Gold World News Flash |
- Gold Market Update
- First-ever spot gold trading on the DGCX planned for later this year, why not make it happen faster?
- Argentina's Financial Collapse – Past Is Prologue
- Eric Sprott: EXPECT $200 SILVER & Financial Implosion & More
- Silver Update 2/10/13 Stackers vs Banksters
- THE REST OF THE STORY
- Russia Flips Petrodollar On Its Head By Exporting Crude, Buying Record Gold
- Gene Arensberg's Got Gold Report sees shares testing support
- MoneyandWealth Guests: Dan Denning Ellen Brown, Gerald Celente – February 10, 2013 – YouTube
- Argentina's Financial Collapse - Past Is Prologue
- Davos 2013 – The Global Financial Context – YouTube
- Silver Market Update
- The impossibility of economic calculation in a fiat world
- Putin turns black gold into bullion as Russia outbuys world
- Venezuelan devaluation sparks panic buying
- Eric Sprott - Expect $200 Silver As Financial System Implodes
- VB Update Notes for February – March 2013 – What is wrong with This Picture?
- In The News Today
- Venezuela Launches First Nuke In Currency Wars, Devalues Currency By 46% | Zero Hedge
- Silver vs Rhodium price action – YouTube
- Chart of the Week: Dollar Index
- Davos 2013 – Crystal Award Ceremony – YouTube
- Davos 2013 – Welcoming Address by the Executive Chairman – YouTube
- Be Out There: An Entrepreneur’s Mindset Out of the Norm – YouTube
- Unfunded liabilities guarantee crackup, Sprott tells King World News
- Global WAR has begun! How to profit from it. 2/10/13 – YouTube
- Crash Course In Short Term Gold & Silver Price Forecasting
- Alasdair Macleod: The impossibility of economic calculation in a fiat world
- DOES JOHN WILLIAMS SOUND CRAZY?
- Goldwatcher – More Sunshine, Less Stormy Weather
- Up or Down? Precious Metals At Important Crossroad
- Adam Werbach: The Future of Sustainable Business – YouTube
- GoldMoney article: The impossibility of economic calculation in a fiat money world
- Gold and Silver
- These 4 Indicators Say “No Stock Market Correction Coming – Yet”
- Sunday Reflections - Dr. Benjamin Carson speech goes viral
| Posted: 11 Feb 2013 08:15 AM PST The Big Story now is that there is evidence that powerful forces will be brought to bear shortly to support the ailing US Treasury market, which is close to crashing critical support, and those wielding the power will have no qualms about sacrificing either the commodity markets or the stockmarket to achieve this objective, if necessary. We will look at the outlook for the bond market and stockmarket later, after we have examined the gold charts and indicators. |
| First-ever spot gold trading on the DGCX planned for later this year, why not make it happen faster? Posted: 11 Feb 2013 08:01 AM PST The Dubai Gold and Commodities Exchange will launch its first-ever spot gold contract later this year allowing UAE traders to buy and sell physical gold on a local exchange for the first time. Gold traders based in the City of Gold are ecstatic about this news reported in The National today. |
| Argentina's Financial Collapse – Past Is Prologue Posted: 10 Feb 2013 10:45 PM PST from Zero Hedge:
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| Eric Sprott: EXPECT $200 SILVER & Financial Implosion & More Posted: 10 Feb 2013 10:29 PM PST from KingWorldNews:
Eric has over 40 years of experience in the investment industry and manages over $10 billion. He has been stunningly accurate in his writings for over a decade, and is one of the most respected industry professionals who accurately foresaw the current crisis. Eric chronicled the dangers of excessive leverage as well as the bubbles the Fed was creating, while correctly forecasting the tragic collapse. Sprott Asset Management is one of the top firms in the world. The firm has become well known not only for its performance, but also for creating a gold and now silver trust. |
| Silver Update 2/10/13 Stackers vs Banksters Posted: 10 Feb 2013 10:05 PM PST |
| Posted: 10 Feb 2013 10:04 PM PST I see a lot of people lately agonizing over what we should have done. By that I mean it's obvious to all by now that the correct move was to buy stocks back in November instead of precious metals and miners. I mean seriously, it's obvious that liquidity was going to flow into every asset class except precious metals. Well it's obvious now in hindsight anyway. Of course everyone has conveniently forgotten how tough it was coming out of that November low. There were ongoing concerns about the approaching fiscal cliff, not to mention a significant sell off as we approached the end of the year. Once the fiscal cliff was resolved the markets rallied violently. Of course no one was positioned ahead of the rally because there was the risk that politicians wouldn't make a deal. So the upshot was almost everyone missed the first day, and virtually no one was expecting a second day of huge gains. So by that time the market was overbought and right up against resistance at the September highs. It's pretty tough to buy into an overbought market that is butting up against a major resistance level, so I don't think anyone could be faulted for abstaining at that point. Once the market broke through 1475 it only took five days for it to reach the next resistance level at 1500. So if you didn't buy immediately you missed that move also. At that point we moved into the timing band for a half cycle low. Again, probably a dangerous time to be initiating long positions. Unfortunately the market didn't give us a half cycle low and continued higher, with two strong down days thrown in to keep traders off-balance. It's easy in hindsight to rationalize the correct trade, but as I have just shown, tough to do in real time. Next I'm going to show you a market progression. Imagine you are experiencing this in real time. In August of 1990 the stock market stagnated, formed a double top, and proceeded to plunge sharply below the 200 day moving average. At this point, as we've heard many times, chartists were screaming that the market was clearly headed down.  Imagine your emotions on that Thursday in August. Realistically, how many people would have been able to pull the trigger and buy at that point? The answer is, not many. But buying on that Thursday, even though one's emotions were screaming sell, was the correct move.  Or was it? Well after two weeks the market certainly appears to be building a base for another leg higher. At this point, although almost certainly nervous, one could probably rationalize adding to positions.  So let's see how that worked out.  Holy crap! That was a mistake. A huge freaking mistake. Sell, sell, sell! Whew, that was a close call. Son of a b***** no sooner did the market break down then we get a strong reversal candle followed by another reversal candle five days later. I have to say, it looks like we finally hit a bottom. Buy everything back.  You've got to be kidding me! Wrong again. This is obviously a bear market, time to sell short.  A couple of days later; Time to add to shorts.  A week later; This sure looks like we finally made the right decision, as this is clearly a bear market, and obviously about to begin the next leg down.  But did one really make the right decision? Remember this was a secular bull market.As Paul Harvey used to say, now let's look at the rest of the story.  As you can see, clearly this was the buy of the decade, although actually doing so and holding through that bottoming process was agonizing to say the least, or more likely virtually impossible. So might I suggest that when the gold bull becomes too frustrating, and you're ready to give up, you come back and review that 1990 bottom. Bull markets never make it easy. Very few traders have the determination, stamina, foresight, and focus to make it all the way through one. But the rewards for the very few that can weather every punch the bull dishes out… are huge.       |
| Russia Flips Petrodollar On Its Head By Exporting Crude, Buying Record Gold Posted: 10 Feb 2013 08:25 PM PST from Zero Hedge:
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| Gene Arensberg's Got Gold Report sees shares testing support Posted: 10 Feb 2013 07:45 PM PST 9:42p ET Sunday, February 10, 2013 Dear Friend of GATA and Gold: Gene Arensberg's Got Gold Report tonight sees or at least imagines a bottom for gold mining shares, a testing of long-term support. His commentary is headlined "What Is Wrong with This Picture?" and it's posted at the GGR's Internet site here: http://www.gotgoldreport.com/2013/02/vb-update-notes-for-february-march-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: California Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata |
| MoneyandWealth Guests: Dan Denning Ellen Brown, Gerald Celente – February 10, 2013 – YouTube Posted: 10 Feb 2013 07:21 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Argentina's Financial Collapse - Past Is Prologue Posted: 10 Feb 2013 07:16 PM PST The following rather stunning documentary provides a critical insight into what Europe (and Argentina once again) could well be progressing towards. There is a reason we highlight the 'scariest chart in Europe' as that of youth unemployment and with the central banks printing money at ever increasing paces and the next round of global competitive devaluation beginning, the debt slaves will suffer ever more. In 2001, Argentina collapsed; after many years of apathy in the country, the insurrection exploded. As TopDocumentary notes, the spontaneous revolt of 'faceless' people meant saucepans were being banged in every neighborhood. What happened to Argentina? How was it possible that in so rich a country so many people were hungry? The country had been ransacked by a new form of aggression, committed in time of peace and in a democracy. A daily and silent violence that caused greater social disruption, more emigration and death than the terrorism of the dictatorship and the Falkland Islands war. Ever since independence, almost 200 years ago, Argentina's foreign debt has been a source of impoverishment and corruption and the biggest scandals. Since the first loan negotiated by Rivadavia in 1824 with the British Bank Baring Brothers, the debt was used to enrich Argentinean financiers, to control the finances and empty the country of its wealth. This foreign debt always went hand in hand with big business, and with the complicity of nearly every government, from Miter and Quintana to Menem and De la Rua. The policy of indebtedness gave rise in Argentina to generations of technocrats and bureaucrats, who favored banks and international corporations over their own country. Educated at Harvard, Chicago, Oxford or Buenos Aires, their portraits hang in the official galleries.
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| Davos 2013 – The Global Financial Context – YouTube Posted: 10 Feb 2013 07:11 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Posted: 10 Feb 2013 06:10 PM PST In the last update we called a bottom in silver the day after it put in a high-volume bull hammer early in January, and while it did reverse as expected, the short-term uptrend that developed has since stalled out in recent weeks and ... Read More... |
| The impossibility of economic calculation in a fiat world Posted: 10 Feb 2013 06:00 PM PST from Gold Money:
It is not normal for businessmen to fret over this. They tend to work from management accounts which are usually prepared monthly, and over that time-scale a depreciating currency is unnoticed – except in the case of monetary extremes. However, businessmen should pay attention to the problem, because the accumulation of entrepreneurial wealth is achieved over many years; its productive value can be significantly altered by fluctuations in the purchasing power of unstable money. |
| Putin turns black gold into bullion as Russia outbuys world Posted: 10 Feb 2013 05:57 PM PST By Scott Rose and Olga Tanas http://www.bloomberg.com/news/2013-02-10/putin-turns-black-gold-into-bul... MOSCOW -- When Vladimir Putin says the United States is endangering the global economy by abusing its dollar monopoly, he's not just talking. He's betting on it. Not only has Putin made Russia the world's largest oil producer, he also has made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to International Monetary Fund data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty. "The more gold a country has, the more sovereignty it will have if there's a cataclysm with the dollar, the euro, the pound, or any other reserve currency," Evgeny Fedorov, a lawmaker for Putin's United Russia party in the lower house of parliament, said in a telephone interview in Moscow. ... Dispatch continues below ... ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold All-Pro Gold, run by long-time GATA supporters Fred Goldstein and Tim Murphy, offers its services to GATA supporters and anyone else interested in precious metals. The company brokers a full line of precious metals and numismatic coins. It aims to inform prospective clients about the importance of the monetary metals as part of a diversified financial portfolio and to keep prospective clients current with market trends. All-Pro Gold has competitive pricing and ships promptly to clients so they may have physical possession. Learn more by e-mailing Fred@allprogold.com or Tim@allprogold.com or telephone 1-855-377-4653 or visit www.allprogold.com. Gold, coveted by Russian rulers including Tsar Nicholas II and the Bolshevik leader whose forces executed him, Vladimir Lenin, has soared almost 400 percent in the period of Putin's purchases. Central banks around the world have printed money to escape the global financial crisis, sapping investor appetite for dollars and euros and setting off a scramble for safety. In 1998, the year Russia defaulted on $40 billion of domestic debt, it took as many as 28 barrels of crude to buy an ounce of gold, Bloomberg data show. That ratio tumbled to 11.5 by the time Putin first came to power a year later and in 2005, after it touched 6.5 -- less than half what it is now -- the president told the central bank to buy. During a tour that November of the Magadan region in the Far East, where Polyus Gold International Ltd. and Polymetal International Plc have operations, Putin told Bank Rossii not to "shy away" from the metal. "After all, they're called gold and currency reserves for a reason," Putin said, according to a Kremlin transcript. At the time, gold was trading at an 18-year high of $495 an ounce and the Moscow-based central bank held 387 tons, or 2.2 percent of its $165 billion total reserves. The share reached 3.5 percent within a month, according to data compiled by Bloomberg. An ounce of gold for immediate delivery traded at $1,670 as of 7:24 p.m. Moscow time on Feb. 8. It rose 7 percent last year, the 12th straight year of gains. Analysts expect the metal to advance again in 2013, to $1,825 by the end of the year, according to the median of 26 forecasts in a Bloomberg survey. "Putin's gold strategy fits in with his resource nationalism, statist agenda," said Tim Ash, head of emerging-market research at Standard Bank Plc in London. "It's kind of a defensive play, but it worked, right?" Ash said in an interview in Moscow. "You need luck in politics and business, and clearly the guy has it." Other world leaders haven't been as lucky. Gordon Brown, as U.K. finance minister, sold almost 400 tons of gold in the 30 months to March 2002, when prices were at two-decade lows. London tabloids have referred to the period as "Brown's Bottom." Quantitative easing by major economies to support financial asset prices is driving demand for gold in the emerging world, said Marcus Grubb, head of investment research at the World Gold Council. Before the crisis, central banks were net sellers of 400 to 500 tons a year. Now, led by Russia and China, they're net buyers by about 450 tons, Grubb said by phone from London, where his industry group is based. While Putin is leading the gold rush in emerging markets, developed nations are liquidating. Switzerland unloaded the most in the past decade, 877 tons, an amount now worth about $48 billion, according to International Monetary Fund data through November. France was second with 589 tons, while Spain, the Netherlands, and Portugal each sold more than 200 tons. Even after Putin's binge, though, Russia's total cache of about 958 tons is only the eighth-largest, the World Gold Council said in a Feb. 8 report. The U.S. is No. 1 with about 8,134 tons, followed by Germany with 3,391 tons and the Washington-based IMF with 2,814 tons. Italy, France, China, and Switzerland are fourth through seventh. While gold accounts for 9.5 percent of Russia's total reserves, it accounts for more than 70 percent in the U.S., Germany, Italy, and France. Russia keeps about two-thirds of its stockpile in a greenish gray stone-and-glass building on Ulitsa Pravdy, or Truth Street, in central Moscow. The street is named after Pravda, the official newspaper of the Communist Party, which also was headquartered there. Then-Prime Minister Putin became the first Russian leader to visit the complex on Jan. 24, 2011, according to the government's website. He toured the 17,000 square-meter facility, which includes 1,500 square meters of storage, with First Deputy Chairman Georgy Luntovsky, posing for photographs lifting an ingot. Most of the bars weigh 10 to 14 kilograms (22 to 31 pounds) and are boxed in plastic or wooden crates alongside an emergency supply of banknotes. Technically, state metals depositary Gokhran has the exclusive right to buy all gold mined in the country. In practice it lets commercial banks buy from producers directly, usually in the form of project financing, said Sergey Kashuba, chairman of the Russian Union of Gold Producers in Moscow. When the central bank buys gold, it's from those commercial banks, led last year by OAO Sberbank, OAO Nomos Bank, VTB Group, and OAO Gazprombank, Kashuba said. Russia produced 205 tons of gold last year, making it No. 4 after China, Australia, and the U.S., according to U.S. Geological Survey estimates. Security is tight along the entire production chain, Kashuba said. Just two organizations are allowed to move partially refined gold from miners in the Far East and northern Siberia to processing facilities in other parts of the country, he said. One is FeldSvyaz, a courier service that reports directly to Putin. The other, SpetsSvyaz, was split off from Stalin's NKVD secret police in 1939 to transport precious metals and state secrets, according to its website. Russia has gone through bouts of hoarding before. Tsar Alexander II ordered his government to start amassing bullion in 1867, just months after selling Alaska, now the No. 2 gold- producing U.S. state, for $7.3 million. His grandson, Nicholas II, introduced the gold standard in 1897, then needed a loan from France to ward off speculators and save the system in 1906. Nicholas, Russia's last tsar, was forced to free the ruble in 1914 as war broke out in Europe. Lenin's revolutionary government reinstated the gold link along with a new currency in 1922. While Soviet rubles were nominally backed by gold, sales of the metal to citizens were halted in 1930, making the peg meaningless. When Lenin's Bolsheviks seized power in Petrograd, as St. Petersburg was then known, in 1917, one of their first targets was the State Bank and its gold, which they captured at 6 a.m. on Nov. 7, according to Bank Rossii's website. They soon nationalized all the banks, confiscating any gold found in vaults and deposit boxes. Communist secrecy regarding the country's gold holdings fueled speculation that party elites had amassed a huge hoard of bullion that they spirited out of the country before the Soviet Union disintegrated in 1991. Viktor Gerashchenko, the last Soviet central banker and a two-time chairman of Bank Rossii, has repeatedly denied such speculation, including last February. "When people ask about the party's gold, my answer is always: Are you an idiot or something?" Gerashchenko, 75, told Afisha magazine. For now, with more than five years left in Putin's term, Russia plans to keep on buying. "The pace will be determined by the market," First Deputy Chairman Alexei Ulyukayev said in an interview in Davos, Switzerland, on Jan. 25. "Whether to speed that up or slow it down is a market decision and I'm not going to discuss it." Join GATA here: California Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard |
| Venezuelan devaluation sparks panic buying Posted: 10 Feb 2013 05:41 PM PST By Benedict Mander http://www.ft.com/intl/cms/s/0/12e9f32e-739e-11e2-9e92-00144feabdc0.html CARACAS, Venezuela -- Panic buyers thronged Venezuelan shops over the carnival weekend after the government of Hugo Chavez announced a surprise devaluation that analysts said was overdue but would only partly right the listing economy. Domestic appliances such as fridges and cookers were in particularly high demand as Venezuelans snapped up goods imported at the now-defunct exchange rate of 4.3 bolÃvars per dollar. From now on they will be imported at 6.3 bolÃvars per dollar. Opposition politicians seized on what is Venezuela's fifth devaluation since strict currency controls were introduced in 2003, criticising the socialist government for springing an International Monetary Fund-style adjustment package on the country and quietly announcing it on Friday while people headed for the beach over the holiday. ... Dispatch continues below ... ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard Although Chavez was re-elected last October after consistently warning during his campaign that an opposition government would implement a "neoliberal package," officials say he ordered the devaluation -- from his hospital bed in Cuba, where he is recovering after a cancer operation two months ago. The move represents the biggest challenge yet for the country's vice president, Nicolas Maduro, who has been in charge since Mr Chavez left for Cuba and who many expect to succeed the socialist leader if he remains too ill to continue in power. Mr Maduro defended the devaluation as an effort to strengthen the economy by optimising revenues while protecting the currency from "speculative attacks." Critics say that although the exchange rate adjustment was essential to correct growing distortions in the economy, it did not go far enough, as the currency remains overvalued. It will therefore fail to solve the fundamental problem that the demand for dollars will remain far greater than the amount the government is likely to supply, they argue. "Either the government burns up huge quantities" of its foreign currency reserves "handing out cheap dollars or there will be shortages," said Luis Vicente Leon, a pollster and economist at Datanalisis. Local economists estimate that the "equilibrium" exchange rate, at which foreign currency is no longer relatively cheap for Venezuelans, is about nine bolÃvars to the dollar. "The big winner ends up being the state," said Asdrúbal Oliveros, an economist at the Caracas-based consultancy Ecoanalitica. The move will relieve pressure on a fiscal deficit variously estimated between 7 and 15 per cent of gross domestic product by increasing the state's net revenues by almost 4 per cent of GDP, or $13 billion at the new exchange rate, according to Mr Oliveros. The devaluation also cuts the dollar value of domestic debt from $42.9 billion to $29.3 billion, leading analysts to expect an increase in prices of Venezuela's foreign debt. But while the government gains, most Venezuelans lose out, with Ecoanalitica estimating an 8 per cent fall in consumers' purchasing power. Until the government next decrees an increase in minimum wages, the relative value of workers' salaries will fall. "Those most affected, apart from consumers, are the multinational companies that couldn't repatriate capital, and they will end up losing from one day to the next 46.5 per cent of their funds accumulated in bolÃvars," said Mr Oliveros. Shares in companies with Venezuelan operations, including Colgate-Palmolive and Avon, fell on the announcement. Mr Oliveros added that the devaluation was also likely to spur inflation, which at more than 20 per cent is one of the highest in the world, since more than a third of the goods consumed by Venezuelans are imported, while around half of locally produced goods rely on imports for their production. Although, in theory, exporting companies benefit from a more competitive exchange rate, Venezuela exports very little apart from oil, which accounts for around 94 per cent of export revenues. Moreover, economists point out that domestic industry is unlikely to benefit much from the devaluation because of hostile relations between the government and the private sector, with expropriations often not compensated, as well as a web of economic controls. Join GATA here: California Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Get the real story about the precious metals Now you don't have to travel to attend a financial conference to hear Sprott Asset Management's precious metals experts -- Eric Sprott, Rick Rule, and John Embry. They'll be holding a round-table discussion via the Internet at 2 p.m. ET Tuesday, February 12, and you can be part of it. Among their topics: -- Why are precious metals such a compelling investment opportunity? -- Why are non-G7 central banks buying gold? Do Western central banks have any left? -- Why are investors buying as much silver as gold in dollar terms? What does this mean for the price of silver? -- Is the growing supply deficit of platinum and palladium going to push their prices higher? To register for this Internet conference and participate from the comfort of your own home or office, please visit: http://w.on24.com/r.htm?e=579230&s=1&k=70B829852A33CD255CC2A43ED63D18D0 |
| Eric Sprott - Expect $200 Silver As Financial System Implodes Posted: 10 Feb 2013 05:10 PM PST
Today billionaire Eric Sprott told King World News, “I’m sure we’ll be seeing $100 and $200 prices for silver.” Sprott also said that despite the advance in global stock markets, “There is no doubt that the path we’re on is not sustainable both for the economy, and for the financial system.” Here is what Sprott had to say: |
| VB Update Notes for February – March 2013 – What is wrong with This Picture? Posted: 10 Feb 2013 04:39 PM PST HOUSTON – The market for junior miners and explorers remains in the grip of an extended, wicked, relentless cyclical bear market inside a secular bull market. As we write in early February, 2013, the long- expected resurgence of interest in the issuers we refer to as The Little Guys; and the expected switch from negative to positive liquidity for the smaller, less liquid and more speculative miners and explorers that would show up coincident with it; "The Big Reversal," to give it a name, is so far MIA. Just below is a simple graph of the Canadian Venture Exchange Index or CDNX compared to gold for a visual reference. The best we can point to in the chart above is that the CDNX has not printed a new low since the middle of last summer (June of 2012) and it does look to be attempting to finally break out of the very wide falling wedge – just not yet with anything approaching confidence. As one of our colleagues said recently, "...the juniors seem to be bottom crawling, unable to climb very much, so far, but at least they have stopped plunging every week." Note the huge divergence which has developed between the price of gold and the CDNX. It is a testament to just how out of favor The Little Guys are at the moment. The CDNX has not been this mistreated since 2009, right after the world thought the banking system was near imminent collapse. It is not news to remind us that The Little Guys are still in a bona fide bear market, but it is not just the smaller issues that have been stinking up the joint. Weakness in mining shares of all kinds is curiously, counter intuitively and unbelievably persistent. Just looking at recent history the Big Miners have been downright puny since at least October of last year as shown in the short term AMEX Gold Bugs Index (HUI) with Gold chart just below. You know, one could be forgiven for thinking that the Big Miners really ought to be doing better in a $1,600 plus gold and $30 plus silver world. Had someone told us in late 2008 or early 2009, when gold had just harshly corrected back to the $700s and silver dropped below $9, that the HUI would only be in the 400 neighborhood with gold more than double then and silver more than triple, we would have laughed aloud at them. The thought would have seemed preposterous then. Yet, here we are. Gold and silver ARE in the $1,600s and the $30s respectively, the smaller miners have been clobbered, not rewarded and the Big Miners have utterly failed to answer, much less leverage the good gains in precious metals since that terrifying Great Panic of 2008-9. Now, perhaps, is a good time to look at a much longer term chart of the relative performance of the Big Miners to gold as an instructive tool. StockCharts has data going back to 1984 that we can access. Since the HUI does not go back that far, we substitute the Philly Gold and Silver Index (XAU) below. This chart measures the relative performance of the XAU and gold in a ratio (XAU:Gold Ratio) monthly, with gold shown in green (left axis). What is wrong with this picture? Incredibly, with gold high consolidating in a $1500 to roughly $1800 range, the XAU:Gold ratio spent the better part of 2011 and 2012 working its way back down to the panic inspired extreme lows of the 2008 banking and financial system crisis panic. Notice, however, that the ratio only briefly tested the sub .10 lows in 2008 and early 2009, leaving long tails or shadows on the monthly trading bars. Since the end of 2011, the ratio has camped out very close to those lows. What does the chart mean? Well, for one thing it means that today mining shares are about as cheap as they were during the financial crisis panic peak in 2008 relative to gold metal. While we do expect the XAU:Gold ratio to decline with gold in a raging bull market based purely on the math, we do not really expect to see the XAU:Gold Ratio revisiting the panicky 2008 lows, except, perhaps in spikes lower; not when gold is high consolidating - like now. Gold is consolidating, not plunging. The miners are discounting the latter, not the former, for now. And just so we do not get accused of using a "parlor trick" in order to over-push a point, below is the same time period with the nominal prices of both the XAU and gold. Chart showing the XAU, monthly, with gold in green, nominal. Notice, please, that previous assaults on the 150 level in the 1980s, 1990s and mid 2000s were all with gold below $650 an ounce. That's $650 an ounce, not $1,650. In charting it is a time honored axiom that long period resistance, once defeated convincingly, then becomes new staunch support. If we take out the deep "V" anomaly for the 2008 crazy period entirely, as if it never occurred (kind of like throwing out an anomaly in a statistical dataset), then what we are looking at above is a retest of what should be very important support for the XAU index. The prior chart (XAU:Gold ratio) helps us to quantify and understand just how bloody strong the support OUGHT to be here near the 150s. Like everything else in charting, seldom do long term levels prove themselves exactly to the number or to the right of the decimal, as they say, so we have to be willing to allow a few points of grace either way. In other words, if we end up seeing the XAU bottom this time in the 140s or right where it is, we would call that a bull's eye test of former resistance turned support. And yes, we understand that the XAU constituent companies have bloated share counts relative to then and they have done a miserable job of providing shareholder value up to just recently, but our sense is that they are coming around to the notion that bigger for bigger's sake is not a good business plan. We believe they are finally taking the notion of shareholder value a bit more seriously – in fits and starts and with some exceptions. To answer the question "what is wrong with this picture?" The answer for the XAU is that near 150 has been associated with much, much lower prices of gold in the past. Even with the up to now poor performance of the miners, with gold at least $1,000 higher than the index is currently discounting, it does seem "wrong" to us to see the XAU retesting the former resistance, but there you go. That's actually a good thing. If the markets always priced everything fairly there would be few, if any opportunities for investors and speculators. Now, as we usually do, let's turn to the short term comparison chart for the Market Vectors Junior Gold Miner's Index ETF or GDXJ and the CDNX. To continue reading, please log in or click here to subscribe to a Got Gold Report Membership |
| Posted: 10 Feb 2013 04:05 PM PST Putin Turns Black Gold Into Bullion as Russia Out-Buys World By Scott Rose & Olga Tanas – Feb 10, 2013 1:00 PM MT When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he's not just talking. He's betting on it. Not only has Putin made Russia Continue reading In The News Today |
| Venezuela Launches First Nuke In Currency Wars, Devalues Currency By 46% | Zero Hedge Posted: 10 Feb 2013 03:31 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Silver vs Rhodium price action – YouTube Posted: 10 Feb 2013 03:28 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Chart of the Week: Dollar Index Posted: 10 Feb 2013 03:16 PM PST This past week Mario Draghi and the European Central Bank held key lending rates steady, but he hinted at his displeasure at a rising EuroDollar. This sparked a sell off in the Euro and strength in the Dollar. More importantly, it brought forth the notion that currency wars are in our future as a rising Dollar is not what the Federal Reserve wants. As one commentator put it: the currency wars are just beginning. It is a race to the bottom. Full story in the video (after the shameless plugs!)
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| Davos 2013 – Crystal Award Ceremony – YouTube Posted: 10 Feb 2013 03:13 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
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| Be Out There: An Entrepreneur’s Mindset Out of the Norm – YouTube Posted: 10 Feb 2013 03:03 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Unfunded liabilities guarantee crackup, Sprott tells King World News Posted: 10 Feb 2013 02:56 PM PST 4:56p ET Sunday, February 10, 2013 Dear Friend of GATA and Gold (and Silver): Unfunded pension and other liabilities guarantee a crackup of the Western financial system, Sprott Asset Management CEO Eric Sprott tells King World News today. Sprott expects gold to do well and silver to do spectacularly well, especially since investors today are buying 50 times more silver than gold. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/10_Er... The full audio is posted at King World News here: http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/2/10_E... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Get the real story about the precious metals Now you don't have to travel to attend a financial conference to hear Sprott Asset Management's precious metals experts -- Eric Sprott, Rick Rule, and John Embry. They'll be holding a round-table discussion via the Internet at 2 p.m. ET Tuesday, February 12, and you can be part of it. Among their topics: -- Why are precious metals such a compelling investment opportunity? -- Why are non-G7 central banks buying gold? Do Western central banks have any left? -- Why are investors buying as much silver as gold in dollar terms? What does this mean for the price of silver? -- Is the growing supply deficit of platinum and palladium going to push their prices higher? To register for this Internet conference and participate from the comfort of your own home or office, please visit: http://w.on24.com/r.htm?e=579230&s=1&k=70B829852A33CD255CC2A43ED63D18D0 Join GATA here: California Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard |
| Global WAR has begun! How to profit from it. 2/10/13 – YouTube Posted: 10 Feb 2013 02:54 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Crash Course In Short Term Gold & Silver Price Forecasting Posted: 10 Feb 2013 02:14 PM PST This article is based on an interview with K. Xeroudakis, Precious Metals Strategist and former macro risk taker in a private family owned business. With the current uncertain economic and monetary situation, the financial markets are extremely difficult to play. The fundamental case for some "assets" is crystal clear. It should not surprise any reader how strong the case is for physical gold and silver is. Apart from the long term investment, one could also use a smaller amount of his assets to play the ups and downs. As the chart shows, the differences between intermediate tops and bottoms are significant enough to consider shorter term investing, let's call it trading.
Before going into detail on what to look at when trading, first K. Xeroudakis explained the key principles every successful investor should respect. He is an experienced man who has been mentored by Ted Butler on fundamental analysis, but also was a real risk taker in a private family office, so he knows his domain very well.
Especially this last point about having access to the right knowledge is extremely important. Gold and silver investors must know what the other side of the trade is doing, which is institutions like for instance JP Morgan. If you are looking at the same kind of information, you will make much more better decisions. The big trading institutions are permanently monitoring futures positions. They use that information for decisions on their own positions.
The charts in this article are publicly accessible and updated on a weekly basis by Standard Bank weekly reports, to be downloaded every Monday afternoon via Kitco.com. The charts in this article are courtesy of the Standard Bank report from February 4th (latest update at the time of writing). Gold futures open interestIn order to put things into perspective, the longer term picture is presented in the next chart. It shows the evolution of the gold price and compares it with the open interest in gold futures. Open interest is an indicator of the participation rate: the higher the open interest, the more traders have an open position, either long or short. As a rule of thumb people should know that a higher [gold] price comes with rising open interest while a lower [gold] price is the result of lower open interest.
At the beginning of 2009, the open interest was historically low. After a period of declining open interest and lower gold prices, the bottom was hit and both open interest and gold price began rising. In the summer of 2011, we witnessed a unique moment in history. Hedgers hit the first short covering: open interest did not continue to go up although the price continued rising. The US sovereign debt downgrade urged hedgers to cover their shorts and gold went to all-time highs. When the S&P 500 recovered from its upmove, gold was out of favor. Today's situation reveals it is slightly better to go long gold than silver (see silver charts). Again, this applies to short and mid-term trading; it does not tell anything about holding long term physical gold! Another important indicator is the number of net speculators, which is indicated for gold in the following chart. It shows the long minus the short speculators. When the net speculators amount to approximately 40% it implies a sell off is likely.
Notice the lows in this charts, right after the financial crash early 2009 and in the 2012 summer. As a rule of thumb, net speculators under 19% implies a full buy signal; it indicates low risk/high reward. Silver futures open interestComparable to the gold chart, historically, silver had low open interests at the beginning of 2009 (minimal interest in the silver market); the hedgers had covered their shorts.
At the beginning of 2011, we witnessed was a historic moment where backwardation occurred. Even during the Hunt brothers peak in 1979/1980 there was no backwardation. Since late 2011, the price has gone up and down with increasing open interest. Currently there is a lot of interest in the silver market. That is the reason why the picture for silver seems not as good as the one for gold. For silver to prepare its move to for instance $60 an ounce, the open interest would ideally be lower. Again the same disclaimer, this tells something about short and mid-term pricing, not long term neither the fundamentals. Also bear in mind that these positions change on a daily basis; so the picture can change drastically even tomorrow. That's why it is important to keep on monitoring these indicators. Notice how the evolution of the net speculators indicator has evolved in a comparable fashion for silver as for gold. The big difference is that the movements are much sharper, especially to the downside. The general rule of thumb: below 12% flashes a full buy signal, while the dangerous zone for longs is around 27%.
5-year averageThe open interest is one indicator to monitor closely, but the comparison with the 5-year average equally important to monitor. One of those averages is the length of open positions which is shown in the "net speculative length" on the next chart (also freely available in the Standard Bank Research reports on Kitco). The black line shows the 5 year average of the speculators (speculators are the hedge funds in the CFTC reports). The red line shows the current situation: if it is in the deep blue area it means that all hedge funds are net long while in the light blue area means most hedge funds are not involved. The current situation shows that speculators have held 421 tonnes of gold compared to the average of 615 tonnes over the past five years. These data show that the risk of speculator selling is smaller in gold than in silver. So there is a potential upmove in silver, but these data (which can change on a daily basis) show that the probability for an upmove in gold is higher. On a short term trading basis, gold has a better risk/reward than silver.
Additional insights can be drawn from the 5-year average open interest positions by comparing them with today's open interest. Here again, the picture for gold is better than for silver.
These 5 year average open interest figures should be compared with the current open interest rates, as shown in the first silver chart above. Today's open interest stands at a record 24,089.0 tonnes. For the silver price to move higher, a lower open interest should be expected. |
| Alasdair Macleod: The impossibility of economic calculation in a fiat world Posted: 10 Feb 2013 01:24 PM PST 3:23p ET Sunday, February 10, 2013 Dear Friend of GATA and Gold: Fiat money, at least as it long has been managed in most countries, has made accurate economic calculations impossible, GoldMoney research director Alasdair Macleod writes today, elaborating on a point made by another British economist, Peter Warburton, in his incisive 2001 essay, "The Debasement of World Currency: It Is Inflation But Not as We Know It": Warburton argued that depriving the economy of a "stable numeraire" had become pretty much the purpose of Western central banking. Macleod writes: "Governments in countries like the United Kingdom have destroyed much of their manufacturing industry through currency depreciation, while Germany contrasts with a history of engineering excellence and a firm currency. The German business owner in the post-war years had relative certainty of economic calculation, allowing him to build up his productive wealth; while the British business lobby resorted to encouraging successive governments to keep costs down by devaluing the pound, rather than investing their own resources in more efficient production. "Reducing costs by managing the currency is, to put it less politely, all about robbing the workforce of the purchasing power of its wages. But the workforce is, in economic terms, made up of individual entrepreneurs selling their skills and labour to employers. They are the unconscious victims of devaluation as indeed are small businesses, but at least in the short term the central planners manipulating fiat money congratulate themselves that jobs have been saved." Macleod's commentary is headlined "The Impossibility of Economic Calculation in a Fiat World" and it's posted at GoldMoney's Internet site here: http://www.goldmoney.com/gold-research/alasdair-macleod/the-impossibilit... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: California Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... |
| DOES JOHN WILLIAMS SOUND CRAZY? Posted: 10 Feb 2013 01:11 PM PST The MSM tries to classify John Williams as a nutjob. His Shadowstats website pokes holes in the economic data reported by the government by calculating the true level of inflation being created by the Federal Reserve. He is a smart, cogent, reasonable man, with an MBA from Dartmouth and the courage to speak the truth. Read this interview and decide for yourself whether he's crazy. John Williams: How to Survive the Illusion of RecoverySource: JT Long of The Gold Report (2/8/13)
The Gold Report: The last few years have been very volatile for investors, particularly resource equity investors. The mainstream media, citing government statistics of improved employment rates and housing starts, called an end to the recession and is forecasting a slow recovery in 2013. You are looking at the same indicators, but coming up with different numbers. Let's start with the unemployment rate. What are you seeing and why is it different than what we are hearing everywhere else? John Williams: I contend that the economy effectively hit bottom in June 2009, followed by a period of somewhat volatile stagnation, and it is beginning to turn down anew. There never was a recovery and no economic data shows the type of recovery that the official gross domestic product (GDP) report is showing. The GDP shows levels of activity now that are above where the economy was before the recession. It's been above that level now for more than a year. No other major economic series has shown a full recovery, shy of perhaps inflation-adjusted retail sales, which is due to a problem with the inflation rate used to adjust the series. Generally, the illusion of recovery has resulted from the government's use of understated inflation. TGR: Are you predicting a double-dip recession? JW: It's more like the pattern a fellow would take going off a ski jump. A plunge and then moving forward, maybe up a little bit and then plunging anew. The economy officially will be recognized as a double-dip recession at some point, but in reality it's all part of the ongoing economic crisis that we've seen for the last five or six years. TGR: One of the indicators people look at to determine the existence of a recession is the unemployment rate. Why you are seeing a different number for that than some of the officially announced numbers? JW: Unemployment is a matter of how you define it. The government has six measures of unemployment. The headline number is the third level of unemployment (U3). That measures people actively seeking work in the last four weeks. That doesn't mean just reading newspaper want ads; it is people mailing resumes and doing interviews. That number was reported at 7.9% for January, but that's not the common experience. The broadest measure that the government has is U6. That includes the people defined as unemployed in U3 plus what they call "discouraged workers" and those who are working part-time for economic reasons, people who are underemployed. U6 was at 14.4% in January.
If you accounted fully for all discouraged workers, not those who have been discouraged for less than a year as counted by the Bureau of Labor Statistics for U6, you'd find that the unemployment rate is up around 23%. The recession has gone on for so long that people have given up looking for work, but those individuals still consider themselves to be unemployed. If there were jobs available, they would take them, but the government doesn't count them in the headline labor force statistic. That is why the official unemployment rate is shrinking while the number of people who want to work, but can't find a job, has actually increased. TGR: Are some of these discouraged unemployed actually retired? JW: Whether individuals are just coming out of school or finding that they have to come out of retirement in order to make ends meet, so long as they are looking actively for a job, again, the government counts them as unemployed. Formerly retired individuals, who want to work but end up as discouraged workers, still are counted as unemployed in the broader measures. They're just not able to find work and have given up looking for work because there are no jobs. As to common experience, if you were to survey everyone in the country as to whether he or she was unemployed, you'd get a response suggesting something close to the 23% unemployment rate. The average person doesn't have to think too long to tell you whether or not he or she is unemployed. He or she may consider him or herself unemployed, but may not necessarily be counted in the headline government's numbers. Again, the "accurate" unemployment number remains a matter of definition. Common experience is close to 23%. TGR: Another indicator of the health of the economy is housing starts. You called December housing starts "not statistically significant." The Department of Commerce reported a 12.1% increase and analysts are saying it's the biggest jump in four years. Are you counting different things? JW: I'm looking at the official numbers. The problem is that the official numbers are just not too meaningful. The 12% headline gain has a 95% confidence interval around it of +/- 16%. Within the Census Bureau's usual reporting error, the monthly gain was statistically insignificant; it just as easily could have been a monthly contraction.
The current level of housing starts is still off about 70% from the peak of activity in 2006. We are certainly off the bottom in the housing market, but it's still at historically very low levels. The month-to-month numbers are not meaningful because of the uncertainties of the surveying and problems with seasonal adjustments. Seasonal adjustments have become much more volatile and increased the uncertainty around the reported month-to-month changes since we've had this terrible downturn. Specifically for December, the housing series likely received some boost for the month from unseasonably mild weather and from rebuilding activity tied to Hurricane Sandy. Seasonal distortions are fleeting, and the rebuilding gains will be temporary. Separately, the mechanism is not in place for sustained growth here. That also applies to retail sales. In both instances, you're looking at problems in the banking system and at structural problems with consumer liquidity. TGR: Retail sales is another indicator people look at to determine the strength of the economy. You reported a contraction in the third quarter of 2012. The Census Bureau reported a 4.7% growth year over year based largely on increased car sales. Why are those numbers different and where do you see that going in the rest of this year? JW: I look at those numbers adjusted for inflation, and, as an aside, that third-quarter contraction was quarter-to-quarter, not year-to-year, although the annual growth is close to new-recession territory. The government adjusts the GDP for inflation as a way, theoretically, to measure underlying economic activity as opposed to measuring activity that can be affected heavily simply by rising prices. It is the same thing with retail sales. If you back out official CPI inflation, as is done by the St. Louis Fed, you'll find that a lot of the headline retail sales growth has been tied to inflation, but the official CPI inflation rate is understated. That results in too high an inflation-adjusted growth rate. Again, we also face the fundamental issue of bad quality month-to-month numbers because of a variety of seasonal adjustment problems. That should leave the average person without much confidence in what's actually being reported month-to-month.
You really need to look at the underlying fundamentals in order to make any sense of what is happening in the real world. Fundamentally, retail sales and housing growth are based on the condition of the consumer. The consumer increasingly is illiquid. Reports of median household income, adjusted for inflation, show that household income plummeted well into 2011 and has been stagnant at the lowest levels of the current cycle ever since. The average guy is not staying even with inflation. That is important, because income drives consumption, and consumption accounts for more than 70% of GDP. If, net of inflation, you don't have sustained growth in income, you're not going to have sustained growth in consumption. You can, however, experience temporary growth by borrowing activity through debt expansion. Former Federal Reserve Chairman Alan Greenspan recognized the deteriorating fundamentals of household income, and encouraged massive debt expansion in order to fuel ongoing economic growth. That, however, led to the debt panic in 2008. Debt-fueled growth is not sustainable, and consumers, still lacking adequate income growth, now also lack the option of significant debt expansion in order to fuel consumption growth. Problems in the banking system continue to impair credit availability for consumers. TGR: Now that loans are more difficult to get, are you predicting that retail and housing probably aren't going to bounce up in 2013? JW: Exactly. The only type of loan growth to consumers has been in government lending of student loans. It has not been in the types of loans that drive auto or retail sales. With the shortfall in income, there's no way the consumer could support sustainable growth in consumption and without that you don't have sustainable growth in the GDP. That is why we haven't had an actual recovery in inflation-adjusted GDP. Also, there is no recovery pending, and that has all sorts of terrible implications for the financial markets and the current fiscal circumstances in the United States. TGR: What does all of this mean for the stock market? If people believe the government numbers and have a false vision of the economy, does that really hinder investors if the rest of the market believes those same positive numbers? Don't we always hear that stocks move based on perception rather than reality? JW: For some time, I don't think stocks have been moving based on anything tied to reality; the market has had no appearance of being rational. There are other factors at work here with the result of some very unusual trading activity. What will happen, eventually, is that underlying economic reality will become undeniable, and even official reporting will be revised to a pattern of contraction, an official double-dip recession. That likely will not be good news for stocks. TGR: If there is no real recovery, will the Dow drop or stagnate? JW: A weaker economy is not good for corporate profits. The government will try to compensate, which will just worsen the liquidity crisis, and sovereign solvency issues will increase. At some point, the global markets are going to turn very heavily against the U.S. dollar. That will spike domestic inflation, which will lead to higher interest rates. Again, that is all generally bad news for the financial markets, but good for gold. TGR: You and I have talked quite a bit about the pros and cons of adjusting inflation figures in the past. The idea of a chain-weighted urban CPI (CPI-U) gained mainstream media attention during the fiscal cliff debate as a way to control costs by slowing Social Security outlays. How would that work? And how would this be different from what is already happening? JW: This is not new. The government went through a similar process back in the 1990s and did, in fact, change the way the CPI-U was reported. The goal then was to reduce the reported rate of inflation along with a resulting reduction in the cost of living adjustments for programs such as Social Security. This enabled the government to reduce the deficit without anyone in Congress having to do the impossible—voting to cut Social Security. What the government tried to do was change the CPI from a fixed-weight index where it effectively measured the cost of inflation—reflecting the ability to maintain a constant standard of living—to a cost of living measure based on the idea that people would substitute hamburger for steak, for example, if steak got too expensive. This is a declining standard of living measurement. I can't imagine any use for such a measure other than government's playing games. But, even with these tricks, the CPI-U still is not fully substitution based. The experimental chain-weighted CPI, the C-CPI, however, would be just that, fully substitution based. Using the C-CPI would allow the government to knock another 0.6–1% off official inflation, further reducing the cost of living adjustments to Social Security. It's unconscionable. It's effectively a fraud. Shame on the government for trying to do that. This impacts people's retirements. There was some protest when the idea was floated as one way to deal with the Fiscal Cliff, and the politicians pulled back. I fully expect they will try to push it forward again, in the negotiations in the months ahead. Politicians should just be straightforward with the American people and say, "We can't afford to pay the cost of living adjustments that we had contracted." At least people would know what is happening and could plan accordingly. TGR: Let's talk about what is happening using some real numbers. I'm hearing a prediction of 2.3% inflation in 2013, up from 1.7% in 2012. You have your own alternative CPI-U that's a measure of the amount needed to maintain a constant standard of living. Does that shadow the government figures, following the same general trend, but at a higher number or do the two numbers move independently? JW: The pattern generally is the same. I have gone back through the adjustments that the government has made and added them back in to the final inflation calculations. I'm either adding in somewhat over 3% or somewhat over 7% to what the government reports, depending on whether I am using 1990- or 1980-based methodologies. TGR: If the trends are the same, aren't people using the government figures at least getting a true idea of the direction of inflation, whether things are getting better or worse, and a general idea of how much of a raise they will have to request in order to maintain their standard of living? JW: They may be getting the relative trend year-to-year, but, at the moment, the official numbers are well shy of the actual magnitude. The magnitude of actual inflation outweighs the magnitude of the short variation, at present. For example, there was a period in recent years where the official CPI went negative year-to-year. My numbers slowed, with year-to-year change softening, but they did not go negative. TGR: Let's talk about something that we can touch and hold and everyone understands—precious metals. You have said that despite the Sept. 5, 2011, $1,895/ounce ($1,895/oz) gold price and the April 2011 $48.70/oz silver price, precious metals have yet to re-hit their 1980 historic levels, adjusted for inflation. How does the price of gold move historically versus inflation? JW: Gold is a basic inflation hedge, over time. Since the founding of the Federal Reserve (active in 1914), the U.S. dollar has lost 95.7% of its purchasing power, based on the government's headline CPI number. Based on the ShadowStats inflation estimate, reflecting 1980 methodologies, the dollar has lost 98.9% of its purchasing power. In that same 99-year period, the dollar also has lost 98.9% of its purchasing power against gold. Gold has fully offset the pummeling effects of domestic inflation on the purchasing power of the U.S. dollar, as measured over decades. TGR: Another place where reality often shows through is energy prices: gas and electricity. What did you see for inflation in energy prices in 2012 and what is the outlook for the energy commodities and the stocks behind them in 2013? JW: All this ties back to the fiscal crisis, the U.S. government's effective long-term insolvency. If the government cannot bring its annual budget deficit under control, eventually it will have to meet its obligations by printing money. That creates inflation, a hyperinflation. This is why the global markets are so cautious at present. Very few people want to hold dollars long term. A massive flight from the dollar, which is likely this year, would be the beginning of a major inflationary period. The problems with the dollar would boost oil prices in dollar-denominated terms, with resulting higher gasoline prices and higher domestic inflation. This is despite not having a strong economy. TGR: So you're predicting higher gas prices, but a weaker economy. JW: Right. I'm looking for a weaker economy with higher inflation—driven by bad monetary policy reflected in a weak U.S. dollar—which will have a big impact on dollar-denominated commodities. TGR: What is your overall prediction for 2013 inflation and would that change if quantitative easing ended? JW: I can't give you a hard number but I expect inflation to increase rapidly. It will certainly be picking up by the end of the year. It is unlikely that the Fed will be able to back off its quantitative easing. TGR: Based on this outlook, what can investors do to protect themselves? If we know the truth, how can that help investors prosper—or at least survive? JW: First, concentrate on preserving the purchasing power of your wealth and assets. The best hedge is physical gold, silver and other hard assets outside the dollar. Look at stronger currencies. I still like the Swiss franc, the Canadian dollar and the Australian dollar as hedges. You need to hold the hedge through the tough times. If gold is up at $100,000/oz, don't get excited and take profits, because the gain there just reflects maintenance of your purchasing power. It suggests the magnitude of the purchasing power you've lost in the dollars you did not put into hard assets. Remain liquid so you can get through the tough times. If you preserve your wealth and you are liquid, you will have some of the most interesting investment opportunities that anyone has ever seen, once the system recovers. I can't put any timing on that, but it's not likely going to be a couple of months. It's more likely going to be a period of years. TGR: Thank you so much for the advice. JW: Always happy to talk. Walter J. "John" Williams has been a private consulting economist and a specialist in government economic reporting for more than 30 years. His economic consultancy is called Shadow Government Statistics (ShadowStats.com). His early work in economic reporting led to front-page stories in The New York Times and Investor's Business Daily. He received a bachelor's degree in economics, cum laude, from Dartmouth College in 1971, and was awarded a Master of Business Administration from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page. |
| Goldwatcher – More Sunshine, Less Stormy Weather Posted: 10 Feb 2013 12:47 PM PST During a recent presentation at the World Money Show in Orlando, Frank Holmes gave a presentation titled "Goldwatcher – More Sunshine, Less Stormy Weather." As the CEO and Chief Investment Officer at US Funds, Frank Holmes runs several funds including a precious metals, natural resources and emerging markets funds. The full presentation is really worth reading. It is accessible on this page. Out of the 77 slides, we have selected a couple of them with interesting insights. The technicals of gold bullion look good. The gold price recently flashed a full buy signal. During the whole bull run since 2001, the oscillator has been only a few times in a comparable condition.
The drivers of gold are ironically simultaneously what people call a "fear trade" and a "love trade." The fear trade applies mainly (but not only) in the West where the economies are being flooded by additional liquidity ("money printing"). In contrast, the East has always shown a love for gold; it has been part of their culture historically to buy gold as a gift for weddings and festivals. The fundamentals in the East show an appreciation of people's purchasing power justifying a continuation of their demand for physical gold. Those ideas are summarized in the following slides.
Frank Holmes also talked about the gold stocks. While the disappointment of the shares has been prevalent over the past 2.5 years, today's undervaluation is so extreme that it is very reasonable to expect a rebound. Investors should really understand the difficult conditions in which gold and silver miners are operating. The following two slides summarize the most important two challenges.
This article showed only some highlights of Frank Holmes his presentation. Please click here for the full presentation. We recommend signing up for Investor Alert Today, a free newsletter with investment tips from Frank Holmes: USfunds.com/subscribe. |
| Up or Down? Precious Metals At Important Crossroad Posted: 10 Feb 2013 12:35 PM PST "Follow the munKNEE" via twitter & Facebook or Register to receive our daily Intelligence Report Precious Metals are now at an important crossroad….Over the last So writes Tiho Brkan (http://theshortsideoflong.blogspot.ca) in edited excerpts from his original article* entitled Precious Metals At Decision Point.
Brkan goes on to say in further edited excerpts: Charts 1/2: Precious Metals at technical decision points The chart below shows Gold and Silver technical triangles, as well as major support and resistance lines. The major support levels for the metals are $1,550 and $27, while major resistance levels are $1,800 and $35 respectively. Interestingly, the triangle battle between bulls and bears is currently right in the middle of those trading ranges and an eventual decision point is coming very shortly. Furthermore, the current price action for both metals is coiled between the 50 day MA on the upside and the 200 day MA on the downside. A breakout or a breakdown will most likely set a trend for the next few months.  Source: Short Side of Long Chart 3: Post election seasonality supports a bullish breakout While the US stock markets almost always tends to rally into an election period, Precious Metals tend to decline. More importantly, the post election period tends to be one of seasonal strength for the Precious Metals sector, as seen in the chart below. Usually some type of an intermediate low occurs at the beginning of February and the current technical triangle could be a perfect catalyst for a price rally.  Source: Seasonal Charts Charts 4/5: Unlike equities, sentiment in Gold is one of disinterest Sentiment also supports a possibility of an upside breakout too…Consider the charts below which show that physical Gold holdings within the GLD ETF continue to bleed out, while hedge funds have reduced net long positions to the lowest level since August 2012, when Gold bottomed at $1,530. While neither of these indicators signal that we will definitely rally, the probability of a bullish case scenario continues to increase. One thing is for sure, bullish expectations seen in October 2012, when the majority of strategists, analysts and newsletter writers expected Gold at $1,900 has subsided.   Source: Short Side of Long Chart 6: Gold Miners are oversold on relative basis Gold Miners also remain oversold and out of favour… Traders and investors everywhere have been throwing in the towel, which usually indicates that a bottom is near. Furthermore, Rydex PMs Fund Flows indicate extreme pessimism only witnessed during the panic of 2008 as well as a major sell off into May of 2012.  Source: SentimenTrader Furthermore, looking at the recent breadth numbers within the whole sector, we note that only 15% of all miners are trading above the 50 MA and 23% above the 200 MA. Also, breadth indicators like McClellan's Oscillator and Summation Index both signal an intermediate bottom is at hand. Comparing these oversold readings against the general stock market, which is currently in euphoria, shows a large contrast. Financial stocks have more than 90% of components above both the 50 MA and 200 MA. Just about every other major equity sector is also overbought. Therefore, a correction in equities could send some money back into Gold Miners, as we experience somewhat of a mean reversion. Chart 7: Long term demand will remain robust as global currencies are devalued In his recent newsletter, Frank Holmes showed [see chart below] that just about every major central bank has plans to increase their balance sheets well beyond 2013. In other words, important currencies around the world are being devalued and the only way one can protect themselves in the long run is to own assets which will adjust to this currency devaluation. While some prefer equities and others prefer real estate, history shows that the best way to protect yourself during times like these is to own very rare and mostly precious assets.  Source: Frank Holmes Chart 8: Gold is not in a bubble… I do admit that Gold has risen very sharply over the last 12 annual years and since middle of 2011, I have been calling for a prolonged consolation period and even a major cyclical bear market. It is only normal for assets to correct 30% to 40% every few years, especially great performers such as Gold over the last decade. However, the talk of a Gold bull market end is very premature and the talk of Gold being in a bubble is ludicrous. The Macro Trends chart below shows that overlapping Gold with previous major bubbles in the Nasdaq, Crude Oil and even Gold throughout the 1970s, shows the current price at very un-elevated and inexpensive levels.  Source: Macro Trends Chart 9: … and could surprise on the upside! Simone Alberizzi shows in his chart [below] that for Gold to mimic the Nasdaq euphoric of the late 1990s, it would have to reach over $10,000 per ounce. Considering this historical data, we can see that during the secular stock bull market of 1982-2000, Nasdaq managed to achieve a return of 26 times its value. Also consider that during the 1970s and into January of 1980, Gold also managed to return more than 23 times its value. When one compares those astronomical moves to the current bull market, hopefully we all come to a conclusion that Gold still has a long way to go.  Source: Simone Alberizzi Charts 10/11: Silver has under performed in the last two years… While realising Precious Metal fundamental conditions continue to improve and assets like Gold are likely not anywhere close to the bubble stage, I once again turn my attention back to the shorter term time frame [as seen in the chart below]. In particular I favour playing the Silver triangle right here and will consider entering long if and when the price breaks from its current formation.  The price of Silver peaked on 25th of April 2011 at almost $50. The correction has been ongoing for more than 1 year & 9 months, and with the price still trading 37% below its all time high, purchasing at current levels definitely falls under the investors rule book of "buying low" and hopefully in some years from now "selling high".  Source: Objective Trader / Simone Alberizzi / Short Side of Long Chart 12: … and still remains inexpensive when adjusted for CPI Just to return to its nominal value of $50 per ounce, last seen in January 1980 and April 2011, Silver would have to rally almost 60% from the current levels. That in itself would be an amazing return, but the true value of this speculative metal [lies] with its possibility [of re-testing] its inflation adjusted highs of January 1980. For that to occur, Silver will have to enter a mania and most likely clock a triple digit handle.  Source: Macro Trends
*http://theshortsideoflong.blogspot.ca/2013/02/precious-metals-at-decision-point.html
Related Articles: 1. With Gold Stocks Suffering So Badly Should You Sell Out or Buy In?
Gold stocks are down between 20% and 30% over the past year yet, in that same timeframe, the price of the gold has risen. As a result, sentiment toward gold stocks is pitiful. Even diehard gold bugs are tired of losing money in gold stocks and have been dumping their shares in disgust. This article discusses 4 main reasons I can think of why gold stocks might be so cheap. Words: 444 2. Equities Should Outperform Gold in the First Half of 2013- Here's Why
I expect gold to move sideways or trend down in the first half of 2013 [and, as such,] I would consider this as a good opportunity to buy gold as there is still no long-term fix in place for the economic and financial problems [that the U.S., and indeed the world, face. Here's why]. Words: 665; Charts: 5 3. Gold Miners Watch: Much Further GDX/HUI Weakness Could Result in a MUCH Further Decline – Here's Why
GDX is currently at approx. 42 but should it drop below the 39 & 40 levels reached last May and July our analysis shows that a good deal of sellers could come forward and push GDX a large percentage lower. That double bottom needs to hold in GDX!!! Take a look at the chart below and you will clearly see why that is the case. 4. Finally the Final Bottom in Gold Stocks Is Coming – Finally!
The mining stocks have been a disaster if you've invested in the average fund, GDX or GDXJ and if you've invested in the wrong stocks, they've been a total disaster and you will now hate the sector forever. We've certainly been surprised by this protracted struggle. In my articles you've heard me talk about accumulating on weakness, buying support, being patient and waiting for better opportunities. Folks, this next week is one of those opportunities. The gold stocks are setting up similarly to the bottom in 2005 [and, as such,] are set to test a major bottom and could be on the cusp of a major reversal. Let me explain. Words: 438; Charts: 3 5. Goldrunner Update: Gold, Silver & PM Stock Sentiment Sucks BUT the Fundamentals Are Off the Wall!
Sentiment in the precious metals sector is in the toilet yet the fundamentals for the sector are off the walls positive. That is not secret, but it is what creates huge market moves in the direction of the fundamentals. In fact, market management will never move price against the underlying fundamentals for too long a period of time. 6. Gold Stocks Go Up Dramatically In Inauguration Years – Will Another +20% Increase Occur This Year?
President Obama will be sworn into office for a second term on January 21 and that's good news if you own gold stocks. Why? Because gold stocks, [as represented by the XAU] have increased, on average, by 20% during inaugural years since 1985 (28% in 2005; 36% in 2003). While there's no real rhyme or reason as to why gold stocks thrive in inauguration years – statistical anomaly or otherwise – it is yet another reason to buy gold stocks right now. Words: 312; Charts: 1 7. Keep the Faith – This Bull Market in Gold STILL Promises to Be One for the History Books! Here's Why
9. A Peek at Possible Developments in Gold, Silver, Mining Shares & the Dow
11. Goldrunner: HUI Index Could Go As High As 1000 in 2013! Here's Why
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| Adam Werbach: The Future of Sustainable Business – YouTube Posted: 10 Feb 2013 10:59 AM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| GoldMoney article: The impossibility of economic calculation in a fiat money world Posted: 10 Feb 2013 10:57 AM PST The following GoldMoney article is posted here. The impossibility of economic calculation in a fiat world 2013-FEB-10
 It is not normal for businessmen to fret over this. They tend to work from management accounts which are usually prepared monthly, and over that time-scale a depreciating currency is unnoticed – except in the case of monetary extremes. However, businessmen should pay attention to the problem, because the accumulation of entrepreneurial wealth is achieved over many years; its productive value can be significantly altered by fluctuations in the purchasing power of unstable money. Governments in countries like the United Kingdom have destroyed much of their manufacturing industry through currency depreciation, while Germany contrasts with a history of engineering excellence and a firm currency. The German business owner in the post-war years had relative certainty of economic calculation, allowing him to build up his productive wealth; while the British business lobby resorted to encouraging successive governments to keep costs down by devaluing the pound, rather than investing their own resources in more efficient production. Reducing costs by managing the currency is, to put it less politely, all about robbing the workforce of the purchasing power of its wages. But the workforce is, in economic terms, made up of individual entrepreneurs selling their skills and labour to employers. They are the unconscious victims of devaluation as indeed are small businesses, but at least in the short-term the central planners manipulating fiat money congratulate themselves that jobs have been saved. The cost comes later, as consumers – who in turn are also entrepreneurs and savers – pay the bill through higher prices and lose on their savings through lower interest rates and monetary value. So where’s the benefit? None. The history of nations whose governments respect sound money, such as Germany and Japan in the post-war years, has been one of persistent economic progress, despite otherwise economically incompetent governments. This is in contrast with the UK and some European countries, whose continual devaluations were always accompanied by economic underperformance. Since then all governments have increased their currency debasement efforts. Nevertheless, it is striking that businesses do better with a stable currency in the long run than with the supposed benefits of these continual devaluations. This lesson is not so clear to today’s economists, because Japan blew up over 20 years ago, Germany ditched her currency for the euro, and now we have a worse set of problems. But those of us who understand that currency devaluation only serves to defraud the majority of society must be alarmed that the governments of nearly all the advanced economies are racing each other to rob their citizens in this way. Instead of bringing about a Lazarene recovery in the economy, this approach is already failing, because the very basis of economic calculation is being destroyed. Who knows the value of anything anymore? We do however know the inevitable outcome of this lunacy, and it is not good Alasdair Macleod Head of research, GoldMoney Alasdair.Macleod@GoldMoney.com Twitter @MacleodFinance |
| Posted: 10 Feb 2013 10:45 AM PST Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 and last for 2-3 years or maybe later). Price target DowJones/Gold Ratio ca. 1:1 -- Price target Gold/Silver Ratio ca. 10:1 Read More... |
| These 4 Indicators Say “No Stock Market Correction Coming – Yet” Posted: 10 Feb 2013 10:23 AM PST "Follow the munKNEE" via twitter & Facebook or Register to receive our daily Intelligence Report While I remain cautious on stocks and the risk trade, the technical So writes Cam Hui (http://humblestudentofthemarkets.blogspot.ca) in edited excerpts from his original article* entitled Correction? Watch The Cyclicals!.
Hui goes on to say in further edited excerpts: SPY At New High Regular readers know that I have been cautious on stocks lately. The market action last week is best characterized as volatile and sloppy. The new high achieved on SPY on Friday was accomplished on low volume and a non-confirmation on On Balance Volume (OBV) [as seen in the chart below so,] at this point, any call for a correction is at best conjecture. (click to enlarge) CYC:SPX Still In Uptrend I am watching the relative action of the cyclical stocks to see if a correction has truly begun. The chart below of the relative return of the Morgan Stanley Cyclical Index (CYC) against the market illustrates my point. CYC remains in a relative uptrend and it has pulled back to test the relative uptrend line – but I cannot call it a technical breakdown. (click to enlarge) XLY:SPY Ratio Still In Uptrend Similarly, the relative performance of the Consumer Discretionary stocks (XLY) against the market as a measure of the risk-on trade shows that this sector remains in a solid relative uptrend. Should the market correct, the relative uptrend line is likely to be broken. (click to enlarge) KOSPI Still In Uptrend Globally, the South Korean economy is known to be highly cyclical and the KOSPI is used as a measure of cyclicality. Currently, KOSPI is showing a pattern similar to the relative return of CYC to SPX – a pullback to test the uptrend line – [as can be seen in the chart below]. It could be said, however, that since South Korea is a competitor to Japan in exporting capital goods to China, the recent JPY devaluation is creating headwinds for Korean stocks and the pullback may be reflective of those circumstances. (click to enlarge) Conclusion In conclusion, while I remain cautious on stocks and the risk trade, the technical picture shows that the uptrend to be intact and the bulls should still be given the benefit of the doubt for now. Nevertheless, my inner trader is closely watching these cyclical indicators and staying long with very tight stops.
*http://humblestudentofthemarkets.blogspot.ca/2013/02/correction-watch-cyclicals.html (Subscribe to Humble Student of the Markets by Email)
Related Articles: 1. Don't Buy This Stock Market. It Isn't Worth the Risk. Here's Why
Don't buy this stock market. It isn't worth the risk. Relative to earnings, most stocks aren't expensively priced—but there's a reason for that. [Let me explain.] Words: 318 2. Bull Market in Stocks Isn't About to End Anytime Soon! Here's Why
As we all know, money printing always leads to inflation. It's just a matter of figuring out which assets get inflated. This time around gold is not the only beneficiary, stocks are, too, and I'm convinced that the chart below holds the key to the end of the bull market. Words: 475; Charts: 1 3. Insider Trading Suggests That a Market Crash Is Coming
What you are about to read below is startling. •Every time that the market has fallen in recent years, insiders have been able to get out ahead of time… •[What] is so alarming [this time round is] that corporate insiders are selling nine times as many shares as they are buying right now. •In addition, some extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S. crash by the end of April. •So what does all of this mean? [Could it be that they] have insider knowledge that a market crash is coming? Evaluate the evidence below and decide for yourself. Words: 570 4. QE Could Drive S&P 500 UP 25% in 2013 & UP Another 28% in 2014 – Here's Why
Ever since the Dow broke the 14,000 mark and the S&P broke the 1,500 mark, even in the face of a shrinking GDP print, a lot of investors and commentators have been anxious. Some are proclaiming a rocket ride to the moon as bond money now rotates into stocks….[while] others are ringing the warning bell that this may be the beginning of the end, and a correction is likely coming. I find it a bit surprising, however, that no one is talking of the single largest driver for stocks in the past 4 years – massive monetary base expansion by the Fed. (This article does just that and concludes that the S&P 500 could well see a year end number of 1872 (+25%) and, realistically, another 28% increase in 2014 to 2387 which would represent a 60% increase from today's level.) Words: 600; Charts: 3 5. 5 Reasons To Be Positive On Equities
For the month of January, U.S. stocks experienced the best month in more than two decades [and the Dow hit 14,009 on Feb. 1st for the first time since 2007]. Per the Stock Traders' Almanac market indicator, the "January Barometer," the performance of the S&P 500 Index in the first month of the year dictates where stock prices will head for the year. Let's hope so…. [This article identifies f more solid reasons why equities should do well in 2013.] Words: 453 6. World Economy & Market Forecast: More Sunshine & Less Stormy Weather Ahead
It seems clear that there are a number of investors who have gained confidence in the global economy and are seeking to capture the growth opportunities taking place around the world. With the European crisis comfortably in the rear view mirror and global central banks taking the position that they will continue their easing policies, investors have taken their foot off the brake and have begun to accelerate….We see more sunshine and less stormy weather ahead [and explain why that is the case in this article]. Words: 695; Charts: 3 7. Start Investing In Equities – Your Future Self May Thank You. Here's Why
As Winston Churchill once said: "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty" and in that vain I challenge all readers to fight off the negativity, see long-term opportunity in global equity markets and, most importantly, remain invested. Your future self may thank you. Words: 732; Charts: 6 8. What Recovery? Contradictions Between Reality & Political Claims Are Everywhere!
There is no recovery, regardless of what the elite and their minions in the media want you to believe. The economy is sick. It was made so by the malpractice of government and will become even weaker as government continues to administer the poison that got us to this point. The political class's version of remedy is akin to the medical profession's practice of bloodletting. Neither does any good and both, carried to extreme, are fatal. [Let me explain more fully.] Words: 548 9. Ignore Wall Street Cheerleaders: Market Technicals, Fundamentals & Other Info Says Otherwise!
[In spite of what] the typical Wall Street cheerleaders, I mean strategists, are predicting, we see the equity market ever more closer to its cyclical top, miners about to retest a major bottom and hard assets with a new catalyst. [This article analyzes 9 pieces of information, complete with charts, that show what is actually going on in the marketplace at this point in time and what the short-term future holds.] Words: 930; Charts: 8
Without economic growth, and real economic growth at that, there can be no meaningful long-term economic recovery in the developed countries. Growth or lack thereof will have to be reflected in the financial markets over time. Currently, I continue to see a disconnect between where the financial markets are pricing things, and where I think they ought to be pricing things. Words: 784
At some point we are going to see another wave of panic hit the financial markets like we saw back in 2008. The false stock market bubble will burst, major banks will fail and the financial system will implode. It could unfold something like this: Words: 660 12. 5 Sound Reasons Investors Would Be Better Off On the Sidelines Than In the Market
New year festivities have continued on the stock market even as the Christmas trees have been put away. The "death of the fiscal cliff," not horrible job numbers and supportive comments from Mario Draghi on the other side of the pond have led to bold and bullish behaviors over the last three weeks. While no one can predict the exact peak, here are five reasons you're better off on the sidelines than in the market. 13. The S&P 500 Continues to Rapidly Build Its "Domed House" As Projected
14. These Charts Suggest a Possible +/-60% Decline in the S&P 500 by 2014
15. 3 Reasons the Stock Market Could Rally & 3 Reasons to Be Cautious Near Term
16. Don't Ignore This Fact: "Greedometer Gauge" Signals S&P 500 Drop to the 500s by July-August, 2013!
17. Current Market Overvaluation (from 33% – 51%!) Suggests Cautious Long-term Outlook
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| Sunday Reflections - Dr. Benjamin Carson speech goes viral Posted: 10 Feb 2013 10:10 AM PST Real Clear Politics sets up the video below: "Famed Baltimore neurosurgeon Dr. Benjamin Carson addressed the National Prayer Breakfast on Thursday morning on healthcare. Dr. Carson often criticized Obamacare and government intrusion in healthcare while President Obama sat in the audience. Dr. Carson encouraged a program where newborn babies are given health savings account as an alternative to Obamacare." Bravo to Dr. Carson, a man we have not been aware of until now, but plan to seek out more from him. The video has since gone viral on YouTube, approaching a million views with several different people having uploaded the speech. (Full size video on page 2. About 27 mins.)
Direct link to YouTube: http://www.youtube.com/watch?v=PFb6NU1giRA&feature=player_embedded Original Source - C-Span via YouTube on Real Clear Politics
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The following rather stunning documentary provides a critical insight into what Europe (and Argentina once again) could well be progressing towards. There is a reason we highlight the 'scariest chart in Europe' as that of youth unemployment and with the central banks printing money at ever increasing paces and the next round of global competitive devaluation beginning, the debt slaves will suffer ever more. In 2001, Argentina collapsed; after many years of apathy in the country, the insurrection exploded. As 
On Sunday, Billionaire Eric Sprott told King World News, "I'm sure we'll be seeing $100 and $200 prices for silver."
China has been a very active purchaser of gold for its reserves in the last few years, as 
The purpose of keeping accurate accounts is to quantify net worth at any given point in time – as well as the change from a prior date. It goes without saying that the measure used, money, should be constant if comparisons over time are to mean anything. Only then do prices of capital goods, consumer goods and services truly reflect their changing values, giving important signals to businessmen. With unstable fiat money market signals lose much of their meaning.
There is no economic recovery, and there are no signs that a recovery is coming, says Shadowstats.com author John Williams. In this 
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