Gold World News Flash |
- Paper Gold & Gold Passbook Scams
- 2 U.S. Supreme Court Justices – And Numerous Other Top Government Officials – Warn of Dictatorship
- A Game Changer For Gold: Samsung Signs Deal With Mining Company
- The New Style of Warfare - Bloodless but Extremely Devastating
- Tungsten Filled 10oz PAMP Suisse Gold Bar Discovered in Manhattan
- Bank Of Japan Increases Asset Purchases By Y10 Trillion, Total Program Now Y80 Trillion, Total Debt Still Y1 Quadrillion
- Gold Seeker Closing Report: Gold and Silver Gain About 1% and 2%
- Gold May Take out 1800 Before Meaningful Dip
- Silver Update 9/18/12 Arab Fall
- Deutsche Bank explains why we hoard gold
- David Morgan: Silver Moving Towards Par With Gold!
- Stagflation in Extremis and the Explosive Rise of Gold
- Richard Russell - Life, The Markets & Gold
- Gold dealer shouldn't complain -- at least he got metal, not paper
- Bernanke, The Blind Archer
- The Inevitability of Economic Collapse
- “Dollar Index Headed for Rapid Collapse” Over Next 3 to 4 Weeks
- New York Sun: The miser's tragedy
- Tungsten-Filled 10 Oz Gold Bar Found In The Middle Of Manhattan's Jewelry District
- Brodsky and Quaintance: First monetize debts, then assets (aka gold)
- A Game Changer For Gold
- VB Update Notes for September - October 2012 – Help Arrives
- The Silver and Gold Price Both Gain Ground Today I'm Expecting Corrections after their Long Runs
- Bill Holter–The Federal Reserve-The End Is Near 18.Sept.12
- The Inanity of Groupthink
- Bob Moriarty: Finding Massively Undervalued Energy Stocks in Today's Irrational Market
- Gold Daily and Silver Weekly Charts - Predator and Prey
- 10 Shocking Quotes About What QE3 Is Going To Do To America
- Downside: After the Returns Stop Diminishing, Part II
- He Who Hesitates Is Lost
| Paper Gold & Gold Passbook Scams Posted: 19 Sep 2012 12:00 AM PDT GoldSilver
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| 2 U.S. Supreme Court Justices – And Numerous Other Top Government Officials – Warn of Dictatorship Posted: 18 Sep 2012 11:21 PM PDT Former Supreme Court Justice David Souter told University of New Hampshire School of Law that the “pervasive civic ignorance” in the U.S. could bring dictatorship:
Former Supreme Court justice Sandra Day O’Connor has also warned of dictatorship. Of course, they’re not the only ones warning of fascism. We noted in April:
(Indeed, we are getting very close, as shown here, here and here). As we noted in 2008:
Indeed, there is overwhelming evidence that the U.S. is quickly drifting into tyranny. See this, this, this, this, this, this, this, this and this.
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| A Game Changer For Gold: Samsung Signs Deal With Mining Company Posted: 18 Sep 2012 11:08 PM PDT Jim Sinclair's Mineset My Dear Extended Family, This is a major game changer. It has taken place in a West African gold miner. It speaks to certain African countries as excellent investments. It underscores that prediction of 12 years ago. It screams at undervaluation. It is the recognition that gold mines mine money. This is a recognition of the dwindling supply side of gold. This is a recognition that gold is the only Honest Money. This is a recognition of gold's role in high tech. The end of the bear market inflicted by the hedges on gold shares is absolutely over. The shorts in good gold shares after today are self destructively insane. This is it for good gold shares. The long bull phase in gold shares starts now. Cluff Gold plc ("Cluff Gold" or "the Company") 12 September 2012 AIM: CLF/TSX: CFG Strategic Alliance between Cluff Gold and Samsung Cluff Gold plc, the dual AIM/TSX listed West African focused gold mining company, i...
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| The New Style of Warfare - Bloodless but Extremely Devastating Posted: 18 Sep 2012 10:29 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Take a look at the following article and you will see that the Biblical concept of "the borrower becomes the lender's slave" is once again proving itself to be true in any age at any time. Beijing hints at bond attack on Japan A senior advisor to the Chinese government has called for an attack on the Japanese bond market to precipitate a funding crisis and bring the country to its knees, unless Tokyo reverses its decision to nationalise the disputed Senkaku/Diaoyu islands in the East China Sea. [URL]http://www.telegraph.co.uk/finance/china-business/9551727/Beijing-hints-at-bond-attack-on-Japan.html[/URL] And one wonders why so many of us in the gold community are becoming increasingly shrill in our denunciation of the US government's reckless borrowing binge, particularly under the current Administration, which has to take the grand price for the most inept, reckless and profligate one in ...
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| Tungsten Filled 10oz PAMP Suisse Gold Bar Discovered in Manhattan Posted: 18 Sep 2012 10:03 PM PDT Last March, SilverDoctors broke news that quickly went viral throughout the PM community that a tungsten filled gold bar had been discovered in the UK. Apparently Manhattan jewelry dealer Ibrahim Fadl caught the SD story, because he apparently decided to … Continue reading
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| Posted: 18 Sep 2012 10:01 PM PDT It seems like only yesterday that we were lamenting "Einstein rolling over in his grave" as a result of the BOJ's latest increase in its asset purchase program from Y65 to Y70 trillion, although technically it was 5 months ago on April 27. We would excuse Einstein if he were doing cartwheels in his grave right about now, following the BOJ's latest attempt to keep doing what has definitvely failed for 30 years, hoping this time it will be different, as a result of the just announced latest expansion in the asset purchase program's size by yet another Y10 trillion, this time to a total of Y80 trillion. The expansion impacts only JGBs and T-Bills, both of which will be monetized by a further Y5 trillion. Putting this in perspective, Japan's total public debt is Y1 quadrillion, and counting very fast. All other components of the Japanese LSAP program, including CP, Corporate Bonds, ETFs and REITs (yes, unlike the Fed, the BOJ is quite open about its equity and corporate bond purchases) remain the same. Bottom line, just as we predicted back in July 2009, the global race to debase continues unabated, and as a result of QEternity will merely accelerate until the only true currency is gold tungsten.
Full BOJ statement, which will be as meaningless as all the others preceding it:
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| Gold Seeker Closing Report: Gold and Silver Gain About 1% and 2% Posted: 18 Sep 2012 10:00 PM PDT Gold dropped down to $1752.61 in Asia before it climbed up to $1773.00 by a little after 10AM EST and then pared its gains a bit in midday action, but it then bumped back higher in late trade and ended with a gain of 0.74%. Silver surged to as high as $35.015 before it also fell back off, but it still ended with a gain of 2.23%.
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| Gold May Take out 1800 Before Meaningful Dip Posted: 18 Sep 2012 09:15 PM PDT courtesy of DailyFX.com September 18, 2012 01:44 PM Daily Bars Prepared by Jamie Saettele, CMT “Gold has reached the long cited 1755 objective and may be in for several sessions of much needed consolidation. As mentioned last week, “the huge volume and large range is consistent with the beginning of some consolidation before the continuation of the advance.”” Gold has come off about $30 but the ‘correction’ isn’t noticeable on a daily closing basis. The market is stretched but a tag of the highs from February (1790.55) and November 2011 (1802.80) may be in the cards before something more meaningful on the downside takes place. LEVELS: 1715 1737 1747 1791 1800 1825...
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| Silver Update 9/18/12 Arab Fall Posted: 18 Sep 2012 09:13 PM PDT | ||||
| Deutsche Bank explains why we hoard gold Posted: 18 Sep 2012 09:09 PM PDT One of my reader's actual hoard Deutsche Bank: GOLD IS MONEY Matthew Boesler|Sep. 18, 2012, 5:53 PM Business Insider (Video & images added by me) Is gold money? It's become a tireless debate: goldbugs seem to cling to the shiny yellow metal with a religious fervor not usually displayed by anyone toward other asset classes, and it's been known to frustrate some who don't share their views.
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| David Morgan: Silver Moving Towards Par With Gold! Posted: 18 Sep 2012 08:29 PM PDT | ||||
| Stagflation in Extremis and the Explosive Rise of Gold Posted: 18 Sep 2012 08:00 PM PDT by Darryl Robert Schoon, Gold Seek:
Stagflation is where economic growth slows, unemployment is high and prices rise. Stagflation's appearance in the 1970s was like an outbreak of three-headed children. It wasn't supposed to happen. Prevailing wisdom—an oxymoron among economists—held that high employment and rising prices were economic handmaidens; and that, conversely, slowing economies and inflation were mutually exclusive. In the 1970s, for the first time in capitalism's history stagflation appeared, i.e. prices rose and economic growth stagnated; and, while economists would search for reasons to explain the apparently inexplicable, it was only because they avoided the obvious that they did not find the answer.
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| Richard Russell - Life, The Markets & Gold Posted: 18 Sep 2012 07:34 PM PDT  The Godfather of newsletter writers, Richard Russell, had some absolutely extraordinary thoughts about life, the markets and gold. Here is what Russell had to say: "Most of the people in the world suffer from fear, anxiety, anger, guilt, bitterness, resentment, sorrow, depression, and various other emotions which can mar their lives. The majority of these emotions are holdovers from damaged or traumatic infancies."
This posting includes an audio/video/photo media file: Download Now | ||||
| Gold dealer shouldn't complain -- at least he got metal, not paper Posted: 18 Sep 2012 07:32 PM PDT Fake Gold Bars Turn Up in Manhattan From WNYW-TV5, New York http://www.myfoxny.com/story/19578206/fake-gold-bars-turn-up-in-manhatta... NEW YORK -- In jewelry stores on 47th Street and Fifth Avenue the important trust between merchants has been violated. A 10-ounce gold bar costing nearly $18,000 turned out to be a counterfeit. The bar was filled with tungsten, which weighs nearly the same as gold but costs just over a dollar an ounce. Ibrahim Fadl bought the bar from a merchant who has sold him real gold before. But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten -- not gold. What makes so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up. That is a sophisticated operation. ... Dispatch continues below ... ADVERTISEMENT Special Offer for GATA Supporters from The Calandra Report Financial journalist Thom Calandra, co-founder of MarketWatch.com and a longtime GATA supporter, has revived his weekly market letter, The Calandra Report, which is aimed at believers in natural resources and metals equities. His three recommended stocks so far -- prospectors in Nevada, Portugal, and Colombia looking for gold, silver, copper, and tungsten -- have risen since his recommendation, and he is traveling throughout the world to research more recommendations. Through Sept. 22 the TCR's subscription price is $48 per year and during that time Calandra will donate to GATA $5 for every GATA supporter who subscribes. After that the TCR's subscription price will rise to $54. Calandra will join GATA's Bill Murphy and Chris Powell at the Toronto Resource Investment Conference on Thursday and Friday, Sept. 27 and 28 -- http://cambridgehouse.com/event/toronto-resource-investment-conference-2... -- and at the New Orleans Investment Conference from Wednesday through Saturday, Oct. 24-27: https://jeffersoncompanies.com/new-orleans-investment-conference/home For a sample of a recent edition of The Calandra Report and to subscribe, please visit: http://www.babybulls.com/index.cfm/page/THE-CALANDRA-REPORT:-AUGUST-26,-... MTB, the Swiss manufacturer of the gold bars, said customers should buy only from a reputable merchant. The problem, he admits, is Ibrahim Fadl is a very reputable merchant. Raymond Nessim, CEO of Manfra, Tordell & Brookes, said he has reported the situation to the FBI and Secret Service. The Secret Service, which deals with counterfeits, said it is investigating. In March gold bars filled with tungsten showed up in England. With New York now hit, it may mean an international ring is involved. 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 Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/.
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| Posted: 18 Sep 2012 07:10 PM PDT Via Sean Corrigan of Diapason Commodities, The Blind Archer
Finally, the great day has come and gone when the Fed would once again ride to the action, not daring to be left behind by the ECB's perverse vaunting of its new 'unlimited' programme of bond purchases and too impatient to attend the continually postponed policy shifts so long expected from both the PBOC and the BOJ. A few months of less-than-stellar macro numbers, coupled with a lull in the rise of the price indices which was helped along by the last cyclical downturn of commodity prices (alas, for the ordinary American housewife, long since reversed) and the Mighty Oz was free to rummage deep into his carpetbag of gewgaws and conjuror's props, once more.
The rationale for this latest enormity is, frankly, hard to determine lest it be Bernanke's eagerness to present whoever might replace him under an incoming Republican administration with a fait accompli and so to ensure his legacy as the worst economic 'experimenter' to be empowered since the dark days of Roosevelt himself (he of the breakfast egg gold price fixing; the alphabet soup price and wage dictatorship; and the enforced famine of mandated crop and livestock destruction).
So, when we received a little insight into the fevered mind of the Chairman – coming in the form of what he told an interlocutor from Reuters, when asked to explain how exactly he envisaged that his new, open-ended, $45-billion a month QEII programme would work - our first urge was to utter the obsecration: "Spare us, Lord, from the scheming of idiot savants!"
Apart from the fact that Blackhawk Ben here seemed to hew to a particularly crude version of the Phillips curve largely disavowed by even the most unreconstructed mainstreamers (one which imagines that extra jobs can be bought if only prices can be made to rise fast enough), after five years of ever more desperate flailing to restore false, Boom-time levels of activity, he appeared to have staked his all on bursting the piñata of the labour market by smacking it with the rough-hewn pole of the so-called 'wealth effect.'
As he told the journalist in Thursdays' post-FOMC Q&A:
These few, brief sentences contain such a miasma of error that it is hard to know where to begin if we are to restore a fresh breeze of economic rationale to this swamp of non sequiturs and wilful misunderstandings. It is not enough that crude, Krugmanite Keynesianism clings to the cheap parlour trick of using money illusion to fool unemployed wage-earners into lowering the reservation price of their labour, but now we must battle against banal, Bernankite Bubble-blowing – the hope that money illusion will fool cash-constrained asset owners instead.
To show what we mean, indulge us while we parse the Chairman's words:
Like most macromancers, what our esteemed Chairman is missing here is any concept of how a business actually functions, of how it and its peers interrelate in the overall structure of the economy, and of the critical role played by capital and time in the division of labour and the provision of goods. He is also prey to the superficial fallacy – a kind of inverted Say's Law - that consumption somehow dictates the amount (rather than merely the composition) of production, something that has not been the case ever since Adam was condemned to earn his daily bread in the sweat of his brow and to till the ground from when he was taken.
Thus, rather than being fooled by the mantra that '(personal) consumption is two-thirds of the economy', one should be clear about the distinction that its (imputation-boosted) count is actually only two-thirds of the highly-subjective statistical shorthand which is GDP – and that this is not the same thing at all! Gloves may well comprise 100% of the clothing I put on my hands in winter, but if they are all I don when I go out snow-shoeing, I'm not likely to get very far before some Good Samaritan of the Alps finds my half-frozen form and has to send forthwith for the nearest brandy-carrying St. Bernard so as to revive me.
This is a matter to which we have already devoted a great deal of time, but a brief synopsis here is probably in order.
Take, for example, the four years from 2006-9 inclusive which saw US GDP average just under $14 trillion while cash PCE came in at a mean $8.5 trillion (ergo, validating the shibboleth that the latter number equates to 60% or so of the first). Mainstream thinking may stop short here, smugly satisfied with this trivial – and circular - QED, but this is not even half the story.
We say this because, over the period in question, aggregate business revenues – i.e., the best representation of the overall circulation of goods and services throughout the economy - amounted to no less than $33 trillion a year (the vast bulk of which receipts were subsequently disbursed again, whether as above-the-line costs, below-the-line outlays, interest, dividends, or taxes).
Thus, not only was the 'economy' almost 2 ½ times as large as the GDP count, but every $1 of that supposedly crucial personal outlay was matched by $3 of business-to-business spending.
So, if Mr, Bernanke really wants to get 'demand' going, the foregoing drops a heavy hint that he would be three times as effective as he has been if he and his masters in Washington could manage to do something (or, conversely, to stop doing much of what they counterproductively have been doing) which ends up promoting greater managerial/entrepreneurial belief that not only can profits be made, but that, once made, more of them will be retained by their rightful owners.
It should also be recognised that the vast bulk of that $25 trillion in B2B expenditures is every bit as discretionary as the outlays of the most finicky of shoppers: no businessman can be compelled to keep his store open, or his factory running, if he finds the game not worth the candle, even though mundane economic analysis tends to assume without question that, far from being an adaptive, calculating, he is an unthinking automaton who can very much be relied upon to do just that, irrespective of his estimated remuneration.
More fundamentally still, it is the relationship (strictly, the ratio) between his receipts and his disbursements wherein the lies the difference between our hero's commercial success – and so, his role in hiring, commissioning and the onward generation of orders for his suppliers – and his failure – hence, his sad duty to undertake lay-offs, cut-backs, and cancellations. Even absent net, new investment to improve and deepen the capital stocks and so raise real incomes, the overwhelming preponderance of that $25 trillion (in fact, all of it less an average $1.5 trillion before – and only $250 billion after – depreciation) represents a voluntary sacrifice of the enjoyment of present goods, undertaken merely to keep things running as they are.
The idea that such a delicate network of relative prices and differential cash-flows can be not only maintained, but enhanced, by the clumsy process of artificially forcing arbitrary quantities of money and credit into the system is at best naïve and at worst astrological in its pseudo-rationality. At root, such gross interventions as these, no matter how greatly they excite the raptures of the mainstream inflationists, ensure nothing more than the confusion of those critical accounting algorithms which help ensure that capital and labour are not being squandered. This is so because, not having the noble pedigree of the free, unhampered market, the infusions – being nothing more than the bastard offspring of the central planners' hubristic conception - bear no definitive relationship to the generation and subsequent movement of the real goods and services whose value-giving exchange it is the sole purpose of these media to facilitate, both across space and through time.
To see this, take the simple – if extreme – example of the post-Lehman crisis itself. The Fed, we are told, by the newly-respectable brotherhood of NGDP targeters, 'only' had to ensure that the gross flow of money out of the funnel at the end of the economy (the $14 trillion per annum, principally in the form of final, exhaustive spending) remained unaltered and all would have been well. [We shall here ignore the fact that this would have been an impossible task to have undertaken in real time even if all the various rivalrous sects and sub-sects of NGDPers had managed to agree upon what means should have been employed, upon whether levels or growth rates of the aggregate should have been controlled, and over what horizon this was to be brought about].
But look at the facts of what did happen that year as the economy swirled around the ragged edges of a maelstrom of total collapse. Total domestic, non-MFI credit rose a modest 2.9% as the private component of this fell 2.5% while Leviathan's appetite grew by a monster 13.7% (counting GSEs in with government itself). Meanwhile, M1 jumped 18.1%, 'Austrian' Money Supply (M1+, if you will) rose 25%, and M2 added a more modest 9.1%. Confusion confounded, you might say, since we are being exhorted to act to control one or more of these aggregates, depending upon which particular 'new' monetary school you choose to believe. But the difficulties do not end there, for worse was to come in the 'real' economy.
Here, the hallowed NGDP measure fell 3.7%, implying the Fed should have added X, or maybe Y, or Z in order to offset the switch in emphasis from credit to money and the concurrent slowdown in the immediate use or 'velocity' of that money.
But this was not the end of it, for private-sector NGDP (the important bit) fell a greater 5.7%, while the total business revenue measure which we have argued above is the real key variable, slumped to a crushing 11.5% loss. Within this the disparities were even more marked. Revenues among the extractive industries plunged 50.6% at one end of the spectrum as those accruing to health & social care rose 4.4% at the other. For profits – and hence, for both the means and the incentive to expand output and employment - the spread was even more extreme for the trailing four quarters to our two end-dates, ranging from a 73% contraction for the extractive sector to a 68% gain for the utilities (which, in part, benefited from the formers' woes in the shape of cheaper energy inputs, again underlining the point that it is relative costs and prices which count, not absolute ones).
Again, we have to ask the targeters and reflationists: how, where, and when was the central authority supposed to have intervened in order to lessen the economic pain; and how do we know that same pain was not either intensified or prolonged, rather than mitigated, by the actions which were taken since these could not have done other than to have interfered with the market's attempts to find proper clearing prices, to excise dead capital stock, and to marshal its combined entrepreneurial abilities for the task of laying down new capital where the evaporation of the prior bubble had revealed it to be truly useful (and, by extension, profitable) to do so?
If the Bernanke Fed had any answers then – or, indeed if it has since achieved sufficient enlightenment to justify its present burst of activism – we should be delighted to hear them. Our breath is not being held.
As a practical matter, it should be noted that the final data which we use to plot these changes have only just begun to be made available on a delayed quarterly basis and, even then, a full check on their validity awaits the glacial progress of the statisticians at the IRS, whose findings can be up to four years in arrears!
Though we must always exercise caution regarding any use of aggregates, a reasonable proxy is therefore what we need if we are to monitor developments, albeit using the broadest of brushes. For us the widely-ignored business sales data fits the bill for overall activity, while the ratio of its sub-components—retail sales versus those made in the manufacturing and wholesale sectors gives us an idea of gross saving/investment v end-consumption. Another way of showing this is to plot the monthly personal consumption estimates against those for business revenues. As the plot shows, this latter is highly variable and has been in decline ever since the financialization of the economy began in earnest in the early-1980s.
A falling ratio implies, to an Austrian, that a greater degree of time preference appears to be developing and hence, a higher natural rate of interest (the ratio of intertemporal prices) has come to prevail.
In contrast, an examination of the path of BAA bond yields shows that market rates (after subtracting consumer price changes) have been steadily falling over time, due to a toxic mix of loose money and abundant speculative leverage. The gap between what should be and what is, is therefore a widening one, suggesting that a mix of overconsumption and malinvestment, fuelled by increased non-productive indebtedness, is to be expected.
Chronic and often highly elevated current account deficits (not to mention the dire fiscal situation) testify to the overconsumption element, while the series of ever-more violent booms and busts, coupled with lacklustre real net investment and stagnant real wages, are symptomatic of the second, while the level of debt itself should itself need no further comment.
Given this malign constellation of factors, the Fed's eagerness to suppress all interest returns for at least the next three years and for as far out the curve as its tainted grasp can extend is not likely to do anything to restore a much-needed touch of balance to the world's largest (and formerly most vibrant) economy.
Bond yields have already been forced far too low, making stocks seem relatively well-valued, even as the underlying conditions deteriorate and the fatal dependency on the sweet neurotoxin of stimulus deepens its grip on the patient. By progressively suppressing the economy's intrinsically-generated price signals in this fashion, a wholesale paralysis of the system may one day result.
What Bernanke's intellect cannot seem to encompass is the thought that if a man has lost weight through an illness related to his previously poor dietary regime, it will simply not do to try to fill out his now-baggy suit by tempting him back into over-indulgence. Some glimmerings of this idea do surface in the occasional expression of doubt about just how large such shadowy entities as the 'output gap' or the 'structural growth rate' may still be in the aftermath of 2008's debacle, but none of these misgivings ever seem to penetrate the cranium of a man who thinks he can meaningfully reduce unemployment by stimulating junk finance in all its many forms.
It is not only that Bernanke's policies will inevitably assist the zombie companies and the obsolescent industries to absorb scarce resources (not least on bank balance sheets) to a much greater degree than is justified, thereby denying greater returns both to their better-positioned rivals and to those nascent endeavours which could better reflect unalloyed consumer preferences and whose growth could come to replace yesterday's failures as tomorrows' providers of income. There is also the danger that lax money misleads even today's supramarginal businesses into over-estimating the depth and duration of demand for their products, ultimately undermining many otherwise sound undertakings and reducing these, too, when the cycle next turns, to the ranks of the Living Dead.
Gather ye rosebuds will ye may, for the bloom on this Fed rally, too, will eventually wither and fall.
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| The Inevitability of Economic Collapse Posted: 18 Sep 2012 07:01 PM PDT From Monty Pelerin: Readers of this blog will find this video a repeat of themes which have been discussed here for over three years. It may be useful even for regular readers to review the conditions which ensure an economic collapse. Each person interviewed agrees that a collapse is coming. There is only disagreement, and little at that, regarding the elements which will trigger the collapse. No one sees a different end result. All agree that the unsustainable is just that — unsustainable! Politicians cannot stop this. Even proper economic policies, if enacted, cannot remedy the problem. Arithmetic now determines what must happen and there is no way to violate the rules of mathematics. The inevitable is coming, only the timing is unknown....
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| “Dollar Index Headed for Rapid Collapse” Over Next 3 to 4 Weeks Posted: 18 Sep 2012 06:45 PM PDT by Mac Slavo, SHTFPlan:
If you think the Federal Reserve's quantitative easing will only affect the US dollar, think again. Now that the United States has officially begun it's third round of money printing to the tune of at least $40 billion monthly, central banks around the world will also act to 'defend' their currencies in kind. Moreover, because everyone is joining the fray, all of that extra money will make its way into key resource stocks and commodities, adding further upside price pressure to essential goods like food and fuel. It's a race to the bottom, and the losers are the 99.9% of us who aren't being kept in the loop.
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| New York Sun: The miser's tragedy Posted: 18 Sep 2012 06:43 PM PDT 8:43p ET Tuesday, September 18, 2012 Dear Friend of GATA and Gold: Reflecting on the likely claim by the U.S. Internal Revenue Service on the estimated $7 million in gold found in the garage of a Nevada man who died with only $200 in the bank, the New York Sun notes the injustice of mistaking mere inflation for capital gains. Gold and silver, the Sun argues, are money in themselves and should not be taxed just because their measure, some other currency, devalues. The Sun's editorial is headlined "The Miser's Tragedy" and it's posted here: http://www.nysun.com/editorials/the-misers-tragedy/87990/ CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. 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 Special Offer for GATA Supporters from The Calandra Report Financial journalist Thom Calandra, co-founder of MarketWatch.com and a longtime GATA supporter, has revived his weekly market letter, The Calandra Report, which is aimed at believers in natural resources and metals equities. His three recommended stocks so far -- prospectors in Nevada, Portugal, and Colombia looking for gold, silver, copper, and tungsten -- have risen since his recommendation, and he is traveling throughout the world to research more recommendations. Through Sept. 22 the TCR's subscription price is $48 per year and during that time Calandra will donate to GATA $5 for every GATA supporter who subscribes. After that the TCR's subscription price will rise to $54. Calandra will join GATA's Bill Murphy and Chris Powell at the Toronto Resource Investment Conference on Thursday and Friday, Sept. 27 and 28 -- http://cambridgehouse.com/event/toronto-resource-investment-conference-2... -- and at the New Orleans Investment Conference from Wednesday through Saturday, Oct. 24-27: https://jeffersoncompanies.com/new-orleans-investment-conference/home For a sample of a recent edition of The Calandra Report and to subscribe, please visit: http://www.babybulls.com/index.cfm/page/THE-CALANDRA-REPORT:-AUGUST-26,-...
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| Tungsten-Filled 10 Oz Gold Bar Found In The Middle Of Manhattan's Jewelry District Posted: 18 Sep 2012 06:42 PM PDT It is one thing for tungsten-filled gold bars to appear in the UK, or in Germany: after all out of sight, and across the Atlantic, certainly must mean out of mind, and out of the safe. However, when a 10 ounce 999.9 gold bar bearing the stamp of the reputable Swiss Produits Artistiques Métaux Précieux (PAMP, with owner MTP) and a serial number (serial #038892, likely rehypothecated in at least 10 gold ETFs across the world but that's a different story), mysteriously emerges in the heart of the world's jewerly district located on 47th street in Manhattan, things get real quick. Moments ago, Myfoxny reported that a 10-ounce gold bar costing nearly $18,000 turned out to be a counterfeit. The discovery was made by the dealer Ibrahim Fadl, who bought the PAMP bar in question from a merchant who has sold him real gold before. "But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten -- not gold. The bar was filled with tungsten, which weighs nearly the same as gold but costs just over a dollar an ounce."
And cue panic on the realization that virtually any gold bar in the world, not just those in Europe and Australia, which have already had close encounters with Tungsten substitutes, but also New York may be hollowed out and have a real worth of a few dollars max. Which, sadly, is fitting considering our main story from last night was the realization that an unknown amount of Chinese iron ore had either never existed or had simply vaporized, and was no longer serving as the secured collateral to various liabilities circulating in the electronic ether. After all, only the most naive out there could conceive of gold being sacrosanct when every other asset class is being diluted to infinity by a regime that has long since run out of money. As for gold-based transactions on West 47th street: look for that market to grind to a halt at least for as long as it takes for this scandal to be forgotten too. The only open question remaining will be how much of the gold located 90 feet below Libert 33 is in the same Tungstenized format. For what it's worth: it is unlikely we will ever find out. This is what glaring gold counterfeiting looks like.
And for the reading challenged: New York News | NYC Breaking News All that said, with false flags rampant these days, we would not be surprised if this is merely yet another attempt to discredit gold, this time physical, as an undilutable medium of warehousing wealth. So buyer beware: in a time when everyone is broke, triple check before exchanging one store of wealth for another.
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| Brodsky and Quaintance: First monetize debts, then assets (aka gold) Posted: 18 Sep 2012 06:11 PM PDT 8p ET Tuesday, September 18, 2012 Dear Friend of GATA and Gold: In their latest report for QB Asset Management in New York, Paul Brodsky and Lee Quaintance forecast that central banks will move from de-leveraging the banking system through debt monetization to monetizing assets to devalue their currencies. Foremost among these assets, Brodsky and Quaintance write, will be gold. Their "shadow gold price" is between $15,000 and $19,000 per ounce. "We believe," they write, that "significant real Alpha will be generated by those properly positioned first for significant monetary inflation and monetary regime change, and second for significant price inflation." Their report is titled "No Pretense" and it's posted in PDF format at GATA's Internet site here: http://www.gata.org/files/QBAMCONoPretense09-18-2012.pdf CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet Company Press Release VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces more results of its 2012 drill program on the company's fully-owned Wellgreen platinum group metals, nickel, and copper project in southwestern Yukon Territory, Canada. Four surface holes and four underground holes all intercepted significant mineralized widths, ranging from 28.5 meters (WS12-201) and up to 459.5 metres (WS12-193). Highlights include WU12-540, which returned 8.9 metres of 5.36 grams per tonne platinum, palladium, and gold; 1.73 percent copper; and 1.01 percent nickel within 304.5 meters of 0.66 g/t platinum-palladium-gold, 0.20 percent copper, and 0.27 percent nickel. The surface drill program started in June and has completed 16 holes (assays pending for 12 holes) with two rigs now on site. The surface program continues to progress at a steady pace. Prophecy Chairman John Lee commented: "Wellgreen is a very large nickel, copper, and platinum group metals project with near-surface high-grade zones. High-grade intercepts will be incorporated into resource modeling and mine planning in the pre-feasibility study. We expect further positive drill results from Wellgreen shortly." Wellgreen features a low 2.59-to-1 strip ratio, is situated at an altitude of 1,300 meters, and is only 15 kilometers from the two-lane paved Alaska Highway. Those factors significantly minimize the project's indirect costs. For the complete company statement with full tabulation of the drilling results, please visit: http://prophecyplat.com/news_2012_sep11_prophecy_platinum_drill_results.... 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. GoldMoney also has recently partnered with Rhenus Freight Logistics to offer another gold storage option in Switzerland. The Rhenus vault is in the secured zone of Zurich Airport and offers customers superb security as well as the ability to inspect their gold. Storage at the new vaults in Canada and Switzerland is available at GoldMoney's lowest fees. Customers can select their storage location when placing their buy order. GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata
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| Posted: 18 Sep 2012 05:32 PM PDT Dear CIGAs, This is a major game changer. It has taken place in a West African gold miner. It speaks to certain African countries as excellent investments. It underscores that prediction of 12 years ago. It screams at undervaluation. It is the recognition that gold mines mine money. This is a recognition of the Continue reading A Game Changer For Gold
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| VB Update Notes for September - October 2012 – Help Arrives Posted: 18 Sep 2012 05:27 PM PDT HOUSTON – Don't look now, but we can definitely point an improvement in the Canadian Venture Exchange Index or CDNX. It is still trading where it did in 2003, with gold then challenging $350 and silver was then trading under $5, but since the last full update we can point, proudly, to at least the beginnings of a long overdue rally. There is still a ton of risk which has been extracted/removed from smaller junior miners and explorers – following the second longest and deepest selloff bear market since the Great Gold Bull Market began. But now we can point to and embrace direct evidence that the horrible buyer's strike and Junior Bear Market From Hell may finally be giving way to some positive money flow. Help has arrived. It's about time. Here's the now very familiar long-term monthly chart. The gold market got oceans of help from the ECB and the Federal Reserve. Unlimited bond buying in Europe and unlimited buying of agency MBS by the Fed put the gold and silver bears into full short-covering retreat. Having a gold and silver rally does help, but The Little Guys had been so severely sold off; they had been so unreasonably pummeled; they had been so shunned by the collective market, they had become collectively what we now call "Idiot Cheap." The level at which we are pretty sure we might look back at today's pricing of our Faves and the stocks covered by the popular indexes a year or two hence and say to ourselves, "Man, it was idiotic for them to trade so low back then." We won't crow (even though we have reason to) but we will point out that since that last report we can point to significant improvement in all the indexes we track. Let's just run the charts and let them do the talking this time, starting with the short term chart for the CDNX. Note the first significantly higher low in late August. Compare the CDNX with the Big Cap Miners represented below by the AMEX Gold Bugs Index or HUI just below. Just for fun let's put up the chart from last time first, then show it today right under it for dramatic effect. HUI as it appeared last time. HUI as of September 18. As gold caught a bid, so did the Big Miners. Just since July 24 the HUI has tacked on 35% as gold added $143 or so, up almost 9%. The outperformance of the miners to gold is a bullish omen. Let's do the same thing with the Market Vectors Junior Gold Miners Index ETF or GDXJ. First the GDXJ as it appeared last time.
The chart shows the action of both the GDXJ and the CDNX. Clearly the GDXJ is leading the charge up and out of purgatory, and darn if it doesn't look like it "means it." The for-sure thing we are talking about, even though we can't see the future and don't really know if this is the beginning of a major bull move for The Little Guys, we know and believe that this is how a major bull move for the little guys MIGHT START. And man, oh man, do The Little Guys have a long, long way to go just to get back to where they were comfortable before the one-year correction for gold. And that was a discounted level relative to where the smaller issues traded prior to the Lehman collapse. That's enough "near-crowing" for now. We wouldn't want to anger the Trading Gods any more than we have. Let's pause here and move directly into the Vulture Bargain (VB) Roundup update for September - October, 2012. *** As always, the first place to look for new commentary is directly in the charts themselves (available to Subscribers). As we have been saying frequently in these reports, moving forward the charts will become more and more the focus and these formerly too-long written reports less and less the focus. To continue reading, please log in or click here to subscribe to a Got Gold Report Membership
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| The Silver and Gold Price Both Gain Ground Today I'm Expecting Corrections after their Long Runs Posted: 18 Sep 2012 05:27 PM PDT Gold Price Close Today : 1768.40 Change : 0.70 or 0.04% Silver Price Close Today : 34.644 Change : 0.346 or 1.01% Gold Silver Ratio Today : 51.045 Change : -0.495 or -0.96% Silver Gold Ratio Today : 0.01959 Change : 0.000188 or 0.97% Platinum Price Close Today : 1635.30 Change : -36.30 or -2.17% Palladium Price Close Today : 666.85 Change : -21.75 or -3.16% S&P 500 : 1,459.32 Change : -1.87 or -0.13% Dow In GOLD$ : $158.56 Change : $ 0.09 or 0.06% Dow in GOLD oz : 7.671 Change : 0.004 or 0.06% Dow in SILVER oz : 391.54 Change : -3.61 or -0.91% Dow Industrial : 13,564.64 Change : 11.54 or 0.09% US Dollar Index : 79.19 Change : 0.235 or 0.30% Platinum and Palladium are weighing on the silver and GOLD PRICE. Beginning mid-August platinum staged a magnificent run from the high $1300s to $1,716.50. Ahh, but what's won easily is lost easily, too. Platinum has lost $77 (4.5%) since Friday, leaving little doubt that this move has ended. Palladium rose from $562.35 to $705.80 on Friday, and today stands at $666.85. It's chart looks finished, too, and these two dropping want to drag silver and gold down as well. The SILVER PRICE gained 34.6 cents today to end at 3464.4c. The GOLD PRICE gained 70 cents to $1,768.40. Silver's 5 day chart has diverged from gold's. While the GOLD PRICE has formed what is probably a rounding top, silver today managed a new high at 3503c. Gold, on the other hand, traded rangebound by $1,769 - $1,775 over Friday and Monday, dropping off to $1,750. It rose again today as high as $1,773.13, but today's low was slightly lower. Overall impression is a rounding top. Since I'm no more than a natural born fool from Tennessee, I could be dead wrong here, and if gold shoots through $1,825 I'll admit it. Till that happens, however, I'm expecting a correction after the long run silver and gold have enjoyed. It's okay --- they've earned it. It dawned on me today: the Fed is fixing up the banks' balance sheets by 1. Buying their Mortgage Backed securities, so the banks can take that newly created money and 2. Buy US treasuries, and 3. Instantly clean the banks' balance sheet, trading a rotten asset for a solvent one. But who pays? You do. Fed created money to buy MBSs, and must inflate hugely to do so, 12 x $40 bn = $480 bn = 1/2 trillion a year. Every dollar the Fed creates cheapens the dollars you own -- sucker. Bottom line: this amounts to creating $40 bn/month to buy, that is, to DIRECTLY MONETIZE, US government debt. At heart this is precisely what the Reichsbank did for the Weimar government during the 1920-1923 German hyperinflation. Ben Bernanke, I would say, finds himself just a little bit pregnant. TODAY'S MORALITY PUZZLER: Does a moral government grant anyone the power to create money out of thin air? Is it immoral to default on a debt owed to such criminals? Think about it this way: a man puts a gun in your ribs and takes your wallet, then asks, "Do you have any more money on you?" Are you morally obliged to tell him about the $100 in your shoe? I keep telling y'all that the central banks probably have an exchange rate range for the yen, euro, and dollar that equals roughly Y80 = E0.80 = US$1 on the high side and Y75 = E0.75 = US$1 on the low side. That means that each currency in dollar terms will range between $1.2500 and $1.3333. Clearly Bogus Ben and Super Mario have made a deal to inflate their currencies together to mask the real game, gutting their currencies. Dollar index bottomed Friday at 78.60. Today it stands at 79.186, up 23.5 basis points today or 0.3%. It will probably rally up to 80 or so before it slows down. Euro has shot its wad for the nonce. Shows two gaps, a runaway gap mid-August and an exhaustion gap Friday. Backed off 0.52% today to 1.3047. Time for a rest. Yen has fallen back badly from Friday's high, down another 0.11% today to 126.90c (Y78.80/US$1). Expect no great things here. Stocks were mostly falling today, although the Potemkin Dow did manage to add 11.54 (0.09%) to 13,564.64. Most other indices fell, including the S&P500, down 1.87 (0.13%) to 1,459.32. On 18 September 1789 the US governemnt took oiut its first loan. Alexander Hamilton (don't spit, you'll mess up the floor!) took the loan from the Bank of New York and the Bank of North America. Funny story about that Bank of North America. It was the bank cobbled together which the insiders hoped to make the central bank for the US, like the privately owned Bank of England. Problem was, they didn't have much capital, hardly any. But they had a few bags of silver coin, so they hired two stout fellows to send them up from the basement on a dumbwaiter, and two others to roll the dolly across the lobby so everyone could see how much money they had. Then they carried the bags downstairs, where the other two would load them into the dumbwaiter again. It was sort of like Bogus Ben going on TV to tell all the hoi polloi that everything is fine in the economy. On 18 September 1873 government bond agent Jay Cooke and Co. collapsed, causing a panic on Wall Street. More things change, more they remain the same. 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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| Bill Holter–The Federal Reserve-The End Is Near 18.Sept.12 Posted: 18 Sep 2012 04:45 PM PDT www.FinancialSurvivalNetwork.com presents Bill Holter believes that the Fed's latest round of QE3 is a suicide pact. By embracing on going systematic money printing, we're only a black swan away from complete and utter financial collapse. Which means that you need to prepare and get ready. The only question is why did it take them so long? And clearly they decided that they couldn't hold off any longer. Everyone knows that QE1 and QE2 were unmitigated failures and there's no reason to expect why QE3 is going to be any different. And it won't be because you don't cure insolvency, which means that your debts exceed your assets, by going further into debt. The only way is to liquidate the debt, which no one wants to do. Go to www.FinancialSurvivalNetwork.com for the latest info on the economy and precious metals markets.
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| Posted: 18 Sep 2012 03:56 PM PDT September 18, 2012
According to Japan's Kyodo News, there were Anti-Japan protests in "at least 100 cities in China," and "about 7,000 people near the Japanese Consulate General in Shanghai chanted: "Destroy Japan and retrieve Okinawa"… "Boycott Japanese products" and… "Beat Japanese imperialism." Looks like someone didn't get the memo. Like all goofy protests, very little sense can be made of the things people say when they go marching… But at least the Chinese protesters will help kick off an entire episode of The 5 dedicated to the insanity of groupthink…
"Both countries claim them as part of their territory," The New York Times reports, "but Japan exercises control over them." The uprising couldn't have come at a worse time for Japan, as their newly appointed ambassador croaked after only two days on the job. "Reacting to anti-Japan protests that struck parts of China over the weekend," The Wall Street Journal report reads, "some of Japan's largest companies on Monday shut factories, advised their employees to stay home and closed shops." The moves have apparently "aggravated tensions" between the world's second- and third-largest economies.
Honda and Mazda both halted operations at plants in China. "Canon Inc. also said it was suspending the operations at three of its four main factories in China for cameras, photocopiers and printers on Monday and Tuesday, due to safety concerns. "Fast Retailing Co., which operates about 145 stores for its Uniqlo casual clothing brand across China, temporarily closed 16 stores Monday. On Tuesday, it closed 42 stores, a spokeswoman said. "Shares of Japanese companies closely tied to China traded lower Tuesday morning, as the broader market largely shrugged off the renewed tensions. Along with the mentioned Japanese companies, Sony suspended two of seven plants, Seven & i Holdings Co. (7-Eleven) closed stores in Beijing and Chengdu, construction giant Komatsu halted all plant operations and Mitsumi Electric Co., distributor of electronic components, had its plant broken into in Qingdao and part of it burned down. Che Guevara is dancing in his grave.
Maybe you remember hearing just a tad about them last year? With an estimated 300-400 protesters turning up yesterday in NYC, and almost half of them getting arrested, it seems they're back and didn't miss a beat. In spirit of Occupy's one year, we've dug up some charts from thinkprogressive.com that only a 1%'er would love. While infamous for getting the diagnosis right, yet ordering up more disease as a cure… the progressives do know how to crunch the numbers, we'll give them that.
"Turmoil in the Middle East benefits precious metal prices," Byron King writes, shaking us back into the global hullabaloo. "Call it the 'fear trade', if nothing else. "Of course," Mr. King goes on, "close to home, you have the 'Federal Reserve trade' as well, for gold and silver, what with Fed Chairman Ben Bernanke last week announcing more quantitative easing — QE3. My take is that QE3 won't do anything to help the economy. Just today, the Financial Times all but pooh-poohed QE3 because the intended beneficiary — the housing market — is backlogged with mortgage processing. "Overall," he explains, "QE3 is just another way for the Fed to bail out the banks and jam more inflation into the U.S. money supply. We're already seeing the impact in gold and silver prices, for both physical metals and certain of the better-run miners. [The 5 Note: If you haven't yet found a good way to buy and store your physical metals, may we politely suggest you look into opening a Hard Assets Alliance account? We've been hammering away about them for good reason. As you'll see, HAA is one of the simplest ways to buy, sell, store and take delivery of precious metals. They're still waiving the account opening fee. And word has it that they've lowered all their pricing, too. Sign up for free, right here. Please note that we may be compensated if and when you fund your account... but we wouldn't make this offer available unless we believed it offered outstanding value.] "I don't want to spend too much time beating up on the Fed here," Byron continues. "Indeed, there's another aspect of life on Earth that's driving gold and silver prices higher. That's labor unrest in South Africa. Recall my discussion about the platinum strikes in South Africa in a note last month? "Sad to say," Byron writes, "things have not improved in that beautiful, yet afflicted, land. Indeed, over the past month, labor strikes have spread to other mines and mining companies, rippling out from the original site owned by London-listed Lonmin Mining Co. "The long and short of the mining issue is that platinum and gold production is falling in South Africa. It's bad for the mining companies, and bad for overall global supply. "Thus, when you watch gold and silver prices rise over time, be sure not to place all the blame on Ben Bernanke of the Fed or the Islamic revolutionaries in the Middle East. Always remember that there are multiple reasons for some things." Yesterday, Byron left us with actionable advice, "Investment wise, get the heck out of the Middle East. Go elsewhere, where the oil is. I cannot see how this ends well." So where should you go? Byron's answer may surprise you. He'll tell you all about it in this controversial presentation… As you may remember, this is the same presentation that caused us to place a wager on whether or not the predictions inside will come true. We're still awaiting the "winner." If you haven't taken a side yet, get up to speed on the idea right here.
"The Occupy movement was, likewise, fostered by forces who believed, erroneously, that they could re-create the social forces that were evident in the '60s for their own political purposes. It is, however, trivial and irrelevant. "Overall," Patrick goes on, "the effect of civil unrest internationally is to make the developing world a less-attractive place to invest and work. This was the case in the past, and we are seeing forces reinforce the dichotomy between the West and the rest. Moreover, the meltdown of the EU is recreating financial conditions reminiscent of the mid-20th-century when Europe was struggling with continual crises and conflict. "The nature of the conflict today is, thus far, financial, rather than martial, but its impact is similar. Already, we're seeing Spanish and French banks bleed assets. The United States and Canada, already enjoying a new energy boom with its associated advantages in commodity chemicals and manufacturing, are and will be the primary beneficiaries and recipients of fleeing capital, both human and financial. "Financial markets are like beauty contestants in a never-ending pageant. You don't have to be beautiful to win, however. The least-ugly in a contest of flawed contestants can win bigger than the marginally more attractive in a lineup of true beauties. Canada is the least ugly today and Canadian markets will benefit most from international civil disturbance. Runner-up America, however, has an established foreign investment infrastructure in place due to long experience as the world's largest tax haven. "Look for the Dutch in particular to continue in their role as facilitators of this traditional arrangement. Australia and New Zealand are also looking pretty good, at least after a few pints. War, of course, is the increasingly likely wild card, which would force a major recalculation."
The Dow is down a hair, 3 points lost, to 13,550. The Nasdaq is down two hairs, 6 points lost, to 3,173. While analysts continue to debate the $4 drop in oil yesterday in 20 minutes, oil continues to slide, sitting at $96.10 a barrel. Gold is up $6 from our look yesterday, sitting at $1,776. Silver is up a nickel and some change at $34.55.
"Jim and I are always looking for great ways to collect income," Kelly writes, "and 8-12% sounds pretty enticing. But we wanted to find a way to take advantage of the real estate recovery without putting out tens of thousands of dollars. "And even though we like housing," Kelly explains, "we wanted to find a way to invest that had a safety net just in case the recovery drags its feet for a bit. "That's how we came across the newest play we're sharing with readers later this week, it's paying a 4.7% dividend. Not only that, but 47% of its business comes from a sector that will explode as housing recovers. But even if that recovery is dragging, the other 53% is our nonhousing safety net. "This isn't the 8-12% Chris is collecting from rental properties," Kelly admits. "But it's definitely a safe way to collect 4.7% regardless of the housing recovery. And a ton more as the recovery continues." Jim Nelson and Kelly plan on revealing this play later this week to their Lifetime Income Report readers. Along with housing, they've also found a way for you to claim an instant "paycheck" on any gold or silver stocks you may be holding. Instant payouts run into the thousands. Full list of participating stocks found here.
"Prices are still very low even if they have not bottomed out and there is a massive amount of opportunity to be had if you are in the right local market. Just because the average value of homes is dropping does not mean all areas are."
"However," our reader goes on, "he says the resale market is at eight-year lows while he states there are already millions of homes in default ready for a distressed sale. My question to him is this: If the value of a house has dropped, say, 50%, is he suggesting that qualified buyers should continue to wait for further price reductions??? My point is there is no guarantee this will be the case for the future. As those millions of foreclosed houses come to market, they will be rolled over to more-qualified buyers to live in or as rentals or they will be bulldozed. "As far as Chris Mayer is concerned, he was a banker too, and if I summarize him: Buy now at significantly less than replacement costs and take advantage of the low mortgage rates. Investing for profit in rental properties is always based on ROI and there appears to be a surplus of renters now and on the horizon. Again, there is no guarantee this will continue to play out exactly as suggested. However, why wait for a potential ROI of, say, 20% when you can get 15% today??? "As always, lots of homework and due diligence will prevail — that's the only guarantee."
"The attached was given to me by a Hungarian professor 30 years ago," our reader continues, "who fought the Russians in the streets of Budapest. "The U.S. system has a set of constraints on both the left and the right. The U.S. system constantly moves between the two walls, on the left and the right, but the two walls hold the U.S. system in place. "Communist systems are like a very large ball in a very shallow 'V' held in place by small supports. Once these supports in communist systems give way, look out — no one knows where the ball will roll. "This happened in Russia, and it sure in the heck will happen in China someday."
The 5: Not sure, but if you find there are, it's a pretty untapped market.
The 5: What? No four-year booze fest after high school? Now you're asking too much!
After Jeffrey Tucker's passionate, "F&ck you, Bernanke" contribution yesterday, we decided to get his take on the matter… "On the first point," Jeffrey writes, "students imagine that they will graduate and make the big bucks by waving a degree around. New freshman aren't so stupid, but a generation got snagged by this myth. "On the second point," he continues, "to work before college is an excellent idea. Maybe you will discover that college involves a huge opportunity cost and is not worth it. It's worth making an informed choice, regardless." To level out the opinion field, we also contacted our intrepid Harvard-trained rockhound Byron King, who commented: "As a Harvard grad in Geology, I'm many years ahead of the latest commodity bull market. Still, it's clear that the long-term resource bull market IS driving the economics of who gets a job after university. "I've said it more than once" Byron writes, about to say it again. "When you see someone grabbing a degree with the word 'Studies' at the end of it, you're looking at someone with an employment problem — or, rather, an unemployment problem. "What's my advice to undecided youngsters out there? Figure out what you like, but… whatever you do, work hard and get good at the sciences! Of course, my bias is toward things that help find and deliver resources out of the ground. Overall, hard sciences, geology and related fields are a great way to make sure you have the basics to find work and stay employed in the future. With 7 billion people living on this world, we're in the midst of a resource and materials play that won't end anytime soon." Indeed. Until tomorrow… Cheers, Addison Wiggin The 5 Min. Forecast P.S. Thought you might like this story… "Nobody had any clue he was hoarding the gold," Carson City Clerk Alan Glover told the Las Vegas Sun. Browsing through the newsfeeds today, I stumbled across a story about a 69-year-old The Associated Press describes as a "Carson City recluse" who was recently found dead with only $200 left in his checking account. "But," AP goes on, "as Walter Samaszko Jr.'s house was being cleared for sale, officials made a surprise discovery: gold bars and coins valued at $7 million… "Based on just the weight of the gold alone," AP writes, "Glover estimates their worth at $7 million. Because some of the coins appear to be collector's items, the value could go much higher, he said… "Samaszko was 'anti-government,' Carson City's Nevada Appeal reported, and a few conspiracy theory books were found in the home along with several guns." "He never went to a doctor," Glover told the newspaper. "He was obsessed with getting diseases from shots." Ahh… the classic gold-collecting, "rich white guys with no life" mainstream-meme rearing its head again. We're onto your tricks, lamestream…
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| Bob Moriarty: Finding Massively Undervalued Energy Stocks in Today's Irrational Market Posted: 18 Sep 2012 02:16 PM PDT The Energy Report: Assuming you watched, would you care to share some of your thoughts about the Republican National Convention and the Democratic National Convention? Bob Moriarty: Are you kidding? We have this bizarre situation where every four years we pretend we have elections and pretend that two different parties offer different alternatives. It's one snake with two heads. I wouldn't waste my time watching two seconds of either fiasco. Whoever wins the presidential election is based on two things: one, how much money he can spend and, two, how big the lies he can tell. These guys are in Never Never Land. TER: What forces really matter in the worldwide economic picture? BM: The global financial crisis that started in 2007 hasn't ended. It's not even in the middle. It's going to get far worse. The dollar will crash, either through hyperinflation or deflation. The euro is hopeless. To hear adults talk about the euro continuing—a five-year-old could do the math. The euro can't go ...
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| Gold Daily and Silver Weekly Charts - Predator and Prey Posted: 18 Sep 2012 02:06 PM PDT | ||||
| 10 Shocking Quotes About What QE3 Is Going To Do To America Posted: 18 Sep 2012 01:03 PM PDT  Ready or not, QE3 is here, and the long-term effects of this reckless money printing by the Federal Reserve are going to be absolutely nightmarish. The Federal Reserve is hoping that buying $40 billion worth of mortgage-backed securities per month will spur more lending and more economic activity. But that didn't happen with either QE1 or QE2. Both times the banks just sat on most of the extra money. As I pointed out the other day, U.S. banks are already sitting on $1.6 trillion in excess reserves. So will pumping them up with more cash suddenly make them decide to start lending? Of course not. In addition, QE3 is not likely to produce many additional jobs.As I showed in a previous article, the employment level did not jump up as a result of either QE1 or QE2. So why will this time be different? But what did happen under both QE1 and QE2 is that a lot of the money ended up pumping up the financial markets. So once again we should see stock prices go up (at least in the short-term) and commodities such as gold, silver, food and oil should also rise. But that also means that average American families will be paying more for the basic necessities that they buy on a regular basis. The most dangerous aspect of QE3, however, is what it is going to do to the U.S. dollar. Most of the rest of the world uses the U.S. dollar to conduct international trade, and by choosing to recklessly print money Ben Bernanke is severely damaging international confidence in our currency. If at some point the rest of the world rejects the dollar and no longer wants to use it as a reserve currency we are going to be facing a crisis unlike anything we have ever seen before. The real debate about QE3 should not be about whether or not it will help the economy a little bit in the short-term. Rather, everyone should be talking about the long-term implications and about how QE3 is going to accelerate the destruction of the dollar. Read more..... 
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| Downside: After the Returns Stop Diminishing, Part II Posted: 18 Sep 2012 12:48 PM PDT "You can't be too safe," is an expression you hear from time to time. The government takes it upon itself to protect its citizens. It suggests that you can't spend too much on military preparedness and that defense is too important to be left to popular preference. Leaders think they know better; they insist. But is military spending really not subject to declining marginal utility? And what happens after even the marginal returns are gone? Germany's experience in WWII shows what you can get from 'too much' military spending; it was almost pure downside. But it was not obvious at first. Central planning can do a good job of imitating real progress — at least in the short run. And in the '30s, Germany's economy began to look a lot like a success. Factories — reacting largely to orders form the military — began to recruit more labor. At the same time, the ranks of the army grew, removing able men from the workforce. The result was a lower unemployment rate. Joblessness had been as high as 6 million at the beginning of 1933, with capacity utilization as low as 50%. That was when the 'Battle for Work' began. Only 6 months later, East Prussia was declared "free from unemployment." How was this miracle achieved? "The jobless of East Prussia were ruthlessly conscripted," explains Adam Tooze in his book The Wages of Destruction. "Thousands of married men were herded together in 'camps of comradeship.' Where they were subjected to a heavy program of earth-moving and political education…" Economists, as we have mentioned, are not able to measure quality, only quantity. They cannot distinguish a ton of steel used in a battleship from the same quantity rolled out and pressed into automobiles. They cannot tell the difference between a man who is growing wheat from one who is distributing propaganda leaflets. But from an employment point of view, the Nazi war economy was rarely surpassed. Unemployment went down after 1933…and kept going down for the next 12 years. When the end came, Germany not only had zero unemployed workers. It had an unemployment rate that had gone deeply negative, with millions more people holding jobs than there were people in the German workforce. How did it achieve this amazing result? Not by increasing the number of real jobs. It did it be reducing the labor force, not only in Germany, but throughout Europe. In Germany alone, 4 million men were taken out of the labor pool for service in the Wehrmacht. When they overran France in May of 1940, the Germans captured 1.2 million Frenchmen. And in 1941, the Third Reich relieved 3.3 million Russians — most of them permanently — from the need to seek employment. As the war continued, Germany's labor force continued to shrink. Forty thousand people were killed in the firestorm set off by the British air force in Hamburg. But losses at home were nothing compared to the losses abroad. Stalingrad cost them 91,000 soldiers. Tunisia cost them 230,000 German and Italian troops. The Wehrmacht was then fighting on three fronts. East. West. And South. Losses to its armies had to be replaced. By the war's end, a third of the boys born between 1915 and 1924 were either dead or missing. This forced the planners to reach further into the population…particularly the farm population. Economists could do some fun ciphering with these numbers. The unemployment rate dropped to zero early in the war…and then it kept going down. Women — who were not really part of the workforce, since they had never worked in the job market and had no desire to get a job — were nevertheless dragooned into the factories to replace their fallen husbands and brothers. And when this source was exhausted, the unemployment went negative even further. A slave is not usually considered part of the labor pool. He is not someone who is looking for work. He is not someone who responds to an ad in the 'help wanted' pages. He is not someone who is likely to pay into a pension or sue his employer. And yet, bringing millions of these workers into the German economy had a remarkable effect on the unemployment rate. There were soon far more laborers than the entire measure of the labor force. By the end of the war, nearly one of every 4 workers was a foreigner — many of them there against their will. As a percentage of the workforce, unemployment had reached a phenomenal level — at about MINUS 25%. Economists must have been delighted. Their numbers had never looked so good. The first large group of laborers were Poles. There was already a precedent for using these foreigners on a seasonal basis in German agriculture. As more German men were called away from farms, more foreign farm labor was used. The first slave laborers in the Fatherland were 300,000 Polish soldiers captured in the 1939 attack. Then, by the spring of 1940 another 200,000 Polish civilians were brought in. Then, after the attack on France, the number of slave laborers swelled by 1.2 million prisoners of war — most of them French. At first, the Poles were recruited with promises of reasonable pay and food. Thousands signed up. However, the Nazis' Übermensch delusions soon spoiled the business. The civilian Poles were treated as badly as the captured soldiers. They were housed in prisons and so poorly fed that many died. After a few months, they were so weak from hunger and mistreatment that they had to be shipped back to Poland. Tooze quotes an eyewitness: "There were dead passengers on the returning train. Women on that train gave birth to children that were tossed from the open window during the journey…people sick with tuberculosis and venereal disease rode the same coach. The dying lay in cars without straw, and one of the dead was thrown onto the embankment." Word got around. Recruiters could no longer get the Poles to sign up as voluntary 'Ostarbeiter' But the demand for labor did not slack off. It increased, and voluntary recruitment soon turned into outright slavery. The biggest source of slaves, or near-slaves, was the Soviet Union, where approximately 2.7 million Soviets are believed to have been rounded up to work in Germany after 1941. Surprisingly one group who fared particularly badly in the hands of German employers was their own erstwhile ally — the Italians. Italy dropped out of the war in the autumn of 1943. Rather than let them go over to the allies, Germany took prisoner every Italian soldier it could lay hands on. These were worked mercilessly during the following winter, with 32,000 succumbing to starvation and related diseases. At the beginning of Operation Barbarossa, the plan was for captured Russians and Poles to be cut off from food and allowed to die; Jews were murdered. But as the labor shortage worsened, even the Jews were given an opportunity to work for the Third Reich. As many as 1.65 million concentration camp internees were put to work for Germany during the war years. Approximately 3/4 did not survive the war. While Germany enjoyed some of the lowest unemployment rates the world has ever seen, its economy boomed. Literally. The English…and then the Americans…were bombing the hell out of it. This too had a remarkably beneficial effect — at least from the point of view of a numbers-addled economist. Capacity utilization — a key measure of economic health — rose to almost impossible levels. Every factory. Every railway car. Everybody who could walk and every corner or every workplace was pressed into service of the war economy. Full capacity. Full employment. What was not to like? Statistically, the German economy in the '30s and early '40s was in rude health; but the health of the people who lived and worked in it deteriorated. They had less to eat, and less fuel for heat and transportation. Their houses were smaller, colder, more dilapidated…if they hadn't been destroyed completely. From the very beginning in 1933, the domestic economy was stripped in order to provide resources to the military. Food, housing, clothing all were soon rationed in order to prevent price inflation. Ration coupons for clothing, for example, helped cut demand. But nothing could boost supply, not when so many people and so much capital had been diverted to war. As the war intensified, of course, so did the shortages. The farms lacked labor and equipment. The factories were converted to supplying guns, uniforms and ammunition. And the houses were deteriorating or being destroyed. Allied bombers were overhead more and more frequently as the war went on. Americans had brought in thousands of Mustang fighter planes that were faster and more maneuverable than the Luftwaffe's planes. This made it possible to undertake massive daylight bombing raids. In terms of built-up demand, Germany's builders never had it so good. Domestic housing construction had peaked out in 1937. Five years later, there was hardly a house in the country that didn't need building…or rebuilding. A quarter of a million houses were damaged in the bombing of Hamburg alone. Trouble was there were no domestic builders to fix them; they had all been drawn into the war effort, along with everyone else. This left Germans with worse food, worse housing, and less income than they had before the Nazis took over. As early as 1941 — in the first years of the war — civilian consumption was already down 18% from 1938…and the collapse was just beginning. With so few workers and so many jobs, you'd expect a substantial increase in real incomes. But that presumes there is a freely-functioning labor market. In Germany, labor rates were controlled by the central planners, who had ideas of their own. And their main idea was to wring out as much of the wealth of the private sector as possible, so that it could be directed to the military industry. By war's end, there was little left. Putting aside the millions of dead and the bombed-out, ruined landscape of Germany, in purely economic terms the war was a catastrophe. In 1945, it was the Germans' turn to starve. In many urban areas, the daily calorie ration was no more than 1,000. Diseases linked to malnutrition were rampant. The birth weight of newborn babies was dangerously low. In terms of GDP per capita, Germany had wiped out 6 decades of progress. Not since 1880 had Germans lived with so little material output. But that assumes the GDP measured real, useful output. It did not. It measured primarily military output. The real living standards of the Germans were much lower than even these numbers reveal. But by then, the chief central planners were dead or in the custody of the allies. It was horribly expensive and painful, but Germany had provided a good lesson. Germans were probably 'safe enough' in 1933. Perhaps the first few extra tanks and airplanes didn't hurt. They may have been useful. Maybe not. Perhaps they merely brought German security spending to the point of declining marginal utility. But then they continued and increased…above and beyond the point where diminishing returns become negative returns; that is, they soon brought Germany to the DOWNSIDE. Regards, Bill Bonner Downside: After the Returns Stop Diminishing, Part II 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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| Posted: 18 Sep 2012 12:07 PM PDT Markets rarely provide " total satisfaction" to investors, and when they do, it's usually not for long. The gold and silver markets are overbought on short term charts, but they refuse to sell-off very much. Read More...
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What's gotten into the Chinese?
What's this one show? The higher the "harder we work" line goes up, the flatter the "get paid" lines get ironed out.
Saving the best for last, according to the Economic Policy Institute, "CEO pay at American firms has risen 725%, more than 127 times faster than worker pay over the same time period."
The 5: Let's just hope the Chinese ball doesn't come rolling this way…
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