Gold World News Flash |
- Fractal Gold Review and Update
- Hi ho silver away! Spectacular month ahead for our top pick of the year!
- The Great Escape
- Silver Trading Higher in Overnight Markets, Knocking at $32
- Economic Failure: 58 Percent Of The Jobs Being Created Are Low Paying Jobs
- ALERT: Scotiabank Tries to Talk SilverDoctors OUT of Buying Physical Silver!
- Black Swan for Gold? 12,000 S.A. Gold Miners Go on Strike
- John Butler on Free-market Economics and the Upcoming ‘Great Crisis'
- First Platinum, Now Gold: As South African Miners Strike Spreads, Thousands Of Ounces Remain In The Ground
- Jim's Mailbox
- Weekend Update Part II
- Even The Wall Street Journal says gold mining shares are undervalued
- Obama Doctrine: China is the New ‘Enemy Image’
- The Bear Case For the S&P 500 Stock Market Index
- Von Greyerz on Bernanke, Norcini on gold and silver futures at King World News
- The return of inflation to the West?
- CIF collapse: This is the eurozone's Northern Rock
- Is 11% This Election's Most Important Number... And If Not, Why Isn't It?
- James Grant: Ben Bernanke Should Return the Fed to its Golden Roots
- Critical Changes Impacting The Gold & Silver Markets
- SHOULD WE BE OPTIMISTIC OR PESSIMISTIC?
- Gold and silver have a lot of catching up to do
- Bagus' Bernanke Rebuttal - Redux
- SP500 Index: Make It or Break It?
- Silver Fractal Analysis Update
- Gold Fractal Analysis Review "YOU AIN'T SEEN NOTHING, YET"
- Alasdair Macleod: The gold price and the exponential growth of our problems
- Geopolitical – Week of 9.2.12
- The gold price and the exponential growth of our problems
| Fractal Gold Review and Update Posted: 03 Sep 2012 10:00 AM PDT The Fractal Gold chart work is a direct comparison of Gold, today, to the late 70's Gold Parabola. Thus, "timing" is taken directly from the late 70's cycle, with price targets created from a combination of the late 70's Gold price and different technical analysis techniques. We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull. Anything above that range would mean that the "Stagflation" comparison to the late 70's was exceeded and "Hyper-inflation" would become a real possibility.
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| Hi ho silver away! Spectacular month ahead for our top pick of the year! Posted: 03 Sep 2012 09:00 AM PDT Silver prices rallied by four per cent after Ben Bernanke sat down from speaking at Jackson Hole on Friday, and that was with the chairman of the Federal Reserve hinting at QE3 to come and failing to actually do it.
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| Posted: 03 Sep 2012 12:43 AM PDT A television program by the same name requires contestants to escape from a containment zone and move progressively through 4 stages by solving various puzzles and problems. If captured by patrolling guards at any stage, they must return to the containment zone and start the process all over again. Once successful at the transport zone, they are eligible to win a large cash prize. [CENTER]Escape from the Containment Zone[/CENTER] For many months, Gold, Silver and the XAU have been contained in a bear market with numerous failures in the 60 minute and daily time frames due the weight of the higher negative trend forces (weekly and monthly) pressing down on the weaker daily trend. On 8/6/12, another positive daily trend was achieved in the XAU. As described in "Let the Journey Begin" the next stage noted was a possible positive weekly posture and that a key metric and steering mechanism for this event was the weekly Pendulum SRA cycle indicator. That SRA indicator did indeed tu...
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| Silver Trading Higher in Overnight Markets, Knocking at $32 Posted: 02 Sep 2012 11:33 PM PDT
With the Nasdaq and other markets closed on Monday in observance of Labor Day, it just may be that the Morgue has a bit less manipulative control than they might like until U.S. markets re-open Tuesday. That may be wishful thinking on our part, regardless Silver is knocking at $32 tonight. SILVER: The Achilles' Heel
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| Economic Failure: 58 Percent Of The Jobs Being Created Are Low Paying Jobs Posted: 02 Sep 2012 11:10 PM PDT from The Economic Collapse Blog:
Read More @ TheEconomicCollpaseBlog.com
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| ALERT: Scotiabank Tries to Talk SilverDoctors OUT of Buying Physical Silver! Posted: 02 Sep 2012 11:10 PM PDT
BREAKING: Doc from SilverDoctors.com informs us that while trying to acquire enough physical silver to fill a 7-figure order, the Silver Doctors contacted Scotiabank in Canada and were promptly scolded for trying to get one of their well-heeled investors into the silver market. Scotiabank informed Doc that "the silver market is far too small for wealthy investors" and then tried to talk the Silver Doctors out of trying to fill their physical silver order. We also talk about silver's fast pace to $32, $35 and back to $40. "Anyone who gets in in the low $30′s will be very glad they did in a few years," Doc says, "We haven't seen anything yet."
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| Black Swan for Gold? 12,000 S.A. Gold Miners Go on Strike Posted: 02 Sep 2012 10:30 PM PDT by The Doc, Silver Doctors:
Gold nearly touched $1700 Friday on speculation Ben Bernanke and The Fed will soon publicly announce QE3. While additional QE impacts the price of gold from a demand side standpoint with traders and investors acquiring the asset in order to protect themselves from currency devaluation and debasement, gold's supply side might have just experienced a black swan event, as 12,000 South African gold miners have followed their platinum miner counter-parts by going on strike from Gold Fields. Gold Fields is the world's 4th largest gold mine, and the strike is costing the firm 1,660 ounces of gold a day in lost production according to Gold Fields' spokesman Sven Lunsche.
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| John Butler on Free-market Economics and the Upcoming ‘Great Crisis' Posted: 02 Sep 2012 10:13 PM PDT by Anthony Wile, The Daily Bell:
Introduction: John Butler is a Marin County native who studied economics, history, philosophy and international politics at university before embarking on a career in the financial industry. He worked for over 15 years as an interest rate, currency and commodity strategist at major investment banks in North America and Europe prior to founding his own independent investment and advisory firm, Amphora Capital. While at Lehman Brothers in the mid-2000s, he was ranked #1 for Interest Rate Strategy in the Institutional Investor Survey. He currently serves as the Chief Investment Officer of the Amphora Commodities Alpha Fund and is the publisher of the popular Amphora Report investment newsletter, featured on a number of prominent financial websites. John is also the author of The Golden Revolution: How to Prepare for the Coming Global Gold Standard, published by John Wiley and Sons (2012). A frequent speaker and presenter at investment conferences and seminars around the world, his research has also been featured in the Wall Street Journal, Financial Times, Boerzenzeitung and the Frankfurter Allgemeine Zeitung, among other publications. Daily Bell: Give us some sense of how you got interested in finance. John Butler: My original interest in finance was as an underappreciated aspect of history. Nothing important happens in the world that is not financed in some way, yet the sources and methods of financing for international trade, industrial expansions and innovations, wars, revolutions, political campaigns, colonialism, imperialism, etc., generally do not feature prominently in the history books. While studying toward a PhD in International Economics and Finance, I learned much about what academia is really like and decided I was better suited to the real world of practical finance. And so I headed off to Wall Street and took the best job I could find.
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| Posted: 02 Sep 2012 09:48 PM PDT from Zero Hedge:
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| Posted: 02 Sep 2012 08:19 PM PDT Hello Jim, Silver Wheaton does not participate in DRS, they say: "Your broker or financial institution can request a certificate through the Depository Trust Company." Is this as good as DRS? Also, mining stocks are heavily shorted (naked?) so multiple people claim ownership of the same shares. So even with DRS are we Continue reading Jim's Mailbox
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| Posted: 02 Sep 2012 06:38 PM PDT The CRB, a basket of commodities, has been declining in Gold terms over the last few years. We have been trading below its March 2009 low for quite some time now and currently we might be in the process of breaking down again. Read More...
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| Even The Wall Street Journal says gold mining shares are undervalued Posted: 02 Sep 2012 06:26 PM PDT Window of Opportunity in Gold By Alex MacDonald http://online.wsj.com/article/SB1000087239639044477280457762361014526643... LONDON -- Investors with risk appetite may want to look at gold stocks, particularly those of companies ripe for takeover, analysts say. A gap between the price of bullion and gold-mining stocks has emerged, and history shows that it likely won't last long. Equities should catch up to gold prices and close the valuation gap. The NYSE Arca Gold Bugs Index, which tracks 16 miners, has underperformed the front-month gold contract on the Comex division of the New York Mercantile Exchange by 16 percentage points since the beginning of the year. This is attributable to a combination of factors, including broader risk aversion toward equity investments, lower gold output among certain miners for various reasons, and the emergence of exchange-traded funds, or ETFs, that have wooed traditional retail investors away from gold-mining stocks and toward direct gold investment. ... Dispatch continues below ... 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 Such funds are considered less risky because investors can buy and sell shares in a fund that buys and holds gold on their behalf. Gold-mining equities, on the other hand, not only provide exposure to gold prices but also fluctuations in cost and production levels, which could either enhance or hamper investment performance. The current gap between the price of gold and gold equities has lasted longer than the previous one in 2008-09, largely because of Europe's protracted sovereign-debt crisis, which has pushed gold prices higher but made equity markets more volatile. "Unfortunately, we believe the overall equity markets may face some difficult times ahead, at least until the euro zone crisis is resolved," analysts at RFC Ambrian said. "But we feel that in most cases the market has significantly oversold gold equities and this has presented some attractive investment opportunities." The valuation gap hasn't gone unnoticed. While retail stock investors may be apprehensive about jumping into gold equities, acquisitive mining companies have demonstrated interest in scooping up gold companies on the cheap. Accountancy and consultancy firm Ernst & Young reported this summer that gold mergers and acquisitions accounted for the highest share of the global mining and metals deal volume during the first half of 2012. Out of 470 M&A deals, 160 were in gold, although the average size of those deals was $40 million compared with $62 million a year earlier. "It's a buyer's paradise" when gold stocks underperform gold prices, said mining analyst Asa Bridle of Seymour Pierce Ltd. The resource base of West African gold developers, for instance, is now valued at an average $30 a troy ounce, compared with $100 12 months ago, said Adam Kiley at RFC Ambrian. RBC Capital Markets analyst Jonathan Guy said investors could stand to reap more rewards from investment in small-to-midtier gold producers than from the top-tier gold producers that have more stable production profiles. Such small-to-midtier miners, mostly exploration and project development companies, may offer more attractive returns, in part because the relatively credit-constrained market environment means they may have to seek partnerships to develop their projects, making them potential M&A targets. "We have not seen a large amount of activity flow through to the explorers/developers as of yet, but as their valuations remain at such distressed levels that we believe it will not be long before producers will look at raiding and cherry-picking the best from this sector," RFC Ambrian analysts said. Mr. Guy of RBC Capital said that one of his top picks would be U.K.-listed Centamin, whose valuation has fallen due to production setbacks stemming from labor issues and sovereign risk associated with political unrest in Egypt. Mr. Kiley highlighted Australia-listed Papillon Resources Ltd., given the company's discovery of a high-grade ore deposit in Mali. The company could be of interest to U.K.-listed Randgold Resources Ltd., because Randgold is interested in high-grade ore deposits and already operates in Mali, he said. Randgold signaled last month that it was interested in pursuing opportunities in the junior mining sector. Investing in small-to-midtier gold miners, however, comes with its own risks. Miners could struggle to finance their projects in the current market environment. And mining costs are still rising while gold prices have been range-bound recently, pressured to the downside by a stronger U.S. dollar and a low-inflation environment. Investors tend to buy gold to protect their investments from risks associated with a weaker dollar and inflation. But the price of gold could surprise to the upside if central banks around the world continue buying gold at current rates and countries implement stimulus measures. U.S. Federal Reserve Chairman Ben Bernanke said Friday that the central bank was open to the possibility of further action to stimulate the economy, prompting spot gold to rise 2.2% to $1,691.40 an ounce, a high last seen just over five months ago. Join GATA here: Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...
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| Obama Doctrine: China is the New ‘Enemy Image’ Posted: 02 Sep 2012 04:22 PM PDT Since the collapse of the Soviet Union and the nominal end of the Cold War some twenty years back, rather than reducing the size of its mammoth defense spending, the US Congress and all US Presidents have enormously expanded spending for new weapons systems, increased permanent military bases around the world and expansion of NATO not only to former Warsaw Pact countries on Russia’s immediate periphery; it also has expanded NATO and US military presence deep into Asia on the perimeters of China through its conduct of the Afghan war and related campaigns.
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| The Bear Case For the S&P 500 Stock Market Index Posted: 02 Sep 2012 04:16 PM PDT Today’s comments by Fed Chairman Bernanke gave equity markets a boost, but it also caused US Treasuries and gold to rise more strongly in a run to safety. There are important voices on both the bull side and the bear side of the US stock market predictions.
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| Von Greyerz on Bernanke, Norcini on gold and silver futures at King World News Posted: 02 Sep 2012 02:38 PM PDT 4:35p ET Sunday, September 2, 2012 Dear Friend of GATA and Gold: Interviewed by King World News, gold fund manager Egon von Greyerz of Matterhorn Asset Management analyzes Federal Reserve Chairman Ben Bernanke's latest ambiguous remarks and concludes that more "quantitative easing" is indeed coming, but not when everyone expects. Also interviewed at King World News, futures market analyst Dan Norcini says speculative money last week entered the gold and silver markets in a big way, which is how those markets climb. Excerpts from the interviews are posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/2_Cri... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res... Join GATA here: Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT GoldMoney adds Toronto vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada. GoldMoney also has recently partnered with Rhenus Freight Logistics to offer another gold storage option in Switzerland. The Rhenus vault is in the secured zone of Zurich Airport and offers customers superb security as well as the ability to inspect their gold. Storage at the new vaults in Canada and Switzerland is available at GoldMoney's lowest fees. Customers can select their storage location when placing their buy order. GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata
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| The return of inflation to the West? Posted: 02 Sep 2012 02:16 PM PDT by Martin Feldstein 9/03/12 "Inflation is now low in every industrial country, and the combination of high unemployment and slow GDP growth removes the usual sources of upward pressure on prices. Nevertheless, financial investors are increasingly worried that inflation will eventually begin to rise, owing to the large expansion of commercial bank reserves engineered by the United States Federal Reserve and the European Central Bank (ECB). Some investors, at least, remember that rising inflation typically follows monetary expansion, and they fear that this time will be no different. Investors have responded to these fears by buying gold, agricultural land, and other traditional inflation hedges. The price of gold recently reached a four-month high and is approaching $1,700 an ounce. Prices per acre of farmland in Iowa and Illinois rose more than 10 per cent over the past year. And the recent release of the US Federal Reserve Board's minutes, which indicate support for another round of quantitative easing, caused sharp jumps in the prices of gold, silver, platinum and other metals."
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| CIF collapse: This is the eurozone's Northern Rock Posted: 02 Sep 2012 01:56 PM PDT Like Northern Crock, it has a tiny deposit base, and a massive reliance on wholesale markets for the vast majority of its funding. Wholesale costs go up as mid-to-southern Europe gets increasingly liquidity-frozen and….p'doing, down goes CIF. What this goes … Continue reading
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| Is 11% This Election's Most Important Number... And If Not, Why Isn't It? Posted: 02 Sep 2012 12:48 PM PDT With the US presidential election looming in just two months, there is hardly a state that is as critical to the outcome of who America's next president will be, as Florida. As Bloomberg vividly summarizes, Florida - and specifically its five swing counties: Hillsborough, Orange, Pinellas, Seminole and Volusia - was the state that determined the president in all of the last 3 elections: set between the Republican-dominated North Florida and the more Democratic southern counties, these suburban communities of middle-class voters are known for their shifting allegiances. In 2008, Obama took four of the five counties to capture Florida. George W. Bush won three of the counties, and the state, in 2004. In 2000, Volusia's vote count was disputed by Vice President Al Gore. Gore won the county yet lost Florida by 537 votes, giving Bush his first term as president. It is quite fitting then that these five counties are very much indicative of the primary malaise that has plagued the country for the past 4 years: the inability of the housing market to rebound no matter how many trillions in printed dollars are thrown at it. Which brings us to the key number that probably should (but most likely won't in this age of ultra short-term attention spans and constant redirection and focus shifts): 11% - this is the foreclosure rate in these 5 critical counties, double what it was 4 years ago, and three times higher than the national foreclosure average rate of 3.4%.
Some more numbers: a stunning half of the mortgages are underwater, double the US average, according to CoreLogic. In other words, if there ever was a time and place when economics, through its sheer failure to restore "household wealth" in this most decisive region, was a key issue, now is the time. And just as importantly, if it is Romney's prerogative to focus on the shortcomings of Obama's economic policies (and if it isn't it certainly should be) it is precisely these 5 counties that should be the focal point of any campaign that not only identifies the weaknesses of the current administration, but also proposes workable alternatives. Because by now the people in America are tired of mere jawboning (and if they aren't they certainly should be) about who did what, even as the plight of the rapidly disappearing middle class gets worse and worse by the day. From Bloomberg:
Here, the irony abounds: As Bloomberg suggests, "nationally, the improved housing picture has helped push the subject off the short list of talking points for both presidential candidates. Neither President Barack Obama nor Republican challenger Mitt Romney gives housing much play, even in the Sunshine State." Alas, the housing picture has not improved, and as we have shown before what we have experienced is merely the latest dead cat bounce in what is now a quadruple-dip, soon to be quintuple, in housing prices.
Of course, what little improvement there is, is in the ultra-luxury segment where the NAR continues to have exemption from anti-money laundering provisions, and gladly obliges any and every foreigner willing to launder their criminally-procured cash via US real estate, ostensibly primarily at the high end of the market. In the meantime, the foreclosure freeze not only continues but is getting worse despite the robosigning settlement which was supposed to unclog the foreclosure pipeline and achieved anything but.
This means banks hold increasingly more housing on their books, but for one reason or another are unwilling to release it, pushing ever more inventory into those unkempt "shadow" regions, and in effect subsidizing the housing market by keeping (tens) of millions of housing units off the market thus artificially pushing prices higher until such time as the true housing inventory picture is unleashed on the market.
All this, coupled with the imminent failure of the most recent shadow subsidization attempt by the government in the form of REO-to-Rentals, which is essentially converting housing into commercial REITs using government funding, for the simple reason that the US consumer is more tapped out by the day, means that the fifth leg lower of the housing market is imminent, but likely not before the November election day. In the meantime this most critical component of US household wealth will get precisely zero mention in the upcoming campaign debates, as will any discussion of what the next administration's policy is when the secular housing decline resumes its deleveraging downward slope.
Curiously, despite their economic plight, Floridians appear to be siding with Obama, although the margin is thin:
So far none have, as if housing will magically fix itself, and instead America's future president and his challenger continue to snipe nonsensically at each other over who paid what taxes and who was born where. Yet what is most surprising is that the US electorate has allowed the presidential campaign to proceed for as long as it has without such critical issues being addressed. Perhaps it is for the better: after all in a time of central planning there is nothing anyone can promise, or do, that would have any significance on the final economic outcome, and perhaps America simply enjoys deluding itself using every known fudge factor in the book that this time, housing has finally bottomed. It bottomed in Japan too... And hasn't stopped doing so for over 30 years!
But perhaps none of the above really matters. The bread may be in short supply, but at least the circuses are flowing 24/7. Just as the average US voter likes it.
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| James Grant: Ben Bernanke Should Return the Fed to its Golden Roots Posted: 02 Sep 2012 12:42 PM PDT "The massive and record short position in gold now held by the raptors really made me stand up and take notice." [COLOR=#7f4028] Yesterday in Gold and Silver The gold price did virtually nothing in early Friday trading in the Far East on their Friday...but began to develop a positive bias about 3:30 p.m. Hong Kong time, about thirty minutes before London opened. [When I hit the 'send' button at 5:10 a.m. Eastern time on yesterday's column, gold was up three bucks...and net volume was around 13,000 contracts.] The price crawled higher from there before getting smacked to the down side starting about ten minutes after the 9:30 a.m. equity market open in New York. Then, half an hour later at 10:10 a.m. Eastern, the sell-off turned on a dime...and the gold price blasted about twenty-five dollar higher in about ten minutes. From there the gold price worked its way higher for pretty much the rest of the trading day in New York...both in the Comex a...
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| Critical Changes Impacting The Gold & Silver Markets Posted: 02 Sep 2012 12:29 PM PDT  On the heels of the spectacular surge in gold and silver, Egon von Greyerz and Dan Norcini update King World News listeners on the critical developments taking place in both markets. Norcini discusses the crucial changes in the COT structure, but first, Egon von Greyerz, of Materhorn Asset Management out of Switzerland, had this to say about Bernanke's speech: "On the one hand he says we shouldn't expand the balance sheet further because that isn't good for the finances of the Fed. But on the other hand, and this is the important statement at the end of his speech, he talks about daunting economic challenges that confront our nation."
This posting includes an audio/video/photo media file: Download Now |
| SHOULD WE BE OPTIMISTIC OR PESSIMISTIC? Posted: 02 Sep 2012 11:53 AM PDT The middle aged and older generations are fairly pessimistic about the future. Most rational thinking people are pessimistic about the next decade. Some have hope about what can be done after the impending financial collapse. But, many in the Millenial generation are optimistic about the future. Are they crazy? Nope. Young people are naturally optimistic. [...]
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| Gold and silver have a lot of catching up to do Posted: 02 Sep 2012 11:44 AM PDT The following article has been posted at GoldMoney, here. The gold price and the exponential growth of our problems2012-SEP-02
 In contrast with these accelerating deficits, the gold price has fallen from over $1,900 to recent lows under $1,600. Admittedly this move has been accompanied by growing apathy in the market, matched perhaps by complacency in bond markets over the state of the government finances quoted above. Furthermore similar budgetary problems, particularly those welfare-related, afflict all advanced economies. And these liabilities are not just rising; they are accelerating and are unlikely to remain hidden for much longer. While the general public is aware that the eurozone, for example, has difficulties and that world economic conditions are far from blissful, it is unaware of the enormous scale of the global sovereign debt crisis. Even economists who should know better ignore it; however, they are gradually beginning to realise, contrary to what their text-books tell them, that stuffing new money into an economy is not leading to recovery and underwriting future tax revenues. This being the case, unfunded liabilities will emerge at the same time tax revenues diminish. Waking up to this reality will create its own financial shock, made worse perhaps because it has been the intention of governments to hide the truth. They have pursued this deception with zero interest rates, which have artificially cut the cost of government borrowing and kept stock markets from falling. At the same time they have fostered the myth that government spending can make a positive difference to the economic outcome. Contrast this with Spain and Italy, who are unable to conceal their financial difficulties any longer. Their problems are a foretaste for what the rest of us will eventually face. Do recent stirrings in precious metal prices indicate an end to this complacency, or is it just a speculative bounce? Time will tell, but given the rapid deterioration of government finances, gold and silver have been left a long way behind. But summer's lease hath all too short a date. In the next few months we will think less about outdoor activities and more about what's ahead of us. Some of our future pre-occupations are easy to anticipate, such as the growing risk of the eurozone disintegrating. Others are less visible, but could this winter see us waking up to the consequences of governments' off-balance sheet liabilities turning into actual deficits? If this is the case gold and silver – having dallied for a year – have a lot of catching up to do, and the recent rise should be the start of a major move upwards. 
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| Bagus' Bernanke Rebuttal - Redux Posted: 02 Sep 2012 11:29 AM PDT At the end of December 2010, Philipp Bagus (he of the must watch/read 'Tragedy of the Euro') provided a clarifying and succinct rebuttal or Bernanke's belief in the extreme monetary policy path he has embarked upon. Bernanke's latest diatribe, or perhaps legacy-defining, self-aggrandizing CYA comment, reminded us that perhaps we need such clarification once again. Critically, Bagus highlights the real exit-strategy dangers and inflationary impacts of Quantitative Easing (a term he finds repulsive in its' smoke-and-mirrors-laden optics) adding that:
Will There Be QE3, QE4, QE5...? Philipp Bagus, December 2010, via the Ludwig von Mises Institute, Recently, Ben Bernanke indicated that Quantitative Easing II (QE2) might be followed by QE3, etc. In an interview at the beginning of December, Bernanke was asked, "Do you anticipate a scenario in which you would commit to more than $600 billion?" Bernanke's answer was startling. "Oh, it's certainly possible," he said. "And again, it depends on the efficacy of the program. It depends on inflation. And finally it depends on how the economy looks." The answer is interesting because it not only indicates the possibility that the Federal Reserve (Fed) will purchase more government bonds but also implies that Bernanke thinks that inflation and QE are different concepts, because otherwise his claim would be a meaningless tautology: more inflation depends on inflation. To make sense of Bernanke's technical talk, let us go back to the beginning of the infamous QE, to the darkest months of the financial crisis. During the boom fired by artificially low interest rates, financial institutions had financed malinvestments, especially in the housing sector. When the bubble burst and housing prices started to fall, these investments lost value rapidly. Bank losses mounted, bank equity fell, and solvency problems arose. Liquidity dried up as financial institutions started to doubt each other's solvency given the problematic loans on their books. When credit markets dried up in September 2008, after the collapse of Lehman Brothers, loans that financed malinvestments did not serve as collateral for interbank lending anymore. The Fed stepped into the breach and accepted these bad assets as collateral for loans. In March 2009, the Fed started to buy these assets outright in what was dubbed QE1. As a consequence of this qualitative and quantitative easing, the Fed's balance sheet almost tripled within a few months. How long would these extraordinary emergency measures be maintained? In March 2009, Ben Bernanke stated that the Fed had an exit strategy from its emergency credit policies. It could simply undo its credit policies and asset purchases, thereby reducing the size of its balance sheet to its pre-crisis level. I have argued that such an easy exit option does not exist. The Fed's purchase of problematic assets did not solve the underlying real problems in the economy: injecting new money does not cause malinvestments to go away. By propping up financial institutions, necessary liquidations and readjustments of the structure of production are only delayed. QE1 could even cause more malinvestments and thereby aggravate the problem. The consequence could be a Japanization of the banking system, with insolvent banks held afloat by the central bank. If the Fed would exit the emergency situation, reduce its balance sheet, and stop accepting problematic assets as collateral for loans, financial institutions would be back to the initial situation of September 2008. If housing prices do not return to their bubble level, many of the problematic assets will continue to be bad and not serve as good collateral. If valued at the market price, these assets might eat up banks' equity. If the Fed ended its emergency measures, we would effectively be back to the initial situation of frozen interbank markets and general illiquidity. In October 2009, I concluded that the Fed could not go back to its initial balance sheet without causing the collapse of the financial system. One possible way out would be to reinflate the bubble. Rising asset prices — and especially housing prices — would make many problematic bank assets valuable again. The Fed could increase the quality of its assets by inflating the housing bubble. In the winter of 2010 [ZH - just as now in Summer of 2012], no one is talking about reducing the Fed's balance sheet or about exit strategies anymore. On the contrary, the Fed has chosen the path of more inflation and dubbed this strategy "QE2." QE2 has a slightly different purpose than QE1. QE1 directly supported struggling banks by buying their problematic assets. QE2 supports the government. The inflationary policies of the Fed have been coupled with the Keynesian fiscal policies of the US government. The US government engaged in deficit spending to bail out financial institutions and automakers, disrupting a fast liquidation of malinvestments and a smooth adaption of the structure of production to consumer wants. QE2 is a direct response to this deficit spending, which obliges the government to issue more bonds. With QE2, the Fed supports the government by buying these bonds. The Fed thereby actively helps the government in its Keynesian policies, which disrupt recovery. While QE1 supported the financial system, QE2 supports the government. Granted, this difference is not substantial given that the fates of the financial system and the government are interwoven. The banking system finances the government that in turn grants the privilege of fractional-reserve banking and implicitly gives guarantees for banks' losses. Of course, Ben Bernanke does not say that he wants to help finance the government's deficit via money creation. The official excuse for QE2 is, yet again, the scapegoat "deflation."[2] Price inflation is too low. James Bullard, president of the St. Louis Federal Reserve Bank, states that "it's important to defend inflation from the low side as we would on the high side." In other words, if prices rise too slowly, we must print money so that things get more expensive faster. Bernanke even denies that QE2 would be inflationary: "One myth that's out there is that what we're doing is printing money. … The money supply is not changing in any significant way." Bernanke plays a semantic trick in this statement. Of course, the Fed does not create the bulk of its new money by literally "printing." Rather, the Fed creates money by manipulating digits in its computer. When the Fed buys a $1,000 government bond from a bank, it transfers 1,000 new dollars as a payment to the bank. It is true that the Fed does not print the money and ship it over to the bank physically. Rather, it increases the account that the bank holds at the Fed by $1,000. It is more convenient to just create the new money in a computer.
However, the fact that the new money is created electronically does not mean that QE2 is not inflationary. QE2 is inflationary in several ways:
Consequently, QE2 is, despite Bernanke's words, inflationary. In fact, it is a euphemism to call the policy QE2. The term quantitative easing conceals the true inflationary nature of the instrument. Furthermore, it sounds technical. The added number "2" makes it even more so. People who know little about economics might ignore news on QE2. Why bother to understand something so technical — let the experts deal with it. The term also has a positive connotation. Who does not want "ease"? As Walter Block has repeatedly pointed out, we should carefully watch our language. Language is crucial to clear communication. The use of the term quantitative easing generates a smog to hide the production of new money. Words, as Block states, can be mightier than pens or swords. They guide our thoughts and writings. The invention of the term quantitative easing prevents people from thinking about the consequences of inflation. The term distorts thinking.
Why not name QE for what it is? Why not name it after the effects it has? Money printing cannot make society richer; it does not produce more real goods. It has a redistributive effect in favor of those who receive the new money first and to the detriment of those who receive it last. The money injection in a specific part of the economy distorts production. Thus, QE does not bring ease to the economy. To the contrary, QE makes the recession longer and harsher. The injection of new money into the economy reinflates old bubbles and generates new ones. Most importantly, QE facilitates government deficit spending — additional distortions and rigidities in the economy. Malinvestments can endure. Factors of production are not shifted to places where the consumer wants them to be most urgently. Thus, QE2 would be better called, "Quantitative Straining," "Quantitative Destruction II," or "Crisis Prolongation III." Or we might name it after the intentions behind it: "Currency Debasement I," "Bank Bailout I," "Government Bailout II," or simply "Consumer Impoverishment." Finally, we might also name it after its essence: "Money Printing I and II." Or, if we follow Bernanke, who pointed out that most of the new money is created in a computer, we can call it "Money Creation I and II." This might be the most neutral term. The rhetorical tricks should not distract us from the fact that QE is simple money creation. The aim of Money Creation II is to finance government spending, debasing the dollar. We should dismiss the term QE and instead call money creation what it is: inflation.
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| SP500 Index: Make It or Break It? Posted: 02 Sep 2012 11:08 AM PDT Ben Bernanke is anticipating another round of measures to support the economy. These could help stocks and gold until the year's end. The U.S. dollar should instead contract. However, failure to move above 1.2670 would take the euro back ... Read More...
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| Silver Fractal Analysis Update Posted: 02 Sep 2012 10:57 AM PDT [Before reading this update on Fractal Silver, you might wish to skim through my recent public article, “Fractal Gold Review and Update” since it discusses key timing issues that this article is based upon.] The Fractal Silver Chart from the late 70’s is a bit different than today, mostly due to the effect that the deflationary psychology of the current period has had on Silver as a partly “economic metal.” This means that the chart of Silver has been much more volatile, especially in downside corrections compared to the late 70’s charts. The Silver parabola is a less fluid form than the Gold parabola with Silver making sharp vertical rises along the way. The Gold and Silver parabolas are driven by the flows of Dollar Inflation to Devaluation, yet big money and Central Banks mostly invest in Gold. This leaves Gold’s little sister, Silver, more prone to volatility and to speculation. This fact can create an advantage for Silver investors.
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| Gold Fractal Analysis Review "YOU AIN'T SEEN NOTHING, YET" Posted: 02 Sep 2012 10:53 AM PDT The Fractal Gold chart work is a direct comparison of Gold, today, to the late 70’s Gold Parabola. Thus, “timing” is taken directly from the late 70’s cycle, with price targets created from a combination of the late 70’s Gold price and different technical analysis techniques. We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull. Anything above that range would mean that the “Stagflation” comparison to the late 70’s was exceeded and “Hyper-inflation” would become a real possibility.
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| Alasdair Macleod: The gold price and the exponential growth of our problems Posted: 02 Sep 2012 10:42 AM PDT 12:40p ET Sunday, September 2, 2012 Dear Friend of GATA and Gold: Unfunded social welfare system liabilities soon may overshadow government budget deficits and start goosing gold and silver, GoldMoney Research Director Alasdair Macleod writes today. His commentary is headlined "The Gold Price and the Exponential Growth of Our Problems" and it's posted at GoldMoney here: http://www.goldmoney.com/gold-research/alasdair-macleod/the-gold-price-a... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. Join GATA here: Toronto Resource Investment Conference New Orleans Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment: Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory. The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57. The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows: Payback period: 3.55 years Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics." For the complete press release, please visit: http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...
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| Geopolitical – Week of 9.2.12 Posted: 02 Sep 2012 09:15 AM PDT 'Massacre': Scores of Amazon Indigenous Tribe Members Killed by Miners |
| The gold price and the exponential growth of our problems Posted: 02 Sep 2012 08:00 AM PDT Two Bloomberg correspondents reported on August 8 that the US Government's unfunded liabilities rose by $11 trillion last year, "ten times larger than the official deficit", and are ...
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Are you good at flipping burgers , waiting tables or stocking shelves? Are you proficient with a cash register? Do you enjoy doing mindless work for very low pay? If you answered yes to any of those questions, then you are probably going to fit in very well in the new U.S. economy. According to a report that has just been released by the National Employment Law Project, 58 percent of the jobs that have been created since the end of the recession have been low paying jobs. So exactly what is a low paying job? Well, the National Employment Law Project defines it as a job with an hourly wage between $7.69 and $13.83. But of course you can't pay a mortgage or support a family on $13.83 an hour. Even if you got full-time hours the entire year, you would make less than $28,000 on an annual basis. The federal poverty level for a family of five is $27,010. So needless to say, most of these new jobs are not paying enough to support a middle class lifestyle. This represents an economic failure on a fundamental level. Our economy is producing very few good jobs that enable people to be able to raise families and live the American Dream. The ranks of "the working poor" are exploding and the number of Americans that are dependent on the government is sitting at 
Two weeks ago 
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