Gold World News Flash |
- Damon Vickers says “Gold is Done”… Is he nuts?
- Eric Sprott and David Baker: Ministry of [Un]Truth
- James Turk: Wooing the Germans
- Bolivia seizes Glencore's Colquiri mine
- Farage expects repression in Europe; Saut sees EU reflation prompting similar Fed move
- Key Development Since G20 in Mexico: A Deal Between Europe, Wall Street & The BRICs?
- GoldCore, TF Metals Report note GATA appearance on CNBC Asia
- Dr. Michael "The Big Short" Burry's "Brutal Hangover Is Inevitable" State-Of-The-World UCLA Commencement Speech
- Could this make Ben Bernanke a Soviet dictator?
- By the Numbers for the Week Ending June 22
- Six Percent Can Draw Gold From The Moon
- Trickle Up Economics
- The Extortion Racket Shifts To Italy
- High gold prices, monsoon worries spark silver sales
- The Gold Price Plunged a Horrific 3.4 Percent this Week Physical Demand is Huge
- Guest Post: Could This Make Ben Bernanke A Soviet Dictator?
- Why the Gold Price Is Surprisingly Strong
- Fibonacci: Gold Stocks Thermometer
- The View From Atop the Junk Bond Bubble
- Gold As A Store Of Value
- Weekly Bull/Bear Recap
- Transcript of the 6.14.12 Precious Metals Market Report Available to Subscribers
- Europe To Launch Massive Two Trillion Euro Bailout Package
- Stocks Dump Into Close After Help From Oil And Bonds All Day
- Gold Daily and Silver Weekly Charts - Ending a Week of Shenanigans
- Stockton, Detroit, North Las Vegas…
- Guest Post: The Fed And Goldilocks Economic Forecasting
- Gold and Silver Disaggregated COT Report (DCOT) for June 22
- Ian Gordon: Why Gold Stocks Outperformed Other Gold Investments
- The Battery-Powered City
| Damon Vickers says “Gold is Done”… Is he nuts? Posted: 22 Jun 2012 06:05 PM PDT |
| Eric Sprott and David Baker: Ministry of [Un]Truth Posted: 22 Jun 2012 04:38 PM PDT 12:34p HKT Saturday, June 23, 2012 Dear Friend of GATA and Gold: Sprott Asset Management's Eric Sprott and David Baker enumerate some of the quickly disproved recent assertions of high political and financial officials -- some of them plainly lies -- and conclude that no official financial policy is working and that debt repudiation is likely the only outcome of the world financial crisis. The Sprott-Baker commentary is titled "Ministry of [Un]Truth" and it's posted at the Sprott Internet site here: http://www.sprott.com/markets-at-a-glance/ministry-of-%5Bun%5Dtruth/ CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res... Join GATA here: 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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| James Turk: Wooing the Germans Posted: 22 Jun 2012 03:47 PM PDT 11:45a HKT Saturday, June 23, 2012 Dear Friend of GATA and Gold: GoldMoney founder James Turk, longtime consultant to GATA, argues that a precise and reliable public accounting of euro-zone gold reserves might do much to restore confidence in the regional currency. Of course, if such an accounting might reveal that euro-zone gold reserves are leased, double- or triple-counted and hypotheticated to infinity, vaulted outside the euro-zone itself, and recoverable only at the cost of terrible international political problems, Europe still will have a long coastline and pretty seashells always can be pressed into service. Turk's commentary is headlined "Wooing the Germans" and it's posted at the GoldMoney Research page here: http://www.goldmoney.com/gold-research/james-turk/wooing-the-germans.htm... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Join GATA here: Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...
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| Bolivia seizes Glencore's Colquiri mine Posted: 22 Jun 2012 03:00 PM PDT By Philip Aldrick http://www.telegraph.co.uk/finance/newsbysector/industry/mining/9350114/... Glencore has demanded compensation from Bolivia after the country's left-wing government nationalised one of the commodities group's tin and zinc mines. The company warned President Evo Morales that his actions risked driving out foreign investment, saying it "strongly protests the action and reserves its rights to seek fair compensation pursuant to all available domestic and international remedies." Mr Morales has already seized the country's natural gas and electricity industries under a policy of resource nationalism that has swept across South America from Ecuador to Argentina. However, his intervention at the Colquiri mine came only after the government had to deploy hundreds of soldiers to stop violent clashes in which 18 workers were injured. The violence began when nearby co-operative workers seized control of the site last month. ... Dispatch continues below ... ADVERTISEMENT Be Part of a Chance to Discover Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada. Check out the exploration program on our Allco gold/silver project : -- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit. -- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries. -- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited. To learn more about the Allco property or Northaven's other gold and silver projects, please visit: http://www.northavenresources.com Or call Northaven CEO Allen Leschert at 604-696-3600. The government had been renegotiating terms with Glencore under which the government's share of total earnings would have risen from 77 to 79 percent and Glencore would have committed to invest more than $160 million in the industry over the next five years, including $56 million in Colquiri. After the clashes, which echoed battles six years ago that left 17 people dead, the unions called on the government to nationalise the mine to restore order. In response, Alvaro Garcia Linera, the vice president, this week revoked Glencore's licence and signed an agreement between the workers, the state, and the co-operatives. He said: "We're recouping a company that belonged to the state and now returns to state hands, and we're democratically resolving the contradiction between two factions of the Bolivian population -- co-operative workers and salaried employees. We're not going to hand our country to foreigners who destroyed Bolivia and left it stagnating for 20 years." The mine, which produced 2,000 tonnes of tin concentrate last year, was acquired by Glencore in 2005. Analysts said it was "not particularly significant," but the troubles contributed to an 8 percent fall in Glencore shares over the week as they came alongside concerns over whether its merger with Xstrata would go through. A spokesman for Glencore, which has invested $250 million in the Bolivian mining industry, said: "The action will pose a number of serious questions relating to the government's future policy toward foreign investment in the mining sector." Join GATA here: 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:
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| Farage expects repression in Europe; Saut sees EU reflation prompting similar Fed move Posted: 22 Jun 2012 02:35 PM PDT 11:30a HKT Saturday, June 23, 2012 Dear Friend of GATA and Gold: At King World News, European Parliament member and United Kingdom Independence Party leader Nigel Farage predicts that European leaders will resort to political repression to try to keep the euro project together as the mathematics of bank bailouts keeps failing. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/6/22_Ni... Meanwhile, Raymond James chief investment strategist Jeffrey Saut tells King World News that he expects that the European Union will attempt a reflation of 2 trillion euros, forcing the U.S. Federal Reserve to undertake a similarly massive reflation to prevent a sharp rise in the dollar. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/6/22_Sa... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res... Join GATA here: 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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| Key Development Since G20 in Mexico: A Deal Between Europe, Wall Street & The BRICs? Posted: 22 Jun 2012 02:28 PM PDT from Silver Vigilante:
The focal point of the G20 leaders' summit in Los Cabos, Mexico, June 18-19 was the eurozone sovereign debt crisis. The United States and other G20 members made sure that Europe would remain committed to "a concrete timeline for further political and fiscal integration." According to the CFR, there are "two key takeaways" from the meeting: "first, the additional commitment of funds to the IMF by the large emerging markets, which indicates that they have accepted to continue a longer-term process of IMF quota reform, despite the Obama administration's inability to get Congressional approval for the 2010 agreement before the October 2012 deadline. Secondly, it is the detailed commitment of the euro area, which "will"–rather than intend, or should–"take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks."
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| GoldCore, TF Metals Report note GATA appearance on CNBC Asia Posted: 22 Jun 2012 02:25 PM PDT 11:29a HKT Saturday, June 23, 2012 Dear Friend of GATA and Gold: Friday's commentary by Mark O'Byrne at GoldCore takes note of your secretary/treasurer's appearance earlier in the day on Bernie Lo's program on CNBC Asia: http://www.goldcore.com/goldcore_blog/central-bank-gold-manipulation-%E2... So does Turd Ferguson in his Friday commentary at the TF Metals Report, also putting in persepctive the the recent declines in gold and silver and compiling some of the recent headlines that have reported the world's slow turn away from the U.S. dollar: http://www.tfmetalsreport.com/blog/3937/friday-odds-and-ends CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Join GATA here: Hong Kong Gold Investment Forum Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...
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| Posted: 22 Jun 2012 02:01 PM PDT Infamous for his prediction of the great recession, Europe's demise, and the collapse of the US financial system (as well as profiting extremely handsomely from said predictions), so well captured in Michael Lewis' book "The Big Short", UCLA's Dr. Michael Burry undertakes UCLA's Economics Department's commencement speech with much aplomb. In this "age of infinite distraction", the astounding truthiness of this 15 minute speech is stunning from single-sentence summation of Europe's convulsions that "when the entitled elect themselves, the party accelerates, and the brutal hangover is inevitable" he reminds us that Californians, and indeed all Americans, should take note. A quarter-of-an-hour well spent from a self-described 'chicken-little' who was "just trying to figure it all out".
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| Could this make Ben Bernanke a Soviet dictator? Posted: 22 Jun 2012 01:45 PM PDT by Simon Black, Sovereign Man :
More than two decades after the fall of the Soviet Union, the Iron Curtain is still alive and well in an often forgotten corner of Eastern Europe… albeit a kindler, gentler version. Belarus has been ruled by the same person, Alexandr Lukashenko, practically since its independence in the early 1990s. He has total control of every facet of the country, from media and information flow, to education, to the military and 'State Security Agency' (which is still called the KGB), to the centrally planned economy. Perhaps nowhere is this more obvious than with respect to the nation's currency, the Belarusian ruble. In 2009, one US dollar bought roughly 2,200 Belarusian rubles. In 2010, that number rose to 2,800. A year later, over 3,000. And today, one US dollar is worth over 8,000 rubles. On the black market, it's much, much higher.
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| By the Numbers for the Week Ending June 22 Posted: 22 Jun 2012 01:12 PM PDT This week's closing table is just below.
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| Six Percent Can Draw Gold From The Moon Posted: 22 Jun 2012 12:45 PM PDT by Richard (Rick) Mills, Ahead of the Herd:
At the start of golden ages golden stories should be told Following many years of net annual sales in the 400 to 500 tonne range, central banks, underweighted in gold and overweight in dollars and euro's, became net buyers of gold in 2009 – in 2002 central banks sold 545 tonnes of gold, in 2011 they bought 440 tonnes. "Central banks continued to buy gold; net purchases recorded during the first quarter, 2012 amounted to 80.8 tonnes, accounting for around 7% of global gold demand. Central banks from a diverse group of countries added to the overall holdings of the official sector, with a number of banks making sizable purchases. Diversification requirements and growth in foreign exchange reserves of a number of countries point towards a continuation of this trend." World Gold Council (WGC) report Read More @ AheadOfTheHerd.com
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| Posted: 22 Jun 2012 12:15 PM PDT By: Peter Schiff , Gold Seek:
The political left wing has long tried to cast doubt on the fairness, and even the efficacy, of free market capitalism by branding it as a "trickle down" system. This epithet is meant to show how the middle and lower classes are dependent on scraps of wealth that happen to fall from the buffet table of the rich. This characterization of an unfair and inefficient system has helped them demonize policies that lower taxes (if they also extend to the wealthy) and reduce regulation on business. To correct these supposed problems, they have long called for policies to redistribute wealth or for government to inject funds directly into the economy. Either mechanism puts money into the hands of everyday consumers who they claim to be the true engines of economic growth. They believe that consumer spending lies at the root of the economic pyramid. When people spend, business owners are able to sell more products, hire more workers, and reap more profits. In essence, they believe in a system of "trickle up" economics, whereby prosperity flows upward from government into the lower and middle classes and ultimately to the upper class.
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| The Extortion Racket Shifts To Italy Posted: 22 Jun 2012 12:06 PM PDT Wolf Richter www.testosteronepit.com One thing Greek politicians have taught other European leaders: fear mongering for the purpose of extortion is the way to go. It might not work, and it might be counterproductive, and it might destroy confidence in the economy and give investors goose bumps and blow up markets, and it might cause spooked consumers to hold back on purchases and worried businesses to freeze hiring plans, thus exacerbating the situation, but it’s nevertheless the way to go. Greek politicians learned it from Treasury Secretary Hank Paulson who'd walked into the Capitol in September 2008, threatening that the whole world would collapse if his demands weren’t met. Soon, they expertly issued a series of escalating threats to extort the maximum amount in bailout euros from the Troika. It didn’t work very well as the Greek economy continued to spiral out of control, and as the frustrated Troika halted bailout payments from time to time, and as tempers flared, and as the people in Greece became increasingly edgy. But it was the way to go. Then came Spain. And now Italian Prime Minister Mario Monti. As always, timing is everything. And there was no better time than Thursday, the day before the meeting in Rome of the big four—Germany, France, Italy, and Spain—and a week before the European summit, which isn’t a run-of-the-mill summit, but the summit, the one that would have to save the Eurozone. And the world. Again. Monti, the unelected technocrat who was supposed to be able to unite parliament, is losing support in Italy, which is mired in its fourth recession since 2001. His real estate tax is widely despised, though he’d picked up some brownie points in the foreign media as deficit fighter, and an imperceptible nod from German Chancellor Angela Merkel. And yields on Italy’s government bonds have spiked to levels where the resulting interest expense would eat Italy’s budget alive [Read.... Italy Trembling on the Brink]. If the summit next week doesn’t result in a grand plan to turn everything around, Monti said, the Eurozone would spiral into its political and economic demise. “There would be progressively greater speculative attacks on individual countries,” he said. And he mentioned Italy by name. A “large part of Europe” would suffocate under “very high interest rates” and would go into paralysis. The public would get frustrated with Europe. A vicious cycle would ensue: while the Eurozone would need greater integration to survive, the people, governments, and parliaments would “turn against that greater integration.” That process has already started, Monti said, “even in the Italian parliament, which has traditionally been pro-European and no longer is.” Hence, no agreement by end of the summit next week, no Eurozone—though the breakup would be gradual. And he had a grand plan: more integration to where “markets are convinced” that the euro would be “indissoluble and irrevocable”; mechanisms to keep debt contagion from spreading (meaning massive and unlimited bailouts); a full-fledged banking union with unified supervision and European-wide deposit insurance; “new market-friendly policy mechanisms”; and the direct purchase of sovereign bonds that teetering member states could no longer bamboozle the markets into buying. Every item on his list would be funded by taxpayers in other countries, particularly in Germany. And so he also mentioned fiscal responsibility, to satisfy Germany. That would be the “absolutely necessary” minimum to save the Eurozone. And it would have to be agreed to by next week—though he’d assured the rest of the anxious world less than a week ago that Italy wouldn’t even need a bailout. But the fear-mongering didn’t sway the German Chancellor during the Rome meeting on Friday. In fact, she left early to fly to Poland to watch Germany’s soccer team demolish the Greeks—and the anti-Merkel triumvirate of Monti, Spanish Prime Minister Mariano Rajoy, and French President Francois Hollande could stew amongst themselves. There was, however, a nugget of success that the triumvirate threw to the media: €130 billion would be dedicated to growth measures. A step away from Merkel’s austerity. Alas, it wouldn’t be new public money or additional public money, but the activation of private capital and a shuffling of funds within the existing EU budget. It was nothing. And Merkel brushed off any hopes that the EFSF and ESM bailout funds could hand taxpayer money directly to the banks. Nein, Merkel said, the contracts clearly spell out that states are the partners, not banks. “It’s not that I don’t feel like it,” she said, “but the contracts aren’t made that way.” Hollande again called for Eurobonds, like a child that doesn’t want to see reality; Germany’s refusal is nearly absolute, and it’s not just Merkel, but the population as a whole. Even the banking union that Merkel emphasized she’d be open to could not include any form of common liability; it could only have a common regulator, she said. And so, Monti’s threat has once again proven to be the way to go, though it didn’t work and might become counterproductive. Meanwhile, Germany and Austria have plunged into public soul searching about the euro and the endlessly growing expense of maintaining it. Like so many things that appear useful, the euro has become dangerous. Read.... “The Euro Is Like a Knife in the Hands of a Child.” And here is a pungent article by George Dorgan, a macro-based fixed-income and currency portfolio manager: Germany won't, and can't, agree to most of the Eurozone bailout measures bandied about. Period. Regardless of what the FT and the Economist wish to believe. And hedge funds betting that Germany will pay in the end are wrong too. Read.... Eurobonds, Fiscal or Banking Union—They're All Pure Utopia.
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| High gold prices, monsoon worries spark silver sales Posted: 22 Jun 2012 11:45 AM PDT by Shivom Seth, MineWeb.com
With gold prices too hot for many in India, silver has regained its sheen. Sales of silver coins are soaring in India, with most consumers buying silver coins which herald good luck and prosperity. Gold, on the other hand, has hit several highs in the last couple of days, deterring buyers from the precious metal. Delayed monsoons in India have all but grounded sale of gold too. In rural India, sales of the yellow metal are closely linked to monsoon, since good rains that bring on a rich harvest will boost gold purchases by farmers.
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| The Gold Price Plunged a Horrific 3.4 Percent this Week Physical Demand is Huge Posted: 22 Jun 2012 11:29 AM PDT Gold Price Close Today : 1,571.20 Gold Price Close 15-Jun : 1,627.00 Change : -55.80 or -3.4% Silver Price Close Today : 2682 Silver Price Close 15-Jun : 2873.4 Change : -191.40 or -6.7% Gold Silver Ratio Today : 58.583 Gold Silver Ratio 15-Jun : 56.623 Change : 1.96 or 3.5% Silver Gold Ratio : 0.01707 Silver Gold Ratio 15-Jun : 0.01766 Change : -0.00059 or -3.3% Dow in Gold Dollars : $ 166.39 Dow in Gold Dollars 15-Jun : $ 162.21 Change : $ 4.18 or 2.6% Dow in Gold Ounces : 8.049 Dow in Gold Ounces 15-Jun : 7.847 Change : 0.20 or 2.6% Dow in Silver Ounces : 471.54 Dow in Silver Ounces 15-Jun : 444.32 Change : 27.22 or 6.1% Dow Industrial : 12,646.78 Dow Industrial 15-Jun : 12,767.17 Change : -120.39 or -0.9% S&P 500 : 1,335.02 S&P 500 15-Jun : 1,342.84 Change : -7.82 or -0.6% US Dollar Index : 82.256 US Dollar Index 15-Jun : 81.547 Change : 0.709 or 0.9% Platinum Price Close Today : 1,427.45 Platinum Price Close 15-Jun : 1,485.70 Change : -58.25 or -3.9% Palladium Price Close Today : 610.50 Palladium Price Close 15-Jun : 629.10 Change : -18.60 or -3.0% The GOLD PRICE bounced today after plunging a horrifying 3.4% this week. Closed $1,571.20 today, up $6.70, but that sayeth little. The SILVER PRICE lost 1.3C to end at 2682c. Long and short is this: If the GOLD PRICE doesn't hold $1,525 and silver 2615c, they will drop much further, as low as $1,450 and 2250c. You will know as they unfold next week, because if they intend to continue falling, Monday and Tuesday will be painful days. On the other hand, physical demand at these prices is huge. I nearly didn't write a commentary this evening because I am so washed out from trying to help all the callers. For silver and gold to fall much further, those buyers would have to disappear. However, if metals do fall, expect even more buyers to crawl out of their hiding places. Nothing significant has changed for those who follow the primary trend. SILVER and GOLD are correcting. So what? They've been correcting since April 2011 and August 2011. Corrections can last up to 18 months. Stop panicking. Has the Federal Reserve stopped inflating? The rest of the world's central banks? Has common sense, honesty, and financial probity suddenly seized the world's leaders and shaken some backbone into them, like a terrier shaking a rat? Sorry, no. And as long as their idiocy, treason, and parasitism continues, silver and gold will remain in a primary trend, and we are following NOT the daily or weekly fluctuations, but the LONG TERM PRIMARY TREND which hath yet years to run. Everything but the dollar took a beating this week when Moody's announced it was downgrading the credit of 15 megabanks. No, it makes no sense since every fractional reserve bank is always insolvent and these have been rotten since at least 2006 and everybody knows it and government has bailed them out time and again, but WHAT HO! Trouble with the banks! Markets slap themselves on the forehead as if they'd never imagined such a threat to financial stability. Meanwhile in Europe, where widespread bank insolvency and national government bankruptcies loom, the eurocrats are cooking up yet another "solution" which bandaids about $700 bn onto a, say, $20 trillion problem. Right, that'll work like square wheels on a wagon. Yet we live in a world where even lemmings, in sufficient numbers, can suffocate you, and we have to deal with it. So let's look at 'em one at a time. STOCKS broke this week. A slim chance exists they might make one more rise, but that's like drawing to a royal flush when holding the Ace, Queen, Jack, and 10 of spades. Much more pain will follow in stocks. Today's bounce meant nothing. US DOLLAR flattened today, losing a token 14 basis points to close at 82.256. Dollar has turned up again, which is wreaking havoc elsewhere. Nice Government Men can't want that dollar to appreciate so strongly against the Euro and yen, but what can they do? Well, following the usual pattern, something stupid. Very stupid. Count on that. Euro lost 0.23% today to $1.2572. Headed to $1.2000 and lower. Yen suffered also, closed 124.35c/Y100, down 0.20%. No strength there. So calm down, throw a steak on the grill, pour yourself something soothing to drink, and enjoy supper with your spouse and family. A hundred years from now you won't remember a bit of this anxiety. Y'all enjoy your weekend! Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't. 
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| Guest Post: Could This Make Ben Bernanke A Soviet Dictator? Posted: 22 Jun 2012 11:23 AM PDT Submitted by Simon Black of Sovereign Man Could This Make Ben Bernanke A Soviet Dictator?  More than two decades after the fall of the Soviet Union, the Iron Curtain is still alive and well in an often forgotten corner of Eastern Europe… albeit a kindler, gentler version. Belarus has been ruled by the same person, Alexandr Lukashenko, practically since its independence in the early 1990s. He has total control of every facet of the country, from media and information flow, to education, to the military and 'State Security Perhaps nowhere is this more obvious than with respect to the nation's currency, the Belarusian ruble. In 2009, one US dollar bought roughly 2,200 Belarusian rubles. In 2010, that number rose to 2,800. A year later, over 3,000. And today, one US dollar is worth over 8,000 rubles. On the black market, it's much, much higher. (You can just imagine how much the ruble has lost against gold and silver over the same period.) My friends here tell me that, last summer after another bout of devaluation, it became nearly impossible to purchase euros and dollars. The currency was falling too rapidly, and no trader was willing to take the risk. Even the central bank stopped exchanging its reserves. Consequently, small businesses in Belarus couldn't get their hands on the hard currency they needed to pay foreigners for imported goods. Store shelves, including groceries, emptied quickly. And people took whatever savings they had and traded it for anything they could find– sugar, toilet paper, ironing boards… you name it. As I've been told, hand tools were especially popular as a store of value in some parts of the country.
Hyperinflation, on the other hand, is a complete loss of confidence in a currency. Anyone here who has held on to the local currency has gotten completely screwed. The few people at the top making the decisions have held on to power and become very wealthy at the expense of everyone else. Let's face it, though, the situation isn't too different in the west– a tiny elite making decisions that affect hundreds of millions of others. The only distinction is that western governments wrap up their economic authoritarianism in a blanket of democracy to make it seem like it's OK. Yet in controlling the price of money, they control virtually everything else in the economy… at the expense of everyone else. It's a different variety of central planning, but it creates the same sorts of egregious misallocations of resources: people borrow when they should be saving, they consume when they should be working harder, they load up on multiple homes when they should be renting, businesses expand when they should be conserving… These are the consequences when a tiny elite is given the power to print silly pieces of paper and pass it off as money. We've all seen this movie before, and we know how it ends. Zimbabwe is the example most frequently cited, though Belarus's authoritarian, state-controlled economy easily ranks among the most spectacular destructions of wealth in modern times. For what it's worth, the Minsk city-center is quite nice and exceptionally clean. If not for the authoritarianism and constant presence of uniformed goons on the street, it would be a really great place to hang out. The people, particularly the youth, are engaging and friendly. I have serious expectations that this country will one day dump this totalitarian nonsense and emerge as a resource-rich power in Europe, in no small part due to the energy of its youth.
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| Why the Gold Price Is Surprisingly Strong Posted: 22 Jun 2012 10:59 AM PDT The Gold Price in 2012 has in truth proven strong, given the challenges it faces... Next up, the world's heaviest physical buyers – Indian households. Now overtaken by Chinese consumers, India buyers are always quiet this time of year (what with the monsoon season, a lack of auspicious festivals, and the post-harvest wedding and Diwali season still four months off). But New Delhi's active policy of trying to stem Gold Bullion imports in 2012, plus the record-high prices set by the fast-sinking Rupee, have chewed up this massive support for global demand by perhaps 30% or more on best estimates. That's had a big impact on the wholesale physical market – still centered in London, more than 80 years after Britain abandoned its Gold Standard. Physical investment demand from the big institutions has clearly eased off as well. Here's what the market-making bullion banks say they're turning over each day on average between themselves. You can size it up by 5 times or more to get the true market-wide volume.  As you can see, London's volume by value has sunk one-third by value since last summer's peak. Yet the Gold Price has lost only 11% on its monthly average. Perhaps that gap will be closed. Some speculative traders in the futures and options market think so – and they think it will be closed by prices falling still further, as well. See the red line in our first chart above. Speculative traders haven't held this big a short position in gold since the price was down at $400 or so. But given these 3 factors all weighing on price, the "plunge" in fact looks more resilient. Existing sellers are refusing to slash their offers, and new buyers are still paying historically strong prices to acquire metal today. Lucky for them, however, gold's unique mix of inflation and default insurance is currently cheaper than its peak price of 12 months ago. Looking to Buy Gold today...? Adrian Ash, 22 Jun '12
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| Fibonacci: Gold Stocks Thermometer Posted: 22 Jun 2012 10:02 AM PDT Super Force Signals - A Leading Market Timing Service We Take Every Trade Ourselves Morris Hubbartt Weekly Market Update Excerpt posted Jun 22, 2012 Gold & Bond Synergy Chart [LIST] [*]The US Bond market is a debt market. Evaluating the US bond from a fundamental view point shows there are several things that make the US bond a long term investment to avoid. [/LIST] [LIST] [*]The dollar is being diluted by the Federal Reserve's quantitative easing programs. Upon maturity, bond investors are set to be paid with a currency worth much less than when the bond was issued. [/LIST] [LIST] [*]Most governments seem to be hopelessly addicted to spending money. The debt in the United States is now nearing $16 trillion, which is an amount too large to be honestly repaid. [/LIST] [LIST] [*]The deficit is now growing by roughly $1 trillion every year. It overwhelms GDP growth. For every dollar collected in tax revenue, an additional dollar is being borro...
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| The View From Atop the Junk Bond Bubble Posted: 22 Jun 2012 09:53 AM PDT If you're like most investors, you may not know where to turn right now. Worrying about the collapse of Europe and what that might do to your portfolio before the opening bell might have you opting for sleep, instead of speculation. Added up, that's why money has been rushing out of the stock market and into junk bond funds at a record pace. If that sounds like you, I urge you to reconsider the "junky stuff." More on that in a moment. First, let's look at the numbers… After net outflows in May, last week, more than half a billion dollars flowed into high-yield debt, and close to $18 billion of investor money has flowed into the junky stuff thus far in 2012. If the money keeps coming into high-yield mutual and exchange-traded funds, the record amount set in 2009, when the S&P sank to 666, will be beat. Corporate America is taking advantage. Companies with junk credit ratings have bellied up to the debt trough like at no other time in history. The first quarter of 2012 will go down as the most active for junk bond issuance since 1980, when Thomson Reuters began keeping track, with 130 companies floating $75 billion in debt offerings. Investors can't get enough of that high-yield stuff, with banks and Treasuries paying just north of zero. "The rally in junk bonds extends an advance that began in early 2009 and can be traced largely to the Federal Reserve's policy of keeping benchmark interest rates near zero," writes The Wall Street Journal. "It's the only place I can find any yield whatsoever with a reasonable risk," Lee Hevner, individual investor and first-time junk bond buyer, told the WSJ. High-yield corporate borrowers paid an average rate of 7.98% on bonds they have sold this year, according to Thomson Reuters, the lowest since the junk bond market was created in the 1980s. Despite the continued strain on state and local government finances, investors are rushing into municipal bond funds as well. Nearly a billion dollars flooded into muni bond funds during the week ended May 9th. According to the Bank Investment Consultant, the muni market "has now seen positive flows for 33 out of the past 36 weeks." The Bernanke Fed, combined with the meltdown in Europe, sent the yield on the US Treasury's 10-year note to the lowest level in history a week ago. The folks at Elliott Wave Theorist point out that the 10-year yield fell 91% from a high of 15.84% in 1981 to 1.438% a few days ago. (The yield has since bounced back to 1.60%.) This is what bubbles look like at the top: No price is too high for (in this case) "safety." As investors fret about losing principal in a stock market crash, they instinctively rush into bond funds. Their brokers are eager to earn the stock sale commissions and put them in some seemingly "safe" bond fund kicking off a little yield and supposedly keeping the principal safe. However, bond and yield mathematics are set to deliver a cruel lesson. When interest rates go up, bond prices go down. Suddenly, what was supposed to be a safe bet looks like 2009 all over again. The math works this way: Say the coupon (annual payment) on a particular bond is $100. Your broker says the bond you're contemplating for purchase is yielding 6%. $100/.06=$1,666.67 bond price. Easy enough so far. But when interest rates increase — and they have nowhere to go but up from here — or if your bond issuer runs into financial trouble, bond buyers will insist on a higher yield. The $100 coupon doesn't change (except for a default), but if the market demands a yield of 8%, that bond's principal value will now fall to $1,250 ($100/.08). That 2% interest rate change whacked 25% off the principal value of the bond. During the Great Depression, high-yield bonds peaked (in price) first in 1930, followed by higher-grade bonds that peaked in 1931. Rates were low and all that, but bond prices crashed and yields soared because of the fear of default. Despite what the talking heads on TV say, the US economy is no better now than it was in 2008, and Europe's is considerably worse. Governments are going broke everywhere. While the government says gross domestic product (GDP) is barely positive, John Williams' Shadow Government Statistics (SGS) version of GDP reflects what we all know from our day-to-day lives: GDP has been negative since 2000, and it actually plunged at a negative 6% rate in 2009. The SGS alternate GDP reflects the inflation-adjusted, or real, year-to-year GDP change. Williams adjusts for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias to official reporting. America's private economy is shrinking, while the size of government and government debt explodes. Moody's indicates that average default rates for high-yield bonds are running at 2.2%, less than half the long-term average of 5.6% and significantly below the recent peak levels of 17.1% in 2009. But remember, more fresh junk debt was issued in the first quarter of this year than ever before. If the economy doesn't pick up soon — and there is no indication that it will — a fresh new crop of defaults will soon appear. The Fed and the ECB cannot print money forever and keep rates near zero. The bull market in bonds has lasted for over 30 years. Now is not the time to pile in reaching for yield, because the stock market is scary. The historic low in interest rates is what Addison Wiggin calls the "Mother of All Financial Bubbles." "When this next bubble bursts," says Addison, "it'll make 500 point swings in the DOW look like good news. It'll change everything you've come to expect from the United States government… from the safety you feel in your city, to the ease in which you're able to move your money outside the country, to the value of the dollars you hold in your wallet." To help you prepare for the "POP!," Addison's spent the better half of his 20-year career working on a unique solution set. He's discovered little-known (and safe) ways designed to multiply your money as the value of the dollar plummets. He's found hidden opportunities to legally move a portion of your wealth outside the government's growing reach, and more. Discover five of Addison's 47 different solutions, for free, by clicking on this presentation. Sincerely, Doug French The View From Atop the Junk Bond Bubble originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".
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| Posted: 22 Jun 2012 09:25 AM PDT 22-Jun (USAGOLD) — Brent Johnson of Santiago Capital provides some pretty compelling evidence as to why, after thousands of years, gold remains the preferred store of value. With a track record of that magnitude, the corrective/consolidative activity we've experienced over the past 9-months isn't even a blip on the radar screen. As Johnson points out, "nothing has changed." allowNetworking="all" height="370" width="435" Click on the full screen option (the little square with an arrow) to make the slides more visible. Source: Santiago Capital
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| Posted: 22 Jun 2012 09:22 AM PDT Courtesy of RCS Investments Bull + The Conference Board's Leading Indicator increases 0.3% after a small 0.1% decline in April. "The index's 6-month growth rate remains in expansionary territory and well above its growth rate at the end of 2011, pointing to a relatively low risk of a downturn in the second half of 2012." — Conference Board Economist + Housing is clearly turning the corner. The NAHB/Wells Fargo Housing Market Index rises to a 5-year high, while lumber prices just hit levels last seen in 2006. Meanwhile Housing Permits, a leading indicator of housing construction, rise to their highest reading since 2008, while Starts show a YoY reading of close to +30%. Continued momentum will create jobs. + Pro-bailout parties are able to form a government in Greece, adding legitimacy to imposed austerity. Moreover, policymakers are slowly moving towards using the EFSF to purchase sovereign bonds, relieving periphery countries of their high funding costs. Germany has left the door open to this course of action. Spanish and Italian bond markets have begun to sniff out use of the EFSF. + The crisis is uniting world leaders, leading to a more coordinated response to global events. The G20 backs growth measures alongside more prudent budget management and decries protectionism. Meanwhile emerging markets show solidarity with Europe, almost doubling the IMF's firepower. Finally, central banks stand ready to act to relieve market stress. Bear - The global recovery is being upended in front of our eyes. China's PMI (HSBC) slumps to a 7-month low, matching the length of contraction seen during the 2008 crisis. Meanwhile, both the Ifo and ZEW confidence surveys in Germany show a deep recession for the Eurozone is in the offing. June Eurozone PMIs confirm this as well. - The market doesn't believe the Greek elections have solved the underlying problem of lack of political will amongst the people of Europe to share their debt burdens. Downside risk for equities will remain high as long as Spanish 10-yr bond yields remain elevated. The end game for the Eurozone is at our door and few believe this to be the case. And no bulls, Germany is not using the EFSF nor the ESM to bailout the periphery until budgetary sovereignty is handed to the European Commission. - The U.S. economy is coming perilously close to stalling. Labor market conditions have deteriorated as job openings fall to the lowest in more than a year, while the downtrend in jobless claims has vanished. Meanwhile growth in the manufacturing sector, the beacon of the U.S. recovery, is fizzling out. - While it may seem that the G20 is united against the Eurozone crisis, behind the scenes is a different story.
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| Transcript of the 6.14.12 Precious Metals Market Report Available to Subscribers Posted: 22 Jun 2012 08:58 AM PDT A transcript of the June 14, 2012 Precious Metals Market Report with special guest Chuck Gibson is available to Subscribers! From the transcript: Catherine: So the Precious Metals Market Report – silver and gold. We've had quite a month since we talked on last month's Precious Metals Market Report. So maybe if you [...]
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| Europe To Launch Massive Two Trillion Euro Bailout Package Posted: 22 Jun 2012 08:40 AM PDT  With tremendous volatility in global markets, today King World News interviewed one of the savviest guys in the business, Jeffrey Saut, Chief Investment Strategist for Raymond James. Saut surprised KWN by saying that Europe is about to launch "a two trillion euro bailout package." He also stated that this "puts our Federal Reserve into a box whereby they will have to provide some kind of liquidity event in order to keep the US dollar from spiking higher." Saut also discussed gold, but first, here is what he had to say about the crisis in Europe: "Having worked inside the Washington DC beltway, I have a pretty good working knowledge of politicians, bureaucrats and bankers. They are the same in Europe as they are in this country. They do not want to lose their power, and if the EU busts apart, they all lose their power."
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| Stocks Dump Into Close After Help From Oil And Bonds All Day Posted: 22 Jun 2012 08:29 AM PDT Early weakness in Treasuries (rising yields) and an acceleration in WTI prices back over $80 provided the 'contextual' support for an almost perfect 38.2% retracement bounce in S&P 500 e-mini futures today. Key support/resistance at the 1330 level was restested on dismal volume with a late-day surge but average trade size and activity picked up rather notably into the bell and ES cracked back almost 7 points to a 'mysterious' VWAP close. HYG outperformed today (as did VXX - and implicitly VIX which closed around 18% dropping 2 vols) but it appeared medium-term that equities were reverting to HYG's less sanguine view of the last month rather than HYG really leading. Financials were strong performers but all of those gains were at the open with XLF (and JPM which was unable to break VWAP in the afternoon) unch from 930ET and MS/GS/BAC/C all down 0.7% to 1.6% from the open (with a late day give back). Gold, Silver, and Copper are pretty much unchanged from the 4pmET close levels of yesterday while WTI is up over 2% closing back above $80. The long-bond underperformed +7bps on the day but outperformed on the week (as the 7Y and 10Y underperformed on the week) and provided the support for equity's levitation but this seemed as much QE-hope unwind as any implicit weakness. FX markets were dead with slight strength in AUD and EUR and weakness in JPY as USD basically trod water +0.8% on the week. S&P 500 e-mini futures perfectly hit the Fibonacci 38.2% retracement and sold back off (and although the chart doesn't show it, ES drifted all the way back to the light blue line which is VWAP)...
And while HYG outperformed (red) over the last two days, on a longer-term scale, it appears equities (green) have merely retraced back to a QE-hope-less level (and we note that HYG is now back at fair with it intrinsics - lower pane)...
as WTI was the big performer on the day but Silver and Oil were weak on the week...
which given the USD only gained 0.8% (and dead today) is quite notable...
and while 30Y underperformed today, it remains the modest winner on the week (though the entire Treasury complex is higher in yield on the week)...
and as is clear from CONTEXT (our prxy for risk assets) the push in yields and Oil provided the impetus for stocks to rise but once they reached their convergence, equities tumbled and reverted rapidly to VWAP into the close - a dismal end to a hopeful day...
Charts: Bloomberg and Capital Context Bonus Chart: ES dumped rapidly to VWAP in the after-hours session...
and JPM Intraday was unable to break its VWAP all afternoon suggesting plenty of selling pressure from pros...
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| Gold Daily and Silver Weekly Charts - Ending a Week of Shenanigans Posted: 22 Jun 2012 08:24 AM PDT |
| Stockton, Detroit, North Las Vegas… Posted: 22 Jun 2012 08:05 AM PDT We've read about the fiscal collapse in several cities, but here's one that might qualify for "innovative bankruptcy." A sign of more to come in other states? Financially-strapped Nevada city declared disaster By CRISTINA SILVA | Associated Press June 22, 2012 NORTH LAS VEGAS, Nev. (AP) — There are no signs of rioters, wind-damaged homes [...]
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| Guest Post: The Fed And Goldilocks Economic Forecasting Posted: 22 Jun 2012 07:57 AM PDT Submitted by Lance Roberts of StreetTalk Advisors The Fed And Goldilocks Economic Forecasting
GDP When it comes to the economy the Fed has consistently overstated economic strength. Take a look at the chart and table. In January of 2011 the Fed was predicting GDP growth for 2011 at 3.7%. Actual real GDP (inflation adjusted) was 1.6% or a negative 56% difference. The estimate at that time for 2012 was almost 4% versus 1.8% currently. We have been stating repeatedly over the last 2 years that we are in for a low growth economy due to the debt deleveraging, deficits and continued fiscal and monetary policies that are retardants for economic prosperity. The simple fact is that when an economy requires nearly $5 of debt to provide $1 of economic growth the engine of prosperity is broken.
What is very important is the long run outlook of 2.6% economic growth. That rate of growth is very sub-par and, over the longer term, does not sustain the level of incomes and employment that were enjoyed in previous decades. Unemployment The Fed is as overly optimistic about the level of unemployment as they are about economic growth. One of the Fed's mandates is "full employment." At the beginning of 2011 the Fed predicted the unemployment rate for the year would be 8.7% for 2011, 7.8% for 2012 and 6.95% for 2013. The unemployment rate for 2011 was 9.1% and is currently at 8.2% currently likely to rise in the coming reports ahead as the economy again weakens.
Today, even the average American has begun to question the credibility of the BLS employment reports. Recently even Congress has launched an inquiry into the data collection and analysis methods used to determine employment reports. Since the end of the last recession employment has improved modestly but mostly centered around temporary and lower paying positions. Since mid-2011 there has been a fairly sharp decline in the unemployment rate from 9.1% to 8.2% currently. The main driver of that decline has come from a shrinkage of the labor pool versus substantial increases in employment. In our past employment reports we have discussed the increasing number of individuals that are moving into the "Not In Labor Force" category where they are no longer counted as part of the labor pool. For the Fed the reality of "full employment" and statistical "full employment" are two entirely different things. While the Fed could be very correct at achieving "full employment" of 5.6% in their longer run scenario - it certainly doesn't mean that 94.4% of working age Americans will be gainfully employed.
When it comes to inflation the Fed's outlook, for the most part, have been below reality. In January of 2011 The Fed's prediction for 2011 inflation was 1.5% which was 2% lower than what inflation turned out to be. As of the latest meeting the Fed's 2012 inflation prediction is 1.6%. With current deflationary pressures pulling headline inflation down from 3% at the beginning of this year to 1.7% currently the Fed's prediction appears to be fairly accurate. The question, however, is how long can inflation remain suppressed at or below 2% which is the long run prediction of the Fed? The Fed has much more control over inflationary pressures in the economy than they do at stimulating economic growth or increasing employment. By increasing or decreasing interest rates, using monetary policy tools and coordinated actions the Fed has historically been able to influence inflation. Unfortunately, their actions in this regard can also be directly linked to economic and market booms and busts.
The second, and more importantly, is that an organic economic recovery will eventually take hold. During real economic expansions where demand is increasing, wages are rising and the velocity of money is accelerating - real levels of higher inflation take hold. However, an organic economic expansion is likely some years away as the balance sheet deleveraging cycle continues globally. Why The Fed Forecasts Like Goldilocks Is the Federal Reserve really as bad at predicting future economic conditions as it appears? The answer is no. The Federal Reserve faces a severe challenge, when communicating to the financial markets and the media, which is the creation of a self-fulfilling prophecy. Imagine that following an FOMC meeting Bernanke stated: "The policies and actions that we have implemented to date have done little to curb economic weakness. The economy is in much worse shape that we have previously communicated as the transmission system of Fed policy through the economy, and the financial markets, is obviously broken." The immediate reaction to such a statement would be a complete collapse of the financial markets. Such a collapse in the financial markets would negatively impact consumer confidence which would subsequently throw the economy into a recession. Conversely, an overly optimistic outlook would lead to an increase of inflationary pressures and asset bubbles. Neither situation is healthy for the economy in the longer term. Therefore, communication from the Federal Reserve must be very guided in its approach - not too hot or cold. This "goldilocks" appoach works to create a "glide path" to the Fed's destination while giving the financial markets and economy time to adjust to the incremental adjustments to forecasts. Let me be clear. I am not making a case for the relevance of the Federal Reserve or its policies. That is another article entirely. What I am stating is that the communications from the Federal Reserve should NEVER be taken at face value. Since the Fed can not communicate its real position at any given time, due to the immediately excessive postive or negative effect on the economy and financial markets, as investors we must read between the lines. The problem for the financial markets, and the mainstream media, is that they tend to extrapolate current estimates indefinitely and generally in an upwardly biased manner. This is not the Fed's objective nor have they been able to repeal the economic and business cycles. The Fed has been slowly guiding economic forecasts lower since 2011. The reality is that 2.6% economic growth is not a boon of economic prosperity, corporate profitability, increasing incomes or a secular bull market. It is also not the "death of America" or the return to the stone age. What is important to understand, as investors, is the impact on investment portfolios, expectated real rates of returns and the realization that higher levels of market volatility with more frequent "booms and busts" are here to stay.
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| Gold and Silver Disaggregated COT Report (DCOT) for June 22 Posted: 22 Jun 2012 07:55 AM PDT HOUSTON -- This week's Commodity Futures Trading Commission (CFTC) disaggregated commitments of traders (DCOT) report was released at 15:30 ET Friday. Our recap of the changes in weekly positioning by the disaggregated trader classes, as compiled by the CFTC, is just below.
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| Ian Gordon: Why Gold Stocks Outperformed Other Gold Investments Posted: 22 Jun 2012 07:51 AM PDT The Gold Report: In a recent edition of Investment Insights, you charted the NYSE Arca Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) of senior gold stocks, gold itself, the TSX Venture Exchange as a proxy for junior mining stocks and a specific company, Temex Resources Corp. (TME:TSX.V; TQ1:FSE), from Dec. 29, 2000. All four were equalized to $100 to make the comparison accurate. What did they show? Ian Gordon: I wanted to look at relative performance since 2000, when gold bottomed out at around $250/ounce (oz)—that was the beginning of the big bull market. The chart shows that the HUI has outperformed all the other benchmarks since 2000. Since then the value of the HUI has increased about 10 times. The second best performer has been gold itself, which has increased about six times. The Venture Exchange has increased just over two times. I used Temex because it happens to be one of my favorite junior mining stocks, but the performance of Temex as a junior miner has been pr...
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| Posted: 22 Jun 2012 07:51 AM PDT The 5 min. Forecast June 22, 2012 11:36 AM Dave Gonigam – June 22, 2012 [LIST] [*]“We’re going to run entire cities off of batteries,” says Byron King — who’s spied the perfect opportunity to profit [*]Two substances behind the next breed of computer chips… and the breakthrough in today’s news that makes Byron’s Monday conference call more timely than ever [*]Death by foreclosure: The tragedy that overshadows Moody’s downgrade of the sickly banks [*]The man who warned about an “international currency war” joins in China’s war on the dollar [*]World’s most outrageous “new taxes and weird fees” entry curtailed… Reader musings about crossing borders with gold… The dollar bill vs. corncobs… and more! [/LIST] “I believe we’re witness to the beginning of an entirely new industry,” says Byron King. “We’re going to run entire cities off of batteri...
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