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Gold World News Flash

Satisfied?
Silver Update 6/14/12 Super Mario
David Pogue - Hunting the Elements
Watson Duke dancing with economic disaster
Gold Finishes Day Relatively Unchanged
Economic Collapse & Capital Controls Assured
Down, Down, Down? The US Dollar
The Gold Price is Battering the $1,625 Resistance May Pierce that Tomorrow
Gold Guru Says, "I've Shifted My Gold from GLD to This…"
Guest Post: Compassion – Killer Of Society?
Why Buy Gold Now
Biderman: "The World Cannot Go Back To The Way It Was"
Norcini - European Crisis & Bullion Banks Capping Gold
Do Asian Central Banks Hold Enough Gold?
LGMR: Germany's Bunds "Behaving More Like Peripheral Bonds" as Spain Yields Hit Fresh High, Gold Sets New Record in India
Gold Daily and Silver Weekly Charts - Rough Waters Ahead
The Sudden Rise of Peer-to-Peer (P2P) Commerce
A Clever Trap… and a Way Out
The Real ‘Goldilocks Economy’, Part II
Gold Seeker Closing Report: Gold and Silver End Mixed Again
The Shape & Future of Indian Gold Demand – Part 2/2
My Second Lecture Irredeemable Currency vs. Gold: The Solution
Precious Metals Market Report – 6.14.12
Monthly Gold Pattern Remains Bullish
Watch Tony Robbins discuss the $15 trillion U.S. national debt
Who Are They Kidding?
Gold turns up after weak inflation data
Dow Industrial Bulls, Gold Bugs, Wagering Big Bets on QE-3

Satisfied?

Posted: 14 Jun 2012 06:25 PM PDT

Silver down 2%. See you in October. Must be natural selling today. Anyone still thinking that silver...

Silver Update 6/14/12 Super Mario

Posted: 14 Jun 2012 04:31 PM PDT

from BrotherJohnf:

David Pogue - Hunting the Elements

Posted: 14 Jun 2012 03:50 PM PDT

"Where do nature's building blocks, called the elements, come from? They're the hidden ingredients of everything in our world, from the carbon in our bodies to the metals in our smartphones. Catch the facinating video below for answers to a few of these mysteries-

To unlock their secrets, David Pogue, the lively host of NOVA's popular "Making Stuff" series and technology correspondent of The New York Times, spins viewers through the world of weird, extreme chemistry: the strongest acids, the deadliest poisons, the universe's most abundant elements, and the rarest of the rare--substances cooked up in atom smashers that flicker into existence for only fractions of a second.

Why are some elements--like platinum or gold--inert, while others--like phosphorus or potassium--are violently explosive? Why are some vital to every breath we take while others are lethal toxins that kill off their discoverers, as with Marie Curie? As he digs for answers, Pogue reveals the story of the elements to be a rich stew simmering with passion, madness, and obsessive scientific rivalry. Punctuated by surprising and often alarming experiments, this program takes NOVA on a roller-coaster ride through nature's hidden lab and the compelling stories of discovery that revealed its secrets." (About 2 hours)

Source: Nova via YouTube

http://www.youtube.com/watch?v=hHpLcYVdvsg&feature=player_detailpage

Watson Duke dancing with economic disaster

Posted: 14 Jun 2012 03:50 PM PDT

I was horrified to read of Watson Duke's call for the re-introduction of the property tax system as a way of the Government affording what will translate to a massive increase in public sector wages. It is clear that Duke has either not given any thought whatsoever to the consequences of such a call, or, he has absolutely no regard or care for the impact of both a property tax re-introduction, and such a massive increase in public sector wages without any productivity increase.

As a trade unionist, one would expect Duke to ensure he gets the best packages for those he represents. Unlike the trade union leaders still locked blissfully in the long distant past like (Ancel) Roget and (David) Abdulah, who think that instability, exhorbitant pay increases and labour strife are what an economy needs.

However, at the same time, one would expect that our country and our people have matured to an extent where the trade unionist can sit and be very straight with those he represents. The Public Service, dollar for dollar and measure for measure, is among the lowest producing institution in our country. Poor service exists in every corner and station in the Public Service. Our nation's competitiveness is also impacted by a Public Service that is, for the most part, inefficient, burdened by incompetence and unwilling to modernise. In fact, it is the middle levels of the Public Service and the young professionals holding contract posts that are actually keeping the Public Service working. I would therefore want to recommend to Duke that he adopts a more modern approach where if one demands a wage increase, one justifies it with productive output. Read more.......

This posting includes an audio/video/photo media file: Download Now

Gold Finishes Day Relatively Unchanged

Posted: 14 Jun 2012 03:32 PM PDT

courtesy of DailyFX.com June 14, 2012 02:06 PM 240 Minute Bars Prepared by Jamie Saettele, CMT “The latest move off of the high is impulsive (5 waves) which favors lower prices from the current level to at least Friday’s low at 1553. The bearish RSI reversal signal that was in place for gold last week is now in place for USD crosses.” The mentioned 5 wave decline was succeeded by a 3 wave advance into former congestion (resistance). Look lower as long as price is below 1641. Exceeding that level would shift focus to the May high at 1672. LEVELS: 1553 1582 1608 1629 1641 1672...

Economic Collapse & Capital Controls Assured

Posted: 14 Jun 2012 02:13 PM PDT

from Fabian4Liberty:

Down, Down, Down? The US Dollar

Posted: 14 Jun 2012 01:56 PM PDT

If you thought you were looking at a roller coaster you might be right. With a real roller coaster it eventually comes to a dead halt at the bottom and hopefully with all passengers returned safely.

Posted: 14 Jun 2012 12:28 PM PDT

Gold Price Close Today : 1618.40
Change : 0.30 or 0.02%

Silver Price Close Today : 2840.1
Change : -53.4 or -1.85%

Gold Silver Ratio Today : 56.984
Change : 1.062 or 1.90%

Silver Gold Ratio Today : 0.01755
Change : -0.000333 or -1.86%

Platinum Price Close Today : 1486.10
Change : 20.80 or 1.42%

Palladium Price Close Today : 633.60
Change : 11.60 or 1.86%

S&P 500 : 1,329.10
Change : 14.22 or 1.08%

Dow In GOLD$ : $161.60
Change : $ 1.97 or 1.24%

Dow in GOLD oz : 7.818
Change : 0.095 or 1.24%

Dow in SILVER oz : 445.47
Change : 13.60 or 3.15%

Dow Industrial : 12,651.91
Change : 155.53 or 1.24%

US Dollar Index : 81.88
Change : 0.256 or 0.31%

The GOLD PRICE rose a mighty 30 cents today to close Comex at $1,618.40. Sounds trifling until you look closer.

First, the GOLD PRICE remains handily within its uptrend since the Monday low. More, About the time the New York market opened, gold has already pushed through $1,625 resistance to reach $,627.50 and bid fair to run off. About 9:30 SOMEbody showed up selling lots of gold and drove the price down to $1,610.30 in minutes. Good try, NGM, but it didn't stick. The GOLD PRICE bounced right back and by 11:30 had gapped and risen above $1,624. After the $1,618.40 Comex close gold bounced back to $1,622+, where it remaineth.

Plainly, the GOLD PRICE is battering at that $1,625 resistance. Barring more mysterious selling -- a lot more -- it could pierce that ceiling tomorrow. In any event I don't expect it will fall back. Surprises can always happen, but I reckon you'll never see gold below $1,590 again.

SOMEbody hit the SILVER PRICE worse than gold today. About the same time somebody took a notion to hit gold SOMEbody smote silver, driving it from 2900 cents to 2820c. No worry, silver re-bounded, but ended the day 53.4 cents lower at 2840.1. GOLD/SILVER RATIO rose to 56.98.

The SILVER PRICE chart doesn't look as garlicky-strong as gold's, but it remains above its 20 DMA so momentum points up. 'Twould comfort me silver rise above its 50 DMA (2971c) tomorrow, or Monday.

From within themselves, silver and gold are ready to move higher. NGM may cast a few more stumbling blocks into their path, but though they fall, they will rise. Count on it.

Rather than hide my suspicions and biases, I'll just parade them right out here in front of you, especially today, when they are being stimulated so electrically.

Now think. As a matter of official and statutory if secretive policy the US government and Federal Reserve in concert with other central banks actively manipulate currency and silver and gold markets. This weekend the Greeks hold an election that may signal their departure from the euro and disrupt the whole fascist banking cart in Europe. If you were a central banker, would you reach into markets proactively and manipulate them to keep them calm before that election?

Does a duck eat bugs?

Hence no one should be surprised that the euro rose today, the dollar fell stoutly (0.33%), and "Somebody" sneaked into the silver market and slapped it from a threatening-to-break--the-leash 2910 to 2820 cents in a few minutes. If you were the Nice Government Men tasked (as they like to intone) with keeping gold down, wouldn't you prefer to hit the much smaller silver market first so your gold market trickery would work more strongly?

Does a rat eat garbage?

Dow Jones industrials probably gainsaid that head and shoulders formation by closing above 12,650 (peak of the head) today, but maybe not. (Remember that the top of the right shoulder in May reached barely higher than the head). In any event most of the buying came from SOMEbody active after 3:30, i.e., 30 minutes before the close. Dow managed a stout gain of 155.53 (+1.24%) to 12,651.91 while the S&P500 almost kept up at 1,329.10, up 14.22 or 1.08%.

None of this even marginally interests me in stocks. Their fate is sealed. Dow today bumped up from beneath into the neckline of the LARGER head and shoulders that it broke down from at May's close. Folks, I know I'm no more than a ridge-runner from Tennessee, but I'm warning y'all that there's no future in this stock market, other than the easy descent into Avernus.

Currencies were as entertaining today as Catherine the Great's Potemkin-sponsored ride through Russia, and about as genuine. US dollar index axed its way through the 20 day moving average (82.24) to drop 25.6 basis points (0.33%) to 81.876. Sure, sure, right before that Greek election everybody's dumping dollars. Right.

The euro rose to $1.2632, up 0.6%. Here there is a gigantic short position, so one could also chalk that rise up to wary shorts closing out their positions before that election, just in case it goes well for the euro.

The yen remained quiet, practically flat at 126c/Y100 (Y79.37/US$1). Yen if floating along underneath its 20 DMA without enough moxie to rise through it.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
1-888-218-9226
10:00am-5:00pm CST, Monday-Friday

© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't.

Gold Guru Says, "I've Shifted My Gold from GLD to This…"

Posted: 14 Jun 2012 12:02 PM PDT

By Dr. Steve Sjuggerud Thursday, June 14, 2012 "Up until now," gold stock expert John Doody has held what he calls his "investment" gold "mostly in the big gold ETF – GLD." Now, John has made a major change OUT of the big gold ETF. GLD is probably the easiest and most popular way for individual investors to "invest" in gold… It trades on the stock market, just like a stock. So you can buy gold through GLD with one click of your computer mouse. You can sell it just as easily. The problem is, the big gold ETF "has several warts," as John explains in the latest issue of his Gold Stock Analyst newsletter. He told his subscribers it's time for an "upgrade" out of GLD. In short, he's shifted all his GLD holdings to CEF (Central Fund of Canada) and PHYS (Sprott Physical Gold Trust). What are CEF and PHYS? And what's wrong with GLD? For one, with GLD, you are taxed as if you held gold as a "collectible." So you are taxed at a 28% tax rate for gains on collectibl...

Guest Post: Compassion – Killer Of Society?

Posted: 14 Jun 2012 11:01 AM PDT

Submitted by Rex van Schalkwyk of Casey Research

Compassion – Killer Of Society?

In politics, it is the idea that counts. So also in philosophy, pop music, pedantry and philanthropy. The idea is everything. And between the idea and the reality, there lies that vast uncharted terrain of promises unfulfilled, of lies and deceit and of naked hypocrisy, all of which account for the failure of the public discourse and of public life. In short, this self-inflicted deception accounts for the failure of society.

Bertrand Russell, who is said by some to have been the greatest philosopher of the 20^th century, and a notable socialist, proposed that in the one-world society he envisaged, the supply of food should be used as a lever to ensure social compliance. This is what he wrote on the need to prevent the increase of the world's population: "If this is to be done otherwise than by wars, pestilence and famines, it will demand a powerful international authority. This authority should deal out the world's food to the various nations in proportion to their population at the time of the establishment of the authority. If any nation should subsequently increase its population, it should not on that account receive more food…"

In this way, the philosopher would have contrived a one-world totalitarian dictatorship in a perpetual state of starvation. Russell did not even consider where the world's food, without which people were to be starved into submission, would realistically be produced. The most extraordinary thing of all is that he could suggest such an idea in pursuit of his ideal of the utopian life. Were it not for the fact that his work, The Impact of Science on Society, is no laughing matter, it might have been read as a malicious satire.

There is a conundrum here: why is it that so many of those who enthusiastically embrace a benign cause conduct themselves with such malevolent intent? The answer in Russell's case and many others besides is that the real object of their concern is not the welfare of the individual, or of the collective, or the world, as the case may be. The real preoccupation is the idea, and close by the idea is the individual who will see self-interest as synonymous with the public good.

And so it is easy for Warren Buffett, Charlie Munger, George Soros, and others who have made their billions to adopt neo-socialist causes and to plead the morality of higher taxation because, having made their pile, they can with impunity identify with the perceived interests of the disadvantaged. They can adopt the mantle of compassion because there is no real cost involved.

The worst crimes in human history were committed in the name of the communist ideology, whose central premise was the brotherhood of men. Everyone was a comrade, except when they were not, which was practically all the time. Never included in the common definition were the rulers, although they were routinely referred to by the same fraternal denomination.

George Bernard Shaw actually visited Russia in the company of a clutch of like-minded intellectuals after the commencement of Stalin's infamous purges. When he returned to the safety of London, he proclaimed to have been well-pleased by the progressive nature of Russian society.

How did this man of letters come to a conclusion so perverse? The answer is that he traded his integrity in exchange for the acknowledgement of the intellectual establishment of the time. It was believed then, particularly among the intellectual classes of Oxford and Cambridge, that communism was the way of the future. In Major Barbara, Shaw had excoriated the wealth derived from machines of death and destruction. What better trade for a playwright of his inclinations than to feign ignorance of the depravity of Stalin's Russia. In this way he would find favor with the masters of the intellectual universe.

In a letter written to The Manchester Guardian on March 2, 1933, Shaw and 20 other fellow travelers made this observation: "We desire to record that we saw nowhere evidence of such economic slavery, privation, unemployment and cynical despair of betterment as are accepted as inevitable and ignored by the [British] press… Everywhere we saw the hopeful and enthusiastic working-class, self-respecting and free up to the limits imposed on them by nature and a terrible inheritance from tyranny…"

If Shaw were to be believed, he was well aware of the tyranny of the tsar but blissfully ignorant of the savagery of Joseph Stalin, of the ubiquitous secret police, the extermination of the kulaks and the mass deportation and starvation of vast swaths of the Russian population. On his visit, he did not even notice the ever-present apparatus of Stalin's propaganda machine.

Joseph Schumpeter, who was both a sociologist and an economist, had the measure of human nature. In every democracy, votes are exchanged for favors. As the democracy matures and as the prize of political office becomes ever more seductive, the promises become ever more extravagant. By this process the democratic bribe must, according to Schumpeter, result in government that becomes increasingly socialist. If practical proof of Schumpeter's thesis is required, it is to be found in the inexorable rise of socialism in Europe, Canada, Australia and in the United States.

Add to this the requirement of the bankers and of the lesser financial institutions to secure political advantage, and it becomes easy to follow the money. This also explains the paradox of capital making common cause with socialism. If there is hypocrisy in those who choose to ignore the contradictions of their actions, this hypocrisy is multiplied in those who regard such conduct as a promotion of the public good.

When, as Treasury Secretary, Hank Paulson went down on his knees in his abject supplication before Nancy Pelosi, the high priestess of Congress, was it for the survival of the economy or his share-option scheme that he most fervently prayed? Whose interests was he guarding when he provided his banker friends and colleagues with insider information about the imminent collapse of Freddie Mac and Fannie Mae – a possibility that only weeks before he had publicly and emphatically dismissed?

The "liberated" South Africa is governed by the African National Congress (ANC), which comprises an assortment of socialists, communists, trades unionists and a sprinkling of pragmatists. The one thing that this unruly crowd has in common is its conspicuous consumption. In the process, billions of rand are misspent, unaccounted for or simply stolen. The chief in the office of former president Thabo Mbeki, Smuts Ngonyama, once proclaimed that he had not engaged in the liberation struggle to be poor. Candor of this kind is, however, rare; far more likely, a critic of government corruption will be met with the accusation of racialism.

The poor and the dispossessed are routinely exploited for the social and political ambitions of their rulers. Winnie Mandela, the former wife of the idealized former president, was convicted of the common-law crimes of kidnapping and assault. Were it not for an opportunistic appeal-court judgment, she might have spent many years in jail. Although she no longer goes by the moniker "Mother of the Nation," she still cuts a prominent and elegant figure on the many occasions she appears in public. Her kidnap victim was found dead, but her compassion is always on display: she never misses a photo shoot opportunity in the immediate presence of misery.

If the politicians and intellectuals are masters at the art of hypocrisy, Hollywood actors and pop stars have a sublime skill in the promotion of humbug. One such practitioner is Paul David Hewson, also known simply as Bono, the lead singer and lyricist of the accomplished Irish rock group U2.

Bono has turned his talents and his genius for publicity to the international populist causes of the day. He has organized many benefit concerts, eagerly supported by the "me-too brigade" who make up much of the entertainment industry. The most woebegone victims invariably attract the greatest artistic support, which is always provided for free.

For his efforts, Bono has consorted with presidents and kings and accumulated an assortment of titles and awards. Formally granted an honorary knighthood in March 2007 and thrice nominated for the Nobel Peace Prize, the former Time Person of the Year has been described by Paul Theroux as a "mythomaniac"; a person who wishes "…to convince the world of (his) worth." The sociologist and political commentator Muhammad Idrees Ahmad has condemned Bono's conduct as "…a grand orgy of narcissistic philanthropy." So we have it on good authority: narcissism and philanthropy can coexist.

If the hypocrisy of the pop stars is nauseating, the grandiloquent but meaningless oratory of the aspirant political "leaders," of which much will be seen and heard in the coming months, is almost certain to produce results, the very opposite of what is pledged.

Greece, Spain, Portugal, Italy and others besides have fallen into the trap of bribing their electorates with promises that become ever more unsustainable. In each of these states, expectations have been created that cannot be met and that cannot now be undone. This is surely a recipe for social unrest.

These will not be the only countries to succumb to failure. The national debt, the unaffordable long-term cost of social security, health care and a myriad other entitlements and the mounting evidence of the insolvent state point to the same outcome for the UK and the US. Failure is ensured; the more pressing question is, what happens next?

Why Buy Gold Now

Posted: 14 Jun 2012 10:03 AM PDT

Why Buy Gold Now...

Biderman: "The World Cannot Go Back To The Way It Was"

Posted: 14 Jun 2012 09:45 AM PDT

In browsing the last seven months of video commentary that Charles Biderman, of TrimTabs, has produced, he is clear on one thing, "nothing has changed". With an 'admittedly rigged' stock market now at the behest of global central banks and the slow-motion train-wreck in Europe seemingly approaching the end of its can-kicking-road, Biderman is frustrated by the inane financial media's perpetual belief that we are 'a grand plan' away from a return to the way the world was before the crisis began - "We are not!" Wages and salaries in the US continue to stagnate with a $100bn per month deficit as he is incredulous at the belief that we can go on printing $1.3 trillion to produce $250 billion in spending each year. The US economy will double-dip when the Fed's attempt at rigging the stock market and economy is no longer perceived as viable and as the paisley-wearing pontificater expects both inflation (inevitable with CB printing) and deflation (big banks, European and EM equities thanks to the interventionist policies of the global central banks), he suggests gold as a core holding.

Norcini - European Crisis & Bullion Banks Capping Gold

Posted: 14 Jun 2012 08:49 AM PDT

With continued volatility in global markets, today King World News interviewed highly acclaimed trader Dan Norcini. Norcini told KWN that "gold was being capped by the bullion banks at that ($1,630) level." Norcini also discussed the crisis in Europe and how it is impacting key markets. But first, here is what he had to say about the recent action and what investors should expect going forward: "Markets are marking time ahead of the all-important Greek election this weekend. Investors and professionals are waiting to see if the euro, as we currently know it, is going to survive. There is still uncertainty surrounding whether Greece will leave the euro or not."

This posting includes an audio/video/photo media file: Download Now

Do Asian Central Banks Hold Enough Gold?

Posted: 14 Jun 2012 08:48 AM PDT

"I'm just sitting here waiting for everything to either melt down or blow up...and it's my opinion that a lot of other people are doing the same." ...

LGMR: Germany's Bunds "Behaving More Like Peripheral Bonds" as Spain Yields Hit Fresh High, Gold Sets New Record in India

Posted: 14 Jun 2012 08:45 AM PDT

London Gold Market Report from Ben Traynor BullionVault Thursday 14 June 2012, 09:00 EDT WHOLESALE MARKET gold prices rose to $1627 an ounce shortly ahead of US trading on Thursday – their highest level so far this week – immediately following the publication of US economic data. Silver prices by contrast continued to trade sideways, hovering around $29 an ounce – around 1.6% up on where they started the week. US consumer price inflation fell to 1.7% last month – down from 2.3% in April – according to official figures published Thursday. This week's initial jobless claims meantime were 386,000 higher than many analysts expected. A day earlier, official data showed the producer price index, regarded by many as an indicator of commodity price inflation, fell 1.0% in May, while retail sales were down 0.2%. The Federal Open Market Committee meets next Tuesday and Wednesday to decide on any changes to US monetary policy. "Once there's evidence that the policymakers on t...

Gold Daily and Silver Weekly Charts - Rough Waters Ahead

Posted: 14 Jun 2012 08:42 AM PDT

This posting includes an audio/video/photo media file: Download Now

The Sudden Rise of Peer-to-Peer (P2P) Commerce

Posted: 14 Jun 2012 08:41 AM PDT

Synopsis:

More and more entrepreneurs are taking business to the "online streets," and the government doesn't like it.

Dear Fellow Technophiles,

The power of the Internet, especially in Western nations where access is provided on a pretty level playing field, is to give an equally loud bullhorn to every member of the community. If a site like the Drudge Report or Newsmax can become a highly regarded news site, there is no other barrier to their traffic far outstripping the Washington Post or LA Times. If Netflix can provide better video streaming than its competitors, there are no regional oligopoly grants from the government to prevent it from having a national reach.

This transition of power to the endpoints of the network, long since foretold in essays like Rise of the Stupid Network, is not only an enabler of new commercial models, though; it is also a disruptive force. It extends all the way down to each and every user of the network, enabling anyone to become both producer and consumer of digital goods. Nowhere was that power more obvious than in the massively disruptive impact that peer-to-peer (P2P) sharing technology had on the music business.

These days a new breed of companies is taking the P2P model – much the way eBay did for selling tchotchkes and used cars – and applying it to a host of new industries. Our own Doug Hornig has been sorting through these startups looking for some of the most unique and interesting, which he highlights below.

Quickly, before we get into that, I am reminded that the old-fashioned way of convening is still alive and well (and hopefully stays that way forever, as there is no substitute for meeting in person). Thus, I will be descending upon San Francisco for a few days to speak at the World MoneyShow on August 23 and 24. If you haven't been, the group puts on a show that if nothing else is grand in scale and with one of the most diverse and thought-provoking faculties of any show this size (credit I happily grant even excluding my admitted bias, given my own spot on the faculty). If you are interested in meeting up with me or any of the other faculty, the show organizers have been kind enough to provide me with this link for free registration. Hopefully I'll see a few of you in San Fran.

Sincerely,

Alex Daley
Chief Technology Investment Strategist
Casey Research

The Sudden Rise of Peer-to-Peer (P2P) Commerce

By Doug Hornig, Senior Editor

The idea of using the Internet for peer-to-peer interactions – "P2P" in trade shorthand – got off to a rocky start. In the beginning, most P2P had to do with file sharing. People would digitize their music collections and pass them around to friends who shared their tastes. Then Napster took the next logical step, removing friends from the equation and creating a centralized meeting ground in cyberspace, where anyone could post files to be shared with anyone else who logged on. The genie was out of the bottle.

That set off a predictable firestorm of protest from the entertainment industry, resulting in a long parade of lawsuits, prosecutions, and government attempts at regulation. Though Napster is long gone, along with subsequent file-sharing services like LimeWire, the issues remain largely unresolved. What once only affected music is now spreading to movies, thanks to increasing storage space and bandwidth, and to books, thanks to the mass adoption of e-readers in recent years.

While music and film "piracy" may be what most people think of when P2P is mentioned, the concept is fundamental to the structure of the Internet, and thus was bound to eventually find its way far beyond the file sharing realm. Today, business are sprouting up around the world based on the idea of connecting individuals directly to each other to trade products and services. While the idea is very much in its infancy still, like the music business at the dawn of Napster, we're beginning to grasp the potential.

On March 8 in this space, Alex Daley wrote about the new phenomenon of peer-to-peer lending, a web-based service that connects those needing loans to those willing to make them – without putting a bank or other large financial organization in the middle. As yet, P2P carves out just a small slice of the lending pie, but it is growing fast, with more than $1 billion in loans originated to date and annual growth projected to double that in half the time it's taken to get to the first billion.

Concurrently, there has been a sharp rise in P2P service-trading sites, where those with a skill or resource can offer their wares and get paired up with those looking for that service... sometimes at below-market rates.

For example, do you love to travel but are put off by the soaring cost of hotel rooms? Then maybe CouchSurfing.org is for you. CouchSurfing gives users access to members in some 230 countries, with whom you can connect to arrange to stay as a guest in their homes or to offer a space in your own home (perhaps the eponymous couch) to a fellow traveler. Or you can just make a date for a meetup with someone of similar interests in a strange place.

As Forbes wrote:

"CouchSurfing boasts a surprisingly large user base of three million people in 81,000 cities. Some 5.6 million connections have taken place on the site – whether that's people sharing a couch, a coffee, or simply local knowledge of the best bars, restaurants and sight-seeing spots with other diehard CouchSurfers. The organization recently learned that a Mongolian livestock farmer has hosted over 100 CouchSurfers in his yurt in the capital of Mongolia."

Other websites are creating jobs – to repeat this election year's never-ending political mantra – in a more direct way, by cutting out the middlemen, which must always include government. Democrats and Republicans alike tout the ability of government to "create" jobs. Yet they never admit that government can't employ Peter without first taking from Paul the money to pay him. Furthermore, there is little stomach in Washington, D.C. – in either party – for rolling back some of the regulations that stifle entrepreneurs who would otherwise be creating real jobs.

New York Times writer Anand Giridharadas recently wrote of governmental meddling:

"Say you want to start a home catering business in New York city. According to the city government, you'd need, among other things, a food protection certificate, a food service establishment permit, a gas authorization, professionally installed range hoods, a licensed carting company for waste, registration as a sales tax vendor as well as compliance with portable fire extinguisher rules and the unincorporated business tax."

That's a pretty formidable list; and it doesn't even include state and federal registrations and compliance. As a result, many entrepreneurs now are circumventing all this and taking to the streets. Or, to be more precise, to the biggest street of all: the Internet. They're creating P2P sites that make it easy for people on both ends of a transaction to contact and work with each other.

Have some small job or errand you'd like to outsource? Just go to TaskRabbit. Founded in 2008 in San Francisco, the business is currently operating in Boston, the Bay Area, San Antonio, Austin, Chicago, Seattle, Portland, Los Angeles, and New York. You just post your need to their website, the company puts your request out to those on its contractor list with the requisite skills, and they bid on it. Lowest bidder gets the work.

TaskRabbit can hook you up with willing labor for everything from deliveries and household chores to skilled tasks like carpentry, electrical work, and plumbing. For safety, the company puts applicants who want to become Rabbits through a process that includes a video interview, federal background check, Social Security number trace, and lastly, a test to determine if they have what it takes. Once in the labor pool, Rabbits also earn ratings based on user feedback.

The company is growing dramatically. Last October, founder Leah Busque said it is handling $4 million in bids per month. Most Rabbits are retirees, stay-at-home moms, or students, but the unemployed are finding a place as well. "Our most active TaskRabbits are cashing out about $5,000 a month," Busque says, making tasking a full-time job. And she says she is also looking into the possibility of group health insurance for her contractors.

Or consider this. What is your car doing when it's just sitting there? Nothing. But it could be earning you money, if you want to list it on RelayRides. This is a P2P service that matches those needing a car for a short time with those willing to provide one to a stranger on an hourly or daily basis. Sounds a bit dicey, of course, since there's always risk involved putting any human behind the wheel of a vehicle. RelayRides tries to mitigate that risk by providing insurance, renter verification and screening, and 24/7 roadside assistance.

The service launched in Boston in 2010 and this March went nationwide. Car owners set their own prices, and the company takes 35%. Owners can earn up to $7,000 annually, the company estimates. I checked for available wheels in my general area, and found everything from a basic 2011 Mazda at $6/hour to a 2005 BMW sports convertible at $20/hour. (Competitor Getaround is similar, and includes the ability to grab cars right from the San Francisco airport, from a Prius to a Porsche.)

Then there's oDesk, which brings together employers and remote contractors for part- or full-time jobs in such fields as writing, Web and software development, graphic design, customer service, and marketing. The service uses a unique "Work Diary" feature to verify that time billed is actually time spent on the project. Though it doesn't do any withholding, oDesk does report contractors' yearly earnings to the IRS.

This is just a small sample of the P2P websites now operating. A few others you might wish to take a look at include: airbnb, through which people can rent out their spare rooms; Kitchit, where you can hire a private chef for your dinner party; and Etsy, an online marketplace for your crafts or other handmade items.

A question that naturally arises is: is all of this legal? After all, much of what goes on in the P2P space involves transactions that, if they were conducted in the more traditional business world, would face the kind of government regulation that New York imposes on wannabe caterers.

For instance, is RelayRides analogous to you lending your Toyota to your buddy for the day, which would be unregulated? Or is it more like Hertz, which has to comply with a full range of regs? Shelby Clark, the founder of RelayRides, admits that his service exists in "a little bit of a legal gray area."

That gray area includes questions about where legal jurisdiction lies. Does a supplier in a peer–to-peer network require a local business license? Or does the network manager have to register in all locations where services are provided? Who is liable if something goes wrong: the supplier, the network, or both? And of course, there still – always – is the matter of taxation.

Taxing online commerce is of course a hot topic of the moment. Governments strapped for cash can be expected to cast a covetous eye on any new potential sources of revenue. Taxing P2P deals will be more complicated than placing a levy on Amazon sales, but it's certainly not outside the reach of government.

Government busybodies, as always, are running behind technological innovation. So it'll take time to sort all these issues out, with no certainty as to what will eventually happen. What is certain, though, is that P2P interactions can form the basis of a powerful business model, creating a wealth of new jobs – without any helping hand from Washington, D.C.

It's here to stay.

Technological innovation is changing the way the world works far beyond the marketplace. It's given us myriad inventions that make us much more productive and life infinitely more enjoyable. It's made assembly-line workers as obsolete as candle-makers. It's saving the lives of military men and women, who can now control robotic soldiers instead of putting themselves in harm's way.

But perhaps one of the biggest benefits technology offers to mankind is in the medical field, particularly in the realm of cancer research.

Bits & Bytes

I Believe I Can Fly (Jetlev)

You've always wanted to, right? Well, now you can, whenever you're around water... and provided you have a hundred grand to spare. Check out the Jetlev R200, and prepare to be amazed.

The New Gold Rush (CNN)

It isn't about staking ground for precious-metals mining, but there's another rush on that could prove golden for some. It's the competition for new top-level domain names. They're not likely to make "dot-com" obsolete, but nearly 2,000 proposals – from the likes of Amazon, Google, car makers, and big banks – have been submitted for "dot-something else." Yesterday we got our first look at what might be on the way in 2013.

Battling the iPad (PC World)

Nothing is likely to dislodge Apple's iPad from its spot at the top of the heap, but the competition is heating up with the introduction of Acer's new Android tablet, with comparable features and a lower price.

Buying Fantasy Objects with Real Money (BBC)

Activision Blizzard's new game Diablo 3 is set to produce a new income stream for the company. Players of the game – which set an all-time launch-day record with more than 3.5 million copies sold – can now fork over real cash for in-game objects like gold, weapons, and armor. Hack attacks are expected.

A Clever Trap… and a Way Out

Posted: 14 Jun 2012 08:37 AM PDT

Dave Gonigam – June 14, 2012

The mother of all financial bubbles, now playing at a fund family near you: Investors flee stocks, rush for the "safety" of bonds
The sneaky way the government will pay down its debt… how it hurts you… and the legal means you can use to escape (for now)
The "hopium" rally? Traders drive up stocks in the expectation the Fed will deal their next QE fix
How the government proposes to solve the problem of fewer tourists coming to America (seriously)
Seven days of The 5… Two methods of defending against zombies… One reader's guess at what Bernanke has up his sleeve… and more!

Would the last investor in stock mutual funds please turn out the lights?

When last we checked up on mutual fund flows two weeks ago, we suggested the "Facebook effect" might be at work.

Hard to say if the resulting evaporation of trust was responsible for investors rushing to the exits. But the stampede is still on: They pulled $1.73 billion out of stock funds in the week ended June 6, according to the Investment Company Institute.

If you zero in on U.S. stock funds, the picture is worse: an outflow of $3.08 billion. Charted from the start of the year, it looks like this.

There was an unexpected inflow the last week of May… but it evaporated as soon as the Dow took a 275-point dump on the day the May unemployment figures came out.

Total outflows from U.S. stock funds in 2012: $48 billion.

So if investors are bailing… and they clearly are… where are they putting the money? In days gone by, stock-skittish investors would park their cash in money market funds.

Not now. Holdings in retail money market funds are down 7.7% this year, according to ICI figures.

Little wonder: Before the Federal Reserve opened up the monetary spigots in 2008, a typical money market fund yielded 5% a year. Since late 2009, yields have been near zero.

Bond mutual funds pulled in $1.60 billion in the same week that stock funds lost $1.73 billion.

Indeed, bond funds have seen rock-steady inflows nearly every month since late 2008… when big-money investors sold anything that wasn't bolted down, just to stay liquid.

So we see that in the main, retail investors are fleeing stocks and embracing bonds.
But ICI's numbers don't tell the whole story. Let's focus on that most-liquid and allegedly "safe" sector of the bond market.

Retail investors bought more U.S. Treasury debt in the first quarter of 2012 than the Federal Reserve and foreigners combined.

New figures from the Fed show households loaded up on $170 billion of AA+ graded U.S. Treasuries. In contrast, foreigners upped their holdings only $110 billion. And the Fed's holdings fell a bit.

"The conventional view," says a research note from Capital Economics, "is that 10-year Treasury yields have been pushed down to 1.5%… by the actions of the Federal Reserve and the safe haven demand from foreign investors. The reality, however, is slightly different."

We'll throw in a caveat that the "household" figures are a bit slippery and might include other categories of buyers; as with many numbers issued by the Fed, this one's a bit opaque.

But the big picture is clear: Investors are fleeing stocks, and instead of parking cash in zero-yield money market funds, they're assuring themselves of some kind of return in Treasuries. The mother of all financial bubbles, as Addison has called it for the last eight months, is unfolding in real-time.

Indeed, yesterday the Treasury auctioned $21 billion in 10-year notes. They flew out the door at a record-low 1.622%.

And for their trouble, Treasury buyers lose ground — even by the government's jimmied numbers.

The Bureau of Labor Statistics is out this morning with its monthly reading of the consumer price index. It fell 0.3% in May, thanks to falling gas prices. This brings the year-over-year increase down to 1.7%.

So let's get this straight: People are lending their (presumably) hard-earned money to Uncle Sam for 10 years… and getting a return that can't keep up with the cost of living, even after the cost-of-living figure has been tortured by statisticians beyond recognition. (The real-world reading this morning from John Williams at ShadowStats.com is 9.3%.)

"This," Addison says, "is no accident. It's policy (even if, in the end, we discover it is accidental policy). 'Negative real interest rates' are how the federal government will try to pay down some of its staggering debt."

So if you're among those skittish about stocks… and you don't want to park your money in Treasuries where you're still a long-term loser… you have to seek other avenues.

Indeed, you have to seek what our publisher Joe Schriefer calls "escape routes."

"There are," he says, "a handful of easy moves you can make… without leaving your home office… that shield your wealth from the greedy hands of our government."

Heads up, though: This "handful" has the potential to shrink rapidly. Every one of these moves is legal right now. But already Congress is moving to change that. It's in your interest to give Joe's new presentation your full attention… before it's too late.

U.S. stocks are improbably rallying today. The Dow has zoomed past 12,600.

That's despite nothing changing materially about the eurozone situation. In fact, it's getting worse. Moody's downgraded Spain three notches late yesterday. As a result, yields on 10-year Spanish debt crested 7% this morning.

7% is thought to be the point of no return beyond which the interest costs pile up too quickly to have a prayer of paying down any principal. It was the breaking point for Greece, Portugal and Ireland — all of which ended up seeking bailouts.

Real bailouts, that is, not the money sink for Spanish banks that took place last weekend.

No, to listen to the cable chatter (sometimes it has entertainment value), the rally today appears driven by a perverse brand of conventional wisdom.

At issue are two economic reports: The aforementioned consumer price index, which fell month over month… and first-time unemployment claims.

The latter rose last week to 386,000. And yes, the previous week's figure was revised up. The number has been stuck in a range of 360,000-400,000 since last October. That's not bad by post-2008 standards, but it's also setting the bar mighty low.

Still, to traders jonesing for another QE fix, both of these items are evidence of a slowing economy that will have to prod the Federal Reserve to launch some new easy-money scheme at its meeting next Tuesday and Wednesday.

If this is what's propping up stocks as an asset class — of course, there are always individual shares that offer good values — we're in sad shape, indeed.

Curiously, precious metals traders aren't buying that argument. Gold sits at $1,618, right where it has most of the week.

And silver sold off this morning. It's down about 1%, to $28.56.

The U.S. State Department has come up with a way to combat the impression among foreigners that it's a pain in the ass to visit the United States.

See, the government knows that all the post-Sept. 11 rules have put a hurt on the tourist trade. The United States attracted 17% of the world's tourists in 2000; now it's only 12.4%.

So what is State doing about it? Well, it's not actually making the visa process any easier. It's not pulling back on the requirement that visitors from many countries be "interviewed" before coming here. Nor is it opening more visa offices to make those interviews more accessible.

No, it's putting out propaganda videos telling people that visiting the United States is "easier than you think."

Judging by most of the comments at YouTube, it's backfiring: "Yes," says one, "make an appointment at the one U.S. consulate in your country, pay the fees, travel all that way to the capital city of your country, then get a denial of your visa application.

"Even wives and children of U.S. citizens are routinely denied visas or U.S. passports because they failed to convince the bureaucrat in the consulate that they followed the exact procedure."

He might have added they're taxed on their income, no matter where they earned it.

"As chief audit executive of a major semiconductor company in Silicon Valley," writes a reader after we picked apart Jamie Dimon's testimony, "I take exception to your comment regarding Sarbanes-Oxley and the implementation of risk control … and that it is not completely accurate."

"If you make bad investment or business decisions but they are adequately reflected and disclosed in your financial statements and related footnotes to the financials, then you have complied with the act and Section 404."

"Sarbanes was about failure to disclose correct financial statement information, off balance sheet transactions, etc., and not about making bad investment or business decisions."

The 5: Never said otherwise. Perhaps we should have been more direct.

"It seems," in the words of the trading veteran who blogs as "Jesse" at Jesse's Cafe Americain, "that JPM was misrepresenting and mispricing their risks, egregiously to the point of making false statements to the press, the public and probably the regulators, and they were doing so with public funds and government-guaranteed deposits in the pursuit of outsized income for their traders and management."

By the way, did anyone else notice Dimon's cufflinks yesterday? They had the presidential seal. Yeah, this one…

"The White House," reports CBS News, "has not responded to request for comment about the cufflinks and if he received them from the president or his aides."

An intimidation tactic? Who knows, but it was one sorry sight, those senators falling all over themselves seeking Dimon's advice for how to regulate the banks.

"I know I am a simpleton," a reader writes humbly, "especially on the macroeconomic scene, but it does not appear to me that Mr. Bernanke wants more stimulus, at least directly."

"It strikes me that his prime objective is to 'kick the can a bit further down the road,' in other words, continue to move short-term debt to long-term to keep the future payments on the debt as low as possible."

"Second, why would he need stimulus? He has to finance $1.3 trillion in extra debt currently, and for as long as possible, at the cheapest rate."

"Third, if he could create real inflation at 5% or 6%, he would love it."

"Extend the long-term debt, devalue at a higher inflation rate. Heck, he owns all kinds of mortgages. If he can wait it out and get the asset prices up though low interest rates and increased value, he will be a hero. He says he wants to cap inflation at 2% — right, that's a nice sound bite. If he could get 10% and quit printing, he would sleep soundly."

The 5: We don't dare attempt to read the mind of Ben Bernanke or anyone else at the Fed.

All we know is there are unstoppable forces at work that will drag down the value of the dollars in your pocket… and there are — for the moment anyway — protective measures you can still take legally.

"Somewhat of a newbie to your service," a reader writes. "Very refreshing, understandable and to the point. Keep it coming."

"I've been hoping for seven days of The 5," writes a gracious reader after our announcement yesterday. "Guess I wasn't alone in that hope!"

The 5: If you missed the announcement, here's the story: Starting this weekend, you can expect two new emails as we expand our service.

Saturdays, we'll bring you a "top 5" list of takeaways from the week's 5 Min. Forecasts. It's the ideal way to catch up if you got busy and missed an issue or two. (Hey, we understand.)

Sundays, Addison will write you directly an intriguing and/or profitable insight to get the new week off on the right foot.

If you already receive The 5, you'll automatically receive these new emails starting Saturday… so be sure to keep an eye out.

Cheers,

Dave Gonigam
The 5 Min. Forecast

P.S. "The zombies are everywhere," wrote Bill Bonner this week at The Daily Reckoning. "Lobbying. Spending. Getting disability and bailouts. Every U.S. government program is full of zombies."

Bill spent part of the week "zombie-fighting" — an activity you might know better as "consulting with a tax accountant."

"We were fighting back," he says, "by using Subsection 16 b, Part 5, Paragraphs g-l… against Rule Number 1,456 as applied to foregone earnings of a limited partnership that invests in unallocated, unamortized, unappealing properties subject to Section 3612, as amended in the Tax Act of 1997 and re-amended in subsequent acts and deeds of which we have either lost tract of or were totally ignorant of all along."

Well, that's one means of zombie defense. Addison recently came upon another…

He promptly posted it at his Facebook page. Have you been there? You can subscribe to his page, or friend him. In any event, it's worth a look… because you never know what you might find!

The Real ‘Goldilocks Economy’, Part II

Posted: 14 Jun 2012 08:26 AM PDT

In Part I, we were presented with a mythical "Goldilocks economy"; a contrivance of propaganda where B.S. Bernanke attempted to portray the U.S.'s worsening economic collapse as representing some sort of Golden Age. We were also presented with a legitimate definition of a Goldilocks economy: steady growth, stable employment, and muted inflation. However, back in the real world we saw a U.S. economy which literally exemplified the exact opposite of all those characteristics.

The purpose of Part II is thus to first expand upon this definition which was presented in Part I, and then to point readers toward how such an economic dream could be achieved. The best way in which to accomplish this is to look at the three facets of the Goldilocks paradigm individually.

With respect to the propaganda myth of "steady growth", understand that as a matter of the simplest arithmetic that this is impossible with any/every economy which embraces the suicidal Keynesian doctrine of perpetually rising debt-levels. Obviously if you begin with an economy which is spending 1% of each dollar of revenue paying interest on debt, then 5%, then 10%, and now 25% to 30% (as Europe's Deadbeat Debtors prepare to default) you can never possibly have steady growth.

Rather, as the Albatross of debt around the throats of these economies becomes heavier and heavier and heavier, it is an inevitable proposition of arithmetic that growth will become more and more anemic as a greater and greater percentage of resources is wasted servicing debt. Inevitably these economies become so saturated with debt that further "growth" is impossible. This is the point at which our Western economies are at today.

We thereby arrive at our first Goldilocks Principle: steady growth requires a solvent economy, and (at the least) a balanced budget. Here it's important for readers to realize that even after the massive "Debt Jubilee" which rapidly approaches for our debt-saturated Western economies that this will not restore solvency.

Thanks to the relentless (and unprecedented) transfer of wealth from the bottom-80% to the top 5% (and most particularly the top 1%), our tax-base has been destroyed. Those on the bottom have nothing left to tax, while those at the very top refuse to pay taxes. Without a viable tax-base, immediately after Debt Jubilee we would simply begin a new debt-spiral – and then (literally) mortgage the future for the succeeding generation.

I've explained the dynamics of taxation in previous commentaries. Any/every income taxation system is inherently parasitic; creating reverse-Robin Hood economies which relentlessly suck the wealth out of the pockets of the bottom-80% and transfer it to the wealth-hoards of the top-5%. Income taxation is roughly revenue neutral for that portion of the affluent in between those two groups.

Wealth taxation is always the optimal form of taxation for any economy. However, in the obscenely top-heavy Western economies of today - where the ultra-wealthy hold (hoard) a larger percentage of total wealth than at any time in history – wealth taxation (i.e. a flat wealth tax) is literally the only possible path to solvency. It is the only form of taxation which fully restores the tax-base to previous levels (i.e. back when our economies were solvent and prosperous).

Even this, however, is not enough to assure the balanced-budget economies necessary for steady growth. It ignores the political reality that the reckless children who run our governments have proven that they cannot be trusted to engage in sound fiscal practices. For them, nothing less than the Golden Handcuffs of a gold standard will suffice. I'll revisit the necessity of a gold standard later in this piece.

As demonstrated in Part I, our economies represent the complete antithesis of "stable employment". Structural unemployment is at an all-time high. The size of our labour forces are rapidly shrinking – despite population growth. Wages for the average worker have been steadily declining for four decades (in real dollars), and that rate of decline has actually accelerated in recent years.

What is critically important here is that both the shrinking labour forces and our plummeting wages are both direct consequences of this massive, permanent structural unemployment. This extreme-and-permanent glut of workers simultaneously drives down wages according to the simple dictates of supply and demand, while it steadily drives people out of the workforce due to the futility of attempting to find employment.

It creates an economic death-spiral which must ultimately manifest itself through all of our economies disintegrating in the same manner we see Greece's economy disintegrating today. Friedman Austerity has both accelerated and intensified that downward spiral, but even without that economic sadism all Western economies are devolving along precisely the same path.

Gold Seeker Closing Report: Gold and Silver End Mixed Again

Posted: 14 Jun 2012 08:13 AM PDT

Gold jumped up to $1627.84 by a little before 8:30AM EST before it dropped back to $1610.33 in the next hour of trade, but it then rallied back higher into the close and ended with a gain of 0.34%. Silver slumped to as low as $28.21 before it also rebounded, but it still ended with a loss of 0.62%.

The Shape & Future of Indian Gold Demand – Part 2/2

Posted: 14 Jun 2012 08:00 AM PDT

The Indian gold investor still has one weakness –his understanding of the Rupee itself in pricing gold. As we are all guilty of, the Indian investor measures the price of gold in the Rupee and rarely measures the price of the Rupee in terms of gold. Consequently as the Rupee weakens, he sees the price of gold rising, when it is not. That's the case in today's market.