Gold World News Flash |
- Diversify With Silver As Set To 'Increase 400% In 3 Years'
- Lawmaker asks to be paid in gold: “Only so many dollars can be printed before they have no value.”
- END OF EMPIRE: Chinese Yuan Hits Record High Against US Dollar
- Follow China's Lead in Gold
- Will The Wealthy Race To Dump Stocks And Other Financial Assets Before The Fiscal Cliff Kicks In?
- Central Bank Insurance
- Global Gold Production Is Poised To Fall Off A Cliff
- Gold Seeker Closing Report: Gold and Silver End Near Unchanged
- Commodity Technical Analysis: Gold Nearing Potential Support at 1713
- China Says It Must Add To Gold Reserves To Promote Yuan Globalization And As An FX Hedge
- Open Letter to Hugo Salinas Price
- Shock: NYTimes notes that banking system gold may not be real or accessible
- In The News Today
- The Gold Price Remains Above it's Twenty Day Moving Average and will Reach for $1,743 Tomorrow Buy More Silver and Gold
- Bart Chilton On Silver Manipulation - Gold and Silver Coiling For a Major Move - The Next Disaster
- On RT's 'Capital Account,' CFTC's Chilton repeats belief in silver market manipulation
- You've Only Got Yourself To Blame
- Ron Paul: "0% Chance Of 'Grand Bargain' Over Fiscal Cliff"
- LGMR: Euro Spikes from 2-Month Low Following Greek Bailout Story, Gold Deposits "Getting Harder to Find" says Barrick
- Gold Bullion vs. Gold Stocks – Which is the Better Investment?
- Guest Post: 1000% Inflation?
- Lemmings in Wonderland
- Gold Daily and Silver Weekly Charts - Eric Sprott on Gold - JPM Backstops NJ Debt Offering
- WayBack Machine 1999: Who Needs Gold When We Have Greenspan?
- Government-Guaranteed Contagion
- The Daily Market Report
- America To Lead OPEC?
- Can Future Dollar Moves Fuel the Rally in Precious Metals?
- This Is A Moment In Time That’s Never Been Seen Before
- Currencies of the Future
| Diversify With Silver As Set To 'Increase 400% In 3 Years' Posted: 14 Nov 2012 02:11 AM PST
Diversify With Silver As Set To 'Increase 400% In 3 Years' Silver remains the most under appreciated and under reported on asset in the world despite continuing positive fundamentals. The Telegraph published an unusually bullish article on silver yesterday which suggests that silver might rise by over five times in the next few years. Emma Wall interviews fund manager Ian Williams who says that "silver is about to enter a sustained bull market that will take the price from the current level of $32 an ounce to $165 an ounce and we expect this price to be hit at the end of October 2015." "This forecast is based entirely using technical & cyclical analysis and is in keeping with the mathematical form displayed so far in the bull run that has taken silver from $8/oz in 2008 to its current price of $32 an ounce – having hit $50 an ounce in 2011." Mr Williams noted that the silver price was more volatile than gold, but that he predicts silver to continue to dramatically outperform gold. The Charteris manager said that macro fundamentals were supportive for the silver price, such as the re-election of President Obama, who supports Ben Bernanke's policy of quantitative easing. "Strong demand for precious metals will remain as long as we have QE, which do well with each round of money printing. QE is bound to lead to inflation at some point and at that time, real assets will do best," he said. "Investing in a fund that holds a range of precious metals gives you positive diversification and less reliance on just gold." We have long been more bullish on silver than on gold and have said since 2003 that silver will likely reach its inflation adjusted high of $150/oz in the coming years. Indeed, we believe that the end of the precious metal bull markets may see the gold silver ratio return to its geological long term average of 15:1. Therefore were gold to trade at over its inflation adjusted high of $2,500/oz (as we believe likely) then silver would be priced at $166.66/oz or $2,500/oz divided by 15. We have also long suggested that owning both gold and silver was sensible from a diversification point of view. Gold is more of a safe haven asset and currency in general and is more of a hedge against macroeconomic and monetary risk. Silver is similar, while more volatile, but continues to have the potential for far higher returns. For breaking news and commentary on financial markets and gold, follow us on Twitter. NEWSWIRE Attendees said in a separate survey yesterday that the metal may trade at $1,914 an ounce by the LBMA's next annual gathering in 10 months, according to Tom Kendall, head of precious-metals research at Credit Suisse Group AG, who presented the findings in Hong Kong today. Rallies were also forecast for silver and platinum, the results showed. While gold is poised for a 12th year of gains as central banks including the U.S. Federal Reserve ramp up stimulus, it's 10 percent below the all-time high reached last year. Gold may surpass $1,800 this year depending on further actions from the Fed, according to Kendall, the most accurate precious-metals forecaster in the past eight quarters tracked by Bloomberg. Goldman Sachs Group Inc. expects gold futures to gain to $1,940 an ounce in 12 months, according to a report dated Nov. 9. "The price can trend a little bit higher," Kendall said in an interview on Nov. 11. "It's going to be a market that needs fresh stimulus or a new geopolitical headline to get investors really excited about gold again." Gold for immediate delivery declined as much as 0.4 percent to $1,721.55 an ounce and traded at $1,724.95 at 5:33 p.m. in Hong Kong. Spot gold reached an all-time high of $1,921.15 on Sept. 6, 2011. Montreal Call Silver will probably climb to $38.40 an ounce by September, according to the survey today, from $32.27 now. Platinum may advance 14 percent to $1,794.90 an ounce, while palladium may gain 18 percent to $724.70 an ounce, the results showed. The Fed said on Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until 2015 to spur growth and reduce joblessness. The Bank of Japan expanded an asset-purchase program on Oct. 30 for the second time in two months and the European Central Bank has said that it is ready to buy bonds of indebted nations. "Next year it's reasonable to be talking about a gold price of between $1,800 and $2,000," said Kendall. For the metal to reach the "top end of that range, it will require investors to become more engaged in the gold market again, particularly on the institutional side." Holdings in gold-backed exchange-traded products were unchanged at 2,594.6 metric tons yesterday after reaching a record 2,596.1 tons on Nov. 8, data compiled by Bloomberg show. They have risen 10 percent this year. The LBMA is a London-based group that represents the wholesale market for gold and silver. (Bloomberg) -- Gold Mining Breakeven Costs Are Increasing, Barrick CEO Says (Bloomberg) -- Gold Bull Market Shows No Signs of Reversing, Barrick CEO Says Mine supply hasn't kept up with demand as production is declining in mature areas and costs are increasing, he said. (Bloomberg) -- Russia's Palladium Sales Seen Dropping to 250,000 Ounces in 2012 NEWS Gold prices rise on festive demand - Reuters Gold drops on firmer dollar, euro zone concerns - Reuters Congress comes back Tuesday to confront "fiscal cliff" - Reuters Asian Stocks Fall as Euro Drops on Greece Concern; Oil Declines - Bloomberg South Africa's Rand builds gold analysis facility in Singapore – Asia One COMMENTARY The Fed Is Playing An Extraordinarily Dangerous Game – King World News Gas prices: FSA examines whistleblower's claims of 'Libor-like' manipulation – The Guardian UK's Most Disturbing Number: Total Unfunded Pension Obligations = 321% Of GDP – Zero Hedge
|
| Posted: 14 Nov 2012 01:15 AM PST by Kevin Cirilli, Politico:
Jerry O'Neil, a Republican just reelected in his northern Montana district, says his constituents told him he was not honoring his duty to uphold the U.S. Constitution, which O'Neil and Gold Standard supporters say requires the government to print money backed by gold. "I believe that if you take a look at the Constitution, that's what it says," he told POLITICO. "I think we've gotten a tremendously long way from it." So he wrote a letter to the state Legislature asking to be paid his public salary in gold and stating: "It is very likely the bottom will fall out from under the U.S. dollar. Only so many dollars can be printed before they have no value."
|
| END OF EMPIRE: Chinese Yuan Hits Record High Against US Dollar Posted: 14 Nov 2012 01:00 AM PST from Xinhuanet:
Tuesday was the second consecutive day that the spot price of the yuan against the U.S. dollar hit a record high since China launched its foreign exchange reforms in 2005. Enterprises and banks have been selling off foreign currencies in anticipation of the yuan's appreciation, pushing up the price of the currency, said Ding Zhijie, an economics professor at the University of International Business and Economics. In China's foreign exchange spot market, the yuan is allowed to rise or fall by 1 percent from the central parity rate each trading day.
|
| Posted: 14 Nov 2012 12:31 AM PST [Gold's long-term charts provide strong justification for accumulating bullion above $1600, although investors' patience appears likely to be strained by a prolonged slog sideways. These points were underscored by the latest analysis at Rick's Picks. Technical analysis aside, interesting new … Continue reading
|
| Will The Wealthy Race To Dump Stocks And Other Financial Assets Before The Fiscal Cliff Kicks In? Posted: 13 Nov 2012 11:30 PM PST from The Economic Collapse Blog:
Read More @ TheEconomicCollpaseBlog.com
|
| Posted: 13 Nov 2012 11:00 PM PST by John Mauldin, Gold Seek: When I had driven past the center of town earlier that afternoon, around five, there were only a few thousand. "Where's the rest of the demonstration?" I asked. "Oh," Enrique replied, "this is Argentina. Everything starts later here. People won't really start gathering till eight." Small pockets of people had started gathering on every street corner, banging their pots and gathering their neighbors as they made their way to the center of town. A trickle soon became a large stream and then a massive river. All across Argentina, demonstrations were held protesting the policies of President Cristina Kirchner. The local press proclaimed the crowd in Buenos Aires to be 700,000+, protesting the increased authoritarianism and policies that are clearly hurting the economy. "As rich as an Argentine" was a saying at the beginning of the last century. And indeed Argentina was one of the richest countries in the world in the early 1900s. It has been a long, slow decay since that time.
|
| Global Gold Production Is Poised To Fall Off A Cliff Posted: 13 Nov 2012 10:02 PM PST  Today a legend in the business surprised King World News when he warned that "... global gold production is poised to fall off a cliff." Keith Barron, who consults with major gold companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also spoke about the tragic events which are taking place in Europe.Here is what Barron had to say: "It was just announced that the creditors for Greece had gotten together and decided they are not going to impose the severe austerity they had been talking about. The European Central Bank is aware that Greece has a shortfall between now and 2016 of 32 billion euros. They have no idea where Greece is going to find it."
This posting includes an audio/video/photo media file: Download Now |
| Gold Seeker Closing Report: Gold and Silver End Near Unchanged Posted: 13 Nov 2012 10:00 PM PST Gold climbed up to $1730.92 at about 7AM EST before it dropped back to $1718.21 by a little after 9AM EST and then rallied to a new session high by late morning in New York, but it then fell back off again into the close and ended with a loss of 0.2%. Silver slipped to as low as $32.128 before it also jumped back higher in late morning New York trade and then fell back off into the close, but it still ended with a gain of 0.12%.
|
| Commodity Technical Analysis: Gold Nearing Potential Support at 1713 Posted: 13 Nov 2012 09:22 PM PST courtesy of DailyFX.com November 13, 2012 05:27 PM Daily Bars Chart Prepared by Jamie Saettele, CMT Commodity Analysis: Gold has traded slightly lower the last 3 days after rallying for 4 days from multi month low. Measured levels at 1740, 1749, and 1762 remain of interest. The latter level is where the rally from the low would consist of 2 equal legs. 1780 can’t be ruled out either. The low on day 3 of the month and emotional trade at the low (11/2 was a JS Thrust day) suggest that price is likely to stay above 1672.50 for the remainder of November. Commodity Trading Strategy: I’m on the lookout for a wave 2 or B top below the October high at higher levels. LEVELS: 1685 1698 1713 1749 1762 1780...
|
| China Says It Must Add To Gold Reserves To Promote Yuan Globalization And As An FX Hedge Posted: 13 Nov 2012 09:14 PM PST Back in September, when we provided the monthly observation on what has become a record year to date surge in Chinese imports of gold from Hong Kong, we reminded readers that "in December 2009, the China Youth Daily quoted State Council advisor Ji as saying that a team of experts from Beijing and Shanghai have set up a "task force" last year to consider growing China's gold reserves. "We suggested that China's gold reserves should reach 6,000 tons in the next 3-5 years and perhaps 10,000 tons in 8-10 years," the paper quoted him. Has China managed to accumulated 6,000 tons yet? We won't know for sure until the official disclosure which will come when China is ready and not a moment earlier, but at the current run-rate of accumulation which is just shy of 1,000 tons per year, it is certainly within the realm of possibilities that China is now the second largest holder of gold in the world, surpassing Germany's 3,395 tons and second only to the US." Two days ago we showed that the relentless importing of gold in China continues, yet what has been missing is an update direct form the horse's mouth how China feels toward gold (because we certainly know how it feels toward US Treasury paper). Today, we finally got one straight from Beijing, and that during a very carefully supervised time when the 18th Communist Congress is still in session, and every word out of China has profoundly telegraphic implications. From Bloomberg:
And there it is: while many have speculated that China, which has not given an update of its official holdings in nearly 4 years, is quietly building up its gold reserve holdings behind the scenes, there was no reason to worry. The time to worry would be when China was starting to give indications it is prepared to tell the world what its true gold holdings are (by now certainly well over 1000 tonnes). And the above piece from Wei is just that: because in saying very little, the Chinese official with a key political post has just given the first hint that China is preparing to give its official gold far greater focus. And from there, the time until China releases an IMF update on its official reserve holdings will be measured in days if not hours. Because all the gold will have long been accumulated. And once that happens it will be too late to buy any incremental gold. Or tungsten.
|
| Open Letter to Hugo Salinas Price Posted: 13 Nov 2012 08:08 PM PST Interest can lure the gold and silver out of hoards and to the twin tasks at hand: recapitalizing the financial system and financing production. Then it is just a matter of time. First bondholders and then suppliers are paid in gold... Read More...
|
| Shock: NYTimes notes that banking system gold may not be real or accessible Posted: 13 Nov 2012 07:52 PM PST How About a Fort Knox of Your Own? By Paul Sullivan http://www.nytimes.com/2012/11/14/your-money/some-gold-investors-want-th... The last time the world as we knew it seemed likely to end, Dan Tapiero thought about buying gold. He didn't tell his wife; they didn't talk about things like that. In fact he didn't tell anyone for a while. He just tried to figure out how he was going to buy physical gold as the financial markets collapsed at the end of 2008. Mining stocks were not for him, and neither was buying gold on the futures exchange. That was financial gold, meaning it existed on account statements but was not tangible. He wanted the real thing, gold in the form of bullion that he could hold in his palms, smudge with his thumbs. But Mr. Tapiero, a portfolio manager at several hedge funds over the last two decades, realized quite quickly that it was harder to fulfill his desire than he had thought. When he called up one bank he patronized in his day job, he learned it had a minimum purchase amount of $20 million worth of physical gold. Even at that amount, he could not have access to it; it would have to stay at the bank. ... Dispatch continues below ... ADVERTISEMENT GoldMoney adds Toronto vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada. GoldMoney also has recently partnered with Rhenus Freight Logistics to offer another gold storage option in Switzerland. The Rhenus vault is in the secured zone of Zurich Airport and offers customers superb security as well as the ability to inspect their gold. Storage at the new vaults in Canada and Switzerland is available at GoldMoney's lowest fees. Customers can select their storage location when placing their buy order. GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata He didn't want to buy that much, but he wanted to buy more than a bag of gold coins, or a bar or two. Most of all, he wanted to know that it would be stored some place safe where he could get to it even if all of the banks suddenly closed for a while. "There was concern at that time that the system was frozen and you didn't really know whether you were going to be able to have access to your money or to your assets," Mr. Tapiero said. "And I started thinking, OK, well, I'd like to own something that isn't a number on a flashing screen." Investing in physical gold has had an image problem of late. After the financial crisis, it was seen by many mainstream advisers as something that crackpots coveted. They would buy it, store in their basements, and know that their wealth was secure if the world -- or at least the prevailing financial and political systems -- ended. This was easy to mock, and many people did. What, after all, would you buy with your gold if the world came to an end? Then there was the group that saw gold as a speculative bet, as something that would rise in value as fear about the global economy sunk in. That was less of a crackpot idea: the price of gold went from around $700 an ounce when Mr. Tapiero began buying it in the fall of 2008 to more than $1,900 an ounce last summer. It is now trading around $1,700 an ounce. Mr. Tapiero did not buy his bullion because he thought the world was ending. "And if it did end," he said, "I don't know that gold would be that important -- it might be radioactive." He also made clear that he does not keep it at his home in Greenwich, Conn. "It might not be safe," he said, "if someone holds you at gunpoint and they say, 'Show me your safe' and you open it up and all your gold is there." Instead, his gold -- now about 25 percent of his net worth, he said, declining to quantify it further -- is kept in various professionally managed vaults. We met at one in Midtown Manhattan. The vault was in an unassuming, brick office building with a completely plain, even dingy lobby. The offices of the vaulting company, which asked not to be named as a condition for granting me entry, had rows of nondescript cubicles that gave no sign beyond the company logo of what might be going on there. As for the vault itself, it looked secure from the outside. But once past the thick door, it felt completely utilitarian, even a bit grim, particularly for what it held for its undisclosed number of clients. Mr. Tapiero eyed the rows of 100-ounce bars -- each about the size of an iPhone and worth about $170,000 -- and estimated there was $4 billion worth of gold at current prices stacked on metal shelves that looked as if they were built in the 1970s. That amount of gold would fit in the back of any sport utility vehicle. The vault company did not share the identities of other customers. But suspicion that there was interest in owning this kind of physical gold led Mr. Tapiero and a friend, Steven Feldman, to form a company, Gold Bullion International, in 2009. It allows people to buy bullion but also to have access to it and, if they want, have it delivered to their home or anywhere else. Their customers range from chief executives and entrepreneurs to housewives and grandparents buying for their grandchildren. Mr. Tapiero described their challenge as, "How do we start a company that can provide physical gold -- have it delivered, but also have it stored outside the banking system -- to the retail customer?" His theory was that gold had been misunderstood in the United States in a way that it had not been in the rest of the world. He attributed this to the inability of individuals to own gold for some 40 years, after President Franklin D. Roosevelt in 1933 ordered any American holding more than $100 worth of gold to exchange if for $20.67 an ounce. He did this to prevent individuals from hoarding gold during the Great Depression, and the restriction wasn't lifted until the 1970s. Another reason Mr. Tapiero thinks people came to misjudge gold was the bull market in stocks from 1982 to 2007, which made owning an asset that just sits there, like gold, unattractive. Mr. Tapiero said that today gold was a legitimate investment that should be part of any diversified portfolio, because it is a hedge against a global economic slowdown and the inflation that many believe will occur when economies pick up. But like many investments, the likelihood that gold will continue to increase in value rests on the rise of India and China. There, gold is being increasingly bought as a way to demonstrate success in addition to as an investment. If you don't need to be able to put your hands on your gold to sleep at night, the World Gold Council sponsors an exchange-traded fund, which trades under the ticker GLD. It allows people to buy and sell shares in a fund that owns gold, much as they would with a mutual fund that owns stocks. Jason Toussaint, managing director of the World Gold Council, said that like Mr. Tapiero, his group wanted people to see gold as something that they should always own and not something they buy only as a safe haven. "It implies people run to it and then when the storm has passed they go back to risky assets," he said. "We think the time is right to look for a new paradigm." More traditional advisers see a place for gold in some portfolios, though they put it in the same group as other alternative assets. They also advise keeping the allocation relatively low, 3 to 5 percent of a total portfolio. "Most assets like equities or bonds can be valued because they throw off some income over time," said Lisa Shalett, chief investment officer and head of investment management and guidance for Merrill Lynch Wealth Management. "We talk about gold not as an investing asset but purely as a hedging asset." Mr. Tapiero said that the idea of making gold a permanent part of a portfolio was part of a broader argument about the future of the global economy, one epitomized in the professional investing world by two very different managers. There is Warren Buffett, who made his fortune buying stocks in companies he understands and who does not see much use in owning gold. Then there is Ray Dalio, who runs Bridgewater Associates, the world's largest hedge fund, who has put 10 percent of his firm's money into gold. Mr. Tapiero says he believes gold will continue to be a store of value, and he dismisses the end-of-the-world crowd -- though, he said, his company is happy to sell them gold and store it for them. "Gold will do very well, and it will be good to have physical gold if everything happens except the end of the world," Mr. Tapiero said. "If the end of the world is zero, and we get to 10, from 100, it's going to be the thing that performs well." Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet Company Press Release 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....
|
| Posted: 13 Nov 2012 07:36 PM PST The antidote to the heroin of liquidity is a controlled substance named Gold. –Yra Harris
My Dear Friends, There is much more to this than meets the eye. Keep your attention on the following military figures other than General David Petraeus. Rear Admiral Charles M. Gaouette. Brigadier General Jeffrey A. Sinclair. US Army Continue reading In The News Today
|
| Posted: 13 Nov 2012 07:24 PM PST Gold Price Close Today : 1724.20 Change : -6.10 or -0.35% Silver Price Close Today : 32.478 Change : -0.035 or -0.11% Gold Silver Ratio Today : 53.088 Change : -0.130 or -0.25% Silver Gold Ratio Today : 0.01884 Change : 0.000046 or 0.25% Platinum Price Close Today : 1583.40 Change : 20.90 or 1.34% Palladium Price Close Today : 635.80 Change : 28.55 or 4.70% S&P 500 : 1,374.53 Change : -5.50 or -0.40% Dow In GOLD$ : $152.94 Change : $ -0.15 or -0.10% Dow in GOLD oz : 7.398 Change : -0.007 or -0.10% Dow in SILVER oz : 392.76 Change : -1.39 or -0.35% Dow Industrial : 12,756.18 Change : -58.90 or -0.46% US Dollar Index : 81.12 Change : 0.045 or 0.06% Today the silver and GOLD PRICE, as expected, turned down a bit. Gold lost $6.10 to $1,724.20 while silver lost a mere 3.5 cents to 3247.8c. The SILVER PRICE actually began the day climbing, but spiked down about 9:30 a.m. as low as 3207c. That didn't last long. Silver immediately gapped up to 3255c! It settle back and traded the rest of the day above 3240c. Obviously, there are buyers galore waiting around 3200c. That re-iterates that support's strength. Also, the 20 DMA lies at 3211, and it was a no-brainer to buy silver at the 20 DMA. Whole day looks like a spike-bottomed reversal. Stepping back from the daily action, silver's four month chart shows the rally from mid-August to the October high, and decline following. It also shows the false breakout through the downtrend line right at 1 November, followed by the collapse and low the next two days. Since 22 October silver has built a pattern that resembles an upside-down head and shoulders reversal. The "neckline" slants from 3153c to about 3200c. As long as silver remains above that line -- shucks, it could even drop to 3150c (coincidentally the current whereabouts of the crucial 300 DMA at 3152c) without damaging silver's reversal and rally. There's more: silver's strong pattern is to make NO calendar year lows in December. Seasonally it routinely rises strongly into year end. Unless silver gainsays me first, I expect it to rise into spring 2013. Where silver hath led, gold followeth. Today's gold action also traced out an upside-down head and shoulders or V-bottom reversal. Low came at $1,717.80, plumb near the 20 DMA ($1,717.41). The GOLD PRICE kept on knocking at the gates of $1,730 with two with two highs near $1,731.80. Tomorrow it will likely break down those gates. Only a close below $1,713 would argue against that. On the four month chart gold has build a reversal pattern like silver's, with a "neckline" slanting up from $1,700 to $1,715. Gold remains above its 20 DMA, successfully defended today, and above its 150 and 200 DMAs. Above remains only the 50 DMA at $1,743. Probably gold will reach for that, and perhaps breach that, tomorrow. As with silver, gold's calendar year lows simply do not appear in December. More than that, gold made an interim low on 2 November, which sets it up to follow the normal seasonal pattern, rallying into year end. I expect gold to keep on rallying into spring, but I'm not going to mention how high it will reach, lest y'all send me one of those white canvas jackets whose sleeves buckle in the back. I may be only a natural born fool from Tennessee, but I ain't that big a fool. I hope y'all are listening: buy silver and gold. Buy more silver than gold because with the GOLD/SILVER RATIO at 53.088, silver is cheap in gold terms. More than that, next ratio low will be 30:1 or less. Buy US 90% silver coin because offers the lowest cost per ounce, most flexible form of investment silver. In gold, steer clear of the expensive American Eagle gold coins and go for the less costly Austrian 100 coronas or Mexican 50 pesos. It's all gold, and over time premium always disappears. I know it doesn't quite reflect the reality, but reading news last night about the Greeks needing $6 billion by Friday to roll over their debt raised pictures in my mind of somebody in a flea market trying to sell the family silver and crystal and even old furniture. For several years now the Euros just haven't been quite able to decide whether they're going to bail out everybody or not. Not bailing out everybody, or bailing out everybody would at least keep the markets from stewing in constant agitation and befuddlement and fear, but the Head Goofs in Europe don't get it. In the end they'll bail, and everybody, because it's not Greece or Spain or Italy or Malta they're bailing out but those who own that sovereign debt, namely, the Banks. And when Banks sneeze, politicians pull out their handkerchiefs -- and tremble. Meanwhile the euro-indecision is making the plug-ugly, scrofulous US dollar look like the prettiest girl at the dance. US Dollar index gained again today, 0.045 to 81.115, up a mighty 0.06%. Thus was I forced to return and review the dollar index chart. It showeth a clean, unblemished, albeit slow rally from the October bottom at 78.93. In fact, one might argue that the rally actually began mid-September. The channel formed by the September rally upper boundary and the October rally lower boundary line is split amidships. If the dollar can pierce that mid-line, a goal it shows right now no more ambition toward than a college freshman toward spending a beer-free Friday, it could run to 83 - 83.5. Generally that means a headwind against silver and gold, but presently they don't give a hoot what the dollar is doing, but just keep marching up. The yen has rallied to a falling fanline and for all it stands barely above its 200 day moving average (125.75) is fixing to launch another spike down. Closed today at 125.89c/Y100, up a nonsensical 0.03%. Today the Euro finished its fifth down day running, tenth if you don't count the little mouse burp up 7 days ago. What scientist of Count Frankenstein's stature can bring it back to life? Not one. Today it closed at $1.2703, down 0.09%. It stands beneath its 20, 50, 200, and 62 day moving averages, which is a recipe for massive downside plunging about as complete as it comes. I don't think it can be fixed. I thought stocks were due for a little dead-cat bounce at least, but that old cat won't bounce. Dow dropped another 58.9 today to 12,756.18, a new low for the move. From where it lies it can hardly spy the 200 DMA far above at 12,993. S&P500 also lost another 5.50 today to close at a new low for the move, 1,374.53. These are broadening top formations, and slow to roll over and fulfill their promise, so stocks might yet stage a rally into year end. Still, the die is cast, the cards are played, the tires are flat, and the rings are shot. Next big move for stocks is earthward, ever earthward. Better swap you stocks for silver and gold while time remaineth. Why do I mumble so much about moving averages? Because they offer an inarguable indicator of a market's direction. Think about a 200 Day Moving Average. You add up the last 200 days action and average it. Then tomorrow you drop the oldest price and add back the newest. Because it is averaging 200 days, the average filters out the daily noise and smooths out the trend. A market below its 200 DMA has turned its face down. When it's also below the 50 DMA and 20 DMA, and those are stacked above it in order, well, it's like playing Tarot and drawing the Death card. Likewise, a market above its 200 day and other moving averages has turned its face sunward. 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. 
|
| Bart Chilton On Silver Manipulation - Gold and Silver Coiling For a Major Move - The Next Disaster Posted: 13 Nov 2012 06:51 PM PST |
| Posted: 13 Nov 2012 06:21 PM PST 8:21p ET Tuesday, November 13, 2012 Dear Friend of GATA and Gold: Bart Chilton, member of the U.S. Commodity Futures Trading Commission, interviewed today by Lauren Lyster on Russia Today's "Capital Account" program, stressed his continued suspicion of manipulation of the silver market. Chilton said that warnings he had received from followers of the market that the price would be pounded imminently often had come true and so could not be ignored. Chilton said he favors repeal of the provision of current law requiring intent to manipulate a market to be proved before a finding of manipulation by the commission. He added that the CFTC will both appeal a federal court ruling invalidating its new regulation for position limits in the commodity markets and re-approve the new regulation with the additional information deemed required by the court. Chilton also said high-frequency trading must be urgently regulated before it causes another "flash crash" in the markets. Today's "Capital Account" program has been posted at YouTube here: http://www.youtube.com/watch?v=eMux5ty90g0 CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard
|
| You've Only Got Yourself To Blame Posted: 13 Nov 2012 06:05 PM PST The questions of who are the 1% and what level of income demarcates the fat cats from the rest of Americans are likely to become more and more polarizing in the coming weeks. What is perhaps the most intriguing is the apparent dichotomy between the demographics (youth - who face considerably worse employment trends) and state-wealth who voted for Obama. As ConvergEx's Nick Colas notes, of all the U.S. states with an above-average incidence of their citizens earning over $200,000 (14 in total), all but one (Alaska) went for President Obama in last week's election. At the other end of the income spectrum, only 2 states in the bottom 10 for +$200K earners (Maine and Iowa) had a majority of voters who sided with the President.
Via Nick Colas, ConvergEx:
|
| Ron Paul: "0% Chance Of 'Grand Bargain' Over Fiscal Cliff" Posted: 13 Nov 2012 05:12 PM PST Shining a little reality light on the otherwise pollyanna-like dearth of pragmatism that is the mainstream media's guest-list, Ron Paul provided Bloomberg TV's Trish Regan a little more than we suspect she bargained for when asked if he had any hope that we avoid the fiscal cliff. The constant "delaying-of-the-inevitable" enables our politicians to avoid facing up to the serious consequences of our reality and as Representative Paul notes the chances of a grand bargain are "probably zero... that's why I think we're over the cliff [already]." Just like the handling of the debt ceiling debacle, Paul notes they will "pretend they are going to do it" until we get a total crash of the dollar and the entire financial system (which he notes is what will occur if we continue the status quo). "We are at a point of no return" unless certain things change, since "we are not the productive nation we used to be." Paul on the fiscal cliff and whether politicians are under more pressure to just do what they need to do to get votes:
On the probability that a grand bargain will be reached on the fiscal cliff:
On whether Obama will be able to bring Congress together for some kind of reform before the end of the year:
|
| Posted: 13 Nov 2012 05:03 PM PST London Gold Market Report from Ben Traynor BullionVault Tuesday 13 November 2012, 07:30 EST PRICE FOR gold bullion on the wholesale market rose to $1730 an ounce this morning in London, after drifting lower overnight, as the Euro jumped half-a-cent against the Dollar following a report that the German government is considering a plan to speed up the payment of bailout money to Greece. "There had been a decoupling in the relationship between gold and the Dollar in terms of the daily trading range, and now we are seeing a readjustment," says LGT Capital Management analyst Bayram Dincer. German tabloid Bild reports that the German government is proposing to bundle the next three tranches of Greece's bailout into one payment of around €44 billion, citing government sources. Greece has to meet a €5 billion debt repayment this week. Earlier in the day, stock markets and the Euro fell to two-month lows after a public disagreement between policymakers over Greece and news th...
|
| Gold Bullion vs. Gold Stocks – Which is the Better Investment? Posted: 13 Nov 2012 04:52 PM PST You have probably read in multiple articles that mining stocks offer leverage to the movement of the underlying metal. But this hasn’t been the case over the past several years, which has created some confusion in the precious metals investment community. While the gold price has more than doubled (+110%) in the past five years, the AMEX Gold Bugs Index (HUI) is up only 15% and the Market Vectors Gold Miners ETF (GDX) is up only 7%.
|
| Posted: 13 Nov 2012 04:30 PM PST Submitted by John Aziz of Azizonomics blog, UBS' Larry Hatheway — who once issued some fairly sane advice when he recommended the purchase of tinned goods and small calibre firearms in the case of a Euro collapse — thinks 1000% inflation could be beneficial:
Nope. This is fairly typical mistake for an economist. In an imaginary economic model, it is possible to assume that inflation is stable, and that it is predictable, and to draw conclusions based on those (absurd) assumptions. In the real world, inflation and the effects of inflation are never predictable, because human behaviour — the micro-level phenomena on which macro-level phenomena like "inflation" are founded — is never fully predictable or stable. This means that future rates of inflation will always be uncertain, and renders Hatheway's point meaningless. As Hatheway readily admits, high inflation is associated in the real world with inflation volatility and uncertainty. It is not relevant to say that the real issue is not the high rate of inflation, because there has not been a single case in history where such a high rate of inflation has resulted in stability or predictability. Getting to a 1000% inflation rate is an inherently volatile path, historically one which has resulted in panics, crashes and breakdowns. And beyond that, such a path would completely undermine the currency and instruments denominated in the currency as a store of value. There are no empirical examples of such high rates of inflation being tolerated, because at every stage in history such effects have been intolerable; when such rates of inflation set in, nations just end up ditching the currency, as happened most recently in Zimbabwe. That is why 1000% (or 100%, or 50%, or probably even 10%) inflation will never be "perfectly acceptable".
|
| Posted: 13 Nov 2012 02:42 PM PST "If I had a world of my own," declared Alice, Lewis Carroll's red pill-popping protagonist while wandering around her author's Wonderland, "everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?" What's going on, Fellow Reckoner? What's happening…now that we're through the looking glass? Stocks dawdle. Gold drags its chain. And the whole economy — to the extent that such a thing even exists — marches headlong off a cliff. That's what we're told. Welcome to post-election 2012…where nothing is quite as it seems. Here's Bloomberg News, describing "how a game of fiscal chicken could turn into a cliff dive." "The subtext of the fiscal cliff battle between Democrats and Republicans is a dispute between going fast and going slow. "Democrats want to capitalize on the political momentum from President Barack Obama's Nov. 6 re-election and reach an agreement that moves policy in their direction with higher taxes on top earners. Republicans want to avert the $607 billion cliff while extending the current lower tax rates, yet they have a good reason for waiting to endorse a deal. Every day puts the 2012 election farther away and brings the country closer to reaching the $16.4 trillion debt limit, an action-forcing event that can give Republicans a political edge." We're all seeing and hearing a lot about the impending "fiscal cliff moment," when a combination of tax break expirations and government spending cuts will combine to knock the US economy back into recession…or worse. Where will the cuts come from? Social programs and…gulp!…the nation's euphemistically named "defence" budget. Of course, the country could do without these cancerous growths anyway. They feed on the labors of the productive class at home and foment distrust and hatred for the US in countries around the world. "Deep cuts," they say? Ha! What's really needed is something closer to a bilateral amputation. In any case, the papers assure us the lawmakers in the nation's Capitol are hard at work, hammering out deals of vital national importance, racing against the clock like a foaming warren of Ritalin-fed White Rabbits. And all the while… Tick tock… Tick tock… Tick tock… For how long can this go on? Just how much track is left before we're over the "fiscal cliff"? In truth, the government does have a debt limit…but it's not the self-imposed "ceiling" that inspires in politicking Washington stiffs no ends of affected indignation. According to the Congressional Research Service, the debt ceiling has been raised 74 times since March of 1962. And it will, after much posturing and hawing and hemming, no doubt, be raised once again. The entire discussion of whether or not to extend the limit of one's own credit card is, in and of itself, absurd. A distraction at best. "Gee…will we vote to allow ourselves to spend more…or not?" There is only one vote that really counts in the debt ceiling debate: the vote of foreign creditors. The debt will ultimately come due, in other words, when the kindness of strangers expires. "The only thing we know for certain about our looming fate," observed Eric Fry in this space during the furor of the Obamney-Robama distraction, "is that we cannot afford it." The destiny of the US economy rests "not in the hands of a Barack Obama or a Mitt Romney," continued Fry, "it rests in the hands of our creditors — guys like Zhou Xiaochuan, Governor of the People's Bank of China, Masaaki Shirakawa, Governor of the Bank of Japan and Abdullah bin Fahd al-Mubarak, Governor of the Saudi Arabian Monetary Authority." Americans can't count on their own politicians to do the right thing. That's certainly true. But in the end, they won't have to. Eventually, their government's hand will be forced, the blue pills will suddenly wear off…and what is, won't be any longer. Joel Bowman Lemmings in Wonderland appeared in the Daily Reckoning. Subscribe to The Daily Reckoning by visiting signup for an Agora Financial newsletter.
|
| Gold Daily and Silver Weekly Charts - Eric Sprott on Gold - JPM Backstops NJ Debt Offering Posted: 13 Nov 2012 02:06 PM PST |
| WayBack Machine 1999: Who Needs Gold When We Have Greenspan? Posted: 13 Nov 2012 12:56 PM PST |
| Government-Guaranteed Contagion Posted: 13 Nov 2012 11:27 AM PST November 13, 2012
"This" refers to a computer virus created by the U.S. government.
"We're glad they [the Iranians] are having trouble with their centrifuge machine," White House arms control czar Gary Samore commented last year. "The U.S. and its allies are doing everything we can to try to make sure that we complicate matters for them." Unfortunately, the Iranians are no longer the only ones for whom "matters" have been "complicated." "I don't think the U.S. government even realized how far [Stuxnet] had spread," Chevron's Koelmel tells CIO Journal. "I think the downside of what they did is going to be far worse than what they actually accomplished."
That's if most corporate IT departments can even recognize their systems are infected. "There are probably only 18-20 people in the country who have those fundamental skills," says Alan Paller of the IT security research group SANS. Good work, if you can get it, we suppose. Apart from the irony unleashed by Stuxnet, we bring it up today because it makes a fine addition to the list of 2013 "gray swans" we identified last week.
"Gold's price pattern since the results of the U.S. presidential election has been an interesting one," writes Lawrence Williams at MineWeb. For a year or so through Election Day, gold "often fell back on poor global economic news when the old safe-haven arguments for the yellow metal might have been thought to come increasingly into play" — thanks in part to a stronger dollar, Mr. Williams writes. "But since the U.S. presidential election, it has been noticeable that gold in general has been rising in price, regardless of U.S. dollar strength — admittedly, this has only been over a short period of time so far, but could be an indicator that gold's safe-haven appeal is returning."
The FOMC meets next on Dec. 11-12, 2012. It will decide whether to transform Operation Twist — in which the Fed trades in its short-term Treasuries for long-term ones — into full-on money printing. "In a weekly report," writes U.S. Global Investors chief and Vancouver stalwart Frank Holmes, "Roberto Perli of International Strategy & Investment (ISI) projected the enormous growth of the U.S. balance sheet if quantitative easing continues over the next few years." The report also features an intriguing chart:
"However, the $40 billion was on top of the previous spending spree on Treasury securities. Added together, this means that Ben Bernanke is forking over $85 billion per month through the end of 2013, which 'makes a provocative picture,' says Perli. "If this open-ended spending continues through the end of 2016, the U.S. balance sheet swells to nearly $7 trillion! "This chart," Mr. Holmes concludes, "is only one reason gold investors like me are bullish."
We haven't said much about the VIX lately… because there hasn't been much to say. The market goes up, the market goes down, but except for a summertime spike, the "fear gauge" has stayed in a mellow range between 15-20 most of this year.
"Traders appear to be turning their attention," says Greg Guenthner of our trading desk, "to the easily tradable S&P VIX Short-Term Futures ETN (VXX)." Movement in VXX is keyed not to the VIX itself, but to VIX futures — hence, the considerable discrepancy between the chart above and the chart that follows. "VXX had been in free fall since the June market rally began," Greg goes on, after we rudely interrupted him. "But as the stocks continue to leak lower this week, VXX looks like it's trying hard to put in a bottom and move higher. Volume has increased steadily since late October as traders jockey for position. They figure something's gotta give. Unfortunately, that something might cost them hopping onto an early trade…
"A low-risk position here would be enticing on a break of $39. On the other hand, a break below the saucerlike rounding bottom would show us that the market probably has more sideways or upside action left in it in over the next few weeks." [Ed. note: So... there's what not to do. What should you do instead? That's where our trading experiment comes in, headed up by Greg and his colleague Jonas Elmerraji. As we've been telling you since last week, they're on a mission to teach at least 75 of our readers to be better traders... in only five days. Give them five days, and they'll give you the skills to turn $1,000 into $5,240. That's their promise. We're still not convinced they can pull it off, and we continue to refine the terms of a wager... in which we'll take the other side of the bet. The experiment begins Thursday, so time's a-wastin' if you want to put Gunner and Jonas to the test. It's a minor time commitment -- you won't be glued to a trading screen all day -- and involves no commitment of money at all. That's right, it's free to take part. Give it a look... while you still can.
The CPSC determined the toys -- made with rare-earth magnets -- pose a swallowing hazard to children. So the agency went after 11 companies that make, distribute or import them. Ten immediately backed down. The distributor of Buckyballs -- which acquired a generic-name cachet akin to Kleenex and Band-Aids -- sued the CPSC. They lost. "Due to baseless and relentless legal badgering," reads a company statement, "by a certain four-letter government agency, it's time to bid a fond farewell to the world's most popular adult desk toys, Buckyballs and Buckycubes. That's right: We're sad to say that Balls and Cubes have a one-way ticket to the Land-of-Awesome-Stuff-You-Should-Have-Bought-When-You-Had-the-Chance."
"The rich SHOULD pay more taxes than they are paying now! This class warfare that you are engaging in is ridiculous. The rich have made out like bandits under the Bush tax cuts. The wealthy pay virtually nothing in taxes. I am about to cancel all of my subscriptions to this organization unless you immediately STOP the politics. You are spreading fear among the elites in order to sell subscriptions to your services. That was Karl Rove's ploy, and it failed." The 5: At least we agree on one thing: Karl Rove with egg all over his chubby mug is a fine sight to behold. Curious position you've taken, however. You'll hold our publications hostage because we disagree with your politics? You ARE Karl Rove's wet dream.
"Not the 75% the French want, just a little bit. Personally, I'm disgusted at the filthy rich Americans that whine about how much tax they pay, and then we find out that by using all the lobbyist-inspired tax welfare cheats, guys like Romney who make millions a year pay HALF the rate of working stiffs. "The rich in the USA get way more welfare back from Uncle Sugar than welfare mothers. And disabled veterans. I spend time almost every week in a VA hospital where on a wall in the atrium it says, 'Here, the price of freedom is visible.' "The goddamn rich whiners pay less than their fair share now and want to pay less. Move to Belize. You sure as hell aren't American patriots." The 5: We can see Obama's populist rhetoric has penetrated deep into The 5's collective psyche. Fair enough. Can't say we didn't forecast as much. Leaving the Republican Party out of it -- easy for us, but evidently not for others -- the problem with "a little bit more" is that it progressively becomes "another little bit"... and then "still more." Thus did Hoover raise the top rate from 25% to 63% in an eerily similar economic and political environment. Following that, FDR jacked it up as high as 94% during World War II. Don't shoot the messenger. (For a unique and personal account of FDR's penchant for wielding federal authority in the 1930s, we recommend The Roosevelt Myth from the Laissez Faire catalog.]
"I just could not stand to see the end of the country I have loved for over 65 years and knew the election would make no difference. I have semiretired to Asia, currently touring Vietnam. I will keep doing business because I love it. "I love the challenge, the creation of something new and helping people to achieve it. I am going to Thailand next, and then on to Myanmar to do something useful with the rest of my life, since my own country looks upon those of us in business as dairy cattle. "I wish those of you who stay behind good fortune and know that I still love America and what it used to stand for."
"For the past five years, I have been living in Bariloche, Argentina. The benefits of living here are the physical beauty of the place and the sense of freedom you develop. You rarely even hear about lawyers, and there are very few people with badges or guns wandering around trying to make your life miserable. "It definitely is a third-world country, but the benefits outweigh the downside." Cheers,
P.S. The fiscal cliff… the results of the election… to that list you can add the envy of your fellow Americans… there's no shortage of factors conspiring to shrink the "wealth" you've worked hard to accumulate. If that's how you feel, that puts you in a select group among our readers, in which case I recommend you consider the next Rancho Santana Sessions we're hosting on Dec. 5-9, 2012. I'm confident they'll prove valuable to you. Not least of which because you'll be in the company of like-minded folks from around the country… relaxing at a high-end conference facility and resort along a stunning stretch of the Pacific frontier. The Daily Reckoning's Eric Fry will lead a panel of experts in areas like foreign business opportunities… foreign real estate… and tax and estate planning. The setting couldn't be more exquisite. The food is fresh from the land and sea. Previous rendezvous at the Ranch have led to lasting friendships. But as you might expect, time is running out. The event is limited — we keep it to no more than 30 people. There are only a few remaining seats. Make plans to join us…here.
|
| Posted: 13 Nov 2012 11:00 AM PST Gold Continues To Consolidate Post US Election Gains
There was an interesting opinion piece on Reuters over the weekend that I posted earlier, suggesting that the real winner of the election was "inflation." It was a victory for "the forces of cheap money," stated author Matthew Stevenson. Almost assuredly, "cheap money" is going to figure into any potential resolution to the 'fiscal cliff'. As Stevenson went on to point out, "The magic of inflation, before it turns everything to dust, is that it papers over a number of intractable financial problems." The 'fiscal cliff' certainly qualifies as on of the intractable problems, so the path of least resistance may once again prove to be inflation. The biggest Treasury rally in 5-months is perhaps the harbinger of this reality. Falling Treasury yields, the price of money, have a tendency to weigh on the dollar. This is particularly true in negative real interest rate environments, where yields are below the rate of inflation. A weaker dollar in turn begets even more inflation. The Fed has been pretty adamant that they will persist with their zero interest rate policy at least through mid-2015. It may well prove to be longer than that, especially if the solution to the fiscal cliff is another short-term kick of the can, rather than a true solution to the underlying fiscal issues. We reported yesterday on the huge rebound in Chinese gold imports from Hong Kong in October; +30% to 69.7 tonnes. The following chart from Casey Research pretty clearly illustrates the voracious surge in China's demand for gold in recent years.
The primary driver for Chinese gold demand is reserve diversification. They're scaling back on their dollar exposure because they are worried about a cheapening greenback as well.
|
| Posted: 13 Nov 2012 10:56 AM PST I think the daily gold chart is beginning to look it was painted by Renoir. Gold is range trading between about $1550 and $1800. There have been 3 touches of the $1550 area, and 3 of the $1800 area. Read More...
|
| Can Future Dollar Moves Fuel the Rally in Precious Metals? Posted: 13 Nov 2012 10:55 AM PST The most important implication from this chart is not what will happen to the dollar but rather the relationship with gold and silver. The precious metals rallied today and last week even without a decline in the USD Index. In fact, the index moved a bit higher last week, but the metals soared strongly. All-in-all, this is a very positive sign for the precious metals sector.
|
| This Is A Moment In Time That’s Never Been Seen Before Posted: 13 Nov 2012 10:40 AM PST  Today Bill Fleckenstein told King World News, "... the world is starting to realize that this is a moment in time that's never been seen before." Fleckenstein, who is President of Fleckenstein Capital, discussed Europe, the US, gold, and the danger the world is facing today. Here is what Fleckenstein had to say: "Greece is a serial bailout, restructuring, can-kick, and I guess this is going to continue as long as the riots don't get worse. Maybe eventually Greece will get ejected from the euro. The question (in Europe) is, is Draghi going to get serious about the OMT or not?"
This posting includes an audio/video/photo media file: Download Now |
| Posted: 13 Nov 2012 10:00 AM PST Many people complain about government control of currency, but only a few do something about it. I'm not talking about movements to "audit the Fed" and such. I'm talking about real innovation that makes an end run around the government's iron grip on the monetary system. A few of us old folks might like to return to the days of slapping a silver dollar on the bar for a shot of whiskey, but the younger techno-savvy generation sees paying for their Negroni cocktail with virtual currency from their hand-held device. To serve this market, a new world of virtual currencies has popped up spontaneously. In a debate, Mitt Romney said, "You couldn't have people opening up banks in their garage and making loans." Really? Some people are thinking precisely along these lines and even going further to create new units of accounting. Money develops from being the most marketable good that in turn is used for indirect trade. Historically, that has been gold and silver. However, governments have worked very hard to demonetize gold and silver with taxes on precious metals and legal tender laws. And while a few people swear by storing their wealth in gold and silver, in relation to all other financial assets, the percentage of portfolios invested in precious metals is only 1%. The idea that government is going to re-shackle its currency to gold anytime soon, when the only way federal governments are staying in business is with an unfettered printing press, is naive. Governments always have driven and will keep driving the value of their currencies to the value of the paper. It may take decades, it may take centuries, but it will happen eventually. The answer to the currency question may not be to reform government in a way that it can't reasonably be reformed, but to turn loose entrepreneurial genius to solve the problem and create a quality product. There are plenty of government roadblocks, but every new innovation encounters government resistance. Entrepreneurs persevere. However, this is a particularly risky area. There are currency entrepreneurs sitting in jail for competing with the government. In 2009, Japanese programmer "Satoshi Nakamoto" (not his real name) was designing and implementing Bitcoin. It's not for the faint of heart. It's proven to be highly volatile. But it's also proven to be very useful in a digital age. Some people in the free-market community don't know what to think of Bitcoin and have dismissed it. They say no currency can exist that doesn't have a prior root in physical commodity. That is because, as Robert Murphy summarized Ludwig von Mises: "We can trace the purchasing power of money back through time until we reach the point at which people first emerged from a state of barter. And at that point, the purchasing power of the money commodity can be explained in just the same way that the exchange value of any commodity is explained." The naysayers contend Bitcoins never had a nonmonetary commodity value. The case for it is then dismissed without thought or argument. However, Mises built his "regression theorem" on the work of Carl Menger, the father of Austrian economics and subjective value. In Menger's view, economizing individuals constantly look to make their lives better through trade. These individuals trade less tradable goods for more tradeable goods. What makes goods more tradeable, Menger emphasizes, is custom in a particular locale. "But the actual performance of exchange operations of this kind presupposes a knowledge of their interest on the part of economizing individuals," Menger writes. But Menger goes on to explain that not all individuals gain this knowledge all at once. A small number of people recognize the marketability of certain goods before most others. These might be considered currency entrepreneurs. They anticipate consumer needs and demands, and as is the case with any other good or service, these entrepreneurs recognized more salable goods before the majority of people.
For example, cattle were, at one time, the most saleable commodity and were thus considered money. Although cattle money sounds unwieldy, the Greeks and the Arabs were both on the cattle standard. This currency had four legs that could move itself, and grass was everywhere, so feeding it was inexpensive. But then the division of labor led to the formation of cities, and the practicality of cattle money was over. Cattle were no longer marketable enough to be money. Cattle still had value, but, "They ceased to be the most saleable of commodities, the economic form of money, and finally ceased to be money at all," Menger explains. Then began the use of metals as money: Copper, brass and iron, and then silver and gold. But Menger was quick to point out that various goods served as money in different locales.
So while people contend that money must be this or must be that, or come from here, or evolve from there, Menger, the father of the Austrian school, seems to leave it up to the market. When a money becomes uneconomic to use, it loses its marketability and ceases to be money. Other marketable goods emerge as money. It's happened throughout history and likely will continue, despite government wanting to freeze the world in place to its liking. Which brings us back to Bitcoin, what the European Central Bank (ECB) calls in its latest report "the most successful — and probably most controversial — virtual currency scheme to date." Ironically, while some economists are pooh-poohing Bitcoin, the ECB devotes some of their lengthy report to the idea that the Austrian school of economics provides the theoretical roots for the virtual currency. The business cycle theory of Mises, Hayek and Bohm-Bawerk is explained in the report and Hayek's Denationalisation of Money is mentioned. The report writers indicate that Bitcoin supporters see the virtual currency as a starting point for ending central bank money monopolies. Like Austrians, they criticize the fractional-reserve banking system and see the scheme as inspired by the classic gold standard. Bitcoins are already used on a global basis. They can be traded for all sorts of products, both material and virtual. Bitcoins are divisible to eight decimal places and thus can be used for any size or type of transaction. Bitcoins are not pegged to any government currency and there is no central clearinghouse or monetary authority. Its exchange rate is determined by supply and demand through the several exchange platforms that operate in real time. Bitcoin is based on a decentralized peer-to-peer network. There are no financial institutions involved. Bitcoin's users take care of these tasks themselves. Additional Bitcoin supply can only be created by "miners" solving specific mathematical problems. There are somewhere around 10 million Bitcoins currently in existence, and more will be released until a total of 21 million have been created by the year 2140. According to Bitcoin's creator (whomever he or she is), mining on Bitcoin provides incentives to be honest:
The ECB's report explains that Bitcoin supply is designed to grow in a predictable fashion. "The algorithms to be solved (i.e., the new blocks to be discovered) in order to receive newly created Bitcoins become more and more complex (more computing resources are needed)." This steady supply increase is to avoid inflation (decrease in the value of Bitcoins) and business cycles caused when monetary authorities rapidly expand money supplies. Bitcoin has become the currency of the online black market. For instance, The Silk Road (the Amazon of the illegal drug trade that can only be accessed through private networks using the IP scrambling service called Tor) only accepts payments in Bitcoin. However, as the ECB report points out, there are only about 10,000 Bitcoin users, and the market is illiquid and immature. So why does the ECB give a damn about Bitcoin and other virtual currencies? The central bankers are worried that they are not regulated or closely supervised, that they could represent a challenge for public authorities and that they could have a negative impact on the reputation of central banks. At the same time, the report makes the point that "these schemes can have positive aspects in terms of financial innovation and the provision of additional payment alternatives for consumers." The report says big players in the financial services arena are purchasing companies in the virtual payments space. VISA acquired PlaySpan Inc., a company with a payment platform that handles transactions for digital goods. American Express (Amex) purchased Sometrics, a company "that helps video game makers establish virtual currencies and… plans to build a virtual currency platform in other industries, taking advantage of its merchant relationships." This would dovetail with American Express' entry into the prepaid credit card business. Banking industry insiders are upset with Amex and Wal-Mart, that also is offering prepaid cards, because these prepaid accounts would amount to uninsured deposits, according to Andrew Kahr, who wrote a scathing piece on the issue for American Banker. Kahr rips into the idea with this analogy:
Kahr is implying that regulated fractionalized banking is safe and sound, while prepaid cards provided by huge companies like Amex and Wal-Mart is a shady scheme set up to rip off consumers. The fact is, in the case of IndyMac, panicked customers forced regulators to close the S&L by withdrawing only 7% of the huge S&L's deposits. It was about the same for WaMu and Wachovia when regulators engineered sales of those banks being run on. Bitcoin supporters, unlike the general public, are well aware of fractionalized banking's fragility. Maybe what the banking industry is really afraid of is the Amexes and Wal-Marts of the world creating their own currencies and banking systems. Wal-Mart has tried to get approval to open a bank for years, and bankers have successfully stopped the retail giant for competing with them. However, prepaid credit cards might be just the first step toward Wal-Mart issuing their own currency — Marts — that might initially be used only for purchases in Wal-Mart stores. But over time, it's not hard to imagine Marts being traded all over town and easily converted to dollars, pesos, Yuan, or other currencies traded where Wal-Mart has stores. Governments are destroying their currencies, and businesses know it. Entrepreneurs won't just stand by and theorize. They're doing something. They recognize a market opportunity. The banking industry realizes it. As Mr. Kahr concluded his article that calls for an end to all uninsured deposits: "Otherwise, we might have an unregulated Facebook or Google of payments, even PayPal, quickly becoming both highly vulnerable and TBTF. (It could actually be run by someone wearing a hoodie, without tie or even white shirt!)" Here at LFB, we don't know what tomorrow's money will be. Digits and computer algorithms? Silver and gold coins engraved with someone wearing a hoodie, perhaps? What we know for sure is that we're rooting for enterprising entrepreneurs to give the government a run for their money in the money business. Watch this space. Doug French Original article posted on Laissez-Faire Today Currencies of the Future appeared in the Daily Reckoning. Subscribe to The Daily Reckoning by visiting signup for an Agora Financial newsletter.
|
A Montana state lawmaker is asking that he be paid in gold coins because of his lack of faith in the U.S. dollar amid a rising deficit.
The spot price of the yuan against the U.S. dollar rose to 6.2262 on Tuesday, marking a record high since China's foreign exchange reforms seven years ago.
The election results made it abundantly clear that taxes are going to be going up, and right now a lot of wealthy people all over America are trying to figure out how to best position themselves for the hit that is coming. There are a whole host of tax cuts that are set to expire on December 31st, and many analysts are now speculating that we could see a race to dump stocks and other financial assets before 2013 in order to get better tax treatment on those sales. Of course it is still possible that Congress may reach a bargain which would avoid these tax increases, but with each passing day that appears to be increasingly unlikely – especially regarding the tax increases on the wealthy. Whatever you may believe about this politically, the truth is that we should all be able to agree that these looming tax increases provide an incentive for wealthy people to sell off financial assets now rather than later. After all, there are very few people out there that would actually prefer to pay higher taxes on purpose. If the race to dump financial assets becomes a landslide, could this push stocks down significantly late in the year? Already there are all sorts of technical signs that indicate that stocks are ready for a "correction" at the very least. For example, the S&P 500 has already closed below its 200 day moving average for several days in a row. Could the "sell off" that has already begun become a race for the exits? 
We begin today with an abject lesson in the "law of unintended consequences" — the bane of bureaucrats and world improvers the world over.
"Currently," Mr. Holmes continues, "the Fed is buying mortgage-backed securities at a rate of $40 billion each month. The dashed orange line assumes that if this $40 billion per month continues over the next few years, America's balance sheet expands to about $4.5 trillion by the end of 2016.
"I would avoid getting caught up in a VIX pop right now," Greg says. "In fact, I wouldn't recommend jumping headfirst into a long position here (which would be a bet that the market will jolt us with a sharp downside move).
Adieu, Buckyballs... the remaining supply is still for sale.
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment