Thursday, August 2, 2012

Gold World News Flash

Gold World News Flash

Gold Breakout Failure

Posted: 02 Aug 2012 12:36 AM PDT

courtesy of DailyFX.com August 01, 2012 03:11 PM Daily Bars Prepared by Jamie Saettele, CMT After breaking the triangle pattern, gold has dropped well into its former range. Other than calling this a range, there really is no reason to waste time trying to figure out where this market is headed next. In fact, one can make the argument that the triangle remains underway (latest top composing wave C), in which case this market will get even more frustrating to follow over the next few months. LEVELS: 1578 1584 1592 1610 1618 1630...


Silver Update 8/01/12 Dark Knight

Posted: 01 Aug 2012 11:18 PM PDT

The Agflation Storm Is About To Strike

Posted: 01 Aug 2012 09:52 PM PDT

from Tom Chatham, SilverBearCafe.com:

Corn and soybeans contribute to almost everything we eat and the sudden rise in the price of these items will filter down into price increases of just about everything. Corn prices are expected to get as high as $12.50 per bushel and soybeans could go to $20.00 or higher. Some commodity specialists have even suggested that soybeans could be the new silver.

Corn and soybean meal are staples in animal feed and the rising prices and drought conditions are forcing farmers and ranchers to sell off their herds for slaughter. This will cause a glut in the market over the short term and you may see lower meat prices as a result but this will only be temporary. By next year the prices of meat will rise as the supply of livestock reaches multi decade lows. Supply and demand will push prices higher as a result.

Larry Pope, chief executive of Smithfield Foods has recently given a dire warning. "Beef is simply going to be too expensive to eat. Pork is not going to be too far behind. Chicken is catching up fast." He also stated that government regulations are going to make things even worse. Almost 40% of the U.S corn crop goes to make ethanol fuel. Pope said, "Its almost a government- mandated disaster here, which is distressing". He warned that meat prices will rise by "significant double digits".

Read More @ SilverBearCafe.com

Obamanomics: Grab Some Pizza, Grow the Economy

Posted: 01 Aug 2012 09:27 PM PDT

As the economy continues to flourish flounder, President Obama hit the road today to continue his Economic Lecture Series.

Today's class, stopping just short of lecturing on the benefits of the broken window theory, taught the good people of Ohio that if you buy a slice of pizza, and build a road, the economy grows.

Pay attention here kids, you don't get this kind of knowledge dropped for free every day. 


 

 

I'm not sure, but weren't we supposed to be rebuilding our infrastructure with the $800 billion dollar Recovery Act passed in 2009? We've spent $765bn of that, which very well could pave every road in the entire United States, and buy some new hard hats for good measure. How's that all working out for us, pretty good?

Speaking of getting hard hats back to work, wasn't that the exact same pitch that was made to us back then? Spend money we don't have, in order to kickstart the economy - let's check the tape

 

 

Noted. Apparently a few hundred billion more and the economy will really get fired up. This time is different! -- or something.

At any rate, now is not the time to be frugal. As we all have been taught by our Keynesian friends: spend your way out of a depression, and pay down the debt during the boom -- or something.

 

Courtesy Update – Got Gold Report Available to Entire GGR Blog Readership

Posted: 01 Aug 2012 08:03 PM PDT

Northern Tiger into very high grade gold shows at Sleeping Giant, Yukon. 

The latest Got Gold Report video update, released to paying GGR Subscribers on Sunday, July 29, is now available to the public via YouTube after a delay.  To view the 15-minute video, which takes a look at the positioning of very large traders of gold futures on the COMEX, simply follow this link:

http://www.youtube.com/watch?v=FV3eZpSPQJ4&feature=plcp

Northern Tiger Sampling High Grade Gold at Sleeping Giant

On another note, on July 31 Northern Tiger Resources (TSX:NTR.V) reported some very high grade gold shows from chip samples taken along a trench in the area called the Sleeping Giant zone of their 3-Ace project in the Yukon. 


"Eleven continuous one metre chip samples taken along the strike of a new quartz vein exposure in the Sleeping Giant Zone returned from 0.06 to 226.68 g/t gold, with a weighted average of 50.3 g/t gold. Results are pending from both channel samples and seven recent drill holes testing the new discovery," the company press release said. 

More...

Those are some impressive grades and we note that the company has done "an extensive set of channel sampling" as a follow up.  Channel sampling, which actually saw cuts the rock instead of using a hammer to knock pieces off into a bag, is considered a more reliable sampling technique.  Evidently the company felt the new discovery was important enough to go to that step.  Suffice it to say that things are "hotting up" at  Sleeping Giant.

We hear from sources close to the action that NTR now believes that their drill program at Sleeping Giant from a couple years ago, which cut gold, but less than hoped for at the time, may have undercut the "good stuff."  That's because the team now believes that the deposit is more flatly lying than previously thought and perhaps wider than they thought.

We should know something fairly soon about that as the new high grade showings at Sleeping Giant prompted the crews to redirect the drill from the Main Zone to Sleeping Giant.  A number of holes have already been drilled with assays pending.     

We understand that CEO Greg Hayes and the NTR geos are staying there in camp at 3-Ace and Sleeping Giant as the drill is turning.  They plan to host "some tours" of the new work there over the next few weeks.  So expect more news from NTR and possibly some informed commentary from others before too long.  

20120801-NTR-photo-Sleeping-giant
 
Northern Tiger investigates new high grade sampling at the Sleeping Giant zone trench, Yukon Territory, Canada. 

Sleeping Giant trench map. 
http://www.northern-tiger.com/i/pdf/Sleeping-Giant-Trench-Map.pdf

Hayes has been a big buyer of his own shares since about the first of December, buying at least two million of them, according to Ink Research (Insider.com). 

Recent trading on a short-term 1-hour volume candle chart.

20120801-NTR-volume-candle

We here at Got Gold Report are pulling for Greg and his team as they work this exciting high grade discovery.  The market has been especially harsh to gold explorers in general and Yukon explorers in particular over the past 15 months.  That has shares of NTR.V (NTGSF in the U.S.)  trading at about one-fifth of where they were about a year ago, when sentiment was still more or less "good" for the quality Yukon exploration companies.

With visible gold shows, new high grade sampling of vein outcrops and trenches, drills turning, some big scale insider buying,  and new thinking about how the deposit is laid down, NTR shareholders finally have at least a little "smoke" to go on, well, quite a bit of smoke acutally, but whether all that leads to something of size and therefore gold "fire" to go with that smoke, is up to the Drill Gods at the moment.

It is good to hear and see some good news coming in for Northern Tiger, though. 

 

Full disclosure, a number of us own shares in the company here at Got Gold Report.

Gene Arensberg for Got Gold Report   

David Rosenberg On Headless Chickens, Topless Americans, And Bottomless Europeans

Posted: 01 Aug 2012 07:52 PM PDT

The S&P 500 has made little headway for two years running and as Gluskin Sheff's David Rosenberg points out, it first crossed 1380 on July 1, 1999 and since then has run around like a headless chicken (while other asset classes have not). Meanwhile, Europe's bottomless pit of debt deleveraging (which is as much a problem for the US and China but less ion focus for now) makes the entire discourse of some new and aggressive intervention by the ECB even more ridiculous (and all so deja vu); and the US is facing up to an entirely topless earnings season as revenues are coming in at only 1.2% above last year as it appears Q2 EPS is on track for a 0.2% YoY dip - with guidance falling fast. But apart from all that, Rosie sees the only source of real buying support for the stock market is the stranded short-seller forced to cover in the face of CB-jawboning as there is little sign of long-term believers stepping into the void.

 

Headless Chicken Markets: BULL OR BEAR?
The cup is half full camp would lay claim that the S&P 500 is not only still up on the year in what has been a challenging 2012 but it is more than twice the lows posted in March 2009.

A discerning bear, however, would point to the fact that the index has made little headway for two years running and keep in mind that it first crossed the 1,380 mark on July 1, 1999 and since then:

  • It has crossed 59 times above and below the 1,380 level on a closing daily basis
  • Gold is up 515%
  • The producer price index is up 45%
  • The consumer price index is up 37%
  • The 10-year Treasury total return index is up 160%
  • The 30-year Treasury total return index is up 215%

So bench-marked against gold prices, producer prices, consumer prices, or bond prices, the secular bear market in equities remains an ongoing phenomenon.

 

Bottomless Europe: UNRESOLVED DEBT ISSUES

Quote of the day:

What can they do and what would bring about a sustained turnaround in market confidence? There I struggle to find something that would really be convincing.

 

From Jacques Cailloux, chief European economist for Nomura, in yesterday's NYT (page B3).

Indeed, this entire discourse on some new and aggressive intervention by the ECB is all so ridiculous, and all so déjà vu. The ECB has already done two LTROs and bought bonds outright before. Draghi is still throwing spaghetti against the wall to see what sticks. The bottom line is that monetary policy is a blunt tool to deal with structural insolvency issues as they pertain to bank and government balance sheets. The ECB has only a temporary effect and then bond yields go back up in the periphery. Until there is a move to solve the issue of too much debt relative to the economy's capacity to service the debt, the problem will re-emerge.

Meanwhile, the credit crunch in the euro area continues unabated, exacerbating recessionary pressures. Cross-border lending by German banks to the periphery has declined nearly 20% in the past seven months to stand at the lowest level since 2005. Overall bank loan books in Spain. Greece and Portugal have contracted 2% as deposits shift to the northern regions. At the same time, the entire regional banking sector is beset by a trillion euros worth of impaired loans, which have expanded 9% from a year ago (2.5 trillion euros are non-performing) with Spain, Ireland and Italy suffering with the largest increases.

Europe for some reason continues to believe that a debt crisis can be fought with more debt. Maybe because they think this strategy has worked in the United States. But it hasn't and the U.S. is either recession-bound or at best left with a listless economy, and also will likely soon face its own existential moment from a fiscal crisis perspective if it doesn't get its act together. If left unchecked, the day will come when the entire revenue base will be absorbed by interest expense, defense, health care and social security.

 

TOPLESS EARNINGS SEASON

The numbers vary by the hour and the data source. but it looks like Q2 operating EPS of S&P 500 companies is on track for a 0.5% YoY dip — by far the weakest since the recovery began three years ago (and well below consensus views of +3% a month ago) . The big problem !s revenues which are coming in just 1.2% ahead of year-ago levels and only 43% are beating their sales targets the lowest since the first quarter of 2009 (only the fourth time in the past 10 years that the beat-rate was under 50%).

The other problem is guidance. The WSJ cites research that finds that 40 companies have already warned about Q3 versus only eight who have raised guidance. We have not seen a gap like this since the onset of the tech wreck in the second quarter of 2001. The bottom-up consensus is now looking for just +3.3% for YoY EPS growth for Q3 — last October, the analysts collectively were calling for 14.5% for the quarter. Talk about a mea-culpa.

 

Summing It All Up

All that said, the key for all of us is to understand that we are still in the throes of a debt deleveraging cycle that first engulfed the housing and consumer sectors and is now attacking the government sector in country after country. It is not only Europe. China and the U.S.A. too. There is still far too much debt at all levels of society relative to the world's capacity to service it. This is a critical reason why government and central bank policies aimed at fighting traditional recessions in the past have so far been ineffective and now we have monetary authorities dipping into the toolbox of unconventional balance sheet expansions and contortions.

We have governments battling a debt deleveraging cycle of epic proportions, and by definition, these phases involve debt paydowns, defaults, and rising savings rates — a highly deflationary brew. And it also means that we now reside in a world of fat-tail distribution risks, where the range of outcomes is unusually wide, as opposed to the comfort zone of a classic post-WWII cycle, where we understood what caused recessions and we knew exactly what it took to get out of them, and where there was a much thinner tail to the probability curve.

May those days rest in peace. But once we can acknowledge that we are in a fat-tail world, it is akin to moving into the acceptance phase of the classic five Kubler-Ross stages of grief. This is no time for denial.


South Korean central bank says it bought 16 tonnes of gold in July

Posted: 01 Aug 2012 07:51 PM PDT

Real gold or paper gold? And who has actual custody of it? Nobody's asking so the central bank isn't telling. So much for financial journalism.

* * *

By Christine Kim
Reuters
Thursday, August 2, 2012

http://www.reuters.com/article/2012/08/02/korea-economy-reserves-idUSL4E...

SEOUL, South Korea -- South Korea's central bank said today it bought 16 tonnes of gold in July as easing financial markets after a turbulent June allowed it to push
ahead with efforts to diversify its massive foreign exchange reserves.

It put the total value of the purchase, which was made on multiple occasions during July and boosted its gold holdings to 70.4 tonnes, at $810 million, slightly less than $850 million it spent buying 15 tonnes of gold in November last year.

"The markets were stable in July and we judged the conditions were good for us to make the purchase then," said Lee Jung, head of the Investment Strategy Team at the Bank of Korea's Reserve Investment Division.

... Dispatch continues below ...

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Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment:
38% Pre-Tax IRR, $3.0 Billion NPV, and a 37-Year Mine Life

Company Press Release

VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory.

The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57.

The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows:

Payback period: 3.55 years
Initial capital investment: $863 million
IRR pre-tax (100% equity): 38 percent
NPV pre-tax (8% discount): $3 billion
Mine life: 37 years
Total mill feed: 405.3 million tonnes
Mill throughput: 32,000 tonnes per day

Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics."

For the complete press release, please visit:

http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...


Lee declined to provide the exact net purchase price per ounce it paid for the bullion, typical of most central banks, although he said price was not a major factor in the decision to make the purchases.

Calculations from the total value and volume of the purchase show that the Bank of Korea paid about $1,582 per ounce on average, compared with an average spot price of about $1,592 for the month.

Increased volatility in the global financial markets and falling confidence in the U.S. dollar have persuaded central banks to diversify their foreign reserves away from the U.S. currency and government debt securities.

Central banks became net gold buyers in 2010 for the first time in two decades and have remained buyers since, with an easing of prices this year helping the cause to accumulate more of the safe-haven reserve asset.

South Korea is Asia's fourth-largest economy and its foreign reserves of more than $300 billion ranked the seventh in the world and were equivalent to about 30 percent of its annual gross domestic product.

Gold accounted for 0.9 percent of the value of South Korea's total foreign reserves at the end of July, up from 0.7 percent a month earlier, the central bank said. The total book value of its gold holdings was at $3.0 billion, it added.

The South Korean central bank said it now ranked 40th in the world in gold holdings at the end of July, up from 43rd in June.

It announced the gold purchases when it made a scheduled release of the country's latest foreign exchange reserves data, which edged up to $314.35 billion at the end of July from $312.38 billion at the end of June.

South Korea, the fourth largest economy in Asia, had the seventh largest foreign exchange reserves in the world as of the end of June, of which securities including government bonds made up 91.1 percent, it added.

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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit:

http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf

In The News Today

Posted: 01 Aug 2012 05:07 PM PDT

Dear CIGAs,

Patience with gold when you know you are right is an asset.

There is nothing like a good nap after the close.

Jim Sinclair's Commentary

Many of you are so lost in the Fed soap opera that you have lost your focus entirely. The longer the Fed waits, the greater

Continue reading In The News Today

Stunning Crimes of the Big Banks: Worse than Your Wildest Imagination

Posted: 01 Aug 2012 05:01 PM PDT

Preface:   Not all banks are criminal enterprises.  The wrongdoing of a particular bank cannot be attributed to other banks without proof.  But – as documented below – many of the biggest banks have engaged in unimaginably bad behavior.

Here are just some of the improprieties by big banks:

  • Engaging in mafia-style big-rigging fraud against local governments. See this, this and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
  • Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Committing massive fraud in an $800 trillion dollar market which effects everything from mortgages, student loans, small business loans and city financing
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this
  • Participating in various Ponzi schemes. See this, this and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments

The executives of the big banks invariably pretend that the hanky-panky was only committed by a couple of low-level rogue employees. But studies show that most of the fraud is committed by management.

Indeed, one of the world’s top fraud experts – professor of law and economics, and former senior S&L regulator Bill Black – says that most financial fraud is “control fraud”, where the people who own the banks are the ones who implement systemic fraud. See this, this and this.

But at least the big banks do good things for society, like loaning money to Main Street, right?

Actually:

  • The big banks have slashed lending since they were bailed out by taxpayers … while smaller banks have increased lending. See this, this and this

We can almost understand why Thomas Jefferson warned:

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies ....

John Adams said:

Banks have done  more injury to religion, morality, tranquillity, prosperity, and even wealth of the nation than they have done or ever will do good.

And Lord Acton argued:

The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.

The Gold Price Remains Safely Above it's 20 and 50 Day Moving Average

Posted: 01 Aug 2012 04:59 PM PDT

Gold Price Close Today : 1603.70
Change : -6.80 or -0.42%

Silver Price Close Today : 2751.70
Change : -37.8 or -1.36%

Gold Silver Ratio Today : 58.280
Change : 0.546 or 0.95%

Silver Gold Ratio Today : 0.01716
Change : -0.000162 or -0.94%

Platinum Price Close Today : 1399.80
Change : -15.60 or -1.10%

Palladium Price Close Today : 581.80
Change : -7.95 or -1.35%

S&P 500 : 1,375.34
Change : -3.98 or -0.29%

Dow In GOLD$ : $167.26
Change : $ 0.31 or 0.18%

Dow in GOLD oz : 8.091
Change : 0.015 or 0.18%

Dow in SILVER oz : 471.57
Change : 5.23 or 1.12%

Dow Industrial : 12,976.21
Change : -32.47 or -0.25%

US Dollar Index : 83.13
Change : 42.600 or 105.10%

Once the GOLD PRICE broke that $1,610 level it must inevitably re-visit $1,600. It did, even dropping today as low as $1,592.70. None of this is fatal, since gold shook off its torpor and closed down only $6.80 at $1,603.70.

On the longer chart, gold closed today barely above the even-sided triangle's top boundary, the one it spent 3 months sketching out and broke out of 6 days ago.

The GOLD PRICE remains safely above its 20 day moving average ($1,591.71) and 50 DMA (1,592.33), and so far today's more looks like no more than a return to breakout for a kiss good-bye.

Left to itself, gold is trying to climb. However, tomorrow the European Central Bank will load up its Blarney Cannon for another salvo. That might blacken gold's face for a day or two, but I think the Fed has already done as much damage to gold as central banks can right now.

As my friend Sut would say, "You could put a central banker's soul into a turnipseed and it would have as much room to fly around as a leatherwing bat in a meeting house."

Markets taxed the SILVER PRICE 37.8 cents today for a close at 2751.7c. Low came at 2716.5c, but point is that silver couldn't hold on above 2800c.

Bull markets climb a wall of worry, especially bull market rallies. SILVER is always the more troublous metal as rallies begin, slower to start, jumpier. Unless tomorrow brings much weaker closes, gold below $1,580 and silver below 2680c, y'all will see higher prices next.

By the way, silver closed right on the upper boundary of that flat-topped triangle.

The world awaited the Mighty Shot from the Ben's Blarney Cannon, but 'twas not the shot heard round the world but the shot barely heard across the street. No bigger than a mouse burp. Peetiful.

Constrained by a presidential election year and heavy political criticism, the Fed chose not to do anything more than bloviate and bluster. Stock and euro buyers weren't happy to hear that, and showed their displeasure by backing off.

Yes, I know that measles, too, is despicable, just like the Fed, but can still kill you. And the Fed can still cause monstrous spasms of pain and poverty, yet once again we see how despicable and powerless they really are. They're not running the economy, they're riding a tiger, praying like crazy they can hold on without getting mauled. The adults are all gone.

Stocks were slammed today from all sides. An electronic glitch stopped trading for a while, stock announcements were mixed, and the Fed refused to mount the white horse and ride to the rescue.

Dow yielded up 32.47 (0.25%) to close 12,976.21. S&P500 matched that with a 3.98 point (0.29%) fall to 1,375.34.

My, my, how a few days' passage has exposed Mario Draghi's boast he would do anything to save the euro, a boast empty as the Grand Canyon. Stocks were ecstatic Friday, and today are depressed. See how wonderfully well central bank manipulation works for markets?

Dow had appeared to have broken out to the upside of a rising wedge, which normally breaks out downside. Now it has traded back down into the wedge, begging one to conclude that it was a false breakout, and the market's true direction is toward the earth's core. A single 200 point bad day will take stocks out the bottom side of that wedge, and that won't encourage buyers any more than Mario Draghi's hogwash.

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.

Big Game Hunting… in the Philippines

Posted: 01 Aug 2012 04:20 PM PDT

People often ask me where I find my off-the-beaten-path ideas. One of the best ways I've found is to travel and meet with fellow investors. They can be your bird dogs to emerging opportunities.

So I'll be in Cambodia and an investor there will tell me excitedly about the opportunities in Myanmar (Burma). Or I'll be in Mongolia and someone will talk of similar opportunities in Namibia. Or I'll be in Colombia hearing an investor tell me about his recent trip to Haiti and what he found there. These things have all happened to me.

It happened again last night.

I was sitting in a Chinese restaurant in Honolulu with new friends. And as often happens, the conversation turned to investing. One of my dinner mates had his own favorite idea: the Philippines.

It might sound far-fetched, but the proof is in the eating. The Philippine stock market is among the best performing in the world this year. Its economy is one of the few Asian economies that will grow faster this year than last. The Philippine peso is the best-performing currency against the dollar this year, with a 5% gain.

The man putting forth the Philippines idea is an ex-banker, among other things. He has interests and connections in Manila. He has been back in forth dozens of times over the past couple of decades and marvels at the changes.

"There are cranes everywhere," he reports. "New buildings, shops, restaurants. It's incredible. I would never have thought to see that happening."

The usual ingredients are at work, like yeast in bread dough, making the place rise: a young population, large untapped mineral wealth and a change in government.

As to the young population, the median age is only 22.9 years old. It seems all the booming countries I've visited in Asia, from Cambodia to Mongolia, have young populations. The advantage this brings is that most of population is of working age and thus such countries avoid the demographic challenges of the aging West.

Then there is that mineral wealth. There are some 7,000 islands that make up the Philippines. The geological forces creating those islands also brought rich minerals to the surface, where they can be mined. By some estimates, the Philippines' mineral wealth tops $2 trillion and is perhaps as great as Indonesia's. Gold, copper, nickel, iron ore — it is all here in large, untapped deposits. Billions of dollars in new mining plans are set for approval.

The third force at work is change at the government level. Current President Benigno Aquino swept into office in 2010. Among other things, he has been a big booster of much-needed infrastructure investment. The government has approved road projects worth $1.1 billion.

The government is also encouraging the build-out of things such as the airport and rail system with public-private partnerships designed to ensure a target return to investors. The country's largest companies are building new office towers and residential communities and shopping malls. Chinese manufacturers, seeking to escape hotly rising costs at home, look at the Philippines as an alternative.

At the sovereign level, Philippine finances are trending well. The country has a rating just below investment grade. It has currency reserves that exceed its external debts. The analogy would be a cash-rich company with more cash than debt. Yet a 10-year government bond pays nearly 6%. Add in the 5% currency gain and, if you are U.S. dollar-based investor, you've got an S&P-beating 11% gain.

Still, you'd had done better in Philippine equities. The iShares exchange-traded fund –ticker EPHE, which consists of Philippine stocks — is up 25% this year.

Pretty wild, huh?

Now, who knows whether this holds together or not? In my experience, these frontier markets tend to run for a while. One-year wonders are not the norm. The Philippines hasn't had a boom since before the Asian Crisis of '97. So it's been a long time coming.

The whole story just goes to show you once again how this planet of ours is one giant ball of constantly evolving opportunities. New ones emerge and old ones close out.

I'm in Hawaii checking out real estate. It seems an unlikely spot for a bargain-hunter like me to be. The housing market in Honolulu, for instance, is the most expensive in the U.S. The median price is nearly nine times the median income. A normal ratio would be something between two-three.

But you'd be surprised at what you can find even here. There is a huge demand for housing. And there are only so many places downtown where such housing might go. Those few places are tremendously valuable — and I've found a company that owns prime real estate in Honolulu trading for a fraction of its worth.

In my investing career, I've learned it pays to never stop searching. Never give up the hunt for great ideas.

One of my favorite explorers was Roy Chapman Andrews, who led the Central Asiatic Expeditions in Mongolia in the 1920s. (I recently read an excellent biography of Andrews called Dragon Hunter while I was traveling through the country myself.) Andrews had a great quote that I like a lot. He said: "Always there has been an adventure just around the corner… and the world is still full of corners!"

Insert the word "opportunity" for adventure and I think you have an investment mantra to live by.

Regards,

Chris Mayer,
for The Daily Reckoning

Big Game Hunting… in the Philippines 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?".

Death of the dollar: John Butler talks to Alasdair Macleod

Posted: 01 Aug 2012 04:15 PM PDT

John Butler, Chief Investment Officer at Amphora Commodities Alpha and publisher of The Amphora Report, talks to GoldMoney's Alasdair Macleod about how America's debt problem and political ...


This posting includes an audio/video/photo media file: Download Now

Turk sees another U.S. debt downgrade and gold explosion

Posted: 01 Aug 2012 03:37 PM PDT

5:33p ET Wednesday, August 1, 2012

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk tells King World News that the Federal Reserve is losing control, that the world financial crisis is a sovereign debt crisis that includes the United States, that U.S. debt will be downgraded again, and that gold and silver explosions are imminent. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/1_Tur...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit:

http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf


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Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment:
38% Pre-Tax IRR, $3.0 Billion NPV, and a 37-Year Mine Life

Company Press Release

VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory.

The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57.

The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows:

Payback period: 3.55 years
Initial capital investment: $863 million
IRR pre-tax (100% equity): 38 percent
NPV pre-tax (8% discount): $3 billion
Mine life: 37 years
Total mill feed: 405.3 million tonnes
Mill throughput: 32,000 tonnes per day

Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics."

For the complete press release, please visit:

http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...

A Cartel of Big Banks Is Hurting the World Economy By Manipulating Derivatives

Posted: 01 Aug 2012 03:28 PM PDT

The Bank of England said recently that Libor is not the only market which is manipulated by the big banks.   We noted last month:

 

There have also been allegations that the self-certifying derivatives indicator – iSwap – has been massively manipulated.  See this and this.

Spiegel reports today:

"In our investigations, we concentrate on suspicious cartel agreements that include derivatives. This includes possible secret agreements about the determination of these lending rates," says European Competition Commissioner Joaquín Almunia. In other words, the investigators are interested in more than the manipulation of global interest rates to benefit specific parties. It's also possible that the enormous market for derivatives was manipulated.

 

"Derivatives traders are also believed to have agreed upon the difference between the buy and sell prices (spreads) of derivatives, thereby selling these financial instruments to customers under conditions that were not customary in the market," says the Swiss Competition Commission, which is also investigating possible cartels.

 

It is difficult to find clear evidence, such as a written cartel agreement. But in Brussels alone, more than 40 banks have contacted authorities to report what they know about years of manipulation.

Of course, out-of-control derivatives were largely responsible for the 2008 financial crisis ... and still pose a massive threat to the economy.

But the cartel of giant banks is preventing a fix:

The big banks are preventing derivatives from being tamed.

 

***

 

The derivatives “reform” legislation previously passed has probably actually weakened existing regulations, and the legislation was “probably written by JP Morgan and Goldman Sachs“.

 

***

 

Harold Bradley – who oversees almost $2 billion in assets as chief investment officer at the Kauffman Foundation – told the Reuters Global Exchanges and Trading Summit in New York that a cabal is preventing swap derivatives from being forced onto clearing exchanges:

There is no incentive from the moneyed interests in either Washington or New York to change it…I believe we are in a cabal. There are five or six players only who are engaged and dominant in this marketplace and apparently they own the regulatory apparatus. Everybody is afraid to regulate them.

That’s bad enough.

 

But Bob Litan of the Brookings Institute wrote a paper (here’s a summary) showing that – even if real derivatives legislation is ever passed – the 5 big derivatives players will still prevent any real change. James Kwak notes that Litan is no radical, but has previously written in defense in financial “innovation”.

 

Here’s a good summary from Rortybomb, showing that this is yet another reason to break up the too big to fails:

Litan is worried about the “Dealer’s Club” of the major derivatives players. I particularly like this paper as the best introduction to the current oligarchy that takes place in the very profitable over-the-counter derivatives trading market and credit default swap market. [Litton says]:

I have written this essay primarily to call attention to the main impediments to meaningful reform: the private actors who now control the trading of derivatives and all key elements of the infrastructure of derivatives trading, the major dealer banks. The importance of this “Derivatives Dealers’ Club” cannot be overstated. All end-users who want derivatives products, CDS in particular, must transact with dealer banks…I will argue that the major dealer banks have strong financial incentives and the ability to delay or impede changes from the status quo — even if the legislative reforms that are now being widely discussed are adopted— that would make the CDS and eventually other derivatives markets safer and more transparent for all concerned…Here, of course, I refer to the major derivatives dealers – the top 5 dealer-banks that control virtually all of the dealer-to-dealer trades in CDS, together with a few others that participate with the top 5 in other institutions important to the derivatives market. Collectively, these institutions have the ability and incentive, if not counteracted by policy intervention, to delay, distort or impede clearing, exchange trading and transparency…

 

Market-makers make the most profit, however, as long as they can operate as much in the dark as is possible – so that customers don’t know the true going prices, only the dealers do. This opacity allows the dealers to keep spreads high…

 

In combination, these various market institutions – relating to standardization, clearing and pricing – have incentives not to rock the boat, and not to accelerate the kinds of changes that would make the derivatives market safer and more transparent. The common element among all of these institutions is strong participation, if not significant ownership, by the major dealers.

So Bob Litan is waving a giant red flag that the top dealer-banks that control the CDS market can more or less, through a variety of means he lays out convincingly in the paper, derail or significantly slow down CDS reform after the fact if it passes.

 

***

 

If you thought we’d at least get our arms around credit default swap reform from a financial reform bill, you should read this report from Litan as a giant warning flag. In case you weren’t sure if you’ve heard anyone directly lay out the case on how the market and political concentration in the United States banking sector hurts consumers and increases systemic risk through both political pressures and anticompetitive levels of control of the institutions of the market, now you have. It’s not Matt Taibbi, but it’s much further away from a “everything is actually fine and the Treasury is in control of reform” reassurance. Which should scare you, and give you yet another good reason for size caps for the major banks.

 

Moreover, the big banks are still dumping huge amounts of their toxic derivatives on the taxpayer. And see this.

Indeed, the U.S. has agreed to backstop potential trillions in derivatives in the U.S. ... and abroad.

If the big banks are manipulating the derivatives market, they could manipulate every other market on the planet.   Given that the size of the derivatives market dwarfs the entire global economy, and given that derivatives are - by definition - not real assets, but paper abstractions loosely based upon real assets, manipulation of derivatives can drive asset prices up or down at whim.

Of course, the big banks are doing a lot other things to move markets as well, such as:

Of course, the big banks own Washington D.C. politicians, lock stock and barrel.  See this, this, this and this.

So don't expect anything to change without a huge public outcry ... or worse (and see this).

Gold to rise to $1,700/oz in a month: UBS

Posted: 01 Aug 2012 03:17 PM PDT

31-Jul (Commodity Online) — Union Bank of Switzerland (UBS) raised its one month gold forecast to $1,700 an ounce from $1,550/oz and its three-month forecast to $1,750 an ounce from $1,600.

According to the Zurich based bank, a greater chance for monetary stimulus from the Federal Reserve should support gold prices, with the yellow metal seen rising to $1,700 an ounce in a month.

Edel Tully, precious metals strategist at UBS stated that, "our one-month target coincides with the Fed's Jackson Hole symposium at the end of August, which we think will be significant for policy expectations ahead of the September FOMC meeting."

[source]

Gold Chart updated

Posted: 01 Aug 2012 02:53 PM PDT

[url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Here is an updated 12 hour gold chart showing the resistance level between 1620-1630 which so far has been able to hold gold's upward progress. Note that gold did spike below the $1600 briefly out of disappointment with the comments from the FOMC but rebounded as dip buyers believe (hope springs eternal) that the Fed will certainly act next month. Also some are expecting some gold friendly statements from the ECB as far as measures they will undertake to support the Euro and deal with the sovereign debt issues over that way. Regardless, the market failed at the upside of the newest congestion zone and thus remains trapped within that pattern albeit with a slight upside bias at this time. ...


In Search of the Next Bubble

Posted: 01 Aug 2012 02:43 PM PDT

August 1, 2012

  • Uh-oh: The people who said gold is a bubble have a new target in their sights…
  • Bill Bonner deconstructs today's Fed announcement… in a days-old interview!
  • Byron King on the "right" price for oil
  • Taking the pulse of the world's manufacturing… Ponzi-tastic precious metals dealer meets his comeuppance… More mind-bending implications of a gun created on a 3-D printer… and more!

  Nothing like looking for a bubble in all the wrong places.

For years, mainstream "experts" insisted gold was in a bubble. Never mind that most of these experts failed to spot the bubble in tech stocks in the late '90s… or in real estate the previous decade.

Now, with gold still gathering steam for its next run at a record high, the bubble spotters have moved on to a new target. Typical of the bunch is this Forbes headline: "Is a Bubble Forming in Dividend Stocks?"

  We pause here to note that four years of zero interest rate policy by the Federal Reserve have wrought the following as of this morning…

• A 10-year Treasury note yields 1.51%

• The best offer we can find on a 5-year CD is 1.68%

• The best offer we can find on a savings account is 1.01%

All of those figures are lower than the government's (totally skewed) measure of consumer price inflation, currently 1.7%.

Talk about "punishing savers." No wonder they're giving dividend stocks a look. But a "bubble"? Seriously?

  The bubble-criers point to Wal-Mart as a prime example.

Jim Nelson recommended his Lifetime Income Report readers get into WMT a year ago at $52.50. This morning, it's at $74.20. That's a ridiculous 41.3% capital gain.

A

"The share price of this giant company shouldn't be moving that much," writes Kelly Green, who joined Jim on our income desk this spring. "The company's fundamentals are growing…but not at that kind of rate."

The most recent dividend hike was 8.1% — one-fifth of the increase in share price. Result: WMT's yield is getting crushed.

"At our entry price," Kelly says, "we're collecting a 3.05% yield. But if you bought at today's price, it would be only 2.10%. The conclusion here is that shares of Wal-Mart are likely overbought." Little wonder Jim and Kelly have moved WMT to "hold," their readers happy to collect their 3% income checks.

"Wal-Mart's stock may not have much upside in the short term," Kelly goes on, "but its dividend certainly does. And over the long term, these share prices will still seem cheap. The investors buying up stock right now are not thinking of the long term. They are just picking up WMT's yield while they wait for something more enticing to come along."

  The problem for the bubble seers is that Wal-Mart is not representative of dividend stocks as a whole.

Check out the yield of the entire S&P 500 index. "If yields are down," says Kelly, "we might have a true bubble on our hands after all."

B

Gee, guess not.

"Not only are dividend yields higher than their 10-year average," Kelly writes, "they are still increasing. This means that there cannot be a bubble forming across dividend stocks. You can't have investors piling into dividend stocks AND see rising dividend yields.

"There is no doubt," Kelly concludes, "that more investors are figuring out that steady streams of income is a great investment strategy. And for certain stocks, this thinking is sure to demolish yields.

"This current landscape has made it more important than ever to make sure that we are locking in the yield that we deserve for each play. We need to make sure that we aren't paying more for a share than it's worth."

Kelly and Jim are on the lookout for only the best income plays of the moment. One in particular they're especially fond of; it affords you a unique opportunity to defray the high cost of filling your gas tank.

  Stocks are treading water yet again this morning, traders waiting with bated breath until the Federal Reserve issues its latest pronouncement on life, the economy and everything.

Said pronouncement — informed by the conceits of what Bill Bonner calls "the new economists" — will be a fait accompli by the time you read this.

"The old economists used to call themselves 'moral philosophers,'" said Bill Bonner during an interview last week in Vancouver with Victor Adair. "They thought the world worked in a way in which you do something, and what you do has consequences."

Interview with Bill Bonner

In contrast, "the new economists think that you just turn another bolt, twist a screw, throw a lever, print some more money… They think they can control the system. They think they can kick the can so far down the road that we'll never find out. I don't think that's happening."

  Until the Fed weighs in, traders have manufacturing numbers to pore over this morning.

It being the first of the month, there's a global synchronized release of factory-activity surveys. As always, numbers higher than 50 indicate growth, lower than 50, contraction…

• China: Sinking to an eight-month low of 50.1, according to the official government figure. HSBC's separate survey, focused on the private sector, improved to a five-month high of 49.3

• Eurozone: Down for the 11th-straight month, to a three-year low of 44.0, according to Markit

• United States: Up a tenth of a point, to 49.8, according to the ISM manufacturing survey. This is two sub-50 readings in a row, the first time that's happened in three years.

Within the ISM, new orders remain in contraction at 48.0. Export orders are worse at 46.5. Bleah…

  Oil is climbing a bit this morning. A barrel of West Texas Intermediate fetches $88.27. Brent crude, a better benchmark for the price worldwide, sits at $105.69.

  "I've had a few media calls," says Byron King, "in which reporters ask me what I think is the 'right' price for oil.

"My view is that oil 'ought' to sell in the $90-100 range for Brent international, with West Texas Intermediate trading about $10 below that.

"These kinds of price levels reflect the value of oil to the world economy, and pay off the major producers and exporters. At the same time, that $80-100 range is well above the finding cost for most new oil plays. The price level gives Western oil companies incentive to keep up the pace of drilling and the search for new supply.

"Then again, oil prices are subject to speculation and manipulation. Beware price spikes, which truly damage the global economy. Beware prices that fall too low for too long, because that cuts the legs out from under necessary investment."

  Gold is losing ground as the Fed announcement approaches. Indeed, it slipped below $1,600 moments before fingers hit keyboard.

Silver has retreated big-time, down more than 2%, to $27.38.

  A South Carolina bullion dealer has reached a plea agreement with the feds over a Ponzi scheme that rooked silver investors to the tune of $90.1 million.

As The 5 mentioned in June, the Commodity Futures Trading Commission accused Atlantic Bullion & Coin of fraudulently offering contracts on silver sales, but never buying any metal. As many as 945 investors had been duped for more than a decade.

"Defendants have, on one or more occasions, used proceeds from a later investor to fund repayment of a portion or all of an earlier investor's investment and/or payment of returns and have not notified the later investor of this material fact," said a statement by South Carolina Securities Commissioner Alan Wilson.

On Monday, the firm's owner Ronnie Gene Wilson — presumably no relation — pleaded guilty to two counts of mail fraud. He faces up to 20 years in prison and $500,000 in fines.

[Ed. Note: Just goes to show you can never be too careful. That's one reason we long shied away from recommending a bullion dealer to our customers. Until now. We've known the people behind the Hard Assets Alliance for years; they've developed the simplest way to buy, store, sell or take delivery of precious metals.

For a limited time, setting up an account is absolutely free; here's where you can get started. Be advised, we may be compensated if you fund your account. But we wouldn't recommend this opportunity if we didn't stand behind it 100%.]

   "Are you guys publishing all the hate for Casey because he's a competitor?" a reader inquires.

"Mr. Gonigam has not provided his 2 cents as he usually does for reader feedback, and only offers the full context of Casey's speeches for at least $99.

"But yeah, readers should know better. Casey's point is that if government didn't stand in the way of wealth creation, employment and output would be such that there'd be practically no need for charity.

"I dare you to publish this (Dunno if that still works. If not, ca va)."

The 5 : As noted last week, it works only if a limited number of people resort to it!

Casey Research, for the record, is a competitor with whom we have a long-standing and thoroughly cordial relationship.

As for "my 2 cents," this editor tries to refrain if other readers can say the same thing, but better. Like this fellow who appeared in yesterday's episode…

  "First, thanks for sharing my comments on Casey.

"I don't reply with an expectation that you'll publish. It's good to know they're read, and my ulterior motive is to provide my share of feedback that keeps The 5 alive. Hey, if nobody was listening, you guys would direct your energies somewhere else. And to complete your value chain (and, in turn, mine), it provided the final motivation to me signing up for the Agora Financial Digital Reserve.

"Second, as a follow-up on the 3-D printing technology, my son, who is an early adopter hobbyist and follower of all things 3-DP said that there have actually been models online for the AR-15 receiver for several months, adding that he was surprised that it took someone this long to print one up.

"I suppose it's one thing to make all the measurements of the real thing and build the model in CAD. It's quite another to put yourself in ATF's cross hairs by putting the picture out on hackaday.com and risk intervention something north of what the lemonade stands are receiving.

"Aside from the hack value, this technology will have amazing repercussions as it matures. At the beginning, it seemed the killer app for a printer was to print more plastic parts to make more printers. As the materials and resolutions improve, so will the decentralization and individualization of production. That's a game changer in more ways that we can imagine."

   "There were some factual errors in The 5 's story about the AR-15 receiver," writes another reader.

"A typical lower is, indeed, made from aluminum, but it is not sheet metal. The receiver is typically forged, some may even be cast, but not sheet metal. Next time, check with a gun shop, not some techie.

"While the report you received may have stated .22 pistol rounds were fired, I am unaware of any such designation. Ammunition is not generally limited to a pistol or rifle. There is something called .22 rimfire which comes in different lengths, but is fired from either a rifle or a pistol with equal ease.

"The photo shown looks like an AR-15 pistol which has the same action but a short barrel and no butt stock. Additionally, the bolt and barrel would no doubt require replacement to change from a rimfire cartridge to a center fire such as a .223."

The 5 : During this editor's lengthy and largely wasted career in conventional journalism, he learned there are two subject areas in which extremely knowledgeable folk are quick to write/call and correct any errors — aviation and firearms. Consider our report amended accordingly.

The story is certainly taking on a life of its own. "What's particularly worrisome," frets a writer at Forbes, "is that the capability to print metal and ceramic parts will appear in low-end printers in the next few years, making it feasible to print an entire gun, and that will be when gun control becomes a totally different problem."

Bring it on, writes J.D. Tuccille at Reason: "Think of it — a world of plenty, with easy localized manufacture of almost anything you might need. It's a world in which 'that should be illegal' becomes a punch line.

"The next time your control freak friends start in on their latest litany of should-be-banneds, tell them that their arguments are now irrelevant. Tell them why. And savor their sweet tears of despair."

How sweet it is,

Dave Gonigam

The 5 Min. Forecast

P.S. Addison's friend Nathan Lewis is among the experts testifying tomorrow at Rep. Ron Paul's monthly hearing of the House Subcommittee on Domestic Monetary Policy. The topic is Sound Money: Parallel Currencies and the Roadmap to Monetary Freedom.

Mr. Lewis' book Gold: The Once and Future Money is required reading here at Agora Financial. Addison wrote the foreword to a volume that's every bit as relevant now as it was when published five years ago.

Turk - Gold To Explode Higher As US Debt To Be Downgraded

Posted: 01 Aug 2012 02:38 PM PDT

On the heels of the Fed decision and continued volatility in gold and silver, today King World News interviewed James Turk out of Europe. Turk stunned KWN by saying that US debt is about to be downgraded once again. Turk also warned, "The reality is the Fed is losing control," and the Fed is now being "overwhelmed." He went on to say that all of this means right now we are going to see an "upside explosion" in both gold and silver.

Here is what Turk had to say:  "The Federal Reserve has made another announcement, Eric, and each one of their proclamations makes it more obvious that the Fed is no longer in the driver's seat.  It is just rehashing the same stuff.  The reality is the Fed is losing control.  It is slowly but surely being overwhelmed by events, and particularly, the reality that US government finances are out of control."


This posting includes an audio/video/photo media file: Download Now

Gold Seeker Closing Report: Gold and Silver Fall With Stocks

Posted: 01 Aug 2012 02:27 PM PDT

Gold edged up to $1618.45 in Asia before it dropped down to $1592.17 after the FOMC announcement, but it then bounced back higher in late trade and ended with a loss of just 0.87%. Silver slumped to as low as $27.157 before it also rebounded, but it still ended with a loss of 2.04%.


Gold Daily and Silver Weekly Charts - Typical FOMC Bear Raid at the Comex Open

Posted: 01 Aug 2012 02:06 PM PDT


This posting includes an audio/video/photo media file: Download Now

What Happens to Greece’s Gold when They Exit the Eurozone

Posted: 01 Aug 2012 02:00 PM PDT

With Germany's leaders telling us that the exit from the Eurozone by Greece no longer holds terror for them, we understand that they are prepared for such an eventuality. As the E.U. leader's representatives went to Greece this week to see the progress on the implementation of structural reforms and the austerity measures, it became clear to all that while we must wait for the results from them, Greece is failing in its efforts and further financing will be held beck for now, at least. Adding to the woes in Greece, there is little agreement within their Parliament. The Greek government is itself a broad mix of conservatives and Socialists.


Make Money in Gold with Prospect-Generator and Royalty Companies

Posted: 01 Aug 2012 01:50 PM PDT

Adrian Day, principal of Adrian Day Asset Management, which manages portfolios for high-net-worth clients, believes that it is time for the gold pendulum to swing away from the excessive pessimism in the market and finds that now is an exceptional time to buy gold equities. In this exclusive interview with The Gold Report, Day explains why gold is ready to rebound and why prospect-generator and royalty companies are king.


Comex Gold Ends Moderately Lower as FOMC Produces No QE3

Posted: 01 Aug 2012 01:49 PM PDT

01-Aug (Forbes) — Comex gold futures prices ended the U.S. day session modestly lower and then extended those losses slightly in the wake of the release of the FOMC statement from the Federal Reserve. The Fed statement did not contain any significant policy changes, as many market bulls were hoping for a fresh monetary stimulus program—nicknamed QE3. The U.S. dollar index did rally following the FOMC statement, which was a bearish development for the precious metals. December gold last traded down $19.00 at $1,595.00 an ounce. Spot gold was last quoted down $20.40 an ounce at $1,595.25. September Comex silver last traded down $0.774 at $27.14 an ounce.

The Wednesday afternoon conclusion of the two-day FOMC meeting of the U.S. Federal Reserve was not widely believed to see the Fed announce a major new stimulus initiative (QE3). Still, many markets, including the precious metals, did weaken following the news. However, many believe such an announcement will occur in the coming weeks.

[source]

Silver Price Slammed Lower

Posted: 01 Aug 2012 01:47 PM PDT

“He did not care for the lying at first. He hated it. Then later he had come to like it. It was part of being an insider, but it was a very corrupting business.” Ernest Hemingway, For Whom the Bell Tolls The slam on silver seems to coincide with the ADP Report which was better than expected. Just now the ISM Manufacturing number showed a contraction at 49.8, so now it can go up again?


What Moves Gold Stocks?: Jocelyn August

Posted: 01 Aug 2012 01:41 PM PDT

The Gold Report: What kinds of catalysts move gold and other precious metals stocks the most? Jocelyn August: The announcements that move gold and precious metals stock are ones that indicate economic viability of a project, such as a feasibility study or the preliminary economic assessment (PEA), which obviously indicate the strength of the mineral or resource. Also, a resource estimate or even updated mineral resource estimates move these stocks because they can show whether or not a resource is getting larger, or if a company has been able to convert some of the mineral resource to a more economically strong asset. So, typically, we'll see a positive move as long as the catalyst indicates positive economic viability or an increase of the mineral resource. TGR: In the current environment, do catalysts matter? [INDENT] Related Articles: Catalytic Events Moving Gold Stocks: Jocelyn August How to Minimize Risk and Increase Returns on Juniors: Joe Mazumdar Ten-Point Model for Pick...


Benighted Policymakers Don't Stand a Chance - Again

Posted: 01 Aug 2012 01:06 PM PDT

Last week's Pivot concluded that the Dollar Index was having trouble getting through the 83.5 level and that any decline would prompt some "Positive vibes". The shelf-life was good until Friday ... Read More...



Gov’t Controlling People Through Food

Posted: 01 Aug 2012 12:08 PM PDT

Dr. Gold brings his diverse background to the air and voices his opinions on politics, the economy, world issues and other hot-button topics. Dr. Gold brings tremendous passion and energy to the Cory Gold Show.

Formerly a practicing dentist, Dr. Gold moved into the business world where he founded several businesses in diverse fields. Dr. Gold has been the president of both a publicly traded company and has run several privately held companies.

Dr. Gold is also a nationally recognized speaker and trainer in the entrepreneurial world of network marketing. He has a history of being a top level leader in several world-renowned network marketing companies and currently holds the highest international rank at the company that he works with. Read more.....


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Government Silently Positions for Martial Law as Financial Collapse Arrives in America

Posted: 01 Aug 2012 11:59 AM PDT

The US government has been scheming on how to provide for continuity of government for many decades now. According to Peter Santilli, an informant who is an ex-marine and worked on portions the contingency plans known as Rex 84, civil unrest will come after a financial collapse.

The Readiness Exercise 1984, a.k.a. Rex 84, outlines continuity of government wherein the US Constitution is suspended, martial law is declared and the US military command take over state and local governments in order to ensure stabilization of our nation at any cost. Any American who is deemed a "national security threat" would be detained in an interment or FEMA camp.

The author of Rex 84 was Lieutenant Colonel Oliver North, National Security Council (NSC) White House aids and NSC liaison to FEMA.

Rex 84 is the plan; the triggers are a series of executive orders . It is the continuity of government under specific contingency strategies that are laid out in various operations guide manuals. Operation Garden Plot is a subprogram of Rex 84.

Twice before, Rex 84 was implemented – during the LA riots and on 9/11. In these scenarios, only small portions of the entire set of documents were used. Within the series of contingency plans, implementation of them depends on the severity of the situation. Read more.....


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Welcome to the Currency War, Part 3: US Corporate Profits Plunge

Posted: 01 Aug 2012 11:53 AM PDT

The euro is down big lately, which is to be expected. Over-indebted countries have traditionally used devaluation to keep their debts from crippling them.

The problem is that a cheaper currency is only a temporary fix because it invites retaliation from everyone else. For a real-world example of this process in action, consider what just happened to McDonald's. For the past few years it has been turning crappy food into great numbers, in part by adding new restaurants in hospitable markets and in part because the dollar was relatively weak, which made the euros and yen McDonald's earned relatively valuable.

But with the euro plunging against the dollar, these trends have shifted into reverse:

McDonald's second-quarter profit falls, shares slide

(Reuters) – McDonald's Corp reported lower-than-expected quarterly profit on Monday, hurt by a slowing global economy and the impact of a stronger dollar, and said sales growth at established restaurants would slow this month.

Results from the world's biggest hamburger chain showed that even the most resilient restaurant operators were being hurt by the weak U.S. economic recovery and persistent financial woes in Europe — which are forcing diners to pull back on spending for meals away from home.

Shares in McDonald's, which hit all-time highs of over $100 earlier this year, fell 3 percent to $88.83 in midday trading on the New York Stock Exchange.

Net income fell 4.5 percent to $1.35 billion, or $1.32 per share. The impact of the stronger dollar — which lessens the value of sales overseas for U.S. companies — cut 7 cents a share from earnings in the latest quarter, the company said.

Now extend this strong dollar/weak earnings narrative to Boeing, Monsanto, Cisco, and most other US multinationals, and suddenly the stock market, tax revenues, year-end bonuses, incumbent political prospects and everything else that makes life worth living for US elites start to look shaky. This is clearly unacceptable and will require a response. The dollar will have to go back down, and soon.

This will be accomplished with some combination of even lower interest rates, election year tax cuts, publicly-announced asset purchases or secret loans to favored banks, corporations, and political action committees. And it will probably work, lowering the dollar and raising the foreign exchange earnings of McDonald's, et al.

But by then the Japanese and Chinese will be in full retaliation mode, which will beget even more ease from Europe. And so it will go until ending the currency war by returning to sound money becomes the least destructive option.


What Happened To Gold? – Part 2

Posted: 01 Aug 2012 11:46 AM PDT

My Dear Extended Family,

I have known Alf Fields for what seems like forever. I have long held that the best technicians simply know the market of their interest and use TA as a point of focus.

The prices of $3500 – $4000 and $4500 are now in the market's focus.

Stay the course.

Continue reading What Happened To Gold? – Part 2
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