saveyourassetsfirst3 |
- Jim Willie: New GOLD Currencies Are On The Way
- Tom Cloud: Wholesale Gold Inventories Evaporating
- A Profitable Approach to Coming Crises
- Silver In Four Charts
- The McDonalds Economic Index
- Mitsui Precious Metals' Jollie: Gold Will Average $1920 In 2013
- Brazil Resources Inc: Gold Exploration Miner With High Potential
- Gold Stocks Approaching a Crossroads
- S7: Silver Rocket and Lucky 13
- Peter Schiff: America's Coming Bankruptcy
- Another Stroll Though Time w/ the HUI-Gold Ratio
- Gold Whackage Perpetrator – Deviously Cunning or Total Idiot?
- Citi's Energy Outlook For 2013
- Yen Weakness And Shifting Capital Flows
- VB Update Notes for November - December 2012 – Fiscal Cliff Blues
- Paul van Eeden on Why Gold is Overvalued
- Rarer Than Gold And Silver, Why Platinum May Be The Better Investment
- Gold's Comex Drop 'A Test of Downside Interest'
- Bullion's Comex Drop 'A Test of Downside Interest'
- Gold Down Just 1.3% Despite 3.5 Million Oz. Sell Orders
- Current Events That Highlight The Energy Sector For Income Investors
- Fiscal Cliff Avoided & Bullion Cliff Created?
- The Euro Loses Its Shackles
- Gold demand increasing in the Subcontinent
- Why Robert Khuzami Would Be a Terrible Choice to Head the SEC
- Expect Gold to Deliver Another Record in 2013
| Jim Willie: New GOLD Currencies Are On The Way Posted: 29 Nov 2012 12:29 PM PST Big Dad speaks with Jim Willie about the current state of the financial war and his recent article "Immutable Gold Laws" from bigdad06: Part 2 Part 3 ~TVR |
| Tom Cloud: Wholesale Gold Inventories Evaporating Posted: 29 Nov 2012 11:59 AM PST In this week's interview with gold dealer Tom Cloud of National Numismatic Associates, we cover one very timely topic – the sudden decline in gold inventories – and one perennial question – how can an individual put physical precious metals in an IRA. DollarCollapse: Good to talk to you again Tom. Let's start with your observation that the major gold wholesalers don't seem to have their usual level of inventory. Why the sudden tightness? Tom Cloud: Of the seven or eight major wholesalers that send me price sheets, almost every one is having supply issues. Some [coins and bars] I can get right away, but most take between a few days and two weeks. The wholesalers don't necessarily know why this is, but some speculate that the 58 tons that China's central bank purchased in September was responsible, and that [the Chinese] purchased at least that much more in October. When a big seller elects to sell something they don't even put it in the market any more, they just call up China's central bank, and we see the report four weeks later, if we see it at all. And it's not just China. Central banks in general are buying. Until 2011 central banks were selling gold but in the last two years hardly any are selling and many are buying. I've been doing this for 35 years and last month made my first sale to a central bank. Another factor is the new Basel III agreement in which gold counts for what it's worth rather than 50% of what it's worth, which makes it a more attractive asset for banks. And the final factor is that more Americans are moving into metals, which is producing more small orders to go with the big orders from central banks. It's different for each wholesaler, but the overall effect is to tighten inventories. DC: That's great news for gold bugs. Now, for those who have money in an IRA and want to convert some of it to bullion, how can they do that? TC: We're starting to see people actually move physical gold out of these ETFs. GLD, for instance, has been trading at a big discount. Why would GLD be selling at a discount if there wasn't anything wrong with the fund? Of course there's plenty wrong with it, as Andrew McGuire has testified. Instead of bullion ETFs, a lot of people are choosing to set up self-directed IRAs that can hold bullion directly. The first step is to find a government-approved custodian. There are ten or eleven out there but I find the two most user-friendly to be Sterling Trust and Goldstar Trust. You get an application online, along with a rollover or transfer form, fill these out and submit them, and your existing IRA is transferred to the custodian. Then you use those funds to buy metals and have them stored. You have two fees per year: a custodian fee of around $75 or $80 annually, in return for which they send you quarterly statements and 1099s for the years when you take a distribution. Then you pay the depository, generally Delaware Depository Service Corporation (DDSC), which stores the physical metal in your allocated account, with your name on it. Their fee is $125 per year for anything between zero and $100,000. For example, if somebody transferred $20,000 into a precious metals IRA then they've got about $200 in fees, or about 1% a year. The more you have the lower the percentage would be. When you get to $100,000 they'll charge 60 basis points on each dollar after that. DC: Can you deposit your own bullion in this kind of an account? TC: Yes, but the amount has to be below what you can put into an IRA in that year. The amounts differ for SEP and traditional IRAs. DC: What if you want to take possession your metal? TC: They'll deliver it to you. If you're old enough to take IRA distributions there would be no penalty but it would be taxable and they'd 1099 you. Here's an interesting point: Many dealers will pay above spot for Gold Eagles and other major coins and bars. So let's say you want to liquidate five gold eagles. You can ask the custodian to convert them to cash at spot and send you a check. Or you can take delivery and sell them yourself for the extra 2%. |
| A Profitable Approach to Coming Crises Posted: 29 Nov 2012 11:37 AM PST Profit Opportunities, as well as pain, surely exist in all coming Crises-Inducing developments such as:
Refusal to confront, or worse, Denial of, the consequences of inevitable coming Crises in an understandable response, but neither constructive nor profit-generating. Indeed, Denial virtually guarantees the Pain without the Profit. A much more constructive response is to Profit from those Crises which one cannot ameliorate. Given the Crises which are surely coming, profit Opportunities abound. And thus we shall identify a few. For example, Japan experienced a record trade deficit of JPY 1 Trillion in September! Japan, a country with a long history of Trade Surpluses, this third largest Economy in the world, is teetering, with its export sector collapsing. In part this collapse results from decades of massive and increasing and unsustainable government debt, wholesale Central Bank Bond Monetization, and a two decades old Zero Interest Rate Policy (sound familiar?!). And other Asian Tigers' economies are contracting also, with Thailand's manufacturing output down 13.7% Y.O.Y. and Philippines exports down 9%, for example. All of the above will hurt the earnings results of Japan's companies which rely on exports -- selected short plays should be very profitable. And the Eurozone presents similar opportunities. "You don't have to be an economic genius to understand that the perpetual uncertainty over the Eurozone's future has led to a widespread freeze on industrial investment and development. Industrial production is collapsing at an accelerating rate, falling 7% year-on-year in Spain and Greece, 4.8% in Italy, and 2.1% in France. "…the old cliché about kicking the can down the road is close to becoming no longer possible. Deferring the inevitable is only a political option so long as there is no immediate damage from doing so. But this is no longer true in the Eurozone… Doctors and teachers in Greece do not get paid anymore, and it is going that way in Spain, with regional governments surviving by simply not paying their bills. Government is destroying society, proving the falsity of the heretofore accepted belief (in Europe, anyway) that government makes society better. But then, anyone who has bothered to read Hayek's The Road to Serfdom will not be surprised. "What was not anticipated in Hayek's masterpiece is the divided state that is emerging. Greece is part of a larger EU and Eurozone bureaucracy and cannot achieve statist ends by turning her citizens into serfs. The government itself is subservient to higher authorities and is now having that medicine applied to it by its peers. Every visit by the Troika (collectively the European Central Bank (ECB), International Monetary Fund (IMF), and the European Commission) screws the Greek government further towards its own serfdom. "Keep in mind just one thing: Greece is utterly broke and cannot escape that fact. All of the posturing by the three Troika members is designed to avoid facing this reality. The political elite drive this party line and rigidly conform to it. "…the ECB and other national central banks in the Eurozone are now Greece's largest creditors and cannot take a haircut on Greek debt. "This is cash for an economy that is tanking with its industrial production collapsing. Deposits have flown from the banks, which, without the ECB's recycling of funds both through the TARGET2 settlement system and… debt as collateral, would themselves default. Tax revenues, insofar as they can be collected, are simply vaporizing. "The concern, obviously, is that Greece is a dry run for Spain and Italy. It is also, as I argue below, a dry run for France, which is in terrible shape and deteriorating rapidly." "Europe Is Now Sinking Fast" Alasdair Macleod, peakprosperity.com, 11/20/2012 That Eurozone "Leaders" continue to have more meetings and to repeat claims that the Latest Band-Aid Fix is The Solution, is not News, but is Reality, albeit unpleasant. The Real News, not widely reported in the MSM at any rate, is that the Eurozone as we know it will not survive. This will adversely affect the Earnings of many, but not all of the companies which do business in or with the Eurozone. Well-chosen, well-timed shorts should be most profitable. And it is not just a matter of shorting companies which are vulnerable to the PIIGS economies. France's Industrial Production, Employment Growth, and Business Confidence are plummeting. Why? Same reasons -- a shrinking economy, higher taxes, and more and more residents eligible for government "benefits," i.e. socialism come home to roost. The French Welfare State is running out of other people's money. And a long-standing relatively Open Borders Policy does not help France either. Low-skill migrants who come to France (or the USA for that matter) to share in that Welfare States "benefits" inevitably create a smaller piece of the pie for everyone, because the benefits received exceed the taxes paid by them. Indeed, an Open Borders policy is a de facto form of socialism so far as low-skilled immigrants are concerned. In the U.S.A., for example, 37% of all immigrants, legal and illegal, are on some sort of welfare program (www.cis.org). And in addition, in many states such as California, low-skill immigrants get free medical care and free K-12 schooling for their children. And all these taxpayer-provided benefits greatly exceed the taxes low-skilled immigrants pay. Moreover, virtually all of the countries mentioned above have allowed their Central Banks to implement Inflation-Inducing, Fiat-Currency degrading, Policies via, for example, The Fed's QE-to-Infinity, the ECB's outright Monetary Transactions, and Japan's Debt Monetization. Thus consequent Superb Profit Opportunities arise in certain Inflation Assets (see Note 1, 2, and 3 below). Real U.S. Inflation is already threshold Hyperinflationary at 9.82% per shadowstats.com. All the foregoing dramatically affect Earnings, Taxation, and Economic Recovery Prospects going forward. Given this context, notable for their Superb Profit Potential are Gold and Silver which have rallied lately and have shown remarkable resistance to being taken down off current levels. Indeed, even with the recent mid-week Takedown, Gold has held stubbornly above $1700 and Silver above $33. The Cartel may take them even lower, short-term. But Gold and Silver are still in Rally Mode and still poised to launch up strongly. And Key Technicals (e.g., Point & Figure Chart and Golden Cross) remain Bullish. And Gold is increasingly being used as money to circumvent use of Fiat Currencies such as the $US. Turkey, for example, is buying Iranian Natural Gas with Gold. And Central Banks' Gold purchases are still increasing overall. And the Chinese New Year (February 10) Gold Buying Season approaches. Indeed, China's Gold demand will exceed 1,000 tons by 2015, but China's production will then be only 450 tons, according to the Chinese Ministry of Industry and Information Technology. And Silver looks especially bullish with Strong Buyers appearing under $34 per ounce. Thus a Significant Profit Opportunity exists in these Precious Metals and Mining Shares, but timing is important, especially for the mining shares, and we forecast timing in our Alerts. In sum, if one has Courage for the Truth, the Truth about Economic and financial Realities, Real Statistics (as opposed to Bogus Official ones), and genuinely serious Impending Crises, then one is in a greatly enhanced position to Profit and Protect. Best regards, Deepcaster November 29, 2012 Note 1: The $US dropped nearly 200 basis points at one point a few weeks ago. No surprise since the Fed's U.S. Dollar-Destructive Q.E. to Infinity Action, coupled with the ECB's Similar Action the week before, boosted the Euro vis-à-vis the Dollar, as we earlier Forecast. The very recent $US bounce does not change its long-term weakening long-term Trend. This Debauchery of the $US weakens its Purchasing Power and thus increases Burdens on the agonized disappearing Middle Class. The Bernanke claim that buying $40 billion per month in Mortgage Backed Securities would Stimulate the Economy and help the Housing Market is just a Fictitious Cover Story. In fact, it is just another Gift to the Mega-Banks who hold Underwater Paper, and to Wall Street which proceeded to rally on The Fed-sugared High. Both the Continuous Commodities Index which show Average Annual Price Inflation of 15% and the Real Inflation Number (9.82% per year from shadowstats.com) reveal Serious Inflation is with us and it Intensifying. And Especially Food Price Inflation. To increase Yields, Farmers increasingly employ Fertilizer. And a recent Reco -- a Fertilizer Producer -- was trading near its 52 week low at under 40¢ per share when we first recommended it. It has moved up nicely since we recommended you buy in. And, trading 45¢ per share as we write, it is still a Superb Opportunity. To see our recent Buy Reco aimed at Profiting from the Fed's Inflation Rocket, read Deepcaster's recent Alert, "Buy Reco (under 40¢/share) to Ride Inflation Rocket; Forecasts: U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, Gold, Silver, Crude Oil, & Equities," recently posted in 'Alerts Cache', on deepcaster.com. Note 2: The world's population increases by over 200,000/day. That's net births over deaths. That's one heck of a large potential market increase for Goods and Services, provided that the increasing population has the Purchasing Power to acquire the goods and services they need and want. Since not all desired goods and services can be acquired, people have to prioritize. Thus some goods and services get bought and others not. Our recent High Yield stock recommendation last week makes a product essential to a Sector which is the very top priority when it comes to purchasing decisions. And its recent yield is 8.8% to boot. And perhaps best of all it is very well situated to be profitable regardless of general economic and financial conditions, including the aforementioned Crises. [And for those very sophisticated Investors who like to sell covered calls or naked puts, the high option premiums on this High Yield Recommendation could make that very lucrative.] And we issued a Markets Warning recently regarding a substantial impending Market Risk for Traders and Investors. To see our High Yield Recommendation and Market warning read our recent Alert "8.8% Yield in Top Sector Reco; & Markets Warning! & Forecasts: U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, Gold, Silver, Crude Oil, & Equities" posted in 'Alerts Cache' at www.deepcaster.com. Note 3: There are Magnificent Opportunities in the Ongoing Crises of Debt Saturation, Rising Unemployment, Negative Real GDP growth, over 9.0% Real U.S. Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults. One Sector full of Opportunities is the High-Yield Sector. Deepcaster's High Yield Portfolio is aimed at generating Total Return (Gain + Yield) well in excess of Real Consumer Price Inflation (9.82% per year in the U.S. per Shadowstats.com). To consider our High-Yield Stocks Portfolio with Recent Yields of 10.6%, 18.5%, 26%, 15.6%, 8%, 6.7%, 8.6%, 10%, 14.9%, 8.8%, 10.4%, 15.4%, and 10.7% when added to the portfolio; go to www.deepcaster.com and click on 'High Yield Portfolio'. |
| Posted: 29 Nov 2012 11:27 AM PST
from tfmetalsreport.com: Just a technical companion piece to Ned's post above, from your favorite "mentally-challenged", "morally bankrupt" and "dangerous" analyst.
Let's start with a review of this chart from Tuesday. So far, so good:
And here is where we are currently. First, this 8-hour chart shows four, clear reversals from Cartel-inspired takedowns. This is very bullish and indicative of strong demand for both paper and physical. Furthermore, extending today's gains through the highs of last week…after the ugly beatdown of yesterday…is a very positive, short-term development. On the daily chart you can see where we are headed next. A close today or tomorrow above the highs of last Friday and yesterday near $34.28 would clearly indicate that $35.50 is next.
Keep on reading @ tfmetalsreport.com |
| Posted: 29 Nov 2012 11:14 AM PST Business news readers are not only continually bombarded with various "indices" concocted by the Corporate Media, but we are regularly having new ones inflicted upon us. The purpose of these contrived numbers is obvious. Any/every economic index is (supposedly) "derived from" economic fundamentals, while hiding the raw data from us upon which the index is based. This makes these indices wonderful propaganda tools. Much like many forms of "processed food" strip-out most/all of the food-value of the raw material which went into them, the same is true (in economic terms) with these indices. I thus offer readers a refreshing change: an economic index which actually means something. Presenting the "McDonalds Economic Index." The premise behind the index is simple. With McDonalds now being firmly established across the (decaying) economies of the West, and rapidly becoming established in the (dynamic) "emerging economies" of much of the Rest of the World; McDonalds sales now provide a useful snapshot of overall global economic health. Note that unlike regular food consumption, purchases at McDonalds are discretionary. They will rise when the economy is robust, and sag as the economy slows. The one weakness in this "index" is that like all other retail sales data (and most economic data in general) it does not strip-out inflation from its sales numbers, so we will have to make that adjustment ourselves. What also makes the McDonalds Economic Index useful (for all Western-centric readers) is that it reports its sales with a clear Western perspective. Sales are broken down into three regions: the U.S. (5% of the world's population); Europe (5% of the world's population); and APMEA ("Asia/Pacific, Middle East, Africa") – i.e. the Rest of the World. Of course such a classification makes sense from a corporate perspective. It separates its divisions into the already-saturated U.S. market (which presumably includes Canada); the nearly-saturated European market; and McDonalds' still-growing, Rest-of-the-World operations. In October, McDonalds reported something which it had not done for nine years: a drop in overall global sales. However, not only was there an overall decline, but there were large declines in all three regions. Sales fell 2.2% (month-over-month) in the U.S. and Europe, and 2.4% in the APMEA region. As noted previously, this is a drop in sales revenues, and thus does not factor-in soaring inflation. As I've mentioned in several recent commentaries, as recently as the month of July the World Bank was reporting global food-inflation increasing by 10% in one month alone. As a low-margin food producer, McDonalds is forced to pass along that inflation to its customers in the form of higher prices. While I doubt very much that McDonalds has hit its customers with any sort of across-the-board 10% increase in menu prices in October, clearly food-inflation would have forced prices higher by at least a couple percentage points on average – effectively doubling the (real) size of this one-month plunge. |
| Mitsui Precious Metals' Jollie: Gold Will Average $1920 In 2013 Posted: 29 Nov 2012 10:50 AM PST By Hard Assets Investor: By Sumit Roy David Jollie is a veteran strategic analyst at Mitsui Precious Metals in London and covers all the precious metals globally for the company. His focus is not short-term price movements but more long term, and some medium trends as well as supply-and-demand issues. HAI's Sumit Roy recently spoke with Jollie and tapped his insight for a look into the gold market. HAI: After surging in anticipation of the Fed's QE3, gold prices haven't done much. Some expected better performance from the metal. Is this merely a temporary pause or have prices topped out? David Jollie: First of all, you have to think about what the impact of QE is, and there are a whole range of different ways QE works. It makes people worry about inflation in the future, it makes more money available to invest, and it does a whole range of other things Complete Story » |
| Brazil Resources Inc: Gold Exploration Miner With High Potential Posted: 29 Nov 2012 10:44 AM PST By Gold Silver Worlds: The necessity to own gold (GLD) and silver (SLV) as a form of protection is increasing by the day. The global wave of monetary stimulus seems unstoppable. The monetary base has reached historical highs in all Western regions and politicians don't show any sign of changing their monetary policies. The historically low interest rates (zero-interest rate policies) result in negative real rates. The trust in the financial system is fading by the day. These are only the most important elements which make much higher gold and silver prices almost a sure thing. One characteristic of precious metals is their very high stock to flow ratio. This truly differentiates precious metals from all other commodities. As the future demand for gold is expected to increase substantially, it's very likely that supply will not be able to meet demand. In terms of supply, the gold rich deposits have become more and Complete Story » |
| Gold Stocks Approaching a Crossroads Posted: 29 Nov 2012 10:42 AM PST |
| S7: Silver Rocket and Lucky 13 Posted: 29 Nov 2012 10:18 AM PST Silver Rocket, Lucky '13. from syyenergy7: My "analysis" using only plain common sense. ~TVR |
| Peter Schiff: America's Coming Bankruptcy Posted: 29 Nov 2012 10:16 AM PST Andy Duncan talks to Peter Schiff about the upcoming "fiscal cliff" in the United States, and how precious metals investors should manage their way through it. from goldmoneynews: They also talk about Peter's view on gold stock investments, China, as well as both the short-term and long-term outlooks for gold. This podcast was recorded on 28 November 2012. ~TVR |
| Another Stroll Though Time w/ the HUI-Gold Ratio Posted: 29 Nov 2012 10:11 AM PST
Yesterday the goons apparently attacked 'paper gold' (according to sources who stand on guard for this stuff) after the HGR had become weak. A pleasant thing happened however, as the HGR did not buy the take down in nominal gold. 2 Hour chart above.
Thus the critical higher low to last summer's low remains in place despite a savage day yesterday. Daily chart above.
Which allowed HGR to maintain itself well above the critical 'Armageddon 08′ low. Weekly chart above.
Which itself was a higher low to the kickoff of the secular bull market in 2000 (in nominal HUI, not this ratio). Monthly chart above. The HGR does indeed look lame over the big picture, but as long as the higher lows are in place and as long as macro fundamentals (e.g. the real price of gold) are in place the above is a view of a buying opportunity, as pained as it is to endure for those already all in. It is a view of opportunity as long as we do not get violations, so you can see why it was a little unsettling when the ratio began to waterfall (by the 2 hour chart at top) into what we now assume was a well coordinated hit (in line with the terrible CoT data noted in this space a couple days ago. It's all in good fun I suppose. At some point the goons will be behind us, as will this accursed noise about the Fiscal Cliff ™ in which markets are finding the latest emotional obsessions. Indicators like the HGR quietly whir beneath the surface and while it got hairy the other day, it remains unbroken. http://www.biiwii.com, Twitter, Free eLetter
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| Gold Whackage Perpetrator – Deviously Cunning or Total Idiot? Posted: 29 Nov 2012 08:12 AM PST
Via WSJ:
The "deviously cunning" explanation comes in the form of a "Rothschild trade."
But of course, in this version of the story, the Rothschild sales were a red herring — the Waterloo news was bullish. After the other traders had dumped shares, driving down the market, Rothschild began buying with magnificent size, at much better initial prices thanks to his headfake. This possibility is reflected in the simple observation that slamming a block of 20,000 Jan puts into the gold market, on a random Tuesday night, is practically guaranteed to cause ugly dislocation. Were the responsible party actually planning to buy a lot more gold, as opposed to simply hedging current holdings, such a move would be brilliant, allowing for short-term lower prices and less risk of gunning the market with high volume buys. That is the "deviously cunning" explanation. But there is also the "complete idiot" possibility… Some massively large hedge fund shops have excellent trading operations. For a clear demonstration of this, check out Felix Salmon's piece on SAC Capital and the Elan trade. SAC's traders were skillful enough to move an astonishingly large block of stock (relative to float and daily volume) without heavily disrupting the market. As Salmon writes:
But not every shop is run by super-astute traders. Some, in fact, are run by long-term buy-with-conviction types who seemingly couldn't trade their way out of a paper bag (ahem, John Paulson, cough cough). Taking a massive position and sitting on it until external forces require you to do something drastic does not count as trading. If someone like a Paulson, a shop with a massive long precious metals position, did indeed decide "we need to hedge against a bullish fiscal cliff outcome" — which would be bad for gold — and further thought, wrongly, that the market could absorb a huge hedge without too much disruption, then said party might well have decided to put it on all at once (or at least a very big chunk). Either way, while silver has managed to recover the damage short-term, gold has not… and serious questions remain as to precious metal miners either way. One problem with gold stocks here, in spite of their impressive rebound from Wednesday's drubbing, is the potential for a "heads you lose, tails you still lose' fiscal cliff outcome:
The other factor made abundantly clear this week is the incredible treachery of the opening print. For weeks and weeks markets displayed the tendency of opening bullish, then selling off into the close… and recently that pattern has flipped, with bearish opens begetting script flips to the upside. As the algos whittle down short-term HFT profits to almost nothing, like a frenzied circle of sharks eating each other, some rocket scientist somewhere is surely writing a program to exploit this enhanced script-flipping tendency. Higher timeframes maintain their integrity, though, by virtue of being much harder for the algos to game (with far less potential for millisecond profits); we have adjusted our own game accordingly. JS (jack@mercenarytrader.com)   p.s. Like this article? For more, visit our Knowledge Center!
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| Citi's Energy Outlook For 2013 Posted: 29 Nov 2012 07:54 AM PST By CommodityHQ: By Daniela Pylypczak Considering this year's rather volatile performance, one thing can be agreed upon by almost all investors – commodity investing is essentially a crap shoot. This year's unprecedented summer drought and escalated geopolitical tensions in the Middle East have wreaked havoc on commodity markets, leaving some lucky investors with profitable returns and others with steep losses. Overall, however, commodities have been experiencing a steady uptrend for quite some time, as global demand has continuously inched higher despite the recent economic slowdown. In a recent statement, global head of commodities research at Citigroup Edward Morse warned that the "commodity super-cycle" is over and that "no longer will a pure long-only strategy bring the returns expected in 2002 to 2008, nor will conditions approximating those of the last decade return anytime soon." Citigroup's (C) 2013 forecast for energy commodities is somewhat mixed, though the slowdown in Complete Story » |
| Yen Weakness And Shifting Capital Flows Posted: 29 Nov 2012 07:53 AM PST By Marc Chandler: LDP Head Abe woke the yen market out of its slumber with aggressive campaign rhetoric. The polls show that he is most likely to be the next prime minister of Japan and will be in a position to enact his plan to ease monetary and fiscal policy dramatically. The yen has weakened since he began ramping up his comments. It is the weakest of the major currencies and the weakest among the Asian regional currencies since the beginning of the month. As we have noted in our weekly reports, the speculators at the IMM have piled into short yen positions. Last week alone the gross short speculative position jumped by more than 50% to 79.7k contracts. This is the largest gross short position since April's 82.2k contracts, which itself was a four year high. Real money appears to also be adjusting to the prospects of a weaker yen. Complete Story » |
| VB Update Notes for November - December 2012 – Fiscal Cliff Blues Posted: 29 Nov 2012 07:33 AM PST HOUSTON – Looking once again at the smaller, more speculative junior miners and explorers, including those represented in the Canadian Venture Exchange Index or CDNX, the effects of the U.S. election have now worn off and we are left with a market still under some pressure from tax loss selling and worries over the U.S. Fiscal Cliff. Since the last full update, the CDNX continued its new pullback. A pullback that suddenly looks capable of retesting the July lows. Here's the now very familiar long-term monthly chart.
Looking at a shorter term, weekly view of the CDNX, with gold shown in green, the massive divergence between gold and the CDNX has made little progress in closing. So far the CDNX has failed to break out above the giant falling wedge formation that has contained it since arguably mid 2011. The lack of CDNX strength stands as a negative signal by itself, mitigated by the attempt to break out just recently. So far we cannot point to a breakout, but we can point to a minor rounding bottom with a trough in July – followed immediately with a rally back up to almost challenge the lagging 40 wma. That was the wedge breakout attempt and the CDNX has been consolidating along the DTL (downtrend line) since. The jury is still out we might as well say. But when we look at the HUI for comparison, we have to come away with the sense that a new bull market for the miners is getting underway (maybe in fits and starts) following a textbook double bottom in the expected range of support (shown in green in the chart below). The CDNX does not necessarily follow the HUI in lock step and as the chart below shows, it can diverge from the larger, better funded and more liquid miners for long periods of time. Notice, however, that over time major moves by the HUI are eventually at the least echoed if not directly "answered" by the tiny companies represented by the infinitely smaller CDNX. If we are right about our assessment of the current read of the chart above, then we should be in the process of marking the first of a series of higher lows for the HUI, and if so for the HUI, then possibly also for the CDNX. That may be a case of wishful thinking in the current environment, but our sense is that sentiment is so sour and defeatist at the moment, a meaningful bottom and upside reversal is now more likely than the opposite. Good reversals and major market turning points often occur at times when the market is either its most depressed or most euphoric. Bull markets are defined on charts as a series higher lows and highs over time. We frankly do not yet know if this is a for-sure bull market underway, but if the current pullbacks for the HUI and the CDNX end or have already ended by the time this offering gets distributed, and the trading goes on to reach a new higher high before falling back in a retreat again, we can then make the case that a new cyclical bull may be underway. The obvious flip side of that gold or silver coin is if, that's IF, either or both of the indexes were to cut new, lower lows than they did in the summer. In that case it would once again postpone the new cyclical bull idea. We said last time: The recent attempt to break out of the wedge is encouraging and technically minded traders will understand instinctively that "something has changed" should the CDNX catch a meaningful bid and move well above the mature wedge. It will mean that whatever had kept the index in a relentless down trend, with lower highs and lows in a tightening wedge; whatever confluence of conditions, metrics and sentiment had conspired to prevent The Little Guys from gaining popularity and positive money flow, resulting in what we have dubbed "The Second Junior Bear Market From Hell," has, at the very least, eased and may be in the process of reversing. Almost (but not quite) universally, when great bears end they are marked by an important reversal and followed by a new, powerful cyclical bull market as the markets strain to correct excesses in both directions over time. Secondly, almost (but not quite) universally, bear markets for the CDNX are periods of lower and falling volume. The short version (no pun): If the CDNX manages to break out, north of the giant falling wedge and move noticeably higher just ahead, it will be one of the best confirming indicators we could ask for -- for our new bull market contention. That failing, with the market already so severely discounted, we would look for strong to overwhelming support to form inside the wedge and we would be very surprised to see the CDNX cutting new lows for 2012. As of this writing, we hold to that notion – that the CDNX is likely to find overwhelming support inside the bullish falling wedge. Subscribers, To continue reading, please login. |
| Paul van Eeden on Why Gold is Overvalued Posted: 29 Nov 2012 07:23 AM PST |
| Rarer Than Gold And Silver, Why Platinum May Be The Better Investment Posted: 29 Nov 2012 05:31 AM PST By Central bank actions around the globe have essentially locked in the long-term trend of devaluation of national currencies while at the same time assuring a long-term bull market in precious metals. Since I have begun analyzing equities and opining on stocks I have been recommending gold and silver in physical form or through one of the ETFs that tracks the price of the metals such as (GLD), (IAU) and (SLV) as I believed inflationary pressures from such action could bolster prices for precious metals. In the last 6 months when talk of European bond buying began and a possible QE3 by the US Federal Reserve, both of which were realized in late summer, GLD, IAU and SLV have appreciated 10.5%, 10.7% and 19.3% respectively. I think these precious metal ETFs remain a buy on any weakness for the long-term investor. While gold and silver are the most Complete Story » |
| Gold's Comex Drop 'A Test of Downside Interest' Posted: 29 Nov 2012 05:28 AM PST Wholesale gold bullion prices rose to $1,725 an ounce Thursday morning, recovering some ground after yesterday's sharp drop during US trading, as stocks, commodities and the euro also gained and US Treasury bond prices fell. |
| Bullion's Comex Drop 'A Test of Downside Interest' Posted: 29 Nov 2012 05:28 AM PST Wholesale gold bullion prices rose to $1,725 an ounce Thursday morning, recovering some ground after yesterday's sharp drop during US trading, as stocks, commodities and the euro also gained and US Treasury bond prices fell. |
| Gold Down Just 1.3% Despite 3.5 Million Oz. Sell Orders Posted: 29 Nov 2012 05:13 AM PST Gold recovered somewhat overnight in Asia and again today in Europe despite the sharp selling seen on the Comex yesterday. As ever, it is very difficult to pinpoint exactly why gold and all precious metals fell in price. |
| Current Events That Highlight The Energy Sector For Income Investors Posted: 29 Nov 2012 05:07 AM PST By Michael J. Ray: In the world of income investing there is never a shortage of financial instruments that are competing for the investor's dollar. That being the case, picking the right investments for one's income portfolio can be a daunting task. Inspiration for new ideas can often come from very interesting, if not unique places. The latest events that have come into play revolve around the latest tragedies named Hurricane Sandy, as well as the latest round of fighting in the Middle East. The devastation that Sandy left in its wake is truly terrible, and no words can describe the loss that the victims are experiencing. Leaving that aside, it was interesting to watch the aftermath of the storm. Story after story was splashed across the media where individuals lined up for hours to get their chance to acquire fuel. They waited in their cars or held gas cans in lines that Complete Story » |
| Fiscal Cliff Avoided & Bullion Cliff Created? Posted: 29 Nov 2012 04:53 AM PST There has been much speculation about the causes of the 24-tonne gold sale on Comex yesterday but closer inspection provides some clues... and more importantly what it tells us about the market outlook for 2013. |
| Posted: 29 Nov 2012 04:48 AM PST By Dean Popplewell: Just when you thought that short EUR position you had been carrying was about to strike big, along comes a few U.S. politicians to throw yet another curve ball. The U.S. fiscal cliff is again capturing the market's attention, as investors look for signs of an imminent resolution to the tax hikes and spending cuts that are scheduled to hit the U.S. in a matter of weeks. The prospect of a compromise on the U.S. deficit strategy has boosted global equities and the vulnerable EUR against the dollar, while also giving oil and commodity prices a lift. It is all about the signals. This market requires guidance, as low volume and problems with liquidity do not provide market confidence to many. The U.S. House of Representatives Speaker Boehner said that he was optimistic that a deal over the fiscal cliff can be reached. Even Complete Story » |
| Gold demand increasing in the Subcontinent Posted: 29 Nov 2012 04:00 AM PST The Nepalese gold price keeps rushing from one record high to another - its latest record at over 155,000 Nepalese rupees per ounce. Demand for the yellow metal is skyrocketing in the country, ... |
| Why Robert Khuzami Would Be a Terrible Choice to Head the SEC Posted: 29 Nov 2012 03:46 AM PST Given that the Obama Administration appears to think that missing-in-action Attorney General Eric Holder has been doing a fine job, it probably isn't surprising to see the SEC's head of enforcement, Robert Khuzami, included on a short list of names rumored to be under consideration to head of the agency. But if the object is to prove that regulators can't regulate and it's too hard to enforce securities laws, then Khuzami's your man. I am old enough to remember when the SEC was feared on Wall Street, and it was due to the effectiveness of its enforcement head, Stanley Sporkin. The SEC's lousy reputation is the direct outcome of its terrible record on enforcement. Promoting Khuzami to lead the SEC would cement this institutional failure. Let's look at the SEC's record of enforcement fiascoes under Khuzami. The only thing he can claims is getting some bigger fry than usual on the insider trading front: Raj Rajaratnam, Rajat Gupta, and closing in on the SEC's big target, Steve Cohen. Well, I suppose it's nice that the SEC is becoming a better one-trick pony. But the wake of the biggest financial crisis in three generations was the time for the agency to up its game, and the SEC has failed miserably. One indicator: in his latest column, the New York Times' Joe Nocera snorted at the appointment of Elisse B. Waters as the interim chief (she's expected to be a placeholder; †he plan is to replace her within a year. We'll see if this is really just a scheme to keep the SEC hobbled while appearing to Do Something). One of the reasons was that anyone was currently at the agency is part of the problem. We'll s go through some examples of glaring Khuzami failures. Mind you, I've had to restrain myself; I could easily have written a post three times as long. Khuzami's overarching failure is the SEC's embarrassing record in pursing fraud that was instrumental in causing the financial crisis. Khuzami has repeatedly claimed that it's hard to go after these cases. Yes, if you aren't competent, anything looks hard. Let's start with the first big crisis case the SEC tried making, that of a criminal suit against the managers of the two Bear Stearns hedge funds that ate too much subprime and died as a result (note that this case was filed in tandem with a SEC civil fraud lawsuit, which continued and was settled for what one observer called "peanuts"). This was a weird choice, since the hedge funds were VICTIMS of bad subprime packing/selling practices. But this was a classic example of "if the only tool you have is a hammer, every problem looks like a nail." The SEC and DoJ conceptualized the case along the lines of an insider trading case: one principals was reducing his holdings in the fund even as he was twisting investor arms to stay in. And they thought they had some slam-dunk evidence in the form of damning e-mails of the two managers saying how awful the funds' holdings looked But the effort botched basic case development, as in doing sufficient discovery. Turns out the dubious-looking sale was part of a program; the timing was not market-driven. And the e-mails were taken out of context; there were contemporaneous ones that were far more positive. And many observers thought the case looked dodgy from the get-go:
Second is the SEC's failure to use the biggest and best tool on offer against any of the probable fraudsters, that of Sarbanes Oxley. Remember that Sarbox was the result of the SEC's last big win, that of its successful pursuit, in conjunction with the DoJ, of Enron. The law was designed to end the "I'm the CEO and I know nothing" defense by requiring the CEO and at a minimum, the CFO to certify the accuracy of financial records and the adequacy of internal controls. For a big financial firm, that includes risk controls. But if you make risk control subordinate to trading, which is how it works in practice, and you drop multi-billion loss bombs, wreck the global economy and need bailouts and years of artfully disguised subsidies, like ZIRP and multiple QEs, it should not be all that hard to establish that risk control was a really an exercise in blame shifting ("We did all the right things. Whocoulddanode?") rather than a serious undertaking. And the other beauty of Sarbox is the criminal violations language tracks the civil. Thus the SEC could file a civil case, and if it prevailed, it would be fairly simple to proceed with a criminal suit. There's been only one time when the SEC made a Sarbox-related claim related to the financial crisis, that in its suit against Angelo Mozilo. We believe SEC was incorrectly deterred by a one sentence ruling. We've argued more recently that Jon Corzine's mismanagement of MF Global is a classic case of poor oversight and controls and a prime candidate for a Sarbox suit. But it looks like Corzine is Too Connected to Prosecute. Third is the SEC's practice of filing cases against big financial perps, and rather than taking any to trial, of settling them with no admission of any facts. The well-respect jurist Jed Rakoff had finally had enough of that. He first took the SEC to the woodshed for its paltry settlement with Bank of America over allegations of inadequate disclosure in its acquisition of Merrill (and notice the SEC took up that case only because then New York attorney general Andrew Cuomo looked about to embarrass the SEC for its inaction). He then told them to go try a case against Citi. From a post exactly one year ago:
The Rakoff ruling produced a great deal of consternation, since the SEC has been using this dubious practice for a long time. But that's hardly a defense. As Forbes columnist Bill Singer noted, in analyzing Khuzami's press release on the ruling:
And it is not as if this ruling deprived the SEC of being able to settle cases. It could still continue to settle them for monetary damages alone; that doesn't require a judge's blessing. What does is the inclusion of "injunctive relief," which is a court order to take certain actions or refrain from certain conduct. The New York Times looked into the matter as a result of the Rakoff ruing and ascertained these orders were frequently violated. Khuzami tried to rationalize this process in House Financial Services Committee hearing that looked designed to give the agency air cover. Matt Stoller found him less than convincing:
Yves again. Now rather than adjust course in light of the Rakoff ruling, the SEC and Citi appealed. It went before a motions panel to ascertain whether the appeal should go forward, since Rakoff objected on procedural grounds. The motions panel ruling criticized Rakoff's action, but a brief written on his behalf may still give the appellate court a way to avoid ruling on the merits of the case. Third is Khuzami's was complicit in some of the worst behavior during the crisis. He should have resigned when it became clear that CDOs were central to the crisis and the SEC would not be able to avoid dealing with them. The SEC appears to have taken a policy of suing on one CDO per major firm and settling. This is heinous, since each and every one of these firms sold more than one CDO and the bad practices were pervasive. From a December 2011 post:
We'll finish with the SEC's demonstration of gross incompetence on other cases. We'll just look at some recent examples. It lost against Brian Stoker, a Citigroup employees who was charged with more heinous conduct than the bank itself (this was one of the curiosities that led Rakoff to take issue with the Citigroup settlement discussed above). This was such an abject failure that some attorneys wondered if the SEC threw the case to support the idea that it could never have won against Citi on the same CDO. The SEC is also pursuing a bizarre case against former Fannie Mae and Freddie Mac for whether they made adequate disclosure of how much subprime exposure they had (the fact that the Bank of Canada's Mark Carney figured out that they were insolvent a full ten months before they were put in conservatorship suggests that public disclosure was plenty adequate). And then we have SEC request a dismissal of its own case against Ed Steffein of GSC, a CDO fund manager. Clearly planted stories depicted the agency's embarrassing reversal as yet another proof of regulatory overzealousness (the corollary of course, is that No One is Really to Blame). Our reader, MBS Guy, had a different take:
Oh, and the SEC isn't missing the boat only in financial-crisis-related conduct. For instance, it issued a mere no-action letter agains UBS after filing a case on fraudulent bidding in municipal bond guaranteed investment products when the underlying allegations looked both serious and not that difficult to substantiate. Even the most cursory look at Khuzami's tenure shows it to be a complete embarrassment. Thus the only reason for him to be allowed to fail upward is that a weak SEC serves the interests of parties near and dear to the Administration. Given that the power of the Rubin/Hamilton Project bank-loving wing of the Democratic party continues its cancerous growth, it's quite plausible this toxic choice will get the nod.
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| Expect Gold to Deliver Another Record in 2013 Posted: 29 Nov 2012 03:46 AM PST The truth is that signs the yellow metal's bull market will soon end are scarce indeed. Meanwhile, breakeven costs continue to rise among gold producers, meaning the price floor keeps rising. That's why gold prices should reach $2,200 next year. |
Whoever whacked the gold market Tuesday night is either deviously cunning or a complete idiot. Whichever serves as the true explanation, gold has sustained significant technical / price momentum damage and lost the support of trend-following capital flows (which tally in the hundreds of billions).
A barrage of sell orders early Wednesday sent gold prices down 1.5%, their steepest decline in more than three weeks.
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