Gold World News Flash |
- Interest Rates Low; Gold Prices Up!
- Big Banks Have Criminally Conspired Since 2005 to Rig $800 Trillion Dollar Market
- Andrew Maguire Dissects the 515-Ton Paper Gold Dump Prior to June FOMC Statement
- On The USD's Demise
- Epic Euro Short Squeeze Sparks Precious Metals Rally, But Will It Last?
- Three Super Marios, The Debt Monetization Game & Gold
- Gold reentering monetary system
- Got Gold Report for July 1, 2012
- Trends in Transition - It's About Time
- Where was the gold?
- MUST HEAR: ‘We're About to Have the Most Devastating COLLAPSE in World History'
- Gold Market Update
- Silver Market Update
- Guest Post: The Origin Of Money
- 77% of JP Morgan’s Net Income Comes from Government Subsidies
- Heading For Economic Collapse
- Collapse Medic: When Help Is NOT On The Way, The Buck Stops With You
- European Sovereign Debt Crisis to End in a Catastrophic, Painful, Epic Meltdown! Are You Financially Prepared?
- Gold re-entering the monetary system
- Silver Price Triple Bottom
- Gold Price Triple Bottom
- The Gold Price Stutters Around $1600
- James Turk: Where was the German gold?
- Bank of England expected to launch L50 billion QE
- Sprott's Embry interviewed by Ron Hera at 24hGold
- Lords of Finance: The Bankers Who Broke the World, Learning From the Great Depression
| Interest Rates Low; Gold Prices Up! Posted: 01 Jul 2012 05:45 PM PDT by Jason Hommel, SilverStockReport.com
Silver and gold will continue to rise for years to come because the government continues to spend money it does not have. If you invested $10,000 into bonds paying 3% in the year 2000, you would now have $14,258. Had you put $10,000 into gold in the year 2000, you would now have $72,876 worth of gold. Whoever said that "gold does not pay interest" gave "epic fail" investment advice, and got the concept completely wrong. It's not the interest, it's the capital appreciation that counts! Gold is at all time highs, but we are nowhere near an ultimate market high yet, as gold is only $1600/oz. The prior high in 1980 was $850/oz., which would be $8,500 if you adjusted for inflation of the monetary base, which has increased ten times, from $1.8 trillion to about $18 trillion. In 1975, gas prices increased beyond $.50/gallon. Today, gas is nearing $5/gallon, nearly ten times as much. Read More @ SilverStockReport.com
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| Big Banks Have Criminally Conspired Since 2005 to Rig $800 Trillion Dollar Market Posted: 01 Jul 2012 05:15 PM PDT … But Receive Only a Light Slap on the Wrist from Washington's Blog:
We actually understated the impact of the Libor scandal. Specifically, more than $800 trillion dollars worth of investments are pegged to the Libor rate. As the Wall Street Journal reports today:
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| Andrew Maguire Dissects the 515-Ton Paper Gold Dump Prior to June FOMC Statement Posted: 01 Jul 2012 05:01 PM PDT from, Silver Doctors:
Many have doubted the validity of these claims, as the official open interest reported by the CME the next day is often less than the reported volume of paper contracts dumped during the raid. Andrew Maguire has released an excellent commentary dissecting the 515 ton paper 'gold' raid launched by the bullion banks immediately prior to the Fed's release of the June FOMC statement. Maguire clarifies how the cartel can accomplish the raid and yet not have the occurrence appear in the CME OI report. Andy states that of the 165,000 paper gold contracts dumped on the market: 'Almost all these contracts were subsequently covered by the bullion bank into the days pit close thereby not showing up in the closing OI #. This is a standard MO. Through concentration, creating sufficient new supply at commonly watched pivots in a very short period of time to swamp any bids distorting true supply demand fundamentals, then once the momentum is turned down, to buy back all originating short positions into freshly pitched longs and a whole array of freshly invited new shorts.'
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| Posted: 01 Jul 2012 04:37 PM PDT Last week the BEA published it preliminary take on the international investment position (IIP) of the country. As Citi's FX team note, the IIP measures foreign investment assets minus native assets owned by foreigners. In the US, the IIP has been negative (meaning the US is a debtor nation) since 1985. The US's IIP deficit reached USD 4.03trn in 2012, up sharply from 2.47trn in 2011. As a share of nominal GDP, the IIP deficit reached a record (for the US) of -27%.
US-based investors hold 41% of their foreign assets in equities and direct investment (property, plant and equipment for foreign subsidiaries). Foreigners have only 26% of their US assets in those two categories. The result of this distinction is that a global equity market downturn will hurt US-based investors more, which means the US IIP deteriorates when equities fall. Citgroup G-10 FX: Implications for the dollar
While risk aversion flows (and rates) suggest there is little to worry about, we have noted again and again the moves behind the scenes in global trade flows to shift away from the world's current numeraire.
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| Epic Euro Short Squeeze Sparks Precious Metals Rally, But Will It Last? Posted: 01 Jul 2012 01:34 PM PDT Friday's "surprise" announcement of a "breakthru" at the EU Summit caught all the market shorts with their pants down. An epic short squeeze ensued. The US Dollar swooned, and Equity and Commodity markets soared as the shorts ran for cover. Funny thing about the EU Summit's "surprise" announcement... Replacing old impaired debt with new impaired debt does not generate growth. Borrowing more money will not reverse financial death spirals. -CHARLES HUGH SMITH Be wary of Friday's violent market move to the upside. A market rising on hot air and short covering can quickly fall back to Earth when the markets run out of panicked buyers. The "devil is in the details", and a lot of questions need to be answered. Specifically, where is all this money that is to "be borrowed" going to come from? The Fed? Gold Surges on European Measures Similar to TARP and QE by Peter A. Grant June 29, AM (from USAGOLD.com) -- Gold rebounded smartly on Friday, retracing all of the losses from earlier in the week and then some. In early New York trading the yellow metal was threatening to push back above $1600, bolstered by an EU summit inspired rebound in the euro and general risk appetite, and a corresponding retreat in the dollar. There was a late-night breakthrough at the EU Summit that caught many by surprise, because German Chancellor Angela Merkel had claimed to be steadfastly opposed to much of what was agreed to. So, public bailout funds will be pumped directly into the Spanish banking system and the senior status of any such loans from the EFSF/ESM has been eschewed. Ireland is likely to get a banking system bailout as well. Additionally, the bailout facility will be able to directly buy sovereign debt, so it is widely believed that Italy will be the next EU member to request a bailout to drive down its borrowing costs. It's sort of TARP and QE combined... In exchange for all that largess, there will be a single banking regulator appointed for the eurozone, a step toward a banking union, and countries accessing these facilities will be expected to honor their debt and deficit commitments. While EU officials may also be able to demand "tighter deadlines and timetables" according to an FT article, there will not be any "Greek-style monitoring programmes." Maybe the periphery countries have learned their lessons; that missing targets — or worse yet, reporting false data — results in nothing but trouble. But more likely, it may be an acknowledgement on the part of the EU that the these countries aren't going to make their numbers, so let's not monitor them because ultimately it will be easier for them to ask forgiveness than permission. I recall the old Reagan adage 'trust, but verify': apparently that's no longer necessary, the periphery can apparently now simply be trusted to honor their commitments in exchange for bailouts. Nonetheless, this is exactly the kind of thing that markets love: Pumping public money into private institutions, while simultaneously suppressing interest rates with artificial demand so they no longer accurately reflect risk. You may recall that the combination of TARP (Sep-2008) and QE1 (Nov-2008) ended the financial crisis inspired deleveraging correction in gold and launched the yellow metal from 681.65 to 1920.50. Might Europe's TARP/QE combo package have a similar result? Only time will tell, but the initial reaction sure looks favorable. Peter Grant is USAGOLD's resident economist and a well-known analyst globally in the forex and precious metals markets. NEWSLETTER SIGN-UP ========================= Europe's Unanswered Questions  The EU summit to save the Euro (the nineteenth, or thereabouts) has, quite remarkably, agreed to do something to try and save the Euro. The whole build-up and conclusion to this summit have brought a sense of nostalgia to some observers; the disillusionment in advance, the insistence by national leaders that absolutely nothing would be sacrificed, the dervish-like spinning of "informed sources" and unnamed officials, the late-night brinkmanship, and then the highly personal process of striking a deal amongst heads of government. Paul Donavan, UBS: [excepted from] One money, one banking system, one fiscal policy?
As ever with a Euro summit there are unanswered questions. Grandiose statements are what heads of government specialise in – the details are left to later (it is one of the reasons why Maastricht produced a monetary union that was flawed from the outset. Once "create a single currency" had been agreed, politicians lost interest). The statement from the summit itself was woefully inadequate, and most of the details have been fleshed out with press conference statements. Doubtless more details will be forthcoming as heads of government return to their own countries and brief their local media on how they "won" in Brussels. So what additional questions need to be answered?
A healthy dose of economists' cynicism is probably best taken at this point. Money market normalisation is likely to take more than a high-flying statement from the Euro area to resolve. As such, the economic effectiveness of liquidity injections is likely to remain low (to nil). ========================= The EU Summit: Europe Needs Capital, NOT Political Posturing Everyone in the media is viewing the latest announcements out of the EU Summit as game-changers. They are not. One facet of the deal is that ESM/ EFSF loans to troubled countries will not subordinate private bondholders holdings. While this does serve the purpose of allowing private bondholders to feel that should a country default, they might get their money back sooner (as opposed to what happened in Greece)… it doesn't change the more critical issue of stopping defaults from happening. Indeed, if Spain were to default, the fact that I as a potential private bondholder would be further up the line to collect my funds doesn't do me a whole lot of good, does it? My money's gone, at least most of it. So the benefits of this move are of borderline significance. Moreover, none of the measures address the most critical issue pertaining to Europe: where is the money going to come from? As I have noted before, the European Stability Mechanism, which everyone sees as the ultimate savior for the EU, does NOT exist yet. Only four out of the required 17 countries have ratified its legislation. And the due date for ratification? July 9th. So we have less than two weeks for 14 EU members to ratify the ESM. Another interesting fact about the ESM… Spain and Italy will contribute 30% of its funding. So… the mega-bailout fund which is going to save Spain and Italy is receiving nearly one third of its funds from the very same countries it's going to bail out!?! You couldn't make this stuff up if you tried. Another topic worth discussing is the fact that EU leaders didn't agree to increase the EFSF or the ESM. The simple and obvious reason for this is no one has the funds to do this. I've seen saying this for months. No one seems to be listening: Europe is out of buyers. End of story. There simply isn't €500 billion lying around to be put to use. That's why the ESM and EFSF aren't being increased in size. They couldn't be. Another point, and perhaps the most key one is that the ECB will now be using bailout funds to help recapitalize EU banks. This move will ultimately end up hurting the banks that seek funding from the ECB much as those firms which drew on the ECB's LTRO1 and LTRO 2 schemes found themselves severely punished in the credit and bond markets. After all, requesting aid is essentially a public admission that one's bank is in major trouble. In this end this hurts the bank seeking aid as everyone now knows that it's on the ropes. Indeed, as we saw with LTRO 2 (which provided over €500 billion to EU banks), those banks that drew on the ECB saw, at most, one month's worth of gains before they were right back to where they started in terms of share price and funding needs. Oh, and none of this will go into effect until December. Let's hope Spain and Italy and others don't need the funds before then! My take on this whole mess?
Markets will stage a knee jerk reaction to these measures. That reaction will see bank shares rise and yields fall, temporarily. But this move will be short-lived, just as moves following LTRO1 and LTRO 2 were. After all, these announcements are just more political measures than anything else. And Europe needs capital NOT politics at this point. So I would expect this rally and the drop in bonds to be short-lived. EU leaders may have put off the Crisis by a few weeks (or perhaps even a month). But they still haven't addressed the core issues causing the Crisis: excess leverage courtesy of hundreds of billions of Euros' worth of garbage debt. With that in mind, I would use this rally to further prepare for the EU Crisis. 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 ========================= SUNDAY, JULY 01, 2012Sorry, Bucko, Europe Is Still in a Death SpiralBY CHARLES HUGH SMITH Replacing old impaired debt with new impaired debt does not generate growth. Borrowing more money will not reverse financial death spirals. Sorry, Bucko--Europe is still in a financial death spiral. Friday's "fix" changed nothing except the names of entities holding impaired debt. We can lay out the death spiral dynamics thusly: 1. Growth was dependent on borrowing money and blowing it on consumption and malinvestment. Replacing old impaired debt with new impaired debt does not generate growth. 2. Borrowing more money to pay the interest on past borrowing will not generate growth. Money must be borrowed to pay the interest and additional money borrowed to fund current consumption. As interest increases, this creates a geometric increase in debt and interest costs. 3. Borrowing more money to fund current consumption is a death spiral, as the interest payments eat up future revenues, starving productive investment and future consumption. 4. Borrowed money must be backed by either collateral or future income streams. The collateral remaining in malinvestments (villas in Spain, etc.) is either impaired, near-zero or simply non-existent. There is no legitimate collateral on which to base more borrowing. 5. Future income streams are already committed to paying interest on past debt and mandated consumption (entitlements, government payrolls, etc.), so there is no legitimate collateral on which to base more borrowing. 6. Interest rates will rise as investors question whether their capital will be returned in full or if it will be returned in depreciated currency. 7. Export-based economies will contract as China's expansion slows to a crawl. Future projections of national income are overly optimistic. 8. As income is bled off to pay rising interest, there is less money available for consumption or investment. Without investment, income declines. As taxes rise, there is less private-sector income available for either investment or consumption. This is the "austerity death spiral," and borrowing more for State malinvestment will not halt it. The more money that is borrowed to maintain Status Quo consumption, the higher the future interest payments. This is a financial death spiral. | ||
| Three Super Marios, The Debt Monetization Game & Gold Posted: 01 Jul 2012 01:27 PM PDT from KingWorldNews:
Michael Pento continues @ KingWorldNews.com
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| Gold reentering monetary system Posted: 01 Jul 2012 01:18 PM PDT by Alasdair Macleod, Gold Money:
This is an important development for the physical gold market, and early warning of the change was signalled by a consultation document issued by the Fed and banking regulators in the light of forthcoming Basel 3 regulations1. It must have stuck in the Fed's craw to have to circulate a proposal that "A bank holding company or savings and loan holding company may assign a risk-weighted asset amount of zero to cash owned and held in all offices of subsidiary depository institutions or in transit; and for gold bullion held in a subsidiary depository institution's own vaults, or held in another depository institution's vaults on an allocated basis, to the extent the gold bullion assets are offset by gold bullion liabilities."(Page 291 and elsewhere).
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| Got Gold Report for July 1, 2012 Posted: 01 Jul 2012 12:52 PM PDT Vultures (Got Gold Report Subscribers) please log in to the Subscriber pages and navigate to the Got Gold Reports Section to view an appendix of charts for the special Got Gold Report released Sunday, July 1. The appendix contains the charts used which are not already linked in the subscriber section. To continue reading, please log in or click here to subscribe to a Got Gold Report Membership
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| Trends in Transition - It's About Time Posted: 01 Jul 2012 12:52 PM PDT The following comments apply to Gold, Silver and the XAU since their structure, trends and cycles are quite similar. While the down trends continue in all these markets, there are elements suggesting progress will be made. Consider the weight of the evidence carefully. First, the bad news. One Day Wonders The negative daily, weekly and monthly TDI time frame trends continue in all these markets. As described 6/21 here, "the higher and more powerful forces of the negative weekly and monthly TDI trends are still in effect." No real significant advance will occur without a positive TDI posture in the daily, then weekly time frames. Other Trends in Transition ...
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| Posted: 01 Jul 2012 12:30 PM PDT by James Turk, Gold Money:
I've just finished a fascinating book published in 1955 entitled Confessions of The Old Wizard. It is the autobiography of Hjalmar Horace Greeley Schacht, whose improbable name reflects his North Schleswig ancestry and his father's admiration of an American newspaper editor. For those not familiar with him, Schacht is generally given credit for ending in 1923 the Weimar Republic hyperinflation and putting Germany once again on a sound monetary footing, commendable feats which earned him the nickname "The Old Wizard". He did this first as Commissioner of the Currency for the Finance Ministry and thereafter as President of the Reichsbank. For these achievements, he received worldwide acclaim as well as fame, if that word accurately describes the popular attention and respect given to a skilled central banker.
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| MUST HEAR: ‘We're About to Have the Most Devastating COLLAPSE in World History' Posted: 01 Jul 2012 12:05 PM PDT
Greetings friends. This is a MUST LISTEN interview with Harley Schlanger the national spokesman for the LaRouche Organization. I've been wanting to interview the LaRouche folks because LaRouchePAC is taking courageous positions based in truth, speaking out against this criminal government and trying hard to present immediate solutions. Harley says "Obama MUST be impeached NOW… An interlocking Board of Directors controls EVERY cartel; Banking, Oil, Strategic metals, Grains, and so on. Right now even the Rothschilds are being bailed out… The whole Trans Atlantic financial system is more bankrupt now than it was when Lehman collapsed in 2008. In Part 2 Harley says, "We are about to have the most devastating collapse in world history, of the whole global financial system… If we don't do something to stop this, we're going to lose EVERYTHING. We're going to have either hyperinflation or an implosion of the banking system which will reduce the value of the Euro and the Dollar to nothing." If you close your eyes, you'd swear Harley was a Libertarian.
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| Posted: 01 Jul 2012 09:06 AM PDT The European Union is a creation of global elitists, the Bilderberg et al, in pursuit of their long-term goal of a world government. Whether this is a good thing or not depends in large part on whether politicians in positions of great power can ...
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| Posted: 01 Jul 2012 09:05 AM PDT Much of what is written for the Gold Market update applies equally to silver, so it will not be repeated here. There are, however, some important differences that we will focus on ...
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| Guest Post: The Origin Of Money Posted: 01 Jul 2012 08:41 AM PDT Submitted by John Aziz of Azizonomics The Origin Of Money Markets are true democracies. The allocation of resources, capital and labour is achieved through the mechanism of spending, and so based on spending preferences. As money flows through the economy the popular grows and the unpopular shrinks. Producers receive a signal to produce more or less based on spending preferences. Markets distribute power according to demand and productivity; the more you earn, the more power you accumulate to allocate resources, capital and labour. As the power to allocate resources (i.e. money) is widely desired, markets encourage the development of skills, talents and ideas. Planned economies have a track record of failure, in my view because they do not have this democratic dimension. The state may claim to be "scientific", but as Hayek conclusively illustrated, the lack of any real feedback mechanism has always led planned economies into hideous misallocations of resources, the most egregious example being the collectivisation of agriculture in both Maoist China and Soviet Russia that led to mass starvation and millions of deaths. The market's resource allocation system is a complex, multi-dimensional process that blends together the skills, knowledge, and ideas of society, and for which there is no substitute. Socialism might claim to represent the wider interests of society, but in adopting a system based on economic planning, the wider interests and desires of society and the democratic market process are ignored. This complex process begins with the designation of money, which is why the choice of the monetary medium is critical. Like all democracies, markets can be corrupted. Whoever creates the money holds a position of great power — the choice of how to allocate resources is in their hands. They choose who gets the money, and for what, and when. And they do this again and again and again. Who should create the monetary medium? Today, money is designated in the ivory towers of central banks and allocated through the banking system. Historically, in the days of commodity-money, money was initially allocated by digging it up out of the ground. Anyone with a shovel or a gold pan could create money. In the days of barter, a monetary medium was created even more simply, through producing things others were happy to swap or credit. While central banks might claim that they have the nation's best democratic interests at heart, evidence shows that since the world exited the gold exchange standard in 1971 (thus giving banks a monopoly over the allocation of money and credit), bank assets as a percentage of GDP have exploded (this data is from the United Kingdom, but there is a similar pattern around the world). Clearly, some pigs are more equal than others:
Giving banks a monopoly over the allocation of capital has dramatically enriched banking interests. It is also correlated with a dramatic fall in total factor productivity, and a dramatic increase in income inequality. Very simply, I believe that the present system is inherently undemocratic. Giving banks a monopoly over the initial allocation of credit and money enriches the banks at the expense of society. Banks and bankers — who produce nothing — allocate resources to their interests. The rest of society — including all the productive sectors — get crumbs from the table. The market mechanism is perverted, and bent in favour of the financial system. The financial system can subsidise incompetence and ineptitude through bailouts and helicopter drops. Such a system is unsustainable. The subsidisation of incompetence breeds more incompetence, and weakens the system, whether it is government handing off corporate welfare to inept corporations, or whether it is the central bank bailing out inept financial institutions. The financial system never learned the lessons of 2008; MF Global and the London Whale illustrate that. Printing money to save broken systems just makes these systems more fragile and prone to collapse. Ignoring the market mechanism, and the interests of the wider society to subsidise the financial sector and well-connected corporations just makes society angry and disaffected. Our monopoly will eventually discredit itself through the subsidisation of graft and incompetence. It is just a matter of time.
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| 77% of JP Morgan’s Net Income Comes from Government Subsidies Posted: 01 Jul 2012 07:44 AM PDT JP Morgan’s credit rating would be much lower without government backing. As Bloomberg noted last week:
And as the editors of Bloomberg pointed out a couple of weeks ago:
Way to suck at the government teat, Mr. self-proclaimed free market champion.
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| Posted: 01 Jul 2012 07:36 AM PDT  A tipping point approaches. Only its timeframe is unknown.Money power runs world economies. Wall Street and giant European banks run Western societies. "Financial deregulation converted the financial system (into) a gambling casino....," says Roberts. Zero interest rates destroy household savings. Media scoundrels suppress ugly truths. Western governments letting banking crooks scam the system for profits "is a system that is headed for catastrophic failure." Bad news keeps getting worse. Public acknowledgement arrives late. Moody's June 21 downgrade of 15 major banks conceded what's been known for years. Giant Western banks are zombies. They're insolvent. Taxpayer funded bailouts alone keep them operating. Moody's warned last winter than downgrades were coming. So-called stress tests suppress more than they revealed. Ellen Brown calls the "derivatives casino....a last-ditch attempt to prop up a private pyramid scheme." It's slowly crumbling under its own weight. JPMorgan Chase is considered America's most stable bank. Brown calls it bankrupt. Evidence, she says, shows it's acknowledged $2 billion loss perhaps exceeds $30 billion. Roberts explained that America's five largest banks hold $226 trillion in derivative bets. For example, JPMorgan's total assets approach $2 trillion. Its derivatives holdings exceed $70 trillion. Its risk capital is about $136 billion. Read more..... 
This posting includes an audio/video/photo media file: Download Now | ||
| Collapse Medic: When Help Is NOT On The Way, The Buck Stops With You Posted: 01 Jul 2012 07:20 AM PDT  Most outdoor medicine guides are intended to aid you in managing emergency situations in austere and remote locations. Certainly, modern medical care on an ocean voyage or wilderness hike is not readily available; even trips to the cities of underdeveloped countries may fit this category as well. There are medical srategies for these mostly short term scenarios that are widely published, and they are both reasonable and effective. An entire medical education system exists to deal with limited wilderness or disaster situations, and it is served by a growing industry of supplies and equipment.The basic premise of wilderness/disaster medicine is to:
This posting includes an audio/video/photo media file: Download Now | ||
| Posted: 01 Jul 2012 07:00 AM PDT I have a sinking suspicion – a*feeling I just can't shake – based on multiple fundamental, technical, and timing indicators….[that] the end is near. I'm not talking about some Mayan calendar apocalypse kind of thing….[but] a catastrophic, painful, epic meltdown-type endgame for this European sovereign debt crisis…[[Let me explain why*I see that to be the eventual outcome.] Words: 810 So says Mike Larson ([url]www.moneyandmarkets.com[/url]) in edited excerpts from his original article*. [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]Larson goes on to say, in part: Why?…Well, for the better part of two years, European fiscal and monetary policymakers have been trying everything they can to a...
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| Gold re-entering the monetary system Posted: 01 Jul 2012 05:47 AM PDT The latest article on behalf of GoldMoney is posted here. Gold re-entering monetary system2012-JUL-01
 This is an important development for the physical gold market, and early warning of the change was signalled by a consultation document issued by the Fed and banking regulators in the light of forthcoming Basel 3 regulations1. It must have stuck in the Fed’s craw to have to circulate a proposal that “A bank holding company or savings and loan holding company may assign a risk-weighted asset amount of zero to cash owned and held in all offices of subsidiary depository institutions or in transit; and for gold bullion held in a subsidiary depository institution’s own vaults, or held in another depository institution’s vaults on an allocated basis, to the extent the gold bullion assets are offset by gold bullion liabilities.”(Page 291 and elsewhere). There can be little doubt if history is any guide that the US Treasury and the Fed would rather not give gold a status that rivals the dollar, but they cannot boss the Basel Committee around. Ever since President Nixon took the dollar off the gold standard, the official mantra has been that gold no longer has any monetary role. To do an about-turn and accord it the same rank as dollar-cash is therefore extremely significant. Furthermore, there is an unarguable logic in favour of not penalising banks who wish to diversify their balance sheets and collateral away from fiat currencies, some of which are becoming increasingly risky in these times of systemic stress. The proposal is only at the stage where comments are invited, but it is unlikely that the banks will turn this proposal down, since it represents a secure lending opportunity and the opportunity to diversify a bank’s own assets without facing a risk-weighting penalty. The proposal when implemented is certain to encourage banks to buy gold, and the bullion banks in London will hedge uncovered unallocated customer liabilities. And what is sauce for the commercial goose is also sauce for the central-bank gander: it makes no sense for the central banks to continue to marginalise gold on their own balance sheets. Instead, central banks should abandon the myth of valuing gold on their books at $42.22 and treat it as a proper monetary asset. What this proposal amounts to is no less than the official remonetisation of gold. And as the implications dawn upon the wider banking community we shall see increasing numbers of banks seeking gold-related lending opportunities and more and more bankers seeking to acquire it as a core balance sheet asset. 1Very few commentators fully appreciate its importance, a notable exception being the current issue of John Butler’sAmphora Report, which is recommended reading. Tags: Fed, gold reserves, LBMA Alasdair Macleod 
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| Posted: 01 Jul 2012 04:15 AM PDT Much of what is written for the Gold Market update applies equally to silver, so it will not be repeated here. There are, however, some important differences that we will focus on here, which suggest that silver now has really big upside potential from this point, despite its comparatively anemic reaction on Friday to the news out of Europe, compared to other commodities.
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| Posted: 01 Jul 2012 04:13 AM PDT The European Union is a creation of global elitists, the Bilderberg et al, in pursuit of their long-term goal of a world government. Whether this is a good thing or not depends in large part on whether politicians in positions of great power can be trusted to behave fairly and responsibly. In deciding if this is the case you have plenty of empirical evidence to assist you in making up your mind, based on their activities and antics of the past several years and their consequences for the global populace.
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| The Gold Price Stutters Around $1600 Posted: 01 Jul 2012 02:04 AM PDT The gold price today continues to linger around $1,600 closing on Friday at $1,599 or &ound;1,017 per ounce. On Friday the gold price surged higher after Eurozone officials agreed to ease restrictions on emergency loans to European banks. The spot price grew as much as $44.37, or 2.9%, to $1,601.27 per ounce in morning trading.
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| James Turk: Where was the German gold? Posted: 01 Jul 2012 12:49 AM PDT 7:40p ICT Sunday, July 1, 2012 Dear Friend of GATA and Gold: GoldMoney founder and GATA consultant James Turk is the latest researcher to expose central bank slovenliness in regard to gold, this time in the memoirs of Hjalmar Schacht, the currency commissioner who ended Weimar Germany's hyperinflation and went on to become president of the Reichsbank for a while in the early days of the Nazi regime. Turk reports that Schacht's autobiography, "Confessions of the Old Wizard," published in 1955, describes how the Federal Reserve Bank of New York couldn't find the German gold held there when Schacht visited in the 1920s but that Schacht laughed it off. "Schacht," Turk writes, "apparently considered friendship to other central bankers and his membership in their exclusive club to be a higher priority than his responsibility as guardian of a nation's gold." Even now the Bundesbank, successor to the Reichsbank, seems to be laughing off concerns about the security of German gold reserves that continue to be vaulted abroad as evidence grows of the juggling and misapplication of national gold reserves generally and, particularly, of the Bundesbank's surreptitiously swapping gold with the United States for market-rigging purposes. Turk's commentary is headlined "Where Was the Gold?" and it's posted at GoldMoney's Internet site here: http://www.goldmoney.com/gold-research/james-turk/where-was-the-gold.htm... 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: 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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| Bank of England expected to launch L50 billion QE Posted: 30 Jun 2012 09:09 PM PDT By Angela Monaghan http://www.telegraph.co.uk/finance/economics/9367178/MPC-expected-to-lau... The Bank of England is poised to pump L50 billion of fresh stimulus into the ailing economy in a bid to drive Britain out of recession. The Bank's Monetary Policy Committee (MPC) is expected to vote for more bond purchases through quantitative easing (QE) when it makes its monthly decision on Thursday. It would take the total spent under the programme to L375 billion. Additional stimulus would come against a backdrop of a recession in Britain that is deeper than initially thought, a eurozone debt crisis that continues, and falling inflation. ... Dispatch continues below ... ADVERTISEMENT Sona Discovers Potential High-Grade Gold Mineralization From a Company Press Release VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling. "We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company." Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered. For the company's complete press release, please visit: http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf Michael Saunders, economist at Citigroup, said: "We expect the MPC will restart QE at the upcoming meeting, in reaction to the persistent weakness of the UK economy, easing inflation worries, and ongoing European Monetary Union crisis." The latest economic indicators suggest the economy may have contracted for a third successive quarter between April and June, having shrunk by 0.4 percent in the fourth quarter of 2011 and by 0.3 percent in the first quarter of this year. Philip Shaw, economist at Investec, said: "Domestically, the official numbers cast some doubt as to whether the economy has begun to expand again, following two quarters of contraction. Meanwhile, signs of a slowdown elsewhere in the world have intensified." The case for more QE has also been strengthened by inflation, which fell to a 2 1/2-year low of 2.8 percent in May from 3 percent in April. Inflation has steadily fallen over recent months, after peaking at 5.2 percent in September last year. Minutes of the June MPC meeting revealed growing support for more QE, with four out of the nine members voting in favour. While it was not enough to secure a majority, it represented a key shift and suggested the committee was moving closer to a collective view that the economy is in need of more stimulus. The Bank's Governor, Sir Mervyn King, was among those voting for further asset purchases. While the Government presses ahead with its austerity plan in order to reduce the deficit, there is little scope for a fiscal boost to the economy. Monetary policy is already unprecedentedly "loose," with interest rates at an all-time low of 0.5 percent since March 2009, and QE at L325 billion. The MPC has always said that it is ready to expand QE when necessary. Economists at Citigroup predict that QE will ultimately be expanded to a total of L500 billion. Christine Lagarde, head of the International Monetary Fund, said in May that the Bank should considering lowering interest rates as well as more QE to support the economy. The British Chambers of Commerce believes more QE "may prove to be counterproductive" by stoking inflation. David Kern, the BCC's chief economist, said: "Adding to QE is not a risk-free policy, as it will limit the decline in inflation at a time when it is important for it to fall. This will be the most important single factor likely to underpin real incomes and boost demand in the UK economy." Join GATA here: 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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| Sprott's Embry interviewed by Ron Hera at 24hGold Posted: 30 Jun 2012 07:33 PM PDT 2:45p ICT Sunday, July 1, 2012 Dear Friend of GATA and Gold: Ron Hera of Hera Research has interviewed Sprott Asset Management's John Embry about what he sees as the box that Western central banks have put themselves into and the implications for the monetary metals and commodities. The interview is headlined "John Embry on Gold, Silver, Currencies, and Commodities" and it's posted at 24hGold here: http://www.24hgold.com/english/news-gold-silver-john-embry-on-gold-silve... CHRIS POWELL, Secretary/Treasurer 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. Join GATA here: 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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| Lords of Finance: The Bankers Who Broke the World, Learning From the Great Depression Posted: 30 Jun 2012 07:23 PM PDT Liaquat Ahamed, author of Lords of Finance, The Bankers Who Broke the World, discusses the parallels between the Great Depression and the Financial Crisis of today at The American Academy of Berlin. I concur heartily with Mr. Ahamed on the primary causes of the bubble and collapse, especially with regard to the enormous policy errors of the Greenspan Fed.
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Why hold bonds that pay 3% or less, when gold, on average, has been up an average of 18% per year since the year 2000? And silver has done better!
We 
Over the past year, SilverDoctors has documented several cartel raids in which the bullion banks dumped over an entire year's global mining output in silver during paper raids.
On the heels of a massive rally in stocks, oil & gold, on Friday, today Michael Pento, of Pento Portfolio Strategies, writes exclusively for King World News to let readers know about the 'Three Super Marios' and 'The Debt Monetization Game.' He also discussed gold and the mining shares, but first, here is what Pento wrote about what is happening with the Three Super Marios: "In the past few days there appears to have been a huge victory scored by Europe's three Italian Super-Marios. But appearances can be deceiving. Mario Balotelli scored two goals for Italy's Azzurri, in a victory against the Germans during Thursday's Euro 2012 semi-final Football game."
Early in 2011, the London Bullion Market Association began to push for gold to be recognised by the Basel Committee on 
I am an avid reader of monetary history. Of late I have been focusing on the monetary events of the 1920s and 1930s. By learning from the maelstrom that riled the global financial scene during those two tumultuous decades, I aim to better understand present circumstances because there are many similarities between then and now.
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