Gold World News Flash |
- Half The World's Richest Women Are Chinese
- Spot Gold Rammed Below $1300 As Japan Opens
- The Gold Price Lost $8.40 to Close at $1,309.50 while Silver Closed Down at $21.73
- The Gold Price Lost $8.40 to Close at $1,309.50 while Silver Closed Down at $21.73
- Mining in Peru: Set to Get Easier?
- Mining in Peru: Set to Get Easier?
- "Taper This!" Says Gold
- "Taper This!" Says Gold
- Afghanistan: Cannabis and Opium Business
- Future of Investing in Gold
- Von Greyerz: Fed will retreat from 'tapering,' gold very scarce
- Andy Hoffman – Who Is Larry Summers And Why Should You Care Anyway?
- Gold Daily and Silver Weekly Charts - Begin the Beguine
- Gold Daily and Silver Weekly Charts - Begin the Beguine
- Did Wells Fargo “Cyprus” Its Clients?
- Gold Technicals Suggest Dovish Taper
- “Major Shortage Of Physical Gold” Has Fed Greatly Concerned
- Gold Commentary
- Gold Technicals Suggest Dovish Taper
- Gold: 'Taper This'
- Here’s Why There Is A War In Gold Near The Key $1,300 Level
- Own Gold to Protect your Wealth against Financial and Geopolitical Risk
- The Richest Households Live Near The Capitol
- The Daily Market Report
- You Can’t Cover Up Bad Monetary Policy
- Warren Buffett’s Next Big Oil Pick
- For Batista, a different gold market to face with possible asset sale
- All that glitters: Chinese brides choose diamonds over gold
- Pan African joins the SA gold mine dividend payers
- Gold and the Fed - What If...
- The Great Gold Heist of 2013:Â Exploding Demand & Falling Supply
- Gold and the Fed – What If...
- Gold Trades Above 5-Week Low on Weaker Dollar Before Fed
- Silver and Gold Price Manipulation
- Gold Retraces 50% of Both Summer 2013 and 2008-2011 Gains
- Historic Buying Opportunity Coming in Gold Stocks
- GOLD Elliott Wave Technical Analysis
- Gold Investment "In Bear Market" Reckon Analysts Ahead of US Fed Tapering Decision
- Gold hugs lows in advance of the Fed
- Gold higher at 1318.19 (+5.21). Silver 21.81 (+0.022). Dollar easier. Euro higher. Stocks called mixed. US 10yr 2.85% (-2 bps).
- Paul Renken: It's Time for Retail Investors to Capture Metals Upside
- Paul Renken: It's Time for Retail Investors to Capture Metals Upside
- Paul Renken: It's Time for Retail Investors to Capture Metals Upside
- Gold Stocks Trend Forecast Into 2014 - Historic Buying Opportunity Coming
- AIG Myth: No Time to Avoid Windfall Bailout
- Why ‘Progressives’ Spin Fairytales About Paper Money
- Gold: How Tactical a Bounce?
| Half The World's Richest Women Are Chinese Posted: 17 Sep 2013 06:11 PM PDT While Chinese stocks are underperforming their Japanese neighbors', the decision of which Asian language to learn (in order to potentially better your future) is clear. As Hurun Research notes, half of the richest women in the world (with assets in excess of $1 billion) are from China - including 3 from the Top 5 and 6 of the Top 10. Asia was home to the highest number of billionaires this year with most of them operating in real estate sector. The total wealth of the 1453 billionaires amounted to a staggering US$5.5 trillion, the equivalent of China's GDP and the so-called 'Ten-Zero-Club' - individuals with over USD10bn - grew by 25 to 108 people. The USA still ranks #1 (exceptionally) for the country with the most billionaires - at 409!
And if you are shooting for the moon, dust off the James Bond tuxedo and head over to meet Yang Huiyan. At 32, she is the heiress to property developer Country Garden, and has retaken the title of China's richest woman from another property tycoon Wu Yajun, 49, this year, according to the Hurun List of Richest Women in China 2013 released today.
And in graphic format from a different source (via Visual.ly):
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| Spot Gold Rammed Below $1300 As Japan Opens Posted: 17 Sep 2013 05:32 PM PDT Gold prices just legged down $15 as Japan opened, breaking bad below $1,300 for the first time in 6 weeks. No news (obviously). It seems the 'early' gold price rally when Summers stepped away was too much to bear... Equities and bonds rally because moar of the same dovish idiocy will remain at the Fed... and gold falls out of bed?
Does make one wonder what will happen when the debt ceiling debates start?
Charts: Bloomberg |
| The Gold Price Lost $8.40 to Close at $1,309.50 while Silver Closed Down at $21.73 Posted: 17 Sep 2013 04:37 PM PDT Gold Price Close Today : 1309.50 Change : -8.40 or -0.64% Silver Price Close Today : 21.735 Change : -0.228 or -1.04% Gold Silver Ratio Today : 60.248 Change : 0.243 or 0.40% Silver Gold Ratio Today : 0.01660 Change : -0.000067 or -0.40% Platinum Price Close Today : 1421.80 Change : -18.80 or -1.31% Palladium Price Close Today : 705.25 Change : 0.95 or 0.13% S&P 500 : 1,704.76 Change : 7.16 or 0.42% Dow In GOLD$ : $245.15 Change : $ 2.11 or 0.87% Dow in GOLD oz : 11.859 Change : 0.102 or 0.87% Dow in SILVER oz : 714.50 Change : 9.01 or 1.28% Dow Industrial : 15,529.73 Change : 34.95 or 0.23% US Dollar Index : 81.260 Change : 0.187 or 0.23% The GOLD PRICE misplaced $8.40 and closed at $1,309.50 while the SILVER PRICE lost 22.8 cents to end at 2173.5 cents. Problem is not so much they're breaking down as they give no evidence of turning up. We're just stuck here, waiting to see whether they will catch and hold at the necklines (about $1,300 for gold and about 2165c). If they break those levels, the GOLD PRICE will drop to $1,280 or lower, silver to 2000c or lower. "Or lower" means back to or past the June lows at 1817c and $1,180. Y'all raise your eyes back up to the horizon: this decline will end before October ends. If it makes a lower low than 27 June, that will mark the end of the 2011-2013 correction. If it makes a higher low, that will confirm the 27 June posting as the low. Either way, silver and gold prices will begin moving up, and -- y'all listen now -- will gain more from here than they have gained through the whole life of this bull market. Long as an alcoholic can still manage to buy more booze, everything's rosy. Doesn't matter that his marriage is tanking, his job's shaky, his friends have dropped him, as long as the booze flows, he's okay. And while the worlds greatest alcoholic, the US government, careens lurches toward the gutter, there's still good news: Price-cutter Janet Yellen is about to open another liquor store, so the supply of new booze/new money will keep on streaming. Reality lies nowhere on the horizon of these people. It's like people who live next door to a paper mill. The smell would kill any stranger, but they've lived with it so long they can't even smell anything bad. Interesting -- the Dow and the S&P500 are right close to their all time highs, but the Dow in Gold and Dow in Silver stand significantly below their highs. Dow in gold today closed 11.859 oz (G$245.14 gold dollars, up 0.87%) against a 27 June 2013 high of 12.51 oz. Dow in silver ended at 714.50 oz (up 9.01 oz or 1.28%) against an end-June high of 816.77 oz. That's right, silver has been much stronger than gold. Dow closed today at 15,529.73, up 34.95 or 0.23%. S&P500 gained 7.16 (0.42%) to 1,704.76. Got the bit between their teeth and running away! I missed noting yesterday that the US dollar index gapped down, below that uptrend line from a May 2011 low. If I were a Roman haruspex, I would say this sheep had a very ugly liver. That trend line forms the bottom of a long rising wedge, which points ultimately to a downward outcome for the dollar. Has the time come? This tumble has delighted the euro, which closed today at $1.3359, up 0.15%. Barrier stands at top of the range about $1.3450. Yen fell 0.07% today to close 100.88 cents/Y100. Beneath its 20 and 50 day moving averages, and the 20 just crossed beneath the 50. As those bearers used to say in the old Tarzan movies when they heard the war drums throbbing through the jungle, "Bad juju, bwana." On 17 September 2008 fell the house of Lehman Brothers, precipitating the Great Financial Panic of 2008. 'Tain't over yet. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't. |
| The Gold Price Lost $8.40 to Close at $1,309.50 while Silver Closed Down at $21.73 Posted: 17 Sep 2013 04:37 PM PDT Gold Price Close Today : 1309.50 Change : -8.40 or -0.64% Silver Price Close Today : 21.735 Change : -0.228 or -1.04% Gold Silver Ratio Today : 60.248 Change : 0.243 or 0.40% Silver Gold Ratio Today : 0.01660 Change : -0.000067 or -0.40% Platinum Price Close Today : 1421.80 Change : -18.80 or -1.31% Palladium Price Close Today : 705.25 Change : 0.95 or 0.13% S&P 500 : 1,704.76 Change : 7.16 or 0.42% Dow In GOLD$ : $245.15 Change : $ 2.11 or 0.87% Dow in GOLD oz : 11.859 Change : 0.102 or 0.87% Dow in SILVER oz : 714.50 Change : 9.01 or 1.28% Dow Industrial : 15,529.73 Change : 34.95 or 0.23% US Dollar Index : 81.260 Change : 0.187 or 0.23% The GOLD PRICE misplaced $8.40 and closed at $1,309.50 while the SILVER PRICE lost 22.8 cents to end at 2173.5 cents. Problem is not so much they're breaking down as they give no evidence of turning up. We're just stuck here, waiting to see whether they will catch and hold at the necklines (about $1,300 for gold and about 2165c). If they break those levels, the GOLD PRICE will drop to $1,280 or lower, silver to 2000c or lower. "Or lower" means back to or past the June lows at 1817c and $1,180. Y'all raise your eyes back up to the horizon: this decline will end before October ends. If it makes a lower low than 27 June, that will mark the end of the 2011-2013 correction. If it makes a higher low, that will confirm the 27 June posting as the low. Either way, silver and gold prices will begin moving up, and -- y'all listen now -- will gain more from here than they have gained through the whole life of this bull market. Long as an alcoholic can still manage to buy more booze, everything's rosy. Doesn't matter that his marriage is tanking, his job's shaky, his friends have dropped him, as long as the booze flows, he's okay. And while the worlds greatest alcoholic, the US government, careens lurches toward the gutter, there's still good news: Price-cutter Janet Yellen is about to open another liquor store, so the supply of new booze/new money will keep on streaming. Reality lies nowhere on the horizon of these people. It's like people who live next door to a paper mill. The smell would kill any stranger, but they've lived with it so long they can't even smell anything bad. Interesting -- the Dow and the S&P500 are right close to their all time highs, but the Dow in Gold and Dow in Silver stand significantly below their highs. Dow in gold today closed 11.859 oz (G$245.14 gold dollars, up 0.87%) against a 27 June 2013 high of 12.51 oz. Dow in silver ended at 714.50 oz (up 9.01 oz or 1.28%) against an end-June high of 816.77 oz. That's right, silver has been much stronger than gold. Dow closed today at 15,529.73, up 34.95 or 0.23%. S&P500 gained 7.16 (0.42%) to 1,704.76. Got the bit between their teeth and running away! I missed noting yesterday that the US dollar index gapped down, below that uptrend line from a May 2011 low. If I were a Roman haruspex, I would say this sheep had a very ugly liver. That trend line forms the bottom of a long rising wedge, which points ultimately to a downward outcome for the dollar. Has the time come? This tumble has delighted the euro, which closed today at $1.3359, up 0.15%. Barrier stands at top of the range about $1.3450. Yen fell 0.07% today to close 100.88 cents/Y100. Beneath its 20 and 50 day moving averages, and the 20 just crossed beneath the 50. As those bearers used to say in the old Tarzan movies when they heard the war drums throbbing through the jungle, "Bad juju, bwana." On 17 September 2008 fell the house of Lehman Brothers, precipitating the Great Financial Panic of 2008. 'Tain't over yet. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't. |
| Mining in Peru: Set to Get Easier? Posted: 17 Sep 2013 03:54 PM PDT Highly rated yet spurned by mining companies, Peru is changing... WITH a credit rating higher than Mexico and Brazil, Peru should be high on the list of mining investors. But confidence has been shaken over the last few years when the government revoked some high-profile mining licenses. According to Lima-based Kallpa Securities managing director Ricardo Carrión and president Alberto Arispe, recent government actions might signal a reset, with the government even acting as a mediator between mining companies and the local communities. In this interview with The Gold Report, Carrión and Arispe detail the state of mining exploration in Peru today... The Gold Report: Please tell us about what's happening now in Peru. Ricardo Carrión: The government of Alan García revoked the license for a Santa Ana project back in June 2011, so Ollanta Humala, the current president of Peru, inherited that situation. Additionally, the Minas Conga project, which was a flagship mining project of the Peruvian government, was suspended because of social and political issues. The Peruvian government realizes that mining is a very important item on the agenda and is a cash cow. It has been upgrading the regulatory framework in Peru and simplifying the process. The government has developed a new strategy to avoid another Minas Conga situation. TGR: Do you think Minas Conga will ever reach production? Ricardo Carrión: It all depends on its company, but we expect Conga to move forward in the next two or three years. TGR: Standard & Poor's just gave Peru a new credit rating of BBB+ and that's higher than either Mexico or Brazil. However, many investors would prefer to put their mining investment Dollars elsewhere. Why doesn't the perception match the reality in Peru? Alberto Arispe: Peru is a smaller country than Mexico and Brazil, so it's not as much on the radar of investors. Also, most of the mining in Peru is in the highlands, the poorest area of the country. The risk of mining is higher in these areas than around Lima. There is a lot of inequality in the highlands, which leads to cultural clashes. That's why some of these companies have problems with local communities in the highlands. Some companies have no problems, others have minor problems and others have a lot of problems. There are projects that are going ahead with good community relations and there are projects that are not going ahead because they have done a bad job in dealing with the local communities. TGR: So is it really about a lack of community engagement on behalf of the companies in most cases? Alberto Arispe: I think so. It depends a lot on the company. TGR: Do you think that the Peruvian government has learned from its mining issues and has taken measures to make sure that those types of problems don't happen as frequently in the future? Ricardo Carrión: On the approval of the three EIAs, I know that the government has been trying to work closely with the companies and the communities, trying to be the mediator. TGR: Is your company seeing a greater interest from institutional and even retail investors in mining securities? Ricardo Carrión: Obviously we are not isolated from the problems around the world. The TSX Venture has had low liquidities for the last few months and investors are afraid of mining ventures. My impression is that we probably will be out of this problem in the next 6 to 12 months. I think the worst is over. TGR: And at the bottom of the food chain are the explorers. Ricardo Carrión: With explorers there is also a wide range of risks. On one side are all those companies that have been drilling for a couple of years, have come up with a bigger resource and are entering the stage of developing the first economic studies, like preliminary economic assessments and prefeasibility studies. TGR: Do you have any parting thoughts on the mining equity space in Peru and investing in mining equities in general at this stage? Ricardo Carrión: One of the main issues that we have now is liquidity in the markets. We have been seeing low volumes in our local exchange, the same as on the TSX and TSX Venture exchanges, but it's improving. Even though we have had some very bad months, in the last few weeks we have seen a little change. We need to see an improvement in liquidity. Then we need to see stable metals prices. The rapid drop in the gold price in April was a shock for investors and some are still concerned about the gold price. If we have stable metal prices and liquidity coming back to the market, we will see more activity. The best catalyst for our local market, at least on the mining side, is to see transactions. The junior market is based on confidence and confidence relies on the ability of the junior miners to set up a deal and sell the project. Good transactions can really boost the interest on equities. TGR: What do you think is going to bring about that kind of confidence? New discoveries? A couple of breakthrough stocks? Ricardo Carrión: The best catalyst for confidence is to see a junior company getting a good deal with a major. We need to see more transactions at high valuations to bring companies back to the market. TGR: Thanks for your insights. |
| Mining in Peru: Set to Get Easier? Posted: 17 Sep 2013 03:54 PM PDT Highly rated yet spurned by mining companies, Peru is changing... WITH a credit rating higher than Mexico and Brazil, Peru should be high on the list of mining investors. But confidence has been shaken over the last few years when the government revoked some high-profile mining licenses. According to Lima-based Kallpa Securities managing director Ricardo Carrión and president Alberto Arispe, recent government actions might signal a reset, with the government even acting as a mediator between mining companies and the local communities. In this interview with The Gold Report, Carrión and Arispe detail the state of mining exploration in Peru today... The Gold Report: Please tell us about what's happening now in Peru. Ricardo Carrión: The government of Alan García revoked the license for a Santa Ana project back in June 2011, so Ollanta Humala, the current president of Peru, inherited that situation. Additionally, the Minas Conga project, which was a flagship mining project of the Peruvian government, was suspended because of social and political issues. The Peruvian government realizes that mining is a very important item on the agenda and is a cash cow. It has been upgrading the regulatory framework in Peru and simplifying the process. The government has developed a new strategy to avoid another Minas Conga situation. TGR: Do you think Minas Conga will ever reach production? Ricardo Carrión: It all depends on its company, but we expect Conga to move forward in the next two or three years. TGR: Standard & Poor's just gave Peru a new credit rating of BBB+ and that's higher than either Mexico or Brazil. However, many investors would prefer to put their mining investment Dollars elsewhere. Why doesn't the perception match the reality in Peru? Alberto Arispe: Peru is a smaller country than Mexico and Brazil, so it's not as much on the radar of investors. Also, most of the mining in Peru is in the highlands, the poorest area of the country. The risk of mining is higher in these areas than around Lima. There is a lot of inequality in the highlands, which leads to cultural clashes. That's why some of these companies have problems with local communities in the highlands. Some companies have no problems, others have minor problems and others have a lot of problems. There are projects that are going ahead with good community relations and there are projects that are not going ahead because they have done a bad job in dealing with the local communities. TGR: So is it really about a lack of community engagement on behalf of the companies in most cases? Alberto Arispe: I think so. It depends a lot on the company. TGR: Do you think that the Peruvian government has learned from its mining issues and has taken measures to make sure that those types of problems don't happen as frequently in the future? Ricardo Carrión: On the approval of the three EIAs, I know that the government has been trying to work closely with the companies and the communities, trying to be the mediator. TGR: Is your company seeing a greater interest from institutional and even retail investors in mining securities? Ricardo Carrión: Obviously we are not isolated from the problems around the world. The TSX Venture has had low liquidities for the last few months and investors are afraid of mining ventures. My impression is that we probably will be out of this problem in the next 6 to 12 months. I think the worst is over. TGR: And at the bottom of the food chain are the explorers. Ricardo Carrión: With explorers there is also a wide range of risks. On one side are all those companies that have been drilling for a couple of years, have come up with a bigger resource and are entering the stage of developing the first economic studies, like preliminary economic assessments and prefeasibility studies. TGR: Do you have any parting thoughts on the mining equity space in Peru and investing in mining equities in general at this stage? Ricardo Carrión: One of the main issues that we have now is liquidity in the markets. We have been seeing low volumes in our local exchange, the same as on the TSX and TSX Venture exchanges, but it's improving. Even though we have had some very bad months, in the last few weeks we have seen a little change. We need to see an improvement in liquidity. Then we need to see stable metals prices. The rapid drop in the gold price in April was a shock for investors and some are still concerned about the gold price. If we have stable metal prices and liquidity coming back to the market, we will see more activity. The best catalyst for our local market, at least on the mining side, is to see transactions. The junior market is based on confidence and confidence relies on the ability of the junior miners to set up a deal and sell the project. Good transactions can really boost the interest on equities. TGR: What do you think is going to bring about that kind of confidence? New discoveries? A couple of breakthrough stocks? Ricardo Carrión: The best catalyst for confidence is to see a junior company getting a good deal with a major. We need to see more transactions at high valuations to bring companies back to the market. TGR: Thanks for your insights. |
| Posted: 17 Sep 2013 03:48 PM PDT At the least, 'taper' is hype and neutral where gold prices are concerned... The MEDIA love to get a hold of buzz words and then give them a spin and a life all their own, writes Gary Tanashian in his Notes from the Rabbit Hole. Recent examples were the mainstream media's presentation of 'Operation Twist' – which was simply an official yield curve manipulation designed to sanitize and dampen inflationary signals – as an inflationary operation, and the 'Fiscal Cliff' drama that sent herds of conventional investors to the sidelines when they should have been contrarian (and bullish) back in Q4, 2012. Now we have the media on job tending the 'Taper' herd. Among the many hyped up implications of 'Taper' according to the media are that it is bearish for gold prices. But I would put forth not only a rejection of that assertion but just maybe a call for the opposite; a bullish stance on gold in the face of a Fed being coerced by natural movements in the Treasury bond market to talk 'taper'. As part of its QE operation, the Fed buys long-term Treasury bonds with newly printed money. It does so to try to keep interest rates down so that the economic recovery they have promoted does not fold in on itself, wheeze, roll over and die. They also buy distressed MBS, but this is a story about Treasury bonds. As we noted back in May, long-term interest rates began bottoming, and then not coincidentally various Fed members began chattering in the media... and our latest buzz word was born. Ladies and gentlemen I give you 'T.A.P.E.R!' – the latest obsession for casino patrons to analyze to death.  Our long-standing target has been 4.2%, below which the 30-year yield now hovers. The red moving average is equivalent to the monthly EMA 100 that we have used for years in gauging the yield's limitations and hence its implications for the entirety of the macro markets. TYX is fast approaching its decades old limiter.  Switching to a monthly view of the 10-year yield, we see that it has registered its 3% target at a potentially limiting moving average. Yesterday's rise in 30 year yields and decline in 10 year yields could simply be a catch up move. Regardless, our theme here is yields and gold; or more specifically yield relationships and gold prices. Gold tends to rise with a rising yield curve and decline with a declining curve. That is at least in part due to the inflationary signals implied by curve at any given time. Is there any wonder why the curve dampening effects of Operation Twist and its inflation sanitizing signals attended gold's correction last year?  The long term view of the gap between 30- and 5-year US Treasury bond yields shows a mostly positive correlation with the Dollar gold price, save for a divergence in the 2011-2012 period. That divergence not coincidentally featured scores of people knee jerking into gold as a haven from the Euro crisis (as gold blew off) and the famed Operation Twist, which helped put pressure on inflation signals and hence, the yield curve and gold. Dialing in to the micro term view of the 30-5, we see a potential bottom as longer dated maturities have risen in yield vs. short dated ones over the last couple of weeks. It is early, but a trend change would have to start somewhere. What do they do when they taper? They buy fewer LONG TERM bonds. What would this do in theory? Put additional pressure on long term interest rates. In reality, I have my doubts and actually hold Treasury bond funds as a 'counter the hype' trade (yields are just about at our targets after all). But in theory a tapering would help put pressure on long yields vs. short yields, whether or not nominal yields are rising. That would theoretically pressure the curve upward. So at the least, 'taper' is hype and neutral where gold is concerned. At most it is another pressure on an upwardly mobile yield curve, which is a driver of gold prices. Summing it all up, I'd say that people should just tune out the hysterics and keep their eyes on the various balls that actually matter like the sentiment backdrops in gold, the stock market and especially Treasury bonds. They should watch macro fundamentals like gold vs. commodities and stock markets and they should watch nominal technicals across the board. We are doing all of those things and more in NFTRH. Changes are coming to the macro markets and these changes may be symbolized by a group of eggheads meeting this week to render their policy decisions, but in reality their 'decisions' will have little impact on events going forward. It is B/S detector time folks and it is time to know what analysis is valid and what supposed analysis is just buzz words gone wild. Any assumption made in the mainstream media between gold and tapering should be questioned and put to the analytical test just as a long line of ill-founded assumptions that came before it should have been. If gold's bull market is over, it is not because hyper-inflationists are not getting the QE they so crave and it not because of decisions that the clerks at FOMC are making this week. Quite the contrary, what is going on in T-bonds could argue for the gold price bull's resumption. |
| Posted: 17 Sep 2013 03:48 PM PDT At the least, 'taper' is hype and neutral where gold prices are concerned... The MEDIA love to get a hold of buzz words and then give them a spin and a life all their own, writes Gary Tanashian in his Notes from the Rabbit Hole. Recent examples were the mainstream media's presentation of 'Operation Twist' – which was simply an official yield curve manipulation designed to sanitize and dampen inflationary signals – as an inflationary operation, and the 'Fiscal Cliff' drama that sent herds of conventional investors to the sidelines when they should have been contrarian (and bullish) back in Q4, 2012. Now we have the media on job tending the 'Taper' herd. Among the many hyped up implications of 'Taper' according to the media are that it is bearish for gold prices. But I would put forth not only a rejection of that assertion but just maybe a call for the opposite; a bullish stance on gold in the face of a Fed being coerced by natural movements in the Treasury bond market to talk 'taper'. As part of its QE operation, the Fed buys long-term Treasury bonds with newly printed money. It does so to try to keep interest rates down so that the economic recovery they have promoted does not fold in on itself, wheeze, roll over and die. They also buy distressed MBS, but this is a story about Treasury bonds. As we noted back in May, long-term interest rates began bottoming, and then not coincidentally various Fed members began chattering in the media... and our latest buzz word was born. Ladies and gentlemen I give you 'T.A.P.E.R!' – the latest obsession for casino patrons to analyze to death. Our long-standing target has been 4.2%, below which the 30-year yield now hovers. The red moving average is equivalent to the monthly EMA 100 that we have used for years in gauging the yield's limitations and hence its implications for the entirety of the macro markets. TYX is fast approaching its decades old limiter. Switching to a monthly view of the 10-year yield, we see that it has registered its 3% target at a potentially limiting moving average. Yesterday's rise in 30 year yields and decline in 10 year yields could simply be a catch up move. Regardless, our theme here is yields and gold; or more specifically yield relationships and gold prices. Gold tends to rise with a rising yield curve and decline with a declining curve. That is at least in part due to the inflationary signals implied by curve at any given time. Is there any wonder why the curve dampening effects of Operation Twist and its inflation sanitizing signals attended gold's correction last year? The long term view of the gap between 30- and 5-year US Treasury bond yields shows a mostly positive correlation with the Dollar gold price, save for a divergence in the 2011-2012 period. That divergence not coincidentally featured scores of people knee jerking into gold as a haven from the Euro crisis (as gold blew off) and the famed Operation Twist, which helped put pressure on inflation signals and hence, the yield curve and gold. Dialing in to the micro term view of the 30-5, we see a potential bottom as longer dated maturities have risen in yield vs. short dated ones over the last couple of weeks. It is early, but a trend change would have to start somewhere. What do they do when they taper? They buy fewer LONG TERM bonds. What would this do in theory? Put additional pressure on long term interest rates. In reality, I have my doubts and actually hold Treasury bond funds as a 'counter the hype' trade (yields are just about at our targets after all). But in theory a tapering would help put pressure on long yields vs. short yields, whether or not nominal yields are rising. That would theoretically pressure the curve upward. So at the least, 'taper' is hype and neutral where gold is concerned. At most it is another pressure on an upwardly mobile yield curve, which is a driver of gold prices. Summing it all up, I'd say that people should just tune out the hysterics and keep their eyes on the various balls that actually matter like the sentiment backdrops in gold, the stock market and especially Treasury bonds. They should watch macro fundamentals like gold vs. commodities and stock markets and they should watch nominal technicals across the board. We are doing all of those things and more in NFTRH. Changes are coming to the macro markets and these changes may be symbolized by a group of eggheads meeting this week to render their policy decisions, but in reality their 'decisions' will have little impact on events going forward. It is B/S detector time folks and it is time to know what analysis is valid and what supposed analysis is just buzz words gone wild. Any assumption made in the mainstream media between gold and tapering should be questioned and put to the analytical test just as a long line of ill-founded assumptions that came before it should have been. If gold's bull market is over, it is not because hyper-inflationists are not getting the QE they so crave and it not because of decisions that the clerks at FOMC are making this week. Quite the contrary, what is going on in T-bonds could argue for the gold price bull's resumption. |
| Afghanistan: Cannabis and Opium Business Posted: 17 Sep 2013 03:42 PM PDT Follow ZeroHedge in Real-Time on FinancialJuice Production of cannabis in Afghanistan has increased again according to estimates that have been published for 2012 and the business is now worth $65 million a year. That's a drop in the ocean maybe in monetary terms but it shows what has happened to the economy of Afghanistan. Afghan farmland might have been destroyed last year where the farmer had turned to growing more-money-spinning cannabis rather than crops, but it was a bumper year for production in 2012. Therefore, despite the destruction of that land, production actually increased. CannabisThe number of hectares fell from 1, 000 to just a tenth of that in 2012 in the southern province of Uruzgan as it saw a crack-down by the authorities for fear that it was financing the Taliban and Islamic fundamentalist groups.
The statistics are telling signs of the consumption in the West.
But, if we look at the number of people that have consumed the substance at one time in their lives, then it's Canada that comes out in first place, with 44.5% of the total population. The USA is the second country in the world that has 42.4% of the population that has at one time consumed the substance during their lives.
Cannabis is decriminalized today (although illegal according to federal law) in many states in the USA and not just for medical use. OpiumBut cannabis is nothing compared to the world's largest producer ofopium in the world.
In fact, opium farming was reduced by 99% in an agreement with the United Nations under the rule of the Taliban in Afghanistan. July 2000 saw Mullah Mohammed Omar, the leader of Afghanistan come to an agreement with the UN, declaring that it was un-Islamic to grow poppies for the production of opium. But the result was that the farmers simply stored their opium (which needs no special storage requirements at all) and then took advantage of the fact that prices increased due to the un-Islamic ban on the production. Was this market manipulation by the drug lords? Thanks largely to the war in 2001 and the invasion of the country causing large-scale scarcity of resources and a lack of any real economy, the Afghans turned once again to growing cannabis and opium. Today corrupt officials complacently let the farming continue just as long as they get the money in a big brown envelope at the end of the season. The US and the allied forces have also played their role in the production of cannabis and opium in Afghanistan. The drug barons and the warlords that largely control the production of narcotics in the country have been valuable assets over the past years to the US and the allied forces in providing intelligence information on the Taliban, for example. They have even participated actively in US military operations too. Is it surprising that the West has complacently accepted the help of the drug barons in Afghanistan in their fight against terrorism and yet at the same time made the Afghan economy dependent on the narcotics industry? Religion was once the opiate of the masses we were always led to believe. Now, it is the very same opium that has been turned into the religion of the people, to be worshipped on mass not only by the war lords and the drug barons or the farmers, but also by the rest of the world. Same thing, just the other way round, isn't it? It's still addiction. The global marijuana market today is worth an estimated $141.8 billion. The medical-marijuana market is set to top $9 billion in the USA alone by 2016.Septaper Will Open Floodgates | How Sinister is the State? | Food: Walking the Breadline | Obama NOT Worst President in reply to Obama: Worst President in US History? Obama's Corporate Grand Bargain Death of the Dollar | Joseph Stiglitz was Right: Suicide | China Injects Cash in Bid to Improve Liquidity Technical Analysis: Bear Expanding Triangle | Bull Expanding Triangle | Bull Falling Wedge | Bear Rising Wedge | High & Tight Flag
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| Posted: 17 Sep 2013 02:58 PM PDT This is a guest post from Profit Confidential, a site dedicated to bringing the real economic facts which are not told by the mainstream media. Time and again, people ask the question, "Does investing in gold have a future?" Over the years, like every other commodity, gold has shown a lot of volatility. When the world was hit hard by the economic recession of 2007-08, people flocked to buy gold. They were doing something humans have done for a very long time – stacking up gold in case global currencies lost their value. Throughout history, people have used gold as the "go-to" asset class during the times of economic calamity. But, as the world is slowly and steadily recuperating from the effects of global recession, people are asking whether the gold run of gold is finally over? Economic Recovery has Reduced Investment in GoldFinancial experts have always believed that disinterest in gold is a good thing for the economy. As we mentioned before, people buy gold when they lose confidence in the economic climate of a country. However, as the world economy has seen a steady recovery, gold has shown signs that it might not offer bumper returns to investors as they are expecting. So the important question arises – should someone invest in gold at current levels? What is the future of investing in gold? Well, first things first, no one, not even the most experienced of gold investors can tell you accurately about the course gold will take in the near future. Based on the historical prices and the state of the economy, they can provide an analysis of the prospects of gold. And if these financial experts are to be believed, you should always have around 5% of gold bullion or stocks of gold mining companies in your portfolio. Why Investment in Gold is being Questioned?One of the main reasons why people are questioning the idea of investing in gold is because 2013 hasn't been a bright year for it. Gold had offered tremendous returns to investors for more than a decade (2001 – 2012), but its price has fallen this year. From the levels of $1,657 at the beginning of this year, gold has seen a fall, and is currently trading at $1,318 per ounce. S&P's 500 index on the other hand, has offered a return of more than 15% to investors. As comparisons are inevitable, people with a bullish view on gold have begun asking whether they will be better off taking their gold investments into stock markets or forex. Gold is an Everlasting InvestmentWe are of the firm belief that gold has an inherent, intrinsic value that most other asset classes lack. The world economy is shaped as much as the policies of the government as by the sentiments of people. And throughout history, people have shown the sentiment that when the going gets tough, they fall back on gold. If you are an optimist who believes that there will be no political and economic catastrophes in future, you might well be correct on staying away from gold. However, as the current Syrian crisis has proven, the world is sitting on an edge, and any potential flare-up can pit major economies of the world against each other. Therefore, as a means of security against economic crisis, and as a hedge against inflation, we advise you to keep investing in gold systematically. |
| Von Greyerz: Fed will retreat from 'tapering,' gold very scarce Posted: 17 Sep 2013 02:22 PM PDT 5:15p ET Tuesday, September 24, 2013 Dear Friend of GATA and Gold: Swiss gold fund manager Egon von Greyerz, interviewed by King World News, predicts that the Federal Reserve will retreat from any reduction in its bond buying, speculates that the recent pounding of gold was engineered to prepare for the Fed's reversal of position, and reports that there is a serious shortage of real metal. An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/9/17_Ma... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Precious Metals Round Table: On Tuesday, September 24, Sprott Asset Management will assemble four experts for a live Internet broadcast about the prospects for the precious metals. Participating will be Sprott's CEO, Eric Sprott; financial letter writer and internationally renowned conference speaker Marc Faber; Sprott's chief investment strategist, John Embry; and Sprott Asset Management President Rick Rule. To participate, please visit: https://event.on24.com/eventRegistration/EventLobbyServlet?target=regist... Join GATA here: Gold Investment Symposium 2013 Mines and Money Australia New Orleans Investment Conference https://jeffersoncompanies.com/landing/speakers?IDPromotion=613011610080... * * * 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: |
| Andy Hoffman – Who Is Larry Summers And Why Should You Care Anyway? Posted: 17 Sep 2013 02:20 PM PDT from FinancialSurvivalNetwork.com:
Click Here to Listen |
| Gold Daily and Silver Weekly Charts - Begin the Beguine Posted: 17 Sep 2013 01:47 PM PDT |
| Gold Daily and Silver Weekly Charts - Begin the Beguine Posted: 17 Sep 2013 01:47 PM PDT |
| Did Wells Fargo “Cyprus” Its Clients? Posted: 17 Sep 2013 01:40 PM PDT by Jeff Berwick, Dollar Vigilante:
But, what some WF customers did get was a little taste of dinner on its way back up as their debit cards and credit cards were declined for a nice meal after a long week. Across the United States on Friday, Wells Fargo customers complained via various social media outlets like Twitter that they were unable to move, deposit or withdraw their funds. Wells Fargo confirmed by email that there was a “situation” going on and they were working hard on it: “We are aware of the situation and we are working to resolve the issue as soon as possible. We apologize to our customers for any inconvenience.” |
| Gold Technicals Suggest Dovish Taper Posted: 17 Sep 2013 01:08 PM PDT A number of bank analysts have suggested that gold could decline to $1000 in 2014. If economic reports continue to suggest growth is accelerating, the Fed might taper quite aggressively, and that could hurt gold prices. Read More... |
| “Major Shortage Of Physical Gold” Has Fed Greatly Concerned Posted: 17 Sep 2013 01:02 PM PDT  As the world awaits the Fed's decision, today a 42-year market veteran told King World News there will be no tapering and that the gold will soar "after the Fed has surprised the market tomorrow." Greyerz also warned KWN that to further complicate matters for the Fed, there is a "major shortage of physical gold" ahead of their decision. Below is what Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say.This posting includes an audio/video/photo media file: Download Now |
| Posted: 17 Sep 2013 12:50 PM PDT In my June 24, 2013 commentary I wrote "While I doubt a final low will be seen in gold until the end of the year the time for a short bounce appears to be upon us." Gold printed its closing low in the 2011 bear market on June 27. Read More... |
| Gold Technicals Suggest Dovish Taper Posted: 17 Sep 2013 12:01 PM PDT Graceland Update |
| Posted: 17 Sep 2013 11:22 AM PDT The media love to get a hold of buzz words and then give them a spin and a life all their own. Recent examples were the mainstream media's presentation of 'Operation Twist' - which was simply an official yield curve manipulation ... Read More... |
| Here’s Why There Is A War In Gold Near The Key $1,300 Level Posted: 17 Sep 2013 10:03 AM PDT  With the Fed announcement and the ongoing war in gold continuing near the key $1,300 level, today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 9 absolutely stunning charts, which included gold, and other incredibly key markets. Eric Pomboy, who is founder of Meridian Macro Research, also provided powerful commentary to go along with the 9 remarkable charts, as well as what all of this means for these key markets, including gold.This posting includes an audio/video/photo media file: Download Now |
| Own Gold to Protect your Wealth against Financial and Geopolitical Risk Posted: 17 Sep 2013 09:51 AM PDT Gold fell around 5% last week despite no major economic data, news developments or significant news regarding physical supply and demand. Once again the decline in the price of the yellow metal can be attributed to massive selling of futures contracts leading to further technical selling as stop loss orders were triggered. While prices dropped there was no marked decrease in global physical bullion demand or significant physical selling of any note. However, the market was reacting to two events that were unfolding. The first event was to do with the latest developments regarding Syria and the other event had to do with the possibility of the US Fed announcing plans to taper its bond purchases. Gold prices fell as the risk of a US military strike against Syria receded. And, once again traders using futures contracts succeeded in knocking the price lower. Over the weekend, both the US and Russia formulated a proposal that stipulates that Syria must provide full details of its stockpile within a week. Also, the chemical arsenal must then be eliminated by mid-2014. If Syria fails to comply, the deal could be enforced by a UN resolution with the use of force as a last resort. But US officials say the president reserves the right to act without the agreement of the UN. China, France, the UK, the UN and Nato have all expressed satisfaction at the agreement. In Beijing, Foreign Minister Wang Yi said on Sunday that China the deal “will enable tensions in Syria to be eased”. There has so far been no reaction from Damascus. The Free Syria Army, the coalition of armed rebels that has been hoping for Western help to fight the Assad regime, has rejected the agreement. The military leader of the anti-Assad Free Syrian Army has rejected the deal and promised to continue fighting. “There is nothing in this agreement that concerns us,” said Gen Salim Idriss, describing it as a Russian initiative designed to gain time for the Syrian government. Less than a week ago the FSA believed that the Americans were about to launch a military attack, which it hoped would tip the balance of the war its way. Whether or not chemical weapons are destroyed is irrelevant. The FSA want the Americans to destroy the regime’s military power, and the US agreement with Russia means the chances of that happening are receding. So, regardless of the outcome of the current issue, I expect to see the conflict in Syria to continue. Russia and the US have agreed on an assessment that the Syrian government possesses 1,000 tons of chemical agents and precursors, according to a US official. The US believes the materials are located in 45 sites, all in government hands, half of which have useable quantities of chemical agents. On Monday, the UN has confirmed “unequivocally and objectively” that chemical weapons have been used in Syria. In a report, the UN stated that Sarin gas was used in a rocket attack in the Syrian capital, Damascus, last month, although it has not attributed blame. “This is a war crime,” Secretary-General Ban Ki-moon said. US allegations that the government was responsible led to threats of military action and then a US-Russia deal for Syria to make safe its chemical arms. In a speech to the UN, Mr Ban said. “The mission has concluded that chemical weapons were used on a relatively large scale in the Ghouta area of Damascus [on 21 August]… The attack resulted in numerous casualties, particularly among civilians.” The UN investigators examined blood, hair, urine and rocket samples. Syrian President Bashar al-Assad has denied responsibility and blamed rebels. The UN Security Council is expected to draft a resolution in the coming days. World powers will now try to hammer out a UN Security Council resolution. However, no matter the outcome of the resolution, the Syrian conflict will continue and is set to even deteriorate. This week the financial markets will be focused on the upcoming FOMC meeting. Despite recent disappointing economic data from the US, it is generally expected that the Federal Reserve will begin to taper its asset purchases. While no figures are known at the moment, it seems that the market has already factored in a small cut of around $10 billion. The Federal Reserve’s upcoming decision has to be this year’s most-highly-anticipated market event. For months traders have been trying to determine the action of the Fed. So, the Federal Open Market Committee’s decision due out this Wednesday is likely to have far reaching ramifications. No matter what the Fed decides, any tapering or even lack thereof, its size, and what the FOMC implies for future tapering will almost certainly spark sharp price reactions in the bond markets, currency markets, stock markets, and precious metals. It is important to remember that between the FOMC’s May 1st meeting and last week, mere QE3-tapering fears have catapulted the benchmark 10-year US Treasury yield from 1.66% to 2.98%! Higher bond yields wreak havoc on the economy, driving up all borrowing costs. Since the mere threat of the Fed slowing its bond purchases sparked a massive bond selloff, can it risk the actual event driving yields even higher? Unemployment will surge again if house buying slows. Higher interest rates are a huge threat to the US government too. If yields on Treasuries rise, the cost of funding the national debt which has already exploded higher, will become unsustainable and will eventually sink the government. Yesterday, in an unexpected move, former US Treasury Secretary Lawrence Summers withdrew from the Fed chairman candidacy. The former Treasury Secretary Summers’ withdrawal from the Fed chairman candidacy impacted on the US dollar which fell as much as 0.5% to the lowest since Aug. 12. Summers was widely viewed as more hawkish than other leading candidates to run the Fed, meaning he was seen as more likely to push for a speedier end to the central bank's easy-money policies. The other favourite candidate, Janet Yellen, is known to be very dovish, favouring ultra-loose monetary policies, even more so than Bernanke. Therefore, her appointment would be bullish for gold as ultra-loose monetary policies and currency debasement will continue. Yellen favours a continuation of zero interest rate policies (ZIRP), which is as important if not more important than 'tapering'. Yellen said in December 2012, that early 2016 may be a more realistic time to start increasing interest rates. The way I see it is that Yellen will not be good for the US dollar. But then, it does not matter who takes over the Fed. It has become a flawed institution. And, the people in power should be held accountable for manipulating just about every market and stop printing money. But as this is unlikely to happen, and as we know current Fed Chairman Ben Bernanke’s replacement won’t do that we can expect more of the same. Ultimately, this will lead to the total loss of confidence in the US dollar. And, when this happens, the price of gold and silver will sky-rocket. For the past four years, the US Fed Fund Rate has been essentially zero, and we have a massive money-printing, monetary inflation that creates a huge pool of liquidity. And, as I have mentioned many times previously, I have my doubts about the US employment figures and certainly don't believe there is a global recovery at hand. And, in order to protect yourself, it is essential to diversify and minimise your risks from economic, political, geopolitical and other factors. Your portfolio should include physical gold that is held out of the banking system. And, this physical gold does not include gold exchange traded funds, or limited edition medallions. Gold is not like other commodities, it’s the only honest currency and an alternative currency to all paper currencies. Technical analysis
Gold prices are back below the 50 day MA, but I expect this to be short-lived and I believe prices will soon trade higher.
About the author: David Levenstein is a leading expert on investing in precious metals . Although he began trading silver through the LME in 1980, over the years he has dealt with gold, silver, platinum and palladium. He has traded and invested in bullion, bullion coins, mining shares, exchange traded funds, as well as futures for his personal account as well as for clients. For more information go to www.lakeshoretrading.co.za
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| The Richest Households Live Near The Capitol Posted: 17 Sep 2013 09:48 AM PDT That three of the five richest States per capita are located around Capitol Hill should not surprise anyone who has spent any time living in the DC area. When you walk around DC or drive around the metro area - which includes northern Virginia and the part of Maryland encircled by the DC "beltway" - you can just feel taxpayer largesse oozing from everywhere. Just like New York City and norther New Jersey has a lot of obvious mafia wealth everywhere, DC has even more wealth connected to the Government, politicians and YOUR tax money. It really is a truly appalling sight. As they say, a picture says 1000 words:  This is just another sign that the U.S. is in economic and political collapse. I really hope no one really wonders how someone like the perverted Mormon, Harry Reid, can enter the Senate with barely a pot to piss in and amass wealth estimated to be at least $10 million during his time there. I know after taxes and living expenses that Senators don't make a lot of money - legitimately, that is. |
| Posted: 17 Sep 2013 09:47 AM PDT Gold Defensive as 2-Day FOMC Meeting Begins
The Fed will announce policy tomorrow at 18:00GMT, with Bernanke’s press conference beginning at approximately 18:30GMT. The consensus favors a modest tapering of at least Treasury purchases, of perhaps $10 to $15 bln. Based on the oft reiterated position that any tapering would be data dependent, it’s hard to reconcile exactly what data of late might incent the Fed to initiate tapering at this juncture. The recovery can generously be described as ‘uneven.’ More specifically our central bank has a dual mandate of maximum employment and stable prices. The latest jobs report was disappointing to say the least and today’s release of CPI data illustrates that inflation remains well below the Fed’s target. So why exactly is the taper even on the table? Does it have to do with chairman Bernanke’s legacy? Is it a signal to fiscal policy makers in Washington? Will their simply be insufficient debt issuance to maintain the $85 bln per month pace? I personally remain skeptical that the Fed will announce tapering tomorrow. I’m certainly not alone, and I consider myself to be in good company with the likes of James Rickards. Rickards notes that taper risks extend as far as emerging markets in a recent interview. Years of expansive monetary policy in the U.S. have resulted in a huge carry trade, where dollars are borrowed cheaply, converted to emerging currencies and then invested in those emerging economies. Hints of tapering earlier this year have caused U.S. rates to rise and investors began to unwind those carry trades, which has begun to have adverse effects as investment is withdrawn from emerging markets and their currencies are sold for dollars. If the taper is indeed initiated, the unwind would likely accelerate. There have already been suggestions that Fed tapering could lead to a crisis similar to the “Asian Contagion” of the late 1990s. The Fed has said that they conduct monetary policy in the best interest of the United States, but if we start crashing emerging economies…that certainly isn’t in the best interest of the United States. |
| You Can’t Cover Up Bad Monetary Policy Posted: 17 Sep 2013 09:19 AM PDT I was in Uruguay and then Buenos Aires, Argentina, last week (and the issue includes an idea I picked up down there). I met with a variety of interesting people on this trip. One of them is a guy who writes a blog from Buenos Aires, OfWealth.com, under the pen name “Marco Polo.” He lives in Buenos Aires, but he is not Argentine. He’s an experienced global financial investor and lived in Hong Kong for a time working for a large investment bank. I can’t tell you much more about him than that, because he doesn’t want me to. But I can share with you our conversation, which included some interesting bits about the U.S. dollar. I met Marco at La Cabrera, an excellent restaurant in the Palermo neighborhood. (This barrio takes its name from an old abbey that dates from the 16th century.) At La Cabrera, of course, we ate great steaks and meats for which the country is justly famous. We started with chorizo and morcilla. (The latter is a Spanish blood sausage.) I have to say: I’ve had blood sausage all over the world, and at La Cabrera I had the best morcilla I’ve ever put in my mouth.
Eating in Buenos Aires is very cheap for those of us who pay with U.S. dollars. There were four of us. We had appetizers, steaks, sides, two bottles of wine and coffee afterward. It cost $100. Total. For that kind of meal in America, it would’ve been $100 each. Which brings us to the dollar. The Argentines live with super-high inflation. Officially, it’s around 10%, but on the ground, it’s closer to 25%. As Marco explained it, the Argentine government prints a lot of money — literally prints it. The physical volume of peso notes, for example, is up by more than a third in the last year. The 100-peso note, the largest denomination, has increased by more than a quarter.
The physical amount of currency is important because people transact so much business in cash. It’s easier to protect your anonymity in a country with a taste for authoritarian government. So guess what their favorite alternative currency is? "With price inflation running at around 25% a year, a large black market economy and peso savings accounts that pay 10-15% less than inflation, there is plenty of demand for dollars." The U.S. dollar. Marco told me that Argentines hold one out of every 15 printed U.S. dollars. “The problem is the current government has made it impossible to buy dollars legally since late 2011,” Marco writes at OfWealth.com. “With price inflation running at around 25% a year, a large black market economy and peso savings accounts that pay 10-15% less than inflation, there is plenty of demand for dollars.” Plus, the official exchange rate is robbery. So what to do? “Enter the so-called ‘dolar blue,’” Marco writes. “This is the parallel exchange rate that Argentines must pay in shady backrooms if they want to convert their pesos into dollars.” You get 60% more for your money at the “blue” rate. It’s a crazy thing, but the Argentines have adapted. They are used to this stuff, after all. Argentines have suffered every imaginable monetary malaise. Hyperinflation, banking crises, debt defaults and more. “The last meltdown was in 2002,” Marco writes. “The currency collapsed, dollar bank deposits were ‘peso-fied’ and rioters were burning tires in the streets and shooting at the shuttered entrances of the banks.” They’ve learned not to trust the colorful peso. And they look to preserve their wealth by owning real stuff such as real estate, art, gold and, apparently, U.S. dollars. “The average taxi driver in Buenos Aires understands more about financial mismanagement than the crowd at a conference of Nobel Prize-winning economics professors and central bankers,” Marco says. Americans have yet to learn these lessons. Ours is a culture still much too trusting of central banks and paper money. Most Americans don’t understand what the central bank really does. Or how the banking system functions. They don’t get how they are being robbed. They are more likely to blame higher prices on the oil companies or foreigners. They don’t see that the cause is the government’s money printing. This reminds me of that old line from Henry Ford. If Americans really understood the banking system, they’d revolt. (Or as he put it: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”) The thing is there is more similarity than you might guess between the two the countries. And in some of these comparisons, the U.S. does not come out looking the best. Marco ran some numbers on the debt of both, for example. “Debt per capita is about $4,900 in Argentina and $53,000 in the U.S.,” Marco begins. “That compares with GDP per capita of about $11,600 in Argentina and $50,000 in the USA. Individual Americans owe almost 11 times as much government debt per capita as individual Argentines. But U.S. GDP per capita is only 4.3 times as much. Now whose government looks irresponsible?”
Indeed, we wondered if the U.S. dollar might one day go the way of the peso… From OfWealth.com: “That’s not to say that the USA is likely to have an Argentine financial crisis any time soon,” Marco said. “But it pays to remind ourselves that it’s not just down on the pampas that public finances are being mismanaged. After all, Argentina was one of the richest countries in the world 100 years ago.” Might the Argentina of today be a glimpse of some dystopian American future? A warning for us all? Regards, Chris Mayer P.S. The future of the U.S. economy is uncertain, at best. And headed for this “dystopian future” I mention, at worst. Best to prepare now, no matter what happens. That’s why I gave readers of The Daily Reckoning email edition a shot at my new investment strategy. One that pays you royalty checks, regardless of the noise in the markets. If you’re not getting the DR email edition, you can sign up for FREE, right here… and start getting all the incredible profit opportunities that come along with it. So don’t wait. Your next email is just a few hours away. |
| Warren Buffett’s Next Big Oil Pick Posted: 17 Sep 2013 08:38 AM PDT WWBB? Just as the slogan "What Would Jesus Do?" gained popularity 20 years ago and has since been used by Christian teenagers, the Occupy movement, and anti-fracking protesters alike, investors have their own mantra for salvation: What Would Buffett Buy? It's no wonder that Warren Buffett has become some kind of superhero to the investing masses. If you had invested $6,225 in one share of his holding company Berkshire Hathaway in September 1990, today you'd be sitting on $172,500… a 2,671% gain. Judging by Buffett's results and his own vast fortune (he's currently worth $53 billion), he must surely be equipped with a Spidey sense, X-ray vision, and omniscience, all wrapped in the body of an old man that kind of reminds us of George Burns in Oh, God!. So how does he do it? Buffett's investment style has been strongly shaped by his mentor, Benjamin Graham (1894-1976), the father of security analysis and value investing, and author of two of the most famous investing books ever written. Buffett is not a true contrarian and emphatically stays away from industries he doesn't understand, such as technology and gold. However, like contrarians, value investors search for stocks that are severely undervalued, believing that in the end Mr. Market will have to give those companies their due; Buffett's bloodhound instinct in finding undervalued investments is legendary. So of course the question "What Would Buffett Buy?" is of the greatest interest to millions of wannabe millionaires. But what if you could know ahead of time which stock Warren Buffett was going to buy next? On August 15, the investing public found out through fund filings that Warren Buffett had bought more than $500 million worth of Suncor Energy Inc. (NYSE.SU), Canada's largest integrated oil company and the world's largest oil sands company. Suncor has done quite well since the end of June when Buffett bought it, climbing another 20% and adding another C$110 million to Berkshire Hathaway's net worth. But Casey Energy subscribers were aware of Suncor long before Buffett started buying. We laid out all of the reasons to own the stock in January 2012; we talked about it not only in our newsletter, but also at the Casey conferences—more than a year before Buffett's big purchase. Don't bother buying Suncor now, though. The stock isn't cheap anymore and is getting more expensive by the day, as the herd is following Buffett's example. While we do have the utmost respect for him—if you're the third-richest person in the world, you must be doing something right—right now we have one up on Warren Buffett again, just like we did in early January 2012. The company we recently highlighted in our Casey Energy Dividend newsletter pays a better dividend, has a better near-term growth profile, a higher revenue per barrel, less debt on the books, and a lower debt-to-cash ratio than Buffett's bet in the oil sands. In fact, even though this company is also a big oil producer, it pays a dividend three times higher than what Buffett is getting on Suncor right now. Not only that, the company is in a prime position to profit from the voracious Chinese appetite for oil and an America that has realized that a safe source of oil is not just important for its economic growth, but also its national security. China has already demonstrated to the world that money is no object when it comes to buying quality oil assets—and there are fewer and fewer of those to go around. The United States is falling behind, and in order to catch up, it must begin to bid aggressively on these foreign assets. Simply put, this oil sands company will be able to make a lot of money by playing the two sides against each other and getting top dollar. With the "easy oil" starting to be tapped out and growing demand for crude oil around the world, the price of oil will inevitably begin to rise. And our pick stands to make the biggest gains. As Warren Buffett says, one should stick to investing in businesses one actually understands. We've been spending years analyzing the oil sector, and while Suncor has done a great job thus far, we think that our Casey Energy Dividends oil pick has the potential to deliver even higher returns to our shareholders. If Warren Buffett were to read our report, he'd be wondering why he doesn't own this company. It fits his model perfectly: cheap valuation and a good, solid dividend. Once he figures it out, I think he'll start buying the stock—but of course, our subscribers will already be well positioned. Try Casey Energy Dividends at half price today—with full money-back guarantee—and stay ahead not just of the curve and the herd, but of the Oracle of Omaha himself. Click here to get it now. |
| For Batista, a different gold market to face with possible asset sale Posted: 17 Sep 2013 08:34 AM PDT Media reports say Eike Batista’s gold assets in Colombia are on the chopping block. What can he get for them now? |
| All that glitters: Chinese brides choose diamonds over gold Posted: 17 Sep 2013 08:34 AM PDT China’s diamond market has more than tripled over the last 5 years as more couples choose the sparkling gems over traditional gold to mark their marriage vows. |
| Pan African joins the SA gold mine dividend payers Posted: 17 Sep 2013 08:34 AM PDT The South African gold sector is perhaps not quite the disaster area many feel with major producers all paying decent dividends. The latest to join their ranks is Pan African Resources. |
| Posted: 17 Sep 2013 08:10 AM PDT In the following part of the article we will discuss what's likely to happen if the Fed simply continues the QE program and informs about it in a direct way. Read More... |
| The Great Gold Heist of 2013:Â Exploding Demand & Falling Supply Posted: 17 Sep 2013 06:48 AM PDT No one was prepared for the orchestrated take-down of the price of gold and silver in the first half of 2013. Forecasted supply was generously overstated while demand... grossly under-estimated. Thus, the tremendous imbalance had to be resolved which came to be known as "The Great Gold Heist of 2013." Not only were the investors taken by surprise from the huge price declines, but so were the Fed and member bullion banks -- one by price movement and the other by huge demand. To understand why I believe there was a gold heist, we have to dissect through some of the just released official data. |
| Gold and the Fed – What If... Posted: 17 Sep 2013 06:34 AM PDT In my previous article (What if the Fed Really Tapers QE?) I focused on what would be the likely outcome of limiting the QE program on several key markets (gold, real estate, stocks and bonds). Today, we will provide you with an analogous analysis for a completely different scenario. In the following part of the article we will discuss what’s likely to happen if the Fed simply continues the QE program and informs about it in a direct way. |
| Gold Trades Above 5-Week Low on Weaker Dollar Before Fed Posted: 17 Sep 2013 06:32 AM PDT
Gold fell to $1,302.70 an ounce yesterday, the lowest since Aug. 8. The dollar was near the lowest in almost three weeks versus the euro as the exit of Lawrence Summers from consideration to be next Fed chairman fueled bets the central bank will be slower to reduce stimulus. Fed Vice Chairman Janet Yellen is now the leading candidate, a person familiar with the process said. Global equities traded near a five-year high. Gold fell 21 percent this year as some investors lost faith in the metal as a store of value and on speculation the Fed will curb stimulus. Policy makers will probably slow monthly bond purchases to $75 billion from $85 billion, according to a Sept. 6 Bloomberg survey of economists. The meeting may keep prices volatile, according to Goldman Sachs Group Inc., which remains neutral on the metal to the end of the year. "You have a firmer euro against the dollar," Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. "The market perceived Summers as being hawkish. It increases the chances for Yellen, and that's regarded as a continuation of monetary easing. That is of course good for gold." [source] |
| Silver and Gold Price Manipulation Posted: 17 Sep 2013 06:31 AM PDT Price manipulation is a time-honored tradition in structured finance. There will be abuse anytime there is a price “fixing” or a price set on the basis of a trade. Instances of abuse are the dragons that “regulators” are supposed to constantly slay. When regulators are too slow, unwilling, or unable to do the job—and if you haven’t been paying attention, regulators have been all three for decades—market professionals take matters into their own hands. |
| Gold Retraces 50% of Both Summer 2013 and 2008-2011 Gains Posted: 17 Sep 2013 06:27 AM PDT The WHOLESALE price of gold halved an early 1.5% rally lunchtime Tuesday in London, dropping back to $1315 per ounce as world stock markets fell ahead of tomorrow's long-awaited US Federal Reserve decision. Silver reversed all of an earlier 1.8% climb, falling back below $22 per ounce. UK and Eurozone government bonds slipped in price, but US Treasuries rose – pushing interest rates down for a fifth session – after new data said US consumer prices rose less quickly than analysts forecast in August. |
| Historic Buying Opportunity Coming in Gold Stocks Posted: 17 Sep 2013 06:22 AM PDT Recently we've been writing that another opportunity is coming to buy gold stocks. While this is still the case, the facts have changed and we have to tweak our view. The evidence argues that the mining stocks are now likely to retest their lows. Read More... |
| GOLD Elliott Wave Technical Analysis Posted: 17 Sep 2013 06:09 AM PDT Last analysis expected a little upwards movement to a short term target at 1,338 before price turned and continued the new downwards trend. Price did move higher, falling 2.86 short of the target, before turning around to make a ... Read More... |
| Gold Investment "In Bear Market" Reckon Analysts Ahead of US Fed Tapering Decision Posted: 17 Sep 2013 06:06 AM PDT WHOLESALE gold investment prices cut an earlier 1.5% rally in half lunchtime Tuesday in London, dropping back to $1315 per ounce as world stock markets fell ahead of tomorrow's much-awaited US Federal Reserve decision on QE tapering. Silver reversed all of an earlier 1.8% climb, falling back below $22 per ounce. UK and Eurozone government bonds slipped in price, but US Treasuries rose – pushing interest rates down for a fifth session – after new data said US consumer prices rose less quickly than analysts forecast in August. The Dollar slipped back as CPI showed a rise of 1.5% year-on-year, but it held the Euro below Monday's 3-week highs. Sterling traded half-a-cent beneath yesterday's new 2013 highs, capping gold investment prices for UK buyers below £830 per ounce. "Our US economists' expectations for a 'dovish' taper," says investment bank Goldman Sachs, "[plus] gold's recent decline will likely limit the downside to gold prices heading into the September FOMC." The Fed will tomorrow cut $10 billion off its current monthly quantitative easing program of $85bn in bond purchases, a Reuters poll of economists says. Betting on the futures market, however, says the US central bank is now likely to keep interest rates near zero for longer, with prices giving odds of only 55% to a first hike in December 2014. But "in the past couple of weeks," says Commerzbank chart analyst Axel Rudolph, the price of investment gold "has reasserted its downtrend." Late Monday's low of $1304 was near both a "50% retracement of the June-to-August rally...and also [a] 50% retracement of the 2008-11 advance," on Rudolph's charts. "Failure at the August low [$1272] will confirm that another interim top has been formed [putting] the 1200/1100 region back in play." "Price action remains weak," agrees chart analysis from Scotia Mocatta's dealing team, pointing to resistance at $1348 and support at $1273. Gold investment "is in bear market," says a note from Credit Suisse analysts, "in which rallies should be sold. "[This is] not a bull market that is just taking a nap." Gold Eagle coin sales from the US Mint are on track for the slowest September in five years according to online data, and are running at just 20% of this month in 2012. Figures for Silver Eagles, in contract, are running equal to last September's strong sales. Gold investment in exchange-traded funds meantime held steady on Monday, with the giant SPDR Gold Trust's ETF holdings staying at 911 tonnes – two tonnes above August's four-and-a-half-year low. Over in India – where the central bank today imposed new rules on India's gold loan industry – "Fresh buying is not happening," Bloomberg quotes Haresh Soni of the All India Gems & Jewellery Trade Federation, "because there is a liquidity crunch and consumer spending has come down." The current festival season, which peaks with Dhanteras and Diwali in November, typically sees the peak for India's gold investment and jewelry demand. But thanks to the weak Rupee, plus high domestic prices caused by the government's fight against gold imports, "Some consumers are delaying purchases for marriages until prices stabilize," says Soni. To try and fight gold smuggling spurred by 10% import duties and other blocks on legal flows, India's Directorate General of Revenue Intelligence "has sounded an alert to all international airports and other transit points," reports the Times of India today, "[to] check smuggling of gold." |
| Gold hugs lows in advance of the Fed Posted: 17 Sep 2013 06:02 AM PDT 17-Sep (Reuters via CNBC) — Gold edged higher on Tuesday as the dollar remained under pressure on prospects the Federal Reserve will announce a modest reduction in its bond-buying stimulus at its two-day meeting. The Fed’s Open Market Committee, which begins its meeting on Tuesday, is widely expected to announce it will begin curbing its $85 billion monthly bond purchases by $10 billion – a smaller reduction than previously anticipated. [source] |
| Posted: 17 Sep 2013 05:33 AM PDT |
| Paul Renken: It's Time for Retail Investors to Capture Metals Upside Posted: 17 Sep 2013 01:00 AM PDT When gold and silver took a plunge, institutional investors went bargain shopping right away, says Paul Renken, mining analyst with VSA Capital. Now it's time for retail investors to ride upside momentum in copper, zinc, tungsten and phosphate. In this interview with The Metals Report, Renken shares his outlook for base and minor metals, as well as the companies that could outperform on the back of climbing commodity prices. (Hint: It's not usually the majors.) |
| Paul Renken: It's Time for Retail Investors to Capture Metals Upside Posted: 17 Sep 2013 01:00 AM PDT When gold and silver took a plunge, institutional investors went bargain shopping right away, says Paul Renken, mining analyst with VSA Capital. Now it's time for retail investors to ride upside momentum in copper, zinc, tungsten and phosphate. In this interview with The Metals Report, Renken shares his outlook for base and minor metals, as well as the companies that could outperform on the back of climbing commodity prices. (Hint: It's not usually the majors.) |
| Paul Renken: It's Time for Retail Investors to Capture Metals Upside Posted: 17 Sep 2013 01:00 AM PDT When gold and silver took a plunge, institutional investors went bargain shopping right away, says Paul Renken, mining analyst with VSA Capital. Now it's time for retail investors to ride upside... Visit the aureport.com for more information and for a free newsletter |
| Gold Stocks Trend Forecast Into 2014 - Historic Buying Opportunity Coming Posted: 16 Sep 2013 11:09 PM PDT Recently we’ve been writing that another opportunity is coming to buy gold stocks. While this is still the case, the facts have changed and we have to tweak our view. The evidence argues that the mining stocks are now likely to retest their lows. Rather than that buying opportunity being days away, we now feel it is weeks away. Investors and speculators need to have more patience. In this missive we discuss why a retest is coming but why it could mark a final bottom and a tremendous buying opportunity. |
| AIG Myth: No Time to Avoid Windfall Bailout Posted: 16 Sep 2013 10:48 PM PDT On August 13, 2007, more than a year before the AIG meltdown, I publicly challenged AIG’s phony accounting for credit default swaps linked to over $19 billion in “super senior” exposure to subprime and other dodgy loans. These were meant to be super safe, but any competent CDO specialist should have been able to perform the same analysis I did. Instead of super safe, AIG had several billion dollars worth of principal risk due to exposure to mezzanine tranches backed by a significant percentage of poorly underwritten loans, and losses were eating through all of the so-called protection. Yet, despite market prices already eroding on the underlying collateral, AIG took no accounting losses at all. That was far from AIG’s only problem. |
| Why ‘Progressives’ Spin Fairytales About Paper Money Posted: 16 Sep 2013 05:00 PM PDT In a recent opinion piece published on Reuters, Professor Charles Postel twists himself into extreme pretzel logic attempting to explain that elastic, manipulated paper money favours the 'have nots' whereas inelastic, gold-backed money favours the 'haves'. |
| Posted: 16 Sep 2013 05:00 PM PDT Gold (and silver) should benefit if the dollar softens in the coming months. A bond rally/dollar selloff as the Fed taper either is delayed, or "rumor" becomes "news", may well play out, with related benefits for gold. |
Andy Hoffman joined us after a two week hiatus. I was stuck up North getting divorced and selling my house. Hope everyone survived without me okay. I'm quite certain you did. Andy raised the issued that as usual the MSM got it wrong that Summers was not the shoe-in to be the next Fed Chairman, surprise. We also discussed the fact that virtually all of the Comex's gold is gone and that gold continues to be in backwardation, which can't be the sign of a healthy market, can it? And then of course there's Syria, imagine if they started a war and nobody came.
Were Wells Fargo customers “Cyprused” on Friday? It is tough to know. Perhaps, it was merely a “glitch.” It certainly wasn’t April 1.
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