Gold World News Flash |
- Hedge Funds Bullish on Silver as Hoard Nears Record: Commodities
- Junior Miners (GDXJ) Are Outperforming Gold Bullion (GLD)
- US Judiciary Leans Towards Disclosure Laws That Could Confiscate Electronic Assets
- What the analyst consensus for gold is telling us
- 1 Ton of Silver Bullets
- Bryan (at Gabelli) - Gold Could Easily Double From These Levels
- David Icke: Reflected Power
- Latest Buzz from PirateMyfilm.com
- The Financial Crisis Of 2015 - A Non-Fictional Fiction
- Greece, Tell Brussels “To Take A Hike” And Let The Troika Bail Out The ECB Instead
- How The Fed Crushed China's Ability To Join The Ease-Fest
- “GOLDRUNNER: SUPER FRACTAL GOLD- 45 degree rise”
- Gold Registers Highest Close Since February
- Visualizing The ECB's 'Solar-Systemic' Impact On The Eurozone
- Wall Street: "We Want QE4"
- A Chinese Mega City Is On The Verge Of Bankruptcy
- Wall Street: “We Want QE4″
- You Ain't Seen Nothing, Yet
- Tom Cloud: Silver is the Hot Thing Now
- Reuters - Canaccord Closes Branches, Aims for "Break Even" Performance
- The Gold Price Jumped $26.90 to $1,777.60 Silver also Rose Correction Still Likely
- Gold Seeker Closing Report: Gold and Silver Gain About 2%
- Superbull Gold Move
- Gold Purchases: Time Them with Technical Analysis
- Is a Correction in Gold Underway?
- Gold Daily and Silver Weekly Charts - Negative Returns on Money Market Funds
- [KR346] Keiser Report: Boom & Bust Vicious Cycle
- A Faltering Global Economy, Neo-Keynesians & $15,000 Gold
- The Daily Market Report
- Strikes Halt 39% of South Africa's Gold Production
| Hedge Funds Bullish on Silver as Hoard Nears Record: Commodities Posted: 28 Sep 2012 12:00 AM PDT by Nicholas Larkin and Debarati Roy, Bloomberg:
Wagers on rising prices jumped 10-fold since June, U.S. Commodity Futures Trading Commission data show. Investors bought 717.2 metric tons valued at $797 million through exchange-traded products this quarter, the most in a year, according to data compiled by Bloomberg. Prices will increase for at least the next three quarters and average $38 an ounce in the three months through June, or 9.9 percent more than now, based on the median of 14 analyst estimates compiled by Bloomberg. If history is any guide, silver will beat gold after the Federal Reserve announced a third round of debt-buying and central banks from Europe to Japan pledged more action. Silver rose about 53 percent in the Fed's first quantitative easing from December 2008 through March 2010, twice as much as gold, and 24 percent during the second phase ending in June 2011, three times as much. Silver will probably keep beating gold in the next several quarters, Morgan Stanley predicts.
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| Junior Miners (GDXJ) Are Outperforming Gold Bullion (GLD) Posted: 27 Sep 2012 11:07 PM PDT Jeb Handwerger, editor of GoldStockTrades.com, says the technicals are lining up for precious metals players, not just the fundamentals. The fundamentals for gold and silver appear to be making a positive turn as the US, ECB and Bank of Japan simultaneously signals Worldwide QE3. The charts are just beginning to make new uptrends and may have much more room to go. One must remember both gold and silver have not made new inflation adjusted highs despite record sovereign debt levels and a coordinated worldwide currency debasement. There is much more room to go in this rally as many investors still need to unwind a record position in cash and treasuries. Over the summer a record number of retail investors held their largest cash position in many years. Now they must look for alternatives as the Central Banks are hoping to increase inflation to promote spending and investing, which will hopefully create employment. It is clear that policy makers are fighting for inflation as economic growth continues to stagnate not only in the U.S. but in Europe, Japan and even China. Meanwhile during this recent summer correction, governments around the world were buying gold and silver as a hedge against the U.S. dollar and the Euro which now appears to be crashing into new lows.
Since the expiration of QE2, gold outperformed silver, the large producers and the small miners. However, that trend appears to be reversing as the cash strapped junior miners are getting more interest from the cash rich majors and royalty companies who need to look for resource growth. Notice the major royalty deals that Silver Wheaton just recently signed for the first time since 2007. The majors are hungry for growth and are sitting on large cash positions which is losing value as Central Banks print dollars. Too many dollars chasing dwindling supplies of precious metals may cause a major price spike. The majors must invest in the junior miners which in a bull market could provide great leverage and move exponentially higher in percentage terms than bullion. As we have believed for many months, governments around the world will be forced to print dollars to deal with a moribund economy while interest rates rise prompting investors to flee bonds into the undervalued precious metals and commodities. We saw capitulation in the mining stocks in late May when they pulled back to 2010 levels. Some junior miners are cheaper now at $1550 gold then when gold was $600 an ounce. For many months we informed our readers that a rotation will continue to occur from overbought equities and treasuries into the record oversold junior miners which could cause a major percentage gain over the next 12-18 months where technical conditions were so oversold that we could see snapback gains of possibly 200-400%. This happened before in the miners in 2008 and at other pivotal turning points such as in 2000 when the dot-com bubble burst and we believe it will happen again in 2013. ________________________________________________________________________________________ I will be presenting a workshop on the junior silver miners and participating on a panel about "New Mines" at the annual Toronto Resource Investment Conference at the Toronto Sheraton Centre tomorrow September 28th, 2012.I will be speaking on Friday at 3:30 in Workshop Room 3 on "Why the Junior Miners Are Set To Outperform". At 5:00PM I will be a participant on the closing panel on "New Mines" in the Speaker Hall.To order my premium service click here and find out why many investors are paying close attention to the junior resource market.
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| US Judiciary Leans Towards Disclosure Laws That Could Confiscate Electronic Assets Posted: 27 Sep 2012 11:00 PM PDT by Staff Report, TheDailyBell.com
Jail time for refusing to comply with mandatory key disclosure hasn't occurred in the United States yet. But, it's already happening in jurisdictions such as the UK, where a 33-year-old man was incarcerated for refusing to turn over his decryption keys and a youth was jailed for not disclosing a 50-character encryption password to authorities. Similarly harsh, key disclosure laws also exist in Australia and South Africa which compel individuals to surrender cryptographic keys to law enforcement without regard for the usual common law protection against self-incrimination. – Forbes Dominant Social Theme: If you encrypt it, it's good as gold. Free-Market Analysis: Here's something we don't ordinarily see in the mainstream press: thoughtful, even courageous, reporting. The author of this article, Jon Matonis, has pointed out that where cryptography has succeeded, authoritarianism must eventually follow. In fact, his point is even more subversive: Successful encryption PROVOKES the state. Using Tor encryption, many currently feel secure about their state of affairs. But the rampant state in the 21st century has the answer to this: It will simply arrest you and throw you in jail until you render your "key" unto Caesar. Here's some more from the article:
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| What the analyst consensus for gold is telling us Posted: 27 Sep 2012 10:56 PM PDT The big news in the commodities world lately is $10/barrel drop in the oil price in the last several days. The decline was initially blamed on Fed-Ex lowering its outlook for global growth and industrial production when it reported its latest quarterly earnings. The world’s second biggest package delivery company forecast a continued slowdown in global trade. Reports that Saudi Arabia is keeping production high to drive oil prices lower were also blamed. The actual reason for the drop in crude oil was likely political; with an upcoming election, the current administration is pulling as many strings as it can to keep voters happy and remain in office. Gasoline prices above $4/gallon and crude oil above $100/barrel isn’t politically acceptable so close to a major election. The real action meanwhile has been in gold, silver and the mining stocks. The precious metals group has been relatively unaffected by the latest drop in oil and other commodities and for good...
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| Posted: 27 Sep 2012 10:15 PM PDT from TruthNeverTold : As of yesterday, we were at 33,176 oz. sold in only 3 weeks of the SBSS Silver Round.
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| Bryan (at Gabelli) - Gold Could Easily Double From These Levels Posted: 27 Sep 2012 10:01 PM PDT  Today 25 year veteran Caesar Bryan surprised King World News when he spoke about gold moving up another $1,900. He said, "Gold could easily double from here." Bryan, from Gabelli & Company, also stated, "... there is no question that gold is undervalued today." Here is what Caesar had to say: "The balance sheets of the major central banks, over the last several years, have gone from just over $2 trillion, to almost $10 trillion. We're talking here about the Fed, ECB, BoE, and the BOJ."
This posting includes an audio/video/photo media file: Download Now |
| Posted: 27 Sep 2012 09:49 PM PDT from TheAlexJonesChannel: Alex welcomes British Author and renowned New World Order investigator David Icke to expose the large strides towards bringing about total financial collapse and public enslavement.
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| Latest Buzz from PirateMyfilm.com Posted: 27 Sep 2012 07:44 PM PDT thscapist (Owner) Follow interview with Max at bitcoin 2012 about ethical silver, zeitgeist movement, and more http://bit.ly/SFWlWj Rebuzz Reply 188% funded – 0% Follow Bitcoin 2012… $200 needed 15 followers
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| The Financial Crisis Of 2015 - A Non-Fictional Fiction Posted: 27 Sep 2012 07:22 PM PDT Via Oliver Wyman, The Financial Crisis Of 2015 John Banks was woken by his phone at 3am on Sunday 26th April 2015. John worked for Garland Brothers, a formerly British bank that had relocated its headquarters to Singapore in late 2011 as a result of what Garland's CEO had described as "irreconcilable differences" between the bank and the UK regulators. The last three years had been the most exciting of John's life. Having led the bank's aggressive expansion into emerging markets wholesale activities, he had recently been promoted to its executive committee. John picked up the phone. It was the bank's legal counsel, Peter Thompson, calling. He had dramatic news. Garland Brothers, one of the world's oldest banks, would tomorrow declare bankruptcy. As he lay there in his spacious air-conditioned bedroom, unable to return to sleep, John tried to reconstruct the events of the last four years.
Planting the seeds of failure At the beginning of 2011, the global economy was showing signs of finding a "new normal". With the exception of a few smaller troubled economies, the world had returned to positive growth, and Western stock markets had returned to their levels prior to the Lehman crisis. Banks had started lending to each other again, becoming gradually less reliant on central bank funding. Insurers had rebuilt their capital positions back to pre-crisis levels. Ireland had joined Greece in the list of peripheral Euro countries requiring a bailout, but there was a general sense that the broader contagion problems had been contained. New bank (Basel III) and insurance (Solvency II, in Europe) regulatory regimes had been introduced and were designed to avoid a repeat of the sub-prime crisis. Banks were phasing in the new tougher controls around capital, liquidity and leverage, albeit over a relatively relaxed timeframe. The Basel Committee's impact study had estimated that the largest banks needed to raise a total of €577 BN to meet the new standards, and several banks came to market in 2011 with multi-billion Euro rights issues. Beneath this relatively calm surface, however, trouble was brewing. Stakeholders in financial services firms wanted lower risk, but shareholders were still demanding high returns. Executives felt their institutions were holding more capital than they needed, and they were struggling to find investment opportunities that satisfied their shareholders' return requirements. Despite attempts by central banks to inject liquidity into the system, loan growth in Western economies had ground to a halt as consumers continued to deleverage and companies remained reluctant to invest, uncertain of the future interest rate, tax and regulatory environment. The talented and ambitious employees of Western banks found themselves under-utilised in an industry that was starting to resemble a utility. They needed to find new outlets for their creativity and drive.
Disappearing into the shadows Talent began shifting into the shadow banking sector. During the low interest rate environment of 2011, investors were desperate for alternative investments with additional yield. Assets under management in the shadow banking sector grew rapidly during 2011. Asset managers were promising "inflation busting" returns but many of the strategies were based on the short-term growth prospects of the hottest markets and often employed leverage to maximise gains. New types of specialist loan funds disintermediated the highly regulated banking sector by matching borrowers and investors directly. These funds tapped into the long-term liquidity pools of pension funds and insurance companies. Their pitch books described such investors as "advantaged holders of illiquid credit". Lacking their own distribution channels, these funds relied on outsourced origination, either through banks or networks of "hungry" agents. Credit discipline was poor. Even at this early stage, the pattern was familiar, but regulators did not intervene. Because the asset flows were global and did not have banks at their centre, no single regulatory body felt responsible.
Go East (or South) young man! Other restless Western banks and bankers moved, not into the shadows, but into the heat of emerging markets. In contrast to the anti-banking sentiment growing in the West, many emerging markets jurisdictions were still viewed as "banker friendly". At the same time, growth opportunities in emerging markets had already encouraged some banks to base their growth strategies on these markets. In early 2011, several small international banks closed down their Western wholesale subsidiaries and re-located them to Singapore or Hong Kong. Garland Brothers was the first British bank to make the move, giving up its UK base when it decided to relocate its headquarters to Singapore in late 2011. Sales of complex derivatives were once again producing a large proportion of many banks' income. Lacking an emerging markets deposit franchise, many of these Western banks started to fund their emerging markets lending activities via the wholesale markets or by tapping domestic funding sources in the West. Problems in the Eurozone meant that many European banks were paying 200-300bps above LIBOR for funding back home, and there were few opportunities in Europe to lend out such funds profitably. European banks found that lending to emerging markets banks and governments was one of the few ways of generating a positive margin over their rising cost of funds. This was part of a general trend among Western banks of moving down the credit spectrum to pick up yield. Bubble creation Based on favourable demographic trends and continued liberalisation, the growth story for emerging markets was accepted by almost everyone. However, much of the economic activity in these markets was buoyed by cheap money being pumped into the system by Western central banks. Commodities prices had acted as a sponge to soak up the excess global money supply, and commodities-rich emerging economies such as Brazil and Russia were the main beneficiaries. High commodities prices created strong incentives for these emerging economies to launch expensive development projects to dig more commodities out of the ground, creating a massive oversupply of commodities relative to the demand coming from the real economy. In the same way that over-valued property prices in the US had allowed people to go on debt-fuelled spending sprees, the governments of commodities-rich economies started spending beyond their means They fell into the familiar trap of borrowing from foreign investors to finance huge development projects justified by unrealistic valuations. Western banks built up large and concentrated loan exposures in these new and exciting growth markets. The narrative driving the global commodities bubble assumed a continuation of the increasing demand from China, which had become the largest commodities importer in the world. Any rumours of a slowing Chinese economy sent tremors through global markets. Much now depended on continued demand growth in China and continued appreciation of commodities prices. The bubble bursts Western central banks pumping cheap money into the financial system was seen by many as having the dual purposes of kick-starting Western economies and pressing China to appreciate its currency. Strict capital controls initially enabled the Chinese authorities to resist pressure on their currency. Yet the dramatic rises in commodities prices resulting from loose Western monetary policies eventually caused rampant inflation in China. China was forced to raise interest rates and appreciate its currency to bring inflation under control. The Western central banks had been granted their wish of an appreciating Chinese currency but with the unwanted side effect of a slowing Chinese economy and the reduction in global demand that came with it. Once the Chinese economy began to slow, investors quickly realised that the demand for commodities was unsustainable. Combined with the massive oversupply that had built up during the boom, this led to a collapse of commodities prices. Having borrowed to finance expensive development projects, the commodities-rich countries in Latin America and Africa and some of the world's leading mining companies were suddenly the focus of a new debt crisis. In the same way that the sub-prime crisis led to a plethora of half-completed real estate development projects in the US, Ireland and Spain, the commodities crisis of 2013 left many expensive commodity exploration projects unfinished. Judgement day for sovereigns The final phase of the crisis saw the US, UK and European debt mountains emerge as the ultimate source of global systemic risk. Long-term sovereign yields had been gradually rising during the last few years, but analysts had assumed that this was because of increasing inflationary expectations. With the advent of the new commodities lending crisis, rising sovereign yields were suddenly being attributed to the deteriorating solvency of the sovereigns. Their high debts, combined with increasing refinancing costs, made it apparent that the debt burden of many developed world sovereigns was unserviceable. It was judgement day for sovereigns. Those sovereigns that were highly indebted and needed to roll over large amounts of short-term debt were forced to either restructure their debts or accept bailout money from other healthier sovereigns. This period, which spanned 2013 to 2015, was the single biggest rebalancing of economic and political power since World War II. The final irony in the tale was that the large sovereign exposures that the banking system had built up as a result of the new liquidity buffer requirements left the banking system, once again, sitting on the edge of the abyss. Our unemployed protagonist As John ran through these facts it became clear to him that not enough had been learnt from the sub-prime crisis. Bankers had gone chasing the next rainbow only to find another pot of toxic waste rather than a pot of gold. The new wave of regulations had proved ineffective at stopping another bubble from forming. John was struggling to understand what he should have done differently. Heads would certainly roll. But who was really to blame this time around?
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| Greece, Tell Brussels “To Take A Hike” And Let The Troika Bail Out The ECB Instead Posted: 27 Sep 2012 06:56 PM PDT Wolf Richter www.testosteronepit.com Awful as Greece’s GDP has been, it doesn’t do justice to the economic fiasco. Take new vehicle registrations: in August, they plunged 46.7% from prior year. Only 3,886 new vehicles were sold. A collapse of 80% from August 2008 at the cusp of the crisis. For the first eight months of 2012, sales were down 42% from prior year, and 65% from 2008. People have stopped buying new cars. And not just cars.
Ten years ago, he built a house in Southern Greece not far from Sparta—”with many fine workers, most of them Albanians and some excellent Greeks as well, but it took a long, long time.” The house is surrounded by citrus and olive groves. In the distance, mountains and the sea. He writes:
Though the gridlock might be thinning out. Over the last two years, 68,000 businesses have shut down; another 63,000 might succumb next year, predicted Vassilis Korkidis, president of the National Confederation of Hellenic Commerce (ESEE). It infected the busiest shopping streets in Athens: on Panepistimiou, 34.7% of the shops were shuttered; on Akadimias, 42%! So a new austerity package must be devised for the Troika—the bailout and austerity gang from the EU, the IMF, and the ECB—in return for more money so that Greece could service its debt that is rotting in some drawer at the ECB. As the coalition government was fighting over the provisions, a 24-hour general strike paralyzed parts of Greece on Wednesday. In Athens, 50,000 - 100,000 demonstrators streamed through the streets, shouting “enough is enough.” Yet on Thursday, the leaders of the three coalition parties apparently agreed on the outlines of the austerity package, to be implemented in 2013 and 2014. It would include tax measures that might be applied to 2012 incomes. They’re even trying to go after the well-represented freelance professionals such as engineers, doctors, and architects. But my acquaintance remained cynical:
As people refuse to pay taxes, the government is slowing disbursements. State-owned institutions have run out of money, and so have companies and individuals. And they stopped paying their bills. The ensuing circular absurdities push the country deeper into fiasco. For example, the state-owned Social Insurance Foundation (IKA), itself out of money, hasn’t paid Saronikos Gulf Kidney Dialysis Center on Aegina Island in months for the treatment of its patients. So the center hasn’t paid its staff in six month, and couldn’t even pay its electricity bill. On Wednesday, Public Power Corporation (DEI), fighting its own liquidity crisis, cut power to the center. Instant media uproar. And power was restored. But still, the money hasn’t started flowing. “Greece is a victim of the monetary union,” explained Czech President Vaclav Klaus. “It would be much better for them not to be in the straightjacket. It would be a victory for them.” If the Greeks told the Troika “to take a hike,” as David Stockman said in his incomparable interview [The Emperor Is Naked], it would solve a host of problems. Greece would return to the drachma and regain control over its printing press. Troika members, and particularly taxpayers in Germany, who’re reluctant, very understandably, to throw good money after bad in Greece, would then have to look at the ECB. It owns most of the now worthless Greek debt. The Troika could then bail out the ECB directly rather than via Greece. It would be closer to home, and more honest—though it still wouldn’t solve the problem of taxpayers bailing out investors. And then new money would start flowing because Greece would still be a member of the 27-nation EU and of NATO. That’s the difference between Greece and Argentina. Greece could restructure its government and society, or it could slide back into its old ways of doing things. It would be up to the Greeks, not the Troika. It should look at Argentina, however. A perfect example of how not to run a post-default economy. And its policies are now taking on desperate and ugly forms. Read.... Not An Effective Capital Control, Import Control, Or Tax Measure – But An Effective People Control, by stilettos-on-the-ground economist Bianca Fernet. And here is Jan Bennink, a Dutch columnist and self-described anti-EU populist, who wonders, “Is there anything more frightening than bureaucrats with a dream?” Read.... The New Great Dictators Are Gaining Momentum In Europe.
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| How The Fed Crushed China's Ability To Join The Ease-Fest Posted: 27 Sep 2012 06:30 PM PDT It will not come as a surprise to anyone who has spent any time reading Zero Hedge (here, here, and here very recently) but now yet another one of our 'crazy fringe blog' non-consensus ideas - the fact that China is cornered by inflation concerns and unable to ease aggressively - has now been confirmed by none other than the Bank of China and Bank of Korea themselves. As the WSJ reports, "The rise in global liquidity could lead to rapid capital inflows into emerging markets including South Korea and China and push up global raw-material prices." The latest round of easing by the U.S. will increase inflationary pressures for emerging-market economies, Mr. Chen said. "This contributes to a monetary-policy dilemma for Chinese authorities", he added. While markets have looked for signs of more forceful action by China's leaders to rekindle growth, some officials attribute the government's caution to fears of reigniting inflation. This confirms previous comments by the PBoC that "A domestic policy may be optimal for the U.S. alone. However at the same time it is not necessarily optimal for the world," he said at the time. "There is a conflict between the U.S. dollar's domestic role and its international settlement role."
Via WSJ: Harsh Words From Beijing, Soeul
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| “GOLDRUNNER: SUPER FRACTAL GOLD- 45 degree rise” Posted: 27 Sep 2012 06:30 PM PDT We are at the point in the paper currency cycle where for the price of Gold it is risk off, Fed management out of the way, and time for Gold to go into free-rise to start to devalue the huge debts in earnest and to balance the budget.* As Gold rises in a parabola on the arithmetic chart, each leg runs higher at a more acute angle. Jim Sinclair's comment- "This line is no line in sand, but rather it is an event horizon that every reader should print out and paste on the wall behind their trading platform. However they will not. In the heat of emotion the gold community will be selling their children to buy gold as it over runs $4500." Now, we have reached the point in the cycle where Gold is in a parabolic rise on the Log Chart, as the Dollar goes through parabolic printing.* In Gold's SuperBull, the 45 degree angle climb comes off of a "tilted base or channel" which gives the rise a more vertical flare. *In the next chart we can see that in the 2005/ 2006 (BLACK DOTTED LINES...
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| Gold Registers Highest Close Since February Posted: 27 Sep 2012 06:14 PM PDT courtesy of DailyFX.com September 27, 2012 02:49 PM Daily Bars Prepared by Jamie Saettele, CMT Gold’s recent decline was nearly entirely retraced today. In fact, the yellow metal registered its highest daily close since the end of February. The advance is no doubt quite mature but the 3 wave decline from 1787.35 suggests that higher prices are in order. Levels of interest in the coming days as gold attempts to extend from the 61.8% of the decline from the record high are from 1790 to 1820. LEVELS: 1752.91 1761.26 1772.10 1790.55 1807.19 1819.05...
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| Visualizing The ECB's 'Solar-Systemic' Impact On The Eurozone Posted: 27 Sep 2012 05:51 PM PDT Here's everything worth knowing about the euro-system in one huge infographic.
Source: GoldMoney.com
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| Posted: 27 Sep 2012 05:33 PM PDT September 27, 2012 [LIST] [*]As the war drums beat louder, The 5 asks why... gets more than we bargained for... [*]How to make $25,000 in 20 minutes... and ride in your own private jet... it's easy: Win an election! [*]A curious correlation: Fed balance sheet and Chinese reserves vs. the upwardly mobile gold price... [*]Pushing on a "golden string"... why the "wealth effect" isn't all it was once cracked up to be... the case for $2,200 gold...and why it's closer than you think.. [*]Reader takes a wrong turn, ends up in the "most violent city in America"... one cheer for Honduras!... Hitler -- the clothing store, not the maniac -- explained... and more! [/LIST] Can you hear it? The drumbeat of war continues. Maybe it's just loud for us because we're so close to the belly of the beast: Washington, D.C. "There are three ways war between U.S. and Iran can begin," Trita Parsi of OpenDemocracy.net reports. "Through a deliberate decision by e...
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| A Chinese Mega City Is On The Verge Of Bankruptcy Posted: 27 Sep 2012 04:29 PM PDT While most "developed world" people have heard of Hong Kong and Macau, far fewer have heard of China's province of Guangdong, which is somewhat surprising. With over 100 million people, a GDP of nearly $1 trillion - the biggest of all Chinese provinces, this South China Sea adjacent territory is perhaps China's most important economic dynamo. One of the key cities of Guangdong is Dongguan, which as the map below shows is a stone's throw from Hong Kong, has a population of nearly 10 million, and has long been considered Guangdong's boomtown and one of China's richest cities.
One notable feature about Dongguan is that it is home to the New South China Mall, which is the world's largest. It also happens to be mostly empty ever since it opened in 2005. Which perhaps is a good segue into this story. Because while for the most part the city of Dongguan has been a story of prosperity, a wrinkle has appeared. According to the South China Morning Post, which cites researchers at Sun Yat-sen University, this city is now on the brink of bankruptcy. Make that a big wrinkle. The irony, of course, is that as always happens, while everyone has been expecting the muni collapse to take place in the good old US of A, it may be about to strike with a great vengeance and furious anger none other than that credit black hole, in which nobody really knows who owes what to whom, China. How is it possible that a city which as the SCMP describes was once a backwater farm town until the late 1980s, and then as China boomed was transformed into one of the most important hi-tech manufacturing centres in the world, and about which an IBM vice-president famously said a mere 15-minute jam on the expressway there would be enough to cause worldwide fluctuations in computer prices, could be facing bankruptcy? The answer is an absolutely fascinating story, one which for the first time exposes what could be the most sordid underbelly of the broken Chinese shadow credit system, and which demonstrates very vividly just what the hard Chinese landing will look like. It also explains precisely what the real creditor-debtor relationships are like in a country in which the banks are the equivalent of government entities, and which do little if any retail crediting in a time when the government is set on contracting the money supply at the wholesale, if not at the bank level (recall the now daily reverse repos conducted by the PBOC). Most importantly it reveals the monetary dynamic "on the ground" - one which is vastly different than the one in the "western world." The question is whether the story of Dongguan is an isolated one. Alas, just like there is never one cockroach, we are confident that many more such provinical centers are currently undergoing the same challenges, which if unresolved would lead to a tsunami of municipal, county and city level defaults, that would leave China in ashes. Ironically, Meredith Whitney may have had the municipal default theme right. She was just envisioning the wrong continent... From SMCP: Boom city Dongguan faces bankruptcy Dongguan's derelict factories and huge deficits send chilling warning to a China in slowdown After three decades of spectacular growth, Guangdong's boom town of Dongguan is on the brink of bankruptcy. Up to 60 per cent of its villages are running up deficits and will soon need a bailout from the township, researchers at Sun Yat-sen University have discovered. It is a dramatic turn of fortune for Dongguan - one of the richest cities in China - and could foreshadow a wider fiscal crisis as the country's economy cools. Local government debt hit 10.7 trillion yuan (HK$13.16 trillion) nationwide at the end of 2010, equivalent to about 27 per cent of gross domestic product. Credit rating service Moody's estimates the actual figure could be about 14.2 trillion yuan. Bai Jingming, a senior researcher at the Ministry of Finance, estimated in 2009 the total debt of village authorities could total 10 per cent of the country's GDP, but there is no official data. Bai said many village chiefs he interviewed had no idea how much debt they had. Yet their failings could bring serious political and financial instability at higher level government right down to the grass roots. Experts have found Dongguan's village debt woes stem from two factors: a tightly-bound landlord economy, plunged into crisis by failing factories in the global downturn, and political pressure on local village chiefs to pay generous "dividends" to voters under the immature rural election system. "The financial problems of the villages are much more serious than expected," said Shao Gongjun, the owner of a printing company who blogs on Dongguan's economy. Shao attributed much of the crisis to the local authorities' dependence on rental incomes. A backwater farm town until the late 1980s, as China boomed Dongguan was transformed into one of the most important hi-tech manufacturing centres in the world. An IBM vice-president famously said a mere 15-minute jam on the expressway there would be enough to cause worldwide fluctuations in computer prices. As industry thrived, the population swelled from 1.8 million in the '80s to more than eight million. Most of the peasants cashed in and built matchbox homes on their land, letting the flats to migrant workers. Village authorities leased community land to factories and collected rent as their main source of income. This worked perfectly until the recent downturn. Shao said many factories had either closed or moved out over the past five years to inland provinces with lower costs. The number of Hong Kong-backed factories has dropped by 15 per cent since 2007. As factories and migrant workers left Dongguan, rents nosedived. "I'm so worried that before long I will lose my tenants and the flats would be left deserted," said a 61-year-old woman surnamed Luo. She put together two million yuan from her life savings 10 years ago and with bank loans built a six-storey apartment building in Luowucun in Zhangmutou county. Her family occupied the first floor and let the rest out to migrant workers. Luo used to collect about 15,000 yuan a month in rent - nearly 10 times what an average worker earned. But rents have dropped by a third since 2007. The fall in rental values forced 60 per cent of the 584 villages in Dongguan into budget deficits, the study by Professor Lin Jiang of the finance and taxation department of Lingnan College at Sun Yat-Sen University found. Lin's estimate is based on a study of 30 villages in relatively well-off counties, such as Tangxia, Houjie and Humen, in May. The figure may not reflect the whole picture, but it gives a good snapshot of the problems authorities face. "They are in deficit because their incomes are shrinking while their expenses are going up," Lin said. This is an unexpected sideeffect of China's fledgling grass-roots democracy. While competitive elections are still absent at almost all levels of government, Beijing has started to let villages choose their leader through universal suffrage. These elections have been getting increasingly competitive, and candidates often promise to pay generous "dividends" to villagers to attract votes. "In some rare cases, the leader-elect promised to give each household 10,000 yuan per month," Lin said. The money would come from the village community "investment" - effectively, the rent they collected from factories. Lately, village chiefs have found it difficult to fulfil such election pledges. But instead of reneging on their promises and sparking the anger of villagers, they turn to the rural credit co-operatives - the de facto local banks - for short-term loans at interest rates as high as 30 percentage points. Banks are willing to lend, because they know that the township government would have to bail villages out if things go wrong. "Some village leaders are now really worried that the bank may come to call in the loans," Lin said. "If the villages default, the burden would be transferred to the county or the township government." The Dongguan government is in poor shape to handle a crisis. Its GDP growth slowed to 2.5 per cent in the first half of the year. The average growth in the past eight years was about 11 per cent. Xu Jianghua, Dongguan's party secretary, urged villages last month to stop raising money to pay dividends. Few took heed. Village chiefs may argue paying dividends are not the sole cause of their debt. They also have to pay for local fire and police services - even though these are supposed to be the local government's responsibility. For years, the township government underinvested in such services, knowing they would be taken care of by the cashed-up village authorities. Eddy Li, president of the Hong Kong Economic and Trade Association, said in some counties police would refuse to investigate a crime unless it involved more than 20,000 yuan. Shao estimated Zhangmutou county authorities alone have accumulated a total of 1.6 billion yuan in debt. Annual revenue is only 600 million yuan. Shao said the Dongguan government needs structural reform to end its reliance on rental income. He proposed the township give residency to migrant workers so they can contribute more to the local economy. "Without a radical change in the social structure, the economic transformation will never succeed," he said.
And some pictures from the city that may soon be the first cockroach observed once the light was truly shone:
A row of empty shops that have been idle for more than nine months – a common sight in what was once a hi-tech heartland. Photo: May Tse
Commercialism came storming into rustic residential areas. Photo: May Tse
Boarded up shops in the suburbs of Zhangmutou. Photo: May Tse
Many roads but few cars in the once desirable district of Zhangmutou, a favourite with expats and retirees. Photo: May Tse
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| Posted: 27 Sep 2012 04:14 PM PDT September 27, 2012
"Through a deliberate decision by either Washington, Tehran or Tel Aviv; through a naval incident in the Persian Gulf that escalates out of control; or through the gradual elimination of all other policy options — the dead-end path to war. "Of these three, it is the last one that is most worrisome and likely. "The Obama administration is not seeking war with Iran," Parsi goes on, trying to excuse the president. "Obama's push back against the Netanyahu government's campaign for war with Iran and the harsh statements from the U.S. military against such reckless adventurism demonstrates this lack of desire for war." Heh. Yeah. OK. "The Netanyahu government is unlikely to initiate war," he also writes, "in spite of its never-ending threats… Israel draws a lot of benefits from threatening war, but actually starting one is an entirely different matter with many unpredictable repercussions." So that leaves Iran, then. Full disclosure: We're not sure there's any value in trying to follow the breadcrumbs here in The 5. You may have to bear with us. But as we have parsed history in works like Empire of Debt, we'd be remiss if a war actually broke out right in front of us and we didn't try to understand why… however foolish the justifications for war might be. One thing is fairly obvious when you dig into the polemics of the situation… the escalation is no one's fault. Ergo, it must be everyone's.
Patrick Clawson, director of research at Washington Institute of Near East Policy (WINEP), doesn't think that's such a bad idea. "If, in fact, the Iranians aren't going to compromise," Clawson said in a recent luncheon address, "it would be best if someone else started the war. "I frankly think that crisis initiation is really tough," Clawson comments on the challenge of getting such a war under way… and it's very hard for me to see how the United States… uh… president can get us to war with Iran." "Before that, Clawson listed all the conflicts in which the U.S. didn't become involved until they were attacked," Business Insider goes on, "emphasizing that a false flag was needed each time for conflict to be initiated. "One can combine other means of pressure with sanctions," Clawson said. "I mentioned that explosion on Aug. 17. We could step up the pressure. I mean look, people, Iranian submarines periodically go down, someday one of them might not come up, who would know why? We can do a variety of things if we wish to increase the pressure… We are in the game of using covert means against the Iranians. We could get nastier." WINEP's website describes the outfit as a "key organization in the Israel lobby," founded in 1985 by leaders of the American Israel Public Affairs Committee (AIPAC) to "provide 'objective' research in 'pro-Israel' analysis and commentary." Objective. Right.
That's how influence gets peddled. American politics at its finest.
Now Washington has had a sudden change of heart… and The Guardian's Washington reporter says the pro-MEK campaign "has seen large sums of money directed at three principal targets: members of Congress, Washington lobby groups and influential former officials," including the GOP congressman who chairs the House Intelligence Committee, Mike Rogers. Is it because MEK have been good lately? Not exactly, MEK has actually intensified its terrorist and other military activities over the last couple of years. In February, NBC News reported, citing U.S. officials, that "deadly attacks on Iranian nuclear scientists are being carried out by [MEK]" as it is "financed, trained and armed by Israel's secret service." Glenn Greenwald reports from The Guardian on "five lessons from the delisting of MEK as a terrorist group:
Yet here we go.
Oil is showing signs of life, jumping up nearly $2, to $91.88. Silver is up 64 cents, to $34.63… and gold has ascended to $1,777.80, up $24.50. Regarding the price of gold, we were forwarded a curious chart. It depicts the rise in gold price versus the Fed's balance sheet + China's dollar-based reserves.
"QE3 will likely be insufficient," Adam Parker, Morgan Stanley's chief equity strategist told some talking heads on CNBC yesterday, "to significantly boost equity markets and we wouldn't be at all surprised to see the Fed dramatically augment this program (i.e., QE4) before year-end, particularly if economic and corporate news continue to deteriorate as they have over the past few weeks." "If the recovery continues to disappoint," Goldman Sachs economists say, "additional steps are possible." Their prediction? QE3 of up to $2 trillion and "an increase in the pace of asset purchases as well as further changes in Fed communications." If the correlation in the chart above holds… gold should climb to north of $2,200…
At one point last fall, we were invited on the local NPR station to debate the merits of a study published by a professor from Harvard who found a widening wealth gap to be disturbing. The two other guests were professors of social justice from some local colleges. The interview was a failure. We couldn't muster the disgust either guest wanted… nor could we justify or defend the trend. Yesterday, however we think we discovered one reason why growing income disparity may actually matter. First, let's review what The Huffington Post had to say about the new findings:
"Likewise," HuffPost continues, "two historians concluded last year that income inequality today is worse even than it was during the Roman Empire. The study found that the top 1% of Ancient Roman earners controlled 16% of the Empire's riches, compared to the top 1% of American earners today who control 40% of the country's wealth." Citing The Atlantic's Jordan Weissman, the HP then hedges their bet: "Such studies should be taken with a grain of salt, given that making historical economic analyses is like 'making a messy collage, collecting the disparate bits and pieces of information we have available and fashioning them into a coherent picture.'" Not that The Atlantic would know anything about that:
and "fashioning them into a coherent picture." Heh. We couldn't resist.
However, with increasing income disparity… i.e., declining middle class… the beneficiaries of the "wealth effect" are slowly disappearing. "The problem with Bernanke's wealth effect thesis," writes Denis Ouellet in John Mauldin's Outside the Box e-letter, "lies with the new reality in America. Income and assets have lately been so significantly redistributed that only a tiny few actually feel a wealth effect from rising equity prices. Here are some sad facts:
"Keep in mind that it is these wealthy people who run American corporations, keeping them lean and mean and flush with cash. They remember how profits literally disappeared in 18 months in 2007-08. They remember how financial markets totally froze in 2008. They see the humongous budget deficits and the debt piling on, and the not-so-distant day of reckoning. They realize that all the QEs in the world can't offset inept and irresponsible politicians on either side of the Atlantic. Yet they are the ones targeted by the so-called wealth effect! "Call that pushing on a golden string."
The 5: Your guess is as good as ours. If you do find someone who can define it, please let us know.
"The scene was something you know exists in your mind, yet the reality is stunning anyhow. Young adolescent prostitutes, people asleep on the sidewalks, truly crumbling buildings like something out of a Dickens novel. Idle adults crowded onto every set of front steps, and, without exaggeration, every eye followed me, and not with friendly interest. "The place looked like pictures you see of war somewhere else. Yet I have trouble seeing it as a sign of the times. Camden's been a place no sane person visits for 40 years. It is a great example of how those kinds of problems can't be solved by throwing money at them, though. "You can drive over the Ben Franklin and count the dollars both public and private that have been 'invested' there, millions and millions and millions, in the name of 'turning the city around,' yet things remain the same." The 5: What… you tink someone stole da money? Hah? [Best read with Joe Pesci in mind.]
"At the time, I began reading some of the Honduran newspapers on the Internet and discovered that someone had forgotten to put an impeachment section in their constitution, so expulsion was the only solution after he ordered the army to distribute illegal ballots. The chief of staff refused. The president fired him. The Supreme Court put him back in charge of the army and the president fired him again. The legislature met and sent someone to escort him to Costa Rica. "I added up the numbers, and at least 93% of the president's party had voted in favor of the expulsion. The ballots that he wanted to have distributed illegally were to hold a constitutional convention so that he could be re-elected. It was illegal to make this change at that time. As nearly as I know, there have only been two occasions when U.S. presidents defied the Supreme Court, once on Cherokee land claims and once on FDR's New Deal. "I believe that they did hold a constitutional convention recently, but restoring Manuel Zelaya to power was not on the to-do list." The 5: Hmnnnn…
"In reference to the man who decided to name his store Hitler, gimmick or not (it probably is), the swastika is a religious symbol to Hindus. It was an ancient Vedic symbol that means good luck, prosperity, good health. Adolph Hitler absconded the swastika and perverted it for the Third Reich, as well as the term Aryan, which is a common name in India. He had an obsession with India and even sent teams of archaeologists there to dig up artifacts. Just an FYI. "I'm not condoning what this store owner did, but there is a chance he was unaware of the reference. Hey, in a country of 1.3 billion people, there are bound to be some idiots. Look at how many we have in America with just over 300 million people!" The 5: OK. Cheers, Addison Wiggin The 5 Min. Forecast P.S. A quick note from our publisher, Joe Schriefer: Make sure you check your e-mail box for a note from Andrea Michsinki, our customer service director. Inside that message you'll see how to claim a loyalty reward of $1,044. The reward is available to all "paid up" Agora Financial readers. But only until midnight tonight. Along with a growing reward (you'll see how it goes from $1,044 this year up to $4,094 each additional year), you'll also claim access to all of Chris Mayer, Byron King, Patrick Cox, and Jim Nelson's best actionable ideas. Wondering the best way to play the shale boom? How about the best way to generate income in a zero-interest rate world? Or what about cashing in from the amazing new technologies set to transform everything from biotech to computing? It's all yours with our rewards program. That program, however, expire tonight. If you missed Andrea's message, click here for the urgent details. Don't worry, this isn't one of those long promotion videos.
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| Posted: 27 Sep 2012 04:10 PM PDT We are at the point in the paper currency cycle where for the price of Gold it is risk off, Fed management out of the way, and time for Gold to go into free-rise to start to devalue the huge debts in earnest and to balance the budget. Read More...
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| Tom Cloud: Silver is the Hot Thing Now Posted: 27 Sep 2012 03:38 PM PDT For the past couple of years, bullion dealer Tom Cloud has been the precious metals guru on the always-interesting and highly-recommended FTM Daily radio show. He's been in the business for 35 years, can separate the legitimate ... Read More...
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| Reuters - Canaccord Closes Branches, Aims for "Break Even" Performance Posted: 27 Sep 2012 03:31 PM PDT Sheds 16 branches, retains 16 branches * Cuts 35 advisory teams, leaving it with 180 teams * Says should now operate on "break-even" basis Reuters reported Monday: "TORONTO, Sept 24 (Reuters) - Canadian wealth management firm Canaccord Financial Inc said on Monday it will close 16 underperfoming branches and cut 35 advisory teams in an attempt to reduce costs so that it can break even on an operating basis. The closing of the branches leaves the securities dealer, one of the few independent firms left in Canada's competitive wealth management space, with another 16 branches that will remain open. It said it will retain about 180 advisory teams. "This initiative will allow us to make additional investments in markets where we see the most opportunity for future growth," John Rothwell, president of Canaccord Wealth Management's Canadian unit, said in a statement. Canaccord said the 16 branches it chose to close accounted for just 16 percent of the firm's C$13.1 billion ($13.4 billion) in client assets in the Canadian wealth management division, while the 16 branches to remain open accounted for the rest. "After these branch reductions, it is expected Canaccord Wealth Management will operate on a near break-even basis in current market conditions. All branches remaining open have the capabilities to be consistently profitable and Canaccord is committed to their continued success and growth," the company said in a statement. It also announced on Monday it would add to its British wealth management platform with the purchase of the wealth management business of Eden Financial Ltd, a boutique private client investment management business, for C$20.3 million in cash. The purchase will result in a C$5.2 million in restructuring charges in the third quarter. With global financial market turmoil hurting business, Canaccord said in August it had a first quarter net loss of C$20.6 million, or 24 Canadian cents a share. That compared with a profit of C$13.2 million, or 16 Canadian cents a share, a year earlier. Excluding one-time amortization costs and other items, the company reported a loss of C$16.3 million, or 20 Canadian cents a share. The Toronto-based financial services firm also halved its quarterly dividend payout in August." Source: Reuters http://in.reuters.com/article/2012/09/24/canaccord-idINL1E8KO76Y20120924 Comment: This is a sign that the 16-month bear market and buyer's strike has been brutal for the brokerage community. It is also the kind of news story we tend to see at bottoms rather than at tops. Recall our commentary in Subscriber Charts that the Funds were having forced sales and redemptions from April to June? We see this as the aftermath or fallout of that difficult period.
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| The Gold Price Jumped $26.90 to $1,777.60 Silver also Rose Correction Still Likely Posted: 27 Sep 2012 03:24 PM PDT Gold Price Close Today : 1777.60 Change : 26.90 or 1.54% Silver Price Close Today : 34.595 Change : 0.718 or 2.12% Gold Silver Ratio Today : 51.383 Change : -0.295 or -0.57% Silver Gold Ratio Today : 0.01946 Change : 0.000111 or 0.57% Platinum Price Close Today : 1645.90 Change : 11.50 or 0.70% Palladium Price Close Today : 634.25 Change : 9.55 or 1.53% S&P 500 : 1,446.64 Change : 13.32 or 0.93% Dow In GOLD$ : $156.78 Change : $ (1.59) or -1.00% Dow in GOLD oz : 7.584 Change : -0.077 or -1.00% Dow in SILVER oz : 389.69 Change : -6.26 or -1.58% Dow Industrial : 13,481.40 Change : 67.89 or 0.51% US Dollar Index : 79.55 Change : -0.269 or -0.34% The Moneychanger had to take his wife to the heart doctor today where she got an A++ report. He sends this message about today's markets: The silver and GOLD PRICE pulled on their 7 league boots today. The SILVER PRICE jumped 71.8 cents to 3,459.5c and Gold jumped $26.90 to $1,777.60. Jubilate moderately, y'all. Gold slammed into $1,780 resistance once again bloodying heads against the wall. Silver didn't quite reach 3500c. Today's action in gold looks like a corrective wave. In very strong markets this B wave of a correction reaches as high as the previous high and sometimes higher before falling off again. Be careful. Jubilate moderately. U.S. index hit a solid wall at 80 and oozed down. Lost 26.9 basis points today to 79.552. The Dollar is going nowhere, but it's loss sent jubilation into stocks and gold. DOW gained 67.89 to 13,481.4, S&P 500 gained 13.32 to 1,446.64. Stocks look no better today than they did yesterday. The Moneychanger will return tommorow, God willing. 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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| Gold Seeker Closing Report: Gold and Silver Gain About 2% Posted: 27 Sep 2012 02:21 PM PDT Gold saw decent gains in Asia before it fell back to $1752.30 in London, but it then rallied to as high as $1780.15 in New York and ended with a gain of 1.48%. Silver surged to as high as $34.74 and ended with a gain of 2.15%.
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| Posted: 27 Sep 2012 02:19 PM PDT We are at the point in the paper currency cycle where for the price of Gold it is risk off, Fed management out of the way, and time for Gold to go into free-rise to start to devalue the huge debts in earnest and to balance the budget. As Gold rises in a parabola on the arithmetic chart, each leg runs higher at a more acute angle.
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| Gold Purchases: Time Them with Technical Analysis Posted: 27 Sep 2012 02:17 PM PDT Technical Analysis is mathematical analysis of the market based on price action, but not the fundamentals of supply, demand, costs of production, and hundreds of other important factors (fundamental analysis). Many people will tell you Technical Analysis does not work. I disagree. If you understand its limits, it works quite well.
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| Is a Correction in Gold Underway? Posted: 27 Sep 2012 02:14 PM PDT Gold prices fell more than 1 percent Wednesday pressured by a stronger dollar and weaker stocks markets along with profit-taking. Gold struggled to maintain gains after hitting six and a half month highs this month after ... Read More...
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| Gold Daily and Silver Weekly Charts - Negative Returns on Money Market Funds Posted: 27 Sep 2012 02:11 PM PDT |
| [KR346] Keiser Report: Boom & Bust Vicious Cycle Posted: 27 Sep 2012 02:10 PM PDT We discuss punk rock 'Tall Paul' giving the two finger salute to Ben Bernanke's QE3 and gold adjusting for zero growth, yield, velocity and confidence. In the second half of the show, Max Keiser talks to the author of Paper … Continue reading
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| A Faltering Global Economy, Neo-Keynesians & $15,000 Gold Posted: 27 Sep 2012 01:31 PM PDT  Today legendary value investor Jean-Marie Eveillard told King World News, "There are people who have figured out that in view of the enormous amount of money printing, which has taken place over the past three or four years, a price of $15,000 an ounce for gold would not be absurd." Eveillard, who oversees $60 billion, also said, "I'm not sure they are right, because I have not studied how they came to that conclusion, but I think what is true is there has been gigantic money printing, which will of course help the price of gold." Here is what Eveillard had to say: "The global economy seems to be weakening. It's weakening in the US, Europe, China, in Asia, and this is in spite of the stimulus. Asia is suffering because Japan continues to do poorly. Again, this weakness is apparent despite the fact that Neo-Keynesian policies are in place. There is enormous fiscal stimulus associated with gigantic budget deficits."
This posting includes an audio/video/photo media file: Download Now |
| Posted: 27 Sep 2012 12:24 PM PDT Already it Seem More QE is in the Offing 27-Sep (USAGOLD) — Gold pushed to new all-time highs against both the euro and the Swiss franc today, underpin by resurgent concerns that ECB efforts in recent weeks to mitigate the persistent eurozone crisis were at best a short-term delaying action. The new record highs now stand at €1380.38 and CHF1670.16, respectively. The rise in civil unrest in Spain and Greece this week is evidence that nothing has really changed in the eurozone, even with the ECB's pledge to buy an unlimited amount of periphery debt. The worsening of the eurozone debt crisis in over the past year, kept gold in euro terms relatively close to the record high. And of course, with the Swiss franc now pegged to the euro; as goes the euro relative to gold, so goes the franc. There seems to be a growing consensus, particularly in light of today's downward revision to US Q2 GDP and the plunge in durable goods orders in August, that central banks are likely to have to do even more, beyond the rather unprecedented measures they just recently announced. Further fiat currency debasement will tend to be gold positive. Yesterday, the Bank of Japan's Takehiro Sato said they "won't hesitate in taking additional monetary easing steps." Later in the day, a MarketWatch article said that some Fed watchers believe the FOMC will announce additional outright Treasury purchases when it meets in early-December. So while, QE3 was just announced 2-weeks ago — and it was a big deal — there already appears to be growing acknowledgement that it simply wont be enough.
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| Strikes Halt 39% of South Africa's Gold Production Posted: 27 Sep 2012 12:06 PM PDT "The resolution of JPMorgan's super-concentrated short silver position remains to be seen...whether they ever speak up about it or not." ...
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Hedge funds are the most bullish on silver in seven months and investors' holdings are expanding toward a record on speculation the metal will outperform gold as central banks seek to boost growth.
Can you hear it? The drumbeat of war continues. Maybe it's just loud for us because we're so close to the belly of the beast: Washington, D.C.
Meh."Iranian submarines periodically go down… someday one of them might not come up."
We're still trying to make sense of it. One interesting feature: When the Fed and China starting pairing back simultaneously, the gold price breaks out ahead of the curve… and then corrects. Only to start rising again when QE began again in earnest…
The Atlantic: "a messy collage, collecting the disparate bits and pieces of information"
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