Sunday, July 22, 2012

saveyourassetsfirst3

saveyourassetsfirst3

EM: James Holmes & Silver Update 7.22.12

Posted: 22 Jul 2012 10:06 AM PDT

James Holmes & Silver Update 2012.07.22

from endlessmountain:

~TVR

Syyenergy7: Silver Ramblings

Posted: 22 Jul 2012 10:05 AM PDT

Silver Ramblings. Various comments of Silver , Gold, economic policy and other commodities.

from syyenergy7:

~TVR

Always take Delivery of your Gold & Silver

Posted: 22 Jul 2012 09:57 AM PDT

Bob Chapman : Well, I tell people with gold and silver to always take delivery...

[[ This is a content summary only. Visit my blog http://www.bobchapman.blogspot.com for the full Story ]]

Getting Finance Off Of LIBOR

Posted: 22 Jul 2012 08:02 AM PDT

By John Fullerton:

The ramifications of the LIBOR scandal (what Warren Buffett glibly called a can of worms) grow by the day. Criminal indictments of individuals, even if firms are too big to indict, appear to be in the making, as the tsunami's shock waves are about to spread to many of the usual suspects. One can only imagine the trial lawyers licking their chops. Has there ever been a class action lawsuit on behalf of the whole world?

Central bankers and regulators, understandably panicked at the height of the crisis, may have been complicit in some of the distortions in an effort to create the pretense of financial system stability. However, like the so-called "war on terror," we find the war on financial system collapse is filled with ends-justifying-the-means moral and legal questions.

Regardless of the specific consequences to individuals, firms, and even institutions, the systemic implications of this "can of worms"


Complete Story »

Front Running QE3

Posted: 22 Jul 2012 07:51 AM PDT

By Tim Shaw:

The market is running on the hopes of QE3 being released by The Fed. Let's have a look at five asset classes in the hopes of gaining some perspective into movements of those markets. I want to look at the prior QE1 and QE2 time periods and see how the markets reacted prior and after the announcement. The five asset class ETFs are S&P 500 (SPY), Copper (JJC), Soft Commodities (JJG) ETN, and I am including oil ($WTIC) as the fourth and Gold (GLD) as number five. From here we can make an argument whether QE3 will even be a consideration and if so, what can we expect from the markets based on two prior QE releases.

QE1 YTD Prior During QE1
SPY -41% +52%
$WTIC -47% @45 +68%
JJC -45% +113%
JJG -35% -9%
GLD -2% +38%
QE2 YTD Prior During QE2
SPY +9% +12%
$WTIC +7% @85 +12%

Complete Story »

Freeport: What Q2 Results Mean For Investors

Posted: 22 Jul 2012 06:40 AM PDT

By Global Value Investor:

Freeport-McMoran (FCX) Wednesday released weak Q2 2012 results, which were mainly driven by lower sales of minerals. Net income for the 2nd quarter came in at $710 million ($0.74 a share) compared to $1.4 billion or $1.43 per share a year ago. Adjustments to environmental obligations and litigation reserves had a $0.06 per share effect, or $53 million in total. Despite weak results, they came in not totally surprising and the stock is trading up about 4.3%.

The company proceeded to give an explanation as to the cause of lower sales:

Our second quarter 2012 consolidated sales as anticipated were lower than the second quarter of 2011 sales of 1 billion pounds of copper, and 356,000 ounces of gold, primarily reflecting lower ore grades and production rates in Indonesia. The lower copper sales volumes also reflected lower ore grades in South America partly offset by increased production in North America


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5 ETFs To Consider Owning During The Next Market Collapse

Posted: 22 Jul 2012 06:11 AM PDT

By CommodityHQ:

By Jared Cummans

With each passing day there grows more and more speculation that global markets are headed for another downturn. One of the favorite theories of investors and analysts is that all of the bailouts and quantitative easing programs have acted as a cover up for the deep-seeded issues in our economy; once the Federal funding stops, those issues will return to the foreground. As such, a number of individuals are trying to decide how to best play the commodity market for the next financial meltdown. Below, we outline five ETFs to help you profit from the financial world's demise.

SPDR Gold Trust (GLD)

This was a fairly obvious choice, as many analysts and individuals suspect that gold will be the real winner from these inflated debt levels. This ETF invests in physical bullion and is one of the largest funds in the world, weighing in with over $60


Complete Story »

Is Japan's Day Of Reckoning Nearing?

Posted: 22 Jul 2012 06:11 AM PDT

By Shareholders Unite:

Here are some figures from Japan:

  • Budget deficit over 7% of GDP
  • Public debt in excess of 200% of GDP
  • Two supposedly 'lost' economic decades
  • Aging, and hence shrinking population
  • Declining current account surplus

(click to enlarge)

Normally one would think this is a disaster looming, especially in the present, very uncertain economic climate. In fact, you might be at a loss in trying to understand that a disaster hasn't already happened.

However, we think you would be wrong. Go to Japan and you'll see a surprisingly prosperous country, with relatively low unemployment. It's nothing like some of the eurozone periphery, even though it is, in many respects, still suffering from the hangover of the collapse of an asset price bubble of rather momentous proportions, all the way back in 1990.

That asset price bubble, and its subsequent deflation, was three times the size of the bubbles and collapses of


Complete Story »

Links for 2012-07-21 [del.icio.us]

Posted: 22 Jul 2012 12:00 AM PDT

Is a Great Grey Exodus from America Starting?

Posted: 21 Jul 2012 10:12 PM PDT

Although there is no shortage of victims of the financial crisis, one group that has generally been missed is the middle aged and elderly. Yes, there are reports of people in their 40s and 50s moving in with their children or other relatives, but for the most part, this cohort does not get much attention.

Yet it isn't hard to see how grim their prospects are. Many thought they'd be employed at decent jobs through age 65 and are un or underemployed. And those still working full time are often victims of downward mobility, and have lost a well paying job and are now working at a lower pay level. If you don't have a decent level of earnings, you can't save much or at all. These pressures come against a backdrop of loss of wealth due to plunges in home prices and to a lesser degree, financial investments. And that's before we get to pension fund whackage and plans to "reform" Social Security and Medicare.

Some mainstream media outlets took note of an AARP study that found that the group that had the highest rate of foreclosures was the 75 and older cohort. And remember, these are people who retired after a period when unemployment was relatively low and the stock market delivered attractive returns.

While people who are under financial stress don't much in the way of options, I see more and more people of modest and better means planning on becoming expats to make their retirement incomes go further. San Miguel, Mexico, was long a destination for older Californians who wanted to stretch their retirement dollar. A once well off jewelry dealer (the "trade" has been in desperate shape for over a decade) planned to move to Buenos Aires, but his situation decayed too quickly for him to exit. Costa Rica is apparently popular with economic emigrants. And I've now heard two mentions of Thailand in the last three weeks. One came a reader who told me how his Abyssinian/Manx cat Precious had been trained to stay on a porch, except when he unwisely tried chasing roadrunners and foxes. His e-mail had this sad postscript:

Without going into a rant … we live in rural Clark County, NV outside Las Vegas, and are in that group of former middle class folks that have lost it all … having invested our life savings in this property (peak month Jul, 2006) we have not been able to sell. To view the place Precious and I were behind the fox, go to the home's website and see the view from the "Perch" seating area. We gave up selling. We have it for rent with option to buy. We hang on but face BK or foreclosure like so many others. When we leave we are moving out of the country. At 65, unemployed since 2007 in a small town, and with a disabled wife, there is no starting over here. We will be able to save more than half my small government pension/her social security in Chiang Mai, Thailand. I am not bitter, but I no longer believe in capitalism or democracy as I once did; not the way they are being practiced now.

Those who are approaching retirement age and have the time, energy, and financial headroom would do much better to get out of Dodge. America ranks badly on pretty much every social indicator, which means that moving to what is nominally a third world county isn't just a step up in terms of spending power but often in overall quality of life. Thus we are likely to see another sort of hollowing out take place: the lower income and wealthy elderly will remain here, while more in between who have the resources and energy will depart. We already have the economic-oriented literature depicting retirees as a burden. Imagine what a middle class exodus in this age group will do for the political and economic position of the aged.


Global QE Is Coming: Let the Gold Mania Begin!

Posted: 21 Jul 2012 08:47 PM PDT

from financialsense.com:

In my last article I commented on Japan's coming debt time bomb (Massive Japanese Debt Monetization is Coming, Yen to be Devalued), in which I made the case that Japan had a tremendous amount of their debt maturing over the next three years and that the Bank of Japan was likely to monetize much of it and weaken the Yen as a result. Since then I've dug a bit deeper and taken a look at the top 10 debtor nations of the world to see if they too had a large portion of their total outstanding debt maturing in the near future. What I found startled me: Nearly 50% of the total outstanding debt of the world's top 10 debtor nations needs to be rolled over by the end of 2015.

While fears over a European contagion and a hard landing in China have driven investors into sovereign debt like the U.S. and Japan, how long can this continue and will investor demand for sovereign debt be able to soak up the total supply over the next few years? It is my belief that global central banks will be the buyers of last resort and will be monetizing the debt in massive quantities over the next two and half years. This may perhaps be the catalyst leading to the mania phase for gold as investors all over the world attempt to protect themselves from global quantitative easing and global currency debasement.

The Top 10 Debtor Nations

While the world is currently focused on Spain and Italy as seen by 5-year credit default swap insurance north of 500 basis points (costs $500K annually to protect $10M worth of debt from default), the picture for the other countries that make up the top 10 debtor nations in the world is not much brighter. For example, while Italy has a debt-to-GDP ratio of 120%, Japan takes the top spot with 208%; and while Italy currently has a budget deficit relative to GDP of -3.9%, the US is far worse with a -8.10%. In fact, of the top 10 debtor nations half of them have budget deficits of more than 5% relative to GDP and 7 of the 10 have debt-to-GDP ratios at or exceeding 80%. As the table below highlights, the sovereign debt crisis is not a Euro phenomenon but a GLOBAL issue.

Keep on reading @ financialsense.com

Valencia, Spain asks for a bailout/Egan Jones lowers credit rating of Spain to CC plus

Posted: 21 Jul 2012 08:43 PM PDT

from harveyorgan.blogspot.com:

Gold closed the week up $1.00 by to $1585.00. Silver after being whacked early, regained its composure and actually finished up on the day by 4 cents to $27.35. The big news of the day came from Spain where it's 3rd largest city asked for funds as it was basically broke. The Spanish Ibex immediately proceeded to fall close to 6% and the Spanish 10 yr bond yield skyrocketed to 6.27%. Not to be undone, the Italian 10 yr bond yield finished the day at 6.16%. All bourses were in the red but it was Europe that had the deeper red ink. Conditions continue to deteriorate in Europe and this was manifested with a huge fall in the Eur/USA cross finishing the day in the USA at:

1.2154

The German DAX finished its session down 1.9%. Both Paris and Lisbon both had their stock exchanges down 2.14%. The Dow finished down 120 points or .93%. Egan Jones lowered the boom on Spain as they lowered its credit rating to CC plus from CCC-.

Let us now head over to the comex and assess trading on Friday.

The total gold comex OI fell by 5731 contracts as gold rose on Thursday by 10.00 dollars. The bankers were probably frightened a bit by a turn of events in Europe so they thought it was best to lighten up on their shortfall. The non official delivery month of July saw its OI fall from 17 contracts to 9 contracts for a loss of 8 . We had 10 delivery notices filed on Thursday so in essence we gained 2 contracts or 200 oz of additional gold standing. The next big delivery month of August is a little over 1 week away with first day notice on Tuesday, July 31.2012. On Monday night, we will get first day notices filed and on Tuesday night, I will bring to your attention the number of gold ounces that intend to stand. However as we are witnessing lately that in official delivery months, the number of ounces standing will decline due to the antics of our bankers. The August delivery month saw its OI fall from 165,994 to 155,776 as many rolled into October and December and some just vacated the paper arena altogether. The world is catching on pretty fast that the comex is nothing but a rigged game. The estimated volume on Friday was very anemic at 126,092 especially with the rollovers. The confirmed volume on Thursday was a touch higher at 156,178.

Keep on reading @ harveyorgan.blogspot.com

Bitcoin Correction Today, Mounting Evidence For Gold & Silver Breakout

Posted: 21 Jul 2012 08:39 PM PDT

from silvervigilante.com:

The big story in real money today is a dip on bitcoin's Mt. Gox. Having reached as low as ฿7.76 per 1$ from its recent high of ฿9 per 1$ reached over just the last two days. This has been correlated by a marginally positive day for gold and silver, each having moved up. Their gains, to be sure, are scantily noteworthy in percentage terms – hell, even dollar terms. In other words, they remain virtually unmoved. Platinum and palladium, also, have scantily moved. Gold currently sits $1.88 up; silver is up 7 cents; platinum is down $1.28; and palladium, having moved the largest percentage besides bitcoins drop, is down $4.75.

Bitcoin has had a positive year, especially over the last 1.75 months when it ran from ฿5 per $1 to ฿9. Such a runup betokens a slowdown and correction, but for the real money advocate who is properly diversified, there is a silver lining; namely concerning the inverse relationship between bitcoins and the precious metals.

This inverse relationship could be mounting evidence for a gold and silver breakout to the upside in the coming weeks, as Bill Murphy has recently broke the news that there will be big, big moves in August.

Keep on reading @ silvervigilante.com

Economic Collapse For Dummies

Posted: 21 Jul 2012 05:35 PM PDT

The Economic Collapse For Dummies form VictoryIndenpendence.

from victoryindependence:

~TVR

Bob Chapman : I do Not Buy Stocks

Posted: 21 Jul 2012 02:16 PM PDT

Bob Chapman : While I do recommend a few gold stocks, I do not buy stocks. I...

[[ This is a content summary only. Visit my blog http://www.bobchapman.blogspot.com for the full Story ]]

Still Think That Money Market Fund Is “Cash”?

Posted: 21 Jul 2012 11:45 AM PDT

When investors decide to close out their riskier positions and move into "cash", they don't actually go to the bank and get a stack of twenties. Most just sell their stocks and let their broker sweep the proceeds into a money market fund which, they assume, is the same thing as cash because it holds high-quality short-term commercial paper that almost never defaults.

That pleasant assumption breaks down as soon as you look at a typical money market fund's holdings and see that it owns, among other disturbing things, a lot of European bank debt.

But at least you can get your money out with a mouse click, right?

Well, maybe not. Apparently the Fed, cognizant of the potential weakness of the money fund system, is considering withdrawal limits:

Fed Eyes Limiting Money-Market Fund Withdrawals
NEW YORK–The Federal Reserve Bank of New York said it supports limiting some types of money-market fund withdrawals in a bid to protect those funds from suffering the equivalent of a bank run.

The recommendations came from a staff report released Thursday. New York Fed President William Dudley in a press release accompanying the document said he "strongly" endorses the ideas put forth by authors Patrick McCabe, Marco Cipriani, Michael Holscher and Antoine Martin.

"Further reform of money funds is essential for our nation's financial stability," Mr. Dudley said.

The analysts propose that money-market funds could be strengthened if they were to have a "minimum balance at risk." As envisaged by the authors, this balance "would be a small fraction of each shareholder's recent balances that would be set aside in the event that they withdrew from the fund," the press release said.

While regular transactions would be allowed as they are now, this special minimum balance would be locked up for 30 days. "The delay would ensure that redeeming investors remain partially invested in the fund long enough to share in any imminent portfolio losses or costs arising from their redemptions," the bank explained.

The idea advanced in the New York Fed paper seeks to force investors to be more mindful of what they are doing with money-market fund investments. Many perceive the funds to be a very safe and liquid place to park funds. But that notion was tested during the 2008 financial crisis, and some have worried that in the current environment, money-market funds could be a prime conduit for importing Europe's ongoing financial crisis to the U.S.

Money-market funds currently hold some $2.7 trillion in assets, according to the paper. They own, as of late 2011, around 40% of all dollar-denominated commercial paper, the New York Fed said.

The report provides fodder for Securities and Exchange Commission Chairman Mary Schapiro as she inches her divided agency toward a vote as early as this summer on a proposal to strengthen money-fund regulations. SEC officials described the New York Fed paper as a "blueprint" for the changes Ms. Schapiro would like to make.

Ms. Schapiro, joined by Federal Reserve and Treasury Department officials, sees money funds as one of the weakest links in the financial system despite reforms adopted two years ago to make the industry more resilient to widespread redemptions. Fund firms and other experts say the cash-like investments rarely run into serious trouble.

To publicly float her proposals, Ms. Schapiro needs "yes" votes from two of her four fellow commissioners. For months, three of the commissioners have said they don't believe there is sufficient evidence additional money-fund overhauls are needed, effectively blocking the proposals' advancement.

A number of Fed officials have been anxious about money-market funds for some time. Central bankers see the funds as a prime source of risk in large part because their structure is such that when trouble, or the fear of trouble, arises, investors have every incentive to withdraw all their funds. That can create the equivalent of a bank run.

In congressional testimony Wednesday, Fed Chairman Ben Bernanke said money-market funds are currently a potential source of financial-market instability. He expressed his support of regulators' attempts to lower the source of risk posed by money funds.

Some thoughts
In a healthy society lots of things can be legitimately seen as risk-free, starting with a sound currency and moving through the financial instruments based on that currency and administered by well-capitalized and sensibly-regulated banks.

In an unhealthy society fewer and fewer things are risk-free. The banks can no longer be trusted to survive, governments run out of money, and even the currency stops functioning as a store of value.

Currency risk and market instability go hand-in-hand, with each amplifying the volatility of the other. So along with inflation-induced booms and busts comes an increase in the incidence of capital controls, where panicked governments limit citizens' and foreign investors' ability to move wealth around. The Fed's proposed money market fund rules are both a perfect example of this and a sign of things to come. Once the crisis really gets going, expect controls to be imposed on bank accounts and international funds transfers initially, and from there who knows. Maybe IRAs and 401(K)s?

If history is any guide, by the end of this process gold will be the only remaining risk-free asset, and its value in debased fiat currency terms will be astronomical.

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