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Friday, October 5, 2012

Gold World News Flash

Gold World News Flash

Asian Metals Market Update

Posted: 05 Oct 2012 12:00 AM PDT

All eyes are on the US September non farm payrolls. I have my doubts whether it will have any significant impact on commodities. Most of the bad news on the US economy and easing has been priced in by the markets. Technically also, gold, silver, copper and crude are all bullish. The key major central bank risk is over after the European central bank and bank of England meeting.


U.S. Dollar, Bonds, Gold, Commodities, and Stocks October Trend Forecasts

Posted: 04 Oct 2012 11:41 PM PDT

Over the past year we have had some really interesting things unfold in the market. Investing or even swing trading has been much more difficult because of all the wild economic data and daily headline news from all over the globe causing strong surges or sell offs almost every week. For a while there you could not hold a position for more than a week without some type of news event moving the market enough to either push you deep in the money or get stopped out for a loss. This has unfortunately caused a lot of individuals to give up on trading which is not a good sign for the financial market as a whole.


Did Turkey Just Declare War On Syria?

Posted: 04 Oct 2012 11:07 PM PDT

from The Economic Collapse Blog:

The Turkish Parliament has "authorized military operations" against Syria. So exactly what does that mean? Did Turkey just declare war on Syria? For now, the government of Turkey is making a clear distinction between "military operations" and "declaring war". If Turkey were to "declare war", that would likely involve Turkish troops actually entering Syria, and the war would not be considered "won" until certain objectives are achieved. So by just authorizing "military operations" against Syria, Turkey can sit back and fire off artillery rounds (and potentially call in air strikes if necessary) without being committed to entering Syria or attacking Damascus. Turkey is not too keen on invading Syria by itself anyway. Turkey would want the help of NATO in such an event, and right now Barack Obama has made it abundantly clear to the Turkish government that he is not going to participate in an attack on Syria before the election. Obama has been leading in the polls and he has way too much to lose by starting another war. But what all of this does show us is a couple of things. First of all, once again we see that the Middle East is a tinderbox that can erupt at any moment. Second of all, just the rumors of a war between Turkey and Syria sent the price of oil absolutely skyrocketing on Thursday. It is frightening to imagine what a real war in the Middle East might do to the price of oil.

Read More @ TheEconomicCollpaseBlog.com

What To Expect With Gold Assaulting $1,800 & Silver At $35

Posted: 04 Oct 2012 11:00 PM PDT

from KingWorldNews:

Today Tom Fitzpatrick spoke with King World News about the recent action in both gold and silver. Fitzpatrick has been astonishingly accurate in forecasting the movements of gold and silver. He has been noting $1,791 as a key level in gold for some time on KWN, and gold has now been battling with that level for three straight weeks. Now Fitzpzatrick lets KWN readers know what to expect next.

Here is what top Citi analyst Fitzpatrick had to say, along with some powerful charts: "The gold market is flirting once again with the critical $1,791 level today. Breaking through this level will be crucial in terms of establishing the momentum for the next leg higher. If gold can get a weekly close above that level, it really completes this pattern. This will then open up the target for gold at $2,060. It could come this year or perhaps in Q1 of next year.

Fitzpzatrick continues @ KingWorldNews.com

Malaysian Central Bank Raided “Gold Investment” Company

Posted: 04 Oct 2012 10:42 PM PDT

- Bank Negara Malaysia just issued a press statement regarding their recent raid on Genneva Malaysia Sdn Bhd, a company "dealing in buying and selling gold products". Bank Negara Malaysia 05 October 2012 The Royal Malaysian Police Bank Negara Malaysia Ministry of Domestic Trade, Cooperative and Consumerism Companies Commission of Malaysia Update on the Joint Raids [...]


This posting includes an audio/video/photo media file: Download Now

Agnico CEO - A Game-Changer That Will Send Gold To $3,000

Posted: 04 Oct 2012 10:41 PM PDT

Today one of the top CEO's in the world told King World News that "... demand coming out of the central banks, is going to be one of the major factors or catalysts that's going to drive gold to the $3,000 mark." Boyd, who is CEO of $9.3 billion Agnico Eagle, also said, "But the last thing these central banks want to do is create disruption in the gold market."

Here is what Boyd had to say: "The last we spoke I think gold was in the $1,500 range, and we likened that to where we were in 2008 when gold was the $700 to $800 level. I felt that gold was basing and would ultimately come off of that base and move to the $3,000 level within the next 24 months."


This posting includes an audio/video/photo media file: Download Now

Gold Seeker Closing Report: Gold and Silver Gain With Stocks and Oil

Posted: 04 Oct 2012 10:00 PM PDT

Gold climbed $16.56 to $1795.06 just before 2PM EST before it pared its gains a bit after the fed released Minutes from their September 12th meeting, but it still ended with a gain of 0.69%. Silver rose to $35.092 in early New York trade before it fell back to $34.655 in the next 15 minutes of trade, but it then rallied back higher for most of the rest of trade and ended with a gain of 1.16%.


Wednesday Chart of the Week...Gold (Will you get filthy rich?)

Posted: 04 Oct 2012 09:51 PM PDT

Tonight I want to show you my long term price objective for this next impulse leg higher for gold.This would be of the intermediate term variety. There are two ways I measure for price objectives. The first one is what I call the ... Read More...



Silver Shield Round Review and Sculptress Interview

Posted: 04 Oct 2012 09:47 PM PDT

from TruthNeverTold :

This special production run is limited to 50,000 .999 one-ounce silver medallions. Nearly 40,000 have already been sold — order yours now, HERE.

UPDATE: The first strikes came off the line this week and they were good… but not perfect. Fortunately, skilled sculptress Heidi Westweet is available to add a whole new dimension to this very cool collector's piece – new molds will be made so production will be delayed two weeks or so. But the wait will ultimately be worth it because in the end, these medallions will be PERFECT!

Gold Inches Towards 1800

Posted: 04 Oct 2012 09:30 PM PDT

courtesy of DailyFX.com October 04, 2012 02:27 PM Daily Bars Prepared by Jamie Saettele, CMT “A previously rare occurrence has popped up 3 times since June. That is, gold has traded in a double inside day AFTER an outside day. Before June, one had to look back to 2009 to find this pattern. The pattern is a function of volatility contraction and the plethora of orders on each side of the narrow range is conducive to false breaks. One can envision a spike to a new high (above 1790.55 and maybe 1802.80) following Fed minutes tomorrow before gold reverses and declines sharply.” Gold rallied to a new high but, like the EURUSD, the rally was steady and gold closed near the highs. This suggests additional upside. 1763.25 is still the near term pivot. LEVELS: 1736.05 1750.90 1763.25 1791.49 1802.80 1819.05...


Silver Update 10/4/12 Silver Fakewardation

Posted: 04 Oct 2012 09:16 PM PDT

Total Embargo: West Aiming For Total Asset Freeze of Iranian Central Bank Assets Amid Currency Crisis

Posted: 04 Oct 2012 08:48 PM PDT

from Silver Vigilante:

Greasing the gears of global governance, both the US and Europe are acting in a coordinated manner to ensure the acceleration of the Iranian rial's current plunge and drain the nation's foreign-exchange reserves, according to Obama administration officials, the US Congress and European Union. The sanctions campaign has kicked into high gear and will begin to resemble the sanctions the US put on Iraq over decades, which led to the starvation of millions. The first techniques of the new phase of sanctions will be detailed at a meeting of EU foreign ministers on October 15, and is expected to include a ban on Iranian natural-gas exports and tighter restriction on transactions with the central bank in Tehran, if not an all-out boycott.

Other banks are also to be targeted into the new financial war led by Washington and Brussels as a means of pressuring Supreme Leader Ayatolla Ali Khamenei to cease his country's nuclear program. The US and EU are also mulling over the technique of imposing a de facto trade embargo early in 2013.

Read More @ Silver Vigilante

Felix Moreno de la Cova: Revisiting Gold Wars by Ferdinand Lips

Posted: 04 Oct 2012 08:00 PM PDT

Gata


Sovereigns may prove bigger than commercials shorting gold, Fitzpatrick says

Posted: 04 Oct 2012 07:19 PM PDT

9:13p ET Thursday, October 4, 2012

Dear Friend of GATA and Gold:

CitiGroup market analyst Tom Fitzpatrick today tells King World News that gold investors may worry too much about the rising open interest in gold futures, which often indicates preparation by the big commercial trading shorts to run small speculative longs out of the market.

Fitzpatrick says: "People are concerned about the commercial shorts in gold, but at the end of the day there are a number of different players in the gold market. The ones we are most focused on are the players who are taking gold out of the market and are not going to be putting it back onto the market. Those large entities are obviously official authorities, central banks, sovereign wealth funds, etc. So while it is possible to chop around because of commercial speculation, and maybe that worries day-to-day traders, for us it is not really a dynamic we are focused on in the big-picture view."

An excerpt from Fitzpatrick's interview is posted at the King World News blog here:

http://tinyurl.com/8gndp3d

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc

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Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet
at Wellgreen Project in Yukon Territory: 5.36 g/t

Company Press Release
Tuesday, September 11, 2012

VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces more results of its 2012 drill program on the company's fully-owned Wellgreen platinum group metals, nickel, and copper project in southwestern Yukon Territory, Canada. Four surface holes and four underground holes all intercepted significant mineralized widths, ranging from 28.5 meters (WS12-201) and up to 459.5 metres (WS12-193). Highlights include WU12-540, which returned 8.9 metres of 5.36 grams per tonne platinum, palladium, and gold; 1.73 percent copper; and 1.01 percent nickel within 304.5 meters of 0.66 g/t platinum-palladium-gold, 0.20 percent copper, and 0.27 percent nickel.

The surface drill program started in June and has completed 16 holes (assays pending for 12 holes) with two rigs now on site. The surface program continues to progress at a steady pace.

Prophecy Chairman John Lee commented: "Wellgreen is a very large nickel, copper, and platinum group metals project with near-surface high-grade zones. High-grade intercepts will be incorporated into resource modeling and mine planning in the pre-feasibility study. We expect further positive drill results from Wellgreen shortly."

Wellgreen features a low 2.59-to-1 strip ratio, is situated at an altitude of 1,300 meters, and is only 15 kilometers from the two-lane paved Alaska Highway. Those factors significantly minimize the project's indirect costs.

For the complete company statement with full tabulation of the drilling results, please visit:

http://prophecyplat.com/news_2012_sep11_prophecy_platinum_drill_results....


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How Goldman Calculates Its 100,000 NFP Forecast For Tomorrow

Posted: 04 Oct 2012 06:11 PM PDT

There was a time, long ago, when economic data mattered, and when Goldman's NFP forecast was considered one of the best on the street due to the proximity of The Pound and Pence to both 85 Broad and 33 Liberty. Then Goldman went to 200 West, central planning took over, and Bizarro world was the result, where a huge NFP beat would mean a collapse in the stock market once the prospect of QEternity actually ending returns. In other words, Goldman lost its touch. Yet their insight can still be valuable. Which is why below we present the argumentation that Goldman's Sven Jari Stehn uses to expect a BLS payroll number of 100,000 tomorrow, translating into an 8.1% unemployment rate.

Payroll Preview: Another Sluggish Report

  • The labor-market news received since the disappointing August employment report has been mixed. While the ADP measure of employment, the manufacturing ISM survey and households' perception of job availability surprised on the upside, initial jobless claims and job advertising have been volatile, and the employment sub-index in the non-manufacturing ISM weakened notably.
  • We therefore expect another sluggish jobs report in September, with a 100,000 gain in nonfarm payrolls and a flat 8.1% unemployment rate. The possibility that the uncertainty associated with the fiscal cliff has started to weigh on firms' hiring decisions poses a downside risk to our forecast.

The August employment report was a disappointment as payrolls grew by only 96,000 and the unemployment rate ticked down to 8.1% due to a drop in labor force participation. The labor-market news since then has been mixed:

  1. Jobless claims. Although initial jobless claims were higher in the September survey week (at 385,000) than in the August survey week (369,000), claims are now back to 367,000.
  2. ADP. The ADP measure of private employment increased by 162,000 in September, ahead of expectations for a 140,000 gain but down from (a revised) 189,000 gain in August.
  3. ISM surveys. While the employment component of the manufacturing ISM survey improved in September (from 51.6 to 54.7), the corresponding sub-index of the non-manufacturing ISM weakened (from 52.0 to 49.5). We have generally found the latter to be more closely correlated with overall payroll growth, not surprisingly given that it covers a much larger part of the economy.
  4. Perceptions of job availability. The differential between respondents who view jobs as "plentiful" versus "hard to get" in the Conference Board survey improved 1.8 points in September.
  5. Online help-wanted advertising. The Conference Board measure of help-wanted advertising declined in both July and August, but rose in September. The Monster.com index was up in seasonally adjusted terms in August (September data are not yet available). We have generally found that online help-wanted ads have the most predictive power for payrolls at a 1-2 month lag, so we would view this as a split verdict.

Our payroll models interpret these conflicting signals as another sluggish employment gain in September. We therefore expect a 100,000 gain in nonfarm payrolls and a flat 8.1% unemployment rate. A sluggish employment report would also be consistent with the state of the economy more generally. Economic momentum since early August has softened, as our GDP tracking estimate for Q3 GDP and the August CAI have fallen from 2.3% to 2.0% and from 1.1% to 0.5%.

A downside risk to our forecast for the September jobs report is the possibility that the uncertainty associated with the fiscal cliff has started to weigh on firms' hiring decisions. In a simple test conducted in late August (i.e. before publication of the August employment report) we found no evidence that the fiscal cliff--or, to be more precise the looming automatic spending cuts (or so-called "sequester")--had already started to weigh on employment. We reached this conclusion by exploring whether industries with meaningful exposure to government spending had experienced weaker employment growth between May and July than industries with little exposure to government spending. We found no such relationship (with an r-squared of 0.003). Exhibit 1 shows an update of this analysis, showing the relationship between industry exposure to government spending against employment growth in August. Although the relationship is far from watertight--with an r-squared of only 0.026--a hint of a negative relationship has emerged. Such an effect would also be consistent with the very weak durable goods orders numbers in July and August. We therefore view any uncertainty effects from the fiscal cliff as a downside risk to our payroll forecast.

Marc Faber Bearish On ALL Asset Classes (Including Gold)!

Posted: 04 Oct 2012 06:00 PM PDT

I consider Dr. Marc Faber [to be] one of the best and well read economists in the world….[A] historical analysis of Dr. Faber’s views…[shows] that he has been spot on most of the time, not exactly always on the timing, but surely on the trend of asset classes and the economy and, currently, he is bearish on almost ALL asset classes, including gold, [and I agree. Below are my reasons for being bearish in the near term.] Words: 880 So say edited excerpts from*an article* posted on Seeking Alpha by Economics Fanatic ([url]www.economicsfanatic.com/[/url]) entitled Dr. Marc Faber Is Bearish On Everything. Are You? [INDENT] Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and [B][COLOR=#0000ff]www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor's Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright...


The Gold Price Closed Up $16.80 at $1,794.10 Will it Break Out Upwards?

Posted: 04 Oct 2012 05:01 PM PDT

Gold Price Close Today : 1794.10
Change : 16.80 or 0.95%

Silver Price Close Today : 35.041
Change : 0.410 or 1.18%

Gold Silver Ratio Today : 51.200
Change : -0.121 or -0.24%

Silver Gold Ratio Today : 0.01953
Change : 0.000046 or 0.24%

Platinum Price Close Today : 1721.20
Change : 30.90 or 1.83%

Palladium Price Close Today : 673.10
Change : 16.85 or 2.57%

S&P 500 : 1,461.40
Change : 10.41 or 0.72%

Dow In GOLD$ : $156.42
Change : $ (0.52) or -0.33%

Dow in GOLD oz : 7.567
Change : -0.025 or -0.33%

Dow in SILVER oz : 387.41
Change : -2.25 or -0.58%

Dow Industrial : 13,575.36
Change : 80.75 or 0.60%

US Dollar Index : 79.34
Change : -0.567 or -0.71%

The GOLD PRICE made a slightly greater high for the move today at $1,794.90. It augmented $16.80 to close at $1,794.10. Low was a lofty $1,779.88.

Yes, yes, that bested the $1,790 line I drew in the sand yesterday, and maybe I am only fighting the tape, but why didn't it clear $1,800? Why can I see nothing but a broadening top since mid-September? And the same in silver? Yes, a consolidation can resemble a broadening top, until it breaks out upward, yes, I know that.

And the SILVER PRICE really puts the brakes on me. It gobbled up 41 cents today to close above 3500c at 3504.1. High was 3509, low 3465c.

But why in the aftermarket is silver trading at 3485.5c? And gold below $1,790 at $1,787.90.

Then the PLATINUM PRICE and PALLADIUM PRICE argue the other way. They were like two drunks with a charge card in a liquor store today. Platinum burst through $1,700 to $1,721.20, up $30.90. Palladium rose $16.85 to $673.10. That brings platinum plumb up to and barely past its last (September) high. But couldn't that be a double top? And it it spent nearly three weeks correcting, why is it so overbought again today? And palladium's close was $30 lower than its September high.

So the SILVER and GOLD PRICE along with platinum and palladium are tugging at the chain like they're dying to run off, and for some reason I can't identify I'm distrustful and doubting. Maybe I'm just out of synch with the market. Maybe I need to wind my watch. I reckon when you're nothing but a natural born fool from Tennessee it's bound to catch up with you sooner or later.

Well, when you set a target too close, you run the risk of whiplash. SO I was whiplashed in gold today, but I still don't believe it . . .yet.

The criminals at the European Central Bank left interest rates unchanged today at 0.75%. Bank of England miscreants did the same, but at 0.5%. And there's no Spanish bailout yet.

Dollar index closed below my 79.40 target, losing 56.7 basis points (0.73%) to 79.344. Are my eyes seeing something my brain's not aware of? That ought to take the dollar down, so why am I doubting? It's mighty perilous to fight the tape.

Maybe the reason is that the closes in the dollar and in silver and gold today are not unequivocal. The euro gained 0.88% to $1.3019 (€0.7681), on what news? On Super Mario Draghi's gas-filled boast that central bank actions have "alleviated tensions" in the euro zone. Gas, pure gas, but the currency markets bought it.

Euro popped its head above the downtrend line but stands a long way from the mid-September high at $1.3172. RSI and MACD both point to lower prices.

Yen just stayed in yesterday's range, waltzing with its 50 DMA (127.54c). Closed 127.45c (Y78.46), up 0.05%.

Stocks, like currencies, feed on bloviation. They're like air ferns, but they feed on gas. Dow rose 80.75 (0.8%) to 13,575.36. S&P500 gained 10.41 (0.72%) to 1,461.40. Stocks are wanting to rise, but are slow about it.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
1-888-218-9226
10:00am-5:00pm CST, Monday-Friday

© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't.

Marc Faber & Jim Rogers On Our "Clueless, Ignorant, Dangerous" Leaders

Posted: 04 Oct 2012 04:13 PM PDT

While the discussions between these two legends varied from Phat Phong nightlife to Dow 30,000, and from China bullishness to AAPL bearishness, it was the conversation about the actions of Bernanke, and more importantly our political leaders that summed up perfectly the dreadful reality in which we find ourselves. The punchline: "It is very dangerous to have ignorant people believing that they know something."


Rogers is bullish China long-term but buying Chinese stocks only selectively...

Faber sees under-the-surface weakness in US equities and while central banks could print us to Dow 30,000; gold and other commodities will be astronomical by then...

Faber is bearish AAPL, believes its a bubble - but too dangerous to short...

Both are uber-bearish central-bankers and politicians...

Marc Faber: "Both candidates are clueless and completely artificial..."

 

Jimmy Rogers: "It's worse than clueless, because they think they know what they're doing.. and so they are dangerous! If they were just clueless and looked out the window, we wouldn't have a problem, but they think they have the solution - but their solutions are what's making the situation worse..."

 

Marc Faber: "That is precisely the point. It is very dangerous to have ignorant people believing that they know something!"

Summed up perfectly, we believe.

 

Must watch - especially to hear the CNBC anchor squirming...

Visa's Worst Nightmare? Not So Much…

Posted: 04 Oct 2012 03:30 PM PDT

Synopsis: Proclamations that the days of credit cards are numbered may be premature. By Alex Daley, Chief Technology Investment Strategist "Your credit card may soon be worthless." That's the notion being promoted by many in the investment industry these days. They are referring to a new technology that is supposedly Visa's worst nightmare and a threat to the status quo of the credit-card industry worth billions. And they are positioning one small company as the holder of the secret keys to cash in on what is promised to be a multibillion-dollar shift in the way we pay for everything from a candy bar to an oil change. But is it really true? Will this technology really turn the credit-card industry on its head? Doubtful. That's because all the popular analysis on the nascent new technology ignores the fundamental underpinnings of all successful technologies. In fact, it ignores basic economics. The supposedly revolutionar...


Confidence Game

Posted: 04 Oct 2012 03:18 PM PDT

From The September 2012 HRA Journal Eric Coffin Did we tell you or did we tell you? It’s a bit premature to claim bragging rights but the Junior market has been trading exactly how we hoped it would. Ben Bernanke delivered the early Christmas presents gold bugs were dreaming of and the market tenor looks better than it has for a year. The operative word is still “better”, not “great”. The increase in volume in the Juniors is gratifying but still not enough. It will take higher volumes still to keep a rally alive through to year end. In keeping with that note of cautious optimism we are sticking with discovery stories that are already working and later stage stories that were under loved until the gold price took off. A number of these are trading impressively well. So far discoveries and undervalued developers/small producers represent most all of the positive volume. They are riding the wave but the tide has not come in for...


Socialist Global Central Bank Crime Syndicate QE-4-Ever Inflation Theft

Posted: 04 Oct 2012 03:11 PM PDT

It is barely four weeks since the European arm of the global central bank crime syndicate (ECB) announced its policy of wanting to print unlimited euro's to monetize bankrupting PIIGS debts that was welcomed by the markets who's participants would be lining up to offload PIIGS bonds bought at far higher interest rates (lower prices) onto predominantly German tax payers because it is Germany that backs the Euro as a sound currency rather than the Greek or Spanish versions of the Zimbabwean Dollar. However the promise made by Super Mario Draghi for unlimited Euro-zone PIIGS bond buying programme "One More Try" (OMT) is already unraveling because the fine print of a list of strings attached does not match the promises made and because of the fundamental fact that just like all of the previous bailouts, all it would do at its very best was to buy a little more time for the Euro-zone by kicking the can into the middle of 2013, because it does near nothing to address the ...


All that glitters is gold

Posted: 04 Oct 2012 03:10 PM PDT

Aubie Baltin


In The News Today

Posted: 04 Oct 2012 02:37 PM PDT

Jim Sinclair's Commentary

You don't like gold? I will bite your ass off!

 

Jim Sinclair's Commentary

QE to infinity needs no more numbers. QE4, 5 and 6 will not come labeled as so.

I see it lasting for no less than three to five years with a month off here and there

Continue reading In The News Today

Gold Daily and Silver Weekly Charts

Posted: 04 Oct 2012 02:12 PM PDT


This posting includes an audio/video/photo media file: Download Now

KILLING IRANIAN CITIZENS

Posted: 04 Oct 2012 01:30 PM PDT

I find it interesting that politicians and journalists can be so nonchalant about some things, but go ballistic regarding idiotic issues. The sanctions imposed by Obama and the U.S. Congress on the people of Iran have resulted in a hyperinflationary collapse of their currency. Hillary Clinton and the other sociopaths that control our government are [...]


Visa's Worst Nightmare? Not So Much…

Posted: 04 Oct 2012 01:29 PM PDT

Synopsis: 

Proclamations that the days of credit cards are numbered may be premature.


By Alex Daley, Chief Technology Investment Strategist

"Your credit card may soon be worthless."

That's the notion being promoted by many in the investment industry these days. They are referring to a new technology that is supposedly  Visa's worst nightmare and a threat to the status quo of the credit-card industry worth billions. And they are positioning one small company as the holder of the secret keys to cash in on what is promised to be a multibillion-dollar shift in the way we pay for everything from a candy bar to an oil change. But is it really true? Will this technology really turn the credit-card industry on its head?

Doubtful. That's because all the popular analysis on the nascent new technology ignores the fundamental underpinnings of all successful technologies. In fact, it ignores basic economics.

The supposedly revolutionary technology involves a specialized chip in your cellphone that communicates wirelessly with other devices within very close proximity, in order to pass data between two devices. This "Near Field Communication" (NFC) chip could pass the equivalent of digital business cards between devices – especially smartphones, where it makes the most sense to be deployed – by simply holding them up to each other. Your phone or tablet could be used to identify you when entering a secure business or even your home, as well as to connect to a rental car's speakerphone or access the local Starbucks Wi-Fi, just by waving it near a device that activates the link. Pass two devices within a few centimeters of each other, and voilà, data is moved between them.

Thus, the theory goes, you can simply wave your phone by a payment terminal at the gas station, grocery store, or other location where credit cards are accepted.

This weekend, I encountered a situation where NFC would have been useful. I was boarding a United Airlines plane, and the passenger in front of me went to swipe her virtual boarding pass across the bar-code reader, only to have it not work. In the time she'd been waiting in line, her screen had timed out. Thus, she was trying to swipe a blank screen over a bar-code reader. Near Field Communication would have alleviated that problem and made it so we were not all held up while the well-meaning woman tried to type in her phone's passcode and bring the browser back up (only to find she had to refresh the page and re-enter her ticket number… leaving us all waiting while the gate agent assisted her).

So NFC could be a major improvement for the ticketing and access control industry, given that it works wirelessly and can be completely non-interactive when desired.

But does that make it a logical choice for contactless payment, the promised multibillion-dollar opportunity? Many seem to think so, and not just our fellow stock pickers. Germany, Austria, Finland, and New Zealand are among the nations that have trialed NFC ticketing for public transport, allowing users to swipe their phones or NFC-enabled payment cards to grab a ride and get billed later. It's basically EZ Pass without the car, and like EZ Pass, it works well in some closely defined scenarios.

But outside of those circumstances, things get messier. Markets dislike messy. So, in order for a new technology to hit the mainstream, it is critically important that one of the players in the value chain today has an overwhelming reason to support the technology. Is that the case here?

Today, the overwhelming majority of electronic payments – I'm talking 99% plus – are processed by the credit- and debit-card providers of the world. That's Visa – the 800-lb. gorilla of the industry – MasterCard, and American Express, along with lesser known names like Novus, Star, Maestro, and others from the debit/ATM world.

These companies already have well-established networks of equipment, merchants who accept their cards, and businesses and consumers who use them.

NFC promises to bring two changes to the industry:

  1. Introduce new players into the ecosystem with an incentive for adoption, in the form of whoever supplies the software operating the NFC device the consumer carries.
  2. Help secure transactions by only submitting the credit-card information over encrypted channels, allowing interactive security controls, and limiting the range of the devices.

But the consequences of these changes may not be as straightforward as they first seem.

Is NFC Another PayPal?

The first of those two changes is most unwelcome for the industry's leaders. However, it's one that they've faced in the past, with PayPal and other direct-payment providers. When PayPal began life, it was meant to facilitate direct consumer-to-consumer transfers of money. I sell a trinket on eBay, you buy it, and PayPal moves the money from your bank account to mine for a small fee. Essentially, that's the same business Visa is in.

Luckily for Visa, eBay soon experienced a large rise in fraud. The credit-card companies saw a massive opportunity there to put their considerable financial assets and longtime experience dealing with fraudsters to use, and chose to increase the amount of indemnity they provided customers against fraud. They marketed this heavily and drove demand for users to use credit cards instead of PayPal-type accounts online.

At the same time, PayPal's potential users also frequently griped about not wanting to sign up for an account and provide a bunch of banking info, just to buy something. So PayPal caved to pressure from sellers on eBay who were losing business to the requirement and made it easy for buyers to just check out with a credit card. While through their website checking accounts are still the default, most of PayPal's business today is as a plain old credit-card merchant-services provider, behind the scenes and unseen, processing credit and debit cards.

It also meant that the fees to sellers included both credit-card fees and PayPal fees on most transactions, a double dip that put a serious dent into PayPal's attractiveness to merchants. Other than on sites like eBay (which basically forced sellers to use PayPal), there was little reason for broad adoption.

This cut seriously into the account growth at PayPal and reduced its threat as an end run around Visa.

Instead, PayPal's success outside of eBay came from making it simple for someone to become a merchant. Signing up for a PayPal account was faster and easier than getting set up with a traditional merchant account. For Visa and company, that was a win, as they had a firm that would get paid to reach a market filled with merchants too small to be reached individually. PayPal transformed from an end run around the payment providers into the world's most popular payment gateway, funneling the overwhelming majority of that traffic right through to the credit-card providers. Threat averted.

But providers of NFC-equipped phones, such as Google, are gearing up to provide services similar to PayPal. Google's Wallet software lets a user store multiple cards in a single account and choose the appropriate one to use when checking out. One of the potential options for payment is Google's own Checkout service, which works just like PayPal and does it for less than typical charge-card fees – something merchants could get excited about much the way they did with cheaper debit-card payments. Just swipe your phone and choose the card on your screen (or vice versa), and you are using Google's services to pay and get paid, whether that service is from Visa or directly through Google.

This sudden entry into the space by big, powerful, connected companies like Google or Apple (which has yet to load NFC into any of its phones, but has long been rumored to be looking at such an option) – with their preexisting relationships with hundreds of millions of global consumers – into the payment chain is a far more pressing threat than PayPal ever was. These companies don't face the "cold start" problem on registrations, have rabidly loyal fan bases, and reach into nearly every home and business in the industrialized world.

On the other hand, they also don't have the expertise to combat fraud, putting them into a potentially risky situation if they fail to do their job effectively.

The phone companies – the other potential middlemen which could support putting NFC in the hands of millions of consumers if they thought they could get value out of it – have seen this movie before:

  • Long-distance "bumping"
  • 900 numbers
  • TXT subscription services

Many times in the past, telephone network operators have tried to insert themselves into the billing relationships of their clients and other parties, and nearly every time it has ended in disaster. Fraud was rampant. Client complaints skyrocketed, boosting costs of keeping customers happy and problem-free. Overall, it was a series of giant headaches, and one would assume that not only did they learn their lesson, but that maybe Apple and Google would learn it from them as well.

Payment-card providers have every incentive in the world to prevent adding another middleman – especially one with big influence on consumers – into the equation. They'll do that with a combination of marketing, lobbying, and threatening behind the scenes, doing everything in their power to stop the technology from taking off, unless they control its use and dictate its terms. And those middlemen may just find themselves treading over treacherous paths that their business models have not prepared them for.

Wireless Security

The other argument for NFC is a technical one. Proponents of the technology say that NFC will be far more secure than the traditional magnetic-stripe card. They point to examples of widespread adoption of "chip + pin" technology in Canada, Europe, and Latin America as evidence that magnetic-stripe cards are faced with fraud problems and that technology can overcome them.

NFC is pitched as something far more convenient than the traditional credit card, without the security holes associated with previous wireless payment technologies. Thanks to the interaction between the NFC device and its host (a phone in most cases), layers of security can be added to require passwords, PIN codes, and other protections prior to the credit-card data being sent across to the merchant's payment terminal.

Unlike previous wireless technology, the data stream between the merchant and the consumer is encrypted for extra security.

However, all this security becomes moot when a device simply transmits that data to an unsecured machine or network. Over the past few years, the overwhelming majority of credit-card theft has happened at the system level. Hackers have done everything from cloning cards – something NFC theoretically could prevent, but more on that below – to hacking hundreds of readers that broadcast card info wirelessly; to breaking into websites, telephone networks, and corporate intranets to steal cards; and even to hacking the networks of large credit-card-transaction aggregators to steal thousands or millions of cards at a time. NFC does nothing to deal with the latter, a far more pressing and larger-ticket fraud than consumer-level security issues today.

With consumers educated to protect their cards and indemnified from damages, and lower-level credit-card fraud a well understood and easily policed threat, Visa and company have little reason to get behind NFC, even if it does offer some minor security benefits.

This is why only a single bank, CitiBank, and a single card company, the distant third-place MasterCard, have signed on for using the technology. And even they are hedging their bets. "NFC may become really important in the future," says, Ed Olebe, head of PayPass Wallet services for MasterCard. But "we are waiting to see how the industry works out its issues."

Enter the Merchants

Even if credit-card companies don't want to see that middleman, won't their direct customers – the merchants who accept their cards – be willing to jump on the bandwagon and push the card providers to support it?

Probably not. In order to add NFC, they would need to upgrade their payment terminals. For small businesses leasing the terminals, the account provider would have to foot the bill for the new technology. And with that, they would have to take on more technical support calls for any issues that creep up from adopting NFC, a far more complex technology stack than a magnetic-card reader, or even than a traditional radio-frequency card. That dynamic has always ensured slow adoption of new payment technology for small retailers.

For larger vendors – like market-leading retailers and restaurants – the ultimate decision point is checkout time. A busy Starbucks or crowded Target will quickly lose money from frustrated customers who walk away from long lines. So they do whatever they can to optimize the checkout process. Checks are discouraged heavily, as they are the slowest. Cash isn't too bad. But cards – especially now that they have lobbied card companies to do away with signatures on small purchases – are king.

NFC potentially complicates the payment chain – especially if advanced security features are used.

The point is that the payment providers and most merchants have little real incentive to support this new technology. Their businesses are less complicated and quite secure enough already.

Nor are mobile phone companies in the United States apt to jump into this space. Visa and company will firmly protect their turf, squeezing margins from any attempt by mobile providers to insert themselves into the existing payment chain. The AT&Ts and Verizons, with their teams of lawyers, accountants, and economists, will recognize the magnitude of the challenge and are likely to take a pass.

Consumer Demand

All of this leaves only consumer demand to drive adoption. If there is enough of that, carriers will have no choice but to accept the technology, and payment-services providers to support it. Sure, carriers will drag their feet. And payment providers may even attempt to fight it, by making it less convenient still than the current system.  But if the technology is well designed, widely implemented, and serves a need for the consumer, no matter the business model behind it, it will prevail in the market.

Is there any reason why consumers would demand the use of NFC? We are adopting smartphones at an astounding rate, after all. More than 50% of all phones sold in the US are smartphones now, up from low single-digit percentages just five years ago. That's a clear sign that a simple fear of technology is not holding back consumer demand.

And we sure picked up on other convenient technologies quickly as well... like Wi-Fi.

The reason of course for our adoption of these new devices, and these new wireless capabilities, is that they directly eliminated a pain point or provided an entirely new convenience.

Before Wi-Fi, laptops were mostly tethered to a wall. You had to wire your laptop to an ethernet port to get access, rendering your portable computer a digital ball and chain. No sitting out on the porch to work from home on a sunny day.

Before the smartphone or tablet, if you wanted to get an email, to see what your friends were up to online, or just to find some news or videos to pass the time, you were stuck flipping open a five-pound laptop. Now it's all in the palm of our hands.

Consumers are quick to embrace any technology that makes their life easier. Credit and debit do, and they now comprise nearly 50% of all transactions per person per month, as this pie chart shows:

(Click on image to enlarge)

Does NFC similarly provide a benefit or solve a problem?

Maybe taking a look at its failed predecessor – RFID – will give us some insight into how high the bar to supplant the credit card actually is. These small Radio-Frequency ID chips – which can transmit a signal from an otherwise inert little device (like a plastic card) when passed near enough to a reader – were the last hot new invention that was supposed to end the supremacy of the magnetic-stripe credit card.

You would be freed from the terrible, awful, painful hassle of removing a credit card from your wallet, thanks to RFID. Heck, they didn't even have to be cards. Instead, companies like Mobil gas stations created keychain versions of the same and gave them useful sounding names like "SpeedPass."

However, there was a simple logistical problem: most people carry more than one card. If you wanted to simply swipe your wallet or purse by a machine, or even walk through an EZ Pass-for-people-style gateway, how would it tell which card to use? Interference problems from multiple cards notwithstanding, if a reader could get a clear list of all the cards, then it would still have to prompt a customer for their choice of cards...

Quick, which of your cards is AMEX ...6057 versus AMEX ...7221?

Again, you have customers reaching into their wallets to avoid confusion and adding to checkout delays. Visit any Target or Starbucks during prime hours and tell me if you think another 30 seconds per transaction would be no big deal.

Then pile on the security problems. In theory, anyone with a relatively cheap reader could pass by you on a sidewalk and read your card(s) from the outside. RFID would have all but put pickpockets out of business... at least, the less technically savvy ones.

In either event, the answer was to make the devices so low-power that they had to be held up next to the reader to work (still not alleviating the wallet issue, meaning you have to get out a specific card).

Needless to say, after one simple look at the problems, merchants weren't exactly beating down the door to install costly new RFID readers in place of their current equipment. It was no better at speeding customers through checkout during busy times, and it was no more convenient. Customers weren't exactly complaining about the failures of their credit cards, and with all the potential problems coming from RFID, the bandwagon for consumers, for merchants, or for payment providers never really filled up.

So let's tally up the scorecard for RFID:

  • New equipment for merchants
  • Less secure than the magnetic stripe

Enter NFC to save the day!

First, let's tackle those pesky duplicate reads. Few people carry more than one cellphone. Even if they did, chances are they are not going to turn on the NFC features of both, and load them up with payment details. A problem affecting 99% of customers just became one affecting less than 1%.

Then there is security. Unlike RFID, NFC transmissions can be encrypted. The two devices that talk – up to a maximum of 20 centimeters apart from each other (a nominal distance intended to limit the chance of accidental cross signals and make spying harder), establish their connection in a few milliseconds, and then set up an encrypted channel to talk through before exchanging any sensitive information, like your credit card number – further reducing the likelihood of that data being intercepted.

In addition, NFC Forum, the industry trade group pushing the technology (similar to the Wi-Fi alliance and the Bluetooth working group, each of which helped popularize their respective protocols and create huge businesses in the process), made sure NFC was fully compatible with old RFID tags and reading infrastructure, to accommodate that small number of merchants already invested in RFID readers, like McDonalds.

Thanks to the fact that the NFC hardware can store multiple potential payment methods in its secure vault, choice in payment to match the good old-fashioned wallet is restored. And it can do this trick with just one device, prompting you on screen to choose your account of choice (or simply defaulting to a standard payment method until you choose differently).

So what's not to like with NFC then? Well, let me ask you a quick question: Has your cellphone battery ever died? Yeah, that's what I thought.

After I was done waiting in that United line, I was greeted on the plane by another interesting situation courtesy of the cellphone boarding passes. Once seated, I noted a man being asked again and again by the people around me to leave his seat. He'd sit down, the next person on would tell him it was their seat, and he'd move back a row. Again and again. After some discussion, it turned out that his cellphone battery had gotten him only as far as the door to the plane and then died. He had no idea what seat he was supposed to be in. Upon asking the flight attendant for help, she told him that he would have to wait until everyone was boarded and she could get a copy of the manifest. In the meantime, he was to sit down "anywhere" until everyone else was on board.

NFC is intended to address this problem, of course. The electronics in the phone for the NFC are activated not by the phone's battery but by the actual reader, wirelessly. In this regard it works much like RFID. In fact, any NFC reader can read a standards-compliant RFID tag too. Problem solved, right?

For the ticketing industry, maybe. But for payments, not so much. More than just transmitting a device ID, the NFC system has to transmit credit-card data. If a phone is dead, that means the NFC system will have to make a choice: transmit the data RFID-style, to any application that requests it without prompting the user; or stop functioning. That's either a pretty big security hole or a pain-in-the-butt inconvenience.

Further, have you ever had a hard time getting a program on your computer or phone to work reliably? Or just fumbled trying to find the notification or popup for an application that needs your attention? Now imagine the kind, older woman in front of you in line at Kohl's selecting her payment method on the touchscreen of her iPhone, tapping in the specific PIN code for that card, then swiping her phone across the reader in the time provided. Sure, the workflow can be altered a little. Enter that PIN after swiping, maybe. Or have the PIN entry on the payment terminal like they do today with debit cards – just don't move the phone out of range when you do.

The practical implementation of NFC leaves a lot of open questions about security, about complexity, about who ultimately controls the experience – credit-card provider, hardware maker, mobile-network operator, or merchant – and about who handles all the support calls that will result.

After all of that, the result is no faster or more convenient than a simple magnetic-stripe card reader. And you introduce the complexities of battery life and other mobile-phone-specific issues to a process that otherwise works great as is.

Credit cards took off because they were infinitely safer, more convenient, and faster than cash – all valuable benefits in these harried lives we lead. The debit card made small leaps from there, in cost for merchants and in convenience for the many Americans who have no credit or prefer to use it more cautiously.

But NFC – just like RFID before it – provides no real improvement in any part of the credit/debit-card value chain. Almost no one is demonstrably better off for adopting NFC, and thus chances are very low that it will find wide success in the payments industry. There may be other reasons it comes into massive scale adoption – another "killer app" as they say – and that will change the equation down the line. But until then, Visa has little to nothing to fear from NFC. And those other investors hopping on the supposedly multibillion-dollar bandwagon should think long and hard about whether their investment is likely to succeed in the long run.

Like many other "revolutionary" technologies before it, NFC just may be a solution in search of a problem.

If you're looking for technology investment advice that won't fall flat in the market, consider Casey Extraordinary Technology. In our three-year history, we've delivered consistently profitable investment recommendations. In fact, since inception our average closed position (including all wins and losses) netted a 34% gain. So far in 2012, we're sitting at a 61% gain. Overall, 78% of our picks have resulted in gains.

As a celebration of our three-year anniversary, for a limited time we are offering half off our subscription price for new customers – as always backed by Casey's unconditional satisfaction guarantee. So I encourage you to give Casey Extraordinary Technology a try today, and discover why we're consistently beating the market for our subscribers.


Bits & Bytes

High-Resolution Desktop 3D Printer (Wired)

We talk about 3D printing a lot in these pages. While many of the technologies still used in 3D printing today have been around since the late '80s, the advancements made over the past few years have been extraordinary. Take this new desktop 3D printer from Formlabs. It uses a technology called stereolithography, which creates 3D objects by drawing the object with a beam of UV light aimed at a photosensitive pool called a liquid photopolymer. The light beam traces a cross section of the desired object, turning a thin layer of the liquid plastic to solid, then adheres it to the layer below. What's great about stereolithography is that it allows for a very high level of detail compared to the technology used in most desktop 3D printers. The Formlabs team has finally figured out how to do this on the cheap, which has been an elusive goal since the technology was first invented by Charles Hull (cofounder of 3D systems) back in 1986. Most desktop 3D printers use fused deposition modeling (FDM), which is like 3D printing with a hot glue gun or a type of ink-jet technology that basically mixes a special powder substrate with a binder to solidify it and deposit it one layer at a time. Both of these are relatively inexpensive and fast, but neither provide the level of detail allowed by stereolithography.

[Ed. note: If you're interested in some background on 3D printing, check out our past articles on the subject, titled A Manufacturing Revolution and A Rebuttal to an Additive-Manufacturing Skeptic.]

The New MakerBot Replicator 2 (Wired)

Probably the most well-known line of desktop 3D printers is the Replicator series from MakerBot. MakerBot was one of the first companies to introduce an affordable FDM-based desktop 3D printer kit (i.e., you had to build it yourself) about four years ago. The new Replicator 2 is not a kit: it's an out-of-the-box-ready printer designed for the homes of ordinary people. It might not offer the level of detail of Formlabs' new machine, but it does offer a much larger build area. The Replicator 2 allows for projects up to about 400 cubic inches, which is about 2.5 times the size of projects y


International Dividend Stock Plays to Hedge Against a Weak U.S. Dollar

Posted: 04 Oct 2012 12:36 PM PDT

Politics and investing rarely mix well. That’s worth keeping in mind as election-year rhetoric heats up this month. But no matter who wins the White House and Congress in November, investors should have money beyond the dollar. Foreign-based power, pipeline, communications and water companies are the ideal vehicles. Not only do you benefit from countries growing faster than the US. They also pay dividends and are priced in currencies other than the US dollar, so the buck’s loss is US investors’ gain.


Ira Epstein's Weekly Metal Report

Posted: 04 Oct 2012 11:55 AM PDT

The Weekly Chart is very bullish as it has an embedded Slow Stochastic reading. This can be seen on the bottom graph on the above chart. When both the "red" K-line and the "gold" D-line are going sideways over an 80-reading for several weeks in a row, I say this study is locked in…embedded. To me this means that those bullish have control of the market and that prices should be pressured to move higher.


Gold Is Not A Bubble

Posted: 04 Oct 2012 11:49 AM PDT

Perth Mint Blog


Jim's Mailbox

Posted: 04 Oct 2012 11:38 AM PDT

Jim,

Gold and stocks are not doing that well today despite a big drop in the buck.  Clearly weakness in the buck no longer levitates markets as it did when asset prices were lower.

Commercials are hugely short both gold and stocks and these tend to move in the same direction.

CIGA George

George,

Continue reading Jim's Mailbox
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