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Sunday, October 7, 2012

Gold World News Flash

Gold World News Flash

Silver Update 10/6/12 Obamanomics

Posted: 06 Oct 2012 11:56 PM PDT

Q&A With the Doc: The Causes & Results of Hyperinflation

Posted: 06 Oct 2012 10:30 PM PDT

from Silver Doctors:

Sitting Bull writes:

I am a physician and have converted my entire portfolio to 50% gold and silver bullion and 50% quality mining stocks. So I am with you. What I am trying to understand is exactly how a 40% devaluation of the dollar will immediately affect American's day to day lives. Can you help me with this? I have studied and studied, but I am trying to understand how prices will be affected for the average person initially. What happened in Mexico? What happens here? Does gasoline go up 80% overnight? Does food go up 80% overnight? I was a Peace Corps volunteer, so I can explain the inner workings of certain pacific island cultures in ways no text book can seem to get right. I was hoping you could do the same thing for me involving this. Thanks.

Sitting Bull,

For an understanding of hyperinflation and where we are headed, a proper understanding of Jim Sinclair's formula, released nearly 8 years ago, is crucial:

1. First interest rates rise affecting the drivers of the economy, housing, but before that auto production goes from bull to a bear markets. -Check

Read More @ Silver Doctors

Phony Government Release Used To Attack Gold Market

Posted: 06 Oct 2012 09:30 PM PDT

from KingWorldNews:

On the heels of the latest jobs data, today Michael Pento writes about the true employment situation, and how this and other key metrics will impact hard assets, particularly gold, going forward. Pento has been incredibly accurate regarding his predictions in these areas. He now states that "… investors around the world are being forced into buying precious metals."

Michael Pento writes exclusively for King World News to let readers know what to expect going forward. Here is Pento's piece: "The gold market dropped nearly $20 an ounce shortly after the U.S. Non-farm Payroll report was released on Friday. The Labor Department reported that the unemployment rate dropped to 7.8%, from 8.1% in the month prior. Gold prices retreated on the fear that the Fed may decide to truncate its debt monetization schemes in the near future."

Michael Pento continues @ KingWorldNews.com

Stacking silver in “Looper”

Posted: 06 Oct 2012 08:37 PM PDT

from SilverFuturist:

Hollywood knows what the real money is – while they might not say silver and gold are real money, they show them being real money.

Jobs report 114,000 new hirings against expectations of 115,000/unemployment rate falls to 7.8%/gold and silver drop on obvious raid/Implats fires 12,000 miners from their S.Africa mine

Posted: 06 Oct 2012 07:59 PM PDT

by Harvey Organ, HarveyOrgan.Blogspot.ca:

Gold closed down $15.50 to $1778.60 while silver fell in sympathy down to $34.52 a drop of 52 cents.

It is customary for the bankers to whack gold either the day before the jobs report or immediately after the report is given. This has been going on for years and today they did not disappoint. The bankers are in desperate shape to keep silver below the 35.00 dollar barrier and gold below the 1800 dollar marker. The open interest on both metals have been rising steadily and it has put tremendous pressure on the bankers as they supply the necessary non backed paper to keep gold/silver from skyrocketing. Meanwhile demand for physical metal continues unabated. From South Africa we learned that the big Implats mining corporation decided to fire 12,000 workers. This will surely go over well in South Africa. This nation may be the second one to enter into hyperinflation after Iran as the rand sinks rapidly in value against all other currencies as this country implodes. Over in Germany we witnessed German factory orders fall last month by 1.1%. Fighting is escalating between Syria and Turkey and rioting continues in Greece and now Bahrain.

We also see trouble brewing in Cyprus which is discussed in detail by Wolf Richter. However the big story of the day was the release of the jobs numbers which came in at 114,000 instead of the projected 115,000. The USA needs 150,000 new jobs just to keep up with population growth.

Read More @ HarveyOrgan.Blogspot.ca

Looking Ahead

Posted: 06 Oct 2012 07:56 PM PDT

from TF Metals Report:

Unfortunately, all the White-Out in the world wouldn't have been enough to hold back the BS of the BLS. So, after failing to get our breakout yesterday, we must regroup and reassess.

On the bright side the charts still look pretty clear and we'll get to them in a minute. First, we have to address the outrageous CoTs from yesterday.

Outrageous, disgusting and pathetic. These are just a few of the terms that could be used to describe the latest actions of The Cartels as well as the inaction of the CFTC. Despite all of the "good cop" bluster of "Thunderlips and Baldy", the remain collusive partners in crime and enablers of The Cartels. Here is the conclusive data:

GOLD

Tuesday, 8/14: Price closed $1602. Total Gold Cartel gross short position 291,358. Net short ratio 1.98:1.

Read More @ TF Metals Report.com

A Glimpse Inside The Industry That Owns Everything

Posted: 06 Oct 2012 07:45 PM PDT

From Jason Kelly, author of The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything - an excerpt

Prologue

Standing in Legoland in Carlsbad, California in 2011, fulfilling a promise to my then eight-year-old son William, it hit me. I was strolling around a Blackstone-owned property. We'd woken up in a Homewood Suites, owned by Blackstone-backed Hilton. We'd driven to the park in a rental car from Hertz, owned by private-equity firms Carlyle and Clayton, Dubilier & Rice. Practically every time I'd opened my wallet that day, it had been to a company owned by private equity. Even on vacation, I couldn't escape.

A few months later, I had dinner with Greg Brenneman, who'd held top positions at Continental, Burger King, and Quizno's, all private-equity-owned at the time he was involved. Brenneman is now the chairman of CCMP Capital, whose investments have included 1-800-Flowers.com and Vitamin Shoppe. We talked at length about the ubiquity of PE ownership -- my J. Crew sweater, the Dollar General store in my wife's hometown in the Catskills. I started a running list on my BlackBerry that quickly grew to dozens of examples. Brand names piled up, from Toys "R" Us to Petco. The more I looked, the more I found it.

The numbers are staggering. Private-equity firms globally and collectively had almost $3 trillion in assets at the end of 2011.1 The companies they own account for about 8 percent of the U.S. gross domestic product by one estimate.2

Contemplating how they got all that money in the first place triggered another thought, a memory of a colleague mentioning that her mother was a teacher in suburban Toronto and had her retirement account in the hands of the Ontario Teachers' Pension Plan. I'd profiled that pension for Bloomberg Businessweek in early 2010 -- they were pursuing a strategy of buying companies directly, like vitamin retailer GNC. Thousands of other pensions, endowments, and government funds, from California to Singapore, were committing hundreds of billions to the likes of Blackstone and KKR. I thought of my in-laws, each with a pension. They, and millions of folks like them were, usually unknowingly, owners of dozens of companies on my ever-growing BlackBerry list.

While the business of buying and selling companies is far from new, the emergence of these players was relatively sudden. What began as a cottage industry known as bootstrapping and leveraged buyouts in the 1970s and 1980s, had blossomed in the 1990s as a handful of small players started to grow rapidly and others, eyeing a huge opportunity, hung out their own shingles. Somewhere toward the turn of the twenty-first century, the more genteel "private equity" became the chosen descriptor. The name may have changed, but the basic business model was the same: collect money, pair it with debt, and buy a company with the intent of selling it down the line for a profit.

The period from 2000 to the present changed everything. Small private partnerships accustomed to rounding up a few hundred million dollars suddenly were raising funds well in excess of $10 billion, accepting huge sums of money from pensions and endowments eager for investment returns topping 20 or 30 percent a year. Wall Street became an eager lender, developing new ways to provide the debt financing in order to get the associated fees. Big investment banks took to investing alongside their clients.

All that money meant that almost nothing was out of bounds for private equity, and 2005 to 2007 saw a spate of deals for companies deeply entrenched in the infrastructure of our everyday lives, from hospital giant HCA to credit card processor First Data to hotelier Hilton.  My own introduction was a baptism by fire; I began covering the industry in February 2007. During my first week, news leaked of the biggest-ever takeover, the leveraged buyout of power producer TXU.

What happened next was a different sort of education. Deal making came to a screeching halt with the credit freeze of 2007 and 2008 that triggered the broader global financial crisis. The private-equity managers generally hunkered down, and tried to soothe their own anxious investors pummeled by the public markets -- investors who also were worried about what they owned through their buyout funds. Unlike hedge funds, where a bad trade can mean huge losses, an ill-conceived private-equity deal can linger. When the dust settled, private-equity firms still owned all of the companies they'd bought in the boom.

Emerging from the crisis, existential questions abounded. My Legoland epiphany demonstrated just how embedded private equity was in our everyday lives. What seemed like an arcane corner of finance when I arrived was actually central to all of us and very few people actually knew who they were or what they did.

Reporting and writing about business, especially finance and especially in New York, can sometimes feel like a demented sports beat, simply keeping score and tracking rich people getting richer or marginally less rich. But in this case, that's just scratching the surface. What these guys are doing matters to all of us in some form or fashion.

Private equity by its nature and design, is secretive, a breathtakingly wealthy corner of the world where the names only occasionally escape the business pages, names like Stephen Schwarzman, David Bonderman, and David Rubenstein. The relatively small firms they've created, by virtue of what they were able to buy with those ever-growing pools gave them outsized influence as owners and employers. Blackstone, Schwarzman's firm, alone counts almost a million employees through companies it controls. They are modern day Wizards of Oz -- the men behind the private-equity curtain.

The best way to understand these men is to look at what they've created, and it's startling how much each of the largest private-equity firms are mirrors of the founders themselves. There's an egotism at the center of the whole exercise. After all, each of these men, some more willingly than others, ditched successful careers because they deeply believed they saw something that only a handful of others did. And then they went a step further. They decided to build what have become massively influential institutions meant to outlast them.

To understand what they created and what it means to have them so entrenched in our lives, I decided to follow the money to reveal through their words and actions the implications of their activities to fix actions. The trail begins in the sanitized meeting rooms of public pensions, moves to palatial suites in skyscrapers with top-of-the-world views, and on to discount stores and pizza chains and hotels, before it comes all the way back to those same vanilla pension offices and eventually to the retirement checks of teachers and firefighters and, in one of several twists, even some workers of the companies owned by private-equity firms.

Along the way, that money finds itself augmented by debt and pushed into companies that may thrive, implode, maintain, or simply fade away. The money befuddles Washington lawmakers and regulators, in a debate sharpened by the presidential candidacy of Mitt Romney. His private-equity career has brought the industry into the public consciousness in a never-before-seen way, prompting its largest players to explain themselves with at times surprising candor.

Their contemplation stems not only from a bright spotlight but from their own personal situations. Having created unbelievable amounts of wealth for themselves, they're mulling their own legacies, in terms of the empires they've built and what they'll ultimately do with their riches.

With all the talk of retirement, it's easy to forget the relative youth of the industry. I've come to think of private equity as a teenager with a lot of potential, but still struggling with adolescent tendencies -- at times unresponsive, rash, selfish, and fluctuating between arrogance and self- doubt. By virtue of some hard work and a lot of luck, it's ended up in a position to potentially be an upstanding member of society. To ignore it or wish it away is foolhardy. It's here and the influence is growing. And whether it's the price of your morning cup of coffee, your bed sheets on a business trip, or the size of your retirement check in the mailbox, you're involved.

1. Paul Hodkinson, "Logjam Gives Buyout Firms $1.2 Trillion Hangover," Financial News, March 19, 2012. http://media.e?nancialnews.com/story/ 2012-03-19/logjam-gives-buyout-?rms-hangover 

2. Katie Gilbert, "New Green Portfolio Program Could Change Private Equity," Institutional Investor, September 6, 2011. www.institutionalinvestor.com/Article/2895315/New-Green-Portfolio-Program-Could-Change-Private-Equity.html

. . .

Continue reading here

WORLD ECONOMY – World Food Prices Rose 1.4% In Sept. – Europe – U.S. – Fraud – Oil – QEIII – Einhorn vs Taco Bell – Zynga & Facebook – India Freak Orders – China – Gold

Posted: 06 Oct 2012 07:27 PM PDT

- World food prices rose 1.4% in Sept. - IMF lowers economic outlook for Germany - Leading institutes cut euro-zone growth forecast - Euro-zone manufacturing PMI confirms contraction - Euro-zone jobless rate hit record highs - Spain jobless claims rise … Continue reading →


Guest Post: Housing: Plenty Of Reasons To Be Pessimstic

Posted: 06 Oct 2012 04:51 PM PDT

Submitted by Michael Panzner of Panzner Insights,

There's plenty of debate about—and money riding on—the question of whether we are in the midst of a sustainable recovery in the housing market. Nobody knows for sure, of course, but there are plenty of reasons to be pessimistic.

For one thing, the supply of homes, in terms of what is currently on the market and what is potentially for sale whether or not prices rebound further—the so-called shadow inventory—remains significant relative to demand, even though data from the National Association of Realtors (NAR) shows that inventories of existing homes are back to where they were eight years ago.

Aside from the question of whether developments that have occurred since then—including the fact that their are more ways to sell property than by going through a broker—have distorted the inventory calculation, the composition of sales has changed from what it was. Nowadays, a much greater share of transactions are in the "distressed" category than before the bubble burst. Given that more than 20 percent of sales are foreclosures and short sales makes the current ratio look healthier than it is in comparable terms.

Needless to say, shadow inventory is far greater than it was during the go-go years, when people were happy to remain long despite a booming market. With prices having fallen sharply since then, we now have a situation akin to those seen in other post-collapse markets: Holders can turn seller on a heartbeat as prices move closer to what they paid or owe on their mortgages. Given that more than 20 percent of mortgagees are underwater, that represents a sizable overhang.

The tide of past, present, and future foreclosures—actual and de facto—has also left lenders with substantial holdings of "real estate owned" (REO) properties that will undoubtedly be offered for sale at some point. These are not voluntary investments being held for the long-term; they are unwanted assets that are costing money by the day to finance and maintain. According to HousingWire, nearly half of mortgage giant Fannie Mae's REO holdings are unable to reach the market at present.

It's not just about supply, however. Demand is significantly less than it used to be for a variety of reasons, most notably because it is much harder to get financing now than it was when the property market was booming. Despite some recent loosening of credit conditions and ultra-low mortgage rates, anecdotal and other reports make it clear that lenders are generally unwilling to grant loans except on stringent terms to the highest quality borrowers.

But even if you discount the fact that traditional home buyers are having a difficult time borrowing the money they need to buy a home, it's apparent that other factors, including societal shifts, are undermining demand—and will likely continue doing so for the foreseeable future.

Number one among them are economic conditions in the post-crisis era, which are having an adverse affect on prospective homeowners' willingness and ability to take the plunge. A structurally weak employment market, where temporary and low-paid services jobs comprise the lion's share of the jobs being created and where the odds of finding another, better paying, and more secure opportunity are low, is not the catalyst for people to step up and make what could be the biggest investment of their lives.

Demographic factors are also playing a role. The upheavals of the past decade or so have reaffirmed the truism that growing older means trading down and taking less risk. And while ultra-low interest rates have pushed some of those who survive on their savings to invest in something other than a bank CD, real estate is definitely not the investment of choice. At the same time, broader societal changes, including more people living alone and more single-parent households, is undercutting demand for what has traditionally been a nuclear family-oriented investment.

Perspectives about what really matters are evolving as well, especially among the younger generation. Whereas in the past the milestones of getting married, buying a car, and acquiring a home represented the natural progression of things when children reached adulthood, priorities have changed. A recent Bloomberg report noted that 4G wireless telephones trumped V-8 cars for the 80 million U.S. consumers born from 1981 to 2001. Meanwhile, the still-ailing post-crisis economy has convinced a growing number of young people to embrace "the age of frugality."

In addition to shifting preferences, many of those who are at the lower end of the demographic scale already have a big financial burden hanging around their necks, which precludes them from taking on other big commitments like a mortgage—that is, student loans. Aside from the fact that, for many graduates, these obligations are far higher than they were, proportionally speaking, even a decade ago, the prospect of being in the hole for as far as the eye can leave a lasting impression on impressionable individuals.

Policy-making in Washington and by the Federal Reserve further underscore doubts about taking big risks that might backfire. While the latter keeps reassuring everyone that it has matters under control and that interest rates will remain low for years to come, given how many promises they and other authorities have broken over the past several decades, it's not surprising that people are hesitant to count on that on those assertions going forward.

Lastly and perhaps most importantly, demand is being undermined by broader-scale mood swings. People are beginning to accept that it isn't necessary to own your own home, nor is it necessarily a long-term goal. That might seem like heresy in a country where property ownership has been viewed as a God-given right, but when you consider that in economic powerhouse Germany the share of residential property accounted for by rentals is more than 60 percent in most states and 90 percent in the capital, Berlin, it's not all that strange.

In sum, while it is easy to focus on the traditional indicators of supply and demand and start believing that the long-awaited recovery in the property market has arrived at last, the fact is that much has changed in the wake of the events of the past decade, a development that is likely to weigh on prices for many years to come.

Jim's Mailbox

Posted: 06 Oct 2012 02:39 PM PDT

Jim,

Let me sign off with that old quote, "Gold is the currency of kings, silver is the currency of princes, barter is the currency of peasants, and DEBT is the currency of SLAVES".

Many thanks and warm regards, CIGA David N

Gold Bull Market Opposing Forces

Posted: 06 Oct 2012 12:06 PM PDT

What accounts for gold's strong performance since the initial rebound in July? That's the question that many analysts are (belatedly) trying to answer. The first and most obvious answer is stimulus; specifically the stimulus provided by the world's leading central bank in the U.S. The Federal Reserve's latest bond-buying scheme known as QE3 is to date the biggest stimulus aid that has had an impact in boosting the gold price.


Junior Mining Stocks Could Soon Outstrip the Senior Ones

Posted: 06 Oct 2012 11:59 AM PDT

It would behoove those who still cling to a misguided faith in fiat currencies to pay close attention to what is happening in Iran. The rial swooned in a free fall as much as 18% on Monday to a record low against the US dollar. The collapse was so steep that Iranian currency websites blanked out the rate. The currency has reportedly lost 80% of its value since the end of 2011. It is literally getting to a point that it will not be worth the paper on which it is printed.


Egon von Greyerz: Gold & Silver Off to the Races ? to $4,500+ & $100+ Each ? Here?s Why

Posted: 06 Oct 2012 11:51 AM PDT

So says Egon von Greyerz ([url]www.goldswitzerland.com[/url]) in edited excerpts from his original*article* entitled Gold & Silver Off to the Races. [INDENT]Lorimer Wilson, editor of [COLOR=#0000ff]www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor's Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.[/COLOR] [/INDENT]von Greyerz goes on to say, in part: Gold reveals governments’ deceitful actions in destroying the value of paper money and the wealth of nations. Western governments dislike gold because gold tells the truth and the truth is that since August 1971 the US dollar has declined 98% in real terms [as can be seen in the graph below]. Before this debt cycle comes to an end in the next few years, the dollar and*most major currencies are likely to f...


James Turk: Why Gold is Preferred to National Currencies

Posted: 06 Oct 2012 11:51 AM PDT

Some say that the gold price rises and falls, but they are grabbing the wrong end of the stick. It is the purchasing power of national currencies that rise and fall. Here is an analogy to make this point clear. When standing in a boat and looking at the shore, it is the boat (currencies) – and not the land (gold) – that is bobbing up and down. [Let me explain the value of gold further.] Words: 631 So says James Turk ([url]www.goldmoney.com[/url]) in edited excerpts from his original article* entitled Determining the value of gold. [INDENT]Lorimer Wilson, editor of [B][COLOR=#0000ff]www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor's Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.[/COLOR][/B] [/INDENT]Turk goes on to say, in part: How Does Gold*Differ from*Fiat Cu...


Once In A Lifetime Cracker Jack Investment Opportunities

Posted: 06 Oct 2012 06:38 AM PDT

Conclusion Looking at a brief list (<1 page) of looming crises coupled with the best investment strategy for each, I come to this even shorter conclusion.  The common Denominator is going long Gold and Silver.  Secondary Strategies would be shorting a) The Dollar, b) Bond Markets and c) Mega Banks (could be bailed out?) in that order. 


How Helicopter Ben Helps Jobs and, Inadvertently, Gold

Posted: 06 Oct 2012 05:20 AM PDT

Frank Holmes, CEO and Chief Investment Officer
U.S. Global Investors, writes:

The world's central bank leaders continue to spike the monetary punch bowl, with investors imbibing on gold once again. This flurry of gold buying prompts many curious investors and doubting media to ask me two questions: 1) How can demand for gold and gold stocks continue; and 2) How high can the precious metal go?

To answer these questions, we need to look at the intentions behind the economic and political decision-making across several developed countries, analyze the causes, the effects, and the possible ramifications.

For example, one of the most debated topics today is America's ongoing unemployment situation. Job loss has affected the lives and pocketbooks of millions of Americans and our friends and families, culminating to a center-stage position in the election this year. All eyes turn to President Barack Obama and Mitt Romney to explain how each intends to create jobs.

During the two years following the Great Recession, Americans lost jobs at a similar rate to the employment losses during the Great Depression and in Finland after 1991. But two years after the crisis, U.S. employment losses stopped and reversed direction.

Compare this to the situations in Norway, Spain, Finland and Sweden, each of which had prolonged unemployment. After Norway's financial crisis in 1987, it took 8.5 years to return to the country's employment peak. It took 13 years for Spain's employment to return to its 1997 peak. For Finland and Sweden, it took more than 17 years following their 1991 peaks.

Employment Loss

Although the job losses in the U.S. don't seem as dismal, "Helicopter" Ben Bernanke wants to avoid Europe's and Japan's catastrophic situations. To him, the economy "has not been growing fast enough recently to make significant progress in bringing down unemployment."

Helicopter Ben - U.S. Global Investors

In a speech to the Economic Club of Indiana on October 1, Bernanke explained that the Fed is "charged with promoting a healthy economy," which includes "an economy with low unemployment, low and stable inflation, and a financial system that meets the economy's needs for credit and other services." With regards to the decisions relating to monetary policy, the Fed's goals are dictated by Congress and are to seek "maximum employment and price stability." He explains, "We would like to see as many Americans as possible who want jobs to have jobs and that we aim to keep the rate of increase in consumer prices low and stable."

Ten years earlier, Ben hinted at the way he might accomplish such goals as a Fed chairman. In a speech regarding deflation, he shared his position on a government's means to print money, referring to Milton Friedman's comment about dropping money out of a helicopter into the economy. He stated, "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." Since then, he's been known as "Helicopter Ben."

With unemployment continuing, the Fed's helicopter drops another $40 billion per month to buy mortgage-backed securities, as well as an additional $45 billion of longer-term securities per month through the end of the year.

And, as Bank of America-Merrill Lynch says, "monetary policy is contagious." The Fed's money printing practice to help create jobs is only one part of the picture. Along with the growing U.S. monetary base, global liquidity has been growing every year for the past 12 years. As you can see, both of these factors have a close correlation to the rise of gold.

Global Liquidity

While well-intentioned, I believe these "quantitative infinity" programs may have a devastating devaluing effect on currencies, which has helped to spur gold prices over this entire time period.

Gold investors have recognized this correlation by returning to gold en masse. In August, investors rushed into gold, with the massive inflows of money going into the gold exchange traded products in August more than each of the prior five months.

Buying continued in September, with gold lovers loading up on coins. According to Bloomberg, people purchased the most American Eagles from the U.S. Mint in eight months. Almost 70,000 ounces were sold last month—the most sold since January when the U.S. Mint sold 127,000 ounces.

Miners also attracted interest, with the FTSE Gold Mines Index experiencing a rise of 13.25 percent and the NYSE Arca Gold Miners Index rising 12 percent during the month of September alone.

So how high can gold go? If you factor in only the Fed's program to purchase mortgages and Treasuries, Bank of America-Merrill Lynch says that over the next nine months gold could go to $2,000, and by the end of 2014, gold could be at $2,400.

FED Balance Sheet

This target doesn't take the Love Trade into consideration. Over the past several months, we've heard only chirping crickets from India, the country that has historically been the world's largest consumer of gold. Demand suffered under a very weak rupee, as the price of gold in the local currency climbed to an all-time high.

The rupee's recent strength has helped to increase Indian gold demand with flows climbing to a five-month high, according to UBS. What's helped bring shoppers back to the market is the fact that the exchange rate is back to where the rupee was in April.

This improvement in the currency comes just in time, as the wedding season is in full bloom. Every year, about 10,000 weddings are held in India from late September through January, in between the monsoons and the summer heat. Gold has historically been closely linked with the celebration of weddings, as the bride wears the precious metal and gifts of gold coins are given to the newlyweds.

In addition, Diwali will be celebrated in November. The Festival of Lights is India's biggest and most important holiday of the year and is celebrated by almost 1 billion Hindus around the world. Traditionally, on the first day of Diwali, it is considered auspicious to clean the home and shop for gold.

Why is India so significant to gold? As you can see below, from 2000 through 2011, the rising incomes in both China and India have been strongly correlated to the price of gold.

Strong Correlation China India Incomes Gold Price

Investors now have two strong reasons to invest in gold: the Fear Trade, driven by an expanding monetary base, and the Love Trade, driven by rising gold demand in Chindia. If you're already sold on gold, make sure to maintain a modest 5 to 10 percent weighting in gold and gold stocks. For those investors who aren't in gold, what's stopping you?

October 5, 2012 (Source: U.S. Global Investors)

http://www.usfunds.com/investor-resources/investor-alert/

[KR350] Keiser Report: Mr. Gold vs Chump &#8216;Economists'

Posted: 06 Oct 2012 02:52 AM PDT

We demonstrate the effects of money printing and Central Bank madness with a hyperinflationary chicken. They also discuss the Securities and Exchange Commission losing its mind as it sues the one rating agency NOT on the payroll of Wal Street. … Continue reading →


The Solar Silver Thrust

Posted: 05 Oct 2012 03:05 PM PDT

In early July, Japan set a premium price for solar energy that was three times the rate of conventional power. This meant utility companies would be paid three times more for electricity sourced from solar. It's widely expected that the premium will ignite the use of solar power – and solar uses a lot of silver.


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