Gold World News Flash |
- As Greek Banks Run Out Of Safe Deposit Boxes, An Eerie Calm Takes Over The Country 24 Hours Before D-Day
- Paul Craig Roberts Explains US Government Gold Market Rigging
- Notes To The SEC–Join The Fight!
- White House Hypocrisy And Trade Sanctions Against China
- Macleod on QE to infinity, Turk on fiat currency in a Kondratieff winter
- India's government seeks to dissuade people from investing in gold
- International Stocks Could Be a Ticking Time Bomb for U.S. Investors! Here?s Why
- Financial System Has Broken Down, The Fix & Where to Invest
- Latest article posted at GoldMoney
- This Past Week in Gold
- Dollar Bulls Leaning Heavily on the Long Side of the Boat
- Guest Post: What Peak Oil?
- Citi's Buiter: Greece will be forced out of the euro regardless of who wins the Sunday elections
- Spain's Fixed??? Even Spain's PM Admits that REAL Capitalization Needs Are Closer to 500 billion Euros!!!
- Former Assistant Treasury Secretary Paul Craig Roberts discusses gold price suppression
- John Hathaway: Gold, gold mining shares, and QE
| Posted: 16 Jun 2012 05:06 PM PDT from Zero Hedge:
Spiegel reports: "Joanna Stavropoulos is not proud of what she has done. "I had a guilty conscience when I withdrew my money from Greece," says the 43-year-old. Of course she knew what would happen if everybody does the same: Greece's banks would be threatened with collapse. But she says she had to think of her two-month-old daughter, Josephina, who is currently asleep on Joanna's shoulder. Increasing numbers of Greeks are following Joanna Stavropoulos' example and emptying their accounts. They are afraid that Greece may leave the euro zone and return to the drachma….
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| Paul Craig Roberts Explains US Government Gold Market Rigging Posted: 16 Jun 2012 04:53 PM PDT One on One with Paul Craig Roberts Assistant... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
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| Notes To The SEC–Join The Fight! Posted: 16 Jun 2012 03:54 PM PDT Jim, Following your call to action, the following is the content of my email to the SEC: "Moments after the New York market closed Friday, June 15, 2012, there was a major carpet bombing of various gold mining shares. I listed NGD above as an example of a company I own. Look at the Continue reading Notes To The SEC–Join The Fight!
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| White House Hypocrisy And Trade Sanctions Against China Posted: 16 Jun 2012 03:21 PM PDT Wolf Richter www.testosteronepit.com Practically every car sold in the US contains Chinese-made components. But suddenly, in the middle of a heated presidential campaign, the Obama administration decided to do something about it. “We’re certainly looking at that,” Tim Reif, general counsel in the US Trade Representative’s office, told reporters, though he insisted that the election had nothing to do with it. Instead, it was all about “careful examination of the facts.” Earlier in 2012, as Republican candidates were bashing not only each other but also President Obama, the United Steelworkers union smelled an opportunity and began pushing the White House to take a stance against “a flood of auto parts from China.” A Department of Commerce investigation, resulting in anti-dumping or countervailing duties, or a WTO case against Chinese subsidies would do. Political picante sauce: 188 lawmakers, many from swing states like Ohio where the auto industry is important, sent a letter to the White House, lambasting China for its “vast array of policies” that heaped unfair advantages on Chinese component manufacturers. And now, four months before the election, the White House is showing its dentures. The force behind the epic migration of component manufacturing from the US to China, however, is the US auto industry itself—and Wall Street engineering. Delphi, former component division of GM, is Exhibit A. GM spun it off in 1999. In 2001, Delphi axed 11,500 workers. In 2004, it got tarred and feathered over its accounting practices. In 2005, six years after its IPO, it went bankrupt and closed 24 plants. In 2006, it closed another 21 plants. Meanwhile, GM was sourcing components elsewhere, particularly in China. In 2009, Delphi Automotive sold its chassis division to BeijingWest Industries, a joint venture of three government-owned companies—Shougang Corp, Bao’an Investment Development Co., and Beijing Fangshan State-Owned Asset Management Co. BeijingWest now develops and manufactures brake and chassis components for US and European automakers. Visteon, Ford’s former component division, is Exhibit B. Ford spun it off in 2000. In 2009, nine years after its IPO, Visteon went bankrupt and shuttered numerous plants. Its center of gravity shifted to its Asia Pacific Corporate Office and Innovation Center in Shanghai. It consolidated its interior and electronics divisions into its Yanfeng joint ventures with Huayu Automotive Systems, a subsidiary of China’s largest automaker, Shanghai Automotive Industry Corp. (SAIC), which is owned by the Chinese government. And the building of its North American Corporate Office in Van Buren Township, Michigan, was sold earlier this year. Germany, whose highly successful auto industry plays a disproportionate role in its export-driven economy, has seen the same migration. The latest was Kiekert AG, the largest manufacturer of automotive door-lock systems in the world. Among its customers: GM, Ford, VW, and BMW. It has plants in Germany, the Czech Republic, Great Britain, the US, Mexico, and, since 2008, China. As with Delphi and Visteon, financial engineering played a role. Permira, a European PE firm, acquired it in 2000 and stuffed it to the gills with debt. In 2006, the game was over. Kiekert was handed to its creditors, Bluebay Asset Management, Silver Point Capital, and Morgan Stanley. In March this year, they sold it to Lingyun Group, a subsidiary of China North Industries Corporation (Norinco), a government-owned conglomerate that manufactures motorcycles, cars, trucks, machinery, weaponry, missiles, ammo.... The Bush administration had slapped it with sanctions in 2003 for selling missile-related products to Iran. In the US, manufacturer after manufacturer followed the routine; they invested billions in China and sent millions of jobs across the Pacific. Sure, the Chinese eagerly played along and encouraged it—not only to expand their manufacturing base but also to obtain proprietary technologies that would, if the plan works out, make it a world leader in the auto industry. So, it’s no surprise that more and more components are manufactured in China. Outsourcing and offshoring—for a myriad of reasons—have been the primary philosophy of American manufacturing for years, and it’s hypocritical for the White House to go after the Chinese four month before the election, just to gain a few union votes in swing states. 2010 was a magical year in China: 18 million new vehicles were sold. Sales had skyrocketed 33% that year and 54% in 2009. Mind-boggling. It catapulted China to the number one new-vehicle market, far ahead of the US which had never sold that many units in a year. But now, the auto bubble is emitting a sharp hiss. Read.... China: A Mixed Bag Turns Very Ugly. And here is Marin Katusa’s superb article.... The New Cold War: with China this time, and over oil.
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| Macleod on QE to infinity, Turk on fiat currency in a Kondratieff winter Posted: 16 Jun 2012 02:55 PM PDT 10:51a HKT Sunday, June 17, 2012 Dear Friend of GATA and Gold: Economist Alasdair Macleod, senior fellow at the GoldMoney Foundation, today laments the destruction of markets by ever-increasing government intervention and figures that the next move will be an even more massive "quantitative easing" engineered by central banks throughout the world. Macleod's commentary is headlined "A Call to Arms for Central Banks" and it's posted at GoldMoney here: http://www.goldmoney.com/gold-research/alasdair-macleod/a-call-to-arms-f... Also at GoldMoney, GoldMoney founder and GATA consultant James Turk observes that while he doesn't believe in the predestination of Kondratieff economic theory, it bears some analogies to Austrian economics, as with the deflation the world is experiencing, a decline in the value of official government money and a rise in the value of natural money, gold, which, taken together, indicate that fiat currency is the actual economic bubble. Turk's commentary is headlined "Fiat Currency in a Kondratieff Winter" and it's posted at GoldMoney here: http://www.fgmr.com/fiat-currency-in-a-kondratieff-winter.html?gmrefcode... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum (TSXV:NKL) Announces Encouraging Rhodium, Ruthenium, Osmium, Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL; OTC-QX: PNIKF; Frankfurt: P94P) is pleased to provide results of full spectrum 6E (Platinum, Palladian, Rhodium, Ruthenium, Osmium, and Iridium) analysis of platinum group elements on the first batch of samples from the company's wholly-owned Wellgreen PGM-Ni-Cu project in the Yukon Territory, Canada. The company enlisted Activation Laboratories (Actlabs) of Ancaster, Ontario, to conduct a full-spectrum 6E analysis of samples taken from the 2011 drill hole WS11-188. Adding Rh, Ru, Os, and Ir to Pt and Pd increased the total PGE content (6E) by an average of 28 percent, based on a population of 90 samples, most of which are from disseminated sulphide-type mineralization. Assay results with 6E exceeding 0.50 ppm (0.5 g/t) (excluding copper and gold assays) are tabulated at Prophecy's Internet site and are available with assay results from the entire batch of 90 samples here: http://prophecyplat.com/news_2012_may25_prophecy_platinum_announces_rare... Join GATA here: Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| India's government seeks to dissuade people from investing in gold Posted: 16 Jun 2012 01:45 PM PDT Could it be the only government in the world with such a policy? * * * From Press Trust of India http://ibnlive.in.com/news/need-to-dissuade-people-from-investing-in-gol... MUMBAI -- Worried over the flow of savings for investment in gold, Finance Minister Pranab Mukherjee on Saturday said there is a need to spread financial literacy to encourage people to invest in market instruments. Pointing out that India's gold imports surged to $60-62 billion in last fiscal year, the minister regretted that people are investing in gold with the expectation that the value of their investment would appreciate. "Quantum of import of gold ... is a clear indication that a large section of the community ... wants investment in a dead asset only with expectation that the value would appreciate," he said while speaking at a Zee television award function. ... Dispatch continues below ... ADVERTISEMENT Prophecy Platinum (TSXV:NKL) Announces Encouraging Rhodium, Ruthenium, Osmium, Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL; OTC-QX: PNIKF; Frankfurt: P94P) is pleased to provide results of full spectrum 6E (Platinum, Palladian, Rhodium, Ruthenium, Osmium, and Iridium) analysis of platinum group elements on the first batch of samples from the company's wholly-owned Wellgreen PGM-Ni-Cu project in the Yukon Territory, Canada. The company enlisted Activation Laboratories (Actlabs) of Ancaster, Ontario, to conduct a full-spectrum 6E analysis of samples taken from the 2011 drill hole WS11-188. Adding Rh, Ru, Os, and Ir to Pt and Pd increased the total PGE content (6E) by an average of 28 percent, based on a population of 90 samples, most of which are from disseminated sulphide-type mineralization. Assay results with 6E exceeding 0.50 ppm (0.5 g/t) (excluding copper and gold assays) are tabulated at Prophecy's Internet site and are available with assay results from the entire batch of 90 samples here: http://prophecyplat.com/news_2012_may25_prophecy_platinum_announces_rare... The minister further said, "Time is ripe to motivate our educated upper middle class to climb from saving mode to wealth-generation mode. ... "My request to financial analysts and other experts and leaders in this field is to ensure than we can create confidence in the market, spread financial literacy, and the merit of investment could be widely spread," he said. The minister added that the government is committed to make India an investment-friendly destination and financial powerhouse of the world. "If India can build on its economic strength, it can be a source of stability for the world economy and safe destination for restless global capital, which can help speed our developmental process," the minister said. On the economic issues, the minister said, "the most important challenge before the country is to regain and then sustain 8-9 grwoth per annum." At the same time, Mukherjee said, there is a need to maintain the basic parameters of healthy development, a moderate rate of inflation, fiscal consolidation, and current account deficit and obviously higher growth in exports. While asking financial analysts and experts to educate investors, Mukherjee cautioned: "We need to put investors' interest in forefornt. If we lose the interest of potential investors, growth will be stalled." He further said inputs of experts on policy correctives and reforms have helped the government to "move forward." "We are now on to the next generation of financial sector reforms, which include, among other things, widening and deepening the Indian security markets as part of concerted efforts to increase the participation of retail investors in the security market and further the goal of financial inclusion," he said. In order to check gold imports, the government has increased the basic customs duty on gold bars from 2 per cent to 4 per cent. * * * Join GATA here: Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| International Stocks Could Be a Ticking Time Bomb for U.S. Investors! Here?s Why Posted: 16 Jun 2012 09:18 AM PDT One moment stock prices rejoice on bailout news for the eurozone… the next moment they collapse….but steering clear of European stocks and bonds doesn’t mean you’re completely safe. In fact, your portfolio could be loaded with ticking time bombs, set to detonate once second-quarter earnings reporting season begins. Here’s why. Words: 611 So says Lou Basenese ([url]www.WallStreetDaily.com[/url]) in edited comments from his*original article* as posted on Seeking Alpha. [INDENT]Lorimer Wilson, editor of [B][COLOR=#0000ff]www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor's Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.[/COLOR][/B] [/INDENT]Basenese goes on to say, in part: The U.S. dollar’s feeling rather mighty again….[up] 5% [see chart below] over the last six weeks [but] these gains aren’t the result of rob...
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| Financial System Has Broken Down, The Fix & Where to Invest Posted: 16 Jun 2012 08:52 AM PDT  With investors around the world wondering what can be done to fix the broken financial system, today Michael Pento, of Pento Portfolio Strategies, writes exclusively for King World News to let readers know what to expect and how to fix the system as it continues to collapse. Here is what Pento had to say about the situation: "We now live in a phony economic world where central bankers rule without check. Any hint of weakening data, which is actually a sign of reality and healing returning to the economy, is quickly met with the promise of more disastrous money printing. Last week we saw U.S. factory orders down and initial jobless claims rise. In Europe, we saw the Spanish bank bailout fall flat on its face and interest rates spike in Spain and Italy."
This posting includes an audio/video/photo media file: Download Now |
| Latest article posted at GoldMoney Posted: 16 Jun 2012 05:58 AM PDT The following article has been posted at GoldMoney, here. A call to arms for central banks2012-JUN-16
 It depends on the purpose behind the question. If it is to seek a genuine solution, then the answer is to cut public spending rigorously in all countries that depend on markets to fund budget deficits or to roll over existing debts. Only a convincing budget surplus is going to lead to falling borrowing costs. The objection to this solution is partly political and partly on the grounds of neoclassical economic prejudice. The former persists in placing social objectives above economic objectives, while the latter has been convincingly proved to be wrong. Otherwise, please talk us through how a government actually knows best to kick-start an economy into recovery, without ignoring the accumulation of past evidence. Explain why it is that those countries, driven by the consumption so loved by Keynesians and monetarists alike, have turned into basket-cases, while economies driven by a savings culture persistently confound all neoclassical theory by making their citizens better off, in every case. The answer is that government intervention is destructive. Taxation and regulation are the tools by which government disrupts the primary social function of humans exchanging their labour for mutual benefit. Government is no substitute: its desire, consciously or unconsciously, is to control people’s lives for its own social objectives. This is the motivation behind the destruction of savings and their replacement by an accumulation of debt; and for the government itself, there are mounting future liabilities. Reversing an accumulation of past interventions, which is necessary if a country’s fortunes are to be improved sufficiently to escape complete bankruptcy, goes counter to every reason a modern politician enters his trade. So it is more likely that the purpose behind the question posed is to find a solution without cutting public spending, and if possible allowing it even to increase. For this reason, Keynesians and monetarists continue to be employed despite their abysmal record. So an alternative to facing up to reality will be found, and the clue, as Sherlock Holmes observed, is in the dog that did not bark in the night. Despite signs from everywhere that major economies are stalling, it has been odd that the major central banks have not indulged in more quantitative easing. One could argue with some conviction that this is because it has not had the desired effect, and that for one country to do so would risk undermining its currency. But there is possibly an alternative reason: that the major central banks are watching the European crisis with the growing realisation that the eurozone is about to crash with horrible consequences for all. The only, final, solution will be a co-ordinated round of multiple quantitative easings, joined in by the European Central Bank, when the outcome without it would obviously be so dire that not even Germany can object. 
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| Posted: 16 Jun 2012 04:28 AM PDT Summary: Long term - on major sell signal. Short term - on buy signals. Gold cycle has bottomed but set ups are counter trend trades, actionable if risks are manageable. Read More...
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| Dollar Bulls Leaning Heavily on the Long Side of the Boat Posted: 16 Jun 2012 04:19 AM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Bullish bets on the US Dollar have reached at least a 7 year high as the crisis in the Euro Zone and the slowing global economy has sent money flows careening wildly into the Greenback. As you look at the Commitment of Traders chart shown below, you can see that this LONG DOLLAR trade is extremely crowded. Markets in this condition, while they can most certainly continue heading higher, are very unstable and quite susceptible to violent downside action should a technical trigger force a bout of long liquidation. Friday, we got a bit of a hint as to what might happen to the Dollar should sentiment shift. It was hit rather hard heading into the weekend ahead of the crucial Greece vote as traders began reacting to the possibility of coordinated Central Bank activity early next week. The eager buyers from Monday and Tuesday all ended up as panicky sellers with the market completely erasing its...
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| Posted: 16 Jun 2012 02:46 AM PDT
Submitted by John Aziz of Azizonomics What Peak Oil? Is peak oil imminent? Lots of people seem to think so. The data (released by BP a company who have a vested interest in oil scarcity) don't agree. Proved reserves keep increasing:
The oil in the ground will run out some day. But as the discovery of proven reserves continues to significantly outpace the rate of extraction, the claims that we're facing immediate shortages looks trashy. Some may try to cast doubt on these figures, saying that BP are counting inaccessible reserves, and that we must accept that while there are huge quantities of shale oil in the ground, the era of cheap and readily accessible oil is over. They might cite the idea that oil prices are much higher than they were ten years ago. Yet this is mostly a monetary phenomenon resulting from excessive money creation beyond the economy's productive capacity. Priced in gold, oil is still very cheap — almost as cheap as it has ever been:
The argument that the vast majority of counted reserves are economically inaccessible is fundamentally flawed. In the long run there is only one equation that really matters in determining whether oil is extractable, and that is whether there is a net energy gain; whether energy-in exceeds energy-out. If there's a net energy gain, it's feasible. Certainly, we are moving toward a higher cost of energy extraction. Shale oil (for example) has a lower net energy gain than conventional oil, but still typically produces five times as much energy as is consumed in extraction. But the Earth's extractable hydrocarbons will eventually dry up, whether that's in 500 years or 200 years. If we want humanity to have a long-term future on Earth, we need to move to renewables; solar, hydroelectric, thorium, synthetic hydrocarbons. And the market will ensure that, eventually — as the cost of renewable energy continues to fall, more and more of us will adopt it. I don't buy the myth that markets are stupid — if humanity needs renewable energy (I believe we do) the market will see to it (I believe that is slowly happening). Markets are just the sum of human preferences. According to the International Renewable Energy Institute:
So no. I'm not lying awake at night worrying about imminent peak oil. There's plenty of extractable oil, and renewable energy will eventually supplement and replace it. But will politics get in the way of energy extraction? The United States has huge hydrocarbon reserves, yet regulation is preventing drilling and shipment, leaving America dependent on foreign oil. And the oil companies themselves are largely to blame — after Deepwater Horizon, should anyone be surprised that politicians and the public want to strangle the oil industry? If there's an imminent energy crisis, it will be man-made. It will come out of the United States' dependency on foreign oil. Or out of an environmental catastrophe caused by mismanagement and graft (protected cartels like the energy industry always lead to mismanagement). Or out of excessive red tape. Or war.
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| Posted: 16 Jun 2012 02:37 AM PDT New Democracy. Syriza. Doesn't matter. According to Citi's senior political analyst Tina Fordham, chief economist Willem Buiter, and global economist Ebrahim Rahbari, "any new Greek government, regardless of its composition, will struggle with implementation challenges related to the imposition of further austerity measures demanded by the Troika in exchange for further assistance," and as a result, they "consider it likely that a new troika deal would ultimately fall apart and lead to Grexit." Citi notes that there is growing sense among European leaders that "promotion of economic growth can no longer be subordinated completely, even in fiscally unsustainable euro area member states, to the requirements of fiscal austerity," but no one has any idea what that means. This seems to be the current thinking, according to Citi:
Warning. Also, reminder: "And of course, reduced austerity does not mean no austerity, let alone the reversal of austerity...fiscal policy will remain contractionary overall – just less contractionary." Citi's doesn't think Greece is able to handle any more austerity, and its rapidly deteriorating fiscal condition is hastening a day of reckoning. On how and when Greek membership in the euro ends:
The Citi team says that "more generally, we are concerned at the prospect of formerly wealthy countries becoming 'new, critical fragile states.'" This is where things get really messy. They don't think the ECB, EU, et al. will even let Greece go financially when things get really bad as described above. More like this:
And the darkness is spreading through Europe. The "seeds of dystopia" are being planted:
Recent articles:
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| Posted: 16 Jun 2012 02:04 AM PDT
While the media is abuzz with the notion that the Spanish bailout will save Spain, more key questions such as “where is the money going to come from?” are being ignored.
Indeed, at this point, it’s not clear if the Spanish bailout is coming via the EFSF or the ESM. If the funding comes via the EFSF then the entire exercise is pointless. The EFSF, if you’ll recall, is essentially a failed entity given that it couldn’t even raise €10 billion via bond auctions without having to step in to make sure the auctions didn’t fail.
Put another way, the EFSF doesn’t have the funds to prop up Spain. So if the funding for Spain’s bailout is to come from there, Spain’s not getting any anything.
However, if the funding comes from the other mega-bailout fund, the European Stability Mechanism (ESM), then ALL Spanish bondholders will become subordinate to the ESM.
Put another way, in the event of insolvency, the ESM’s claims will be senior to every one else’s.
Given that Germany’s finance minister Wolfgang Schaeuble wants the funding to come from the ESM (you’ll see why in a moment). It’s likely it will be the ESM who funds” the Spanish bailout as Germany is in fact the real backstop of the EU. So what Germany says goes.
Schaeuble Wants Spain Aid To Come From ESM, Handelsblatt Says
German Finance Minister Wolfgang Schaeuble wants aid for Spain’s banks to come from the future permanent backstop, the European Stability Mechanism, to avoid greater risks for the German budget, Handelsblatt said.
Spain would not be able to guarantee loans from the current backstop, the European Financial Stability Facility, if funds for its banks came from the EFSF, the newspaper said, citing European Union diplomats it didn’t name.
Germany’s share of guarantees to the EFSF would rise in such an event, the newspaper said. The ESM is financed by all 17 euro-region countries, including those that receive funds from it, the newspaper said.
If this occurs, a Spanish bailout via the ESM will ultimately damage the Spanish banking system as private bondholders and other investors will flee Spanish bank bonds since they know that they are not likely to get much, if anything, if a Spanish bank fails (which the markets now know they will).
Indeed, one has to wonder… just how does a €100 billion bailout solve Spain’s banking woes when its Prime Minister was suggesting the real damage is more to the tune of €500 billion in a text message to his Finance Minister???
Indeed, if Rajoy’s text is even remotely truthful, then we can assume that Spain’s real capitalization needs are multiples of the €100 billion bailout… something that the EU media is picking up on already. As one example, JP Morgan believes that when all is said and done Spanish banks could be looking at €350 BILLION in capital needs.
Bank bail-out won't end Spain's property nightmare
In a recent research note, economists at investment bank JP Morgan estimated that despite the €40bn (&ound;32.4bn) or so that many in the market believe Spain’s banks need to be adequately recapitalised, the full requirement could be as much as €350bn once all is said and done.
It’s highly likely JP Morgan is accurate or even underestimating here. Remember, we’re talking about a banking system stuffed to the brim with loans made during the following housing bubble (Spain in blue, the US in gray).
According to the Economist in 2006, Spain built FIVE TIMES as many homes as the UK (FYI the Spanish population is 47 million… UK population is 62 million). Today, Spanish housing starts are down 90% from their peak and Spain is littered with unfinished projects.
However, instead of bringing their inventory to market, Spanish banks continue to offer loans of 95%-100% at low interest rates to attempt to sell these properties at inflated levels. Indeed, things are so desperate that literally every Spanish bank out there is launching English-speaking websites trying to lure buyers from around the globe into buying properties.
Those who buy will likely find themselves losing on the deal.
Bank bail-out won't end Spain's property nightmare
Recent data from the Knight Frank Global House Price index shows that Spanish residential properties fell by 7.3pc in the year to the end of March. Official Spanish data state that prices are down 20pc from the peak, but those figures are based on bank valuations, rather than actual sales.
In spite of the small but growing number of articles in the British media that ask whether now is the time to buy Spanish property, it is likely, if the case of Ireland is anything to go by, that values will fall by as much as 50pc from the peak before they begin to bottom out.
In this context, the following data points make it more than obvious that Spain will need much more than €100 billion to recapitalize its banks… and that Spanish banks will be increasingly facing insolvency due to their bond issuance schedule for the remainder of the year.
Consider the following…
Thus, by even a simple back of the envelope analysis it is clear that Spain will need a lot more than €100 billion to recapitalize its banks. How on earth Spanish banks can roll over €600 billion in bonds at a time when the global bond market has just learned that all private bondholders will be subordinate to the ESM is beyond me (read: it won’t happen).
Folks, the Spanish bailout isn’t going to work. If Spain’s Prime Minister admitted in private that needs are more like €500, then you can bet the €100 billion bailout, which isn’t even guaranteed at this point, will solve nothing.
So if you’re not taking steps for the potential that Spain could in fact default and take down the European banking system with it (NO ONE in the EU has €500 billion to spare), you need to take action now.
On that note, I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.
This report is 100% FREE. You can pick up a copy today at: http://www.gainspainscapital.com
Good Investing!
Graham Summers
PS. We also feature numerous other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s a US Debt Default, runaway inflation, or even food shortages and bank holidays, our reports cover how to get through these situations safely and profitably.
And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com
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| Former Assistant Treasury Secretary Paul Craig Roberts discusses gold price suppression Posted: 15 Jun 2012 07:53 PM PDT 3:50p HKT Saturday, June 16, 2012 Dear Friend of GATA and Gold: Former assistant U.S. treasury secretary Paul Craig Roberts, an economist and newspaper columnist, discusses gold and silver price suppression at some length in a video interview with Greg Hunter at USAWatchdog. The interview is 22 minutes long and it's posted here: http://usawatchdog.com/one-on-one-with-paul-craig-roberts/ CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum (TSXV:NKL) Announces Encouraging Rhodium, Ruthenium, Osmium, Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL; OTC-QX: PNIKF; Frankfurt: P94P) is pleased to provide results of full spectrum 6E (Platinum, Palladian, Rhodium, Ruthenium, Osmium, and Iridium) analysis of platinum group elements on the first batch of samples from the company's wholly-owned Wellgreen PGM-Ni-Cu project in the Yukon Territory, Canada. The company enlisted Activation Laboratories (Actlabs) of Ancaster, Ontario, to conduct a full-spectrum 6E analysis of samples taken from the 2011 drill hole WS11-188. Adding Rh, Ru, Os, and Ir to Pt and Pd increased the total PGE content (6E) by an average of 28 percent, based on a population of 90 samples, most of which are from disseminated sulphide-type mineralization. Assay results with 6E exceeding 0.50 ppm (0.5 g/t) (excluding copper and gold assays) are tabulated at Prophecy's Internet site and are available with assay results from the entire batch of 90 samples here: http://prophecyplat.com/news_2012_may25_prophecy_platinum_announces_rare... Join GATA here: Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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| John Hathaway: Gold, gold mining shares, and QE Posted: 15 Jun 2012 04:29 PM PDT 12:28p HKT Saturday, June 16, 2012 Dear Friend of GATA and Gold: In his latest market analysis, Tocqueville Gold Fund manager John Hathaway explains why he thinks gold mining shares will start outperforming the metal. Hathaway expects that a new world financial system will reprice gold upward. His commentary is headlined "Gold, Gold Mining Shares, and QE -- An Attempt to Answer Two Persistent Questions" and it's posted at the Tocqueville Internet site here: http://tocqueville.com/insights/gold-gold-mining-shares-and-qe CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum (TSXV:NKL) Announces Encouraging Rhodium, Ruthenium, Osmium, Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL; OTC-QX: PNIKF; Frankfurt: P94P) is pleased to provide results of full spectrum 6E (Platinum, Palladian, Rhodium, Ruthenium, Osmium, and Iridium) analysis of platinum group elements on the first batch of samples from the company's wholly-owned Wellgreen PGM-Ni-Cu project in the Yukon Territory, Canada. The company enlisted Activation Laboratories (Actlabs) of Ancaster, Ontario, to conduct a full-spectrum 6E analysis of samples taken from the 2011 drill hole WS11-188. Adding Rh, Ru, Os, and Ir to Pt and Pd increased the total PGE content (6E) by an average of 28 percent, based on a population of 90 samples, most of which are from disseminated sulphide-type mineralization. Assay results with 6E exceeding 0.50 ppm (0.5 g/t) (excluding copper and gold assays) are tabulated at Prophecy's Internet site and are available with assay results from the entire batch of 90 samples here: http://prophecyplat.com/news_2012_may25_prophecy_platinum_announces_rare... Join GATA here: Standard Chartered's Earth Resources Conference Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf
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A day before the Greek D-Day, which was unexpectedly punctuated with a surprising 
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