Gold World News Flash

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• Buy The SPDR Gold Trust – You Don’t Argue With Paulson and Soros
• 22 Stats That Show How The Emerging One World Economy Is Absolutely Killing American Workers
• Two Masterpiece Gold and Silver Medals
• Gold Stuck at 1600
• Gold’s performance reflects continued challenging economic climate
• Get Ready, Gold Bears To Be Crushed & Silver To Catch Fire
• Why are Gold, Silver Mining Share Prices Not Moving Higher?
• 41 Years After The Death Of The Gold Standard, A Look At “How We Ended Up In This Economic Purgatory”
• Silver Update 8/15/12 Sleeping Sentinels
• 41 Years After The Death Of The Gold Standard, A Look At "How We Ended Up In This Economic Purgatory"
• Why QE Is Not Working
• The Gold Price Up $4.30 and will Likely Close Above $1,605 maybe $1,610 Tomorrow
• They’re After Your Money!
• Are China's Gold Holdings More Than The 2800 Tons At The IMF?
• Guest Post: Former Central Bankers Step Up Against The Central Banks
• Why Goldman Sachs May Have Trouble Maintaining its Business Model
• Optimize Your Gold Portfolio with Ron Struthers' Tips
• They’re After Your Money!
• Gold and the Middle East crisis
• Do Hedge Funds Still Have Faith in GOLD?
• ZZZZZZZZZZZZZZZZZZ!
• $12,000 Gold, Paulson, Soros & A Coming Mania In The Shares
• Gold Seeker Closing Report: Gold and Silver End Slightly Higher
• Gold Daily and Silver Weekly Charts - Markets In Monetary Driven Stasis
• China Has Imported More Gold In Six Months Than Portugal's Entire Gold Reserve
• Paulson Adds Gold, Soros Adds Gold, GE, Wal-Mart and Facebook – Exits J.P. Morgan, Goldman stakes
• LGMR: Good Economic News "Bad for Gold", Paulson, Soros Add to Gold ETF Positions
• Doug Casey on Gun Control
• Morning Snapshot
• Richard Russell - Get Ready For Massive QE3 & Epic Inflation

Buy The SPDR Gold Trust – You Don’t Argue With Paulson and Soros Posted: 16 Aug 2012 12:33 AM PDT Despite the correction in gold prices since last summer, investors in gold ETFs have increased their stakes.  Worldwide holdings of gold ETFs are now at a record 2,417 metric tons according to Bloomberg News. The SPDR Gold Trust (GLD) is the largest gold ETF and has returned a lustrous annual return of 18.4% since the [...]

22 Stats That Show How The Emerging One World Economy Is Absolutely Killing American Workers Posted: 15 Aug 2012 11:30 PM PDT from The Economic Collapse Blog: For decades our politicians have promised us that the "free trade" agenda would bring us greater prosperity than ever before. They insisted that merging our economy into the emerging one world economy would cause millions upon millions of new jobs to be added to the U.S. economy. Unfortunately, it was all a giant lie. Trading with other countries is not a bad thing as long as the level of trade is fairly equal on both sides. When trade becomes very unequal, the consequences can be absolutely catastrophic. Since 1975, the United States has bought more than 8 trillion dollars more stuff from the rest of the world than they have bought from us. We are the only economy on earth that could have had 8 trillion dollars drained out of it and still be standing. Instead of leaving the country, those 8 trillion dollars could have gone to U.S. businesses and U.S. workers. If we could go back and have a "do over", how much more prosperous would we be today if we had kept that 8 trillion dollars inside the country? Read More @ TheEconomicCollpaseBlog.com

Two Masterpiece Gold and Silver Medals Posted: 15 Aug 2012 11:17 PM PDT Precious metal investors who have a deep appreciation for the artistry of gold and silver coins are likely to be blown away by the latest medals issued by the Royal British Mint. As reported by World Mint News Blog, the Royal Mint has issued two magnificent gold and silver medals that showcase the skill and [...]

Gold Stuck at 1600 Posted: 15 Aug 2012 11:12 PM PDT courtesy of DailyFX.com August 15, 2012 01:10 PM Daily Bars Prepared by Jamie Saettele, CMT A bearish triangle remains favored (headed lower from current level) but presentation of an alternate count is appropriate. The alternate would treat consolidation from 1640.80 as a B wave triangle. A break above 1640.80 would confirm that wave C is underway towards 1700 (Fibonacci extension is just below that level and the 2/10 low is just above 1700). LEVELS: 1555 1563 1584 1607 1616 1626...

Gold’s performance reflects continued challenging economic climate Posted: 15 Aug 2012 11:00 PM PDT

Get Ready, Gold Bears To Be Crushed & Silver To Catch Fire Posted: 15 Aug 2012 10:01 PM PDT Today acclaimed commodity trader Dan Norcini told KWN, "... we have a combination of bullish indicators that may very well signal that the gold bears are going to be crushed and overrun." Norcini also said, "We could very well see silver ignite." Here is what Norcini had to say: "We have a surge in crude oil and gasoline. At the wholesale level, gasoline has already surged more than 20% higher. WTI Crude oil is up near $95 a barrel, and Brent crude is significantly higher. Not only do we have energy on the move, but we also have grains on the move as well." This posting includes an audio/video/photo media file: Download Now

Why are Gold, Silver Mining Share Prices Not Moving Higher? Posted: 15 Aug 2012 09:30 PM PDT by Julian D. W. Phillips, Gold Seek: This is perhaps one of the most asked questions among gold investors today. But the answer is not a simple one. It goes to the basics of which people invest in gold in the first place and what form of gold they buy. In this, the first of a two part article, we delve deeper into this subject. Who Buys Gold? It's so easy to become short-sighted in the different facets of the gold market. In the U.S., it's easy to believe that gold price rises seen since 2005 are due to either the economic outlook of the U.S. or the strength and weakness of the USD. There's no doubt that in the short-term, gold price movements are driven by traders focused on the exchange rate between the dollar and the euro. But what gold are they buying? The sophisticated trading operations and tools available in the developed world are able to discount such moves quickly and dramatically, seemingly providing such gold and silver price dominance. Looked at on a day-to-day basis, the evidence of such dominance is overwhelming. The volumes of gold bought and sold daily are enormous. But are they buying the sort of gold that moves the gold price? Read More @ GoldSeek.com

41 Years After The Death Of The Gold Standard, A Look At “How We Ended Up In This Economic Purgatory” Posted: 15 Aug 2012 09:07 PM PDT from Zero Hedge: As we await the latest developments out of the Eurozone and Washington, JPMorgan's Kenneth Landon takes a moment to look back on this very important day in history. If you want to understand current events, then you first have to understand history. How did we get here? More specifically for financial markets, how did we end up in this mess — this economic purgatory? This being August 15, 2012, students of the history of monetary economics no doubt are aware that this is the 41th Anniversary of the breakdown of Bretton Woods. It was on this day 41 years ago that President Nixon defaulted on the promise to exchange gold for paper dollars presented for exchange by foreign central banks. The crisis in confidence that we observe today resulted from cumulative effects of those measures. Read More @ Zero Hedge

Silver Update 8/15/12 Sleeping Sentinels Posted: 15 Aug 2012 09:03 PM PDT from BrotherJohnf:

41 Years After The Death Of The Gold Standard, A Look At "How We Ended Up In This Economic Purgatory" Posted: 15 Aug 2012 06:53 PM PDT Via Kenneth Landon, JPMorgan... Yes, JPMorgan Landon Lowdown: "Brother, Can You Spare $1.37"? As we await the latest developments out of the Eurozone and Washington, I take a moment to look back on this very important day in history. If you want to understand current events, then you first have to understand history. How did we get here? More specifically for financial markets, how did we end up in this mess -- this economic purgatory? The answer boils down to a simple proposition on the philosophical level, which I will leave to the reader to identify because my doing so would likely ruffle a few too many feathers. So I will keep the discussion on the concrete-bound level. However, I am willing to say that the political philosophy that drove us to the current state of affairs was responsible for the respective concrete measures implemented over the years. The crisis in confidence that we observe today resulted from cumulative effects of those measures.  This being August 15, 2012, students of the history of monetary economics no doubt are aware that this is the 41th Anniversary of the breakdown of Bretton Woods. It was on this day 41 years ago that President Nixon defaulted on the promise to exchange gold for paper dollars presented for exchange by foreign central banks. Aug 15th marks the anniversary of the collapse of Bretton Woods and the gold-exchange standard that was established after WW II. (Notice that dollar debasement has been bipartisan over the years: Republicans Nixon and Bush and Democrats Carter and Obama have all presided over major declines in the value of U.S. money.) The current crisis in the global monetary system pales in magnitude to the sundering of gold from central banks' fiat paper currencies in 1971. That is, we are not witnessing the wholesale dismantling of an entire monetary system. What we are witnessing is a loss of confidence in the current monetary system, which, of course, is equivalent to a loss of confidence in central banks' ability to restore stability. However, the decision to renege on the gold-exchange standard that was made 41 years ago is still reverberating today. In *fact*, many or most of the problems observed today are the direct result of wrong-headed discretionary monetary policies. What was it that made the current morass inevitable once the paper dollar was severed from gold?  The answer is simple: fiat paper money that is not grounded in any objective standard can be manipulated at the whim of the issuer. Without the requirement to exchange fiat money for gold or some other commodity, the central bank can issue unlimited amounts, thus making its value subject to extreme volatility and, as we have seen, perpetual debasement. Chart 1 (above) shows the extent of debasement of the value of U.S. money since 1913 when the Fed was established. To summarize in simple terms, a child with 4 cents in his pocket could buy the same amount of candy in 1913 as his descendant could with $1 in 2012. Today, it takes a quarter to buy what a penny did in 1913. The dollar has lost 96% of its purchasing power since 1913! (using CPI statistics) Once the dollar lost all linkage to gold, its value plummeted at an accelerated rate. Since 1971 when Bretton Woods was intentionally dismantled, the dollar has lost 82% of its purchasing power. 82%! Because Nixon sabotaged the last vestige of honest money, a child in 2012 would need $1 to buy the same amount of candy purchased by children for just 18 cents in 1971. Monetary debasement has rendered obsolete the expression "brother, can you spare a dime?", which was the title of a 1930's Depression-era song that became a common refrain of panhandlers in those days. In 2012, the equivalent would be "brother, can you spare $1.37?"  An honestly governed gold standard eliminates "discretionary" monetary policy by centralized authorities (i.e., central banks). Gold is an honest check on the amount of leverage that can build in the financial system and it limits the amount of money the government can borrow. A government that does not have a captive central bank and fiat paper currency cannot borrow massive amounts of money (think Greece). Fiat paper money managed by complicit central banks remove any discipline of free-spending politicians. Thus, central banking and huge deficit spending go hand in hand. Let's turn to a former Chairman of the Fed to give some added explanation: "Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.   They have created paper reserves in the form of government bonds which -- through a complex series of steps -- the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of society lose value in terms of goods.   In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold [in 1933]. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.   This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."   Alan Greenspan, 1966 When Greenspan later rose to a position of prominent political power when named Chairman of the Fed, he disavowed his essay about gold. However, that disavowal does not detract from the truth of his written word. His words stand on their own. (What changed since 1966 was Mr. Greenspan and not the truth.) We are currently witnessing in both Europe and the U.S. a crisis relating to the financing of the modern-day Social Welfare State that goes to the core of the generally-accepted political philosophy upon which they rest. The resolution of the problem is therefore not as simple as coming up with a new policy that is a derivation of previous ones (e.g., using debt to solve debt). The real resolution will come only after a major shift in political power, if seen at all, that results in a significant reduction in spending of the respective governments. Otherwise, it will be more of the same: a continued decline in living standards and individual liberty in countries experiencing this rot. Profligate central banks are a symptom and enabler of the political rot. They are not the cause.   The chart 2 (above) shows the gold content of one U.S. dollar. Today, one dollar buys a pitiful 0.0006 ounce of gold, which compares to about 0.05 ounce a hundred years ago just before the Fed existed. The deprivations that Mr. Greenspan wrote about are illustrated in the sharp decline in the gold content of the dollar.   For point of historical reference, Chart 3 (above) shows the silver content of the Roman Danarius between 64A.D. and 270A.D. You can draw your own conclusions. "Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice."   George Washington, in letter to J. Bowen, Rhode Island, Jan. 9, 1787 Sadly, few people understand the process by which paper money leads to "fraud and injustice" as President Washington accurately warned in 1787. If they did, then perhaps days like Aug 15, 1971 would never have happened. To end with one last quote, this time from a Socialist who knew the importance of gold:   "You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold."   George Bernard Shaw Shaw wanted to end the Capitalist system and knew, like Greenspan, that gold stood in the way of a Socialist government from achieving its objectives. August 15, 1971: A day that will live in infamy.   h/t Wallstreetmane

Why QE Is Not Working Posted: 15 Aug 2012 06:12 PM PDT Up until now we were a lone voice in the wilderness, with our "dry-humored" Transatlantic colleagues, working for a newspaper funded with Goldman Sachs advertisements, periodically mocking our "misunderstanding" of credit and money creation. We are now delighted that none other than one of the foremost opinions on all topics "shadow" stood up this week, and admitted that indeed, it is Zero Hedge whose view on money creation is the correct one. Behold several absolutely critical observations by Citi's Matt King. The same Matt King who a week before the collapse of Lehman wrote "Are The Brokers Broken" and explained to all those who had heretofore been reading and basing their understanding of finance on the above-mentioned Transatlantic newspaper, why everything they know about the modern financial system is wrong. Lehman filed for bankruptcy 12 days later. Since early 2010 Zero Hedge has said that for the Fed's QE efforts to be successful in stimulating the economy, and rekindling inflation, it has to focus on not only stimulating traditional bank liabilities but far more importantly offsetting the collapse in shadow bank liabilities. As we observed in July, when the latest Z.1. update was made available, there is still a nearly $4 trillion hole that has to be be plugged on a condolidated basis from the all time "credit money" high of $33 trillion in 2008. Until such time as the Fed's largesse pumps enough to fill this void, the US economy will be mired in deflation. To wit: "What is worse is that even when accounting for offsetting traditional bank liabilities, on a consolidated basis, the US total financial sector is still an epic $3.8 trillion below its all time highs, just above $33 trillion. Unless and until this $3.8 trillion hole is plugged, one thing is certain: risk is not going anywhere (also notable is that consolidated liabilities in Q1 declined by $86.2 billion at a time when the Fed was engaged in Twist but that is for Ben Bernanke to worry about, not us)." In fact, the misconception is so bad, that even the Fed's own John Williams recently confirmed the Fed itself has no idea how money creation in the New Normal, where the bulk of "credit money" exists in shadow aggregates, actually works. We explained this in "Fed's John Williams Opens Mouth, Proves He Has No Clue About Modern Money Creation"   The Problem (How Large Will The Losses Be - and can the reaction be contained?):   The Impact (Fear of losses mean private sector is running for the exits...):   ...and TARGET2 (official sector) is forced to pick up the slack...   The Band-Aid Fix (print money into traditional banking system):   Is NOT Working (global equities range-bound on policy action, economies remain in slump, and money multipliers are broken):   Because (they are simply impacting the wrong system):   and more and more - funding depends on collateral...   and there is only one 'funder' - the collateral-taker-of-last-resort (as unsafe assets can only be funded at Central Banks)...   Credit Growth will remain 'stalled' until 'risky' is made safe - by on-boarding 'risk' to infinitely expanded CB balance sheets (credit-easing) with its consequent total and utter break-down of every asset class reality (and bank encumbrance); or a cataclysmic price mark-down and 'creative destruction' allowing the savers to scoop up the assets at 'reasonable' levels.   Charts: Citi

The Gold Price Up $4.30 and will Likely Close Above $1,605 maybe $1,610 Tomorrow Posted: 15 Aug 2012 05:08 PM PDT Gold Price Close Today : 1603.70 Change : 4.30 or 0.27% Silver Price Close Today : 27.805 Change : 0.049 or 0.18% Gold Silver Ratio Today : 57.677 Change : 0.053 or 0.09% Silver Gold Ratio Today : 0.01734 Change : -0.000016 or -0.09% Platinum Price Close Today : 1397.60 Change : -2.70 or -0.19% Palladium Price Close Today : 577.70 Change : -0.30 or -0.05% S&P 500 : 1,405.53 Change : 1.60 or 0.11% Dow In GOLD$ : $169.70 Change : $ (0.53) or -0.31% Dow in GOLD oz : 8.209 Change : -0.026 or -0.31% Dow in SILVER oz : 473.47 Change : -1.10 or -0.23% Dow Industrial : 13,164.78 Change : -7.38 or -0.06% US Dollar Index : 82.56 Change : -0.091 or -0.11% When y'all saw the silver and GOLD PRICE slipping on Monday and Tuesday, y'all ought to have reckoned that it was a mere correction from the Friday high. Sorry, friends, I sent y'all no commentary the last two days, but I had to make a trip and forgot to warn y'all on Friday. The SILVER PRICE and GOLD PRICE haven't been anything to brag on the last two days, but pulled out of the slump today. Last Friday GOLD was tapping away at $1,625, but yesterday dropped below $1,600 and today tested that $1,590 support with a $1,591.40 low. That didn't last long. Gold puts its toes down and bounced along that bottom from 4:00 a.m. to 8:00 a.m. When Comex opened the doors the crowd rushed in with money and a will, like women headed to an After-Christmas Sale. Whoops, gold ran out of gas at $1,609 resistance, and closed at $1,603.70, up $4.30. Don't y'all whine and complain about that, because gold's chart looks a bit like a key reversal, or at least a double bottom the last two days. What has it achieved? It has now twice successfully defended this $1,590-ish support. It's uptrend remaineth intact. The MACD momentum indicator looks lazy, but remember this is August, and nothing much happens for metals in August. The GOLD PRICE will likely creep through $1,605 tomorrow, maybe close above $1,610. The SILVER PRICE chart differeth from gold's only in the numbers on the index. Last three day's low struck today at 2748.8, but silver lingered not there. Ran straight for 28, but was driven back. Comex closed at 2780.5c, up 4.9 cents. Look for a couple of days sideway movement then a push through 2800c. Yet nothing significant will happen until silver breaks it's bounds at 2850c. The Scrofulous US dollar (index) rose 14 basis points today to 82.663. This continues the silly sidewise move, saying nothing but that the Nice Government Men keeping it down to prevent panic from erupting in the euro. Euro is green and sick as a ten-year old smoking cheap cigars. Spite of everything the central bank oxygen-wasters can do, euro keeps on nervously gapping down. They managed -- barely -- to close it above the 20 DMA ($1.2271) today at $1.2291, but still down 0.24%. 'Taint nothing going for the euro but wishful thinking. Oh, what pain will surge through the world if it breaks $1.1800! Yen finally gapped down yesterday, away from that overhead resistance and nearly at the 50 DMA (126.53). Closed at 126.62 cents (Y78.98). Roll-over toward the earth's core is gaining speed. Stocks spent another bewildered day, some indices rising, some falling, but no big moves in either direction. Dow looks like somebody's EKG, jerking up and down. Dow ended down 7.66 (0.06%) at 13,164.78 while the SYP500 gained 1.6 (0.11%) to 1,405.53. Face it, stock fans: stocks have stalled. We may have seen the extent of this rally. All it's doing is building a rising wedge, which will most likely break out gravity-ward. 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.

They’re After Your Money! Posted: 15 Aug 2012 04:34 PM PDT August 15, 2012 [LIST] [*]Sweetheart deal for breaking Iranian sanctions... more bad news for MF Global customers: New case studies in how the financial services industry plays by different rules [*]The harsh reality about where you stand in the pecking order with banks, insurers and brokerages... and your chance to even the score [*]Soros and Paulson load up on gold: How Paulson's move could signal a new epic run-up in the Midas metal [*]An emerging market you might want to avoid... Irate readers rise to Paul Ryan's defense... the most-important issue of the election (in 1932)... and more! [/LIST] "The financial services industry," writes Tim Maurer, "is not in the do-good-ing business so much as it is in the profit business." Mr. Maurer does not ordinarily traffic in self-evident propositions. He is a financial planner here in Baltimore; he also teaches financial planning at nearby Towson University. Addison had a memorable experience addres...

Are China's Gold Holdings More Than The 2800 Tons At The IMF? Posted: 15 Aug 2012 03:36 PM PDT Granted the IMF's gold is on loan and likely double counted, but zerohedge speculates that China gold reserves could be more than the IMF's 2814 tons. See link here.

Guest Post: Former Central Bankers Step Up Against The Central Banks Posted: 15 Aug 2012 03:17 PM PDT Submitted by George Dorgan of SNBCHF blog, There are already three former European central bankers who criticize more or less openly the European Central Bank (ECB).   Axel Weber, former president of the Bundesbank Axel Weber quit the Bundesbank in February 2011 when he realized that his tough monetary stance would not allow him to become president of the ECB. Later he took a new job at UBS, where he is supposed not to utter too much critics against the establishment. Juergen Stark, former chief economist of the ECB Juergen Stark left the ECB in September 2011 in protest against the ECB monetizing of debt.  The current role of Juergen Stark is different. He decided to make his opposition against the ECB public. Juergen Stark spoke with the Manager Magazin last month. "I see the need for consolidation in the euro area. Weaker states would have to leave the monetary union. What matters is that the Franco-German axis hold. The integration of the core must not be lost. Otherwise we get a political and economic disaster of historic proportions." In March he criticized the ECB and accused her of provoking inflation.  "Both the policy and the central banks have succumbed to the temptation to treat all problems of the world flooding the markets with liquidity. It is historically proven that "any particularly strong expansion of the central bank balance sheet leads to inflation in the medium term". At the end of July he called Draghi's plan to save the euro at any cost  "a violation of European law". He said furthermore:  "It is not the task of a central bank – at least not a modern central bank, as we understand it in Europe – to finance governmental functions or to give money directly to states."   Otmar Issing, former chief economist of the ECB Another European central banker has voiced his opposition even more strongly. Otmar Issing worked for eight years in the Bundesbank and changed 1998 into the board of the ECB and remained there till 2006. He is called one of the "fathers of the euro". In 1998 he called the the euro "a very courageous experiment."  Now he realizes that this experiment might fail soon.  He will publish soon a book with title "How to save the euro and enforce Europe". Some of his opinions are: "More and more bailouts, and everybody says, the dose should be increased further. This is wrong. The political union of Europe as a solution to the problem? Do you really think anyone wants more integration of Germany into Europe, if it means that Germans must pay even more to other countries?" He claims that Spain and Italy had many years of cheap money before the financial crisis, but did not use this period effectively. "Spain and Italy need to solve their problems themselves, as they caused them. During the years of monetary union Italy had  always slow growth – an expression of bad policies. The global financial crisis has only accentuated the issues. Italy has so far done nothing to reform the labor market. The only exception are the Portuguese, they reform their country, they stick to agreements. What should the Portuguese think if other states constantly obtain exemptions from ? "The euro will survive, but not with all members", he adds. More details on Otmar Issing's new book can be found here.   Kurt Schiltknecht, former chief economist of the SNB   The next former central banker who is criticizing the central banks, is the chief economist of the Swiss Nationalbank (SNB) in the 1970s. In 1978 the SNB stipulated a cap for the franc, at that time against the German mark and was successful.  Schiltknecht was member of the socialist party (SP), what made his election into the rather conservative Swiss National Bank more difficult. Interestingly he is now the main advisor for monetary policy to the right-win politician Christoph Blocher of the Swiss People's Party (SVP). Both Schiltknecht and Blocher were opposed to the early SNB interventions in 2010, but were in favor of a EUR/CHF floor in Summer 2011, more details on Blocher's homepage. Here a selection of Schiltknecht's critical voices against today's SNB leaders: [Capital controls in the 1970s:] we tried, with negative interest rates, with investment bans and such things, to influence the movement of capital. But these measures have never worked at all. (Source, more details here) Pegging the Swiss franc against the euro is far more dangerous than pegging it against the stable German mark, as the SNB did in the 1970s.  (Source) In June 2010, when the SNB intervened at EUR/CHF 1.40, he said:  "It has been well established that these interventions have ultimately brought nothing huge. The market has not received a clear signal, the SNB has intervened too soon and has pumped too much money in the market. They have probably noticed that we are moving towards inflation."  (Source) In August 2011, when the franc was trading near parity to the euro, he opted for the first time for interventions: In difficult times, you have to give the market a clear signal, where the exchange rate should be. The SNB should not target a single exchange rate, but a basket of currencies. (Source) The SNB did not listen to his statement, when she set the floor. If she had used a basket as reference, then the strong fall of the franc against the dollar since September 2011 would be less accentuated. The USD/CHF exchange rate would be lower, the franc less cheap for Americans and other parts of the world. Schiltknecht confirmed his August 2011 proposal of a currency basket in April 2012: Faced with declining confidence in the economic policy of the euro countries it could be advantageous to define an exchange rate target for a currency basket. In this basket could be included also countries, whose economic policies are more stable than the ones in Europe and in the USA. This could help to minimize the risk that an unpredictable and uncontrolled development in the euro area would have a devastating impact on Swiss monetary policy. Pegging the franc to a currency basket would be more useful than removing the peg completely.  In current uncertain times the SNB must  do everything so that the Swiss franc is not dragged down into the vortex of weak currencies.   Georg Rich, former chief economist of the SNB Schiltknecht was not the only central banker to disapprove the SNB interventions in June 2010. Georg Rich was until the end of 2001 Chief Economist of the SNB. In 2010 he asserted: "Until spring [2010] I totally agreed with the National Bank policy. In May, however, it was scary to me, as the SNB bought up such an extensive euro sums. " (source)   The SNB intervened in May 2010 for 77 billion francs, but in 2012 she had to increase currency reserves by 59 in both May and June and by 41 billion francs in July.   Ernst Baltensberger,  Thomas Jordan's academic supervisor Also in summer 2010 Professor Ernst Baltensberger, Thomas Jordan's academic supervisor said: "To fight against the market has no prospect of success. Using quantitative easing in a recession makes sense, it is a method used even in prior crisis. But now we do not see a crisis, the SNB should reduce liquidity…  (source)   Summary All these older central bankers experienced the inflationary periods in the 1970s in detail, whereas the younger ones seem not to grasp what inflation means. Modern central bankers seem to think that monetary inflation will not lead to price inflation in the long-term. This might be true in countries where asset prices need to de-leverage after the bust of real-estate bubbles. But it is certainly not true in states like Germany, Finland or Switzerland, that did not have a real-estate bubble till 2008. With current low employment and the aging population, qualified personnel who speaks the local language  will get rare. PIMCO's Bill Gross might be right saying that soon employees want to get a part of the cake and not only the stock holders. This essentially implies wage inflation, the enemy of the 1970s.

Why Goldman Sachs May Have Trouble Maintaining its Business Model Posted: 15 Aug 2012 03:05 PM PDT Don't judge each day by the harvest you reap, but by the seeds that you plant. — Robert Louis Stevenson —————————————————- "There's nothing to see here, folks… Move along… Move along… Nuthin' to see here… Just another little pile-up of victimless financial crimes." That's what the beat cops on Wall Street barked repeatedly last week just after the Justice Department and the SEC dropped their separate criminal investigations of Goldman Sachs. Last Thursday, the Justice Department announced that it would not pursue criminal charges against Goldman Sachs or its employees over its "big short" on the housing market several years ago. Nevertheless, as Bloomberg's Jonathan Weil observes, "the details of Goldman's appalling behavior and role in the financial crisis will live on forever in the public record. The department's investigation began last year after Senators Carl Levin of Michigan and Tom Coburn of Oklahoma, a Democrat and a Republican, released the findings of a two-year inquiry by the Senate Permanent Subcommittee on Investigations into Goldman's sales and trading practices. "At a press conference last year," Weil continues, "Levin said he wanted prosecutors to examine whether Goldman violated the law by putting customers into disastrous mortgage bonds that it was shorting — without telling the customers about its short positions. Levin also said prosecutors should review whether Goldman officials who testified before the panel committed perjury, including Goldman's chief executive, Lloyd Blankfein." The Justice Department took the bit in its mouth for a while, but spit it out last week, having "determined that, based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report." Gosh that's lucky! But here's double-lucky: On the very same day that Justice dropped its case, Goldman announced that the SEC had decided to drop its case also. "The SEC extracted a $550 million settlement from Goldman in 2010 over a deal called Abacus," Weil explains "which had a prominent role in the Levin-Coburn report. It may have been perfectly legal for Goldman to sell doomed investment schemes of the bank's own invention to Goldman customers, while its employees denigrated the same deals in e-mails to colleagues as 'crap' and other bad words we can't use on a family website. The conduct was exposed, and Goldman's slogan of putting customers first was debunked." Interestingly, Levin was not content to quietly accept the non-actions of the Justice Department and SEC. He responded in a statement: Our investigation of the origins of the financial crisis revealed wrongdoing and failures among mortgage lenders, banking regulators, credit rating agencies and investment banks. One of those investment banks, Goldman Sachs, created complex securities that included 'junk' from its own inventory that it wanted to get rid of. It misled investors by claiming its interests in those securities were 'aligned' with theirs while at the same time it was betting heavily against those same securities, and therefore against its own clients, to its own substantial profit. Its actions did immense harm to its clients, and helped create the financial crisis that nearly plunged us into a second Great Depression. Wow!…It's getting harder to hang a felony charge on a past or present Goldman exec than it is to hang panties on a porn star. The darn things just keep sliding off. "Whether the decision by the Department of Justice is the product of weak laws or weak enforcement," Weil concludes, "Goldman Sachs' actions were deceptive and immoral." Remember, the Justice Department is one of the same government agencies that can't bring itself to pose a single embarrassing question to John Corzine, former CEO of Goldman Sachs, former New Jersey Senator, former CEO of the fraudulently destroyed M.F. Global and perennial scumbag. In particular, the Justice Department can't bring itself to ask Corzine what happened to the $1.6 billion of customer funds that he (allegedly) "disappeared" while overseeing M.F. Global. How embarrassing these charades of justice must be for President Obama! Here you've got Goldman Sachs, the largest contributor to President Obama's 2008 election campaign — as well as the largest contributor the Democratic Party itself in 2008 — slipping charge after charge from federal agencies. Coincidences like that might give folks the wrong idea…like the idea that American Justice sometimes peeks through her blindfold. Better for outward appearances if the Justice Department had impounded Goldman CEO, Lloyd Blankfein's car for parking at an expired meter and then dropped its investigation…and better for appearances if the SEC had fined Goldman $100,000 for omitting a comma in a regulatory filing and then dropped its case. But that's not what happened. Such a shame. Folks can be so judgmental. [For the record, Goldman Sachs has become a major supporter of the Republican Party. Based on campaign contributions-to-date, Goldman employees have tossed nearly $5 million to Republican campaign efforts — that's tops among contributors from private companies. Perhaps Goldman senses a change in the wind and wishes to sail with it, rather than into it]. Poetically, even though the Justice Department and the SEC can't find any wrists to slap at Goldman Sachs, the financial markets are finding plenty. Goldman's trading revenues are falling even faster than its reputation, especially proprietary trading revenues — the high-octane fuel that has long-powered Goldman's profitability. Goldman's prop trading profit plummeted 80% in the second quarter of 2012, continuing a multi-quarter trend of mostly dismal trading results. Since trading profits often account for one- to two-thirds of Goldman's overall profit, the company would miss them if they took a sabbatical. What's that saying? You can fool some of the people some of the time [and you might even be able to fool some of the people all of the time], but you certainly can't fool all of the people all the time. Just maybe, Team Goldman is struggling to find enough folks to fool — "Muppets," I believe, is Goldman's technical term for these individuals — to keep their "business model" thriving. The same could be said of the Federal Reserve's monetary policy, relying as it does on the gullibility of the Muppetinvestoriat. The Fed's policies succeed only to the extent that the masses trust them. But if the Fed loses the faith of the masses, it loses everything…including its power over the currency it purports to "control." Faith in the Fed — and in central banking generally — may not yet have slipped into a genuine bear market, but as Jim Grant often asserts, the bull market has ended. If Grant is correct, therefore, we Muppets may want to begin pledging our allegiances to assets that Goldman Sachs cannot manipulate and that the Federal Reserve does not "control." The list of such assets is very short…and most of them glisten in direct sunlight. Eric Fry for The Daily Reckoning Why Goldman Sachs May Have Trouble Maintaining its Business Model originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas. Recently Agora Financial released a video titled "What Causes Gas Price to Increase?".

Optimize Your Gold Portfolio with Ron Struthers' Tips Posted: 15 Aug 2012 03:04 PM PDT The Gold Report: Last November, you talked about indicators you use to make investment decisions, mentioning the S&P 500, the PHLX Gold/Silver Sector Index (XAU:NASDAQ), the AMEX Gold BUGS Index (HUI:NYSE) and the TSX Venture Exchange. You recently predicted junior explorer stocks would stay low over the summer before recovering, along with the commodity price. What indicators are behind that, and do you foresee a dramatic rise or a gradual slope? Ron Struthers: We have seen a downward correction in the market space, a deflation scare because of Europe, and that has been the theme for some time—a battle between deflation and inflation—while central banks print money to make up for a contraction in money because of imploding debt and slowing economies. But everything has corrected substantially; the senior gold stocks bottomed in May, and since then, gold has gone sideways. Gold stocks and the S&P 500 have rallied, but we've only seen part of a potential summer rise so far. Now the S&P...

They’re After Your Money! Posted: 15 Aug 2012 02:54 PM PDT August 15, 2012 Sweetheart deal for breaking Iranian sanctions… more bad news for MF Global customers: New case studies in how the financial services industry plays by different rules The harsh reality about where you stand in the pecking order with banks, insurers and brokerages… and your chance to even the score Soros and Paulson load up on gold: How Paulson's move could signal a new epic run-up in the Midas metal An emerging market you might want to avoid… Irate readers rise to Paul Ryan's defense… the most-important issue of the election (in 1932)… and more!   "The financial services industry," writes Tim Maurer, "is not in the do-good-ing business so much as it is in the profit business." Mr. Maurer does not ordinarily traffic in self-evident propositions. He is a financial planner here in Baltimore; he also teaches financial planning at nearby Towson University. Addison had a memorable experience addressing some of his students a while back. "Let me be clear," he writes in a blogpost at Forbes. "There is NOTHING at all wrong, evil, immoral or unethical about profit, nor in profiting from doing good. It need not be one-or-the-other. "What I do take issue with, however, is an industry hellbent on convincing us that its primary motive is something verging on altruism when the primacy of profit in its eyes is so blatantly apparent." Case in point: "The appalling number of mutual funds that 'don't beat the index.' Most notorious is the large-cap growth discipline, 79% of which did NOT beat their respective benchmark — the S&P 500 — last year… "This and scores of other stories beg the question, then, who is benefiting primarily and most from the core activities of the financial industry? Well, the financial industry itself! "When forced to answer that question under oath, the industry has no choice but to tell us as much." To wit, the congressional testimony of Goldman's CFO more than two years ago… As we noted last Friday, the Justice Department finds nothing wrong with this. Apart from Mr. Maurer's examples, we have two more from the last 48 hours.   Standard Chartered — a big British bank — has settled a money-laundering case brought by the State of New York: With a payment of $340 million, the case goes away. The story first broke a few days ago when the state accused Standard Chartered of hiding transactions in Iran. The bank's license to operate in New York was in jeopardy. The evidence was damning, including an email from a London-based director that said, "You f—ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians?" An understandable sentiment, actually. The problem is that if you or I were to "deal with Iranians" — or Cubans, or other folks who have the misfortune of living under a government despised by America's political masters — we would do hard time. In contrast, banks pay a fine that amounts to a "cost of doing business" line item on the budget.  Then there's a court ruling that bodes ill for the MF Global customers hoping for the return of their "missing" $1.6 billion… even as ex-CEO Jon Corzine continues to walk free. Last week, a federal appeals court issued a ruling in an earlier case of a brokerage going bust — Sentinel Management Group, which failed in 2007. The court allowed Bank of New York Mellon to cut in line in front of Sentinel customers when it comes to who recovers lost funds. The bank had a "secured position" on a $321 million loan it gave to Sentinel. But it turned out the loan had been secured with customers' money. Somehow the court found that fact to be irrelevant. The ruling "could make it more difficult for customers to recoup money lost in the much-larger collapse of MF Global," says a Reuters dispatch. Yeah, just a little bit…   "It's important for us to recognize," says Mr. Maurer, "that each of 'The Big Three' —banks, brokerage firms and insurance companies — are in business primarily for the entity (and its shareholders) and secondarily for their representatives. You, as a client, are at best a tertiary concern… "It is important, because if you recognize the inherent conflicts of interest in the industry for what they are, you'll be better served by it — the industry. After all, it's not going anywhere, and yes, we need it… "When you realize your financial adviser is charging you 1.5% to baby-sit a static portfolio with training wheels, you need not feel gipped… You can calmly recognize this is simply how the industry is structured and incentivized… and tell them you'll be taking your business elsewhere, with a well-informed smile." Perhaps you've taken this step already. You might well be reading The 5 because you fired your adviser and sought out the sort of fiercely independent guidance that's the stock in trade of our many paid publications. This week, we'd like to extend our thanks. Our "loyalty rewards" program is open. Through this program, you receive a generous credit toward access to publications in addition to the ones you already subscribe to. At minimum, your "loyalty reward" is worth $1,044. Depending on your current subscriptions, it could be much more. "The recommendations and research insights have been good and useful," says a satisfied customer. "The wide spread over different industries and businesses gives my portfolio good risk reduction." Let publisher Joe Schriefer explains exactly how the "loyalty program" works right here. There's no lengthy presentation to watch — only a straightforward description of what's in it for you.   Another day, another directionless stock market. The major indexes have barely budged. The VIX has eased a bit after yesterday's spike to 14.6. Like yesterday, traders are chewing on a set of government numbers that furnish zero clarity on the prospects of more EZ credit from the Federal Reserve… Consumer prices: Ruler-flat between June and July. The year-over-year change remains at 1.4%. The "core" rate — for people who don't consume food or energy — is actually higher, at 2.1% New York State manufacturing: In contraction, according to the Fed's Empire State Survey. It's the first outright negative reading since last October. Industrial production: Up 0.6% from June to July, the increase spurred by auto output and high utility consumption during a record heat wave The National Association of Home Builders' confidence index sits at its highest level since early 2007. Oy… Only four weeks and one day until the next Fed announcement. Unless Ben Bernanke drops a hint at his annual Jackson Hole speech, as he did two years ago. That's coming up at the end of this month.   After dipping as low as $1,590 in overnight trading, the spot price of gold is back to $1,603. Silver sits at $27.87.   George Soros and John Paulson both loaded up on gold during the second quarter. New 13-F filings with the SEC reveal Soros doubled his exposure to the SPDR Gold Trust (GLD). He now holds 884,400 shares. Soros has been tiptoeing back in after unloading nearly all of his 4.67 million shares in the first quarter of last year — when gold was still under $1,400! Paulson, meanwhile, upped his GLD stake by 26%, to 21.8 million shares. His $21 billion hedge fund now has 44% exposure to GLD and gold stocks, up from 33% in the previous quarter. "The last time his stock portfolio had a bigger concentration in gold-related equities than last quarter was March 2009, when U.S. equities hit bottom," Bloomberg reports. "Paulson is buying like March 2009, eh?" muses Daily Resource Hunter's Matt Insley. "That sounds familiar. That's the last time that gold was a screaming buy." Skeptical of that claim? Matt presents a compelling chart for your perusal.   So much for the return of multinational corporations to Nepal. Foreign investment dried up in the Himalayan nation when Maoists waged a bloody civil war against a monarchy from 1996-2006. Frequently, they targeted the presence of companies like Coke, Pepsi and Unilever. After a peace deal and transition to a secular state, KFC and Pizza Hut ventured in to the country in 2009 — opening four restaurants. Something has clearly gone haywire: "In order to disrupt our operations, some staff have physically attacked and threatened to kill the senior managers," according to a letter from Devyani Intl., which operates the chains in Nepal and India. Thus were the restaurants shuttered yesterday. Nepalese couldn't get enough of the Colonel when KFC arrived in 2009… "These acts have put the life of senior managers at risk," the letter went on. "To maintain the safety of our restaurants and the staff, we have shut down our services for an indefinite period." Exactly what the staff are upset about, no one's saying. We doubt it has to do with the overhyped introduction of KFC's "Original Recipe Bites."  "Your editorials sound a little lefty to me," writes the first of a couple readers determined to reconcile the rhetoric and reality of Paul Ryan. "If you are looking for the second coming, you certainly are out of touch. Paul Ryan and no other politicians are saints, but he also has many attributes that make him a winner in my book. "If you are an Obama supporter, please let me know so that I can cancel my affiliation with your website." The 5: If you'd been paying attention, you'd know we had no expectations of a second coming. We're merely amused by the many people who do have those expectations, some of whom ought to know better. We also notice you didn't cite any of those "attributes which make him a winner." If it's merely the fact he's "not Obama," you've set a mighty low bar… "While you berate Paul Ryan," writes another critic, "try to remember that our political system is in place and one of these sets of candidates will win in November. "Would you rather continue your slavery on the Obama plantation or opt for a team that at least thinks about how to modify our fascist police state? Please stop beating up on what might be America's last best hope. Doing so makes you part of the Obama re-election team." The 5: Good grief. This tribal-warfare "if you're not for the Red Team, you must be for the Blue Team" is getting real old. And on the subject of "how to modify our fascist police state," you might want to know a few things pointed out by Marcus Tully of the Republican Liberty Caucus: "Since 2010, Ryan has been on the wrong side of almost every important vote involving basic constitutionally protected rights. "He voted to extend the Patriot Act, for the Cyber Intelligence Sharing and Protection Act, for the Defense of Marriage Act, for the National Defense Authorization Act (three times), to expand the Department of Homeland Security, to extend troop commitments in Iraq, Afghanistan and Libya and to give the president the power to appoint department heads without senatorial approval." "Until a politician says the first step is to freeze spending at last year's level and start cutting from there, they aren't serious," a reader suggests. "Freeze and then cut 10% per year in real cuts and the budget is balanced at the end of four years without raising taxes and you can make the Bush tax cuts permanent. "They even had a head start with the ending of the war in Iraq, but they wasted their chance. Plus, once they show they are serious, we would see real economic growth that would raise tax revenues just by people/corporations making more money." "As a neighbor of Martha Boneta," writes a reader revisiting last Friday's episode, "I have been surprised that one highly pertinent fact is not being mentioned in the coverage of this 'Pitchfork Protest.' "Fauquier County leads the nation in conservation easements — permanent deed restrictions on land use which are voluntarily established by landowners and the county. Mrs. Boneta purchased her farm from the Piedmont Environmental Council. Because of the easement, she paid a price far below what the land would have been worth if unrestricted. "It is my strong suspicion, based on past history, that many, if not all, of the violations Mrs. Boneta has been charged with, are related to the restrictions that she voluntarily accepted when she purchased the farm, rather than arbitrary zoning ordinances imposed by the county. "As the value of my own property is due in part to the surrounding land, including the farm in question, that has been protected from development and certain commercial activities, I resent the fact that Mrs. Boneta is apparently manipulating the local Tea Party and press in an attempt to escape the penalty for flouting these restrictions after benefiting financially from them." "I was born in 1925, and got a kid's view of the Depression," writes a reader who caught our musings about booze and hard times Monday. "We called it the depression. I didn't hear of the Great Depression until I was in advanced middle age. "A 7-year-old may not qualify as a political analyst, but I noticed what caused the loudest and longest discussions in 1932: If Roosevelt wins, we can have beer." The 5: Hmmm… Imagine this: The fattest, juiciest financial bubble bursting between now and 2016… and the biggest issue on voters' minds is legalizing pot! Cheers, Dave Gonigam The 5 Min. Forecast P.S. Five years ago, Australia's famous Perth Mint rocked the coin collector world with its silver Koala Dollar. This year, the Perth Mint has outdone itself… and our friends at First Federal have snagged a supply of a brand-new and in-demand issue. If you missed the announcement in your inbox earlier today, you can check out all the details at this link. Thank you for reading The 5 Min. Forecast! We greatly value your questions and comments. Please send all feedback to 5minforecast@agorafinancial.com

Gold and the Middle East crisis Posted: 15 Aug 2012 02:45 PM PDT The year 2012 has been relatively peaceful compared with the past 10 years. The lack of military aggression on the part of the U.S. has led many to believe that the America's days of military adventures are over. But as we'll see here, 2012 is simply a temporary respite in a longer-term "theater" of war that has only just passed the opening act. The past decade has indeed been one of near constant strife and turmoil. Starting with 9/11 and the U.S.-led NATO invasion of Afghanistan, and later Iraq, the 10 years between 2001 and 2011 were characterized by ceaseless warfare. The military invasions in the Middle East have been followed by civil and military uprisings in Egypt, North Africa and elsewhere in the region. By contrast, 2012 might be styled a "quiet" year for the Mideast. A withdrawal of U.S. troops from Iraq began in mid 2009 and formally ended in late 2011. Meanwhile, the so-called "Arab Spring" revolts have subsided and revolutionary fervor has tem...

Do Hedge Funds Still Have Faith in GOLD? Posted: 15 Aug 2012 02:40 PM PDT The price of gold has been relatively subdued so far this year. After finishing 2011 at $1,531 an ounce, the precious metal trades modestly higher near $1,600. Over the past three months, gold has been in a tight trading range between $1,540 and $1,640. However, several well-known hedge funds recently made large moves regarding the safe-haven asset.

ZZZZZZZZZZZZZZZZZZ! Posted: 15 Aug 2012 02:29 PM PDT Today was the lowest volume in S&P 500 e-mini futures (for a non-holiday trading day) in, well, bloody years (and NYSE volume was as dire as Monday's). Today's ES range, under 9 points, was the lowest in the last eight days of low ranges and in fact the eight-day range has only been this low a few times in the last few years and all but one of those marked a significant top. The S&P wavered around unch for most of the day with a US day-session-open ramp, post weak-data that signaled bad-is-good buying in Gold and stocks. Treasuries kept on leaking higher in yield, now up 12-16bps on the week as the USD meandered around unch on the week - with EUR weakness pulling it also back to unch on the week. VIX limped lower by 0.25 vols to 14.6 (after touching unch) but we do note that VVIX (the implied vol of VIX) has been diverging higher in the last two days but it's getting kinda crazy when we are looking at compound options for any signal. HY credit underperformed once again - with a quite ugly flush into the close (on heavy volume). Weak Empire data provided just the QE lift the pre-open needed and we wriggled higher in ES (blue) all day - as TSY yields also pushed further up...   Intraday ranges remain remarkably low - for eight days now - and volume a disaster. The chart below highlights the last few times that intraday ranges over an eight day period have been so low...   SPY was in a low volume world of its own today as HYG notably underperformed once again (and we have seen some selling in the underlying high yield bonds too)...   as ES remains mind-blowingly dull...   and while the USD is unch on the week, Gold and Silver are down 1% while WTI is up 1.4% (and Brent in EUR even more)...   but someone is betting on some realized vol action picking up as VVIX is majorly diverging from VIX...   which (admittedly cherry-picked) has signaled turning points in the past...   Charts: Bloomberg   Bonus Chart: Quite Impressive hope-iness reversion in Treasuries relative to stocks (not sure many were expecting it to revert this way?)...

$12,000 Gold, Paulson, Soros & A Coming Mania In The Shares Posted: 15 Aug 2012 02:26 PM PDT Today acclaimed money manager Stephen Leeb spoke with King World News about a coming move in gold to $12,000 and a mania in the gold shares. Leeb, who is Chairman of Leeb Capital Management, had this to say: "It's already been reported that John Paulson and George Soros have just increased their gold holdings. Paulson, in particular, is really betting the house on gold. I believe gold now comprises 44% of Paulson's fund. Soros, who also knows a thing or two about macro-economics, added a pretty big chunk to his gold holdings." This posting includes an audio/video/photo media file: Download Now

Gold Seeker Closing Report: Gold and Silver End Slightly Higher Posted: 15 Aug 2012 02:15 PM PDT Gold edged up to $1603.09 in Asia before it fell back to $1590.08 at about 4AM EST, but it then rose to as high as $1605.83 in New York and ended with a gain of 0.28%. Silver slipped to as low as $27.496 at about 4AM EST, but it then rose to as high as $27.99 in New York and ended with a gain of 0.07%.

Gold Daily and Silver Weekly Charts - Markets In Monetary Driven Stasis Posted: 15 Aug 2012 02:02 PM PDT This posting includes an audio/video/photo media file: Download Now

China Has Imported More Gold In Six Months Than Portugal's Entire Gold Reserve Posted: 15 Aug 2012 01:37 PM PDT 15-Aug (ZeroHedge) — While the highly "sophisticated" traders that make up the gold market continue to buy or sell the precious metal based on whether the Fed will or will not do the NEW QE tomorrow (or just because, like Bruno Iskil, they have a massive balance sheet, and can create margin position out of thin air with impunity), China continues to do one thing. Buy. Because while earlier today we were wondering (rhetorically, of course) what China is doing with all that excess trade surplus if it is not recycling it back into Treasurys, now we once again find out that instead of purchasing US paper, Beijing continues to buy non-US gold, in the form of 68 tons in imports from Hong Kong in the month of June. The year to date total (6 months)? 383 tons. [source]

Paulson Adds Gold, Soros Adds Gold, GE, Wal-Mart and Facebook – Exits J.P. Morgan, Goldman stakes Posted: 15 Aug 2012 01:10 PM PDT Paulson, Soros Add Gold as Price Declines Most Since 2008 Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a U.S. Securities and Exchange … Continue reading →

LGMR: Good Economic News "Bad for Gold", Paulson, Soros Add to Gold ETF Positions Posted: 15 Aug 2012 01:04 PM PDT London Gold Market Report from Ben Traynor BullionVault Wednesday 15 August 2012, 07:00 EDT THE WHOLESALE MARKET gold price fell back below $1600 an ounce during Wednesday morning's London trading, hitting its lowest level for nearly two-weeks, while European stock markets also traded lower, as analysts speculated on the prospects for a third round of quantitative easing (QE3) from the Federal Reserve following the release of positive US economic data. "The market is disappointed that [gold] was not able to revisit the July high of $1633," says the latest technical analysis note from bullion bank Scotia Mocatta. "The closest support comes in at $1584." The silver price fell as low as $27.60 per ounce this morning – down 2% for the week so far – while other commodities were broadly flat and US Treasury bond prices fell. A day earlier, the gold price dropped over 1% in less than an hour Tuesday, as the Dollar rallied following publication of better-than-expected US re...

Doug Casey on Gun Control Posted: 15 Aug 2012 12:36 PM PDT Synopsis:  Will stricter gun-control laws in the wake of recent mass shootings invite more massacres? (Interviewed by Louis James, Editor, International Speculator) L: [Skype rings; it's Doug.] Howdy, Doug! I guess it's that time – what's on your mind this week? Doug: I'm glad to see you survived the wilds of Lithuania. I'm sorry my canceled flights caused me to miss the event – it sounds like you had a really good CYCLE. L: It was a terrific time, with some very inspiring teachers and really great students. We had a lot of return customers, actually – no longer in school – and a good number of them are applying what we've been teaching. One has become a successful investor; he makes about US$10,000 a month, lives on only 10% of that, reinvests 40%, and saves 50%. Blew me away. Several others have started businesses of their own. Some of our veterans told me this was the best CYCLE yet. Doug: Fantastic. Too bad I could only make a video appearance through Skype. I did enjoy it a great deal the time I went in person; I'll be back. I encourage our readers who have children, grandchildren, or know of young people who need an instant education in what's really going on in the world and how they can be successful to look into sending their students to next year's CYCLE. L: We haven't started planning that yet, but folks can send us inquiries through www.profitfromfreedom.com. Doug: Well, that's the bright side. On the darker side of things, there's been a spate of mass shootings and attempted shootings recently, which has all sorts of people calling for stricter, so-called gun-control laws. L: I like my gun control: I'm no great marksman, but I can hit a man-sized target with a pistol at over 100 yards. I like having the tools to protect my family in case of need, and the training on how to do it. Doug: Unfortunately, a majority in Congress don't see it that way; their idea of gun control is to disarm citizens. It's inevitable, I'm afraid. The type of person who gets into politics is naturally a busybody who thinks he knows what's best for everyone else and is anxious to enforce his opinions using the state. Historically, one of the main differences between a slave and a free man has always been that a free man has the right to own weapons and defend himself. The average person the world over – absolutely including the US – has devolved into little better than a slave. He thinks he's free because he has a relatively high standard of living, but he's not much more than a lapdog who does as he's told. And he better not even growl, much less try to defend himself, or his masters will lock him in a cage. L: Thereby inviting more massacres by establishing target-rich environments where crazy people can kill with impunity, knowing it's very unlikely anyone will shoot back. But that's not new; I'm just waiting for Congress to ban Batman movies, since the spate started with the movie theater massacre on the opening night of the new Batman movie. That would seem logical: if guns are to blame for violence, video games are to blame for violence, movies are to blame for violence – anyone but the crazy person who murders people is to blame for the violence. Doug: [Laughs] That's right – let's ban Batman movies. Better ban Westerns too. It won't do for people to get the dangerous idea that they actually should control their own destinies and be responsible for their actions. Governments want adults to act like children and get permission from the nanny state for everything. The kind of people who go into government view "the masses" as automatons; they think hoi polloi should do as they're told, the way sheep should do what the shepherd tells them. God forbid sheep ever get the idea they should defend themselves… But what do we really know about these events? All anyone who wasn't actually there knows is what they read in the press, and all the reporters know is hearsay they gather locally and official information released by the police – when they're not just regurgitating hearsay gathered by other reporters. You'll likely never know the real facts. For instance, I heard that several witnesses saw a confederate of the shooter open the emergency exit to let him in – which seems logically necessary. But that piece of data seems to have disappeared down the memory hole. And where did the alleged shooter get the thousands of dollars needed to buy all his weapons and body armor? It's said he was relying entirely on government aid for his schooling. The quality of reporting is abysmal. That said, I'm hesitant to armchair quarterback regarding things I really have no direct knowledge of, where the facts that are reported are slim, disjointed, and unreliable. Reporters today all seem to be blow-dried, air-headed faux news-readers. I'm so sorry both Gore Vidal and Andrew Cockburn have just kicked the bucket; it's almost like they were the last of a breed. L: Fair enough; neither of us has primary data on the Colorado movie theater massacre. But we do have data – as much as anyone – on the political fallout of such things, and how the state tends to use such events to ratchet up its control over a people all to willing to give up freedom in exchange for perceived safety. This reminds me of my own thoughts at the time of the siege of the Branch Davidians at their church in Waco, Texas. At the time, I remember being skeptical of government accounts and suspicious of the fact that reporters were kept well away from the scene. It occurred to me that it might be a good thing to do to go down there with my own camera gear and try to get the truth, whatever it was, out to the world. I'm ashamed to say that I did not follow up on that impulse. But I'm glad some people have tried to expose the inadequacies of the government's explanations for what happened. Still, most people seem to believe the government's story and blame the 76 men, women, and children who were gunned down or died in flames for their own deaths. I remember this when I see talking heads on news programs delivering information they have not verified as though it were fact. Doug: Yes. There's a film trying to expose the truth about Waco done by my friend Mike McNulty, and there's a lot more he's uncovered since releasing it. But it got no traction among Boobus americanus. It's worth noting that the site of the Waco massacre is one of the largest crime scenes in US history. As with other crime scenes where the US government has killed people, a thorough forensic investigation of the place was not allowed. The government kept people away and bulldozed the place within a week, effectively destroying the crime scene and most evidence of what actually happened. That left us with very little but what the government agents had to say about it. It's both shocking and disgusting. The government kills all those people, the government conducts the investigation, and then the government puts the survivors – not the perpetrators – on trial. And the American public swallows the whole corrupt charade without even asking a few meek questions. As usual, the guys at South Park have a far more intelligent take on the episode than any of the national media. L: I seem to recall that the county coroner in the Waco area was not allowed access – or only very limited access – and complained loudly, but to no avail. Doug: Par for the course, and ancillary evidence that most of the US population is thoughtless, brainwashed, and/or on Prozac. But back to today. We can't say we know much for a fact about what really happened, but there are reports the killer in the Colorado movie theater shootings was getting some sort of psychological or psychiatric counseling. I would not be surprised if it came out that he was on some kind of psychiatric drug – it seems that a lot of shootings by young people in recent times have been done by kids on psychiatric drugs. The same with postal employees – and someone seems to "go postal" annually. L: I remember reading that one of the killers in the Columbine massacre was on Ritalin. Doug: I think that's true in more than one case – and it's one of the most widely prescribed drugs school shrinks give to kids who ask too many questions in classrooms... or just act like kids. I've heard numbers quoted to the effect that up to 25% of kids in school these days are on one kind of psychiatric drug or another. I've not heard of any studies done on this connection, but it sure seems like there ought to be. My suspicion is that Cesar Milan, the "dog whisperer," could replace 99% of the shrinks and counselors in schools – most of whom are either worthless or actively destructive – simply by taking the kids out for a long run every day. It's the first thing he does to get dogs rehabilitated. L: Indeed. The people who use every act of violence involving a gun as an excuse for more bans and limits never seem to ask why there are more mass shootings now, when fewer people carry guns... and why there were far fewer back when many Americans carried guns frequently. A hundred years ago, it was common for boys to carry rifles to school and shoot something for dinner on the way home. I've read about schools having shooting ranges, just as they have football fields, as recently as the 1960s. But back then, massacres were pretty much the province of people in uniforms under orders from on high. Doug: Yes. I went to a military boarding school, and we had a full arsenal, including belt-fed machine guns, a whole locker room full of M1 rifles, and all kinds of wonderful weapons – even 81mm mortars. When I was growing up in Indiana, almost everyone had guns. My friends and I would grab our rifles and pistols and head into the forest to do some shooting, and no one thought anything of it. But now, guns have become much, much less part of US culture. If people see a kid with a gun today, they'll call 911 and a SWAT team will appear. L: When I lived in Wyoming, they allowed open carry. I could go into a gas station to pay for my gas with my gun belt on, and no one would scream, dive for the floor, or put their hands in the air. That was only 15 years ago… I wonder if it's changed. Doug: As a matter of fact, I once flew from Chicago to Washington, DC and back, and I took both my rifle and my pistol. I just put them in my carry-on baggage and stuffed them in the overhead bin on the plane. No gun locks nor any special arrangements of any kind whatsoever. This was normal, legal, and no one even thought to question me about it. I was just a 17-year-old kid at the time. L: I think it was in the 1960s when the US government banned carrying guns on airplanes, and that rule spread around the world. I don't think it's a coincidence that hijacking commercial airliners became a choice tool for terrorists after this. Doug: I think that's right. As late as the 1930s anyone could cross most any border – except into totalitarian countries, of course – with a sidearm. Remember Indiana Jones? So what to do about mass shootings? Disarming people only leaves them at the mercy of the psychopaths of the world, who, if they are going to kill, are going to kill regardless of what the laws are. I think everyone should own at least one gun at a minimum, and preferably four or five, of different types and for different uses. And they should take the time to learn how to use them. Even a very effective and honorable police force – which is increasingly rare – can only respond to crimes, and then only a considerable time after they've happened. People need tools for self-defense to stop crimes from happening in the first place. Failure to stop a criminal not only leaves you and your family at the mercy of the psychopath in question, but it also leaves that person free to go on to harm more victims. Self-defense is both a fundamental human right and a responsibility no one should shirk. It's perverse and outrageous that the subject is even open to discussion. It's a major sign of how degraded civilization has become. On top of these personal considerations, there's the sociopolitical aspect of the issue: a disarmed population cannot resist its government when it turns predatory. An armed population – the more heavily armed the better – can arguably limit the depredations of the state when it gets taken over by psychopaths, as it always, inevitably, and invariably does. Although, the fact is that argument was much more realistic 50 or 100 years ago. The weapons the state can use against its subjects are now orders of magnitude more powerful than in the past. But what's happening in Syria, like what happened in Libya, is some cause for optimism… I think this latter point is a real driving force behind so-called gun-control laws. It's not about safety or reducing crime. John Lott, among others, has shown that that's just not so. The state does not want the people it rules to have any power to resist it. The state wants its subjects to feel powerless and forced to rely on it for everything. And so today, unfortunately, it's becoming more and more dangerous to be a gun owner in the US. Owning a gun means you're an automatic addition to the list of undesirables. The whole atmosphere in the US has changed. L: I suppose state troopers can see if people have a concealed carry permit when they type license-plate numbers into their onboard computers – that could change the character of a simple traffic stop pretty quickly. Doug: Yes. And cops are increasingly aggressive and paranoid in the US – it's not a good thing. We no longer see friendly "Andy Griffith" types who help lost kids get home. We see heavily armed and armored paramilitary thugs who see citizens as potential enemies. It's a fact that the term cops often use for civilians is "assholes." Cops increasingly suffer from an "us against them" mentality. Their first loyalty is to other cops, then to their employer, the government, and only then to those they're supposed to "serve and protect." It's laughable actually, the way they're portrayed in TV cop shows; good cops are becoming the exception, not the rule. L: Speaking of this and mass shootings, I find it quite telling that the emphasis seems to have shifted from stopping the violence ASAP to making sure officers don't get hurt. If memory serves, in several recent cases more victims died after the cops showed up, because they formed cordons and waited until they thought it was safe to proceed. That's why many of these shootings only end when the shooter kills himself – Columbine, for example. Well, there was that one case in which two boys whose father was a Navy SEAL and who had been themselves trained in the use of guns tackled the shooter when he stopped to reload – they knew they had a chance while others just cowered. Doug: Like many things that have to do with the state, it's perverse. Being a cop is more dangerous than being an office worker, but it's a lot less dangerous than being a fisherman, a roofer, a logger, a farmer, or many other professions in which physical danger is commonplace. The paranoia cops feel is unjustified. And it's a line of work that is drawing the wrong kind of people today, as we've discussed before. I hate to say it, but I think the bad guys are winning on this issue, and the right to self-defense seems unlikely to last much longer in the US. The bad guys seem to be winning in many areas all over the world. Let's hope for a massive change of trend. I'm working for it, as are you. It's not because I expect to succeed, but because it's the right thing to do. L: As it happens, this subject came up on my way back from Lithuania; the young lady next to me on the plane commented on the movie theater shooting in Colorado, and I said it was too bad no one in the audience was armed. She asked if it wouldn't be better if all guns could be banned – then nothing like this could ever happen. That's that way most people think these days. I made the point that if guns are outlawed, they will not cease to exist; but the law-abiding won't have them and the outlaws will. I also pointed out that the guy's apparent purpose was to kill people, not just to go shooting. We hear he had bomb-making material in his apartment – he could have used that if he didn't have guns, or maybe just driven a truck through the glass doors of a busy store and run people over. Eliminating one set of tools does not eliminate the problem of there being a homicidal maniac on the lose. Just look at the recent mass shooting in Norway, where they have gun control. There was one in Germany some years ago, involving a high-school triathlon competitor who used his slow-fire competition rifle to kill a lot of people – and they've got a lot of gun-control laws in Germany. To her credit, my fellow passenger gave this some thought, but even that is a rarity. So many people have made up their minds that guns are intrinsically evil, there's no point in even discussing the matter with them. Doug: I've thought about this too; I suspect that if someone wanted to go on a killing spree, he could do a lot of harm with a simple bow and hunting arrows, with a machete as a secondary weapon – maybe even more harm than a shooter – before he could be stopped. Since the bow is almost silent, people wouldn't necessarily be alerted to the violence right away. And it's harder to disarm someone with an edged weapon in close quarters than someone with a gun. L: It could be anything; one could put a bike chain on the exit of a crowded theater and then torch the place with a can of gasoline and a lighter. Removing one set of tools from the picture – even if it could be done – does not remove the problem, which is whatever factors are driving people to become mass murderers. Doug: That's exactly right. You've got to get to the root of the problem, and I believe that root is that a lot of people have serious psychological aberrations. The world won't be free of violence until everyone has confronted their personal demons, come to understand them, and eliminated them. L: I'm not going to hold my breath waiting for that. I'm glad I have some ability to defend my family now. But what's the answer, then? Doug: I don't know that there is any simple solution. But the answer is not to suppress bad impulses with the psychiatric drugs that are so popular; all they do is disguise the symptoms and tighten down the lid on the pressure cooker. Furthermore, when you try to control people physically or chemically, it leads to frustration and hostility, and those things lead to violence. In addition, the state has encouraged people to behave irresponsibly for generations now. People think it's a good thing for the nanny state to take care of everything for people: feed them, clothe them, medicate them, tell everyone what's right and wrong. This encourages people, subtly and overtly, to act in irresponsible ways. It's no surprise then that irresponsibility and criminality is what we get. Long term, the solution is to encourage people to take responsibility for their own lives – but the government is doing exactly the opposite. I blame the state in many ways. The very existence of the state is, at least, a contributing factor to most of the world's problems. L: I agree. In the US, it started earlier, most notably with the US's disastrous attempt at alcohol prohibition, but really, the major push in this direction started with the New Deal. That's when things changed from "some people are unlucky, so we'll lend a helping hand" to "people are not competent to take care of themselves, so we must force everyone to participate in state-run retirement and medical care schemes." Lo and behold, you tell people for generations that they are irresponsible and not capable of anything else, and you get a lot of irresponsibility. Add to this a compulsory, coercive education system in which many schools look more like prisons than places of education, and you get a lot of frustrated people under pressure and without a strong sense of responsibility for their own actions. The consequences seem clean and unsurprising to me. Doug: That's absolutely right. And the more the politicians do to try to solve the problem, the worse they make it. They don't see that they are the problem. Speaking of Prohibition, everybody applauds Roosevelt for helping re-legalize alcohol in 1933. But the fool learned nothing, because in 1938 he illegalized hemp – an extremely useful and salubrious plant – and basically started the insane War on Drugs. It amazes me that people look to politicians for solutions. They've learned absolutely nothing. L: So… Boobus americanus is unlikely to vote the bums out. What to do? Doug: You know my opinion: the most intelligent thing to do is remove yourself and your loved ones from harm's way. Unfortunately, today that means most Western developed countries. This is why I prefer spending most of my time in the so-called Third World these days. As a practical matter, you're both much freer and much safer than you are in the US – or EU, for that matter. L: So… we've talked about your favorite guns before… you packing heat today, Doug? Doug: No, I'm not. I travel a lot and as a practical matter, can't carry all the time, which makes it dangerous to carry some of the time. I wouldn't want to get into a situation inadvertently thinking I was packing when I wasn't. L: I went shooting recently with my wife and uncle – it had been too long, and I was rusty. It was a first for my wife, however, who picked it up like an old habit she'd forgotten she had. She hit the target with every weapon she tried, from a variety of distances. Her favorite was my .44 magnum, with its authoritative boom. It was fun! But back to business – is there an investment angle to this? Doug: Well, it's not practical to invest in guns on a large scale, because they're not expensive enough – too bulky to put big money into. Nor is it politically wise; if you have more than a few you might be tagged as an enemy of the state. On the other hand, they are durable, and prices have at least kept up with inflation. Guns maintain high resale values, so putting a few thousand of dollars into some good guns is a sound move – you won't lose money. But a better investment is ammunition. I say that because the Second Amendment still makes it hard for the government to just steal everyone's guns and ban new ones. I think it will be easier for them to disarm people by regulating ammunition and taxing it right off the market – and, of course, a gun without ammunition is not much use. So, without making ammo illegal, they will essentially ban it by making it too expensive, and that makes stockpiling ammo a good speculation. I suggest owning a bunch – say a couple thousand rounds in each of a number of calibers. Put it in a dry, cool, safe place and forget about it. L: Betting on the government doing the wrong thing and profiting – a classic Casey speculation. I guess ammo's not as good as gold, but in a pinch, boxes of ammo could function as money: they are durable, divisible, compact enough to be pretty convenient, and the units are consistent – and they have value in their utility. Doug: Right. A no-lose investment, with big percentage upside and a lot of utility. You just can't reasonably have a lot of money there. L: What about stocks? Would you buy Smith & Wesson? Doug: No, I wouldn't – changes in regs could crush a gun manufacturer's profits at the stroke of a pen – too much political risk these days. And as far as general equities go, I think stocks are overvalued and vulnerable – I don't want to buy any at this point. However, in my 1993 book, Crisis Investing for the Rest of the '90s, I mentioned a pair trade of going short Ben & Jerry's and going long Ruger. Ben & Jerry's was overpriced and Ruger was underpriced – it turned out to be a tremendous spread. It was the perfect politically incorrect trade, which made it amusing and psychologically gratifying as a bonus. L: So, what else, besides stashing ammo in the basement? Doug: Well, everyone who travels should buy cigarettes and liquor every time they go through the airport and have access to a duty-free shop. You don't have to smoke them or drink them; such items are highly liquid and hold their value over time. L: I can't see putting a couple million into cartons of Marlboros… Doug: No, these are not serious investments, just prudent things to do with smaller amounts of money. Like buying a stash of silver coins. L: Very well then. Words to the wise. Thanks for another interesting conversation. Doug: My pleasure. We'll talk again next week, and then again at our Casey Summit coming up in California. L: Right. For those who can't make that, you'll also be speaking at the New Orleans Investment Conference, October 24-27. Doug: Right. Keep your powder dry. L: I will, Doug. Thanks. While loading up on cigarettes and booze won't offer much protection for the bulk of your wealth, there are steps you can take right now to shield your

Morning Snapshot Posted: 15 Aug 2012 11:16 AM PDT 15-Aug (USAGOLD) — Gold popped back above $1600 as the absence of inflation and a terrible Empire State Index print offset yesterday's better than expected retail sales data (albeit with a strange seasonal adjustment factor). Investors that continue to hold out hope for easier Fed policy come September are perhaps feeling modestly more confident today. However, as we've stated many times throughout this consolidative phase, a resumption of the long-term uptrend in gold is not wholly dependent on QE3. The harsh realities of the fundamentals (massive debt in much of the industrial world, über-accommodative monetary policy and currency devaluation) and the omnipresent verity of supply and demand will ultimately carry the day. When that happens, the long-term secular bull market will reestablish itself. • US NAHB housing market index rose to 37 in Aug, above expectations, vs 35 in Jul. • US industrial production +0.6% in Jul, on expectations of +0.5%, vs negative revised +0.1% in Jun; cap use 79.3%. • US TIC net long-term security purchases (ex-swaps) +$9.3 bln in Jun, vs $55.9 bln in May; total net flows +$16.7 bln. • US Empire State Index plunged to -5.9 in Aug, well below expectations of 7.0, vs 7.4 in Jul. • US CPI unch in Jul, below expectations of +0.2%, vs unch in Jun; core +0.1%, on expectations of +0.2%. • Turkey unemployment rate (nsa) fell to 8.2% in May, vs 9.0% in Apr. • UK Claimant Count Change -5.9k in Jul, on expectations of +7.0k, vs 6.1k in Jun; Claimant Count Rate steady at 4.9%. • Australia Q2 Wage Cost Index +1.0%, vs 0.9% in Q1. • Singapore retail sales (Nominal) -0.9% y/y in Jun, vs upward revised +0.6% R • China foreign direct investment -1.5% y/y in Jul, vs -6.9% in Jun. • Malaysia Q2 GDP +5.4% y/y, vs +4.7% y/y in Q1. • Malaysia CPI +1.4% y/y in Jul, vs +1.6% in Jun. • South Korea unemployment rate (sa) steady at 3.2% in Jul.

Richard Russell - Get Ready For Massive QE3 & Epic Inflation Posted: 15 Aug 2012 10:58 AM PDT Today the Godfather of newsletter writers, Richard Russell, wrote a special report stating that a massive QE3 is now headed our way, along with epic inflation. He also covered gold. Here is what Russell had to say: "There's nowhere to hide. Governments will opt for their favorite remedy -- inflation. Inflate away the debt. Problem -- a little QE3 won't help, if the Fed really wants to jazz up the economy, it will have to be a massive QE3." This posting includes an audio/video/photo media file: Download Now

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