Gold World News Flash

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• Davies – Gold Is Now Set Up For A Vertical Price Explosion
• Obama’s Third Term? We Have More Pressing Problems
• Chinese To Increase Gold & Silver Storage A Staggering 180%
• Felix Zulauf interview with Fusion IQ, Felix Zulauf Blog
• Bill Ackman Blog: Bill Ackman and Pershing Square Give This Retailer a Vote of Confidence
• James Grant Likes Gold & Metropolitan Life, Jim Grant Blog
• Max Otte Blog: Das neue Jahr 2013 fängt gut an
• The Gold Price Finished the Week at $1,660.60 Silver Closed at $30.41
• Eric Sprott – Central Banks Don’t Have Enough Gold – YouTube
• By the Numbers for the Week Ending January 11
• The Great Precious Metal Bull Cycle and the Money Supply
• Kyle Bass Bought 9%+ of Two Companies, Kyle Bass Blog
• John Taylor ~ FX Concepts acquires Track research business, John Taylor Blog
• US bank rejects silver quarter as ‘bad money’…
• The U.S.'s “Trillion-Dollar” (coin) solution…
• Quaintance and Brodsky: Enough of the favoritism -- get on with the devaluation
• White House Petition To Publicly Assay And Validate The US Treasury's 8,100 Tons Of Gold
• Gold Chart - Update
• Update on Gold and the HUI Gold Bugs Index
• Your Money, Investments & Gold – How To Get Started
• Bleeding Billions
• Guyana Goldfields Announces Updated Feasibility Study with $800 Million NPV and 38% IRR (After-Tax)
• Fed official warns about slipping into currency wars
• Gold Seeker Weekly Wrap-Up: Gold and Silver End Slightly Higher on the Week
• Gold Daily and Silver Weekly Charts
• Egon von Greyerz: Gold's Prospects & Why Gold Is Not In A Bubble
• COT Gold, Silver and US Dollar Index Report - January 11, 2013
• Gold and Silver Disaggregated COT Report (DCOT) for January 11
• Gold price to explode soon, Hinde Capital's Davies tells King World News
• Gold Futures Drop as China’s Inflation Jumps to Seven-Month High
• Current Weakness In Gold May Be Buying Opportunity
• Lessons not learned from World War II
• Insights into Cultural Shifts from a Visit to a Hardware Store
• Mike Kosares: John Law reincarnated, and Ernest Hemingway on inflation
• Six Provocative Predictions for 2013… and Beyond, Part II

Davies – Gold Is Now Set Up For A Vertical Price Explosion Posted: 12 Jan 2013 01:00 AM PST from KingWorldNews: Ben Davies now predicts that gold is getting very close to the point where it will see a vertical explosion to the upside. Eric King: "Ben, your call for the Japanese to enter the gold market was absolutely brilliant. You were the first one in the world to do that (make that call). That's become mainstream, so everyone is talking about this now, but you were way ahead of the curve on this." Davies: "Well, we did write about it a few years ago in a piece called, 'The World Monetary Earthquake, The Dash From Cash.' Also, 'Let's Say Gold Went To $13,000. We revisited it a few months ago, 'There Is A New Buyer Entering The Gold Market,' and it's definitely an ongoing theme. Obviously the Japanese are going to get religion like our investors, and they are going to start buying physical gold to protect themselves from what we see as an inevitable hyperinflation in Japan. Ben Davies continues @ KingWorldNews.com

Obama’s Third Term? We Have More Pressing Problems Posted: 11 Jan 2013 11:30 PM PST from Silver Vigilante: "Karger, they want to make Obama the King (officially) by rescinding the 22nd Amendment. Sounds like a legal issue to me. You want to take it on? — Berwick" Not really, I thought. The fact that some dim-wit Congressman from New York wants to enshrine Obama by making him eligible for a third, fourth, fifth or tenth term, would require support of both Houses of Congress and three-quarters of the States. Odds of success: 0.0 America is certifiably insane, but that doesn't make "we the people" agree on much, and at least 48% of voters, based on the results of the last election, didn't want Obama for a second term, much less for a lifetime. Read More @ Silver Vigilante

Chinese To Increase Gold & Silver Storage A Staggering 180% Posted: 11 Jan 2013 10:01 PM PST Today acclaimed money manager Stephen Leeb told King World News the West is becoming even more desperate as the Chinese are going to increase storage a staggering 180% this year for gold, silver and other metals. Leeb continues to believe that when the Chinese eventually have gold underlying their currency the game is over. Here is what Leeb had to say: "I'm focused on this battle between the West and the East right now, and the Basel III situation. The Basel III ratios that discuss liquidity ratios the BIS wants the banks to maintain so they can survive a bank run are utterly baffling. The puzzling thing was what they said banks could hold in the event of a run on the banks or a liquidity squeeze." This posting includes an audio/video/photo media file: Download Now

Felix Zulauf interview with Fusion IQ, Felix Zulauf Blog Posted: 11 Jan 2013 08:33 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

Bill Ackman Blog: Bill Ackman and Pershing Square Give This Retailer a Vote of Confidence Posted: 11 Jan 2013 08:27 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

James Grant Likes Gold & Metropolitan Life, Jim Grant Blog Posted: 11 Jan 2013 08:20 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

Max Otte Blog: Das neue Jahr 2013 fängt gut an Posted: 11 Jan 2013 08:16 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

The Gold Price Finished the Week at $1,660.60 Silver Closed at $30.41 Posted: 11 Jan 2013 08:15 PM PST Gold Price Close Today : 1,660.60 Gold Price Close 4-Jan-13 : 1,648.10 Change : 12.50 or 0.758% Silver Price Close Today : 30.41 Silver Price Close 4-Jan-13 : 29.90 Change : 0.51 or 1.706% Gold Silver Ratio Today : 54.61 Gold Silver Ratio 4-Jan-13 : 55.128 Change : -0.518 or -0.94% Franklin Sanders didn't post commentary today, if he posts later it will be available here. 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.

Eric Sprott – Central Banks Don’t Have Enough Gold – YouTube Posted: 11 Jan 2013 08:13 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

By the Numbers for the Week Ending January 11 Posted: 11 Jan 2013 08:07 PM PST  This week's closing table is just below.  If the image is too small click on it for a larger version.   (More...) Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (by 18:00 ET).     To subscribe to Got Gold Report please click on the "Subscribe to GGR" button at top right.  Join us today.

The Great Precious Metal Bull Cycle and the Money Supply Posted: 11 Jan 2013 08:00 PM PST by Dr. Jeffrey Lewis, Silver-coin-investor: Inflationary cycles tend to result in notable bullish moves in the prices of precious metals like silver, and such times have always created powerful political factions. Furthermore, massive credit expansion and an extreme use of money printing presses provide incredible wealth-accumulating opportunities for sectors of the economy. These sectors also give rise to powerful financial elites who are willing to use whatever tools are available to them by virtue of their extraordinary wealth and power to maintain the status quo. Read More @ silver-coin-investor.com

Kyle Bass Bought 9%+ of Two Companies, Kyle Bass Blog Posted: 11 Jan 2013 07:53 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

John Taylor ~ FX Concepts acquires Track research business, John Taylor Blog Posted: 11 Jan 2013 07:49 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]

US bank rejects silver quarter as ‘bad money’… Posted: 11 Jan 2013 07:00 PM PST from Sovereign Man: Just a quick note today… a funny story to end the week. Like you probably do, my friend Larry keeps a large change bucket. Every night, he drops in a few coins that he might have picked up throughout the day… and gradually, it accumulates. Every now and again, Larry takes his change bucket to the bank to use its automated coin machine. You put in the coins, and the machine spits out bills (or deposit slips). Now, Larry is a worldly guy, and he travels frequently. So occasionally a coin from Canada or Europe will have made its way in to the coin bucket. But these machines have a very sensitive tolerance, and any 'bad' coin is rejected.Larry emailed me the other day telling me about his most recent bout with the change machine: Read More @ sovereignman.com

The U.S.'s “Trillion-Dollar” (coin) solution… Posted: 11 Jan 2013 06:40 PM PST by Jeff Nielson, Bullion Bulls Canada: I'm pretty sure that most readers have already heard about the HILARIOUS "idea" to create a "$1 trillion-dollar" platinum coin — and thus to avoid any "debt ceiling" problem for the U.S., because it wouldn't have to "borrow" any money. Lol!!!!!!!! By itself, this suggestion is so idiotically simplistic that it doesn't even merit addressing; which is why I haven't discussed it in detail previously. Obviously the U.S. government could take a ROCK and proclaim that the rock was worth $1 TRILLION — and it's absolutely no different than if B.S. Bernanke simply printed-up a(nother) $1 trillion-stack of Bernanke Bills. It is "money" (i.e. currency) conjured out of thin air. So why doesn't B.S. Bernanke print-up ANOTHER $1 trillion (on top of all the $trillions he hands to Wall Street for FREE)– and solve the latest U.S. "debt crisis"? Precisely for the reason I've warned about for 4 years on this site: conjuring money out of thin air destroys the value of ALL currency in existence — through soaring inflation/hyperinflation. Read More @ BullionBullsCanada.com

Quaintance and Brodsky: Enough of the favoritism -- get on with the devaluation Posted: 11 Jan 2013 06:29 PM PST 8:28p ET Friday, January 11, 2013 Dear Friend of GATA and Gold: In their new reflection on the world economy and international financial system, the economists and fund managers Lee Quaintance and Paul Brodsky of QB Asset Management in New York (http://qbamco.com/) have had enough of central bank favoritism and subsidies to big banks and rich folk with access to discounted capital, the financial gaming that has indefinitely postponed real economic growth, the scheming for faster mechanisms of infinite money creation (like the trillion-dollar platinum coin) and market leverage, and the loss of sensible valuations. Time, Quaintance and Brodsky say, to get on with the big reset, the worldwide devaluation of currencies and their pegging to sovereign gold reserves. Indeed, the blatant suppression of gold futures prices over the last few months even as international financial conditions have gotten crazier hints at the surreptitious redistribution of sovereign gold in advance of coordinated devaluations that Quaintance and Brodsky mused about last May: http://www.gata.org/node/11373 With the continuing kind permission of Quaintance and Brodsky, their new paper, titled "Macro Polo" -- as in macro-economics -- has been posted in PDF format at GATA's Internet site here: http://www.gata.org/files/QBAMCO-MacroPolo-01-2013.pdf CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 31, 2013. The gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 31, 2013, 15.00 UK time. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata 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 Sunday-Monday, January 20 and 21, 2013 Vancouver Convention Centre West Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit in the new year with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Attachment Size QBAMCO-MacroPolo-01-2013.pdf 312.03 KB This posting includes an audio/video/photo media file: Download Now

White House Petition To Publicly Assay And Validate The US Treasury's 8,100 Tons Of Gold Posted: 11 Jan 2013 06:26 PM PST In the past few weeks there has been a veritable explosion of White House petitions ranging from the bizarre to the surreal to the outright absurd, including such demands as Texas (and other southern states) seceding, deporting Piers Morgan, not deporting Piers Morgan, creating a Joe Biden sitcom, and even making a total mockery out of the US, and global, monetary system and evading the debt ceiling using a cheap, platinum coin-based parlor trick. All of these are, for lack of a better word, a la carte distractions launched by bored American citizens, meant to evade the menial drudgery of everyday life, and, generally, reality. In short: entertainment. And, logically, virtually none have so far contained actual, actionable provisions, that stood to benefit all Americans, instead of just one half of the ideological or party split. At least not until a new petition appeared two days ago, one demanding that the administration do something that has never been done on the public record: perform an assayed public audit of all the 8,100 tons of gold owned by the US Treasury. And not just any audit, but one including "professional auditors outside of the Mint, Treasury, GAO, Inspector General and Federal Reserve system." That is one petition, which unlike all the other gimmicky wastes of time, that we (and certainly the German people if not the Bundesbank) would wholeheartedly endorse, and one which we hope promptly crosses the 25,000 signature threshold needed for a formal response from the White House. Sadly, the response will be one denying what the people demand, but it will be interesting to see just what excuse the White House uses to shoot down an idea that is far more worthy of people's time and attention than "minting" coins whose only real symbolism is that America is flat broke.

Gold Chart - Update Posted: 11 Jan 2013 05:12 PM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Gold gave back a goodly portion of its torrid gains from yesterday in today's session. In spite of the weaker Dollar, it was hit with a fairly good wave of selling. Noteworthy however is that it did end the pit session ABOVE the 200 day moving average after having fallen being this level at one point during the trading session. The price action continues to reflect the uncertainty abounding in the minds of many regarding gold's future. I will not be convinced that this market is going to undergo a sustained move higher until it clears that solid blue line near $1698 and preferably until it gains a handle of "17" in front of it. While the close, particularly to end the week, was at least NOT BELOW that 200 day moving average, it is not enough to turn the technicals friendly yet. Clearly traders are selling rallies in this market as it works within a defined range trade although it is di...

Update on Gold and the HUI Gold Bugs Index Posted: 11 Jan 2013 04:53 PM PST In spite of the recent down turn in the price of gold and silver, we still remain bullish on precious metals and its equities. Regardless of its paper manipulated price (if you believe this is currently happening) ... Read More...

Your Money, Investments & Gold – How To Get Started Posted: 11 Jan 2013 03:07 PM PST How much gold is enough? How much should you allocate to dividend-paying stocks? How much should you hold in cash? How can you sort through the vast number of opportunities out there? One of the biggest surprises since starting Miller's Money Forever is the kind of questions I've received from our readers. The vast majority are about the process behind selecting investments and building a balanced portfolio, and very few are about this or that stock. Most readers understand that sitting on cash during times of inflation is a bad thing. At the same time, they are reluctant to invest in an uncertain market. We're All Money Managers Now Most of these folks have done well for themselves, accumulated a solid nest egg, and then cashed out some sort of 401(k) when they retired. Now they need to make that money last. As I've said countless times before, regardless of what field you were in when you earned your money, we're all money managers now. Many folks jump into retirement with a good bit of cash. Others start with a 401(k) full of mutual funds which they selected years ago based on vague adjectives like "conservative," "aggressive," or "high-yield." Some even have a large accumulation of stock from their former employer. Building an "Ideal" Model First, start with a blank piece of paper, and write the total amount of your portfolio on the top. Second, imagine for a moment that you're starting with 100% of your portfolio in cash. Set aside one-third to keep in cash, and then determine how the remaining two-thirds should be allocated by sector. There are many publications on the newsstands that show their version of the ideal allocation. Schwab sends us regular publications with pie charts showing aggressive, balanced, and conservative allocations. Personally, I look them over and consider them suggestions at best. At the same time, they give you a general idea and are a helpful place to start. Understanding what's right for you is the real key. You may want a certain amount of dividend income. At the same time, too large of an allocation in dividend-paying utility stocks, for example, might send your portfolio's value down because their stock prices are heavily influenced by interest rates. The end result – your ideal sector allocation – should reflect your needs and personal risk tolerance. It may take some tinkering to get there. Getting from Real to Ideal Assuming you currently have a portfolio, break it down by sector to see how close you are to your ideal. Also, remember to color code each of your investments according to its risk level, a process I discussed at length in Getting the Most from Your Investment Newsletters. At that point, compare your current portfolio to your ideal. If you're pretty close, good for you! If not, don't panic. You may discover that your sector allocation is fine, but your depth in one or more sectors is off. For example, you may have too many or too few speculative investments. Once you identify where you're off, you can start to rebalance accordingly. Balancing your portfolio is a process, not an event. Once you've outlined the ideal structure for your portfolio, you'll need to find stocks or other investments to fill the gaps and make the necessary changes. But how in the heck are you supposed to do that? Recruiting and Selection In an earlier life, I taught a course called "Recruiting and Selection." "Recruiting" meant finding the maximum number of qualified candidates, and "selection" meant picking the best qualified candidate to suit your needs. For most folks, investment newsletters are their primary recruitment source. If you're shy in one particular sector, find a newsletter written by an expert in that field. Casey Extraordinary Technology is a great example. It has approximately 30 technology picks in its portfolio; they are broken down into "big tech," "growth tech," and "junior tech," which helps subscribers better understand the risk factors of each investment. I look at every pick in the various newsletters I subscribe to as a potential candidate for my portfolio, as though I were collecting résumés to fill an open position. Once you're done recruiting, it's time to move on to selection. That's where our five-point balancing test comes in handy. Five-Point Balancing Test When Vedran Vuk, our senior research analyst, begins a project, he will start with a particular investment goal in mind. After filtering through thousands of options (with the help of some very expensive and sophisticated computer programs), he'll narrow down the list considerably. The next step is to apply our five-point balancing test to further identify the best candidate or candidates for our subscribers. Is it a solid company or investment vehicle? The vast majority of our subscribers cannot afford a do-over. Investing in safe companies and investment vehicles is a must. This also applies to the picks in the speculative section of the Money Forever portfolio. Many of the speculative picks are high-risk, high-reward picks, but we still look for those with the highest probability of success. Sure, you may get lucky and invest in a speculative pick that returns your investment one hundredfold. We, however, are generally more conservative and will take a lower return in exchange for a higher probability of success. Does it provide good income? In today's low-yield environment for CDs and Treasuries, every investment should be mined for yield. While some may be very low or even zero, we may ultimately recommend them because we think the return will justify the investment down the road. At the end of today's newsletter we'll have more on this subject. Is there good opportunity for appreciation? While that might sound like a no-brainer, you still have to consider it. There are many good solid companies that pay dividends like clockwork, but their stock prices barely keep up with inflation. At times we've had to choose between two candidates for the Money Forever portfolio, where one paid a slightly smaller dividend but the company was growing and the other was a utility with a slightly higher dividend. Some utility stock prices are more interest-rate sensitive than a growing company might be. That's when you have to decide if a bit more yield is more important than potential stock appreciation. Does it protect against inflation? A friend recently asked me if I was one of those inflation-mongers. I told him that I know that increasing the money supply increases inflation, and I think our current inflation rate is much higher than the government reports. If you'd like to learn more about how the government skews inflation statistics, John Williams' Shadow Government Statisticsis an excellent resource.I lost faith in most of our elected officials long ago. Part of my motive for warning others about inflation is the desire to protect my family – and my extended family of subscribers – against the potential damage. While I cannot predict the probability of high inflation – or worse yet, hyperinflation – I do know that if it does occur, many seniors and savers will be clobbered, especially if all of their life savings is invested in US dollars. We have never had a fire in our home, but we buy fire insurance because a fire could wipe out a good bit of our net worth. Factoring in the possibility of an investment hedging against inflation is a type of portfolio insurance. I don't want my entire portfolio wiped out by inflation any more than I want a fire to burn down my house. That's why I try to protect myself where I can. Is it easily reversible? In addition to teaching "Recruiting and Selection," I also taught "Problem Solving" back when I was still a working man. One of the criteria in your decision analysis should always be: "Can it be easily and quickly reversed if I make a mistake or the unexpected occurs?" That's one reason we set stop losses on many of the highly traded stocks in the Money Forever portfolio.I just checked, and the best rate I can get for a five-year CD is 1.3%. If you own a CD outside of an IRA, the net yield is reduced by the amount of income tax you have to pay on the interest. Government-reported inflation is currently 2%, and the Federal Reserve is printing money like mad. Do you want to invest your money in a five-year vehicle that's difficult to reverse, where you are guaranteed to lose buying power, and could lose a whole lot more if inflation spikes? No; and neither do we. We use these five factors to cull the list of potential candidates and develop a short list of candidates for our subscribers. Then it's a matter of experience and judgment… and I'm happy to have our research team to lean on. "TCBY" Does Not Mean "The Country's Best Yield" As an aside, I am chuckling to myself as I type. One of the first stocks I ever bought was TCBY, because my wife and I liked their yogurt and their stores were clean. I got in late and never did make any money. Fortunately, my standards for evaluation have improved a great deal over the years. The Miller's Money Forever team is committed to helping our subscribers build and maintain their portfolios. Without a solid plan in place, there's a good chance you'll end up with a portfolio full of seemingly random stock picks that may or may not do well. Choosing stocks is only part of the battle; knowing how to fit them together into a sane portfolio is the key to finding the right level of risk for you. The Money Forever portfolio, updated monthly in our premium subscription, shows readers how to understand the process of selecting investments, balancing picks among various sectors, and structuring their portfolio accordingly. We want our subscribers to fully understand our thinking behind the recommendations we make. Fortunately for all, we take our subscriber feedback very seriously and strongly encourage it. If anything is ever unclear – or if there's a topic you want to know more about – let us know! It's important that our subscribers understand why we make the recommendations we do and how we got there. As a person who's now retired twice, I know how important it is to truly turn your nest egg into "money forever." Please note, this whole article has been about how to develop your own plan and move forward. Vedran and I have just released the update to our Money Every Month report, a plan that outlines how to set up income to your portfolio every month with high yield dividend stocks. You can find out more about it with a letter that explains it here.

Bleeding Billions Posted: 11 Jan 2013 03:06 PM PST January 11, 2013 Five years after Countrywide ceased to be, what have we learned? (According to Buffett today, "squat") "Pluripotent": The Economist adds a new word to its lexicon, reinforcing our most controversial forecast of 2013… More mainstream validation: The Wall Street Journal piles into the buy side of our New Trade of the Decade… The biggest lie coming from Iran (not what you think)… a government registry for gold holders (or the next-worst thing)… the stupidest thing we've seen on TV all year (oy, it's still early)… and more!   Pontius Pilate had nothing on Angelo Mozilo. Five years ago today, Bank of America became the nation's biggest mortgage lender. It bought Mozilo's firm, Countrywide, for $4 billion. That was on top of the $1.4 billion it poured into Countrywide the previous summer… and never recovered. "We're getting the sneaking suspicion," we wrote, "that Countrywide will bleed Bank of America for billions more before it returns to profitability." Sure enough, BAC has hemorrhaged $44 billion… so far… in "litigation expenses, payouts and reserves as a result of deals to acquire Countrywide and brokerage Merrill Lynch & Co. in 2008," reports Dow Jones Newswires. BAC forked over $11.6 billion of that total on Monday to make up for the no-good mortgages it inherited from Countrywide… and foisted on Fannie Mae.   But wait, the bloodletting still isn't over. Bank of America is fighting bond insurer MBIA in New York state court this week… hoping to steer clear of another $3 billion liability for defaulted Countrywide mortgage-backed securities. The case has dragged on for months. Countrywide's former CEO Angelo Mozilo gave a deposition last June, although it didn't become public until a few days ago. The biggest takeaway: The tanned and not-so-fit exec who oversaw a massive mortgage empire professed he didn't know the difference between a mortgage applicant's "verified" income… and his "stated" income. Seriously. Agent Orange pulls a Sgt. Schultz: "I know nnnnnnoothing!" GodMozilo is still, we presume, roaming the Earth and living large — having been paid $521.5 million between 2000-2008. He did fork over a $67.5 million settlement in 2010 to make SEC fraud charges go away… but Countrywide covered $20 million of that. Wasn't Congress supposed to fix all this? Wasn't TARP supposed to rescue the banks and then Dodd-Frank rein in their excesses so something like this would never, ever happen again? Fat chance: The five largest banks now have 44% of all U.S. bank deposits. Before the Panic of 2008, it was 37%. A decade ago? 28%.   But no worries: "The banks will not get this country in trouble, I guarantee it," Warren Buffett enthuses to Bloomberg News. "The capital ratios are huge, the excesses on the asset side have been largely cleared out." So says the owner of claims on two large black boxes: Goldman Sachs and the aforementioned Bank of America. "Our banking system is in the best shape in recent memory." Which makes us question what kind of memory Buffett has now at age 82. "Aren't you supposed to get less naive with age?" observes our macro strategist Dan Amoss. "Guaranteeing something you cannot predict with a reasonable amount of precision is foolish. Perhaps Buffett has inside information about the complete risk exposure of the Wall Street banks' derivatives — and has stress-tested the derivatives' behavior through every conceivable scenario. No? "Then the investing public shouldn't take this proclamation as anything other than a self-interested attempt at boosting confidence in a fragile, corrupt web of too big to fail banks."   "The big banks and brokerages, including BofA and Goldman, operate in opaque derivatives markets," Dan goes on. "As JPMorgan showed us in the 'London Whale' debacle, derivatives dealers create synthetic sources of interest income by writing credit default swap contracts for their clients looking to hedge credit risk. JPMorgan, by the way, used its glut of deposits as collateral for these risky activities. Taxpayers and the Fed still provide a cushy safety net for such activity (JPMorgan should not be part of the FDIC system if it chooses to gamble with synthetic derivatives)." Worse, banks are struggling with the same rock-bottom interest rates the rest of us are. "Even plain vanilla banks not involved in derivatives," says Dan, "will suffer as assets re-price at lower rates, and the cost of liabilities can hardly go any lower." Consider it another symptom of "financial repression" — the policy of keeping interest rates below the rate of inflation. But there's still profit to be eked out from the financials… if you know where to look. We'll point out one opportunity in today's 5 Min. Forecast PRO. Read on to the bottom if you're a subscriber; sign up for a free trial if you're not.   Stocks are taking a breather today, the S&P off fractionally from the latest post-2007 high it notched yesterday.    "Pluripotent," The Economist writes, "is a long word that means 'able to do many things.' It is the technical term applied to stem cells that can generate many different sorts of bodily tissue, rather than just one sort, which is all that lesser stem cells can manage. "Not only might they be used to make replacement tissues and organs for transplantation into those whose existing body parts no longer work properly (an approach known as regenerative medicine), they might also be used to produce pure cultures of cells for the early testing of drugs." As you know, our normal circuit is to catch the "fat tail" events before they hit the mainstream. The fruits of our labor lie quietly in articles such as the aforementioned Economist. Why? They prove that what we've been pounding the table on is slowly creeping into popular thought.   "It has happened," Patrick writes, not a moment too soon. "The contract has been signed, giving [Company A] control of nearly all the relevant patent library covering pluripotent embryonic and induced pluripotent stem cells. It will also accelerate the development of regenerative medicine significantly. I can't express how excited I am by this development." Yesterday and Wednesday, we touched on the developments of the near-monopoly Patrick's "undisputed leader in regenerative medicine" has on the field from the gates. "This puts the company in an extraordinary position," proclaims Patrick, "because the community of scientists in regenerative medicine has realized over the past few years that adult stem cells simply do not have the potential of pluripotent stem cells. "I know from talking to people who attend the major scientific conferences that thousands of scientists are currently working on revolutionary stem cell therapies. Most, if not all, will need to deal with [Company A] for the use of basic stem cell technologies as a result of this just-completed acquisition."   Meanwhile, the courts try to sort out horse manure while cars are taking over the streets… "The U.S. Supreme Court on Monday," Reuters reports, "refused to review a challenge to federal funding of human embryonic stem cell research brought by two researchers who said the U.S. National Institutes of Health rules on such studies violate federal law. "The decision brings an end to a lawsuit that had threatened to hamper stem cell research after a district court judge blocked the taxpayer funding in 2010. But some observers expected the Supreme Court would decline the take the case after an appeals court ruled that the funding could continue." While the courts are busy regulating technology past its prime, they're too distracted to notice the new kid on the block: The "God Switch."   Precious metals have given up a good chunk of yesterday's gains. Gold sits at $1,648, silver at $30.36. That's despite a greenback that continues to weaken: At last check, the dollar index had broken below 79.5.   "With the greenback crapping the bed yesterday," our technical guru Greg "Gunner" Guenthner writes, "we're seeing it inch even closer toward a breakdown that has been setting up for the better part of the past six months… "The U.S. dollar didn't even come close to its July highs during its most recent rally that appears to have ended last month, setting up the right shoulder in a bearish-looking head-and-shoulders pattern: "The neckline looks to be right at 79 on the weekly chart," Greg observes. "This is where you should watch for the dollar to break down. And if we do see a meaningful move below 79, the consequences for the dollar are pretty grim… "Typically, a downside price target for a head and shoulders is equal to the highest point of the pattern measured from the neckline (84 in this case). That gives us a downside target of 74 for the dollar index after a move below 79." One more thing: "Look," urges Greg, "at how this downside target lines up perfectly with support near the dollar's 2011 lows. This level would also mark a 100% retracement of the 2011-2012 rally. When you begin to see all of these technical factors line up, a long-term target of 74 appears even more likely for the U.S. dollar index."   "Today," our longtime friend Steve Hanke wrote this week for our first bit of international intrigue, "the Central Bank of Iran released its inflation statistics for 2012." Yesterday, we took a look  at China's "significantly inconsistent" growing import and export numbers. Today, we avert our gaze. And it falls on another cooked book. This in one of the hottest regions in the Middle East. In March 2011, Iran mysteriously stopped publishing data on its money supply. And during a seminar in October, politician Gholam Ali Haddad-Adel said this when asked about inflation rates: "According to a decision by the Supreme Statistics Council, figures published by it are 'classified information' and would be provided to government managers and decision-makers." "Despite all of the international notoriety surrounding Iran's outbreak of hyperinflation in October," Mr. Henke writes, "the Central Bank claims that Iran experienced an annual inflation rate of only 27.4%." Using the principle of purchasing power parity, he explains, "I estimate that Iran experienced an annual inflation rate of 110% during 2012." Quite the dissonance.   Three years and some days ago, we announced our next "Trade of the Decade." We wrote: "How long will it be before the market in Treasury debt crashes? How long will it be before hyperinflation… or a debt default… sends investors running for cover? We don't know… but it seems a likely bet that it will happen sometime in the next 10 years. "So on our sell side…we'll put U.S. Treasury debt. "How about the buy side? Ah… that is something we've struggled with. While there are many things that seem likely to go down, there aren't many that seem destined to go up. Let's see, what has been beaten down, dissed, battered and abused for the last 20 years or more? What is it that people don't want? What is it that they expect to go down… possibly forever? "Of course…Japanese stocks! "So there is our Trade of the Decade: Sell U.S. Treasury debt/Buy Japanese stocks."   "Japanese stocks ended higher for the ninth consecutive week," The Wall Street Journal writes, donning it the "longest Nikkei bull run since 1988. "Japan certainly looks tempting," WSJ writes, "with its benchmark Nikkei 225 stock index having gone from a level of more than 14 times the Dow Jones industrial average at its late-1989 peak to 8/10ths of the Dow's level today."   "'Ever heard of SB3341?' is Rick Santelli's opening salvo in today's rantless discussion of the concerns he has with Illinois' 'Precious Metal Purchasing Act,'" Zero Hedge's faceless Tyler Durden reports. "While passed in the Illinois Senate last year, and mothballed in the House since, Rick notes that 'the long and short of it is they want an audit trail to any precious metals, whether you're talking coins or bullion.' "Sounds reasonable, after all, only 'terrorists' buy guns and gold anyway." "As Liberty Blitzkrieg's Mike Krieger notes: 'So let me get this straight. First they want gun registration and now precious metal registration? I'm sure the government would only use such information in our best interests, because as we all know: Your Government Loves You.'"   Another metal is taking to the newsfeeds today… this time at Mr. Murdoch's expense. "Fox News doesn't understand seigniorage," HuffPo Politics' Jason Linkins tweets, "Or they do and are just willfully peddling bull****." Remember the trillion-dollar platinum coin gambit we've been writing about, weeks before it enraptured the likes of Paul Krugman? Evidently, Fox believed it would actually contain… a trillion dollars' worth of platinum. Kinda defeats the purpose, doesn't it… Just in case the passive readers missed the obvious blunder, they snuck in the counterintuitive banner "Lawmakers pushing plans to bypass Congress on debt limit" bit to throw them off track. Cheers, Dave Gonigam The 5 Min. Forecast P.S. Here we sit five years later and the problems and causes of the 2008 crash remain unsolved. We believe the mother of all financial bubbles lies in wait. But this time, on the back of the unsolved and papered-over problems of the 2008 crisis, we've piled up five years of "stimulus" and QE1, 2 & 3. Only making the next crisis much worse. When might the big, burly brother of '08 arrive? We don't know. No one does. But what if you were tipped off that the crisis was approaching? What if you were handed tools to determine that the tipping point of the next "event" was close? What would you do differently with your business? Your retirement planning? In the coming weeks, we're presenting an event like we've never had before. One that will show you how to know when the next crisis is getting close and what you need to do to protect your family and your way of life. Watch our virtual pages for details in the days ahead.

Guyana Goldfields Announces Updated Feasibility Study with $800 Million NPV and 38% IRR (After-Tax) Posted: 11 Jan 2013 02:32 PM PST TORONTO, Jan. 11, 2013 /CNW/ - Guyana Goldfields Inc. (TSX: GUY) (the "Company") is pleased to report the key findings from its NI 43-101 Technical Report, Updated Feasibility Study ("FS") for the 100% owned and fully permitted Aurora Gold Property (the "Project"). The FS was authored by Tetra Tech Inc. with contributions from SRK Consulting Inc., Bluhm Burton Engineering, Itasca International Inc., Environ International Corporation, and others. The FS will be available on SEDAR and the Company website within 45 days.  (Continued...)   The estimated initial capital required to achieve commercial production is US$205 million and reflects numerous positive changes, in particular, the phased mining and milling approach, reduced footprint of the mine site and facilities, and utilization of an optimized mobile equipment fleet. Based on the key findings of the FS, the Company will continue to move forward with mine construction and development of the Project. The improved mine plan produces 3.29 million ounces of gold over an initial 17 year mine life at an operating cash cost of US$527 per ounce (including royalty). Average annual gold production over the life of mine is 194,000 ounces, and averages 231,000 ounces per year over the first ten years. Gold production peaks in 2020 at 349,000 ounces. Commercial production is expected to commence in Q1 2015. Gold production will be staged, with initial open pit production of 5,000 tonnes per day from the Rory's Knoll deposit and expanding to 10,000 tonnes per day in early 2018 when underground mining commences. Highlights of the Study Financials @ 5% Discount Rate Gold Price (base case) US$1,300/oz Production Start Date Q1 2015 Mine Life (LOM) 17 years Average Mill Throughput (initial) 5,000 tpd Average Mill Throughput (extended) 10,000 tpd Mine Depth 1,037 metres Strip Ratio 4.7:1 (waste to ore) Average Gold Grade (mill head) 2.7g/t Gold Recovery (saprolite) 97% Gold Recovery (fresh rock) 94.4% Average Annual Production (LOM) 194,000 oz/yr Average Annual Production (first ten years) 231,000 oz/yr Peak Production (year 2020) 349,000 oz Total Gold Production (Recovered Gold) 3,291,000 oz Average Operating Cash Cost w/Royalty (LOM) US$527/oz Initial Capital Cost US$205 Million Pre-Tax NPV US$1.12 Billion After-Tax NPV US$800 Million IRR (After-tax) 38% Payback (After-tax) 3.4 years     "The updated feasibility study provides very attractive returns based on a sound execution plan.  The Project is fully permitted and has the support of the Guyanese government.  Our recent senior management hires on the operations side give us the foundation to expand our team as we continue with development and mine construction," said Patrick Sheridan, CEO of Guyana Goldfields. "I am extremely pleased with the mine plan and look forward, with the support of my team, to building a world-class mine," said Marcel DeGuire, President and COO of Guyana Goldfields. Project Economics The following table provides details of the Project's economics at variable gold price assumptions. Financials @ 5% Discount Rate Units Gold Price Per Ounce in US$ $1,000 $1,300 $1,4701 $1,650 $2,000 Average Operating Cash Cost (LOM) US$/oz 423 423 423 423 423 Average Operating Cash Cost w/Royalty (LOM) US$/oz 473 527 540 555 583 Pre-Tax NPV US$M 593 1,119 1,453 1,807 2,495 After-Tax NPV US$M 429 800 1,034 1,282 1,764 IRR (After-Tax) % 25 38 45 52 65 Payback (After-tax) Years 4.6 3.4 2.3 1.9 1.5 2015 EBITDA (1st year of production) US$M 69 99 119 140 180 2020 EBITDA (Peak year) US$M 214 300 354 412 524 Cumulative Cash Flow2 US$M 1,019 1,828 2,342 2,887 3,946 1 Three year trailing average. 2 Cumulative cash flow defined as revenue less operating costs less capital expenditures.   Capital Costs The following table identifies key capital expenditures before and after the commencement of commercial production in Q1 2015. Capital Expenditures (Millions of US$) Capital required up to Commercial Production Internally Funded from Cash Flow Initial Capital (2013 - 14) Expansion Capital (2015 - 17) Sustaining Capital (2018 - 2031) Mine Equipment Fleet $13 $11 $10 General Mobile Equipment $2 - - Ore Crushing and Handling $18 $2 - Process Facility $49 $19 $18 On-Site Infrastructure $25 $12 - Ancillary Buildings $8 $1 - Tailings & Reclamation $5 $3 $3 Off-Site Infrastructure $12 - - Indirect Costs $36 $7 - Owner's Cost $18 $1 - Underground Development - $82 $275 Contingency $19 $15 $41 Closure costs - - $9 Total Capital $205 $153 $356   Operating Costs Cash operating costs (@ $1,300 gold, includes royalty) US$527/oz Mining cost per tonne (open pit) US$2.39/tonne Mining cost per tonne to the Mill (((Strip ratio 4.7 avg.) + 1) X $2.39) US$13.68/tonne Mining cost per tonne (underground) US$19.28/tonne Processing cost per tonne US$13.78/tonne G&A cost per tonne US$3.83/tonne   Mining and Production The improved mine plan contains 39.5 million tonnes of ore containing 3.48 million ounces of gold at an average grade of 2.74 g/t over an initial 17 year mine life.  Total gold recovered is expected to be 3.29 million ounces.  Average annual gold production over the life of mine is 194,000 ounces, averaging 231,000 ounces over the first ten years, with production peaking at 349,000 ounces in 2020. Commercial production is scheduled to start in Q1 2015.  Mining operations will commence with open pit production supplying ore to the mill at a rate of 1.75 million tonnes per year or 5,000 tonnes per day, starting with Rory's Knoll in the first three years where the strip ratio is low. After nine years of operation, open pit mining will be completed at the Rory's Knoll, Aleck Hill, Walcott Hill and Mad Kiss zones. Underground mining commences in early 2018 at the Rory's Knoll zone as open pit mining operations in this zone are complete.  Rory's Knoll underground will be mined utilizing the open benching and sublevel retreat mining methods via a decline access with truck haulage from a depth of -137 metres (70mbsl) down to -1,037 metres (970mbsl).  The results from a detailed coupled hydrogeological and geotechnical model support the open benching and sublevel retreat mining method approach.  The study results show underground mining creates minimal surface subsidence and indicate water inflows are manageable.  Concurrent with the commencement of underground mining, the mill capacity will increase to 10,000 tonnes per day with an average rate of 3.5 million tonnes per year over five years.  Thereafter, the underground mine will operate at 5,300 tonnes per day for the next nine years. Annual Production Years O/P Ore Mined (kt) O/P Grade (g/t) O/P Contained gold (koz) O/P Waste (kt) O/P Strip Ratio U/G Ore Mined (kt) U/G Grade (g/t) U/G Contained Gold (koz) Mill Head Grade (g/t) Mill Production (koz) 1 (2014) 28 1.06 - 91 2.61 - - - 0.00 0 2 (2015) 1,752 2.33 131 3,945 2.21 - - - 2.33 125 3 (2016) 1,755 2.91 164 4,204 2.35 - - - 2.91 155 4 (2017) 1,996 2.63 148 2,151 1.04 81 2.09 5 2.61 145 5 (2018) 1,804 1.59 90 4,542 2.48 1,658 2.66 142 2.11 221 6 (2019) 1,820 1.86 79 10,249 5.59 2,175 2.75 192 2.41 258 7 (2020) 1,338 3.24 161 13,219 9.82 1,969 3.28 208 3.26 349 8 (2021) 1,365 2.17 104 13,028 9.49 2,016 3.40 220 2.88 306 9 (2022) 1,177 2.93 158 9,209 7.76 1,818 3.18 186 3.06 326 10 (2023) 637 4.19 86 3,776 5.81 1,878 3.04 184 3.33 255 11 (2024) - - - - - 1,776 3.16 181 3.16 170 12 (2025) - - - - - 1,858 2.99 179 2.99 169 13 (2026) - - - - - 1,775 3.18 181 3.18 171 14 (2027) - - - - - 1,851 3.14 187 3.14 176 15 (2028) - - - - - 2,012 2.56 165 2.56 156 16 (2029) - - - - - 2,267 1.83 133 1.83 126 17 (2030) - - - - - 2,113 2.14 145 2.14 137 18 (2031) - - - - - 603 2.50 49 2.50 46 Total/Avg 13,674 2.55 1,120 64,414 4.66 25,851 2.84 2,357 2.74 3,291   Aurora Gold Project Mineral Reserves at US$1,300/oz Gold January 2013 Reserve Category Quantity (kt) Grade (g/t) Contained Gold (koz) Proven Open pit saprolite    168 2.64 14 Open pit fresh ore 2,207 3.07 218 Total Proven 2,375 3.04 232 Probable Open pit saprolite 4,955 1.70   270 O/P fresh ore 6,343 3.03   618 Underground 25,851 2.84 2,357 Total Probable 37,149 Fed official warns about slipping into currency wars Posted: 11 Jan 2013 02:31 PM PST 11-Jan (Reuters) — A top U.S. Federal Reserve official waded into the sticky debate over global currency wars on Friday, warning that such beggar-thy-neighbor monetary policies would only hurt world trade and the economies that were involved. Philadelphia Federal Reserve Bank President Charles Plosser said central banks in many countries are adopting policies, often under pressure from governments, to control their currencies, calling it an unhealthy phenomenon. "We do not want to get ourselves in a world where you have currency wars. Beggar-thy-neighbor policies … would not be healthy," Plosser told a bankers conference here. [source] PG View: Too late Charles, it's already happening. What I really hear you saying is Fed actions to debase the dollar are okay, but we don't like it when other central banks do it…then it's "beggar-thy-neighbor." Gold Seeker Weekly Wrap-Up: Gold and Silver End Slightly Higher on the Week Posted: 11 Jan 2013 02:28 PM PST Gold climbed up to $1676.71 at about 8:30AM EST before it fell back to $1653.52 by late morning in New York, but it then rallied back higher in afternoon trade and ended with a loss of just 0.58%. Silver slipped to as low as $30.174 before it also rebounded, but it still ended with a loss of 0.97%. Gold Daily and Silver Weekly Charts Posted: 11 Jan 2013 02:27 PM PST This posting includes an audio/video/photo media file: Download Now Egon von Greyerz: Gold's Prospects & Why Gold Is Not In A Bubble Posted: 11 Jan 2013 02:05 PM PST In a recent interview conducted by Fabrice Drouin Ristori from GoldBroker.com, well-known Egon von Greyerz provides his view on the necessity of owning gold and gold's prospects. After a lengthy consolidtion of 18 months, the gold price still stands at $1,660 | €1,250 and the silver price at $22 | €30. Enough reason for the bears to argue that the top in precious metals is in and that the economy will recover. On the other hand, gold bulls focus on the monetary and economic fundamentals which leave them convinced that we are nowhere near a top. Egon von Greyerz (EvG), being part of the latter group, explains in this interview which fundamentals lead him to conclude that gold has a long way to go and the bubble in gold is still far away. Why it is important to own real physical gold and silver and not paper gold and certificates ? EvG: The paper market, the gold paper market, is a hundred times bigger than the physical market. So there is so much paper outstanding in gold, and in silver, and governments are said to have –world governments – up to around 30.000 tons of gold. Most probably don't have it, they probably lent it to bullion banks and trading banks, and therefore there is probably not the gold around the banks are saying, the central banks are saying they have, and one day when investors ask for delivery against the paper gold that is outstanding there will not be enough physical gold. Therefore it is extremely important to hold physical gold because the paper gold will be totally worthless and banks will not be able to meet their commitments. Why is it important to own your physical gold and silver outside the banking system? EvG: Well, the world is in a mess, as I said, it was already in a mess in 2002 and it is a lot worse now. We have never ever in history had a situation when virtually every single major government is bankrupt, and when the whole banking system is also bankrupt, the banking system is only standing because banks are allowed to value their toxic debt at full value, or rather at maturity value. If they valued it at market value, no bank would be standing today. So you have a situation where governments are bust, where the banks are bust, or potentially bust, and therefore we think that gold must be held outside the banking system, in your own possession where you have direct access to your physical bars. And because a lot of the gold that is stored in banks – and we have seen that – is not actually there. How do you see the situation evolving in the future? EvG: There is no solution to this problem. The problem is too big, as I said, governments are bankrupt, debts are increasing now at an exponential rate, and there is no chance whatsoever to reduce the debts. Any government even trying austerity programs is thrown out immediately, but even if they did try austerity measures, it is too late now. So the next stage that I see, and I think that will start very soon, it could already be in 2013, is that the money printing will accelerate, deficits will accelerate, and therefore money printing will accelerate, and we will be on the way to a hyperinflationary depression. Now, it might take a few years, but I think it could go faster than we expect because the system is so fragile, so money printing, as I said, will destroy the currencies as all currencies are going down, they have for the last hundred years, they are down 97 to 99 percent against gold in the last hundred years, they are down 80 percent against gold in the last 12 years, so there is not far to go to be down 100 percent and that will happen, and so will the money printing destroy the value of paper money, and that is what will create hyperinflation. Can we say that gold is in a bubble? EvG: Gold is not in a bubble, all gold is doing is reflecting the destruction of paper money, you just have to turn the curve upside down, if you look at, rather than seeing gold going up you turn the curve upside down and it is the currencies going down. It is the Dollar going down, it is the Euro going down and it is the Pound going down. And that will continue. Only one percent of world financial assets are in gold today, so nobody owns gold actually, and gold has still gone up over the last 12 years, it has gone up five, six times, depending on the currency. And as I said, still only one percent of investors actually hold gold. So, that will change in the next few years, and which will mean the demand for gold will increase, there isn't enough supply, so the additional supply can only be met by higher prices. And this is what is going to happen. Interested in owning physical gold and silver, outside the banking system? GoldBroker.com is a service specifically designed to eliminate counterparty risk from the financial world and a potential collapse in the economy. COT Gold, Silver and US Dollar Index Report - January 11, 2013 Posted: 11 Jan 2013 01:43 PM PST COT Gold, Silver and US Dollar Index Report - January 11, 2013 Gold and Silver Disaggregated COT Report (DCOT) for January 11 Posted: 11 Jan 2013 01:42 PM PST HOUSTON -- This week's Commodity Futures Trading Commission (CFTC) disaggregated commitments of traders (DCOT) report was released at 15:30 ET Friday. Our recap of the changes in weekly positioning by the disaggregated trader classes, as compiled by the CFTC, is just below. (DCOT Table for January 11, 2013, for data as of the close on Tuesday, January 8.   Source CFTC for COT data, Cash Market for gold and silver.)  In the DCOT table above a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter. All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report. Gold price to explode soon, Hinde Capital's Davies tells King World News Posted: 11 Jan 2013 01:38 PM PST 3:30p ET Friday, January 11, 2013 Dear Friend of GATA and Gold: Britsh gold fund manager Ben Davies, CEO of Hinde Capital, today sticks his neck way out in an interview with King World News, explaining why he thinks an explosion in gold is imminent as central bankers undertake to engineer inflation. An excerpt from Davies' interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/11_Da... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Opinion Around the World Is Changing in Favor of Gold -- Find Out Why 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 Join GATA here: Vancouver Resource Investment Conference Sunday-Monday, January 20 and 21, 2013 Vancouver Convention Centre West Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 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/. Gold Futures Drop as China’s Inflation Jumps to Seven-Month High Posted: 11 Jan 2013 01:35 PM PST 11-Jan (Bloomberg) — Gold fell for the second time in three days as inflation in China topped economist estimates, increasing concern that officials may curb stimulus. China's inflation accelerated to a seven-month high in December, the National Bureau of Statistics said today. Bullion climbed 7 percent last year, a 12th straight gain, as central banks in Europe, the U.S. and China increased stimulus measures to boost economies. The Asian country is the world's biggest bullion buyer after India. "The market is reacting to China's inflation numbers," Phil Streible, a senior commodity broker at R.J. O'Brien & Associates, said in a telephone interview from Chicago. "Less liquidity in the system means a slowdown in purchases." [source] PG View: I find Streible's analysis interesting; for while it is true that inflation saps disposable income, it simultaneously incents savers to shelter against the falling purchasing power of the renmimbi in hard assets like gold. Current Weakness In Gold May Be Buying Opportunity Posted: 11 Jan 2013 01:05 PM PST Despite current weakness in gold around the $1650 area we expect a turnaround in gold with a new leg up to $1800 area and eventual breakout at $2000 in 2013.  Despite noises heard in the Fed minutes of a purported exit from quantitative easing, Central Banks around the world have flooded the markets with fiat currency. Around the world gold has outstripped every competitive currency for the past ten years, yet the mainstream fail to understand the importance of owning gold and the gold miners.  Recently we have been in a sideways basing period in gold where the price has bounced between $1800 and $1550.  Gold may now be forming the base for a major breakout at $1800. For the past ten years gold has been the place to be yet the masses have still not yet participated.  The recent consolidation like 2008 may prove to be a great discount opportunity. Keep a close eye on this fully permitted miner operating in mining friendly Spain. This country is desperate for new mines as their unemployment rate is extremely high.  This past year has been significant in the development of this nascent junior miner which is permitted and in the feasibility stage. The first half of 2013 could be even greater as they plan to announce an updated resource estimate and a bankable feasibility study on its Corcoesto Gold Project.  Edgewater Exploration (EDW.V or EDWZF) just announced approval of its Environmental Impact Statement (EIS) by the Government in Spain. There are very few advanced and permitted junior miners who are so close to producing over 100,000 ounces of gold annually.  The first half of 2013 could be significant for Edgewater as they are preparing an updated resource estimate and a bankable feasibility study. This mine has significant support from the local region that is dealing with high unemployment as this project could have major economic benefits.  Investors may realize the undervaluation of this permitted project which is already at the advanced bankable feasibility stage.  The bankable feasibility study should be published in the first half of 2013. The company's long term trend appears to be turning higher as technically the chart is showing a bullish golden crossover of the 50 and 200 day moving averages.  Each time it has pulled back to support at the 50 day moving average, strong buying came in showing increased interest.  Keep a close eye on this chart which may be beginning a new major uptrend. Check out our recent discussion with George Salamis, CEO of Edgewater (EDW.V) below. Disclosure: Author and Interviewer Owns Shares Of Edgewater and Edgewater is a sponsor of http://goldstocktrades.com __________________________________________________________ Only a fraction of my research is published on my free website. Get timely analysis on precious metals, uranium and rare earths by signing up for my premium service by clicking here…     Try it out for a free 30 day trial no questions asked by clicking here… We will be speaking at the Vancouver Resource Investment Conference on January 21st, 2013 at 1PM.  Register for the conference for free by clicking here… and watch the video below.  This January conference is one of the biggest resource conferences of the year. Accredited Investors click here… Lessons not learned from World War II Posted: 11 Jan 2013 01:05 PM PST Policymakers today draw what they consider obvious conclusions from the Good War.   The New Deal had been chipping away at unemployment and the economy was recovering, but then Japan's surprise attack provided the political means for allowing the government to shift gears.  Over the next four years the American economy got a heavy dose of Keynesianism, and the results prove the Keynesian case: GDP soared and unemployment all but disappeared.  Only in 1946 did official GDP take a beating, though surprisingly, given that the government fired roughly 20% of the labor force, the unemployment rate rose to only 3.8%.  (Five percent is considered normal for a healthy economy.) Since Keynesianism has been validated under fire in the real world, its advocates tell us, it is altogether appropriate that government spend and inflate the economy back to prosperity today or any other time. This is why Obama in 2009 came charging into office touting a big spending plan.  Mark Zandi, one of the architects of Obama's stimulus package (officially, the American Recovery and Reinvestment Plan of 2009), projected in November, 2008 that "even with the [$300 billion] stimulus [in 2009], some 1.8 million jobs will be lost, with unemployment peaking near 8%."  Without the stimulus, God forbid, unemployment would reach 8.94% by October, 2009. What actually happened?  By October, 2009, with a $250 billion stimulus (according to the CBO), unemployment reached 10.1%.  How did it happen that the cure made matters worse by more than a full point?  Always spin-ready, the administration's post-facto claim was they had misjudged the degree to which Bush had ruined the economy.  Without the stimulus, you see, unemployment would've risen even further.  They can say this with a straight face because they know big deficits and inflation did the trick in World War II.  They know because they've seen the data.  Even conservatives readily agree - "World War II got us out of the Depression." Conscription to the rescue During the 1930s and up until Pearl Harbor, there were many deteriorating measures of economic health, but none worse than unemployment.  All the controls and regulations, all the taxes and inflation, all the fireside chats and damnations of the rich, all the privileges to the unions, all the deficits, were not restoring employment to anything close to pre-Crash levels. Then the Japanese finally struck, giving Roosevelt the back door he had been looking for.  Finally, the government was in a position to provide millions of men with a paying job - conscript them and send them overseas to fight a war.  Government's pitch was we had tried minding our own business but the forces of evil spread to our shores - not our shores, exactly, but the shores of an island some 2,500 miles from the mainland where the U.S. Navy had been hanging out since the 19th century. There was a sudden rush to kill a lot of people, and the government would pay men to do the killing.  Low pay, of course, but nonetheless something.  Since government was doing the "hiring," the 10 million or so men who were drafted could either take the job or stay home in the comfort of prison.  In a display of patriotic fervor, most of them took the job.  The draftees had no way of knowing their beloved FDR had set them up by provoking an attack that killed over 2,400 people, including civilians. Was the economy booming as a result of the war?  No.  People stateside were working, but they were building things for the military rather than private citizens.  People were getting paychecks but price ceilings, rationing, and other government controls made life anything but prosperous. Let's ask that question again: Was the economy booming?  Absolutely.  The GDP figures tell the story.  During the war years, GDP exploded.  The government component of GDP went wild while private investment shrank, but so what?  To most analysts, GDP is GDP. Ignoring the market's signals From the beginning of the depression in 1930, the free market had been willing to put people to work, but government wouldn't let it.  Allowing wages to fall along with other prices was deemed cruel and unfair.  Almost 12 years later wages did fall for the men sent overseas, over a million of whom came back dead or wounded.    Americans had a choice - the market's way or the government's way.  Unfortunately, they let government decide for them. Politicians know that workers don't take kindly to seeing their nominal income decrease, even if other prices are falling, and are likely to register their displeasure at the polls.  But there has to be more to it than political expediency, so officials announce that if wages fall, workers can't buy as much and the economy goes downhill.   So they keep wages up to protect the workers, without whose spending they put themselves out of a job. Keeping wages from falling did protect them - the ones who managed to hold onto their jobs.  Given the falling prices prior to Roosevelt's gold heist, people with jobs found the dollars in their paychecks were buying more.  Predictably, high wages led to high unemployment, but Keynes considered this evidence of market failure, that Say's Law no longer worked - there was a glut of labor but no one was hiring.  As Rothbard explains, however, There is never any genuine unsold surplus, or "glut," whether specific or general over the whole economy, if prices are free to fall to clear the market and eliminate the surplus. Keynes's recommended policy - deficit spending and inflation - was far more politically palatable than leaving wage rates to the market.  With above-market wages, especially after passage of the Wagner Act in 1935, not only were people out of work, but those with jobs frequently worked reduced work weeks and lived in constant fear of getting fired.  By contrast, if you were stateside during the war you had no trouble at all finding a military contractor willing to hire you. Government deficits and inflation didn't cure unemployment in the 1930s, and they didn't cure it during the war, either.   When did prosperity return?  After Roosevelt died and the war ended, a new attitude prevailed in Washington that gave investors enough confidence to begin investing again.  Most of the wartime controls were removed, and consequently private investment soared even though official GDP plummeted. As Robert Higgs tells us, A minimum estimate of [economic] growth in 1946 was 30%.  There was never a year like that in our history.  Ever.  Not even half that good.  Ever.  Thirty percent in one year.  This was real growth.  What looks like the second-worse year in history from the standard GDP data was, in reality, the best year ever in year to year performance of all time.  This was the real peace dividend. Conclusion Keynesianism instills the conviction that some combination of deficits and inflation will set things right again, that when one QE or stimulus package doesn't do the job, another will, then another, then another.  We need to remember that it wasn't more government that restored prosperity in 1946, but rather the release of productive energy made possible by significantly less government. Insights into Cultural Shifts from a Visit to a Hardware Store Posted: 11 Jan 2013 12:57 PM PST "So this is what it looks like when a society is starting to collapse," the man standing behind the counter at the hardware store said matter-of-factly. The remark had been directed at no one in particular, but generally at anyone standing nearby. As I was among that audience, I looked at him inquisitively, eliciting in return a look indicating that his observation should be intuitively obvious to even the casual observer. "We should not be this busy," he continued. "People are normally out Christmas shopping for the latest tech gadgets for their kids, but instead they are spending their hard-earned money here." I had to agree with his observation, because the place was packed, and it was obvious that his inventory was disappearing from the glass showcases and from the wall behind the counter quicker than the store could replenish it. "We have manufacturers that aren't taking any more orders. We even have a manufacturer that has shut down production and furloughed the entire workforce. I guess when we run out, we run out." He excused himself and joined his staff to help restock the shelves as well as operate the register. As I surveyed the store, I noticed no discernible demographic pattern among the customers. They included elderly ladies, young couples, construction workers, police officers and hipster techies as well as people from virtually every ethnic and socio-economic background. They would have made the perfect tapestry for a politician's campaign stop. "So this is what it looks like when a society starts to collapse," I reflected on what the man behind the counter had said. As melodramatic as his words were, they would be understood by any student of human history. But it raised questions in my mind: "Does social decline precede economic decline? Does the decay of social graces, the protocols that define civilized interaction, the written and unwritten laws of the land, precipitate the ruin of a nation, or is it the other way around? Is it a vicious cycle where one feeds the other, and if so, can the destructive feedback loop be reversed?" Based on what I observed in the store, I'm inclined to believe that people are concerned about social collapse, in whatever form that may take. Publications such as The Casey Report implore its readership to hedge against inflation (as well as deflation) by dividing their portfolio into balanced thirds spread across asset classes and political jurisdictions, but what does the erosion of a fiat currency really mean? I would suggest that very much depends on where you live. In more resilient communities, in which economic actors all create value, the impact may in fact be little more than a moderate nuisance. Various South American countries have shown that, despite their governments' penchant for destroying the nation's currency at predictable intervals, life can go on. As a result, while people in those countries know that things can periodically get tougher, they also have become resolved to soldiering through the hardships, knowing that the latest challenging period will pass. By contrast, with their advanced – and leveraged – economies and large urban centers that are highly dependent on government subsidies as well as consumer supply chains that are extended, the social impact of a fiat currency collapse in the US and Europe could be far more profound. Such an event would likely be even further exacerbated, and significantly so, by the absence of such experiences to most Western nations in recent memory. In the United States, a small but emerging subculture known as "preppers" focus their resources and attention on developing personal resiliency in response to the perceived deterioration of both financial and social infrastructure. While the theories and actions of "preppers" range from the sublime to the ridiculous, it is undeniable that the financial, social and logistical fabric of the United States has been stretched very thin. This tenuous position in turn manifests itself as a palpable level of stress readily observed in many people. There is no longer a sense that "everything will be OK." In conversations with people, I get the sense that people feel very uncertain about the future, and not in a hopeful way. They see their prospects as having limited upside with virtually unlimited downward risk. There is a prevailing belief that this is as good as it is going to be for a long time. It is this subsurface tension that was palpable among shoppers in the hardware store. You see, the hardware store I was in was a gun store. What on earth would compel me to visit a gun store so close to the horrible tragedy in Connecticut? As some readers know, firearms played a significant role in my former professional life in the military. The truth is I wanted to get a sense for what's actually going on in the gun industry, as opposed to the manufactured "reality" presented by the mainstream media. Having returned from serving a customer, the owner of the gun store continued his observations. "It's different this time. The last time, with the Clinton gun ban, people knew that it would be temporary. The economy was good and people didn't really care. This time… well, it's different." He then elaborated on the reason that one manufacturer had shut down its fabrication facility: Apparently it was unwilling to be stuck with inventory that at a stroke of a pen will become contraband. In reply to my follow-on question as to what he meant when he said society was starting to collapse, he answered, "People talk about debt, a recession that won't go away and how we are on track to bankrupting the country. This is all true. But they are all part of a bigger problem." "What problem is that?" I asked. "Respect," he said, with just a hint of bitterness. "Treating people with disrespect has become a way of doing business, a way of life. When a culture ceases to demand respect for life or livelihood, anything and everything is fair game." At this point another gentleman joined the conversation, adding, "You know, these tragedies are a politician's best friend. It allows them to take the public's eye off issues like financial woes and cutbacks in benefits." In my view, the spectacle in the gun store, which apparently has played out nationwide, is a clear indication that people are doing the equivalent of "shorting" social stability. This is clearly concerning, because the extent to which we can plan our future is directly related to the faith we can reasonably place in social stability. It may be presumptive, but in my view, people who rush out to purchase firearms in anticipation of gun-control measures are not part of the "gun culture." The "gun culture" already has its arsenal stocked up. The "last-minute shoppers" are people who believe that one day they may need a gun and may not be able to buy one. These are the same people who clean out the grocery store before the first big winter storm hits. As for the logistics of controlling access to firearms, I suspect that in short order, it will prove to be an academic point anyway, perhaps even more futile than the War on Drugs. The relevant agents include: crypto currency, open-source hardware, 3D printing, and Dark Net exchanges like The Silk Road. On the topic of technical limitations to keeping guns out of the hands of the citizenry, let me direct your attention to the following article on a gunsmith who "printed" a gun. Is it a good thing or a bad thing? I don't know, but I do know that it is inevitable. The first group that will make a go at it will likely be people who are legally prohibited from owning firearms, yet their livelihood depends on access to weapons; in other words, members of criminal organizations. Shortly behind them will be technically gifted people who, one can only hope, are imbued with decency and respect for human life. Many people move through cultural shifts like this without recognizing them until well after the fact. But those who see an inchoate trend can capitalize on it effectively, in all manner of ways. Legendary speculator and contrarian investor Doug Casey has long had a keen eye for such things, and he focuses it as much on culture worldwide as he does investment possibilities. That, along with his highly principled libertarian perspective, often makes for thought-provoking presentations by him. His long track record of pulling no punches has also contributed to Doug regularly enjoying standing-room-only audiences wherever he speaks. But you don't need to go anywhere to get wide-ranging, in-depth access to Doug Casey's thoughts and ideas. His recently published book, Totally Incorrect, touches upon many topics and gives one a solid base for understanding this iconoclast. If you've ever wondered what makes a self-made millionaire successful, this book will provide you with a stimulating, entertaining answer. Learn more and order your copy of Totally Incorrect today. Mike Kosares: John Law reincarnated, and Ernest Hemingway on inflation Posted: 11 Jan 2013 12:52 PM PST 2:43p ET Friday, January 11, 2013 Dear Friend of GATA and Gold: Mike Kosares of Centennial Precious Metals in Denver today cites the novelist Ernest Hemingway's comments about inflation, war, and icebergs to evoke the likely outcome of worldwide central bank policy amounting to the reincarnation of the infamous French finance minister of the early 1700s, John Law. Kosares' commentary is headlined "The Reincarnation(s) of John Law; Ernest Hemingway on Inflation" and it's posted at Centennial's Internet site, USAGold.com, here: http://www.usagold.com/cpmforum/2013/01/11/the-reincarnation-of-john-law... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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Join GATA here: Vancouver Resource Investment Conference Sunday-Monday, January 20 and 21, 2013 Vancouver Convention Centre West Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Opinion Around the World Is Changing in Favor of Gold -- Find Out Why 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... 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To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard Six Provocative Predictions for 2013… and Beyond, Part II Posted: 11 Jan 2013 12:46 PM PST In yesterday's Daily Reckoning, we shared the first three of our "Six Provocative Predictions." Today, we present our final three predictions…including our most provocative prediction of all! [If you missed yesterday's issue, you can check it out here: 6 Provocative Predictions for 2013...and Beyond] 1. China sends gold on the next leg to $5,000. We stood up and took notice on April 24, 2009, when out of nowhere, the Chinese government announced it had grown its gold reserves to 1,054 metric tons. The previous announcement came in 2003, when the number was only 600 metric tons. Assuming another six-year lag, China's next announcement is due in 2015. Coincidentally, that's the year the former governor of China's central bank predicts his country will achieve full convertibility between the renminbi and other currencies. They can't make that happen without a much larger gold stash. But long before that happens, we expect China to propel the gold price — probably as soon as this coming March. That's the time of year when metals-sector analysts and researchers issue many of their annual reviews and outlooks. We have every reason to believe they'll uncover evidence of massive under-the-radar gold accumulation by China. Some of that evidence already emerges in China's gold imports via Hong Kong — which we note almost every month in our daily 5 Min. Forecast. They've been off the charts during 2011 and 2012. "The Chinese buy gold hand over fist!" sums up our precious metals and energy expert Byron King. But that's not all they're doing… Domestic gold mining has propelled China to the No. 1 spot among world producers — bigger than longtime leader South Africa. China's gold miners — most of them state-owned — are on a global gold mine-buying spree, as well. It is illegal to export gold from China. What's mined in China stays in China… which means there's ample gold for citizens to purchase, either directly or through ETFs (and the government encourages both). "The Chinese government," said the Chinese central bank's research chief a year ago, "should not only be cautious of the imported risk caused by rising global inflation, but also further optimize its foreign exchange portfolio and purchase gold assets when the gold price shows a favorable fluctuation." That's a mouthful… but the last part of the sentence gets the point across. 2. The world's tiniest and most powerful storage medium. In 2012, scientists at Harvard's Wyss Institute managed to store 700 terabytes of data in a single gram of DNA. For perspective, that's equal to 700,000 printed copies of the Encyclopedia Britannica stuffed into a droplet that would fit on your pinky. DNA, as it happens, is an outstanding storage medium. It's very stable: "Where other leading-edge storage mediums need to be kept in subzero vacuums," according to Extreme Tech, "DNA can survive for hundreds of thousands of years in a box in your garage." Reading the data from DNA is as simple as sequencing DNA, just like sequencing the human genome. In the 1990s, when our friend Juan Enriquez was backing the Human Genome Project, that process took years. Nowadays, it takes hours. "Imagine that you had really cheap videorecorders everywhere," says geneticist George Church, who headed up the research. "Just paint walls with videorecorders. And for the most part, they just record and no one ever goes to them. But if something really good or really bad happens, you want to go and scrape the wall and see what you got. So something that's molecular is so much more energy-efficient and compact that you can consider applications that were impossible before." The most immediate application? Anti-counterfeiting. Think bar codes or RFID — taken to the nth degree. Microchips stamped with DNA can overcome the epidemic of counterfeit chips. No big surprise, the Pentagon is in line to become the biggest user of the technology, but our tech maven Patrick Cox points out, "It is also being adopted by banks, Martin Guitar and high-end goods producers like top wineries and fashion shops. The potential applications are limitless, says Patrick, "Drugs, clothing, textiles, foods, metals and even air bags with potentially lethal flaws are counterfeited or stolen and resold with no way to track thefts. "DNA-marking is still largely in the preview and testing phase," he concludes. "But this breakthrough technology has tremendous appeal for a broad range of industries." 3. And the most provocative prediction of all… we'll call it "life after the dollar." That's the name we're giving it, but credit for the idea goes to a Brit named Dominic Frisby — one of the most provocative young thinkers we've had the privilege of meeting this year. "The monopoly that governments and banks hold on money gives them too much power," he wrote this fall. "Whether through incompetence or worse, that power will inevitably be abused. The best way to stop the abuse of power is to spread it as widely and thinly as possible… "In my Brave New World, there is no monopoly on money. We restore choice. We restore transparency. We use whatever money we like. We have independent money. "What do you fancy using, sir? Gold, silver, Bitcoins, paper issued by a farmer against stocks of grain in his barn, Brixton pounds, Dominic Frisby's currency (the 'Dominus' I think I'll call it, since you ask), pounds, dollars? You name it, you can use it. "Payment with these alternative currencies is as easy as clicking 'pay' on an app on your phone or on a website." A pipe dream? Hardly. For one thing, the notion of "competing currencies" is not new. Nobel Prize-winning economist Friedrich Hayek explored it in depth during his long and productive life. What is new, says Mr. Frisby, is that we're on the edge of competing currencies becoming everyday reality — no matter what the Federal Reserve, Goldman Sachs and JPMorgan Chase might wish. "Multiple currencies can work on a practical, day-to-day basis," he says. "I've just come back from Istanbul. Traders in the Grand Bazaar will accept dollars, euros, Turkish lira, pounds, Russian rubles — anything, as long as it means trade for them." As you might imagine, getting from here to there is going to be a messy, and at times ugly, process — one that encompasses all of the other predictions we've shared above. But on the other side of that process lies a future of prosperity few people dare dream of. Not only is it "life after the dollar," it's Life After the State — the title of a book Mr. Frisby has in the works, which we hope to publish through our Laissez Faire Books in 2013. Stay tuned! Regards, Addison Wiggin for The Daily Reckoning Six Provocative Predictions for 2013… and Beyond, Part II appeared in the Daily Reckoning. Subscribe to The Daily Reckoning by visiting signup for an Agora Financial newsletter. You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. Email delivery powered by Google Google Inc., 20 West Kinzie, Chicago IL USA 60610 Subscribe to: Post Comments (Atom) More charts Gold trendline Silver trendline Gold vs USD Gold vs. CPI Gold vs CPI 200 years Silver vs CPI 200 years USD purchasing power long term Gold/Silver vs 50 bubbles Dow to Gold Ratio US monetary base vs Gold US debt Gold quotes "gold would have to hit $7,150 to be the equivalent of the 1980 record" John Williams   "...how in God's name is the US going to pay off trillions in debt? By raising taxes? Impossible. They could renege on the debt like Argentina - unthinkable. But there is a way - they'll try to minimize the importance of the debt with a cheaper devalued dollar.  That's the time-honored US way, but loyal Americans don't believe it. If they did, gold would be selling at $4000 an ounce." 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