Gold World News Flash

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• By the Numbers for the Week Ending August 3
• The Gold Rush Will Return
• Gold Looking Set for Weekly Loss Ahead of Nonfarm Release, But Likelihood of Central Bank Action “Still Elevated”
• Time To Buy The Summer Bottom In Gold
• Turk – Gold Is In Backwardation & About To Rocket Higher
• Why Isn?t Gold Hitting New Highs Given What?s Going On In the World These Days?
• Gold to Rally Above $1,900 by End 2012: HSBC
• The Silver and Gold Price have Defended their Lows Look for Much Higher Prices in September
• Frontier Markets Harbor High-Reward Investment Opportunities: Carlos Andres
• Sprott Physical Silver Trust offer underwriters take up additional units
• Family Dollar Stores - Stock Research Analysis
• Central Bankers Agenda: Obama Sanctions Against Iran Over Gold
• Paying Lip Service to Liberty
• Greyerz – The Risk Of Systemic Collapse Is Now Enormous
• Buying The Summer Lows While Gold Bottoms
• Turk - Gold Is In Backwardation & About To Rocket Higher
• Why is McDonald’s the Official Restaurant of the Olympics?
• NITE Justice
• Two Disturbing Gold Charts
• Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week
• Gold and Silver Disaggregated COT Report (DCOT) for August 3
• Government Is Shrinking?
• Gold Daily and Silver Weekly Charts - Phony Market Action Cycle
• YOU CAN’T MAKE THIS UP!
• EUR Shorts Collapse By 35% In Two Months, Down 10% In One Week
• On S. Korea's recent 16 tonne gold purchase
• Profit Amid Absurdity
• COT Gold, Silver and US Dollar Index Report - August 3, 2012
• Dissing Price Discovery
• Jim's Mailbox

By the Numbers for the Week Ending August 3 Posted: 03 Aug 2012 09:45 PM PDT This week's closing table is just below.   If the image is too small click on it for a larger version.

The Gold Rush Will Return Posted: 03 Aug 2012 09:00 PM PDT from Gold Money: It's easy to be bewildered by the daily noise of the mainstream media. Yet at a time when savings and wealth are threatened by the debt crisis, there is little talk about the real benefits of precious metals as a hedge against the ongoing crisis. People are completely missing the point. What about gold's fundamental value? What about the real benefits of owning gold? To help put this in perspective, I created a simple but comprehensive framework below, outlining the bullish and bearish factors affecting gold's "true" value. An historical evolution is underway, with many important gold-bullish events in recent months despite the horizontal price action. Something that could be of critical importance for the gold market in the years ahead are the proposals to treat gold as a zero-risk asset under the Basel III agreement, which could take place as soon as 01/01/2013. It implies that the banks that are members of the Basel Committee on Banking Supervision should treat gold in the same way as cash or bonds. In order to reduce risks in current uncertain circumstances, those zero-risk assets need to be increased from 6% to 8%. Fundamentally it means that gold again becomes part of the financial system. Agreements between Iran and several eastern nations (Turkey, China, India) to use gold as payment for oil carry similar implications for gold, and could herald a rapid reappraisal of gold's status among institutional investors, who have long considered it a "risk" asset. Read More @ GoldMoney.com

Gold Looking Set for Weekly Loss Ahead of Nonfarm Release, But Likelihood of Central Bank Action “Still Elevated” Posted: 03 Aug 2012 08:30 PM PDT by Ben Traynor, Gold Seek: U.S. DOLLAR prices quoted for gold bullion on the wholesale market rose to $1596 an ounce during Friday morning's London trading, recovering some ground following three days of losses, as stock markets also rebounded ahead of the release of US nonfarm payrolls data later today. Silver bullion climbed back above $27.30 per ounce, in line with where it closed two weeks ago, while other industrial commodities also edged higher. Heading into the weekend, gold bullion looked set for a 1.7% weekly loss by Friday lunchtime in London. Gold prices fell sharply on Wednesday following a better-than-expected ADP Employment report, a privately-produced precursor to today's official nonfarms figure. Gold then fell again Thursday along with the Euro, after the European Central Bank opted to leave interest rates on hold and, like the Federal Reserve a day earlier, announced no new stimulus measures. "While this week's price behavior highlights that investors are rather quick to get out, it's important to remember that gold is back to levels it was trading at just last week," says a note from UBS. Read More @ GoldSeek.com

Time To Buy The Summer Bottom In Gold Posted: 03 Aug 2012 07:56 PM PDT By Vin Maru General Outlook for Gold and the Miners It is our firm belief that the precious metals sector has bottomed out and the downside is very limited from here on out.  While there doesn't seem to be an immediate rush back into the sector, now is a great time to be acquiring physical [...]

Turk – Gold Is In Backwardation & About To Rocket Higher Posted: 03 Aug 2012 07:00 PM PDT from KingWorldNews: Today James Turk told King World News that gold is now in backwardation and about to rocket higher. Turk also warned, "The bottom line is we are in a fiat currency bubble. Eventually this bubble is going to pop because we are using this fiat currency, backed by nothing, not just in one country, but throughout the world." Here is what Turk had to say: "This is exactly the kind of action I had been hoping for, Eric. When had the KWN blog interview on Wednesday, I had mentioned that we probably missed the last chance to buy gold at $1,580, and silver under $27. The way the metals traded yesterday and today illustrates the important point I was making when we did that interview. There's a ton of money on the sidelines waiting to buy the dips. This is exactly the type of thing you see at the beginning of a bull market." James Turk continues @ KingWorldNews.com

Why Isn?t Gold Hitting New Highs Given What?s Going On In the World These Days? Posted: 03 Aug 2012 06:56 PM PDT …[Y]ou may be curious why, despite continued money-printing and abysmal US economic reports, gold hasn’t been able to hit new highs. The answer*is that*gold is currently priced for collapse. Many investors believe the yellow metal has topped out and are selling into every rally. Treasuries have temporarily overtaken gold as the primary safe-haven asset [but, as I see it,] once that dynamic is broken the counterflow into gold will be tremendous. [Let me explain further.] Words: 797* So says [B]Peter Schiff (www.europacmetals.com) [/B]in edited excerpts from his original article*. [INDENT]Lorimer Wilson, editor of [B][COLOR=#0000ff]www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) has edited the article below for length and clarity – see Editor's Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.[/COLOR][/B] [/INDEN...

Gold to Rally Above $1,900 by End 2012: HSBC Posted: 03 Aug 2012 06:30 PM PDT by Holly Ellyatt, CNBC: Gold could be one of the few assets to profit from the political and economic turbulence in the United States as the "fiscal cliff" approaches, potentially creating a rally in the precious metal later in 2012 for it to reach $1,900 per ounce by the end of the year, analysts at HSBC said. "Economic uncertainty, geopolitical tensions and the uncertainty of the U.S. November elections are theoretically gold-bullish," and gold should perform better later in the year "when U.S. growth is poor and the dollar is weak," a new HSBC report said. "We expect prices to rally to above $1,900/oz by the end of the year. Patience is the most important commodity." HSBC recommends holding onto gold as an asset that will gain in value as investors fear the future of the euro [EUR=X 1.2377 0.0197 (+1.62%) ] and dollar [.DXY 82.39 -0.97 (-1.16%) ], with governments and central banks expected to intervene to shore up their currencies' strength. Read More @ CNBC.com

The Silver and Gold Price have Defended their Lows Look for Much Higher Prices in September Posted: 03 Aug 2012 06:24 PM PDT Gold Price Close Today : 1,606.00 Gold Price Close 27-Jul : 1,618.00 Change : -12.00 or -0.7% Silver Price Close Today : 2779 Silver Price Close 27-Jul : 2747.8 Change : 31.20 or 1.1% Gold Silver Ratio Today : 57.791 Gold Silver Ratio 27-Jul : 58.883 Change : -1.09 or -1.9% Silver Gold Ratio : 0.01730 Silver Gold Ratio 27-Jul : 0.01698 Change : 0.00032 or 1.9% Dow in Gold Dollars : $ 168.57 Dow in Gold Dollars 27-Jul : $ 167.06 Change : $ 1.51 or 0.9% Dow in Gold Ounces : 8.155 Dow in Gold Ounces 27-Jul : 8.082 Change : 0.07 or 0.9% Dow in Silver Ounces : 471.25 Dow in Silver Ounces 27-Jul : 475.87 Change : -4.61 or -1.0% Dow Industrial : 13,096.17 Dow Industrial 27-Jul : 13,075.88 Change : 20.29 or 0.2% S&P 500 : 1,390.99 S&P 500 27-Jul : 1,385.98 Change : 5.01 or 0.4% US Dollar Index : 82.318 US Dollar Index 27-Jul : 82.676 Change : -0.358 or -0.4% Platinum Price Close Today : 1,412.90 Platinum Price Close 27-Jul : 1,406.70 Change : 6.20 or 0.4% Palladium Price Close Today : 577.40 Palladium Price Close 27-Jul : 571.05 Change : 6.35 or 1.1% 'Twas a week of correction for the silver and GOLD PRICE, complete with a peach tree branch whipping. Yet after dipping back into their triangle formations, after gold touching its 50 and 20 DMAs, both ended the week well outside those triangles again. Looks like the final kiss good-bye before a rally. Rally may spend the rest of August rolling out, but the lower prices appear behind us. Today the GOLD PRICE vaulted 1.2% while silver leapt 3.3%. Further witness of a turnaround is today's significantly lower GOLD/SILVER RATIO (57.791) after nearly touching the last high last week. Gold jumped $18.60 to $1,606. The SILVER PRICE grabbed 89 cents to close way above 2700c resistance at 2779c, above its 20 and 50 DMAs. Other indicators point higher, too. There's a very interesting study by Alf Field. What's interesting is that gold made a series falls of 88 days, 55 days, and 33 days, with a low falling 23 July. Add 11 days to that and you come to 3 August. Apparently the low came yesterday and was nearly matched today before gold shot up. BOTTOM LINE: silver and gold have established and defended lows in their post April-2011 and post-August 2011 corrections. They may not run away from here, but time and price loudly argue that the correction lies behind us. Look for much higher prices in September. That suggests y'all ought to buy silver and gold here. Down below the SILVER PRICE must not fall through 2680c nor gold through $1,585, and above gold must steam quickly through $1,640 resistance and on to $1,680.00 Don't let a long correction and all the central bank blarney and blather deceive you. Bad debt, sick economies, and rotten banks have not been cured. As it now appears, Obama will beat what's his name, Mr. Forgettable, and if he does he will let all the Inflationists and Spenders out of the loony bin. Not what I want to happen, but I'd be a pure king fool sure enough if I didn't tell y'all the truth. Markets got pushed around this week like an old bull gets pushed around by a young one. In the end, silver and gold won, stocks won, the euro won, and the dollar and yen lost. Way to paint that tape, Nice Government Men! Friends, you can believe a lot of things, but how can you believe something that gainsays itself out of its own mouth? I'm a fool, but not that big a fool. I reckon we raise a better run of fool here in Tennessee than in the rest of the world. Media tells us that euphoria and generalized jubilation broke out in the stock market and the euro because the US employment report today -- which, I mark in passing, ain't worth no more than an "I love you" off a trashy girl's lips, cause it's a government number -- "beat expectations" and came in at 163,000 new jobs created instead of 100,000. Break out the champagne, right? Nope, the unemployment rate in fact rose from 8.2% to 8.3% (itself an hilariously understated number, maybe half or a third of actual unemployment). So right there its blowing hot and cold out of both sides of its government mouth. That, at least, is what this Tennessee fool's common sense would logic out of that report, but durned if the mystery of stock and currency markets ain't too deep for me. First, the US dollar index lost a massive 100.3 basis points (1.29%). Throwing risk aversion and caution to the wind, the yield on US 10 year treasuries rose, after recent all time lows (bonds fall when yields rise, remember). That now begins to look as if it might be scratching out a bottom. So folks run out of dollars and out of Treasuries, but not just mincing along, they stampede. Course my suspicious mind says the NGM, unable any longer to stand a high dollar and sinking euro, pushed markets over the brink into the deep. Makes no never mind, it happened. Euro rose a ridiculous 1.68% to $1.2388. Jumped clean through its 20 day moving average (1.2242) and nearly plumb to the 50 dma ($1.2410). All of this is useless noise unless the euro can clear $1.2500, and then around $1.3000 there waits a minefield of resistance. What y'all need to note here is that the dollar gave up all the last few days' gains as well as falling below its 20 DMA (83.18), its 50 dma (82.68), and below 83 support. It came to rest up against support of a fan line. from the Oct. 2011 low. Should that fail and the last low (81.50) not hold, the dollar will pay a visit to its 200 DMA (80.08). Before I leave these nasty, scabrous fiat currencies, let me mention that the yen closed down 0.30% at 127.46 cents (Y78.46), and is making a megaphone formation, deadly to upward moves. Stocks are showing themselves determined to try at least to move higher, yet today's performance, bold as it was, only posted a double top with last Friday. Stunning as it was, stocks' move means nothing unless they improve on it next week. There remaineth the chance that stocks will move back to May highs (S&P500 1,420 and Dow 13,300) before they fail. That would paint a baleful triple top over investor's hopes. Dow today rose 217.29 (1.69%) to slightly better last week's high (13,076) and closing at 13,096.17. S&P500 gobbled up 25.99 (1.9%) to end at 1,390.99, versus last week's 1,386. Y'all enjoy your weekend. 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.

Frontier Markets Harbor High-Reward Investment Opportunities: Carlos Andres Posted: 03 Aug 2012 05:19 PM PDT The Gold Report: Carlos, you note in the January edition of Frontier Research Report, entitled "2011 In Review: A World in Turmoil," that only three countries with major stock exchanges finished 2011 in the black: Indonesia, the Philippines and Malaysia. Is the face of global risk changing? Carlos Andres: In a word? Yes. Some emerging and frontier markets with significant natural resource endowments continue to emerge as robust places to invest and weather economic storms for savvy investors. Paradoxically, the world's developed economies have become the more risky markets. TGR: What factors are contributing to that? [INDENT] Related Articles: Gold Profits from World Turmoil: Carlos Andres How to Find the Next Tenbagger in Peru: Maria Belen Vega and Ricardo Carrion A Historic Window of Opportunity In Mongolia: James Passin[/INDENT]CA: On the one hand, robust natural resource demand has asserted itself over the last decade, led by Asia in general and China in particular. Latin Am...

Sprott Physical Silver Trust offer underwriters take up additional units Posted: 03 Aug 2012 04:30 PM PDT by Lawrence Williams, MineWeb.com Suggesting institutional confidence in the future of the silver price, the underwriters in the recent $200 million offering of new units in the Sprott Physical Silver Trust have taken up $20 million in additional units.. The recent fully subscribed $200 million offering of new units by the Sprott Physical Silver Trust has received an additional boost by the offer underwriters – Morgan Stanley and RBC Capital Markets – taking advantage of an option that enables them to buy additional units on their own accounts. The two underwriters have between them taken up1.8 million units, in addition to the 18.1 million units on offer at US$11.15 each, bringing the amount raised by the Trust to a little over $220 million. As previously noted here, Sprott plans to use the proceeds to purchase, and take delivery of physical silver to the value of the amount raised, which at current silver prices would amount to some 8 million plus ounces of physical metal. It should be recalled that when Sprott launched the Physical Silver Trust securing 15 million ounces for it took a full three months before delivery of the metal was received and, according to Sprott, some of the delivery had not even been mined when the order was put in. Read More @ MineWeb.com

Family Dollar Stores - Stock Research Analysis Posted: 03 Aug 2012 04:25 PM PDT A quick glance at the historical earnings and price correlated FAST Graphs on Family Dollar Stores (FDO) shows a picture of overvaluation based upon the historical earnings growth rate of 15.2%. Analysts are expecting the earnings growth ... Read More...

Central Bankers Agenda: Obama Sanctions Against Iran Over Gold Posted: 03 Aug 2012 04:00 PM PDT by Susanne Posel, Occupy Corporatism: Last month, President Obama placed more stringent sanctions on Iran's oil sales and financial transactions. And in the next breath, he claimed that because Iran is supposedly developing a nuclear weapon, Obama will "once again reaffirming [the US government's] commitment to hold the Iranian government accountable for its actions." While Israel is threatening to attack Iran pre-emptively to "knock out" nuclear facilities, Benjamin Netanyahu, Israeli Prime Minister asserts that "all the sanctions and diplomacy so far have not set back the Iranian (nuclear) program by one iota And that's why I believe that we need a strong and credible military threat coupled with the sanctions to have a chance to change that situation." Sanctions placed against Iran are directed at their economy and value of their currency because Iran has been using gold instead of the US dollar to trade with other nations for their oil. Read More @ OccupyCorporatism.com

Paying Lip Service to Liberty Posted: 03 Aug 2012 03:46 PM PDT Synopsis:  Most Americans have unwittingly become enemies of liberty. Dear Reader, We have a full issue today, including a guest essay by long-term friend and now business partner John Mauldin. But before we get to that and more, I want to share some musings with you on a topic of no small interest to many of you – the topic of liberty. I'm pretty sure I'm about to offend many dear readers, though that's definitely not my intention. Rather, I hope to provide fodder for reflecting on the nature of liberty and how to find it in a world that is increasingly coming under the thumb of totalitarians. With that preface, we begin. Paying Lip Service to Liberty For some time now – years actually – I have pondered the nature of liberty. Or more specifically, what liberty actually means to me. And to be extra clear, I am not talking about the meaning in abstract or philosophical terms, but tangibly – in much the same way I might answer if asked what my wife means to me. The trigger for this entirely personal discourse comes from reading various articles and viewing various YouTubes and speeches from self-styled champions of liberty (COL). There is even an entire conference, Mark Skousen's FreedomFest, dedicated to the topic. Invariably, these well-meaning COL rail against "The Man" (something I do myself), accentuating their public angst by sharing stories of being molested by the TSA or otherwise inconvenienced by minions of the state. It is my contention that most of these individuals, and certainly the majority of "freedom-loving" Americans, don't actually understand the meaning of liberty, but rather give the matter little more than lip service. And again, I don't mean liberty in an abstract way – like, say, "world peace" – but tangibly. Now, before going on, tripping emotional wires as I do, I feel the need to quickly establish my bona fides on the topic. I start with the simple fact that with age, and 58 years old counts, comes perspective. In addition, unlike most of today's COL, I have actually been jailed for rioting against authority – at the naïve age of 14, as the result of actively participating in the toe-to-toe anti-war confrontations during the Oakland Induction Center Riots of the late 1960s. In addition, as over-the-top as it now sounds, along with my now-departed friend and colleague of many years, Jim Blanchard, I spent many months assisting the RENAMO-led freedom fighters raise awareness in their fight against Mozambique's vicious dictatorship. The adventure ultimately ended up with us in a very tight spot under house arrest in neighboring Malawi, followed by a high-speed car chase with the Malawian secret police in hot pursuit. I have been directly involved with prominent members of the freedom movement in the US as part and parcel of my business career since a very young age, including running the 1980 Libertarian Presidential Nominating Convention in Los Angeles at the request of my friend Ed Crane, the founder of the Cato Institute. Furthermore, I have been friends, business associates, or acquaintances with too many well-known COLs to recount here, starting with my business partner of many years Doug Casey, but also Harry Browne, Milton Friedman, and even Ayn Rand (I arranged for and hosted her at her last public appearance before she died.) And finally, I would mention my involvement in helping to create La Estancia de Cafayate in a remote wine-growing region of Argentina, without question the largest and most successful community of largely libertarian-minded individuals on the planet. All of which is to say that I'm not arriving to this discussion fresh off the back of a turnip truck. So, what does liberty mean to me? In the simplest and purest terms, it means being free to come and go as I please. Of course it would be my strong preference to come and go without the charade and indignity of transportation security instituted by most nations these days (ironically, the land of the free being the worst of the lot). But, unlike some prominent COL, I don't make the mistake of conflating transiting airports with protesting against the inanity of transport security. That's because if I wanted to mount a protest against TSA, I would do it in an organized fashion. Say, by arranging for a large and loud demonstration at whatever passes for TSA's headquarters, making sure that the media was there to provide coverage. I certainly wouldn't do it ad hoc without media present, on a day when I actually needed to travel from point A to point B. After all, like trees falling in remote woods, if a protest happens and there's no media to record it, was there a protest? The polar opposite to being free to come and go as one pleases, the essential tenet to my personal definition of liberty, is to be trapped in a jail cell. Been there, done that – and very much have no interest in doing it again. Thus, I avoid engaging in activities where one of the possible outcomes is being arrested and jailed. For example, making angry displays when a TSA minion asks me to take off my shoes. Now, I realize that the degradation of principles and justice in countries such as the US means that pretty much everyone breaks a law or three every day, but miscarriages of justice resulting in an innocent person being sentenced to jail (or gunned down) are statistically very rare. Yes, they happen – but so does getting struck by lightning. Thus, when I talk about acting in a fashion unlikely to lead to being locked up in a cage, I'm talking about playing simple odds. And no, I don't need to be a cowering sheep to keep the odds of my being jailed near zero. Rather, I just need to take note of the laws of whatever land my feet are currently planted on and avoid tripping over the big stuff. In the US, for example, walking around with a bag of pot in your pocket could lead to jail time. In Uruguay or Amsterdam or dozens of other countries, it's legal. So, when in the US – again, ironically still called "the Land of the Free" – I can manage without the pot. (Actually, I've done without pot for many decades; I'm just using this as an illustration). Failing to pay the legally proscribed amount of taxes is another easy way to end up in jail. As a US citizen, there's no denying I'm trapped in a tax regime I find abhorrent and counterproductive to the building of capital. That's a big disadvantage compared to many countries. But am I willing to trade my liberty for the money I might be able to hide from the IRS? Not hardly. That would be the equivalent of choosing the latter when confronted by a gun-wielding thug demanding my money or my life. Does this mean I'm powerless against the institutionalized theft of taxation? Not at all. It just means I have to work harder to uncover legal ways to minimize the tax bite, starting by hiring good counsel. And let's not forget, for the citizens of most countries, minimizing the tax burden is as simple as getting on a plane, as – unlike the Land of the Free – they don't tax non-resident citizens on worldwide income. As for US citizens, if the issue is important enough to you, there are specific steps you can take to legally avoid the taxes altogether, by replacing the passport you carry in your pocket. It's not particularly quick or easy, but if paying less (no?) taxes is that important to you, then there are clear paths to accomplishing just that objective without risking the loss of your liberty. I'm not making these comments cavalierly, but rather to point out hard facts about the world we live in. So, freedom to come and go freely is the core principle of my personal liberty. What else? Well, part of that freedom has to do with personal finances. Namely, you can have all the liberty in the world, but if you don't have the money necessary to actually travel, you probably aren't going to get very far… at least not in a fashion you might enjoy. While there are countries such as North Korea where the government makes accumulating any wealth almost impossible (unless you are part of the dictator's inner circle), in most of the world, this aspect of life – call it "financial freedom" – has far more to do with a person's willingness to work hard than anything else. That said, I readily acknowledge that governments everywhere are a constant weight on the entrepreneur's back. Yet, simply looking at the facts as they are, I personally know dozens of people, here in the US – and in places like Argentina, where the government makes doing business an order of magnitude more difficult – who, through their own creativity and exertions, are fabulously successful. As something of a tangent, while generalizations are rarely useful, in my direct experience many individuals who paint themselves as libertarians have trouble coming up with the proverbial two nickels to rub together. Doug Casey and I have discussed this on more than one occasion, and I don't think either of us has a good answer. If pressed to it, I would hypothesize that it has to do with a latent inability to work as part of a team, something libertarians tend not to be very good at but which is often required to launch a successful career. In support of that hypothesis, look no further than the reality that the Libertarian party has never been able to mount an effective national political campaign. Back to the point, despite the government's meddling, financial freedom is imminently attainable for individuals who focus on their work and who put in steady efforts at increasingly their personal knowledge (including learning how to handle your money, once you have some). Of course, succeeding may not be easy... it rarely is, though it can be. While I'm sure there are additional nuances to my personal definition of liberty that I could mention, the big point is that as long as I am free to come and go as I please and have the capability to build the wealth I need to do so, then I have pretty much all the liberty I need to enjoy my limited lifetime on this planet. After all, with those two conditions in place, if one place becomes too unfree for my taste, I can move on. "Wait a second!" some of you may find yourselves thinking indignantly. What about the wholesale trampling of the US Constitution in recent decades? What about the militarization of the domestic police force here in the US? What about the loss of freedom in the Land of the Free? I might respond with a sad shake of the head and by mouthing words such as "tragic," or "damn shame," or even "it's outrageous, criminal even." And there's no question it's all of those things and more. The idea of America in its youth was amazing, especially considering the era in which it was birthed. But that idea has been so diluted at this point to be almost meaningless… here in the United States. And therein lies the importance of being able to travel freely. You see, unlike many, I refuse to define myself by the artificial borders that were determined solely by an accident of birth. Why should I? Do I relate to the idea of America? Of course; what thinking person wouldn't? But during this philosophical dark ages for freedom in the United States, what practical purpose does clinging onto that idea serve? To use an overused comparison, what practical purpose would it have served for the head of a Jewish family during Hitler's Germany to stand on a street corner handing out anti-Nazi pamphlets? The obvious answer is "none." It would have just resulted in the ultimate loss of liberty – his death and likely that of everyone he loved. Personally, I look at the Americans and I see a people who have been very effectively brainwashed, or who simply have given in to the entirely human tendency to shuffle unquestioningly onto the path of least resistance and let themselves go. I see a people who, on a wholesale basis, have consciously or unconsciously decided to trade the idea of America for the false security of a totalitarian state. While there are voices in the woods, such as Ron Paul, that warn of the consequences, I'm trying to focus today on hard realities. And the hard reality is that if you were to assemble all 300 million US citizens in an auditorium to listen to well-presented arguments for less vs. more government and then ask for a show of hands, the vast majority would raise their hands in favor of the current system that has the state deeply involved in pretty much every aspect of the economy and society at large. Skeptical? Then ask yourself what percentage of the audience would raise their hands in favor if asked the following: "How many of you want Social Security to remain intact?" "How many think the government should subsidize health care?" "How many think the rich should pay more taxes?" Or ask your questions in the negative, and watch how few hands stick in the air. "How many of you think the Food and Drug Administration should be abolished?" "How many of you think recreational drugs, including cocaine and heroin, should be legalized?" "How many of you think the Department of Education should be shuttered?" "How many of you think that the tax credit for mortgages should be cancelled?" At the end of the exercise, the level of support for the very same tangled body of state controlled handouts, regulations and central economic planning now choking the last gasps of life out of the body politic would be obvious and overwhelming. The practical point I am trying to make here is that the COL are fighting against a very entrenched and increasingly dangerous public mindset. Some like to hearken back to the days of the revolution when prominent men in the community risked it all to overthrow the British. I would contend that the situation today is totally different. Then it was a foreign enemy daily adding salt to the open wound of what was essentially an occupation by marching troops around and passing highly unpopular and often arbitrarily punitive laws. Today the enemy (of true freedom) is within. In fact, the nation is overrun by them… they dominate in most every community, in most businesses and even in most families. And your fellow citizens don't want what the COL are selling. Sure, there are a fair number – for instance, members of the Tea Party – who might be sympathetic on a largely abstract level, but drill down into the specifics by asking questions such as those above and you'll quickly find just how far off the grid you are. So what's the point? Face the facts – Free No More. Contrary to popular delusions, the United States is no longer the Land of the Free – either in terms of its judicial system or its market structure. Rather, it is the land of the paranoid, the state-dependent, supporters of Guantanamo and permawar… with the highest incarceration rates in the world, militarized police and… and… and… That said, it's also the land of the convenient shopping, relatively inexpensive food and housing and trains that run on time. Provided you pay attention not to trip over the big legal no-nos, you can live a very high standard of living (though, in fairness, that's true of most of the world). If, on the other hand, you don't think you can stay out of trouble here or in any country whose government is becoming a danger to residents, then go somewhere else. Or, to quote my friend and partner Doug Casey, "Stop thinking like a serf."   Define what it is you want from your life. And I am speaking about this life, not some promised afterlife. Do you really want to put yourself on the front line of a battle that the vast majority of the populace wouldn't support you in? If the answer is "yes," that you are willing to lose your liberty – the ability to travel freely – in support of the cause, then I can only wish you well. I hope at the end of your life, which in the US could come quicker than you'd like, you'll have found satisfaction and purpose in the struggle. Just be sure you are clear on your objectives and are willing to accept the consequences. Of course, I'll continue to support the champions of liberty here in the US, even though I think they are tilting against windmills for the most part. And I will almost certainly find occasion to speak against the totalitarian tide myself, albeit in terms sufficiently tame to avoid leading to a loss of my liberty. Far more important as it relates to my personal liberty, I'll continue the process of diversifying my life between political jurisdictions so that if and when things in my native country become unbearably oppressive – and therefore an active risk to my ability to freely go about my business – I can bid it goodbye. Call me a coward, but in my view it's far better to switch than to fight, especially when the vast majority of my fellow citizens wouldn't know the true meaning of freedom if you served it to them on a silver plate. Nothing too profound, just something that's been on my mind. As always, your feedback is most welcomed at david@CaseyResearch.com, though I can't promise I'll be able to respond to everyone. (Since I mentioned it above, I'll mention that the next big event at La Estancia de Cafayate is being held November 5-10. It's the official kickoff of "The Season" down there, when many of the over 230 property owners from countries in the northern hemisphere come to visit or to take up residence in order to enjoy the beautiful Argentine summer. There are social events, a Casey Research mini-conference, wine tastings, horses and polo, a golf tournament, tennis, classes at the world-class spa and much more. Information on the "Cafayate Adventure" event can be found here.) Letters from You: Stepping into the Fire Because it relates to the above musings, I wanted to share a snippet from an email I received from subscriber Brian A., which concluded with the following well-meant sentiments: "I would like to do more to change the path this country is going down. Voting seems useless. People like Dave Janda and Ann Barnhardt are getting the message out in their own way to the masses as well as the Casey folks. But I am trying to figure a way a basic person such as myself can contribute to the solution. Any suggestions?" Brian A. My response… Brian, Thanks for the note. As far as helping to change the world, alas there is not much I can suggest on that front. As I see it, the country – and much of the large, degraded democracies – are on fire, the fire starting in the piles of paper money and debt and spreading fairly quickly at this point. The bureaucrats are throwing everything they can at the fire at this point, but the size of the paper mountain is too big for them to have any effect. That won't stop them from trying... by throwing the corpses of the productive classes onto the inferno (which, of course, just stokes the fire further, but they don't know that), by adding more regulations, exchange controls, starting wars, etc. Meanwhile, the public has been trained to think that the bureaucrats are the only ones that know how to put out a fire, and so instead of throwing them into the inferno (figuratively speaking, of course) which would be the actual solution, they stand on the sidelines and encourage them to greater efforts. Now, you may want to step into middle of this raging blaze, perhaps with your garden hose, but in my view all that's going to happen is that you, and everything you own, will then go up in smoke. The reality, at least as I see it, is that the fire needs to complete its natural cycle, leaving behind scorched earth that will provide the fertile soil for an economic resurgence. While we each have to make our own choices on where to be during the firestorm that's coming, I plan on being about as far away as I can – in a small, wine-growing town in Northwest Argentina. In addition to being a truly wonderful place, the Argentines are old hands at dealing with economic crisis – and the place is completely self-sustaining in all the right things (starting with good food and wine, and lots of it). Not sure that helps, but that's the way I see it. David I guess that sums up my current view pretty well. And now, on to an article on the realities of the current investment environment. Starving the Savers with Operation Twist By John Mauldin, chairman of Mauldin Economics The news that the Federal Reserve Bank expanded its Operation Twist program by another $267 billion was meet with somewhat surprising yawn by Wall Street. In case you've been ignoring the Fed (which is not such a bad idea if they weren't so powerful), Operation Twist is the process in which the Fed sells billion of dollars of short-term bonds and uses those funds to purchase long-term Treasury bonds on the open market. The goal is to reduce long-term interest and make mortgages as well as business loans more affordable. According to the Federal Open Market Committee, Operation Twist "should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative." That strategy didn't work so well on the day of the announcement, as yields on the 10-year Treasury note rose from 1.62% to 1.65%. Operation Twist is on top of the Fed commitment to keep interest rates "exceptionally low" at least until late 2014. The idea is to lower the interest rate of the longer bonds, which in turn is supposed to lower interest rates for borrowers on mortgages, cars, and business loans. While Operation Twist may be helpful to people and businesses who want to borrow money, the result for savers is financial starvation. These are the people who have responsibly spent less than they made and socked away those savings for a rainy day, presumably the golden years of retirement. Savers are simply getting what my father described as "diddly-squat" on their savings. One has to go out beyond five years to get more than a 1% yield. Who is buying this stuff? And if this additional waste of taxpayer money doesn't work, Bernanke promises to spend even more borrowed money. "If we don't see continued improvement in the labor market, we'll be prepared to take additional steps if appropriate," promises Bernanke. Those "appropriate steps" will certainly be the third round of Quantitative Easing, or QE3. QE3, however, is effectively the last bullet in the Federal Reserve Bank's pistol, and if it proves to be as ineffective as QE1 and QE2, some other division of the government cavalry will need to ride to the rescue. Operation Twist, Quantitative Easing, and keeping interest rates at historic lows are all acknowledgements that our economy is weak and going to get weaker. Meanwhile... Back on the Congressional Ranch At the same time, our elected officials need to turn their focus away from getting re-elected to finding a solution – at least a temporary one – for the fiscal cliff we are approaching. By the end of this year, unless lawmakers intervene, some automatic spending cuts will go into effect, the Bush-era tax cuts will expire, and income tax rates will rise, along with taxes on long-term capital gains and dividends. The maximum tax on long-term capital gains from the sale of securities will rise from the current 15% to 23.8% in 2013. Dividends will be taxed as ordinary income, so the tax will rise from the current 15% to as high as 43.4%. And don't forget the expiration of the payroll tax cut on Social Security. While I believe the legislators will find some solution as we approach year end, there is no way to know what they will do, so you would be wise to have a plan in place to protect your portfolio. If the Bush tax cuts expire, you may want to harvest some of your capital gains in 2012. Not only because tax rates will rise, but you should also consider the very real possibility that our economy may fall back into a recession and take the stock market with it. Europe, Here We Come Our country is at an important crossroad. Our politicians want to spend even more money that we don't have and like Europe, have built up a mountain of debt. The US will soon be faced with similar sovereign debt problems. As the bond investors look at Europe and a soon-to-implode Japan, they will decide that the US is only different in size and scale. Our national debt surpassed our country's GDP last year. Think about that: our politicians have spent their way to the point that we owe more than the collective output of all our individuals and businesses in the entire United States. And our debt problem is going to get worse. The interest on our $16 trillion of national debt is rapidly becoming a huge part of the overall budget, and any rise in interest rates will put severe constraints on spending or force large tax increases or require the Federal Reserve to monetize the debt. None of those have positive outcomes. Our ballooning deficit creates the very real risk of the bond market treating us just as it is treating Italy and any other country that gets to the point where its debt is unsustainable. No country can run deficits the size we are currently running, along with unfunded deficits over four times the size of the economy and a growing overall debt burden, without consequences. At some not-too-distant point, investors in bonds will start to question the ability of the United States to service that debt and will treat our government debt like a red-headed stepchild. But until that time comes, which is a ways off, it's clear that the Federal Reserve, other central banks, and even our esteemed leaders in Washington are going to take whatever measures they deem fit to rectify Washington's problems – even if it means effectively repressing your income, your returns on savings and investments, and more. The bottom line is that Washington has effectively changed the game for successful income investing. So much so that people who rely on yields will need to adapt to a new way of investing for inco

Greyerz – The Risk Of Systemic Collapse Is Now Enormous Posted: 03 Aug 2012 03:30 PM PDT from KingWorldNews: Today Egon von Greyerz told King World News, "We've had Lehman, AIG, MF Global, PFG, the latest (trouble) is Knight Capital which lost $440 million overnight. This just shows that it's not safe for investors to keep their money in the system." Greyerz also spoke with KWN about some lofty targets for both gold and silver. Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also said, "We are being warned that we should not keep the main part of our money there (in the financial system) because the risk that you will be totally wiped out is massive." Here is what Greyerz had to say: "Short-term let's just look at some of the figures which have come out. US unemployment was 8.3%, and Nonfarm Payrolls went up by 163,000. Well, first of all we know that 8.3% is not a real figure. I said to you last time that every figure which comes out is false and this figure was incorrect." Egon von Greyerz continues @ KingWorldNews.com

Buying The Summer Lows While Gold Bottoms Posted: 03 Aug 2012 03:02 PM PDT It is our firm belief that the precious metals sector has bottomed out and the downside is very limited from here on out. While there doesn't seem to be an immediate rush back into the sector, now is a great time to be acquiring ... Read More...

Turk - Gold Is In Backwardation & About To Rocket Higher Posted: 03 Aug 2012 03:00 PM PDT Today James Turk told King World News that gold is now in backwardation and about to rocket higher. Turk also warned, "The bottom line is we are in a fiat currency bubble. Eventually this bubble is going to pop because we are using this fiat currency, backed by nothing, not just in one country, but throughout the world." Here is what Turk had to say:  "This is exactly the kind of action I had been hoping for, Eric. When had the KWN blog interview on Wednesday, I had mentioned that we probably missed the last chance to buy gold at $1,580, and silver under $27." This posting includes an audio/video/photo media file: Download Now

Why is McDonald’s the Official Restaurant of the Olympics? Posted: 03 Aug 2012 03:00 PM PDT from Anthony Gucciardi, Activist Post McDonald's restaurants are the very epitome of poor health, with their McNuggets most notably containing chemicals used in breast implants and silly putty. So why have the Olympic games officials adopted the restaurant chain as their official restaurant of the Olympics? Considering the Olympic games represent some of the most conditioned athletes across the globe, it seems quite bizarre that the face of the entire event would be that of Ronald McDonald. With the media frenzy surrounding the Olympic games, it's easy to see why McDonald's continues to be a major sponsor (dishing out cash for over 35 years). A massive marketing opportunity is presented to the company that involves aligning itself with a 'healthy' and fit event. In fact, McDonald's is reaping the benefits as even some of the most decorated Olympic finalists are chomping down on their disease-linked frankenburgers. It was reported that 'the most highly decorated Olympian' Michael Phelps gorged himself at McDonald's after winning a gold medal at the Olympics. Read More @ Activist Post

NITE Justice Posted: 03 Aug 2012 02:55 PM PDT by Andrew Hoffman, MilesFranklin.com: On a day when I've already written for nearly four-and-a-half hours – on this morning's commentary alone – with the prospect of an equally angry, aggressive RANT this afternoon as we conclude day two of the "three days of terror," I'd like to stamp closure on the demise of the CRIMINALS at Knight Capital Group. Given that I referred to it yesterday afternoon and this morning already, there's no need to "intro" with my March 26th RANT, "GOING BATS!" – in which I reiterated my belief that murderous, fraudulently executed ALGORITHMS were DESTROYING markets, as much as government intervention. Of course, given that Goldman Sachs (20% market share of ALL High Frequency trading) and the PPT itself are the largest market participants, it's safe to say the majority of "algos" are either government initiated or funded. Some – like those attacking mining shares and the ETFs GLD and SLV – are utilized solely to manipulate prices; while others were created simply to STEAL YOUR MONEY. This morning, I wrote the following of my experience over a decade of stock trading, before abandoning equities FOREVER – with the vile scum at Knight Capital… Read more @ MilesFranklin.com

Two Disturbing Gold Charts Posted: 03 Aug 2012 02:45 PM PDT So, gold didn't move below $1,500 and it rallied recently - the worst is behind us, right? It might be, but there are reasons to think otherwise and in today's essay we will feature two charts that should make you think twice before .... Read More...

Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week Posted: 03 Aug 2012 02:34 PM PDT Gold climbed $11.03 to $1599.73 by a little after 8AM EST before it dropped back to $1586.90 immediately after the jobs report was released, but it then rallied back higher for most of the rest of trade and ended with a gain of 0.89%. Silver slumped down to $27.066 in early New York trade, but it then surged to as high as $27.883 and ended with a gain of 2.4%.

Gold and Silver Disaggregated COT Report (DCOT) for August 3 Posted: 03 Aug 2012 02:23 PM PDT UPDATE 1:  Adds charts, commentary on large changes in gold futures trader positioning. HOUSTON -- This week's Commodity Futures Trading Commission (CFTC) disaggregated commitments of traders (DCOT) report was released at 15:30 ET Friday.  Our recap of the changes in weekly positioning by the disaggregated trader classes, as compiled by the CFTC, is just below. (DCOT Table for Friday, August 3, 2012, for data as of the close on Tuesday, July 31.   Source CFTC for COT data, Cash Market for gold and silver.)  In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter. All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report. Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (18:00 ET).       As a reminder, the linked charts for gold, silver, mining shares indexes and important ratios are located in the subscriber pages.  In addition Vultures have access anytime to all 30-something Vulture Bargain (VB) and Vulture Bargain Candidates of Interest (VBCI) tracking charts – the small resource-related companies that we attempt to game here at Got Gold Report.   Continue to look for new commentary directly in the charts often. UPDATE 1. Edit at 16:35 CT.  Worthy of mention:  Last week Traders classed by the CFTC as Other Reportables reported their highest net long position for gold futures in the history of the disaggregated commitments of traders report data (going back to 2006). The Other Reportables then showed a net long position of 53,168 contracts as of July 24.  (The previous high was in the December 7, 2010 report when they reported holding 52,994 lots net long with gold then near $1,401.)  This week, as of Tuesday, July 31, with gold closing at $1,614.24 up $33.59 or 2.1% for the COT week, Other Reportable traders reduced that net long position by 7,961 lots to show 45,207 contracts net long as shown in the DCOT chart below.    Source for all charts CFTC for COT, Cash Market for gold.     Last week traders classed as Managed Money reported a net reduction of their net long position of a large 21,547 contracts to a low 59,809 lots net long gold.  (Then the lowest net long position for the Funds since December 9, 2008 during the 2008 panic, when they reported holding 57,835 lots net long with gold near $776.) This COT week Managed Money traders were net buyers of a large 21,048 contracts, back up to 80,857 contracts net long, as shown in the DCOT chart below.  Last week Swap Dealer traders returned to modestly net long by 1,426 contracts flipping from the previous week's showing of 618 lots net short.  This week Swap Dealers were heavy net sellers of 9,692 lots to once again return to the net short side (by 8,266 lots), joining the Producer/Merchants and the Other Reportables on the strong selling side of the gold futures ledger. By all appearances, as gold tested the $1,620s on COT Tuesday it met with determined "opposition" by the veteran traders required to report their positioning to the CFTC.  However, the net position changes may not tell the entire story.  As just one example we note that a big part of the reason Managed Money traders' collective net long position increased by 21,048 contracts was not just because they added a big number of long contracts for gold.  It was also in large part because the Funds covered a big 8,815 contracts or 26.6% of their short contracts – in one week, as shown in the DCOT chart below.      The Fund's short position had become "gold rally fuel," as we have been saying it would, most recently in the GGR video update for July 29.  As a courtesy we shared that video here for our entire readership.  (Link to the July 29 GGR video.)          If it isn't obvious, then please note that Managed Money traders chose to strongly reduce their "insurance" short bets for gold this COT week.  Notice, please, what the price of gold did shortly after they covered  a big chunk of their record high short position in 2008.  (It began a protracted rally.)  We will have more in the GGR subscriber charts this weekend, including the large amount of Fund (Managed Money) shorts covered for silver futures (21.5% of their record short position covered in one week).    That is all for now.

Government Is Shrinking? Posted: 03 Aug 2012 02:17 PM PDT In today's political climate, the more implausible the claim, the more likely it is to stick. One that seems to be sticking now is that government today is small by historical standards and constantly shrinking. Run that one by the man on the street — looted by the tax man, harassed by police, hounded by regulators — and he will scoff. Now comes the highbrow journalist with a nuanced view to correct him, citing all kinds of complex data. The highbrow in this case is Catherine Rampell, writing in The New York Times. Her claim seems apodictically certain. "Government has been shrinking steadily for two years," she says, "and compared to the size of the overall economy, government is actually slightly smaller today than it has been on average in the postwar era." Huh? Well, she provides data of "the percentage change in total government spending and investment" as compared with the change in the GDP. She shows GDP rises and government falls. Wow, amazing. Not so fast. You can always know that when people claim that government is small, it will always appear small by comparison to the GDP, which is to say that anything looks small by comparison to anything (in the words of economist Roger Garrison). Moreover, it is a peculiar presumption that government should always grow in proportion to the wealth of society (presuming that GDP does measure that). Why? If government is providing essential and minimal functions only, it should get smaller in proportion to economic growth. Should the thief keep coming back for more when his victim grows wealthier? Also, shrinking by comparison to everything else doesn't mean that it literally gets smaller. It should only constitute a smaller portion of the total. But that's only the beginning of Rampell's statistical antics. If you compare federal government spending as a percentage of GDP, it comes in at 24.3%, which is the highest in postwar history. In fact, it is the same as 1942, the year American troops landed in Europe. So what is she talking about? Is she just making stuff up? Not exactly. She carefully says that she is looking at "the percentage change in total government spending and investment." More precisely, she is examining something called "government consumption expenditures and total investment," one of the ways that you can slice and dice national income accounting. This is the figure among many options that best makes her case. Piles of data had to be thrown in the trash can to generate the result she wanted. As AmosWEB points out, this figure is the only one that completely excludes transfer payments, which are defined (arbitrarily) as not investment and not consumption, and includes all those things that (arbitrarily) fall into a specific category. It's a bit like saying that a giraffe is a horse if you exclude the neck. Rampell even took the manipulation one step further to look at quarterly change in the data, and not the actual figure. Therefore, if government spends a trillion on a stimulus now and that stimulus runs out next year, it would seem to show a crash in spending. Surprise, that's exactly what happened! Despite her rhetoric, then, we can see that she had to engage in three levels of distortion to come up with the claim that government is shrinking. Let's say that we look at what most normal people would consider government spending, by which I mean… the dollar figures on how much government actually spends. And let's add a column on debt so we can see the total unfulfilled commitments in the year in question too. There is nothing fancy pants here, just the raw truth, year by year. Now, I ask you: Does this look like steady shrinking to you? In other words, the man of the street is exactly right. Think about these numbers when you hear pundits and politicians over the next months tell you how dramatically government is shrinking. Of course, spending alone doesn't measure government size. If your front door is being broken down by feds, if you are jailed for violating regulations, if you are prevented from starting a business or if you can't hire new workers because of the high costs, government is effectively totalitarian from your point of view. In the last 10 years, this is the largest change we've seen, from big government to police state. In the end, this is a change that no data set can quite capture. Regards, Jeffrey Tucker, for The Daily Reckoning Government Is Shrinking? 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?".

Gold Daily and Silver Weekly Charts - Phony Market Action Cycle Posted: 03 Aug 2012 02:13 PM PDT This posting includes an audio/video/photo media file: Download Now

YOU CAN’T MAKE THIS UP! Posted: 03 Aug 2012 02:06 PM PDT The Gold Anti-Trust Action Committee has held four international gold conferences to expose the manipulation of the gold and silver markets. The last one was held in August 2011 at The Savoy Hotel in London. A number of the speakers presented evidence of exactly what The Gold Cartel does to manipulate the markets. One of the speakers was James McShirley who has documented numerous repetitive market activities which could never occur time and time again in a freely traded market. Just this past week gold completed its 2% up, 1% up, sideways, down hard pattern, which is only one of many trading anomalies James has tracked.   On Thursday he contributed the following to my daily PM markets commentary: Divining... with 80% guidance Bill, Reading the cartel tea leaves, and divining the near-future as it relates to 80% probabilities leads us to the following: If gold recovers mildly tomorrow the rally will stop somewhere around $1,606.50, which is +1% of the (unofficial) Comex pit close. If gold recovers nicely tomorrow the rally will stop somewhere around $1,622.40, which is +2% of the (unofficial) Comex pit close. If they pressure gold in the access trade today the employment report tomorrow will be gold-friendly. If they also pressure gold tomorrow the employment report will be very gold-friendly. Regardless of the outcome gold has the best chance of rising from the Friday PM fix to the Monday AM fix. Who needs Carnac the Magnificent when you have a totally manipulated, and likely predetermined outcome?     "May the fleas of a thousand camels nest in the cartel's shorts". This latest cartel operation is feeling more and more like smoke and mirrors. The relentless attacks have a smell of desperation. It feels like they're firing all of their pea shooters at once hoping to stop a charging rhinoceros Maybe like the newly "discovered" WH covert ops in Syria there is also a heightened covert state of aggression towards gold. Keeping gold contained until November might be EVERYTHING This is what he wrote today after The Gold Cartel’s 1% Rule was initiated despite the DOW, oil, and the euro soaring…   Winning predertermined outcome was....   Bill, In the category of the "80% probability rule" the winning predetermined cartel outcome was, drum roll, : Both "A". and "E". Gold recovered mildly, and was capped at 1%, and also rises immediately after the PM fix. As most here remember reading yesterday I wrote: Reading the cartel tea leaves, and divining the near-future as it relates to 80% probabilities leads us to the following: A. If gold recovers mildly tomorrow the rally will stop somewhere around $1,606.50, which is +1% of the (unofficial) Comex pit close. B. If gold recovers nicely tomorrow the rally will stop somewhere around $1,622.40, which is +2% of the (unofficial) Comex pit close. C. If they pressure gold in the access trade today the employment report tomorrow will be gold-friendly. D. If they also pressure gold tomorrow the employment report will be very gold-friendly. E. Regardless of the outcome gold has the best chance of rising from the Friday PM fix to the Monday AM fix. The high tick today up until the London PM fix was $1,606.80, which adjusting for yesterday's official Comex pit close was to the exact tick what I predicted. Gold then surged $12 after the PM fix to briefly trade slightly above +1%, but quickly fell back into the +1% rut. There can be no earthly reason for such uncanny predictions that happen with such regularity other than official, or coordinated price capping. This goes SO beyond the realm of even standard deviations. It would be impossible to claim profit as a motive when normal markets would kick anybody's ass that attempted such stupidity. The only answer lies in the deep pockets of a surreptitious cartel bent on illegally manipulating gold to serve their MOPE interests. Signing off here at 12:00 EST with gold dead in the water at $1,606.80, or +1.00%. Nothing to see here. Everybody go home for the weekend and watch Olympic athletes get fake-gold medals. Even the best athletes in the world get swindled when it comes to owning gold. http://chemistry.about.com/od/metalsalloys/f/what_are_olympic_medals_made_of.htm James Mc   And yes, gold finished up 1% on the Comex.   YEP, you can’t make it up!   right now. James Mc

EUR Shorts Collapse By 35% In Two Months, Down 10% In One Week Posted: 03 Aug 2012 01:58 PM PDT By now even 5 year olds know that the one asset class driving the general stock market is the highly leverageable EURUSD: where the core pair goes, everything else follows, especially if the direction is up (when the EURUSD slides lately it is assumed to be a confirmation that the ECB will print; when it goes up, the agreed upon explanation is that more Fed easing is imminent). As such a key variable has been the amount of net shorts in the pair, as exposed every week by the CFTC in its COT report. And where two months ago, the net short position in the EUR hit an all time record, north of -200K contracts, in the interim this number has contracted by over a third, and as of minutes ago was revealed to be "just" 139K in the week ending July 31, a 10% drop in shorts in one week. Why is this important? Because while short covering rallies have long been yet another narrative to keep shorts on the sidelines, the probability of such an event has declined dramatically now that the bulk of the weak hands have been kicked out, and the net exposure is back to January 2012 levels. In other words, 8 months later we have completed one full shorting circle when it comes to the euro., which however now is 700 pips lower than where it was back then. The Jack in the Box potential of further squeezing is rapidly declining with every move such as today's when no news and mere rumor drives the pair up by 200 pips (only to be faded of course).

On S. Korea's recent 16 tonne gold purchase Posted: 03 Aug 2012 01:45 PM PDT South Korea has added 56 tonnes to its reserves since June of last year. Lee Jung, who heads up the Bank of Korea's reserve investments division, told Financial Times that the purchases are "part of our long-term strategy and not because of short-term conditions in international financial markets." It's the reference to a "long-term strategy" that makes Lee Jung's comments intriguing. BoK's gold reserves are just under one per cent of its total reserves leaving a good deal of headroom for future activity in the gold market. It is worth keeping in mind that most of the buying among central banks globally is for reasons similar to the one Jung gives above. There is a rumor in the gold market that there are major buyers under $1550. The smart official sector buyer would do well to get ahead of that buying which is what BoK appears to have done. Since this secular gold bull market began in 2001, long term accumulators, to their advantage, have generally viewed consolidations as buying opportunities.

Profit Amid Absurdity Posted: 03 Aug 2012 01:43 PM PDT August 3, 2012 Absurdity abounds: California counts on one company for 2% of its 2012 revenue…Goldman goes to jail (but not the way you wish)…Olympic medals as ordinary income A fat-killer obesity drug…Real-time blood monitoring…a cure for flu: Patrick Cox with a roundup of the latest biotech breakthroughs Market rallies on a rotten (but good by recent standards) jobs number…The 5 cuts through the noise in search of the real news A new take on 3-D printed weaponry…Jeffrey Tucker addresses the towering issue of our times…Rick Rule's tribute to a titan…and more!   Looks as if gullible investors weren't the only ones taken in by the Facebook story. So were California lawmakers. Ordinarily, it would be beneath us to knock Facebook two days in a row. But the absurdity is so abject, so screaming, we can't ignore it. And so we begin a Friday chronicle of absurdities with another fatal Facebook miscalculation.   When the California assembly drew up its budget $91.3 billion budget for this year, it made a fantastic assumption on the revenue side of the ledger. It assumed $1.9 billion of income tax revenue from Mark Zuckerberg and other company insiders exercising options or selling shares at an average price of $35. This morning, FB teeters on the edge of $20. If "the lower share prices persist through November and December, hundreds of millions of dollars of income-tax revenue assumed in the state budget plan are at risk," says a report from the state's Legislative Analyst's Office. We're still wrapping our heads around the idea that California was counting on one company to cover $2 out of every $100 it would spend…   Goldman Sachs, its executives having successfully avoided incarceration, is now investing in jails. In another absurd development, the vampire squid will pour almost $10 million into a New York City jail program offering education, training and counseling to inmates age 16-18. At present, nearly half of young inmates who are released end up back in jail within a year. If the program reduces that number, Goldman collects up to $2.1 million. If it does not, the firm stands to lose up to $2.4 million. "We believe," says Goldman CEO Lloyd Blankfein, "this investment paves the way for a new type of instrument that enables the public sector to leverage upfront funding from the private sector." If you suspect the fix is in somehow, a commenter at The Sacramento Bee website spells it out: "What do you think the recidivism rate will do if they start incarcerating more people who are innocent, or who committed minor crimes like having a joint in their pocket? Of course… it will drop. Where can I get a piece of this action?"   Then there's the absurdity of "amateur" athletes being taxed for their Olympic winnings. Americans for Tax Reform (ATR) ran the numbers this week and found a gold medal winner collects $25,000 in cash, plus the medal itself, with a value of roughly $675. (As The 5 noted earlier this year, gold makes up only 1.5% of the metal content; the rest is silver.) The IRS classifies both as ordinary income. Using ATR's figures, The Daily figures U.S. swimmer Allison Schmitt — having won two golds, a silver and a bronze — will collect $75,000 in prize money…and will owe the IRS $26,857. Granted, that's a bit of hyperbole: It assumes Schmitt falls into the top bracket of 35% and will have zero deductions. That makes the story no less absurd…   As long as we're dealing with absurdities…might as well get to the unemployment numbers. For the first time in months, they surprised to the upside. But the headline number was still pathetic: 163,000 new jobs in June, barely enough to keep up with population growth. And the Bureau of Labor Statistics generated that number only after seasonal adjustments. U-3 unemployment inched up to 8.3%, while the broader U-6 figure did likewise, to 15%. John Williams at Shadow Government Statistics, calculating the unemployment rate the way it was when Jimmy Carter was president, comes up with a figure of 22.9%. The only month it's been higher was September 2011. The big chart at Calculated Risk — plotting the job losses and recovery from every postwar recession — looks like this now… The one number the government can't game — the employment-population ratio — fell to 58.4%. It remains mired near 30-year lows, having peaked in 2000 at nearly 65%.   The jobs numbers make even less sense in light of this: Employment is now contracting in the service sector, according to this morning's ISM nonmanufacturing survey. The overall number moved up to 52.6 in July, comfortably above the 50 dividing line between expansion and contraction. But the jobs component nose-dived from 52.3 to 49.3. Hmmm… We bring you this laundry list of absurdity today not to discourage you. Far from it. We urge you not to fall into the trap so aptly described by our tech and biotech maven Patrick Cox: "They complain and complain about the stupid things that governments do and the fact that stupid people enable those stupid things…stupidly. "So what? If you can't change it, accept it. And profit from it." With that in mind…   Testing is under way on a revolutionary "fat-killer" drug Patrick says will change everything about obesity. Most "diet drugs" try to fool the brain into feeling satisfied. This drug gets to the heart of the problem — eliminating fat cells. There's nothing else like it. Strictly speaking, the trial is a Phase 1 safety study, but "the nature of the trial is such that it will deliver efficacy data as well," says Patrick. That should accelerate the drug-approval process. Better still, the entire study is being funded by the world-famous MD Anderson Cancer Center in Houston. Shareholders aren't shouldering the burden. Patrick's readers have already had success with one company's anti-obesity drug. After doubling their money, he urged them to sell half and let the rest ride. This morning, it's up 145% from their entry price. But Patrick says that will be "small potatoes" compared with a treatment that kills off fat cells. "It's so obvious that I feel I don't need to point out how enormous the demand for a safe, painless and effective permanent weight loss drug would be, but I'm doing it anyway. "I'm astonished that this stock hasn't already taken off, but I'm thankful it hasn't," he adds. "I suspect that five years out, it would have been a bargain at many times its current price."   A second round of testing has shown immense promise for a real-time method of tracking blood glucose. The new method is leagues apart from the usual "stick your finger with a needle and wait for the lab results." A tiny sensor inserted beneath the top layer of the skin takes a reading every minute…and then relays that information wirelessly to a doctor or nurse. Any sudden spikes or drops can be spotted right away…and treated before they become a serious problem. Results of the testing on critically ill patients who've undergone major surgery show a 9% error rate. That improves on the first trial, which as Patrick points out, "was well within the target margin of error." The company developing this method is pursuing approval first in the European Union. "The fact that aggressive glucose monitoring is predicted to lower hospital costs by a third," says Patrick, "will not be lost on cash-strapped European health care systems. It is possible, in fact, that the market could reach EU markets next year."   A treatment Patrick calls "a one-dose cure for even the most-lethal influenza viruses" is a step closer to reality. The company developing it plans to pursue the first human trials in Australia. "This is a brilliant move," Patrick explains, "because Australian data are accepted by the U.S. FDA, but the process is significantly faster in the land down below. I expect that six-nine months will be shaved off the process via this move. "Another influenza pandemic is, by the way, inevitable," Patrick adds. This treatment is not a vaccine. "It is polymer-ligand nanobots that disassemble viruses in the bloodstream — several orders of magnitude better than existing flu medications. In fact, I predict it will be a cure for influenza. "Things are getting really exciting," Patrick concludes. "The economy has held back biotech significantly, but progress is beginning to get past the barriers regardless." The development that has Patrick most excited right now is one that happened entirely by accident…the same way Pfizer stumbled onto Viagra. The libido drug delivered annual sales of $1.7 million at its peak. This new accidental discovery "could make Viagra seem like a 5-cent gumball by comparison," Patrick ventures. That's a bold claim…but he backs it up with scads of scientific proof. See for yourself at this link.  Stocks are staging a monster rally today, the Dow cresting 13,100 for the first time in three months. Given the "logic" of the market of late, you'd expect a massive sell-off: A jobs number that soundly beat the "expert consensus" means a lower likelihood of QE3, right? As an aside, it appears Abe Cofnas' demonstration trade this week will be a winner. Recall he expected Dow futures to end the week above 12,775. They're comfortably above that level…delivering a 12.9% payoff in only four days.   Seen in the light of stock traders' reaction to the unemployment number, the reaction of precious metals traders is even more absurd. Gold's up nearly 1%, back above $1,600. Silver's at $27.70. Go figure. "The reader who concluded that 3-D printer technology allowing everyone to produce an AR-15 would be 'monumental' is incorrect," a reader writes. "Switzerland has every able-bodied male issued an semi-automatic rifle to take home after training. His conclusion that guns = violence is ridiculous. I own at least 50 firearms and I present no threat to any decent person. Why? Because I respect the rule of law and the sanctity of human life. "The problem isn't what is in your hands, but what is between your ears. That is why Libertarians abhor any pre-emptive legislation that prohibits a person from owning any object because of the possibility that he might hurt someone. That is a paternal and elitist attitude, and not compatible with a free society. "If everyone were armed, Aurora, Bosnia and a multitude of other massacres would never have happen. Once again, the real answer is freedom. That nut job would never have gone in that theater if he thought there would be armed persons in there." "Doug Casey's 'ice floe' views are a disaster!" writes one of our regulars getting in a last word on the subject after a week's furor. "Can you imagine how many of our elected 'representatives' and bureaucraps would have to take the 'walk' on the basis of having become a drain on the family and/or village (of all sizes) resources? Who would then be left for the sheeple to turn to? Horrors!!!! Oh, wait, the 'walk' is a voluntary act to benefit others. OK, no worry anymore…" The 5: [Breathing easier already…] Have a good weekend, Dave Gonigam The 5 Min. Forecast P.S. "In my town this week," writes Jeffrey Tucker at Laissez Faire Books, "two tribes shouted each other down, each claiming that the other is destroying the country." You don't want to miss his take on the Chick-fil-A dispute. It's been an exceptionally busy week for Mr. Tucker. He also held court with our friends at RT's Capital Account — taking on, among other things, the bald corruption of Wall Street. He also became the first guest in the show's nine-month history invited to stick around for the "Loose Change" round table – quite the honor! The video has already generated 144 comments at YouTube… P.P.S. Attention Silicon Valley residents: Agora Financial is among the sponsors of a special event marking the 131st anniversary of Ludwig von Mises' birth. Sprott Global Resource Investments chief and Vancouver favorite Rick Rule will deliver a can't-miss commemorative speech the evening of Saturday, Sept. 29, at the Silicon Valley Capital Club in San Jose. Jeffrey Tucker has all the details (told you he's been busy) at this link.

COT Gold, Silver and US Dollar Index Report - August 3, 2012 Posted: 03 Aug 2012 01:34 PM PDT COT Gold, Silver and US Dollar Index Report - August 3, 2012

Dissing Price Discovery Posted: 03 Aug 2012 01:17 PM PDT Da-da, da-da, da-data… What, if anything, does it all mean? Dow down 92…Crude holding tight at $88…Gold hovering around just below $1,600 an ounce…Ten-year Treasuries retesting historical lows, at 1.46%…Dollar index up half a smidge, to 83.5… Muddle along…muddle along…muddle along… What are the markets telling us, Fellow Reckoner? In a word: Nothing. As investors are fast coming to realize, the markets couldn't tell us anything even if they wanted to. Mr. Market has a gag in his mouth, his voice muffled by the price fixers. And we don't just mean LIBOR-rigging bankers in The City. We're wagging fingers at the real fixers…the Feds. It's something we heard again and again at last week's AF investment symposium in Vancouver. "Prices are broken," noted Dan Denning, the big, bright mind behind the Aussie Daily Reckoning. "They are not to be trusted." Dan spoke candidly about the mechanisms behind the curtain: "How can anyone possibly take Ben Bernanke seriously? He told the Senate Banking Committee that the Fed's unconventional policies have been, 'effective in easing financial conditions and promoting strength in the economy,' and that, 'Large-scale asset purchases have also contributed to economic growth.' He added that the Fed is 'prepared to take further action as appropriate to promote a stronger economic recovery.' More action. More fiddling. More distortion. And more restraints on Mr. Market's ability to communicate real world prices, real world information, real world demand. So, where do we go from here? "We are at the absolute frontier of monetary policy," wrote Dan in a recent Aussie DR. "The Fed can't 'promote growth' when households are reducing debt. It's telling that Bernanke said the government needs to get fiscal policy in order (spending), in order for consumers and businesses to be more confident about taking risk. But it's as if the Fed and its mainstream lapdogs are completely unable to imagine their set of tools not working on the economy. "Bernanke said the Fed has three tools left in the box to promote growth. He can reduce the rate the Fed pays on reserves banks deposit overnight with the Fed. He said the Fed can communicate its intentions differently. And he said further asset purchases could happen." Da-da, da-da, da-data… Continued Dan: "Does anyone really think the US and world economies aren't growing because the Federal Reserve isn't communicating effectively? Maybe it's because the Fed has destroyed rational decision making by wrecking the system of price discovery through the manipulation of money." The Dow is up over 600 points year-to-date. But 600 points of what? Thanks to their ongoing commitment to institutional-level counterfeiting, money just ain't what it used to be. How, then, can we measure what it buys? Simply, we can't. Not honestly anyway. "The Fed IS the problem," concluded Dan, "not the solution." Unfortunately, the financial markets are not the only sector of society laboring under the crushing weight of the state. As Jeffrey Tucker, executive publisher of Laissez-Faire Books, explains in today's guest column, the Leviathan is growing both in measurable…and, more frighteningly, immeasurable…ways. Look out below… Regards, Joel Bowman, for The Daily Reckoning  Dissing Price Discovery 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?".

Jim's Mailbox Posted: 03 Aug 2012 12:45 PM PDT Dear Jim, Something reminiscent of the 30's depression, when Governments taxed farm land to the point people were forced to sell parcels to keep the house. Property taxes go way, way up in Saskatoon-area rural municipality I've been reading your site since gold was $300 and everything that you said a decade ago is Continue reading Jim's Mailbox

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