Gold World News Flash |
- Why A Weimar-Style Hyperinflation Will Never Occur In The West...
- Eric Sprott: Silver to Outshine Gold as the Investment of this Decade!
- Asian Metals Market Update
- Richard Russell: Stage Now Set For Public To Enter Gold Market
- Great Examiner Article on Copyright, Buried Lede on Staffer's Firing
- Gold Seeker Closing Report: Gold and Silver Gain With Stocks
- Secret IMF report: Hide gold loans and swaps for market manipulation
- Peter Grandich: What a Turnaround in Junior Gold Mining Stocks Will Look Like
- Market manipulation discussed by Sprott on Russia Today and by Lanci on Kitco News
- The Socialist Heart Of France Spits Out Its First Victim
- Turk – The Key Chart Every Silver Investor Needs To Watch
- GoldMoney's Turk, Sprott's Embry explain enthusiasm for silver
- Guest Post: A Few Thoughts On Gold, Part 1 – Gold As An Investment
- The US's "EU Style" Negotiations Will Take Us Right Over the Cliff
- 10 Days Left For The End Of Times? What Did We Learn?
- Commodity Technical Analysis: Gold Probably Faces Resistance at 1727
- The Gold Price Closed Up at $1,712.50 and Needs to Climb to $1,725
- Presenting The Fund-tastic Four: Ireland, Greece, Spain And... The U.S.
- Golden End Of Year Gifts – Some Tips
- Why A Weimar-Style Hyperinflation Will Never Occur In The West…
- Gold And Silver Are “Go-To” Assets For Capital Preservation
- Precious Metals Market Report – December 13
- Gold Daily and Silver Weekly Charts - FOMC QE Unfolding
- A $551 Billion Hole
- How Gold Miners Can Leverage the Price of Gold
- What a Turnaround in Junior Gold Mining Stocks Will Look Like
- Bitcoin sponsor gets recognition as bank and payment system
- Turk - The Key Chart Every Silver Investor Needs To Watch
- Latin America catches the gold bug
- LGMR: Gold "Respecting Uptrend", Berlusconi Speaks of "Desperation" at Returning to Public Life after Monti Announces Resignation Plan
| Why A Weimar-Style Hyperinflation Will Never Occur In The West... Posted: 11 Dec 2012 08:10 AM PST I saw a YouTube video published by Nick Barisheff recently (not an endorsement), which details his argument for hyperinflation and $10,000 oz. gold. While I don't doubt the possibility of $10,000 oz. gold, I'm highly skeptical of the possibility of hyperinflation in the United States and Europe. The reason is simple: Money today is not what money was 50 or 100 years ago. | ||||
| Eric Sprott: Silver to Outshine Gold as the Investment of this Decade! Posted: 11 Dec 2012 08:07 AM PST Eric Sprott is interviewed on CapitalAccount. | ||||
| Posted: 11 Dec 2012 12:04 AM PST The Italian political crisis has been just what the gold and silver bulls were looking for apart from the Federal Reserve meeting this week. Bank of England Governor Mervyn King said the Group of 20 nations must revive efforts to address global imbalances or more countries may start using exchange rates as their key tool for monetary policy. This is an indirect aim at China and no one else which will not have any impact on currency market. These are just words which will never be followed by actions. | ||||
| Richard Russell: Stage Now Set For Public To Enter Gold Market Posted: 10 Dec 2012 10:01 PM PST  With continued volatility in global markets, the Godfather of newsletter writers, Richard Russell, writes about the action in the Metal of Kings, Warren Buffett and the public's long awaited entry into the gold market in a note to subscribers: "Where's gold going? -- As you can see on the chart below, gold has formed an almost perfect rectangle. The top of the rectangle has been tested three times, and each time gold was turned back."This posting includes an audio/video/photo media file: Download Now | ||||
| Great Examiner Article on Copyright, Buried Lede on Staffer's Firing Posted: 10 Dec 2012 10:00 PM PST from The Daily Bell:
Dominant Social Theme: Always side with Hollywood. Free-Market Analysis: The lede of this article is a bit buried, in our humble view. Here's the real news: "The staffer who wrote the memo [see above], an ambitious 24-year-old named Derek Khanna, was fired – even before the RSC had decided on other staffing changes for the upcoming Congress. The copyright memo was a main reason." | ||||
| Gold Seeker Closing Report: Gold and Silver Gain With Stocks Posted: 10 Dec 2012 10:00 PM PST Gold climbed to as high as $1717.20 by about 8:30AM EST before it drifted back lower for most of the rest of trade, but it still ended with a gain of 0.44%. Silver rose to as high as $33.415 ended with a gain of 0.39%. | ||||
| Secret IMF report: Hide gold loans and swaps for market manipulation Posted: 10 Dec 2012 09:53 PM PST 11:58p ET Monday, December 10, 2012 Dear Friend of GATA and Gold: Western central banks conceal their gold loans and swaps because information about them is "highly market-sensitive" and accountability about them would hinder secret currency market interventions by central banks, according to a confidential report by the International Monetary Fund obtained this week by GATA. The report, provided to GATA by its researcher R.M., was written in March 1999 as the IMF staff proposed to strengthen financial reporting standards for central banks. The report shows that the objections by gold-lending central banks were decisive in weakening the standards. While the first draft of the new reporting rules would have required disclosing central bank gold loans and swaps, the revised rules, later adopted, allowed central banks to hide their gold loans and swaps within their gold reserves and even not to disclose the amount of their monetary gold at all, just the value assigned to it. That is, the explicit but secret policy of Western central banking toward gold is to deceive and manipulate markets, as GATA long has complained. The confidential IMF report says that to strengthen its financial reporting standards for central banks -- its Special Data Dissemination Standard reserves template -- IMF staff members consulted top officials of the organization as well as the Bank for International Settlements, the European Central Bank, the Bank of England, the German Bundesbank, the Bank of France, and other European central banks. ... Dispatch continues below ... ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard "Central bank officials," the confidential report says, "indicated that they considered information on gold loans and swaps to be highly market-sensitive, in view of the limited number of participants in such transactions. Thus, they considered that the Special Data Dissemination Standard reserves template should not require the separate disclosure of such information but should instead treat all monetary gold assets, including gold on loan or subject to swap agreements, as a single data item. They also confirmed a view, taken by a number of countries (both inside and outside the G-10) at the December board meeting that the disclosure of the composition of reserves by individual currencies would be market-sensitive but that they would have no objection to disclosure of such information by groups of currencies. ..." (Page 6, Paragraph 15.) "Conversations with a few executive directors confirmed the reluctance of their authorities at present to disclose information on their international reserve positions on a highly frequent and timely basis, as a matter of policy. The motivations underlying this position were: (a) a desire to preserve the confidentiality of foreign exchange market intervention for a period, in order to enhance its effectiveness; b) a reluctance by some monetary authorities to reveal information on their official transactions in exchange markets on a more frequent and timely basis than the disclosure of transactions by major international investors; and c) a concern by some countries that weekly reserves data could be inherently more volatile than monthly data, which could be misleading and potentially destabilizing to exchange markets. This position had stimulated, during the December board meeting, a lively discussion of the costs and benefits of increased transparency under various circumstances and the information requirements for well-functioning international financial markets." (Page 8, Paragraph 20.) Specifying changes to be made in the reporting standards proposed by the IMF staff, the confidential report says: "On the assets side of the template, the major changes are: a) the elimination of any requirement to disclose the amount of gold loans, and of the explicit requirement to disclose the volume of monetary gold. The revised template would require only that the total value of monetary gold (including gold loans) be disclosed." (Page 8, Paragraph 23.) The confidential IMF report confirms and elaborates on the Bank of England's admission to GATA a year ago that the bank's gold swap and leasing information is "market sensitive" and its disclosure "would allow enquirers to find out what gold transactions have been taking place." Such knowledge of what the bank was doing in the gold market, a spokesman for the bank said, would harm the interests of both the British government and the bank's "private customers," to whom the bank "owes a duty of confidentiality": http://www.gata.org/node/10635 While disclosure of the confidential IMF report is unlikely to prompt any acknowledgment from the most determined purveyors of misinformation in gold market analysis and the mainstream financial news media -- nothing is likely to get them to be truthful -- it will enable individual investors and citizens to confront their central bank and elected officials and ask more authoritatively for an accounting and explanation of the purposes of secret central bank gold loans and swaps, transactions in which even the U.S. Federal Reserve is participating, according to a statement extracted by GATA from a member of the Fed's Board of Governors in 2009: The confidential IMF report on the authorization of secrecy for gold loans and swaps is posted in PDF format at GATA's Internet site here: http://www.gata.org/files/IMFGoldDataMemo--3-10-1999.pdf CHRIS POWELL, Secretary/Treasurer Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/.
This posting includes an audio/video/photo media file: Download Now | ||||
| Peter Grandich: What a Turnaround in Junior Gold Mining Stocks Will Look Like Posted: 10 Dec 2012 09:30 PM PST by Brian Sylvester, The Gold Report:
Peter Grandich: I am still on course. While 2012 may not have been the worst junior resource market by percentage losses, given the prices of metals now versus other markets and other market conditions compared to last year, it was the worst bear market since I entered Wall Street in 1984. | ||||
| Market manipulation discussed by Sprott on Russia Today and by Lanci on Kitco News Posted: 10 Dec 2012 08:06 PM PST 10p ET Monday, December 10, 2012 Dear Friend of GATA and Gold (and Silver): Market manipulation was the topic of today's interview of Sprott Asset Management CEO Eric Sprott by Lauren Lyster on Russia Today's "Capital Account" program and Kitco News' Daniela Cambone's interview of Vince Lanci, founder of the Echo Bay Partners investment house in Stamford, Connecticut. Sprott told "Capital Account" that central banks suppress the gold price to conceal disquieting trends in the world economy. His interview is 28 minutes long and is posted in video at YouTube here: http://www.youtube.com/watch?v=xbDWqS68Hag Lanci told Kitco News that all markets are manipulated to some degree and governments may be manipulating the gold market but he doesn't think that the U.S. government is manipulating the gold market or that JPMorganChase is manipulating the silver market. Lanci's interview is 20 minutes long and is posted in video at Kitco here: http://www.kitco.com/KitcoNewsVideo/index.html?v=12-12-06_Vince_Lanci_FI... GATA is mentioned in both interviews. CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT GoldMoney adds Toronto vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada. GoldMoney also has recently partnered with Rhenus Freight Logistics to offer another gold storage option in Switzerland. The Rhenus vault is in the secured zone of Zurich Airport and offers customers superb security as well as the ability to inspect their gold. Storage at the new vaults in Canada and Switzerland is available at GoldMoney's lowest fees. Customers can select their storage location when placing their buy order. GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: | ||||
| The Socialist Heart Of France Spits Out Its First Victim Posted: 10 Dec 2012 08:06 PM PST Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter A new report released by Insee details the inexorable rise of official poverty in France. By the end of 2010, it engulfed 8.6 million people, 5.4% more than in 2009, and 16.7% more than in 2004. The poverty rate jumped to 14.1%, the highest since 1997. For children (under 18), the poverty rate hit 19.6%, for young adults (18 to 25 years old), it was a grizzly 22.5%! More extreme forms of poverty increased rapidly. Poverty was defined as earning less than 60% of the median income in 2010. But those earning less than 50% of the median income rose to 4.755 million people, 22% more than in 2004. The report noted that “the standard of living has been sliding or stagnating for practically all categories of the population except the wealthiest.” Overall, it dropped 0.5% in constant euros in 2010. But for the lower 30%, it dropped between 1.3% and 1.6%, while it increased 1.3% for the top 5%. “Most of the indicators show a progression of inequalities,” the report underlines dryly. Blame the current unemployment fiasco? Nope, the report says. In 2010, unemployment had been improving as the economy recovered from the financial crisis. Future poverty reports—those for 2011 and 2012—will reflect the pernicious effects of the rise in unemployment that started in mid-2011. And there is no letup in sight. On Monday, the government reported that the number of temporary workers—an indicator of changes in demand for labor—had plunged 3.5% in October and is now down 13.9% from prior year. A collapse that nearly mirrors the debacle of the financial crisis. But this time around, it started falling from a much lower point than it did in 2008. The disappearance of jobs, as France skids deeper into its economic crisis, is already putting its mark on poverty: 48% of the people consider themselves either living in poverty or on the way to living in it. The survey set the tone for the National Conference of the Fight against Poverty and Exclusion this Monday and Tuesday. In a sign that the government was taking poverty seriously, President François Hollande himself would kick it off. Prime Minister Jean-Marc Ayrault would close it. It would be packed with ministers, representatives of anti-poverty associations, and even people who live in poverty. All under the motto, “Imagine the social policies of the 21st century” [read.... The Alarming “Sense of Pauperization” in France]. But the government’s display of its Socialist heart is already stalling. Hollande had a scheduling conflict. Instead of getting tangled up in a dicey effort that would call for programs the government wouldn’t have the money to pay for, he decided to hobnob, and hold hands, with German Chancellor Angela Merkel in Oslo, Norway, during the Nobel Peace Prize ceremony. It didn’t go unnoticed. And the tip of the spear of the Socialist left wing, Industry Minister Arnaud Montebourg? In October he’d pleaded flamboyantly that the “made in France” be given preference and that a dose of protectionism be instituted at the European level to stem France’s deindustrialization and protect its car makers from Korean imports [Shooting From The Hip And Hitting Consumers]. Then he’d stirred up a raucous debate with his threat to nationalize ArcelorMittal’s old steel plant at Florange [Nationalizations Take Off In France]. That tip of the spear? Broken off! While in Brussels on Monday to beg the free traders in the EU to impose his industrial vision on the land, he was asked about the ArcelorMittal plant—Ayrault having swept his threat off the table. “I let Prime Minister Ayrault sort things out at Florange,” he said, “That’s his job now.” Montebourg has been shunted aside. After he got the cold shoulder from the same free traders who’d shot down his plea for protection against Korean imports, he mused, “For 30 years, consumers made the law in Europe, and the result is a disaster. As for me, I defend the producers.” He claimed that the EU was the only entity that didn’t “defend itself against unfair competition”—purposefully forgetting that the EU has a trade surplus with the rest of the world, though France has a trade deficit. “We’ve become the idiots of the global village,” he added. But hardly anyone was listening to the Socialist firebrand. He has become irrelevant in an unpopular government that is desperately trying to swing the other way. Fearing their own economic principles, economists and politicians drive Europe into perhaps decades of austerity, transfers from north to south, worsening imbalances, and uncertainty. Uncertainty, however, is the worst thing for business leaders and the European economy. Read.... He Who Says “No” To Austerity And Global Imbalances Must Say “Yes” To The Northern Euro. | ||||
| Turk – The Key Chart Every Silver Investor Needs To Watch Posted: 10 Dec 2012 08:00 PM PST from KingWorldNews:
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| GoldMoney's Turk, Sprott's Embry explain enthusiasm for silver Posted: 10 Dec 2012 07:07 PM PST 9p ET Monday, December 10, 2012 Dear Friends of GATA and Gold: GoldMoney's James Turk today tells King World News that silver has broken upward out of a flag pattern and that support for its price strong: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/10_T... And Sprott Asset Management's John Embry tells King World News that silver demand will increase because of the metal's increasing utility even as its production is likely to decline with the decline of the base-metal mines that produce most of it as byproduct: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard | ||||
| Guest Post: A Few Thoughts On Gold, Part 1 – Gold As An Investment Posted: 10 Dec 2012 05:58 PM PST Via Pater Tenebrarum of Acting-Man blog, Satyajit Das on GoldWell known market observer and commentator Satyajit Das has written an article on gold which has been published at Naked Capitalism. As is usually his wont, he is adopting a very neutral tone of voice, with the occasional barb thrown in almost imperceptibly. Both detractors and fans of gold are ribbed a little bit, while Das enumerates their lines of argument seemingly without passing judgment. Still, we see the publication of this actually quite non-controversial article as an opportunity to add a few comments. Quite early on in his article, Das relates an anecdote from post war Germany that one would do well to keep in mind. He writes:
Every discussion of the 'political metal' gold should probably be prefaced with an anecdote of this sort so as to make clear what the main difference between a market chosen money like gold and government-imposed legal tender actually is: the latter depends on promises that are rarely kept. What we would like to comment on are a few of the observations Das makes regarding gold's investment merits as well as his presentation of the lines of argument forwarded by supporters and detractors of a gold standard. In this article we will discuss the 'gold as an investment' portion of his article.
Gold as an InvestmentDas begins by enumerating the various avenues open to people that want to invest in gold today, listing their advantages and disadvantages as well as the associated risk factors. This is an excellent overview that highlights all the important points one should be aware of, but most of these things are probably well known to our readers anyway. Then he segues into the topic of how tricky gold can be as an investment. Below are a few excerpts with our comments interspersed.
Of course the case for every investment asset is 'mixed', and every investment asset has 'significant tactical value over specific time periods'. It is well known that various investment classes are subject to long term cycles. However, this is nevertheless an important point, see also further below. He continues:
Believe it or not, there were actually a number of investors that said so in real time and acted on the recognition that yet another sale of British gold was like a bell ringing. After all, there was a historical precedent: the last time before Brown's sale Britain sold a large amount of gold was in the late 1960's, when it dumped 800 tons at the princely price of $42/oz. – only to watch gold's price soar by 2,400% over the next decade. That was actually a much larger loss for UK tax payers than Gordon Brown's gold sale, especially in real terms (of course, Brown may well still catch up; we fully expect him to). Of course the 'number' of such investors was really very small. It is characteristic of major lows that they occur amid a dearth of interest. Das continues:
Now, this is something we have to take exception to. For one thing, allow us to point out that anyone who bought stocks at the market peak of 1929 had also gained precisely nothing in real terms by the time the low of 1982 arrived. That's a cool 53 years of earning nothing, and although dividends are obviously not included in this calculation, the 'survivor bias' of indexes isn't reflected in them either. Countless companies that were listed in 1929 were long bankrupt when 1982 came around, so a passive approach would have done considerably worse than earning nothing. Moreover, one must ask here, how are 'real terms' even defined? Presumably Das refers to values deflated by the government's official CPI data. If we apply a different metric to calculating gold's real value, such as e.g. the Austrian money supply measure TMS-2, then we arrive at a 1980 high equivalent of roughly $3,000 today, not $2,300 ($2,300 is incidentally the very conservative gold price target of our friend Ronald Stoeferle, who writes the excellent annual gold report for Erstegroup). Furthermore, Das adopts here, whether consciously or not, a method always trotted out be assorted gold bears when they try to denigrate gold's investment merits. This is to say, they mention the 1980 peak as the relevant yardstick by which to measure gold's performance, a price that lasted for all but a second and was attained after several days of frantic panic buying when news of the Soviet invasion of Afghanistan hit. Gold went from about $550 to $850 within three weeks, was at that price for one second and then collapsed immediately again. How many people actually invested at that peak? What these gold bears usually gloss over is that only four years earlier, in August of 1976, gold could be bought for $108/oz., and that another six years earlier, in 1970, it could be bought at prices ranging from $35 to $42/oz. Why not mention the returns that have accrued to investors in gold since then? Could it be the fact that it turns out that gold actually beat the pants off the stock market? Besides, it should be pointed out here that gold is actually not an 'investment' in the conventional sense. Obviously it pays no dividend, but why should it? It is money after all. Don't get us wrong: gold is certainly not money at the moment per the correct definition of money as the general medium of exchange. And yet, the market treats gold as though it were money: while it does not currently fulfill the role of a medium of exchange, it still retains all the characteristics that flow from a commodity that has become a medium of exchange, such as its function as a store of value. The reason for this is simple: although gold has been 'demonetized' by legal tender laws, the markets know that it would be our money in the absence of such laws. It is the market-chosen money commodity that would be used as money in a truly free market. It is also noteworthy in this context that central banks continue to hold some 32,000 tons of gold, obviously for monetary reasons. Given though that gold is currently not a medium of exchange, we may concede that it has become an 'investment asset'. Only, in gold's case one might say: monetary demand equals investment demand. After all, the fundamental backdrop most conducive to rising gold prices is a desire by economic actors to increase their cash balances and savings on account of regime uncertainty, declining economic confidence, coupled with a growing conviction that the fiscal and monetary authorities are about to devalue their liabilities at break-neck speed in a vain and misguided attempt to cover up their previous mistakes by adding fresh mistakes atop them, only on an even greater scale than before. So we should then after all perhaps hearken back to the first sentence of Das' ruminations about gold as an investment mentioned above: there are times when it makes sense to invest in gold and times when it doesn't make sense and one will do better with other types of investments. Obviously, since about the year 2000, it would have been best to have held a very low weighting in equities and a very large weighting in gold. Das continues:
First of all, we think it is nigh impossible to make such an estimate. How would we actually know what the 'real price of gold' was in the 15th century? Here is a chart that has been published in the late 1990's that contains such an estimate (note that the 'real values' depicted on the chart all refer to 1999 dollars – today the numbers would all be considerably higher):
An estimate of the 'real price of gold' over 600 years published in 1999; some of the data seem questionable to us (for instance, we miss the Mississippi and South Seas bubble spikes, as well as the post-revolutionary French hyperinflation episode in this chart). We do of course know that gold was subject to considerable inflation in the 16th century when Spain's conquistadors flooded the old world with gold they had discovered in the new world. At the time, these additions due to a higher mine supply actually still made a big difference to the purchasing power of gold, as they were of very large size relative to the then existing stock of gold. So it is credible that there was a big decline in gold's purchasing power during the 16th century. This is no longer the case; today the mine supply has become largely irrelevant, as we have discussed on several previous occasions. However, one must ask, how much stock should one put in such an estimate anyway? We think it's a good bet that if anyone still has a 15th century gold hoard at home, that it has actually preserved value through the centuries far better than any other type of investment would have (for one thing, the likelihood of still possessing that original store of gold is a good deal better than possessing anything else that one might have invested in during medieval times; also, well preserved medieval gold coins trade at well above their bullion value). One thing is certain though: against all other forms of money, i.e., state sponsored fiat monies and the debts denominated in them, it is really no contest: a large percentage of the currencies that existed a century ago has been repudiated, some of them more than just once. The promises of the State eventually always wither on the vine. Gold just stays gold. One should not make the mistake of believing that the current paper money standard is likely to fare any better. Longer-lived though it may be than many of its predecessors, it is still beset by the same flaws. It is a system that was destined for an eventual conflagration on the day it was born. Lastly, even if gold's 'real value' in 1350 a.d. was estimated to be $2,400/oz. (or even higher in 2012 dollars), what could actually be bought with that gold back then? One sure couldn't buy an iPad in the year 1350 to name an example. In fact, there existed no mass-produced consumer goods at all. Choices were extremely limited even for the select few that actually possessed gold at the time. So how can one say the 'real value' was a number 'X'? It really doesn't seem to make much sense to make such an assertion. The only thing that is certain is what we have already noted above: as far as money goes, gold has almost always managed to preserve the purchasing power of savings – the gold inflation of the 16th century represents a notable one-time exception to this rule. State-produced and administered legal tender money never did and never will. Das continues:
Let us rephrase that: "equities can also be very volatile. Shortly after having reached record levels in late 2007, they collapsed by 58% into early 2009, with most of the decline happening very quickly indeed." It is really a non-sequitur. Gold is volatile? Even if it were, why should one be particularly worried about it? As it is, it is actually a lot less volatile than most other commodities and investment assets. A brief look at the bull market from 2000 to date shows this remarkable lack of volatility. It simply makes no sense to even mention gold's volatility unless one wants to specifically stress that it exhibits a distinct lack of it so far:
The recent gold bull market: so far it is one of the least volatile bull markets of all, if not the least volatile one. To complain about gold's 'volatility' strikes us as rather strange – click for better resolution. Regarding Warren Buffett's observations on gold, generally they are not worth much. Buffett doesn't like gold, we get it, but then he regularly betrays his utter ignorance about it, so why would one even bother to mention his gold-related bon-mots? The specific quote Das has picked has been well chosen though: when economic confidence is strengthening and the social mood is optimistic, then it is usually better to be invested in stocks than in gold. Gold investors obviously do expect the 'ranks of the fearful to grow', and for very good reasons. The problem is that economic confidence has been on a roller-coaster with a very negative bias since the flaming out of the great stock mania in the year 2000, which is why it was better to be invested in gold since then, something that continues to hold true in our opinion. ConclusionIt must be pointed out that gold is certainly no longer the bargain it was at the lows over a decade ago (at which time Warren Buffett undoubtedly hated it just as much as today). This is by no means akin to saying that there is no longer a bull market in force though. The bull market can of course take a breather, even an extended one, at any time. That is something we obviously cannot know for certain – market perceptions are notoriously fickle in the short term. What seems however extremely unlikely to us is that the long term bull market is anywhere near to being over. After all, the people in charge of fiscal and monetary policy all over the globe are applying their 'tried and true' recipe to the perceived economic ills of the world in ever bigger gobs of 'more of the same'. Until that changes – and we feel pretty sure that the only thing that can usher in profound change on that score is a crisis of such proportions that the ability of said authorities to keep things under control by employing this recipe is simply overwhelmed – there is no reason not to hold gold in order to insure oneself against their depredations. As a result of these policies, real interest rates are either negative or minuscule, the money supply is inflated at astonishing speed and the economy is undermined structurally at every turn. It is precisely the environment in which it makes sense to hold gold. Few holders of gold bullion are likely to be worried over the short to medium term fluctuations in the price of gold, since their motives for holding it are as a rule not comparable to those of short term speculators. Futures traders and gold stock investors obviously must apply a more active approach to managing their exposure. Especially the latter have had very little joy of late, a topic we also plan to discuss again in more detail shortly. Lastly, every long term bull market of course ends at some point. However, most of the time the final phases of a long term bull market exhibit certain characteristics that can be observed in a wide variety of markets over and over again. Bull markets don't die with a whimper. They end with major blow-off moves that often occur at a time when the fundamental backdrop is already clearly shifting from bullish to bearish. This is something that has yet to happen in the current gold bull market. | ||||
| The US's "EU Style" Negotiations Will Take Us Right Over the Cliff Posted: 10 Dec 2012 05:56 PM PST
Ever since the EU Crisis began in earnest in January 2010, EU leaders have maintained the following strategy:
The prime example is Greece. There have been no less than 30 “Greece is saved” press releases/ announcements, accompanied by market rallies only to discover that Greece is not saved and in fact is worsening by the week.
We’ve now had two formal Greece bailouts. We’re currently working on a third/ debt buyback program, the stated goal of which is to get Greece’s Debt to GDP ratio to 120% by 2020.
Again, the goal for the current proposal is to get Greece to the point at which it will still be totally broke in eight years. It’s amazing no one laughs out loud at EU meetings.
Actually they did… the below came from a recent Q&A session with Jean-Claude Juncker, current Prime Minister of Luxembourg.
Question: Is the goal still to get Greece's debt to 120%? Juncker: The fact is that the target of 120% will remain, but the target as far as the time frame is concerned has been postponed to 2022. [Laughter in the room] Juncker: That was not a joke! Source: ZeroHedge
The reality is that no politician wants to implement actual solutions (total default, wipe out of all bad debt, and massive economic structural changes) because all of them are 100% politically toxic.
Meanwhile Greek unemployment worsens while its GDP continues to collapse. Indeed, from peak to today, Greek GDP has fallen nearly 20%. This collapse is equal to that of Argentina in 2001, when it had a full-scale systemic implosion.
Again, this is the country that political leaders and financial luminaries claim has been “saved” dozens of times.
US leaders see that this strategy has worked for EU leaders (those who went along with it are still in office, those who didn’t have been kicked out). And so they are now adopting a similar strategy with discussions on the fiscal cliff.
President Obama is out campaigning the notion that we need to increase taxes on those who earn more than $250K per year. According to the Congressional Budget Office, Obama’s current proposal would raise an additional $83 billion in taxes per year.
The US budget deficit is over $1 trillion. It has been ever since Obama took office. So his proposal would not even cover one month of deficit spending. And this is supposed to represent a “solution.”
Mathematically, the only way to cut the Federal deficit would be to either raise an additional $1.2 trillion in taxes (politically impossible, no one would go for it) or cut Federal Spending by $1.2 trillion (again, politically impossible).
Indeed, the US’s fiscal problems are so great that tackling them would require truly impossible measures. For instance, consider that the top 1% of income earners (the very folks Obama is targeting) paid $318 billion in income taxes according to the most recent data.
So, even if we doubled their taxes, we’d only raise enough money to cover about six months of the US deficit.
So, in order for us to close the deficit in the US, we’d have to both double the taxes paid by the top 1% AND cut spending by $600 BILLION. Now imagine trying to get the American people to go along with this.
My point with all of this is that the US budget talks are really just an American version of the various EU crisis talks we’ve seen over the last two years: a lot of discussion over phony “solutions” all of which fail to address the try size of the problem.
As a result, we’re likely going to experience something very similar to the debt ceiling talks in July-August 2011: a lot of talks which fail to go anywhere followed by a market collapse.
For more market commentary, investment ideas, and macro-economic research swing by www.gainspainscapital.com
Best Regards,
Graham Summers
PS. We also offer a FREE Special Report detailing the threat of inflation as well as two investments that will explode higher as it seeps throughout the financial system. You can pick up a copy of this report at:
http://gainspainscapital.com/gpc-inflation/
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| 10 Days Left For The End Of Times? What Did We Learn? Posted: 10 Dec 2012 04:59 PM PST In exactly ten days, the Mayan calendar is ending a super cycle of 5125.36 years. The fuzz that was created about the end of the "world" was successful for the popular media. In reality, the world will still exist in 2013 but the point is that times could be changing. To answer the question what could be changing, the first step is to look back and try to see the key learnings of what we human beings have realized. Gary Christenson gives his view on the subject from a macro economic, monetary point of view. Yes indeed, this affects all of us and, more importantly, our future.
In closing, the author points to the consequences that were caused by the presented actions. Those consequences were detailed in an earlier article: We Have Been Warned! Click for furter reading on the consequences of paper based money systems and its inherent risks.
The author recently published an eBook "Survival Investing With Gold & Silver." It's available on this website, from Smashwords, and from Amazon Kindle eBooks. | ||||
| Commodity Technical Analysis: Gold Probably Faces Resistance at 1727 Posted: 10 Dec 2012 04:51 PM PST courtesy of DailyFX.com December 10, 2012 03:40 PM Daily Bars Chart Prepared by Jamie Saettele, CMT Commodity Analysis: “Viewed in light of the 3 wave advance from 1672.50, the trend is lower.” Friday’s JS Spike right at mentioned support (1685) will probably propel gold to at least the 61.8% retracement of the decline from the 11/12 high at 1727. There is trendline resistance to keep an eye on as well. Commodity Trading Strategy: Look to short strength from 1727 to 1738 with a 1754 stop. LEVELS: 1673 1683 1704 1727 1738 1754... | ||||
| The Gold Price Closed Up at $1,712.50 and Needs to Climb to $1,725 Posted: 10 Dec 2012 04:35 PM PST Gold Price Close Today : 1712.50 Change : 7.90 or 0.46% Silver Price Close Today : 33.039 Change : 0.156 or 0.47% Gold Silver Ratio Today : 51.833 Change : -0.006 or -0.01% Silver Gold Ratio Today : 0.01929 Change : 0.000002 or 0.01% Platinum Price Close Today : 1599.20 Change : 16.30 or 1.03% Palladium Price Close Today : 695.55 Change : 6.75 or 0.98% S&P 500 : 1,413.94 Change : 4.66 or 0.33% Dow In GOLD$ : $158.96 Change : $ (0.24) or -0.15% Dow in GOLD oz : 7.690 Change : -0.011 or -0.15% Dow in SILVER oz : 395.74 Change : -0.67 or -0.17% Dow Industrial : 13,074.74 Change : 39.55 or 0.30% US Dollar Index : 80.23 Change : 0.404 or 0.51% Today the GOLD PRICE picked up $9.00 to score $1,713 at close. Silver added 24.7 cents and shuttered Comex at 3330c an ounce. No question this was a better day. Five day chart shows two bottoms at $1,685, one on Wednesday and one Thursday, followed by a sharp rise. If the chart is accurate and not sporting an artifact, there was a very short spike to $1,685 on Friday, too, but that may be a misprint. Thereafter gold climbed steadily. Today it put in a little peak at $1,716.74, and never fell below critical $1,705 support (low was $1,705.18. Now look at the SILVER PRICE. The bottoms Thursday and Friday was successively higher, 3250c and 3260c. After Friday's low, silver continuously climbed toward today's 3341.5 high, then rolled over. The silver and GOLD PRICE may well have posted their lows, but I've been slapped on both sides of my face too often in this range for me to call a bottom yet. Silver needs to close above 3350c or below 3250c and gold above $1,725 or below $1,685. I'd buy in either of those places, but only when silver and gold exceed those numbers, up or down, will we have a clue what the very short term holds. By "very short term" I mean till year-end. If they haven't dropped by then, the new year will kick in and take them up. You see, with the silver and GOLD PRICE there is no "Fiscal Cliff" because long decades ago the Fed and the US government pushed the US dollar over that cliff, and the faster and harder it falls, the faster and harder silver and gold will rise. Really not any more complicated than that, folks. Only reason I can grasp that is that I have no Harvard MBA, no MIT Economics PhD (Piled Higher and Deeper), no cushy job losing other people's money on Wall Street while pretending to "manage" their money. Since I'm only a natural born fool from Tennessee, why, I don't know no better than to call a fool a fool, and to name a thing for what it is. Wish I could get educated, but just as soon as I see idiocies, I recognize we're kin and the words just POP out of my mouth. That's why I can't visit the White House or congress. The eurocrat imposed on Italy, Monti, to bring the country down into austerity, is done for. Silvio Berluscone and his party have withdrawn support fro him, so he will resign. Interest rates the Italian government has to pay responded by rising since Berlusconi is already campaigning on an anti-Germany, anti-austerity program. Never mind all Berluscone's baggage, longer and gamier than the baggage train of the Khan's Golden Horde, the point is that opposition is surfacing, and making enough waves to drive out the technocrat. Euro remains imperilled. US dollar index gave ground today, losing 21.4 basis points to 80.318 (down 0.28%). If this little reflex (upward) reaction hasn't already sputtered out, it might yet reach the 200 DMA at 80.80. If it can't cross that line, dollar is just marking time until it falls again. US$1=Y82.37=E0.7726=0.030 030 oz Ag=0.000 584 oz Au. [Short Exchange Rate Lesson: The US Dollar exchange rate in Euros can be expressed as (a) dollars per euro, today $1.2944 or (b) euros per dollar, today E0.07726. Likewise, silver can be expressed in "dollars per ounce," today $33.30, or "ounces per dollar," today 0.030030 oz.] Stocks have surely embarked on a rally. For the second day the Dow closed above its 50 DMA (13,142), and already stood above the 200 and 20 DMAs. Higher. Not clear yet whether it wills top around 13,300 or reach higher, but 'tis clear that this peak likely will be the final disaster dénouement, the last peak, and then the flood. Today the Dow rose 34.14 (0.26%) to 13,189.27. S&P500 gained 2.06 (0.15%) to 1,420.13. Yet only the unwary would gauge stocks' performance by their mere, un-inflation-adjusted numbers. Only measuring them against gold and silver tells us whether they are gaining purchasing power (value). Against gold, stocks ran over Victoria Falls in November, then rallied back about 3/4 of the way. Now they've stalled and are rolling over. Against silver stocks have painted the same picture, only worse. Rebound off November low has only been about 1/3 of the foregoing loss. What, what, what does this say? That regardless what stocks do, high or low, silver and gold are both set to outrun them speedily. 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.   | ||||
| Presenting The Fund-tastic Four: Ireland, Greece, Spain And... The U.S. Posted: 10 Dec 2012 03:54 PM PST Behold the fund-tastic four: Ireland, Greece, Spain and... the US? These are the four countries that in the past four years have accumulated the greatest deficit as a % of GDP (and yes, at just under 50%, the US is worse than Spain whose cumulative deficit has been over 40% of GDP), which in turn they have had to fund with what else: new debt. The chart explains the scramble to force rates across the world to all time lows: a necessity to allow continued deficit funding, even if by doing so, the monetary authorities have made any economic growth impossible as true inflation (coupled with a rise in funding costs and government yields) is the last thing governments, locked in years more of deficit funding, can afford. And while Europe is more or less toast due to a fixed currency, which means the only way it can grow its way out of the current mess which in turn would mean an internal devaluation resulting in 30-50% wage declines (as explained before), the US "can print its own currency" so as to preserve the myth that nominal wages are flat or rising. Of course, the concurrent external devaluation means the US will have to devalue the dollar (i.e., loss of purchasing power by those paid in USD). Relative to whom? Why Europe of course, which means the EUR will have to rise even more relative to the USD as the US "rebalances" its way out of its own deficit spending quicksand. Alas, this takes us back to square one, as any external devaluation by the US would mean the internal devaluation in Europe will have to be even more profound, read even greater wage reductions, even greater social instability, and even greater cuts in the welfare spending. It also will mean even more and bigger bailouts in Europe, and a barage of endless lies and propaganda out of the unbearable Brussels-bsed circle of unelected Eurocrats. Ah, the joy of closed loop Keynesian systems, in which one's gain is always someone else's loss... | ||||
| Golden End Of Year Gifts – Some Tips Posted: 10 Dec 2012 03:44 PM PST Christmas is nearing so it's time for a gift. For precious metals lovers (either you, a friend or a family member), we created a selection of end of year specials by the most respected personalities in the market. David Morgan – The Silver Investor NewsletterThe newsletter and market updates of David Morgan's Silver Investor (also known as The Morgan Report) guarantees qualitative, accurate and in-depth insights in precious metals, money and mining companies. It's a world class service. By subscribing before December 21, 2012, you lock in lower prices. As a reminder, David Morgan called correctly all but one bottoms and tops in the current gold and silver bull market over the past twelve years, both in miners and in metals. Mike Maloney – GoldSilverGoldSilver offers a saving on your bullion purchases till the 31st of December 2012. It's the right time to consider a beautiful necklace or bracelet from Bullion Jewelry GoldWithoutBorders© or opening a secure segregated Gold & Silver Storage service in Singapore, Salt Lake City, Hong Kong, Miami, Canada, Germany. Moreover, the GoldSilver Insiders Program offers exclusive insights into our investment strategies including Mike Maloney's expert analysis of this gold and silver bull market. Use the Code GoldSilverWorlds before 1/1/2013 to save 50 basis points on any transactions you make from GoldSilver.com Eric Sprott – Sprott MoneySprott Money offers an additional gift on bullion purchases made until Tuesday, December 25, 2012. You will receive a mystery gift on orders more than $2,000, $10,000 or $25,000 (more expensive gift for higher orders).
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| Why A Weimar-Style Hyperinflation Will Never Occur In The West… Posted: 10 Dec 2012 03:28 PM PST I saw a YouTube video published by Nick Barisheff recently (not an endorsement), which details his argument for hyperinflation and $10,000 oz. gold. While I don't doubt the possibility of $10,000 oz. gold, I'm highly skeptical of the possibility of hyperinflation in the United States and Europe. The reason is simple: Money today is not what money was 50 or 100 years ago. Money today is digital, and all money can be controlled through digital mechanisms. Money can be "shut-off", the flow of money can be temporarily halted, and money supply can be "erased". Additionally, tools within the banking system, such as a debts being called-in on mortgages, credit lines & access to credit being eliminated, can create money-draughts and reduce the money supply. An economy wide debt-calling collection would create a shortage of money, along with forced liquidations of financial assets and commodities. Said liquidations would then cascade into further liquidation, as the paper chase towards digital currency accelerates. On the other hand, if we were living in a world of paper money only—and each time the government borrowed money, the Federal Reserve/US treasury printed the borrowed sum on new paper, and handed it over to the government to spend, control of paper money would be lost once it was spent. For example, if the government borrows $1 billion from the Federal Reserve and prints each dollar…and then hands it over to Defense Company Inc. for military expenses…once Defense Company Inc. hands out that physical cash to its employees and shareholders, it circulates through the economy and cannot be controlled by the banking system (unless deposited back into a bank account). However, if the government borrows that same $1 billion digitally (as is does today), and the ownership of each dollar is transferred from party to party digitally—it still remains within the domain of the banking system, and can be controlled (or turned off/eliminated/erased) at the flip of a switch. That's a big difference. For that reason I am skeptical of, and will say that I will never expect to see a Weimar-style hyperinflation in the West—ever. A Slow Grinding Decline I am more of the opinion these days that over the next 10-15 years, while everyone is arguing about the coming currency collapse, the US dollar will have been slowly devalued by 50-75%. A slow devaluation is better for business globally, it will give multinationals time to adjust to the new order of things, and it will be gradual enough (in a political sense), to preserve American social order to the best extent possible. We all know the story of the lobster in warm water. So that's that. A slow devaluation over the next two decades, with emerging markets forgetting to call home to "Grandpa West". Meanwhile, Grandpa West sits back in his rocking chair and drinks a cold lemonade, reminiscing to nobody listening about the days of his youth and the "prettiest girl in high school"… Meanwhile…if you're investing in common stocks, consider learning about "direct registration" and "paper share certification", which are alternative forms of share ownership (I've written about these ownership methods in a report entitled, "BulletProof Shares – How to Protest Your Stock Investments From Broker Bankrtupcy & Theft"). Many corporations and financial firms own large positions of publically-traded companies, and use these methods to hedge "broker-default risk". This means if the stock broker they use to execute the purchase of the stock goes bankrupt (like MF Global, PFG Best and a growing number of others), they will still own their stocks full and clear, and their positions will be held in their own legal names, at the "transfer agent", or held safely within a safe-deposit box. Details of these methods (and how to use them for FREE) are outlined in the report. All the best, | ||||
| Gold And Silver Are “Go-To” Assets For Capital Preservation Posted: 10 Dec 2012 03:26 PM PST The new Thunder Report is out. The author reviews the macro economic prospects for 2013-15, based on the long wave or Kondratieff Cycle. In the past, following the Kondratieff Cycle gave a 91% probability on success. It is now signalling that a new crisis is looming on the horizon. Excessive debt is the key driver. The Kondratieff Cycle is in its last of four big cycles that started in 1788. The end of this large cycle will be characterized by debt reduction through INFLATION and by DEFLATION in the prices of almost everything in terms of gold. That's why the title of the current edition of The Thunder Report is "Inflationary Deflation".
The author explains how Greenspan and Bernanke's interventions have contemplated the problematic resolution of the old bubbles, paving the way for the creation of new bubbles. Debt is being piled on top of debt and misallocated capital on top of misallocated capital and the previous equities bubble has moved to real estate/securitised debt and a new one is forming in MONEY itself. Although "the end game" is not to be expected the coming year, the central point in the research is that we are entering a phase of acceleration of the Cycle's forces in 2013.
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| Precious Metals Market Report – December 13 Posted: 10 Dec 2012 02:59 PM PST | ||||
| Gold Daily and Silver Weekly Charts - FOMC QE Unfolding Posted: 10 Dec 2012 02:11 PM PST  This posting includes an audio/video/photo media file: Download Now | ||||
| Posted: 10 Dec 2012 01:42 PM PST December 10, 2012
Hmmm… That works out to about $77 billion a year. In the Great Correction era, food stamps are what get all the publicity when it comes to federal poverty programs. The growth looks scary-big on a chart, and there's a visceral quality to the notion of Americans gathering at a 24-hour Wal-Mart at 11:45 p.m. the last night of the month… waiting for their EBT cards to be reloaded at midnight.
The figure we've cited up to now is $70 billion. But buried in a Congressional Budget Office report last summer was the revised $42 billion. (In theory, that number would grow steadily to total $824 billion over 10 years. Right.) Add up the total spending on food stamps, Medicaid, extended unemployment and Social Security disability… and you get $551 billion. The $42 billion extracted from "the 1%" (more like 3%) would cover 8 cents of every dollar of spending under those four anti-poverty programs. There's simply no way the situation can end well…
For the moment, traders are shrugging off the latest news disrupting the illusion that Europe is fixed: Italian Prime Minister Mario Monti plans to step down, and his lecherous predecessor Silvio Berlusconi is plotting a comeback. Elections are set for February. Italian bond spreads have blown out. The 10-year yield spiked from 4.53% to 4.89%. The Italian stock market is down nearly 3.5%. The euro has slipped to $1.29. The dollar index has firmed to 80.3.
"In 2012," writes our macro strategist Dan Amoss, "the Venezuelan economy offered us a case study in leftist, Keynesian economic policy. In a vigorous pre-election vote-buying stimulus effort, Venezuela's government budget deficit ballooned to an estimated 20% of the economy — twice the demand-boosting power of the Obama stimulus. Its central bank printed money, crashing the local currency against the U.S. dollar on black market exchanges. "Paul Krugman and Larry Summers look on, green with envy that such elegant policy is not happening in the U.S. "But the Venezuelan version of fiscal stimulus didn't nudge the economy into a self-sustaining virtuous cycle of spending; it simply stored up trouble for the future. "Trouble will arrive with a vengeance once Venezuela officially devalues its currency against the dollar. When that happens, chaos will ensue. Consumer prices will explode. Any recovery in capital spending will grind to a halt amidst fears that today's investments will be repaid with tomorrow's worthless currency. "The real case study offered by Venezuela is not yet complete," says Dan. But the results are already conclusive: "When weighed against the trouble stored up for the future, deficits and money printing solve nothing. There is no free lunch in economics."
The account comes from Chris Mayer's father, who's in the salvage biz after decades in the insurance trade. "There are some beautiful cars here. Brand-new cars. 2013 cars. There are old ones too, of course… I saw two Ferraris. There are literally 50 Corvettes. A Bentley. I heard there was a Model T somewhere. "These cars will be either broken down for parts or crushed or sent overseas to be rebuilt in Africa, Eastern Europe, Southeast Asia and the Middle East. We'll be selling these cars into June." Not every operator is as scrupulous as Chris' dad; beware if you're in the used car market for the next couple years.
"Occupancy rates are still rising in the lodging sector. Only a few markets see any significant construction activity. And hotel stocks stand to gain from two years of heavy renovation spending." Chris' favorite plays are an important component to the current Capital & Crisis portfolio.
"Property values will go underwater long before property actually goes underwater," writes Reserve member John Englander in his new book High Tide on Main Street: Rising Sea Level and the Coming Coastal Crisis. Mr. Englander is not an ivory-tower academic. He's an oceanographer who's been to the bottom of the ocean beneath the polar ice cap. And for years, he's been looking into the causes and consequences of rising sea levels. In the book, he estimated oceanfront property values would go "underwater" within a decade. After Sandy, he believes the process has already begun. "We've all put a premium on coastal real estate for obvious reasons," he tells The Atlantic. "But we all assumed, like all land, that it was permanent. … It could be we now are slowly coming to the realization that's not true." True, there's federal flood insurance — which was expanded earlier this year. But like ever-rising federal poverty programs, it won't last forever: "Inevitably, governments will not be able to compensate everyone for the risk of assets exposed to rising sea level," he writes. "The key questions are when that will happen, how much notice you will have of a change in policy and whether you will then be able to liquidate your asset at a reasonable price."
When Ernest Hemingway lived and wrote in Key West during the 1930s, he took in some unusual six-toed cats. Now a federal appeals court says those cats' descendants are subject to the Constitution's interstate Commerce Clause. Seriously. Hemingway's house is a museum these days… and it remains home to about 50 such cats. "As in Hemingway's time," reports The Christian Science Monitor, "the cats are allowed to roam and lounge at will in the house and on the one-acre grounds." Enter a busybody museum visitor who for whatever reason was concerned about the cats' care. "The visitor took that concern all the way to the U.S. Department of Agriculture and, literally, made a federal case out of it," says the Monitor. Yes, the agency that hands out food stamps also enforces the Animal Welfare Act… so it dispatched inspectors to Key West. They determined the museum must "confine the cats in individual cages each night, or construct a higher fence around the property, or install an electric wire atop the existing brick wall or hire a night watchman to keep an eye on the cats." The museum went to court… and lost. "The museum," wrote Chief Judge Joel Dubina, "invites and receives thousands of admissions-paying visitors from beyond Florida, many of whom are drawn by the museum's reputation for and purposeful marketing of the Hemingway cats. "The exhibition of the Hemingway cats is integral to the museum's commercial purpose, and thus, their exhibition affects interstate commerce."
"However, if the government really wants to collect more revenue and not raise rates, they should require people that contribute appreciated stock to charities pay capital gain taxes before the shares are transferred. "How much tax is Warren Buffett going to pay on the $40 billion in Berkshire Hathaway stock that he has pledged to donate to the Bill & Melinda Gates Foundation? How much tax did the Gateses pay on the $25 million that their foundation gave to the William J. Clinton Foundation? "Besides supporting Obama, didn't Warren say the rich should pay more taxes? With the long-term capital gains tax for those earning over $250,000 going to 23.8% in 2013, the foundation would still be getting over $30 billion. "I would be OK with some amount being exempt from the capital gains tax so that that only the superrich are affected. "Maybe they could take a poll that went like this – Do you think that government should let Warren Buffett, the world's third-richest person, pay zero taxes on $40 billion just because he is giving it to Bill Gates, the world's second-richest person? Or should he do what's right and pay long-term capital gains tax like everybody else that sells their appreciated stock?"
"They price all items to the penny, but don't use any. All final sales are rounded to the nearest nickel. They also don't have a A$1 bill, but use A$1 & A$2 coins with a A$5 bill. I thought that it was a very good system when I was in Sydney."
"Think of how valuable (in relative terms) old pennies will become to collectors once nearly everyone else turns in their pennies for their copper value. The numismatists might be drooling already. Seems to me that the Treasury took the silver content out of dimes dated after 1964, due to its value being greater than that of the 10 cents (which could buy a cup of coffee back then — or a local phone call). "Maybe metal content should be required for all monetary systems — of course, that takes the power away from the banksters, doesn't it?" The 5: True, but there's a brief window in which you can turn the tables and pocket a substantial gain — up to 228%. Be advised: The window might slam shut as early as this Friday. Regards, P.S. "Atlas Shrugged was a warning," quips John Towers, "not an instruction manual." But with large parts of the instruction manual being implemented, Mr. Towers says you must invest accordingly: He shared several ideas over the weekend at the Rancho Santana Sessions. Watch later today for colleague Chris Campbell's full write-up of the opportunities laid out by our guest speakers. And if you want access to either audio or HD video recordings of the presentations, you can still sign up through midnight tomorrow.
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| How Gold Miners Can Leverage the Price of Gold Posted: 10 Dec 2012 01:13 PM PST Gazing into their crystal balls last week, Wall Street firms interpreted differing futures for gold next year. Morgan Stanley awarded gold the "best commodity for 2013" while Goldman Sachs called the end of the metal's hot streak. Read More...  | ||||
| What a Turnaround in Junior Gold Mining Stocks Will Look Like Posted: 10 Dec 2012 01:02 PM PST The fundamentals at many junior mining companies have improved, yet their stock prices continue to languish. In this interview with The Gold Report, market guru Peter Grandich gives his thoughts on when this may end and where gold is headed in 2013. | ||||
| Bitcoin sponsor gets recognition as bank and payment system Posted: 10 Dec 2012 12:32 PM PST Another currency market for the Federal Reserve and JPMorganChase to start manipulating. * * * Virtual Cash Exchange Becomes Bank From the British Broadcasting Corp. http://www.bbc.co.uk/news/technology-20641465 A currency exchange that specialises in virtual cash has won the right to operate as a bank. Bitcoin-Central got the go-ahead thanks to a deal with French financial firms Aqoba and Credit Mutuel. The exchange is one of many that swaps bitcoins, computer-generated cash, for real world currencies. The change in status makes it easier to use bitcoins and bestows national protections on balances held at the exchange. ... Dispatch continues below ... ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard Bitcoins, and the global network of computers that supports them, first appeared in 2009 and since then it has become a very widely used alternative payments system. Many people "mine" the coins by participating in that network and a growing number of web stores and online firms accept bitcoins as payment. One bitcoin is currently worth about L8 ($13). Under European laws, the deal means Bitcoin-Central becomes a Payment Services Provider (PSP) that has an international bank identification number. This puts it on an equal footing with other payment networks such as PayPal and WorldPay. As a PSP it will be able to issue debit cards, carry out real-time transfers to other banks, and accept transfers into its own coffers. The deal was a "significant" step towardslegitimacy for Bitcoin, said Vitalik Buterin, technical editor of Bitcoin magazine. Before now, he told the BBC, it had been hard for novices to get started with bitcoins. The links that Bitcoin-Central, and other exchanges that have also applied to be PSPs will have to the global banking system will make that much easier as it will become possible to transact with a bitcoin account just like any other bank account. It also means, he said, that deposits held at Bitcoin-Central would be backed by the same compensation laws and schemes that apply to cash held in other bank accounts. However, he said, this protection applied only to balances held in euros rather than bitcoins. The move could convince many organisations and businesses to start accepting bitcoins as payment, he said. "The more we see governments and banks being willing to deal with Bitcoin, the more comfortable a lot of organisations are going to be making the step forward themselves," he said. Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. | ||||
| Turk - The Key Chart Every Silver Investor Needs To Watch Posted: 10 Dec 2012 12:09 PM PST  Today James Turk sent King World News a crucial chart which will determine the fate of silver going forward. Consequently, this will impact the gold market as well. Here is what Turk had to say, along with this very important chart: "The weekly silver chart is giving us an important message, Eric. I have been watching this chart carefully for a long time, and waiting for the breakout from the flag pattern on the chart. Flag patterns are very bullish formations, and normally occur in bull markets."This posting includes an audio/video/photo media file: Download Now | ||||
| Latin America catches the gold bug Posted: 10 Dec 2012 12:07 PM PST By Jack Farchy http://www.ft.com/intl/cms/s/0/4f5412ca-429a-11e2-a233-00144feabdc0.html Central bank reserve managers are a conservative bunch: Once they fix on a certain policy it can take a long time to change course. They also tend to move in herds, with new ideas catching on by region. In 2009, for example, China announced it had been buying gold and India purchased 200 tonnes from the International Monetary Fund. Since then Thailand, South Korea, Sri Lanka, and Bangladesh have all bought significant quantities for the first time in years, making Asian central banks the main driver of "official sector" purchasing. Now the gold bug appears to be catching in Latin America. The trendsetter was Mexico, which last year snapped up close to 100 tonnes in a couple of months. More recently Brazil, holder of the region's largest international reserves, has joined the party. In September and October, according to IMF data, the central bank bought 18.9 tonnes. ... Dispatch continues below ... ADVERTISEMENT GoldMoney adds Toronto vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada. GoldMoney also has recently partnered with Rhenus Freight Logistics to offer another gold storage option in Switzerland. The Rhenus vault is in the secured zone of Zurich Airport and offers customers superb security as well as the ability to inspect their gold. Storage at the new vaults in Canada and Switzerland is available at GoldMoney's lowest fees. Customers can select their storage location when placing their buy order. GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata "We bought some gold," Alexandre Tombini, central bank governor, confirmed to journalists recently in BrasÃlia. Yet Brazil appears to have much further to go: Gold still accounts for just 0.8 per cent of its reserves of $379 billion, the world's eighth-largest. Of the 20 largest holders of international reserves, it has more gold than only Hong Kong and Malaysia. Indeed, Mr Tombini acknowledged as much, saying that the central bank was "looking into this issue" of reserve diversification "on a current basis." The shift by Mexico and now Brazil could prompt some of their neighbours to reconsider gold as well. A wave of gold buying among Latin American central banks is likely to be of less significance to the market than the trend in Asia has been, simply because a larger proportion of the world's reserves is held by Asian countries. Nonetheless, consistent buying by central banks -- often through the Bank for International Settlements -- is one of the main factors propping up the gold market. New buyers from Latin America could help maintain the current pace of roughly 500 tonnes a year -- equivalent to the jewellery consumption of Europe and North America combined. A few have already begun to dip their toes in. Paraguay bought 7.5 tonnes in July, while Argentina added 7 tonnes last year and Colombia purchased 2.3 tonnes. But others have so far remained on the sidelines. Peru, holder of the third-largest international reserves in the region at $61 billion, has not bought the yellow metal since 2001. And Chile, with reserves of $40 billion, holds less than 1 tonne of gold. Pisco sours, anyone? Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: | ||||
| Posted: 10 Dec 2012 12:03 PM PST London Gold Market Report from Ben Traynor BullionVault Monday 10 December 2012, 07:30 EST SPOT MARKET gold bullion prices rose to one-week highs above $1710 an ounce Monday morning, while European stock markets fell following news that Italy's prime minister plans to resign. "Gold continues to consolidate its gains from August-September, and is still respecting its long term uptrend," says the latest technical analysis from bullion dealing Scotiabank. Italy's FTSE MIB index was down more than 3% on the day by Monday lunchtime, after technocrat Italian prime minister Mario Monti announced over the weekend his intention to resign once Italy's next budget is passed by parliament. Monti's announcement comes after members of former prime minister Silvio Berlusconi's People of Liberty party last Thursday declined to support a package of economic measures proposed by Monti's government. Berlusconi wrote on his Facebook page Saturday that he intends to contest next year's ... |
The Gold Report: Peter, when we talked in the spring, you were essentially all in on a number of junior resource equities that were trading at what you believed were at or near their lows. Have you changed your course of action or are you still all in?
Today James Turk sent King World News a crucial chart which will determine the fate of silver going forward. Consequently, this will impact the gold market as well. Here is what Turk had to say, along with this very important chart: "The weekly silver chart is giving us an important message, Eric. I have been watching this chart carefully for a long time, and waiting for the breakout from the flag pattern on the chart. Flag patterns are very bullish formations, and normally occur in bull markets."
After a year of indecisive movement, one of the most depressing indicators of all has hit another record high…
Foreign minister Nicolas Maduro: Meet the new boss…After winning reelection in October, Chavez is off to Cuba for a third round of cancer surgery — seldom a good sign.
Sorry, little fella… You'll have to go into a cage at nightSurely, it's the most inventive application of the Commerce Clause since Wickard v. Filburn — the infamous 1942 decision that declared a farmer growing wheat for consumption on his own property ran afoul of the feds' limits on wheat production.
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