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Friday, February 8, 2013

Gold World News Flash

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Gold World News Flash

Gold Outside Day but in Center of Range

Posted: 07 Feb 2013 11:35 PM PST

courtesy of DailyFX.com February 06, 2013 04:01 PM Weekly Bars Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0 Commodity Analysis: Gold’s rebound from the 61.8% retracement of the rally from 1522 and former resistance (June-August 2012 highs) is constructive but the near term picture is defined by roughly 1650 and 1700. A break of that zone will present the next directional opportunity. Commodity Trading Strategy: Flat LEVELS: 1626 1642 1652 1685 1697 1711...

This story shall the good man teach his son

Posted: 07 Feb 2013 10:59 PM PST

1:04a ET Friday, February 9, 2013

Dear Friend of GATA and Gold:

Jim Sinclair tonight appeals to his comrades in golden arms for a little courage.

"Gold has always been a war between sound finance and debt-ridden currencies," Sinclair writes. "When you entered the fray you joined a band of brothers and sisters as foxhole buddies in this war for both gold's and our freedom." He proposes that they take a simple pledge not to be frightened and then offers Kenneth Branagh's performance of the St. Crispin's Day speech from "Henry V," likely the greatest and noblest passage from Shakespeare, who has the king's eloquence and righteousness carrying his vastly outnumbered soldiers to victory over the French army at Agincourt.

Gold bugs surely are engaged in a war -- not just a war between sound finance and dishonest currencies but a war between democracy and plutocracy, imperialism and national self-determination, truth and lies, justice and fraud, a war against all the power and money in the world. (Well, maybe not quite all the money, insofar as the gold bugs have some of the gold, as do some of the countries resisting imperialism.)

Shakespeare's Henry foresees that the courage of his soldiers will gain them remembrance "from this day to the ending of the world." Even Sinclair might not make such a grand claim for the gold bugs. But whether they are to be remembered or not, still, as Shakespeare writes, "This story shall the good man teach his son." It is the story Sinclair has been telling and GATA has been documenting and archiving lest it be forgotten again:

http://www.gata.org/taxonomy/term/21

And the story is being heard -- even, the other day, by the Financial Times:

http://www.gata.org/node/12180

So as Sinclair writes there is no reason to lose heart now.

His commentary is headlined "The CIGA Pledge," it contains a link to a video of Branagh's performance, and it's posted at JSMineSet here:

http://www.jsmineset.com/2013/02/07/the-ciga-pledge/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Opinion Around the World Is Changing
in Favor of Gold -- Find Out Why

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

Goldman Sachs Jeff Currie Continues to Botch WTI-Brent Spread

Posted: 07 Feb 2013 09:56 PM PST

By EconMatters

 

Revise enough times; you might just get it right!

 

Jeff Currie originally said that by January of 2013 the WTI-Brent spread would narrow to $4 because of the Seaway pipeline; Jeff amended this target after Cushing inventory continues to build even though the Seaway route was in operation (June 2012 100,000 barrels per day) to $8 by January of 2013 once the pipeline was expanded (January 2013 400,000 barrels per day). Now Jeff Currie states that the spread will shrink to $6 in the second quarter of 2013 (No more pipeline expansions during 2nd quarter).

 

Oil Industry full of Bad Analysts

 

I hope Goldman Sachs doesn`t trade on his recommendations. Jeff Currie has to be one of the worst oil analysts in the industry, and the oil industry is full of bad analysts. How he has continued to be employed in this capacity despite being incorrect on almost every major call of the last decade regarding the oil markets is astonishing. 

 

I guess Jeff Currie is another case where job performance for analysts on Wall Street is less critical than keeping good relationships with upper management. Jeff Currie must have pictures on somebody high up in Goldman Sachs because he couldn`t analyze the oil markets if his life depended upon it.

 

Further Reading - Counterpoint to Goldman Sachs Chief Commodity Strategist

 

WTI-Brent Spread $20

 

Well it is January of 2013 and Jeff the WTI-Brent spread is trading around $20, the same range it was for 2012, and Cushing Oklahoma has nearly 52 million barrels in storage, with no signs of decreasing anytime soon in a significant manner. 

 

 

The Spread existed when Cushing only had 30 Million in Storage

 

For context a year ago Cushing storage stood at 30 million barrels, and there was a significant spread back then between the two oil benchmarks. So even if magically robust demand for products picked up all over the world, do you envision Cushing storage being reduced down below 30 million barrels?

Maybe if inflows were flat or declining! But if the trajectory of domestic production continues for 2013 which seems as certain as Jeff Currie being wrong again in the second quarter then inflows into Cushing will be trending higher. 

 

Refiners on the other side of trade

 

The refiners have been on the other side of this trade, actually putting money down on the trade by committing resources to expanding their operations to take further advantage of this spread continuing. There is a reason that Hess closed the refinery on the East Coast, they cannot make the same margins that the Gulf Coast refineries can because of cheap access to WTI oil. 

 

Jeff Currie has woefully underestimated the magnitude of the rise in domestic and North American production of oil. Cushing is going to need to expand storage facilities well beyond 100 million barrels to keep up with the domestic drilling activity in North America. There are so many projects that haven`t even begun producing but will come online over the next 5 to 10 years.

 

 

$6 Average Spread for 2nd Quarter seems implausible 

 

Therefore, even if we take the best case scenario for a 30 million drawdown at Cushing, and given the continuing troubles in the Middle East, and throw on top of that the dynamics of benchmarking products to the global Brent Oil contract. 

 

It seems highly unlikely that the WTI – Brent Spread averages $6 for the second quarter. The best chance for a contracting spread of this magnitude would be a severe "Risk Off" event as the spread has narrowed the most during the past two years on 'asset withdrawals' from markets.

 

CME Cuts Gold, Silver Margins

Posted: 07 Feb 2013 09:30 PM PST

from Zero Hedge:

Any trader of paper gold and silver will likely never forget the endless and certainly parabolic barrage of margin hikes that the CME imposed in the spring and summer of 2011 which had only one purpose: to break the back of the relentless anti-fiat rally in the precious metals (and which culminated with the historic May 1 take down of silver when the metal plunged some 15% in the span of seconds). Since then, perhaps as a result of initial and maintenance margins still at residual levels indicative of when the S&P was some 30% lower and some $4 trillion less in slushing global central bank liquidity, the upside euphoria in gold and silver has been decidedly hobbled, perhaps so much that the CME is now scrambling to find a whole new set of gullible investors who will obediently put their money in the paper trap, only to see a surge followed by yet another mauling from soaring margin demands. After all, the CME needs trading volume to keep the cash flow flowing – killing the paper market in any one product suits nobody. Sure enough, moments ago, the CME once again cut margins in a slew of products, most notably gold and silver, by some 10% and 14%.

Read More @ Zero Hedge.com

The CIGA Pledge

Posted: 07 Feb 2013 09:28 PM PST

My Dear Extended Family,

Gold has always been a war between sound finance and debt ridden currencies. When you entered the fray you joined a band of brothers and sisters as fox hole buddies, in this war for both gold's and our freedom.

Comrades in Golden Arms, if there is to be a battle

Continue reading The CIGA Pledge

The European House of Cards is About to Collapse

Posted: 07 Feb 2013 09:00 PM PST

by Graham Summers, Gains Pains & Capital:

The house of cards that is Europe is close to collapsing as those widely held responsible for solving the Crisis (Prime Ministers, Treasurers and ECB head Mario Draghi) have all been recently implicated in corruption scandals.

Those EU leaders who have yet to be implicated in scandals are not faring much better than their more corrupt counterparts. In France, socialist Prime Minister Francois Hollande, has proven yet again that socialism doesn't work by chasing after the wealthy and trying to grow France's public sector… when the public sector already accounts for 56% of French employment.

France was already suffering from a lack of competitiveness. Now that wealthy businesspeople are fleeing the country (meaning investment will dry up), the economy has begun to positively implode.

The first sign of this came actually came from Germany. As we noted a few months ago, Germany had prepared a working group to examine the impact of an economic collapse in France.

Read More @ GainsPainsCapital.com

Jason Burack- Gold + Silver Demand is Out of Control! – YouTube

Posted: 07 Feb 2013 08:25 PM PST

Check our website daily at...

[[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

Swiss banking and the lose-lose scenario of unallocated gold

Posted: 07 Feb 2013 08:20 PM PST

What the Swiss banks' move away from unallocated accounts says about gold, and about banking…

by Adrian Ash, MineWeb.com

IMAGINE you could sell someone something, but keep ownership of it, and then use it yourself.

You could lend it out for interest, say, or raise loans of your own by pledging it as collateral. Or even sell it to raise cash when things get tight. And if your business fails entirely, the "owner" will just have to cue up with all of your other creditors, and be thankful with whatever small change is paid out by the courts.

This is pretty much what big banks get away with in gold – or they did. Now Swiss banking giants UBS and Credit Suisse are changing their gold-account fees for big, institutional clients.

Read More @ MineWeb.com

Fraudclosure Fail | ROMAN PINO vs THE BANK OF NEW YORK – Florida Supreme Court: We Can't Stop the Fraud

Posted: 07 Feb 2013 08:17 PM PST

Supreme Court

Homeowners Lose in Landmark Foreclosure Decision

From the PB POST...

A Florida Supreme Court ruling involving a Greenacres foreclosure allows banks to get away with fraud, as long as they voluntarily dismiss the case, attorneys said today.

The case, Roman Pino v. the Bank of New York, was the first significant foreclosure complaint heard by the high court since the state's legendary housing collapse.

At issue was whether a bank can escape punishment for filing flawed or fraudulent documents in a case by voluntarily dismissing it. A voluntary dismissal allows the bank to refile at a later date.

Royal Palm Beach-based foreclosure defense attorney Tom Ice, who represented Pino, had challenged a document created by the former Law Offices of David J. Stern and sought to question employees about its veracity. On the eve of those depositions, the bank moved to dismiss the case, blocking the court's ability to address any sanctions.

"I would say the Supreme Court has spoken loud and clear that it doesn't care about litigants that abuse the court system and that fraud is OK," Ice said about the ruling. "There are no ramifications if you get caught defrauding the court. Just take a voluntary dismissal and start over."

The case was unusual because the Supreme Court decided to pass judgment on the case even after Ice had negotiated a settlement with the bank that allowed his client to keep his house.

Florida law professors said the case, which was heard by the Supreme Court in May, was significant because it speaks to the integrity of Florida's judiciary.

The 4th District Court of Appeal had previously agreed that a voluntary dismissal couldn't be reversed, but said it wanted the high court to weigh in because "many, many mortgage foreclosures appear tainted with suspect documents."

Banks warned of a "widespread financial crisis" if the Supreme Court rules in favor of Pino.

They argued banks will cut back on awarding home loans and be discouraged from filing legitimate claims if, when they find a paperwork error, they can't voluntarily dismiss the case, correct the error and refile.

"With large numbers of defaulted loans in their portfolios, members of the Mortgage Bankers Association and Florida Bankers Association no doubt occasionally will make clerical errors, lose promissory notes, or discover other deficiencies in their foreclosure complaints that mandate correction in the interest of fairness," the brief states.

Ice made headlines with the Pino case in 2010 when he was featured in a national magazine article about Florida's so-called "foreclosure mills" and the discovery of allegedly fraudulent documents.

The robo-signing scandal was just breaking at the time, Florida's foreclosure "rocket dockets" were full speed ahead, and David J. Stern's Plantation-based firm was a foreclosure empire handling more than 100,000 cases statewide. It has since closed after losing most of its clients in the wake of the scandal.

Lenders halted home repossessions to revamp and rework cases. Beginning last year, foreclosures ramped up again.

"The banks won again, and like everything else in this state, we missed the chance to just say 'stop,'" said St. Petersburg defense attorney Matt Weidner about the Pino ruling. "This is the final piece, we have legalized bank fraud and we now have a court system, an entire judicial system, that supports fraud."

 

CONCLUSION FROM THE FL SUPREME COURT OPINION

Based on the above, we answer the certified question in the negative. We hold that when a defendant alleges fraud on the court as a basis for seeking to set aside a plaintiff's voluntary dismissal, the trial court has jurisdiction to reinstate the dismissed action only when the fraud, if proven, resulted in the plaintiff securing affirmative relief to the detriment of the defendant and, upon obtaining that relief, voluntarily dismissing the case to prevent the trial court from remedying the effects of the fraudulent conduct. Any affirmative relief the plaintiff obtained against the defendant as a result of the fraudulent conduct would clearly have an adverse impact on the defendant, thereby entitling the defendant to seek relief to set aside the voluntary dismissal pursuant to Florida Rule of Civil Procedure 1.540(b)(3).

In this case, because BNY Mellon did not obtain affirmative relief before taking the voluntary dismissal, the trial court did not have jurisdiction to reinstate the dismissed foreclosure action for the purpose of dismissing the action with prejudice. We also conclude that the trial court did not have the inherent authority to strike the notice of voluntary dismissal. Because Pino sought no other available sanctions, and the case has since been resolved between the parties, we need not reach the question of whether the trial court should be able to award monetary sanctions under the circumstances of this case. We therefore approve the result reached by the Fourth District affirming the trial court's denial of Pino's motion.

While affirming the decision of the Fourth District, we also understand the concerns of those who discuss the multiple abuses that can occur from fraudulent pleadings being filed with the trial courts in this state. While rule 1.420(a)(1) has well served the litigants and courts of this state, we request the Civil Procedure Rules Committee review this concern and make a recommendation to this Court regarding whether (a) explicit sanction authority should be provided to a trial court pursuant to rule 1.110(b), even after a case is voluntarily dismissed, (b) rule 1.420(a)(1) should be amended to expressly allow the trial court to retain jurisdiction to rule on any pending sanction motions that seek monetary sanctions for abuses committed by either party during the litigation process, or to allow the trial court explicit authority to include attorney's fees in any award to a party when the dismissed action is reinstated, or (c) to adopt a rule similar to Federal Rule 11 to provide explicit authority for the trial court to impose sanctions.

 

It is so ordered.

LEWIS, QUINCE, LABARGA, and PERRY, JJ., concur.
POLSTON, C.J., and CANADY, J., concur in result only.

 

Florida Supreme Court Oral Arguments
(A MUST VIEW)

 

Full opinion below…

Welcome to the wild wild south…

www.4closureFraud.org

Greeks Fight For Food: “I Never Imagined That I Would End Up Here”

Posted: 07 Feb 2013 07:40 PM PST

by Mac Slavo, SHTFPlan:

Once a bastion of European success and center of tourism, the country of Greece has become the harbinger of things to come for the rest of the world's developed nations.

Not long ago Greeks were enjoying high paid salaries, early retirements, excess cash, and seemingly never ending economic growth.

Today, just a short time after a financial collapse that rocked global financial markets, Europe's darling has turned into a frightening example of what happens when governments and their people take on more debt than they can ever hope to repay.

The end result is a warning to the rest of us.

Read More @ SHTFPlan.com

Will Japan's "Attempted" Reflation Succeed And Will It Spill Over Into Full-Fledged Currency War?

Posted: 07 Feb 2013 07:36 PM PST

Yesterday we presented a simplistic analysis of why for Japan "This Time Won't Be Different", a preliminary observation so far validated by the just announced Japanese December current account deficit which was not only nearly double the expected 144.2 billion yen, printing at some 264.1 billion yen, but was only the first back-to-back monthly current account deficit since 1985.

In short - at least in the first month of Abe's great reflation attempt, not only did trade post another whopper of a deficit, but so did the broader current account implying that much more Yen weakness will be needed to generate the structural reforms sought by the new Prime Minister.

But perhaps we are wrong and this time Abe will succeed where he, and so many others, have failed before. And, as is now widely understood, perhaps Japan will succeed in finally launching the necessary and sufficient currency war that would be part and parcel of Japans great reflation, as even various G-8 members have recently acknowledged.

The question is will it, and when?

One attempt at an answer comes from the fine folks at Bienville Capital who have compiled the definitive pros and cons presentation on what Japan must do, and how it will play out, at least if all goes according to plan.

What not even this presentation addresses is what happens if Japan is, in the end, successful in reflating, in the process beggaring all its neighbors, radically shifting the economic lay of the globe, and launching full blown currency war - far worse than anything seen to date, including the dark days of the 1930s.

Below are the highlights:

  • Monetary policy in Japan is undergoing a monumental change. For the first time in Japan's post-bubble era beginning in 1990, it appears policymakers intend to drive real interest rates into negative territory. As a result, we believe the yen could continue to weaken and that Japanese equities could be in the early stages of a powerful rally
  • On October 30, 2012 the Bank of Japan and Ministry of Finance issued a joint statement entitled "Measures Aimed at Overcoming Deflation," setting the stage for "powerful easing," including what seems to be an explicit attempt to weaken the yen. On December 16th, 2012, Shinzo Abe was elected Prime Minister with a mandate to end deflation (i.e. to reflate the Japanese economy)
  • Although Japan has struggled with a deflating economy for nearly two decades, the timing of these actions is not random. For a variety of idiosyncratic, macro and geopolitical reasons, the Japanese economy is faltering. Partly as a result of a strong yen, industrial production and business surveys have deteriorated, and the revenues of several national export champions have collapsed
  • Due to negligible growth and deflation, the level of nominal GDP in Japan remains well below previous highs (Slide 4), a dangerous circumstance for an economy carrying the world's largest sovereign debt burden. As history has proven, debt and deflation cannot coexist
  • In return for failing to reflate the Japanese economy, the Bank of Japan is on the verge of losing its independence. At the behest of Abe, it seems likely the BOJ will confirm a new 2.0% inflation target on January 22nd. In April 2013, the BOJ's 'hawkish' Governor, Masaaki Shirakawa, is set to retire, likely to be replaced with a far more 'dovish' candidate (Slide 5)
  • In implementing monetary policy, the Bank of Japan is authorized to buy domestic and foreign assets, including equities and REITs (Slide 6). Achieving the 2% inflation target will prove difficult as domestic deflationary pressures remain. Wages, specifically, are contracting (Slide 7). Hence policy will need to be highly aggressive
  • In recent years, although the BOJ has expanded its balance sheet (Slide 8), it has risen far less than other central banks since the financial crisis began (Slide 9)
  • Regardless of whether the BOJ proves successful in achieving their inflation target, the expectation of aggressive policy can have a meaningful impact on the yen and Japanese equities, which remain at low levels compared to previous highs (Slide 10 & 11). Recently, equities have rallied and the yen has begun to weaken (Slide 12). But on a "real, trade-weighted basis," the yen could fall another 20% before reaching the levels of 2007
  • To be clear, the intention of the additional policy measures in Japan is to enlist the "portfolio balance channel"—that is, to drive "real" interest rates negative, forcing Japanese savers out of cash and bonds and into riskier assets (i.e. equities). The Federal Reserve has attempted this process twice recently: in 2003 and 2009 (Slide 13), both of which resulted in higher asset prices. By contrast, real interest rates in Japan have remained positive, benefitting bondholders (Slide 14). High real rates also encourages saving over consumption
  • The 2003-2005 analog in Japan is interesting: monetary policy was aggressive, the BOJ's balance sheet expanded by 25%, the yen weakened by 15% and Japanese equities rallied 125%. Of course this occurred during a period of global easing and reflation. In order to achieve today's stated goals, the BOJ will need to be far more aggressive. For instance, in order to peg and maintain the Swiss Franc to the Euro at 1.20, the Swiss National Bank has expanded its balance sheet by 100% since August 2011
  • We believe the primary risk to this theme is lack of policy follow-through—that is, policymakers fail to act to the degree they are currently suggesting, as has occurred in the past. We currently believe this risk is minimal given the determined and coordinated communications from policymakers, as well as key upcoming events (e.g. Upper House elections, etc.). However, lack of policy follow-through would invalidate the theme
  • However, on a valuation basis, Japanese equities are relatively cheap (1.2x Price/Book versus 1.5x for other global indices) and yield 2.7%, more than 3x the yield from Japanese government bonds
  • International mutual funds are also currently underweight Japanese equities. Goldman Sachs believes international mutual funds' allocation to Japan is 4% below benchmark (MSCI EAFE). If portfolio managers feel pressure to "get to benchmark, " some $60 billion could flow into Japanese equities (in addition to the estimated $20 billion of recent inflows
  • Japan's debt-to-GDP ratio is above 200%. Therefore, higher interest rates in Japan could be highly destabilizing. Today policymakers are undergoing a delicate balancing act: attempting to increase inflation and inflation expectations so that investors reallocate savings to riskier assets without causing nominal bond yields to rise. We are unsure of whether they can achieve this and continue to expect significant stress in the JGB market at some point. However, at the moment our focus has been to attempt to profit from a weakening yen and rising Japanese equities
  • To be sure, these events have significant implications for the global economy. To weaken the yen, the BOJ needs to buy foreign assets, and given the size of the purchases required, the likely candidates would be US Dollar and Euro-denominated assets. Neither the US, nor Europe prefer to see a meaningful appreciation of their currencies
  • A materially weaker yen also complicates the necessary global rebalancing process: the US and parts of Europe—i.e. current account deficit countries—need to move towards trade balance to achieve sustainable growth (i.e. a weaker USD and euro relative to some peers). By contrast, the surplus countries, notably China, Japan and Germany—the world's 2nd, 3rd, and 4th largest economies—need to engineer more domestic demand, relying less on exports, or external demand, for growth. A policy-induced shift back towards export-led growth by the surplus countries would only rekindle the global imbalances that erupted in 2008
  • Having virtually exhausted its ability to grow through investment, China is unlikely to sit idle as Japan weakens the yen, stealing external demand in the process
  • Recently, the yen has weakened by nearly 20% versus the Korean won, one of Japan's primary competitors, threatening Korean exports, which represent 50% of its economy
  • In sum, aggressive actions by the BOJ could escalate into a full-fledged currency war. Investors should be monitoring these events closely

Full presentation:

Just how RARE is Freedom Girl??? 2013 Freedom Girl vs. 1922 Peace Dollar

Posted: 07 Feb 2013 07:20 PM PST

[Ed. Note: It's not too late, get your own .999 silver Freedom Girl before this limited edition coin is history.]

from Petros7373:

1922 Peace Dollars alone outnumber the Freedom Girl Coin 1,685 to 1

84,275,000 Peace Dollars from 1922 vs 50,000 Freedom Girl Coins from 2013

Lessons From The 1930s Currency Wars

Posted: 07 Feb 2013 06:23 PM PST

With Abe picking his new dovish playmate, and Draghi doing his best to jawbone the EUR down without actually saying anything, it is becoming very clear that no matter what level of bullshit histrionics is used by the politicians and bankers in public, the currency wars have begun to gather pace. Japan's more open aggressive policy intervention is the game-changer (and increasingly fascinating how they will talk around it at the upcoming G-20), as if a weaker JPY is an important pillar of the strategy to make this export-oriented economy more competitive again, it brings into the picture something that was missing from earlier interactions among central banks of the advanced economies – competitive depreciation. The last time the world saw a fully fledged currency war was in the early 1930s. Morgan Stanley's Joachim Fels looks at what it was like and what lessons can be drawn for the sequence of events - there are definite winners and losers and a clear first-mover advantage.

 

Via Morgan Stanley, Back to the 1930s? What Would a Currency War Look Like?

What did the currency war of the 1930s look like?

The backdrop for the currency war of the 1930s was the Gold Standard and the Great Depression (many economists blame the former for the latter). By fixing the value of the currency to the price of gold, the Gold Standard prevented a country from printing too much money. If it did, people would simply exchange it for gold (or for other currencies pegged to gold). Yet, this rigid 'rule' also denied policy-makers any flexibility to deal with shocks to their economies. This was the reason why the UK abandoned this regime, setting off a volatile chain of events:

  • On September 19, 1931, sterling was taken off the Gold Standard. It was devalued against gold and hence against the 'gold bloc' currencies (currencies that remained pegged to gold). The run-up to this event and its fallout was felt throughout the world.
  • Prior to the devaluation, in June and July 1931, one prominent bank in both Austria and Germany failed, which led to capital controls being imposed in both places. Capital controls protected these economies in the near term, but exacerbated fears about the future of sterling and the Gold Standard itself.
  • Following the devaluation of sterling, Norway and Sweden went off the Gold Standard on September 29. A day later, Denmark followed.
  • The US economies, like other countries of the gold bloc, lost competitiveness and exports turned down. Eventually, in January 1934, the US Congress passed the 'Gold Reserve Act' to nationalize gold held by banks and monetized it by giving banks gold certificates that they could use as reserves at the Fed. More importantly, it also forced a devaluation of the US dollar against gold.
  • Like the US economy, the remaining gold bloc countries (France, Germany and some smaller economies) also suffered a loss of competitiveness and poor export and industrial production growth. By 1936, they gave up and abandoned the Gold Standard as well.

What lessons can we draw from the events of the 1930s?

 We draw three pertinent lessons from that episode:

Lesson 1: As in every crisis, events were and will always be highly non-linear, with domestic conditions the most likely cause: It was painfully high unemployment that was the main driver of the devaluation of sterling.2 Although unemployment had been painfully high for a while, it was only a few months prior to the devaluation that market fear really ratcheted up.

 

Lesson 2: Markets punish policy uncertainty: Needless to say, there were dramatic movements in the exchange rate of the countries that devalued. However, with the devaluation out of the way, market and economic pressure as well as policy uncertainty shifted to the 'gold bloc' economies. For investors, it became a matter of when, rather than whether, the gold bloc economies would be forced to respond.

 

Lesson 3: Early movers benefited at the expense of the gold bloc, a 'beggar-thy-neighbor' outcome: From an economic standpoint, the sharp improvement in competitiveness of the early movers stood them in good stead against the gold bloc economies who stuck to the regime. Exhibit 1 shows that the UK and the Scandinavian economies saw a significant improvement in industrial production by 1935, whereas the 'gold bloc' economies (France and Germany – even though the latter employed capital controls) suffered. By the time the gold bloc economies capitulated, they had lost significant ground on this front to the early movers.

 

 

Could it happen again? Like any historical precedent, there are differences and similarities that must be accounted for.

What's different this time? Unlike the Gold Standard era, most major currencies are now part of a flexible exchange rate regime, which should make such large currency moves less likely. Further, extreme tail risks that might well have precipitated such dramatic policy responses only a few years ago have also receded.

What's similar? Domestic origins and 'beggar-thy-neighbor' effects: Even though policy-makers battled using exchange rates, the events of the 1930s had their origins in domestic issues. As mentioned above, it was painfully high unemployment in England that led sterling off the Gold Standard. The competitive devaluations that followed were also reactions by policy-makers to protect their domestic economies.

Similarly, it is the domestic agenda that could drive competitive depreciation today. In this vein, the desire of Japan's policy-makers to revive investment in their export-oriented economy likely means that the yen will likely play an important role. However, since global demand is likely to remain sluggish, a revival of Japan's export sector on the back of yen weakness is likely to eat into the market share of other exporters – something that could well invite measures to curb significant weakening of the yen. These negative spillovers are identical in nature to the 'beggar-thy-neighbour' policies of the 1930s.

If it did happen, what could an improbable but not implausible sequence of events look like?

In what follows, we create a plausible sequence using events that have both a reasonable probability of occurring and are already on investors' radar screens:

  • The starting point: Japan's policy-makers initially follow a concerted plan of reflating the Japanese economy, with a weak yen as an important pillar of strengthening the export sector.
  • Further easing from the major central banks... The ECB and/or the Fed ease further due to a deterioration in financial conditions. In the case of the euro area, euro strength or an idiosyncratic increase in risks might be responsible for a tightening in financial conditions. In the US, the obvious candidate is the risk surrounding the fiscal cliff and the debt ceiling confronting the US Congress.
  • ...and/or capital controls from EM economies: Uncomfortable with the combination of further capital inflows and yen weakness, some AXJ and LatAm economies impose capital controls.
  • Japanese policy-makers react to yen strength: In order to ensure export competitiveness, Japanese policy-makers take further measures to weaken the yen.

There isn't much in the 'timeline' above that is news, yet the combination serves well to illustrate how a currency war could plausibly play out.

Where are we now?

The key variable in the sequence of events above is the reaction of Japan's policy-makers. If a weaker yen is indeed an integral part of their plans and if they have a strong intent to make sure it remains so, the risk of a currency war is higher now than it has been in the past. Investors have moved beyond questioning whether EM economies will have a response and are now wondering at what point such a response is likely. At the same time, near-term risks in the US and euro area economies remain in play, as does the prospect of prolonged or even enhanced monetary stimulus.

In the EM world, Japan's export competitors in AXJ could respond with some combination of verbal intervention, FX intervention, capital controls and, with a much lower likelihood, policy rate cuts. In the particularly interesting cases of Korea and Taiwan, our economist Sharon Lam believes that verbal intervention (already under way to some extent), intervention in the foreign exchange markets and capital controls represent the most likely policy reactions. Rate cuts at a time when both economies are already expanding may serve to accelerate domestic growth and perversely cause even more capital inflows and currency appreciation rather than depreciation. For moderate moves in the yen's value, the effects on China are likely to be limited since it does not compete head-to-head with Japan's high-end electronics and car exports. However, in a currency war situation, the slow-moving USDCNY exchange rate may make restoring competitiveness tricky.

However, even as we discuss AXJ, let us not forget that other parts of the EM world are also concerned about currency appreciation. For all the talk about potential policy action in AXJ, we have already seen some of it come out of Latin America. In contrast to AXJ, Latin America is slowing, which puts rate cuts firmly on the agenda. Indeed, Colombia's recent rate cut was likely influenced by the peso's strength. Luis Arcentales, our Mexico economist, believes that concerns about the currency war have also probably been an influencing factor in Banxico's u-turn towards a dovish stance from a hawkish one just a few weeks ago. In an innovative twist to the usual FX intervention, Peru has announced that it will buy back its international bonds and issue ones denominated in its domestic currency instead. Even Chile, one of the most advanced and stable EM economies, is discussing structural reforms to address the strength of its currency.

In summary, while a currency war is not our base case, the new-found commitment of Japan's policy-makers does raise the risk of retaliatory action to keep the yen weak, and brings us a step closer to a currency war. The experience of the 1930s suggests to us that such large currency crises are likely triggered by domestic issues, and that they do create distinct winners and losers. EM policy-makers are already gearing up to make sure they remain on the winning side, but the balance of power for now rests with Japan.

What The Major Breakout In The Platinum to Gold Ratio Signifies

Posted: 07 Feb 2013 05:38 PM PST

Platinum (PTM) is breaking out compared to gold (GLD) as South Africa, which supplies three quarters of world production, continues to struggle with labor issues and possible nationalization. Look for a major breakout of the platinum ... Read More...

Jim Rogers 2013 Predictions Gold, Silver, Economic Outlook & Investments 720p – YouTube

Posted: 07 Feb 2013 05:18 PM PST

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Crunch Time

Posted: 07 Feb 2013 04:55 PM PST

As I detailed yesterday, the Qs have moved sideways since the beginning of January and there seems to be an equilibrium right around where we entered our short position. This morning we have bonds and dollar making attempts to rally ... Read More...

DOJ Scrambles To Appear Impartial, Says "Don't Think Moody's Is Off The Hook"

Posted: 07 Feb 2013 04:52 PM PST

While Moody's slipped over 20% when the DoJ announced its cajillion dollar lawsuit against S&P for knowing the crisis was coming but not telling anyone, it later bounced back over 10% as investors believed the non-US-downgrading rating agency (that happened to be owned by Buffett) was too-big-to-jail. After-hours today, Reuters is reporting that the Justice Department and multiple states are discussing also suing Moody's Corp for defrauding investors, according to people familiar with the matter, but any such move will likely wait until a similar lawsuit against rival Standard and Poor's is tested in the courts. The stock is trading down 3% after-hours as sources (not authorized to speak publicly) added "don't think Moody's is off the hook." We can't help but think about the pending sequester-delaying deficit spike as perhaps, to appear impartial, the DoJ will keep the threat of a lawsuit against Moody's alive... during the entire period when the US may and should be downgraded.

 


 

U.S. Justice Dept, states weigh action against Moody's

* Federal, state actions contemplated against Moody's

* Connecticut case against Moody's proceeding to trial

* Lawyers say stronger paper trail exists against S&P

By Aruna Viswanatha and Luciana Lopez

Feb 7 (Reuters) - The U.S. Justice Department and multiple states are discussing also suing Moody's Corp for defrauding investors, according to people familiar with the matter, but any such move will likely wait until a similar lawsuit against rival Standard and Poor's is tested in the courts.

 

Inquiries into Moody's are in the early stages, largely because state and federal authorities have dedicated more resources to the S&P lawsuit, said the sources, who were not authorized to speak publicly about enforcement discussions.

 

...

 

Moody's in the past has defended itself against similar allegations, including a 2011 congressional report that concluded the major ratings agencies manipulated ratings to drive business.

 

...

 

"Don't think Moody's is off the hook," said one law enforcement official.

 

Another rival, Fimalac SA's Fitch Ratings, is unlikely to face similar action, the sources said, since it is a much smaller player in the U.S. ratings industry. The firm also escaped the brunt of scrutiny from congressional investigators.

 

...

 

A similar coordinated federal-state action against Moody's would follow lawsuits two states have already filed against the ratings firm. Connecticut, which led the states in this week's actions, sued Moody's and S&P in March 2010.

 

In January a state court in Hartford denied the last of the preliminary motions Moody's had filed to have the case thrown out. That case and the one against S&P are proceeding to trial in the second half of 2014.

 

Those earlier cases and the more recent ones against S&P are based on a theory that the firms misled investors by stating that their ratings on mortgage products were objective and not influenced by conflicts of interest.

 

Instead, the lawsuits contend, the firms inflated ratings and understated risks as the housing bubble started to burst, driven by a desire to gain more business from the investment banks that issued mortgage securities.

 

Framing the cases in that manner steers clear of attacking individual ratings, which have largely been shielded under free speech protections. Instead, the focus is on proving false just one statement S&P made - that its ratings were objective.

 

....

 

"It may very well be that the government's testing their waters and they don't want to bite off more than they can chew," said Philip Hilder of Hilder & Associates in Houston, a former federal prosecutor. "Nobody should take these cases lightly."

Rothschild Descendant Lists Estate for $14.45M – YouTube

Posted: 07 Feb 2013 04:36 PM PST

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U.S. Markets Flashing RED Signal. By Gregory Mannarino – YouTube

Posted: 07 Feb 2013 04:34 PM PST

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The US Monetary Base and Gold!

Posted: 07 Feb 2013 04:13 PM PST

Last week COTW noted that the US monetary base had broken out of an 18 to 20 month sideways pattern. The US monetary base first hit $2.7 trillion back in June 2011 and since then it has ranged between $2.7 trillion and $2.6 trillion. Read More...

Golden Mistake?

Posted: 07 Feb 2013 03:55 PM PST

Headlines, airwaves, and hotel conference centers have lately been packed with advisors telling people that they need to own gold - and lots of it. These gurus advocate holding bullion in IRAs or gold-linked ETFs in 401(k) accounts ... Read More...

CME Margin Rates Decline for Gold and Silver

Posted: 07 Feb 2013 03:46 PM PST

A notice sent out by the CME Group February 7, 2013, announced new, lower margin rates for gold and silver futures effective at the close of business Tuesday, February 12.

For Spec traders in the 100-ounce gold contract (GC) the initial performance bond requirement drops $660 or 10% from $6,600 to $5,940 per contract. Maintenance (margin) requirements also will fall 10% from $6,000 to $5,400 per contract.  (More...)

For Hedge members both the initial bond requirement and Maintenance rates will also fall 10% from $6,000 to $5,400 per GC gold contract. 

Silver

For Spec traders in the 5,000-ounce silver contract (SI) the initial performance bond requirement will fall $1,650 or 13.6% from $12,100 to $10,450 per contract. Spec Maintenance (margin) requirements decline $1,500 (also 13.6%) from $11,000 to $9,500 per contract.

For Hedge Members in the big silver contract, both the initial bond and margin rates will drop  13.6% from $11,000 to $9,500 per contract.

Other margin changes in various metals contracts were reported in the notice, linked below.

Source: CME Group
http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv13-070.pdf

Bite The Emotional Restraint Bullet

Posted: 07 Feb 2013 02:49 PM PST

My Dear Friends,

The pressure on gold is not permanent in any sense. This decline is, as I have told you, similar to the series of declines just before gold took off in the 70s from $400 to $887.50. Those declines then were for the purpose of the last great shake of the gold

Continue reading Bite The Emotional Restraint Bullet

Gold Seeker Closing Report: Gold and Silver Fall With Stocks and Oil

Posted: 07 Feb 2013 02:18 PM PST

Gold edged up to $1681.23 in Asia before it fell back to $1663.26 at the start of this morning's news conference from the ECB and then rose to a new session high of $1682.98 in the next couple of hours of trade, but it then fell back off again in early afternoon New York trade and ended with a loss of 0.34%. Silver slipped to as low as $31.283 and ended with a loss of 1.16%.

Gold Daily and Silver Weekly Charts - CFTC Finally Does Something About Market Manipulation

Posted: 07 Feb 2013 02:14 PM PST

This posting includes an audio/video/photo media file: Download Now

Pitched Currency War & USDollar Rejection

Posted: 07 Feb 2013 02:00 PM PST

Friend of gold Jim Sinclair, and executive to a mining firm with interests in Tanzania, put it so well. He captures the theme of this article when he said, "It is the constant drop in the dollar's usage as a contract mechanism internationally. No one sees this but it is the Hammer of Thor on the head of the dollar." The rejection of the USDollar in global trade will mean the end of the abused privilege in a currency turned toxic. Its rejection is the marquee event in the financial world for 2013, following isolation. It is unstoppable and all-encompassing, certain to have geopolitical consequences, as it alters the economic and financial landscape in harsh ways much like a band of violent marauders brandishing machetes alter the neckline of their victims. See the Tonton Macoute in Haiti. The greenback is cornered; it is done!

Lifeboats In Case of Sinking Dollar

Posted: 07 Feb 2013 01:30 PM PST

February 7, 2013

  • "Deep-seated distrust" of the dollar prompts a "lifeboat study": Why we're not holding our breath
  • When high-tech meets biotech: How the "magic material" could be the building blocks of artificial muscles
  • Dirt-cheap Fannie and Freddie foreclosures become (a little) more accessible to the retail investor
  • A new potential war to worry about… the one thing Belgium has going for it these days… how one state's lawmakers view their citizens as pawns (literally)… and more!

  "The fact that the debate is happening at all," says The Washington Post, "reflects a deep-seated distrust in the very foundation of the country's economic system — the dollar."

This week, the Virginia House of Delegates passed — by a 2-to-1 margin — a bill setting up the proverbial blue-ribbon panel to study whether the Old Dominion should issue its own currency.

"This is a lifeboat study; what happens if?" says the bill's sponsor, Del. Robert Marshall. A close reading of the U.S. Constitution, he believes, could allow states to coin silver and gold.

"I view it," says George Mason University economist Lawrence White, "as a kind of state-level expression of concern about the uncharted course the Federal Reserve has been on in monetary policy." That is it's a protest, however feeble, against a shrinking dollar.

The bill still has to pass the Senate. But if it does, we wouldn't be at all surprised if Gov. Bob McDonnell signs it… with the same sort of guffaw up his sleeve that Utah Gov. Gary Herbert made when he signed a bill affirming Gold and Silver Eagles as legal tender.

"If somebody is stupid enough that they want to buy a Snickers bar at 7-Eleven with a gold coin worth thousands of dollars," one of Herbert's flunkies told CNN, "they will be able to do that."

  Stocks are tumbling today. All the major indexes are down a little less than 1%. The S&P is holding on to 1,500 by a slender thread.

Lacking any obvious explanation, but desperate to come up with one anyway, the financial media are latching on to the morning's economic numbers…

  • First-time unemployment claims rang in last week at 366,000 — worse than the most optimistic guess among dozens of economists polled by Bloomberg
  • Nonfarm business productivity as measured by the Bureau of Labor Statistics fell an annualized 2% during the fourth quarter.

Or maybe it's Europe. That's always a handy explanation. Or the automatic budget cuts in Washington. Really guys, just pick up the Magic 8 Ball.

  Apple took another hit this morning after hedge fund manager David Einhorn filed suit over the firm's plan to eliminate preferred shares.

"I have to say that Apple's stock price collapse does not surprise me," says Chris Mayer — who took no shortage of grief for declaring Apple a sell 11 months ago at $538. This morning, it's $458 — even as the broad market sits near new highs.

"It goes to show you again that what's popular is not often a good investment," Chris adds. "The unpopular opinion is the one worth listening to. As of now, I am no longer bearish on Apple's stock. It's in the muddled area of fairly priced, in my view."

100  All's quiet among the precious metals – gold at $1,675, silver at $31.60. Relative to the dollar, they're looking pretty resilient; the dollar index has soared this week, up to 80.2 at last check.

100  "New artificial muscles," Xuanhe Zhao, assistant professor in Duke's Pratt School of Engineering tells Plastics Today, "are enabling diverse technologies ranging from robotics and drug delivery to energy harvesting and storage."

The implications of these "artificial muscles" are vast: Lightweight and super-strong prostheses, full-page, modifiable Braille displays and automatic harvest and storage of energy are the tip of the iceberg.

The broad impact of which is, according to Zhao, "potentially analogous to the impact of piezoelectric materials on a global society."

In other words, this could become useful in not only improving the lives of the disabled and revolutionizing robotics, but could also become ubiquitous in everyday technology.

Crumpled graphene

How's it done? If you guessed through our favorite "magic material," graphene, you're right on the money.

"Indeed," Zhao goes on, "the crumpling and unfolding of graphene allows large deformation of the artificial muscle."

And Zhao's team has found a way to exploit this by mixing graphene with plastic and rubber, creating what is, essentially, an artificial muscle. "Our approach has opened avenues to exploit unprecedented properties and functions of graphene," Jianfeng Zang, a postdoctoral fellow on Zhao's team, explained. "For example," he said, using electricity, "we can tune the graphene from being transparent to opaque by crumpling it, and tune it back by unfolding it."

[Ed. Note: "If this ONE penny stock takes off..." Byron wrote more than a year ago about a tiny company set to become a major source of graphene, "you could retire rich -- without worrying about your future financial security."

We don't think he imagined the "magic material" was going to take off this quickly. The good news is the company is still extremely "cheap" by his standards. But after Feb. 28, that could change. To see why, click here.]

  Want to buy Fannie Mae and Freddie Mac foreclosures at bargain-basement prices? It's getting more affordable. Sort of.

"JPMorgan Chase & Co. is giving its wealthiest clients the chance to invest in the single-family rental market after other investments linked to the U.S. housing recovery jumped in value," Bloomberg reports. You can get in with a net worth of at least $5 million.

Well, the price of entry has fallen considerably from the $1 billion we cited a year ago in Apogee Advisory. "In a dystopian America of the near future," we wrote, "millions of foreclosed homes sitting on the federal government's books are flipped at fire-sale prices to hedge funds and private-equity firms with government connections."

Blogger Charles Hugh Smith is on the case this morning: "In effect, private capital puts a few bucks down and Fannie Mae loans them the rest at zero interest. It also gives them roughly 30% of the rental income for managing the properties."

That was the first wave of deals we spotlighted in January 2012: The feds allowed only private equity, hedge funds, investment banks and the like — bringing $1 billion or more to each transaction. Now that J.P. Morgan is on the inside, it's offering its well-heeled clients a chance at 8% annual rental income, plus a cut of the proceeds whenever the house is sold.

You catch that? JPM gets 30%… Its clients get 8%. Damn, it feels good to be a bankster.

And what of the poor retail investor? "The traditional places people might look — homebuilder stocks and appliance makers — probably aren't the best places for new investments," asset manager John Buckingham told Bloomberg. "They've had fantastic runs."

What about the IPOs in the sector? PRO-level readers are tipped off today about one to avoid at all costs. If you missed out on a charter subscription to The 5 PRO, we plan to reopen it soon.

  It's hard to keep up, but we do anyway: We now hear distant war drums between Japan and two countries over strategically meaningless islands.

We brought you the latest on the Japan-China dispute Monday. This morning comes word that the Japanese government accuses Russian jets of breaching its airspace. Russia, of course, denies it.

We'd write off the incident except for this fact: "Because of the dispute," says the BBC, "the two nations have not yet signed a peace treaty to end World War II."

  Because they've solved all their other problems…

The country has had three straight quarters of zero or negative growth… S&P has their sovereign debt on negative watch… and separatists in the north are gaining momentum…

But by golly, the Belgians have chocolate-flavored postage stamps.

"We have added a chocolate taste to the glue of the stamps," the country's postal service announced yesterday, "which you can taste when you lick it.

"It was not easy to get the scent and flavor of the dark chocolate right," the statement added. "In the end, people from Belgium, Germany, the Netherlands and Switzerland all worked on it."

Maybe the Belgians can license it to the U.S. Postal Service. That'll solve their budget crisis, for sure!

  "Assemblyman Phil Ting," a reader writes of the California lawmaker proposing mandatory liability insurance for gun owners, "should be taxing those who do not have a weapon to defend themselves by paying for the police protection that shows up after the crime is committed."

  "We have many rights," another reader chimes in, "that are in some way taxed or requiring insurance (effectively the same thing, as far as the pocketbook is concerned), so why not liability for gun owners?

"My state requires automobile insurance, my mortgage holder requires property and liability insurance and almost anything done in the 'pursuit of happiness' likely has some fee structure for participation. Guns are dangerous, just the same as cars, certain chemicals, etc.

"The insurance executives must be drooling at the prospect."

The 5: Here in Maryland, thousands of people trudged to the capitol in Annapolis yesterday to speak up against scads of new gun limits proposed by Gov. Tommy Carcetti — er, Martin O'Malley.

One of the guys on our team felt strongly enough to put in for the day off to make the trek. "Testimony went on for hours," he said. "Hundreds of people testified before their lawmakers… And our lawmakers disrespected all of us, by playing chess during testimony."

The people's business, indeed…

  "To add to the list of ways local governments are grabbing a buck," a reader chimes in after yesterday's parking space outrage from Tel Aviv, "a friend in Philadelphia recently received a traffic citation for having a 'For Sale' sign displayed in the window of his legally parked automobile.

"Apparently, having a car with a 'For Sale' sign parked on a city street is now a citation offense. The total: $301.00!! So much for Brotherly Love!"

 "As a regular reader and Jew with working knowledge of basic Yiddish," writes another clarifying the use of the word 'schlemielism' in the Tel Aviv story, "I thought I would throw you a definition of schlemiel… basically it means someone who messes something up, usually through incompetence or disregard (a fool).

"There is a Yiddish joke… A schlemiel is the guy who spills his soup on the person next to him. A schlimazel is the fellow he spills it on.

"So in this, the city is the schlemiel, and the ticketed person was the schlimazel."

  "Devolution rears its ugly head in the most interesting places," chimes in our final reader on the Tel Aviv incident.

"Oh well, as Laverne and Shirley say…

"Schlemielism! Schlemuzzelosity! Hasenpfefferocracy Incorporated!"

The 5: Oy…

Cheers,

Dave Gonigam
The 5 Min. Forecast

P.S. Fancy this above the masthead of today's Wall Street Journal…

If you've been with us for a while, you can imagine the angle they took…

"'I was thinking about Ortega, Sandinistas,' said Rina Anoussi, president of the Travel Business in New York, whose clients include art-world and entertainment celebrities. 'I'm trying to absorb what kind of people I can sell this to — people with illicit love affairs? No one will see you.'"

But that's changing, the Journal suggests, with the opening of the country's first full-blown luxury hotel last week. It's part of a $300 million development called Guacalito de la Isla… not far from Rancho Santana, our own little patch of paradise on Nicaragua's Pacific Frontier.

Property values in the area are already on the rise with the arrival of the new development… which may be one reason we got overwhelming response to our invitation for the latest Chill Weekend at the ranch later this month. We're filled up now, but we're considering another for April. Watch this space for further announcements…

With Gold Stocks Suffering So Badly Should You Sell Out or Buy In?

Posted: 07 Feb 2013 01:30 PM PST

"Follow the munKNEE" via twitter & Facebook or Register to receive our daily Intelligence Report 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 So writes Tim Staermose ([url]www.sovereignman.com[/url]) in edited excerpts from his original article* entitled Four reasons why gold stocks are so hated.? [INDENT]This article is presented compliments of [B]www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and [COLOR=#ff0000]www.munKNEE.com [/COLOR](Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ens...

Silver Prices - The Big Picture

Posted: 07 Feb 2013 01:01 PM PST

What do May 2004, January 2005, August 2005, June 2006, October 2008, February 2010, September 2011, December 2011, June 2012, and December 2012 have in common? Read More...

Gold and Silver both remain Rangebound

Posted: 07 Feb 2013 01:00 PM PST

[url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Gold cannot seem to muster enough energy to break out from the top of the trading range near $1695 while silver seems to run into selling above $32. Today was all about the selling in the Euro which tended to bring back some of the RISK OFF trades or at the very least, induced some profit taking in the RISK ON trades. Draghi did not offer much in the way of support for Euro bulls and after that big run up, they booked profits. That brought on some selling in both gold and silver, along with the commodity sector in general. Even crude oil was finally knocked lower for a change. ...

Chart: Employment Report January 2013 – YouTube

Posted: 07 Feb 2013 11:21 AM PST

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Carlos Slim Parlaying IPad Demand Into IPO – YouTube

Posted: 07 Feb 2013 11:20 AM PST

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Gold firms in volatile post-ECB trade

Posted: 07 Feb 2013 11:05 AM PST

07-Feb (Reuters) — Gold rose in volatile trade on Thursday, displaying resilience even as currency fundamentals turned against the market, after European Central Bank (ECB) President Mario Draghi highlighted downside risks for the euro area's outlook.

The euro hit its lowest in a week versus the dollar after Draghi said risks to the bank's outlook for the euro zone were to the downside. The euro had earlier maintained gains after the ECB held its main interest rate at a record low 0.75 percent.

Gold fell to a session low of $1,662.80 an ounce immediately after Draghi's comments before clawing higher to $1,682 an ounce by 1548 GMT, up 0.3 percent on the day.

[source]

A Billionaire’s Startup Secrets Part 1: Growing With The Company – YouTube

Posted: 07 Feb 2013 10:54 AM PST

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Mike Hampton: gold price at a long-term low – YouTube

Posted: 07 Feb 2013 10:52 AM PST

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The Daily Market Report

Posted: 07 Feb 2013 10:05 AM PST

Gold Choppy as ECB Takes Note of Euro Strength


07-Feb (USAGOLD) — Gold retreated into the range in early New York trading, weighed by a stronger dollar. However, those intraday downticks proved short-lived.

The initial retreat was spurred by concerns expressed by ECB chief Mario Draghi about recent euro strength. While the ECB held steady on rates today, the implications was that if the stronger euro began to have a negative impact on the economy, the central bank would reconsider its policy position.

The euro dropped back below 1.3400 for the first time in two-weeks on the prospect of easier policy and the corresponding dollar strength weighed initially on gold. However, the yellow metal has snapped back and is presently trading back in positive territory, more than $15 off the intraday low, even as the euro is sustaining its losses.

Euro strength may indeed exacerbate the current recession in Europe, particularly given the recent sharp losses in the yen, which make things like German cars more expensive on the global market. Simultaneouly, a strong currency diminishes inflation risks, giving the ECB the leeway for a rate cut. Gold may have rebounded on rising expectations that the ECB will at least be considering a retaliatory strike against the BoJ and Abe government.
at

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