Gold World News Flash |
- The Decisive Key Now To Gold, Silver & Global Stock Markets
- Schiff - The US Will Be On A Gold Standard In 12 To 24 Months
- Comex Data Only
- Gillian Tett: Time for eurozone to reach for the gold reserves?
- Guest Post: Paul Krugman’s Mis-Characterization Of The Gold Standard
- Gold Price Closed Down at $1,653.50 but 5 Day Chart is just Trading Sideways with no New Highs or Lows
- The Banana Oil Rally
- Volatility on the Rise
- GOLD STANDARD MISINFORMATION
- Gold Daily and Silver Weekly Charts - Sleepy August, But Here Come the Winds of September
- Schizophrenia: Retirement ON By <1 DJIA Point, But Retirement OFF By <1 S&P Point
- Gold Seeker Closing Report: Gold and Silver Fall With Stocks
- Should the U.S. Return to the Gold Standard?
- Gold Price Projection – for 2013
- Ring The Bell: Treasury Debt Now Over $16 Trillion - A Modest Proposal
- When Will It Happen? What Will It Be?
- All of the assets that were financed by the credit bubble will collapse, in real terms, in the next few years. In real terms, that is against gold, they will collapse.
- Gold Smuggling Raises Its Head Again in India
- LGMR: Jackson Hole Puts Gold on Hold, But New US Money-Printing "Not Yet Priced In"
- The Hurricane Whisperer
- Kodak Drive By Shooting For Silver?
- Wars Do Not Come Unannounced
- Morning Snapshot
- Greyerz: Investors Assets To Be Stolen In The Coming Collapse
- Japan Shrugs Off Bad Data Once Again
- QE3 Hopes Lift Agricultural Shares
- Eric Sprott among GATA favorites to address Silver Summit in October
- Depressed gold shares are a screaming opportunity, Agnico CEO Boyd says
- Seth Lipsky: The gold standard goes mainstream
| The Decisive Key Now To Gold, Silver & Global Stock Markets Posted: 30 Aug 2012 11:14 PM PDT from KingWorldNews:
Here is what top Citi analyst Fitzpatrick had to say, along with some powerful charts: "I think you have to be fairly careful in these markets to get a breakout that looks fairly conclusive. If you look at silver, what we do have, which is probably the best level to look at, we have a downward sloping trendline on the log chart (see below). We look at these types of charts when we see large percentage changes, which occurred when silver dropped from $50 to $26. Converging into the same area as the sloping downtrend line is the 55 week moving average, which is currently around $31.70. If we get a weekly close above $31.70, that should open up for this retest of what we believe is the big level, the $37.48 level, which is the neckline of the double-bottom. So we would look at a close above this $31.70 area in silver as being decisive." Tom Fitzpatrick continues @ KingWorldNews.com
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| Schiff - The US Will Be On A Gold Standard In 12 To 24 Months Posted: 30 Aug 2012 10:01 PM PDT  Today Peter Schiff stunned King World News when he said the US will be back on a gold standard "... in a year or two." Schiff also said, "I would have expected a (financial) collapse to have already happened." Schiff went on to warn, "... at this point I'm going to assume there is no more stay of execution and we are going to have our crisis coming up right after Europe." But first, Schiff had this to say regarding Bernanke and his Jackson Hole speech: "QE3 is coming. He's got that card up his sleeve. It's been hidden up there for a long time. He's reluctant to admit it, but he will play it eventually. He's going to be coy about it because he doesn't want to actually come out and reveal his hand."
This posting includes an audio/video/photo media file: Download Now |
| Posted: 30 Aug 2012 08:13 PM PDT by Harvey Organ, HarveyOrgan.Blogspot.ca:
Good evening Ladies and Gentlemen: I am back and the surgery went real well. I am very wobbly but I will attempt to give you the data. The physical stories etc were written today prior to my surgery. I will catch up on all of the major stories on Saturday with you. The total comex gold OI fell by 3808 contracts from 426,559 to 422,751 as the bankers raid was quite effective in reducing OI as many gold leaves fell from the tree. The August gold month was completed yesterday. The September gold month saw it's OI fall by 28 contracts from 749 to 721. The active delivery month of October saw its OI fall 2975 contracts from 34,5034 to 31,528. The estimated volume at the gold comex was awful coming in at only 102,147. The confirmed volume yesterday was also bad at 126,398. Read More @ HarveyOrgan.Blogspot.ca
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| Gillian Tett: Time for eurozone to reach for the gold reserves? Posted: 30 Aug 2012 07:33 PM PDT Unless the gold collateral was moved out of the vaults of the sovereign borrowers vault and into the vaults of the lenders, this idea would be just another government scam, especially insofar as the supposed gold of the anticipated borrowers probably already has been sold, swapped, leased, and hypothecated into oblivion anyway. * * * Time for Eurozone to Reach for the Gold Reserves? By Gillian Tett http://www.ft.com/intl/cms/s/0/80a239a6-f2c2-11e1-8577-00144feabdc0.html Is it time for some eurozone governments to start selling that metaphorical family silver? Or, more specifically look at their all-too-real gold reserves, to find a solution to Europe's crisis? That is a question which has recently been buzzing around in some policy making and investing circles. For as autumn looms, it is clear that the eurozone remains under profound stress. However, it is also unclear whether the European Central Bank -- let alone the eurozone politicians -- will really be able to do anything soon to ease market fears and lower those borrowing costs. Thus, as unease builds, the World Gold Council -- or the body that represents the gold industry -- has recently lobbed a new idea into the fray: It thinks it is time for eurozone governments to start using gold in a creative manner, particularly in places such as Italy, to cut those interest rates. ... Dispatch continues below ... ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res... The issue at stake revolves around the estimated 10,000 tonnes of gold reserves that are held by eurozone governments. According to the council, "It is well known that some of the countries most affected by the crisis, including Portugal and Italy, are responsible for a significant proportion of these assets." Unsurprisingly, this situation has prompted some to suggest that governments should sell some of that gold. The value of gold has soared in the last few years, and if there were ever a time that eurozone countries needed an unexpected windfall -- say, to pay interest on bonds -- it would be now. But the gold council, for its part, insists this would be a mistake. For quite apart from the fact that a massive dump of gold would dampen the price, eurozone debt woes are now so large that gold sales would only scratch the surface of the problem. Or as the council notes: "The gold holdings of the crisis-hit eurozone countries (Portugal, Spain, Greece, Ireland, and Italy) represent only 3.3 per cent of the combined outstanding debt of their central governments." Thus it favours an alternative idea: Instead eurozone countries should essentially securitise part of that gold, by issuing government bonds that are backed by gold. This could be done in a simple manner; or it could be structured to include tranches of different risks. Either way, the key point is that gold would be used to provide additional security for bonds -- and thus reassure investors who do not trust eurozone government balance sheets anymore. "Using only a portion of those gold reserves as collateral could significantly reduce the rate at which each of these [periphery] countries could issue debt," the council argues, pointing out that this scheme has been employed on a few occasions in history before. In the 1970s, for example, Italy and Portugal used their gold reserves as collateral to get loans from the Bundesbank, the Bank for International Settlements, and other creditors. More recently, India raised a loan from Japan, which it backed with gold. So is there any chance this idea could fly? Don't hold your breath, or not soon. Personally -- and leaving aside the gold council's self-serving interest in pushing the scheme -- I think that the concept of gold-backed bonds certainly is worth debating. While gold-backed bonds would not be a full-blown solution, it could help in some respects. But there is little sign that the idea has garnered any serious support from policy makers thus far. Even if eurozone leaders embraced the idea, there would be some big legal obstacles; most notably, much of the gold is held by central banks, not treasuries. Nevertheless, if nothing else, investors should take note of the debate as an interesting straw in the wind. A decade ago it seemed utterly old-fashioned to ever suggest that any investor -- or institution -- would post gold as a collateral; in the era of cyber finance, securities such as treasury bonds tended to rule. But in recent months groups such as a LCH.Clearnet, Intercontinental Exchange, and the Chicago Mercantile Exchange have increasingly started to accept gold as collateral for margin requirements for derivatives trades. And earlier this summer the Basel Committee on Banking Supervision issued a discussion paper that suggested that gold should be one of six items used as collateral for margin requirements for non-centrally cleared derivatives trades, alongside items such as treasury bonds. This does not add up to a revolution, let alone the type of step toward gold-backed finance -- or a gold standard -- that gold bugs (and some American Republican Party members) would love to see. But it does suggest that a slow evolution of attitudes is underway – not so much in terms of the desirability of gold per se, but the increasingly undesirability and riskiness of other supposedly "safe" assets, such as government bonds. That pattern is unlikely to change soon, especially as markets wait to see what the ECB might unveil on September 6. Join GATA here: Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT GoldMoney adds Toronto vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada. 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| Guest Post: Paul Krugman’s Mis-Characterization Of The Gold Standard Posted: 30 Aug 2012 06:42 PM PDT Submitted by James E. Miller of the Ludwig von Mises Institute of Canada, With a price hovering around $1,600 an ounce and the prospect of "additional monetary accommodation" hinted to in the latest meeting of the Federal Reserve's Federal Open Market Committee, gold is once again becoming a hot topic of discussion. George Soros made news recently when a filing with the Securities and Exchange Commission revealed that he had liquidated his position with major financial firms and had loaded up on gold; approximately 884,000 shares worth. Jim Cramer, the CNBC personality in constant search of growing business trends, recommends putting at least 20% of one's assets in gold. Following the Republican National Convention, the party platform now proposes the establishment of a commission to study "the feasibility of a metallic basis for U.S. currency." Like the gold commission before it, this new interest in gold has brought out the critics who regard the precious metal as nothing short of, to borrow the infamous term coined by John M. Keynes, a "barbarous relic." Wesleyan University economist Richard Grossman writes in the Los Angeles Times that the idea of a gold commission is a "waste of time and money" because the standard hasn't "worked for 100 years." In The Atlantic, fiat currency enthusiast Matthew O'Brien calls the gold standard a "terrible idea" and presents a few charts demonstrating that linking the dollar to gold failed to keep prices stable. Economist and New York Times columnist Paul Krugman has praised O'Brien's article on his blog and makes sure to point out that the price of gold has been highly volatile since 1968 by showing the following chart:
There is a remarkably widespread view that at least gold has had stable purchasing power. But nothing could be further from the truth. Krugman points out that when interest rates are low the price of gold typically rises. He claims that as interest rates tend to fall during recessions, gold's rise in price would lead to "a fall in the general price level." Lastly, Krugman ridicules the notion that a true gold standard would prevent asset bubbles and subsequent busts from occurring by calling attention to the fact that America suffered from financial panics "in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933." These criticisms, while containing empirical data, are grossly deceptive. The information provided doesn't support Krugman's assertions whatsoever. Instead of utilizing sound economic theory as an interpreter of the data, Krugman and his Keynesian colleagues use it to prove their claims. Their methodological positivism has lead them to fallacious conclusions which just so happen to support their favored policies of state domination over money. The reality is that not only has gold held its value over time, those panics which Krugman refers to occurred because of government intervention; not the gold standard. Right off the bat, the Nobel Laureate makes the amateur mistake of conflating two different gold standards. There was not one set standard throughout the 19th century up to the Great Depression. Until the first World War, the United States and much of the West was under the classical gold standard. This meant that the dollar was just a name for a set amount of gold; generally 1/20 of an ounce. Following the massive inflation used to pay for World War I and the Genoa Conference of 1922, the gold exchange standard was adopted by many Western countries including Britain. Though the United States remained under an imperfect classical gold standard, other Western countries stopped redeeming gold coins for national currencies. Instead, they redeemed their currencies for dollars or pounds which allowed for expanded fiscal policies because the constraint of gold was not so prominent. At the same time, President of the New York Federal Reserve, Benjamin Strong, conspired with the head of the Bank of England, Montague Norman, to keep gold from flowing out of Britain by having the Fed adopt "easy money conditions in the United States" and "increase bank liquidity a great deal" according to economic historian Robert Higgs. This backroom deal was carried out as England readopted the gold standard in 1926 at the pre-World War 1 parity despite the pound being devalued during the war. Because trade unions and unemployment insurance made wage rates less flexible downwards, the ensuing deflation was detrimental and combated through further inflation aided and abetted by the Fed. This new international agreement between central bankers may have appeared to be a maintaining of the classical gold standard but it was nothing of the sort. The inflationary boom in the later half of the 1920s was a product of the monetary scheming of the Fed and Bank of England. The final result was the stock market crash of 1929 which ushered in the Great Depression. Contrary to popular belief, the Depression was not caused by the classical gold standard but because of its rejection. As for the other panics Krugman mentions, neither were caused by the gold standard but by government intervention in the money market. As economist Joseph Salerno explains, the pervasiveness of fractional reserve banking, or the expansion of credit unbacked by gold reserves, played a key role in creating financial instability. The panics were caused primarily by ..the establishment of a quasi-central banking cartel among seven privileged New York banks resulting in the almost complete centralization of U.S. gold reserves in their vaults by the National Bank acts of 1863-1864. This New York City banking cartel was able to expand willy nilly the monetary base and the overall money supply by expanding their own notes and deposits on top of gold reserves. Their notes and deposits were then used as reserves by lower tier banks (Reserve City Banks and Country Banks) on which to pyramid their own notes and deposits. Moreover, banks, especially the larger ones, were encouraged in their inflationary credit creation by the firmly entrenched expectation that they would be freed from fulfilling their contractual obligations in times of difficulty by the legal suspensions of cash payments to their depositors and note-holders that recurred during panics throughout the 19th century. In sum, an adherence to a real gold standard was not the main cause of all the financial panics Paul Krugman lists. It was his favorite institution, the state, and the incessant fiddling around with the economy by the political class that created an unstable monetary system. It is also worth pointing out that the late 19th century was a period of incredible economic growth for both the United States and the rest of the world in spite of the flawed gold standard. Though it is often alluded to as a time of robber barons, worker starvation, and terrible deflation, the U.S. economy experienced its highest rate of growth ever recorded as the 1800s drew to a close. As Murray Rothbard documents in The History of Money and Banking in the United States: The Colonial Era to World War II: The record of 1879–1896 was very similar to the first stage of the alleged great depression from 1873 to 1879. Once again, we had a phenomenal expansion of American industry, production, and real output per head. Real reproducible, tangible wealth per capita rose at the decadal peak in American history in the 1880s, at 3.8 percent per annum. Real net national product rose at the rate of 3.7 percent per year from 1879 to 1897, while per-capita net national product increased by 1.5 percent per year… Both consumer prices and nominal wages fell by about 30 percent during the last decade of greenbacks. But from 1879–1889, while prices kept falling, wages rose 23 percent. So real wages, after taking inflation—or the lack of it—into effect, soared. No decade before or since produced such a sustainable rise in real wages. From 1869 to 1879 the total number of business establishments barely rose, but the next decade saw a 39.4-percent increase. Nor surprisingly, a decade of falling prices, rising real income, and lucrative interest returns made for tremendous capital investment, ensuring future gains in productivity. When the United States maintained a gold standard to a fairly significant degree, the economy blossomed. The relative absence of inflation ensured that the dollar acted as a store of value in addition to facilitating transactions. Without the threat of looming price increases, the public was more willing to put off consumption and add to the supply of capital availability by saving. The prudent technique of producing more than you consume allowed for a greater number of entrepreneurs to put capital to work. This set the foundation for mass production and giving consumers access to an abundance of goods never thought possible just a century before. To the Keynesians' befuddlement, the economic renaissance of the late 19th century occurred at a time where prices weren't rising or stable but actually falling. The fall in the general price level occurred as the production capacity expanded at a faster rate than the money supply. Today, economists of the Keynesian and monetarist school remain convinced that a stable price level is good thing when common sense dictates otherwise. Falling prices are a godsend for consumers; not a catastrophe. As long as entrepreneurs are able to utilize the inherent feedback mechanism of an undistorted pricing system to forecast input costs, falling prices are only a minor problem. The focus on price stability is why many economists missed the Depression and the Fed-engineered boom of the 1920s. In a free market, the tendency is for prices to fall as production increases. Krugman denies not only that sound money leads to economic stability and growth, he does so while attempting to show that gold has been incredibly volatile since Richard Nixon cuts the dollar's tie to the precious metal in 1971. But Krugman puts the proverbial cart before the horse with his example as it hasn't been the price of gold that has fluctuated to a high degree but rather the dollar's value. As Forbes editor John Tamny pointed out in August of 2011 as Brookes calculated in his essential book The Economy In Mind, "In 1970 an ounce of gold ($35) would buy 15 barrels of OPEC oil ($2.30/bbl). In May 1981 an ounce of gold ($480) still bought 15 barrels of Saudi oil ($32/bbl)." Fast forward to the present, and an ounce of gold ($1750) buys roughly 20 barrels of oil ($85) Krugman also asserts that when interest rates fall, the price of gold increases [ZH - we discussed the various regime changes between interest rates and gold here in great detail]. But again he makes the same mistake of not recognizing the role dollar manipulation plays in both measures. Interest rates haven't been formed by market forces since the Federal Reserve was established. In a free market, interest rates are determined by the public's collective time preference or the discounting of future goods against present goods. When more people are saving, and therefore putting off consumption, there is a higher supply of loanable funds. This higher supply translates to lower interest rates as the price of present capital lowers. Under a fiat regime like the Fed which oversees a system of fractional reserve banking, interests rates are manipulated by a few central bankers instead of the market. These central planners increase the supply of money in an effort to push down interest rates and induce consumers into borrowing. This also has the effect of pushing up the price of gold as investors lose confidence in the dollar's value. In his crusade to keep Keynesianism as a legitimate school of thought, Krugman has yet again attempted to mischaracterize gold and blame it for crises caused solely by government intervention. What Keynesianism amounts to is a theory of state worship and the virtue of hedonism. Its leading proponents declare there is such thing as a free lunch and that it is served directly by the printing of money. In other words, it is based on backwards logic and remains distant from reality. The Keynesians admit there was a housing bubble then fret over an "output gap." They blame market exuberance for recessions but then prescribe the exact same policies that lead to exuberance to begin with. This irrationality was best displayed with a remarkable quote by former Treasury Secretary and former director of President Obama's National Economic Council Lawrence Summers who wrote in an editorial for the Washington Post: The central irony of a financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending, it can be resolved only with more confidence, borrowing and lending, and spending. Keynesians have no pure economic theory; they are totally ad hoc in their approach. Any data point which fits their view is trumpeted. Any theory that presents a challenge to the idea that the economy can be finely tuned like a child's trinket is dismissed as right-wing propaganda. Keynesians ultimately reject the golden rule of economics: savings represents deferred consumption and producing more than is consumed. Real savings in the form of capital goods (factories, equipment, machinery, etc.) are the backbone of any economy. Government only squanders these scarce resources through its constant pillaging of wealth. Keynes himself was contemptuous of the middle class throughout his professional career. This is perhaps why he held such disdain for gold. Gold is the market's choice for money; not the statist ruling class dependent on spending virtually unlimited sums of tax dollars. Because a true gold standard prevents runaway inflation and budget deficits from occurring in perpetuity, Keynesians will do all they can to discredit gold as a workable form of currency. Their allegiance lies with the state and paper money; not the natural choices of the common man.
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| Posted: 30 Aug 2012 05:04 PM PDT Gold Price Close Today : 1653.50 Change : -6.00 or -0.36% Silver Price Close Today : 30.367 Change : -0.470 or -1.52% Gold Silver Ratio Today : 54.451 Change : 0.635 or 1.18% Silver Gold Ratio Today : 0.01837 Change : -0.000217 or -1.17% Platinum Price Close Today : 1502.70 Change : -16.60 or -1.09% Palladium Price Close Today : 614.90 Change : -19.95 or -3.14% S&P 500 : 1,399.48 Change : -11.01 or -0.78% Dow In GOLD$ : $162.53 Change : $ (0.73) or -0.44% Dow in GOLD oz : 7.863 Change : -0.035 or -0.44% Dow in SILVER oz : 428.12 Change : 3.06 or 0.72% Dow Industrial : 13,000.71 Change : -106.77 or -0.81% US Dollar Index : 81.56 Change : 0.185 or 0.23% I understand the GOLD PRICE closed lower today, down $6 to $1,653.50, but on the 5 day chart it looks like nothing at all but a sideways range, no new low, no new high, just about the same range as yesterday. High at $1,663.84, low at $1652.3. Close below $1,645 gainsays the flag on the GOLD chart, so watch out. The SILVER PRICE, on the other hand, fell 47 cents today to 3036.7 and made a new low for the move at 3022.5, about as far as it can travel and still keep that flag in play. Closed nearly on, but a smidge below, its 200 DMA (3042). Times like these make me feel about central banks, central bankers, and fiat money the same way a ten year old feels about chicken pox and liver. Y'all be patient. Whatever Ben bloviates, y'all already know it'll be something everybody already knows. He's full of clichés like, "The youth of today are the leaders of tomorrow" and other remarkably deep insights. I'd rather fall into starving chiggers than have to listen to one of his speeches. Stocks must be even weaker than I thought, since the Dow plunged 106.77 (0.81%) today to 13,000.71 on news Ben the Bandit MIGHT not announce in his Jackson Hole speech tomorrow a new plan to inflate more. I'd just as soon Bernanke and the whole Crowd of the Mighty climbed down in that Jackson Hole and pulled it right in over the top of 'em. My, my, that sure was a photogenic close, 13,000.71, a thin 0.71 points above the morale-bustin' 13,000 level. S&P500 lost 11.01 (0.78%) and ended at 1,399.48 -- whoops!. Stands right on the bottom boundary of that rising wedge, and the neckline of the January-May head and shoulders neckline. Wouldn't take more than a mouse burp to push it over the cliff. Well, well, dollar index performed today about as expected -- down a leetle yesterday, up a leetle today. Trading now 81.689, up 14.2 basis points. Trend is down, but the Nice Government Men are stretching it out as long as they dare. Euro backed off 0.19% to $1.2506, sidling sideways. Yen did the same, but rose 0.14%. Nobody's moving, afraid of imminent fire from Ben's Blarney Cannon. I walked into the kitchen yesterday and thought the Last Great Chicken Slaughter had happened. Naked chickens were piled chin high in the sink. Then I noticed they were all in plastic bags. Thawing. Oh, yeah, my wife Susan was getting ready to smoke them for the Bodacious Hoedown on Saturday. She's over near the barn now, six smokers billowing like blast furnaces, happy as little girl with a new kitten. Y'all are still welcome to join us. Read about it at http://the-moneychanger.com/hoedown_2012. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't. 
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| Posted: 30 Aug 2012 03:41 PM PDT August 30, 2012 [LIST] [*]Market tanks a day before Bernanke's big speech: We step back and search for truths that are immune to anything he says tomorrow [*]Bullish sign for gold: Wedding season in India. Even more bullish sign for gold: Metal being smuggled into India! [*]Merkel pushes, Draghi pulls: Dan Amoss on the asset class set to lose biggest from the eurozone power struggle [*]When expatriation costs more than it's worth... reader reflections on jury duty and the justice [sic] system... another of our concepts gone mainstream... and more! [/LIST] "I hate writing about the Federal Reserve," says Chris Mayer. "I hate writing about politics. "I'd much rather focus on great ideas and companies. I'd much rather spend my time exploring the wonders of this great planet of ours. But sometimes big-picture events impinge on that process. It would be foolish to be blind to them." We offer Chris' musings this morning as prologue to the ...
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| Posted: 30 Aug 2012 03:15 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] It is interesting to note the price action of the CBOE Volatility Index or VIX of late. The S&P 500 appears to be struggling to break through the 1420 - 1425 region. That combined with growing concern that tomorrow's Bernanke comments are not going to be sufficiently "QE bullish" is fueling nervousness among traders who are fearful of being caught in any downdraft resulting from disappointment among the "punch bowl" crowd. This same concern is also providing selling pressure in the metals with gold bears capping at the $1680 level while nervous longs exit the market. Dip buying however is coming into the metals from traders who suspect that the ECB is getting its act together on its bond buying program. The result is that both metals have faded from chart resistance levels but are not breaking down technically. You can see the VIX Chart below: ...
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| Posted: 30 Aug 2012 02:58 PM PDT The Atlantic Weighs In on the Gold Standard … August 28, 2012 | Author Pater Tenebrarum … or Why Trying to Prove a Point about Economics with 'Just Two Charts' is a Really Bad Idea The Gold Standard Debate Revisited The discussion over the GOP's gold standard proposals continues in spite of the [...]
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| Gold Daily and Silver Weekly Charts - Sleepy August, But Here Come the Winds of September Posted: 30 Aug 2012 02:34 PM PDT |
| Schizophrenia: Retirement ON By <1 DJIA Point, But Retirement OFF By <1 S&P Point Posted: 30 Aug 2012 02:29 PM PDT This evening, as many boomers on the verge of stepping into the golden hue of retirement sit down for dinner and watch the news, they will be perplexed at their next move. The Dow closed at 13000.71 (just in the realm of the Fed's 3rd mandate to enable retirement) but stunningly the S&P 500 closed at 1399.48 (below the dreaded 1400 level that gives everyone a green-light to retire). Volume was average for the recent lows and despite the S&P 500 e-mini's 'tickle-algo' efforts to get back up to the day-session opening levels (cutting half the day's losses), the last few minutes of the day saw a plunged back down to the lows. AAPL fell over 1.5% - its worst day in five weeks - enabling NASDAQ to catch-down to the S&P in performance terms since the 8/21 highs (down ~1.2%) while the Dow Transports is down 3.8% in the same period. Healthcare and Staples outperformed (though all sectors were red today) as Energy and Tech were the biggest losers. A strong 7Y auction sent TSYs bid to the week's low yields this afternoon but the early comments from Europe were the driver of USD strength (EUR weakness) and Treasury strength - which implicitly dragged commodities (though mixed) and stocks lower. VIX traded over 18% just before the European close, fell back and then rose once again into the close up 0.75 vols to its highest in a month. As everyone holds their breath for tomorrow, the after-hours crack lower in S&P futures - to end at the lows of the day - suggests some urgency to cover longs (as opposed to hedge - as VIX did not keep pace).
It was the best of times; it was the worst of times...
The After-hours flush in ES was not pretty, heavy volume and large average trade size... anyone would think that the market was levitated just to allow the bigger boys out...
As average trade size (lower pane) rose very significantly as we tumbled 6 points (from the day-session open levels)...
NASDAQ is catching down to the S&P 500 as Trannies continue to suck...
NASDAQ weakness is in large part due to AAPL's coring - its worse day in five weeks - coincidence that it had hit that magic 20% weighting of NASDAQ level? who knows but we hope you traded on it...
Commodities were mixed - oddly - with Oil and Silver down from the US equity close yesterday but Copper and Gold unch
though all commodities are notably red on the week even as the USD is now fractionally stronger on the week (though the weakness in AUD -1% on the week is not encouraging for carry trades)...
Charts: Bloomberg
Bonus Chart: AAPL's worst day in 5 weeks... at a familiar level...
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| Gold Seeker Closing Report: Gold and Silver Fall With Stocks Posted: 30 Aug 2012 02:28 PM PDT Gold climbed up to $1663.83 at about 9AM EST before it fell back to $1651.91 by late morning in New York, but it then bounced back higher into the close and ended with a loss of just 0.05%. Silver climbed to as high as $30.90 before it fell back to $30.215 and then also bounced back higher, but it still ended with a loss of 1.04%.
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| Should the U.S. Return to the Gold Standard? Posted: 30 Aug 2012 02:18 PM PDT Aug. 30 (Bloomberg) — Matthew O'Brien, associate editor at The Atlantic, and James Rickards, senior managing director at Tangent Capital Partners, debate whether the U.S. should return to the gold standard. Bloomberg's Deirdre Bolton moderates. [video]
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| Gold Price Projection – for 2013 Posted: 30 Aug 2012 01:58 PM PDT An objective and reasonable estimate for the price of gold at the next intermediate peak (estimating 2013 – Quarter 2) is $2250 to $2550 per ounce (current price is about $1,650). This is not a prediction based on wishful thinking and hope, but a best estimate based on rational analysis of data back to 1975.
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| Ring The Bell: Treasury Debt Now Over $16 Trillion - A Modest Proposal Posted: 30 Aug 2012 01:45 PM PDT Behind every small business, there's a story worth knowing. All the corner shops in our towns and cities, the restaurants, cleaners, gyms, hair salons, hardware stores – these didn't come out of nowhere. A lot of heart goes into each one. And if small businesspeople say they made it on their own, all they are saying is that nobody else worked seven days a week in their place. Nobody showed up in their place to open the door at five in the morning. Nobody did their thinking, and worrying, and sweating for them. After all that work, and in a bad economy, it sure doesn't help to hear from their president that government gets the credit. What they deserve to hear is the truth: Yes, you did build that. - Paul Ryan, Republican VP Candidate, RNC SpeechI just want to preface that my using that passage from Ryan's speech last night in no way is an endorsement of the Romney/Ryan ticket for the Presidency. In fact, as I've stated on this blog previously, I firmly believe the best way to get real change in this country is if no one shows up to vote on election day, which would de facto invalidate our Government. People accuse me of being unpatriotic and ungrateful for not voting. But, au contraire, I would argue that anyone who does vote is affirming and legitimizing an illegitimate system. Our Governmental system bears no resemblance to the system ratified and put in place by the Constitution and our "elected" officials - nearly every one of them - is either a complete fraud (Obama) or thoroughly corrupt. Moving along, I wanted to point out that as of Tuesday's debt issuance by the Government, our national Treasury debt officially exceeds $16 trillion. The debt ceiling limit put in place in 2010 is $16.394 trillion. It was lifted to this level at the end of January 2012. At this rate of new debt issuance, roughly $114 billion per month, the Government will exceed its legal debt limit by the beginning of December. And please keep in mind that there is off-balance-sheet Government guaranteed debt in the form of Fannie Mae, Freddie Mac, FHA and General Motors. That extra $8-10 trillion gets conveniently left out of everyone's discussion. But not mine. Furthermore, a report was released earlier this week showing that the 50 individual States collectively have over $4 trillion in outstanding bonds, unfunded pension commitments and budget gaps: LINK If you add that to the debt that is an obligation of the U.S. Treasury (vs. all the "legacy" liabilities like under-funded Federal pensions, social security, medicare, etc), you have around $30 Trillion in Federal and State direct debt. That's about 200% of GDP. That ratio makes Greece and Spain look like "gold standard" countries. When will this debt/dollar bubble finally burst? Anyone's guess is as good as mine, but mathematically this can not go on much longer. Either the Government has to shut everything down except the functions provided in the Constitution or the Fed has to crank up the printing press in a major way. I will say that anyone who owns Treasury bonds, from the Chinese Central Bank to the lowliest American retiree, is a complete idiot. I'd rather own a big bag of shit. At least I can sell the bag of shit for use as crop fertilizer. Circling back to my endorsement of that particular passage from Ryan's speech last night (honestly, that was actually the only part I heard as I had clicked on to CNN randomly and there it was. It was also the first time I've heard Ryan give a speech - his voice makes him sound like a high-pitched pin-head - it's bad enough that he looks like Pee Wee Herman), it was clearly a massive missile fired at Obama's comment that American business owners owe their success to the Government. I don't think anything I've heard Obama say has pissed me off more than that. Obama owes his "success" to the Government and to all the socialist programs put in place like Affirmative Action which have enabled Obama throughout his life. Obama has been a lifelong beneficiary of public spending and the public payroll. In fact, Obama has made more than enough money off of his book deals to live comfortably and I have this modest proposal: Obama should be the first person on Capitol Hill who gives up his Taxpayer and debt-financed salary plus benefits in order to help solve our catastrophic debt problem . And he should step forward as a leader and call on all members of Congress who have personal wealth to give up their Congressional pay and benefits. I think as public servants this is the least they all can do.  
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| When Will It Happen? What Will It Be? Posted: 30 Aug 2012 01:17 PM PDT  There as many opinions and even more guesses than those who are guessing about what will cause the collapse of the world as we know it. There may be unexpected triggers in nature or in society such as natural disasters of a sudden or a gradual nature, geopolitical events or developments, or environmental triggers that may be natural or man made. With or without any of these events and processes about which there is an enormous volume of speculation, my previous skepticism about one in particular has been transformed to a personal certainty.Economic Collapse – Really? The expectation that the economy may or will deteriorate beyond a typical recession is gaining wider acceptance every week. Let me explain why I am confident that this situation will become unmistakable within the next six to eighteen months. I will also discuss how serious this problem is likely to become. Before we get too far into the discussion about what may happen in the economy, it is necessary to understand the nature of money and bartering. Money is fundamentally a way to facilitate bartering among a large group of people. When one person, lets call him George, needs something that a second person, lets call him Peter, can provide, George may try to offer something he owns in exchange for what he wants. This may become difficult if the George does not have anything that the Peter wants. George is then left wanting unless he can arrange a series of trades or exchanges with other people until the George finally obtains something that Peter wants. Another advantage of money is if George has something that Peter finds desirable, but there is a wide disparity between the values of the two objects being considered for trade. For example let's suppose that George has one too many cows and would like to obtain a hand saw from Peter who has an extra saw. The difference in value of the two tradable items makes it unlikely that an easy trade will occur. By this point I am sure you can see the advantage of having a reserve of money or currency to facilitate the transactions between George and Peter. Read more..... 
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| Posted: 30 Aug 2012 01:03 PM PDT Greyerz: Investors Assets To Be Stolen In The Coming Collapse
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| Gold Smuggling Raises Its Head Again in India Posted: 30 Aug 2012 12:32 PM PDT "In the grand scheme of things, not much has changed in any of the precious metals all week long." ...
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| LGMR: Jackson Hole Puts Gold on Hold, But New US Money-Printing "Not Yet Priced In" Posted: 30 Aug 2012 12:29 PM PDT London Gold Market Report from Adrian Ash BullionVault Thurs 30 August, 07:20 EST WHOLESALE-MARKET prices to buy gold retreated Thursday morning in London, ticking back towards yesterday's 1-week low at $1653 per ounce as world stock markets also fell. Prices for silver bullion held steadier, trading just 10¢ below Monday's start at $30.70 per ounce. The US Dollar ticked lower against the Euro and Sterling on the currency market. Iron ore sank yet again, hitting a 3-year low and taking its fall over the last 6 months to 37%. "Bullion trading is still quite light with the market awaiting [Friday's] Jackson Hole symposium," says one London market-maker in a note. "Players on the precious metal markets already appear to be exercising restraint ahead of the annual [central-banking] conference this weekend," agrees Commerzbank's commodities team in Frankfurt. But "the currently very brisk levels of investment demand should prevent any serious fall in gold prices," they add. ...
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| Posted: 30 Aug 2012 12:20 PM PDT "A national debt, if it is not excessive, will be to us a national blessing." — Alexander Hamilton "A man in debt is so far a slave." — Ralph Waldo Emerson —————————————————— Gold, virtually unchanged: $1,655 an ounce. Dow, virtually unchanged: 13,107 points. Oil, virtually unchanged: $95 a barrel. Investors should have taken yesterday off…spent some time with the kids…worked on their swing…or whittled away the hours on Praia do Camilo with a good book. Markets aren't going anywhere, Fellow Reckoner…not without the say-so from the Feds. "Everyone is waiting," writes Bill Bonner. "They want to know what will happen when the Fed gets together tomorrow. Will there be an open-ended commitment to QE — as much as you want, when you want it — or will there be nothing at all?" The Powers that Be are hunkered down in Jackson Hole for their annual international central banking symposium, a jaw-gabbing event where the world's "brightest" economists get together to come up with the world's dumbest "solutions"…solutions to problems largely caused by their last round of "solutions." The Feds use a number of complicated instruments to determine which way the economic breeze is blowing, almost all of them baloney. Then they imagine that, after holding their windsocks out in the hurricane, they can command the gales to blow in any direction they so desire. And what's more, people actually believe them! Growth rates, ostensibly their primary focus, are slowing in the US, down from a limpish 2% rate for the first quarter to a decidedly flaccid 1.7% in the second. And that, after unprecedented amounts of economic "stimulus." A more modest man might feel a twinge of embarrassment, perhaps even the onset of "performance anxiety." But Bernanke is not that man. He has pledged, in the face of demonstrable impotence, to do "whatever it takes" to get the economy…"up." Alas, the employment situation, another Fed Fetish, has softened too, with official unemployment still above 8%. Factor in discouraged non-workers and those forced to take part-time jobs and we're looking at closer to 15%. John Williams at ShadowStats, who computes the figures the "old way," pre Clintonian fiddling, puts the rate at almost 23%…nearly 1 in 4. But unemployment today is nothing compared to what it might be tomorrow. According to the August report from the US Bureau of Labor Statistics, "From April to July 2012, the number of employed youth 16 to 24 years old rose 2.1 million to 19.5 million." The BLS was quick to couch its statement, however, explaining that: "The youth labor force (16- to 24-year-olds working or actively looking for work) grows sharply between April and July each year. During these months, large numbers of high school and college students search for or take summer jobs, and many graduates enter the labor market to look for or begin permanent employment." Even so, the number of unemployed youth increased by 90,000 from the same period in 2011. The generation unlucky enough to find itself graduating today is far worse off than its predecessors. Confirmed the BLS, "The labor force participation rate for all youth — the proportion of the population 16 to 24 years old working or looking for work — was 60.5 percent in July [...] 17.0 percentage points below the peak rate for that month in 1989 (77.5 percent)."
Today, one quarter of employed youths show up to work in the hospitality sector, which includes scraping coffee residue from Starbucks' grinders and sweeping peanut shells from barroom floors. Another 20% work retail. It's honest work, to be sure…but it's not the kind of Mad Men-like middle-management positions promised to them at the beginning of their studies. More to the point, it's not nearly enough to cover enormous and growing student loan repayments hanging around their necks. According to a new research study published by the Young Invincibles, a national youth advocacy group, average debt held by students at time of graduation has increased by an astounding 46% since 2000. "Moreover," the study reveals, "total outstanding debt held by the public has skyrocketed 511% over the past decade." And it's not only the youth straining under this huge and expanding debt burden. Incredibly, people over 60 carry a total of $2.2 million in student loans that are more than 90 days in arrears, prompting the federal government to reduce benefit payments on Social Security checks for 115,000 retirees. Where will those dependent on Social Security find the spare change to repay these debts, you ask? Our guess is, they won't. But these sexagenarians are merely the first zephyr of the coming tempest. Their $2.2 million overdue is tuppence when one considers the overall size of outstanding student loans, a debt bubble that has now, at more than $1 trillion and counting, come to eclipse even outstanding credit card debt in the US. "The US Department of Education has become the Countrywide of student lending," Dan Amoss, editor of Strategic Short Report, warned in these pages recently. "After a lending binge started in 2009, it now holds a massive $452 billion portfolio of student loan receivables, according to Federal Reserve data. This so-called 'asset' will become a liability by next year… "Like Countrywide," Dan continued, "the government is not honestly accounting for its portfolio risks. This $452 billion portfolio doesn't even include a few hundred billion more in guaranteed student loans. The chief accountant of the Government Accountability Office (GAO) wrote a report dated December 2011 on the federal government's accounting deficiencies: 'The deficiencies, for the most part, involved credit subsidy estimation and related financial reporting processes.' In other words, accounting for below-market loan interest rate subsidies is complex, and the government is not adequately disclosing the risks it is taking." Borrowers lured in by artificially manipulated rates? Government intervention distorting markets? Policies aimed at assisting people blowing up right in their faces? We're shocked, Fellow Reckoner. No, we're FLABBERGASTED! And now, all eyes are on the Fed Chairman to mend the situation. What is poor ol' Ben "The Hurricane Whisperer" Bernanke to do? "Destiny is demography," Auguste Comte once declared. The French philosopher made another important observation too. "The dead governs the living," he said. Graduating students have zombie politicians to thank for their dismal lot. In their case, it's the undead calling the shots. Joel Bowman The Hurricane Whisperer 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. ".
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| Kodak Drive By Shooting For Silver? Posted: 30 Aug 2012 12:00 PM PDT Kodak Sells Film Business: Company's Silver Up For Grabs? According to Bloomberg News, Eastman Kodak consumes approximately 8.5 million ounces or $300 million worth of silver each year for its manufactured goods and supplies. Would Kodak be selling off silver … Continue reading
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| Posted: 30 Aug 2012 11:53 AM PDT [B]A king, Nabonidus, left his son Belshazzer in charge while he went to worship the moon god Sin for three years. By the time he returned, the Persians were invading his country. [/B] [B]Belshazzer's job was defense of the capitol Babylon while his father's army was defeated elsewhere by Cyrus on October 10, 539 BC. Two days later, and ignoring this event, Belshazzer decided to have a party for the lords and ladies of his court. At this drunken feast he took sacred golden and silver vessels, which earlier had been removed from Solomon's Temple in Jerusalem by Nebuchadnezzar, and profaned them. [/B] [B]Suddenly, words written by a mysterious hand appear on the wall of Belshazzar's palace and they were "Mene, Mene, Tekel, Upharsin". These are Aramaic names and measures of currency that only Daniel could interpret and provide their meaning which essentially was…[/B] [LIST] [*]The days of your kingdom are numbered and will be brought to an end. [*]You have been weighe...
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| Posted: 30 Aug 2012 11:09 AM PDT
Lockhart said that more easing in September was going to be a "close call," reiterating that action was data dependent in saying, "If we were to see deterioration from this point, let's say a persistence of job growth numbers that were well below 100,000 per month, or see signs of disinflation that could signal the onset of deflation, then there wouldn't be much of a question about policy." Those data have not been quite that bad of late, suggesting perhaps the Fed might indeed be looking to keep its powder dry for the time being. Nonetheless, the market will be hanging on Bernanke's every word when he speaks in Jackson Hole on Friday. They'll be hoping to glean additional clues as to the likelihood of further Fed measures in September, or whether they should just start looking forward to the October FOMC meeting. Our own Mike Kosares, wrote a couple really good posts on the Breaking News Page yesterday on the topic of QE3: One man's opinion on Bernanke's QE3 quandary Follow up question: How would the lack of QE3 affect the gold market? As I've stated in the past, the direction gold ultimately takes is not wholly dependent on whether there is a QE3 or not. Mike apparently agrees, calling QE3 a "huge distraction and a short term consideration that takes away from the real reasons why the gold price might rise in the years to come." The speculation about additional ECB measures continues to rage as well. Both business and consumer confidence in the eurozone plunged to 3-year lows in August, upping the pressure on ECB chief Mario Draghi to find a way to provide additional stimulus without enraging core-Europe…and specifically the Germans. • US initial jobless claims UNCH at 374k for the week ended 25-Aug, above expectations of 370k, vs upward revised 374k in the previous week.
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| Greyerz: Investors Assets To Be Stolen In The Coming Collapse Posted: 30 Aug 2012 11:07 AM PDT  Today Egon von Greyerz told King World News, "I'm seeing how massive amounts of money are within the system, and people think they are safe, but they are not." Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also warned, "This is the illusion that people are living under, and it's very sad. That's not going to be the case. The banks are going to close if there is a problem, and people are not going to get access to their assets." Here is what Greyerz had to say: "Right now the markets are in a waiting game. They are waiting for Bernanke's Jackson Hole speech tomorrow. They are (also) waiting for the German court decision which is on the 12th of September. This is to decide if they are going to approve the ESM (European Stability Mechanism), which replaces the EFSF."
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| Japan Shrugs Off Bad Data Once Again Posted: 30 Aug 2012 10:02 AM PDT Yesterday, we saw the euro hold onto gains, but the Australian dollar lose quite a bit of ground, and that continued throughout the overnight sessions. Aussie data last night were on the softer side, and that's not what the A$ needs right now. But my favorite saying these days, it is what it is, applies here. But most of the currencies and metals that represent global growth, like the A$, the Canadian dollar/loonie and gold, saw selling yesterday after the U.S. second-quarter GDP was revised upward. I know, I know, don't get me started on these mental giants. I've finally come to the conclusion that the people in the markets, those that trade, etc., are lunatics. What brought me to this conclusion? Yesterday, the U.S. printed a revision to second-quarter GDP. It was an upward revision. But shoot, Rudy, just about anything would be upward when you start out at 1.5%! The upward revision was to 1.7%. And the markets took this as positive news and decided that the didn't need gold anymore. What? As if 1.7% was a "good, strong number"! Get out! That's just downright crazy to think that! But from what I read that day, any "positive news" for the U.S. is good for the dollar and bad for gold. I would add that they should have said, "Any positive news, no matter how miniscule, is good for the dollar and bad for gold." I could go on and on about this, but you don't want my blood pressure shooting to the moon, and starting the day banging on the desk and yelling at the walls makes for a very long day. But I think you know how I feel about this "perception" by the markets that all is right on the night with the U.S. economy. How soon they forget about the upcoming fiscal cliff. Time to move along. I was correct yesterday when I said that the Norges Bank (of Norway) would leave rates unchanged, as they are more fearful of what a stronger krone would do to their economy than a housing bubble that's going on right now. What I did find to be interesting is that the accompanying statement that followed the rate announcement was clearly void of any new signals. In other words, mum's the word. Or loose lips sink ships. And with the next meeting not scheduled until October, the markets will decide where the krone goes between now and then, and that decision won't be based on a foreseen change in monetary policy! It's my opinion that the krone has been tarred with the same brush as the euro, and how the euro goes against the dollar, the krone will too. I would love dearly for this link to break and the krone to be traded on its own fundamentals — which, by the way, beat the eurozone by a mile. Speaking of links to the euro, Denmark has a hard peg to the euro. The idea has been passed around that things will get so bad in the eurozone that Denmark will break the hard peg to the euro. Seeing the Danish economy sink further into a recession is going to add gas to the fire. Second-quarter GDP contracted -0.5% and pushed the annual level to just +0.9%. Unemployment is soaring at 6.3%, and for Danes aged 25-29, the unemployment rate is 10.6%. But even with all this bad stuff happening to the economy, I don't believe the hard peg will be broken. I make that statement about not breaking the hard peg, because when you get right down to it, was it the peg to the euro's fault that Denmark has had to deal with twin housing and banking crises? Maybe in a roundabout way, but still… Denmark was not controlled by the European Central Bank and could have raised interest rates to combat the housing crisis — and they didn't. I saw that German Chancellor Angela Merkel was in China. And I saw comments from both the chancellor and Chinese Premier Wen Jiabao. It was as if the two of them decided that the markets needed a pep talk. Wen, while admitting that the eurozone debt crisis has continued to worsen, said that he was more confident on the eurozone after the meeting with Merkel, and that governments in the EU have the wisdom and ability to overcome the crisis. And then the Angela Merkel made a comment that China will continue to invest in euro debt. Now either she shocked the Chinese with that statement or she received permission from the Chinese to make that statement. I would have to believe that it was the latter. So those comments by the leaders of Germany and China have underpinned the euro overnight and through the morning sessions. We'll have to wait and see just how long the markets will be impressed with those statements. In today's world of trading, I would say "not long": The markets' attention span is like that of a 2-year-old. I saw last night that Japan printed some data, which is always interesting in that we want to see if the economic funk continues. And apparently, it does! Japanese retail sales for July were not good. They fell -1.5% versus June, and -0.8% year on year. And large retailer's sales fell -4.4% versus June. But this is so old hat for Japan. The Japanese have been in this economic funk so long now that when data print bad, traders just ignore it. They've been there, done that and bought the T-shirt. The sad part is that I truly believe that we are heading down the same road traveled previously by Japan. The only difference I see right now is that the Japanese people are in better financial situations than we are here in the U.S. I do believe that this is the reason that Japanese yen hasn't been sent for a very long ride on the slippery slope. About a month ago, I talked about how the yen was looking weaker and it could be the end of yen strength versus the dollar. That lasted about as long as it takes to read the "what man knows about women book." The demographics are against Japan, though. And eventually, they will catch up with the strong yen. But when that happens, I have no idea. There's a guy that has attended some of the investment shows that I've done who does a whole presentation on demographics of countries and what they mean for their economy. Very interesting stuff. The only problem I have with the whole thing is that it doesn't take into consideration anything else going on in the economy or in the markets. For instance — and boy, do I wish he was right on this — last May, this guy said that the price of oil would be $40 within a year. As I said, I sure wish he had been correct! Remember right after the Olympics I told you how I saw Brazilian President Rousseff, doing the V8 head slap and saying, "OMG! Our Olympics are only four years away!"? I have no idea if that really happened, but you get the idea I'm trying to get across. All the rate cuts, the taxes on inflows of investment, and the kitchen sink that was thrown at investors to weaken the real are going to have to be reversed so that the investment into Brazil can get the infrastructure built that will be needed for the Olympics. And lo and behold, this morning, a story on the Bloomberg plays well with my thoughts: "Brazil's central bank signaled as yearlong easing of interest rates may have come to an end as record-low borrowing costs start to revive the economy." For those of you keeping score at home, Brazil cut 500 basis points from their interest rates (5%). And just for good measure, they cut another 50 basis points (0.5%) from their official rate last night. But now it's time to deal with inflation, and with that, I expect interest rates in Brazil will begin a rate hike cycle in the first quarter of next year. What does this do to the currency (the real)? I can tell you this, given the recent history of the Brazilian government dealing with the uber-strong real, we don't want to go there again! But a slow general appreciation that's almost stealthlike would be fine, I think. So hopefully, the markets don't go bananas on Brazil (HA!), and hopefully they have learned their lesson! Today's U.S. data cupboard has two of my faves: personal income and spending. The July readings of this will most likely show that once again the U.S. consumer spent more than they made. And with it being a Tub-Thumpin' Thursday, the weekly initial jobless claims will print. Last week, they bumped up to 372,000. I expect them to remain in that area. After we put away the barbeque pits, and the public swimming pools close, and we all drag ourselves back after a three-day weekend, we will see the color of the latest ISM manufacturing index. You may recall that last month the index fell below 50. Given the regional manufacturing reports, one would expect the ISM to fall further below 50. However, the "experts" believe it will print right at 50. But shouldn't all the regional reports make up the national ISM? Yes, grasshopper, they should, and do. But that's before the government gets to massage the numbers. Anyway, I'm going to stick to my guns and say that the regional reports tell me that the ISM should be lower. If it does print lower, the calls for more stimulus will come back out of the walls. It's like a tug of war on this stimulus call. One day, the stimulus campers win, and the next day the no-stimulus campers win. The RealtyTrac people issued a report yesterday that shows that foreclosures were down in the second this year from last year. Last month, 1.47 million U.S. homes were in a stage of foreclosure or owned by a bank. Of 620,751 held by lenders, just 15% are listed as for sale. The measured approach has triggered bidding wars and led to higher prices in markets like Las Vegas, where the inventory of bank-owned homes sank to a 6.2-month supply in June. The pool of foreclosed properties for sale also has declined because many pending foreclosure cases were put on hold last year while banks sorted through foreclosure abuse claims. A $25 billion settlement in February cleared the way for lenders to tackle that backlog of foreclosures, and the number of homes entering the foreclosure process has been rising. Still, those properties, should they end up foreclosed, are not likely to hit the market until next year. And this is why I said yesterday that I'm not buying the idea that the home price rise is a sign that the housing sector is healing. Then There Was This, from CNBC, and that's appropriate, given this story. Here it is. I file this under the heading, "You've got to be kidding me!": "Thought the global financial crisis in 2008 was caused by subprime bonds, collateralized debt obligations (CDOs) and other Wall Street engineering? Think again… "[A] study from the Erasmus Research Institute of Management said the saving frenzy of the Chinese created the cheap money, which fueled the U.S. housing bubble and its collapse. "Heleen Mees, writer of the study and adjunct associate professor at the NYU Wagner Graduate School of Public Service, said that exotic mortgage products could hardly have been the cause of the U.S. housing market bubble and its ultimate collapse." The only part of the report that I agree with was the study that argued that "Ben Bernanke set the world up for the Great Recession by providing the "intellectual backing for the aggressive rate cuts in the early 2000s." Regards, Japan Shrugs Off Bad Data Once Again originally appeared in the Daily Reckoning. 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| QE3 Hopes Lift Agricultural Shares Posted: 30 Aug 2012 09:40 AM PDT By Chris Vermeulen, TheGoldAndOilGuy Prices for those securities in the agriculture sector such as the exchange traded fund for wheat (NYSE: WEAT) and the exchange traded fund for agricultural stocks (NYSE: DBA) continue to rise in expectations of more quantitative easing measures from the Federal Reserve. Both the DBA and the WEAT were up strongly in market action today.  Agricultural Stocks Commodity prices have already risen due to the drought in the United States. But that only impacted the actual production of corn and soybean. Each of those grains had a terrible harvest. As the United States produces about 40% of the world's corn, the impact was brutal. The price of corn reached record highs. Speculators also drove up the price of the DBA and the WEAT. The wheat crop and others were not that bad. But traders piled into all food commodity prices due to the drought. But weak economic data from the United States has more economic stimulus measures likely. The American economy has unemployment increasing and economic growth decreasing. A recent statement from the Federal Reserve has the markets hopeful that Quantitative Easing 3 is coming. As a result, commodity prices are rising. This increase now is based almost totally on speculators positioning themselves for a major economic stimulus measure to be announced by Federal Reserve Chairman Ben Bernanke when he speaks at economic policy summit at Jackson Hole on Friday. This happened too during the period of Quantitative Easing 2, from November 2010 through June 2011, but for a different reason. Quantitative Easing 2 greatly lowered the US Dollar in value. As a result, commodity prices for gold, oil, silver and others rose. The WEAT and DBA were very strong during the period of Quantitative Easing 2.  Agricultural Shares Based on the price trajectories, traders are expecting this for the period of Quantitative Easing 3, too.
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| Eric Sprott among GATA favorites to address Silver Summit in October Posted: 30 Aug 2012 09:38 AM PDT GATA 10:40p ET Wednesday, August 29, 2012 Dear Friend of GATA and Gold: The 10th annual Silver Summit will be held Thursday and Friday, October 25 and 26, at the Davenport Hotel in Spokane, Washington, and will feature presentations by GATA favorites Eric Sprott of Sprott Asset Management, Peter Spina of GoldSeek and SilverSeek, Al Korelin of the Korelin Economic Report, David Morgan of The Morgan Report, Bix Weir of the Road to Roota newsletter, Roger Weigand of the Trader Tracks newsletter, Ron Hera of Hera Research, and CPM Group Managing Director Jeff Christian. Many silver mining companies will be exhibiting. Admission is $40. The conference's Internet site, with registration and hotel information, is here: http://cambridgehouse.com/node/6192 The conference's press release is appended. CHRIS POWELL, Secretary/Treasurer * * * Silver Summit to Celebrate its 10th Anniversary Cambridge House International's annual Silver Summit celebrates its tenth year Oct. 25 and 26 at the historic Davenport Hotel in Spokane, Washington, with a cavalcade of experts in all things silver and a thousand silver aficionados. "The junior sector in the resource industry, which was just plain hammered in the 2008 market debacle, is making a comeback. So is silver," says Joe Martin, president of Cambridge House. "It's on the long end of the slingshot. You'd be just plain crazy not to investigate the silver sector of this market, and the Silver Summit is the place to do it." The Silver Summit is unique in the world of resource investment conferences as its focus is on silver: its exploration, its production, its end uses — industrial and medical — and its potential as a store of value as an alternative to paper money. Speakers and panelists at the Silver Summit will address all aspects of silver, and will feature the CEOs of the world's leading silver explorers and producers, as well as experts in the silver market. "While it has grown tenfold, we still regard the Silver Summit as a 'mom-and-pop' show, where customer service comes first." says Silver Summit co-founder Shauna Hillman. "After 10 years we know that most of our attendees, and all of our exhibitors, by their first names. You couldn't find better people to hang out with at the West's most historic mining hotel for several days of networking, nitpicking, camaraderie, and knowledge. It's where the giants of silver mining, exploration, and investing let their hair down and speak as equals." Casey Research's Jeff Clark, CPM Group's Jeff Christian, silver guru David Morgan, Dr. Michael Berry, and Sprott Asset Management's Eric Sprott will headline this year's Silver Summit, along with a host of newsletter writers and analysts who cover the silver markets. As always, admission to the Silver Summit costs 1 ounce of .999 silver or fiat paper money equivalent convertible to $40 U.S. dollars. Attendance, and rooms, are limited. For a special Silver Summit room rate at the Davenport or one of its affiliates, please contact the hotel directly at 1-800-899-1482 or visit their website. For further information, please visit the Silver Summit's website, or contact Shauna Hillman at 208-556-1621 or Cambridge House at 877-363-3356. * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
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| Depressed gold shares are a screaming opportunity, Agnico CEO Boyd says Posted: 30 Aug 2012 09:38 AM PDT GATA 1:41p Wednesday, August 29, 2012 Dear Friend of GATA and Gold: Agnico-Eagle CEO Sean Boyd today tells King World News that gold mining shares are trading at their lowest levels in history relative to the price of gold itself. Boyd expects that anomaly to be corrected as central banks continue with economic "stimulus" and thus he sees depressed share prices as a screaming opportunity. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/29_Ag… CHRIS POWELL, Secretary/Treasurer * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
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| Seth Lipsky: The gold standard goes mainstream Posted: 30 Aug 2012 09:38 AM PDT GATA In the ferment within today's Republican Party, there's a growing realization that America's system of fiat money is part of the economic problem. By Seth Lipsky http://online.wsj.com/article/SB1000087239639044491490457761938321878884… An under-reported development of this campaign season is the Republican Party's decision this week to send Gov. Mitt Romney into the presidential race on a platform effectively calling for a new gold commission. The realization that America's system of fiat money is part of its economic problem is moving from the fringes of political discussion to the center. This is a sharp contrast from the last time a gold commission was convened, in 1981, a decade after President Nixon abandoned the Bretton Woods system and opened the era of a fiat dollar. The 1981 commission recommended against restoring a gold basis to the dollar. But two members—Congressman Ron Paul and businessman-scholar Lewis Lehrman—dissented and outlined the case for gold. The new platform doesn't use the word "gold," describing the 1981 United States Gold Commission as looking at a "metallic basis" for the dollar. But the metal was gold, and the new platform calls for a similar commission to investigate ways "to set a fixed value for the dollar."
The 1981 commission was also stacked against a gold-backed dollar from the start. The ruling philosophy was monetarism—which, as propounded by Milton Friedman, seeks to keep prices steady by adjusting the money supply. The commission's executive director was Anna Schwartz, co-author of Friedman's "Monetary History of the United States," and the Democratic-controlled House held firm to monetarist orthodoxy. Today things have changed. Both Friedman and Schwartz died as heroes of capitalism and freedom, but monetarism lacks the sway it once had. Even Friedman before he died seemed to adjust his thinking on using the quantity of money as a target. Schwartz predicted that monetary instability would be a breeding ground for a restoration for the role of gold. In the ferment within today's Republican Party, the gold standard has become almost the centrist position. On the left would be those who favor a system of discretionary activism in which brilliant technocrats, such as Ben Bernanke at the Fed, use their judgment in setting interest rates. A bit to their right would be advocates of a rule, such as John Taylor's rule linking interest rates to various conditions, or one that requires the Fed to target the price of gold but stops short of defining the dollar in terms of specie. In the center would be advocates of a classical gold standard, in which a dollar is defined as a fixed amount of gold. These include, among others, Mr. Lehrman, James Grant of Grant's Interest Rate Observer, publisher Steve Forbes, economist Judy Shelton, and Sean Fieler of the American Principles Project. A bit further to the right would be partisans of the Austrian school of economics, including Rep. Paul. He advocates less for a gold standard than for an idea of Friedrich Hayek, the Nobel laureate who came to favor what he called the denationalization of money and a system centered on private coinage and currency that would compete with government-issued money. Further right are purists such as the radical constitutionalist Edwin Vieira Jr., who would simply price things in weights of gold or silver. A good bit of overlap exists among the camps, but Congress has come alive to all points on this spectrum. Rep. Kevin Brady, a Texas Republican who is vice chairman of the Joint Economic Committee, is seeking to pass the Sound Dollar Act, which would end the Fed's mandate to keep unemployment down, instead having the central bank focus only on stable prices. Rep. Paul is pressing the Free Competition in Currency Act, which would end legal tender and put Hayek's ideas into practice. In the Senate, Jim DeMint, Mike Lee and Rand Paul are offering the Sound Money Promotion Act, which would remove the tax on the appreciation in the value of gold and silver coins that have been declared legal tender by the federal or a state government. Utah has already made gold and silver coins legal tender in the state. Then there is Mr. Romney. In Paul Ryan he chose a running mate who understands the idea of sound money. In June 2010, as chairman of the House Budget Committee, Mr. Ryan asked Mr. Bernanke what he made of record-high prices of gold. (The value of the dollar had just slid to below 1/1,200th of an ounce of gold; it has since plunged to below 1/1,600th of an ounce.) "I don't fully understand the movements in the gold price," Mr. Bernanke replied. He confessed his belief that some people were hedging "against the fact that they view many other investments as being risky and hard to predict at this point." No wonder the eventual House bill to audit the Fed passed with overwhelming bipartisan support. This is the context in which Mr. Romney last week moved so pointedly to distance himself from a suggestion by one of his advisers, Glenn Hubbard, that Mr. Bernanke should be considered for another term. Mr. Romney made clear that he would be looking for a new Fed chairman, an important signal from a candidate who has made some mistakes—such as suggesting that monetary policy should be kept away from Congress. In fact, it is precisely to Congress that the Constitution (in Article 1, Section 8) grants the power to coin money and regulate the value thereof. The New York Sun, the online paper I edit, has warned that a gold commission could prove to be the graveyard for sound money—on the principle that if one wants to bury an idea, one need but name a commission. But it's possible that a well-conceived and well-staffed gold commission could actually sort out the debate. It's no small thing that Mr. Romney's platform calls for a gold commission and an audit of the Fed. The last Republican to run on a platform calling for a dollar "on a fully convertible gold basis" was Dwight Eisenhower, who cast the promise aside once in office. That's a strategic misstep for Mr. Romney, should he win in November, to avoid. —– Mr. Lipsky is editor of the New York Sun. The recipient in April of a grant in the form of a lifetime achievement award from the Lehrman Institute, he is writing a book on the constitutional dollar, forthcoming from Basic Books. Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit:
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Today Tom Fitzpatrick spoke with King World News about the "decisive" areas to watch for on both gold and silver. A break of these key areas will ignite gold and silver to the upside. Fitzpatrick also issued major warnings regarding the global stock markets and China.
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