: May 18, 2012 http://www.gata.org/node/11381 The evidence and explanation have long been posted in the "Documentation" file at GATA's Internet site here: http://www.gata.org/taxonomy/term/21 Maybe the most comprehensive treatment of the subject is the latest version of your secretary/treasurer's "stump speech" here: http://www.gata.org/node/10554 But we're always adding to the "Documentation" file, like the acknowledgment by the late Dutch central banker and Bank for International Settlements President Jelle Zijlstra that Western central banks rig the gold market -- http://www.gata.org/node/11304 -- so if he's at all curious Casey might want to drop by occasionally for updates. CHRIS POWELL, Secretary/Treasurer This is a facinating and compelling read.
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| Small Cap Gold Resources Investing, An Extraordinary Time to Be in the Driver's Seat Posted: 20 May 2012 01:53 AM PDT Aaron Kennon, co-founder and CEO of Clear Harbor Asset Management, shares some of his company's trade secrets in this exclusive interview with The Gold Report. Educating yourself is critical before investing, and Kennon suggests questions to ask, what specialized knowledge your adviser should know and why small-cap and junior resource equities are offering surprisingly thrilling returns. The Gold Report: Clear Harbor Asset Management actively invests in resource equities, and it's doing so during one of the most bearish periods ever for resource equities, particularly for small-cap resource equities. Some institutions are leaving the space altogether while others are reducing their exposure. What are your plans?
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| Economic Recovery Is an Illusion When Adjusted or Inflation Posted: 20 May 2012 01:48 AM PDT John Williams, author of the ShadowStats.com newsletter, shines light on his interpretations of the GDP, CPI, unemployment and other government statistics in this exclusive Gold Report interview from the recent Recovery Reality Check conference. Highlights include what the money supply measures tell him and why QE3 will be a hard sell. The Gold Report: John, at the recent Casey Research Recovery Reality Check conference you described the economic recovery heralded by the Obama administration as an illusion based largely on skewed inflation data. Can you walk us through why, based on your calculations, a recovery is impossible?
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| Peter Grandich "Mother of All Gold Markets" Posted: 20 May 2012 01:35 AM PDT Peter Grandich Speaks at New York Hard Assets Investment Conference - May 15, 2012, defends being bullish on gold - "Reasons reasons Bears "missed it" - they did't recognize change in the gold market, producers were no longer forward selling, creation of ETFs... "Gold isn't a currency...it's an alternative to paper currency" "Gold is hated by the financial world and the media that follows it...widespread coverage is given to the Bears" "There is no gold bubble" A video you won't want to miss.
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During an appearance on Meet The Press on Sunday, Jim Cramer of CNBC boldly predicted that "financial anarchy" is coming to Europe and that there will be "bank runs" in Spain and Italy in the next few weeks. This is very strong language for the most famous personality on the most watched financial news channel in the United States to be using. In fact, if Cramer is not careful, people will start accusing him of sounding 
JAKARTA(BullionStreet): Indonesia has decided to retain gold, silver and platinum in the list of minerals enforced with a 20 percent export tax but coal is exempted.
Commercials bought a huge 9,579 longs but only covered -2,959 shorts to end the week with 56.88% of all open interest and now stand as a group at -13,891,500 ounces net short, another huge decrease of over 1,000,000 ounces net short from the previous week.
The largest portion of Germany's massive gold reserves are stored abroad, mainly in the Federal Reserve in the USA, New York. But their question is, are the bars really where they are supposed to be? A dispute has broken out over whether the German central bank needs to check on its gold, or can Germany trust its international partners.
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