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- AUD/USD Could Target Parity In 2013
- How Gold Miners Can Leverage the Price of Gold
- An Emerging Low in Gold Stocks?
- When is the Silver Price Going to Get Its Mojo Back?
- Got Gold Report - COT Chart Review for December 10
- Gold futures market heading for crisis
- Ronald Stöferle: ‘gold is a soft metal, but a hard currency’
- Bullion Investment Continues to Be Buoyant
- Timberline Receives Draft Hard Rock Operating Permit for Butte Highlands Gold Project
- WHY is gold money?
- Gold Up as Berlusconi Talks of Return & Monti Goes
- The Value of the Dollar & Gold
- Silver Update: Backdoor Austerity 12.9.12
- Gregory Mannarino talks Precious Metals with Greg Hunter
- Gold, Silver to Finish 2012 Weak
- Silver Investment — Time is Slipping Away
- Peter Grandich: What a Turnaround in Junior Gold Mining Stocks Will Look Like
- Links for 2012-12-09 [del.icio.us]
- Bill Black: Why is the Failed Monti a “Technocrat” and the Successful Correa a “Left-Leaning Economist”?
- What catalyst will trigger Gold’s parabolic rise
- Inside The Bank Of Englands Gold Vault
- IMF study in 1999 found 80 central banks lending 15% of official gold reserves
- The Australian Banking Behemoth
- DEBT COLLAPSE to IMPLODE THE ECONOMY? – Fr. Robert Sirico
- The value of the dollar
- SilverFuturist: Science of Precious Metals
| AUD/USD Could Target Parity In 2013 Posted: 10 Dec 2012 11:48 AM PST By Angelo Airaghi: The Reserve Bank of Australia has just cut interest rates by 25 basis points. The Australian dollar (AUDUSD) is overbought and could correct to 1.0340/1.0180 during the first months of 2013. EURUSD is contracting from the resistance at 1.3130. However, an increase to 1.33 is still possible this year. Central Bank Wants a Cheaper Australian Dollar Last week, the Reserve Bank of Australia (RBA) cut its policy rate by 25 basis points. Economic data confirmed that a peak in resource investment is nearing. Further cuts were not anticipated by the RBA and the AUDUSD rose to the important resistance line at 1.0510. The RBA also declared that the exchange rate is higher than expected, considering the decline in export prices and the troubling global outlook. In effect, Australian growth stays subdued by mild investments in the mining sectors and by the government's intention to achieve a budget surplus next Complete Story » |
| How Gold Miners Can Leverage the Price of Gold Posted: 10 Dec 2012 11:04 AM PST The upside to gold stocks is that investors historically have received a 2-to-1 leverage by owning gold equities instead of the commodity. We believe that effective management can help miners gain more leverage over the metal for their shareholders.  |
| An Emerging Low in Gold Stocks? Posted: 10 Dec 2012 09:20 AM PST If we review the GDX ETF for gold stocks we can see a possible triple bottom formation. This one though looks bullish for a reversal trade to the upside near term as gold forms a C wave bottom.  |
| When is the Silver Price Going to Get Its Mojo Back? Posted: 10 Dec 2012 07:56 AM PST There are no queues down the road outside gold and silver shops, though we note that most large towns do now have somewhere to buy and sell precious metals and that was not true a decade ago. So when the retail investors finally bite they will be able to buy....  |
| Got Gold Report - COT Chart Review for December 10 Posted: 10 Dec 2012 06:28 AM PST Vultures (Got Gold Report Subscribers) please log in and navigate to the Got Gold Reports Section for an update containing most of the charts we review each week for the Commodity Futures Trading Commission (CFTC) commitment of traders report (COT). The charts present a visual record of the significant changes which surfaced this past week. |
| Gold futures market heading for crisis Posted: 10 Dec 2012 06:06 AM PST The author, Alasdair Macleod, is one of the sane-est and most rational PM analysts you can find anywhere.  Gold futures market heading for crisis 2012-DEC-10  I thought I had a good idea what disasters we might face in 2013, and then I saw the most recent US Commodity Futures Trading Commission's Bank Participation Report for gold and silver. On the basis of recent BPRs these markets are heading for a crisis, which is generally unexpected. I shall break the reader in gently by looking at gold first. The first chart below shows US banks' net short exposure to gold up to December 4. Between February and August the US banks managed to reduce their net shorts from 104,717 to 57,689 contracts against a background of a declining gold price. This is logical, to be expected and sensible position management. However, when the gold price turned up after the August BPR, net shorts rapidly rose to new highs, and over the last month unexpectedly increased again while the gold price actually declined. This is a sign that the US banks, of which only five made returns for December, are having difficulty keeping a lid on the market that emotionally at best is neutral, but most probably somewhat oversold. This differs from an over-bought market with potential profit-takers to shake out, as was the case when gold traded at $1,900 per ounce and the same banks were able to bring the gold price back under control.  The next chart is of Non-US banks' net shorts, which tells a very different story. From October 2011 these banks increased their short positions, with a sudden jump between August and October, before sharply reducing their net positions to 44,707 contracts this month. It appears that some of the shorts have ended up on the US banks' books, pushing their shorts to uncomfortable levels as shown in the first chart.  The jump in these net shorts between August and October was comprised of sharp rises in both longs and shorts involving swap dealers and the other commercials. Longs more than tripled from 9,199 to 34,881 and shorts rose even more from 49,772 to 113,445 on a rising gold price. The likely explanation is that buyers materialised through some of these non-US banks, who hedged by buying futures contracts. A dealer or dealers at one or more other non-US banks saw the price go against their shorts and tried to kill it by massive intervention. Subsequently, when the US banks sold the market down from the October rally these non-US banks took the opportunity to reduce their shorts to more normal levels. This information is particularly revealing, given that the Commitment of Traders Report shows a substantial reduction in the Commercials' net position by 34,551 contracts for the week to the same date as the BPR, giving an impression of a market being brought back under control. The BPR suggests otherwise. Silver While there is a large stock of gold that can theoretically become available at higher prices, the same cannot be said for silver. We shall look at the position of the US banks first. The first silver chart shows that even though silver is trading well below its 2011 highs, US banks' net shorts are substantially higher than might be expected. The long figure is down to only 625 contracts, while the shorts are 40,198, so these less-than-four-banks that reported last week have a net short exposure of nearly 200,000,000 ounces, or twice the estimated annual supply of silver available to investors after industrial demand is allowed for.  The final chart shows the non-US banks' net shorts. Unlike their exposure to gold, these banks are in the same deep trouble as the US banks, having made the mistake of turning a broadly level book as recently as the August BPR into a record net short position on the August-October price rise. This is a vicious bear squeeze on them, which added to the US banks' position amounts to a total short of 290,000,000 ounces. This figure compares with net shorts of only 120,000,000 ounces when the price was successfully taken down from its all-time highs early last year.  Conclusion The silver does not exist to cover these short positions, and it will take very little further buying to set off a crisis in this important market. In the case of gold, there have always been central banks with physical bullion available to ease market shortages, but so far as we are aware the strategic silver stockpiles of previous decades are exhausted. There is therefore no price at which these shorts can be closed. Bank positions in both silver and gold seem to have been adversely affected by "events unknown" from the August BPR onwards. All attempts by the banking community to regain control of these important markets appear to have failed. Since the date of the latest BPR (December 4), there have been three serious attempts to reduce these short positions and each time the same $32.60 level has held firm. This suggests that a buyer or buyers larger than the banks are prepared to take them on by buying the dips. This price action supports anecdotal evidence that physical bullion in important markets such as London is in short supply. On this evidence, and assuming the trend continues, there will shortly come a time where NYMEX will be forced to declare force majeure in this market, which they can do under their rule book. The consequences of this extreme action could well be destabilising not only for the price and demand for silver but also disruptive for gold. Therefore, we must add the breakdown of precious metals markets to the list of systemic dangers we face in the New Year. Author: Alasdair Macleod http://www.goldmoney.com/gold-resear...gmrefcode=gata |
| Ronald Stöferle: ‘gold is a soft metal, but a hard currency’ Posted: 10 Dec 2012 05:45 AM PST Episode 81: GoldMoney's Alasdair Macleod interviews Ronald Stöferle, who was a gold expert at Erste Group Bank and now works as a fund manager at Incrementum. They discuss the situation in ...  This posting includes an audio/video/photo media file: Download Now |
| Bullion Investment Continues to Be Buoyant Posted: 10 Dec 2012 05:33 AM PST Gold price has received a bit of a boost thanks to positive data from China and potential political mayhem in Italy. Political and economic uncertainty causes people to want to buy gold bullion.  |
| Timberline Receives Draft Hard Rock Operating Permit for Butte Highlands Gold Project Posted: 10 Dec 2012 05:30 AM PST COEUR D'ALENE, IDAHO--(Marketwire - Dec. 10, 2012) - Timberline Resources Corporation (TSX VENTURE:TBR)(NYSE MKT:TLR)(NYSE Amex:TLR) ("Timberline" or the "Company") is pleased to announce today that it has received a draft Hard Rock Operating Permit for its Butte Highlands Gold Project from the Montana Department of Environmental Quality (MDEQ). The Company also received a Compliance Determination setting forth the MDEQ's determination that the completed application for the operating permit complies with the substantive requirements of Montana's Metal Mine Reclamation Act. The draft Hard Rock Operating Permit and the Compliance Determination may be viewed on the Company's web site at http://timberline-resources.com/main.php?page=196. Timberline CEO Paul Dircksen commented, "This permit is a critical milestone for Timberline and our joint-venture partner. The regulators have been fastidious about our permit application, and we have provided thorough responses to each of their inquiries and comments. Our JV partner continues to fully fund the permitting and development at Butte Highlands, and they are actively involved and working closely with us to expedite the remaining permits and complete project development. The receipt of this draft permit and positive compliance determination from the MDEQ provides clear evidence that we will receive the final Hard Rock Operating Permit in mid-2013. We expect to commence gold production at Butte Highlands shortly thereafter." As noted in the draft permit, the final operating permit is expected to be issued upon the completion of the MDEQ's review pursuant to the Montana Environmental Policy Act and its determination that the project bonding is sufficient. Based on current projections, the Company expects that the reviews will be completed and the final operating permit will be issued in mid-2013. The Company expects to receive the water discharge permit and road use permit related to the Butte Highlands Project prior to the receipt of the final operating permit.As announced previously, the initial mine plan at Butte Highlands will target production of approximately 400 tons per day for the first four years of operation with material direct shipped to a nearby mill. In 2011, Timberline completed a 50,000-foot (15,240-metre) underground drill program which returned intercepts of up to 14.5 feet (4.4 metres) grading 6.77 ounces of gold per ton (231.85 grams per metric tonne). The Company has also completed over 4,500 feet (1.4 kilometres) of underground development and completed construction of essentially all surface facilities for the project. The Butte Highlands Joint Venture is located within a favorable geologic domain that has hosted several multi-million ounce gold deposits including Butte, Golden Sunlight, Montana Tunnels, and Virginia City. December 10, 2012 (Source: Marketwire) Disclosure: Timberline Resources is a Vulture Bargain Candidate of Interest (VBCI) and is our fully fledged Vulture Bargain #4. Members of the GGR team are actively accumulating shares of TLR and continue to hold a speculative long position in the company. |
| Posted: 10 Dec 2012 05:28 AM PST We were watching a video last week and in one of the scenes someone stumbles on a hidden treasure full of gold coins. As they are picking up the coins and letting them run through their fingers my littlest daughter (4 years old) says out of nowhere, "Gold is money, and money is gold." It really shocked me -- she said those exact words. I hadn't told her that before, so she came up with it from her own observation. What is it about gold that has made it so universally valued througout history? Even in the very beginning of the Bible -- right in the Creation account -- the narrator, when describing the rivers that formed the boundaries to the Garden of Eden, mentions specifically a location that is rich in gold even though it seems completely irrelevant to the account. Sure it is very heavy, doesn't corrode under normal circumstances, induplicable, maleable, brightly colored (beautiful, you might say), and scarce. But is that enough to make it universally appreciated as a token of exchange? And a 4 year old would know this by instinct? Afterall, money is nothing more than an exchange on the value of labor. It could be anything we agree upon (or have thrust upon us like FRNs). So why gold? And is there any reason it should continue as "money" in our era of technological advancement? Why do Central Banks continue to hold it when currencies are no longer tied to it? Shouldn't it just be jewelry and circuit boards? |
| Gold Up as Berlusconi Talks of Return & Monti Goes Posted: 10 Dec 2012 05:15 AM PST Spot market gold bullion prices rose to one-week highs above $1,710 an ounce Monday morning, while European stock markets fell following news that Italy's prime minister plans to resign.  |
| The Value of the Dollar & Gold Posted: 10 Dec 2012 04:08 AM PST The dollar only has value because the foreign exchange markets and the people that use it assume it has value, vaguely based on the standing of the issuer. This can change suddenly and substantially, irrespective of changes of the quantity in circulation.  |
| Silver Update: Backdoor Austerity 12.9.12 Posted: 10 Dec 2012 03:22 AM PST |
| Gregory Mannarino talks Precious Metals with Greg Hunter Posted: 10 Dec 2012 03:14 AM PST "Nothing they do now can change the trajectory we are on, which is the mother of all collapses of the financial system–on a global level," says Gregory Mannarino. from usawatchdog: When that happens, what is going to happen to all the asset classes? Mannarino says, "You got to be nuts to buy 10-Year Treasury bonds . . . . At some point, it will be the free market that will decide fair value with regard to everything across the board, including debt." Mannarino thinks interest rates will spike and "commodities are going to go to the moon . . . gold and silver are going up over the long term." Join Greg Hunter as he goes One-on-One with financial analyst Gregory Mannarino. ~TVR |
| Gold, Silver to Finish 2012 Weak Posted: 10 Dec 2012 02:50 AM PST Precious Metals Stock Review |
| Silver Investment — Time is Slipping Away Posted: 10 Dec 2012 02:27 AM PST On the surface, investing in precious metals appears relatively simple, and yet as soon as one comes to terms with the many good reasons for doing this, the decisions involved become quite complicated — almost to the point of absurdity.  |
| Peter Grandich: What a Turnaround in Junior Gold Mining Stocks Will Look Like Posted: 10 Dec 2012 12:00 AM 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... Visit the aureport.com for more information and for a free newsletter      |
| Links for 2012-12-09 [del.icio.us] Posted: 10 Dec 2012 12:00 AM PST
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| Posted: 09 Dec 2012 10:04 PM PST By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly posted with New Economic Perspectives The New York Times produces profiles of national leaders like Italy's Mario Monti and Ecuador's Rafael Correa. I invite readers to contrast the worshipful treatment accorded Monti with the Correa profile. The next time someone tells you the NYT is a "leftist" paper you can show them how far right it is on financial issues. http://topics.nytimes.com/topics/reference/timestopics/people/m/mario_monti/index.html http://topics.nytimes.com/top/reference/timestopics/people/c/rafael_correa/index.html The NYT's slant in describing Monti as a "technocrat" and Correa as a "left-leaning economist" is typical of the dominant media. Monti and Correa both have doctorates in economics from U.S. universities and both have been professors of economics. Why does the NYT treat Monti reverentially and Correa dismissively? There are a series of factors that the U.S. media normally uses to judge relative merit among those with elite qualifications and national leaders. The media normally values most highly national leaders who demonstrate:
A Track Record of Success Readers of the Monti and Correa profiles would not be able to judge their relative success as economists and national leaders, but that is not because the facts are not readily available. Under Monti, Italy's economy sank back into a serious recession because of the self-destructive austerity policies that Monti strongly supported. The "troika" forced Monti's predecessor, Mr. Berlusconi, to adopt austerity and Monti doubled and tripled down on austerity. The largest banks then staged a de facto coup that forced Berlusconi to resign. The Troika pressured Italy to make Monti its leader without any elections. Under Monti, unemployment has risen to 11.1% and the unemployment rate for young Italians exceeds 36%. Many of Italy's best and brightest emigrate as soon as they graduate. That means that the 36% figure substantially understates the extent of unemployment among young Italians because those that emigrate are not counted. The loss of Italy's greatest asset, its already scarce young people will damage Italy for decades. The Monti profile tries hard to make it appear that Monti led a successful campaign against German's insistence on austerity. That is false. Monti did not get German approval to adopt the essential fiscal stimulus programs. Monti imposed serious austerity programs that had the effect he predicted – they increased unemployment, deepened the recession, and increased emigration. Monti's recent failures do not stand in distinction to much of his career. He deserves credit for his time as an anti-trust official, but his record on the key financial issues of his time is disastrous. He is a neo-liberal economist who supported Italy's adoption of the fatally flawed euro design and financial deregulation and desupervision. Correa inherited a more crippling debt crisis than did Monti. He used his skills as an economist to devise a default on that debt and a buy-back of the debt at a dramatically discounted rate. He did all of this while producing robust growth. Ecuador was not frozen out of obtaining credit. Correa convinced China to loan money to Ecuador after the default to provide the credit Ecuador desired. He tossed out the World Bank (which warned him not to default) and took steps to maintain Ecuador's reserves when the U.S. suffered the Great Recession. Ecuador lacks a sovereign currency it is potentially exposed to the bond vigilantes. This makes Correa's success all the more impressive. It is important to understand that Monti failed and Correa succeeded because Correa is a skilled technocrat and Monti is a believer in neo-liberal dogmas that have been repeatedly falsified. Monti is no more a technocrat than the medical quacks who continued to bleed patients in the late 19th century were doctors. Prescribing austerity as a means of "recovering" from a Great Recession is delusional – it is not economics. Paul Krugman has repeatedly emphasized this point in his NYT column, but most NYT writers cannot understand this point. Monti's profile, for example, has this clunker about Monti's appointment in November 2011 to run Italy: "But even the change in leadership — and a $40 billion package of austerity measures, including tax increases and a sweeping pension overhaul — has not calmed [financial] markets." The writer is shocked that Monti's promise to throw Italy into recession through self-destructive austerity has not "calmed markets." It is beyond me why a journalist would think that financial markets (lenders) would be "calmed" by knowing that their borrower was about to go into recession. The financial policies that Monti supported prior to the onset of the Great Recession were failures. His support for financial deregulation and desupervision, the euro, and the efficient market hypothesis were further examples of theoclassical economics. The Correa profile, however, begins with multiple efforts to picture Correa as the leader peddling dubious economics.
I have no difficulty with using the term "left-leaning" – even in the first clause of the profile where it is obviously designed to set a defining tone of hostility. More precisely, I have no problem with it if the paper does three things: states its bias openly, acts consistently (e.g., the first line of Monti's profile should describe him as a "neo-liberal economist"), and the article should explore analytically whether the "left-leaning" or "neo-liberal" approaches to economics has demonstrated greater predictive success in contexts that are the subject of the profile. The NYT's profiles fail on each of these requirements for journalism. The Correa profile then compounds its bias with false statements and an analysis-free statement of great analytical significance. It falsely claims that Correa's "left-leaning" policies are in derogation of the "free-market policies backed by the United States and [Ecuador's] traditional elites." I'll begin with the preposterous assertion that Ecuador's "traditional elites support "free-market policies." The profile is a fact rather than an opinion column so making asserted factual statements that would cause anyone in Ecuador to burst into snickers is particularly egregious. Ecuador is a nation characterized by immensely powerful economic and political elites who have dramatic market power and often act in a concerted anti-competitive fashion. I did a recent column on how the managers that control their four largest banks acted in concert to attempt to extort the government not to increase their taxes and restrict their compensation. The very last thing Ecuador's wealth elites want is market competition. Similarly, the Washington Consensus' policies of deregulation, desupervision, and privatization do not produce a "free-market." In the U.S. we have just run a domestic experiment in which we implemented the theoclassical economic policies of the Washington Consensus. It proved massively criminogenic. The resultant epidemic of accounting control fraud hyper-inflated the bubble and drove the Great Recession. It produced crony capitalism – the antithesis of "free markets." Effective financial regulation, supervision, and prosecutions are essential to "free" financial markets. When cheaters prosper honest firms are driven from the markets, a point that the Nobel Laureate George Akerlof explained in his famous 1970 article on markets for "lemons." He described a "Gresham's" dynamic in which bad ethics drove good ethics from the marketplace.
The results of our domestic Washington Consensus were so disastrous that they caused most of the U.S. electorate to repudiate the policies. The same thing happened in most Latin American nations because Latin America was the (failed) test bed for the Washington Consensus. The failures of the faux free markets in Latin America caused many electorates to repudiate the policies and elect leaders who promised to oppose the Washington Consensus. This is the analytics-free clause of the first sentence of the Correa profile: "becoming one of a growing number of Latin American leaders who came to power by running against the free-market policies…." The NYT does not believe that the fact that Latin American electorates' experience with faux "free-trade policies" produced such severe policy failures and revulsion for the faux "free-trade" policies that it led overwhelmingly to the election of leaders pledged to oppose those failed policies should lead us to reexamine the validity of the cynical label "free-market policies" and the actual impact of those policies. Courage and Leadership in Making the Tough Decisions that Produce Success The Monti profile is positively glowing about his courage and willingness to take on the powerful in order to push austerity. Here is one of key passages – see if you can spot the missing group in this supposed profile in courage.
Note the not-so-broad range of "entrenched interests" Monti took on – all of them workers. Corporations, particularly the elite banks and banksters that drove the global crisis are the most destructive, most powerful, and most entrenched interests in Italy. Monti, however, is a creature of the banking industry. His father was a banker and he was a consultant to Goldman Sachs. He chose for his cabinet as his principal economic advisor the head of one of Italy's largest banks. Who were Monti's key "unelected technocrats?" Monti assigned himself as the minister responsible for the economy. I've explained that he is the worst kind of failure as a "technocrat." He knew better. He knew that austerity would hurl Italy into a gratuitous recession, but he imposed it pursuant to the theoclassical dogmas he venerated. Consider the profile's uncritical adoption of Monti's claim that his government of (supposed) technocrats "was uniquely qualified to push through the changes because it had no natural constituency to protect." We all understand why Monti's press flacks pushed this meme, but I cannot understand why any sentient journalist would allow such a meme to go unchallenged. Monti ensured that his government was dominated by bankers, indeed executives and advisors of enormous banks. It is apparently credible to the NYT that bankers have no "natural constituency to protect."
What a series of pro-Monti myths concocted by his press flacks and accepted as divine truth by the NYT reporters. Consider first the implications, ignored by the reporters, that the bond vigilantes forced out Italy's elected leader and Germany determined his replacement. That is a remarkable and outrageous indication of Italy's crippled democracy (Berlusconi and the power of the elite banks and bankers. Merkel chose Monti because Monti was German bankers' favorite ally. (A nation that elects Berlusconi its leader already has a severe democratic deficit.) Consider next the epic terms in which Monti is described in his NTY profile. He is the "tenacious opponent" of Merkel's austerity policies and the "uncontested leader" of "pro-growth" forces. The obvious problem with this Monti myth is that Monti imposed austerity on Italy and told the nation that there was "no alternative" to it. The reporters are using an Orwellian definition of the term "tenacious opponent." There is no "growth pact" – unless the reporters are adopting an Orwellian definition of "growth." Merkel insists on austerity and insists that there is "no alternative" to throwing the Eurozone back into a gratuitous recession through her anti-growth policies. The reporters cite only a single achievement of Monti's supposed tenacity: "European leaders agreed to allow Europe's new bailout funds to directly recapitalize ailing banks, rather than going through the governments." The reporters describe this in heroic terms as "one of the largest steps toward European integration since the euro crisis began." Inept "European integration" – the euro – put nations that adopted the euro at the mercy of the bond vigilantes, so there is no reason to assume that increased integration is desirable. Note that the "increased integration" is not a pro-growth measure. It is a measure to bail out banks. Indeed, it is a measure designed to bail out banks rather than provide funds to the nations that are suffering from the recessions. It turns out that Monti's supposed act of valor was getting a more direct way for the Troika to bail out banks. The Troika had been using the member nations to launder the bail out proceeds to the banks. The Troika would lend money to a distressed nation with the understanding that the nation would use the proceeds to bail out the banks. The banks would then use much of the proceeds to buy the distressed nation's sovereign debt. The Troika, the banks, and the distressed nations would then pretend that all was well and austerity was a great success. Monti's monumental accomplishment is that the Troika can lend directly to the banks, pretend that all is well, and proclaim austerity a great success. Transformative! No? But the Monti myth's hype is not the critical analytical point that can be derived by Monti's efforts to make it easier to bail out banks. The central point is that when one dispels the hype it turns out that the NYT reporters knew that Monti's act of faux bravery was making it easier to bail out banks. This means that the same credulous reporters, who accepted the Monti myth that Monti's unelected government of bankers could be trusted to act solely in Italy's national interest because they had "no natural constituency to protect" knew the claim was a lie. The reporters knew that the Monti's paramount strategy was protecting his "natural constituency" – bankers – by making it easier to give them public bailouts. Correa followed the opposite policies – successfully. He took on the wealthiest entrenched interests in Ecuador, particularly the banks. Correa took enormous political and safety risks when he took on these entrenched interests. Whether or not the U.S. fomented the coups in Venezuela and Honduras, it has demonstrated its support for coups designed to remove democratically-elected leaders from power in Latin America if they oppose the Washington Consensus. The U.S. pro-coup policy has placed the lives of a number of Latin American leaders, including Correa, at great risk. Correa was the target of what he and many observers believe was an attempted coup by police officers. Correa was cut off, badly outnumbered, and surrounded by a large force of police officers. He responded to the police officers' action by demonstrating exceptional courage. In order to defeat the attempted coup, Correa personally confronted the most aggressive officers and dared them to murder him in public. His courage helped defeat the coup. One might think this pattern would lead the NYT to laud his courage. Instead, the passage describing the event in his profile appears to be written to imply that the critical fact was that he gratuitously chose to engage "in a shouting match" with the police.
Rising from Humble Circumstances Through Hard Work and Self-Sacrifice Americans love rags-to-riches stories. Our elected politicians brag of their humble origins. Monti was born with the silver spoon. He was the son of a banker with the connections and wealth to attend top Italian and U.S. universities (his Ph.D. is from Yale). Correa is the exemplar of everything the U.S. cherishes. His father was often unemployed. He worked hard and was able to get a doctorate at a fine, but far less prestigious U.S. school. Repeated Success in Democratic Elections Monti was not elected. None of the ministers he appointed were elected. Monti was made a "Senator for Life" so that he could hold office. His popularity has fallen so sharply that his political opponents turned on him and he has announced his intention to resign. Correa was elected in 2007, re-elected in 2008, and has a very large lead in the polls projecting that he is about to again win reelection. His electoral success is remarkable because he inherited the global financial crisis when he came into office and Ecuador had a recent track record of immense political instability.
Dedication to the Interests of Those with the Greatest Needs Rather Than to the Wealthy Monti's austerity policies attacked the least powerful and least well-off Italians. His emphasis was on getting bailouts for Italy's largest banks in the form of direct lending from the ECB (instead of indirect bailouts through ECB loans to the Italian government that would then make loans to the banks). That is the grand concession he obtained from Angela Merkel. The results of his policies are a deep recession, rapidly growing unemployment, increasing inequality, and growing emigration. Correa's policies have led to increased employment for large numbers of Ecuadorians, reduced poverty, and an improved safety net. The least politically powerful people in Ecuador now have political champions. Bold, Innovative Policies The profiles would lead a reader to believe that Monti exemplified flexibility and innovation and that Correa is the ideologue. The reality is that the opposite is true. Monti is pictured as the leader of a successful insurrection against Merkel's austerity policies, but he lacked the courage to adopt fiscal stimulus and actually implemented the self-destructive austerity policies that Merkel insisted Italy adopt. Indeed, Monti famously misinformed Italians that there was "no alternative" to austerity. The contrast between Monti's timidity and Correa's boldness is stark. Correa threw the World Bank out of Ecuador. He threw the U.S. out of its military base in Ecuador. He led the default on Ecuador's debt and a successful buy-back of the debt at a huge discount. He arranged a large loan from China to provide access to credit. He imposed a tax on banks in order to fund an increase in social spending that helps the poor the most. He did all this in an environment in which he was risking his life because of the serious dangers of a coup and where most observers believed he was dooming his chances for reelection. Correa's bold policies s have produced high growth in real GDP, significantly reduced unemployment and poverty, political stability, and strong political support. Conclusion Correa is the economist who has demonstrated the complete package: the head to get the economic policies correct, the heart to act on behalf of the people with the greatest need and the least power, the guts to risk his life on behalf of his nation, and the soul to take on the most powerful and entrenched interests in his nation in order to liberate his nation from their toxic grip. Correa is exceptionally popular with the Ecuadorian people and has won multiple elections. So why does the NYT continue to praise Monti and disparage Correa? The NYT's hagiographic praise of Monti's purported act of courage – insisting that Germany allow the Troika to bail out Italian banks directly – is further proof of our family's rule that it is impossible to compete with unintentional self-parody. Readers, however, may share my belief that the supreme example of unintentional self-parody contained in the profiles is the related claim that Monti, an elite banker who used his power to ease public bail outs of banks, is a selfless "technocrat" devoid of any "natural constituency to protect" because he was unelected and appointed through a de facto coup orchestrated by elite banks and bankers. The NYT accepted as gospel the claim that elite bankers like Monti are devoid of self-interest and do not protect the interests of the elite banks that provide him wealth and prestige and put him in power. The Onion couldn't have written it better.         |
| What catalyst will trigger Gold’s parabolic rise Posted: 09 Dec 2012 10:00 PM PST |
| Inside The Bank Of Englands Gold Vault Posted: 09 Dec 2012 10:00 PM PST |
| IMF study in 1999 found 80 central banks lending 15% of official gold reserves Posted: 09 Dec 2012 10:00 PM PST |
| The Australian Banking Behemoth Posted: 09 Dec 2012 09:49 PM PST How big, bad, and burly is Australia's banking system? It's so big, bad, and burly that the market capitalisation of the Commonwealth Bank of Australia (ASX: CBA) is not only close to $100 billion, it's bigger than the total market cap of the banking sector in countries like Germany, Italy, or Singapore. That's right, one single Australian bank is worth more than all the banks in Germany, at least according to the share market. It's an amazing achievement, considering Germany has a GDP of around $3.5 trillion dollars. Australia's GDP is around $1.4 trillion. The CBA is obviously punching above its weight. But is there another explanation? Well, it could be that the market valuation of CBA confirms that Australia has the best banks in the world. They flew through the GFC with minor turbulence, hardly touching the government guarantee on their borrowings. This, then, is a testament to the superior management of Australian bankers and outstanding regulation, right? That's one way of looking at. Another way of looking at is that Australia has an oversized banking sector for its economy and the banks remain over-leveraged and heavily invested in residential and commercial real estate. He doesn't put it exactly that way, but we reckon this is one of the points Greg Canavan makes in his new brief on the Australian economy. When you say something like 'the fuse is lit,' you're implying that something is going to blow up. It could be the national balance sheet (thanks to the trade deficit) or the banks themselves. Either way, it certainly smells like sulphur. But to be fair, the only thing blowing up so far this year is CBA's share price. The share price of Australia's biggest battling bank is up almost 25% this year. That's a tidy little capital gain in a blue chip stock, before profits. But something tells us that just as BHP Billiton became a proxy for the commodity story, CBA has become a proxy for the 'yield' story. The 'yield' story is the story of desperate savers and investors. With interest rates under attack by central bankers, investors and savers have had to search high and low for anything that delivers fixed income without a whole lot of risk. We will ignore how wrong it is for central bankers to favour finance and housing investors over savers and focus on the investment aspect of the hunt for 'yield'. The hunt for 'yield' is probably a narrative lie. That is, the idea that you can easily and painlessly switch from one class of investments (growth) to another (income) is probably wrong. It's never that easy. And with equities, you always have risk, even if you're investing in mature companies. But there's no doubt that investors, in psychological terms, are more worried about the return OF their capital than the return ON it. Hedge funds have noticed. Fixed income hedge funds are set to have more assets under management than equity hedge funds for the first time ever, according to the Financial Times. Both groups had just over $500 billion in assets under management at the end of the third quarter. But the trend is clearly with fixed income. CBA's rising share price is a version of this trend within the share market. The bank pays a dividend yield of 5.48%. That's downright opulent by current standards. NAB yields 7.31%, ANX 5.81%, and Westpac 6.40%. With a limited number of commonwealth bonds and State bonds on offer, the Big Four banks may all have become yield proxies. If the banks have become the flavour of the month with foreign capital, it could also explain the persistently high Australian dollar. The falling terms of trade and slower GDP growth would normally be accompanied by a weaker dollars, as Greg notes. But the attractiveness of relatively high yields on bank stocks could delay this adjustment. Out in the wider and more chaotic world, things fall apart as they always do. Egyptian President Mohamed Morsi has rescinded the decree making all Presidential decrees exempt from judicial review. This is supposed to 'walk back' from the constitutional cliff the crisis that pits Egypt's Muslim Brotherhood versus the seculars, liberals, and Christians trying to collaborate on a new political living arrangement. We hate to be the one to point this out, but rescinding the decree unilaterally is, in principle, every bit as objectionable as issuing it in the first place. It confirms the basic idea of government by executive order. It reminds us a little of how the principle of judicial review was established in American law. In the Marbury vs. Madison decision, US Supreme Court Chief Justice John Jay ruled that a Congressional act empowering the Supreme Court to review certain aspects of the Executive branch was itself unconstitutional. Do you see what he did there? In denying the Court a specific power given it by the legislature, he gave it a far bigger general power: the ability to decide if any law is constitutional. Pretty clever, isn't it? Yet modern day advocates of democracy scream and howl any time the courts get in the way of 'the People'. Are they right? To quote Mostafa Hussein, 'Being democratically elected doesn't mean everything you do thereafter is by definition democratic.' The law is still the law, even when you win an election. But the fig leaf of elections have covered the worst parts of many tyrants, at least for a while. Regards, Dan Denning Regards, Dan Denning From the Archives... Will Lower Interest Rates Impact Australia in 2013? Is the Australian Economy in Recession? US Debt: Why America May Need a Bail Out by the IMF If Profits are Falling Why are Stocks Rising? The Frontier Way
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| DEBT COLLAPSE to IMPLODE THE ECONOMY? – Fr. Robert Sirico Posted: 09 Dec 2012 07:29 PM PST Unconventional Finance With the US National Debt over $16 trillion, is there any hope that our economy will turn around? In my interview with Fr. Robert Sirico, president of the Acton Institute and author of Defending the Free Market: The Moral Case for a Free Economy, spills the truth about our dire fiscal situation, and whether he believes we can turn the ship around or if the debt will collapse the entire system. from unconventionalfin: ~DF |
| Posted: 09 Dec 2012 07:00 PM PST Goldmoney |
| SilverFuturist: Science of Precious Metals Posted: 09 Dec 2012 05:50 PM PST SilverFuturist: Science of Precious Metals from silverfuturist: Gold vault video: Aqua Regia dissolves Gold: Platinum: Copper: ~TVR |
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