Gold World News Flash

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• IMF keeps pretending it had to sell gold to help poor countries. ...
• TFMR Podcast #29 – Patrick Heller of Liberty Coin Service
• Gold Seeker Weekly Wrap-Up: Gold and Silver End Near Unchanged on the Week
• Gold Close To A Major Breakout Which Will Send It To $1,900+
• Gold Still Stuck near $1785 - $1800
• BRIC Hallucination: China Won’t Be Engine of New World Order, nor Russia, nor India
• Finding the Ultimate Bug Out Property or Survival Retreat
• Gold Glitters
• The Pauperization Of Japan
• Silver Demand & Performance Analysis With Hecla Mining CEO
• By the Numbers for the Week Ending September 28
• The Silver and Gold Price Have Begun their Next Leg Up that will Carry Gold Above $4,000 the Current Correction will be Short Lived
• Precious Metals Shine in Q3
• Why You Shouldn’t Vote… And Other Touchy Subjects
• DOILLAR MISBEHAVING
• Guest Post: Welcome To The Era of 'Ugly' Inflation
• FAKE PAMP SUISSE Tungsten Filled Gold Bars found in NYC. Is your gold bullion real?
• Gold and Silver Disaggregated COT Report (DCOT) for September 28
• Yuan hits a record — and the Chinese can thank the U.S.
• Judge throws out CFTC's position limits rule
• John Stephenson's Predictions for Avoiding an Economic Crash
• Gold And Silver Lead Everything Week-, Month-, Quarter-, & Year-To-Date
• Gold Daily and Silver Weekly Charts - Not Much of a Pullback Yet
• Silver Miners ETF
• How Oliver Wyman Manipulated The Spanish Bank Bailout Analysis
• COT Gold, Silver and US Dollar Index Report - September 28, 2012
• '2016: Obama's America' Filmmakers Claim Organized Disinformation Campaign
• Gold Sets Records in Euros and Francs on Currency Concerns
• LGMR: Gold in Euros Sets New High as Crisis "Escalates" and Spain "Lays Groundwork" for Bailout
• Von Greyerz sees wealthy buying gold and moving it outside banking system

IMF keeps pretending it had to sell gold to help poor countries. ... Posted: 28 Sep 2012 11:07 PM PDT ... as if its member central banks aren't in the business of just printing money. * * * IMF to Use Windfall Gold Profit for Loans to Poor Members By Sandrine Rastello Bloomberg News Friday, September 27, 2012 http://www.bloomberg.com/news/2012-09-28/imf-to-use-windfall-gold-profit... WASHINGTON -- The International Monetary Fund said today it agreed to distribute $2.7 billion in windfall profits from gold sales to subsidize loans to poor countries. The IMF's 188 members will receive a payment in proportion to their weight within the institution, the IMF said in an e-mailed statement today. As a pre-condition, countries must give assurances that they'll make at least 90 percent of the $2.7 billion available to a trust fund that lends to low-income countries at zero interest rates. ... Dispatch continues below ... 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It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata "The strategy endorsed today by the executive board ensures the IMF is better positioned to help our low-income members absorb future shocks and underpin their efforts to achieve stronger and sustainable economic growth," IMF Managing Director Christine Lagarde said in the statement. The gold sales took place in 2009-2010 as part of the fund's plan to shore up its finances. It brought in about $3.8 billion more than expected because of higher than anticipated gold prices. The IMF already agreed to use about $1.1 billion of windfall profit through the same process, and member countries are close to giving assurances they will distribute 90 percent from that round to poor countries, according to the statement. * * * Join GATA here: New Orleans Investment Conference Wednesday-Saturday, October 24-27, 2012 Hilton New Orleans Riverside Hotel New Orleans, Louisiana http://www.neworleansconference.com/ * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet at Wellgreen Project in Yukon Territory: 5.36 g/t Company Press Release Tuesday, September 11, 2012 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....

TFMR Podcast #29 – Patrick Heller of Liberty Coin Service Posted: 28 Sep 2012 10:20 PM PDT from TF Metals Report: On Thursday, I had an opportunity to visit with Patrick Heller of Liberty Coin Service in Lansing, Michigan. Pat is one of the world's foremost experts on rare and collectible coins and was recently named "Dealer of The Year" by the American Numismatic Association. I met Pat at FreedomFest back in July. Besides being an outstanding coin dealer, Pat's a prolific writer whose articles are often featured on many precious metals sites around the internet. Being a fan of his writings for several years, I was very excited to finally make his acquaintance. Dealings in bullion and rare coins can, occasionally, be tricky business and I knew that our community needed an expert, knowledgeable "go-to" guy. So, in this podcast, I wanted to introduce Pat to the group and query him for answers to several, commonly-asked questions. Click HERE to Listen to the Audio This posting includes an audio/video/photo media file: Download Now

Gold Seeker Weekly Wrap-Up: Gold and Silver End Near Unchanged on the Week Posted: 28 Sep 2012 10:00 PM PDT Gold traded mostly slightly higher in Asia and London, but it then drifted back lower in New York and ended with a loss of 0.23%. Silver slipped to as low as $34.27 and ended with a loss of 0.35%.

Gold Close To A Major Breakout Which Will Send It To $1,900+ Posted: 28 Sep 2012 09:45 PM PDT from KingWorldNews: Today Jeffrey Saut told King World News, "… gold is still in a secular bull market." Saut, who is Chief Investment Strategist for $360 billion Raymond James, also said, "Right now gold is testing the upper side of the trading range we've been in, and if it breaks out, I think it travels back up to the old highs, a little bit above $1900 an ounce." Here is what Saut had this to say: "The stock market is following the election year pattern, with a correlation of about 98%. A typical election year pattern since 1936 called for a peak in the first week of April, a pull back into the first of June, a stair step higher into the first week of September, and then a pull back or correction into about middle to late October." Jeffrey Saut continues @ KingWorldNews.com

Gold Still Stuck near $1785 - $1800 Posted: 28 Sep 2012 09:24 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Over the last two weeks, gold has had some difficulty clearing the stubborn resistance level beginning near $1785 and extending towards $1800, round number psychological resistance. It has poked its head into this zone but cannot breach it as of yet. When examining the chart it is not difficult to understand the significance of this region. Note that there have been two occasions in the last year, one back towards October 2011 and the other earlier this year in Jan/Feb, when gold either punched through this level or came extremely near to it, but failed to close ABOVE it. Look carefully at what happened the following week after the failure to extend higher - there was a downside reversal in both cases which led to a protracted period of falling prices that did not culminate until gold was near the $1525 - $1550 level. It was at this level, that we later learned, Asian Central Bank buying pr...

BRIC Hallucination: China Won’t Be Engine of New World Order, nor Russia, nor India Posted: 28 Sep 2012 09:15 PM PDT from Silver Vigilante: In the New World Order, the BRIC nations – developing nations – are to be the engine of global growth. That is at least what officials from the foremost global institutions have maintained all along, divorcing their narrative from the other, more populist narrative of just what the 'New World Order' is. That the 'New World Order' is not a standardization of the world system of financial governance, but, instead, merely a shift of power away from the North to the South has been the storyline given from technocrats, politicians and banksters through the entire crisis since 2008. But, as the crisis wears on and reveals itself to be globally systemic and evasive in nature – endemic to globalization – the future takes on a different aura. For instance, Caroline Anstey, managing director of the World Bank, claims that "the North no longer offers the model for development, it's much more about South to South." But also that "It's still a volatile world and it's a world in which we have to live with expectations of volatility." But is Anstey's understanding of the New World Order reality-based? Read More @ Silver Vigilante

Finding the Ultimate Bug Out Property or Survival Retreat Posted: 28 Sep 2012 09:00 PM PDT from Off Grid Survival: When it comes to buying a survival retreat or bug out location, location really is the key. Here are some of the top considerations that you need to keep in mind when looking for the ultimate bug out location. Bug Out Location Checklist Distance – If you're purchasing a piece of property to serve as a bug out location, then you really need to consider how far that property is from your current home. Any property that you can't make it to on a single tank of gas should really be reconsidered. If you're looking for a fulltime survival retreat, distance isn't really a problem. In fact, I would think the farther you can get away from the major cities, the better off you will be during a major collapse or SHTF situation. How far is the land from your current location, and would you be able to safely make it there during a crisis situation? How far is the land from high density population areas? Read More @ OffGridSurvival.com

Gold Glitters Posted: 28 Sep 2012 08:02 PM PDT By: John Browne Friday, September 28, 2012 Just a few weeks ago, Mario Draghi, President of the European Central Bank (ECB), announced that he would do anything required to bailout the weakest members of the Eurozone and in so doing prevent the euro currency from dissolution. Investors who may have been previously positioning themselves to withstand a euro crisis seem to be anxious to believe that such bold actions will prevent the worst. Consequently, many unwound positions in U.S. dollars and bought back euros. In the wake of the announcement, the euro rose from $1.22 to $1.30. Two weeks ago, as signs of recession increased, Fed Chairman Bernanke announced he would do anything required to stimulate the U.S. economy, real estate, and the financial markets. Investors, who may have been previously concerned that the U.S. stock market was set for a correction (having risen approximately 20% o...

The Pauperization Of Japan Posted: 28 Sep 2012 07:03 PM PDT Wolf Richter   www.testosteronepit.com "Pauperization,” the word, became infamous when three executives of huge consumer products companies voiced it as the new challenge in Europe. To market their products successfully, they changed their commercial strategies and applied what worked in poor countries [The “Pauperization of Europe"]. In Japan, a similar process has hounded the economy, but for much longer. And nothing shows this better than the plight of the ubiquitous but hapless “salaryman.” He is a cultural phenomenon. He enters the formidable corporate hierarchy upon graduation and struggles within it till retirement. Most of the time, the career trajectory flattens sooner or later. Often enough the aging salaryman is shuffled aside to a “window job” where he might not even have the tools to work, such as a phone. His life is defined by commutes in packed trains and long hours at work. After work, at restaurants and bars, the informal part of work begins with clients or coworkers to hash out inter-office issues, price differences, design problems, or product failures under the influence of alcohol—the official excuse to be direct in a culture that prizes vagueness. In return for his labors, the salaryman hands his paycheck to his wife. She manages the household budget, pays the bills, buys what is needed, and makes investment decisions. Stories abound of the Japanese housewife who blew the couple’s life savings on leveraged investments that no one understood. And she’s known for her impeccably wrong timing [The Japanese Are Dumping Their Gold]. She also gives her husband a monthly allowance, kozukai, to buy lunch, dinner, drinks, etc., though regular visits to “soapland,” due to their higher costs, would have to be covered by special company cash bonuses. Now a lot of these structures are loosening up, and lifetime employment is no longer the ground rule, nor is marriage, but for those who end up married, especially if the wife stays at home, the allowance still applies. In 1979, Shinsei Bank started one of the most insightful polls into consumer spending habits, or rather into male consumer spending ability—the Salaryman Pocket Money Survey. Back then, the average salaryman’s allowance was ¥47,175 ($590) per month. By 1990, the peak of the bubble when money grew on trees, wives indulged their husbands with an allowance of ¥77,725 ($971) per month. Then it crashed. By 2004, it landed on the ¥40,000 mark. This year? ¥39,756. And those with kids receive ¥15,000 less than those without kids. The bursting of the Japanese bubble, now in its third decade, has ravaged salaries, bonuses, household budgets, and thus allowances—and spending. The zero-interest-rate policy that the Bank of Japan has perfected, extensive quantitative easing, and two decades of stimulus budgets that have left Japan saddled with the worst debt-to-GDP ratio in the world ... all conspired against the hapless salaryman. He works harder and longer than ever before, for less pay, and even his lunch money is getting cut. In 1992, the average salaryman spent ¥746 ($9.32) on lunch; this year, ¥510 ($6.38). Back then, when everybody was still assuming that this was just a temporary lull in the excitement, the average salaryman took an almost leisurely 27.6 minutes to eat lunch; this year, he inhaled it in 19.6 minutes. After-work drinking took the biggest hit: in 2001, the average salaryman forked over ¥6,160 ($77) when he went out to drink. That’s a serious amount of beer. Hence the image of a midnight train stuffed with drunken and barfing guys. This year, he spent only ¥2,860 ($35) per drinking excursion. The beer industry caught the brunt of it. Beer shipments, a closely watched index based on data from the five major brewers, dropped by 3.7% in 2011, the seventh straight year of declines. Only 442.39 million cases were shipped, the lowest EVER in recorded Japanese beer history. But this August, a miracle occurred. For the first time in years, there was an uptick in beer shipments for the month of 2.8%. Where there is beer, there is hope. Or maybe not. Eating out got slammed. Again. In 2010, 22.6% of the salarymen said they didn’t eat out at all; in 2011, 35.8% weren’t eating out; and this year, 37.9%. If this trend keeps going, it will destroy the core of Japanese social life. (But those are the lucky ones. The number of welfare recipients set a new record: 2.115 million individuals and 1.543 million households, according to the Ministry of Health, Labor, and Welfare.) Japanese housewives and other traders who are stuck in an old paradigm are frequently selling gold for the wrong reasons. The most egregious example is that gold often drops when the euro drops. Examining price relationships among the US dollar, the euro, and gold reveals an important pattern for investors. Read.... The Bottom Line on Gold, the Dollar, and the Euro, by Louis James. And here is my book about Japan. It all started in France with a Japanese girl—a “funny as hell nonfiction book about wanderlust and traveling abroad,” a reader tweeted. Read the first few chapters for free.... BIG LIKE: CASCADE INTO AN ODYSSEY, at Amazon.

Silver Demand & Performance Analysis With Hecla Mining CEO Posted: 28 Sep 2012 07:00 PM PDT from The Street:

By the Numbers for the Week Ending September 28 Posted: 28 Sep 2012 06:58 PM PDT This week's closing table is just below.  If the image is too small click on it for a larger version. Note that the ICE commercial traders have flipped to modestly net long the greenback.  Both the Ted Spread and the Gold:Silver Ratio were flat. Euro gold gained by 0.85% while gold in USD was flat. COMEX commercial traders have reached high net short positioning (LCNS) which can be compared to August of 2011. More about that later this weekend or early Monday for subscribers.

The Silver and Gold Price Have Begun their Next Leg Up that will Carry Gold Above $4,000 the Current Correction will be Short Lived Posted: 28 Sep 2012 06:06 PM PDT Gold Price Close Today : 1,770.40 Gold Price Close 21-Sep : 1,775.50 Change : -5.10 or -0.3% Silver Price Close Today : 34.424 Silver Price Close 21-Sep : 34.567 Change : -14.30 or -0.4% Gold Silver Ratio Today : 51.429 Gold Silver Ratio 21-Sep : 51.364 Change : 0.07 or 0.1% Silver Gold Ratio : 0.01944 Silver Gold Ratio 21-Sep : 0.01947 Change : -0.00002 or -0.1% Dow in Gold Dollars : $ 156.90 Dow in Gold Dollars 21-Sep : $ 158.10 Change : $ (1.21) or -0.8% Dow in Gold Ounces : 7.590 Dow in Gold Ounces 21-Sep : 7.648 Change : -0.06 or -0.8% Dow in Silver Ounces : 390.34 Dow in Silver Ounces 21-Sep : 392.84 Change : -2.50 or -0.6% Dow Industrial : 13,437.13 Dow Industrial 21-Sep : 13,579.47 Change : -142.34 or -1.0% S&P 500 : 1,440.67 S&P 500 21-Sep : 1,460.17 Change : -19.50 or -1.3% US Dollar Index : 79.922 US Dollar Index 21-Sep : 79.323 Change : 0.599 or 0.8% Platinum Price Close Today : 1,647.40 Platinum Price Close 21-Sep : 1,637.10 Change : 10.30 or 0.6% Palladium Price Close Today : 626.80 Palladium Price Close 21-Sep : 670.05 Change : -43.25 or -6.5% The GOLD PRICE gave up $7.20 to end at $1,770.40 and the SILVER PRICE today lost 17.1 cents to 3442.4c. Right in step, It may confuse y'all that I sound less than sunny about gold and silver, but I'm trying to read the chart honestly. Besides, I am only leery of the short run: the long run is sure, skyward, and sublime. I've got to press on. Alliteration is about to seize up my mind. Both metals have this week traced out what appears to be a megaphone or broadening top. In these patterns, the correction from the first plunge (especially with very strong markets) may reach or beat the high. This is a feint, a fake out, a false signal, for the following plunge will be sharp. I believe we are watching this unfold in silver and gold, but here are the bounds that will yea- or naysay me: The GOLD PRICE above $1,805 (2 day close) with silver above 3525c screams that no correction is coming soon, or Gold below $1,738 (1 day close) with silver below 3336c sets both up for lower prices. The 20 day moving averages, first tripwire of a decline, stand now at 3363c and $1,748. Any closes thereunder point down. Correction targets are $1,700 and $1,650 for gold, 3200c and 3100c for silver. If they do fall, expect it to last no more than three weeks. I repeat: misunderstand me not. Silver and gold have already begun their next leg up that will carry gold above $4,000. The weakness I am expecting is very short-lived and a mere bagatelle compared to the long term outcome. One of the most difficult thing to explain to my customers is that they are FAR, FAR better served in a long term bull market to keep their excess funds in silver and gold rather than in a bank. Today came a gracious example. A customer called to sell some silver and gold to meet a family need. She had converted US$5,000 to gold and silver in October 2008 (good timing). She sold it today at a 90.2% gain -- it was worth nearly twice what she had paid for it. I won't tell y'all about her profit on what she bought in 2006. It's a bull market. That means that year after year, silver and gold become more value -- they don't just hold their own against paper dollars, they GAIN. I reckon we live in Candide's Best of All Possible Worlds, where we hoi polloi don't have to worry about a thing 'cause our central bank massas are sure taking care of us. Yes, sir! Except for a practically meaningless 8/10% rise in the US dollar index, markets at first glance did nothing. At second glance, however, other shapes appear. Remember, too, that the scoreboard never lies. Silver, gold, stocks, palladium the yen and euro all lost this week. Talk about the Best of All Possible Worlds! Why, US$1 = Y77.98 = E0.7784. It don't get no better than that, central bankers walking hand in hand, depreciating their currencies in perfect time like they were waltzing. US dollar index this week closed 79.922, up 60 basis points for the week and 37.4 for the week. Dollar, if your gonna strut your stuff, you'd better step higher than that! Dollar ranged this week from 79.35 to 80, and failed again today to clear that 80 hurdle. Dollar is dancing with its 20 Day Moving Average (79.97) and if it should pierce that and resistance at 80, might run to its 200 DMA at 80.72 before it collapses again into the dung heap where it belongs. Whoops. I've got to watch that. Start talking about the dollar and my bile just leaks out everywhere. Something about a set-up where private individuals are given the state's powers to steal from the whole world just goes down crossways in my gullet. Back to the thread: My guess is that the US, European, and Japanese central banks have struck a deal to keep their currencies in a range from $1 = Y75 = E0.75 to US$1 = Y83 = E0.83. You are watching them control that. However, should the dollar break 78.60, the last low, the sharks will come in and short like crazy, creating manifold and multitudinous migraines for the Nice Government Men. Yen closed today own 0.49% at 128.23 cents (Y77.98). Euro lost 0.53% to $1.2847 (E0.7784). Both lost steam and faded today, and neither show any signs of liveliness, up or down. In gold terms, both the Dow and the S&P500 are working their sweatiest to break down and fall. Dow in Gold gapped down yesterday and is sitting near its recent lows. S&P500 in Gold didn't gap down but is well below its 200 DMA, 0.8057 oz today against the 200 dma at 0.824. Dow looks even worse, 7.57 oz against a 200 at 7.80 oz. In paper terms the Dow today bounced off its 20 DMA (13,402.12), closing down 48.84 at 13,437.15. Any break below 13,300 - 13,250 would be fatal. However, when Octobers are not deadly months for stocks, they sometimes see tops. Think of October 2007. Be not surprised, therefore, nor amazed, if the Dow runs even to the 14,200 top of that year. 'Twill not be strength, but death throes. For the S&P500 a break below 1,420 would deal death. For both indices, keep bearing in mind that their gains in paper dollar terms will be nugatory, fruitless, barren, feckless, and futile. All the while they will be losing value against gold, for they have already broken down in gold terms. Be not fooled by the Ben Behind the Curtain! Y'all enjoy your weekend. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't.

Precious Metals Shine in Q3 Posted: 28 Sep 2012 04:54 PM PDT 28-Sep (USAGOLD) — Gold rose 10.9% and silver was up 25.5% in Q3. By comparison, stock gains were considerably more modest: DJIA +4.32%, S&P500 +5.76%, NASDAQ +6.17%, Russell 2000 +4.88%.

Why You Shouldn’t Vote… And Other Touchy Subjects Posted: 28 Sep 2012 04:17 PM PDT September 28, 2012 Spain goes berserk… Germany inches towards the exit… Amoss fills us in on why "investors will soon be roused from their blissful trances"… Burma becoming the new economic goldmine? Mayer fills us in…and lets us in on the little-known history of passports… "Mr. Perkins poses an extreme risk to the market when drunk." The lesson humanity must learn time and time again: do not do anything when drunk… Byron clears confusion about peak oil…  Question from viewer: are we anarchists? "Fire Obama!" irate reader screams… a Nazi Space Buddha? … and more!   "Investors have embraced an overly simple belief," Dan Amoss wrote to us early today, "the belief that central banks can prod investors into stocks against their will. Investing is not that simple. The comparison between bond yields and stock yields — two completely different investments — has become absurd. It's Friday. You may be surprised by what you read in today's 5… but the election nears, and sometimes we all go a little stir crazy.  "Bonds are contracts involving a fixed stream of cash flows and a predetermined maturity date," Mr. Amoss continues. "Stocks are claims on highly uncertain streams of future free cash flows that often stretch out for decades. Many risks can enter the picture and alter the trajectory of free cash flow — and investors' expectations of them. "Risks tend to appear out of the blue, and smack investors out of their blissful trance — a trance created by central banks which have shifted far too much attention on the returns of stocks versus bonds… "Here is just one negative catalyst growing closer as the weeks and months pass: Germany could exit from the Euro, and return to the Deutsche Mark. While a German exit would offer long-awaited clarity about the future of the Europe, it would also spark a mad scramble to adjust to a new reality.   "A German exit would trash the euro's value against the currency that's steadily becoming the reserve of choice: gold," Dan goes on. "Only weak economies with bankrupt governments would be left standing behind the Euro. The European Central Bank (ECB) would be free to monetize as much Italian and Spanish debt as it wishes. The economists calling for a weaker currency to restore prosperity to the PIIGS countries would get to see their prescription play out in a real-world laboratory. Results would show that currency debasement does not create stronger, more competitive economies. Countries left in the Euro would see collapsing living standards: import prices would rise and capital investment would fall amidst a chaotic currency regime. "Having seen the example of Greece, the Spanish public suspects austerity will only make things worse. Spain will come to believe that its salvation lies in the printing press — in the ability to inflate away its heavy debt burden. After promising markets that the ECB would buy Spanish debt, Mario Draghi now has no choice but to fire up the Euro printing press. Most other debt holders will flee the chaos unfolding in Spain. They'll refuse to hold Spanish bonds at yields too low to compensate for default risk. The ECB, once it establishes a fake, above-market price for Spanish bonds, will ultimately find itself as the only holder of those bonds. This is what happens when central planners impose prices far from what private investors consider fair value (in this case, pushing Spanish debt yields to below 4%, versus a much higher market-based yield). Once the German public sees that the ECB will become the majority holder of Spanish debt, they will insist that German politicians plan an exit from the Euro.   "Yesterday's anti-austerity protests in Madrid," GFT strategist David Morrison says, "together with today's 24-hour strike in Greece, are both reminders that rampant unemployment and a general collapse in living standards make people desperate and angry." I think 'angry' might be an understatement there, Dave. The man in the biker helmet beating the police car…yeah…he's angry… "Protests against budget cuts have only just begun. Debilitating strikes are on the way," Amoss goes on, forecasting more turmoil in the already out of control Spain. "Do you think many investors will hold Spanish bonds while whole regions are threatening to secede, fighting a central government that might morph into a military dictatorship? Or that, in this scenario, "Germany would tolerate staying in a Euro collateralized by Spanish bonds?" he asks. "I don't think so." "Germany will watch as all of this unfolds, and realize that the austerity promises will be broken. The ECB will be left holding hundreds of billions of Spanish debt, with no possible exit, and constant pressure to continue monetizing Spanish debt. It is then that the drive to exit the Euro will pick up speed. "With this as a backdrop," Amoss concludes, "the stock market will not remain in its current tranquil state. Investors will soon be roused from their blissful trance."   "Burma is once again opening up," Chris Mayer writes. "And once again, it is drawing the fortune seekers. While in Myanmar, I plan to meet with oil and gas explorers, property development companies and more. I'll travel by plane, train and riverboat as I poke around this newly opened market. "In the early part of the 20th century," Chris goes on, "Burma was a place for fortune seekers. Besides exporting rice, teak and oil, Burma had (and has) loads of mineral wealth — tungsten, copper, silver, lead and zinc. "As I write," Chris goes on, "I don't yet have my visa. So there is a chance I never even get off the ground, which brings me to unique hassle of modern-day travel — passports and visas. "I am always mystified by what countries require. As part of the Myanmar visa application, I had to give them my work history. Now, what possible difference could that make? Are they looking to see if anyone writes in "arms dealer" or "drug lord"?  "The passport, we should remember," Mr. Mayer continues, "came about as a wartime measure England during World War I. Before 1915, as Paul Fussell writes in his classic Abroad: "His Majesty's Government did not require a passport for departure, nor did any European state require one for admittance except the two notoriously backward and neurotic countries of Russia and the Ottoman Empire." "On Nov. 30, 1915, the British government passed Regulation 14c. It was a temporary measure, they said, a wartime emergency. Yet here we are and the regulation stands. In fact, the whole world has adopted this way of tracking people and keeping them from going here and there without special permissions, stamps and fees. "Fussell tells us that the idea of carrying a passport was a shock and something of a scandal when it was first introduced. The passport had to have your picture, your profession and a description of your particular features. You had to describe your forehead, the shape of your nose, mouth and chin, skin complexion and the shape of your face. "It is amazing to think, as Fussell points out, that when writer D.H. Lawrence and Frieda Weekley fled England for France in 1912, they just left. No passports. No papers to file."  "Stories like this make you realize how the powers that be have chiseled away at so many freedoms," Chris writes. "Little by little, they gain ground and never cede it." "Well, they never cede it until the burdens become completely untenable, as in Myanmar. Many long years of repression made a country that was once one of the richest in Asia into one of the poorest. The result is so shameful that the ruling military dictatorship gave up voluntarily. I oversimplify, but I am not far from the truth. "I wonder how long Americans will allow themselves to be pushed around by bureaucrat overlords. How long will the descendents of 1776 continue to meekly take off their shoes and belts as they go through the TSA gauntlet? How long will we suffer the indignity of standing there with our hands up like some idiot criminal while we wait for the scanners to do their work? How long will we act like bovines being shuttled through some filthy pen? "Probably until it becomes untenable…"   After one good day, the market is already moping around again. Dow is down 48 points to 13,437. Nasdaq shaved off 20 points to 3,116. The S&P cut 6 points to 1,440. Oil is down 14 cents to $92.05. Gold is down $6.30 to $1,771.30… and silver lost 17 cents to $34.49 an oz.   "Mr. Perkins poses an extreme risk to the market when drunk." We're considering adding that statement to the "Comments of the Year" file for 2012. Last week's mysterious oil drop continues to puzzle the pundits, but a similar drop in 2009 has, at long last, been resolved… The culprit? A drunken, blacked-out senior broker at PVM Oil Futures. "Steve Perkins," Russia Today reports, "spent $520 million of his client's cash on oil futures contracts throughout the night during a "drunken blackout". The US Financial Services Authority made this discovery while investigating a mysterious oil price spike on June 30, 2009. Apparently, Perkins got drunk, blacked out and purchased 7 million barrels, or 69% of the global oil market in the middle of the night, pushing the price up by $1.50… Oops. "The next morning," RT continues, "an admin clerk called Perkins to ask why he had bought so much crude during the night, but Perkins couldn't recollect making the trades. Later, after he apparently sobered up and became terrified with what he had done, the broker sent a message to his boss claiming he had to stay at home to care for a sick relative."   Peak oil (PO), says Byron, "is an analytical tool." Following his Remade In America investment thesis, we've been – understandably – fielding inquiries from readers about Byron's stance on peak oil. "Essentially," Byron says,  PO is "a way of looking at global oil output, and evaluating the nature of the production curves. "Like all tools," Byron writes, "PO has evolved from the early days of Hubbert and his simple curve.  Today PO is a way of forecasting when, where & how to deploy new capital to find "new" oil — for govts, NOCs, Big Oil cos and little oil cos. each have their own agenda… "Still, the operative idea is that it takes more & more capital to recover the same number of barrels as in the old days. The easy oil is long gone.  And keep in mind that, as our capital-deployment system constrains and spirals inward, due to bad money and worse policy, it stands to reason that we'll have less & less good capital deployment towards energy, leading to less & less future oil… "To illustrate the point, look at Mexico, and it's piss-poor record of sustaining its oil industry — in the face of one of the worst decline curves on the planet — due to corruption, cronyism and drawing down oil sector capital to prop up unsustainable socialism.  Or look at Venezuela (ditto Mexico) — now importing oil.  Or Nigeria (ditto Mexico, on steroids) — a dead oil power walking.  Or the UK, which has spent years taxing away the profitability of the North Sea oil biz… I could go on.   "Recent oil prices and PO —  the indicators are not trustworthy," Byron shifts gears. "Talk to me after the US election. I don't trust anything coming out of the government, big banks, mainstream media, etc about the economy, or even price signals about oil. It's all way too susceptible to manipulation."   "Interesting coincidence," one amused reader writes, "that this discussion about Hitler appeared in The 5 the day the following article came out. Indiana Jones where are you?" For some odd reason, Hitler is rearing his ugly head in strange ways lately. A couple days ago, it was in India at a clothing store, today, a Buddha statue from space. Seriously. The Nazi Space Buddha… a new kids' toy?. "Researchers have recently released information on a carved Buddha," Dvice.com reports, "brought to Germany from Tibet by the Nazis. Astoundingly, the statue is made from a meteorite believed to have fallen some 10,000 years ago along the Siberia-Mongolian border. "This ancient Buddha," Dvice goes on, "also known as "Iron Man" to the scientists, ended up in Germany as the result of zoologist and ethnologist Ernst Schäfer's journey to Tibet in 1938 and '39. The mission was to find the roots of the Aryan "race." Instead he returned with the carving of what researchers believe to be is the Buddhist god Vaisravana — somewhat ironically, the god of wealth or war."   "I've never understood," one confused reader writes, "why government and state workers get such great pensions and benefits. The government gets it's money from printing or (stealing) taxing the people. I don't know anyone who gets a pension or for that matter will ever get a pension. All the burden is in each individual's hands, weather it be a 401k or some other form of savings plan. So what gives? "I think that takes a lot of Gaul to give the money I earn to someone else for a job that was probably never needed in the first place, while I go without many things trying to save for my later years. How can this be stopped? "Thanks again to all at Agora." The 5: We wish we knew. Our next reader thinks he knows, but we beg to differ… as delicately as possible.   You need to stop getting your information from Huffington Post and CNBC," writes a jaded, if myopic, reader. I am starting to feel like youre leaning too far in the left of center. Is it profits for you or do you really care about America?  This is our country still. We need to wake up America before its too late. "Fire Obama!" The 5: Hmmmn… On my Facebook page last week, someone who'd just finished watching I.O.U.S.A. asked if we were anarchists". We're certainly "'much-less"-archists," we replied… to crickets. The academic term is "minarchist""… meaning we prefer as minimum government as is possible. Mostly because we don't like being told what to do. But, allow us a digression. A political one. (If you don't like politics, avert your eyes. Save yourself the angst.) Normally we'd wait for a few weeks to start this campaign, but since you brought it up, we prefer to get this out of the way: don't vote this year. You'll only encourage the bastards. Much to the dismay of some of our family members, back in 2008 we even tried to create a website encouraging non-action." You can still visit the site today at www.stopthevote.com. We failed. The site was and still is the least visited site we've ever created. Yet being the masochists we are, we keep paying the $50 annual web-hosting fee. We're hoping one day the idea will catch hold. (Off the backend, we're hoping you might endulge us, buy a copy of The Great Fiction by Dr. Hans Herman-Hoppe and read it.) Still, if you insist on voting, you'd better hope Obama wins the election. [Yep. You read that correctly. We'll pause and let that one sink in for a bit. And then we'll check with Andrea, our customer service director, to see how fast the e-mail box is filling up with right-wing hate mail.] Now that you're back in your chair and hopefully without your finger on the delete" key… hear us out. With Obama you know what you're going to get. He's a guy who believes in his heart (and his errr… your wallet) that government is not only the solution to all your problems, but the source of all your good fortune. We couldn't disagree more. But at least with Obama we know what we're dealing with. You can look at the headlines every morning and see what government policies have wrought around the globe. Indeed, we spend most of our time calculating the destruction in the 5. The destruction of your savings, your opportunities, your future. The sooner Obamas policies fail completely (which, a quick tour of history tells us they will) and the charade is ended, the sooner we can get back to the core principles of private enterprise, capital accumulation, investment and cooperation… you know, those small ideas that helped create the most prosperous society in human history. It's only after the current political environment burns out that these ideas can rise again. So, by all means, bring it on. If you think Mitt Romney and Paul Ryan are going to step up and restore these values by virtue of gaining the White House, we think you're making a big mistake. Romney is a panacea. Repbulicans only want to point the gun at someone else. If Obama wins, you and I – we -will be forced to make the argument for prosperity through economic freedom and civil liberties to a much wider audience than the 6% voting block currently being targeted by the Republican minority. That's an argument we believe will eventually prevail. But not before this silly election is over… In Agora Financial we have a saying "fail quickly," but learn from mistakes". The sooner the political elite fail, the sooner we can get back to the business of improyourving our lives, without them. Cheers, Addison Wiggin, The 5 Min. Forecast p.s. What happens after the crash? What's the way forward? Well… to help answer and prepare for "that", we've assembled a "round table" of ladies and gentlemen who've been working on the same question for years: a billionaire, several best-selling authors, erstwhile bankers and economists, financial gurus, market historians, a philanthropist,  a filmmaker… all have sat at the table for a good chat. If you'd like to join in the discussion, please accept my formal invitation here.

DOILLAR MISBEHAVING Posted: 28 Sep 2012 04:09 PM PDT And as often happens right when you think you have a handle on what's going on the market throws you a curve ball. In order for assets to continue rising the dollar has to resume it's downward trajectory. It didn't do that today. That's a warning sign that we may be on the cusp of an intermediate degree rally in the dollar, which would probably trigger an intermediate degree correction in stocks and precious metals. More in the weekend report.

Guest Post: Welcome To The Era of 'Ugly' Inflation Posted: 28 Sep 2012 04:01 PM PDT Submitted by Charles Hugh-Smith via Peak Prosperity, The Siren Song of 'Beautiful Deleveraging' In a world of rising sovereign debts and an overleveraged, over-indebted private sector, history suggests there are only three possible ways out: gradual deleveraging, defaulting on the debt, or printing enough money to inflate away the debt. Ray Dalio recently described the characteristics of a "beautiful deleveraging" in which equal doses of austerity, write-downs, and inflation gradually lighten the load of impaired debt.  This might be called the Goldilocks Deleveraging, as the key feature of this "beautiful" solution is that each component is "not too hot, not too cold" – inflation is modest, write-downs of bad debt are gradual, and austerity is not too severe.  Given enough time, the leverage and debt are worked off without requiring any structural change to the Status Quo. Understandably, the Status Quo has embraced this solution for the appealing reason it doesn't change the power structure at all.  Everyone currently in charge remains in charge, and everyone who owns outsized wealth continues owning outsized wealth. Rather than falling onto the politically powerful "too big to fail" banking sector, the pain of deleveraging is spread over the entire economy.  There is no such thing as painless deleveraging, so the "solution" is to distribute the pain over hundreds of millions of people. That's what makes it "beautiful" to the Status Quo: It doesn't cost them either their power or their wealth. The Status Quo in Japan has pursued this strategy for 20 years, and the Status Quo in Europe and the U.S. have pursued it for the past four years, ever since the global financial system imploded in 2008. Unsurprisingly, the conventional view is that it's working "beautifully".  Housing has bottomed, stocks have doubled since their March 2009 lows, households are slowly deleveraging, inflation is modest, and growth is sluggish but steady.  All we need to do, we're told, is stay the course for a few more years, and the stage will be set for a return to the rapid growth of the bubble years. Central Banks to the Rescue The core mechanism of this "leave the Status Quo intact" solution is that central banks conjure money out of thin air (i.e., "print money"), which they use to then buy impaired bank debt (such as delinquent mortgages) and sovereign debt (such as the bonds of Spain, Italy and the U.S.) This transfers impaired private-sector debt and sovereign debt to the central banks' balance sheets, where they are safely sequestered from price discovery.  The central banks keep these questionable assets on the books at full value, and the Status Quo is happy.  The banks trade their risky impaired assets to the central bank for cash, which they can use to speculate or originate new loans, and governments can continue to run monumental deficits because the bonds they issue are purchased (i.e., "monetized") by central banks. Central bank balance sheets swell with phantom assets, but nobody cares, as the debt no longer burdens private banks and governments are free to borrow and spend. It all seems too good to be true, and so skeptics ask: If this deleveraging is so 'beautiful', why are the developed economies sliding into recession?  If this deleveraging has worked so well, why are governments still running unprecedented deficits even as hiring, production, and lending all weaken? Skeptics of the official "happy story" see plentiful evidence that the beautiful deleveraging of central-bank monetization is simply papering over the structural rot at the heart of the financial/political Status Quo – the shadow banking system, the risk-laden derivatives trade, the "fraud-is-our-business-model" mortgage securitization industry, and so on. Somebody Has to Pay the Price Skeptics reviewing history find few examples of painless deleveraging and many examples where over-indebtedness and central bank money-printing lead to a stark choice: Either accept high inflation as a way of inflating debts away, or renounce sovereign debt and devalue the currency. Neither "solution" is ideal nor beautiful. Inflating away debt by depreciating the currency (via money-printing) allows debtors to pay debt with "cheaper" money, but inflation savagely erodes financial wealth.  If we earn $100,000 an hour, our $100,000 mortgage can be paid off with one hour's labor, but our $100,000 in savings will only buy three gallons of gasoline – the same number of gallons an hour's labor bought back when we earned $12 an hour. We can print money but not oil. If a nation renounces its debt, everyone who owns the sovereign bonds loses some or all of their investment, and the currency loses value as global traders and investors recalibrate the value of the currency. Once the currency is devalued, imports such as oil rise steeply in cost, leaving less household income to be spent or invested.  Consumers pay the price of devaluation. In other words, there is no painless deleveraging. The price has to be paid by someone, and so the battle behind the façade of "beautiful deleveraging" is over whom the cost will be transferred to.   If the government absorbs all the banks' bad debts and runs large structural deficits, the cost is transferred to the taxpayers.  If the central bank prints money in excess in order to absorb the banks' bad debts, inflation rears its head, and everyone with savings and who earns wages pays the price via a loss of purchasing power. Though it is dismissed as "impossible" – and it is politically impossible, as the banks have captured the machinery of governance – banks could be forced to into insolvency and their assets liquidated on the open market.  This would clear the decks of impaired debt and distribute the losses to those who owned the impaired debt: pension funds, insurance companies, hedge funds, individuals, etc.  Every owner would share equitably and proportionately in the losses. But this would upset the Status Quo's power and wealth-sharing arrangement, and so it is dismissed as unworkable. Beautiful and Ugly Inflation A key mechanism in beautiful deleveraging is beautiful inflation at an annual rate of, say, 3% (gosh, isn't that the Federal Reserve's target?) that steals 3% from the purchasing power of the currency while depreciating debts by the same 3%. In a decade, both the value of the debt and the currency have fallen by over 30%, but the loss of purchasing power has been so gradual that the losers – wage earners, consumers, savers, and owners of the devalued debt – don't feel enough pain to protest. Truly beautiful inflation combines low-interest fixed-rate debt, wage and price inflation, and a stable currency.  If wages and prices are both inflating at 10% a year, wage earners don't feel any pain as their income rises in tandem with the cost of goods and services.  Any mismatch – say wages rise 8% a year while prices rise 10% – is slight enough that the erosion won't trigger any political fallout. With a stable currency, imports don't cost more, either. Meanwhile, low-interest fixed-rate debt is being wiped out at a rapid clip. In a decade of 10% annual inflation, the debt has lost roughly two-thirds of its value.  Wages have doubled at the end of ten years, while existing mortgage payments have remained unchanged. Debtors have an easier time servicing debt, and inflation has magically deleveraged the household.  As the value of people's old debt declines and their nominal income rises, they can afford to take on more debt. Banks can issue new debt to the newly deleveraged households, earning fat transaction fees and securitizing the newly issued debt so that it can be offloaded to investors. The government also benefits, as rising nominal wages push taxpayers into higher income brackets, swelling government revenues. Everybody wins.  Households get to consume more goods and services, banks get to originate more debt, and the government rakes in more tax revenues. No wonder the Status Quo is pursuing beautiful inflation. Two things can turn beautiful inflation into ugly inflation: Wages don't inflate along with prices and the currency depreciates as money is printed excessively. This might not matter for a nation that is a net exporter of goods and services.  But for nations that import essentials such as oil and grain, this is a catastrophe, as wages are flat while the cost of imported energy and food skyrocket.  Households have less money to spend, and servicing debt becomes increasingly burdensome. This is ugly inflation: Household incomes decline in real terms, the rising cost of essentials squeezes discretionary spending, and servicing debt becomes more difficult. Households not only cannot afford new debt; many have to default on debt just to survive.  Bank lending falters and defaults rise, eroding banks' solvency. As household incomes stagnate, government tax revenues decline as well. In ugly inflation, everybody loses. Welcome to the United States of Ugly Inflation.  Real household income (i.e., adjusted for official inflation) has declined 8% since 2007; the cost of oil, medical care and higher education has climbed; and government revenues have stagnated even as demand for government services has increased. As a result, the entire beautiful deleveraging scenario is at risk. Austerity carries a high political cost, and central bank printing appears to be fueling ugly inflation. Behind the "happy story" façade, falling incomes mean that household deleveraging is an illusion, along with bank solvency.  What else is at work here?  Where is this leading? Possibly to destinations many reading this may not expect. In Part II: Why the U.S. Dollar, Counterintuitively, May Strengthen from Here, we explore several key (and under-appreciated) mechanisms. Reality rarely unfolds in a tidy linear progression (if A > than B > than C) and usually involves more factors than we think to put into our forecasting models. There are several key market influences (e.g., the price of oil) and non-market influences (e.g., sovereign interests) capable of constraining central banks' ability to print money. And as a result, the currency devaluation that many see as being baked into the cake may not materialize. Click here to read Part II of this report (free executive summary; paid enrollment required for full access).

FAKE PAMP SUISSE Tungsten Filled Gold Bars found in NYC. Is your gold bullion real? Posted: 28 Sep 2012 03:55 PM PDT An international ring.....Hong Kong found tons of... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]]

Gold and Silver Disaggregated COT Report (DCOT) for September 28 Posted: 28 Sep 2012 03:51 PM PDT HOUSTON -- This week's Commodity Futures Trading Commission (CFTC) disaggregated commitments of traders (DCOT) report was released at 15:30 ET Friday.  Our recap of the changes in weekly positioning by the disaggregated trader classes, as compiled by the CFTC, is just below. (DCOT Table for Friday, September 28, 2012, for data as of the close on Tuesday, September 25.   Source CFTC for COT data, Cash Market for gold and silver.)  In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter. All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report. Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (by 18:00 ET).

Yuan hits a record — and the Chinese can thank the U.S. Posted: 28 Sep 2012 03:02 PM PDT 28-Sep (MarketWatch) — China's yuan climbed Friday to its highest level against the U.S. dollar since the currency was revaluated in July of 2005, buoyed by the U.S. Federal Reserve's recent QE3 program as well as data this week showing that the People's Bank of China injected a record amount of cash into the financial system, according to analysts. The greenback bought 6.2848 Chinese yuan, down from 6.3024 on Thursday. It traded as low as 6.2838 yuan. "The yuan's recent rise, on first glance comes as a surprise considering all of the doom and gloom surrounding the Chinese economy," said Christopher Vecchio, currency analyst at DailyFX. "However, it's important to consider that the Fed's QE3 program creates excess liquidity — like its predecessors — that, in theory, should flow to the safest- , highest-yielding assets." [source]

Judge throws out CFTC's position limits rule Posted: 28 Sep 2012 02:41 PM PDT By Alexandra Alper and Karey Wutkowski Reuters Friday, September 28, 2012 http://www.reuters.com/article/2012/09/28/us-cftc-positionlimits-idUSBRE... WASHINGTON -- A federal judge handed an 11th-hour victory to Wall Street's biggest commodity traders today, knocking back tough new regulations that would have cracked down on speculation in energy, grain, and metal markets. Judge Robert Wilkins of the U.S. District Court for the District of Columbia threw out the U.S. Commodity Futures Trading Commission's new position limits rule and sent the regulation back to the agency for further consideration. Wilkins ruled that, by law, the CFTC was required to prove that the position limits in commodity markets are necessary to diminish or prevent excessive speculation. ... Dispatch continues below ... 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/. He also ruled that the amendments to the 2010 Dodd-Frank financial oversight law "do not constitute a clear and unambiguous mandate to set position limits, as the commission argues." The ruling is a major victory for traders just two weeks before parts of the new position limits rule were scheduled to go into effect. The Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association brought the suit against the CFTC, arguing that the regulations would force their members to drastically alter their businesses, cost them tens of millions of dollars, and send customers fleeing. Wall Street has also long argued that regulators have not proven that position limits would curb speculation in markets and prevent disruptive price spikes. The CFTC and industry groups that brought the suit did not immediately have comment. The agency passed the position limit rule last year, in a bid to limit the number of contracts traders can hold in 28 commodities, including oil, coffee, and gold. * * * Statement by CFTC Commissioner Bart Chilton on Ruling to Vacate Position Limits Rule Friday, September 28, 2012 This is obviously tough news for those of us who believe there's too much speculative concentration in commodity futures and swap markets. While I respect the judgment of the court, there's no question that huge individual trader positions have the potential to influence prices in a way that hurts legitimate hedgers and ultimately consumers. I will continue to push hard for a position limits rule, as mandated by Congress. This is clearly a setback but we can learn from it and continue this critical effort to help make our markets safe and fair. * * * Join GATA here: New Orleans Investment Conference Wednesday-Saturday, October 24-27, 2012 Hilton New Orleans Riverside Hotel New Orleans, Louisiana http://www.neworleansconference.com/ * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

John Stephenson's Predictions for Avoiding an Economic Crash Posted: 28 Sep 2012 02:22 PM PDT The Gold Report: Since you last spoke with The Gold Report in January, we've had a seemingly self-feeding cycle of expectations, plans, bailouts, lack of results and back-to-the-drawing-board. Do you see any ultimate resolution to the world's economic dilemma, or will we somehow just muddle through, or have to go through an actual crash of some sort? John Stephenson: I think we'll basically muddle through from here. We've had several important developments over the last few weeks. The Federal Reserve's Quantitative Easing 3 (QE3) $40 billion program targeting mainly mortgage securities has the potential to move the needle. There was a big rally to risk assets when that was announced but that has faded somewhat. The other huge thing is the announcement by European Central Bank (ECB) President Mario Draghi that he would defend the euro at all costs. Later he talked about a bailout plan called the Outright Monetary Transactions (OMT) program that would involve unlimited purchases of sove...

Gold And Silver Lead Everything Week-, Month-, Quarter-, & Year-To-Date Posted: 28 Sep 2012 02:12 PM PDT It has been a volatile week but equities have drifted lower overall with today's early going retracing all of yesterday's gains only to bounce post Europe's close (once again) on the farce of the Spanish bank audit. Reality sunk in into the close though a glance at S&P 500 futures in the last 30 minutes suggest more V-Fib than trend (as VWAP came into play amid heavy volume at the close). EUR weakness (and USD strength) lifted DXY to a 0.75% gain on the week (almost mirroring Copper and Oil's 0.9% loss on the week) but Gold and Silver popped into the close to end the week unchanged (notably outperforming other asset classes). Treasuries held on to 5bps (5Y) to 12bps (10y & 30Y) yield compression on the week - with some volatility this afternoon bringing them back off their low yields of the week. Utilities ended the week up 1% as the only green sector with Tech, Materials, and Energy all -1.5 to 2% on the week. VIX ended the week up around 1.6 vols (in line with stocks at around 15.6%) and credit continued to lag equities modestly. Cross-asset-class correlations fell away a little this afternoon as stocks meandered but broadly risk-assets suggest some more downside to equities. US equity indices post-QE are mixed with the Trannies down hardest followed by Russell 2000 weakness and a pack of the Dow, S&P, and NDX at around +0.25 to +0.75%...   Interestingly on the week, each time the USD fell back to unchanged, it went bid again... as the EUR lost over 1% against the USD this week   Gold and Silver rolled over a little this afternoon - after outperforming all week - but ended the week unchanged...   Silver and Gold have been the big winners across multiple time frames this year.     S&P 500 sectoral performance has been highly volatile but broadly speaking - until QEternity - Tech and Financials have led. Utilities have been consistently low vol and low return. Financials, Tech, and Discretionary remain the best performers of the year by a long way...   Across the capital structure - equities were a little exuberant into the close - relative to credit/rates/vol (HYG/TLT/VXX)...   Charts: Bloomberg and Capital Context

Gold Daily and Silver Weekly Charts - Not Much of a Pullback Yet Posted: 28 Sep 2012 02:08 PM PDT This posting includes an audio/video/photo media file: Download Now

Silver Miners ETF Posted: 28 Sep 2012 01:54 PM PDT Scott Wright September 28, 2012 2415 Words It's hard to believe that silver was trading at only $4 just 11 years ago. And amazingly it was only 7 years ago that silver had hit $10 for the first time in nearly two decades. Now at over $30 and rising, silver is flexing its muscles as one of the best-performing assets of the last decade. There's no arguing that silver's secular bull has been spectacular. Since its 2001 low, silver had soared a staggering 1094% to its 2011 high. And based on its structural fundamentals, silver's bull still likely has plenty of room to run in the years to come. Investors who've been accumulating this precious metal over the years (like our newsletter subscribers who first started buying with us when we officially recommended it as a long-term investment back in 2001) have obviously fared quite nicely. But there's another silver vehicle ...

How Oliver Wyman Manipulated The Spanish Bank Bailout Analysis Posted: 28 Sep 2012 01:40 PM PDT The biggest (non) news of the day was Oliver Wyman ("OW") conducting an "independent" audit of the Spanish banking system to validate the previously disclosed funding needs of Spain's banks which were announced back in June (just a week after Mariano Rajoy "insisted" no bank bailouts are needed). What OW really did was exercise 1 in a financial analyst's playbook: to goal seek a number in excel using a variety of input variables, especially several fudge factors that are tangential to the matter at hand, yet which provide the biggest bang for the buck. In this case the target of the goalseeking exercise was to get a final headline number for bank capital needs to be just as expected, or €60 billion. Sure enough it the number was €59.3 billion, just a little bit less than consensus. This is the total number of cash the bank system will need in order to be considered viable, and unless something has changed drastically, the cash will come from new debt issued by Spain, which in turn funds its bank bailout fund, the FROB (a process explained here). While it is a given that several months from now we will go through this whole entire exercise to find out how much more cash Spain's banks will need, for now what is curious is to understand what the fudge factor was that OW abused to allow it to get the desired result. That fudge factor is what is known as "excess capital buffer", whose usage in the model to plug a major capital shortfall gap is non-sensical and shows that the real funding needs of Spain's banks will be far greater, even absent future deterioration. What is the excess capital buffer? First, here is a chart showing the walkthru of the entire exercise. In the OW report, the consulting company which is happy to goalseek any result requested of it by its client, shows that total projected losses for all Spanish banks, not just those who are now nationalized, under the adverse scenario will be €270 billion. The question then is how to plug this hole. First, Spanish banks have already taken €110 billion in provisions. Next, OW estimates that somehow Spain's banks can generate profit to the tune of €59 billion, which together with a government-backed loss backstop called "Asset Protection Schemes" in place for BBVA, Liverbank and Sabadell amounting to €8 billion, brings the capital deficiency hole to €93 billion. Now if it wasn't for the excess capital buffer, this is the total amount of new capital that banks would have to raise: a number which the market would have thrown up on, as it would effectively raise Spain's official debt/GDP by an additional ~15%. But thanks to the magic of excel, and consultants of dubious ethical standing, we get what is known a fudge factor. What is the formal definition of the Capital Buffer. Here it is from pages2 and 53 of the OW report: To improve the quality of the projected loss absorption, we...utilized a structured approach to model the additional capital buffer resulting from deleverage, by estimating RWA reductions in line with projected entities' credit volumes by asset type in each scenario. ... The capital buffer is the excess available capital above the requirements set for the purpose of the bottom-up stress testing exercise. As defined by the Steering Committee, post-shock capital needs are estimated taking a minimum Core Tier 1 ratio (as defined by the EBA) of 9% and 6%, under the base and the adverse scenarios respectively.   Credit deleverage has the effect of reducing an entity's total risk-weighted assets (RWAs) and subsequently, capital requirements. This RWA reduction reflects the current specific asset mix of each entity and their growth strategy in different credit segments. To simplify, what OW has done is to assume that as the situation deteriorates, whether in the base or adverse case, Spanish banks will sell debt, in the process reducing capital requirements, which implicitly makes sense: less debt, less equity needed to support it. Keep that in mind for now. So the first thing that is surprising about the capital buffer is the following disclosure in the report: Capital buffer generates approximately €73 BN of extra loss absorption capacity in the adverse scenario (€22 BN in the base scenario) This is curious. It basically means that in the worst case scenario, it is assumed that Spain's banks will sell much more debt, ostensibly hundreds of billions worth, in order to get the benefit of Core Tier 1 deleveraging. Visually this is shown as follows: So basically what OW, Spain, and all those who have endorsed this report and its findings, among them the IMF and the ECB, are saying, is that as the situation gets worse, Spanish banks will delever. In fact, they will delever in the adverse case to an amount that on a consolidated basis fress up more capital (€73 billion), than the entire capital shortfall under the same scenario at €60 billion. This also implies that the total amount of deleveraging is in the hundreds of billions (also keep this number in minds). That this is the deus ex fudge used by the European brain trust is simply laughable as it raises several quite hilarious questions, the first one being: just whom will these Spanish banks sell said debt to? Since we are talking adverse case, in which the Spanish economy is imploding, GDP is crashing, and unemployment is soaring, one can assume an ongoing global deflationary deleveraging is the general context assumed by the authors. That someone under these circumstances would offer a bid, any sensible bid to a Spanish bank system which is now known will have to sell should things get far worse, and thus hit any bid, is simply laughable and shows how little understanding of actual capital markets consultants have. In short: in having to sell debt in the open market to mitigate capital requirements, Spanish banks would have to suffer massive P&L hits, which since all this debt, the bulk of which is Spanish sovereign debt to begin with, is market at par would lead to crippling Income Statement losses. Naturally, P&L losses would then make their way to the balance sheet and annihilate all of those €59 billion in OL assumed profits that offset the €270 billion in total future losses. In fact, should Spanish banks have to dump hundreds of billions in debt, and hit any bid, the total losses would be order of magnitude bigger than just €270 billion. But a far bigger issue is the following. We will let readers figure it out using the chart below: The chart above simply shows what the complete liquidity needs of the Spanish banking system are, far beyond and above what the Stress Test is calculating for. It shows that in August, the ECB, via any of its numerous funding vehciles, had funded Spanish banks to the tune o a record €412 billion. Why so much? The reason is Exhibit A of just why the Spanish banking system is doomed: the endless and relentless deposit outflow, which we noted yesterday. Here is the chart again in all its glory. Since bank deposits are bank liabilites, the constant outflow of deposits means three things: i) either the banks have to generate profits and thus increase shareholder equity, to offset the loss in liabilities, which in the current environment will never happen, or ii) they have to sell assets, which in the current massively mismarked environment would also never happen as the banks would then have to take great unprovisioned losses on these asset sales, in the process generating greater losses to equity, than offsetting cash creation, or iii) and this is precisely what is happening, pledge assets (and potentially re-pledge and re-re-pledge using rehypothecation) to the ECB in exchange for cash via any of the generic funding conduits such as the MRO and LTRO. And that's precisely where the paradox lies: What Oliver Wyman is suggesting is that Spanish banks can plug capital shortfalls, modestly in the base case, massively in a worst case environment, by selling hundreds of billions of the very debt they use to pledge as collateral with the ECB! What this means of course, is that as the inventory of dry powder of eligible collateral declines (because the ECB will accept any bank assets, regardless of how worthless it is in exchange for 100 cents on the euro), the ability of the ECB to fund ongoing deposit outflows is eliminated. And therein lies the Catch 22. Because unless the bank runs are halted, and the need for liquidity from some source, i.e., the ECB, ends, the Spanish banks will need more not less debt on their balance sheets! It certainly means that in reality none of that €73 billion in benefits from "excess capital buffer" will ever become available to the banks. But what it most certainly means is that if someone were to sit down and think through the logic of the OW bailout schematic, the real capital needs for Spain's banks would far, far, greater, which in turn would crush any residual confidence in the system, which in turn would send the bank runs into overdrive, which in turn would guarantee the imminent collapse of the entire Spanish system, and with it the state of Spain, and thus the ECB and the Eurozone. Is the picture emerging now? Of course, all of the above has to be avoided at all costs, which is precisely why OW did what it did, why it fudged the numbers the way it did, and why the Eurozone, the IMF and the ECB rushed to give their seals of approval to an analysis which cracks after 15 seconds of critical thinking. But at the end of the day it is all about confidence, and the last thing the people of an entire insolvent world continent can afford is the truth. Finally, and the biggest irony of the entire farce that is the Oliver Wyman analysis, is the unexpected sideffect of their conclusion which has more capital being formed for three of Spain's banks, Santander, BBVA and Bankinter under the Adverse scenario than under the Baseline. In other words, in order to appear better, these three banks would have every incentive to crash the Spanish economy! * * * In retrospect, it is almost as if 'they' are not even trying any more.

COT Gold, Silver and US Dollar Index Report - September 28, 2012 Posted: 28 Sep 2012 01:32 PM PDT COT Gold, Silver and US Dollar Index Report - September 28, 2012

'2016: Obama's America' Filmmakers Claim Organized Disinformation Campaign Posted: 28 Sep 2012 01:30 PM PDT UPDATED: The movie showed up on YouTube over the weekend as (false) rumors spread it would also be shown free on the Fox News Channel. Paul Bond, writes:  "The filmmakers behind 2016: Obama's America are claiming a coordinated attack engineered by supporters of Barack Obama to suppress the box-office results of the movie, which is a critical look at the president. The film, the second-highest-grossing political documentary in U.S. box-office history, has made $32 million domestically since opening in mid July but took in only $938,000 during the recent weekend for a per-screen average of $771, down 27 percent from $1,060 per screen in the previous weekend, according to BoxOfficeMojo. Overall, the movie's boxoffice dropped 53 percent in the most recent weekend compared with the previous one, its largest decline since opening 10 weeks ago. While such a drop isn't unusual for a movie during the course of a week -- especially when the theater count dropped from 1,876 to 1,216 -- filmmakers nevertheless say box-office results were artificially depressed for two reasons: a disinformation campaign spreading the false rumor that Fox News Channel would be showing the movie in its entirety Sunday and a pirated version of the film showing up on YouTube this weekend. "Saturday morning, I started getting e-mails from groups and individuals either warning me about the piracy of 2016: Obama's America or thanking me for allowing the movie to go online," said Randy Slaughter, president of Rocky Mountain Pictures, the film's distributor. Filmmakers said they notified the FBI that the movie was available illegally and that they notified YouTube of a copyright breach, prompting the user to take down the film."  Continued... (More at the link below.  Dispels the rumor that 2016 was to be aired on Fox Sunday night.  Go see 2016 in theaters soon.) Source: Hollywood Reporter Edit at 16:11 to correct link. http://www.hollywoodreporter.com/news/filmmakers-2016-obamas-america-fox-news-373478

Gold Sets Records in Euros and Francs on Currency Concerns Posted: 28 Sep 2012 01:27 PM PDT "With today being the last trading day of the week, month and quarter...I wouldn't want to bet on the price action...up or down." ...

LGMR: Gold in Euros Sets New High as Crisis "Escalates" and Spain "Lays Groundwork" for Bailout Posted: 28 Sep 2012 01:27 PM PDT London Gold Market Report from Ben Traynor BullionVault Friday 28 September 2012, 06:45 EDT U.S. DOLLAR gold prices hovered near seven-month highs above $1780 an ounce for most of Friday morning's London trading – a few Dollars up on where they started the week – while stocks failed to hold early gains after a analysts interpreted Spain's budget as "laying the groundwork" for a formal bailout. Silver prices eased to $34.73 per ounce after failing to breach $35, while other commodities were broadly flat and US Treasury bonds gained. Euro gold prices meantime remained close to all-time highs hit yesterday. "The debt crisis in the Eurozone has escalated again," says today's commodities note from Commerzbank. "Gold should therefore remain in high demand as a store of value and alternative currency. Silver has also been pulled upwards in gold's slipstream." Spain unveiled a "crisis budget" Thursday that included a third year of public sector wage freezes and an 8.9% cut in ...

Von Greyerz sees wealthy buying gold and moving it outside banking system Posted: 28 Sep 2012 01:15 PM PDT 3:12p ET Friday, September 28, 2012 Dear Friend of GATA and Gold: Gold fund manager Egon von Greyerz is unusual in the gold world for being bullish on the metal in the short term as well as the long term. Today he tells King World News that he sees wealthy people buying gold and taking it outside the banking system, beyond counterparty risk. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/28_Gr... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet at Wellgreen Project in Yukon Territory: 5.36 g/t Company Press Release Tuesday, September 11, 2012 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: New Orleans Investment Conference Wednesday-Saturday, October 24-27, 2012 Hilton New Orleans Riverside Hotel New Orleans, Louisiana http://www.neworleansconference.com/ * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 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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