Gold World News Flash |
- Brown's Bottom: Why Gordon Brown Sold England's Gold On the Cheap To Bail Out the Banks
- CRASH WARNING
- Have Gold Stocks Hit Bottom Yet? Richmont Mines Latest Disappointment
- Australia seeks closer currency ties with China
- Central Planners Are Making Desperate Maneuvers Right Now
- Are Banks Raiding "Allocated" Gold Accounts?
- Gold is real; central planning is fiction
- Lies everywhere from governments and news media, von Greyerz tells King World News
- Wide World of Mankind
- Thomas Pascoe: Revealed -- Why Gordon Brown sold Britain's gold at a knock-down price
- Silver Update 7/5/12 Rates Deflate
- Gold Bullion Coin Sales Up 13% In June, Silver Bullion Coin Sales Remain Steady
- Is Mario Draghi Lying Again?
- Barclays Wins Euromoney's Best Global Debt, Best Investment Bank, And Best Global Flow House Of The Year Awards
- Nevada: The Next American Gold Rush
- The Gold Price Lost $12.40 Today Closing at $1,608.90
- Thunder Road Report On The Death March: Approaching A New Financial System
- Your Money or Your Kid
- Equities Fumble As Broke Banks Mounting
- Gold Seeker Closing Report: Gold and Silver End Slightly Lower
- Gold Daily and Silver Weekly Charts - Metals Rigging Worse Than LIBOR
- "Abundance": A Book Review
- Chart of the Week - Looking at Gold From a Dif...
- A Rare Forex Trading Opportunity in the Australian Dollar
- Silver, Gold and The Coming Deflation
- Jim Rogers – Civil Unrest Possible in Europe, Bankruptcy Preferred
- Gold Rally Fails ahead of Important High
- The Dow/Gold Ratio This Independence Day
- Wall Street Journal's Constable on central bank gold purchases
| Brown's Bottom: Why Gordon Brown Sold England's Gold On the Cheap To Bail Out the Banks Posted: 06 Jul 2012 12:10 AM PDT |
| Posted: 05 Jul 2012 11:15 PM PDT by Jeff Nielson, Bullion Bulls Canada:
While both paths represent utter, economic suicide; the road to ruin is much different in these two scenarios. This has severely limited the investment options and strategies for any prudent investor. Forced not only to "play defense" with our investing but to prepare for two more-or-less opposite events has made precious metals the one asset class which can protect investors from either of these fates. I've explained on multiple occasions in the past why precious metals will outperform other asset classes in both a debt-default crash or hyperinflation-spiral scenario. The purpose of this piece is not to repeat that analysis, but rather to point out that as of this moment the "crash" scenario has become not only the most likely scenario, but an imminent event. Read More @ BullionBullsCanada.com
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| Have Gold Stocks Hit Bottom Yet? Richmont Mines Latest Disappointment Posted: 05 Jul 2012 10:54 PM PDT The price of gold is almost exactly unchanged on the year. The first trading day of the year saw gold close at $1598 per ounce. After reaching a high of $1781 on February 28th, gold has drifted lower and at today's closing price of $1604 gold is up a fraction of a percent on the [...]
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| Australia seeks closer currency ties with China Posted: 05 Jul 2012 10:07 PM PDT By James Glynn and Caroline Henshaw http://online.wsj.com/article/SB1000142405270230414120457750802117053482... SYDNEY -- Australia will step up its campaign to boost economic ties with its largest trading partner China when Treasurer Wayne Swan heads to Beijing next week hoping to secure a deal to make the Australian dollar the third currency to be directly convertible with the yuan. Mr. Swan will lead a forum in Hong Kong on Wednesday on the internationalization of the yuan -- a strategy pursued by China to ease away from dependence on the U.S. dollar as a reserve currency -- before heading to Beijing for more direct discussions with officials. "Internationalization of the yuan is clearly in the interests of Australian businesses and the broader Australian economy, which is why we've been taking action to promote and deepen the market in yuan/Australian dollar transactions," Mr. Swan said. ... Dispatch continues below ... 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... Last month China surprised markets by making the Japanese yen the second directly convertible currency behind the U.S. dollar. Direct conversion would slash costs for importers and exporters dealing with China by avoiding the added burden of converting through an intermediary currency. China has been moving in a steady trajectory to liberalize the yuan as it has grown to become the world's second-largest economy after the U.S. Beijing aims to have 30% of foreign trade settled in yuan by 2015, a threefold increase from current levels, and has been working to establish international trading hubs beyond Hong Kong to increase global liquidity in its currency. The Reserve Bank of Australia and the People's Bank of China signed a 30-billion Australian dollar (US$30.1 billion) currency swap line in March in a bid to support liquidity in Australian dollar/yuan trades -- the only Western economy along with New Zealand to have done so -- but until now Australia has lagged behind London and Singapore in the race to become an international yuan trading center. Bankers say it could also encourage more Chinese investment in Australia's resources industry. China is Australia's largest trading partner, accounting for about 60% of its exports, largely raw materials such as iron ore and coal. Trade between the two countries reached an eight-month high of A$11.1 billion in May, according to government statistics. The Australian dollar is a "natural" candidate to be paired with the yuan due to the countries' close trading ties, said Li-Gang Liu, head of Greater China Economics at Australia & New Zealand Banking Group Ltd. Such a liberalization could see 10% of commerce between Australia and China settled in yuan within two years as the offshore yuan market doubles in size, he added. Some Australian companies already have begun settling trade in yuan. Last year Fortescue Metals Group Ltd. made its first yuan-denominated transaction in China in a step toward settling iron-ore contracts in the local currency. HSBC Holdings estimates that only 7% of Australian businesses are ready to use the yuan to settle trades, compared with 48% of their Chinese counterparts. Mr. Liu said the technical architecture is in place to allow Australia's major cities, Sydney and Melbourne, to become hubs for trading the yuan should Beijing further relax controls on the Chinese currency. "If you were to see the Australian dollar and Renminbi (yuan) quoted in the near future, [importers and exporters'] willingness to use their own currency to settle trade will increase a lot," he said. "This kind of development hinges on market development." 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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| Central Planners Are Making Desperate Maneuvers Right Now Posted: 05 Jul 2012 10:01 PM PDT  With investors around the world are wondering which direction markets will head next, today King World News interviewed 25 year veteran Caesar Bryan. Gabelli & Company has over $31 billion under management and Caesar Bryan has managed the gold fund since its inception in 1994. Here is what Ceasar had to say regarding what is happening around the globe: "Since we last spoke, Eric, there was the summit between the countries in the eurozone. They agreed to separate the bank debt from the sovereign debt, but that doesn't fix the problem because the debt is still there. There are two issues, and the first one is too much debt and who is going to take the losses?"
This posting includes an audio/video/photo media file: Download Now |
| Are Banks Raiding "Allocated" Gold Accounts? Posted: 05 Jul 2012 10:00 PM PDT In 2007, Morgan Stanley paid out $4.4 million to settle a class-action lawsuit by its clients after Morgan Stanley charged them to buy and "store" precious metals for them, but neither bought or stored the metals. (Similarly, a 2011 class-action lawsuit filed in federal court in New York accused UBS Financial Services of misleading silver investors and harging them storage fees for metal that was never actually purchased, segregated, and stored for them.) Avery Goodman points out that Morgan Stanley has once again just launched a similar scam, offering "allocated" metals, but gaming the definition so that the holdings are not really allocated. On May 21st, Matterhorn Asset Management's Egon von Greyerz alleged that Swiss banks are trading physical gold bullion which is being held in special "allocated" accounts for its customers:
On May 23rd, John Embry - Chief Investment Strategist of Sprott Asset Management, with $10 billion under management - added:
Jim Willie claims that :
Similar reports have come from Canada and other countries. Indeed, Jim Willie alleges today:
Given the numerous reports of supposedly "allocated" gold not being there, it should not be entirely surprising that wealthy investors are taking matters into their own hands ... literally. Kirby Analytics notes:
And as we pointed out in 2010:
Does this mean you shouldn't own gold? No ... It just means that you should only buy physical gold, and store it somewhere you can actually get your hands on it.
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| Gold is real; central planning is fiction Posted: 05 Jul 2012 10:00 PM PDT by Félix Moreno de la Cova, Gold Money:
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| Lies everywhere from governments and news media, von Greyerz tells King World News Posted: 05 Jul 2012 09:48 PM PDT 10:45a ICT Friday, July 6, 2012 Dear Friend of GATA and Gold: Egon von Greyerz of Matterhorn Asset Management in Switzerland has been interviewed by King World News about the disinformation being distributed by governments and the news media about the financial trouble that is simply not resolvable with the methods being attempted. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/5_Gre... 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: 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: 05 Jul 2012 09:40 PM PDT by Andrew Hoffman, MilesFranklin.com:
Three years ago, when the stock of the junior miner I worked for – and most of my mining investments – fell 80%, I saw the worst of humanity, first-hand. The cumulative human response to Global Meltdown I – particularly in my sector – was NOT to band together, but lash out, double-cross, and otherwise demonstrate how the "survival instinct" works, at the expense of ones' fellow man.
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| Thomas Pascoe: Revealed -- Why Gordon Brown sold Britain's gold at a knock-down price Posted: 05 Jul 2012 09:07 PM PDT Of course all this was "revealed" by GATA and particularly gold price suppression litigator Reginald H. Howe not long after it happened a decade ago, and GATA has been repeatedly thrusting it at the Telegraph ever since then, but it's thrilling to see a mainstream news organization getting around to it even this late. * * * Revealed: Why Gordon Brown Sold Britain's Gold at a Knock-Down Price By Thomas Pascoe http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/revealed-why... A great deal of Gordon Brown's economic strategy would strike a sane man as troubling. Not a great deal was mysterious. The orgy of consumption spending, frequent extensions of the cycle over which he would "borrow to invest," proclamations of the "end of boom and bust": These are part of the armoury of modern politicians of all political hues. One decision stands out as downright bizarre, however: the sale of the majority of Britain's gold reserves for prices between $256 and $296 an ounce, only to watch it soar so far as $1,615 per ounce today. When Brown decided to dispose of almost 400 tonnes of gold between 1999 and 2002, he did two distinctly odd things. First, he broke with convention and announced the sale well in advance, giving the market notice that it was shortly to be flooded and forcing down the spot price. This was apparently done in the interests of "open government" but had the effect of sending the spot price of gold to a 20-year low, as implied by basic supply and demand theory. ... Dispatch continues below ... 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... Second, the Treasury elected to sell its gold via auction. Again, this broke with the standard model. The price of gold was usually determined at a morning and afternoon "fix" between representatives of big banks whose network of smaller bank clients and private orders allowed them to determine the exact price at which demand met with supply. The auction system again frequently achieved a lower price than the equivalent fix price. The first auction saw an auction price of $10 less per ounce than was achieved at the morning fix. It also acted to depress the price of the afternoon fix which fell by nearly $4. It seemed almost as if the Treasury was trying to achieve the lowest price possible for the public's gold. It was. One of the most popular trading plays of the late 1990s was the carry trade, particularly the gold carry trade. In this a bank would borrow gold from another financial institution for a set period, and pay a token sum relative to the overall value of that gold for the privilege. Once control of the gold had been passed over, the bank would then immediately sell it for its full market value. The proceeds would be invested in an alternative product which was predicted to generate a better return over the period than gold which was enduring a spell of relative price stability, even decline. At the end of the allotted period, the bank would sell its investment and use the proceeds to buy back the amount of gold it had originally borrowed. This gold would be returned to the lender. The borrowing bank would trouser the difference between the two prices. This plan worked brilliantly when gold fell and the other asset -- for the bank at the heart of this case, yen-backed securities -- rose. When the prices moved the other way, the banks were in trouble. This is what had happened on an enormous scale by early 1999. One globally significant US bank in particular is understood to have been heavily short on two tonnes of gold, enough to call into question its solvency if redemption occurred at the prevailing price. Goldman Sachs, which is not understood to have been significantly short on gold itself, is rumoured to have approached the Treasury to explain the situation through its then head of commodities Gavyn Davies, later chairman of the BBC and married to Sue Nye, who ran Brown's private office. Faced with the prospect of a global collapse in the banking system, the Chancellor took the decision to bail out the banks by dumping Britain's gold, forcing the price down and allowing the banks to buy back gold at a profit, thus meeting their borrowing obligations. I spoke with Peter Hambro, chairman of Petroplavosk and a leading figure in the London gold market, late last year and asked him about the rumours above. "I think that Mr Brown found himself in a terrible position," Hambro said. "He was facing a problem that was a world-scale problem where a number of financial institutions had become voluntarily short of gold to the extent that it was threatening the stability of the financial system and it was obvious that something had to be done." While the market manipulation that occurred when the gold reserves were sold was not illegal as the abuse at Barclays may have been, the moral atmosphere in which it took place was identical. The crash which began in 2007 and endures still was the result of an abdication of responsibility across the financial sector. This abdication ranged from the consumer whose thirst for goods pushed him beyond into grave debt to a government whose lust for popularity encouraged it to do the same. Responsibility is evaded by all bar those on whose shoulders it ought to rest. The gold panic of 1999 was expensively paid for by the British public. The one thing politicians ought to have bought with that money was a lesson in the structural restraints that needed to be placed on banks now that the principle that they were ultimately public liabilities had been established. It was a lesson that could have acted to restrain all players in the credit market boom of the 2000s. It was a lesson nobody learnt. ----- Thomas Pascoe worked in both the Lloyd's of London insurance market and in corporate finance before joining the Telegraph. He writes about the financial markets. 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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| Silver Update 7/5/12 Rates Deflate Posted: 05 Jul 2012 09:00 PM PDT |
| Gold Bullion Coin Sales Up 13% In June, Silver Bullion Coin Sales Remain Steady Posted: 05 Jul 2012 08:20 PM PDT According to the latest report from the U.S. Mint, sales of gold bullion coins increased by over 13% during June, while total sales of the silver bullion coins were essentially unchanged from May. Monthly sales of the American Eagle gold bullion coin have fluctuated considerably during 2012 with sales reaching a monthly high of 127,000 [...]
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| Posted: 05 Jul 2012 06:03 PM PDT The last time Mario Draghi made an unequivocal statement regarding his actions under exceptional circumstances, we pointed out the unthruthiness of his comment that LTRO borrowing in no way stigmatized a bank. That did not end so well for the LTRO banks. Today's ECB press conference perhaps sets him up for another banana-skin down the road. From the 20 minute segment, the ECB head describes the lowering of eligibility standards for ECB collateral to include assets that banks take as collateral in the real economy ("credit claims and ABS of lower rating", i.e. rusty old cars, empty coffee-shops, unkempt holiday homes). His description of the hypothecated-hell: "It's very useful [for the banks] to lend to the real economy; as the banks generate collateral that they can now use for funding themselves" - which sounds awfully like a ponzi scheme - is nothing less than a massive on-boarding of all European asset risk by the ECB (using the banks as a simple pass-thru). This would seem to dramatically lower the quality of the ECB balance sheet. But have no fear, for as the new maestro puts it "we want to do this in a way to keep the risks of the ECB balance sheet very very low". Low indeed. His commentary on the lending to SMEs and the broadening of ECB collateral eligibility starts at around 20:00...
All this comes down to is simply enabling 'some' credit to flow to the banks to cover funding holes from deposit flight (and ECB margin calls) and perhaps confirms our view that a Senior-Sub decompression trade remains worthwhile as more and more of European bank balance sheets become encumbered. Also worthy of mention is this is an implicitly inflationary action so perhaps could help gold in its leaking effect into the real economy - though we suspect this is less so. Monitoring the levels of this line item of collateral in the ECB balance sheet is critical.
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| Posted: 05 Jul 2012 04:24 PM PDT Financial magazine Euromoney, which in addition to being a subscription-based publication appears to also rely on bank advertising, has just held its 2012 Awards for Excellence dinner event. And in the "you can't make this up" category we have Barclays winning the Best Global Debt House, Best Investment Bank, And Best Global Flow House Of The Year Awards. Specifically we learn that "the bank's commitment to the US is exemplified by the addition of another global senior manager to the country – Tom Kalaris is now going to be splitting his time between New York and London as executive chairman of the Americas as well as overseeing wealth management. Jerry del Missier, who has overseen the corporate and investment bank through its Lehman integration and was recently appointed COO of the Barclays group, says the bank is well positioned. "We came out of the crisis in a stronger strategic position and that has allowed us to continue to win market share and build our franchise. Keep in mind that the US is the largest investment banking, wealth management, credit card and investment management market in the world, and in terms of fee share will remain the most dynamic economy in the world for many years. As a strong global, universal bank operating in a competitive environment that is undergoing significant retrenchment, we like our position." That said, with the Chairman, CEO and COO all now fired, just who was it who accepted the various award: the firm's LIBOR setting team? And if so, were they drinking Bollinger at the dinner? From the oxymoronically named Euromoney (shouldn't it be Eurorehypothecation, or Eurospidermantowelsascollateral?) which just held its Awards from Excellence 2012: Barclays With Barclays still the target of invective as a result of the Libor scandal, Euromoney outlines the reasoning behind bestowing the UK bank with multiple accolades for its performance over the past year – a period which supersedes the Libor probe. Awards for Excellence 2012: Best Global Flow House An ability to adapt while sustaining a market leading global flow business sets Barclays apart. There have been some seismic shifts among investment banks active in the flow markets in the past year but not at the top, where Barclays, Deutsche Bank and JPMorgan dominate and should expect to capitalize further on rivals that are scaling down or exiting businesses entirely. In a world where fixed-income, currencies and commodities sales and trading is becoming increasingly like cash equities, senior management of many of the investment banks outside of this top tier are being forced to decide whether they have the appetite or ability to run a full-scale all-in-one business servicing clients in all the product areas globally. For Barclays, Deutsche Bank and JPMorgan, which provide institutional clients with this full-scale global capability, the question is not can they grow, but, by how much and in what direction. Deutsche Bank and JPMorgan have been aggressively building their commodities trading businesses in recent years, while Barclays has sought to expand in cash equities and equity derivatives, and foreign exchange too. While all three firms can claim success in each of these areas, in addition to sustaining their enviable market shares in rates, credit and FX, it is Barclays that stands out this year. The UK investment bank has not only performed strongly in serving clients across the whole spectrum of rates, credit and FX, to commodities and equities, but more importantly is leading the advance of a development that could define the future of flow markets – over-the-counter clearing. Guglielmo Sartori di Borgoricco, head of distribution at Barclays, says: "This is the natural evolution of that flow monster role, and an area that we believe is elemental to the flow market. Clearing will be the umbilical cord to the flow business in the future." What investment banks and the broader finance industry are preparing for is that all standardized OTC derivative contracts must be traded on exchanges or electronic trading platforms and cleared through central counterparties by end-2012 at the latest. This has ramifications for the OTC derivatives market, the investment banks and their investor clients too. Arguably well ahead of others, Barclays has invested accordingly, and is capitalizing on its lead. "What does it mean to be a flow monster? The liquidity provision is very important, the ability to deliver great content is important, and the clearing side is the completion of it all, because once you have it all – the front office, back office and pipes working together – then you have great liquidity, content and execution. That is precisely how Barclays is set up," says Sartori di Borgoricco. He adds: "What our OTC clearing team is doing today is just as pioneering as the global netting agreement we took the lead on some eight years ago." Ralph Segreti, head of FICC OTC clearing distribution for Europe and Asia, is equally bullish, arguing that growth in this area is expected to boom He says: "Clearing is an area where our work with clients really comes together. We realized early on that clearing was absolutely elemental to the future of our platform and that it would help us strengthen the partnerships we have with our clients. So we had an early and deep commitment to OTC clearing, and it is one where we are starting to reap the benefits." Segreti believes this business is set to grow substantially from clearing roughly $60 billion of trades a week currently. He says: "We are only doing a fraction of the business we expect to do, but we have a very scalable solution in place and we are ready to facilitate the growth as it comes." Time will tell if Barclays manages to up-scale this business to a size that generates healthy returns, but in the meantime the firm's global flow sales and trading business will doubtless continue to perform strongly, and particularly in areas where it has most to gain. In equities, for instance, Barclays now has an 8% market share of all US volume, and in Asia the firm has tripled its market share on the Tokyo Stock Exchange and increased its market share on the Hong Kong Stock Exchange. Barclays – ranked third by market share in Euromoney's 2011 FX survey – is also gaining ground on Deutsche Bank's dominance in the global FX market. Nick Howard, head of distribution for Europe, the Middle East and Africa, says: "We have been consistently building our FX business in all three regions. In the Americas it takes a couple of years to on-board some of the big accounts, but we have gained market share there, and that is partly a result of the tailwind effect from the Lehman acquisition. We've also invested heavily in technology, particularly around the FX forwards market."
Awards for Excellence 2012: Best Global Debt House Barclays has shown skill and strength in adversity to cement its place as the leader in DCM this year. This year more than any other, success in DCM has required both breadth and depth. With markets as jumpy and unpredictable as they have been, the best global debt house must not only have excellent global reach, it must also be product, tenor and currency agnostic. This year that house is Barclays. Barclays and its shortlisted competitors dominate the DCM markets. But over the past 12 months the UK bank has been everywhere – among the top-three ranked underwriters across all FIG, SSA, US dollar, euro and sterling issuance. This focus on both domestic and cross-border business is underpinned by an enviable trading, distribution and research platform. League-table strength is a given in this category, but a closer look at the business that Barclays has been writing gives an indication of the regard in which this team is held. In SSA, under the most challenging circumstances imaginable, the bank has excelled amid the storm. It is the number-one underwriter for EFSF and ESM issuance – quite a feat for an institution that is not even a eurozone bank. "There is no natural embedded advantage – we are thought of as a British bank not an indigenous eurozone bank," says Charlie Berman, head of public-sector EMEA at Barclays. "These issuers want this team working with them on the tough deals." The bank also underwrote the first benchmark issue for the Republic of Iceland since 2006. Its strength in volatile markets also saw it have 50% market share of corporate issuance in Europe in October 2011 – an extremely stressed time – and it has been instrumental in reopening peripheral markets in 2012. Deals such as those for Portugal's Semapa and EDP required the kind of access to the domestic retail investor base that very few global banks have. The past year has been a rollercoaster ride of risk-on, risk-off sentiment, so the ability to identify and exploit relevant and untapped investor bases is a crucial skill. Barclays demonstrated this in spades last year across FIG and corporate issuance. "Access is always about navigating windows, so you need to be with the bank that is in the flows," says Mark Geller, head of FIG syndicate in London. In its top-tier US franchise it dominated in yankee bank issuance and US dollar covered bonds – key themes of the past year as some banks' euro liquidity evaporated. This strength was in evidence on the corporate side as well, with yankee deals for BHP Billiton, Teva, GlaxoSmithKline, Tesco and Pernod Ricard among many others. Barclays' Asian and emerging market yankee business included the underwriting of deals for Honda, Toyota, Brasil Telecom, Ipic and KNOC. The bank's strength in cross-border liquidity was also demonstrated as sole arranger of the groundbreaking ¥50.7 billion ($636.2 billion) Tokyo Pro-bond for ING Bank in April. It was ING's debut benchmark bond offering in Japan. "This was an exceptionally important opening of previously trapped domestic liquidity," says David Lyon, managing director IBD FIG EMEA. The theme of trapped liquidity was also addressed in the UK, with pioneering retail bond deals for National Grid and Tesco Bank. Barclays was also sole arranger for Lloyds Bank's US retail notes programme, which enabled the bank to access US dollar funding away from the institutional market. "This was an important diversification for an entity like Lloyds," says Lyon. In emerging markets the bank had success in opening new funding currencies with deals such as the debut SFr500 million ($520 million) issue for VEB and the £650 million ($1 billion) deal for Russian Railways. Barclays' US franchise is the bellwether of the entire firm and its strength was firmly in evidence this year. Its $13.3 billion sole underwrite on the bridge loan for Kinder Morgan's acquisition of El Paso was the largest sole underwrite ever for a non-investment-grade credit and was done at the same time that other European banks did not even have access to the dollar market. When SABMiller was looking to refinance the $12.5 billion acquisition loan backing its acquisition of Foster's it mandated Barclays for the preparation of the US 144a/RegS documentation, as an active bookrunner and as a billing and delivery bank. One sector where Barclays has traditionally not been as strong as its closest competition is high yield, but the bank has made progress this year. "The engine behind the high-yield product has been the strength of our global distribution platform," says Peder Oien, co-head of European leveraged finance. Barclays has increased its share of the US high-yield market from 4.4% in 2009 to 7.1% in 2011, and in Europe it has a 7.2% market share so far this year – up from 3.4% in 2009. "This has not been an easy market to be operating in," says Oien. "It requires a lot of coordination and a unique set of skills." The firm was on four of the five largest deals in the US over the past year – HCA, Sprint, CIT Group and Chrysler – and has brought 31 new issuers to the European market since 2010. "We have a pretty unique story," says Jim Glascott, head of global DCM at Barclays. "It has taken us a long time to get this franchise to where it is today."
Best Investment Bank and Risk Adviser in United States But one investment bank has not only kept a clean sheet, it has also managed to make headway in all areas of investment banking. Barclays wins the award for this year's best investment bank in the US and for best US risk adviser. In DCM, Barclays ranks third in the league tables. The bank excels in being product agnostic, having an integrated loan and bond and securitized offering, and is known for its attention to detail. Barclays is a leader in covered bonds, leading a $5 billion covered bond for TD Bank over the period. In investment grade debt it has led the last six deals by GECC – more than any other bank. In esoteric ABS, the bank is the leader in the market, with deals for Miramax and Dominos. Together with Deutsche Bank it successfully bid for a portion of the Maiden Lane III legacy AIG assets that were auctioned by the Fed in April this year. In ECM, Barclays ranks seventh in the league tables and has a way to go to bring itself up to competing with such stalwarts as Morgan Stanley and JPMorgan. But in equity flow and hedging for clients the bank is a leader. It has a high share of US flow products and jostles for first place in block trading with Deutsche Bank. The bank advised Capital One when it needed $2 billion in equity to finance its acquisition of ING, suggesting instead an equity forward structure to de-risk the deal, showing its equity risk management capabilities to be top-tier. In M&A, Barclays now ranks fourth in the league tables and last year was third for full-year 2011 – the only non-US bank to make that position in 12 years. Barclays was the sole underwriter of $13 billion of committed acquisition financing for the Kinder Morgan/El Paso transaction, the largest acquisition-related financing of the period and the largest ever sole underwriting to a non-investment-grade company. The bank was also financial adviser to Hewlett Packard in its subsequently troubled acquisition of Autonomy last August. It incorporated an FX hedge and a fully underwritten $8 billion bridge facility. Barclays is also a leader in the LBO M&A advisory sector. The bank's commitment to the US is exemplified by the addition of another global senior manager to the country – Tom Kalaris is now going to be splitting his time between New York and London as executive chairman of the Americas as well as overseeing wealth management. Jerry del Missier, who has overseen the corporate and investment bank through its Lehman integration and was recently appointed COO of the Barclays group, says the bank is well positioned. "We came out of the crisis in a stronger strategic position and that has allowed us to continue to win market share and build our franchise. Keep in mind that the US is the largest investment banking, wealth management, credit card and investment management market in the world, and in terms of fee share will remain the most dynamic economy in the world for many years. As a strong global, universal bank operating in a competitive environment that is undergoing significant retrenchment, we like our position."
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| Nevada: The Next American Gold Rush Posted: 05 Jul 2012 04:16 PM PDT Nevada has been a prolific mining region in the U.S. since the famous Comstock silver discovery in the late 1800s. It is now gold, however,*that draws miners to Nevada. Learn more about how Nevada has become the next American gold rush in the infographic below.* So says the introduction to this infographic* from www.visualcapitalist.com and*presented* *to you here compliments of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and its feeder site www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds). The introduction goes on to say: Gold deposits in Nevada are unique in that they cannot be seen by the naked eye. This makes them difficult to find. Despite this, gold occurs in massive trends which constitute the second largest concentration of gold on earth after South Africa. In 1962, gold was struck outside the town of Carlin and ever since The Next American Gold Rush began. * Nevada currently constitutes 73% of all US gold producti...
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| The Gold Price Lost $12.40 Today Closing at $1,608.90 Posted: 05 Jul 2012 03:35 PM PDT Gold Price Close Today : 1608.90 Change : -12.40 or -0.76% Silver Price Close Today : 2763.8 Change : 60.5 or -2.14% Gold Silver Ratio Today : 58.213 Change : 0.808 or 1.41% Silver Gold Ratio Today : 0.01718 Change : -0.000242 or -1.39% Platinum Price Close Today : 1475.00 Change : -23.40 or -1.56% Palladium Price Close Today : 584.25 Change : -15.35 or -2.56% S&P 500 : 1,369.52 Change : 1.62 or 0.12% Dow In GOLD$ : $165.95 Change : $ 0.97 or 0.59% Dow in GOLD oz : 8.028 Change : 0.047 or 0.59% Dow in SILVER oz : 467.34 Change : 9.15 or 2.00% Dow Industrial : 12,916.27 Change : -24.44 or -0.19% US Dollar Index : 81.81 Change : -0.070 or -0.09% Franklin will not be publishing commentary today as he is nursing his wife who is recovering from heart surgery. 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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| Thunder Road Report On The Death March: Approaching A New Financial System Posted: 05 Jul 2012 03:21 PM PDT From Paul Mylchreest's latest Thunder Road Report Death march: approaching a new financial system If you are reading this, you are probably a member of what the sociologists would term middle class (albeit at the upper end). This is precisely the segment of society which is poised to come off worst from what is coming. Here is a very disturbing idea. As this crisis develops, if you are an equity portfolio manager and you want to outperform the market, you are going to have to position your portfolio so that it benefits most from your own wealth destruction and that of your family, friends and colleagues. Almost everybody is going to lose and there aren't many places to hide. This is deeply unpleasant but you can blame the central planners. I've written about my own investing, e.g. gold and silver, equities in terms of Maslow's Hierarchy of Needs, etc. In this Thunder Road Report (below) and going forward, I will discuss this middle class theme and highlight positions I have in individual stocks, etc. The only good thing that can come out of this is a rise in awareness. It's just awful. In government bonds, the natural inflow of funds is approaching the end of the road – although there is probably one more short-lived and "wrong-footing" move downwards in the yield on the 10-year US Treasury. Increasingly, the flow of funds into government bonds is merely a direct reflection of newly created liabilities (debt) on the balance sheets of central banks like the Fed, ECB and Bank of England. Long-term US Treasury bonds are in their highest ever supply and at their highest ever price/lowest ever yield. Just another example of our "upside down" world. Brief aside: besides (or maybe in conjunction with) inflation/currency devaluation, there is one other way the US could extinguish the Federal debt (US$15.8 trillion dollars when I just checked the real time national debt clock) just like that…gone! Used in isolation, almost nobody would suffer! And some people (probably less than 1%) would gain…and boy would they GAIN! Do you know what I'm talking about? Got any? Don't know if it'll happen, but at least it would cheer my wife up. She is still trying to work out how I could have forecast the Great Financial Crisis and made so little money out of it? "You knew Fannie Mae was bust, you should have made millions." At least she didn't add "you idiot". She's nice like that. Meanwhile the price of the only financial asset with zero counterparty risk in the biggest global debt crisis in history has been "locked down" for months. There is a reason. It must move in volume to where there is an insufficient quantity prior to the denouement of the current financial system. A new system is coming with a bigger role for gold. You see "the man" isn't stupid, even if some of his acolytes are. He has a plan. But there's one "person" who could make things difficult for "the man", so he had to be brought "onside" first. Dr Kurt Richebacher was the publisher of "The Richebacher Letter" until his death in 2007. Paul Volcker commented that: "Sometimes I think that the job of central bankers is to prove Kurt Richebächer wrong." Ain't going to happen. Richebacher himself sagely remarked that: "The only cure for a bubble is to prevent it from developing." Well it's far too late for this financial system. Ten years ago, before the debt bubble became catastrophic, the free market could have resolved this issue. But Greenspan, the "Great Architect", had to create yet another bubble in real estate and the "point of no return" was left far behind. Then the helicopter-flying monetary psychopath took over and he is creating the bubble to end all bubbles in MONEY itself. Cue a great comment from Damon Vrabel in "Harvard Lobotomies And The Disgrace Of The Economics Profession": "The truth is that economics has been designed to completely hide the monetary system that hovers above the economy. Economics assumes money is just a medium of exchange floating through the economy to facilitate a free market and generate wealth. At times that has been true, but today it's probably the biggest lie of modern history." Let's take most people's current favourite "safe haven", the mighty United (Socialist) States of America. This is the chart of the debt in the economy (total Credit Market Debt Outstanding) since the current Kondratieff cycle began.
There She Goes - debt in the US economy (US$bn)
Imagine telling people that you'd set up a Ponzi scheme and asked them to invest in it. They'd be very offended that you could take them for being so stupid. But you only need to look out of the window, or in the mirror. Salaries, pensions, mortgages, savings, etc. are all paid in…MONEY. And nearly everybody is "all-in." The Euro, or its purchasing power anyway, is clearly finished if they try to keep the system together, but what about the dollar? The songwriter, Noel Gallagher, formerly of Oasis and now with his High Flying Birds, commented Raoul Pal, of the Global Macro Investor, said in May 2012 that: "All that is left (to buy) is the Dollar and Gold" I f-----' love reading Raoul Pal's stuff when I can get hold of it, which is incredibly difficult. He grew up (at least for a few years) near where I did and not far from Lee Mavers. I can't recommend his work highly enough. I don't disagree with him on much, but I do disagree with his view on the dollar (although he might be bullish on the dollar just from a trading perspective and he's been right since May). The two remaining "sacred cows" preserving the US dollar as the world's reserve currency are:
Regarding number one, the Chinese have been sellers since the end of July 2011 (note the date). With regard to number two, have you noticed how China has set up currency swaps with nearly all of its trading partners? Have you noticed how Iran has been excluded from the SWIFT system and has begun selling oil to some countries in currencies other than dollars? China has been preparing for dollar devaluation for nearly a year now, but hardly anybody has noticed. While everybody frets about the Euro, the dismantling of the US dollar's reserve currency status is occurring within plain sight. I think a deal was done between the US and China in late Summer or early Autumn of last year. Have you also noticed how Ben Bernanke has used just about every unconventional method of monetary policy he'd discussed in his earlier writings on preventing deflation…bar one big one? Dollar devaluation. Let me repeat that, dollar devaluation. We are heading into a truly mega-financial crisis. This is (another) classic "I hope I'm wrong, but…" report. I think the crisis is going to result in the transition to a new financial system as the current one implodes. Best guess is that it will be either happening, or perfectly obvious that it's going to happen, within 6-12 months, i.e. within our investing time horizon. This report connects a lot of dots and analyses each one of them. The dots include: Dot - Loss of US AAA credit rating in August 2011
Full report below:
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| Posted: 05 Jul 2012 03:00 PM PDT The 5 min. Forecast July 05, 2012 11:33 AM Dave Gonigam – July 5, 2012 [LIST] [*]When do-gooders urge you to “do your part”: A tax for failing to send your teenagers into the military? [*]Airlines are a terrible business… but Chris Mayer finds a lucrative subsector he calls “REITs with wings” [*]Patrick Cox on “phytochemicals” and the profitable end run they’re making around the drug industry [*]“Mountain pride” vs. food stamps… fun with “what a dollar buys today” comparisons… our last and best offer on our all-stocks-all-the-time package deal… and more! [/LIST] It’s rapidly coming to this: If you can be “taxed” for refusing to buy health insurance, you can also be “taxed” for refusing to ship off your kids to the U.S. armed forces. “If you have military-age children who have not served in this decade’s wars, then you owe a debt —...
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| Equities Fumble As Broke Banks Mounting Posted: 05 Jul 2012 02:32 PM PDT Volumes were not that far below average today as the Dow and the S&P (but not the miraculous NASDAAPL - not that story again please!) ended the day lower after some significant intraday volatility early (around the ECB/BoE decisions and jobs/ISM data in the US). S&P 500 e-mini futures levitated off the day's early lows to stabilize around VWAP before testing up to unchanged and then losing it all into the close on heavy volume and larger average trade size. Financials were the biggest losers, as the big banks dumped off most of their EU-Summit gains (with JPM and MS down over 4% today), followed closely by Energy names - even with WTI basically treading water close to close (despite some +/-2% swings early on). USD strength saw Silver lagging on the day and gold dropped a little but rather notably since the EU-Summit, gold and the S&P have been trading more in lockstep (with Treasuries and the USD pointing to more risk-off perspectives). Elsewhere in commodity-land, corn continues its upsurge - now up 40% in the last 3 weeks. After falling off the 1.25 cliff as Draghi disappointed, EURUSD tracked sideways just under 1.2400 for the rest of the day; carry FX pairs tended to drift lower most of the day but the afternoon was quiet. Treasuries limped a little higher in yield into the close - led by the long-end - but ended the day down a few bps from Tuesday's close (with 7/10Y outperforming). Treasuries are unch from the last NFP report (as is EURUSD) while ES is 55pts higher - hhmm. VIX ended the day up almost 1 vol accelerating above 17.5% as futures dived after-hours and cross-asset class correlation remained relatively low today - though ES traded with CONTEXT - as Europe's tensions were once again shrugged off once it had closed and then remembered into the US close. Gold and Stocks seem joined at the hip here post EU-Summit as Treasuries and the USD (strength) say something different...
from the last NFP report, Treasuries and EURUSD are unchanged but the S&P a perfectly sensible 55pts higher...
Broad risk assets drifted lower overnight to ES and recoupled early ion the morning as Europe opened. Some disconnects intraday were evident with equities generally underperforming from ISM to Europe's close. Risk recoupled for the rest of the day with a brief rally over-reaction and sell-off over-reaction into the close...
The high-beta equity exuberance - or is it "when in doubt, buy AAPL" from the long-only crowd looking at rumors of a new minipad - has pushed the NASDAQ up over 5% from Pre-EU Summit and it notably outperformed this afternoon...
and Financials were the laggards in a big way today - all trading notably lower than the Friday post-EU-Summit decision open and reverting a lot of the last Thursday pre-EU-Summit rumor move also...
but on the bright-side for now, it appears JPMorgan's equity and CDS have realigned for now - notably lower in stock price than when we pointed out that CDS was still seeing more pain (although into the close JPM CDS was popping back wider again suggesting a little more weakness still relatively speaking to come for its stock)...
Charts: Bloomberg Bonus Chart: Corn's magnificent weather-fueled ripfest (and comment via Reuters)
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| Gold Seeker Closing Report: Gold and Silver End Slightly Lower Posted: 05 Jul 2012 02:31 PM PDT Gold climbed up to $1623.53 at about 7:45AM EST before it fell back to $1597.59 in the next hour of trade, but it then bounced back higher at times and ended with a loss of 1.13%. Silver rose to $28.39 before it slumped back to $27.516 and then also bounced back higher, but it still ended with a loss of 2.29%.
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| Gold Daily and Silver Weekly Charts - Metals Rigging Worse Than LIBOR Posted: 05 Jul 2012 02:16 PM PDT |
| "Abundance": A Book Review Posted: 05 Jul 2012 01:33 PM PDT Synopsis: Shortages of food and water may soon be things of the past, thanks to two revolutionary technological breakthroughs. By Doug Hornig, Senior Editor With all of the doom and gloom promulgated by the media these days, you might be led to believe that there is no hope left in the world... that humanity is on a one-way trip back to cave fires and hunting down the last remaining wild animals. Or at least that a savage depression will wipe out the bulk of the world's wealth... or at best, that we must learn to accept a greatly diminished standard of living. Or, well, not. Here in the technology space, as you know, we're more keen on the facts that tech never sleeps and that it cares not about stock prices or turmoil in the Middle East. It just keeps on keeping on, through thick and thin. We are unabashed promoters of the notion that advances in tech will soon transform our lives for the better – so much so that we can envision a future in which the question will not be how to survive on so little, but what to do with so much. That's also one of the central ideas of the new book, Abundance (Free Press, 2012), aptly subtitled The Future Is Better Than You Think. Abundance was written by Peter Diamandis in collaboration with journalist Steven Kotler. Diamandis, for those who don't already know him, is a 51-year-old world-class futurist, innovator, and entrepreneur. He has degrees in molecular biology and aerospace engineering from MIT, as well as an M.D. from Harvard Medical School. He's founded or cofounded a staggering array of new companies and organizations, including the X Prize Foundation, Singularity University, the International Space University, and the Space Generation Foundation, among others. In April of this year, his name hit the headlines again as cofounder of his latest venture, Planetary Resources, Inc. – backed by Google's Eric Schmidt and Larry Page, Ross Perot, Jr., and film titan James Cameron, among others. It is dedicated to developing the commercial feasibility of asteroid mining. This guy does not think small. The book is not full of the pie-in-the-sky dreams of visionaries ungrounded in reality. Rather, it focuses on technology that is right here, right now, or will be in the very near future – the kinds of things that we write about – and profit from – every month in Casey Extraordinary Technology. Diamandis is also a man after our own hearts with his commitment to the free-market system and his disdain for government's invariably botched attempts to "help" people in need. Regarding the latter, he quotes economist William Easterly who points out, "The West has spent $2.3 trillion in foreign aid over the past five decades and still has not managed to get twelve-cent medicines to children to prevent half of all malarial deaths." It'd be difficult to find one sentence that better sums up the ongoing futility of a policy that enriches a few corrupt kleptocrats at the expense of millions of others. The way forward, Diamandis understands, is through technology. That's what got us out of the caves in the first place, and it is what will forge a future that is bright not only for those nations now privileged, but for everyone. And the first thing that needs be done, as always, is to secure the essentials of life. Food, water, energy, shelter. Take water, for example – a huge concern in many parts of the world. Diamandis details the work of Dean Kamen, a self-taught physicist, inventor, and multimillionaire entrepreneur who started out devising a more efficient way of getting sterile water to dialysis patients, who need five gallons a day. Then Kamen began thinking more broadly, not just about helping, in his words, "a few tens of thousands of dialysis patients … if I made a different machine … it might help a few billion people." So he did. In 2003, he perfected the Slingshot – a machine the size of a dorm-room refrigerator, with a power cord, an intake hose, and an outflow hose. It can produce 250 gallons of water a day, using the same amount of energy it takes to run a hair dryer, provided by an engine that can burn just about anything (it's been run on cow dung). It's designed to run maintenance-free for at least five years. Says Kamen: "Stick the intake hose into anything wet – arsenic-laden water, salt water, the latrine, the holding tanks of a chemical waste treatment plant; really, anything wet – and the outflow is one hundred percent pure pharmaceutical-grade injectable water." The Slingshot costs about $100,000, but Kamen figures machines could be mass produced to sell for $2,500, with another $2,500 for the engine. Amortized over five years, that pegs the cost of producing nearly 1,000 liters of drinking water per day at a microscopic $0.0027/liter. Kamen has negotiated a deal with Coca-Cola to launch a series of Slingshot field trials. One bright guy has partnered with a global giant that sees the commercial potential, and between them they're poised to resolve an enormous problem that's vexed governments and NGOs forever. Food? It's a fast-approaching global crisis, with the Food and Agriculture Organization (FAO) estimating that we will need to double agricultural production by 2050 just to keep up with population growth. Yet the amount of arable land keeps shrinking. Obviously, a drastic new vision is needed, and one has appeared. Growing food has always been a horizontal activity, spreading out over the land. It has centered around putting more acres into production and increasing the yield of each of those acres. But technology has now reached the point where soil is no longer necessary. So why not build our next farms upward instead of outward? That's the idea behind vertical farming. It isn't even a very new idea. While most people have heard of hydroponics (usually associated with tomatoes and marijuana), almost no one is familiar with aeroponics. It's based on the discovery – in 1983 by inventor/entrepreneur Richard Stoner (yes, that's his real name) – that it is possible to suspend plants in midair and deliver food through a nutrient-rich mist. Aeroponics is far more efficient than soil-based agriculture. It requires only a tiny fraction of the water supply needed by conventional farming; takes up far less space; eliminates expensive farm equipment and the fossil fuels needed to run them; makes herbicides and pesticides unnecessary, thus removing their toxic runoff from the ecosystem; minimizes transportation costs; and allows for year-round growing. It's the ideal way to feed a city. A Swedish company, Plantagon, is already deploying 10,000-square-meter glass spheres in Sweden, Singapore, and China that can grow 100,000 square meters' worth of produce. But the concept could scale up far beyond that. It's estimated that a 30-story building one New York square block in footprint could feed 50,000 people all year long. Vertical farms would be constructed with a skin of ethylene tetrafluoroethylene, a polymer that is extremely light, self-cleaning, and transparent as water. Parabolic mirrors would increase the amount of sunlight bouncing around inside, and LED grow lights could be used as a supplement on cloudy days and at night. Embedded, computer-controlled sensors could monitor and adjust temperature, pH balance, and nutrient flows. On top of all that, University of Illinois researchers predict that within the next 10-15 years, genetic engineering will increase a plant's photosynthetic optimization and thus ramp up crop yields by as much as 50%. Beyond the basics, tech is continually refining the way we do everything. Space considerations limit us to a single final example out of many – one which illustrates the intensive and extensive capabilities for knowledge sharing that the Internet affords. Many businesses which heretofore have closely guarded their secrets are finding that it can pay great dividends to open source some of their needs, tapping into a worldwide web of people just itching to put their spare computer time to use. That resource literally represented a gold mine to Goldcorp's CEO Rob McEwen, who had been impressed with the voluntary, cooperative effort that had produced Linux. It gave McEwen a really radical idea. What if, rather than ask his own engineers to estimate the amount of gold he had underground, he took his company's most prized asset—the geological data normally locked in the safe—and made it freely available to the public? And that's just what he did. Then, in March 2000, McEwen issued the Goldcorp Challenge: "Show me where I can find the next six million ounces of gold, and I will pay you five hundred thousand dollars." That was incentive enough for 125 teams to enter the competition. A year later, three were declared winners, none of whom had ever visited Goldcorp's properties. Yet McEwen's modest investment yielded billions of dollars' worth of new gold. Overall, Diamandis' thesis is that, far from being on a precipice beyond which lurks another Dark Age, we're actually poised to make mankind's oldest dream a reality. The book's title says it all. The road ahead will surely be bumpy, but thanks to technology, we're about to enter the Age of Abundance. Next time you're feeling hopeless about the state of the world, you should find Abundance to be a welcome antidote. Few investment sectors offer as many opportunities for life-changing gains as technology does. From biotechnology breakthroughs in cancer to quantum leaps in computing speeds to exciting developments that could end food and water shortages forever, there's no shortage of ways to play the tech market. And perhaps no one knows more about how to make money in this sector than our own Alex Daley, editor of Casey Extraordinary Technology and chief technology investment strategist. He's been a featured guest on CNN, CNBC, CBS World News, and the BBC – among many others. In short, whenever Alex talks about technology, smart investors pay close attention. Right now there's a rare opportunity to see him live – at the upcoming Casey Research/Sprott Inc. Navigating the Politicized Economy Summit, where he will share his favorite investments in technologies that are changing the world and creating massive wealth for early investors. The Summit will also feature legendary contrarian investor Doug Casey, former United States Comptroller General David Walker, bestselling author Peter Schweizer (Throw Them All Out), and a host of other financial luminaries. Right now you can reserve a deeply discounted seat at the Summit and hear all of their priceless advice.
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| Chart of the Week - Looking at Gold From a Dif... Posted: 05 Jul 2012 01:30 PM PDT SafeHaven
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| A Rare Forex Trading Opportunity in the Australian Dollar Posted: 05 Jul 2012 01:27 PM PDT Dr. Steve Sjuggerud writes: Right now, the Australian dollar is a perfect example of what I look for in my True Wealth newsletter... It is cheap, hated, and in an uptrend. It is time to buy Aussie dollars.
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| Silver, Gold and The Coming Deflation Posted: 05 Jul 2012 01:03 PM PDT Historically gold has made its significant gains, relative to other assets (as well as nominally), not during inflation, but during deflation (Note: I am using the terms inflation and deflation very loosely in this case). These significant gold rallies historically occur when value flees instruments such as stocks and certain commodities. Since the 1920s there have been three major gold rallies (1930s, 1970s and the current rally).
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| Jim Rogers – Civil Unrest Possible in Europe, Bankruptcy Preferred Posted: 05 Jul 2012 12:33 PM PDT Jim Rogers (Rogers Holdings) tells Lauren Lyster of Capital Account that civil unrest is a possible outcome of the debt mess in Europe according to a review of history. Rogers thinks bankruptcy/default is an option for European banks and sovereigns and it might follow across The Pond to the U.S. He acknowledges that economies around the world are slowing but seems to suggest that China is doing so intentionally. The downtrend in gold is "normal" following an 11-year run higher. India 'talking' about banning the purchase of gold (coins) which, if adopted, might pressure gold lower, but if it does he'd be a buyer. At about 15:40 in the interview listen to what Rogers says about inflation and the Federal Reserve, which includes, "The government is lying about inflation," and "The Fed will destroy itself – they keep making such absurd decisions down there; they are going to put themselves out of business." Rogers says he holds U.S. dollars right now, not because they are a safe haven, but because that's where everyone is running in a storm, as politicians keep digging us into ever deeper holes.
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| Gold Rally Fails ahead of Important High Posted: 05 Jul 2012 11:51 AM PDT courtesy of DailyFX.com July 05, 2012 09:33 AM Weekly Bars Prepared by Jamie Saettele, CMT No change…I’m looking lower as long as gold is below 1641. There is very little to say as gold is in its 8th week of consolidation. In fact, gold has oscillated on both sides on 1600 since May 2011. This length of consolidation will probably fuel an impressive break…eventually. The sideways trading from the May 2012 low is taking on the form of a head and shoulders continuation pattern (bearish) but a break below 1548 is needed to confirm. Exceeding 1641 would shift focus to 1671 (May high). LEVELS: 1547 1588 1607 1641 1672 1700...
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| The Dow/Gold Ratio This Independence Day Posted: 05 Jul 2012 11:45 AM PDT by Adrian Ash BullionVault Wednesday, 4 July 2012 Dividing the Dow Jones index of stocks by the Gold Price 80 years after its low... PLENTY OF PEOPLE pay close attention to the Dow/Gold Ratio. Eighty years after it sank to its Great Depression low, you might want to take a look this week, too. This blunt measure of stocks versus stuff gets nearly 5 million results on Google, posting some 650 unique stories on the Dow/Gold Ratio. Search volumes for the term "Dow Gold" don't quite match "Kim Kardashian" say, over the last 5 years (nor even "Reggie Bush"). But spiking in late 2008 and mid-2011, they very nearly matched search volumes for "Treasury bonds" – a market priced at twice the value of all the gold in the world. So why the interest? The Dow/Gold Ratio maps, over time, how the Dow index of US stocks is performing in terms of gold, rather than just in nominal dollars. Dividing the number of points in the Dow Jones Industrial Average by the Dollars in the gold pri...
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| Wall Street Journal's Constable on central bank gold purchases Posted: 05 Jul 2012 11:43 AM PDT Here's a very good interview of the Wall Street Journal's Simon Constable on the significance of central bank gold purchases, i.e., what it means to the ordinary gold owner.
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Regular readers of my work know that I have been outlining (and warning people about) 
The dream of developing a science that would allow wise philosopher kings to rule humanity from ivory towers is as old as Plato, but it received a significant boost during the 20th Century as "scientific" socialism searched for the tools to replace the market economy and the price system with a centrally planned "ideal" world. John Maynard Keynes' equation-rich General Theory of Employment, Interest and Money gave many aspiring central planners what looked like the mathematical tools to do so, and they rushed to build both statistical and mechanical extensions that would bring practical policy applications to economic theory. Unfortunately when logic is absent and the theoretical foundations are a mish-mash of tautologies and fallacies, no amount of adjusting parameters or clever computing can solve the underlying flaws. 
Amidst my pervasive "gloom and doom," I like to mix in inspirational stories of the human condition – how individuals occasionally triumph over challenging obstacles, harrowing circumstances, or their own inner demons – per recent RANTS such as "
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