Gold World News Flash |
- Silver: A Collapse or a Rally
- SILVER SQUELCHERS PART 2: Assassinate Silver & Gold To Bring In Fiat Money
- Rule Rule – Massive Fund Flows Pouring Into Gold & Silver
- U.S. House passes Fed audit bill but measure is seen doomed in Senate
- The NEXT Reserve Currency
- What is the Gold Fix?
- The bad guys WILL be beaten -- probably by themselves
- An Appalling Practice Used In Only Two Nations, Of Which The US Is One
- Seth Klarman: "We Are Recreating The Markets Of 2007"
- The Gold Price was Holding Steady Until the FOMC Report Closing Down at $1,234.40
- Mike Kosares: Scottish secession, not the Fed, just knocked gold down
- GATA secretary to be interviewed Thursday on 'The Larry Parks Show'
- How to Invest in a Strong Dollar World
- Rate Bounce After Fed Meeting Pushes Dollar Higher and Gold Price Lower
- Peer-to-Peer Marketplace For Gold And Bitcoin
- Gold Daily and Silver Weekly Charts - Late Afternoon Smackdown - Ball and Chain
- Rule tells KWN about Denver conference, sees rising investment in monetary metals
- Celente: Propaganda Aside, It’s Bad Out There & Getting Worse
- The NEXT Reserve Currency
- Gold and Silver End Game Here-John Embry
- Are Government Bonds Really ‘Safe’?
- The Divergence Between Debt and Gold
- Rick Rule - Massive Fund Flows Pouring Into Gold & Silver
- Here’s the Market’s Next Hot Sector…
- Systemic Dollar Failure
- THE EVIL EMPIRE & THE IDOLATERS OF MONEY -- Harley Schlanger
- Gold Report - U.S. National Debt Surges $1 Trillion In Just 12 Months
- "Don't Go Short" Gold Prices Ahead of Fed Says Analyst as US Inflation Goes Negative
- Shanghai Gold Trading: The Real Challenge to London
- Can Gold Price Finally Recover?
- What Is Next For The Price Of Silver: Collapse or Rally?
- Unwinding the Hyper-Inflationist "Dollar Collapse"
- Time to Buy Gold Stocks Cheap?
- Mean Reversion to the Rescue
- Eric Coffin: Can Investors Still Find Tenbaggers?
- The New Gold
- Can Gold Finally Recover?
| Posted: 17 Sep 2014 11:01 PM PDT COMPLAINT FROM A SILVER BULL: The last 3 plus years have been difficult. My faith in the silver bull market and my fear of fiat currencies has been shattered. There is no joy in "Silverville" –... {This is a content summary only. Click on the blog title to continue reading this post, share your comments, browse the website, and more!} | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SILVER SQUELCHERS PART 2: Assassinate Silver & Gold To Bring In Fiat Money Posted: 17 Sep 2014 09:20 PM PDT by Charles Savoie, SRS Rocco:
The path towards fiat is always the same. First, assassinate silver. Second, hit at gold! Recall in the first episode of this series we documented the hostility of the N.Y. Clearing House Association to monetary silver. Manufacturers Hanover was in on the frenzy to winnow silver coins out of the nation's largest banking district in 1964 to 1967 for shipment to the Treasury for processing into bullion to feed to the Silver Users association in order to routinely attack silver prices—it was of course the same at J.P. Morgan under H.C. Alexander, at Chase under Pilgrims Society member George Champion, and so through the other New York megabanks and the New York Savings Banks, also run by Pilgrims Society members. Continuing with number 2 in this series, as we progress towards the present, we will consider another 15 Pilgrims Society members from the leaked 1914 rosters. Unavoidably we will mention others significantly connected to them. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rule Rule – Massive Fund Flows Pouring Into Gold & Silver Posted: 17 Sep 2014 08:00 PM PDT from KingWorldNews:
One of the key takeaways for KWN readers around the world would probably be Chuck Jeannes from Goldcorp discussing 'peak gold.' He was exposing the fact that gold production most likely peaks this year and trends lower from here. Jeannes cited the shortage of new discoveries and the fact that new mining production around the world is coming from older deposits. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. House passes Fed audit bill but measure is seen doomed in Senate Posted: 17 Sep 2014 07:45 PM PDT By David Lawder WASHINGTON -- The U.S. House of Representatives today overwhelmingly passed a bill that would open up Federal Reserve monetary policy decisions to a congressional audit, reviving a measure passed in 2012. But the legislation approved by the Republican-dominated House is expected to meet a fate similar to its predecessor's: death in the Democratic-controlled Senate. The "Federal Reserve Transparency Act" passed 333-92 in a bipartisan vote. It is largely similar to the 2012 "Audit the Fed" bill championed by former libertarian Representative Ron Paul. ... ... For the remainder of the report: http://www.reuters.com/article/2014/09/17/us-usa-fed-congress-idUSKBN0HC... ADVERTISEMENT Jim Sinclair Plans Market Seminar in Nashville on September 20 Mining entrepreneur and gold advocate Jim Sinclair will hold his next market seminar on Saturday, September 20, in Nashville, Tennesse. For details about attending, please visit: http://www.jsmineset.com/qa-session-tickets/ Join GATA here: Casey Research 2014 Summit http://www.caseyresearch.com/summit/2014-fall Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 17 Sep 2014 07:05 PM PDT "Give me control of a nation's money and I care not who makes the laws." by Jeff Nielson, Bullion Bulls Canada:
Naturally, the dollar's ugly death is never mentioned in the Corporate media. Even with the manipulation choke-hold which this banking cabal has over our so-called "markets"; it would be extremely difficult to pump-up the value of the dollar to its present, absurdly fraudulent level if everyone knew that this was a dying currency – which will be obsolete (and thus officially worthless) in a few year's time. All this is carved in stone. What has (previously) been the subject of considerable debate and speculation is what currency will replace the U.S. dollar as the world's "reserve currency". | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 17 Sep 2014 07:00 PM PDT gold.ie | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The bad guys WILL be beaten -- probably by themselves Posted: 17 Sep 2014 06:53 PM PDT 10:07p ET Wednesday, September 17, 2014 Dear Friend of GATA and Gold: Our longtime supporter R.B. writes tonight in disgust if not quite despair over the increasing rigging of the gold market: "A question I've asked myself a more than once is: Why a guy such as I continues to think he can beat these people and invests accordingly, time after time, the routine being, in each cycle, turning out to have been that he got stubborn when he should have bent, and bent when he should have been stubborn. It seems the problem has been that I thought conventional logic would work sooner or later. Maybe we can beat these people sooner or later, but today's sort of activity makes that even harder to believe." ... Dispatch continues below ... ADVERTISEMENT Silver mining stock report comes with 1-ounce silver round Future Money Trends is offering a special 18-page silver mining stock report about how to profit with the monetary and industrial metal in 2014, and it comes with a free 1-ounce silver round. Proceeds from the report's sales are shared with the Gold Anti-Trust Action Committee to support its efforts to expose manipulation in the monetary metals markets. To learn about this report, please visit: Your secretary/treasurer is no investment adviser; he merely has a layman's hope that truth and justice will prevail, even if that hope is impugned a bit by the hope he also has for the lottery ticket he bought on the way home tonight. But there is something to this hope. The bad guys will be beaten, despite our not knowing at the moment exactly how or by whom, if only because the great lesson of history is that the bad guys always go too far and beat themselves. As for gold price suppression and surreptitious market rigging particularly, your secretary/treasurer suspects that circumstances are most likely to change overnight, as they did on March 14, 1968, when the London Gold Pool collapsed, having run out of gold for delivery: http://en.wikipedia.org/wiki/London_Gold_Pool Will any of us live to see the day? Of course many of our most expert and righteous colleagues died without seeing what they deserved to see. They deserved it more than we do. But the youngest among us might live to see it. You just have to remember that with surreptitious intervention in the markets by central banks, institutions that lately have been authorized to create infinite money and operate largely in secret, which is essentially a license on infinite power, we are up against a totalitarianism far greater than the all the totalitarianism throughout history combined: the Nazis, the Commies, the fascists, the religious crazies, the kings and queens, and the lesser despots. As a result this has taken a little time, and it may require a little more. But, as Gandhi said, "When I despair I remember that all through history the ways of truth and love have always won. There have been tyrants and murderers and for a time they can seem invincible, but in the end they always fall. Think of it -- always." Now Gandhi and $1,200 or so will get you an ounce of gold tonight, which isn't terribly satisfying, but something is always being done at GATA's end. In addition to commiserating with R.B. tonight, your secretary/treasurer slogged through another disappointing and essentially irrelevant piece of journalism about gold, this time by David Milstead in the Toronto Globe & Mail -- http://www.theglobeandmail.com/globe-investor/investment-ideas/gold-bull... -- and then wrote to the author: * * * Dear Mr. Milstead: Reading your report tonight in the Globe and Mail from the Denver gold conference, I was disappointed that apparently no one at the conference mentioned the most important determinant of gold prices: surreptitious intervention in the gold market by Western central banks, intervention that now seems to encompass all major futures markets. While my organization, the Gold Anti-Trust Action Committee Inc., has documented this intervention for many years, we have not had much success in persuading financial news organizations to look at the documentation and to question central banks about it. A summary of the documentation, with links to the most important documents, is posted at GATA's Internet site here: http://www.gata.org/node/13644 An updating from a few months ago is here: http://www.gata.org/node/13829 The documents disclosed recently confirming that central banks are surreptitiously trading all the major futures markets, documents on file with the U.S. Commodity Futures Trading Commission, are here: http://www.gata.org/node/14385 http://www.gata.org/node/14411 http://www.gata.org/node/14421 None of this stuff is what it is often disparaged as being, mere "conspiracy theory." Rather it is all public record and includes admissions from many central bankers themselves. The destruction of markets will continue until financial news organizations report about it and challenge it, so I'll be very grateful if you would look at the documentation. Of course I'd be glad to provide more information. With good wishes. CHRIS POWELL, Secretary/Treasurer * * * Most major financial news organizations have gotten similar cordial pleas from GATA in the last year or so, and while these pleas are seldom acknowledged, nevertheless few people involved with the gold market have not heard complaints that it is manipulated by central banks. We know that the Russia government has known of such manipulation via GATA since 2004 -- -- and we know that the Chinese government has known since at least 2009: http://www.gata.org/node/10380 http://www.gata.org/node/10416 http://www.gata.org/node/12917 We know that a worldwide currency war is under way even if the mainstream financial news organizations won't report it. The obvious peace is gold. Alas, we don't know when. But we do know that doing nothing makes nothing happen. So we press on in the morning, and you can help if you're so inclined, though of course we can't promise results, only effort: CHRIS POWELL, Secretary/Treasurer Join GATA here: Casey Research 2014 Summit http://www.caseyresearch.com/summit/2014-fall Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| An Appalling Practice Used In Only Two Nations, Of Which The US Is One Posted: 17 Sep 2014 06:13 PM PDT Submitted by Nick Giambruno via Doug Casey's International Man, It’s sort of an obscure story, but it’s also incredibly instructive. That’s the story of how Eritrea—a tiny, mostly unheard-of country in East Africa—taxes its citizens who live abroad. Eritrea is one of only two countries in the entire world that taxes its nonresident citizens on their global income. Specifically, Eritrea levies a flat 2% tax on the income of its citizens who reside abroad. Nearly every other country in the world bases its tax system on residency rather than citizenship. For example, if you’re an Italian citizen and leave Italy to become a resident of and earn income in Dubai, you would not have to pay taxes on that income to the Italian government. If you were an Eritrean citizen, on the other hand, you would have to pay taxes to the Eritrean government no matter where you live and work. This practice has been condemned as “extortion” and a “repressive” measure by an “authoritarian” government by the media. In fact, even the UN has weighed in. In Resolution 2023, the UN Security Council condemned Eritrea for “using extortion, threats of violence, fraud and other illicit means to collect taxes outside of Eritrea from its nationals.” You may be thinking, “What’s the controversy? Eritrea is getting criticized, and rightly so.” To understand the controversy, we have to examine the only other country on the planet that has a similar tax system. Eritrea’s Expat Tax on SteroidsThe only other country to tax its nonresident citizens globally is of course the US. The US essentially does exactly the same thing as Eritrea to its nonresident citizens, except that it’s done on a much bigger scale and with absolutely draconian penalties. Eritrea’s paltry 2% tax is a mere fraction of the top 39.6% federal tax rate that expat Americans have to pay—even if they earned that income abroad and never set foot in the US. (The US does allow for an exemption of a limited amount of foreign earned income, if strict requirements are met.) It should also be noted that Eritrea is a poor country and has a very limited capability to actually enforce its 2% expat tax. Many Eritreans who live abroad have never even heard of it, let alone are frightened by it. The US, on the other hand—being the world’s financial and military superpower (for now at least)—does have the capability to enforce its byzantine tax system literally anywhere in the world. When you consider this capability and the penalties—which can only be described as cruel and unusual—it’s no surprise that US expats are terrified. And they should be… or they aren’t paying attention. American expats are threatened with prison and outlandish fines merely for not filing a litany of complex forms correctly—even if no taxes are due in the first place. When you consider the totality of it, it’s not actually a fair comparison to contrast poor little Eritrea and its relatively modest expat tax to the monstrosity of the US system. Eritrea gets hounded, ostracized, and sanctioned for using—according to the UN—“threats, harassment and intimidation” to “extort” taxes out of its citizens living abroad. You would think there would at least be a peep of criticism for the only other country that does essentially the same thing, but on steroids. But you’d be wrong. If you listen for it, all you will hear are the crickets chirping. This isn’t surprising, though. Even though it’s clearly a double standard, it’s easy to understand why it exists. As the world’s sole superpower and issuer of the premier reserve currency, the US is not accountable to anyone. It’s a heck of a lot easier to push around some small, impoverished African country than it is to stand up to the US juggernaut—just ask Canada. Canadian ConfusionRecently the Canadian government took the drastic step of expelling the head of the Eritrean consulate in Toronto because he had been involved with levying the 2% expat tax on Eritreans living in Canada. It would seem that Canada doesn’t like foreign governments shaking down Canadian residents. That is, unless the foreign government is the US government. Somehow I don’t expect the Canadian government to give any American officials the boot… even though they’re shaking down vastly more Canadian residents for vastly more money. Curiously, Canada’s reaction to the US’s expat tax is exactly the opposite of its reaction to Eritrea’s. Rather than taking action to prevent the US government from harassing US citizens living in Canada, the Canadian government has amazingly facilitated it, by complying with the FATCA law—even though it contradicts Canadian law. The Uncomfortable TruthIt’s always better to face reality than to ignore ugly truths. And the story of Eritrea’s expat tax helps us reveal a big one. Namely that Americans—especially those who live abroad—are living under one of the worst tax systems in the entire world. A rather ironic situation, when you take a look at history. Americans went from revolting over a comparatively small tax on tea to the system which exists today. But don’t hold your breath for positive change. At least not as long as the US dollar remains the world’s premier reserve currency. Until then, no other country is going to meaningfully stand up to the US as it forces its tax policies on the rest of the world through things like FATCA. Likewise, positive change through the US political system is just as unlikely. Most Americans passively accept as “normal” the current tax system. And insofar as they want change, many Americans want more people to “pay their fair share.” The bottom line is that it’s simply not possible to stop this tsunami. The best you can do is to educate yourself on your options, and take practical steps to protect you and your family. Moving some of your savings abroad in the form of offshore bank and brokerage accounts, foreign real estate, and physical gold held in safe jurisdictions will go a long way toward protecting yourself. Obtaining a second passport is an important part of the mix as well. It’s not all doom and gloom; the world is your oyster, and there are very attractive jurisdictions that are cause for optimism. That’s what International Man is all about—making the most of your personal freedom and financial opportunity around the world. Be sure to get the free IM Communiqué to keep up with the latest on the best strategies. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seth Klarman: "We Are Recreating The Markets Of 2007" Posted: 17 Sep 2014 04:58 PM PDT Exceprted from Seth Klarman's Baupost letter to investors, We don't know now (nor do we ever know) what the overall market will do. As we've discussed in recent letters, there are reasons for investors to be frightened but also numerous individual opportunities worth seizing. Today's limited opportunity set means that we are still holding sizable cash balances, about 35% of the portfolio at June 30. This dry powder will become more valuable if the markets become more turbulent. Equity markets continue to hit successive record highs, volatility remains strikingly low in equity and most other markets, and inflation is ticking higher. Investors have clearly grown weary of worrying about risky scenarios that never seem to materialize or, when they do, don't seem to matter to anyone else. U.S. GDP, for example, was recently restated to minus 2.9% for the first quarter of 2014. Normally, this magnitude drop signals recession. Equities, nevertheless, marched relentlessly higher. ... In today's ebullient markets, we see many investors ratcheting up their own risk levels--buying substandard credits and piling up leverage are two favorite methods--in an attempt to generate near-term performance. ... The financial markets could be getting closer to an inflection point, where the economic weakness that the bond market seems to be reflecting derails the more optimistic equity market. Or perhaps things can go on forever exactly as they are: a "Goldilocks" stock market resulting from a tepid economy, dampened volatility, and relentlessly low interest rates. Amidst the market rally, complacent investors continue to ignore a growing array of global trouble spots. Contrary to claims from the Obama Administration, the world is not a tranquil place at present. As such, risks facing investors seem to be rising but are not yet priced into the markets. ... Late in a market cycle--when bargains are increasingly hard to find, valuations are lofty, and most investors have been scoring handsome gains for a number of years--we can say from experience that history tends to rhyme. Money becomes more freely available to pursue even the most marginal of opportunities. Dollars pour into venture capital, and the largest buy-side firms take strategic stakes in hot, late-stage private investments just prior to an expected big money IPO. Specialized funds are raised, regularly and easily, to invest in things like Greek private investments, Spanish real estate, or European non-performing loan pools. Willing investors abound for these. It doesn't matter that market prices have mostly rebounded, prospective returns are thereby limited, and the capital in those funds is likely to be put to work whether or not prices warrant and even if conditions on the ground deteriorate. With investment bankers and hedge fund executives canvassing Europe today to bet on recovery, you have the increasingly common circumstance of proliferating "opportunity funds," absent only the investment opportunity. Some clients of hedge funds today are, in a sense, disintermediating themselves, funding new entities to bid higher for the same sort of assets their other, more disciplined managers are already bidding more judiciously for. The discipline problem in this case is not that of the legacy managers; it may just be that of the clients. The pressure to reach for return virtually ensures that many investors will take greater and greater risk for less and less potential reward at market peaks. If you can't find bonds that yield 8%, better grab those offering 6%. Or 4%. If you need 8% to meet your bogey (assumed pension fund returns, for example, or promised returns to investors), then you will be prone to own increasingly risky assets or leverage up the safer ones. These pressures, as much as any indicator, are today signaling danger. Investors today are bidding ever higher amidst frenzied competition to buy pools of non-performing loans, and then leveraging them up to get double-digit returns. Mortgage securities backed by questionable loans issued to dicey borrowers now trade close to par and yield a downright stingy 3-5% where they once yielded a generous 15-20%. A recent brokerage report excitedly touted the new HoldCo PIK Toggle notes of a Croatian consumer goods retailer. Nearly every word of that description is a flashing red light to seasoned investors. To put it a bit differently, writer and investor John Mauldin is right when he says that there is "a bubble in complacency." Fear has effectively been banished. The members of the Fed know it. Stock traders who chase the market to new highs almost daily know it. Implied volatilities (and realized volatilities) are historically low (the VIX Index recently hit a seven-year low), and falling. The Bank for International Settlements recently cautioned that financial markets are euphoric and in the grip of an aggressive search for yield. The S&P has gone over 1,000 days without a 10% decline, according to Birinyi Associates. Dutch and French 10-year government bond yields are at 500 and 250 year lows, respectively; Spain, 225 years. Spanish debt yields were recently inside of U.S. levels. Increasingly, hopes and dreams are being capitalized as if the future is certain and nothing can go wrong, as if up cycles such as the present one don't inevitably sow the seeds of the next decline. The European Central Bank recently cut its deposit rate to an unprecedented minus 0.1%, and Mario Draghi assured that he isn't finished. Can this be done without consequence? Investors have become numb to risk because such policies continue, seemingly forever, and new measures (such as European and now even Chinese QE) are regularly threatened and claimed to be costless and reliably effective. We are far from convinced of this; indeed, the higher the level of valuations and the greater the level of complacency, the more there is to be concerned about. Even as reported inflation remains quite subdued, signs of incipient cost increases are increasingly evident. We are seeing them, for example, in apartment rents, construction costs, and salaries of newly minted engineering graduates and oilfield workers. Like global equity markets, credit markets have been surprisingly resilient, and our worry meter is high here, too. Ecuador recently issued $2 billion of ten-year bonds, as the market shrugged off its 2008 default. Kenya also completed a $2 billion offering, the largest ever debt sale by an African country, according to The Wall Street Journal. That offering attracted $8 billion worth of bids. In the U.S., issuance of low-grade credit is at record levels, as is covenant-lite issuance. Yields are at or near historic lows, which is especially nutty for junk credits, including the hideously risky CCC-rated issues. June CLO issuance set a record. Given changes in regulation, Wall Street has far less capital available to support the trading of this burgeoning junk issuance and the corresponding surge in debt ETFs. A sudden change in rates or sentiment could lead to serious market instability. When is harder to predict than if. While we are not predicting imminent collapse (market timing is not our thing), we are saying that a selloff, greater volatility, and investor losses would hardly be surprising from today's levels. In markets, it's always hard to tell, in the words of the old commercial starring Ella Fitzgerald, Is it real or is it Memorex? Is the market nearly triple its spring 2009 level because things are better, or do things feel better because the market has nearly tripled? Indeed, we can do a simple thought experiment that might be revealing: How would everything feel if the S&P 500 were suddenly cut by one-third or one-half? Would such a drop drive astonishing bargains, or would the U.S. economy soon falter, with festering problems such as unemployment, the federal, state and local deficits, the long-term fiscal situation, and the creditworthiness of most sovereigns suddenly seeming ominous? It's not hard to reach the conclusion that so many investors feel good not because things are good but because investors have been seduced into feeling good—otherwise known as "the wealth effect." We really are far along in re-creating the markets of 2007, which felt great but were deeply unstable when shocks started to pile up. Even Janet Yellen sees "pockets of increasing risk-taking" in the markets, yet she has made clear that she won't raise rates to fight incipient bubbles. For all of our sakes, we really wish she would. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Gold Price was Holding Steady Until the FOMC Report Closing Down at $1,234.40 Posted: 17 Sep 2014 04:48 PM PDT
Here's what's odd. The GOLD/SILVER RATIO closed at 66.142, but in the aftermarket was trading lower, at 65.913. When a panic strikes it usually grips silver fiercer than gold, but not today. Silver's relative strength is a good sign -- no bigger than a cloud the size of a man's hand on the horizon, but a good sign. Gold's break in the aftermarket tugs it down to the low of its recent range and then some. It's lustily oversold, but gives only the merest breath of a hint of turning up in the MACD. In the aftermarket silver lost 10 cents to $18.57, but didn't reach its recent low. Unless both silver and GOLD PRICES come to life tomorrow, then we'll have to endure yet more downside. "Come to life" means close higher, strikingly higher. Easiest thing in the world to do when things go against you is to panic -- throw your hands up in the air, whine and cry, spiral down by lamenting all the stuff you didn't see you should've seen and all the stuff you should have done but didn't do. All that ain't worth spit in the ocean. Worse, it only makes you feel worse and keeps you from taking action. Worse yet, it makes you look like a coward and whiner, and nobody likes those. Besides, I'd hate to admit I'd been whupped by the likes of pudgy Janet Yellum and the socialist apparatchiki at the Federal Reserve. Although for the moment it might seem that way. First thing you do when things go north is look around and ask if you've read them right. It is possible that what you are seeing right this instant is the WASH-OUT in silver and gold and blow-up in stocks and the US dollar. I won't know until we see how markets continue tomorrow. The FOMC's announcement contained no hint of raising interest rates anytime soon, and emphasized that by mumble-mouthing about the labor market. At first stocks foundered on the FOMC announcement, then, reasoning (if they reason) that Zero Interest Rates are good for stocks (they're not), they rose. Dow made a new high close at 17,156.85, up 24.88 or 0.15% but the S&P500 did not make a new high, rising only 2.59 (0.13%) to 2001.57. Both charts show what could be double tops, or a continuation higher. Today took the Dow in silver to 925.15 oz (S$1,196.13 silver dollars) and the upper boundary of that rising wedge. Must stop here if it intends to stop. Dow in Gold broke through the December high (13.80 oz/G$285.28) to end up 1.09% at 14.02 oz (G$289.82). The US dollar index rose 53 basis points to 84.75. Remains fabulously overbought and due for a correction. Maybe tomorrow? FOMC wrecked the yen, down 1.13% to 92.30c/Y100. Euro lost only 0.8% to $1.2859, right at the bottom of its recent range. Most interesting and most paradoxical is the 10 year US treasury note yield ROSE today, by 0.42% to 2.600%. That carries it up into the triangle it broke out of, and above the downtrend's upper boundary. It broke out upside. On news the Fed isn't raising rates any time soon. I can't parse that. Aurum et argentum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2014, 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 or 18 ounces of silver. or 18 ounces of silver. US $ and 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mike Kosares: Scottish secession, not the Fed, just knocked gold down Posted: 17 Sep 2014 04:32 PM PDT 7:30p ET Wednesday, September 17, 2014 Dear Friend of GATA and Gold: Gold has been knocked down tonight not by anything said or done by the Federal Reserve today but by rising fear of Scotland's secession from the United Kingdom and the separatism it is likely to encourage throughout Europe, Mike Kosares of Centennial Precious Metals in Denver writes. This fear and the usual algorithmic trading programs, Kosares contends, have goosed the dollar. His commentary is headlined "It's Not the Fed Taking Gold Down but the Vote in Scotland" and it's posted at Centennial's Internet site, USAGold.com, here: http://www.usagold.com/cpmforum/2014/09/17/its-not-the-fed-talking-gold-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Casey Research 2014 Summit http://www.caseyresearch.com/summit/2014-fall Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GATA secretary to be interviewed Thursday on 'The Larry Parks Show' Posted: 17 Sep 2014 02:56 PM PDT 5:55p ET Wednesday, September 17, 2014 Dear Friend of GATA and Gold: Your secretary/treasurer will be interviewed about gold market manipulation by Larry Parks, founder of the Foundation for the Advancement of Monetary Education (www.fame.org), on "The Larry Parks Show," which is to be broadcast from 7 to 7:30 p.m. Thursday on cable television networks in New York City (Time Warner Channel 56, RCN Channel 83, and Verizon Channel 34) and on the Manhattan Neighborhood Network's Internet site: http://www.mnn.org/live/1-community-channel CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Free Storage with BullionStar in Singapore Until 2016 BullionStar is a Singapore-registered company with a one-stop bullion shop, showroom, and vault at 45 New Bridge Road in Singapore. BullionStar's solution for storing bullion in Singapore is called My Vault Storage. With My Vault Storage you can store bullion in BullionStar's bullion vault, which is integrated with BullionStar's shop and showroom, making it a convenient one-stop-shop for precious metals in Singapore. Customers can buy, store, sell, or request physical withdrawal of their bullion through My Vault Storage® online around the clock. Storage is FREE until 2016 and will have the most competitive rates in the industry thereafter. For more information, please visit Bullion Star here: Join GATA here: Casey Research 2014 Summit http://www.caseyresearch.com/summit/2014-fall Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| How to Invest in a Strong Dollar World Posted: 17 Sep 2014 02:08 PM PDT "We continue to believe that we are moving into a 'strong U.S. dollar world,'" Louis-Vincent Gave, the investment strategist, wrote in a recent note to his investors. "This makes for a very different set of winners and losers, and very different portfolios, than what most investors have been used to over the past decade or so." I think there is a good case for a strong U.S. dollar for the rest of this year and into next. We'll look into the argument here and what its chief effect is likely to be. Gave's comments inspired me to set down my own. In his note, Gave shared the chart below. It shows the dollar index since circa 1985. The dollar index measures the value of the dollar against a basket of foreign currencies. The euro makes up more than half the index (and European currencies did before the creation of the euro). The yen, pound and Canadian dollar fill out the bulk of the rest of the basket. I share the chart because I think the pattern shown might surprise you. After all, didn't the U.S. government run widening deficits after the crisis? Didn't the central bank engage in "money printing"? And wouldn't you expect these would drive the dollar lower? You might've. Plenty of people did. And they were (and are still) wrong. "As things stand," Gave wrote, "we are basically trading roughly at the same levels that have prevailed for most of the post-2008 crisis period." I think there is a good case for a strong U.S. dollar for the rest of this year and into next. In fact, the U.S. dollar index recently put in an 11-month high. There are a few reasons I'd point to for that strength against foreign currencies to continue. First, the U.S. trade deficit continues to shrink. According to the latest readings in June, the deficit shrank by 7%. When the trade deficit shrinks, that means fewer net dollars flow overseas. Hold that thought. Second, the federal deficit is also shrinking. For the fiscal year ending September 2014, the deficit will be around $500 billion. That's less than one-third of what it was in 2009 — the recent peak. Lower deficits means fewer dollars injected into the system. Now put the two together. You know basic economics. What happens when the supply of something gets tighter? Its value rises, assuming demand stays the same. Aye, what about dollar demand? There is steady demand for U.S. dollars from abroad, because it is the world's reserve currency. Meaning just about everyone uses it to settle up international trade. As Gave writes in his book, Too Different for Comfort, it's not easy to unseat a reserve currency. After running through some history, Gave concludes: A reserve currency is thus a bit like a computer operating system — it pays to use the one that everyone else is using, and the more people use one system, the less incentive there is to switch. Once a reserve currency gets entrenched, therefore, it is exceedingly difficult to dislodge, because the benefits of the new currency have to outweigh those of the old one, not by a little, but by a lot. Of course, the dollar's standing won't last forever. But I think we can safely say the U.S. will remain the standard for years yet. There is simply no competitor on the near horizon. Not even one that's close. True, a variety of emerging markets and other countries have learned to use other currencies to settle transactions. That's just good sense. They've been caught short of dollars before and had to endure a crisis of some sort as a result. But these transactions are small in the scheme of things. Meanwhile, those foreign markets are growing and the demand for dollars ought to remain at least stable. Thus, the dollar index is putting in that 11-month high. Part of the U.S. dollar strength also comes from the fact that there are lots of attractive assets in the U.S. that foreigners like to buy and own. They have to pay for them in dollars. Gave makes this point in his book, too. When the U.S. dollar gets cheap, Brazilians rush in to buy condos in Miami. Canadians pick up second properties in Arizona. Russians buy New York condos. Foreign pension funds buy up U.S. debt, stocks and real estate. And whenever there is a crisis, what do people do? They go to cash, and that means U.S. dollars. They buy U.S. T-bills. When the you-know-what hits the fan, it is still the dollar they retreat to. They're not buying Chinese yuan. Gold is another asset seen as a safe haven, but the gold market is tiny and off the radar of the big pools of money out there. When a big fund wants safety, it turns to cash — U.S. dollars. So let's say the dollar stays strong. What effect could it have? It could drive U.S. interest rates even lower. If you look at the 10-year securities of the big EU countries, Japan, Canada and other developed nations, you find that interest rates are all lower than in the U.S. But as Gave asks, "Why own 10-year bonds yielding 1%, or Japanese government bonds yielding 0.5% in falling currencies, when you can own 10-year U.S. Treasuries denominated in a rising dollar yielding 2.5%?" This is the question the market will be asking itself soon, especially as/if that dollar index continues to make highs. Then you can expect to see U.S. Treasury yields falling to levels where these other developed markets already sit. All is to say that if you are looking to get out of the U.S. dollar, cool your jets. As long as the trends above are in place, the dollar index might be on the verge of a bigger rally. Regards, Chris Mayer P.S.: We’ve been covering the fate of the dollar, inflation’s impact on the market and nation’s “race to the bottom” in our email editions of the Daily Reckoning. If you're not signed up to receive it, you’re missing out on crucial context that sets the stage for essays like the one you just read. Sign up to receive our email episodes for FREE, right here, and you’ll get the best (and most snarky) economic and financial analysis on the internet. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rate Bounce After Fed Meeting Pushes Dollar Higher and Gold Price Lower Posted: 17 Sep 2014 01:54 PM PDT This is an excerpt from the daily StockCharts.com newsletter to premium subscribers, which offers daily a detailed market analysis (recommended service). Although today’s Fed announcement didn’t really change anything, the financial markets continued to anticipate higher U.S. rates. The first chart shows the 5-Year Treasury Note Yield climbing close to its yearly high. The 10-Year T-Note yield also bounced. The widening spread between U.S. and foreign yields continues to support the dollar. The second chart shows the Dollar Index hitting a new recovery high. That pushed most commodity prices lower. The orange bars in the second chart shows the Gold Trust (GLD) falling to a new low.
The third chart shows the 2-year Treasury Yield recently hitting a three-year high. Its yield of .55 is well below the 10-Year Yield of 2.60%. The two-year yield would have to climb above the 10-year to signal danger for the stock market. That’s not likely to happen for a long time. History also suggests that when the Fed does finally start to raise short-term rates, stocks usually continue to rise. Sam Stovall of Standard & Poors was quoted in Barrons over the weekend to the effect that the S&P 500 rises 2.6% on average in the six months following the first Fed rate hike, and 6.2% higher over the following 12 months. It’s not a bad thing when rates start rising from historically low levels when that rise is being caused by a stronger economy. It can be a bad thing when rates are rising from higher levels because of a threat from rising inflation. So far, the former scenario best describes the current situation. There just aren’t any signs of rising inflation anywhere. With the rising dollar putting downside pressure on commodities, any inflation threat is being pushed further into the future. Ms. Yellen said today that the Fed won’t start rising the Fed funds rate until it believes the economy is strong enough to handle it. That will be like telling a sick patient that he’s strong enough to stop taking his medicine. That’s usually good news.
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| Peer-to-Peer Marketplace For Gold And Bitcoin Posted: 17 Sep 2014 01:44 PM PDT One of our newest contributors, Michael Mansour from DigitalTangible, submitted a press release announcing the launch of their “Peer-to-Peer Gold and Bitcoin Marketplace.” It is a brand new marketplace where users can list their gold bullion confidently and new buyers, anywhere in the world, can find premium gold deals at lower prices for immediate purchase and delivery. DigitalTangible enables this Peer-to-Peer Marketplace via its global network of professionally insured and bonded custodians. From the press release: DigitalTangible was created to deliver hard asset investing to customers seeking new ways to diversify into all forms of real tangible wealth, while lowering investment cost and delivering increased transparency via its patent-pending Proof of Custody innovation. DigitalTangible's expanded Peer-to-Peer marketplace functionality allows customers to buy and sell their physical gold holdings under custody represented by digital gold tokens linked to the Bitcoin Blockchain. Current customers of DigitalTangible who purchase gold on the platform have a new avenue for liquidity previously unavailable to them. Gold investors can now choose from user-listed sales at potentially no premiums and the wide catalogs of Agora Commodities and Amagi Metals with premiums as low as 1.87% over spot. DigitalTangible also announces the launch of its Priced in Bitcoins real-time chart data of the top precious metals markets including Gold, Silver, Platinum, and Palladium. This commodities industry first allows commodity investors anywhere in the world to monitor precious metals in Bitcoin as well as USD. According to DigitalTangible Founder and CEO Taariq Lewis The strong demand and immense success of our initial sales volumes push us to expand our capabilities in serving the customer who lacks a well-established marketplace for buying and selling gold with speed, transparency and liquidity. Online gold marketplaces already exist, but we are now lowering the marketplace transaction costs borne by investors; something that was previously impossible to deliver.
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| Gold Daily and Silver Weekly Charts - Late Afternoon Smackdown - Ball and Chain Posted: 17 Sep 2014 01:21 PM PDT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rule tells KWN about Denver conference, sees rising investment in monetary metals Posted: 17 Sep 2014 01:09 PM PDT 4:06p ET Wednesday, September 17, 2014 Dear Friend of GATA and Gold: Sprott Asset Management's Rick Rule tells King World News today about the gold mining conference just held in Denver, which included discussion of "peak gold" production. Rule adds that investment fund flows into monetary metals have been "very strong" lately. An excerpt from Rule's interview is posted at the KWN blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/17_Ru... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy precious metals free of value-added tax throughout Europe Europe Silver Bullion is a fast-growing dealer sourcing its products from renowned mints, refiners, and distributors. Because of a legal loophole that will close soon, you can acquire the world's most popular bullion coins free of value-added tax throughout the European Union. You can collect your order in person at our headquarters in Tallinn, Estonia, or have it delivered in any of the 28 EU countries. Europe Silver Bullion is owned and operated by North American and European experts in selling, storing, and transporting precious metals. We have an extensive product inventory of silver, gold, platinum, and palladium, and our network spans the world. Visit us at www.europesilverbullion.com. Join GATA here: Casey Research 2014 Summit http://www.caseyresearch.com/summit/2014-fall Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Celente: Propaganda Aside, It’s Bad Out There & Getting Worse Posted: 17 Sep 2014 01:01 PM PDT  On the heels of the announcement from the Fed, today the top trends forecaster in the world warned King World News that despite the propaganda, it's bad out there and it's getting worse. Celente also discussed the gold market. Below is what Gerald Celente, founder of Trends Research and the man considered to be the top trends forecaster in the world, had to say in this timely and powerful KWN interview.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 17 Sep 2014 10:52 AM PDT The U.S. dollar is dying an ugly death. The U.S. government knows it, and the bankers who run the U.S. government are certainly aware of it – since they are the ones who have (already) undermined its value to worthlessness. Naturally, the dollar's ugly death is never mentioned in the Corporate media. Even with the manipulation choke-hold which this banking cabal has over our so-called "markets"; it would be extremely difficult to pump-up the value of the dollar to its present, absurdly fraudulent level if everyone knew that this was a dying currency – which will be obsolete (and thus officially worthless) in a few year's time. All this is carved in stone. What has (previously) been the subject of considerable debate and speculation is what currency will replace the U.S. dollar as the world's "reserve currency". The crooked bankers and corrupt governments of the Western bloc have already floated several trial-balloons, in their efforts to attempt to maintain control over the global economy by being in complete control of the principal money supply for the global economy. "Give me control of a nation's money and I care not who makes the laws." - Mayer Amschel Rothschild (1744 – 1812) This mantra of financial criminals (in general), and crooked big-banks (in particular) is based on the simplest of premises. If one control's the printing press of a nation (or, in this case, the global economy); that criminal can print-and-steal as much currency as he/she desires – and then use all that dirty money to buy-off politicians, regulators, and entire governments. Buying politicians is "good business" (assuming that one has no scruples) because these stooges-for-hire are notoriously cheap. Spend $100's of thousands (or perhaps a few $millions) buying-off politicians, and it can yield countless $billions in (generally illegal) profits. Put another way; "investing" in governments (i.e. buying them off) pays much better than investing in markets. The result of this obsession of the Old World Order with attempting to maintain control of the printing press for the global economy has been several pathetic attempts to cobble together some (corrupt) replacement paper for the USD. First we had "the Amero". The "Amero" (as the name implies) was to be launched in North America as the official currency for that (new) bloc, and (if the banksters had succeeded in their conspiring) would have coincided with the launch of a "North American Union". However, despite having complete control over the Corporate media (and thus all mainstream "news"); the banking cabal's puppet politicians couldn't sell either the Amero or a North American Union. The next attempted replacement for the USD was even more pathetic. The bankers and their Western governments attempted to take an ordinary credit instrument (the "special drawing rights" by which the International Monetary Fund extends credit), and convert that (somehow) into a currency. This would have entirely eliminated the distinction between "money" and "debt". But it was such outrageous monetary voodoo that even the One Bank's puppet governments wouldn't embrace the scheme. In part; this was due to the simple fact that there would have been no way to portray this instrument of financial fraud (and infinite debt) as "money" to the masses of Sheep in our societies. Lesser, and even sillier schemes have been put forth by the bankers and their minions, but none of them ever achieved enough significance to merit mention. Meanwhile in the Rest of the World (i.e. its less-corrupt regimes) there has been a steady, inexorable move toward at least a quasi-legitimate replacement for the USD: China's renminbi. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold and Silver End Game Here-John Embry Posted: 17 Sep 2014 10:46 AM PDT By Greg Hunter's USAWatchdog.com Dear CIGAs, Investment strategist John Embry says the market manipulation in physical gold and silver is coming to an end. How close? Embry says, "I think we are very close now in the sense that the physical supplies of both gold and silver are being diminished at a fast clip. I... Read more » The post Gold and Silver End Game Here-John Embry appeared first on Jim Sinclair's Mineset. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Are Government Bonds Really ‘Safe’? Posted: 17 Sep 2014 09:51 AM PDT By Dickson Buchanan Jr., Director of International Development: One of the striking ironies of our modern economy is that government bonds are considered safe-haven investments, while gold is a “barbarous relic” to be avoided at all costs. Since the 2008 financial collapse, the bond market has been on a tear, thanks to the Federal Reserve’s endless interest rate suppression. This has only served to reinforce the traditional notion that government bonds are “safe.” | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Divergence Between Debt and Gold Posted: 17 Sep 2014 09:31 AM PDT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rick Rule - Massive Fund Flows Pouring Into Gold & Silver Posted: 17 Sep 2014 08:57 AM PDT  Today one of the wealthiest people in the financial world told King World News that despite the pullback in gold and silver prices, last week saw extremely large fund flows into virtually everything gold and silver related. Rick Rule, who is business partners with Eric Sprott, also discussed why he is so bullish going forward.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Here’s the Market’s Next Hot Sector… Posted: 17 Sep 2014 08:41 AM PDT A major market rotation is underway. And if you can spot this trend and hop on before the herds of unsuspecting investors, you'll make a killing this fall. Here's the setup… The Russell 2000 is down about 3.5% since July 1st. That might not trip any alarms for you—but the small-cap index's sub-par performance is putting it on track to end its longest quarterly winning streak ever. According to my friend and fellow technician Ryan Detrick, The Russell's quarterly win streak of 8 is the index's best performance of all time—even topping two monster runs in the 90s. So if small-caps are slipping, where can you find the next hot sector? The answer might surprise you… Before I talk specifics, let's dive into some strategy. I've said it before and I'll say it again: If you want to make consistent money trading stocks, you have to master the market's up and down cycles. You have to know when to buy with both hands—and when to hang back while all the other traders jump headfirst into the wood chipper. Right now, momentum stocks are whipping back and forth. Small stocks are feeling the pain. Tech names are slipping. Consider these unexpected (but very true) statistics: 47% of stocks in the Nasdaq Composite are down at least 20% from their peak in the last 12 months, according to Bloomberg. Compare that to the S&P 500, where you'll find less than 6% of companies in bear markets. If you take these comparisons a step further, you'll see that the Dow Jones Industrial Average is beginning to break out relative to the Nasdaq…
The last time the Dow outperformed the Nasdaq was during the spring swoon. As popular momentum names began their meltdown, the big boys took over. The Dow easily beat the tech-heavy Nasdaq for nearly two months before investors were ready to take back their "riskier" investments they shunned just weeks earlier. Now, you can see how the Dow is breaking its downtrend vs. the Nasdaq. Remember, rotation is key. Don't get caught flat-footed if the momentum names start slipping. Utilities and blue chips are catching a bid. That's where you can hide out as this rotation begins to take hold… Regards, Greg Guenthner PS: If you want to make consistent money trading stocks, you have to master the market's up and down cycles. Sign up for the Rude Awakening for FREE today to see how you can trade these trends for huge gains… | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 17 Sep 2014 08:35 AM PDT They should have let it collapse. The world would have been forced to reset. Anything would have been better that what we have today. The banks are frauds ... they had to take the peoples tax money to keep the fraud alive. People are so misled. So easily. END THE FED. [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| THE EVIL EMPIRE & THE IDOLATERS OF MONEY -- Harley Schlanger Posted: 17 Sep 2014 08:29 AM PDT Harley Schlanger, historian and national spokesperson for LaRouchePAC joins me to talk about 9/11 and false flag terror, western-backed ISIS terror, Obama's speech, Ted Cruz' undying love for Israel, the death of the dollar, the evil empire & the idolaters of money. We also talk about much... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Report - U.S. National Debt Surges $1 Trillion In Just 12 Months Posted: 17 Sep 2014 08:11 AM PDT The U.S. financial position continues to deteriorate badly and in the last 12 months has increased by over $1 trillion dollars. Nick Laird of Sharelynx has just reproduced his fascinating and timely chart showing the US debt limit, the actual US debt and the gold price all in one chart. From 2000 until around the first quarter of 2013, there was a very strong and close correlation between the growth of the US national debt and the rise in the US dollar gold price. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| "Don't Go Short" Gold Prices Ahead of Fed Says Analyst as US Inflation Goes Negative Posted: 17 Sep 2014 06:51 AM PDT GOLD PRICES held steady around $1235 per ounce in Asian and London trade ahead of the US Fed's policy statement on Wednesday. US consumer prices fell in August from July, new data showed meantime, with minus 0.2% marking the first negative monthly inflation reading since spring 2012. World stock markets ticked higher overall as commodities were flat and major government bond prices rose, nudging yields down. With one day to go before Scotland's vote on independence from the UK, the British Pound regained last week's sharp loss after pollsters put the "Yes" camp ahead. Gold prices for UK savers today retreated to unchanged for the week at £757 per ounce. "Rising rates and a significantly stronger Dollar present headwinds" for gold prices, says a new note from metals analyst Suki Cooper at London market-making bullion bank Barclays. Those factors "are set to overwhelm any seasonal strength in physical demand this year," Cooper believes, cutting her gold price forecast for 2015 to an average $1180 per ounce – the 3-year low reached twice in 2013. "The months of August and September," explains Swiss refiner MKS in a trading note, "are typically strong for gold due to upcoming festivals and wedding season" in India – formerly the world's No.1 gold consumer nation. "However premiums over loco London [gold prices] are currently sitting around $5 per ounce, having been as high as $170 this time last year" after the Indian government first imposed strict anti-gold import rules. "The 80:20 scheme will continue," today's Hindu Business Line quotes Krishna Pratap Singh, a director at India's Directorate-General of Export Promotion, referring to a rule requiring one-fifth of any new imports to be re-exported before the rest is released to the domestic market. "We have [already] allowed more banks to import gold...help[ing] cut the premium that jewellers had to pay." Ahead of the US Fed decision Wednesday, "We would want to avoid taking any positions over the next 48 hours," says a note from US brokerage INTL FCStone. "But if pressed," it adds – saying today's statement is more likely to leave the Fed's forecast for possible interest-rate hikes from zero until well into 2015 – "we would rather be long gold at this point than short." Further ahead, and "as the US economy continues to recover and monetary policies in other countries diverge," Bloomberg quotes analyst Yang Xi at Yongan Futures Co. in Hangzhou, China, "the Dollar will remain strong and put precious metals under pressure." The Eurozone's latest long-term bank-lending scheme will begin Thursday, with the European Central Banking injecting cash in a bid to boost private-sector borrowing. Beijing today injected $81 billion into China's 5 largest banks according to Chinese reports unconfirmed by the People's Bank. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shanghai Gold Trading: The Real Challenge to London Posted: 17 Sep 2014 04:55 AM PDT If China remains a one-way street for gold, it cannot become the world hub... SHANGHAI this week launches a new international gold exchange inside the city's free-trade zone, writes Adrian Ash at BullionVault. Most everyone thinks this is important because "global gold traders [see] the zone as a gateway to China's huge gold demand." But that's the wrong way round. Because if it's to have any real importance, the Shanghai FTZ gold bourse must mark a step towards China's gold output and private holdings flowing out into the world, not the other way round. Start with the situation today. China and the UK could hardly be more different when it comes to gold. China is the world's No.1 gold-mining producer, the No.1 importer, and the No.1 consumer. The UK in contrast...and despite spending its way to household debt worth 140% of income...has no gold jewellery demand to speak of. Private investment demand is also tiny compared to Asia's big buyers On the supply-side the UK hasn't had any gold-mine output worth noting since 1938. Nor does it currently have any market-accredited refineries for producing large wholesale bars. So you might think China plays a bigger role in the international gold market than does the UK. Yet nearly 300 years since it first seized the job, London remains the center of global gold flows, trading and thus pricing. For now at least.  Since 2004, and with no domestic mine output and next to no end demand, the UK has imported over 6,800 tonnes of gold, according to official trade statistics – more than China but behind India, the former No.1 buyer. It has also exported nearly 5,000 tonnes, more than any country except No.1 bar refiner, Switzerland. That's in a global market seeing some 4,500 tonnes of end-user demand per year. Because London is the heart of the world's gold bullion market, and the central vaulting point for its wholesale trade. (Same applies to silver, by the way – the UK was the world's No.1 importer and exporter in 2013.) The relationship with prices is clear. When metal piles up in London's vaults (where its market also offers the deepest, most liquid place for large investors to hold their gold in secure vaults, ready to sell or expand at the lowest costs) prices have tended to rise. But when the rate of accumulation in London is slowing, prices have tended to fall. Gold prices have sunk when London's vaults have shed metal. On BullionVault's analysis, those months since end-2004 where Dollar gold prices rose saw net demand for London-vaulted gold average 38 tonnes. Falling prices, in contrast, saw London's vaults lose 16 tonnes per month on average (imports minus exports). Exclude the gold-price crash of 2013 and we get the same pattern. Average net inflows when Dollar price fell were only 15 tonnes per month between 2005 and 2012. Rising prices, in contrast, saw London vaults add 48 tonnes net on average per month. So what's happening with London-vaulted gold really does matter to world prices. Far more, to date, than what's happening to China's flows. Why? The Middle Kingdom's modern gold boom has come in mining, importing and refining. But in exports it just doesn't figure. Because bullion exports are banned, thanks to Beijing deeming gold to be a "strategic metal". Never mind that China now boasts 8 gold refineries accredited to produce London-grade wholesale bars. Out of a world total of 74, that's more than any other country except Japan. But Chinese-made wholesale bars never reach London (or shouldn't...) because they are dedicated by diktat to meeting its world-beating domestic demand alone. Global investment flows are further locked out by Beijing's block on foreign cash coming into China – another key difference between the UK and China in all financial trading, not just gold. Shanghai vaults have therefore been closed to international gold investment to date. So the impact of global flows on pricing has completely passed China by. This may change this week however, when the Shanghai Gold Exchange launches its new international gold exchange inside the city's huge free-trade zone on Thursday. Six major Chinese banks will provide clearing and settlement services. The first 40 approved members of the exchange include London market makers HSBC, UBS and Goldman Sachs. But whether global investors will choose to hold gold in Shanghai vaults remains to be seen. China remains a Communist dictatorship, after all. Whereas London, even in the dark days of 1970s exchange controls – which barred UK investors from buying gold, as well as moving cash overseas – still freely allowed foreign money to come and go as it pleased, not least through the City's world-leading gold and silver markets. Remember, China's gold market has only answered Chinese supply and demand so far. Its mine-supply leads the world...but cannot reach it. China's demand has meantime needed imports from abroad to supplement what Chinese mines produce. That demand leapt when world prices fell in 2013, doubling China's net imports through Hong Kong from 2012 to well over 1,000 tonnes, and clearly showing that – for now – its gold market remains a price taker, not a price maker. The running is made instead by free-flowing investment cash choosing to buy or sell down gold holdings worldwide, and that decision shows up in London, center of the world's bullion trade. Yes, Shanghai's new free-trade zone gold market marks one step towards changing that. Yes, the FTZ is very likely to replace Hong Kong as the stop-off point for gold imports entering the world's No.1 consumer market. But only a truly liberalized gold trade, with foreign cash and gold flowing in...and out...right alongside China's domesic flows will challenge London's 300-year old dominance. Attachments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Can Gold Price Finally Recover? Posted: 17 Sep 2014 04:00 AM PDT Gold recently fell to its lowest level in seven-and-a-half months as the dollar rose to a 14-month high. Easing tensions in Ukraine and the Middle East also acted as a drag on gold and silver prices. Investors have been asking the obvious question as to whether gold can recover from here and if a bottom of at least short-term duration is imminent? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| What Is Next For The Price Of Silver: Collapse or Rally? Posted: 17 Sep 2014 03:32 AM PDT Facts and figures from the silver marketSENTIMENT: Sentiment for gold (and silver) is very weak – as low as it was at the bottom in June 2013. This suggests both gold and silver are again at or near a bottom. GOLD TO SILVER RATIO: The ratio is currently about 66 – near the high end of the slowly declining range for the past 27 years. See the graph and note that a high ratio indicates silver is too inexpensive in relation to gold. All of the ratio peaks (February 1991, March 1995, March – May 2003, October 2008, and July 2013) occurred at significant silver lows.
OVER-SOLD TECHNICAL INDICATORS: The silver market is "over-sold" once again, as it was in October 2008, June 2013, and December 2013. Note the chart of weekly silver and the low reading on the TDI_Trade_Signal_Line. Other weekly oscillators show similar readings. The daily chart and monthly chart for silver and the daily and monthly TDI oscillators also show "over-sold" conditions. Such "over-sold" conditions are (eventually) followed by rallies. This is not to say a market can't become temporarily more "over-sold" but the probabilities have shifted toward rally instead of decline.
CYCLES: Monthly cycles are of little use for trading, but they do help with a big picture view for investors. Silver made an important low in July 1997, another low in March 2003, a major low in October 2008, and what appears to be a major low in September 2014. They are all approximately 5.75 years apart.
DEBT: People have written about out-of-control and unpayable debt extensively. Since currency is created as debt, and most or all governments around the world run deficits and perpetually increase their debt, it is the basis of our current financial system. A quick review:
National debt has increased exponentially since 1913 at about 9.0% per year, and since 1971 at about 9.2% per year. Silver has increased exponentially since 1913 at about 3.6% per year and since 1971 at about 6.4% per year. Also exponentially increasing, on average, are gold prices, crude oil prices, politician salaries, postage prices, the number of government programs, food prices, and military spending. Do you believe that politician salaries, military spending, and national debt will continue increasing? So do I! Consequently I believe that consumer price inflation is alive and well, and that we should expect a much higher cost of living in the next few years. In the long-term, I believe the prices for gold and silver will increase even more rapidly. SummaryBig Picture – the next decade: Prices for what we need, food and energy, will continue to increase as long as we live in a debt based fiat currency economy. Silver and gold prices will rapidly increase along with debt, the money supply, and politician promises. Medium Term – several years: Silver cycles indicate another important low probably is occurring about now. Expect silver prices to rally in the next several years. Monthly Prices: Silver is "over-sold" based on the charts, the TDI oscillator, and many other oscillators. Expect silver prices to rise. The gold to silver ratio is high which indicates relatively inexpensive silver prices and higher silver prices ahead. Weekly Prices: Same as monthly prices – "over-sold" and ready to rally. Daily Prices: They are also "over-sold" but pretty much controlled by the High Frequency Trading algorithms and the temporary needs of the "powers-that-be." From Michael Pento: Why Goldman Sachs is Wrong on Gold.
Believe it! Read my book: "Gold Value and Gold Prices From 1971 – 2021." (available at Amazon.com and GEChristenson.com)
Gary Christenson | The Deviant Investor
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| Unwinding the Hyper-Inflationist "Dollar Collapse" Posted: 17 Sep 2014 02:19 AM PDT The US Dollar keeps getting stronger, not weaker as so many have predicted... IT IS time now for a closer look at Uncle Buck, writes Gary Tanashian in his Notes from the Rabbit Hole, since this reserve currency is key to so many asset markets the world over. We'll use the standard weekly currency chart NFTRH followed along for months as the Euro found resistance at the long-term downtrend line as expected. The commodity currencies long ago lost major support and non-confirmed the commodity complex, and the US Dollar moved from a hold of critical support, to a trend line breakout, to its current impulsive and over bought status. But as the charts below show, USD is over bought on both daily and weekly time frames. The monthly chart in contrast shows a big picture view of a basing/bottoming pattern, and it is bullish. That is a long-term director, so regardless of what happens in the short-term, a process of unwinding the hyper-inflationist 'Dollar Collapse' cult is ongoing. Signs point to disinflation toward deflation. We'll start with a daily chart and then ascend right through the weekly and then the monthly to take the pulse of USD. As noted, the daily chart below is very over bought. It is currently consolidating the big jerk upward that has come against Euro-negative policy from the ECB and an increasing drum beat about an eventual rise in the Fed Funds rate in the US. People are finally catching on to the fact that the US economy has been strengthening since early 2013 and that the Fed is looking out of touch holding ZIRP despite this strength. So the Dollar is getting bid up. The question the chart asks is whether the current consolidation will work-off of another over bought situation, or is a prelude to a reversal? The answer is going to be key to the bounce potential in many asset markets, but especially commodities, which are generally tanking and precious metals, with gold eventually due to firm after it finishes its bear market and its fundamentals come in line.  You will recognize the weekly chart as it is the top panel of our long-running multi-currency chart. RSI has been added to this view to show the over bought level. Note that the weekly has joined the daily in over bought status on this most recent drive, whereas it was merely healthy – and not over bought – the last time the daily registered an over bought reading in July.  The monthly chart directs the big picture. An eventual upside target of 98 is indicated by measuring the pattern's depth. Adding credence to the idea that today's over bought status is different from the one in July (ref. daily chart above) and that USD can take a routine correction is that this time there is significant upside resistance at around 85. The previous daily over bought had no such monthly resistance.  The macro plan has not changed. It is not complete by any means, but components of it seem to be in progress. That plan includes an eventual economic deceleration and conveniently enough, while a strong USD can pull global capital into the US like a well tuned Dyson (Hoover for old school domestic engineers), it may start to erode US business activity. Specifically, future ISM reports for example, will be very interesting. Manufacturing likes a weaker Dollar. They may have repealed many laws of economics (or maybe just delayed them), but I have a feeling this one will endure. In the financial sphere things are more complicated. As global funds seek to get themselves denominated and/or invested in USD, large (too big to fail) financial entities – the US' greatest industry after all – can benefit longer than some factory selling widgets to European customers. For 19 months now we have been noting first the potential for economic strength (with the Semiconductor equipment ramp up) and then the realization and persistence of that strength. The strength in Uncle Buck is at least in large part a reflection of that. If just one traditional market signal holds to its historical modus operandi, that strength would eventually wear at the economy as an angry Uncle Buck, so reviled for so long as an anti-market to ongoing asset market parties reclaims his territory. (Recall how impressive the rolling commodity speculations featuring USD as a counter-party were uranium and China in 2007, crude oil and copper in 2008, silver and in my opinion to a lesser extent, gold in 2011 – although that event was driven largely by the Euro too.) Meanwhile, USD is at risk of a correction if it cannot work off the daily and weekly over bought status in a calm manner as it did in August. In that event, assets could bounce with the implication of commodities and precious metals getting counter trend rallies and stocks continuing upward. If on the other hand USD works off the over bought with another consolidation, the trend is up in all time frames and some pretty big upside could follow. The daily chart will instruct so while we will continue to monitor the major currency group from weekly and monthly perspectives, consider Uncle Buck on radar for more intensive short-term management going forward. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Time to Buy Gold Stocks Cheap? Posted: 17 Sep 2014 02:10 AM PDT Mining equities just keep getting cheaper as gold prices struggle... WITH a career spanning three decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the New Orleans Investment Conference, the oldest and most respected investment event of its kind. As Lundin here tells The Gold Report, he now believes at least a small amount of the massive liquidity produced by loose monetary policy in Western economies will find its way into mining equities following the summer pullback – but don't wait long... The Gold Report: On July 30, you sent out a Gold Newsletter alert that forecast a pullback in the midsummer bull market. The next day the Dow dropped 317 points, while the Nasdaq fell about 93 points. Since then the Dow has climbed back above 17,000, the Nasdaq above 4,600. Should investors dismiss that drop or do you believe it was akin to a tremor preceding an earthquake? Brien Lundin: That particular call made me look like a genius at the time, but right after that drop the stock market took off and reached new highs. The stock sell-off in late July was a sign that investors were nervous because we haven't had a meaningful correction during this bull market. However, there are potential pitfalls ahead for the economy – we still have to navigate the US Federal Reserve's ending of quantitative easing and its first interest rate hikes. There's nothing directly ahead that indicates a major correction will occur, yet these things happen when you're least expecting them. TGR: You've been warning investors in Gold Newsletter about the erosion of the foundation of the US equity market. Please give our readers a few points to underpin your thesis. Brien Lundin: When I put forth that thesis, Q1 '14 gross domestic product (GDP) had missed consensus estimates by 3.3%. The consensus going into that report was for 1.2% growth but it turned out to be just 0.1% – only to be subsequently revised further down to -2.1%. The miss for the consensus estimate was remarkable. I posited that these reports had possibly captured some underlying weakness in the economy. I expected a rebound in Q2 '14 because a lot of economic activity was put off due to the unusually cold winter weather. But Q2 '14 GDP was over 4%. I certainly wasn't expecting anything like that, and neither was anyone else. So, the idea of a major stock market decline stemming from a weakening US economy has become more remote, at least for the time being. TGR: What are you seeing now? Brien Lundin: The massive amount of money created in developed economies since the 2008 credit crisis really has not resulted in significant retail price inflation. If anything, there has been disinflation in major economies, such as in Europe where the European Central Bank is now turning to quantitative easing. The real result of quantitative easing in the US and loose money policy throughout the Western economies is a virtual flood of liquidity looking for places to land. It's why we have US Treasuries being bid down to their lowest rates ever, while the US stock market is hitting record highs. Those two asset classes should be at opposite sides of the seesaw, but there's so much money looking for a home that both are soaring simultaneously. TGR: The Market Vectors Junior Gold Miners ETF (NYSEArca:GDXJ) has been trading lower since mid-July. In fact, the Dow Jones Industrial Average has outperformed that ETF over the last month or so. Is that a buying opportunity? Brien Lundin: I think so. The timing is critical, though. While I don't see a near-term, fundamental driver to push the market higher in the very near future, there are some factors that I think will push the junior resource stocks and the metals higher this fall. So your real buying opportunity is probably over the next couple of weeks. All of the liquidity that I referred to earlier has to go somewhere. There's a broad consensus that gold is going lower and a lot of money is shorting gold. At some point over the next month or so – at the first sign that gold is not going lower – we're going to see some short positions get covered, and that ocean of money is going to start sloshing into gold and silver. At that point we should also see stronger seasonal demand for gold and that also will help power the gold equities market forward. TGR: Every year your company, Jefferson Financial, puts on the New Orleans Investment Conference. This year the show celebrates its 40th anniversary from October 22-25. The headline event is a panel discussion with former Fed Chairman Alan Greenspan, legendary investor Porter Stansberry and Marc Faber, publisher of the Gloom, Boom & Doom newsletter. What can investors learn from this? Brien Lundin: On the Greenspan panel we're going to pointedly ask him about the Fed and the Treasury's role in manipulating the gold price and how that occurs, if it occurs. He no longer has any reason to obscure the truth. There will also be a moderated Q&A with Greenspan where he'll take questions from the audience. Those two panels with Greenspan are going to make headlines, if not history. He has a fascinating story. Greenspan was one of the most ardent and eloquent goldbugs in the 1960s. He was a close follower of Ayn Rand and some of his writings on gold still stand today as among the best ever produced on the role of gold in protecting citizens from currency depreciation. The rest of our lineup includes Dr. Charles Krauthammer, Peter Schiff, Rick Rule and Doug Casey. People come back year after year because they get to meet these experts and talk with them. They get stock recommendations and strategies that they'll never get anywhere else. It's always a dynamic event. TGR: Thank you for talking with us, Brien. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 17 Sep 2014 01:57 AM PDT Small-cap US stocks are lagging bigger companies. The lesson...? SO FAR this year, writes Frank Holmes at US Global Investors, small-cap growth stocks have surprisingly been lackluster. After 2013, when it gained a scorching 38.8%, the Russell 2000 has delivered a tepid 0.62% year-to-date (YTD).  Performance has been so poor, in fact, that the spread, or bifurcation, between the 12-month return residuals of small and large caps is at its widest since the dotcom bubble of the late 1990s and early 2000s. This bifurcation is one of the largest since 1975. According to Morgan Stanley, we're in the worst beta-adjusted period for small-cap stocks since the late 1990s. The 12-month return in August for small-caps was -9.7%, placing it in the bottom 6% of any 12-month period since the mid-1970s.  The bifurcation is more than apparent when you compare the year-to-date (YTD) total returns of the big boys (those in the S&P 500 Index and Dow Jones Industrial Average) to their little brothers (those in the Russell 2000 and S&P SmallCap 600 Index). The Russell, though it led the other indices in March, has failed to reach a new record high, which the S&P 500 and Dow managed to achieve in the last couple of months.  Are we on the verge of another bubble? We don't think so. History shows bubbles are associated with excessive leverage and lofty valuations. That is not the case this time. In July, Federal Reserve Chairwoman Janet Yellen stated in her semiannual report to Congress that small caps appear to be "substantially stretched," even after a drop in equity prices at the beginning of the year. There may be some truth to Yellen's remark, an ideological echo of former Fed Chairman Alan Greenspan's now-famous "irrational exuberance," his description of investors' rosy attitude toward dotcom startups of the late 1990s and early 2000s. Much of the valuation gap has evaporated. Looking at the price/earnings to growth ratio – 20x for the Russell 2000 and 18x for the S&P 500 – small caps have slightly higher yet reasonable multiples and may offer better long-term growth prospects. The recent underperformance among small caps has been a headwind for a few of our funds, most notably our Holmes Macro Trends Fund (MEGAX),whose benchmark, the S&P 1500 Composite, tracks the performance of not just large- and mid-cap US companies, but small-cap as well. With a bias toward small-cap companies, the fund has underperformed compared to last year, when such stocks were doing well. Because small caps tend to have higher beta than blue chips, you would expect them to outperform in a generally rising market – which we're currently in. So it appears that a major rotation out of these riskier, more volatile stocks has inexplicably occurred, leading to the wide bifurcation between small and large companies. The good news is that, based on 20 years of historical data, stocks in the Russell 2000 tend to rally in the fourth quarter and continue steadily until around the end of the first quarter. Over this 20-year period ending in December 2013, the Russell has generated an impressive annualized return of approximately 10%.  Whether or not this fourth-through-first-quarter rally will recur in 2014 and early 2015 is impossible to forecast. What can be said, however, is that prices and returns do tend to revert back to their mean over time. I discussed this concept in full last month in the second part of my Managing Expectations series,"The Importance of Oscillators, Standard Deviation and Mean Reversion". Although small caps are underperforming right now, the concept of mean reversion suggests that they'll return to their historical relationship with large caps eventually – just as they did following the dotcom bubble. In his 2006 book The New Rules for Investing Now: Smart Portfolios for the Next Fifteen Years, investor James P. O'Shaughnessy makes the case that small stocks have a performance advantage over large stocks simply because, well, they'resmall. This might sound like circular logic, but as he writes:
O'Shaughnessy examined every 20-year rolling time period beginning each month between June 1947 and December 2004. That's 691 20-year rolling time periods. What he found is that "small stocks outperformed the S&P 500 84% of the time."  If O'Shaughnessy's research is accurate, it seems very reasonable to be optimistic in the long term. It would be myopic to look only at the Russell 2000's recent underperformance and impulsively rotate out of small caps without also considering the decades' worth of data showing the growth that can be achieved. Comparing index funds to actively managed funds, Kiplinger columnist Steven Goldberg wrote last month: "[I]ndex funds are designed to give you all the upside of bull markets and every bit of the downside of bear markets. Only good actively managed funds can protect you from some of the pain of a bear market." We at US Global Investors agree with Goldberg's attitude toward good active management. Although MEGAX might be temporarily underperforming right now as a result of the sentiment-driven and disappointing performance of small-cap stocks, we're confident that they will eventually revert back to their historical pattern as fear over Fed tightening settles down and fundamentals prevail. In the meantime, we will continue to apply our dynamic management strategy of picking stocks in the fund using the 10-20-20 model: we focus on companies that are growing revenues at 10% and generating a 20% growth rate and 20% return-on-equity. This approach has served us very well in the past and enabled us to select the most attractive growth-oriented companies for our clients. On another note, and as I explained in a recent Frank Talk, a strong US Dollar could spell trouble for commodities such as gold, which tend to have a historic inverse relationship to the Dollar.  When the Dollar does well, investors often choose to store their money in paper rather than bars. Though September is statistically the best month for gold, with the Dollar rising almost two standard deviations above its mean, this month might not be kind to the yellow metal and other commodities. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eric Coffin: Can Investors Still Find Tenbaggers? Posted: 17 Sep 2014 01:00 AM PDT The continuing strength of the U.S. dollar is bad news for the price of gold, and Eric Coffin believes that in the short term a price of $1,200/oz is possible, though there is room now for an oversold bounce. This, of course, is bad news for gold miners and explorers. But in this interview with The Gold Report, the publisher of Hard Rock Analyst counsels that even in a bull market investors are best advised to seek out the potential tenbaggers and presents several companies in gold, base metals and uranium with the potential to flourish even in the bad times. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 16 Sep 2014 10:54 PM PDT Dear Reader, The topic of today’s guest essay is corn. Stephen Belmont, chief market strategist at RMB Group, joins us to explain why the stuff is unusually cheap, and offers a strategy to profit from corn prices returning to normal. Steve’s corn trade requires a futures account, so before turning this column over to him, let me quickly offer an alternative idea to those of you with only stock-trading accounts. Pacific Ethanol Inc., (PEIX), an ethanol producer, has gained a whopping 341% year to date through August. Its stock chart is jaw-dropping. Ethanol fuel, of course, is primarily made from corn. Cheap corn equals fatter margins, so with corn at multiyear lows, ethanol producers are raking in profits. Other ethanol producers up big in 2014 include Green Plains Inc. (GPRE, up 131%), and REX American Resources Corp. (REX, up 142%). If you want to bet on rising corn prices without using futures, consider shorting one of these high fliers. You’ll have to do your own due diligence, but I strongly suspect that these companies’ breathtaking run-ups are not sustainable—especially since it’s a matter of when, not if, corn will return to more historically normal prices. With that, here’s Steve. This article originally appeared in World Money Analyst—a publication that I consider required reading for its unmatched boots-on-the-ground intelligence on international investment opportunities. Enjoy. Dan Steinhart | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 16 Sep 2014 05:00 PM PDT Gold recently fell to its lowest level in seven-and-a-half months as the dollar rose to a 14-month high. Easing tensions in Ukraine and the Middle East also acted as a drag on gold and silver prices. Investors have been asking the obvious question... |
The last 10 days for me has been consumed by the Precious Metals Summit near Vale, and then the gathering by the Denver Gold Group. There were 400 companies exhibiting. Denver, in particular, had the major gold mining companies from around the world as well as many intermediates and juniors. So it was a situation where there was a great deal to learn in terms of updates from companies. It was a very, very useful exercise for us because we had a team of people covering a lot of ground and participating in a great many meetings.
The U.S. dollar is 
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