Gold World News Flash |
- The Impenetrably Tiny Bank of England Gold Bullion Vault – A Place So Small, A Single Human Being (With a Camera Crew) Can Barely Squeeze In.
- Don Durrett: Gold & Silver Going Higher in 2013 But Be VERY Careful With Juniors
- By the Numbers for the Week Ending December 7
- Silver still Mirroring the CCI
- YenGold near all time Highs
- The Gold Price Lost $6.90 this Week Closing at $1,704 by Spring Gold Ought to be $2,300 and Silver $50
- Guest Post: Preppers Who Make Surviving The Apocalypse Even Less Fun
- 7.3 Earthquake Rattles Fukushima
- 9 Charts To Help Understand The Direction Of Global Markets
- Guest Post: Where To From Here?
- Gold and Silver Disaggregated COT Report (DCOT) for December 4
- Hidden Dangers in Gold
- Gold Confiscation: Lessons from the 20th Century
- AAPL Death-Cross Pushes Dow To Highs
- Escape from Rumorville
- Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Less Than 1% on the Week
- Gold Daily and Silver Weekly Charts
- Commodities: Oil May Rise, Gold Outlook Murky as All Eyes Turn to NFP
- These Funds Are About To Get Creamed If The Nexen/CNOOC Deal Fails
- COT Gold, Silver and US Dollar Index Report - December 7, 2012
- Jim's Mailbox
- The Coming Derivatives Panic That Will Destroy Global Financial Markets
- Silver Investment — Time is Slipping Away
- Sprott's Michael Kosowan on Surviving Death by Paper Cut in Today's Mining Equity Market
- Brazilian Gold - Amended Resource Estimate for the São Jorge Gold Deposit - Significant Increase in Gold Grade and Contained Ounces
- LGMR: Momentum in Gold "Unlikely to Come Back Until New Year", Survey Shows Traders Less Bullish on Gold
- On Gold: Morgan Stanley is Buying What Goldman is Selling
- Continuum
- Investing for 2013: Why Investors are Buying Gold
- Could two platinum coins solve the debt-ceiling crisis?
| Posted: 07 Dec 2012 10:22 PM PST
As you know, according to official world gold holding statistics Germany is second only to the United States in TOTAL physical gold bullion reserves with 3,395 tons. As you probably also know by now the German court of auditors has demanded that the Bundesbank undertake an audit of its gold reserves. All they need to do is get their auditors into the bullion vaults at the New York Fed to SEE and AUDIT their 1,536 tons of PHYSICAL gold. And they need to get into the Bank of England bullion vault to see their 450 tons of the PHYSICAL stuff. The problem is, officials at the Bank of England told German officials that allowing them in to the vault to perform physical "audits" of their gold just isn't possible because there isn't enough room, or enough "suitable rooms" in which to do it. That made us wonder. What exactly is the bullion vault inside of the Bank of England like? Surely it must be tight quarters and very, very crowded… far too tight a space to accommodate a few pencil pushers with calculators and a guard or two. Fortunately our friend 'joshman' sent us this video so we could see the problem first hand: The Bank of England bullion vault. A space so tiny, so crowded, so loaded with physical gold [or Tungsten-salted gold] bars that it could not possibly be counted. Ever. Anyway, it's probably best that the gold just continues to sit there quietly. Right? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Don Durrett: Gold & Silver Going Higher in 2013 But Be VERY Careful With Juniors Posted: 07 Dec 2012 09:35 PM PST from WallStForMainSt: Don Durrett has written a great book on investing in Gold, Silver and Mining Stocks. He also has a paid newsletter database website to help people speculate on junior Gold & Silver stocks | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By the Numbers for the Week Ending December 7 Posted: 07 Dec 2012 08:32 PM PST This week's closing table is just below. Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (by 18:00 ET). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver still Mirroring the CCI Posted: 07 Dec 2012 08:00 PM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Silver continues to mirror the CCI with traders unsure of what direction to take things next. ... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Dec 2012 06:55 PM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] TAke a look at the following chart of gold, priced in terms of the Japanese Yen, and then tell me that the Japanese monetary authorities and political leaders are not deliberately debauching their currency. "PRINT, PRINT, PRINT; BANSAI, BANSAI, BANSAI"! They are killing their own currency in terms of its purchasing power. ... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Dec 2012 06:34 PM PST Gold Price Close Today : 1,704.00 Gold Price Close 30-Nov : 1,710.90 Change : -6.90 or -0.4% Silver Price Close Today : 33.053 Silver Price Close 30-Nov : 33.204 Change : -15.10 or -0.5% Gold Silver Ratio Today : 51.554 Gold Silver Ratio 30-Nov : 51.527 Change : 0.03 or 0.1% Silver Gold Ratio : 0.01940 Silver Gold Ratio 30-Nov : 0.01941 Change : -0.00001 or -0.1% Dow in Gold Dollars : $ 159.59 Dow in Gold Dollars 30-Nov : $ 157.38 Change : $ 2.21 or 1.4% Dow in Gold Ounces : 7.720 Dow in Gold Ounces 30-Nov : 7.613 Change : 0.11 or 1.4% Dow in Silver Ounces : 398.00 Dow in Silver Ounces 30-Nov : 392.29 Change : 5.71 or 1.5% Dow Industrial : 13,155.13 Dow Industrial 30-Nov : 13,025.58 Change : 129.55 or 1.0% S&P 500 : 1,418.07 S&P 500 30-Nov : 1,416.18 Change : 1.89 or 0.1% US Dollar Index : 80.425 US Dollar Index 30-Nov : 80.232 Change : 0.193 or 0.2% Platinum Price Close Today : 1,605.50 Platinum Price Close 30-Nov : 1,603.10 Change : 2.40 or 0.1% Palladium Price Close Today : 696.50 Palladium Price Close 30-Nov : 686.25 Change : 10.25 or 1.5% The silver and GOLD PRICE are hinting at something, but talking out of both sides of their mouth. Silver rose 1.4 cents today to 3305.3 while gold augmented $3.70 to $1,704. Let's look at the good, the bad, and the ugly. Bad, bad, GOLD PRICE! You didn't close above $1,705 resistance today. Good, gold price! You have three days touched off the same $1,685+ low and held every time. Strong. Persuasive. Makes me want to believe you might have found your bottom. The Ugly: Gold was correcting from the August - October rally through the 12 month downtrend line to $1,800. Found a bottom at $1,672.50, rallied, but never went all the way to the 200 DMA or 150 dma (now both about $1,664). That would have given me firm grounds to believe you have finished correcting. Uglier still, you might be tricking me. You might intend to kiss back all the way to that downtrend line, say $1,630 - $1,650. Wherefore, gold, I'm going to have to wait until you give better security, a better pledge of upward intentions, like closing over $1,725 support, or better yet, over the last high ($1,755). Oh, you'll get there, I know, but I'm going to have to see the cash, and let the credit go. The SILVER PRICE, you have been so bad. You're wrestling right now with your 50 DMA (3305c) and 20 DMA (3322c) and can't get clear of that sticky 3300c level. But you, too, hit that 3250-3260c level three times in as many days, and held like a rock. Can I really trust you right here? The ugly is that big drop that might take you all the way to 3050c, or 2950c. Can I really trust you? 'Tis good is that you are holding on, Silver, and no matter how hard you've been hit, you haven't really been knocked down. I love you, but I just want to see you climb over 3350c, then jump past 3450c, before I can really rest easy. Don't miss the long term: silver and gold remain in a primary up trend (bull market) and have finished their 12-month and 17 month corrections and begun their next rally. By spring this ought to take gold to $2,300 and silver above $50. You all ought to be watching the silver and GOLD PRICE like hungry red-tailed hawks over a rodent-ridden field. Your chance to buy will come soon, and will flee away fast. Thinking about the world this week has left me with one conclusion: A nation without a central bank is like a snail without a glue gun. This is how silly the fiscal-cliff has gotten. Congress passed a law a few years ago to mint one ounce palladium coins, and left the denominations up to the Mint to assign. So some goof has suggested -- tongue in cheek or in earnest is not plain -- that the treasury just mint two of these with trillion dollar denominations, then deposit them with the Federal Reserve. Economist Joseph Gagnon of the Peterson Inst. For International Economics says that since the yankee gov't. would merely be using the money to maintain spending at present levels, it wouldn't create any extra inflation. Surely, surely, these folks are kidding. Aren't they? Surely they realize that it makes no difference whether you print a 1 followed by 12 zeros on paper or platinum, it's still inflation? Don't they? Thanks to MDM for sending me this. Just when I thought the fiscal cliff conversation couldn't possibly become any stupider, this turns up. Odd week, passing odd. After all the turmoil in silver and gold, they were down only 0.5% and 0.4% for the week. Stocks finally broke through the downtrend line, but not much. US dollar index rose, but probably not for long. Dollar's surge in the last two days has taken it above the resistance/support line and even above its 50 DMA (80.15. Closed today up 18 basis points (0.23%) to 80.425. Wouldn't it surprise everyone if the dollar turned around and rallied from here? Sure would, but bet on that happening next week just after hogs put on neckties. 200 DMA stands way above at 80.79. Y'all write that down, because next week if the US dollar index does close over its 200 DMA I will shamelessly disremember I ever said that. Three days ago the euro hit its downtrend line and ran like a kid threatened with castor oil. Yesterday it plunged, and today again, down 0.32% to $1.2928, but got its feet tangled in a cluster of moving averages. Yesterday's drop shows that euro investors are nearly as loyal as Liberian army privates. Euro might still rise, but 'twill be a meaningless exercise, since all the bad debt problems, bankrupt banks, bad mortgages, and economies strangling on regulations and social costs have never been addressed, and won't be until the peasants take the pitchforks to parliament. Mercy! Can it be the Yen made ANOTHER new low today, at 120.74c? Hard to fathom. Surely that ought to mark the decline's end. Closed down 0.12% at 121.22c/Y100. Japanese are trying to fix their export-addicted economy by depreciating their currency. Hard to win that fight, since every other country will do the same -- already is. 'Twill be interesting to observe how much honor there is among central banking thieves. So far they have kept their currencies in a wide range, depreciating generally at the same rate. If one of them goes below the 118c level, Fed's likely to get feisty. Stocks, like ballet toe shoes and a chiffon tutu, are not something I aspire to own. Still, they're working on a rally that will be touted as stupor mundi, the wonder of the world. 'Tain't, tho. Dow racked in 81.09 (0.62%) today to close at 13,155.13. S&P500 clawed in 4.153 (0.3%) to end up at 1,418.07. This brought distinct progress, as the Dow broke through the dam at 13,080 which had so long blocked its upward flow. Also closed the Dow above its 200 DMA (12,999) and its 50 DMA (13,147). Shortly the Dow will challenge 13,300, where strong resistance waits in ambush. Should stocks overpower that resistance, they could run to to 13,700. This will not be good. Rather, will be the last touch off the top of the Jaws of Death that will snap them shut. Y'all get this straight, get out your little shirt-pocket notebooks and write this down: stocks are in a primary down trend (bear market) and have been since the year 2000. That bear market has another 3 - 10 years to run. Y'all enjoy your weekend. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't.  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guest Post: Preppers Who Make Surviving The Apocalypse Even Less Fun Posted: 07 Dec 2012 04:43 PM PST Submitted by Brandon Smith from Alt-Market Preppers Who Make Surviving The Apocalypse Even Less Fun Being forced to endure and survive a catastrophic macro event like a monetary or social collapse is perhaps one of the worst experiences I could imagine. Such a crisis leads to just about every crime and inhuman action in existence, and, the time required for a culture to right itself and rebuild is severely protracted. A hurricane or earthquake or tidal wave; these calamities are short lived and easy in comparison. The point is, as survivalists who are preparing to make an economic end-game scenario as "comfortable" to live through as we can, it is incumbent upon us to consider the kind of company we keep during the gambit. Some allies will make that mad world bearable; others will bring the madness to your doorstep. Many preppers are aware of the dangers inherent in our progressively deteriorating nation. Unfortunately, some of them are completely unaware of the dangers inherent within themselves. Building a solid community of people to rely on during a collapse is absolutely essential, and the larger the group of liberty minded neighbors the better. But, if certain ground rules are not established from the very beginning, a rainbow of personal issues and character flaws could very well destroy years of effort. Care must be taken by all parties involved to ensure that internal conflicts remain at a minimum, and when they do arise, that each person is wise enough to resolve issues in an adult manner. I hate to say it, but you will inevitably run into some folks that are beyond compromise and beyond hope. Working with them is like pulling teeth…shark's teeth…from your jugular. Here are just a handful of powder keg personalities that will make the apocalypse more than a living hell for you and your friends if they manage to latch onto or take leadership in your survival watch… 1) The Self Assumed "Leader" The "Assumed Leader" is not actually a reliable or practical leader; he just thinks he is, and reminds everyone loudly whenever he can find occasion. He does not generally do this by screaming "I AM YOUR LEADER!" Instead, he attempts to micro-manage every aspect of the survival group and shows early signs of control issues. The Assumed Leader will first make forceful suggestions to test the waters, scoffing angrily whenever people do not strictly follow his advice. If he gains traction, his suggestions turn into orders, and he begins to act as though he is somehow in a superior position to the rest of the community. He seems to have an answer to every question or concern, which would be nice if he actually knew what he as talking about half of the time. Usually, this is not the case. He may have expertise in a certain field, like farming, or building, or engineering, or even defense, and this is indeed valuable. However, his mastery of one area of knowledge has inflated his ego to massive proportions and he now pretends as if he is some kind of hyper-educated elitist potentate. When approached with alternative options and methods, he will respond with ridicule as if you have no clue what you are talking about. When his ideas are criticized, he will react with fury, and try to remove dissenters from the community entirely. The best way to avoid these people is to discover them early in your prepping project, and to make certain that NO ONE becomes a De facto dictator. Every person with particular expertise within the community should be given respect in that specific field, but not given authority over all decisions. The experienced farmer should offer leadership when it comes to farming, but step aside when it comes to defense and defenders, and vice versa. It is best to keep in mind that the most effective leaders always ask those around them for aid and advice before coming to any conclusion. The worst leaders already assume they know everything. 2) The Feudal Lord The Feudal Lord is an Assumed Leader who has managed to lure other preppers into a Commune, rather than a Community, and there is a considerable difference. He is often a well-off survivalist who has suddenly realized that for all his money and land and supplies, he is basically defenseless, and needs an organized group to protect his bounty. He entices other preppers into the fold with ideas that he is building a legitimate and fair community, and with land already available, many take interest. The problem is, the Feudal Lord believes possession of the land that the group is defending automatically makes him Grand Poobah, and that those people are not equals, but servants and serfs. I have found that Feudal Lords also have a tendency to charge people "fees" for the right to join their communes. They will argue that this is designed to "vet" candidates and see if they are truly "serious" about survival prepping. In the dark corner of their minds, however, they actually believe that they are OWED a tithe from anyone who wishes to earn the "privilege" of becoming a permanent installment on their property. From the very beginning they go into the project with almost no sincere regard for the people they are working with. The reality is, the Feudal Lord's land and supplies are utterly meaningless without security and without aid. His survival riches can be taken in an instant by a mere handful of looters, or even one experienced raider. Without other people, treated as equals in survival and ready to lay down their lives to protect each other and him, he has nothing, and is foolhardy to think otherwise. This is not to say that all landowners who try to centralize a group on their property are seeking to become mini-kings of a mini-kingdom. If rules and agreements are made early on, and everyone understands their role, then such an arrangement could work. But, if the landowner purposely avoids set agreements, appoints roles to people without asking them, changes the plan regularly to suit himself, and tries to leech money out of participants, then it's time to walk away now before it is too late. Eventually he WILL use his position as landowner as a means to dominate, and will threaten to cast people out who disagree with his methods. The best way to avoid these characters and the commune situation altogether is to not centralize on a single piece of land, but to organize in a neighborhood fashion, where everyone maintains sovereign control of what they do and all aid is voluntary. 3) The Moral Relativist There is, sadly, a small subsection of survivalists out there who do not plan to live off their own preps; they plan to confiscate the preps of others by force and solve every problem at the barrel of a gun. In their mind, a crisis situation calls for the abandonment of conscience and the application of a "survival of the fittest" mentality. They believe that morals are all well and good when civilized society remains, but a source of weakness during catastrophe. Their philosophy is: Only the strongest of men will be able to set aside principle and "do what needs to be done". That is to say, they believe you must become the monster to defeat the monster. In fact, only men who are able to hold onto their principles during the worst moments are strong. Weak men run away from conscience, using the excuse that times are "different and difficult". They are not survivalists, they are terrorists in every sense, and they will only hurt our ultimate goal of rebuilding a free, prosperous, and individualistic society. These people should be avoided like the plague. They will make enemies wherever they go, ask you to do highly questionable things, and push your community into annihilation. Eventually, somebody is going to put them out of their misery, and it's best to not be around when that happens. 4) The Obsessive The Obsessive is a person whose drive is initially impressive but also ultimately destructive. His entire life revolves around survival prepping and impending doom. Certainly, it is better to be extra concerned about the economic crisis on the horizon than to be utterly oblivious. A smart man over-prepares. But, there is such a thing as overkill, even in the world of survivalism. No one can ever do enough fast enough in this person's eyes. He will whine constantly about how he is the only one taking preparations seriously, and how everyone else is a lazy bum. He will become frantic on a daily basis, admonishing the group or community on their lack of urgency. In a leadership position, this person is a nightmare, creating constant waves of tension and panic, instead of calmly offering solutions or constructive criticism. Obsessives are generally unimaginative people with little talent or intelligence who use their prepping lifestyle as their only means to feel superior to others. They tend to become legends in their own minds, dreaming of the day when everyone will desperately cling to them and their remedial survival know-how. They fantasize about all the people who "wouldn't take their advice" (usually smug advice), crawling in squalor begging them for help one day. The Obsessive's motto is: "Let me tell you why you are wrong and how you are lazy!" Instead of: "How can I help you fix this?" We all need a break once in a while from the horrors we know are waiting for us. To step back and enjoy what we can of a beautiful day or good friends is not the same as being a freeloader or a backslider within your prepper group. Survival is about more than sustaining the body. It is about more than chopping wood, stockpiling ammo, and slaving over a piece of land from sun up until sundown like a mindless drone just to get by; it is also about sustaining the heart and the mind. Otherwise, what is the point of living? 5) The Ulterior Motive Drama Queen The Drama Queen is a man or woman who is loosely interested in survivalism, but wants to join your community for other reasons, and these reasons may cause many members dismay. The opposite of The Obsessive, you'll notice a strange non-involvement on their part or lack of interest as far as participating in survival discussions and decision making. They will often hand over all their survival preparation plans to another person or persons, while hovering like a gnat around the community searching for that special something. They may be looking for friends and social recognition. They may be afraid of collapse and simply trying to lock into ANY group regardless of whether they fit, becoming disenchanted later. They may enjoy the excitement of feeling like they are involved, and are living vicariously through the accomplishments of others. They may just be looking for a date. Ultimately, their primary objective is not to build a working community, but to get something out of the community beyond safety. If they do not get what they want, they raise hell, using whatever excuse happens to be handy without ever admitting their real motivations. They will deliberately start unnecessary drama, attempt to create divisions, focus on one person as the cause of all their troubles, or blame the whole group for the heartache in their life. They will attempt to draw everyone into their personal soap opera in the hopes of becoming the focal point, sharing strange and extremely private issues with anyone who accidentally offers to listen. Eventually, they will be seen for what they are and will lose the ear of the other preppers, who obviously have better things to worry about, but not after wreaking some havoc in the process. The Zealot has a perfect picture in his mind of how his survival community is going to look. Absolutely perfect. The problem is, all people are imperfect and all have different conceptions of life, and this disturbs and disrupts the Zealot's fantasy. It is one thing to be careful in whom you associate with when assembling a prepper organization, but it is entirely another to hold everyone to insane standards that even you cannot meet. The Zealot usually wants to be in charge so that he can vet and control each member of the group, but this is not always the case. Zealots are also sometimes highly anti-social, showing interest in a group for a short time and then suddenly walking away as if no one is up to par. He may base his zealotry on a misplaced religious fervor or philosophical inflexibility, but he will not be happy until everyone sees the world the way he does, or until they meet his grandiose brand of moral flawlessness. For him, it is not enough that the community around him shares a love for liberty and a disdain for tyranny, they must also be "spiritually pure" in his eyes. One mistake or disagreement by a member of the group earns them a black mark on the Zealot's list which he never forgets. From then on, that member is the enemy, and the Zealot will engineer conflict after conflict until the person gives up and goes away, or until he can convince the group that person is more trouble than they are worth. The great dilemma for any survivalist is to balance personal freedom and a peaceful home life with the reality that they will not last long without relying on a group. Other people bring talent, friendship, and safety to our lives, but they also bring baggage. The key is to work with those who know how to manage as much of their own baggage as possible, who are aware of themselves and are willing to police their own quirks, and who have not swan dived off a cliff into extreme disturbia. No survival community can withstand the savage assault of national collapse otherwise. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7.3 Earthquake Rattles Fukushima Posted: 07 Dec 2012 04:10 PM PST A 7.3 earthquake hit near Fukushima. That is large earthquake … bigger than the 1989 San Francisco earthquake (But it is much smaller than last year’s 9.0 Japanese earthquake, which produced almost 1,000 times more energy.) Here are webcam videos showing today’s shaking at Fukushima: < A mini tsunami – only 1 yard high – resulted in Ishinomaki, a city in Miyagi prefecture. The earthquake appears to have caused only very limited injuries and property damage. There are no reports of damage at the Fukushima Daiichi nuclear complex – the nuclear reactors which melted down last year. There are reports of rising pressure at the Fukushima Daini complex 7 miles away … which narrowly avoided melting down last year. But so far it looks like the problems are minor and contained. While we dodged a bullet this time, we’ve repeatedly noted that there is a very real danger that an earthquake could damage the fuel pools at Fukushima. For example, we noted in February:
And Germany’s ZDF tv quotes nuclear engineer Yukitero Naka as saying:
Today’s earthquake may show that the fears that a 7.0 earthquake could damage the fuel pools are overblown. But given that the Japanese government said today that an 8.0 earthquake is possible, and given that another monster earthquake is likely at Fukushima, stabilizing the fuel pools is urgently needed as a national security concern. And see this. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9 Charts To Help Understand The Direction Of Global Markets Posted: 07 Dec 2012 03:39 PM PST  Today King World News wanted to share 9 charts from top Citi analyst Tom Fitzpatrick concerning the future direction of the global markets, and yes gold is included. Fitzpatrick has been incredibly accurate regarding his forecasts and it now appears global equity markets may be headed for trouble.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guest Post: Where To From Here? Posted: 07 Dec 2012 03:18 PM PST Originally posted by Gerardo Coco at The Cobden Centre, We face one of the deepest crises in history. A prognosis for the economic future requires a deepening of the concepts of inflation and deflation. Without understanding their dynamic relationship and their implications is difficult to predict how things might unfold. The economic future depends on the interplay of both these forces. From the point of view of their final effects, inflation and deflation are, respectively, the devaluation and revaluation of the currency unit. The quantity theory of money developed in 1912 by the American economist Irving Fisher asserts that an increase in the money supply, all other things been equal, results in a proportional increase in the price level [1]. If the circulation of money signifies the aggregate amount of its transfers against goods, its increase must result in a price increase of all the goods. The theory must be viewed through the lens of the law of supply and demand: if money is abundant and goods are scarce, their prices increase and currency depreciates. Inflation rises when the monetary aggregate expands faster than goods. Conversely, if money is scarce, prices fall and the opposite, deflation, occurs. In this case the monetary aggregate shrinks faster than goods and as prices decrease money appreciates. Inflation is a political phenomenon because monetary aggregates are not determined by market forces but are planned by central banks in agreement with governments. It is in fact connected with the monetary expansion to fund their deficits. Inflation raises the demand for goods and decreases the demand for money; it increases aggregate spending and money velocity as the ratio between GDP and the amount of money in circulation which expresses the rapidity with which the monetary unit is spent and respent until it remains in existence. There is no such things as demand-pull inflation or cost-push inflation. Provided that the quantity of money does not increase, if cost or demand for some goods changes, demand for other goods must necessarily adjust, leaving unchanged the amount of spending and the money aggregate in the economic system. If some people spend more, others have to spend less, thus leaving the purchasing power unaltered. The cause of inflation is nothing but money manipulation. Inflation is a tax affecting all real incomes. While this is obvious for the fixed ones, it is less so for the variables ones such as business income. Inflation, in fact, overstates profits by making final sale prices to rise as compared to historical sale costs. When the moment arrives that businesses renew their capital assets, the higher price they will pay for them due to inflation will absorb the extra nominal profits. Since taxes are calculated on them, real profits will be insufficient to either replace or increase capital. Hence by decumulating capital, inflation penalizes economic growth and innovation. As an economic stimulus, inflation sets the stage for deflation. By increasing the nominal taxable economy, it reduces the real one. Likewise, subsidies and bailouts produce the same inflationary effects because most of them are financed through monetary expansion: a money supply growing faster than the productivity of capital and labor impairs both. If inflation accelerates and becomes extreme, hyperinflation sets in: the demand for money tends to zero and because everyone hurries to spend it to avoid the loss of purchasing power, its velocity accelerates rapidly. The monetary aggregate and prices tend to infinity and the value of money to zero. Money loses the character of a medium of exchange and the credit-debit system collapses. Because money is the prerequisite of the division of labour, its destruction implies the destruction of the latter. To avoid barter the monetary system must be redesigned. In this catastrophic state of affairs it is small comfort to acknowledge that the overall debt of a nation is repudiated. Inflation is a precondition of extreme deflation: depression. Deflation in itself, however, is an economic phenomenon. Economic progress has a natural tendency to lead to falling prices. By increasing production and productivity, prices decrease, signaling that the economy grows faster than the money aggregate, which means that with the same volume of expenditure more things can be bought – i.e. money has a higher purchasing power. Because depression usually is accompanied by deflation, central banks interpret any incipient downturn in prices as a sign of crisis and try to prevent it with monetary stimulus. But a depression occurs not because the price level falls but because real output, expenditure and all incomes on which aggregate expenditure is based fall. Regardless of the causes and confusing them with the effects, central banks always inflate, opening the door to evil that they claim to cure. True and false moneyThere are many definitions of monetary aggregate. Strictly speaking it is the aggregate in the narrow sense which reveals inflation because it includes only the effective means of payment excluding short term redeemable financial assets. In fact, by definition, something that must be converted into money is not itself money. No one pays necessities with short term securities. Money is only the stock or base money needed to buy goods and services. If the public holds 50 in his pocket and banks 1000 in their reserves, the monetary base equals 1050. It's called "base" because is the foundation upon which the banking system builds a pyramid of money and credit. Whenever central banks purchase government securities either directly from governments or from banks they increase bank reserves and the monetary base setting the pace for credit expansion. More aggregate expenditure follows, making nominal GDP grow. Because new credit corresponds to new debt, credit expansion by inducing more debt lowers the ratio between liquid assets and liabilities in the entire economy. When a deficit of liquidity follows to a credit crunch, debts repayment can only be made by deleveraging balance sheets and asset prices across the board sharply fall. Moreover part of the overall debt is cancelled by insolvencies and the combined effect of prices and debt reduction shrinks the monetary and spending aggregates triggering deflation in the form of recession. On the other hand the overall debt does not decrease because governments do not liquidate it as the private sector does. Quite to the contrary they increase debt to pay the outstanding so as to avoid default. As a matter of fact they must increase their debt to make up for debt deflation in the private sector. Should in fact the overall debt collapse, there would be an extreme deflation or depression because the money aggregate would contract dramatically. In fact the money equivalent to the defaulted debt would literally vanish. It is for this reason that central banks monetize new debt at a lower interest rates, raising its value. Because lower interests raise also the values of all assets, the entire economy looks healthier. But debt monetization gives only the illusion of wealth. It produces inflation growing faster than GDP with the effect of diluting wealth. Real incomes fall not only because of money debasement but because by raising their nominal value, inflation pushes them into higher tax brackets. In this context only the financial sector thrives because in a context of ever growing uncertainty and unpredictability, instruments for averting risks proliferate. All the financial bubbles and the mass of derivatives are just the consequence of debt monetization. By keeping interest rates extremely low, monetary expansion finances speculation at low cost, allowing it to shift huge amounts of money and earn risk-free profits by capturing price differentials between different markets, which, is the only way to gain returns and preserve purchasing power when interests are kept low or even negative. Because new money is dissipated through the process it must continually be recreated. Debt monetization result in a never ending process of creation and destruction of money. It discourages productive activities leaving the economic future at the mercy of speculation. All this destabilizing process is the consequence of the creation of money out of the debt. Debt monetization is the exchange of new money for a promise to pay it in the future. Now, if money is a function of the debt it is impossible that we can settle debt permanently. Legal currencies are false money because they depend on the debt expanding and contracting accordingly. Real money cannot be a liability or a promise to pay unlimited debt of third parties subject to default. The role of money can be discharged only by an economic good that is always in demand, preserves its value and is immune from the failure of third parties. The money with these characteristics is gold, the only financial asset which is not dependent on anybody's promises and is not subject to debasement or default. As long as this truth is not fully recognised no structural reform whatsoever can overcome a crisis which is systemic precisely because it is immanent to an economic and financial system based on debt. Without sound money on the scene of the economic drama, inflation and deflation will continue to play their conflict until the final outcome: the monetary breakdown. The currency cliffIn a context of false money, fiscal and monetary instruments are not only ineffective, but harmful. The first, trying to reduce the debt by increasing the tax burden results in draining resources when they are most needed. The second by refinancing the debt and boosting the monetary aggregate to prevent its collapse produces inflation. Hence debt cannot be tamed. Only hyperinflation or default can annihilate it. But the first would destroy the money system, the second would trigger a deep depression. How will this all end? In history, debt monetization has always produced hyperinflation. As long as countries are enjoying credit, fiscal deficits through inflation work. But when they incur new debt to repay the outstanding they reach the point of no return because it becomes clear that they cannot repaid it. Thence hyperinflation has always been the consequence of the inability to service the debt. Investors start to lose confidence in the country and its currency and so citizens. At this point, monetary policy can no longer defend it and a collapse ensues. In Western countries, despite the exponential debt a runaway inflation has not yet occurred. Monetary policy has only inflated the financial sector, starving the private one, which is showing a bias towards a deflationary depression: here the demand for money increases, the velocity and prices fall but the monetary aggregate holds as long as debt monetization works. According to the quantity theory it is the money actually spent on goods and services that causes inflation. As long as liquidity is parked in the bank reserves or finances speculation it does not flow into the real economy and inflation progresses slowly. If money were suddenly released it would have the same destructive impact of a dam breaking and overthrowing water downstream. Central banks in fact control the quantity of money but not its velocity, which depends on social forces. At the present fiscal and monetary policies try to preserve a precarious status quo, balancing inflation and deflation, a state of affairs which allows the debt perpetuation. But this balance can not be maintained for long because sooner or later inflation will be translated from the financial into the real economy via the general currency debasement taking place worldwide. It must not be forgotten that not only are currencies depreciated by debt monetization and fiscal deficits. Governments debase their currencies, destabilizing their trading relationships too by correcting trade deficits to boost exports. Hence a currency downtrend might eventually trigger a systemic collapse, because speculation causes further debasement through currency short-selling . Ultimately the combined action of low interest rates and currency depreciation would drive investors away either from financial securities or currencies on behalf of tangible assets, notably commodities, whose prices would escalate. Demand for money would fall and so velocity and aggregate expenditure. At this point the market value of the debt securities would fall, bringing the interest rate to astronomical levels. The value of the whole debt would collapse while the price increases of critical commodities would hit the entire economy, pushing up the consumer prices dramatically. All this process is not linear but oscillatory: massive flows of money would alternatively inflate and deflate financial and real sectors, causing vibrations in the economy that superimpose, eventually reaching a magnitude sufficient to bring down the whole economic structure. It is impossible to predict whether defaults would occur through hyperinflation or depression and where they would start first. Probably the first countries to be affected would be the ones with the weakest currency and the most fragile political setting. The outcome will also depend on the geopolitical situation. The prospect of the extension of a war would certainly make for hyperinflation. Floating currencies would disappear as suddenly as they appeared a little more the forty years ago. It is very hard to imagine the social cataclysm that it would ensue. Managing deflationIf all the disruptive effects of inflation were understood it would be prevented. The fact is that its effects are confused with real economic growth while inflation is pure and simple currency debasement via increasing currency supply destroying money gradually and systematically. Inflation cannot be controlled. Once the currency loses value it is lost forever. Deflation, by contrast, can be controlled – avoiding its deepening into depression. The latter is like a purge whereby the economic organism expels the poisons accumulated previously with inflation. A gradual deflation induces the recovery because it realigns values with the economic reality, reducing the inflated money stock at level that makes the debt sustainable and repayable. The currency appreciation which ensues is just the antidote to depression itself. In fact, when the quantity of money tends to be measured in terms of absolute purchasing power, it corresponds to more money and therefore to more liquidity. Note, here, the difference between the true and the false money: defaults make money disappear, while gold, the real money, never does: once in circulation it will remain – it cannot be eliminated by default. The criticism that gold causes depression is unfounded; on the contrary avoids it. Inflation and its effects can be contended by managing deflation, and this is a political task. First, to avoid a systemic collapse reciprocal debts have to be either renegotiated or condoned. It must be recognized that their current dimension makes it impossible to repay them, opening the way to uncontrolled defaults. Second, government spending must be reduced as well as taxes. At the same time, all banks' bad debts recorded in the accounts as sound credits should be written down. Without this adjustment banks will never be able to operate normally, resuming their credit activity and financing the economy, neither will they be able to attract new capital. The recognition of their losses is the prerequisite for their financial reconstruction. In order to be able to provide new credit banks must first receive it. No investor is willing to lend them funds with the fear of covering losses disguised as gains. All this restructuring would last a few years and would give a positive signal to markets that facing true values can restore the lost confidence in the economy. Currencies would appreciate again and money would start to flow again without inflating. However, problems would not be solved and crisis would recur with a debt based money. Hence a process of readjustment must contemplate the return of the real money, gold. Since 2010 central banks have become net importers of gold. Why keep it in their coffers? It has to be used immediately to recapitalize banks, and remonetized straight after. Unfortunately governments and banks will go for more inflation. It is well known that both usually make not only the wrong choices but the exact opposite of the right choices. As history teaches, besides money the freedom of citizens can also be the victim. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold and Silver Disaggregated COT Report (DCOT) for December 4 Posted: 07 Dec 2012 03:11 PM PST HOUSTON -- This week's Commodity Futures Trading Commission (CFTC) disaggregated commitments of traders (DCOT) report was released at 15:30 ET Friday. Our recap of the changes in weekly positioning by the disaggregated trader classes, as compiled by the CFTC, is just below. In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter. All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Dec 2012 03:06 PM PST Hidden Dangers in GoldBased on an article by Dr. Paul Price in the Dec. 4, 12 issue of the Market Shadows newsletter: A Failure to Communicate: Numbers, Rates & Lies Why isn't Paul currently buying gold bars, gold Electronically Traded Notes (ETFs), and mining companies? Wouldn't owning gold offset the (understated) inflation that we see daily and that may soon spiral out of control? While Paul argues that Washington's Biggest Lie is its denial of real inflation, he also believes that pouring money into physical gold, gold-tracking assets, and shares of mining companies, is very risky, even if it makes logical sense. (Gold - The Biggest Risks Are The Ones You Don't See) It makes sense because the supply of gold is limited and gold cannot be magically created by the Central Banks. Gold has also been used as a store of wealth for centuries. And of course, gold is presumed to be a good inflation hedge. But is it really? Going back to 1980, gold peaked at about $850 per ounce. It bottomed in 2000 at about $250 per ounce. Annual inflation in 1980 and 1981 was in the double-digits. Later in the 1980s and through the 1990s, inflation fluctuated from under 2 to over 5 percent, drifting lower over those two decades. Paul's chart below shows the nominal price of gold beginning in the 1970s. The second chart shows the nominal price of gold from 1979 to July 2012. (Click on charts to enlarge.)
Nominal Gold Prices 1979 - 2012
Chart from allaboutinflation.com Paul notes that from 1980 to 2000, the CPI inflated by a cumulative 137% (compounded). Gold dropped to $250 during this period. But what about yearly inflation rates vs. the price of gold - is there a correlation? The following chart shows gold prices vs. annual inflation rates. Apart from a clear correlation between inflation and the price of gold in in the 1970s, the correlation has weakened in recent years. Gold Prices vs. Inflation Rate
Chart from Bloomberg Describing the chart above, SymmetricInfo wrote,
In Gold vs. Inflation, Barry Ritholtz noted that the link between gold prices and inflation is limited. The correlation between gold and inflation year over year is 0.42. On a month over month basis, it's only 0.11. According to Merrill, "Gold is not a great hedge against inflation. Investors would be better off owning TIPS if they are looking for protection against a potential rise in inflation." (Merrill Lynch via Barry Ritholtz)
Paul doubts that gold prices will soar to new heights anytime soon. He questioned the wisdom of amassing physical gold, buying gold in a custodian's care, and loading up one's portfolio with assets reflecting gold prices:
Fakes and Frauds Besides the risks that inflation won't skyrock and that custodians of your gold-based assets will go belly up, Zero Hedge noted that tungsten is being used to fill fake gold items. A firm called ChinaTungsten Online is marketing its broad 'tungsten-alloy services.' These services include "the gold plating of various tungsten formulations among them 'gold' bricks, bars and, yes, coins." The company is openly advertizing its tungsten gold-plating and precious metals replication services. Zero Hedge also relayed a story about counterfeit gold being found in Manhattan's Jewelry District. "Myfoxny reported that a 10-ounce gold bar costing nearly $18,000 turned out to be a counterfeit. The discovery was made by the dealer Ibrahim Fadl, who bought the PAMP bar in question from a merchant who has sold him real gold before. 'But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten -- not gold. The bar was filled with tungsten, which weighs nearly the same as gold but costs just over a dollar an ounce.'" Will we soon be drilling into the cores of our shiny golden trinkets, bars and coins to test for purity? This is expensive, time-consuming, and decreases value and transferability. The fraud in the metals market is here in the US, and not limited to physical pieces. In a Fool's gold? CFTC says 12 firms sell phantom metals, Rob Varnon reports:
Mining companies may seem like viable alternative to other gold-based investments involving trusting custodians or stockpiling one's own gold supply. However, particularly for mining companies with foreign operations, forward estimates and past performance may not be good predictors of future profits.
A Gold Bubble? It is not easy to find financial gurus and writers who are currently bearish on gold. There is Warren Buffett, who prefers buying something that generates income. Joe Weisenthal posed the bubble question in writing about Felix Salmon's attempt to go shopping with a gold bar. "It sounds silly, but if gold is a currency, then it should be usable as a medium of exchange... Felix goes up to a guy loading wholesale beer, and the guy knows instantly (!) what a gram of gold is worth: right around $50! When the guy loading wholesale beer knows the price of a gram of gold instantly, you've just got your famous example of the taxi driver giving you stock tips. DANGER!" (This Is The Best Proof We've Ever Seen That Gold Is In A Bubble) Safe Haven Built on China? Jordan Weissmann at The Atlantic argues that China's problems are gold's problems.
Source: Why Is the Price of Gold Falling?
Updated and based on Paul's article in the latest Market Shadows newsletter: A Failure to Communicate: Numbers, Rates & Lies.
Special Offer from Phil's Stock World: Click on this link to try PSW Free! | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Confiscation: Lessons from the 20th Century Posted: 07 Dec 2012 02:51 PM PST by Adrian Ash BullionVault Friday, 7 December 2012 Three nasty examples of how people lost the gold they owned... TODAY'S chatter in the trading rooms says some gold owners fear a punitive US tax hike in New Year 2013, with the Obama government targeting precious-metal investors. Hence this month's sell-off (or so the tittle-tattle says) – akin to the move by Japanese households to sell gold in late 2011 ahead of new reporting rules for precious-metals dealers. In truth, such a US move looks very unlikely. Ahead of needing cross-party support to fix both the fiscal cliff and debt ceiling disaster, it would be clearly partisan. (Not all US gold investors are Republicans, but very few are Democrats in our experience.) And besides, gold already attracts the higher 28% rate of capital-gains tax in the US, since it is deemed a "collectible". Easier to raise CGT rates across the board, and whack anyone trying to grow their savings in fair measure. It would raise far more re... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AAPL Death-Cross Pushes Dow To Highs Posted: 07 Dec 2012 02:25 PM PST Of course, it makes perfect sense - the largest market cap company in the world drops further and experiences a death cross and sure enough - the evergreen Dow Jones Industrial Average ended near the highs of the day - well north of the critical 'retirement-on' 13,000. In general risk-assets were quietly correlated with stocks today (amid relatively quiet volume on the major averages) but we note that the capital structure ETFs in general were less exuberant - though they did get a little bounce after the consumer credit data. All-in-all, the Dow stood alone in its non-AAPL exuberance as the rest of the market was mired in the sentment shift that is occurring (note the Dow saw ts 50DMA cross below its 100DMA and its closed perfectly intersecting with those averages). Must be the 'great' jobs number, right? Treasury yields end near their lows of the week, USD near its highs, Gold down on the week though at 3-day highs (supporting stocks), and high-yield credit weak today. Paging Skynet... The S&P remained considerably more excited that credit/rates/vol today - though the latter did tend to keep pulling back up...
and the Dow's rise is very exciting for Pisani et al... but we wonder just what the machines were thinking when we see it close spot on its 50DMA, 100DMA and saw them cross each other in their own little death cross...
We hate to burst everyone's bubble (everyone being the herd of hedge fund managers who remain 'stuck') but there is only one reason why AAPL's stock is falling. Forget the fundamentals, its not about higher margins at a second-tier clearing agent, and it's not about arbitraging CNBC prognosticators. It's sentiment - plain and simple. The death crossing of the 50DMA below the 200DMA, while exciting and pretty to look at, merely reflects the shift from most loved to most hated as every manager who lauded the magical exponential rise is now talking it up while selling it down to reduce that over-weighting. An ugly end to an ugly week as we suspect the modest bid under the S&P remains due to the beta-hedged AAPL unwinds. WWJTD?
And the last 3 days - it is very clear that institutional selling is in play as VWAPs get hit and drop...
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| Posted: 07 Dec 2012 02:15 PM PST December 7, 2012 [LIST] [*]Talk about "skewed": the origins of the penny/nickel rumor, the truth of the situation... and the backstory almost no one is telling [*]Some recovery in the job market: It's January 2009 again! [*]Late to the party: Chris Mayer with the real deal behind Apple's U.S. manufacturing gambit [*]Contrarian indicator: a gold forecast from the people who do God's work [*]The coolest surfing video you've ever seen... readers' taxation fixation... fiscal cliff funnies... and more! [/LIST] The best rumors, like the best satire, are based on a smidgen of truth. Just enough to make them believable. This morning, we endeavor to knock one of them down... while helping you, dear reader, profit at the same time. Here's a typical repetition of the rumor from the Silver Doctors site, posted a week ago today: "Timothy Geithner reportedly has announced plans by the U.S. Treasury to completely remove both the penny and the ... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Less Than 1% on the Week Posted: 07 Dec 2012 02:14 PM PST Gold dropped $13.80 to $1684.20 just after this morning's jobs data was released, but it then climbed back to as high as $1705.28 in the next hour of trade and ended with a gain of 0.36%. Silver slipped to as low as $32.61, but it the rebounded to as high as $33.244 and ended with a gain of 0.24%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Daily and Silver Weekly Charts Posted: 07 Dec 2012 02:08 PM PST This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commodities: Oil May Rise, Gold Outlook Murky as All Eyes Turn to NFP Posted: 07 Dec 2012 02:02 PM PST courtesy of DailyFX.com December 07, 2012 05:02 AM Crude oil may rise but the outlook for gold appears clouded as markets await November’s US jobs report, with volatility risk seemingly stacked on the upside. Crude oil may rise but the outlook for gold appears clouded as markets await November’s US jobs report, with volatility risk seemingly stacked on the upside. Talking Points [LIST] [*] Crude Oil, Copper to Rise if US Jobs Report Yields Upside Surprise [*] Gold, Silver Outlook Clouded as NFP Generates Mixed Dollar Cues [/LIST] Commodities are treading water in European trade as traders await the much-anticipated US Employment report. Expectations suggest payrolls rose by a paltry 85,000 in November to mark the weakest performance in five months, with economists citing the negative impact of Hurricane Sandy as the culprit. While a slowdown seems reasonable, the degree of weakness implied by consensus forecasts suggests the final outcome would have... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| These Funds Are About To Get Creamed If The Nexen/CNOOC Deal Fails Posted: 07 Dec 2012 01:45 PM PST In just over one hour the Canadian government will hold a press conference on the troubled Nexen/CNOOC deal: a deal that will make or break many M&A merger arbs or 2012. And judging by the algo reaction in the past few minutes, i.e., the complete collapse in NXY stock, the deal is off. So who is about to get crushed? Below is a sort of all hedge and mutual funds who added the most NXY stock in Q3, i.e., those who decided to pick pennies in front of a steam roller in hopes the Canadian government lets the deal through, with far more downside than upside if said assumption fails. All we can say is: Oops Paulson.... Again.
Quite intriguing flash crash (down over 16%) which just happened to coincide with the 200DMA - perfectly normal...
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| COT Gold, Silver and US Dollar Index Report - December 7, 2012 Posted: 07 Dec 2012 01:32 PM PST COT Gold, Silver and US Dollar Index Report - December 7, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Dec 2012 01:26 PM PST Jim Sinclair's Commentary Although, I have not confirmed the number yet, I understand 350,000 left the unemployment list by simply giving up seeking a job. Therefore the improvement only exists in that statistic. Employment Report and Gold's Reponse: Same Old Same Old CIGA Eric The invisible hand knows the following: Job creation remains weak Continue reading Jim's Mailbox | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Coming Derivatives Panic That Will Destroy Global Financial Markets Posted: 07 Dec 2012 12:51 PM PST  When financial markets in the United States crash, so does the U.S. economy. Just remember what happened back in 2008. The financial markets crashed, the credit markets froze up, and suddenly the economy went into cardiac arrest. Well, there are very few things that could cause the financial markets to crash harder or farther than a derivatives panic. Sadly, most Americans don't even understand what derivatives are. Unlike stocks and bonds, a derivative is not an investment in anything real. Rather, a derivative is a legal bet on the future value or performance of something else. Just like you can go to Las Vegas and bet on who will win the football games this weekend, bankers on Wall Street make trillions of dollars of bets about how interest rates will perform in the future and about what credit instruments are likely to default. Wall Street has been transformed into a gigantic casino where people are betting on just about anything that you can imagine. This works fine as long as there are not any wild swings in the economy and risk is managed with strict discipline, but as we have seen, there have been times when derivatives have caused massive problems in recent years. For example, do you know why the largest insurance company in the world, AIG, crashed back in 2008 and required a government bailout? It was because of derivatives. Bad derivatives trades also caused the failure of MF Global, and the 6 billion dollar loss that JPMorgan Chase recently suffered because of derivatives made headlines all over the globe. But all of those incidents were just warm up acts for the coming derivatives panic that will destroy global financial markets. The largest casino in the history of the world is going to go "bust" and the economic fallout from the financial crash that will happen as a result will be absolutely horrific. Read more....  This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Investment — Time is Slipping Away Posted: 07 Dec 2012 12:34 PM PST Everything has been distorted by the media. Humanity may no longer believe that the sun revolves around the earth, but some people still think that they can control nature. Nevertheless, with all the truly breathtaking science that has resulted in great social progress and technological advancement, the mass distortions in perception caused by propaganda — including illegal, unethical and immoral media intervention — will resolve itself eventually. Price Managed Asset Classes Perhaps it is no accident that at the center of these technological advances happens to be the asset classes that are the most managed of all, specifically: oil, precious metals and currencies. Based on its obvious uses for energy and petroleum products, oil underpins just about every recent technological advance. For their part, currencies are caught up in a global race to debase their value, as central banks and treasuries around the world attempt to manage unprecedented levels of national de... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sprott's Michael Kosowan on Surviving Death by Paper Cut in Today's Mining Equity Market Posted: 07 Dec 2012 12:18 PM PST The Gold Report: Are you mostly involved in mining investments, or are you also involved in oil and gas? Michael Kosowan: If it comes out of the ground and has value in a commodity sense, we're looking at it for investment ideas. My background is as a mining engineer, so what I'm often looking at are mineral-style investments along the precious metals space, because a lot of my clients are speculators. They're looking for the high-return, high-potential rewards that we can get from a discovery. We're coming into a market where there's been a lot of work that's gone into the ground and a lot of dollars spent, some misspent. Either way it sets the table for a strong exploration market. TGR: A lot of these junior mining companies are struggling because they're running out of money for exploration. Yet you say it's a strong exploration market—could you explain that? MK: Strong because there have been a lot of dollars put in the ground over the last decade that are going to prove up so... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Dec 2012 11:51 AM PST Indicated Resource of 14.42 Mt grading 1.54 g/t gold (715,000 oz) and Inferred Resource of 28.19 Mt grading 1.14 g/t gold (1,035,000 oz) at a 0.3 g/t cut-off Brazilian Gold Corporation (TSXV: BGC) reports an amended NI43-101 mineral resource estimate for the São Jorge gold deposit that was previously announced on September 19, 2012 (Tables 1 to 3). The amended independent resource estimate was completed by Coffey Mining (Coffey)* of Toronto, Ontario and will be documented in an Amended NI43-101 Technical Report that will be posted on SEDAR and our website within 45 days of this News Release. Coffey confirms that work associated with the Preliminary Economic Assessment (PEA) on the São Jorge project, which is currently in progress, has identified a grade variance between the published resource and the block model. Coffey's undertaken standard procedure includes internal verification of the block model data when it is imported into the mine design software. More... Coffey has completed a thorough and detailed investigation and has confirmed that the data in the block model is correct. Further "independent verification" was completed by a Coffey office outside of Toronto, not associated with the São Jorge study, and proficient in the commercial software used for the resource estimate. This work has confirmed the variance and the resulting positive grade revisions to the São Jorge resource estimate. Highlights
**According to National Instrument 43-101 and CIM (2010) an "Inferred Mineral Resource" is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, workings and drill holes. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Ian Stalker, CEO of Brazilian Gold, commented "The incorrect resource estimate reported on September 19th has been amended by the appropriate Qualified Person within the Coffey Mining organization. We are pleased that the amended estimate has resulted in a substantial increase in the overall grade and total ounces for the São Jorge deposit. The amended resource numbers along with recently completed metallurgy, power studies, environmental assessments, as well as the depreciation of the Brazilian Real will be incorporated in an updated PEA, which should result in substantially better economics than the previous more than acceptable PEA results. The significant increase in the grade and tonnage of the indicated and inferred resource suggests that many more ounces will fall within the pit shell as compared to the 2011 PEA and may provide for a longer mine life and/or higher production rate at a higher overall average head grade. Clearly these revised results, now create a solid foundation for Brazilian Gold to move ahead with great confidence and take São Jorge into mine development, where Brazilian Gold can swiftly become a mid-tier gold mining company. The amended São Jorge resource statement along with resources outlined on the Surubim (Jau deposit) and Boa Vista (VG1 deposit) projects in 2012 now totals 715,000 ounces (14.42 Mt grading 1.54 g/t gold) in the indicated category and 1,921,000 ounces (59.76 Mt grading 1.0 g/t gold) in the inferred category at a 0.3 g/t gold cut-off. This global resource statement does not include results from a recently completed drill program on the Batistão project, which will be the subject of a NI43-101 resource estimate early in 2013." The São Jorge deposit is approximately 1,400 m long by up to 200 m wide and has been intersected in drill holes to 350 m depth; the deposit strikes northwest and has a sub-vertical dip. The deposit is hosted in quartz monzogranite and mineralization appears to be spatially associated with a number of discontinuous shear and fracture zones. Alteration minerals included chlorite, epidote, sericite, silica and sulphides that occur along fractures or where the fracture density is high as pervasive alteration. The predominant sulphide is pyrite with minor amounts of chalcopyrite. Gold mineralization is commonly associated with silica-sericite-sulphide alteration and higher gold values are generally associated with higher pyrite content and the presence of chalcopyrite. Porfirio Cabaleiro, B.Sc., (Mining Engineer), MAIG and Hebert Oliveira, B.Sc. (Geology), MAIG, are the Qualified Persons for the NI43-101 Report on the Resource Estimate of the São Jorge gold deposit and have reviewed and approved the contents of this press release as far as it relates to their work. Garnet Dawson, M.Sc., P.Geo. (British Columbia), Vice President, Exploration for the Company and a Qualified Person, as defined by National Instrument 43-101, has reviewed and approved the technical disclosure contained in this News Release. *About Coffey Mining Coffey Mining is a specialist professional services consultancy with expertise in geosciences, international development and project management. Operating for more than 50 years, they are well known in our markets for deep technical skills and market-leading solutions to complex tasks. Featuring some of the best industry specialists, professionally accredited in all mining jurisdictions globally, the Coffey team is supported by a network of offices throughout the Americas, Africa, Asia Pacific, Europe and the Middle East. Coffey Mining is proud of its independence and is recognized by all major international financial institutions, resource funds and securities exchanges. This accreditation ensures that all tasks are performed and completed to accepted international audit standards. About Brazilian Gold Corporation Brazilian Gold has a resource inventory of 715,000 ounces of gold grading 1.54 g/t gold in the indicated category and 1,921,000 ounces of gold grading 1.00 g/t gold in the inferred category at a 0.3 g/t cut-off that is hosted in three deposits (Table 4).
At a 0.5 g/t cut-off, the resource inventory is 666,000 ounces grading 1.97 g/t gold in the indicated category and 1,663,000 ounces grading 1.32 g/t gold in the inferred category (Table 5).
Brazilian Gold is a Canadian-based public company with a focus on the acquisition, exploration and development of mineral properties in northern Brazil. The Company has title to one of the largest land packages (3,753 km2) in the Tapajós and adjacent Alta Floresta gold provinces. The land package contains green fields to more advance stage projects including the Company's flagship São Jorge project. Rapid improvements to regional infrastructure continue to provide underlying support to Brazilian Gold's activities in northern Brazil. For More Information Brazilian Gold Coproration Joanne Yan, President and Director Renmark Financial Communications Inc. Source: Brazilian Gold http://www.braziliangold.ca/corporate/press-releases/20121207-1.html Some statements in this news release contain forward-looking information, including without limitation statements as to planned expenditures and exploration programs. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of planned expenditures, the ability to complete exploration programs on schedule and the success of exploration programs. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this news release. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Dec 2012 11:48 AM PST London Gold Market Report from Ben Traynor BullionVault Friday 7 December 2012, 07:00 EST FIRDAY morning saw the gold price drop below $1700 an ounce again, while stock markets, commodities and the Euro all fell ahead of the final US nonfarm payrolls release of 2012. According to several sources the consensus forecast among analysts ahead of the report was for 93,000 jobs added in November, with the official unemployment rate expected to hold steady at 7.9%. "US payroll data will be the main number focus today but there's probably two reasons why we might expect less reaction than normal," says Standard Bank analyst Steve Barrow. "The first is that the markets are clearly fixated by the fiscal cliff and it is doubtful that any data is going to have a significant impact until the cliff is sorted. Secondly, economic growth this quarter will be written off due to the impact of [Hurricane] Sandy." "If the unemployment rate should turn out to be higher than anticipated, ... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On Gold: Morgan Stanley is Buying What Goldman is Selling Posted: 07 Dec 2012 11:46 AM PST "JPMorgan et al are riding shotgun over these markets every minute and hour of the day." ... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Dec 2012 11:35 AM PST Synopsis: An analysis of a decades-old continuum that threatens liberty around the world. Dear Reader, "Take it that you have died today, and your life's story is ended; and henceforward regard what further time may be given you as an uncovenanted surplus, and live it out in harmony with nature." –Meditations, Marcus Aurelius Watching the two pilots scrambling to regain control of the plane containing our family as it was being blown nearly sideways just yards above the hard surface of the runway, I knew we were in imminent danger of crashing, but also that the matter was entirely out of our control. Fortunately, our fate was very much in the hands of two talented professional pilots whose interest in staying alive was precisely aligned with our own. But I'm getting ahead of myself. So much has occurred since last I wrote, foremost being that our family has successfully made the transition from living in a small town in Vermont, to the town of Cafayate in the Argentine outback. But that fact lacks all nuance, as the reality of the move involved weeks of planning followed by a series of maneuvers starting with a whirlwind dash through Asunción, Paraguay, with Alice, our friend and force of nature, to finalize some residency paperwork. In the care of one of her drivers, we then drove across the Argentine border in a truck packed to the roof with duffel bags and even our two small dogs. Fortunately, unlike arriving in the US, the border between Paraguay and Argentina is a haphazard affair with the "guard" being a friendly fellow perched precariously in a white plastic lawn chair. He struggled to his feet long enough to glance in the back of the truck and wave us on. We drove for about an hour to a small town with a runway sufficient to handle the plane we had chartered for the final leg to Cafayate and were soon settled in for a pleasant one-hour hop. (For the record, there are much easier ways to get to Cafayate; our route was determined largely by our need to see Alice in Paraguay.) It was as we were approaching what passes for an airport in Cafayate that I made the cosmic mistake of glancing at my watch and, puffing up, saying to my wife something to the effect of, "Why, lookie here. Even though I laid out the itinerary for our trip well over a month ago, we'll be landing within a minute of the scheduled time. Just like a military operation!" No more than a few heartbeats later, just as the plane was about to touch down, the turbulent air we had been bumping through hurled a dangerous wind shear at us, tossing the plane most of the way up on its side, sending the aforementioned pilots to scrambling. Having been in a couple of somewhat close calls in small planes in my life, I can say without hesitation this was as close as it gets, an opinion shared by the pilots who, once we'd regained altitude, gamely gave us the option of giving it another go, but recommended in the strongest terms that we should fly to a different airport. And so it was that, rather than landing within a minute of the established schedule, we had to add an additional leg to our trip, a drive from the nearest large city, delaying our arrival at El Terruno on the plaza in Cafayate by a full three hours. Fortunately, dinner in Argentina runs late, and Miguel, the finest waiter in town, was on hand to welcome us with steaks that we washed down with an excellent Malbec-Syrah blend. Per the quote by Marcus Aurelius above, I found the near-death arrival in Cafayate most cathartic and oddly appropriate for closing the book on one phase of life and opening the cover on a new one. It's kind of complicated, but as those of you dear readers who have been through one already know, near-death experiences can be hugely life affirming. Or, as Winston Churchill put it after his experiences as a correspondent in the Boer War, "There is nothing more exhilarating than to be shot at without result." And so it was that we were reborn to our new lives in Cafayate. Quick Comments on Life Here Versus ThereAs we are going to be living in Cafayate until the end of May, before returning north for five months of summer, I will almost certainly have more to say about the place in future editions of these musings. It's not so much my intent to present a travelogue, but rather to provide what I hope will be useful observations on some of the life-enhancing values that seem to have been lost as more "civilized" societies have moved further and further away from the earth. In addition, since few peoples have as much experience in coping with crises, especially those involving high inflation, than the Argentines, from time to time I'll be chatting a bit about some of the survival skills learned locally as well. For now, however, I want to share a quick observation about just one of the differences between life in more modern locales and life here in a rural yet up-and-coming wine-growing town three hours from the nearest city. Freedom to Fall
Off hand, I can't think of a better illustration of the level of freedom here, versus "there," than by sharing the photo of a man in the United Kingdom riding a bicycle with a child on his shoulders. This heinous act was caught on film by a concerned resident of Derbyshire and reported breathlessly in the BBC, setting off a minor manhunt for the perp. As I sit here, I don't know if I'll be able to capture a photo of the vehicular antics of the average Argentine in time for publication, but I can assure you that riding a bike with a child on your shoulders wouldn't qualify you for even the most amateurish of bike-riding events hereabouts. For that, in addition to a child on your shoulders, you'd have to have a child perched on the back fender and one on the handlebars… then text a modest essay with your one free hand. That's because, unlike the more controlled cultures, the Argentines are largely left to live their lives being responsible for their own actions and so understand they will have to accept the consequences when those actions lead to an unpleasant outcome. The result is a far less paranoid and far more relaxed culture. Instead of dwelling on the threats the Western media and officialdom are constantly beating the drums about, people hereabout live in the moment and don't get mired down with excessive fears and overblown risks. If someone in this bustling little town owns a bicycle helmet, they must keep it hidden away, because I have yet to see one. And bicycles are a primary form of transport. By contrast, sending your child out on their bicycle without a helmet in the US would be considered a form of child neglect. Here's another example. Whereas in the US and most other more controlled societies, a doctor's prescription is required for most drugs, here all you usually need is the name of your desired drug and a few bucks, and the pharmacist will pass it straight across the counter. I suppose if you asked, they'd be happy to tell you when and in what quantity you should take your medicine, but if you don't ask, they won't bother to tell. In the US, a hole in the sidewalk would attract a line of people hoping to attain the lucrative status of litigant by stepping into it. Here, if you were to step into a hole in a sidewalk and take it to a lawyer, in return you would get a puzzled frown followed by the question, "Why weren't you looking where you were going?" Of course, some visitors to these parts have a hard time adjusting to a world where life hasn't yet had all risk, or at least the appearance of all risk, squeezed out of it. But once you accept that you need to take responsibility for your actions and be just that much more aware of the actions of others, your innate senses actually begin to function again… when you look, you actually see. Otherwise, you might step into a hole. I have so much more I want to write about, especially some of the wonderful characters I have met and, in some cases, befriended since landing here, but I will leave off for now and move on to a topic that has been on my mind since the reelection of Obama and his allies a month ago.
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| Could two platinum coins solve the debt-ceiling crisis? Posted: 07 Dec 2012 11:09 AM PST 07-Dec (Washington Post) — If President Obama wants to avoid an economic calamity next year, he could always show up at a press conference bearing two shiny platinum coins, worth… $1 trillion apiece. Okay, that sounds utterly insane. But ever since last year, some economists and legal scholars have suggested that the "platinum coin option" is one way to defuse a crisis if Congress can't or won't lift the debt ceiling soon. At least in theory. The U.S. government is, after all, facing a real problem. The Treasury Department will hit its $16.4 trillion borrowing limit by next February at the latest. Unless Congress reaches an agreement to raise that borrowing limit, the government will no longer be able to borrow enough money to pay all its bills. …Enter the platinum coins. Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases. Under this scenario, the U.S. Mint would make a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed moves this money into Treasury's accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue. [source] PG View: Sure, it's that simple. Strike a couple $1 trillion coins and all our problems will be solved! In reality, all it would do is further obscure the real problem. Ah, but smoke and mirrors are loved by our policymakers…so I wouldn't put it past them… | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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