saveyourassetsfirst3 |
- New Gold's Management Presents at Bank of America Merrill Lynch 18th Annual Canada Mining Conference (Transcript)
- Weak Economy Positions Dollar Tree For Strong Growth
- Semafo Breaking Key Resistance Level
- Leverage To The Downside? If QE3 Is Not Announced Next Week Look Out Below!
- Silver Wheaton Management Presents at Bank of America Merrill Lynch 18th Annual Mining Conference (Transcript)
- Comstock Commences Drilling at VG Zone on QV Project
- Get Ready for a Gold-Stock Breakout
- The Most Investment-Critical Trend & Its Antidotes
- Precious Metals Jump as Jobs Data Boosts QE3 Odds
- Gold Stocks are Breaking Out; Commodity Report by Leading Financial Newsletter Profit …
- Gold "A Bit Overcooked" Ahead of US Nonfarms Data
- Obama’s Acceptance Speech – As It Should Be
- Silver: “You ain’t seen nothing, yet” – Fractal Analysis
- Central Banker Berates Indians For Preferring Gold to Paper Money
- KWN – Special Friday Gold & Silver ‘Chart Mania’
- Anti-Gold Fool
- Sprott Physical Gold Trust Announces Follow-On Offering
- Schiff – Ban Corporate Profits!
- Bullish Trifecta Boosts Money Center Banks
- Did you notice the game changing?
- Gold spikes on nonfarm payroll disappointment
- Gold Imports to China from Hong Kong Double Again
- "Silver steals the spotlight from gold"
- Bullion 'A Bit Overcooked' Ahead of US Nonfarms Data
- Gold Likes ECB Plan & Expects More from Fed
- Four King World News Blogs/Audio Interviews
| Posted: 07 Sep 2012 12:34 PM PDT New Gold Inc. (NGD) Bank of America Merrill Lynch 18th Annual Canada Mining Conference September 7, 2012 9:30 am ET Executives Randall Oliphant – Executive Chairman and Director Analysts Michael Jalonen – Bank of America Merrill Lynch Presentation Michael Jalonen – Bank of America Merrill Lynch Okay, moving on to our next speaker, very pleased to have from New Gold, Randall Oliphant, Executive Chairman. Randall has been with the New Gold and predecessor companies since 2007 and some of you may remember him from being CEO of Barrick and for four years 1999-2003, and so he's had extensive experience in the mining business. I think Randall we both started in the mining business at the same time. And we're both 35 years old and it has been like 30 years and basically, but New Gold is an evolving mid-tier gold producer and Randall, why don't I passed on to yourself? Complete Story » | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weak Economy Positions Dollar Tree For Strong Growth Posted: 07 Sep 2012 12:29 PM PDT By Dollar Tree's (DLTR) business model is extremely attractive and benefits from a weak economy. The company has solid long-term growth prospects supported by a number of growth initiatives and opportunities to further expand solid margins. Management does an admirable job of creating shareholder value which is reflected in the way that they allocate capital. The valuation is fair currently and Dollar Tree has significant capital appreciation potential given the companies' solid growth prospects in the long term. It is a solid equity to own amid global macro concerns. Business Differentiation Dollar Tree is the largest chain of discount stores which have uniform merchandise pricing of $1. Dollar Tree, Family Dollar (FDO), and Dollar General (DG) all operate smaller square foot stores that are more conveniently located for day to day shopping than Wal-Mart (WMT) stores. Single price dollar stores differ from other discounters with multiple price points, such as Family Complete Story » | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Semafo Breaking Key Resistance Level Posted: 07 Sep 2012 12:18 PM PDT By Felix Pinhasov: Semafo (SEMFF.PK) is a Quebec-based miner with mines in Burkina Faso, Niger, and Guinea, West Africa. The company's primary asset, the Mana Mine, is located Burkina Faso. As the 1-year chart below illustrates, the stock has been extremely volatile and not particularly kind to long-term investors as it is to traders. As the chart shows, the stock experienced a deep correction in early July due to a resource estimate report that did not meet market expectations, which were inflated after the former CEO boosted market expectations of the Wona-Kona Super Pit. The estimate returned total reserves and resources of 7.3M ounces (not including the inferred resource), up 1.3 million ounces from the prior estimate, at a grade of 1.80 grams per tonne. The stock broke a key resistance level of the $4 level today (Friday) and is one of the best performing gold producers from a price action perspective. Technically Complete Story » | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leverage To The Downside? If QE3 Is Not Announced Next Week Look Out Below! Posted: 07 Sep 2012 11:21 AM PDT By Yesterday the European Central Bank announced an unlimited short-term bond-buying program with some conditions, helping to allay fears that it would not do all it can to save the euro. Although the announcement was somewhat expected, it also held interest rates at current levels, which could be considered a disappointment. The U.S. markets didn't mind and surged on the news even though volume was relatively light for such a rally. Today we were met with yet another pitiful jobs number and downward revisions of prior months. Some are taking this as a sign the Federal Reserve must move on QE3. Maybe it will, maybe it won't. In my opinion if it moves on QE3 it will have minimal impact as I suspect it has been baked into the markets. If it does not announce QE3 this month I think we will finally see this rally exhaust and a sell-off ensue. Complete Story » | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Sep 2012 11:16 AM PDT Silver Wheaton Corporation (SLW) Bank of America Merrill Lynch 18th Annual Mining Conference Call September 6, 2012 1:25 PM ET Executives Gary Brown – SVP and CFO Analysts Michael Jalonen – Bank of America/Merrill Lynch Presentation Michael Jalonen – Bank of America/Merrill Lynch Now we're moving on to Silver Wheaton. We have Gary Brown, the Senior VP and Chief Financial Officer to make the presentation, and this continues our streaming side, focusing now on the silver streams. Gary, you guys just made a transaction also. Gary Brown Great, thanks Mike, and it's always a pleasure to speak at this conference, thanks for the invite back, and thank you for taking time out of your schedules to learn a little bit more about Silver Wheaton, and why we believe it represents the best investment vehicle out there to gain long-term exposure to silver Complete Story » | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comstock Commences Drilling at VG Zone on QV Project Posted: 07 Sep 2012 10:36 AM PDT Vancouver, BC - September 7, 2012 - Comstock Metals Ltd. (TSX-V: CSL) ("Comstock" or the "Company") is pleased to announce that a diamond drilling program has commenced on the QV Project in the White Gold district, Yukon.The drilling program is designed to test strong gold enrichment discovered in trenches at the VG Zone, including 3.31 g/t gold over 95m from trench QVTR12-06 and 3.77 g/t gold over 45m in QVTR12-15 (see Comstock news release dated September 4, 2012). �The gold mineralization occurs within lode quartz-carbonate veins, stockworks, and breccias, as well as pyrite veinlets, fractures and disseminations within a north-east trending zone of strongly quartz-sercite-carbonate altered felsic schists, and granitic intrusives that has been defined over a minimum strike length of 390 m and is open to both the east and west. In addition to drilling, additional trenching and soil sampling is continuing to more closely define the limits of this gold anomaly. For detailed maps of the property and the locations, please visit the website at: www.comstock-metals.com. The 2012 drilling program is supervised by Jodie Gibson, P.Geo., Consultant for Comstock Metals Ltd. and Gordon Davidson, P.Geol., Director Comstock Metals. Both are Qualified Persons as defined by NI 43-101.� Drill core will be cut in half using a diamond saw, with one half placed in sealed bags, and delivered to Acme Analytical Laboratories Ltd. in Whitehorse, Yukon. The technical information in this Release has been reviewed by both Mr. Davidson and Mr. Gibson. About Comstock Metals Ltd. Comstock Metals is focused on two principal projects:� the QV Property in the Yukon Territory, and the Corona Property in Mexico.� The QV Property lies within an area of 494 claims covering 10,374 hectares (25,634 acres) within the prolific White Gold District in the Yukon Territory about 70 kilometres south of Dawson City. The Company has also earned a 60% interest in the Corona Property in Mexico and can earn an additional 15% interest from Golden Goliath Resources (GNG) to hold a 75% interest by completing a positive bankable feasibility study by December 31, 2017. Comstock's Corona Gold-Silver project is located in the prolific Sierra Madre Occidental in Chihuahua, Mexico.� The Company completed a drill program in the spring of 2012. The drill program discovered two new zones of gold and silver mineralization. Please refer to the website at http://www.comstock-metals.com/projects/corona_gold_silver/ for details. To learn more, please visit the Company's website at: www.comstock-metals.com For further information, contact Rasool Mohammad or Larry Johnson at 604-639-4533. COMSTOCK METALS LTD. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Disclosure: Comstock Metals Ltd. is a Vulture Bargain Candidate of Interest (VBCI). Members of the GGR team are actively accumulating and may hold long positions in CSL.V or CMMMF. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Get Ready for a Gold-Stock Breakout Posted: 07 Sep 2012 09:32 AM PDT Gold stocks are on the verge of a major upside breakout. Once the HUI gold-stock index climbs decisively above its summer resistance and 200-day moving average, the shift in sentiment from bearish to bullish should accelerate dramatically. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Most Investment-Critical Trend & Its Antidotes Posted: 07 Sep 2012 09:27 AM PDT "Check out the chart of the Continuous Commodity Index or CCI and note that it has managed to put in a weekly close above the 38.2% Fibonacci Retracement Level of the move lower from its all time recent high made last year. If the market pysche remains the same, look for this index to now make an eventual run back towards the 597-600 level. "We can look at these charts as subjects of interest to us as traders/investors but what this particular stock represents is increasing pain for consumers and the hard-pressed middle class in one of the worst, if not the worst "recovery" since the Great Depression. "Think of this as increased frustration at the grocery store, at the gas pump, at the hardware store, at the local restaurant, etc. While some of this rally is the result of the drought and I will of course not lay that at the feet of the Fed, it is a simple fact that the breakout on this chart today, is the DIRECT RESULT of Mr. Bernanke's insistence on implying that another round of bond buying is on the way. "When you pull into the gas station and fill up your car or truck, and are sent reeling at the cost, you can lay some of the blame right at his feet and the feet of his elitists on the FOMC who insist on pacifying Wall Street instead of having concerns how their policies are destroying Main Street." "More Pain for the Middle Class courtesy of Bernanke" Dan Norcini, traderdannorcini.com, 8/31/2012 It is not just the skyrocketing prices we pay for Food and Energy as reflected in the CCI, that demonstrate the Price-Inflationary effect of The Fed's (and ECB's) ongoing Monetary Inflation. But it is the prices for most of what we buy that have skyrocketed as a result of The Fed's decades-long monetary inflation. Consider the following chart comparing the 1930's cost in the U.S. for common goods and services, with today's costs.
Insiders Strategic Review, 8/26/2012 Clearly, monetary-inflation-generated Price Inflation robs Retirees and Savers, especially, but also citizens in general via loss of the Purchasing Power of their Fiat Currencies. Indeed, in just the most recent decade 2000-2010 when Americans have suffered a nominal 7% income loss, their Purchasing Power loss has been about 40%. This ongoing threshold Hyperinflation is reflected in the Real Numbers (as opposed to Bogus Official Ones) per shadowstats.com. Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest. Consider Bogus Official Numbers vs. Real Numbers (per Shadowstats.com) Annual U.S. Consumer Price Inflation reported August 15, 2012 1.41% / 9.02% U.S. Unemployment reported August 3, 2012 8.3% / 22.9% U.S. GDP Annual Growth/Decline reported July 27, 2012 2.21% / -2.15% U.S. M3 reported August 4, 2012 (Month of July, Y.O.Y.) No Official Report / 2.86% e Fed and ECB Money Printing has allowed/encouraged U.S., U.K., and Eurozone Sovereign Nations to run up debts which are unpayable under any reasonably possible scenario. Interest on the U.S.A's $16 Trillion Debt is already over $400 Billion/yr. The U.S.' Debt plus downstream unfunded liabilities now total $222 Trillion according to Economist Laurence Kotlikoff of Boston University. And even though there are certain Deflationary forces (recently, Housing Deflation in the U.S. and PIIGS countries of the Eurozone), the Inflationary forces are overwhelming the Deflationary ones on a net basis, if one considers the Real Numbers as opposed to the Bogus Official ones. Thus The Fed and ECB (and Spendthrift Politicians) have brought the U.S. and Eurozone to the point when Debts cannot be expanded much now without creating Hyperinflation, but Budgets cannot be cut dramatically without throwing Economies into Deeper Recession and even Depression. And perhaps the worst aspect is that Q.E. has been provided and Sovereign Debt has been increased mainly to bail out the Mega-Banks some of which are Owners of the private for-profit Fed. The $5 Trillion added to the U.S. National Debt and $1 Trillion plus added to the Fed's balance sheet in the last four years have not helped Main Street. The Mega-Banks are still not lending much to Small Business, but prefer to keep Reserves deposited at the Fed which pays them interest. (If The Fed were really serious about helping Main Street it would stop these "Interest" payments, in order to encourage more lending!) Indeed, the Mega-Banks' Money Printing has not only not helped Main Street, but has also encouraged reckless and ultimately self-destructive lending and trading by the Mega-banks. (Case in Point: J.P. Morgan Chase recent $5 billion Trading Loss.) Consider: "[The] central bank offers the equivalent of gambling insurance to the banking industry. "Imagine if an insurance company made the following deal with all patrons of a casino: In exchange for a patron's promise to gamble prudently, the insurance company promises to come to the patron's aid if he finds himself short of money. Knowing that the insurance company was essentially acting as a financial backstop, at least a few gamblers would take more risk than they would otherwise. "In a similar vein, knowing that the central bank will be ready, willing and able to provide support via emergence liquidity injections if things go wrong, some private banks will take more risks. Furthermore, due to the higher profits that tend to temporarily accrue to the banks that take more risk, most banks will eventually be drawn toward riskier business practices. This is why a mechanism supposedly (according to the propaganda) put in place to prevent banking crises ends up increasing the severity and frequency of banking crises." Steve Saville, The Speculative Investor, 8/31/2012 Unfortunately, even though more Central Bank Money Printing and Bond Buying benefits mainly the Mega-Banks (and the Equities Markets for a few weeks), print they will to protect (they claim) for a while more, against a Depression. The ECB's decision Sept. 6, 2012 to buy "Unlimited" amounts of Sovereign Bonds is but one more example of ongoing Monetary Inflation, which inevitably becomes Price Inflation as we see in Food and Energy (and notwithstanding the ECB's fallacious claim the Bond Buying will be "sanitized" to prevent Inflation). Thus the Most Investment-Critical Trend going forward is Accelerating Price Inflation (see Note 2) though it is often masked by Bogus Official Numbers. Therefore the Antidotes for investors are:
And one should be prepared to short at the right time:
Of course, when investing in aforementioned Assets, the Key to Success is Timing, Timing, and Timing, and being increasingly Wary of Counterparty Risk. And just in case any reader still has illusions that Official Forecasts are usually correct, consider the Congressional Budget Office's Record:
Insiders Strategic Review, 9/4/2012 Accelerating Price Inflation is the Most Investment-Critical Trend going forward, and Investors must deploy the Antidotes wisely to Profit and Protect. Best regards, Deepcaster September 6, 2012 Note 1: There are Magnificent Opportunities in the Ongoing Crises of Debt Saturation, Rising Unemployment, negative Real GDP growth, over 9.0% Real U.S. Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults. One Sector full of Opportunities is the High-Yield Sector. Deepcaster's High Yield Portfolio is aimed at generating Total Return (Gain + Yield) well in excess of Real Consumer Price Inflation (9% per year in the U.S. per Shadowstats.com). To consider our High-Yield Stocks Portfolio with Recent Yields of 10.6%, 18.5%, 26%, 15.6%, 8%, 6.7%, 8.6%, 10%, 14.9%, 10.4%, 15.4%, and 10.7% when added to the portfolio; go to www.deepcaster.com and click on 'High Yield Portfolio'. Note 2: No question that THE BIG ONE is coming soon. The Can can no longer be kicked down the road: Consider "On a three-month rolling basis, portfolion and investment outflows from Spain totaled 52.3% of the country's GDP, more than double the outflows from Indonesia, which reached 23% of GDP at the time of the Asian crisis." Jens Nordaig, Nomura The only Questions are: When? In what form? Key Powers-that-be have telegraphed it already. They see it as the only way to save their Bacon. But it creates Profit Opportunities for Investors. To see these Opportunities, read Deepcaster's latest Alert, "The Big One Cometh! Opportunity Knocks; Forecasts: Gold, Silver, Crude Oil; Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates," just posted in 'Alerts Cache' at deepcaster.com. And do not miss our recent Recommendation which could turn a 4,500% Profit if it moves back up to its 52 week high. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Precious Metals Jump as Jobs Data Boosts QE3 Odds Posted: 07 Sep 2012 08:25 AM PDT The price of gold jumped to $1,733 and silver to $33.50 an ounce on news of worse than expected US job figures. The US economy added 96,000 workers last month following a revised 141,000 rise in July that was smaller than initially estimated. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Stocks are Breaking Out; Commodity Report by Leading Financial Newsletter Profit … Posted: 07 Sep 2012 08:10 AM PDT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold "A Bit Overcooked" Ahead of US Nonfarms Data Posted: 07 Sep 2012 07:42 AM PDT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Obama’s Acceptance Speech – As It Should Be Posted: 07 Sep 2012 07:40 AM PDT
from dollarvigilante.com: "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship." — Alexander Tyler, 1887 (An empty stage. Obama is nowhere in sight. There is no warmup act. The lights go down. A screen drops. The entirety of Romney's nomination acceptance speech is played. Americans haven't disliked a Presidential nomination acceptance speech that much since 1996. Lights come up. Obama is standing, open collar, no podium, a knowing smile ear to ear.) "That's what I'm talkin' about!" (He does a 360 on his heels.) "You want some of that shit?" (Obama yells to the crowd, pointing to the screen, Romney's huge head and constipated smile frozen in time.) "Here's the bottom line muthafucka's . . . I didn't do you right. No! I bent you over and banged you like a gong!" (Another 360-degree pivot on his heels . . . Evil grin.) Keep on reading @ dollarvigilante.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver: “You ain’t seen nothing, yet” – Fractal Analysis Posted: 07 Sep 2012 07:37 AM PDT
from mineweb.com: ILLINOIS – 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. Keep on reading @ mineweb.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Central Banker Berates Indians For Preferring Gold to Paper Money Posted: 07 Sep 2012 07:31 AM PDT
from caseyresearch.com: Yesterday in Gold and Silver As I stated in 'The Wrap' yesterday morning just minutes before my 5:20 a.m. Eastern time filing deadline…"It remains to be seen whether these rallies [in gold and silver] continue in London…or get stepped on before New York opens…" With the benefit of 20/20 hindsight, it's easy to see that virtually all the excitement was over by 9:20 a.m. BST in London. There was a vertical price spike at 1:00 p.m. BST, twenty minutes before the Comex open…but it got hammered flat in pretty short order. The rally after the London p.m. gold fix at 10:00 a.m. Eastern time wasn't allowed to get too far, either. Keep on reading @ caseyresearch.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| KWN – Special Friday Gold & Silver ‘Chart Mania’ Posted: 07 Sep 2012 07:28 AM PDT
from kingworldnews.com: With the wild action in gold and silver this week, top Citi analyst Tom Fitzpatrick put together a 'Gold & Silver Chartapalooza' where he laid out the roadmap for gold and silver to hit new all-time highs. Below is his piece and the KWN Special Friday Gold & Silver 'Chart Mania.' But first, Fitzpatrick warned in his repoprt: "It seems that in this 'brave new world' the goalposts for failure/success have been sharply shifted. Failure is recession/depression, deflation, default, wealth destruction, social strife/conflict and possibly worse. Success now seems to revolve around a dynamic familiar to people who were around in the 1970's…STAGFLATION looks set to be a our 'new normal' (If we are lucky) in the years ahead." Keep on reading @ kingworldnews.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Sep 2012 07:27 AM PDT
from lewrockwell.com: David Weidner wrote a piece for MarketWatch: "Fool's Gold Standard." It was standard stuff, i.e., a combination of economic stupidity, attempted cleverness, and the rhetoric of contempt. It deserves my special treatment, which I reserve for mainstream media journalists who hate the idea of a world not run by the Federal Reserve and who try to be clever. Weidner is not clever. Let me explain. I quote him verbatim and in context. He begins with this: Keep on reading @ lewrockwell.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sprott Physical Gold Trust Announces Follow-On Offering Posted: 07 Sep 2012 07:01 AM PDT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schiff – Ban Corporate Profits! Posted: 07 Sep 2012 06:52 AM PDT Our friend Dennis Gartman included a link to a Peter Schiff video in his missive this Friday morning. The video covers Mr. Schiff interviewing delegates and attendees to the Democratic National Convention in North Carolina. We won't give away the contents of the video in advance, but we echo Mr. Gartman's comments on it – Gartman said: "Be afraid; be very, very afraid."
Source: Schiff Radio via YouTube | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bullish Trifecta Boosts Money Center Banks Posted: 07 Sep 2012 06:49 AM PDT
The European Central Bank (ECB) has moved decisively to save the euro, confirming an unlimited bond-buying program (to the great fury of German voters and the Bundesbank). China has announced a new stimulus program that amounts to building another slew of ghost infrastucture: 1,254 miles of roads, nine sewage-treatment plants, five port and warehouse projects, and two waterway upgrades (plus three turtle doves, two french hens, and a partridge in a Chinese pear tree). A weaker than expected jobs report on the U.S. front has cemented the likelihood of a QE3 announcement at the FOMC meeting next week.
Prior to Draghi's "ammunition unlimited" victory over the Bundesbank, it was not clear whether the political will actually existed to "do whatever it takes" to save the euro. Now we see that it does. The Bundesbank, the historical protector of German fiscal soundness, was defeated in a vote that essentially gives the ECB unlimited ammunition in its fight to make the euro appear not a currency in jeopardy of break-up, but "irreversible" (Draghi's term). Who are the big winners in all this?
Given the interconnectedness of the global financial system, one major winner is the money center banks. Decisive steps to save the eurozone mean that tail risk for European banks – the possibility of a derivatives-related blowup – has been substantially reduced. This is very good news for US banks and brokers as well, given the connectedness of the system and their unquantifiable exposures to Europe. Early on EURUSD We anticipated a potential window of opportunity for shorting EURUSD, but it turns out we were premature (and the virtue of a tight risk point kept us from losing much on a small probing position). While economic drivers favor the United States over recession-racked Europe, and "printing" by the newly enabled ECB is all but guaranteed, it may be that short-term capital flows back into the old continent (on the all-clear to buy distressed European assets) are a stronger short-term force than any macroeconomic anticipation as to what is actually ahead for Europe's economy. Aussie squeeze The Aussie dollar (AUDUSD) is also surging on news of China's "everything but the kitchen sink" stimulus plan, along with increasingly anticipated odds of dollar-weakening QE3 next week via a US jobs report that came in light. What we are seeing here is tantamount to a vicious short squeeze, as China's long-term prospects (and Australia's) have not actually changed. We have enough profits built into our short Aussie position to ride out the squeeze with no risk to initial capital, and will look to pyramid yet again if the squeeze convincingly fails. Shorts hanging in As for US markets, in addition to our new "rented long" exposure (from Thursday's open) on the money center bank side, most of our short book actually managed to survive Thursday's melt-up. Names like UPS, DNKN and TFM (some of the shorts we own) responded very tepidly or even declined in the face of the rally, which, as others have noted, is not being confirmed by Dow theory. Where do we go from here? Much will depend on Friday's close and next week's reaction to the two-day Fed meeting. Stimulus in the form of QE3 has been such a long-awaited, its arrival may yet prove anti-climactic, or a euphoric blow-off top of sorts. Beyond the huge exhale of relief that comes with Europe being "saved", China finally "doing something," and the Federal Reserve firing one of its few remaining bullets, the reality looms that global slowdown is still in effect, corporate earnings are still in jeopardy, and the world on the whole is, at least economically speaking, in a more precarious position than it was before. Given all the above – plus the increasing odds next week could put a cap on things – we still favor a selective shorting bias in areas of the market that are rolling over, clearly weakening, or otherwise failing to confirm the extended new highs… per usual, all real money positions (traded with our own capital) documented and time-stamped in the Mercenary Live Feed. NEWS FLOW
The Economist does a good job of clarifying what the ECB has actually accomplished. The odds of the euro surviving as a currency are now very strong – the odds of the eurozone and its various economies escaping a brutal recession, and possibly even great-depression-like conditions, not so much. We have grown so used to European crisis, and the prospect of Europe's monetary union teetering on the brink of dissolution, that a booster shot of certainty, re, the euro's survival is enough in itself for a wild outbreak of bullishness. But it does not change the fact that, once the patient has confirmed likely survival, there is still a great deal of severe illness to be dealt with.
An interesting question is whether Buba (the Bundesbank) and German voters have been well and truly vanquished. Is the fight over for good? Have The possibility remains for more monkey wrenches to be thrown in the works, though it seems unlikely… an attack by the German courts in the upcoming September 12th ruling could be disastrously destabilizing. Not a high probability risk, but one to be aware of. One potentially significant reason for market melt-up is the "career risk" of benchmark chasing money managers who have found themselves under-exposed to equities. This is both a powerful driver in the short term and a false hope in the intermediate to longer term, as such forms of rocket fuel tend to run out at the most inopportune times, leaving late-to-the-party investors staring down at air. CHART NOTES
POSITIONING Our new bullish exposure is concentrated in money center banks (BAC and C). Many of our shorts continue to "act right", behaving weakly or even declining outright in the face of recent bullish price action. (Those shorts that did not act right have been kicked out.) Rather than chase further upside here, we are actually finding more attractive shorts to put on as Thursday's big push gave a window into which areas of the market are weak (by dint of the sectors and names that did not respond). Our trading book is still light, relative to the amount of activity and exposure we take on in higher quality / more target rich environments… with that said, we are growing ever more excited for opportunities in the final stretch of the year as we get this big slug of central bank political risk behind us. As usual and as noted, we eat our own cooking (trade our own capital) and have the substantial majority of our liquid net worth invested in our strategies. No paper trading or shooting at wine glasses here. To follow along, check out the Mercenary Live Feed. JS (jack@mercenarytrader.com)   p.s. Like this article? For more, visit our Knowledge Center! p.p.s. If you haven't already, check out the Mercenary Live Feed!
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| Did you notice the game changing? Posted: 07 Sep 2012 06:46 AM PDT There was a time when, as Alan Greenspan said, the dollar was acting like gold. When the economy dwindled downward, stocks and commodities fell and the dollar got a boost upward. And as the economy did well, stocks and commodities moved up and the dollar fell. But that's not exactly what we've been seeing lately. The news this morning is weak job numbers, the economy isn't doing well. But stocks and commodities are up, and the dollar is down. The opposite results of what investors had become used to over the past couple of decades. The reason is those investors know the Fed will come in and rescue all with newly printed bucks. And this is nothing new, the Fed bailed out everyone after the dot com bubble burst and even more so after the housing bubble burst. So it seems like the market just has a better understanding of the game. This is pretty important and here's why. Equipped with an understanding of Business Cycle theory, we know that newly printed bucks dispersed by the Fed don't really make the economy better, that this only creates an illusion of economic growth, a boom with an eventual bust. And eventually, the illusion isn't so easily created. I think we've experienced just that since the Fed started up the printing presses nearly four years ago and unemployment still hasn't moved significantly. Unemployment wasn't great even during the housing bubble. Over time, I believe the market will figure this out too, I think it will become so obvious they'll have to see it. What happens then? Inflation that cannot be easily cracked. Because weak economic news will send the dollar down, the market knowing the Fed will inflate, but nominally stocks will fall too, as the market understands the new money will not help unemployment. What's left? Commodities, and they'll soar. What are the king commodities? Gold for sure, and this time, likely silver, too. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold spikes on nonfarm payroll disappointment Posted: 07 Sep 2012 06:00 AM PDT "Draghi Day" yesterday was something of an anti-climax as far as precious metals were concerned: though the European Central Bank is now prepared to buy unlimited amounts of troubled ... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Imports to China from Hong Kong Double Again Posted: 07 Sep 2012 05:40 AM PDT Gold rose in anticipation of the ECB embarking on another money printing exercise with a potentially unlimited bond-buying program. There was then an element of 'buy on the rumor and sell on the news' as gold then saw slight falls on the well-flagged announcement. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| "Silver steals the spotlight from gold" Posted: 07 Sep 2012 05:39 AM PDT  Commodities Corner Archives | Email alerts Sept. 7, 2012, 12:01 a.m. EDT Silver steals the spotlight from gold Demand's poised to rise, but watch out for silver's volatility By Myra P. Saefong, MarketWatch  Reuters SAN FRANCISCO (MarketWatch) — Silver has been a top performer among major metals this year, and it looks set to continue to steal the spotlight from gold, with investment and industrial demand for the white metal expected to rise. "We could see a spectacular performance in silver" during the rest of the year, said Julian Phillips, a South Africa-based editor at SilverForecaster.com. "Silver, in addition to its demand [and] supply disjoint, will attract huge investment demand." Already, silver futures prices /quotes/zigman/699341 SIZ2 -0.70% trade above $32.60 an ounce, up about 18% for the quarter to date and up 17% from the end of 2011. Gold /quotes/zigman/699338 GCZ2 -0.43% , at more than $1,700 an ounce, has seen a quarter-to-date gain of 6% and less than 9% rise for the year. "Investors see precious metals like silver and gold as hedges against the debasement of paper currencies," said Elliott Orsillo, co-founder and portfolio manager at Season Investments LLC. Much of the recent move in both silver and gold has been a reaction to rising expectations for more monetary easing on the part of the European Central Bank and the U.S. Federal Reserve, which tend to devalue currencies. Orsillo warned that the market might have gotten a little ahead of itself regarding those expectations. "We could see a pullback and a better entry point [for silver] in the next couple of weeks," he said, noting that silver tends to be more of a "high-beta play," much more volatile than gold. Overall, however, "quantitative easing acts as a catalyst for precious metals," said Dawn Bennett, portfolio manager of the Bennett Group of Funds. The Fed's second round of quantitative easing, or QE, helped lift gold to a closing record of almost $1,900 and silver near $50 an ounce in 2011. A third installment of QE will likely have an even greater impact and both metals will "retest, if not surpass, 2011 highs," added Bennett. "While silver trades more volatile than gold, when the fundamentals for the safe-haven trade are in place, it performs extremely well and is affordable for any investor seeking refuge from the equity and bond markets or looking to hedge the dollar." Ratios Silver's lofty gain this year may be one that's built to last, but also one that's raised concerns over the risk of a steep pullback. The rally in the precious-metals sector finally getting under way is "likely to be a good one," with a record high in gold above $2,000 this year "a realistic target," said James Turk, founder and chairman of GoldMoney. For silver, although it comes with greater risk because it is not yet seen as money, the upside potential is even greater, he commented. "It is still largely seen as an industrial commodity and with global economic activity weak, people are not paying attention to what is actually happening in silver." 'Slowly but surely, silver is being recognized as an alternative to owning gold.' James Turk, GoldMoney "Slowly but surely, silver is being recognized as an alternative to owning gold," said Turk, so around "54 ounces of silver accomplishes for you the same thing as one ounce of gold — it is money outside of the banking system." Watching that gold-to-silver ratio is among the things traders can do to help figure out whether silver remains a good value, thereby hedging some risk in the metal's usually high volatile market. After Thursday's rally, the gold-to-silver ratio stood at around 52 ounces of silver for one ounce of gold. Read more on Thursday's metals trading. "Silver will outperform gold — meaning the gold/silver ratio will fall," added Turk. The historical norm for the ratio is 16 ounces of silver to one ounce of gold, so silver at current levels is undervalued relative to gold, he elaborated. "Because it is better value, silver will attract more money from investors than gold in the months ahead." Turk expects the ratio to fall to 30 next year, the same level it approached back in April 2011 when silver prices neared $50. In the longer term, silver will approach its historical 16-to-1 norm, he said. Open interest Traders can also look to open interest figures on the Comex division of the New York Mercantile Exchange to help gauge risks. "There seems to be close correlation between turns in the silver market and speculative open interest," which is the total number of long and short positions being held through the day's close by speculators, said Phil Storer, director of trading at Dillon Gage Inc. "The rationale is that when specs are out of the market, they are just waiting for some movement to draw them back in," he explained. "The more out, the more back in." George Kleinman, president of Nevada-based Commodity Resource Corp., said that on the recent rally in silver to $32 an ounce from under $30, total open interest, which includes both commercial and speculative positions, "collapsed from highs for the year to the lowest levels in four months" indicating that "much of this buying was shorts covering, which is not the strongest kind of buying." Click to Play  Energy independence: What's next A funny thing happened on the way to Barack Obama and Mitt Romney's goal of greater U.S. energy independence: American industry got there first, on paper at least. (Photo: AP) Open interest peaked at around 129,000 contracts during the second half of August, when silver prices were at about $30.80, Kleinman noted, and recently open interest was at 119,000 when prices were around $32.30, he said. That's a fall of 10,000 contracts on a price rise of $1.50 — showing "short covering to a major extent, not new buying," according to Kleinman. "To sustain a bull market, I would like to see open interest go up as the market goes up." For now, that's not quite the case. As open interest pulled back from their high in August, silver prices gained more than 12% that month. "Silver has a habit of putting in sharp, deep drops after extended up moves like this, so it can be pretty dangerous, but it also typically recovers the lost ground almost as quickly," said Dillon Gage's Storer. Still, "speculators tend to become numb to events rather rapidly so without new fuel to feed the fervor, we could see a roll over fairly soon. I'm happy to see the upward movement, but don't yet trust it for the long haul." 'Zigzag' rise Looking ahead, some analysts have some rather grand expectations for silver prices, but also worry about the potential for a big price retreat. Paul Mladjenovic, author of Precious Metals Investing for Dummies, expects silver prices to "zigzag upward toward $100" an ounce by 2014. "Oversized short positions in the silver futures, continued industrial demand in Asia, investment demand in the U.S. and the new applications for silver in areas such as solar power, [radio-frequency identification] technology and other new developments" are all a net positive for silver's price outlook, he said. Investment demand as well should "take off again as we see more monetary inflation/economic stimulus programs by governments in America, Europe and China," according to Brad Cooke, chairman and chief executive of Endeavour Silver Corp. /quotes/zigman/31426/quotes/nls/exk EXK +0.74% He expects silver to retest the $40 mark over the next six months before it backs off to consolidate those gains. "We may have seen the last of $20 to $30 silver for quite some time," said Cooke. "The main risk to this scenario is deflation if governments choose austerity over stimuli." /quotes/zigman/31426/quotes/nls/exk http://www.marketwatch.com/story/sil...=home_carousel Myra Saefong is a MarketWatch reporter based in San Francisco. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bullion 'A Bit Overcooked' Ahead of US Nonfarms Data Posted: 07 Sep 2012 05:16 AM PDT Spot market prices for buying gold rose to $1,698 an ounce Friday morning, in line with where they started the week, while stock markets also rose, following yesterday's announcement of the European Central Bank's bond market intervention plan. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Likes ECB Plan & Expects More from Fed Posted: 07 Sep 2012 04:54 AM PDT Markets rallied big on Thursday when the ECB Governor Mario Draghi unveiled the details of his much-anticipated bond purchasing program, although the measures were leaked the day before. Traders have positioned themselves for a good month in gold in September. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Four King World News Blogs/Audio Interviews Posted: 07 Sep 2012 03:20 AM PDT  The first blog is with Egon von Greyerz...and the headline reads "The ECB Move, $4,000 - $5,000 Gold & $150 Silver". The next one is with Dan Norcini...and it's entitled "What Hedge Funds are now Doing in the Gold & Silver Markets". The last blog is with Citi's Tom Fitzpatrick. It's headlined "read more |
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