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- Silver Wheaton: Valuing The Silver Giant
- Space: the final gold rush frontier
- The Most Boring Gold Market Ever?
- Meadow Bay Drills 21.34 m of 2.77 g/t Au at Atlanta
- Gold “Lackluster” in “Calm Before Storm” as Record-High Rupee Prices Boost Indian Speculation, Dent Physical Demand
- Dodd-Frank Strikes the Commodity Markets
- Bullion: Volatile Within A Bull Market
- Caribbean Island Gold: Scott Jobin-Bevans
- Swiss Gold Stored At “Decentralised Locations” – SNB Does Not Disclose Where
- Swiss Gold in ‘Decentralized Locations’ – but Where?
- How Flat Are These Gold Prices?
- States To Use Gold and Silver as Legal Tender
- Merkel’s In Hot Water, So No More Bailouts, Sorry Spain
- Hong Kong to hear about gold market manipulation
- Gold Standard for All, From Nuts to Paul Krugman
- Leeb: We Will See Unbelievable Chaos Going Forward
- Stoeferle: Petro Dollar System Losing Influence
- A Truly Physical Perspective On Precious Metals
- Silver rally to hit $50 later this year
- Banks and Governments Will Collapse Together: James Turk
- Earth's Resources Conference in Hong Kong to hear about gold market manipulation
- MineWeb's Williams sees U.S. using gold for gradual devaluation of dollar
- Gold & Silver Market Morning, May 03 2012
- Adam Davidson Parrots Disinformation as He Extols Rule by the Top 0.1%
- A Weak Economy Remains Gold’s Best Friend
- $4,000 Gold & $100 Silver or Lower Prices?
- How to Invest in a Declining US Dollar
- Examining the Long-Term Benefits of Gold Investing
- Central Bank Demand to Change Gold, Silver Markets and Prices
- Gold Breaks 3-Month Rule for 1st Time in 11 Years
| Silver Wheaton: Valuing The Silver Giant Posted: 03 May 2012 06:25 AM PDT By Bulls and Bears: Silver Wheaton Ticker: SLW Share Price 5/1/2012: $30.53 Shares Outstanding 3/22/2012: 353,563,679 Market Cap: $10.8B Website here Company Overview Silver Wheaton (SLW) operates as a worldwide silver streaming company. The company has 19 long-term purchase agreements, three of which are under development: Pascua-Lama, Rosemont, and Loma de La Plata (Navidad). The company acquires future silver production (and to a much lesser extent, gold) from its counter-parties for a negotiated up-front consideration plus approximately $4 Oz Ag upon delivery. 2011 Key Points
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| Space: the final gold rush frontier Posted: 03 May 2012 06:20 AM PDT Goldmoney | |||||||||||||||||||||
| The Most Boring Gold Market Ever? Posted: 03 May 2012 04:38 AM PDT
HOW OFTEN are gold prices as range bound as this? The London gold fix on Wednesday afternoon marked the fortieth trading day in a row that gold fixed between $1600 and $1700. The last PM Fix outside this range was on March 5 ($1705 an ounce). Spot gold prices did manage to poke their head above the $1700 mark later that same week, but since then gold has gone pretty much nowhere. Is it common to see such a protracted period of sideways trading? One way of gauging how much (or indeed how little) gold prices have moved in that time is to calculate the coefficient of variation (CV) – simply the standard deviation divided by the mean average – and compare it with rolling 40 day periods. The chart below does exactly that, going back to 1968, the year the London Gold Pool collapsed. The vertical green lines represent the final day of any 40 day period with a lower CV than the 40 trading days just gone, with the gold price shown over the top (left hand axis): A block of six trading days – August 30 to September 6, 2007 – each marked the end of quieter 40-day periods than the one we have just had. There is a similar cluster of four days in July 2007. Over the last 10 years, there have been only five 40-day periods quieter than the one we have just had – the two in 2007, another two in 2005, and one towards the end of 2002. By contrast, the 1990s saw loads of periods quieter than the current one. So too did the late 1960s and early 1970s, as we would expect since gold was, until August 1971, still officially tied to the Dollar at $35 an ounce (though a two-tier market allowed for a fluctuating price for non-central bank transactions). Of course, 40 trading days is a rather arbitrary span of time to pick. But similar patterns emerge when we look at other rolling periods. Wednesday 2 May 2012 also marked the quietest 20 trading day period by the CV measure. Here's the chart for rolling 20-day periods going back to 1968:
Something else happened this week. As my BullionVault colleague Adrian Ash notes, spot market gold prices on Monday ended a calendar month lower for the third month in a row – a rare event indeed in a bull market. It is also worth checking out Adrian's log scale chart (reproduced below), which shows that gold prices over the last ten years have made a much smaller proportionate gain (shown as the vertical distance moved) than they did in the ten years to 1980: Bears might counter that since this bull market has seen a gentler rise, it may well be followed by a gentler decline, which could be what we are seeing right now. Ultimately, gold prices over the long run are determined by fundamentals. One of the key fundamentals is real interest rates i.e. nominal rates minus the rate of inflation. And the key central bank to watch is, of course, the Federal Reserve. There have been signs in recent weeks that the US economy is picking up. This has dampened expectations of further quantitative easing, and has also raised the prospect that the Fed could raise its policy interest rate sooner than previously expected. Few would go so far as to declare the crisis over, but doubts have crept in about how accommodative the Fed will remain. I believe this uncertainty is the main reason trading volumes have been low, and gold prices have been stuck in a range. It doesn't help that we are headed towards summer, when the gold market tends to be much quieter (2011 notwithstanding). If the tentative US recovery continues, more investors will likely surmise that QE will not happen, and that a rate hike will be sooner rather than later. On the other hand, if the recovery stalls, QE could shoot back up the agenda. Sooner or later, gold prices will break out of this range. Whether it will a break higher or a break lower depends a great deal on the health of the US economy. Ben Traynor Gold value calculator | Buy gold online at live prices Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. (c) BullionVault 2011 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
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| Meadow Bay Drills 21.34 m of 2.77 g/t Au at Atlanta Posted: 03 May 2012 04:37 AM PDT
Mr. Robert Dinning reports
MEADOW BAY GOLD REPORTS DRILL RESULTS INCLUDING 21.34 METRES OF 2.77 G/T GOLD FROM THE ATLANTA GOLD PORPHYRY
Meadow Bay Gold Corp. has received assay results from its Atlanta gold mine project, Lincoln county, Nevada.
Drilling in 2011 tested the extent of Atlanta fault zone mineralization and also discovered porphyry-hosted gold mineralization to the west of the historic Atlanta open pit. The porphyry-hosted mineralization is distinctly different from the gold-silver mineralization within the jasperoid breccias of the Atlanta fault previously mined. After the discovery was made, drilling was redirected to explore the extent of the porphyry intrusive and determine the continuity of gold mineralization north of the discovery hole.
Assay results from two of the remaining holes were significant. Hole DHRC-11-RCN04 tested the central portion of the Atlanta porphyry. Previous assay results have indicated that gold mineralization occurs within both the northern and southern portions of the intrusive. This is one of several holes drilled to test the continuity of the mineralization.
Hole DHRC-11-011R is the southernmost drill hole to intersect gold mineralization within the Atlanta shear zone. This hole was drilled due south at an inclination of negative 60 degrees. The true thickness of the mineralized intercept has not been determined. Robert Dinning, chief executive officer, commented: "Now that we have received all of the remaining assays from the 2011 program, we can turn our focus to our plans for 2012. These include our next rounds of definition and exploration drilling as well creating a new NI 43-101-compliant resource estimate."
NEW SIGNIFICANT INTERCEPTS FROM 2011 ATLANTA DRILL PROGRAM Drill hole Total depth From To Length Au Ag (m) (m) (m) (m) g/t g/t DHRC-11-RCN04 385.57 329.27 350.61 21.34 2.77 9.4 DHRC-11-11R 143.26 99.09 125.00 25.91 1.07 5.0 Au: gold Ag: silver g/t: grams per tonne m: metre
The company considers these results highly significant but also cautions that they are preliminary in nature and not conclusive evidence of the likelihood of the occurrence of an economic mineral deposit. Insufficient information is available to determine the true width of these drill intercepts.
The QA/QC (quality assurance/quality control) program employed for this drill program includes monitoring the results of blind duplicate samples inserted into the sample stream at a frequency of 2 per cent, certified standard reference samples inserted at a frequency of 1 per cent to 5 per cent and blank samples inserted at a frequency of at least 1 per cent. Geochemical analyses were done at the ALS Minerals laboratory in Elko, Nev., which is an independent certified laboratory (ISO 9001:2008). Gold was determined by fire assay with a gravimetric finish. Drill hole location maps, cross-sections and tables of results are also available on the Meadow Bay Gold website. Full details of the Atlanta project and the 2011 drill program are given in the last technical report filed on SEDAR. Dr. Matt Ball, PGeo, a qualified person as defined by National Instrument 43-101 and independent consultant to the company, has reviewed the technical aspects of this press release.
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| Posted: 03 May 2012 04:36 AM PDT
THE PRICE OF GOLD in wholesale trading slipped to a new 1-week low at $1640 per ounce in London on Thursdayb as the US Dollar rose and crude oil slipped again. Ahead of Friday's much-anticipated US Non-Farm Payrolls report for April, weekly data showed a fall in the number of jobless benefit claimants. Spain meantime sold €1.6 billion of new 3- and 5-year government debt, paying 1.4 percentage points more in interest than at the last time of asking. A sale of €5 billion in new government debt in France, where current president Sarkozy looked set to lose this weekend's election to Socialist candidate Hollande, meantime drew a greater excess of investor demand than at the last sale in April, with interest rates falling slightly on 9- and 10-year debt. The Euro held at $1.3130 – right in the middle of the last month's tight 2.5¢ range. With trading volume now lower for longer than any time since late 2007, US stock market futures pointed 0.2% higher after the Dow Jones Industrial Average yesterday slipped back from 4-year highs. Slipping in line with the gold price, silver fell back to $30.40 per ounce. "In this lackluster environment, it seems like the gold bullion market is in need of more than just resilience," says a note from Swiss refining and finance group MKS. "[The gold price] has FLAT LINED on a closing basis," says the latest technical analysis from Russell Browne at Scotia Mocatta in New York, "staying glued between 1635 and 1670 over the past month. "This sideways consolidation is the calm prior to the next storm…The long-term bullish trend line comes in near 1630 on daily chart." Over in India in contrast – the world's #1 gold consuming nation – "Gold traders have extended their positions in futures market as prices of the precious metal in spot market touched an all-time high," reports the Economic Times. Touching INR 29,690 per 10 grams today, the gold price for Indian wholesalers has now recovered 2012′s early 10% fall to reach a series of fresh all-time highs this week. Amid a wave of strikes and protests by Indian jewellers against this year's duty and tax rises, last month's Akshaya Tritiya festival failed to stoke consumer demand, says the Bombay Bullion Association, with gold bullion imports falling to just 30 tonnes from April 2011′s level of 90 tonnes. Helping gold rise, the Rupee fell further again on the FX market Thursday, extending this week's drop vs. the US Dollar to more than 1% and erasing the last of 2012′s rally so far. "The financing of the current account deficit will continue to pose a major challenge," the Reserve Bank of India recently noted in a policy statement. "Lot of new positions has been created in [Indian gold ftures ] after traders noticed sharp rise," Money Life quotes Badruddin Khan, researcher at Angel Broking & Commodities. "The momentum is likely to be continued with a back-up of Dollar appreciation." Back in Europe, where the European Central Bank today left its key interest rate unchanged at 1.0% for the sixth month running, factory-gate inflation in the 17-nation Eurozone slipped to 3.3% per year in April, new data showed. Here in the UK, where the ruling coalition's Conservative and Liberal Democrat parties were both expecting "dismal" results in local council elections on Thursday, house prices showed a near 1% annual slip on the Nationwide index. In London, precious metals consultancy GFMS – now part of the Thomson Reuters news group – said the surplus of available metal over demand rose sharply in both platinum and palladium in 2011, thanks to stockpile sales and weak auto demand, especially in Europe. Silver bullion stockpiles yesterday retreated further on Wednesday from this week's 25-year record highs, with the withdrawal of half-a-million ounces of "eligible" metal – which qualifies for settlement in Comex futures, but isn't made available by the owner – taken out of approved depository storage. Adrian Ash Gold price chart, no delay | Buy gold online at live prices Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees. (c) BullionVault 2012 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
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| Dodd-Frank Strikes the Commodity Markets Posted: 03 May 2012 03:41 AM PDT People looking for the reasons behind the current weakness in silver and gold should consider Trader Dan's post yesterday. It looks like bargain basement buying time for cash buyers who do not mess with margin! Snip: Quote: news came out last evening that CME was requiring all member firms to comply with regulations arising from Dodd-Frank which basically is forcing margin requirements for all "Non-Hedges" to effectively double as of this coming Monday. Talk about short notice! The ramifications of this are obviously huge and no doubt are adding to an already volatile mix of madness. Those traders with losing positions are going to be impacted even more since the new requirements may well push them over the line as far as margin calls and force them to either liquidate or come up with more cash, immediately. I think some of what we saw in the markets today is traders already anticipating this with the result that we had a significant amount of position squaring. | |||||||||||||||||||||
| Bullion: Volatile Within A Bull Market Posted: 03 May 2012 02:30 AM PDT Gold has been one of the most volatile markets. But gold is bullish and the major trend is up, despite the volatility. In fact, gold has held firmly above its $1,600 major support, which has become increasingly important. | |||||||||||||||||||||
| Caribbean Island Gold: Scott Jobin-Bevans Posted: 03 May 2012 01:40 AM PDT | |||||||||||||||||||||
| Swiss Gold Stored At “Decentralised Locations” – SNB Does Not Disclose Where Posted: 03 May 2012 01:33 AM PDT gold.ie | |||||||||||||||||||||
| Swiss Gold in ‘Decentralized Locations’ – but Where? Posted: 02 May 2012 11:48 PM PDT Gold has been under pressure in Asia and Europe despite very disappointing economic data further igniting concerns about global growth and the debt crisis.Gold continues to trade in a range between $1,600/oz. and $1,700/oz. | |||||||||||||||||||||
| How Flat Are These Gold Prices? Posted: 02 May 2012 11:04 PM PDT 40 days and 40 nights of the quietest gold market since the crisis began... | |||||||||||||||||||||
| States To Use Gold and Silver as Legal Tender Posted: 02 May 2012 10:50 PM PDT
from activistpost.com: As America slips into monetary oblivion, some states are turning to the US Constitutional right and desiring to use alternative currencies – preparing for the hyper-inflation that Bernanke is currently creating. Minnesota, Tennessee, Iowa, South Carolina and Georgia are awaiting approval from their respective governments to create a separate currency. This number is up from 2011, when just 3 states were brave enough to attempt this constitutional right. "In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System … the State's governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley. He introduced a new currency bill in 2011. These states are planning on issuing gold or silver coins as tender "in payments of debts" as allotted them in the US Constitution. Law makers are becoming at ease with this proposal as the worth of the US dollar is further lessened by the actions of the Federal Reserve, and the prices of precious metals like gold and silver soar higher. In Utah, Governor Gary Herbert signed a bill introducing an alternative currency in March of 2011. This bill recognized gold and silver coins issued by the US Mint as legal tender. Keep on reading @ activistpost.com | |||||||||||||||||||||
| Merkel’s In Hot Water, So No More Bailouts, Sorry Spain Posted: 02 May 2012 10:47 PM PDT
from gainspainscapital.com: Spain, which is now at the forefront of the Great Western Debt Default Collapse, has opted to seek funding from the mega-bailout fund, the European Stability Mechanism (ESM) rather than going directly to the ECB or the IMF. The reasons for this are clear: the IMF doesn't have the funds (nor will it as the US won't fund a European bailout during a Presidential election year). And the ECB is now backed into a political corner with Germany. However, Spain is discovering that even ESM funding doesn't come without strings attached: Germany Rejects Spain Banks Tapping Bailout Fund, Meister Says Spain's rating downgrade at Standard & Poor's doesn't alter Germany's stance that banks can't have direct access to Europe's financial backstops, a senior lawmaker from Chancellor Angela Merkel's party said. "The German position is absolutely strict," Michael Meister, the deputy caucus chairman of Merkel's Christian Democrats, said in a phone interview in Berlin. "And since such aid programs require unanimity, there's not going to be any change. All sorts of people can try to set things in motion, but Germany won't vote for it." http://www.bloomberg.com/news/2012-04-27/germany-rejects-spain-banks-tapping-bailout-fund-meister-says.html The ESM funding idea is really just Spain playing for time (the ESM doesn't actually have the funds to bail Spain out). But the fact that Germany is now making the ESM a political issue indicates the degree to which political relationships are breaking down in the EU. And once the political relationships break down… so will the Euro. Indeed, Germany has no choice. If it decides to prop up Spain it will receive a ratings downgrade (something which France is about to experience anyway). Europe with a downgraded Germany is not a pretty sight. Keep on reading @ gainspainscapital.com | |||||||||||||||||||||
| Hong Kong to hear about gold market manipulation Posted: 02 May 2012 10:44 PM PDT
from gata.org: Dear Friend of GATA and Gold: Your secretary/treasurer will join renowned mining entrepreneurs Robert Friedland, Rob McEwen, and Bob Quartermain among the speakers at Standard Chartered's Earth's Resources Conference in Hong Kong on Wednesday and Thursday, June 20 and 21. The conference will be held at the luxurious J.W. Marriott Hotel at Pacific Place in the glamorous Wan Chai section of Hong Kong, and the conference has arranged a special discounted room rate for attendees staying at the hotel. Just about everything in the resource world will be discussed — not just gold and oil but also platinum, diamonds, copper, base metals, rare earths, rubber, and natural gas. A special gala dinner to raise funds for the Child's Dream charity will be held on the conference's first night, introduced by Marc Faber, publisher of the Gloom, Doom, and Boom Report. Keep on reading @ gata.org | |||||||||||||||||||||
| Gold Standard for All, From Nuts to Paul Krugman Posted: 02 May 2012 10:43 PM PDT
from bloomberg.com: That's the consensus among credentialed economists who describe advocates of a return to the monetary regime known as the gold standard. In fact, the economic pack will marginalize you as a weirdo faster than you can say "Jacques Rueff," if you even raise the topic of monetary policy in relation to gold. he first rule Ozimek offers is that free trade benefits economies. So obvious. That makes the penalty for disagreement higher. Then you read down to the final principle: "The gold standard is a terrible idea." By putting the proposition in such strong terms, the author raises the penalty for disagreeing. If you don't subscribe to this view, you risk both being classed as the kind of genuine nut case who believes in protectionism, and enduring the disdain of other economists — "all economists," as the Atlantic headline writer summarized it. Gold's Real Record Keep on reading @ bloomberg.com | |||||||||||||||||||||
| Leeb: We Will See Unbelievable Chaos Going Forward Posted: 02 May 2012 10:40 PM PDT
from kingworldnews.com: On the heels of unemployment reports being released today in Europe and the US, King World News interviewed acclaimed money manager Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management. Leeb told KWN he expects to see a tremendous amount of chaos going forward, and it will mean the end of the euro. Leeb also discussed gold and silver, but first, here is what Leeb had to say about what is happening in Europe and the US: "Today we got two bad employment reports. One of those reports was from Europe, the other from the United States. The fundamentals in Europe and the US are horrendous. Things are even worse in Europe than they are in the US." Stephen Leeb continues: The euro is not going to last…. Keep on reading @ kingworldnews.com | |||||||||||||||||||||
| Stoeferle: Petro Dollar System Losing Influence Posted: 02 May 2012 10:17 PM PDT
From Jim Puplava and Financial Sense: Jim welcomes back Ronald Stoeferle CMT, from Erste Group Bank in Austria. In his recent oil report "Nothing To Spare" Ronald notes OPEC spare capacity is virtually non-existent and we have reached a peak in conventional oil production. He also sees the "Petro Dollar" system losing its influence, as some countries begin to buy Middle Eastern oil in other currencies. Much More @ FinancialSense.com | |||||||||||||||||||||
| A Truly Physical Perspective On Precious Metals Posted: 02 May 2012 10:08 PM PDT from seekingalpha.com: Many people will agree that silver is a beautiful precious metal. After just a little polishing, jewelry and crockery made from sterling silver can look just as good today as it did over a century ago. In fact, there are very few materials like silver that can lay claim to possessing versatility of use, durability, fungibility, store of value, liquidity and aesthetics all at once. In my opinion, the only materials that tick all of these boxes simultaneously are the precious metals gold, silver, platinum and copper. Like a long-lost silver vase you might chance upon in the attic, many investors have re-discovered the fact that precious metals are and have always been a safe haven – an investment that literally stands the test of time. This is due to the simple fact that owning or investing in physical precious metals has absolutely no counterparty risk. Essentially, what you see is exactly what you possess. The increasing attention that the financial media have given to precious metals over the past couple of years has resulted in a kaleidoscope of different opinions, predictions and worrisome stories of market manipulation. Having said that, in this article I would like to take a step back from the financial mayhem and take a fresh look at the physical stuff. Literally. I am hoping that for both old and new investors my analysis will yield a new perspective on precious metals. Keep on reading @ seekingalpha.com | |||||||||||||||||||||
| Silver rally to hit $50 later this year Posted: 02 May 2012 10:05 PM PDT
from bullionstreet.com: After being the top performer in Q1 2012 out of all other commodities; including gold, Silver might hit $40 an ounce soon and $50 an ounce by the year end,analysts said. Silver grew by an annual rate of 2.2% in the first quarter this year. Analysts said silver is currently reacting much of the same way that physical commodities do and could hit $40 an ounce in a short time and may surpass $50 an ounce in the third or fourth quarter. Short supply of the metal with minable silver being pushed to the limit, the only place for silver to go is up and up, they added. The white metal received a boost last month after largest consumer China started Future trading on the Shanghai Futures Exchange which brings a new group of traders to silver. Analysts said Asian investors get a direct way to trade silver futures and will impact on silver's overall price point as the market will be bigger and more liquid with the advent of these futures contracts. With the Chinese Futures, the U.S. exchanges and sentiments will no longer dominate futures trading in the silver market. Keep on reading @ bullionstreet.com | |||||||||||||||||||||
| Banks and Governments Will Collapse Together: James Turk Posted: 02 May 2012 09:18 PM PDT ¤ Yesterday in Gold and SilverIn gold, the price action on Wednesday looked very similar to the price action on Tuesday...the gentle sell-off in London, the rally that began shortly before the Comex open, the smack-down shortly after the Comex open...and the low of the day coming at 9:45 a.m. Eastern, which may have been an early London p.m. gold fix. The gold price recovered a bit from that low until just before the close of Comex trading...and then traded sideways into the close of electronic trading in New York at 5:15 p.m. Gold closed at $1,653.70 spot...down $8.50 from Tuesday. Net volume was a third higher than Tuesday at around 112,000 contracts.
The silver price traded sideways until about 9:00 a.m. Hong Kong time on their Wednesday morning...and then the price decline began. The tiny rally that got under way shortly before the Comex opened, if you wish to dignify it with that name, got dealt with in the usual manner...and silver's low price tick [$30.31 spot] came at the same moment as gold's low price tick...9:45 a.m. in New York. And also like the gold price, the silver price then gained back a bit until the close of Comex trading at 1:30 p.m. Eastern time...and then more or less traded sideways until the end of electronic trading. The silver price traded in a 2 percent price range on Wednesday...and closed at $30.65 spot...down 32 cents...which is a hair over a one percent loss on the day. Silver volume was also up a third from Tuesday at 30,000 contracts.
The dollar index crawled slowly higher during the Far East trading day...but jumped about 20 basis points in just a few minutes starting at 8:30 a.m. in London. From there, the index picked its way higher, with the high tick coming a couple of minutes before 9:00 a.m. in New York. Then it gave up a bit of those gains going into the close. The dollar index finished up about 36 basis points at around 79.19...which was just under a half a percent. I would say that what little dollar index action there was during the Comex session had nothing to do with the price action of any of the precious metals.
The gold stocks gapped down at the open...and the low came just minutes after 10:00 a.m. Eastern. From there, the equities recovered just a little, then more or less traded sideways after that. The HUI finished down 1.84%.
The silver shares didn't do well, either...and Nick Laird's Silver Sentiment Index got clobbered to the tune of 3.41%.
(Click on image to enlarge) Day four of the May delivery month showed that 5 gold and 64 silver contracts were posted for delivery on Friday. JPMorgan and Deutsche Bank were involved in the lion's share of the deliveries...and the link to the Issuers and Stoppers Report is here. There were no reported changes in either GLD or SLV...and the U.S. Mint didn't have a sales report on Wednesday, either. Over at the Comex-approved depositories on Tuesday, they had a much quieter day than they had on Monday. They didn't receive any silver, but shipped 537,909 troy ounces of the stuff out the door. The link to that action is here. Silver analyst Ted Butler posted his mid-week commentary for his paying subscribers...and here are three free paragraphs that are must reads. "The price of silver began to climb in earnest in the late summer of 2010 from about the $18 level to roughly the $31 level by the end of the year as physical silver began to grow tighter. My basis for the physical tightness explanation is that there was no net speculative buying in futures contracts on the COMEX for that period. In fact, the net speculative long/commercial short position declined by almost 25% from the mid-September through year end 2010. Almost 99 times out of 100, it is COMEX positioning that drives the price of silver. So if it wasn't speculative buying on the COMEX that was driving the price, by process of elimination, it had to be something else. That something else was demand for physical, as evidenced in the collective 100 million oz growth in various silver ETFs (like SLV, PSLV, SIVR, etc) over that time period." "After correcting to $27 in late January 2011, the price of silver surged to $49 in three months to the end of April. Once again, after some gyrations in the COT structure, the total net commercial short position was lower by the end of April, proving that it wasn't buying by speculators on the COMEX that drove prices to historic highs; it was continued physical buying in ETFs and elsewhere and commercial short covering into the highs. The changes in the COT structure prove that the COMEX commercials on the short side were in a bind and were clearly panicking into the end of April. It was not a speculative bubble in any true sense of the word. I do admit that a good chunk of the buying in the silver ETFs was obviously momentum buying on rising prices and that was the metal that was subsequently liquidated on the May 2011 price smash. But it would be a stretch to call that a bubble. In retrospect, it was a shortage of silver, more than anything else that drove prices to the highs." "Had the big COMEX commercials not collusively banded together [starting on the evening of May 1st...and continuing to this day] to manipulatively rig prices lower, we would be looking down at $50 silver, instead of looking up to that price now. There's no real way of telling how high we may have gone had the physical silver shortage into April 2011 jumped the fire break and spread to the world's industrial users. Such a development would have created a situation where the fire would need to burn itself out by prices moving irrationally higher. I don't know if the commercials knew on May 1st that they would be able to trip off the metal liquidation in SLV and the subsequent liquidation in COMEX contracts, but I am inclined to think that their backs were up against the wall...and it could have gone the other way. Let's face it – if the commercials were in such total control, they never would have let silver have gotten to such extremes with them so close to being overrun to the upside. The commercials miscalculated from $18 on up...and only got lucky on their desperate last-gasp sell-off a year ago." Here's a chart that Australian reader Wesley Legrand sent me late last night.
(Click on image to enlarge) Here's a rather unhappy looking chart that Washington state reader S.A. sent me yesterday. I'm not sure what he stole it from, but whatever the source, I'm glad he did. The graph is self-explanatory.
Reader Scott Pluschau has posted another short commentary on gold at his website...and the link is here. Well, it was obvious from yesterday's price action that JPMorgan et al aren't done to the downside yet. Gold Standard for All, From Nuts to Paul Krugman. Inept Central Bankers Will Keep Long-Term Gold Prices High: Marc Faber. A Scream Worth $119,922,500. ¤ Critical ReadsSubscribeNBER's Martin Feldstein Bashes The Deplorable US Economy, Says Bernanke Has Engineered Another Stock BubbleThat the market is merely yet another transitory sugar high bubble creation of the Chairsatan and his central planning colleagues in various marble buildings around the world is no surprising to anyone, at least not anyone who maintains a pretense of objectivity, is not desperate to sell a weekly newsletter, and has a frontal lobe. What however is not only surprising, but outright shocking, is that such embedded members of the aristocratic status quo elite as Martin Feldstein - a professor of economics at that bastion of Keynesianism Harvard as well as president emeritus of the NBER - the folks who tell us when recessions start and end, are starting to get it. This zerohedge.com piece from yesterday is courtesy of reader Phil Barlett...and the link is here.  Norwegians take big broker's trading algos for an expensive rideTwo Norwegian day traders who outwitted the automated trading system of a big US broker have been cleared of all wrongdoing by the country's highest court. The two men were handed suspended prison sentences for market manipulation in 2010 after they worked out how the computerised system would react to certain trading patterns -- allowing them to influence the price of low-volume stocks. Their appeal against that ruling was upheld by the Norwegian Supreme Court on Wednesday, which cleared them of market manipulation. The verdict will please the trading community in Norway, which had come to view the duo as Robin Hood figures, beating the big financial houses at their own game. This Financial Times story from yesterday is posted in the clear in this GATA release. I thank Australian reader Wesley Legrand for bringing it to my attention...and then Chris Powell's. It's a must read...and the link is here.  Retirement, Slipping Farther and Farther AwayOver the last decade and a half, Americans' expected retirement age has slowly risen to 67 from 60, according to a new Gallup survey. If a standard retirement age of 60 sounds relatively low, remember that the economy was booming in the 1990s and Americans' savings were being inflated by the tech bubble. That's about the time when housing prices began to skyrocket, which also made homeowners feel particularly wealthy. Since then, of course, both the dot-com and housing bubbles have burst. Americans have been putting their money where their mouths are, so to speak, and have been working longer and longer in recent decades. In 1996, for example, 45.8 percent of workers ages 60 to 64 were either working or looking for work. Last year, the figure was 54.5 percent. This short story, with some excellent graphs, was posted in The New York Times yesterday. I thank Phil Barlett for his second offering in a row...and the link is here.  Dallas Fed's Fisher Not Supportive of Quantitative Easing"No amount of monetary accommodation will make up for this problem of not dealing with this fiscal cliff," Fisher said in an interview from Los Angeles played today on BNN Television in Canada. He said Europe's fiscal and economic issues are a lesson for the U.S. "Monetary policy alone cannot solve problems without proper fiscal policy," Fisher said. "If we let it go too far as the Greeks obviously did, we'll end up with riots in the streets in the United States." This was a Bloomberg story that was posted on their website on Tuesday. I 'borrowed' it from yesterday's King Report...and the link is here.  A Scream Worth $119,922,500If Munch's Scream was a public company, its stock would be limit up now, because contrary to expectations of it selling at a just concluded auction in Sotheby's for $80 million, the painting just slammed all expectations (except LaVorgna's we are told), selling at a record $119,922,500 (that's $119.9 million... for a made in 1895, 36" x 28.9" painting). This makes it the highest amount of money ever spent for an artwork, with only Picasso's "Boy With a Pipe" and Giacometti's "Walking Man I" selling for more than $100 million in the past. No bubbles here, folks. I thank West Virginia reader Elliot Simon for sending me this very interesting zerohedge.com piece..and the link is here.  Jobless Rate Reaches New High in Euro ZoneUnemployment in the euro zone rose to a new high in March, according to figures released on Wednesday. The data came a few days before crucial elections in France and Greece, and it is likely to prompt more intense calls for an easing of Europe's austerity drive. Unemployment in the 17 countries that belong to the euro zone rose to 10.9 percent in March from 10.8 percent in February, according to Eurostat, the European Union's statistics agency. In March 2011, the rate was 9.9 percent, a number that illustrates the deterioration of the region's economy in the last year. The monthly increase, the 11th in a row, translates into more than 17 million jobless people, and it is in line with other recent indicators showing that the euro zone economy remains distressed. Manufacturing in the region hit a 34-month low in April, according to a survey of purchasing managers released Wednesday by the research firm Markit. This story was filed from Frankfurt yesterday...and was posted in The New York Times. I thank Phil Barlett for his third offering in today's column...and the link is here.  Crisis? What Crisis? - Election Threatens to Become Snapshot of Greek DespairGreek voters are slated to head for the polls this weekend. The candidates are pledging to change everything in the crisis-plagued country. But in many cases these promises are coming from the very politicians who helped drive the country into the abyss. "It's absurd that precisely those who drove the cart against the wall are now expected to pull it out of the dirt again," says political scientist Seraphim Seferiades. It's almost as if the crisis has been forgotten. Crisis? What crisis? This very interesting read was posted over at the German website spiegel.de yesterday...and I thank Roy Stephens for bringing it to our attention. The link is here.  The euro crisis just got a whole lot worseEarth's Resources Conference in Hong Kong to hear about gold market manipulation Posted: 02 May 2012 09:18 PM PDT  GATA's secretary/treasurer Chris Powell will join renowned mining entrepreneurs Robert Friedland, Rob McEwen, and Bob Quartermain among the speakers at Standard Chartered's Earth's Resources Conference in Hong Kong on Wednesday and Thursday, June 20 and 21. The conference will be held at the luxurious J.W. Marriott Hotel at Pacific Place in the glamorous Wan Chai section of Hong Kong, and the conference has arranged a special discounted room rate for attendees staying at the hotel. At this conference Chris plans to bring gold market manipulation to the attention of a huge and influential Asian audience, and thus to hasten the manipulation's end. | |||||||||||||||||||||
| MineWeb's Williams sees U.S. using gold for gradual devaluation of dollar Posted: 02 May 2012 09:18 PM PDT  Lawrence Williams notes the recent strange smash-downs in the gold price, cites GATA's work, and endorses GATA's view that, through the gold price, the U.S. government is attempting a gradual and controlled devaluation of the dollar. Williams' commentary is headlined "Patterns in Gold Price Puzzling -- but Understandable". The story is posted over at the mineweb.com website...and the link is here. | |||||||||||||||||||||
| Gold & Silver Market Morning, May 03 2012 Posted: 02 May 2012 09:00 PM PDT | |||||||||||||||||||||
| Adam Davidson Parrots Disinformation as He Extols Rule by the Top 0.1% Posted: 02 May 2012 08:11 PM PDT Adam Davidson is moving up in the world. He has gone from fellating the 1% to the top 0.1%. But bear in mind that we can't hold Davidson solely responsible for his latest assault on common sense, decency, and most important accuracy. It was the editors of the Sunday Magazine that not only decided to showcase an interview with Mitt Romney's uber wealthy former partner Edward Conard ("The Purpose of Spectacular Wealth, According to a Spectacularly Wealthy Guy") but to give it a full 6 pages (per my browser) and put it on the magazine cover. Conard says his new career is to "make his case for a new, decidedly pro-investor way to think about the economy." And what follows is half-baked, largely inaccurate, unabashed propaganda. Now admittedly, Davidson as interlocutor gets to have it both ways. He presents Conard's arguments pretty much straight up for the first half of the piece, and treats them and Conard with a good deal of respect (well, save Conard's view of the crisis, that is was a run on sound banks which is utterly batshit, and Davidson does pause to intimate that). For instance, after pointing out that Conard is heretofore best known in the wider world as being a mystery Romney funder at the center of a pending scandal that went poof when Conard outed himself, Davidson suggests he might be media wary. But no, this is how Davidson described his first meeting:
This introduction to Conard as a real person segues into an overview of Conard as an icon of successful risk-taking (a theme in Conard's book, due out next month, which this story also has the unfortunate effect of promoting): born into a middle class family, rising through consulting firm Bain to become partner, leapfrogging to M&A boutique Wasserstein Perella, taking a pay cut to go for greater upside by returning to the Bain fold, but this time at private equity firm Bain Capital. Aside from the description of Conard's devoid-of-reality take on the crisis, Davidson uncritically recites his views in the first half of the story and then only, all too politely, as no doubt fits in a world where men like Conard deserve deference, questions his ideas towards the end. But even with this unduly respectful treatment, the picture that emerges is stunning. Conard is in fact a living, walking homo economicus. If he were written up in a novel, he'd be treated as a ridiculous parody. He treats finding a mate like a shopping exercise, and recommends a sampling phase prior to a selection phase. He thinks philanthropy is bad and money should go only to investments:
And, not surprisingly, Conar denies that rent seeking occurs any place other than despotic third world countries. But it isn't simply that the overly polite questioning of Conard's utilitarian world view is too mild and comes too late. It is that Davidson happily recites things that are simply untrue. And to make matters worse, if my readership is any indicator, many people don't get past the first page or two of this piece before deciding they've read plenty and so get a full dose of claptrap before tuning out. The article is chock full of blatant falsehoods. Let's start with Conard's personal Big Lie: that he is a risk taker and risk taking is good. All you have to do is look at his career to see that it contradicts both claims. He sees himself as a risk taker because…hold your breath…he went to Harvard Business School rather than going to law school! I graduated from HBS the year before Conard, and was accepted by both top law schools and business schools. Anyone with an operating brain cell will tell you that the fancy grad school route, particularly back then, when tuitions were vastly lower, was a risk averse strategy. You get good grades, show up for job interviews wearing a decent suit and exhibit at least adequate social skills, and you are guaranteed a well paid job. And of the career choices of a newly minted MBA in the early 1980s, the big consulting firms were the least risky path on offer. Unlike Wall Street, where even first year pay had a meaningful bonus component, consulting firms pay high salaries. And they hysterical thing is he repeatedly rags on lawyers as prototypical people who "don't maximize their wealth creating potential." Yet he went on a path exactly like that. Consulting firms take fees, like law firms, and have explicitly modeled their pay and promotion structures on law firms'. He then went to Wasserstein (another firm which takes fees, albeit largely dependent on whether deals get done), which was already an established powerhouse, hence pretty much nada in the way of financial downside in joining them. And partners in private equity firms do not take risk either. PE firms get 2% of the funds under management and 20% of the upside. Partners may but are not required to invest along side the limited partners. Conard has absolutely no clue about what entrepreneurship is about. Experts on entrepreneurship, like Amar Bhide, who has done considerable research into Inck 500 companies and entrepreneurship generally, have found that the top performers have founders who have very high ambitions and are good at minimizing risk. Another Big Lie that Davidson promotes is Conard's claim that the sort of investing he did at Bain Capital and that wealthy people do generally. Earth to base, academic studies have shown that PE fund returns are due to financial engineering and application of leverage. They don't nurture companies. Anyone who has been in an PE investee company will tell you they are aggressive cost-cutters and investment minimizers. Anything to boost cash flow and facilitate a flip at a higher price to a corporate buyer or public shareholders goes. Ex angel investors or long-term owners of private companies who reinvest their profits, the investments of the uber wealthy are in established companies, the overwhelming majority of the time in secondary trading of securities (which means they are simply cashing out other investors rather than providing growth capital). And for public businesses, the biggest source of investment funds is retained earnings, second is debt financing, and the occasional stock sale is a distant third. Davidson says things that are factually incorrect in parroting Conard's argument (and notice how he depicts it as cogent):
First, it's clear Conard never heard of Moore's law as the driver of falling computing costs. Second, investors had comparatively little to do with the growth and success of the computing industry (and in general this is true. Bhide has found that only 1/4 of the Inc 500 companies were venture capital funded). If you look at the PC revolution (which was when the real falls in price and growth in reach of computers took place), the drivers were geek tinkerers and hobbyists who all wanted to create a new Hewlett Packard. HP was founded in 1939 and it grew into a dominant Silicon Valley player in the 1950s and 1960s, when top Federal marginal income tax rates were over 90% in the later 1950 and over 70% in the 1960s. Silicon Valley came into being thanks to the work of engineers who clearly were not motivated by dreams of becoming Filthy Rich, since it was pretty much impossible back then. If you look at the iconic companies of the 1980s tech revolution, few had venture capital or wealthy individuals as backers. Apple funded itself off of purchase orders. Software firms like Microsoft and Oracle didn't need meaningful seed money. Cisco didn't take VC until shortly before its IPO so as to get a better multiple. Third, the internet was created by the Federal government (remember them?). Unix, still the most robust computing platform, was funded by heavily regulated and highly profitable monopoly AT&T, not by wealthy investors. These are also important parts of the tech infrastructure. We also have stuff like this:
This is how bad things have gotten, that Davidson and Conard dare suggest that the discovery and solving of production problems for penicillin had anything to do with homo economicus grasping for the brass ring. Don't New York Times fact checkers know how to use Wikipedia?
So penicillin was the product of a persistent but unsuccessful effort of a brilliant researcher (Fleming was highly regarded even before the potential of his penicillin discovery was realized), carried forward by researchers at Oxford (risk averse academics!) funded by the government (horrors!) who made the critical production breakthroughs. And the iPhone was very much a product of Steve Jobs' vision, and Steve Jobs flies in the face of the World According to Mr. 0.1%. Consider this diatribe:
Conard must not believe in art of any kind. Can't a rich guy like him see the need of art educated adults, if nothing else, to help curate his collection, to inform the aesthetics of architects and city planners? And the decorators I know are plenty entrepreneurial, far more so than "never took a real risk" Conard. In addition, Conard apparently does not read newspapers and has not heard that unemployment is really high these days. He clearly labors under the delusion that anyone not working is a dilettante. I'd hazard that at least some of these Starbucks denizens are underemployed and go there to get out of the house (yours truly also did a lot of work on ECONNED at Starbucks for similar reasons). Most important, Steve Jobs, the capitalist's wet dream, did everything Conard rails against: took art courses, didn't graduate from college, followed his inner muse (doing drugs, spending a year in India). But the key to Conard is in that last section. He doesn't revere risk taking. He reveres competition and numbing overwork. Davidson close to the end picks up on that:
His vision is the logical outcome of the belief system of early industrialists, who needed to justify their exploitation of formerly self sufficient farmers. Per Yasha Levine:
Levine quotes a book by Michael Perleman, The Invention of Capitalism, which cites numerous tracts bewailing the idleness of the lower orders (notice this was never perceived to be a problem prior to the Industrial Revolution). For instance:
So Conard celebrates competitiveness, when he managed to find his way onto the low-risk elite path when it was less crowded than today. And high income disparity serves that end. If you lose your economic perch, unlike in more equal societies, you are almost certain to lose most of your putative friends. If you can't socialize at their level, over time you disappear from their set (and that's before you factor in the possibility of serious budget problems). Yet as you peel the layers back, despite his confidence that the world would work better if it was mashed into his template, it sounds utterly miserable. Just because someone has an internally consistent world view does not make it accurate. Fans of slavery, alchemy, the Inquisition, trial by combat, and Ptolemaic astronomy all had logical looking arguments supporting their now discredited views. Conard at first seems to yet another evangelist of a hopelessly flawed and dangerous orthodoxy, and the more he speaks, the more he seems to be deeply imbalanced, so intensely invested in his distorted personal mythology that he is driven to make the world at large reflect it back. It would be far better for Davidson and the New York Times to treat people like Conard as epitomes of deep-seated cultural pathologies, rather than promote them. Update: In a misrepresentation I missed (hat tip Lynn Parramore), Davidson cites Dean Baker as supporting Conard's views. Baker objects:
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| A Weak Economy Remains Gold’s Best Friend Posted: 02 May 2012 07:19 PM PDT With equities nearing major resistance and precious metals emerging from an important low, it is obvious which asset class is in position to benefit from disappointing economic data and which asset class could enter a mild cyclical bear market. | |||||||||||||||||||||
| $4,000 Gold & $100 Silver or Lower Prices? Posted: 02 May 2012 06:01 PM PDT Far from being the usual boring consensus event for gold prices, the inaugural Dubai Multi Commodities Centre Precious Metals Conference struck a decidedly controversial note. It was good to see precious metal analysts battling it out with some contrarian views. | |||||||||||||||||||||
| How to Invest in a Declining US Dollar Posted: 02 May 2012 05:25 PM PDT Reckoning from Sea Island, Georgia... Yesterday, we got a glimpse. Yes, dear reader, we were on our way to Sea Island. We looked across the bridge at another island - Jekyll Island. You know Jekyll Island, don't you? It's where the monster of the US dollar was created... A group of the nation's richest, biggest, and most powerful bankers got together there - in secret - in November, 1910. They figured it was time to put in place a system that would make it a little easier for them to make money. Instead of competing head to head, without any backstop to protect them when things got rough, they decided to set up a central bank. The meeting was so cloaked in secrecy few believed it ever took place. Implausibly, it was first reported by the poet Ezra Pound. How Pound learned of it...and why he reported it...we don't know. But that's the word on the street. B. C. Forbes reported in 1916:
Picture a party of the nation's greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundreds of miles South, embarking on a mysterious launch, sneaking onto an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned, lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. And now it's official. Ben Bernanke went there to give a speech in 2010, marking the 100th year of the meeting. The role of the Fed...apart from greasing the skids for rich bankers...was supposed to be to protect the value of the US dollar. Why the US dollar needed protection was never explained. For the previous 100 years, it had been solid enough - except for during the War Between the States, when Lincoln printed up far too many of them in order to pay for his attack on the South. But Lincoln's paper dollars came and went. And on the day the Fed was officially set up, in 1913, the US dollar was still worth about as much as it had been when Napoleon Bonaparte set off for Russia. Whatever the Fed was supposed do to, what it did not do was protect the greenback. Instead, the US dollar slipped and slid throughout the 20th century and is now worth only about 3 cents. Which is why we return to yesterday's theme. There's no guarantee. But we have a feeling that the US dollar will continue to lose ground. Maybe not right away. But sooner or later. Housing and the US DollarAnd if someone will lend you money at the lowest mortgage rates in history...in advance of what could be the greatest inflation in US history...perhaps you should take it. We're down here at a financial conference. Among the attendees is colleague Steve Sjuggerud, who believes US real estate may be the best investment of all time. Adjusted for inflation, housing prices are back to 1979 levels, he says. But they're much better deals now. Because mortgage rates in '79 were 3 times higher. "If you took out a mortgage in 1979," says Steve, "you'd be paying 15% to 20% interest. So, over the life of a $200,000 mortgage, you'd pay as much as $700,000, including interest. "And you got a lot less house for your money in 1979," he continues. "The typical house sold in '79 had only 1,600 square feet of living space. Today, the average is about 2,200 sq. ft. It's a much bigger house. "So, in terms of dollars per square foot, you're paying about $75 now compared to about $100 back then. In terms of affordability, and value per US dollar, the US house is a better deal now than it has ever been, Steve concludes. It would have to increase in value by $100,000 just to get to normal affordability levels. "There are unbelievable bargains around," Steve goes on. He found a farm in Florida that had been appraised at more than $10 million in 2006. Now, the owner is bankrupt and the bank is desperate to get rid of it. What bid will it take to buy it? "Maybe less than $1 million," says Steve. There's a time to be a borrower and a time to be a lender. As long as the Great Correction continues (and we think it will continue for a few more years...perhaps 10) it will be a good time to be a lender. Interest rates will tend to go down, not up. That is the lesson of Japan's economy, where bonds have been the only decent investment for the last 22 years. But thanks to that clandestine meeting on Jekyll Island 102 years ago, we probably won't stay in a Japan-like rut forever. Ben Bernanke promises. He has 'a little technology' called a printing press. And he knows how to use it! And more thoughts... Your editor is not a good example. He bought a house and paid more than he needed to pay. But he was buying a house, not an investment. At least that's what he told himself. Still, he figures that he will mortgage the place and let Ben Bernanke help make it a better deal. It may be a good time to be a lender now, but we will borrow anyway. The borrowers' time must be coming. What's a US Dollar's Debt Worth?What are the odds that a US dollar's worth of debt...at 4% interest...will still be worth a dollar 10 years...20 years...30 years from now? The odds can't be very high. The headline story over the weekend was that GDP growth in America, in the last quarter, was "disappointing." Which just goes to show how little people understand what is going on. The Great Correction began 5 years ago. The feds have been fighting it ever since - with trillions of dollars' worth of fiscal and monetary stimulus. You can see what good this does. Just look at the Dow. After Lehman went broke the index dropped to the 6,000 level. Then, the feds began dumping in money. Remember TARP? And tax cut extensions. And 'cash for clunkers'? And ZIRP? And QEI, QEII, and now...the Twist? Naturally, the markets...and the economy...react. GDP growth resumed in 2009. But most of the growth depends on further spending and money-creation by the feds. We don't know how much of it...maybe all of it. There is no 'recovery.' Instead, the private sector is correcting...or trying to...and the economy is merely returning to its trend. GDP growth rates have been going down for 40 years. Growth rates averaged about 4% in the '70s...3% in the '80s and '90s...and then about 2% in the '00s. On a 10-year trailing average basis, they are down to about 1.6% now. And they still seem to be headed lower. What caused this drop off in growth is a matter of debate. (We have our ideas!) But the decline in the last quarter was right in line with what has been going on for more than a generation. As long as growth is disappointing, the feds will fight it...and they'll fight the Great Correction too. The US government borrows a trillion dollars a year...with no end in sight. And last year, 61% of that money came from...Ben Bernanke's printing press. Keep up the fight, Ben! And our long-term fixed-rate mortgage will eventually be worthless. Regards, Bill Bonner From the Archives... How to Use Preference Shares to Become an Absolutist Investor Why Politicians Can't Solve Economic Problems Pozieres Investor Choices - Do You Have a Lifeboat or a Bottle of Brandy? A Bankrupt Idea Whose Time Has Gone
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| Examining the Long-Term Benefits of Gold Investing Posted: 02 May 2012 05:25 PM PDT Reckoning today from Buenos Aires, Argentina... We don't go in for daily numbers, Fellow Reckoner. They're too volatile. Too capricious. Too whimsical. One minute, stocks are on an upward tear. The next they're crashing down again. Then you take a step back and realize the chart you're looking at tracks movements by the fractions of a point. It's like watching footage from a tiny camera, strapped to the back of an ant...at an IMAX theatre. Comfortably navigable ground suddenly becomes a terrifying terrain of Himalayan proportions. Who needs the headache, the vertigo or the motion sickness? A nose-on-screen perspective is fine - necessary even - if you are day trading in and out of stocks...but your editor has neither the discipline nor the stomach for such demanding activity. Besides, it's hard to really glean much from a second-by-second analysis of events. The sheer amount of information is simply too much for the human brain to process, much less to arrange in any meaningful kind of pattern. The price of gold, for example, might have been cheap a few minutes ago...when compared to the price a few more minutes ago. Then, compared to the price yesterday, it's cheaper still. About $8 bucks cheaper an ounce. (And even that number will have changed by the time you read this.) But so what? One year ago, you could have bought an ounce for about $180 less than today. That would seem to make today's price expensive, no? But wait. Five years ago, you could have bought two and a half ounces for the same price it costs you to buy just one today. And ten years ago, you could have bought five and a half ounces. Does that make gold cheap, or expensive? A buy, or a sell? It depends on your perspective. We've all wished we could go back in time and buy '90s shares of Apple, acres of unpopulated beachfront and unloved ounces of gold. Alas, time marches in one direction and one direction only. So where will gold be tomorrow...a year from now...next decade? Central bankers seem to be betting on a higher price - perhaps a much higher price - in the months and years ahead. Perhaps they're looking at the divergence between the paper gold market - largely dominated by exchange traded funds and futures - and the physical, stuff-you-can-touch-and-feel market. Reads the April letter from Sprott Asset Management (courtesy of Dave Gonigam over at The 5- Minute Forecast):
"Although the paper gold price has been range-bound over the past month, the physical gold market has been undergoing staggering change... Adds Dave, always hard on the story for The 5's loyal readers, "And that's not a one-off event; Chinese gold imports during the last eight months have grown nearly eight-fold year over year. And as we noted a few days ago, China's hardly alone: The IMF says 12 countries bought 58 tonnes last month - with Mexico, Turkey, Russia and Kazakhstan leading the charge." "Meanwhile," continues Dave, "Cheviot Asset Management reckons for every one bar of physical gold, there are 100 open positions in the 'paper gold' market." "The paper market for gold can continue its charade," conclude Sprott and Baker in their report, "but demand in the physical market will soon overpower it through sheer momentum - there's only so much physical to go around, and it appears that there are some very large buyers that are eager to take it." We have no idea where gold is ultimately going, Fellow Reckoner...only that, throughout history, the Midas Metal has proved a tremendously successful insurance against central banker folly. That's a fact onto which even the central bankers themselves appear to be cottoning. Don't let them beat you to the punch. Regards, Joel Bowman From the Archives... How to Use Preference Shares to Become an Absolutist Investor Why Politicians Can't Solve Economic Problems Pozieres Investor Choices - Do You Have a Lifeboat or a Bottle of Brandy? A Bankrupt Idea Whose Time Has Gone
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| Central Bank Demand to Change Gold, Silver Markets and Prices Posted: 02 May 2012 05:18 PM PDT Gold Forecaster | |||||||||||||||||||||
| Gold Breaks 3-Month Rule for 1st Time in 11 Years Posted: 02 May 2012 05:13 PM PDT | |||||||||||||||||||||
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