Friday, July 27, 2012

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Gold World News Flash 2

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Reviewing Futures Commitments of Gold Traders

Posted: 27 Jul 2012 11:37 AM PDT

Gold has been deeply out of favor lately, languishing in its usual summer doldrums. This sentiment wasteland is driving traders to flee wholesale, including the futures players. But provocatively such behavior is a powerful contrarian indicator.

Sandstorm Gold's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Posted: 27 Jul 2012 11:10 AM PDT

Sandstorm Gold Ltd. (SNDXF.PK)

Q2 2012 Earnings Call

July 27, 2012 11:30 am ET

Executives

Denver Harris - IR

Nolan Watson - President & CEO

Erfan Kazemi - CFO

David Awram - EVP

Analysts

Heiko Ihle - Euro Pacific Capital

Shane Nagel - National Bank Financial

Presentation

Operator

Good morning and welcome to Sandstorm Gold Q2 conference call. This call is being recorded. I would now like to turn the call over to Mr. Denver Harris. Sir, please go ahead.

Denver Harris

Good morning everyone. I want to thank you all for being part of today's Q2 conference call. With me I have Nolan Watson, Sandstorm's President and Chief Executive Officer; Erfan Kazemi, Chief Financial Officer and David Awram, Executive Vice President.

Before we get started, I would like to bring to your attention that some of the commentary on today's call may contain forward-looking statements. There could be no


Complete Story »

Gold traders stay on sidelines as prices hit 2-week high

Posted: 27 Jul 2012 10:32 AM PDT

from in.news.yahoo.com:

MUMBAI (Reuters) – Physical traders of gold in India stayed on the sidelines after gold prices extended gains for a third straight day to hit their highest level in more than two weeks.

* The most-active gold for August delivery on the Multi Commodity Exchange (MCX) rose to as much as 29,729 rupees per 10 grams, the highest level since July 6, before trading 0.47 percent higher at 29,708 rupees at 0807 GMT.

* The contract gained 1 percent in the previous two sessions.

* A weaker rupee and firm overseas markets helped sentiment.

* The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

* Global gold inched up, extending gains into a second session after poor economic data from both sides of the Atlantic helped raise hopes for further monetary stimulus measures.

* Imports of gold into India, the world's biggest buyer in 2011, have been subdued this year, and are expected to fall for the rest of the year. A below-normal monsoon is likely to further threaten gold demand from rural areas, which consume 60 percent of the yellow metal.

Keep on reading @ in.news.yahoo.com

Gold prices soar; regain Rs 30,000 levels

Posted: 27 Jul 2012 10:25 AM PDT

from goodreturns.in:

Gold has again grabbed the attention from investors globally as the impending economic mess, has once again made gold a better and less riskier investment bet.

Sentiments improved further today on reports that the U.S. Federal Reserve is likely to take new steps to boost U.S. economic growth.

Prices also rose as the dollar fell against other major currencies in turn sending gold prices rising. International gold was seen trading at $ 1,588 an ounce.

In the domestic bullion market, gold of of 99.9 and 99.5% purity rose marginally and was at Rs 30,160 and Rs 29,960 per 10 grams, respectively

MCX gold futures rose in line with overseas markets. Gold futures for August delivery contract on MCX opened at Rs 29,600 per 10 grams and was seen trading at Rs 29,705 higher by Rs 137.

The gold futures contract for October delivery contract was trading higher by Rs 140 at Rs 30,0071 per 10 grams at 2.20 pm IST.

Keep on reading @ goodreturns.in

Get Ready For Next Week

Posted: 27 Jul 2012 10:17 AM PDT

from tfmetalsreport.com:

Today's action, though disappointing, is meaningless when next week brings another FOMC meeting and the BLSBS. I hope you're ready.

Frankly, my biggest concern is that we've seen this all before. The Cartel allows the metals to rise in the days before some kind of Fed "news", only to rip the spec's guts out when the Fed, inevitably, disappoints. So, the most likely outcome next week is a rally on Monday and Tuesday as the Spec Sheep are led into the shearing barn.

The hammer falls on Wednesday and Thursday as the politically-handcuffed Fed "disappoints".

Then, a sharp rally on Friday when the BLSBS comes in lousy.

The Spec Sheep get sheared twice by being long on Wednesday and short on Friday. The Gold Cartel wins twice and laughs all the way to the bank.

{Now, let's get one thing straight. I am NOT trying to have it both ways. What I have described above is the most likely outcome for next week. Likely but not 100% certain. Regardless of what happens next week, I am still expecting a hot, explosive and historic summer and fall.}

OK, let's just wrap up some charts before we get to the weekend. First, The Pig. Where all looked strong earlier this week, the bluster regarding QEIII has buckled its knees, somewhat. It is still well within the channel that has driven it higher since late last year but, with all this talk of easing, it must be watched closely.

Keep on reading @ tfmetalsreport.com

David Stockman Interview - End of Debt Supercycle Nigh

Posted: 27 Jul 2012 10:11 AM PDT

Louis James, of Casey Research penned an intro to this important video below. Louis writes: 

"...we have some good videos from our last summit we'd like to share. Today's video is a conversation between our own Alex Daley and David Stockman – David gives a startlingly blunt assessment of the US's economic outlook and how it came to this precipice.

I hope you find the conversation as insightful and valuable as I did."

Comment:  A sobering and stark assessment from the former budget director.  We tend to believe him, but timing for when the bond market forces a debt reset is uncertain.  We cannot continue on the current, unsustainable path and a day of reckoning looms. 

Mr. Stockman sees 2008 as a "trial run" for a much bigger and more dangerous event ahead, all caused by monetary central planners using what Stockman calls "Ponzi economics."  With that in mind, the daily fluctuations of the metals don't seem all that important. 

Consider carefully whether one has enough precious metals for the long haul ahead...

Video runs about 30 minutes and is worthy of sharing in our view. 

 

"The Fed has taken itself hostage."... "As a result of that (the Fed boxing itself into a corner where it cannot allow interest rates to rise), you have a doomsday machine."..."Gold is the only currency that anyone is going to believe in after a while." - David Stockman

Source:  Casey Research via YouTube

http://www.youtube.com/watch?v=jKprapaBXPo&feature=player_embedded

KWN – Special Friday Gold & Silver ‘Chart Mania’

Posted: 27 Jul 2012 10:11 AM PDT

from kingworldnews.com:

With the wild action in gold and silver this week, top Citi analyst Tom Fitzpatrick put together a 'Gold & Silver Chartapalooza' where he laid out the roadmap for gold and silver to hit new all-time highs. Below is his interview and the KWN Special Friday Gold & Silver 'Chart Mania':

Tom Fitzpatrick latest report:

"We are still of the view that this has been a base building process for gold, and I would the same is true for silver. This has been similar to the 2006/2007 base before we went higher (See chart below). It's really just a question of timing more than anything else because we are increasingly convinced we are going to get the up move.

Keep on reading @ kingworldnews.com

Gold Clears $1600 – Psychological Boost to Bulls

Posted: 27 Jul 2012 10:07 AM PDT

from traderdannorcini.blogspot.ca:

The abillity of the gold market to push a "16″ handle on the price can be considered a minor victory for the bulls. You can see from the chart below, that within its broader consolidation pattern, gold had been experiencing a somewhat tightening or constricting of its range. The upper boundary of that "mini-pattern" has been the $1600 level. The ability of the bulls to take it through this region gives them a very slight advantage over the bears in the immediate term and provides the possibility of a push towards more stubborn resistance beginning near the $1620 level.

Keep in mind that every bit of today's move higher was predicated on the notion being floated that the Fed is going to ease and provide additional stimulus measures as soon as next month. What the Fed giveth, the Fed can taketh away in a real hurry. What this means is that as long as traders feel fairly confident that the stimulus is coming sooner rather than later, gold will attract dip buyers. On the other hand, if anything comes along to disabuse them of this notion, the market will drop back down towards the bottom of the recent range where the big Asian buyers are lurking.

I have stated many times that I believe any additional bond buying programs are an enormous waste of time which will do absolutely nothing to deal with the underlying problems in the US economy, which are structural in nature. Simply put – there is already too much debt in the system. Trying to lower interest rates even further in order to encourage additional borrowing is a fool's exercise.

For Pete's sake, the yield on the Ten Year note is at 1.406% today. Speaking sarcastically here I am sure that all those fence sitters out there just itching to spend money they do not have will immediately launch forward with those plans if the Fed manages to push the yield down to 1.25%.

Keep on reading @ traderdannorcini.blogspot.ca

Some Intriguing Charts

Posted: 27 Jul 2012 10:04 AM PDT

from tfmetalsreport.com:

Not much to add this morning but I wanted to pass along these charts. It's not much but it's a start!

On the previous post, I pointed out that both gold and silver were very close to breaking out of "pennant" formations on their daily charts. With today's action, they have! Now, again, take this for what it's worth:

These are simply formations at the base of the long-term pattern.
The primary ranges are still intact, namely 27-29 in silver and 1535-1635 in gold.
However, these initial breakouts are a positive development and may be the initial signal that he next move higher has begun. Watch closely to see if the breakouts can be maintained.

And I thought I would give you this chart of crude, as well. How many times have you read me stating that "what was resistance becomes support and vice versa"? Well, the crude oil chart shows this about as clearly as possible. Recall that for the past few weeks, I was telling you that $88 and then $90 would be critical levels for crude to pass IF it was going to sustain a rally. Well, take a look at the chart below. The next target for crude is to exceed last week's highs. IF it can do so, $100 will be clearly within its sights.

Keep on reading @ tfmetalsreport.com

Why India’s Tradition of Storing Gold is Savvy, not Silly

Posted: 27 Jul 2012 10:01 AM PDT

from dailyreckoning.com.au:

Reserve Bank of India, Deputy Governor K C Chakrabarty. is a little miffed about India's current account deficit and the value of the currency. He blames gold and India's ancient traditions for his country's woes.

'Ninety percent of the gold demand is jewellery or to offer to God. Both have to stop. Wearing gold as an ornament was a culture when you were a rich society, when you were contributing to 30% of the GDP of the world. Today, we have become a poor country, we need to change our culture.'

Mr Chakrabarty goes on to say that gold is a speculative and unproductive investment and its price will fall sharply when the speculators exit the market. We would guess most Indians will respond to the advice with a yawn, if not a laugh.

It is this type of Orwellian gibberish you come to expect from central bankers. The producers of paper money always rail against gold's ability to shine a light on their ineptitude.

In one respect he's right though. Gold as an investment is unproductive. But as a long term store of value it is unrivalled. And Indians, long weary of inflation, corruption and economic mismanagement, know this only too well. Throw in the natural volatility of an economy highly dependent on agriculture, and the store of wealth thing tends to become ingrained.

Is putting your savings into US government debt, at less than 1.5% for ten years, any more productive? A large chunk of the US budget now goes towards welfare. It is prudent to give your savings to a government who then facilities the consumption of those savings? All you get in return is a piece of paper promising future repayment, the real value of which is unknown.

Keep on reading @ dailyreckoning.com.au

Gold Rises For Third Day on Stimulus Expectations

Posted: 27 Jul 2012 09:57 AM PDT

from truthingold.com:

Gold edged up on Thursday, extending gains to a third session, as hopes of more stimulus measures from central banks to revive a flagging global economy boosted bullion's appeal as a hedge against inflation.

Gold rose to a three-week high on Wednesday, buoyed by expectations that the ECB will intervene to prop up the euro zone's ailing finances after an official suggested leveraging a rescue fund to increase its capacity.

The comments by ECB Governing Council member Ewald Nowotny boosted the euro and equities, benefiting gold which in recent months has largely moved in tandem with riskier assets.

But analysts doubted the rally would have much momentum as there is little sound evidence from the ECB or the US Federal Reserve on what they plan to do to tackle the European debt crisis and shore up the frail economy.

"Spain's public finance problems as well as poor data from the region led investors to believe that the ECB will intervene, but the foundation of this rally is rather shaky," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.

"The Fed is still ambiguous on further monetary easing and the economic conditions have not deteriorated much. As a result, gold doesn't have much potential on the upside for now."

Technical analysis suggested that spot gold faces resistance zone of $1,608-$1,615, and could retrace to $1,589 an ounce during the day, said market analyst Wang Tao.

Gold in the past few months has lost its safe-haven appeal to assets such as the dollar and US Treasuries that are perceived safer by investors.

Its fortunes now hinge on whether the US central bank will embark on another round of quantitative easing, dubbed as QE3, which would raise inflation outlook and attract investors to buy gold.

Bullion rose more than 2 per cent so far this year, leading the precious metals complex, but w

Keep on reading @ truthingold.com

Norcini – If This Happens It Will Devastate The Gold Shorts

Posted: 27 Jul 2012 09:54 AM PDT

from kingworldnews.com:

Today acclaimed commodity trader Dan Norcini told King World News, "Once you had the 50 day moving average in gold violated to the upside, then you had a much larger wave of short covering which began to occur." Norcini also said, "The momentum crowd, that was waiting for $1,600 to be breached, then took over and the move has continued to feed on itself."

Norcini also discussed a key level which "… is where you will really see the shorts panic." But first, here is what he had to say about the recent action in gold: "The move in gold we have been seeing was precipitated by an article which indicated the Fed was going to move in August, instead of September. Some of the shorts began to cover yesterday, and as they began driving the prices higher they tripped some key technical levels."

Keep on reading @ kingworldnews.com

Central Bank Gold-Grab Intensifies Further, Part II

Posted: 27 Jul 2012 09:38 AM PDT

from bullionbullscanada.com:

In Part I, readers had revealed to them the latest chapter in Western bankers' newfound love-affair with gold. Indeed, as central banks around the world swap their own paper for gold at the fastest pace in history, it's quite clear which monetary asset these charlatans really believe is a "barbarous relic." After bad-mouthing gold for decades (and continuing to get their media trolls to attempt to frighten people away from gold today), we are currently witnessing history's greatest "bash and buy".

Both European banking authorities and those in the U.S. are now proposing reclassifying gold as a "Tier 1" financial asset. As was previously noted, this would have the effect of instantly making gold twice as attractive and twice as valuable to all of these large, Western financial institutions. What makes these developments especially interesting at the present time is that they are occurring at the end of another long period of sideways trading in the gold and silver markets.

Throughout this 10+ year bull market, these temporary periods of sideways price-action where the bankers are able to trap gold and silver within trading ranges have preceded the largest/longest rallies over the past decade – where gold and silver prices smash through all previous (nominal) highs. While the bankers are typically the last to notice and understand the consequences of their relentless manipulation, if you hit a dog over the nose with a rolled-up newspaper enough times, eventually the dog will get the message.

Thus the bankers themselves know their "fun" has nearly come an end (at least for an extended period of time), and they will have to once again sound the retreat on gold and silver prices. Being greedy (above all else), these banksters manage to be quite pragmatic: when they know that gold and silver are set to blast-off once again, many of them like to come along for the ride.

Keep on reading @ bullionbullscanada.com

How Ben Bernanke Can Prevent the End of Civilization

Posted: 27 Jul 2012 09:36 AM PDT

from dailyreckoning.com:

Ev'ry morning, ev'ry evening
Ain't we got fun?
Not much money, Oh, but honey
Ain't we got fun?
The rent's unpaid dear
We haven't a bus
But smiles were made dear
For people like us

In the winter in the Summer
Don't we have fun
Times are bum and getting bummer
Still we have fun
There's nothing surer
The rich get rich and the poor get children
In the meantime, in between time
Ain't we got fun?

— Whiting, Kahn, Egan…1921

The Dow up 58 yesterday…nothing important there.

Gold up $31. Hmmm…what does the gold market see? More QE?

Last week, it was the IMF. It urged the Europeans to increase their money-printing efforts to avoid deflation. This week, the Financial Times tells Ben Bernanke to get off his cushy derriere and take bold, decisive action in the fight against the Great Correction.

Sebastian Mallaby, writing in the FT, says Bernanke is acting like a wimp. He needs to come up with some new weapons, new strategies, and new tactics. C'mon Ben, "show some real audacity."

Ben Bernanke, hero of '08, will not want to see himself stripped of his medals. He will not sit on his hands and watch as the US follows Japan down that long, lonely road towards stagnation. He will not want his resume blemished by a splotch of failure just when he faced his greatest challenge.

No, dear reader, he will 'do something!' — no matter how dimwitted it may be.

And here's a BBC sage reminding Ben Bernanke what the greatest economist of the 20th would have done. "What would Keynes do?" he asks.

Of course, the answer is obvious to anyone who ever thought much about Keynes. He would have done just the wrong thing!

Read more: How Ben Bernanke Can Prevent the End of Civilization http://dailyreckoning.com/how-ben-bernanke-can-prevent-the-end-of-civilization/#ixzz21qEZsJBl

Keep on reading @ dailyreckoning.com

Draghi gooses all bourses higher with hints of shared eurobonds/

Posted: 27 Jul 2012 09:31 AM PDT

from harveyorgan.blogspot.com:

Good evening Ladies and Gentlemen:

Gold closed up today by $7.00 to $1615.00. Silver fell by 2 cents to $27.43. With markets heading southbound in Asia and in Europe, Mario Draghi, the ECB chairman, without confirmation from Germany, commented that the central bank might engage in a joint sovereign issue of eurobonds and purchase struggling sovereign bonds in the secondary markets. Both of these are verboten by Germany. The markets around the world rejoiced. Only one little problem, nobody could speak to Angela Merkel who went on a holiday no were to be found. You just do not make these things up. The announcement had no merit and everything will revert back to normal as soon as Germany will not confirm any of Draghi's statements. As I pointed out to you on several occasions, it looks like August 20.2012 is the last day for Greece as 3.8 billion euros must be returned to the ECB or else a default is deemed. And that basically was the day.

So without further ado:

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

The total comex gold OI rose by 4944 contracts from 420,296 to 425,237. Gold had a great day yesterday rising by 31 dollars so the increase in OI is quite understandable as demand for gold rose. The July delivery month for gold fell by 1 contract from 11 to 10. We had 3 delivery notices filed yesterday so we again gained two contracts or an additional 200 oz of gold standing. The next big delivery month is August and here the OI contracted by a huge 20,246 contracts from 126,248 to 106,002. We have two more trading days before first day notice, Friday and Monday. On Monday we will get first day notice deliveries and on Tuesday we get to see who will stand for delivery in gold. The estimated volume today was pretty good at 243,361 even with the huge number of rollovers. The confirmed volume yesterday with the big advance in gold came in at 285,446.

Keep on reading @ harveyorgan.blogspot.com

Peter Schiff – Gold Just Broke Out & Is Now Off To The Races

Posted: 27 Jul 2012 09:28 AM PDT

from kingworldnews.com:

Today Peter Schiff told King World News that "Gold has now broken out of a channel. There was a very nice trendline and we just broke out of that today." He also said, "Now that we have broken out of that channel, there is a lot of room to the upside."

Schiff discussed the Fed, mining shares, and key levels in the gold market, but first, here is what he had to say about today's comments out of Europe by Draghi: "Draghi is just saying he's going to print as many euros as he has to. That's what people are interpreting here is him saying, 'We are not going to let countries default. We're going to keep countries on board, which means we are going to acquiesce to the pressure to print money.'"

Keep on reading @ kingworldnews.com

Gold Bullion On Course for Weekly Gain, ECB's Draghi “Is Plundering People's Savings”

Posted: 27 Jul 2012 09:25 AM PDT

from goldnews.bullionvault.com:

Gold Bullion touched a five-week high of $1625 per ounce Friday morning in London, on course for a weekly gain that would see the pattern of alternating up and down weeks stretched to week number eleven.

Silver Bullion also held onto most of its recent gains, trading around $27.70 per ounce for much of the morning.

A day earlier, gold and silver rallied following comments from European Central Bank president Mario Draghi that were taken to suggest the ECB could start buying government bonds again.

"We believe the risk [for gold] now lies with a move to $1640, the June high," says the latest technical analysis note from bullion bank Scotia Mocatta.

""There will be buyers now on any retracement to "1590."

"Technically the price action is starting to look a bit more constructive," agrees Credit Suisse analyst Tom Kendall.

"But that could fade as quickly as it appears to have been building… physical demand is still pretty soft [and] positioning is disinterested across much of the investment community

Based on London Fix prices, Gold Bullion looked set for its biggest weekly gain in seven weeks by Friday lunchtime in London. A PM Gold Fix of $1626.75 or higher would make this the biggest weekly gain since the last full week in January.

With markets looking ahead to preliminary US GDP figures due to be published later, European stocks were broadly flat this morning, having rallied on Thursday after Draghi said the ECB "is ready to whatever it takes to preserve the Euro".

"It is a signal that the ECB is closer to reactivating bond purchases if all else fails," says Julian Callow, head of international economics at Barclays.

The ECB's Securities Markets Programme, which was launched in 2010, was used last year to buy Spanish and Italian government bonds on the open market.

"The thing we wonder here is exactly where the Bundesbank stands…[since it has] historically been resisting the reactivation of the SMP."

"The Bundesbank has not changed its opinion [on ECB bond purchases]," a spokesman for the German central bank told Dow Jones Newswires on Friday.

"[Draghi has] maneuvered himself into an extremely difficult situation," warns Carsten Brzeski, senior economist at ING Group.

"[Market] expectations are very high."

Keep on reading @ goldnews.bullionvault.com

Surmounting Bogus U.S., Chinese, et al. Official Data

Posted: 27 Jul 2012 09:14 AM PDT

"A fake Libor rate, the scandal involving global benchmark interest rates that has raised the level of distrust in major banks and markets, is nothing compared to the damage that could be done if China's true economic growth figures were revealed, according to Larry McDonald's newsletter.

"Is Chinese GDP the new Libor? …More and more investors are starting to question the Chinese math on GDP.

"Annual gross domestic product came in at 7.6 percent in the second quarter, according to China's government on July 13th. The report was better than investors expected…

"But slowing imports and industrial production, as well as harder-to-fudge electricity usage data, points to much slower growth, according to McDonald and other investors. Barclays believes the number should have been more like 7.15 percent.

"What worries McDonald… is that lying by governments and banks — be it Libor rates or GDP statistics — raises the systemic risk to the markets, which is much worse than just economic risk."

"Lying Libor Is Nothing Compared to China's Fake GDP: Report"
John Melloy, CNBC, 7/22/2012


Indeed, if one considers all the salient Chinese data together, one concludes that the Barclays estimate of Chinese GDP at 7.15% is still high.

In order to obtain a realistic view of economic performance it is necessary to look beyond the Official Data to data that are more difficult to manipulate. For China, for example, consider:

China's shipbuilding industry has suffered a 60% decline in gross tonnage of orders; some builders may go bankrupt. China has vast stockpiles of as-of-yet-unused coal, iron ore, and copper. In the first half of 2012, Shanghai land sales fell close to 60%. The June 2012 Chinese electrical grid usage was flat. Prices in some Asian sectors sank an incredible 25% in June because of collapsing demand. China's neighbor Singapore reported that its GDP growth fell 1.1% during the second quarter of 2012 following a 9.4% gain during the first quarter.

Australia is losing jobs – Australian employers surprised the market after reporting payrolls were trimmed by 27,000 in June; pushing the unemployment rate up to 5.2% from 5.1% in May, due primarily to redirection in growth of Chinese demand. And the two major customers of China's exports – the Eurozone and the US continue to weaken.

Switching focus to the U.S. we recently see that some Mainstream Media are claiming that the Housing Market has bottomed and is recovering. It is not.

"Some upside bottom-bouncing was seen with June 2012 housing starts, with the level of activity 67% below the 2006 series high. Although the headline month-to-month gain of 6.9% was not statistically-significant, the level of reported activity was at its the highest since October 2008, in the midst of the ongoing economic crash.

"Protracted stagnation in housing starts at historically-low levels of activity has continued well into its fourth year of activity, averaging 74% below 2006's record-high construction level. Within the normal scope of volatility for the series in the last four years, a slightly higher plateau of activity appears to have developed in the eight months through June that is 68% below the 2006 high. Given the underlying economic fundamentals, there still is no recovery or relief in sight." (emphasis added)

"June Housing Starts, Economic Review, #457"
John Williams, shadowstats.com, 7/18/2012


And most important, consider Williams on Real Current U.S. Inflation.

"Headline CPI inflation was unchanged in June, despite the sharp decline in gasoline prices last month. Seasonal-adjustment factors that had depressed reported gasoline prices in the first part of year, shifted so as to inflate gasoline-price reporting in June. Those same upside pressures will continue in place for the next several months, boosting headline CPI inflation, even when gasoline prices are falling. Yet, for the moment, gasoline prices appear to have bottomed out.

"The June 2012 CPI-U was unchanged for the month, with year-to-year inflation holding at 1.7%. …The SGS-Alternate inflation measures for June showed a 5.0% annual inflation rate (1990-based) and a 9.3% annual inflation rate (1980-based)." (emphasis added)

"June CPI and Industrial Production, #456"
John Williams, shadowstats.com, 7/17/2012


9.3% Real U.S. Inflation is (already!) Threshold Hyperinflationary and reflects the effects of excessive Fed and ECB Fiat Money and Credit Creation. Indeed, Bogus Official Statistics mask a wide variety of Negative Effects of ongoing Q.E. and related Actions. Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest. Consider

Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)

Annual U.S. Consumer Price Inflation reported July 17, 2012
1.70% / 9.26%

U.S. Unemployment reported July 6, 2012
8.2% / 22.8%

U.S. GDP Annual Growth/Decline reported June 28, 2012
1.99% / -2.17%

U.S. M3 reported July 13, 2012 (Month of June, Y.O.Y.)
No Official Report / 2.82%


Shadowstats Forecast of Impending Hyperinflation beginning no later than the end of 2014, is quite significant.

"I have been warning of a hyperinflation for at least seven years, but those warnings have been about a hyperinflation that was sometime in the future, generally in 2018 or 2014 timeframes mentioned above. Now, however, along with the passage of time, circumstances have evolved and are aligned for the hyperinflation to develop in the near future, specifically, within the next two years or so, by the end of 2014. Key developments, such as global loss of confidence in the U.S. dollar, and the dollar losing its safe-haven status, fell into place during 2011.

"Why 2014? While inflation is far from being out of control at the moment, the U.S. dollar is relatively strong, due to the euro crisis, that can change rapidly as global markets and domestic holders of the U.S. currency begin to flee the dollar, along with dumping dollar-denominated assets. Fiscal, systemic-solvency and economic conditions are deteriorating markedly, with a confluence of unstable circumstances likely to come to a head within the next year or so, placing extremely heavy selling pressure on the U.S. dollar and, before 2014, setting the stage for hyperinflation.

"The damage to the U.S. financial system and to U.S. dollar credibility have been so severe in recent years…

"The U.S. economy is far weaker than commonly viewed—it never recovered from the 2006/2007-to-2009 plunge in activity—and* has begun to show renewed deterioration in terms of already moribund consumer income growth.

"Fundamental effects of the crises already have been seen in deteriorating funding conditions for Social Security and the annual budget deficit in general.

"Reflecting the impact of the recession, Social Security cash flows began turning negative in 2010, seven or eight years ahead of schedule. Also reflecting the effects of the recession and the crises responses of the Fed and federal government, the annual cash-based federal deficit exploded, hitting $1.3 trillion or above for each of the last three years, with annual GAAP-based deficits running at $5 trillion or more.

"Pending the results of court challenges, the Affordable Care Act (ACA) healthcare legislation likely will add more than $10 trillion in unfunded liabilities (net present value) to the government's 2012 GAAP-based accounting, due for release in December 2012. That, plus consideration of accounting for Freddie Mac and Fannie Mae and otherwise normal annual transactions, could push the reporting of total GAAP-Based U.S. obligations—including gross federal debt and net present value of unfunded liabilities—from $80 trillion in 2011, into the $120 trillion range for 2012, or roughly eight-times the level of U.S. GDP."

"Review of Economic, Systemic-Solvency, Inflation, U.S. Dollar and Gold Circumstances, #445"
John Williams, shadowstats.com, 7/17/2012


Of Great Significance is the fact that degradation of the U.S. Dollar's status as World Reserve Currency is already well under way.

China has already entered into bilateral Currency Deals with several nations including Russia, Iran, Brazil, and (soon to be former) financial allies Japan and Australia. Consequently the Purchasing Power of the $US will suffer a huge hit in the next very few years. Given the Real Numbers (per Shadowstats and Deepcaster, et al.) it is no wonder Economist Nouriel Roubini characterizes U.S. Recovery as a "Fairy Tale."

"…the first-half growth rate looks set to come in closer to 1.5 percent at best, even below 2011's dismal 1.7 percent. And now, after getting the first half of 2012 wrong, many are repeating the fairy tale that a combination of lower oil prices, rising auto sales, recovering house prices and a resurgence of U.S. manufacturing will boost growth in the second half of the year and fuel above-potential growth by 2013.

"…the gravity of weaker growth will most likely overcome the levitational effect on equity prices from more quantitative easing, particularly given that equity valuations today are not as depressed as they were in 2009 or 2010. Indeed, growth in earnings and profits is now running out of steam…"

"We're Not Even Close to a Robust Recovery"
Nouriel Roubini, Project Syndicate, 7/22/2012


And it is not just Doctor Doom Roubini who sees beyond the Bogus Official Data. Former Reagan Budget Director, David Stockman sees the Real Data, the Consequences, and the Challenges clearly.

"I don't think we are at the beginning of the recovery. I think we are at the end of a disastrous debt supercycle that has gone on for the last thirty or forty years, really. It started when Nixon defaulted on our obligations under Bretton Woods and closed the gold window. Incrementally, year after year since then, we have been going in a direction of extremely unsound money, of massive borrowing in both the private and the public sector. We now have an economy that is saturated with debt: $54 trillion or $53 trillion – 3.5 times the GDP – way off the charts from where it was for a hundred years prior to the beginning of this. The idea that somehow all of that debt is irrelevant, as the Keynesians would tell us, is fundamentally wrong – and the reason why the economy can't get up off the mat.

"We're doing all the wrong things. We're adding to the problem, not subtracting. We are not allowing the debt to be worked down and liquidated. We're not asking people to save more and consume less, which is what we really need to do. And so therefore I think policy is just making it worse, and any day now we will have another recurrence of the kind of economic crisis we had a few years ago."

"Austerity Is Not Discretionary," Interviewed by Alex Daley, Casey Research
David Stockman, Congressman and former Reagan Budget Director, 7/20/2012


Official data sources have powerful interests to protect and Truth is often sacrificed. Thus it is essential to rely on other entities and persons such as Shadowstats, Deepcaster, Stockman, and Roubini for Genuine Data and Honest Analyses. For Deepcaster's specific recommendations aimed at Profit and Protection despite Bogus Official data see Notes 2 and 3 below.

Necessary also, is having Courage to see the Truth, because the Truth is not always Pretty.

Finally, important to note is the fact that, absent manipulation, Gold and Silver would be the monetary "Canaries" of the Financial World, whose prices would warn of Excessive Monetary and Credit Creation. Well, in the past decade their price appreciation certainly has "warned" of that, but not in the past few months. Gold and Silver prices are subject of ongoing Price Suppression by a Fed-led Cartel as described in Note 1 below. But Gold and Silver Price Suppression, cannot last forever.


Best regards,

Deepcaster
July 26, 2012

Note 1: We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster's December, 2009, Special Alert containing a summary overview of Intervention entitled "Forecasts and December, 2009 Special Alert: Profiting From The Cartel's Dark Interventions - III" and Deepcaster's July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the 'Alerts Cache' and 'Latest Letter' Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster's profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these "Interventionals." Attention to The Interventionals facilitated Deepcaster's recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.

Note 2: We have described Crude Oil as the "Truth Teller" because it is an Essential Commodity that gets used up. Thus its Price is very difficult to manipulate over the mid to long term, and it therefore serves as a fairly reliable Real Inflation indicator.

So, it is very significant, that in spite of recent US$ strength, Crude Prices have begun to move up off of $80/bbl resistance and have been trading around $90. Indeed, anticipating this move UP we recommended a Long Energy Play in early June, which is up nicely since then.

Looking at the Real Inflation Numbers (e.g. 9.3% U.S. Inflation per shadowstats.com) allowed us to make this Call.

Considering the Real Inflation Numbers leads us to recommend another stock in our recent Alert with a Recent Yield of 10.7%. And it is selling at under $10.50/share. Our High Yield Portfolio is aimed at achieving a Total Return well in excess of Real Inflation.

Considering Inflation and other Real Numbers, plus Fundamentals, Technicals, and Interventionals leads us to conclude that certain other Key Sectors are about to begin Major Price Moves.

Our recent recommendations Position our Portfolios well for these Moves.

To consider them, read our Alert, "10.7% Yield Buy Reco; Mega-Moves Impending; Forecasts: Key Commodities incl Gold, Silver, Crude Oil; Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates," recently posted in the 'Alerts Cache' at deepcaster.com.

Note 3: Amid all the uncertainty in the Markets and Economy there are three "Fortress Asset" Sectors which will likely return profits regardless of Boom or Bust, Inflation or Deflation. To understand why we select just these three Sectors first consider

"The Bureau of Labor statistics reported the increase/decrease in non-farm payrolls and the unemployment rate for June 2012 on Friday, July 6th. Stocks plunged on the news. Why? The BLS reported that non-farm payrolls increased by 80,000 new jobs in June. Isn't that good? Well first of all, it is a false figure. The true figure is there was a net loss of 44,000 jobs in June. The BLS decided in their infinite wisdom that they think, they guess, they pretended that new businesses that started up in June created 126,000 new jobs. They have no idea what new businesses started, nor did they count new jobs in these phantom new businesses. This 126,000 phony figure was added to the loss of 44,000 jobs to fudge a positive number for the release of the June jobs report. This phony figure is called the CESBD adjustment, or the Birth/Death adjustment. Birth/Death refers to businesses, not people. The truth is the economy lost 44,000 jobs in June. This is abysmal. This is recession. This is an indictment of government fiscal policy, of Fed monetary policy, of tax policy and regulation of businesses. We need a true increase of 150,000 new jobs each month just to break even with population growth, and need millions more to put displaced workers back in a job.

"The truth is, the economy is falling off a cliff, housing transactions are essentially non-existent, jobs are declining, growth is shrinking."

"Current Weekend Report"
Robert McHugh, Main Line Investors, 7/7/12


There is a War going on between the forces of Inflation (e.g. Central Bank Money Printing) and the forces of Deflation (e.g. several contracting Economies around the world resulting in increasing Unemployment and a slowing Velocity of Money). That war is disguised by Bogus Official Numbers which conceal, for example, the USA's 9.3% Real Inflation rate and 22.8% Unemployment rate.

The Central banks will ultimately "Win" via QE-to-Infinity but that "Win" will be a Pyrrhic victory because it will bring Hyperinflation. But the Real Numbers are being Masked by the Bogus Official Ones.

Consider Adrian Douglas' point:

"There are frequent claims that the U.S. economy has entered a period of "deflation." These claims are totally unfounded and are false. Deflation can only be a persistent state of general price decline. In fact, in examining price trends, the U.S. is experiencing shocking price increases of over 15% per annum. To illustrate this, …the Continuous Commodities Index, CCI over the past ten years.

"Deflation – Nowhere to be Seen"
Adrian Douglas, Market Force Analysis, 7/7/12


Fortunately there are three "Fortress Profit Sectors" which should suffice to Protect and Profit. We identify these, including a Mini-Sector with Spectacular Profit Potential.

One other category can serve to Protect Against Inflation – To consider our High-Yield Stocks Portfolio with Recent Yields of 18.5%, 8.6%, 10.6%, 26%, 6.7%, 8%, 10.6%, 14.9%, 10% and 15.6% when added to the portfolio; go to www.deepcaster.com and click on 'High Yield Portfolio'.

For this and more, read Deepcaster's August Letter, "3 Fortress Profit Sectors & 1 Not; Forecasts: Key Commodities: Gold, Silver, Equities, Crude Oil, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates; August Letter", posted in 'Latest Letter', at deepcaster.com.

Gold and silver up following Draghi speech

Posted: 27 Jul 2012 09:09 AM PDT

from goldmoney.com:

There's been a decent pop higher in gold and silver prices over the last 48 hours, occasioned of course by talk of more easing from the Federal Reserve and European Central Bank. Mario Draghi's comments yesterday that the ECB was prepared to "do whatever it takes" to save the eurozone have raised expectations of another large-scale European money-printing venture, though whether Draghi is actually prepared to walk the walk on this score remains to be seen.

As remarked in our Monday article, holding the likes of Spain and Greece's feet to the fire by refusing to monetise debt is a way of forcing governments in these countries to make cuts. It may also be a beneficial crisis for the EU if it forces the kind of eurozone fiscal integration that many would have thought impossible just a few years ago.

Back in the USA meanwhile, the Fed's "QE3 timetable" is said to have been moved forwards, from September to August. You're probably sick of reading about endless speculation on this front, and perhaps disheartened that markets are now so heavily influenced by monetary central planners. One point worth making though is that the Fed may choose the nuclear option: an open-ended commitment to nominal-GDP targeting. QE to infinity in other words.

Keep on reading @ goldmoney.com

Silver Spikes Through $28, is Instantly Raided

Posted: 27 Jul 2012 09:07 AM PDT

from silverdoctors.com:

Gold and silver consolidated gains and worked higher overnight throughout the Asian and London sessions, and both made a mini spike higher in early COMEX trading but have subsequently been smacked down.

At 8am EST Silver made a .25 vertical move from $27.75 through $28 to $28.01, but was then instantly raided and smashed all the way back to $27.50.

To demonstrate how quickly the cartel leapt into action once silver cleared $28, the move to $28.01 does not even appear on today's 1 minute bid chart.

Wave 2 has subsequently taken silver back to $27.33. Clearly the cartel understands the significance of silver closing the week above $28.
Gold also was treated to a $10 smash on the COMEX open, falling from $1630 to $1620.

Keep on reading @ silverdoctors.com

Will US GDP Numbers Lead to QE3?

Posted: 27 Jul 2012 09:03 AM PDT

from goldcore.com:

Today's AM fix was USD 1,618.75, EUR 1,321.43, and GBP 1,031.51 per ounce.
Yesterday's AM fix was USD 1,603.00, EUR 1,321.74and GBP 1,034.26 per ounce.

Silver is trading at $27.79/oz, €22.65/oz and £17.74/oz. Platinum is trading at $1,420.70/oz, palladium at $571.75/oz and rhodium at $1,150/oz.

Gold rose $11.10 or 0.69% in New York yesterday and closed at $1,615.60/oz. Silver climbed to a high of $27.815 and ended with a gain of 0.55%.

Gold edged up Friday, near the 3 week high, on the promise of the ECB President Mario Draghi's words to do "whatever it takes" to prevent a collapse of the euro zone signalled more serious efforts to tackle the debt crisis. The weakened dollar increased gold's safe haven appeal.

Today US 2nd qtr GDP figures are released and many feel these numbers will be the catalyst for the US Fed to decide next week on QE3.

US GDP is expected to grow at 1.5% for Q2 according to a Reuters poll, which is the slowest pace since 2Q 2011.

Spot gold prices were headed for over a 2% gain this week, the biggest weekly rise since the last week of May.

Keep on reading @ goldcore.com

Ranking World Gold Mines & Deposits

Posted: 27 Jul 2012 08:46 AM PDT

We started with a list of 1,892 publicly traded companies that are in some way involved in gold production, exploration, or development of over 7,000 geologic anomalies. The goal was to find deposits hosting over 1 million troy ounces of in-situ resources.

Global QE Is Coming: Let the Gold Mania Begin!

Posted: 27 Jul 2012 07:36 AM PDT

Global QE Is Coming: Let the Gold Mania Begin!
Bill Rummel

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. (Note: debt tables that follow include only debt held by the public, excluding inter-governmental holdings.)
top ten debtors

01-top10.jpg
Source: Bloomberg

The table below breaks out the total outstanding debt for the world's top 10 debtor nations and looks at how much comes due by year.

02-debt-levels.jpg


Looking at the total amount of debt tells only a part of the picture because it doesn't tell you how soon the sovereign debt mountain will become a problem. For that we need to see how much of it is coming due and how quickly that debt will be rolling over. What precipitated the US housing crisis was when adjustable-rate mortgages reset at higher rates beginning in 2005 and into 2008 as homeowners couldn't afford the higher payments. What I believe will precipitate the global sovereign debt crisis is not necessarily the debt resetting at higher interest rates, but debt maturing with not enough buyers to soak up the supply. This brings about two consequences: either higher interest rates and thus higher debt servicing costs or there is another option, which is central banks stepping in and monetizing the debt. The latter option has been going on now since 2008 and I believe it will be kicked into overdrive between now and 2015.

I believe global central banks will be monetizing debt in massive quantities between now and 2015 because large portions of debt will be maturing in just the next two and a half years. For example, both the US and Japan will see one fifth of their entire debt outstanding mature just between now and the end of the year, with Canada seeing 26% of their total outstanding debt mature! The other members of the top 10 are only in a slightly better position with all but the UK to see double-digit debt rollovers of their total outstanding debt between now and 2015.

03-debt_0.jpg

The table below helps provide some idea of the magnitude of global sovereign debt maturing over the next few years by comparing the cumulative debt maturing relative to 2011 GDP. By the end of 2016, nearly 50% of the cumulative debt maturing for the top 10 debtor nations combined relative to their combined 2011 GDP will have to be rolled over.

04-cumulative-debt_0-1.jpg

Looking at the outstanding debt for the top 10 combined shows that just between now and the end of the year more than $5 trillion in debt will mature, or 17% of their total outstanding debt, and by 2015 nearly 50% of the top 10 debtor nations total outstanding debt will come due. That is more than $15 trillion in debt coming due in the next two and half years!

06-debt-summary.jpg


http://www.silverbearcafe.com/private/07.12/mania.html
Attached Images

Auditing The Fed is Like Auditing a Mafia Counterfeiting Operation

Posted: 27 Jul 2012 07:09 AM PDT

from dollarvigilante.com:

Ron Paul's Federal Reserve Transparency Act (H.R. 459), or "Audit the Fed," passed Wednesday July 25, 2012 in the U.S. House of Representatives by a wide margin of 327-98, exceeding the two-thirds majority needed. It had 274 cosponsors. But, by the evening of the same day, mainstream press around the country was already preparing the people for the bill's fate in the Democrat-controlled Senate. As the Chicago Tribune and others reported, it had little chance of passing in the Senate, let alone being signed into law by the President. In fact, Senate Majority Leader Harry Reid has already said that the Senate will not even consider the bill, because, as Ron Paul told CSPAN, he didn't have the "guts." With this in mind, as well as their own reputations, Romney, Boehner and Cantor backed it. Even Harry Reid backed it… in 1987 and 2010, but now he has changed his mind on a Fed audit for some reason.

But, here is the plain fact of the matter. We already know what the Federal Reserve is doing. Sure we may not know exactly which banks get exactly which graft, which may be of some interest. But for the most part we know exactly what they are doing. They are artificially price-fixing/manipulating interest rates at 0% through to 2014… which will be six years of ZIRP. And they are counterfeiting as much money as is necessary to support the massive trillion+ dollar deficits that the US Government has been doing for the last five years and with no end in sight in an unprecedented amount of money printing that has never been surpassed in Federal Reserve history.

Keep on reading @ dollarvigilante.com

The Location Of All Of The World's Gold [Inforgraphic]

Posted: 27 Jul 2012 07:00 AM PDT

Peter Schiff: Gold Just Broke Out and is Now Off to the Races

Posted: 27 Jul 2012 06:42 AM PDT

from caseyresearch.com:

It was deathly quiet in the precious metal markets up until 11:00 a.m. in London on Thursday. Then the dollar index did a major face plant…and the precious metals moved higher. But they didn't move very far.

Gold rose about twenty bucks or so during the next hour and a bit…and the high for the day [around $1,622 spot] was in about 12:45 p.m. BST…which was 7:45 a.m. Eastern time. Even though the dollar index continued to decline, the gold price moved either sideways or down for the rest of the trading session in both London and New York.

The New York low in gold [$1.608.00 spot] came about 12:10 p.m. Eastern time…and then recovered until the 1:30 p.m. close of Comex trading, before moving sideways for the duration of the electronic trading session.

Keep on reading @ caseyresearch.com
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