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- State Street's Mazza: Gold ETF 'GLD' Easier To Trade Than Bullion And Coins
- Gold: Buy On The Dip Or Regret It Later
- Bridgewater, Dalio And The Gospel Of Diversification - Post-Modern Value Investing?
- Subscriber Investment Summit Vancouver 2012: Millrock Resources
- Why Voting Obama Will Mean Higher Gold Prices
- The Argentina Scenario
- Gold and Silver Worth $1.4 Billion Carried In Baggage From Turkey To Iran…
- Putting Gold & Gold Stocks in Proper Context
- Brian Booth's Weekly Gold Report (November 5th through November 9th)
- Obama Pocket Kings, Romney Pocket Queens?
- Gold & Silver Worth $1.4B Carried to Iran by Hand
- Reaction to US Election 'Likely to be Short-Lived'
- Links 11/05/2012
- Gold weakens following BLS release
- A Tipping Point for Gold Companies
- Bullion’s Time to Buy, Buy, Buy
- Putting Gold and Gold Stocks in Proper Context
- Pete Peterson and the Deficit Hawks Teach Lawmakers Deep Fiscal Irresponsibility
- Iran’s Untouchable Energy Exports
- Exploding the Myth of Unbacked Silver Certificates and Phony Silver Storage
- Updating the COT Charts For Silver–It Doesn’t Look Pretty
- The World Calls the FEDs Bluff: Give Us Our GOLD Back! *Video Parts I/II*
- Gold Seasonality Chart Shows November as Strongest Month
- Doug Casey: There will be a panic into Gold and a Huge Change of Ownership Over Global Resources
- nam gov says hold dong, not gold
- No Inflation to See Here!
| State Street's Mazza: Gold ETF 'GLD' Easier To Trade Than Bullion And Coins Posted: 05 Nov 2012 11:49 AM PST By Hard Assets Investor: Investment strategist and firm principal behind GLD talks about how the ETF has made gold a growing and necessary staple in portfolios. David Mazza is a principal of State Street Global Advisors — issuer of SPDR Gold Shares (GLD), which has more than $73billion in AUM — and is also the head of exchange-traded fund investment strategy for the Americas within the SPDR ETF Strategy and Consulting Group. Mazza develops market outlooks and investment themes and also authors white papers on various market and ETF-related topics. HAI Managing Editor Drew Voros recently spoke with Mazza about GLD's success, the gold market in general and why GLD is better for a portfolio than gold bullion and coins. Hard Assets Investor: How would you characterize fund flows this year for GLD? David Mazza: We're particularly happy with how robust the flows have been into GLD this year. We're close to $5.6 billion Complete Story » |
| Gold: Buy On The Dip Or Regret It Later Posted: 05 Nov 2012 11:17 AM PST By CommodityHQ: By Jared Cummans Gold was the beneficiary of a strong rally after the announcement of the open-ended QE3 that pledged to pump $40 billion/month into the economy. But after picking up some steam, the precious metal suffered a rough couple of weeks. October has historically been the worst month for gold over the last 15 years, and this year's loss of nearly 3.5% for the four week period fell right in line with those expectations. Now that gold is seemingly correcting, many investors are wondering if the hard asset is at a bargaining point. Peter Schiff seems to think so. The renown investor recently said that "one day we're going to look back at $1,700 with nostalgia. People are going to be shocked at how inexpensive gold was when it could be snapped up for such a bargain price." Schiff has been urging investors to buy this commodity for quite Complete Story » |
| Bridgewater, Dalio And The Gospel Of Diversification - Post-Modern Value Investing? Posted: 05 Nov 2012 11:15 AM PST By As Hurricane Sandy bore down on New York City, the only silver lining was an early market close that provided me the leisure to open up "The Alpha Masters" by Manet Ahuja. I've just finished the first chapter on Ray Dalio, but already there are things worth sharing. For those who don't know, Ray Dalio is the radically transparent founder and co-CIO of Bridgewater Associates LP, one of the world's largest and most successful hedge funds. He is also one of the most interesting characters in the hedge fund world. I first encountered him watching an interview on Charlie Rose. I recall being impressed if not inspired by the clarity of his thinking and the methodical ruthlessness with which he approached problems. His requirement that any discussion of a complex subject be contingent on the participant's commitment to having a thoughtful conversation, uncontaminated by emotion was a breath of fresh Complete Story » |
| Subscriber Investment Summit Vancouver 2012: Millrock Resources Posted: 05 Nov 2012 09:24 AM PST With the closing of the 2012 Alaska field season and focus shifting south to projects in Arizona, Millrock's President & CEO Greg Beischer updates investors at the Vancouver Subscriber Investment Summit – an annual invite-only conference put on by Lawrence Roulston, Keith Schaefer & Eric Coffin. The presentation is part of an initiative that will see Millrock's story being told to a broad audience across North America. The ten-minute video highlights the exploration success achieved by the company this year and the great benefits of the Project Generator – Joint Venture exploration business model. To view Greg's presentation, click the video. Please check our website for upcoming news and information. November 5, 2012 (Source: Millrock Resources Inc.) http://www.millrockresources.com/newsletter_archive/millrock_president_ceo_presents_millrocks_story/ Disclosure: Millrock Resources is a Vulture Bargain Candidate of Interest (VBCI). Members of the GGR team are actively accumulating and hold long positions in MRO.V or MLRKF. |
| Why Voting Obama Will Mean Higher Gold Prices Posted: 05 Nov 2012 08:51 AM PST The statistics on presidents and gold prices since Richard Nixon make for some interesting reading; some surprising and some not so surprising trends exist. Our main findings show that voting Obama is best for the gold price. |
| Posted: 05 Nov 2012 07:54 AM PST Jay Hallen writes: The Obama administration's familiar economic mistakes- The opening decade of the twenty-first century has seen a slow but distinct decline in American capitalism. Economic policy has become increasingly overrun by central planning, redistribution, and government picking of industrial winners and losers. Beginning about half a century ago, those elements helped sink another free-market powerhouse—Argentina. While Barack Obama is no Juan Perón, the president's misguided policies threaten to squander our economic advantages, just as Perón's did in Argentina. Government intervention in the housing market, caused by low interest rates; direct subsidies, such as the home-mortgage interest-tax deduction; and the market distortion caused by Fannie Mae and Freddie Mac—the two state-backed entities that make virtually all home loans now—has helped throw the American economy into a tailspin. A rerun threatens to occur in the student loan market and perhaps also health care, two areas where the government now plays an outsize role in financing and subsidies. Subsidies and bailouts to favored sectors have come at substantial cost to the taxpayer. The notion of "too big to fail" removes banks' incentives for responsible risk-taking, while the Fed's continued "quantitative easing" plays to the American consumer's worst instincts: the over-leveraging that brought about the current crisis in the first place. Meanwhile, the U.S. Treasury retains a 27 percent stake in General Motors and refuses to sell its shares lest it realize a multibillion-dollar loss. But with government-subsidized Chevy Voltslosing $49,000 per car, any increase in GM's share price seems a long way off. President Obama's response to the Great Recession and then a pallid recovery has been guided more by "fairness," a thinly veiled code for redistribution, than by free-market principles. As it stands now, the top 1 percent of Americans generate 16 percent of the nation's income butpay 40 percent of the income tax. This isn't enough for Obama: he's pushing for still-higher taxes on those who create jobs while increasing transfer payments and entitlement spending for everyone else. Recent publication of a 1998 video in which Obama declares, "I actually believe in redistribution," helps reveal the philosophical underpinnings of his economic agenda.To see the long-term consequences of these policies, Americans can look to Argentina, a country that was once strikingly similar to the United States. As outposts of the "New World," both were settled by frontiersmen who tamed a wild landscape, setting the foundation for valuable agricultural and livestock industries. The frontier spirit contributed to strong federalist traditions, which in Argentina's case drove the outlying regions to take up arms against the dominance of Buenos Aires throughout the nineteenth century. Free trade with Europe powered both nations' economies, attracting foreign investment and millions of European immigrants between 1880 and 1930. By 1930, Argentina's GDP and per-capita income rivaled those of Germany, Canada, and Australia. This period was Argentina's golden age, and the country remained a free-market bastion through the 1940s. Buenos Aires was the "Paris of the South," with a trove of cultural and architectural treasures that reflected the country's wealth. Then everything changed. As soon as Perón assumed the presidency in 1946, he sought to appease his political base in the labor unions with dictates of full employment and wealth redistribution. He incited massive strikes in order to coerce the private sector into accepting increasingly pro-labor legislation. In a similar vein, the National Labor Relations Board's 2011 filing of a lawsuit against Boeing, which built a plant in South Carolina to avoid strikes and delays to its Dreamliner, revealed the Obama administration's willingness to insert itself into private industrial disputes on labor's behalf. Deciding that Argentina needed industrial "self-sufficiency" more than it needed its productive agricultural sector, Perón advanced government subsidies to inefficient manufacturers, protecting them with high tariffs. Predictably, these actions crowded out agricultural investment, weakened the country's profitable export base, and drove unemployed workers to Buenos Aires and into the arms of state-subsidized factories and their associated unions. Such preferential treatment recalls the Obama administration's fascination with green energy and the $527 million that it squandered in the Solyndra scandal, along with the federal stimulus bill's funding of costly boondoggles like California High Speed Rail. The California rail project is almost guaranteed to lose between $50 and $100 billion, though it's difficult to say exactly how much, because the price tag keeps rising. Labor unions, corporate railroad interests, and environmental extremists—all part of Obama's political base—continue their lobbying efforts for the project. Note, too, that when Perón nationalized banks, railways, shipping, and utilities, he poured revenues into social-welfare projects, among them the revitalization of a National Mortgage Bank to fuel housing loans. Sound familiar? Perónism's effects were soon clear. Between 1945 and 1948, Argentina's $1.3 billion trade surplus was eviscerated. Argentina borrowed heavily from the United States, forcing the nation's central bank to print money to service the debt, devaluing the peso by 70 percent between 1948 and 1950. Political leaders made some genuine attempts at reform, but Perón's overhaul of economic institutions and tradition of central planning proved hard to undo. After decades of high inflation and continued stumbling from one crisis to the next, the country defaulted on its debt in 2001 and had to be bailed out by the IMF and other international lenders. Argentina's fall from grace remains unprecedented in modern history. It was driven by the hubris of a government that took its country's affluence for granted and thought it could manage the economy better than the private sector could. And it shows what America could look like in 30 years. The size of the U.S. government has accelerated measurably under the Bush and Obama administrations. From 1980 to 2000, government spending held steady between 30 percent and 35 percent of GDP, but it jumped to 37 percent after Bush's second term and is now at 41 percent as Obama's current term comes to a close. As government grows, so do annual budget deficits, themselves a brash assumption that economic growth will continue indefinitely. Interest rates today are at rock bottom, penalizing those who would save or invest conservatively. The Fed's current expansionary policies maydevalue the dollar by as much as 33 percent over the next 20 years. America's 2008 recession, aided as it was by government intervention, has pushed the country closer to becoming a handout nation in which those relying on government for sustenance and services may soon outnumber those earning the money that funds these goods. Argentina became such a nation when the government seized control of the economy, rendering much of the population de facto state employees, dependent on some form of federal largesse. The recent news that one-third of American households now receive Medicaid and food stamps complements a report that nearly half of Americans don't pay income taxes. Mitt Romney's infamous "47 percent" comment, while technically inaccurate—many who don't pay income tax do pay payroll tax, and seniors receiving Medicare and Social Security shouldn't be described as "victims"—was nonetheless correct in spirit. These trends suggest that the United States is becoming a nation of "makers" and "takers," which may someday lead to a dangerous electoral tipping point. Politicians would be forced to pander to a vast constituency with even higher taxes and spending, while the political discourse becomes even further divided between social and business interests. The Argentine case study shows that even wealthy New World countries, blessed with natural resources and a diligent immigrant workforce, can bring ruin on themselves through economic mismanagement. To restore growth and escape economic stagnation, the United States must return to its free-market roots, rather than travel farther down the path of intervention, dependency, and decline. Jay Hallen, CFA, is a New York City–based writer. November 5, 2012 (Source: City Journal) http://www.city-journal.org/2012/eon1102jh.html
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| Gold and Silver Worth $1.4 Billion Carried In Baggage From Turkey To Iran… Posted: 05 Nov 2012 07:24 AM PST gold.ie |
| Putting Gold & Gold Stocks in Proper Context Posted: 05 Nov 2012 06:55 AM PST The precious metals complex had a great rebound at the end of the summer but is now in the midst of a correction. Recently we wrote that the correction was nearing an end. We believe that to be the case. |
| Brian Booth's Weekly Gold Report (November 5th through November 9th) Posted: 05 Nov 2012 06:40 AM PST It was not until the United States Non Farm Payroll Report on Friday that traders had a clear idea concerning the technicals in the Gold Futures. Prior to the report, futures prices saw higher lows each day throughout the week and even traded up and outside of the range before failing miserably all day Friday. To begin the week, Gold saw a lift after better than expected news from China was reported and was coupled with additional easing measures applied by the Bank of Japan. The light buying continued despite concerns in Europe over Spain and once again Greece. Once the labor data was released in the United States that showed a better than expected number, there was a strong rally in the US Dollar which ultimately led to the demise of Gold and most other Dollar-based vehicles. The word is that traders saw a better than expected jobs number as a reason for the FED to scale back on their commitment to Quantitative Easing. Additionally, traders are awaiting important newsthis week from not only the United States but also from Europe and a G20 Summit now in session. This week traders will try to position themselves ahead of the United States Presidential Election, which at this point is anyone's guess. In Europe, all eyes will be on Greece where their Parliament votes on new austerity measures imposed by the Troika and will once again answer any questions surrounding Greece's staying power in the Eurozone. Lastly, member of the G20 are in Mexico today discussing all of the aforementioned topics and more. The last few meetings have produced very little new news, but any major announcements from this meeting could always impact global markets. From a technical perspective, the Gold Futures dropped to a critical support level that I had mentioned in past reports. You can see on the chart that the support level last week was $1700 an ounce. I did think that Gold Futures would hold that support to close the week. But I also mentioned the fact that if that price was breached, the next support would look to fill a gap on the chart from back in late September. And that is exactly what the market did on Friday and into today's trade. I believe that with little news on the data front to start the week, that traders will likely look to scale into the Gold at this support level. Once the final decision is made in Greece and the United States has chosen a President for the next four years, it will be decided if Gold holds support, or if it targets the next support near $1650. Gold's reaction to the strong rally in the US Dollar on Friday reaffirmed their inverse relationship to one another. Furthermore, it also indicated the fact that many markets are still heavily reliant on the US FED to continue their Easing campaign. While the fundamental picture in Gold continues to walk a tightrope, the technical picture is a bit more stable. Traders should continue to watch the direction of the US Dollar, and also keep technical support levels in Gold in their sights. Since drifting from the highs of $1800, the market has given a clearly defined range (diagonal lines in blue) to follow. We begin the week at the bottom end of the range and thus far seems to be holding up, which deserves traders attention, whether they are bullish or bearish. Good luck this week and as always, feel free to call or email me directly to discuss the Gold Market. I can be reached directly by phone at (888) 272-6926 or by email at bbooth@longleaftrading.com. November 5, 2012 (Source: Brian Booth, Long Leaf Trading Group) |
| Obama Pocket Kings, Romney Pocket Queens? Posted: 05 Nov 2012 06:26 AM PST
Various odds makers have the election all sown up for President Obama. The controversial New York Times blogger Nate Silver has Obama's re-election odds at 86 percent, and Irish spread-betting firm Paddy Power is paying out on Obama bets two days early as a form of publicity stunt. The notion is that, even though the popular vote is deadlocked, Obama is registering a near-insurmountable advantage in electoral college votes. This makes the odds of a Romney upset highly unlikely — but certainly far from impossible.
Sticking with poker, the worst possible outcome would be a draw — if, say, a five-card straight or five-card flush came out, forcing both candidates to "play the board" for a tie.
Also horrible, politically speaking, would be the event of Obama winning via electoral college with Romney taking the popular vote. If that happened, rancor would go through the roof… and potential odds of logically resolving the 'fiscal cliff' would drop correspondingly. We don't have a dog in this fight, but none of this is good for markets…  click to enlarge
Bulls are hopeful that this rally can be extended, but the whole market feels balanced on a knife edge. Upcoming 2013 looks to be a year of trials and troubles, with most of the 'hopium' supply already used up.  click to enlarge On the bullish side of the coin you have:
But on the bearish side you have:
 click to enlarge
We are long the dollar from pre-breakout levels (via UUP) and noted last week it was odd to see stocks switching to "risk on" mode even as the greenback strengthened. But with Friday's equity reversal, intermarket relationships may be getting back to "normal" again…  click to enlarge
As we have said repeatedly, the precious metals case just doesn't add up at this juncture… maybe later but not now… and a 200 EMA submersion is saying the same thing loud and clear.
There are no guarantees markets will decline further post-election, of course, but this is an odds and probabilities game, and that's the way risk / reward is tilting right now… if you would like to see our trade rationales, position sizing etc in real time, check out the Mercenary Live Feed. JS (jack@mercenarytrader.com)   p.s. Like this article? For more, visit our Knowledge Center! p.p.s. If you haven't already, check out the Mercenary Live Feed! |
| Gold & Silver Worth $1.4B Carried to Iran by Hand Posted: 05 Nov 2012 05:11 AM PST Gold edged up a bit on Monday, limiting the fall after the better than expected US jobs number sent the yellow metal downward to a two month low. The US dollar limited gold's rebound as investors parked money there before the US election. |
| Reaction to US Election 'Likely to be Short-Lived' Posted: 05 Nov 2012 04:47 AM PST Spot market gold bullion prices rallied above $1,680 an ounce Monday morning in London, having earlier fallen to a nine-week low, while stock markets edged lower and US Treasury bonds gained, with one day to go before the US presidential election. |
| Posted: 05 Nov 2012 03:55 AM PST Building Small: In Many Industries, Economies of Size Is Shifting to Economies of Numbers Science Daily Why Great Sign Language Interpreters Are So Animated Atlantic Steven Davidoff Whitewashes the Investment Banks in the NYT CEPR Zeitgeist watch: The 2012 U. S. Presidential Elections: Reversals, Revelations and Renewal (LT). Mercury in retrograde. The wrong side absolutely must not win A. Barton Hinkle, Richmond Times-Dispatch (BR) Against Voting: "As long as we live, we shall have to live together with ourselves" Power of Narrative Third party laziness, 2012 edition Pruning Shears Obama, Romney & Enthusiasm Angry Bear Obama Robocall Urging Support for Love Desegregation PatriotBoy. Subtext: "Leave it up to the states." The Politics of Fear NYRB Video: The Undecided The New Yorker The Difference Between Bush's First Term Vs. Obama's First Term In One Devastating Chart Joe Weisenthal, Business Insider The Scariest Jobs Chart, Private Sector Edition Atlantic The Myth That Screwed Up 50 Years of U.S. Foreign Policy FP. Headline, "myth"; url, 'lie." 1-star firing a public rebuke for decorated CO Navy Times. Carrier Admiral on duty in the Arabian Sea. "Leadership judgment." Not sex, so… ? Greece braced for crucial votes FT. Parliamentary. The Bailout Of Russian "Black Money" In Cyprus Testosterone Pit A letter from Athens Al Jazeera. Golden Dawn MP also fascist-themed T-shirt vendor. Synergy! China's 'new Manhattan' becomes censorship capital FT China economy: Non-manufacturing sector growth picks up BBC China's Non-Manufacturing Industries Signal Rebound Ahead Bloomberg Watchdog inspectors divided on fault activity at Oi nuclear plant site Asahi Shimbun Useless Liberal Intellectuals FDL. Until the last college President is strangled with the entrails of the last post-structuralist… How MIT Became the Most Important University in the World Boston Magazine Attacks on Social Security Are Attacks on Today's Youth, The Seniors of 2050 and Beyond FDL. "When politicians declared war on Social Security…" Well, which? Abstract thinking can make you more politically moderate University of Illinois A Lost Generation? Not Even Wrong The professional 'cuddler' who makes $260 a day by inviting strangers to take a nap with her at home Daily Mail Our Paedophile Culture LRB. The BBC. * * * Mission elapsed time: T + 56 and counting* Major Danby replied indulgently with a superior smile: "But, Yossarian, suppose everyone felt that way.""Then," said Yossarian, "I'd certainly be a damned fool to feel any other way, wouldn't I?" –Joseph Heller, Catch 22 Readers: Yves has asked me to live blog election eve, so I will see those of you who are interested here at around 4:30PM on Tuesday. More Hurricane Sandy NJ. Voting: Via email and fax. …. Voting: Via physical ballot (AH). …. Power: Still, a quarter of New Jersey and almost a tenth of New York remained in the dark, the Department of Energy said. … Power: " By today, NJ's power losses dropped to 999,927, according to the Energy Department." … Power <-> gas: " One gas station in Little Ferry, NJ still without power is now using a gasoline powered generator to pump gasoline in small quantities." Rather like ethanol, if you think about it. … Class warfare: "The enormity of the crisis in New Jersey has not yet been fully grasped by national media. While shore locales are typically associated with luxury, innumerable working-to-upper middle class homes have also been devastated. At Seaside Heights, the foreboding odor of gas leaks is now ubiquitous. On Wednesday I visited Atlantic City, five miles north of where Sandy made landfall. President Barack Obama and Governor Christie toured the devastation in Brigantine, just across the bay. Many poor, primarily black residents who live in the shadows of the iconic casinos had been scattered – fled to shelters or with relatives – and were not even being allowed back in the city yet. For those who stayed behind, preparing to vote was hardly a consideration. Lives are still at risk. It is now getting very cold, and the elderly are without heat. People cannot fuel their cars to go to work, nevermind drive to the polls. Turnout across New Jersey will almost certainly be low on Tuesday, which would likely favour Mitt Romney. Further, those displaced by the storm are disproportionately low-income people of colour, a crucial D constituency." … Public good: " If you are in a Sandy impact zone, call your congressman and senators and let them know how disappointed you are that AT&T and the other telecoms are using their data allowance caps to extort money from you in the absence of landline and wifi accessibility. Tell them that this disaster has taught you that the telecomms who provide cell service are actually public utilities and that they should be regulated like a public utility." … Solidarity: "'I know a lot of people not working,' he said. 'But the town came together — the people that have power are helping other people charge phones. I think it made Hoboken a better place. On a regular day, everybody sticks to who you know. Now people have extension cords just hanging out their windows. It gives me hope for the world." NY. Heat: "'These are public housing projects where sand and water got into the boilers and electrical systems got destroyed. We don't have a lot of empty housing in this city so it's really a problem to find housing,' Mr Bloomberg said." I know! Privatize them! … Staten Island: "But when we finally made it to Crescent Beach, the scale of the damage was total." … Power: "[14] much-needed generators sat idle all day yesterday in a rental company's New Jersey parking lot after they were moved from the Staten Island staging area of the New York City Marathon — less than two miles from some of superstorm Sandy's hardest-hit victims" (AH). … Food: "Thousands of New Yorkers affected by Sandy are still without access to food or water–but don't worry guys, because you're about to get some chips and soda! Governor Cuomo announced today that Walmart and PepsiCo will be donating snacks, beverages and supplies to New Yorkers in need. So much for Bloomberg's attempt to banish every trans-fat and sugary drink from the city, they're about to be brought in by the truckload." … Solidarity: "'When are we going to get some f****** help?' one woman demanded of the billionaire mayor. 'There's old ladies in my building that don't got nothing,' one furious man told Bloomberg." NOTE: Swing states in bold italic, with (poll closing). CO (9:00pm ET) The Obame: "Thousands of people huddled in the late-night cold Sunday awaiting Obama and acoustic sensation Dave Matthews. Most polls — including a Denver Post poll out Sunday — put Romney and Obama at a statistical tie." … The Romney: "Romney, who spoke earlier in the day in Colorado Springs, positioned himself as a practical problem-solver, someone who would work with both parties to find solutions. 'I won't just represent one party,' Romney said. 'I'll represent one nation.'" Among those who have already voted, Obama leads 49% to 46%, and he leads 45% to 42% among those who say they will vote before Tuesday. Only with Election Day voters — 18 percent of respondents — does Romney lead, 47% to 42%." … Mass incarceration: "Three days ago, CO shut down a brand-new prison it didn't need. Unless the state government finds someone else who can use it, CO taxpayers can expect to spend $208 million for an empty building. The legislature [had] resorted to a financing method called "certificates of participation." Rather than borrow money to build its own prison, the state sold certificates to investors, becoming the operator of a prison owned by a multitude of lenders." FL (7:00pm ET for eastern part of state; 8pm ET for the west). … Voting: "Elections officials, overwhelmed with voters, locked the doors to their Doral headquarters and temporarily shut down the operation, angering nearly 200 voters standing in line outside — only to resume the proceedings an hour later. 'This is America, not a third-world country,' said Myrna Peralta, who waited in line with her 4-year-old grandson for nearly two hours before the doors closed. "They should have been prepared.'" … Voting: "But the law [that reduced the number of early voting days from 14 to eight and eliminated early voting on the Sunday before the election] includes a loophole: Election offices are allowed to be open for voters to drop off absentee ballots. On Sunday morning, officials in Miami-Dade and Palm Beach counties announced that in addition to accepting absentee ballots, their main election offices would be open all day to print out absentee ballots for voters who had not already requested them." … Voting: "Five things that could go wrong on Election Day in FL: Long ballots, provisional ballots, absentee ballots, challenges, confusion" (explainer). IA (10:00pm ET) Polls: "The Des Moines Register's final poll of the year by Selzer & Co shows Obama ahead by 47% to 42% among likely IA voters. Meanwhile, Project New America and USA Action released a new Iowa poll conducted by Grove Insight on November 1 and 2, which found Obama leading Romney 47% to 44%." OH. Ground war: "The Obama operation established itself here by 2008, winning Ohio and, to the shock of local leaders in the county that surrounds this city, Hamilton, which had long favored Republican presidential candidates. Then it never left." NC. Voting: "Officials say a new problem this year is people showing up at polling places and thinking they have the right to walk right in and inspect things. In some states, ordinary citizens do actually have that ability, but in most — including NC — there are strict limits regarding observers and pre-approval is required." Out of curiosity, is open carry permitted at the polls? NH (7:00pm ET for most of state; 8pm ET for a few bigger cities) Polls: "Most recent polls give Obama a slight edge over Romney in NH, but within the margin of error." NV (10:00pm ET) Prediction: "It would be very difficult for Obama to lose Nevada, especially because I think more than two-thirds of the vote is in, so whatever turnout advantage the GOP has on Tuesday won't be enough. Obama, 50%; Romney, 46%; others and 'none of the above,' 4 percent." OH (7:30pm ET). Voting: "[T]he state's leading newspapers have all reported on various potential electoral controversies, and many have zeroed in on what is likely to be one of the most critical concerns for both camps–the counting of provisional and absentee ballots" (excellent survey). … Voting: "'If we encounter outages, we have portable generators we could deploy to a limited number of locations and also have flashlight supplies on hand to help deal with that situation,' said Jane Platten, director of the Cuyahoga County Board of Elections. 'At this point, we are encouraged by reports from the utility companies that they hope all [Hurricane Sandy] outages will be restored by the end of Monday.'" PA. Power: "With so many residents still off the grid and overnight temperatures dipping into the 20s, Montgomery County officials declared a 'code blue' cold-weather warning, scheduled to continue through noon Monday. Lower Merion, one of the county's hardest-hit townships, set up 'warming stations' at local firehouses and libraries to provide residents with a place to warm up, get a cup of coffee and other nourishment, recharge electronic equipment such as cellphones and laptops, and just have an opportunity to get outside and away from home for a bit" (PT). … The Rpmney: "Romney drew a crowd of 30,000 at a rally Sunday evening, as supporters from both sides of the Delaware River converged on a suburban Philadelphia farm. People waited for hours to get into the rally in a stiff wind and temperatures falling through the 40s, sending a message of support in this red corner of the state." Impressive, but what the heck is Romney doing there? "Little early voting"? VA (7:00pm ET). Voting: "Friday a coalition of voter advocates lodged a formal complaint about the guidance [True the Vote] has offered [through its manual for poll watchers]. One they pinpoint is a section on when polls close advising that people who vote after polls close should cast a provisional ballot that's kept separate from other votes. The manual also notes that VA law allows anyone in line by the time polls close to vote. That's a conflicting message that could cause problems at the polls, according to some who signed the letter. Another complaint is that the wording in the manual on voter identification laws is imprecise, given changes VA made to its law this year." WAi>. Gay marriage: Obama Robocall Urging Support for Love Desegregation. Policy: "Leave it up to the states." WI (9:00pm ET) Voting: "The hundreds of thousands of people who vote by absentee ballots in Wisconsin might not realize mail-in ballots are probably the least reliable way to ensure a vote is counted, said Barry Burden, a UW-Madison political science professor." … Voting: "Wisconsin is a 'same-day registration state,' meaning it's easy to vote at the last minute so the Democrats hope the Boss will help them rouse people to the ballot boxes. 'The general belief is that voters who move around a lot or students are going to lean Democratic and they're going to register on Election Day," said Burden" (Burden's in everyone's Rolodex!) Outside baseball. Polarization: "'[P]olarization has grown because Ds and Rs are representing moderate districts in increasingly extreme ways.' We can add that this appears to be true in all the other districts, too" (charts). … Oil: "Crude shipments are now the fastest-growing product for several big U.S. and Canadian Class 1 railroads after oil output expanded more quickly than pipeline capacity." … Freedom: "Freedom exists only if we are prepared to do things which are not in our material interest." … Hurricane Sandy: "If Google is doing the best job of collecting and presenting the data citizens need during — and after — a natural disaster, then, unless news organizations can match it, they should be doing their best to share and promote Google's map." Grand Bargain™-brand Catfood Watch. "Fever": "Biden said that if President Obama is re-elected, the R 'fever' will break and some level of bipartisanship would return to Washington." Just in time for the Grand Bargain! How convenient. The trail. Polls: "President Obama heads into election day with a narrow lead in two carefully watched national polls, with the Pew Research Center projecting a 50% to 47% margin for the president over Romney and the NBC/Wall St. Journal poll finding him ahead 48% to 47%." … Polls: "As of this writing, on Sunday evening, Obama led by an average of 1.3 percentage points across 12 national polls that had been published over the course of the prior 24 hours. On Saturday, we wrote that state polls would have to be statistically biased against Mr. Romney for him to win the Electoral College. Now, it may be the case that the national polls would have to be biased against him as well'" (Nate Silver). … Swing counties: "Of the 18 stops that Obama and/or Biden will make, eight are in counties that went for Bush in 2004 and Obama in 2008. These are the swing counties like Arapahoe and Jefferson in CO, Hamilton in OH and Loudon in VA. The other ten stops are in traditionally solid D areas where Team Obama needs strong base turnout, such as Fairfax County, VA which gave Obama 60 percent of the vote in 2008 and Dane County, WI which gave Obama a whopping 73 percent of the vote. This tells us that Obama is focused on securing the gains they made in 2008 in key swing, suburban areas, but they are also concerned about pumping up the D base. Team Romney is targeting some of those same swing suburban areas as Team Obama, but they are also spending a lot of time in D counties like Franklin and Cuyahoga in OH, Polk in IA and Milwaukee in WI. Another ten stops are in solid R territory like El Paso County, Colorado (Colorado Springs) and Bay County, Florida (Panama City). Overall, the Romney/Ryan schedule suggests that they are more focused on wooing independent voters than simply firing up the base." … LOTE voting; "Strategic Voting was still being debated among the far left when Obama's senior campaign adviser and former press secretary, Robert Gibbs, said a 16 year old American citizen who was blasted to bits by a US drone while he sat around a campfire with his cousins should have had a better father. … Discourse: "DOWD: …Every time you feel a losing campaign, these three things happen. [1] don't believe — the public polls are wrong. [2] we're going to change the nature of the electorate, and you're not seeing it reflected in the polls. [3] the only poll that counts is Election Day. When you hear those things, you know you're about to lose." … Voting: Handy election eve timeline, with poll closing. Pass the popcorn! … Voting: Timeline with paths to victory. Keen graphic! The Obama. Incentives: "TV executives believe the First Lady would be a natural to become a talk show host. She has even been compared to Oprah Winfrey." … Nooners: "Whatever happens, Obama will not own the room again as once he did. If he wins, we will see a different presidency–even more stasis, and political struggle–but not a different president. " * Slogan of the day: In Following the Middle of The Road, Strive for an Even Greater Victory! * * * Antidote du jour:
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| Gold weakens following BLS release Posted: 05 Nov 2012 03:45 AM PST Gold and silver endured a tough day on Friday, following the release of better-than-expected US economic data. December Comex gold lost 2.4% ($40.30), settling at $1,675.20 per troy ounce - the ... |
| A Tipping Point for Gold Companies Posted: 05 Nov 2012 03:38 AM PST Did you know that gold stocks tend to under-perform during election years? The silver lining for gold stock investors is that they have historically bounced back the year after the election. |
| Bullion’s Time to Buy, Buy, Buy Posted: 05 Nov 2012 02:23 AM PST If you aren't already in, Monday or Tuesday should represent an exceptional buying opportunity as gold moves into its final intermediate cycle bottom. Look for a final exhaustion move to test the 50% level early in the week. |
| Putting Gold and Gold Stocks in Proper Context Posted: 04 Nov 2012 11:08 PM PST The precious metals complex had a great rebound at the end of the summer but is now in the midst of a correction. Recently we wrote that the correction was nearing an end. We believe that to be the case. A short-term bottom could occur sometime this week. However, the precious metals sector was unable to retain much of the very strong momentum it previously had. Thus, the metals and stocks will need some time to confirm support and generate positive momentum before they have a chance of breaking to new highs. That being said, we wanted to take a broader view and analyze the sector in its current context in comparsion to the past. Gold is likely to end up in its longest consolidation, which would surpass the 2006-2007 and 2008-2009 consolidations. Note the chart below and our observations on the three consolidations. Gold's current position is weaker than the previous two consolidations but that won't be of concern as long as the metal holds above the 400-day moving average at $1650. Whether Gold holds at $1650 or bottoms at $1600, the metal is likely to remain in this consolidation for a while.
Checking the gold stocks (HUI), we see that the 400-day moving average provides excellent context. The gold stocks put in a strong double bottom and rallied up to the moving average. The market is now correcting the previous overbought state. In the three previous examples, the market began its rebound off of a major bottom (2000, 2005, 2008) and encountered initial resistance at the 400-day moving average.
We focus on 2005 and 2008 because those are most applicable to today's situation. In 2005, the HUI traded around the moving average for almost three months before pushing up to the previous all-time high. A similar thing happened in 2009. The HUI wrestled with the 400-day moving average from May until September before eventually rallying back to all-time high. To conclude, there is nothing to be worried about in regards to precious metals. First, we should note that the shares have been showing more strength than the metals, which is always a very good sign for the near future. Second, the metals and more specifically the shares have been acting exactly as they did within a similar context in the past. After a rebound from a major low, the shares typically correct and wrestle with the 400-day moving average before embarking on a move to previous highs. Traders and investors are urged to be patient and accumulate at support when sentiment is constructive. Now while the market is wrestling with the 400-day moving average is the time to do your research and find the companies that will lead the next leg higher and outperform the market indices like the HUI, GDX and GDXJ. If you'd be interested in professional guidance in uncovering the producers and explorers poised for big gains then we invite you to learn more about our service. Good Luck! Jordan Roy-Byrne, CMT
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| Pete Peterson and the Deficit Hawks Teach Lawmakers Deep Fiscal Irresponsibility Posted: 04 Nov 2012 10:59 PM PST Michael Hoexter is a policy analyst and marketing consultant on green issues, climate change, clean and renewable energy, and energy efficiency. Originally published at New Economic Perspectives We have come to accept in the Orwellian world of mass communication and media spin that pressure groups and political organizations name themselves in ways that contradict their actual mission. We have become cynical about truth and about good intentions, trusting only after long observation certain political actors and then only reservedly. There is now such an alphabet soup of organizations in Washington, a veritable smorgasbord of lobbyists that only political junkies and Washington insiders will know every acronym and player. However there is a constellation of particularly influential groupings in Washington that should be known by every American for what they are and what they are not. These groups form a powerful hub at the center of the fiscal austerity campaign. Purveying an economics based on political pose and hunch, these groups have relied on the deep pockets of Wall Street billionaire Pete Peterson and others from the financial industry to fund their activities involving sometimes massive lobbying, publicity, and astroturf "grassroots" activism. Utilizing strategies reminiscent of the mid-20th Century American Communist Party, Peterson's overall tactic has been to found and/or fund a number of front organizations to create the illusion of a broad consensus arrayed in favor of his personal views, which are shared for the most part by a wealthy few within the financial and political elites. These views in turn are extremely unpopular with the electorate, particularly as regards cutting or partially privatizing universal social programs like Social Security and Medicare. The current "Central Committee" of the fiscal austerity drive is the Committee for a Responsible Federal Budget that has been cleverly sited at the liberal New America Foundation. The directors of the CRFB include Peterson, Erskine Bowles, Alan Simpson, Alice Rivlin, as well as a number of conservative Democrats and "centrist" Republicans. The composition of the board overall reflects a cross-section of Washington elite opinion that is ignorant of basic macroeconomics but attempts to portray this ignorance, or apparent ignorance, as virtue. The menagerie of political opinion collected there shares a common belief in the private or non-government ownership of the US dollar, which according to them, is either taxed away from private citizens for government use or is borrowed from foreigners. The greatest coup of the deficit hawks so far has been fostering an alliance with President Barack Obama, who has turned out to be as committed to fiscal austerity as almost any Democrat and more than many Republicans. Obama appointed two of Washington's deficit hawks, Erskine Bowles and Alan Simpson, to head his bipartisan "National Commission on Fiscal Responsibility and Reform". Obama's true belief in the fiscal austerity "meme" may come from a number of sources: a naturally conservative character, a belief in bipartisanship as an end in itself, a long-term political strategy of protecting his right flank, endorsement of neoliberal principles altogether and perhaps, an interest in graduating to a comfortable post-Presidency mingling with the Washington and Wall Street elites. Overall Obama has governed as a moderate conservative rather than the liberal that his right-wing critics portray him as and that progressives wish he had been. Obama seems entirely in his element satirizing the now marginalized "Left" in the US and is hesitant, surprisingly inarticulate, and a little awestruck when he is attacked from the Right. The deficit hawks' apparent victory consists not only in having an ideological ally in the White House but furthermore having that ally be the leader of the "left-ward" major political party in the US. This has pacified the resistance to austerity in the US so far. Mishandling the Tool of the Currency and Government Spending At its heart, the Peterson campaign is based on common misconceptions about what money is and where it comes from. It bases its popularity on the psychology of the abandoned gold standard, which still has a following in the right-ward side of the electorate. Unlike the mental model of money that goldbugs promote, the value of money is not fixed in a set of objects, especially in our current era of fiat currencies, but a representation of what people owe each other and the real value to people that can be obtained by spending it; it is a tool most often provided by governments to market participants but also applied by governments to achieve the public purpose, i.e. the fulfillment of "the social contract", however construed. Governments with their own currencies must be free to respond to economic conditions and spend on vital programs and in quantities depending on how the public purpose is defined by the polity as a whole. One of the pillars of the American social contract has been social mobility enabled by economic growth. While the Peterson-funded campaigners would claim that they too are "for" economic growth, their preferred policies stifle economic growth by throttling government spending. Economic growth and broadly shared prosperity are a matter of simple arithmetic that escapes Peterson, those who are in his thrall and/or those who have inhaled of the myths of market fundamentalism too deeply: all of the net gains in wealth of the private sector on an annual basis are the sum of the balance of trade plus the sum of the government budget deficit. All net gains made by the private sector, which includes private businesses and households, are the sum of the deficits of the government and the rest of the world. If the government runs a surplus, i.e. taxes more than it spends, it takes away in net from the domestic private sector and the "rest of the world". Peterson and his retinue claim that government budget balancing will lead to the reward of "confidence" from the private sector, which obviously an examination of the numbers doesn't support. In reality, actual business confidence, rather than the ideological-cudgel version favored by Peterson and his lackeys, would require greater government spending than taxation, and more so in the present conditions of lowered private demand and private over-indebtedness. Government is responsible for upholding the social contract, which involves consideration of a number of social and environmental factors that private businesses in their activities and contractual negotiations do not generally account for or encompass. One aspect of that social contract is "meta-business ethics" the legal and regulatory structure that "referees" business transactions. Sometimes the social contract must be renegotiated because economic and social conditions change: this renegotiation process most often costs money (mobilization of real economic resources) which is sustained by government spending. Disguised as "conservatives" or "centrists", the deficit hawks are attempting to radically rewrite the social contract with the assumption that it is just another business contract, with a similarly narrow focus and without regard for the "meta-business" framework which government must provide in order for a workable civilization to be maintained. The narrative that the Peterson groups purvey suggests to federal legislators that they do not have the policy space to spend beyond taxes collected when this is in fact not the case, as the Treasury in combination with the Federal Reserve under Congress's supervision can "mark up bank accounts" with no meaningful affordability constraints. The government has the ability to spend in "deficit" unlimitedly because the government does not need to tax or borrow the currency which it creates by spending. Whether it should do this for one or the other expenditure is a matter of political discussion but the arbitrary limit of expenditure to taxes collected or, even worse, efforts to collect more taxes than spending, hampers the stabilizing effect and leadership role of government in our inevitably mixed economy. Real economic considerations that would limit spending are a) inflation above a certain politically determined limit (not continually predicting hyperinflation when government spends money), b) currency depreciation/appreciation beyond a certain politically determined limit, c) the diversion of real resources from the private sector into the public sector beyond some political-economically determined limit. i.e. how large a public sector do you need to fulfill the public purpose but not larger? None of these constraints are arrived at via counting how much money has been collected in taxes. Instead, their determination requires actual macroeconomic analyses and serious, reality-based political-ethical discussions, analyses and serious discussions which the deficit hawks are unable to produce. Now more than ever, the real effects of increased government spending, particularly on projects that produce public goods of high value and also increase employment, have a very high net positive value for the economy. The budgetary rule that Peterson and the so-called Center for a Responsible Federal Budget would like to impose leads American legislators exactly in the direction of the mistakes of the founders of the Euro-Zone when they agreed to limit deficit spending to 3% of GDP, not thinking that a financial crisis could hit, requiring governments to counteract a downturn in the private economy. Equally their efforts to lame the spending capacity of government so that it conforms to rules that ordinary households must use could not meet the enormous challenges of disasters such as Hurricane Sandy. The Peterson crowd would have Washington tailor government's spending to fit a self-satisfied businessman's fantasy about government's economic role rather than its real economic role. Thus the Center for a Responsible Federal Budget and allied organizations like the Concord Coalition preach a deep fiscal irresponsibility. "Responsible" Only to a Misinterpretation of Financial Market Sentiment The deficit hawk narrative has become all too familiar in the times when there is a Democrat in the Presidency, nominally the leftward of the two main political parties in the US. People like Peterson warn that "entitlements" are bankrupting the government or making financial markets frown on buying the debt issued by the US Treasury. The President of Peterson's Committee for a Responsible Federal Budget, Maya MacGuineas, has called herself at other times in her career a "bond vigilante", and has a background in financial services. The "bond vigilantes", supposed enforcers of rough "justice" in the bond markets, talk up their displeasure at government embarking upon ambitious programs of spending that benefit ordinary people rather than elites. As it turns out, bond markets are only too happy to buy the bonds of the US, Japan and other nations that control their own currencies, whatever the level of indebtedness of those national governments. The notion that bond vigilantes are frowning on the deficit spending of governments is only true in circumstances where a government does not control its own currency or pegs its currency to a foreign currency. The story that they are particularly opposed to social spending is a political fabrication that may reflect the social outlook of financial market speculators and investors but not necessarily their bond-buying behavior. The focus on bond markets and their sentiments inverts the priorities of government, tuning fiscal policy to a side-effect, the selling of bonds in the amount of budget deficits, of the current deficit spending arrangements of the US government and a hold-over from the era of convertible currencies. Peterson and CRFB would have misplaced fears about bond market sentiment and the opinions of foreign investors about the US rule the fiscal arrangements of the US government. He would trap legislators and political discourse in the era of the gold standard while attempting to sequester the power of the fiat currency issuing government for the use of the financial elite. Ultimately national sovereignty is at stake and Peterson's and the deficit hawks' advice jeopardizes national sovereignty, while falsely claiming to do the opposite. Irresponsible to the American People One of the primary purposes of the fiscal arrangements of the US government is to enable the pursuit of happiness for the American people as a whole, however that is defined at a given point in time in the political, social and ethical development of the polity of the United States. The rules that Peterson's deficit hawks would impose on the federal government would short-circuit this mission of government and tie the fiscal operations of government to the short-term interests of the speculative and rentier financial interests that helped bring down the world economy in 2007-2008. Wall Street has for a long time, had its eye on privatizing the markets for old age pensions and insurance, which are currently anchored by Social Security and Medicare. Furthermore Wall Street titans fear government will re-regulate them as happened in the period after the last great financial crash in 1929. Re-regulation of Wall Street in favor of the real economy and ordinary debtors would under many scenarios mean credit writedowns or some form of devaluation of the asset holdings of Wall Street to enable repayment of these restructured debts from the reduced incomes of our current era relative to the valuation of these assets dating from the peak of the bubble. These bankers are unwilling or unable to take losses in their portfolios in order to start the economy on a new path. In some scenarios banks would be nationalized, their managements thrown out, and then broken up and restructured. The austerity drive, originating among the Wall Street elite and popular there, is a way to distract from these issues of the real economy and lame government as a potential regulator, as well as prospectively weaken the provision of social insurance by government to enable the eventual takeover of these functions by Wall Street. Resurrecting and re-regulating the private credit system is not the only or most important responsibility of government at this time. Since the invention of macroeconomics in the wake of the last Great Depression, it has been government's role to be relatively generous in a downturn, to spend in a counter-cyclical manner, when people are unwilling or unable to invest in the future. While war-time government spending on both sides in the World War II were some of the most dramatic forms of economic stimulus of that period, governments have continued since then to spend more in times when businesses were spending less. Critical public goods, like schools, public services, and transport systems are decaying in America while unemployment is at high levels. Median and below median incomes have stagnated. Investing in public infrastructure is crucially important both during times of prosperity and times of crisis. Investment in public education is declining. All of these investments are necessities for America to decisively enter the 21st Century and these necessities require not just rhetoric but spending to succeed. The path of direct investment in these public goods has yielded the most success in countries around the world, yet we in the United States continue to avoid the obvious. Vainly, some call upon the private market to provide public goods at lesser public expenditure but this path has proven to be an ideological sinkhole. In the years in which Americans have played around with "market solutions" to the provision of public goods, its world ranking in areas like infrastructure and healthcare have sunk in international comparisons. In a recent rankings of prosperity of nations and cities, the United States did not make the top ten in either category, a sign of the failure of the market fundamentalism/neoliberalism to deliver on its promise of riches for the many, rather than simply for the few. While many of these investments would re-employ skilled workers, there is also a broader category of the unemployed which require more support in entering the workforce. Government should create a WPA style jobs program, a job guarantee for all who are willing to work for a reasonable minimum wage. This program would provide the work environment necessary for some of the long-term unemployed to get a foothold in the labor market to enter the private sector or public sector job markets if they so chose. Such a program could offer additional social services like day-care that would enable parents with young children to participate in the job market if they so chose. This government spending, above the amount of taxes collected, would have the additional, though critically important virtue of spurring aggregate demand for both the goods and services directly purchased by government but also to stimulate the economy more generally as that income was re-spent throughout the economy. A necessary element of economic growth in all nations, especially those with trade deficits will always be government spending more money than it collects in taxes, a fact of macroeconomics that has escaped those who have not thought it through. The pursuit of budget balancing and reducing public debt is then an abandonment of responsibility of government to enable the pursuit of happiness as some form of broadly shared prosperity, enabled by government provision of basic social insurance and maintenance of full employment levels. In claiming that they represent responsibility to the phantom demands of bond markets or the arbitrary amounts of taxes collected in a given year, Peterson and the Center for a Responsible Federal Budget are asking lawmakers to abandon now or at some future point in time, most of the current responsibilities of government as regards the real American economy. Irresponsible in the Face of the Climate and Energy Crises The pursuit of an irrelevant budgetary rule to suit the vanity of an old man is the height of fiscal irresponsibility in the face of the most important challenge for the US and the world as a planetary civilization. The calamity of Hurricane Sandy is only the latest reminder of a climate becoming increasingly hostile to the designs of human beings, an indication of the role of rising global temperatures in spurring extreme weather events. These rising average temperatures are in large part driven or accelerated by human activity, most often emissions of greenhouse gases like carbon dioxide. To reduce carbon emissions substantially and make lines of communication and the commons more resilient to the effects of climate change, government will play a crucial role, spending billions and trillions to build new infrastructure that will utilize renewable energy and draw lesser amounts of energy overall to achieve a comfortable standard of living. The spending to build these types of public goods is best motivated not by profit for specific individuals and families but by a desire to invest in a common future, much as the road network has been built in the United States. To privatize public infrastructure, as is sometimes currently advocated, is a kneejerk reaction to local governments starved of federal funding in a recession and would yield a neofeudal tollbooth economy with higher transaction costs and still greater social inequality. With adequate explanation by political leaders about the necessity to insulate society from the depletion of fossil fuels as well as reduce their negative effects on the natural basis of our livelihoods, we, the members of the private sector, would be all too willing to accept these fiat issued dollars to build that infrastructure through our labor and exchange of goods and services. We would with excitement await the day when we or our children would be able to use this infrastructure in the conduct of our lives in a society that was wiser for the excesses of the 20th Century. Such a society would be hard at work in caring for itself as well as creating the basis for a post-carbon civilization as an expression of care for future generations. If the spending of government on these projects were to create unacceptable levels of inflation in concrete or steel or other construction materials, targeted taxation or price controls could be brought in to dampen inflationary pressure. A mixture of market mechanisms, regulation, and government direct investment would yield the quickest results in our time of increasing need to simply save our society and a functioning economy. The irreplaceable benefits of the climate in which our species evolved are far more valuable than the imaginary storehouse of monetary treasure, modeled after the bullion reserves of old, with which the deficit hawks would like us to think the government operates. The currency issuing power of government enables resources to be mobilized to help save the most valuable real assets we have, the environment which enables us and future generations to keep on living.
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| Iran’s Untouchable Energy Exports Posted: 04 Nov 2012 10:36 PM PST Yves here. Media reports in the US stress how tightening sanctions against Iran, particularly on banks, are increasingly isolating Iran, leading its currency to fall sharply. This article describes a key break in the cordon, that of electricity exports. But Iran's major source of foreign exchange, its official dollar oil-related payments, via Standard Chartered, were roughly $500 million a day. The electricity trade is small relative to this total, but it is also an interesting act of defiance among American "allies". By John Daly, chief analyst for OilPrice. Cross posted from OilPrice. Few people are aware that Iran is currently subjected to not one, but three sets of sanctions imposed by U.S., the United Nations and the European Union, the latter two over concerns about Iran's civilian nuclear energy program, which both Washington and Israel allege masks a covert nuclear weapons program, a charge Iran steadfastly denies. The first U.S. economic sanctions against Iran were instituted in 1979 following the overthrow of the Pahlavi monarchy and its replacement by an Islamic Republic, while the first United Nations Security Council sanctions again Iran were implemented by Resolution 1737, voted in 23 December 2006. Earlier this year, European Union foreign ministers agreed to place sanctions on Iranian oil and oil products because of Iran's purported non-compliance with its obligations of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), and the EU sanctions entered into force on 1 July. The collective effect of the trio of legislative restrictions is to impede Iranian oil and natural gas exports, the source of the majority of its foreign currency earnings until Tehran suspends its uranium enrichment activities. Iran maintains that by signing and ratifying the NPT, its Article IV permits its current nuclear activities. But while the legislation has increasingly shut off Iranian hydrocarbon exports, there is one sector of Iran's energy industry that is flourishing – electricity exports. And this trade, lucrative as it is, stymies Washington's efforts to squeeze Iran's economy because, in four out of five instances, the trade is with U.S. allies. According to the U.S. government's Energy Information Administration, "Iran is a net exporter of electric power and currently exports electricity to neighboring states including Armenia, Pakistan, Turkey, Iraq, and Afghanistan." And exactly who are these miscreant states aiding and abetting the Iranian economy? Related Article: Iran Finally Blinks in Terms of Sanctions Pressure Turkey, like the U.S., is a member of North Atlantic Treaty Organization, while former Soviet republic Armenia has been a member of NATO's Partnership for Peace affiliate program since 1994. Iraq? The U.S.–Iraq Status of Forces Agreement (SOFA, official name: "Agreement Between the United States of America and the Republic of Iraq On the Withdrawal of United States Forces from Iraq and the Organization of Their Activities during Their Temporary Presence in Iraq") was signed in 2008, and the U.S. signed a similar SOFA agreement with Afghanistan earlier this year. As for Pakistan, the military cooperation between Washington and Islamabad is self evident. So then, five U.S. "allies" are purchasing Iranian electricity. To give but one instance, Turkey and Iran agreed in August 2007 to jointly pursue an electricity designed to produce 6,000 megawatts, of which a percentage would be exported to Turkey's relatively isolated eastern provinces adjacent to its 312-mile long frontier with Iran. And how valuable are these power exports? From 20 March 2012, the beginning of the current Iranian calendar year to 23 October,Iran exported 6,624 gigawatts of electricity to the quintet of neighboring countries, a 44 percent rise compared to the same period in 2011. On 27 October Deputy Energy Minister Mohammad Behzad announced in Tehran that Iran's electricity exports were worth $5 billion since the beginning of the current Iranian calendar year. Behzad disclosed the data on the sidelines of 12th International Electricity Exhibition (IEE) currently underway in Tehran. And among those nations attending are Italy, France, Germany and Turkey, all NATO members, along with representatives from China and South Korea. Expect to see more growth in Iran's electrical sector. According to Iranian Energy Ministry officials, Iran will become self-sufficient in manufacturing equipment and goods, which are used in the electrical power industry by the end of the current Iranian year, which finishes in March 2013. Iran's rising electrical exports to its neighbors presents Washington policymakers hawkish on Iran with the unpleasant reality that the nations importing Iranian electricity are all involved to a lesser or greater degree with regional U.S. military policies, whose cooperation could be endangered if the American administration pressured them too far to downgrade their energy relations with Tehran. So, for the foreseeable future, Turkish lira, Armenian drams, Pakistani rupees, Iraqi dinars and Afghan afghanis will continue to flow into Iran's treasury in return for reliable supplies of electricity. And more deals are on the way, as on 27 October Iran and India signed a Memorandum of Understanding that Iran would provide 4,000 megawatts of electricity exports to India via Pakistan, which as part of the agreement receive 2,000 additional megawatts for its role in facilitating the transfer. Apparently Iran's neighbors have concluded that their value to Washington transcends the American administration's ability to punish them for interacting with Iran. At least electricity, unlike uranium, is not "dual use."
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| Exploding the Myth of Unbacked Silver Certificates and Phony Silver Storage Posted: 04 Nov 2012 10:00 PM PST |
| Updating the COT Charts For Silver–It Doesn’t Look Pretty Posted: 04 Nov 2012 09:55 PM PST The Fundemental View |
| The World Calls the FEDs Bluff: Give Us Our GOLD Back! *Video Parts I/II* Posted: 04 Nov 2012 09:39 PM PST |
| Gold Seasonality Chart Shows November as Strongest Month Posted: 04 Nov 2012 09:33 PM PST In statistics, many time series exhibit cyclic variation known as seasonality. For precious metals investors, understanding seasonality can help to determine when to buy and sell at optimal price points. Analysts often mention gold's seasonality and refer to the "Summer doldrums" as a buying opportunity and the Winter months as the high season. To verify [...] |
| Doug Casey: There will be a panic into Gold and a Huge Change of Ownership Over Global Resources Posted: 04 Nov 2012 09:30 PM PST |
| nam gov says hold dong, not gold Posted: 04 Nov 2012 08:45 PM PST http://english.vietnamnet.vn/fms/bus...sell-gold.html A solution to the gold market management has been found, which can satisfy the two most important requirements: it allows mobilizing the huge capital from the public for economic development, while it does not encourage people to keep gold, which may make the "goldenization" more serious. Governor of the State Bank of Vietnam Nguyen Van Binh said the bank is drawing up a 3-step plan to fight against the goldenization (people tend to keep gold instead of dong for fear of the dong depreciation). In the first stage, a legal framework on the gold market management would be set up. After that, commercial banks would be forced to stop mobilizing and lending in gold. And in the third stage, the resources from gold would be mobilized on the buy-sale basis instead of the borrowing-lending one. Binh said that the first two steps have been fulfilled, while the central bank is entering the third stage–encouraging people to sell gold definitively instead of depositing gold. Collaborating on this, Le Minh Hung, Deputy Governor of the State Bank of Vietnam, said the State Bank would treat gold like foreign currencies. Credit institutions won't be able to mobilize gold, while people have to pay storage fees to banks if they leave gold at the banks. However, analysts have warned that it would not be easy for the State to persuade people to sell gold, because Vietnamese people have the long-standing habit of hoarding gold instead of cash to preserve their assets. They would not give up the habit right now, when the national economy still shows uncertainties. Dr Tran Du Lich, a well-known economist, said that in the immediate time, the State Bank should keep mobilizing gold deposits from the public. "The State Bank should allow commercial banks to raise gold deposits, but it would prohibit banks to lend in gold or convert gold deposits into dong for lending," Lich said. Dr Cao Sy Kiem, Member of the National Advisory Council for Finance and Monetary Policies also has doubts about the feasibility of mobilizing the public's sources by encouraging people to sell gold at this moment. Hastiness may make plan fail completely Economists have warned that the State Bank should not be too hasty to mobilize the gold resource from the public until it knows for sure how the huge capital should be used. Meanwhile, others have urged the State Bank to go ahead with the plan to mobilize gold from the public. Dinh Nho Bang, Secretary General of the Vietnam Gold Business Association, while agreeing that it would be better to keep cautious with the plan, said that it would be better to linger. "Hundreds of tons of gold is being kept among the public, which could be a huge source of capital. Why don't we think of turning the capital into the resource for economic development?" Bang said. Pham Do Chi, a well-known economist, thinks that the best way to deal with the mobilized gold is to mortgage the gold at foreign finance institutions for loans. Currently, Vietnam has to borrow money from foreign sources at relatively high interest rates. Therefore, the suggested method has been described as "feasible solution". |
| Posted: 04 Nov 2012 08:27 PM PST It's a big week. The race that stops the nation will stop us from coming into our St Kilda headquarters tomorrow. We used to try working on Melbourne Cup day. But we gave up when we realised most people really do take the day off. But don't worry. We've queued up a special US election preview presentation for your enjoyment. Watch out for it. In the meantime, there is a fair bit to get to today. In today's Daily Reckoning we'll figure out what the RBA is going to do tomorrow with interest rates. We'll give you a red hot tip for Tuesday's biggest race of all, the US election! And finally, some reader mail about the end of the world, misleading and/or deceptive advertising, transparency, and more. First off, there is the usual anticipation about tomorrow's Reserve Bank of Australia meeting. Will they or won't they? Well, a lot depends on what the bank defines as inflation, and then what it tells us inflation is doing. Consumer price inflation will be the big factor. Consumer prices jumped 1.4% in the September quarter, according to the bank's own numbers. But you have to wonder where those numbers are coming from. When we were up in Sydney for the Gold Symposium, we paid $28 for a hotel breakfast that consisted of breakfast cereal and stale coffee. For the full buffet we would have paid $35. Australia has become an incredibly expensive place to live and breathe, even if you throw out over-priced hotel breakfasts. But then, you can see from the chart below that according to the RBA's data, the cost of things you use every day is actually going down, once you exclude those things from your cost calculations. Funny how that works.
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So Tuesday is the Presidential election. What does this mean for markets?
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