Gold World News Flash

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• Anarchy Along The Jersey Shore And On Long Island In The Aftermath Of Hurricane Sandy
• Get Ready For Big Moves In Gold, The US Dollar & The Euro
• Gold Seeker Closing Report: Gold and Silver End Slightly Lower
• Max's Advice: Own your weight in gold (and silver)!
• DAY 3: Desperate New Yorkers Turning to Dumpsters for Food
• Desperate French Government Threatens To “Requisition” Vacant Buildings
• Gold Better Rise on Diwali Demand: Dennis Gartman
• Is Genetically Modified Food Killing Us?
• The Germans Are Coming! The Germans Are Coming!
• The Gold Price Closed Down $3.60 at $1,715.50
• A Tipping Point for Gold Companies
• [KR361] Keiser Report: Fraud by Day, Fraud by Night
• Guest Post: Getting On The Train - The Rail Resurrection Gets Underway
• Greyerz - Gold & The Incredible Financial Destruction We Face
• ELECTION PREDICTION
• THE NEW TREND IN GOLD
• Break Myths, Not Windows
• Bron Suchecki–The Perth Mint Really Does Have The Metal 31.Oct.12
• LGMR: Gold & Silver Rise as China's Long-Term Demand Forecast to Keep Growing
• Gold Price to Rally Regardless of Who is Elected President
• Greyerz - One Of The Most Important Charts Ever
• A Perfectly Normal Gold Price Correction
• Gold Bullion Held Within America and Foreign Countries, Much Is Really There
• Gold and Silver Rise as China's Long-Term Demand Forecast to Keep Growing
• The Economy Is Crumbling
• Daily Telegraph article on James Turk's aboveground gold stock research
• Jim Willie: Central Bank Gold Rehypothecation Scandal to Take Gold to $5,000/oz
• The Currency War Heats Up
• Pyrrhic Stimulus
• AAPL Looks Ready Bounce & the Next Best Trade Ideas

Anarchy Along The Jersey Shore And On Long Island In The Aftermath Of Hurricane Sandy Posted: 02 Nov 2012 12:00 AM PDT from The Economic Collapse Blog: Hurricane Sandy is another reminder of just how incredibly fragile the thin veneer of civilization that we all take for granted on a daily basis really is. Many of the hardest hit areas along the Jersey shore and the coast of Long Island have descended into a state of anarchy. More than 7 million people live on Long Island, and millions more live along the Jersey shore and right now they are getting a taste of what life would be like during a total economic meltdown. At the moment, there are still approximately 4.7 million homes and businesses that do not have power. Officials say that some of those homes and businesses may not have their power restored until the weekend of November 10th and 11th. Meanwhile, it is getting very cold at night. This weekend the low temperatures on Long Island are supposed to dip into the upper thirties. There have been reports of people diving into dumpsters behind supermarkets in a desperate search for food, and there have been other reports of roaming gangs of criminals posing as officials from FEMA or Con Edison and then robbing families at gunpoint once they have gained entrance into their homes. If people will behave like this during a temporary emergency that lasts only a few days, what would they do during a total economic collapse? That is a frightening thing to think about. Read More @ TheEconomicCollpaseBlog.com

Get Ready For Big Moves In Gold, The US Dollar & The Euro Posted: 01 Nov 2012 10:01 PM PDT Today Tom Fitzpatrick spoke with King World News about what to expect going forward from gold, silver, the US dollar, and the euro. Fitzpatrick has been astonishingly accurate in forecasting the movements of both gold and silver. Now Fitzpzatrick lets KWN readers know what to expect from the currencies as well as the metals. This posting includes an audio/video/photo media file: Download Now

Gold Seeker Closing Report: Gold and Silver End Slightly Lower Posted: 01 Nov 2012 10:00 PM PDT Gold rose $5.45 to $1726.65 at about 8AM EST, but it then fell back off for most of the rest of trade and ended with a loss of 0.44%. Silver climbed up to $32.652 before it fell back to as low as $32.177 and ended with a loss of 0.16%.

Max's Advice: Own your weight in gold (and silver)! Posted: 01 Nov 2012 09:39 PM PDT from Russia Today:

DAY 3: Desperate New Yorkers Turning to Dumpsters for Food Posted: 01 Nov 2012 08:44 PM PDT from NBC New York, via SurvivalWithBushcraf: For those who who have not prepared for the potential of an economic collapse in the United States, for those who mock the concept of prepping and deride those who would dare to think ahead and stock up on tangible commodities like physical silver, food, water and toilet paper – take heed. DAY THREE in New York and "civilized" Americans are already scavenging through dumpsters for rotting food out of sheer desperation. We should all consider this a final warning. – SGT

Desperate French Government Threatens To “Requisition” Vacant Buildings Posted: 01 Nov 2012 08:40 PM PDT Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter Prime Minister Jean-Marc Ayrault made it official: the government would requisition vacant buildings regardless of who owned them, including office buildings. It would then convert them to apartments and make them available to the homeless and the “badly housed.” As a first step, he asked for “an inventory of available buildings.” That list should be on his desk in “a few weeks,” he said. He was in a rush to identify these properties “so that we can undertake at least several operations in January and February 2013.” A desperate move to halt the collapse of his numbers. And another broadside at investors. It’s getting tough for him and President François Hollande. As France sinks deeper into its economic mire, people are losing patience: those who still have confidence in Hollande plunged to 36%, the lowest level of any president six months after taking office (the data go back to 1981). He dropped to 31% among workers —a catastrophe for a Socialist—and to 21% among shop keepers, artisans, business owners, and CEOs [they’d already stirred up the pot: A Capitalist Revolt in Socialist France]. And Prime Minister Ayrault hit 34%. Among his predecessors, only Édith Cresson in 1991 and Alain Juppé in 1995 were lower. Both were sacked, Cresson 11 months into her term, and Juppé two years into his. Only 19% of the shop keepers, artisans, business owners, and CEOs had any confidence in him—despite his “gaffe” that he would be open to discussing the 35-hour workweek to bring down the cost of labor, which was followed by furious backpedaling from the entire Socialist power structure. Among workers, his confidence level dwindled to 29%. An untenable position. He should be polishing his resume. Instead, he’d requisition buildings. With his announcement, he backed Housing minister Cécile Duflot. She’d already pointed at the “seriousness of the situation” and declared—as the first major cold wave imposed additional risks on the homeless—that she’d study the possibility of requisitioning vacant buildings for the purpose of converting them into housing for the homeless and the “badly housed.” To preempt the conservative opposition from having public conniptions, she dragged their former standard-bearer Jacques Chirac out of the closet. Back in 1995 when he was still mayor of Paris, he requisitioned, “as everyone remembers,” about 1,000 offices and apartments. Requisitioning buildings and apartments is a tactic for all sides of the political spectrum. The law that authorized it was passed in 1945 to deal with the post-World War II housing crunch. And during the 1960s, over 100,000 requisition orders were issued. Advocacy groups such as Jeudi Noir (Black Thursday) and Droit au Logement (Right to Housing) have been pressuring the government to do something about the “housing crisis.” To make a public point, they chose a famous symbol as backdrop for their press conference: 1a, Place des Vosges—a building of 1500 sq. meters (16,000 sq. ft.) that has been vacant since 1965. I used to live not far from there and walked through the Place de Vosges a lot, always wondering why someone would allow such a valuable property to remain empty. At the time, it was visibly going to heck. Yet it’s in an awesome location, facing the garden in the middle of the square, with galleries and cafés on two sides, and no traffic—an immense luxury in Paris. Members of Jeudi Noir squatted that building for a year until they were removed in 2010, a highly mediatized affair. Instead of doing his utmost to encourage private sector construction, Prime Minister Ayrault has jumped on the bandwagon of the squatters, sending shivers down the spines of those who invest in real estate development and construction. With perfect timing: just when France desperately needs that business to pick up speed—not only to create sorely needed housing units, but also to create jobs [Worse than the Infamous Lehman September: France’s Private Sector Gets Kicked off a Cliff]. Unemployment is over 10%, youth unemployment over 25%. In disadvantaged areas, such as a number of volatile suburbs, unemployment is far higher. For example, in Clichy-sous-Bois, an eastern suburb of Paris, unemployment is 22%, and youth unemployment is astronomical. The pressure in these areas is rising. They’ve blown up before. Jobs would relieve some of it. But requisitioning buildings and scaring investors won’t. To counter ugly economic trends that started while Nicolas Sarkozy was still president, the government has re-unearthed the catchword “competitiveness”—entailing the cherished and untouchable 35-hour workweek, equally untouchable wages, and sky-high employer-paid payroll charges. An explosive mix. And it just blew up. Read.... Attack On France’s Sacred Cow.

Gold Better Rise on Diwali Demand: Dennis Gartman Posted: 01 Nov 2012 07:40 PM PDT Gold prices have failed to climb above $1800... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]]

Is Genetically Modified Food Killing Us? Posted: 01 Nov 2012 07:28 PM PDT By Alex Daley, Chief Technology Investment Strategist Last month, a group of Australian scientists published a warning to the citizens of the country and of the world who collectively gobble up some $34 billion annually of its agricultural exports. The warning concerned the safety of a new type of wheat. As Australia's number-one export, a $6-billion annual industry, and the most-consumed grain locally, wheat is of the utmost importance to the country. A serious safety risk from wheat – a mad wheat disease of sorts – would have disastrous effects for the country and for its customers. Which is why the alarm bells are being rung over a new variety of wheat being ushered toward production by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) of Australia. In a sense, the crop is little different than the wide variety of modern genetically modified foods. A sequence of the plant's genes has been turned off to change the wheat's natural behavior a bit, to make it more commercially viable (hardier, higher yielding, slower decaying, etc.). Franken-Wheat? What's really different this time – and what has Professor Jack Heinemann of the University of Canterbury, NZ, and Associate Professor Judy Carman, a biochemist at Flinders University in Australia, holding press conferences to garner attention to the subject – is the technique employed to effectuate the genetic change. It doesn't modify the genes of the wheat plants in question; instead, a specialized gene blocker interferes with the natural action of the genes. The process at issue, dubbed RNA interference or RNAi for short, has been a hotbed of research activity ever since the Nobel Prize-winning 1997 research paper that described the process. It is one of a number of so-called "antisense" technologies that help suppress natural genetic expression and provide a mechanism for suppressing undesirable genetic behaviors. RNAi's appeal is simple: it can potentially provide a temporary, reversible off switch for genes. Unlike most other genetic modification techniques, it doesn't require making permanent changes to the underlying genome of the target. Instead, specialized siRNAs – chemical DNA blockers based on the same mechanism our own bodies use to temporarily turn genes on and off as needed – are delivered into the target organism and act to block the messages cells use to express a particular gene. When those messages meet with their chemical opposites, they turn inert. And when all of the siRNA is used up, the effect wears off. The new wheat is in early-stage field trials (i.e., it's been planted to grow somewhere, but has not yet been tested for human consumption), part of a multi-year process on its way to potential approval and not unlike the rigorous process many drugs go through. The researchers responsible are using RNAi to turn down the production of glycogen. They are targeting the production of the wheat branching enzyme which, if suppressed, would result in a much lower starch level for the wheat. The result would be a grain with a lower glycemic index – i.e., healthier wheat. This is a noble goal. However, Professors Heinemann and Carman warn, there's a risk that the gene silencing done to these plants might make its way into humans and wreak havoc on our bodies. In their press conference and subsequent papers, they describe the possibility that the siRNA molecules – which are pretty hardy little chemicals and not easily gotten rid of – could wind up interacting with our RNA. If their theories prove true, the results might be as bad as mimicking glycogen storage disease IV, a super-rare genetic disorder which almost always leads to early childhood death. "Franken-Wheat Causes Massive Deaths from Liver Failure!" Now that is potentially headline-grabbing stuff. Unfortunately, much of it is mere speculation at this point, albeit rooted in scientific expertise on the subject. What they've produced is a series of opinion papers – not scientific research nor empirical data to prove that what they suspect might happen, actually does. They point to the possibilities that could happen if a number of criteria are met: If the siRNAs remain in the wheat in transferrable form, in large quantities, when the grain makes it to your plate. And… If the siRNA molecules interfere with the somewhat different but largely similar human branching enzyme as well. Then the result might be symptoms similar to such a condition, on some scale or another, anywhere from completely unnoticeable to highly impactful. They further postulate that if the same effect is seen in animals, it could result in devastating ecological impact. Dead bugs and dead wild animals. Luckily for us, as potential consumers of these foods, all of these are easily testable theories. And this is precisely the type of data the lengthy approval process is meant to look at. Opinion papers like this – while not to be confused with conclusions resulting from solid research – are a critically important part of the scientific process, challenging researchers to provide hard data on areas that other experts suspect could be overlooked. Professors Carman and Heinemann provide a very important public good in challenging the strength of the due-diligence process for RNAi's use in agriculture, an incomplete subject we continue to discover more about every day. However, we'll have to wait until the data come back on this particular experiment – among thousands of similar ones being conducted at government labs, universities, and in the research facilities of commercial agribusinesses like Monsanto and Cargill – to know if this wheat variety would in fact result in a dietary apocalypse. That's a notion many anti-genetically modified organism (GMO) pundits seem to have latched onto following the press conference the professors held. But if the history of modern agriculture can teach us anything, it's that far more aggressive forms of GMO foods appear to have had a huge net positive effect on the global economy and our lives. Not only have they not killed us, in many ways GMO foods have been responsible for the massive increases in public health and quality of life around the world. The Roots of the GMO Food Debate The debate over genetically modified (GM) food is a heated one. Few contest that we are working in somewhat murky waters when it comes to genetically modified anything, human or plant alike. At issue, really, is the question of whether we are prepared to use the technologies we've discovered. In other words, are we the equivalent of a herd of monkeys armed with bazookas, unable to comprehend the sheer destructive power we possess yet perfectly capable of pulling the trigger? Or do we simply face the same type of daunting intellectual challenge as those who discovered fire, electricity, or even penicillin, at a time when the tools to fully understand how they worked had not yet been conceived of? In all of those cases, we were able to probe, study, and learn the mysteries of these incredible discoveries over time. Sure, there were certainly costly mistakes along the way. But we were also able to make great use of them to advance civilization long before we fully understood how they worked at a scientific level. Much is the same in the study and practical use of GM foods. While the fundamentals of DNA have been well understood for decades, we are still in the process of uncovering many of the inner workings of what is arguably the single most advanced form of programming humans have ever encountered. It is still very much a rapidly evolving science to this day. For example, in the 1990s, an idea known simply as "gene therapy" – really a generalized term for a host of new-at-the-time experimental techniques that share the simple characteristic of permanently modifying the genetic make-up of an organism – was all the rage in medical study. Two decades on, it's hardly ever spoken of. That's because the great majority of attempted disease therapies from genetic modification failed, with many resulting in terrible side effects and even death for the patients who underwent the treatments. Its use in the early days, of course, was limited almost exclusively to some of the world's most debilitating, genetically rooted diseases. Still – whether in their zeal to use a fledgling tool to cure a dreadful malady or in selfish, hurried desire to be recognized among the pioneers of what they thought would be the very future of medicine – doctors chose to move forward at a dangerous pace with gene therapy. In one famous case, and somewhat typical of the times, University of Pennsylvania physicians enrolled a sick 18-year-old boy with a liver mutation into a trial for a gene therapy that was known to have resulted in the deaths of some of the monkeys it had just been tested on. The treatment resulted in the young man's death a few days later, and the lengthy investigation that followed resulted in serious accusations of what can only be called "cowboy medicine." Not one of science's prouder moments, to be sure. But could GM foods be following the same dangerous path? After all, the first GM foods made their way to market during the same time period. The 1980s saw large-scale genetic-science research and experimentation from agricultural companies, producing everything from antibiotic-resistant tobacco to pesticide-hardy corn. After much debate and study, in 1994 the FDA gave approval to the first GM food to be sold in the United States: the ironically named Flavr Savr tomato, with its delayed ripening genes which made it an ideal candidate for sitting for days or weeks on grocery store shelves. Ever since, there has been a seeming rush of modified foods into the marketplace. Modern GM foods include soybeans, corn, cotton, canola, sugar beets, and a number of squash and greens varieties, as well as products made from them. One of the most prevalent modifications is to make plants glyphosate-resistant, or in common terms, "Roundup Ready." This yields varieties that are able to stand up to much heavier doses of the herbicide Roundup, which is used to keep weeds and other pest plants from damaging large monoculture fields, thereby reducing costs and lowering risks. In total it is estimated that modern GM crops have grown to become a $12 billion annual business since their commercialization in 1994, according to the International Service for the Acquisition of Agri-biotech Applications (ISAAA). Over 15 million farms around the world are reported to have grown GM crops, and their popularity increases every year. They've brought huge improvements in shelf life, pathogen and other stress resistance, and even added nutritional benefits. For instance, yellow rice – which was the first approved crop with an entirely new genetic pathway added artificially – provides beta-carotene to a large population of people around the world who otherwise struggle to find enough in their diets. However, the race for horticulturalists to the genetic table in the past few decades – what could be described accurately as the transgenic generation of research – has by no means been our first experiment with the genetic manipulation of food. In fact, if anything, it is a more deliberate, well studied, and careful advance than those that came before it. A VERY Brief History of Genetically Modified Food Some proponents of GMO foods are quick to point out that humans have been modifying foods at the genetic level since the dawn of agriculture itself. We crossbreed plants with each other to produce hybrids (can I interest you in a boysenberry?). And of course, we select our crops for breeding from those with the most desirable traits, effectively encouraging genetic mutations that would have otherwise resulted in natural failure, if not helped along by human hands. Corn as we know it, for example, would never have survived in nature without our help in breeding it. Using that as a justification for genetic meddling, however, is like saying we know that NASCAR drivers don't need seatbelts because kids have been building soapbox racers without them for years. Nature, had the mix not been near ideal to begin with, would have prevented such crossbreeding. Despite Hollywood's desires, one can't simply crossbreed a human and a fly, or even a bee and a mosquito, for that matter – their genetics are too different to naturally mix. And even if it did somehow occur, if it did not make for a hardier result, then natural selection would have quickly kicked in. No, I am talking about real, scientific genetic mucking – the kind we imagined would result in the destruction of the world from giant killer tomatoes or man-eating cockroaches in our B-grade science-fiction films. Radiation mutants. Enterprising agrarians have been blasting plants with radiation of all sorts ever since we starting messing around with atomic science at the dawn of the 20th century. In the 1920s, just when Einstein and Fermi were getting in their grooves, Dr. Lewis Stadler at the University of Missouri was busy blasting barley seeds with X-rays – research that would usher in a frenzy of mutation breeding to follow. With the advent of nuclear technology from the war effort, X-rays expanded into atomic radiation, with the use of gamma rays leading the pack. The United States even actively encouraged the practice for decades, through a program dubbed "Atoms for Peace" that proliferated nuclear technology throughout various parts of the private sector in a hope that it would improve the lives of many. And it did. Today, thousands of agricultural varieties we take for granted – including, according to a 2007 New York Times feature on the practice, "rice, wheat, barley, pears, peas, cotton, peppermint, sunflowers, peanuts, grapefruit, sesame, bananas, cassava and sorghum" – are a direct result of mutation breeding. They would not be classified as GM foods, in the sense that we did not use modern transgenic techniques to make them, but they are genetically altered nonetheless, to the same or greater degree than most modern GMO strains. Unlike modern GM foods – which are often closely protected by patents and armies of lawyers to ensure the inventing companies reap maximum profits from their use – the overwhelming majority of the original generations of radiation-mutated plant varieties came out of academic and government sponsored research, and thus were provided free and clear for farmers to use without restriction. With the chemical revolution of the mid-20th century, radiation-based mutations were followed by the use of chemical agents like the methyl sulfate family of mutagens. And after that, the crudest forms of organic genetic manipulation came into use, such as the uses of transposons, highly repetitive strands of DNA discovered in 1948 that can be used like biological duct tape to cover whole sections the genome. These modified crops stood up better to pests, lessened famines, reduced reliance on pesticides, and most of all enabled farmers to increase their effective yields. Coupled with the development of commercial machinery like tractors and harvesters, the rise of mutagenic breeding resulted in an agricultural revolution of a magnitude few truly appreciate. In the late 1800s, the overwhelming majority of global populations lived in rural areas, and most people spent their lives in agrarian pursuits. From subsistence farmers to small commercial operations, the majority of the population of every country, the US included, was employed in agriculture. Today, less than 2% of the American population (legal and illegal combined) works in farming of any kind. Yet we have more than enough food to feed all of our people, and a surplus to export to more densely populated nations like China and India. The result is that a sizable percentage of the world's plant crops today – the ones on top of which much of the modern-era GMO experiments are done – are already genetic mutants. Hence the slippery slope that serves as the foundation of the resistance from regulators over the labeling of GM food products. Where do you draw the line on what to label? And frankly, how do you even know for sure, following the Wild-West days of blasting everything that could grow with some form or another of radiation, what plants are truly virgin DNA? The world's public is largely unaware that many of the foods they eat today – far more than those targeted by anti-GMO protestors and labeling advocates – are genetically modified. Yet we don't seem to be dying off in large numbers, like the anti-RNAi researchers project will happen. In fact, global lifespans have increased dramatically across the board in the last century. The Rise of Careful The science of GM food has advanced considerably since the dark ages of the 1920s. Previous versions of mutation breeding were akin to trying to fix a pair of eyeglasses with a sledgehammer – messy and imprecise, with rare positive results. And the outputs of those experiments were often foisted upon a public without any knowledge or understanding of what they were consuming. Modern-day GM foods are produced with a much more precise toolset, which means less unintended collateral damage. Of course it also opens up a veritable Pandora's box of new possibilities (glow-in-the-dark corn, anyone?) and with it a whole host of potential new risks. Like any sufficiently powerful technology, such as the radiation and harsh chemicals used in prior generations of mutation breeding, without careful control over its use, the results can be devastating. This fact is only outweighed by the massive improvements over the prior, messier generation of techniques. And thus, regulatory regimes from the FDA to CSIRO to the European Food Safety Authority (EFSA) are taking increasing steps to ensure that GM foods are thoroughly tested long before they come to market. In many ways, the tests are far more rigorous than those that prescription drugs undergo, as the target population is not sick and in need of urgent care, and for which side effects can be tolerated. This is why a great many of the proposed GM foods of the last 20 years, including the controversial "suicide seeds" meant to protect the intellectual property of the large GM seed producers like Monsanto (which bought out Calgene, the inventor of that Flavr Savr tomato, and is now the 800-lb. gorilla of the GM food business), were never allowed to market. Still, with the 15 years from 1996 to 2011 seeing a 96-fold increase in the amount of land dedicated to growing GM crops and the incalculable success of the generations of pre-transgenic mutants before them, scientists and corporations are still in a mad sprint to find the next billion-dollar GM blockbuster. In doing so they are seeking tools that make the discovery of such breakthroughs faster and more reliable. With RNAi, they may just have found one such tool. If it holds true to its laboratory promises, its benefits will be obvious from all sides. Unlike previous generations of GMO, RNAi-treated crops do not need to be permanently modified. This means that mutations which outlive their usefulness, like resistance to a plague which is eradicated, do not need to live on forever. This allows companies to be more responsive, and potentially provides a big relief to consumers concerned about the implications of eating foods with permanent genetic modifications. The simple science of creating RNAi molecules is also attractive to people who develop these new agricultural products, as once a messenger RNA is identified, there is a precise formula to tell you exactly how to shut it off, potentially saving millions or even billions of dollars that would be spent in the research lab trying to figure out exactly how to affect a particular genetic process. And with the temporary nature of the technique, both the farmers and the Monsantos of the world can breathe easily over the huge intellectual-property questions of how to deal with genetically altered seeds. Not to mention the questions of natural spread of strains between farms who might not want GMO crops in their midst. Instead of needing to engineer in complex genetic functions to ensure progeny don't pass down enhancements for free and that black markets in GMO seeds don't flourish, the economic equation becomes as simple as fertilizer: use it or don't. While RNAi is not a panacea for GMO scientists – it serves as an off switch, but cannot add new traits nor even turn on dormant ones – the dawn of antisense techniques is likely to mean an even further acceleration of the science of genetic meddling in agriculture. Its tools are more precise even than many of the most recent permanent genetic-modification methods. And the temporary nature of the technique – the ability to apply it selectively as needed versus breeding it directly into plants which may not benefit from the change decades on – is sure to please farmers, and maybe even consumers as well. That is, unless the scientists in Australia are proven correct, and the siRNAs used in experiments today make their way into humans and affect the same genetic functions in us as they do in the plants. The science behind their assertions still needs a great deal of testing. Much of their assertion defies the basic understanding of how siRNA molecules are delivered – an incredibly difficult and delicate process that has been the subject of hundreds of millions of dollars of research thus far, and still remains, thanks to our incredible immune systems, a daunting challenge in front of one of the most promising forms of medicine (and now of farming too). Still, their perspective is important food for thought… and likely fuel for much more debate to come. After all, even if you must label your products as containing GMO-derived ingredients, does that apply if you just treated an otherwise normal plant with a temporary, consumable, genetic on or off switch? In theory, the plant which ends up on your plate is once again genetically no different than the one which would have been on your plate had no siRNAs been used during its formative stages. One thing is sure: the GMO food train left the station nearly a century ago and is now a very big business that will continue to grow and to innovate, using RNAi and other techniques to come. The Casey Extraordinary Technology team has been tracking the leading lights of the RNAi medical industry for some time. Recently, one of our small biotech upstarts struck a potentially massive, exclusive deal with an agricultural giant to seed its own RNAi research program. Success could mean billions for both firms. If you'd like to know what company we believe will profit most from the next generation of GM food development, subscribe to CET.

The Germans Are Coming! The Germans Are Coming! Posted: 01 Nov 2012 07:25 PM PDT A German federal court has said that country's central bank should conduct annual audits and physically inspect its gold reserves worldwide, including gold in the custody of the Federal Reserve Bank of New York… …In any event, it looks like … Continue reading →

The Gold Price Closed Down $3.60 at $1,715.50 Posted: 01 Nov 2012 07:13 PM PDT Gold Price Close Today : 1715.50 Change : -3.60 or 0.21% Silver Price Close Today : 32.25 Change : -0.07  or -0.21% Gold Silver Ratio Today : 53.2 Change : 0.00 or 0.001% I'm sorry but I will not be sending a commentary Thursday or Friday, because I will be in Colorado attending my daughter-in-law's funeral. God willing I'll return on Monday, 5 November. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't.

A Tipping Point for Gold Companies Posted: 01 Nov 2012 06:26 PM PDT Frank Holmes writes today: Did you know that gold stocks tend to underperform during election years? As shown in the chart below, over the past quarter-century up until the prior election, the performance of the Philadelphia Stock Exchange Gold and Silver Index (XAU) was weak during the year of a presidential election. The silver lining for gold stock investors is that the XAU has historically bounced back the year after the election. I often say that life is all about managing expectations. The difficult part of investing in gold and gold companies is experiencing the typical price swings, so it's important to understand the inherentmonthly and annual volatility. Along with the normal volatility, gold equity investors have had to deal with plenty of challenges in recent years, as many executives overpromised and underdelivered, diluting their production per share and their reserves per share. In addition, margin costs have been rising. The result is unhappy shareholders, with bullion outperforming gold miners. Perhaps investors can anticipate a sea change occurring in the management of gold companies. As I explained in a recent interview with Kitco, I believe a tipping point took place last summer when Gold Fields' CEO Nick Holland discussed the future of mining companies. In my opinion, his thought leadership regarding growing production volume, expanding margins and optimizing capital is crucial in shaping the future decision-making of boards, with an enhanced focus on protecting the value per share for their shareholders, increasing dividends, as well as an effective leveraging of the balance sheet. See the Kitco discussion now. 2013 may be a pivotal year for gold stocks: With the presidential election year behind us, and executives making best use of their capital, it appears that miners are poised for a comeback. What else is in store for investors after the U.S. election? Tune in to my webcast with Money Map Press' Chief Investment Strategist Keith Fitz-Gerald on November 12 at 2 p.m. Central Time as we discuss energy prices, the "fiscal cliff," and the presidential cycle over the next four years. Register today. The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver. The following security mentioned was held by one or more of U.S. Global Investors Funds as of 9/30/12: Gold Fields Ltd. November 1, 2012 (Source: U. S. Global Investors) http://www.usfunds.com/investor-resources/frank-talk/#.UJMSe2_R6Vo

[KR361] Keiser Report: Fraud by Day, Fraud by Night Posted: 01 Nov 2012 05:06 PM PDT We discuss Chinese investors pouring money into silver, while American investors pour money into bonds 33 times faster than into equities. They also look at the latest updates to the mystery of there being no Chinese gold bars in the … Continue reading →

Guest Post: Getting On The Train - The Rail Resurrection Gets Underway Posted: 01 Nov 2012 04:41 PM PDT Submitted by Gregor McDonald, a PeakProsperity.com contributing editor Getting On The Train Given emerging data in 2012, it's becoming increasingly clear that the post-war automobile era in the United States is now in well-articulated decline. Accordingly, it makes sense to note the beginning of a long-term supertrend that is just getting started: the resurrection of America's rail system. At Seattle's historic King Street Station (a classic example of early 20th Century railroad architecture), a nasty looking dropped-tile ceiling – which hung above travellers for decades – was removed late last year to reveal ornate plasterwork as the building undergoes extensive renovation. These cosmetic (and structural) alterations are part of a wide-ranging upgrade to the entire Cascades passenger rail service that runs from Vancouver, British Columbia, to Eugene, Oregon. In Tacoma, for example, a new station will either be built or renovated, and part of the Cascades line will be re-routed from its current shoreline path more directly through that city. Elsewhere, bridges are being rebuilt, track is being upgraded, and other infrastructure improvements are underway as part of the $500 million program to resurrect more efficient, faster inter-city rail in the 466-mile Amtrak route through this part of the Pacific Northwest. These changes will not bring European-style high-speed rail to the United States. Indeed, in many similar projects across the country, top speeds of 125 mph will characterize new system capability, rather than the average speed actually maintained from city to city. However, the incremental improvements now underway will become the platform for the next phase of investment, as Americans are increasingly persuaded to limit their car ownership and make rail transport part of their lives once again. What America Lost Up until World War II, rail transport of all kinds – intercity, light rail, and commuter rail – dominated transportation in America. Los Angeles had the largest light-rail system in the entire world, connecting the San Fernando Valley to Long Beach, and San Bernardino County to central L.A. and the northern reaches of Orange County. As the old saying goes, however, the car killed America. And the following 40 years from 1945-1985 saw a relentless decline of all forms of rail in the United States. To get a sense of what the country lost as it eagerly built out a vast highway infrastructure and foolishly stopped investing in rail, let's look at two historical maps showing a veritable collapse of passenger route miles over just a ten year period. The first map shows that in 1962 intercity passenger rail network still covered 88,710 route miles. Just ten years later, however, with intrusive highways bisecting American cities and ruining the integrity of their downtowns, the number of passenger route miles had collapsed by over 75%(!), to just 19,366 miles. Laughing at Amtrak Most people born after World War II have regarded Amtrak as a kind of joke, with its routine dysfunction and massive annual operating losses. The economics of national rail transport, however, deem that your railway system will only be as efficient as the proper mix of investment and operational fitness allows. If you starve your railways of upgrades, make them share tracks with freight rail, and divert national infrastructure spending to other modes of transport, the results will be quite predictable. One of the great misunderstandings of public rail transport is the mistaken belief that it should run at an operating profit. Not so. The purpose of commuter rail, light-rail, or intercity rail is to harvest economy-wide efficiencies and to ensure that wasteful expenditures spent collectively on transportation can be directed elsewhere. These "savings" were not an issue and were harder to determine during the cheap oil era, when much of the national highway system was built during the era of $14/bbl oil. Now, however, the impact on household budgets and monthly cash flow from much higher oil prices is pushing U.S. transportation demand rather dramatically away from roads and highways – and instead to rail. In Los Angeles, for example, where the aggressive Measure R has been restoring L.A.'s lost light-rail system, annual ridership has made extraordinary gains. A recent piece from LA Observed reports that "[a]verage weekday ridership on Metro's rail lines in September soared to 357,096, up nearly 12 percent over the same time last year and 16 percent over 2010." Similar restorations of commuter rail in cities like Boston and improvements in either infrastructure or rolling stock in the NY Metro region have emerged in the past decade. Indeed, some U.S. regions took the signal of oil's price revolution early and began work on local rail systems long before federal spending began to shift, ever so slightly, to rail transport. Meanwhile, on the national level, Amtrak just announced that ridership hit an all-time high and has climbed nearly 50% in the past decade. From its October 2012 press release: Amtrak carried more than 31.2 million passengers in Fiscal Year 2012 ending September 30, marking the highest annual ridership total since America's Railroad started operations in 1971 and the ninth ridership record during the last ten years. A year-over-year comparison of FY 2012 to FY 2011 shows ridership grew 3.5 percent to a new record of 31,240,565 passengers and ticket revenue jumped 6.8 percent to a best ever $2.02 billion. In addition, Amtrak system-wide on-time performance increased to 83 percent, up from 78.1 percent and its highest level in 12 years. During FY 2012, ridership on the Northeast Corridor is up 4.8 percent to a record 11.4 million, state-supported and other short distance routes is up 2.1 percent to a record 15.1 million and long-distance services is up 4.7 percent to their best showing in 19 years at 4.7 million. Also, FY 2012 produced other ridership achievements including new records for 25 of 44 Amtrak services, and 12 consecutive monthly records with July being the single best month in the history of Amtrak.  Since FY 2000, Amtrak ridership is up 49 percent. Rationalizing the Rail System Many will decry the fact that Amtrak and the United States as a whole are still not in a position to offer European- or Asian-style high-speed-rail, where sustained traveling speeds routinely average above 150 mph. However, five to six decades of neglect necessitate that the U.S. undertake its resurrection of rail in phases. Two of the many projects around the country (The Vermonter & The Cascade Line) demonstrate exactly the type of initial heavy-lifting that must be done, in which fundamental changes are made in route selection and in the separation of tracks between freight and passenger rail. The Vermonter: New York City to Burlington Three states, Vermont, Massachusetts, and Connecticut, are currently in partnership with Amtrak to upgrade tracks, bridges, and stations along the route between Burlington and New York City. The state of Vermont has just completed its part by upgrading track with new, very long, continuously-welded rail, which will increase speeds. Work in Connecticut and Massachusetts is now underway, but one of the more significant transformations occurs in the switching of 60 miles of track from Palmer and Amherst back to the other side of the Connecticut River. This is actually a restoration of the original route between Vermont and New York, and means that trains from Springfield, MA will now travel north to Holyoke, Northampton, and then Greenfield before joining up again with the current route through Brattleboro in southern Vermont. Below is one of the new train stations, located in Greenfield, Massachusetts. In bringing The Vermonter back to the west side of the Connecticut River, Amtrak is rationalizing the route in several ways, but most importantly it is reducing the passenger train's exposure to freight traffic. Shared tracks, in which passenger service and freight traffic run on the same routes, is actually an enormous problem in the United States and accounts for a tremendous amount of the dysfunction that many users of Amtrak services experience. The biggest change in the Vermont-New York City trip, therefore, will come via on-time reliability as the transfer away from Palmer, MA will greatly reduce overlap with freight rail. Completion of this project is currently set for 2014. The Cascades Line The twin ports of Vancouver, Washington and Portland, Oregon – straddling each side of the Columbia River – have seen very strong growth the past few years as increasing volumes of lumber, potash, and wheat are shipped to Asia. Accordingly, on the north side of the river at the Port of Vancouver (Washington), a large freight rail project has been underway to help increase loadings. But one of the little-noticed initiatives is the construction of new track to alleviate congestion for passenger trains as they head out of Portland toward Seattle. Finally, these trains will be able to steer clear of freight traffic at the Vancouver, Washington side of the river. As usual, these are not the types of splashy, high-profile infrastructure improvements that garner headlines. But the Portland to Seattle route typically has had very poor on-time reliability, which invariably reduces ridership. As mentioned in the start of this essay, Cascades Line improvements are quite wide-ranging, with the Federal Government having awarded over $800 million to multiple projects. The upgrades will continue for several years, with noticeable differences in on-time reliability already in force. Aiming for the Virtuous Circle: Reliability and Ridership Amtrak's 50% increase in ridership the past decade certainly began as a result of rising oil prices, and not because of any notable service improvements. However in the latter part of the decade and especially in the past 3-4 years, Amtrak (and other rail networks) have started to deliver substantial improvements to riders as the upgrade cycle gains momentum. Deep skepticism has greeted just about every major rail project in the country over the past twenty years. But a virtuous circle, in which riders are persuaded to reduce car-miles driven, has started to unfold as heavier demand comes online for rail services. This has been especially true in cities such as Los Angeles which started its light-rail project twenty years ago, greeted initially greeted by a fearful public. Now however, L.A. is laying track down along many of the same routes from its pre-war light-rail system. It is finally becoming possible to live in Los Angeles without a car. Continuing the Virtuous Circle Various trends are already coming together that will support the resurrection of rail and possibly strengthen it as we move out towards 2025. In Part II, Reducing Your Exposure to Oil, we explore ways to take part in the U.S. rail renaissance. I also offer a case study how much savings a household can capture by moving to a city that is served by extensive rail transport. Finally, I give a brief update on energy transition, as the developed world continues to move away from high-priced oil and pursues economic development along the contours of the powergrid. Click here to read Part II of this report (free executive summary; paid enrollment required for full access).

Greyerz - Gold & The Incredible Financial Destruction We Face Posted: 01 Nov 2012 02:58 PM PDT Earlier today King World News published the extraordinary chart sent exclusively to KWN by Egon von Greyerz. In part II of his interview, Greyerz, who is founder and managing partner at Matterhorn Asset Management, discusses the incredible chart, and gives readers a shocking price for gold which is based on that 'cubed' chart. Here is what Greyerz had this to say in Part II, along with his comments about the fascinating chart:  "I discussed the real over-the-counter derivatives earlier, which stand at $1.1 quadrillion, and this is worldwide. Every time there is a problem in a bank it seems to be derivatives related, such as what happened with JP Morgan which recently lost $5.6 billion, and UBS which lost $2.3 billion." This posting includes an audio/video/photo media file: Download Now

ELECTION PREDICTION Posted: 01 Nov 2012 02:25 PM PDT  I think Nadeem is wrong and I'm going to try and write an article before next Tuesday that explains why. Who Will Win the U.S. Presidential Election, Forecast 2012 ElectionOracle / US Presidential Election 2012Oct 27, 2012 – 06:15 AM By: Nadeem_Walayat The final countdown to the U.S. presidential election has now begun with expectations that there is little that each candidate can now effect on the electorate during the remaining 10 days. Most opinion polls currently put Romney slightly ahead of Obama i.e. ABC 50/47, BBC Poll of Polls 49/47, Gallop 48/48. However the high margin of error of as much as +/ -5%, and typically +/ -3% compounded by the electoral college system makes all of these opinion polls unreliable in trying to determine the US election outcome, therefore this analysis is focused on key events that impact on determining a probable forecast for the US presidential election 2012.   The time-line of key events begins with Romney's infamous own goal 47% video that resulted in a near collapse of Romney's poll ratings which set the scene for a virtual walk in the park re-election for President Obama who had always been the favourite, as long as he did not make the mistake of taking the voters for granted. "There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That, that's an entitlement. And the government should give it to them. And they will vote for this president no matter what." 3rd October – Romney Wins the First Presidential Debate President Obama turned out to be his worst enemy by following what was clearly disastrous advice and handing Romney a decisive win and an actual chance at the White House as polls started to narrow. 6th October – US Employment Rescue, Obama reelection virtually guaranteed If there is one issue that ranks highest amongst most of the electorate than that would be Jobs. Therefore Obama averted possible election disaster by the BLS publishing a highly favourable employment report for September that showed the US unemployment rate falling below 8% to 7.8% for the first time in some 45 months, against which Romney was left to make statements that did not stand up to scrutiny as the below unemployment record graph shows that there was little Romney could say that could counter Obama's Jobs performance that followed the Bush economic disaster. The unemployment data halted the momentum that had been building following the first debate. This led me to conclude at the time that rather than the race being as tight as the mainstream pundits were suggesting as they mistakenly were extrapolating the Romney momentum all the way into election day, and despite two debates pending, President Obama was still heading for a relatively strong re-election victory of over 300 electoral votes (270 needed to win) as I correctly concluded the Romney momentum had ended, and that it had never actually seen Romney take an actual lead over Obama at any point. 06 Oct 2012 – High U.S. Unemployment Rate, Obama Failure or Bush Catastrophe for Romney to Continue? Therefore many american's may be surprised on election night when the results start coming in that point to a relatively strong Obama election win of more than 300 Electoral votes. Can October Jobs Report Help Romney? The October Jobs report is due just 4 days before the election (November 2nd), if it is very bad then yes it could help Romney, just as a good jobs report helped Obama. But the election momentum continues in Obama's as is the overall down-trend in the official unemployment data. However as my analysis of 6th October stated, the trend in US unemployment is likely to rise into mid 2013, this is due to the level of corruptness in reported employment statistics against real US unemployment (U6) that the below graph illustrates - An analysis of the rate of corruption suggests that a. the Bush regime during the last 3 years of it's Presidency was engaged in maximising the level of corruption in the official unemployment statistics. b. That the Obama regime official statistics have in the lead up to the 2012 Election increasingly become more corrupt with the final statistics on par with that of the Bush regimes efforts in the lead up to the November 2008 election. Therefore whilst the real rate of unemployment is reducing as both graphs exhibit a downtrend, the actual extent of the fall in unemployment is far less than the official statistics suggests, which luckily for Obama is that which most of the general population focuses upon. Therefore probability favours a rise in the U.S. unemployment rate as will be reported on the Friday ahead of the Tuesday election. The big question mark is to what extent could that figure rise, Obama is hoping for a marginal rise to 7.9%, and Romney for a rate at above 8%, my expectation is for a marginal rise to 7.9% under the basis that the U.S. economy continues to bounce into election as evidenced by latest GDP data of 2% per annum. 16nd October – Aggressive Obama Wins 2nd Presidential debate. Obama sought to avert a reply of the disaster of the first debate and in so doing put the poll trajectory back in his favour as the gap between Romney and Obama once more starts to widen. 22nd October – Third Presidential Election Debate – Romney's Failure. Most viewers and commentators would give Obama a slight edge over Romney in the third and final debate, his last chance to build momentum, instead Romney tried hard to appear a man of peace after having made a string of statements in the past that alluded to an aggressive foreign policy and Obama focused on domestic reasons for why he should be re-elected. In fact the whole debate stands out for the continuous statements of agreement on subject after subject which ultimately favoured Obama and hence fed the trend for a widening in the gap between Obama and Romney. Therefore Romney blew his last chance towards building momentum so the strategy for agreeing with Obama was a mistake. So whilst all eyes are on misleading highly erroneous opinion polls that give the illusion of a close race, and on which way Ohio goes, as things stand my forecast remains for President Obama to be re-elected on November 6th with the probability favouring more than 300 electoral votes i.e. there has been no net change since the release of September jobs report as the trend continues to build towards Obama increasing the real events based gap between himself and Mitt Romney by election day, enough to push through the 300 barrier, with or without Ohio and even a bad October Jobs report of a rate above 8% (I expect 7.9%), will not have enough time behind it to create enough momentum to make much impact at such a late stage. The bottom line is that Romney failed to re-ignite the momentum that built up following he first debate that was halted by the 6th October Unemployment report, instead his performance during subsequent debates has been weaker than Obama's and therefore the election really was lost by Mitt Romney during mid September following the 47% video, which crippled his chance of ever taking the lead as I correctly suggested at the time (19 Sep 2012 – The Day Mitt Romney Lost the U.S. Presidential Election 2012, Youtube Fund Raising Video). Source: http://www.marketoracle.co.uk/Article37226.html By Nadeem Walayat http://www.marketoracle.co.uk

THE NEW TREND IN GOLD Posted: 01 Nov 2012 12:54 PM PDT By The Hard Assets Alliance Team It's not too often that you see a major shift within the gold market. The last such recalibration in sentiment for gold investors was the introduction of the first gold-backed ETF in 2004, and the subsequent explosion in exchange-traded products (ETPs) for bullion and precious-metals equities. Today, another tidal change is under way, as the flow of funds into structured bullion products ebbs. I think this shift – as you'll read about in a moment – signals two things. First, it confirms that growing numbers of investors are increasingly nervous about the reckless monetary and fiscal paths being pursued on a global scale. Identifying this trend early on will let investors position themselves accordingly. Second, it tells me that acting now – securing the gold you want and need – is critical to withstanding the likely fallout ahead from the mountain of unpayable government debt and promised benefits. If we're correct about the dismal future of all major currencies – the dollar's inexorable decay in purchasing power and the "race to the bottom" between it and other currencies – then failing to act will greatly degrade your future standard of living. What is this new trend? It's simple, yet powerful… Investors are shifting from paper to physical We began to watch this trend after it was reported last year that billionaire hedge fund manager John Paulson dumped his shares in the ETF GLD, opting instead to purchase physical metal. Since then, the shift out of paper proxies for gold and into the metal itself has picked up steam, and it's now clear that a new investor trend is under way. Here's the evidence. The following chart shows the total purchases since 2001 of gold coins and bars versus the net additions to gold ETPs. Total coin and bar purchases are up 96% since 2009, while net additions to ETPs are down 73% over the same period. While ETPs include the ownership of physical bars, it's clear that increasing numbers of investors are buying more bullion than proxies. This is a remarkable shift, especially given the claimed popularity of GLD. The shift is even more dramatic with silver. Investors have tripled their silver bullion purchases since 2007, while the exchange-traded vehicles sold 26 million ounces more than what they bought to back their funds last year. Why is this happening? And what does it mean? Certainly some of the shift stems from concerns with the funds themselves. While we discount allegations that these funds don't possess the metal they claim to hold, there are other issues, such as complicated custodial structures and the possibility of leasing or substituting paper certificates for physical metal. Another reason for the shift is certainly due to global economic, fiscal, and monetary concerns. As fears of systemic risk ratchet higher, it's only natural for investors to gravitate toward the safest methods for holding physical metal. Throw in events like what happened to MF Global last year, and it's easy to understand why many investors would prefer holding their own bullion over a fund. More important, what should we do as a result of this trend? First, this is not a "keeping up with the Joneses" debate. We support the overall thrust of this shift into physical metal; gold is not an obscure metal that sits in a vault and "does nothing." It offers direct and immediate financial protection for you and your family like nothing else can. Remember that gold is above all else the world's best, time-tested form of money – something people were duped into doubting in the 20th century, but are now beginning to remember. Today's environment is exactly one in which gold shines: eroding purchasing power of paper currencies, vulnerable global economies, fears of inflation and/or deflation, a shaky banking system, insurmountable public debt levels, and fanciful money-printing schemes… if there were ever a time to own gold, this is it. Having metal in your control and at your disposal empowers you in times of turmoil and lets you avoid dependence on counterparties. Second, this trend carries a subtle signal: diversify. If risks are at a level sufficient to encourage holding physical metal, it's also worth diversifying that risk. Stash some at home, use private vaults, and store some internationally. Even large institutional investors frequently use more than one facility. No single method or location is risk-free, so spread it around. An easy way to do that is with a new breakthrough program: Hard Assets Alliance. Storage locations include Zurich, London, Melbourne, New York, Salt Lake City and Singapore. You can conduct all services online, and the metal is fully allocated and registered in your name. Selling and taking delivery are as easy as buying or selling GLD. Perhaps most attractive is that your order is bid out to a network of dealers who compete for your business, ensuring you get the best available price. All of the details are available in our free Action Kit. Remember: once Main Street enters the precious metals market – whether it's an overnight event or a slow awakening over time – we expect supply for physical metal to become increasingly spotty, premiums to rise, and much higher gold and silver prices to ensue. That process may be under way now, so our advice is to make sure your stash of gold and silver is big enough to get to the other side of the crisis intact. Bottom line: this is a trend you want to be a part of – and you don't want to be late.

Break Myths, Not Windows Posted: 01 Nov 2012 12:23 PM PDT When markets reopened in New York this week after Hurricane Sandy had ravaged the region, one Dow-listed darling scooted ahead of the crowd. Home Depot, which has already clocked a 45% gain YTD, jumped ahead another 2.5% before lunchtime. The logic here is simple enough. Investors were betting that the home improvement retailer would be one likely beneficiary from Hurricane Sandy. Homeowners need to repair their homes after the storm. Home depot has all their needs. What's not to like? Nothing, really. Taken in isolation, the havoc wrought by Hurricane Sandy probably is a boon for the retailer. At least in the short term. Roofs need repairing. Windows need fixing. Basements need bailing out. Hurricanes, along with earthquakes, natural disasters and the strange advent of DIY home improvement television programming, are good for Home Depot. But that's only part of the story. Sadly, it's the part people lacking the ability to look past their own noses tend to focus on. Dr. Peter Morici, a professor at the Smith School of Business at the University of Maryland and former chief economist at the U.S. International Trade Commission, is one such person. For Morici, gauging the damage of Sandy is more than "merely adding up insurance payouts and uninsured losses." Mired in myopia, the well-degreed professor wrote in a CNBC blog post that went to press just hours before Sandy made landfall on Monday: "Disasters can give the ailing construction sector a boost, and unleash smart reinvestment that actually improves stricken areas and the lives of those that survive intact." Where the "smart reinvestment" comes from, the professor doesn't say. Lacking Morici's academic qualifications, we'll resort to taking a wild, pie-in-the-sky guess: it will come from…somewhere else. In other words, the resources to which Morici refers will not be conjured out of thin air. The work will come as an opportunity cost to the community. Every brick laid, every roof mended, every man hour employed to repair the destruction left in Sandy's wake will be a brick…a roof…a man hour not put to use somewhere else. The lesson, as Bastiat, Hazlitt and countless others have sought to illuminate, is to take into account that which is unseen. That something is a benefit to one part of the economy says nothing about its effect on other sectors. More importantly still, is tells us nothing about its net effect. Energy and resources do not magically appear, as the professor would have us believe, but merely change their form. Applied to chemistry, this law (sometimes known as the principle of mass/matter conservation) helped unshackle 19th century chemists from their crude fixation with alchemy. More than 100 years on, modern mainstream economists of Morici's strange bent have yet to learn their lesson. Not content to merely miss the point, the professor went out of his way to avoid it altogether when he continued, further in his post… "…rebuilding after Sandy, especially in an economy with high unemployment and underused resources in the construction industry, will unleash at least $15-20 billion in new direct private spending — likely more as many folks rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive." Following Morici's tortured logic, one gets the feeling that he thinks hurricanes might actually be a net positive for the economy. Not so fast. According to an estimate he cites, losses from Sandy would be "about $35 to 45 billion." So far, Morici has only shuffled $15-20 billion from one place to another. Still a net loss. Ah, but a good Keynesian never lets a natural disaster go to waste. Here he continues, summoning that most magical of tools, the "multiplier effect." "Factoring in the multiplier effect of $15-20 billion spent rebuilding yields an economic benefit from reconstruction of about $27-36 billion. Add to that the gains from more a [sic] more modern and productive capital stock — likely in the range of $10 billion — and consumer and business spending that is only delayed but not permanently lost-likely in the range of $12 billion — and the total effects of natural disasters of the scale of Sandy are not as devastating two years down the road." And there you have it. What was once seen as a multi-billion dollar natural disaster is really, when viewed through the broken lens of mainstream-approved academia, a multi-billion dollar boon to the economy. This kind of illogical legerdemain is nothing new. Nor, it seems, will it be overcome anytime soon. An article published by Bloomberg Businessweek features the bloviating quackery of yet another destruction enthusiast. "We definitely see stronger job gains in response to natural disasters, particularly when economies are coming out of recession," Gus Faucher, senior economist at PNC Financial, "who has researched the economic effects of natural disasters," was quoted as saying. Enlightening. Really. Why not just bulldoze the entire eastern seaboard, Mr. Faucher? Think of the job creation! Of course, no discussion of the Broken Window Fallacy would be complete without at least a nod to Mr. Paul Krugman, vacant-eyed flag waver for the Alien Invasion Stimulus Plan. This is a man who has repeatedly referred to WWII as a "public works program." Then, in the aftermath of 9/11, safe and sound in his Ivory Tower of Idiocy, Krugman announced: "Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could do some economic good." Leave it to the New York Times, no less, to brandish this reproachable filth on their editorial pages. Shame! Meanwhile, back on planet earth, hurricanes, wars and other disasters, both "natural" and "unnatural," are devastating events that reduce — rather than raise — our standard of living. They wreck lives and property, level communities to rubble and ravage entire regions. Our thoughts today are with those who, instead of building on what they once had, must now exhaust scarce resources just getting back to where they once were. It's hard enough suffering a tragedy without some condescending twit telling you how, if only you employed their hackneyed thinking, it really is a good thing after all. Regards, Joel Bowman for The Daily Reckoning Break Myths, Not Windows appeared in the Daily Reckoning. Subscribe to The Daily Reckoning by visiting signup for an Agora Financial newsletter.

Bron Suchecki–The Perth Mint Really Does Have The Metal 31.Oct.12 Posted: 01 Nov 2012 11:31 AM PDT www.FinancialSurvivalNetwork.com presents Bron Suchecki, director of strategy at the Perth Mint joined us today to clarify a number of rumors and misunderstandings about the Mint's policies and accounting. Perth sells certificates that are backed up by the metal they have in inventory, awaiting fabrication. Buyers of the certificates are not charged for storage. This practice has led a number of reputable writers to question whether Perth really does have the metal and perhaps more importantly, what would happen if a shortage of metal prevented them from restocking their inventory. Bron explains that they never actually ran out of metal in 2008. They tapped other sources to keep the metal flowing, and if they were ever in a position where suddenly gold and silver became unobtainable, they would be forced to stop producing and keep the inventory in place. Additionally, Perth's auditors have certified their financial statements, never qualifying them due to an inventory shortage. While there are no sure things in this world, especially where counterparty risk exists, Perth is probably as close as one can get to minimization of this risk. Go to www.FinancialSurvivalNetwork.com for the latest info on the economy and precious metals markets This posting includes an audio/video/photo media file: Download Now

LGMR: Gold & Silver Rise as China's Long-Term Demand Forecast to Keep Growing Posted: 01 Nov 2012 11:24 AM PDT London Gold Market Report from Adrian Ash BullionVault Thurs 1 Nov, 09:00 EST WHOLESALE PRICES to buy gold rose to 7-session highs in London on Thursday morning, touching $1726 per ounce even as new data showed US employment rising at its fastest pace since February. The private-sector ADP payrolls report said the US added 158,000 jobs in October. Earlier data from the manufacturing sector in China, the world's #2 gold consumer, showed its slowdown to be easing. However, "Over 17% of survey respondents reported a fall in the volume of new export orders," said the new Purchasing Managing Index report from HSBC/Markit Economics, "and just under 10% noted an increase." Two-thirds of Chinese businesses reporting quarterly results to the stock market have seen a sharp rise in unpaid bills according to the Financial Times. The People's Bank of China has this week pumped a record $60 billion-worth of liquidity into its domestic money market. "Gold has been finding support on...

Gold Price to Rally Regardless of Who is Elected President Posted: 01 Nov 2012 11:21 AM PDT "Positive interest rates are light years away, so it will be up, up, up and away for the gold price." ...

Greyerz - One Of The Most Important Charts Ever Posted: 01 Nov 2012 11:15 AM PDT Today Egon von Greyerz sent King World News one of the most important charts you will ever see. Greyerz, who is founder and managing partner at Matterhorn Asset Management, demonstrated, in this one chart, the incredible danger facing the global financial system and why gold will explode higher in price. This is the first of two interviews KWN will be releasing with Greyerz today. Here is what Greyerz had this to say in Part I, along with his chart:  "If I look around the world, the problems continue. China has yet another round of QE totaling $60 billion. China is under real pressure. And if you look at ArcelorMittal, which is the biggest steel producer in the world, and for them China is a massive market, they had a 20% decline in sales in Q3." This posting includes an audio/video/photo media file: Download Now

A Perfectly Normal Gold Price Correction Posted: 01 Nov 2012 10:40 AM PDT Gold Price corrections are normal for October... read more

Gold Bullion Held Within America and Foreign Countries, Much Is Really There Posted: 01 Nov 2012 10:37 AM PDT With the rise of instability within the European Union (E.U.), gold bullion has become increasingly attractive as a backstop. Next to America, Germany has the second-largest holding of gold bullion, with approximately 3,600 metric tons. What is interesting at the current moment is that many voices within Germany are calling for the Bundesbank, its central bank, to check its international holdings, namely in the U.S., as not all of the gold bullion held by Germany is being stored on the country’s own soil.

Gold and Silver Rise as China's Long-Term Demand Forecast to Keep Growing Posted: 01 Nov 2012 10:32 AM PDT WHOLESALE PRICES to buy gold rose to 7-session highs in London on Thursday morning, touching $1726 per ounce even as new data showed US employment rising at its fastest pace since February. The private-sector ADP payrolls report said the US added 158,000 jobs in October. Earlier data from the manufacturing sector in China, the world's #2 gold consumer, showed its slowdown to be easing.

The Economy Is Crumbling Posted: 01 Nov 2012 10:31 AM PDT If you lie down with dogs, you wake up with fleas  (attributed to Benjamin Franklin) Before I chat briefly about the subject of the title, I want to point out that today's action in the mining stock HUI index (-1.8% vs. the SPX +1%) is largely a result of American Barrick and it's big earnings miss released today.  ABX is currently down 9%.  ABX accounts for 15.4% of the HUI index.  Barrick announced crappy operating results plus a pretty big bump in cash costs, which led to the huge earnings miss.  Plus there's this item:  "$71 million in unrealized losses on non-hedge derivative instruments."  I like the way they qualify that as "non-hedge."  Remember they supposedly removed their hedges in 2009, but I never trusted that and it turns out they still have "non-hedge" hedges in place - lol.   I've always thought ABX was a poorly managed company and have steered investors away from it.  ABX is the poster-child of the quote above... Several economic reports were released today.  Actually, yesterday the Chicago Purchasing Manager's Index was released and was lower than expected.  Worse, the sub-index of component measures was ugly.  Today it was followed up with a slight "beat" by the touchy-feely ISM manufacturing index.  Consumer confidence came in lower than expected and construction spending missed expectations.  In addition, the notoriously manipulated jobless claims weekly report of course came in slightly better than expected (lower claims supposedly) but last week's "better than expected" was of course revised quite a bit lower and below last week's expected number.  For those paying attention to the Government-sponsored (i.e. Taxpayer financed) General Motors, it was reported that the inventories at GM dealers soared to a record level.  Zerohedge does a great job following this metric:  LINK  A lot of tech hardware and manufacturing companies "stuff the channel" with inventory in order to inflate revenues.  This is because the way GAAP accounting works, when a manufactured good leaves the manufacturer's factory and is shipped to the middle man distributor, it is counted as a sale, even though technically it's never really a sale until it's in the end-user's possession and paid for.  What makes GM's channel-stuffing inordinately egregious is the fact that GM dealer inventories are financed with Taxpayer money.  So when the music finally stops in our fractional-reserve Ponzi system, the Taxpayer will be left holding the bag on millions of unsold cars.   And, of course, the top brass at GM will have walked away with tens of millions in bonus money based on artificially inflated sales.  That particular bubble, by the way and just so readers don't think that my Presidential-candidate hatred is limited to Romney, is being blown by Obama.  Helluva blow job there, Barack. The point of all of this is that our economy is starting to spiral downwardly out of control and that process is starting to pick up some speed.  Rest assured that the Fed will come to the rescue after the election with another big slug of QE.  This time it will consist of expanding the Treasury financing being done by the Fed.  Interestingly, more on this is future posts, the trickle of fiat money globally that is converting into non-fiat gold/silver bullion is also starting to increase in velocity...

Daily Telegraph article on James Turk's aboveground gold stock research Posted: 01 Nov 2012 10:30 AM PDT Daily Telegraph article on James Turk's aboveground gold stock research (external link - video)

Jim Willie: Central Bank Gold Rehypothecation Scandal to Take Gold to $5,000/oz Posted: 01 Nov 2012 10:13 AM PDT -The battle is on for delivery and verification for official gold accounts -Evidence grows that much of it is gone, and when demanded, replaced with urgency -It is soon to transform into a global gold war -The German Govt gold … Continue reading →

The Currency War Heats Up Posted: 01 Nov 2012 10:00 AM PDT During the last debate, Mitt Romney emphatically stated he would blast China for manipulating its currency the first day he takes office. Talk about priorities. Of all the nation's pressing issues, the minute the oath is over, he'll be calling out China for manipulating the yuan. A remark like that should cause exasperation for anyone in the know. As Mary Anastasia O'Grady writes in The Wall Street Journal, "To be consistent, Mr. Romney should call out the Federal Reserve on day two for engaging in its own currency manipulation by way of 'quantitative easing,' which undermines the value of the dollar relative to Latin American currencies." About a month ago, Brazilian Finance Minister Guido Mantega called out Ben Bernanke for manipulation, blasting the Fed's QE3 (or QE Infinity) policy for setting off currency wars. Again this year we've had the Fed, the ECB, and the Bank of Japan all announcing easing within days of each other. And the effects are inflation in China, food riots in Egypt, stock bubbles and consumer price inflation in Brazil, and higher unemployment in developing countries. International Monetary Fund Managing Director Christine Lagarde took the central banks to task in a speech delivered at the IMF's October meeting, warning that easy money from developed country central banks creates asset price bubbles in developing countries. Romney's hectoring of China is not so harmless. Combine the Romney rhetoric with the Federal Reserve's stated policy to keep interest rates at virtually zero until… forever, these are the sounds of Currency War III (CWIII) in its initial stages. The big picture is that governments inevitably reduce the value of their currencies to the value of their physical content. But in the meantime, politicians are looking for votes, and governments look for advantage over competing governments. It is not just rockets and bombs that are fired; war is raged on the economic front, with currency manipulation as the primary weapon. While American politicians talk about peace, America's military-industrial complex wages war all over the world. At the same time, we constantly hear noise about a strong dollar, while America has been a leading advocate of currency debasement for the past 200 years: through the Revolution, the Civil War, the Great Depression, the inflation of the Carter years and now Bernanke's QE Forever. James Rickards in his book Currency Wars warns of a complete collapse of the dollar. He says that Fed chair Ben Bernanke "is engaged in the greatest gamble in the history of finance." He says the dollar crash is overdue and that it's not a matter of guesswork — the preconditions are already in place. Bernanke's attempt to print America's way out of its economic jam is, in essence, the declaration of a currency war on the entire world. And the major central banks are retaliating. Rickards writes, "The new currency war is the most meaningful struggle in the world today — the one struggle that determines the outcome of all others." The author explains that while currency wars are fought on the world stage, they begin with a domestic economy lacking in growth, high unemployment, a weak banking sector, and worsening public finances. With economic growth stymied, time and time again, countries look to depreciate their currencies to promote export growth and investment. Sound familiar? There was once a classical gold standard in the world, and it was self-equilibrating, operated like a club, with members strictly adhering to the unwritten but well-understood rules. Free-market forces prevailed; government interventions were minimal; exchange rates were stable. It worked because there was no U.S. central bank to mess up monetary matters. This monetary tranquility was jarred with the creation of the Federal Reserve in 1913. The Federal Reserve Act was just a part of the wave of legislation brought about by the Progressive movement. Big business was tired of competing and continually innovating to stay ahead of falling prices. Business would much rather use the power of government to establish and maintain cartels in an effort to ensure high profits. The plan was to transform the economy from more or less laissez-faire to centralized and coordinated statism. What Rickards calls Currency War I began with the German hyperinflation in 1921 and ended with France breaking with gold in 1936 at the same time England was devaluing the pound sterling. In between were continual monetary fireworks. Moviegoers who've seen Midnight in Paris probably wonder how or why an amazing collection of literary and creative U.S. expatriates ended up in Paris in the mid-1920s. The answer is that the French franc collapsed in 1923, allowing Ernest Hemingway, Scott and Zelda Fitzgerald, and Gertrude Stein to afford comfortable lifestyles in Paris by converting their dollars from home. By this time, the classic gold standard was long gone, replaced by a deeply flawed gold-exchange standard that allowed centrals banks to inflate, causing the boom of the 1920s, which therefore brought about the required correction of the 1930s, exacerbated by government policy. FDR started his term in office by closing banks and then confiscating the people's gold. The language of FDR's order is chilling, giving citizens until May 1, 1933, to deliver to the Federal Reserve System "all gold coin, gold bullion, and gold certificates now owned by them" with the threat of a $10,000 fine or 10 years in prison. Citizens received $20.67 per ounce from the government, only to watch their new president move the price up to $35 an ounce over three months — a 70% devaluation. Rickards places Currency War II from 1967 to 1987. In between CWI and CWII was the Bretton Woods era (a phony gold standard scheme) that both Henry Hazlitt and Jacques Rueff predicted would collapse, setting the stage for CWII. CWII began with a number of crises in the British sterling and then a flight from the dollar into gold, with French president Charles de Gaulle calling for a return to the gold standard. The French president "helpfully offered to send the French navy to the United States to ferry the gold back to France." This all led up to Richard Nixon preempting Bonanza on Aug. 15, 1971, telling the nation he was closing the gold window, because of evil international speculators. Of course, it was money printing and budget deficits that were to blame. Nixon also instituted a 10% surtax on all imports, effectively devaluing the dollar in the trade arena. The devaluation was to spur employment, but within two years, the United States was mired in recession. The United States suffered three recessions from 1973 to 1981, while purchasing power dropped by half from 1977 to 1981. Suddenly, "stagflation" was on the tip of everyone's tongue. Paul Volcker took over as Fed chairman and quickly hiked interest rates, looking to stop the price inflation. The price of gold collapsed along with the inflation rate, and the dollar strengthened. But dollar strength finally got in the way of export jobs and the Plaza Accord of September 1985 was an attempt to drive down the greenback's value primarily against the yen and the mark. And it worked, from 1985 to 1988: The dollar fell 40% against the French franc, was cut in half against the yen, and fell 20% against the mark. However, the devaluation did little for the U.S. economy, and by 1987, monetary authorities met in Paris at the Louvre. The Louvre Accord was hatched to stop the dollar's fall. The Bank of Japan's willingness to expand its money supply to depreciate the yen would fuel one of the biggest stock market bubbles of all time, with the Nikkei stock average roaring from around 10,000 in 1985 to a peak of 38,957.44 on Dec. 29, 1989. More than two decades hence, that market still hasn't recovered. Currency War III has just begun, and after 40 years of massive money printing and the explosion of derivatives, CWIII will be fought on a massive scale, with a real risk of a collapse of the entire monetary system. So how's this currency war to end all currency wars going to turn out? Let's use Ludwig von Mises' outline of the three stages of inflation. In Mises' stage one, government prints all the money it can, because prices don't rise nearly as much as money supply. In stage two, the demand for money falls, which intensifies price inflation. Finally, in stage three, prices go up faster than money supply. A shortage of money develops, and people urge government to print more; when the government does this, prices and money supply spiral upward. A small change in preferences among just a few people could lead to a collapse, because the financial framework is a weakly constructed Keynesian contraption of fiat money, government deficits and financial alchemy. Any one of thousands of events could trigger the collapse, and the last straw will not be known until after the fact. It's been said that war is the health of the state. Currency war is a desperate government willing to wreck it citizens' lives to benefit its own agenda. Chaos is the most likely outcome of the latest currency war. It won't be pretty. After the government gets desperate, it gets mean. After currencies collapse, the government freezes people's assets, gold is confiscated, and capital controls are imposed. A currency war is neither a spectator sport nor a game. We all have to participate. It's the government's war on each and every one of us. It's not a matter of if: The war has already started. Now is the time to get prepared. First, order Jim Rickards' Currency Wars from Laissez Faire Books to understand the problems we face on the currency front. Next, I'd like to introduce you to Addison Wiggin's Apogee Advisory. "Apogee," as you may know, means the "farthest and highest point." And in Addison Wiggin's Apogee Advisory, that's what you'll get — high-level economic and financial analysis boiled down to actionable solutions. Wiggin is the New York Times best-selling author of three books on this subject, including The Little Book of the Shrinking Dollar, which will be mailed to you free with a trial subscription to Apogee. This war on you has already started. There is no time to waste. Sincerely, Douglas French Original article posted on Laissez-Faire Today The Currency War Heats Up appeared in the Daily Reckoning. Subscribe to The Daily Reckoning by visiting signup for an Agora Financial newsletter.

Pyrrhic Stimulus Posted: 01 Nov 2012 10:00 AM PDT November 1, 2012 As sure as sunshine follows a hurricane: claims of "economic stimulus" from Sandy reconstruction… The scam of flood insurance, the folly of GDP numbers and other debris left behind by the storm… A spike in dividend cuts, at the same time special dividends surge: Kelly Green unpacks a seeming contradiction… Spain's stunning discovery… France's relentless punishment of beer drinkers… "I'm starting to take you less seriously"… readers unleash "War on The 5"… and more!   "Disasters," writes the bow-tied celebrity economist Peter Morici, "can give the ailing construction sector a boost, and unleash smart reinvestment that actually improves stricken areas and the lives of those that survive intact." Oy… Hurricane Sandy appears to be having a number of perverse effects… Knight Capital — the outfit that sent more than 100 stocks on wild swings in August thanks to a "software glitch" — ran into generator problems at its New Jersey headquarters yesterday and couldn't execute orders from brokers ADP accidentally released revisions to its September jobs report a day early — about which more below And economists who should know better are playing up the storm's "stimulus" effects. Look! It's a boon to the auto industry!"Rebuilding after Sandy," Mr. Morici writes at Yahoo Finance, "especially in an economy with high unemployment and underused resources in the construction industry, will unleash at least $15-20 billion in new direct private spending." Oy.   Mr. Morici is hardly alone. "You certainly don't want to get a stimulus out of disaster," adds Mesirow Capital's Diane Swonk, "but they certainly do tend to stimulate. "Much of it is infrastructure spending," she tells MarketWatch, "so the subways, the electrical grid, the downed power lines, the roadwork, the overtime on that. That's the initial stuff that's done immediately, along with window replacement." Window replacement? Really?   "The broken-window fallacy," wrote Henry Hazlitt in his 1946 gem Economics in One Lesson, "under a hundred disguises, is the most persistent — and rabble-rousing — misunderstanding in the history of economics." Taking his cue from the 19th-century French economist Frederic Bastiat, Hazlitt tells the story of a vandal who breaks a bakery window. The baker supposedly stimulates the economy with his purchase of a new window. Never mind that he'd hoped to buy a new suit with the money and the glazier's gain is the tailor's loss. "No new 'employment' has been added," Hazlitt sums up.   Here, the clumsy Morici, likely aware of this reality, tries to justify his position by pointing out that many storm victims will "rebuild larger than before. "On the shore," he says, "older smaller homes on large plots are replaced by larger dwellings that can accommodate more families during the summer tourist season. The Outer Banks of North Carolina saw such gains several decades ago after rebuilding from a storm of similar scale."   Um, wait a minute: Aren't many of those homes "on the shore" insured by the federal government? Why yes, they are: "Four months before Hurricane Sandy hit the East Coast," Ira Stoll writes at Reason, "President Obama quietly signed legislation expanding the federal program that offers taxpayer-subsidized flood insurance to oceanfront homeowners." Now multifamily dwellings are covered in addition to the single-family variety. It's right there in the catchall "transportation bill" that links your passport to your back taxes and requires a "black box" in all new cars. Rebuilding "bigger and better" will take place with money taken out of a taxpayer's pocket and put into the pocket of property owners who built in a flood zone. "Net-net," we're still no better off.   "For the umpteeth time," writes Jeffrey Tucker at Laissez Faire Today, "there is no upside to wealth destruction. But try telling that to the folks who calculate GDP. "It is very likely the Sandy will be given credit for any fourth-quarter fake economic growth. After all, that's how government affects the GDP. The more it spends, the higher economic growth appears to be." Look at the GDP figures that came out last Friday. We pointed out then how government spending accounted for most of the "growth." Indeed, economists at George Mason University's Mercatus Center figure it's the biggest quarterly increase in federal spending in two years. And it gets worse: Private-sector production — the stuff that doesn't get shifted from one pocket to another, or is run up on Uncle Sam's no-limit card — is falling. "This is not economic growth," says Mr. Tucker. "No matter how many economists tell us that the storm will inspire all kinds of new and wonderful things, this storm has been a disaster and a serious blow to the economy when we least needed it."   We're tempted to take up a collection and send our four-volume "Economics in One Library" set to 100 random economists to try to shake some sense into the profession. Unfortunately, we've become adept at recognizing lost causes as soon as they pop into our heads… What we can do is put this set in your own hands so you'll have a chance to talk sense into your neighbors who might spout the same fallacies. The set includes… Henry Hazlitt's Economics in One Lesson Frederic Bastiat's The Law Garet Garrett's A Bubble That Broke the World Freidrich von Hayek's A Tiger by the Tail. The first two titles are timeless classics. The other two are less well-known… but they offer keen insights to the crises of their era (Garrett's volume is from the 1930s, Hayek's from the 70s) and you'll instantly recognize how history is rhyming, if not repeating, today. Each volume has new forewords by authors like Robert Murphy, Keynes-vs.-Hayek video creator John Papola, our own Chris Mayer and Agora Inc. founder Bill Bonner. We've made it possible for you to get all four volumes — not e-books, but bound the old-fashioned way — absolutely free. Details here.   Stock traders have donned their rally caps this morning. At last check the Dow and the Nasdaq were both up about 1%. Gold is flat at $1,719. For the moment earnings have taken a back seat to economic numbers. Consumer confidence as deduced by the Conference Board is at its highest since February 2008. And there's more…   U.S. factory activity expanded last month, according to the October ISM manufacturing survey out this morning. With 50 as the dividing line between expansion and contraction, the number came in at 51.7. That's two consecutive months of growth after three straight months of shrinkage. A similar report from China overnight crossed the line from contraction in September (49.8) to expansion in October (50.2).   Also on the radar this morning: Two measures of the jobs market in advance of tomorrow's nonfarm payroll report from the Labor Department… First-time unemployment claims: Down 9,000 last week to 363,000. It amounts to statistical noise; the four-week moving average is again nearly unchanged Private payrolls: Up 158,000 last month, in the estimation of the payroll firm ADP. ADP made a big deal about its new-and-improved methodology starting with this morning's report. But yesterday it accidentally released revisions to the September number — revisions to the downside. But that's now a distant memory with October's semi-robust figure. And yes, the Labor Department will issue its October jobs report on schedule tomorrow morning; no Sandy-related delay as was suggested earlier in the week.   "September saw the most dividend cuts since August 2009," writes Kelly Green of our income desk. And yet… "We're also seeing more special dividend announcements than anytime except the last two months of 2010." She says the October total should prove even more dramatic. "So far, 139 companies have issued special payments this year. There's plenty of room before we hit 2010′s numbers. But most of those came in November and December of that year." The special dividends, and the dividend cuts, both spring from the same source — uncertainty over the fate of dividend tax rates come next year: Will they stay at 15%, or will they be taxed as ordinary income? "Even in the worst-case scenario," Kelly advises, "it's not all bad news. "According to Goldman Sachs, this debate should force the hands of a lot of companies to reward their shareholders by the end of the year. The bank notes that in the fourth quarter of 2010 — the original reset year — the number of special dividends issued by U.S. companies doubled what had been released in the previous 11 years. "We suspect this year will be even better than 2010." Kelly has teamed up with our other dividend hound Jim Nelson to assemble a toolbox of techniques you can use to get ahead of the crowd. Begin here.   From the Federal Department of Duh: A tax increase — an austerity measure, wouldn't you know — helps shrink the Spanish economy. While the Spanish mull through details of basic macroeconomics, "the economy," The Telegraph reports, "which only emerged from the last recession at the end of 2010, has now contracted for five straight quarters," according to data the National Statistics Institute. Despite a shriveling economy, Prime Minister Mariano Rajoy is determined to hold off on outside help. "It's not essential at this moment," he said at a press conference. "I will do it when I think it is in Spain's best interest." Instead, he decided it is in Spain's best interest to increase the value-added tax (VAT) from 18% to 21%… causing the economy to shrink 0.3% and unemployment to hit a new high of 25.1%. A shocking revelation for Spain: the correlation between taxes and economic activity.   While Spain tries to squeeze blood from shale, Francois Hollande targets the lesser of two French pastimes: beer. In another half-hearted attempt to keep their own heads above water, the French government is pushing to increase taxes on beer by 160%. Fortunately for the black market, governments still haven't learned the power of unintended consequences. Smugglers, start your engines. Although beer represents only 16% of France's alcohol market, "This measure will affect all brewers, including small entrepreneurs" the head of Brewers of Europe told AP. This glass is half-empty…What's more outstanding? Hollande's efforts to raise €480 million ($623 million) aren't to reduce the ever-expanding deficit. Instead, they're to boost existing social benefits. The Brewers of Europe scream that beer is being "singled out" compared to wine and are calling this measure a "kick in the teeth," and they might be right… Who in their right mind would mess with the French when it comes to their wine?   "The 5 used to be pleasant reading every day," a reader writes. "Alas! Not anymore. It has turned into a collection of photos of your editors and a pile of lengthy and stupid topics." Ouch. We've received a number of emails like this in recent days. So much so we've dedicated special folder in the inbox to them. We call it: "War on The 5." A selection of the more civilized messages follows…   "I've been a subscriber and an avid reader for almost two years," reads another entrant, "I've paid two subscriptions, but I'm starting to take you less seriously. "Not at all for content," the reader goes on. "You tackle current issues with voracity, oftentimes before they appear in the press (are we surprised?). However, you've sunk into a lot of hyperbole and long-winded essays on why I need to read and buy the next 'generation' of information. "And you've become a bit political. Not that politics in this day and age can be avoided. However, you're becoming a bit smug. I want to hear the 'punch line'; not many and many paragraphs of why I should read the 'punch line'… which often leads me to another sales pitch to buy another series connected with or recommended by The 5. "I actually work and am highly capable of understanding the juste of the presentation. I don't need many minutes of reading to qualify the speaker — nor the concept. I just want the facts. If I didn't believe in your ideas and your assessment of things, I wouldn't subscribe to The 5. Unfortunately, outside of your mounting sarcasm, I'm more and more led to links that spend enormous amounts of time building the 'drama' of their presentation prior to getting to the point. "Please, don't misunderstand me. I really like The 5. "However, you are becoming a bit too comfortable with your writing chair. You are not writing to friends. You are exchanging ideas with a select public that values and digests your ideas in a complicated and multimessage communications environment. "Get back to where you were and quit making The 5 a maze. I have enough of that with the daily press, of which I follow The New York Times, the LA Times, The Economist… and YOU." The 5: We pause here for a breather. [Sound of reader panting.]   "I'm a single mom," the reader continues, "now approaching 62 years old. I put my son through USC with no student loans and support myself with the rental of four lovely middle-class residences in Sacramento (which I bought after the crisis), and I am most informed as to the regulations being imposed on the middle class, 'never ask for anything from the government' class. Sometimes you insult my intelligence. Just give your great message succinctly, and when you lead me to other links… please ensure that they will not insult my intelligence as well. Just get to the point. "I read the news. I just need your valued assessment."   "I do enjoy reading Agora Financial and glean much valuable insight beyond those financial/economic subjects that you opine upon," writes another. [We're sensing a built up to the inevitable "but..."] "Your thoughts on those nonfinancial issues are very entertaining and interesting, and lead to some understanding of human nature and some of 'why' things are the way they are, and will remain, human nature, what it is. Your between-the-lines point of views, and especially when you poke the autocratic establishment historians or sophomoric media for their slanted and biased writings, should be read by more than just your subscribers. "However!" [There it is...] "Your writings as of late seem to more and more resemble those of an arrogant elite. Sarcasm in one's writing can be and is entertaining. In fact, I enjoy good sarcasm, which is only effective if there is a resemblance of some truth. That which you do very well. So my discord is not your opinions or the use of sarcasm. We agree on way more than those few differences. The writers are very good wordsmiths, and knowledgeable too. "Being correct, or believing one is correct on a subject(s), should not entail fancying oneself on a pedestal. "Love your publication. But sometimes it seems to be preachy. I think we get your good points without the perch." The 5: Can I get an amen, brother! Regards, Addison Wiggin The 5 Min. Forecast P.S. "The War on You," writes a lone complimentary reader, "is the most important theme in your newsletter. It's an indicator of a culture in collapse. Keep publishing these items." All is not lost… thank you.

AAPL Looks Ready Bounce & the Next Best Trade Ideas Posted: 01 Nov 2012 09:49 AM PDT By Chris Vermeulen, TheGoldAndOilGuy AAPL shares have been in free fall mode all October spooking investors with a $120 drop from the all-time high in September. As well all know, though it's hard to follow without a proven trading strategy to keep us focused but the key is that you must buy when others are selling and then sell when everyone is buying. Apple shares really have helped in holding the overall stock market up in the past but recently it has been a big drag on the broad market. Taking a look at the chart below you can see my analysis and thoughts of this giant. The red horizontal line shows the key level where high volume traded in the past. For the market to reset (flush out investors/traders) it must shake as many longs out before it can start rising again. By the price breaking below that level which also happens to be a Century Number $600, most of the stops were placed down around this level. The volume spike of 40,000,000 shares clearly shows it triggered stops once that $600 level was broken. We want stops run because it give more power to the next rally/bounce. NASDAQ Index: The NASDAQ has formed a similar chart pattern and is heavily weighted with AAPL shares. Trading NQ futures, QQQ, QLD or the XLK exchange traded fund as a much more affordable way to play a bounce/rally in the coming weeks. Russell 2000 Index: I really like the Russell 2000 index because small cap stocks can rally hard and fast outperforming the large caps like AAPL, SP500, NASDAQ and DOW. This index is looking ripe for a bounce in the coming days which could trigger the next major rally to new highs. You can plan this index through TF futures contract, IWM, TNA, UWM exchange traded funds. Trading Conclusion: While this setup looks very promising because the election is almost over and the Santa Clause rally is just around the corner. Know that some of the biggest drops in the market happens during times when the market is running the stops. It is a natural tendency to take big positions which things look great, but that is not how you do it… Take calculated position sizes knowing indexes could fall another 2-3% before putting in a real washout bottom. Get My Trade Alerts at: www.TheGoldAndOilGuy.com Chris Vermeulen

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