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GEAB N°69 ist angekommen! Von Katrina zu Sandy: Zwei Wirbelstürme und das Ende Amerikas, wie wir es kannten
Vivus Inc: This Hedge Fund Just Went Activist
Barrick: Look Beyond Pascua-Lama
Dividend Growth Investing: Improving DCA By Using Valuation
Dr. Marc Faber: "I Keep a Picture of Mr. Bernanke in My Toilet."
Gold “Being Liquidated for Cash” as Stock Markets Fall Ahead of Fiscal Cliff Negotiations
The Silver Manipulation Continues! Damn Thieves!
Treasuries and Silver the Clear Winners Since the Election
Global Gold Demand Reflects Challenging Global Economic Climate – World Gold Council
John Mauldins Roadmap to Surviving the Fiscal Cliff
Marc Faber, Gold & a Special Picture of Ben Bernanke
Lessons from the London Gold Pool
By the Numbers for the Week Ending November 16
Silver: 5 X The Reward
Roman Gold: Lost and Found
Silver Decoder Lens
Silver Buying: Hold Off
Why Outsourcing Your Retirement Pension is a Really Bad Idea
Inflation: The Downside of Debt
Gold and Silver Disaggregated COT Report (DCOT) for November 16

Posted: 17 Nov 2012 11:04 AM PST

Thanks for the silver dollar!

I will patiently watch it's value rise.

GEAB N°69 ist angekommen! Von Katrina zu Sandy: Zwei Wirbelstürme und das Ende Amerikas, wie wir es kannten

Posted: 17 Nov 2012 10:15 AM PST

- Pressemitteilung des GEAB vom 17. November 2012 (GEAB N°69) -

GEAB N°69 ist angekommen! Von Katrina zu Sandy: Zwei Wirbelstürme und das Ende Amerikas, wie wir es kannten

Wie LEAP/E2020 es seit mehreren Monaten vorhersagt, ist der große Schock für die Weltwirtschaft und die globale politische Stabilität sehr wohl im Herbst 2012 in Form eines symbolträchtigen Ereignisses hereingebrochen, über das in den Geschichtsbüchern nachzulesen sein wird: Wirbelsturm Sandy.

In der politischen Antizipation als Methode, auf die die Arbeiten von LEAP/E2020 gründen (1), ist Sandy unter zwei Gesichtspunkten wichtig: Zum einen ist es ein Ereignis, das wie ein Wassertropfen, der das Fass zum Überlaufen bringt, bei den Menschen angesichts der angestauten Probleme die Überzeugung entstehen lässt, dass es so nicht weitergehen kann, dass Dinge sich grundlegend ändern müssen; zum anderen ein Ereignis, das die Perspektive der Menschen verändert und den Blick auf die neue Wirklichkeit freigibt - denn man muss immer unterscheiden zwischen der Realität einer umfassenden Veränderung (die sich zumindest seit 2008 vollzieht) und dem Moment, an dem diese Veränderung endlich im kollektiven Bewusstsein als solche angekommen ist - was hier konkret bedeutet, dass erst jetzt den Menschen bewusst wird, dass Amerika nicht mehr das ist, was es einmal war.

Oktober 2012 wird damit in die Geschichtsbücher als der Zeitpunkt eingehen, an dem das Amerika der Nachkriegszeit und des ausgehenden 20. Jahrhunderts unterging. Der 29. Oktober 2012, der Tag, an dem der Wirbelsturm Sandy über New York hereinbrach, auf den Tag genau 83 Jahre nach dem Schwarzen Dienstag der Weltwirtschaftskrise, die 1929 begann, legt vor den Augen der Welt den wahren Zustand der amerikanischen Gesellschaft und ihres herausragenden Symbols, die Stadt New York, bloß. Die Kehrtwende der großen Medien weltweit ist erstaunlich, die alle am Morgen nach einem Wahltag, der fast überall auf der Welt Anlass zu Freude gab, mit Schlagzeilen aufmachten von einem Amerika "das sich verändert habe", "gespalten sei", ein "Dritte-Welt- Land", "in der Sackgasse", "vor dem Untergang" usw. (vgl. unten die Liste der Links). Sandy hat die Fassaden des alten Amerikas unserer Nostalgie endgültig zum Einsturz gebracht und den Blick auf das wahre Amerika freigegeben.

Sandy bestätigt alle Vorhersagen, die LEAP/E2020 seit sechs Jahren über den Niedergang der USA verfasst hat und insbesondere die, die wir in der 65. Ausgabe des GEAB veröffentlichten (2); sein Wüten markiert den Eintritt in die letzte Etappe des Zusammenbruchs des amerikanischen Systems. Der Sturm wütet im Finanzzentrum der Welt und richtet das allgemeine Augenmerk auf das Unvermögen der größten Stadt des mächtigsten Lands der Welt, sich gegen einen "kleinen" Wirbelsturm zu rüsten, der auch noch Tage vorher angekündigt worden war. Das ist wirklich das Ende des Amerikas, das die Welt kannte und je nach Standpunkt, bewunderte, verabscheute oder fürchtete.

Wie wir im Januar 2006 vorhersagten, ist die "Dollarmauer" (3) im Verlauf der letzten sechs Jahre brüchig geworden. Sandy hat diese brüchige Mauer mit voller Kraft getroffen, und dahinter kam ein "König ohne Kleider(4)" zum Vorschein. Die Verwüstung von New Orleans im Jahr 2005 ist die Entsprechung zur Kernschmelze von Tschernobyl in der Sowjetunion im Jahr 1986, als die ganze Welt fassungslos zusah, wie planlos die Krisenbekämpfung ablief und in welch schlechtem Zustand die Wirtschaft war. Und die Dollarmauer ist die Entsprechung zur Berliner Mauer. Zwei Jahre nach deren Fall brach auch die UdSSR zusammen. Die Dollarmauer fiel der Krise zum Opfer und 2013 wird das Jahr werden, in der das Amerika der Nachkriegszeit und des 20. Jahrhunderts zusammen bricht.

Von Katrina zu Sandy über Lehman Brothers - diese Abfolge von Schocks hat die US-Macht zusammenbrechen lassen, das Vertrauen der Welt hat sich verflüchtigt. Hierzu lohnt sich wirklich die Lektüre des unglaublichen Artikels des Spiegels "Divided States of America: Notes on the Decline of a Great Nation (5)", geradezu eine Zusammenfassung der Vorhersagen von LEAP aus sechs Jahren - in einem Massenmedium wie dem Spiegel ist dies wirklich nichts Banales.

Nach Sandy und den amerikanischen Präsidentschaftswahlen haben die globalen Medien, einschließlich der europäischen, die sich üblicherweise vor Bewunderung vor den USA überschlagen, eindeutig eine Kehrtwende gemachtund betrachten das Land nun mit dem kritischen Auge der Realität (6). Das Urteil ist einstimmig, die große Macht der Nachkriegszeit ist nun Teil der Vergangenheit.

Nachdem Sandy abgeflaut ist, bleibt von der Wiederwahl Obamas ein bitterer Nachgeschmack für eine Hälfte Amerikas und die übrige Welt, wie man sehr gut an den Presseschlagzeilen sehen kann. Was eigentlich eine gute Nachricht sein sollte, da Obama der Wunschkandidat der übrigen Welt war, ist gleichzeitig aber auch das Vorzeichen der fortgesetzten Blockade, der Ohnmacht, der Lähmung, was angesichts der politischen und wirtschaftlichen Lage der USA das Schlimmste ist. Alle Probleme, die in den letzten vier Jahren nicht behoben werden konnten, harren weiterhin einer Lösung. Im Wahlkampf waren sie verdrängt worden, jetzt sind sie wieder auf dem Tapet, größer, furchterregender und noch schwerer lösbar als zuvor.

Angesichts dieser weiterhin bestehenden Probleme und mit einer Wiederwahl Obamas, die für die Republikaner nur schwer erträglich ist, werden die USA nicht in der Lage sein, die Herausforderungen, vor denen sie Ende 2012, Anfang 2013 stehen, zu meistern: Im Bereich der Wirtschaft das "fiscal cliff", die Erhöhung der Schuldengrenze, die "Staatsanleihenblase", die Studentenkreditblase. Im Sozialen die Spaltung des Landes zwischen den Weißen, die mehrheitlich für Romney sind, und den Minderheiten, die für Obama sind; das enthält viel Sprengstoff und kann in Unruhen münden, die die Gefahr in sich tragen, in Sezessionsbestrebungen und Bürgerkrieg umzuschlagen, da dafür ausreichend Waffen in dem Land vorhanden sind. Im Politischen eine anhaltende Lähmung Washingtons, die das Risiko eines Militärputsches birgt in einem Land, in dem das einzige, was noch zu funktionieren scheint, die Armee ist, und damit als einziges gesellschaftliches Element in der Lage ist, die Dinge wieder unter Kontrolle zu bringen. Wir werden diese Analyse des Zusammenbruchs der USA in dieser Ausgabe des GEAB weiter entwickeln.

Ebenfalls kommen wir auf die Probleme des nördlichen Nachbarns der USA zu sprechen, Kanada, wo die Implosion der Immobilienblase bevorsteht, und analysieren deren Auswirkungen. Obwohl die Lage Kanadas gegenwärtig noch bei Weitem nicht so schlimm ist wie die der USA, stehen damit ganz Nordamerika schwere Zeiten bevor.

Aber wir erinnern daran, dass diese Krise eine weltweite ist und nicht einmal die Schwellenländer verschont, allen voran China. Daher legen wir in dieser Ausgabe dar, vor welchen Herausforderungen China steht, insbesondere soziale Proteste und Unruhen, die in dem Land 2013 ausbrechen werden.

Auch präsentieren wir wie gewöhnlich unsere monatlichen strategischen und praktischen Empfehlungen zu Devisen, den Aktienmärkten usw. und den GlobalEurometer.

Auch wenn wir in dieser Ausgabe wieder einmal das Schwergewicht auf die USA legen, so darf man nicht aus den Augen verlieren, dass die geopolitische Lage explosiv ist, wofür die Gründe ja auch im nachlassenden amerikanischen Einfluss zu suchen sind. Das sieht man insbesondere daran, dass sie sich in den Krisen Libyen, Syrien und Mali ganz bewusst im Hintergrund gehalten haben oder halten. Wegen ihres begrenzten finanziellen Spielraums besteht ihre neue Strategie darin, ihre Interessenwahrung an die Verbündeten zu "delegieren", Frankreich und Großbritannien in Libyen, die Westafrikanische Wirtschaftsunion CEDEAO in Mali (7), Israel in Syrien (8) usw. Dass die führende globale Macht der letzten achtzig Jahre im Mittleren Osten nicht in Erscheinung tritt, macht dort die Lage besonders schwierig: Jeder versucht borniert seine Interessen durchzusetzen und die Lage degeneriert zum Chaos.

Lösungen könnten von Russland und China oder von Europa vorangetrieben werden, aber die Europäer sind immer noch nicht soweit, sich von ihrem alten amerikanischen Verbündeten zu lösen und verurteilen sich damit zur Untätigkeit; die Russen und Chinesen hingegen genießen noch nicht die ideologische Aura der "Achse des Guten", also von Staaten, deren Interessen Hand in Hand gehen mit den wahren universellen Werten. Daher sind gegenwärtig weder Russland noch China in der Lage, die gefallene Führungsmacht USA zu ersetzen. Über eines müssen sich Russen und Chinesen jedoch klar werden: Sie werden erst dann zu globalen Führungsmächten aufsteigen, wenn es ihnen gelingt, diese universellen Werte in ihre Politik zu integrieren. Denn auf diese Fähigkeit gründet sich wahre Macht. Ansonsten bleibt nur Gewalt, aber das wäre für Russland und China wie auch für den Rest der Welt die schlechteste Lösung von allen.

Ein anderes Beispiel für die schwindende Macht Amerikas sind die Sanktionen gegen den Irak, die wirkungslos zu bleiben; das einzige, was damit erreicht wird, ist, den Hass der Iraner auf den Westen zu schüren. Das Bein haben sich die Europäer aber selbst gestellt, statt lieber iranisches Öl mit Euro zu kaufen. Nun ist es so, dass der Iran sein Öl ohne Probleme nach China und in die Türkei verkauft; und die Türkei, obwohl Nato-Mitglied, bezahlt das Öl über Dubai (9) in vollkommen legaler Weise mit Gold. Daran lässt sich ablesen, wie brüchig das westliche Bündnis geworden ist und wie einfach Länder ihre Rohölkäufe auch ohne die Verwendung von Dollar bezahlen können. Für die USA ist das eine Katastrophe, denn die Leitwährungsstellung des Dollars (und damit der amerikanische Einfluss) hängt davon ab, dass der Dollar ausschließliches Zahlungsmittel für Rohöl bleibt. In einer kommenden Ausgabe des GEAB werden wir die Bedeutung von Öl als zentrales Element der gegenwärtigen Geopolitik in all ihren Fassetten herausarbeiten.

Abschließend bleibt noch festzuhalten, dass der Einfluss Amerikas auf Europa auch immer mehr an Bedeutung verliert. Wenn die Lage in Europa auch alles andere als rosig ist, angesichts einer hohen Arbeitslosigkeit und einer zunehmenden Verarmung insbesondere in Griechenland und Spanien, fällt dennoch auf, dass die amerikanischen und britischen Medien nur noch vereinzelt und auch mit weniger Schaum vor dem Mund das Gespenst einer Explosion der Eurozone an die Wand malen; denn ein Auseinanderfallen der Währungsunion kann immer weniger glaubhaft als mögliches Szenario beschrieben werden, und die Probleme der USA wie auch die Englands drängen immer mehr in den Vordergrund. Die Reformen in Euroland, die unter Schmerzen in den letzten vier Jahren umgesetzt wurden, beginnen nun, Früchte zu tragen (10). Die Eurozone emanzipiert sich immer stärker von den Finanzmärkten der Wall street und der Londoner City (11); im Fall der City ist es sogar Großbritannien selbst, dass sich immer stärker ins Abseits manövriert (12). Natürlich wird auch Euroland den Fall Amerikas nicht unbeschadet überstehen, aber genauso sicher ist auch, dass es von dessen Fall nicht mitgerissen werden wird. Viele Herausforderungen harren der Europäer, insbesondere die Tatsache, dass Merkels Einstellung eine Diskussion mit ihren Partnern nicht immer einfach macht. Wir werden im Übrigen in der kommenden 70. Ausgabe des GEAB eine Gesamtschau auf die politische Entwicklung in Deutschland für 2013 und danach anbieten.

---------
Noten:

(1) Vgl. Handbuch der Politischen Antizipaton, Marie-Hélène Caillol, Editions Anticipolis

(2) Präzise für den Herbst vorhergesagte entscheidende Entwicklung

(3) Vgl. 1. und 52. Ausgabe des GEAB.

(4) Nach dem Märchen von Andersen "Des Kaisers neue Kleider". Quelle: Wikipedia

(5) Quelle: Der Spiegel, 05/11/2012

(6) Zur Lektüre wird beispielsweise empfohlen: Die düstere Zukunft Amerikas, neuer Gegner für Obama (Libération und Süddeutsche Zeitung 07/11/2012), "Die getrennten Staaten von Amerika (La Tribune, 06/11/2012), Rebuilding America (Foreign Policy, 14/11/2012), Waarom Amerika niet langer wereldmacht is (Elsevier.nl ) usw.

(7) Quelle: Le Monde, 11/11/2012

(8) Quelle: The New York Times, 12/11/2012

(9) Quellen: Reuters, 23/10/2012; ZeroHedge, 23/10/2012

(10) Neustes Beispiel, eine strengere EU- Regulierung bestimmter Spekulationsprodukte (Verbot des Kaufs von CDS für Staatsanleihen, die man nicht besitzt, und Kontrolle von Leerverkäufen) blieb beinahe unbeachtet, aber stärkt die Verteidigungsfähigkeit der Euroländer gegen Spekulationsangriffe. Quelle: Le Monde, 01/11/2012.

(11) Par exemple dans le domaine, voir Ou la demande des Allemands d'avoir un droit de regard sur leur or stocké aux États-Unis (source).
Siehe hierzu z.B. Seeking Alpha (18/12/2011). Oder die Forderung des deutschen Rechnungshofs, die in den USA gelagerten deutschen Goldbestände zu überprüfen. Quelle: Der Spiegel, 30/10/2012

(12) Quellen: Financial Times (04/11/2012), Le Monde (31/10/2012), Der Spiegel (02/11/2012), etc.

Vivus Inc: This Hedge Fund Just Went Activist

Posted: 17 Nov 2012 09:30 AM PST

By Insider Monkey:

By Brian Tracz

Shares of Vivus Inc (VVUS) have been in free-fall mode since the beginning of July, with shares down more than 60 percent since then. However, this has not discouraged QVT Financial, run by managing partners Daniel A. Gold and Tracy Fu, from buttressing their activist stake in the company with 8.3 million shares, up from 8 million at the end of June (see QVT's portfolio here). This gives them an 8.3 percent stake in this popular pharmaceutical company.

We have detailed Vivus' story before. Vivus recently began the sale of its weight-loss drug Qsymia, a hot-cake drug in an eager weight loss market. However, based on its third quarter earnings loss of 40 cents per share, compared to an expected loss of 32 cents, Vivus' alleged blockbuster drug still has a ways to go before being labeled a sales success. Andrew Barens, senior analyst with Bloomberg Industries,

Complete Story »

Barrick: Look Beyond Pascua-Lama

Posted: 17 Nov 2012 08:51 AM PST

By Cris Frangold:

The high price of gold does not necessarily mean a bright outlook and strong returns for a gold mining company. That is true even when discussing the largest gold miner in the world. Barrick Gold (ABX) is an example of this seeming contradiction.

Barrick's share price has been falling all year. This time last year the company was trading around $52 per share. Now it is barely above $33. The company's market cap is now below that of its smaller Canadian rival, Goldcorp (GG). Goldcorp's market cap stands at $32.08 billion while Barrick's stands at $33.60 billion. This is true despite the fact that Barrick mines far more gold than Goldcorp and owns many more mines. Gold, while having declined somewhat from recent highs, is still well-priced. So what problem is Barrick having?

Barrick is now worth less than Goldcorp, even though it mines

Complete Story »

Dividend Growth Investing: Improving DCA By Using Valuation

Posted: 17 Nov 2012 07:43 AM PST

By Doctor DGI:

In my previous article, I showed that using a simple dollar cost average (DCA) technique worked at least as well, if not better, than a timing technique based on the Percentage Above Average Yield (PAAY). But this test was based on looking at one stock at a time. That is great if your entire retirement account is invested in McDonald's (MCD) or Procter & Gamble (PG) or any other individual stock, but most of us look for diversification and have multiple stocks in our accounts. So I thought it would be useful to see how PAAY could be used to increase returns in an entire portfolio, rather than on any one individual stock.

We already know that DCA is an effective method for long-term investing. Every quarter, when you get your pension contribution, you immediately invest it in the stocks you already own, or in new stocks. My question is

Complete Story »

Dr. Marc Faber: "I Keep a Picture of Mr. Bernanke in My Toilet."

Posted: 17 Nov 2012 05:34 AM PST

¤ Yesterday in Gold and Silver

It was pretty much a nothing day for gold again on Friday. The low price tick [just under $1,705 spot] came about 11:30 a.m in London...and the subsequent rally was never allowed to get above Thursday's closing price in New York. Once the London p.m. gold fix was in at 10:00 a.m. Eastern time, the gold price traded more or less sideways into the 5:15 p.m. electronic close.

Gold closed at $1,713.70 spot...down $2.40 on the day. Net volume was exceedingly light, as only around 108,000 contracts were traded.

Of course the silver price action was far more 'volatile'. The London low came about the same time as gold's low price tick...and the subsequent rally into the London p.m. gold fix [the high of the day at $32.72 spot] was more defined...as was the engineered price decline that immediately followed.

The low of the day [$31.96 spot] came at precisely 11:30 a.m. in New York. The rally that followed wasn't allowed to get back above it's Thursday closing price...and got sold down into the close.

Silver finished the day at $32.31 spot...down 29 cents. Net volume was only 26,500 contracts.

Here's the New York Spot Silver [Bid] chart on its own, so you can see the wild price gyrations that occurred during the Comex trading session.

The dollar index opened at 81.04...and then rallied about ten basis points by 8:30 a.m. in New York. Then away went the index to the upside, with the high tick of 81.44 coming just before 11:30 a.m. Eastern...and it was all down hill from there until about 3:45 p.m...and the dollar index traded sideways from there into the close of trading, finishing up 16 basis points on the day at 81.20.

A casual glance at the gold chart shows no co-relation whatsoever between the dollar index and the gold price. The only co-relation I could see was that the index topped out about the same time as silver hit its low price tick...and even then it's a real stretch to get any co-relation with the rest of the trading day.

The gold stocks followed the tiny price gyrations of the gold price pretty closely during the time the equity markets were open...except for the smallish rally going into the close of trading that began before 3:00 p.m. Eastern time. That was certainly unrelated to the gold price action at the time, which was comatose. The HUI finally had a positive close...the first time in six days...up 0.87%.

Despite silver's lousy price performance, most of the silver stocks finished well into the plus column...but the seven large cap silver stocks that make up the Silver Sentiment Index only closed up 1.39% on average. A lot of the juniors did much better than that.

(Click on image to enlarge)

The CME Daily Delivery Report was quiet once again, which has been typical all month, as November is not a regular delivery month for either gold or silver. Yesterday they reported that only 1 gold contract was posted for delivery on Tuesday.

The GLD and SLV went in separate directions again on Friday. GLD reported that an authorized participant added 96,887 troy ounces of gold. It was a different story over at SLV, as another 1,452,117 troy ounces were reported shipped out. This amount was within 20 troy ounces of the amount that was reported shipped out on Thursday. A reporting error perhaps? I don't know, but if it was, we'll find out about it on Monday.

I just want to note here that it appears that we are at an all-time record high for gold in GLD...which is 43,166,879 troy ounces. And now that I check back through the records, we've been at these new record highs for many months now. SLV has a long way to go...at least 40 million ounces.

The U.S. Mint had another decent sales day on Friday. They sold 8,500 ounces of gold eagles...1,500 one-ounce 24K gold buffaloes...and 70,000 silver eagles. Month-to-date the mint has sold 56,000 ounces of gold eagles...8,000 one-ounce 24K gold buffaloes...and 2,265,500 silver eagles. Based on these sales, the silver/gold sales ratio so far this month is a bit over 35 to 1.

Over at the Comex-approved depositories on Thursday, they reported receiving 845,435 troy ounces of silver...and shipped nothing out. The link to that activity is here.

Well, I wasn't at all surprised by the Commitment of Traders Report. The big rally that began early last week got capped in the usual way, as JPMorgan et al went short against all comers...and that is certainly reflected in the increases in the Commercial net short positions in both metals...especially gold.

In silver, the price increase over the reporting week wasn't that great...and the Commercial net short position only increased by 1,283 contracts. The total Commercial net short position now sits at 254.8 million ounces.

The 'Big 4' bullion banks are short 251.5 million ounces of silver which, on a net basis, represents 44.0% of the entire Comex futures market in silver. [A brief glance at the previous paragraph shows that these 'Big 4' traders are short almost the entire Commercial net short position all by themselves.]

The '5 through 8' big traders are short an additional 51.3 million ounces of silver, or 9.0% of the Comex futures market in silver on a net basis.

Straight math shows that the 'Big 8' are short 53.0% of the entire Comex silver market on a net basis...and these are minimum numbers!

In gold, the Commercial net short position increased by a chunky 17,053 contracts...or 1.7 million ounces...and is now back up to 22.48 million ounces.

The 'Big 4' traders are short 34.1% of the entire Comex futures market in gold on a net basis...and the '5 through 8' traders are short an additional 13.2 percentage points. The 'Big 8' are short 47.3% of the entire Comex gold market on a net basis...minimum.

It's obvious that the bullion banks have the precious metals market in a vice...and aren't about to let go anytime soon. As I've always said, on any rally, the bullion banks are going short against all comers. This past reporting week's activity is a case in point.

It's these obscene and grotesque short positions that Bart Chilton was discussing with Lauren Lyster on Capital Account on Monday. It's obvious even to Bart...and it's just as obvious that he can't/won't do anything about it...at least not at the moment.

Here's Nick's "Days of World Production to Cover Short Positions" in graphic form. The "obscene and grotesque" portions are on the far right of this chart. For a historic perspective of the COTs for both gold and silver...click here for gold and here for silver.

(Click on image to enlarge)

A couple more 'critter' pictures that Nick extracted from a Powerpoint Presentation I received from reader William Gebhardt several weeks back.

The first is a Hoopoe feeding its young, or the female sitting on the nest...

This photo is a pair of hedgehogs...

It's a Saturday column...and I have a fair number of stories for you today...and quite a few must reads.

It's always the timing that's hard to predict...and what JPMorgan Chase et al will do when it occurs.

Gold demand in China to recover in fourth quarter: experts. Gold & Silver Plunge Déjà Déjà Déjà Vu. Gold May Pass $2,000, But Consumers Warned Against Scams. South Africa arrests man with a belly full of diamonds.

¤ Critical Reads

Fed's Fisher: Central Bank Can't Save US from 'Fiscal Perdition'

Federal Reserve Bank of Dallas President Richard Fisher said the Fed can't avert "fiscal perdition" as lawmakers wrangle over how to avert $600 billion in tax increases and spending cuts threatening economic growth.

"The Federal Reserve has been carrying the ball for the fiscal authorities by holding down interest rates in an attempt to stoke the recovery while the fiscal authorities wrestle themselves off the mat," Fisher said Thursday in prepared remarks given in Stanford, California. "But there are limits to what a monetary authority can do."

"Only the Congress of the United States can now save us from fiscal perdition," Fisher said at Stanford University. The Fed can't "endlessly" keep purchasing bonds to keep the recovery going, he said.

Wow! And from a Fed governor no less. This story was posted on the moneynews.com Internet site on Thursday afternoon...and I thank West Virginia reader Elliot Simon for providing today's first story. The link is here.

View full GSD edition

JPMorgan, Credit Suisse settle with SEC for $417 million

JPMorgan Chase & Co and Credit Suisse Group AG will pay a combined $416.9 million to settle U.S. civil charges that they misled investors in the sale of risky mortgage bonds prior to the 2008 financial crisis, regulators said on Friday.

JPMorgan will pay $296.9 million, while Credit Suisse will pay $120 million in a separate case, with the money going to harmed investors, the U.S. Securities and Exchange Commission said.

Both settlements addressed alleged negligence or other wrongdoing in the packaging and sale of risky residential mortgage-backed securities (RMBS), including at the former Bear Stearns Cos which JPMorgan bought in 2008.

The banks settled without admitting wrongdoing, and in separate statements said they were pleased to settle.

These fines are obviously just licensing fees...and nobody is ever going to go to jail. This Reuters story was posted on their Internet site late yesterday afternoon after the markets were closed for the day...and I thank Marshall Angeles for sending it our way. The link is here.

View full GSD edition

Twinkie Junkies Raid Stores as Hostess Brands to Close

Since Hostess Brands Inc. announced yesterday it plans to liquidate and sell its products until supplies are exhausted, Americans have been scooping up Twinkies to get a fix of their beloved snacks. Supermarkets are running out and fans are pushing up prices on E-Bay Inc.

Yesterday, shoppers emptied the shelves of Twinkies at a Jewel-Osco store in Chicago.

Hostess, which also makes Wonder Bread, Ding Dongs and Ho Hos, plans to fire more than 18,000 employees and liquidate assets after a nationwide strike by bakery workers crippled operations. The 82-year old maker of snack cakes was undone by the strike after changes in American diets led to years of declining sales while ingredient and labor costs rose.

This Bloomberg story was sent to me by many readers yesterday, but the first one through the door was Marshall Angeles...and is his second offering in a row in today's column. The link is here.

View full GSD edition

Spengler: Screens flicker out across Washington

It seems fitting that the director of Central Intelligence should be the first casualty of an election where both sides had more to lose than to gain by mentioning foreign policy. My admiration for General David Petraeus was grudging, but he was well-qualified for the job: a general who can manipulate his own masters can jerk the chains of foreign leaders as well.

Whether Petraeus' personal indiscretions required his resignation or President Barack Obama put paid to a Republican holdover is not yet clear. It doesn't matter much, for the screens are going dark in Washington. After four years of American strategic withdrawal, and a vast display of apathy from the voters, America is a diminishing factor in world affairs. Americans will learn of critical developments after the fact if at all, and its intelligence services will continue to devolve into a sort of Work Progress Administration for failed academics.

This longish essay was one that I was saving for today's column...and here it is now. It was posted over on the Asia Times website early on Thursday morning Hong Kong time...and I thank Roy Stephens for finding it for us. It's a must read in my opinion, especially for students of the "New Great Game"...and the link is here.

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The End of the Bond Bull: A Precondition For Hyperinflation Is Upon Us

I was a super bull of long-term bonds. I stated my case over 3 years ago with a yield target on 30-year maturities of 2.5%. Back then, the timing and structure looked right for another run to new highs. Discussions about hyperinflation were premature.

The pre-condition I had been waiting for has now arrived. In my opinion, we have seen the end of the bull market in bonds.

There is a delicate balance in time, where mega trends and short term trends meet. Price has now shaped reasoning and convinced investors of future stability, and such conviction could not come at a worse time. You see, we are heading toward the D.I.I.G. Can you dig it?

The Demographically Influenced Investment Gap is one giant mismatch of assets to liabilities. The growing future needs of financing in equities and bonds cannot be matched with future available disposable savings.

This short essay was posted over on the businessinsider.com Internet site early yesterday afternoon...and it's courtesy of Roy Stephens as well. It's worth reading...and the link is here.

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Doug Noland: When Money Dies

Any inflationary cycle "advantage" comes with a significant downside. For one, never in the history of mankind has an inflationary cycle so spurred and rewarded financial speculation. Global risk markets have evolved into essentially one historic policy-induced speculative Bubble. Financial speculation was nurtured into one gigantic "crowded trade," which manifested into the dysfunctional "risk on, risk off" trading dynamic. Increasingly aggressive policy responses over too many years created a speculation monster that will not be easily contained or tamed.

As noted above (and in previous CBBs), a Credit Bubble is sustained only through ever-increasing quantities of "money" and Credit. The greater the Bubble, the greater the required policy response to sustain the inflation. But, importantly, the greater the policy measures imposed the greater the market reaction – and the greater the market reaction the greater the necessity for an even bigger policy intervention in the future. I've posited that there's an element of "fighting a losing battle."

There was talk this week of the need for larger monthly QE from the Fed. The markets also anxiously await the firing up of Dr. Draghi's bazooka. A new Japanese government could see the Bank of Japan further crank up their white-hot electronic printing press. With new leadership in China, perhaps they'll be ready to push further on the accelerator. It all seems rather "late-cycle" to me. And, I'll suggest, a loss of confidence in all these electronic journal entries - the global financial system more generally – is this historic cycle's greatest vulnerability. As we witnessed not many years ago, one day everyone is so enjoying the dance party and the next they're fighting for the exits. It's a spiking the punch rather than removing the punchbowl dilemma.<

Gold “Being Liquidated for Cash” as Stock Markets Fall Ahead of Fiscal Cliff Negotiations

Posted: 17 Nov 2012 12:25 AM PST

Gold "Being Liquidated for Cash" as Stock Markets Fall Ahead of Fiscal Cliff Negotiations

WHOLESALE gold bullion prices fell below $1710 an ounce Friday morning in London, dropping below that level for the second day in a row, as stocks, commodities and the Euro all fell and US Treasuries gained ahead of negotiations among US lawmakers about the so-called fiscal cliff.

"Gold is being seen increasingly as a source of cash," says Simon Weeks, head of precious metals at bullion bank Scotia Mocatta.

"Liquidation of gold can cover losses elsewhere."

Silver bullion meantime fell to $32.19 an ounce.

On the currency markets, the US Dollar Index, which measures the Dollar's strength against other major currencies, touched a 10-week high as the Euro's recent rally stalled.

Heading into the weekend, gold bullion looked set for a 1.2% weekly loss by Friday lunchtime in London, while silver was down 1.3%.

President Obama is due to meet congressional leaders later today for negotiations on the so-called fiscal cliff due at the start of next year. Tax cuts made by former president George W Bush are due to expire on December 31, while spending cuts for the military and social programs are currently scheduled for January as a result of a deficit deal agreed last year.

Lawmakers are negotiating on how to reduce the federal deficit over the next deficit; failure to agree a deal would see the tax cut expiries and spending cuts occur as scheduled.

"[Obama] will not sign, under any circumstances, an extension of tax cuts for the top 2% of American earners," White House spokesman Jay Carney said Thursday, a day after President Obama suggested taxes should be raised for the wealthy to reduce the deficit.

"What we won't do is raise tax rates," countered Republican Senate leader Mitch McConnell, who will be at today's talks.

Ratings agency Standard & Poor's stripped the US of its AAA credit rating in August 2011, after weeks of negotiations on raising the so-called 'debt ceiling' for federal debt.

"The [US credit] rating is in the hands of policymakers," says John Chambers, chairman of S&P's sovereign rating committee.

"If no budget deal is reached in the early part of next year and the debt trajectory just continues to rise," adds Bart Oosterveld at fellow ratings agency Moody's, "then we'd be looking at a downgrade of a notch to Aa1."

Aa1 is the second-highest Moody's rating after Aaa.

"If we don't see an agreement and there is a gridlock, it will burden the Dollar and benefit gold," reckons Dominic Schnider at UBS Wealth Management.

The UK government is unlikely to end its ownership of Royal Bank of Scotland and Lloyds "any time soon", according to a report published by parliament's Public Accounts Committee.

"The £66 billion cash spent purchasing shares in RBS and Lloyds may never be recovered," the report on the sale of Northern Rock says.

"The low level of competition [to buy Northern Rock assets] does not give us confidence that the taxpayer will make a profit on the sale of RBS or Lloyds… it seems inevitable that their 'temporary public ownership' will last for some time, if getting value for our investment remains the most important objective for government. "

By contrast, the US Treasury Department said earlier this year that it expects to make a $2 billion profit on the stakes it bought in US banks during the 2008 crisis.

The volume of gold bullion held to back shares in the SPDR Gold Trust (GLD), the world's largest gold ETF, rose to within 0.07% of its all-time high yesterday, rising to 1339.6 tonnes during Thursday's US trading.

Soros Fund Management increased its investment in the GLD by 49% to 1.32 million shares during the third quarter, according to the fund's 13F filing with Securities and Exchange Commission. Hedge fund Paulson & Co., the GLD's biggest investor, maintained its stake at 21.8 million shares.

In its quarterly Gold Demand Trends published yesterday, the World Gold Council notes that notes that gold investment through exchange traded funds was strong in Q3, in contrast with demand in many markets for gold coins and bars.

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault's weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

The Silver Manipulation Continues! Damn Thieves!

Posted: 17 Nov 2012 12:18 AM PST

Treasuries and Silver the Clear Winners Since the Election

Posted: 17 Nov 2012 12:14 AM PST

Global Gold Demand Reflects Challenging Global Economic Climate – World Gold Council

Posted: 17 Nov 2012 12:05 AM PST

Perth Mint Blog

John Mauldins Roadmap to Surviving the Fiscal Cliff

Posted: 16 Nov 2012 11:53 PM PST

The Gold Report

Marc Faber, Gold & a Special Picture of Ben Bernanke

Posted: 16 Nov 2012 11:40 PM PST

Lessons from the London Gold Pool

Posted: 16 Nov 2012 09:00 PM PST

By the Numbers for the Week Ending November 16

Posted: 16 Nov 2012 06:38 PM PST

This week's closing table is just below.

If the image is too small click on it for a larger version.

Silver: 5 X The Reward

Posted: 16 Nov 2012 05:17 PM PST

David Morgan (Silver Guru): "Silver to outperform GOld by a factor of five.

from silverguru:

~TVR

Roman Gold: Lost and Found

Posted: 16 Nov 2012 05:07 PM PST

W. E. Pollock presents: Roman Gold Coins Lost and Found in Long Island New York

I now understand why and how huge amounts of Roman Coins are periodically found in the modern day.

from wepollock:

~TVR

Silver Decoder Lens

Posted: 16 Nov 2012 05:03 PM PST

Silver Futurist presents: Silver decoder lens

from silverfuturist:

King of Kong: Part 1

from sfcplanet:
Copyright Picture House 2006

Silver decoder lens for Sunshine Mint bars:

http://www.apmex.com/Product/72469/Sunshine_Minting_Decoder_Lens_1.aspx

The real story:

http://the-1up.com/kongoff/

~TVR

Silver Buying: Hold Off

Posted: 16 Nov 2012 04:53 PM PST

Barnone on Ag and latest new for the sheeple.

from barnone11967:
Hold off buying Silver : I explain why…

~TVR

Why Outsourcing Your Retirement Pension is a Really Bad Idea

Posted: 16 Nov 2012 03:00 PM PST

The Germans are up to their old tricks again. They're sending undesirables off to Eastern Europe by the thousands. Only this time, it's not racially or religiously motivated. Nor is it a matter of Lebensraum. It's a matter of cost. Old people are expensive, and Eastern Europe is cheap.

All you have to do is give companies like 'Seniorpalace' a call and an ambulance comes and takes your aged person off to Hungary, the Czech Republic or Slovakia. Monthly care costs there are about a third as much as in Germany.

God only knows what the locals think about their former invaders returning to retire. Let's not dwell on that. We've been politically incorrect enough for the minute.

All this is very depressing. Our German grandmother is fit and well, by the way. Our biological grandfather was less lucky. He picked the wrong retirement haven and got himself killed by terrorists.

Anyway, if a place as prosperous as Germany can't afford its retirees, who can?

Perhaps the Germans are just being honest about what they can afford. You can't say the same for the UK, or the US. There, pension problems are something you shouldn't talk about.

But the numbers speak for themselves. The problem is, there aren't any Australian numbers for comparison. We don't really know how much trouble we're in down under. Back to that in a moment.

The UK figures are straight forward. Here are the numbers from the Office for National Statistics:

'In summary, the estimates in the new supplementary table indicate a total Government pension obligation, at the end of December 2010, of £5.01 trillion, or 342 per cent of GDP, of which around £4.7 trillion relates to unfunded obligations.'

It's a number so big it's probably meaningless. You can't even count it on all the fingers and toes of the world. Not even all the human fingers and toes that have ever existed. We'll get to what the figures mean for retirees below. First, how do the Americans compare?

At the federal level, unfunded liabilities are around $US 61 trillion, with $US 5.3 trillion added in 2010 alone. That's half a million dollars per American household in payments that will have to be made for things like healthcare, pensions and the like. Remember, these are unfunded liabilities, so nobody has set money aside for them.

Imagine what will happen to the world's economy when the American consumer figures out that they can't afford to consume. The money they were promised isn't there.

Here's an interesting summary from Stanford Professor Joshua Rauh on the state of the individual American states themselves. He was interviewed by Econtalk's Russ Roberts:

Joshua: 'The actual unfunded liability is $4.4 trillion, as of the end of 2011.'

Russ: 'And that would be about $36,000 per American household? Is that correct?'

Joshua: 'Yeah. $38,000 per U.S. household...'

The interesting thing here is that American states can't print money like the federal government can. Many states have to balance their budgets each year. But there's no way these payments are affordable.

So what will the world look like when people in Europe, the UK and America realise the cash they were promised in retirement simply isn't there? Russ and Joshua explain:

Russ: 'These are thousands of people who are expecting large sums of money, and they are going to fall very unpleasantly on another group of people. I don't know how that's going to turn out.'

Joshua: 'Exactly. I think the breakdown of civilization over these things, the breakdown of a functioning government that can provide these services that we rely on, is unfortunately going to become increasingly likely.'

Russ: 'Yeah, but I think the strike is the least. That would be a great outcome. Then you negotiate some settlement. But that's a settlement you'd usually negotiate with current employees over future benefits. We're talking about trying to renegotiate past promises to current retirees.'

Joshua: 'Right.'

Russ: 'It's going to get nasty.'

Russ Roberts, who is the least likely person in the world to exaggerate something, then says this:

Russ: 'But I think it's worse than that, actually. It seems to me that the real risk is the breakdown of civilization which we saw a little bit of in Greece...'

Australia's Slice of the Pension Cake That Was Had but Will Never Be Eaten

If you think this is only a foreign problem, think again. We haven't had a recession in more than two decades and we're still in trouble, according to two articles in the Australian:

'A budget blowout of up to $107 billion in public servants' pension costs risks swamping the value of the Future Fund and potentially undermining the Gillard government's AAA credit rating.'

And:

'Taxpayers facing a super-sized problem

'PITY the poor future taxpayers who must meet the superannuation bill of commonwealth public servants, defence personnel and others.

'Lurking in the federal government's recently released final budget outcome statement for the 2011-12 year is a considerable $90 billion increase in superannuation liabilities.

'The Future Fund is falling behind in its capacity to meet these liabilities. The superannuation liability has increased from $145.1bn at June 30 last year to $235.4bn at June 30 this year, an increase of 62 per cent.'

The interesting thing here is what makes the black hole a whole lot worse than it seems.

'The government estimated public service superannuation liabilities at $139bn in May; these were partly offset by $77bn of assets in the Future Fund. But the government is assuming a 6 per cent rate of return on safe assets, a far cry from yields of 3 per cent observed on commonwealth government bonds this week.

'Analysis from Rice Warner Actuaries shows that using a 3 per cent discount rate leads to federal pension liabilities surging by between $46bn and $107bn; the more retiring public servants choose indexed life pensions over lump sums, which they typically do, the greater the cost.

'That equates to an increase in unfunded pension liabilities of between 78 per cent and 181 per cent.'

Did you notice the figures weren't as dramatic as the UK's &ound;4.7 trillion and the US' $60 trillion? Maybe our hundred billion or two isn't so bad after all, right? What's really worrying is that Australian statistics seem to be calculated a little differently to the US and UK.

There, all obligations of the government are considered 'unfunded liabilities'. Here in Australia, only public sector employee obligations get counted. The rest of us don't get an accounting entry. Promises like the old age pension and the disability pension aren't factored into projections. At least not any we could find.

If you know of any 'unfunded liability' calculations for pensions that don't just mention the public sector, let us know at letters@dailyreckoning.com.au.

As far as we can tell, nobody seems to have bothered figuring out just how much money we've promised to hand out to the retirees of the future. But if we can't even provision for the government's employees, paying for the rest of us will be real fun.

We did find this comment on the matter in the Treasury's 2009 Tax Review:

'... demographic change will impose increasing costs on government budgets, not only for retirement incomes but also for health and aged care services. Across governments, these increases are likely to exceed four per cent of GDP by the 2040s. Four per cent of GDP is equivalent to the revenue currently raised by the GST or the entire Australian Government health budget.'

Do you think the Australian economy could sustain a second GST, or healthcare system?

If the percent of Australia's tax revenue stays the same, at 20% of GDP, an additional 4% of GDP going to retirement incomes means that cost will eat up an additional 20% of government tax revenue. Would you like your taxes to go up 20%?

The report puts the conclusion mildly:

'Future taxpayers may therefore have to carry a higher taxation burden to support the funding of pensions, and other services, for a much larger population of retirees.'

Or, maybe the taxpayer will refuse to pay for past promises. In countries that went through the process of discovering they couldn't keep their welfare promises (the Scandinavian countries in the 90s), and in countries going though that experience now (Greece), the taxpayer simply defaulted on those promises.

Pensioners didn't get paid then. And they won't get paid in the future. At least not what they were promised.

Australians might discover the problem of unfunded liabilities later than their friends in Europe and America. But they will discover that outsourcing their retirement to the government and its cronies in the funds management industry was a bad idea.

So now what?

We spent 20 minutes answering that question in an interview that you can watch here.

Until next week,

Nickolai Hubble.
The Daily Reckoning Weekend Edition

ALSO THIS WEEK in The Daily Reckoning Australia...

Accelerando Towards the Fiscal Cliff
By Dan Denning

The Italians have a word for what may now be happening in the financial markets. It's a musical word. But sometimes you have to go outside the vocabulary of economics to describe what's going on in the world. Now is one of those times. The word is 'accelerando'...or the purposes of today's DR, it's the quickening of pace towards a fast finish that we're interested in.

Why Banks Won't Buy Risk Free Gold
By Greg Canavan

Gold doesn't have a natural home in the commercial banking system. It's not 'money' in the way that paper money is. It's more at home in central bank vaults, being a store of wealth for nations rather than a plaything for banks. It also doesn't hurt for individuals to store some of their wealth, OUTSIDE THE SYSTEM, in the ancient metal either.

Flesh Eating Zombies Will Feast on the US Economy
By Bill Bonner

At the rate the zombies are multiplying, there will not be a single normal person left in the US by 2052. We'll all be riding in government-provided wheelchairs... and living on food stamps. And who will pay for it? That's the thing about zombies... they need living flesh. In the coming zombie Armageddon the last productive citizens will be hunted down and torn to pieces. Then what?

The Ills of Fractional Reserve Banking
By Nick Hubble

If fractional reserve banking is a problem, as the paper acknowledges, why don't we solve that problem before rejigging the entire financial system in all sorts of other ways? Why don't we make banks operate under the same laws the rest of us do? We're not allowed to lend out what isn't ours. You don't see Kennard's Storage lending out their customer's garden furniture.