Gold World News Flash |
- Gold Mine
- Watch This One: Silver Update 1/26/13 Silver Reserves
- Prisoner of the Bureaucracy
- Iceland's President – Let banks go bankrupt, we did!
- Warning for American silver investors RE: Monster boxes as poker chips
- China, World’s Biggest Producer & Consumer of Gold, Will Introduce Gold ETFs
- World Economy & Market Forecast: More Sunshine & Less Stormy Weather Ahead
- GGR COT Subscriber Update Posted
- GATA closing in on secrets behind gold cartel? Interview with GATA's Chris Powell
- The ‘Why" Of Gold At And Above $3500
- James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices
- What To Expect After This Week’s Gold & Silver Smash
- BUY GOLD NOW As the WORLDWIDE CURRENCY WAR is STARTING Japan, China, US & Europe on DECLINE – YouTube
- World financial leaders close summit in Davos – YouTube
- Jim Rogers : The Euro may Collapse after the German election in 2013, Jim Rogers Blog
- Chris Martenson interviews James Turk about the central bank war against gold
- The End Of An Era
- Debt Ceiling Fiasco – YouTube
- Europe's 'Bank Sector Involvement'
- Are you investing yet? Don’t fight the Bull Market! 1/25/13 update. – YouTube
- On The Money: Russian Davos – YouTube
- James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices – YouTube
- Which Should I Own ? Physical Gold or a Gold ETF?
- What To Expect After This Week’s Gold & Silver Smash
- The soothing lullaby of the Junior Mogambo Ranger (JMR)
- Which Should I Own – Physical Gold or a Gold ETF?
- In The News Today
- James Turk and Chris Martenson: Central Banks Losing Gold and Silver Price Suppression
- To the Fed - Defer this!
- Saturday (morning) Weekly Market Wrap for January 26, 2013
- This Past Week in Gold
- Italian Scandal Widens As Italy's Third Largest Bank Set To Get Third Bailout In 3 Years; Draghi, Monti Implicated
- Stocks New Bull Market High's Leaves Bears Foaming at the Mouth
- DAVID MAMET ON GUN CONTROL
- Soros Sees Interest Rates Soaring Soon ? What Does That Mean for Bonds & Gold?
- Soros Sees Interest Rates Soaring Soon – What Does That Mean for Bonds & Gold?
| Posted: 27 Jan 2013 12:02 AM PST It sure was an amazing week and by far the best week of the year so far for myself. Not for gold or silver by any means and that's why I just hold some physical gold and silver and focus my daily energies on finding the big winners. |
| Watch This One: Silver Update 1/26/13 Silver Reserves Posted: 26 Jan 2013 11:36 PM PST from BrotherJohnF: |
| Posted: 26 Jan 2013 11:30 PM PST by John Mauldin, Gold Seek:
I penned these words in January of 2010: "Everyone knows the problems of Greece. There is no political will in the country (so far) to do what Ireland has done, and really cut their budget. I think Spain is an even bigger nightmare for the EU when compared to relatively small Greece. Italy? Belgium? Portugal? All those countries (and their voters) will be watching to see how the EU deals with Greece." |
| Iceland's President – Let banks go bankrupt, we did! Posted: 26 Jan 2013 11:11 PM PST from AussieNews1: Iceland President Olafur Ragnar Grimsson tells Al Jazeera's Stephen Cole that Europe should let banks that are ran "irresponsibly" go bankrupt. Speaking at the annual World Economic Forum in Davos, Grimsson also held his country as a model of economic recovery after its near-collapse four years ago. "We didn't follow the traditional prevailing orthodoxies. And the end result four years later is that Iceland is enjoying progress and recovery." |
| Warning for American silver investors RE: Monster boxes as poker chips Posted: 26 Jan 2013 11:00 PM PST from Alexiscom1: |
| China, World’s Biggest Producer & Consumer of Gold, Will Introduce Gold ETFs Posted: 26 Jan 2013 10:30 PM PST from Silver Vigilante:
Authorities will look into how to regulate gold ETFs, a product available in most of the world's major financial markets, with a combined asset scale of about $140 billion at the end of July 2012. The statement by the securities regulator in China cited the nation's rapidly growing gold market, as well as that the nation is the world's biggest gold producer and consumer, as its gold output reaches 360.96 tonnes in 2011, according to the China gold association. |
| World Economy & Market Forecast: More Sunshine & Less Stormy Weather Ahead Posted: 26 Jan 2013 09:56 PM PST "Follow the munKNEE" via twitter & Facebook or Register to receive our daily Intelligence Report It seems clear that there are a number of investors who have gained So says Frank Holmes (www.usfunds.com) in edited excerpts from his original article* entitled Resource Investors: Why You Can Expect Sunnier Days Ahead.
Holmes goes on to say in further edited excerpts: During the current commodity supercycle, there have been occasions – too many to count – when investor psyche has been damaged by reports about slowing U.S. growth, a hard landing in China or a debt crisis in Europe. Just behind the gloom, however, significant and positive trends are taking hold, causing the storms to start dissipating. Government policies are precursors to change, which is why we follow the monetary and fiscal actions closely as they can have a significant impact on asset prices….
China's PMI at a 2-year High Historically, central banks' policy actions occur after there hss been some economic deterioration. Several months later, the stimulative measures work their way through the global economy. This has been the case with China, which has been showing remarkable improvement in its export-oriented HSBC Purchasing Managers Index. The PMI is a measure of health of companies in China, as it includes output, new orders, employment and prices across numerous sectors and this month the Flash PMI came in at 51.9, beating market consensus, which was at 51.7. The PMI stands at a two-year high, as you can see in the chart below.  …PMIs are leading indicators for global resources stocks, which have lagged over the past year. In 2012, the Morgan Stanley Commodity Related Index only increased 1.4%. This year, however, the index is off to an incredible start, rising more than 8% in only four weeks. Dow Jones Transportation Average at Record High Stocks across a number of cyclical areas of the market have benefited from this global improvement, including industrial companies such as trucking, rail and airlines. Take a look below at a classic cyclical measure of the market, the Dow Jones Transportation Average, or Dow Jones Transports. The index, an average of 20 transportation companies in the U.S., reached an all-time high this week. Best Month for Energy Stocks Lie Ahead In addition to the synchronized stimulus driving resources, we are entering the time of year that has historically been good for energy equities. Looking at two decades of seasonal patterns of companies in the S&P 500 Energy Index, the next six months have historically been the best of the year. While energy stocks typically decline in January, they have seen positive results in February, March, April and May. July has historically been the best month for energy stocks, climbing more than 3% on a median return basis. Conclusion We see more sunshine and less stormy weather ahead. A caveat to these sunnier days is the U.S. debt ceiling issue. In managing expectations going forward, we likely will see volatility not unlike the ups and downs of the last four years. However, every dip has historically been a buying opportunity. With many investors now considering equities today, future dips are likely to be opportunities to buy as well. Take advantage of these momentous and seasonal shifts and make sure you have an appropriate allocation to equities poised to benefit, such as global natural resources stocks….
*http://www.usfunds.com/media/files/pdfs/investor-alert/_2013/2013-01-25/Investor_Alert_01-25-2013.pdf
Related Articles: Without economic growth, and real economic growth at that, there can be no meaningful long-term economic recovery in the developed countries. Growth or lack thereof will have to be reflected in the financial markets over time. Currently, I continue to see a disconnect between where the financial markets are pricing things, and where I think they ought to be pricing things. Words: 784 2. Nouriel Roubini: 5 Downside Risks to Global Economy Are Gathering Force …[F]iscal austerity will envelop most advanced economies this year, rather than just the eurozone periphery and the United Kingdom. Indeed, austerity is spreading to the core of the eurozone, the United States, and other advanced economies (with the exception of Japan). Given synchronized fiscal retrenchment in most advanced economies, another year of mediocre growth could give way to outright contraction in some countries. Words: 780 3. 8 Key Dynamics Which Will Impact Us Over the Next 2-3 Years & Their Eventual Consequences Risk is inevitably mispriced when unprecedented intervention suppresses risk [and, as such, the] policies that appear to have been successful for the past four years may continue to appear successful for a year or two longer but that very success comes at a steep, and as yet unpaid, price in suppressed systemic risk, cost, and consequence. [This article identifies 8] key dynamics that will continue to play out over the next two to three years [and an] understanding of the eventual consequence of such influential trends – that risk is inevitably mispriced when unprecedented intervention suppresses risk. Words: 1299 4. 5 Sound Reasons Investors Would Be Better Off On the Sidelines Than In the Market New year festivities have continued on the stock market even as the Christmas trees have been put away. The "death of the fiscal cliff," not horrible job numbers and supportive comments from Mario Draghi on the other side of the pond have led to bold and bullish behaviors over the last three weeks. While no one can predict the exact peak, here are five reasons you're better off on the sidelines than in the market. 5. Current Market Overvaluation (from 33% – 51%!) Suggests Cautious Long-term Outlook
6. Goldman Sachs' Leading Indicators Signal Steep Market Crash Ahead
7. Don't Ignore This Fact: "Greedometer Gauge" Signals S&P 500 Drop to the 500s by July-August, 2013!
8. The S&P 500 Continues to Rapidly Build Its "Domed House" As Projected
9. These Charts Suggest a Possible +/-60% Decline in the S&P 500 by 2014
10. Soros Sees Interest Rates Soaring Soon – What Does That Mean for Bonds & Gold? The U.S. economy is picking up steam and the Fed's quantitative-easing approach is helping and as a result investors should watch out for a possible spike in interest rates once growth is well under way (later this year) warns billionaire financier George Soros. It has been suggested that this would adversely affect bonds but not everyone agrees. Read on!
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| GGR COT Subscriber Update Posted Posted: 26 Jan 2013 09:02 PM PST HOUSTON – Vultures (Got Gold Report Subscribers) please log in and navigate to the Got Gold Reports Section of the Subscriber Welcome Page to view a presentation we intend to give in an upcoming conference. This presentation focuses on the current conditions in the Commodity Futures Trading Commission (CFTC) commitments of traders (COT) reports and presents our "read" of those conditions as of the most recent COT report released Friday, January 25. Importantly, we need to note significant changes since our most recent video update in this presentation. To subscribe to Got Gold Report click on the "Subscribe to GGR" button at right under the GGR Login button. |
| GATA closing in on secrets behind gold cartel? Interview with GATA's Chris Powell Posted: 26 Jan 2013 09:00 PM PST from Cambridge House: |
| The ‘Why" Of Gold At And Above $3500 Posted: 26 Jan 2013 08:58 PM PST My Dear Extended Family, Think of the value of the gold reserves of the euro with their gold marked to market by the ECB. Think of the percentage then that their gold reserves would be as a percentage of fiat currency held in reserve. Think then of the primary market in gold by Continue reading The 'Why" Of Gold At And Above $3500 |
| James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices Posted: 26 Jan 2013 08:40 PM PST from ChrisMartensondotcom : |
| What To Expect After This Week’s Gold & Silver Smash Posted: 26 Jan 2013 08:20 PM PST from KingWorldNews:
Rick Rule, who is the CEO of Sprott USA, said, "We are in the midst of a commodities super cycle of the same dimension we experienced in the 1970s." The 1970s was an extremely difficult period, and it eventually culminated in a flight from fiat currencies into gold as the world experienced a period of tremendous turmoil. Here is what Rick Rule had to say: "We are in the midst of a commodities super cycle of the same dimension we experienced in the 1970s … By the way, I don't disagree that there are attempts being made to suppress the price of gold, but the market is bigger than the morons who are trying to suppress it. As far as I'm concerned, the harder they try to suppress it, the bigger the ultimate move will be." |
| Posted: 26 Jan 2013 07:02 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| World financial leaders close summit in Davos – YouTube Posted: 26 Jan 2013 06:54 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Jim Rogers : The Euro may Collapse after the German election in 2013, Jim Rogers Blog Posted: 26 Jan 2013 06:39 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Chris Martenson interviews James Turk about the central bank war against gold Posted: 26 Jan 2013 06:00 PM PST 7:56p ET Saturday, January 26, 2013 Dear Friend of GATA and Gold: Market analyst Chris Martenson today interviews GoldMoney founder and GATA consultant James Turk about gold market manipulation by U.S.-allied central banks, which, Turk says, are losing their war against gold. The interview is about 27 minutes long and is posted as audio at Martenson's Internet site, Peak Prosperity, here: http://www.peakprosperity.com/podcast/80609/james-turk CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard Join GATA here: California Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. |
| Posted: 26 Jan 2013 05:54 PM PST Authored by Dr. Tim Morgan, Tullet Prebon, The economy as we know it is facing a lethal confluence of four critical factors – the fall-out from the biggest debt bubble in history; a disastrous experiment with globalisation; the massaging of data to the point where economic trends are obscured; and, most important of all, the approach of an energy-returns cliff-edge. Through technology, through culture and through economic and political change, society is more short-term in nature now than at any time in recorded history. Financial market participants can carry out transactions in milliseconds. With 24-hour news coverage, the media focus has shifted inexorably from the analytical to the immediate. The basis of politicians' calculations has shortened to the point where it can seem that all that matters is the next sound-bite, the next headline and the next snapshot of public opinion. The corporate focus has moved all too often from strategic planning to immediate profitability as represented by the next quarter's earnings. This report explains that this acceleration towards ever-greater immediacy has blinded society to a series of fundamental economic trends which, if not anticipated and tackled well in advance, could have devastating effects. The relentless shortening of media, social and political horizons has resulted in the establishment of self-destructive economic patterns which now threaten to undermine economic viability. We date the acceleration in short-termism to the early 1980s. Since then, there has been a relentless shift to immediate consumption as part of something that has been called a "cult of self-worship". The pursuit of instant gratification has resulted in the accumulation of debt on an unprecedented scale. The financial crisis, which began in 2008 and has since segued into the deepest and most protracted economic slump for at least eighty years, did not result entirely from a short period of malfeasance by a tiny minority, comforting though this illusion may be. Rather, what began in 2008 was the denouement of a broadly-based process which had lasted for thirty years, and is described here as "the great credit super-cycle".
The credit super-cycle process is exemplified by the relationship between GDP and aggregate credit market debt in the United States (see fig. 1.1). In 1945, and despite the huge costs involved in winning the Second World War, the aggregate indebtedness of American businesses, individuals and government equated to 159% of GDP. More than three decades later, in 1981, this ratio was little changed, at 168%. In real terms, total debt had increased by 214% since 1945, but the economy had grown by 197%, keeping the debt ratio remarkably static over an extended period which, incidentally, was far from shock-free (since it included two major oil crises).
From the early 1980s, as figs. 1.1 and 1.2 show, an unmistakeable and seemingly relentless upwards trend in indebtedness became established. Between 1981 and 2009, debt grew by 390% in real terms, far out-pacing the growth (of 120%) in the American economy. By 2009, the debt ratio had reached 381%, a level unprecedented in history. Even in 1930, when GDP collapsed, the ratio barely topped 300%, and thereafter declined very rapidly indeed. This report is not, primarily, about debt, and neither does it suggest that the problems identified here are unique to the United States. Rather, the massive escalation in American indebtedness is one amongst a host of indicators of a state of mind which has elevated immediate consumption over prudence throughout much of the world. This report explains that we need only look beyond the predominant short-termism of contemporary thinking to perceive that we are at the confluence of four extremely dangerous developments which, individually or collectively, have already started to throw more than two centuries of economic expansion into reverse. Before the financial crisis of 2008, this analysis might have seemed purely theoretical, but the banking catastrophe, and the ensuing slump, should demonstrate that the dangerous confluence described here is already underway. Indeed, more than two centuries of near-perpetual growth probably went into reverse as much as ten years ago. Lacking longer-term insights, today's policymakers seem bewildered about many issues. Why, for instance, has there been little or no recovery from the post-2008 economic slump? Why have traditional, tried-and-tested fiscal and monetary tools ceased to function? Why have both austerity and stimulus failed us? The missing piece of the economic equation is an appreciation of four underlying trends, each of which renders many of the lessons of the past irrelevant. trend #1 – the madness of crowds The first of the four highly dangerous trends identified here is the creation, over three decades, of the worst financial bubble in history. In his 1841 work Extraordinary Popular Delusions and the Madness of Crowds, Charles Mackay (1814-89) identified a common thread of individual and collective idiocy running through such follies of the past as alchemy, witchhunts, prophecies, fortune-telling, magnetizers, phrenology, poisoning, the admiration of thieves, duels, the imputation of mystic powers to relics, haunted houses, crusades – and financial bubbles. A clear implication of Mackay's work was that all of these follies had been consigned to the past by intelligence, experience and enlightenment. For the most part, he has been right. Intelligent people today do not put faith in alchemy, fortune-telling, witchcraft or haunting, and – with the arguable exception of the invasion of Iraq – crusades have faded into the history books. But one folly remains alive and well. Far from confining financial bubbles to historical tales of Dutch tulips and British South Sea stock, the last three decades have witnessed the creation and the bursting of the biggest bubble in financial history. Described here as 'the credit supercycle', this bubble confirmed that one aspect, at least, of the idiocy identified by Mackay continues to wreak havoc. Insane though historic obsessions with tulip bulbs and south seas riches may appear, they are dwarfed by the latterday, 'money for nothing' lunacy that, through the credit super-cycle, has mired much of the world in debts from which no escape (save perhaps hyperinflation) exists. Perhaps the most truly remarkable feature of the super-cycle was that it endured for so long in defiance of all logic or common sense. Individuals in their millions believed that property prices could only ever increase, such that either borrowing against equity (by taking on invariably-expensive credit) or spending it (through equity release) was a safe, rational and even normal way to behave. Regulators, meanwhile, believed that there was nothing wrong with loosening banking reserve criteria (both by risk-weighting assets in ways that masked leverage, and by broadening definitions of bank capital to the point where even some forms of debt counted as shock-absorbing equity). Former Federal Reserve boss Alan Greenspan has been ridiculed for believing that banks would always act in the best interests of their shareholders, and that the market would sort everything out in a benign way. But regulators more generally bent over backwards to ignore the most obvious warning signs, such as escalating property price-to-incomes ratios, soaring levels of debt-to-GDP, and such obviously-abusive practices as sub-prime mortgages, NINJA loans and the proliferation of unsafe financial instruments. Where idiocy and naïveté were concerned, however, regulators and the general public were trumped by policymakers and their advisors. Gordon Brown, for example, proclaimed an end to "boom and bust" and gloried in Britain's "growth" despite the way in which debt escalation was making it self-evident that the apparent expansion in the economy was neither more nor less than the simple spending of borrowed money.
Between 2001-02 and 2009-10, Britain added £5.40 of private and public debt for each £1 of 'growth' in GDP (fig. 1.3). Between 1998 and 2012, real GDP increased by just £338bn (30%) whilst debt soared by £1,133bn (95%) (fig. 1.4).
Asset managers have a very simple term to describe what happened to Britain under Brown – it was a collapse in returns on capital employed. No other major economy got it quite as wrong as Britain under Brown, but much the same was happening across the Western world, most notably in those countries which followed the disastrous Anglo-American philosophy of "light-touch" financial regulation. trend #2 – the globalisation disaster The compounding mistake, where the Western countries were concerned, was a wide-eyed belief that 'globalisation' would make everyone richer, when the reality was that the out-sourcing of production to emerging economies was a self-inflicted disaster with few parallels in economic history. One would have to look back to a Spanish empire awash with bullion from the New World to find a combination of economic idiocy and minority self-interest equal to the folly of globalization. The big problem with globalisation was that Western countries reduced their production without making corresponding reductions in their consumption. Corporations' outsourcing of production to emerging economies boosted their earnings (and, consequently, the incomes of the minority at the very top) whilst hollowing out their domestic economies through the export of skilled jobs. This report uses a measure called 'globally-marketable output' (GMO) as a metric for domestic production, a measure which combines manufacturing, agriculture, construction and mining with net exports of services. By definition, activities falling outside this category consist of services provided to each other. At constant (2011) values, consumption by Americans increased by $6,500bn between 1981 and 2011, whilst consumption on their behalf by the government rose by a further $1,700bn, but the combined output of the manufacturing, construction, agricultural and extractive industries grew by barely $600bn. At less than $200bn in 2011, net exports of services did almost nothing to bridge the chasm between consumption and production. This left two residuals – domestically consumed services, and debt – with debt the clincher. Between 1981 and 2011, and again expressed at constant values, American indebtedness soared from $11 trillion to almost $54 trillion. Fundamentally, what had happened here was that skilled, well-paid jobs had been exported, consumption had increased, and ever-greater quantities of debt had been used to fill the gap. This was, by any definition, unsustainable. Talk of Western economies modernising themselves by moving from production into services contained far more waffle than logic – Western consumers sold each other ever greater numbers of hair-cuts, ever greater quantities of fast food and ever more zero-sum financial services whilst depending more and more on imported goods and, critically, on the debts used to buy them. Corporate executives prospered, as did the gateholders of the debt economy, whilst the vast majority saw their real wages decline and their indebtedness spiral. For our purposes, what matters here is that reducing production, increasing consumption and taking on escalating debt to fill the gap was never a remotely sustainable course of action. What this in turn means is that no return to the pre-2008 world is either possible or desirable. trend #3 – an exercise in self-delusion One explanation for widespread public (and policymaker) ignorance of the truly parlous state of the Western economies lies in the delusory nature of economic and fiscal statistics, many of which have been massaged out of all relation to reality. There seems to have been no 'grand conspiracy' here, but the overall effect of accretive changes has been much the same. In America, for example, the benchmark measure of inflation (CPI-U) has been modified by 'substitution', 'hedonics' and 'geometric weighting' to the point where reported numbers seem to be at least six percentage points lower than they would have been under the 'pre-tinkering' basis of calculation used until the early 1980s. US unemployment, reported at 7.8%, excludes so many categories of people (such as "discouraged workers") that it hides very much higher levels of inactivity. The critical distortion here is clearly inflation, which feeds through into computations showing "growth" even when it is intuitively apparent (and evident on many other benchmarks) that, for a decade or more, the economy has, at best, stagnated, not just in the United States but across much of the Western world. Distorted inflation also tells wage-earners that they have become better off even though such statistics do not accord with their own perceptions. It is arguable, too, that real (inflation-free) interest rates were negative from as long ago as the mid-1990s, a trend which undoubtedly exacerbated an escalating tendency to live on debt. Fiscal figures, too, are heavily distorted, most noticeably in the way in which quasi-debt obligations are kept off the official balance sheet. As we explain in this report, the official public debts of countries such as the United States and the United Kingdom exclude truly enormous commitments such as pensions. trend #4 – the growth dynamo winds down One of the problems with economics is that its practitioners preach a concentration on money, whereas money is the language rather than the substance of the real economy. Ultimately, the economy is – and always has been – a surplus energy equation, governed by the laws of thermodynamics, not those of the market. Society and the economy began when agriculture created an energy surplus which, though tiny by later standards, liberated part of the population to engage in non-subsistence activities. A vastly larger liberation of surplus energy occurred with the discovery of the heat engine, meaning that the energy delivered by human labour could be leveraged massively by exogenous sources of energy such as coal, oil and natural gas. A single US gallon of gasoline delivers work equivalent to between 360 and 490 hours of strenuous human labour, labour which would cost perhaps $6,500 if it were paid for at prevailing rates. Of the energy – a term coterminous with 'work' – consumed in Western societies, well over 99% comes from exogenous sources, and probably less than 0.7% from human effort. Energy does far more than provide us with transport and warmth. In modern societies, manufacturing, services, minerals, food and even water are functions of the availability of energy. The critical equation here is not the absolute quantity of energy available but, rather, the difference between energy extracted and energy consumed in the extraction process. This is measured by the mathematical equation EROEI (energy return on energy invested). For much of the period since the Industrial Revolution, EROEIs have been extremely high. The oil fields discovered in the 1930s, for example, provided at least 100 units of extracted energy for every unit consumed in extraction (an EROEI of 100:1). For some decades now, though, global average EROEIs have been falling, as energy discoveries have become both smaller and more difficult (meaning energy-costly) to extract.
The killer factor is the non-linear nature of EROEIs. As fig. 1.5 shows, the effects of a fall-off in EROEI from, say, 80:1 to 20:1 do not seem particularly disruptive but, once returns ratios have fallen below about 15:1, there is a dramatic, 'cliff-edge' slump in surplus energy, combined with a sharp escalation in its cost. Research suggests that the global average EROEI, having fallen from about 40:1 in 1990 to 17:1 in 2010, may decline to just 11:1 by 2020, at which point energy will be about 50% more expensive, in real terms, than it is today, a metric which will carry through directly into the cost of almost everything else – including food. crisis, culpability and consequences If the analysis set out in this report is right, we are nearing the end of a period of more than 250 years in which growth has been 'the assumed normal'. There have been setbacks, of course, but the near-universal assumption has been that economic growth is the usual state of affairs, a rule to which downturns (even on the scale of the 1930s) are the exceptions. That comfortable assumption is now in the process of being over-turned. The views set out here must provoke a host of questions. For a start, if we really are nearing a cliff-edge economic crisis, why isn't this visible already? Second, who is to blame for this? Third, how bad could it get? Last, but surely most important, can anything be done about it? Where visibility is concerned, our belief is that, if the economy does tip over in the coming few years, retrospect – which always enjoys the 20-20 vision of hindsight – will say that the signs of the impending crash were visible well before 2013. For a start, anyone who believed that a globalisation model (in which the West unloaded production but expected to consume as much, or even more, than ever) was sustainable was surely guilty of wilful blindness. Such a state of affairs was only ever viable on the insane assumption that debt could go on increasing indefinitely. Charles Mackay chronicled many delusions, but none – not even the faith placed in witchcraft – was ever quite as irrational as the belief (seldom stated, but always implicit in Western economic policy) that there need never be an end to a way of life which was wholly dependent on ever-greater debt. Even to those who were happy to swallow the nonsense of perpetually expanding indebtedness, the sheer scale of debt – and, relevantly in this context, of quasi-debt commitments as well – surely should have sounded warning bells. From Liverpool to Los Angeles, from Madrid to Matsuyama, the developed world is mired in debts that can never be repaid. In addition to formal debt, governments have entered into pension and welfare commitments which are only affordable if truly heroic assumptions are made about future prosperity. At the same time, there is no real evidence that the economy is recovering from what is already a more prolonged slump than the Great Depression of the 1930s. We are now more than four years on from the banking crisis and, under anything approaching normal conditions, there should have been a return to economic expansion by now. Governments have tried almost everything, from prolonged near-zero interest rates and stimulus expenditures to the creation of money on a gigantic scale. These tools have worked in the past, and the fact that, this time, they manifestly are not working should tell us that something profoundly different is going on. The question of culpability has been the equivalent of Sherlock Holmes' "dog that did not bark in the night", in that very few individuals have been held to account for what is unarguably the worst economic disaster in at least eighty years. A small number of obviously-criminal miscreants have been prosecuted, but this is something that happens on a routine basis in normal times, so does not amount to an attribution of blame for the crisis. There has been widespread public vilification of bankers, the vast majority of whom were, in any case, only acting within the parameters of the 'debtfuelled, immediate gratification' ethos established across Western societies as a whole. Governments have been ejected by their electorates, but their replacements have tended to look very similar indeed to their predecessors. The real reason for the seeming lack of retribution is that culpability is far too dispersed across society as a whole. If, say, society was to punish senior bankers, what about the thousands of salesmen who knowingly pushed millions of customers into mortgages that were not remotely affordable? The suspicion lingers that there has been a 'grand conspiracy of culpability', but even the radical left has failed to tie this down to specifics in a convincing way. The real causes of the economic crash are the cultural norms of a society that has come to believe that immediate material gratification, fuelled if necessary by debt, can ever be a sustainable way of life. We can, if we wish, choose to blame the advertising industry (which spends perhaps $470bn annually pushing the consumerist message), or the cadre of corporate executives who have outsourced skilled jobs in pursuit of personal gain. We can blame a generation of policymakers whose short-termism has blinded them to underlying trends, or regulators and central bankers who failed to "take away the punch-bowl" long after the party was self-evidently out of control. But blaming any of these really means blaming ourselves – for falling for the consumerist message of instant gratification, for buying imported goods, for borrowing far more than was healthy, and for electing glib and vacuous political leaders. Beyond visibility and culpability, the two big questions which need to be addressed are 'how bad can it get?' and 'is there anything that we can do about it?' Of these, the first question hardly needs an answer, since the implications seem self-evident – economies will lurch into hyper-inflation in a forlorn attempt to escape from debt, whilst social strains will increase as the vice of resource (including food) shortages tightens. In terms of solutions, the first imperative is surely a cultural change away from instant gratification, a change which, if it is not adopted willingly, will be enforced upon society anyway by the reversal of economic growth. The magic bullet, of course, would be the discovery of a new source of energy which can reverse the winding-down of the critical energy returns equation. Some pin their faith in nuclear fusion (along lines being pioneered by ITER) but this, even if it works, lies decades in the future – that is, long after the global EROEI has fallen below levels which will support society as we know it. Solutions such as biofuels and shales are rendered non-workable by their intrinsically-low EROEIs. Likewise, expecting a technological solution to occur would be extremely unwise, because technology uses energy – it does not create it. To expect technology to provide an answer would be equivalent to locking the finest scientific minds in a bankvault, providing them with enormous computing power and vast amounts of money, and expecting them to create a ham sandwich. In the absence of such a breakthrough, really promising energy sources (such as concentrated solar power) need to be pursued together, above all, with social, political and cultural adaptation to "life after growth". |
| Posted: 26 Jan 2013 03:53 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Europe's 'Bank Sector Involvement' Posted: 26 Jan 2013 03:53 PM PST Via Mark J. Grant, author Out of the Box, How many European Union officials does it take to change a light bulb? |
| Are you investing yet? Don’t fight the Bull Market! 1/25/13 update. – YouTube Posted: 26 Jan 2013 03:44 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| On The Money: Russian Davos – YouTube Posted: 26 Jan 2013 03:40 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices – YouTube Posted: 26 Jan 2013 03:21 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Which Should I Own ? Physical Gold or a Gold ETF? Posted: 26 Jan 2013 02:10 PM PST [B][B][B][B][B][B][B][B][B][B][B]"[B]Follow the [COLOR=#0000ff][U]munKNEE"[/U][/COLOR] [/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B]via twitter &[B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B] Facebook [/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B]or [B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B]Register [/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B]to receive our daily Intelligence Report There are many tools available to buy gold, which is the bedrock of any portfolio. These include coins, bars, futures contracts, certificates, options, and what has recently perhaps become the most popular instrument of all, the gold exchange-traded fund – the so-called ETF – but which of these many tools is the right one for you? So writes James Turk ([url]www.goldmoney.com[/url]) in edited excerpts from his original article* entitled Gold or a gold ETF?. [INDENT]This article is presented compliments of [B]www.FinancialArticleSummaries... |
| What To Expect After This Week’s Gold & Silver Smash Posted: 26 Jan 2013 01:51 PM PST  There has been a great deal of propaganda from the Fed and mainstream media claiming that the world is on the road to recovery. Today one of the wealthiest and most street-smart pros in the business spoke with King World News about the reality of what is really taking place, the gold and silver smash, and where markets are headed from here. Rick Rule, who is the CEO of Sprott USA, said, "We are in the midst of a commodities super cycle of the same dimension we experienced in the 1970s." The 1970s was an extremely difficult period, and it eventually culminated in a flight from fiat currencies into gold as the world experienced a period of tremendous turmoil. This posting includes an audio/video/photo media file: Download Now |
| The soothing lullaby of the Junior Mogambo Ranger (JMR) Posted: 26 Jan 2013 01:32 PM PST January 22, 2013 Mogambo Guru To vividly demonstrate how rude people can be these days, let me recount a recent experience at the grocery store. A guy, we'll call him Tom, and he is coming across the parking lot to go into the grocery store behind me. I recognize him, and, for me, it was a kind of reunion, and I thought he would be as happy to see me as I was happy to see him. But he wasn't. He had his ragamuffin wife and kids with him, and they were all apparently in some kind of bad mood as they trudged along towards me, and I could see them looking at me furtively, and hear them muttering amongst themselves "Oh, no! It's that creepy old guy who is always trying to get us to buy gold bullion, silver bullion and oil stocks because the evil Federal Reserve has created so impossibly much money and credit that the inflation in prices will destroy us!" At this I kind of beamed, and was pleased that he learned something about monetary policy from our earlier encounter! Then I hear Tom say to his wife "And he even suggested that we dump the kids, because the deadweight burden of our own children will hasten our demise, and with the money we will save we could buy bullion because it is imperative that we own gold and silver, in which case we shall be rich, rich, rich, and then we can afford to get our own kids back, or buy as many new kids as we want!" Well, regardless of your politics, ethics, morality, having even a shred of human decency, or what kind of inhuman monster could think up such a despicable idea, you gotta admit that the logic is, nonetheless, iron-clad. But research shows that this "dump the kids and buy gold with the savings!" as a wealth-management idea never really, you know, resonated with investors. Now Tom, in a rude kind of ugly way, snarls "Get out of my way, you idiot!" at me as he hurriedly brushes past! Instantly, by virtue of my Mogambo Empathic Nature (MEN) combined with cursory brushes with genuine psychiatric/psychological mumbo-jumbo, I knew that 1) henceforth I would call him Turd-Face, and 2) that he was not actually angry with me, per se, but angry with himself. The reason is that he is now embarrassingly revealed as, obviously, not following my Fabulous Mogambo Advice (FBA), which was to buy gold, silver and oil because the foul Federal Reserve is killing us with roaring monetary inflation which will inevitably produce roaring price inflation and insuring that, from a purely objective and scientific perspective, We're Freaking Doomed (WFD). And the Fed has created the dollars, and price inflation was created, and the Fed is, and price inflation is, and the Fed will continue to create untold trillions more dollars every year, and price inflation will continue to get horrendously worse from here until, as you probably suspected, the aforementioned We're Freaking Doomed (WFD). But ol' Turd-Face didn't buy them, and now he is here, and to look at him is to pity him, where angels weep for him, and the mocking voice of The Wrathful Mogambo (TWM) rings out loud and clear, "Moron!" And speaking of rude, people ask me lots of rude questions, too, such as the popular question "Are you as stupid as you sound?", and "Do you ever shut up?", or the equally popular question "Do I have to call a cop?" The answers are yes, yes and no. Then again, sometimes they ask me intelligent questions, too, like about gold, as in "How much gold does the United States own, in total, including the gold stored at Fort Knox, and under the Federal Reserve, and probably at other places I don't even know about, and nobody knows about, because all the records have been altered by a bunch of lying, traitorous crooks who are stealing the gold to finance the impending invasion of extraterrestrial spaceships coming to conquer the Earth?" Well, as far as "how much" gold there is, wikipedia.com lists the gold holdings of the "sovereign United States" as 8,133.5 tonnes of gold, which, at about 32,000 gold ounces per tonne, is 260.3 million ounces, which pretty much agrees with the figure of 261 million ounces claimed by the Federal Reserve, which, at $1,670, per ounce is a lousy $436 billion. Those of you who parse everything I say, perhaps looking for Secret Mogambo Messages (SMM) about the pending invasion of the Earth by alien creatures from beyond time and space, doubtlessly have noticed that I said that the entire gold holdings of the Federal Reserve is a "lousy $436 billion," which I delightfully do with disdain because -- it's no secret! -- it's such a piece of chump-change! I mean, the damnable, bankrupting, moronic, treasonous federal government DEFICIT-spends that selfsame $436 billion every three months! Which doesn't even count the $2.4 trillion spending in the federal government's budget that IS funded by actual taxes, duties and fees! Hahaha! So, you can see why I am laughing at the gold in Fort Knox, when every bit of all that gold is only enough, measured in today's dollars, to replace the federal government's massive BORROWING for a few lousy months, and then the gold is all gone! And, perhaps more telling, is that very bit of gold held by the federal government would only pay for 6 weeks of government spending! Hahaha! What a public-relations faux pas, which rhymes with "Hahaha!", which I point out for no particular reason, other than perhaps as a desperate cry for the help I so obviously need. This means that the Federal Reserve will, instead of selling the gold and looking like a bunch of chumps, print the $1.6 trillion to buy the newly-issued government bonds over the next year, which the government will spend, which will cause the money supply to go up, prices will have to rise, people will suffer and complain, the economy will slow, round and round with more money, and more inflation, and more suffering at every turn until everyone realizes We're Freaking Doomed (WFD)! Doomed I tells ya! Which, if history is any guide, won't be long in coming, and, unfortunately, there ain't nothin' that anybody can do to stop it. Soon and inevitable. Ugh. Ergo my dismal outlook on things economic. Sometimes this surprising fact is enough to elicit a life-changing, sudden, spontaneous flash of transcendental enlightenment, turning an average, unsuspecting man or woman, perhaps not unlike yourself in many ways, into an instantaneous, genuine Junior Mogambo Ranger (JMR). To be a JMR is to be characterized by being scared out of one's wits by the irresponsible, insane, incomprehensible madness of current monetary and fiscal policies that guarantee soaring price inflation, leading to the JMR to feverishly buy gold and silver in a panic-driven mania at the dire dread of the darkening doom, and to take advantage of the fact that these precious metals are so laughably, insanely, ridiculously undervalued right now. The situation is indeed dire, and only the absolute, dead-bang, lead-pipe-cinch certainty that the prices of gold, silver and oil will go up, up and up, making oodles and oodles of luscious, life-changing, massive capital gains for its lucky owners, makes it all bearable. Hence the soothing lullaby of the Junior Mogambo Ranger (JMR): "Whee! This investing stuff is easy!"  |
| Which Should I Own – Physical Gold or a Gold ETF? Posted: 26 Jan 2013 12:50 PM PST "Follow the munKNEE" via twitter & Facebook or Register to receive our daily Intelligence Report There are many tools available to buy gold, which is the bedrock of any So writes James Turk (www.goldmoney.com) in edited excerpts from his original article* entitled Gold or a gold ETF?.
Turk goes on to say in further edited excerpts: The answer to this question begins by first determining your objective. In other words, it is necessary to identify the reasons you want to own gold. Once these are clearly understood, the right tools can then be chosen to enable you to meet the objective you intend to accomplish by owning gold, of which there are two. 1. Fluctuations in the price of gold enable skilful traders to profit from these moves, buying when they expect the price to rise and selling in anticipation of a lower price. In this sense, gold is often characterised as an investment, but it isn't that. Gold is a sterile asset that does not generate cash flow. It doesn't have a management team or a balance sheet, so clearly gold is not an investment. Gold is money, and therefore is part of the liquidity everyone needs in his or her portfolio, which leads to the other reason to own gold. 2. Gold is a safe haven. It does not have counterparty risk. Because it is a tangible asset, its value does not rest upon someone's – or more to the point – some bank's promise. When you own gold, you own money completely outside the banking system. From the above two observations, you may be starting to sense that there are actually two types of gold: paper gold and physical gold. The former is a financial asset, which means it has counterparty risk. The latter is altogether different. Physical gold is a tangible asset, and consequently, it therefore does not have counterparty risk. Only physical gold provides a safe haven so do not view any of the gold ETFs as an alternative to physical gold, because they are not. The ETFs meet the first objective by providing exposure to the gold price, but they are not a safe haven. The ETFs should be compared to a gold futures contract, not to physical metal. A futures contract tracks the future price of gold in the form of a tradable contract. In a similar vein, an ETF tracks the spot price of gold in the form of a tradable security. I favour the concept of a gold exchange-traded fund, just as I think a futures contract can be useful, but one needs to choose the right tool for the right job. Physical metal is one thing, and the paper representation of metal in an ETF that simply tracks the gold price is something entirely different. Importantly, it is physical gold itself – and not just the promise to pay metal – that is the bedrock asset of one's portfolio. Conclusion Use gold ETFs as you would a futures contract – as a trading tool. It is not an alternative to owning physical metal. If you want to own gold because of its safe-haven attributes, then buy physical metal.
*http://www.goldmoney.com/gold-research/james-turk/gold-or-a-gold-etf.html (Published by GoldMoney; Copyright © 2013. All rights reserved; Written by James Turk)
Related Articles: 1. Which Is the Best Buy Now – Gold or Gold Stocks? You have probably read in multiple articles that mining stocks offer leverage to the movement of the underlying metal. This hasn't been the case over the past several years, however, which has created some confusion in the precious metals investment community. While the gold price has more than doubled (+110%) in the past five years, the AMEX Gold Bugs Index (HUI) is up only 15% so why do people keep saying that mining stocks offer leverage? Well, because they do during certain periods of the bull market. [Let me explain the situation more fully and exactly where we are in the current bull market.] Words: 677 2. Nick Barisheff: Make Sure You'll Actually OWN the Gold Bullion Before You Buy – Here's Why and How Worldwide economic uncertainty has created a growing interest in precious metals as a way to…protect one's wealth from impending economic Armageddon…Unfortunately, many today don't know how to purchase or store bullion, and consequently may find themselves as vulnerable to financial collapse as those who didn't purchase any bullion at all. [This article outlines what rigorous due diligence is absolutely required when entering into an agreement to buy gold bullion and how it should be stored and why. Don't buy any gold product without reading this article first.] 3. The Case Against Physical Gold and For Gold ETFs This article is probably going to draw a lot of heat. Regardless, I feel it is only fair to present both sides of the argument when it comes to owning physical gold vs. owning gold ETFs. [Here they are.] Words: 4974 4. Before Buying a Gold-related ETF Check Out These Alternatives There are many legitimate reasons to trade in gold and its derivatives. Gold has been proven time and time again to be an excellent "safe haven" investment, a holding that will appreciate in value during times of economic uncertainty. As such, gold may offer some valuable hedging and diversification benefits for a long-term portfolio. A number of exchange-traded products offering exposure to gold prices but not all gold ETFs are created equal. Here's a quick rundown of factors to consider when making an investment in a gold ETF. Words: 1268 4. Surprise! A Close Look at GLD Reveals What it IS and is NOT The most common misunderstandings regarding the primary gold ETF, SPDR Gold Trust (NYSE:GLD) is that it buys and sells gold. That is not the case. It is just a paper asset. It is not a way to buy gold and have someone else store your holdings for you. It is just an innovative way to "own gold." [Below I outline more of just what GLD is and is not:] Words: 1470 5. All Gold & Silver ETFs Are NOT the Same: a Lease vs. Own Comparison I have always been leery of the two big exchange traded funds, SLV and GLD, because they lease the gold and silver that they sell you. I much prefer the ETFs SGOL, CEF, PSVL and PHYS which actually own the gold and silver they sell you and store it for you segregated vaults. Words: 717 6. All Gold and Silver ETFs are NOT Created Equal! Here's the Best Whole oceans of ink have been spilled detailing the good and not-so-good points of the closed-end fund CEF (Central Fund of Canada) and the twin ETF's GLD (SPDR Gold Trust) and SLV (iShares Silver Trust) funds. My goal here is to distill the salient points down to the fewest words possible to help make your due diligence task somewhat less…well…tasking. [Let's go!] Words: 650 7. Vaulted Gold: What Is It and How Does It Compare With Other Gold Investments? The infographic below on vaulted gold explains what vaulted gold is and visualizes key facts relating to investments in gold that is stored on behalf of investors in high-security vaults.
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| Posted: 26 Jan 2013 12:36 PM PST Jim Sinclair's Commentary Our enemies believe they won a battle, but they are stuck between debt and legerdemain to give the dollar an appearance of gold. Our opposition will not prevail. Jim Sinclair's Commentary The direction of gold is from the West to the East. In fact, from every direction to the Continue reading In The News Today |
| James Turk and Chris Martenson: Central Banks Losing Gold and Silver Price Suppression Posted: 26 Jan 2013 11:56 AM PST  This posting includes an audio/video/photo media file: Download Now |
| Posted: 26 Jan 2013 10:53 AM PST
The Federal Reserve makes a ton of money on its $3T horde of government bonds. In 2012 the Fed earned a tidy $90B by borrowing short and lending long. That income number is the difference between interest income and expense. The P/L does not reflect the fact that the Fed has a huge unrealized gain on the portfolio (The Fed takes capital gains and losses only when securities are sold). According to a recent Fed report, the Fed is sitting on unrealized gains that are in the neighborhood of $200B.
This chart shows how big the Fed's contributions to Treasury have been over the past few years. The Fed's net income has cut 10% off of the annual deficit.
The question that hangs in the air is what happens if interest rates were allowed to "normalize". Fortunately, there is an answer to this question. The source of this information is interesting, it comes from the Federal Reserve.
This is a technical report and covers many "what ifs". One critical assumption is what does the Fed do in 2013. That question has been answered, the Fed has done QE#4 and will grow its balance sheet at the rate of $85B per month. This result is reflected in the red-dotted lines in the following charts. First a look at the interest rate assumptions that drive the results at the Fed:
On the assumption that those rates will be the reality, then this is what would happen to the Fed's income statement:
Note that in all cases, the years of $80b Fed gains are over. Note also that if interest rates do rise, the annual return to Treasury quickly falls to zero, and actually goes negative (loss). The Fed's balance sheet would get crushed (on a mark-to-market basis). The $200B of unrealized gains would fall to an unrealized loss of $300B. A half-trillion dollar swing in just a few years.
Let's say it plays out like this. What does in mean if the Fed has annual losses and and a big hole in its assets? The answer is, "Not much".
- The annual remittances to Treasury would fall to zero, That would, by itself, add to the deficit. The magnitude of the change (-$80b) would not be that big of a deal.
-If the Fed takes an annual loss, an accounting "asset" is immediately created equal to the loss. The asset would be in the form of a future claim on remittances to Treasury. This is an accounting gimmick.
If the Fed had a $50B loss in year #1, a $50 Deferred Asset is created. If in year #2 the Fed has a$50B profit, the money is first used to reduce the Deferred Asset. If you believe that the Fed will earn a profit over time to offset current losses, then the Fed can never be consider insolvent.
This is the Fed's explanation of the magical accounting:
The Fed goes on to defend this (flaky) logic with:
Well, that is "sort of" correct. This situation can arise with a private sector company. Tax loss carry forwards are an asset. But they are an asset that analysts look askance at - for obvious reasons. The Fed is not just a Central Bank. It is a regulator for the nation's biggest banks. If one of those banks tried to use a $100B tax loss carry forward as an asset, the Fed would put the screws to them. For example:
-The Basel II capital requirements specifically exclude Deferred Taxes as a qualified asset. (So how can the Fed treat it as equity?)
-The Fed has restricted Citi from stock buy-backs and dividends because the bank has $50B in Deferred Tax assets on its books. (Good for the goose, but not the gander...)
Note: This is an odd report to be coming from the Fed. What to make of it? I put it on the growing list of "things" that are suggesting that the Fed is pondering a change in direction. If there are any 'tea leaves' in the analysis, they would read that QE is going to be ending pretty soon. The Fed is aware of the risks it is taking. The report quantifies the risks in an orderly, but scary way. The fact that this report exists, confirms to me that some Fed members are increasingly uncomfortable with those risks.
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| Saturday (morning) Weekly Market Wrap for January 26, 2013 Posted: 26 Jan 2013 10:33 AM PST The Gold Bugs are always excited and seldom have much to support their excitement. From what I read -- they too are just doing their thing (losing money) for the past year or so! This week it appears that a rally is coming, but the Miners ... Read More...  |
| Posted: 26 Jan 2013 10:31 AM PST Summary: Long term - on major sell signal. Short term - on mixed signals. Gold sector cycle - down as of Oct 13. COT data - currently not supportive of a new up cycle, caution is advised. Read More...  |
| Posted: 26 Jan 2013 10:09 AM PST While little has been said in the mainstream western press about the ongoing fiasco surrounding Siena's Banca Monte dei Pasci, Italy's third largest bank and the world's oldest which may get its third bailout in three years - or even be nationalized - as soon as today, for fears that it may break the thin veneer of "recovery" in the European financial system, the situation on the ground in Italy is getting more serious by the minute, and will have implications on both next month's general election, on Mario Monti, on Silvio Berlusconi, on frontrunner for the Prime Minister post Pier Luigi Bersani, and reach as far up as the head of the ECB - Mario Draghi. Several hours ago, on Saturday morning, the four-member board of the Bank of Italy - this time without its prior president Mario Draghi - met to consider the position of scandal-hit bank Monte dei Paschi di Siena and decide whether to authorize its request for 3.9 billion euros ($5.3 billion) of state loans. As we reported previously, it has emerged over the past week that due to previously undisclosed derivative contracts first exposed by Bloomberg, the Siena bank has hid as much as $1 billion in losses. However as was explained in "Will The Super Goldman Mario Brothers Succeed In Covering Up The Latest Italian Bailout Scandal", this discovery has far greater implications for both the bank's future viability, as well as the implied credibility of both the Bank of Italy, and especially the man who headed it for five years before becoming head of the ECB (where he now demands the same supervisory authority over all European banks that he had in Italy, only to supposedly let countless derivative fiascos slip through his fingers). As Zero Hedge first connected the dots, it is not so much a question of why BMPS engaged in a variety of derivative deals, of which only three have emerged so far and likely has many more on the books, but how or rather why, the then-Draghi led Bank of Italy allowed this to happen not once, not twice, but at least three times.
The next day, Retuers released "Draghi under fire over Monte Paschi derivatives scandal" continuing where we left off:
Draghi saw no evil, smelled no evil, and certainly heard no evil:
If only Mario Draghi could threaten to print countless lira, as he has effectively done as head of the ECB, to contain, for now, the European banking implosion, all would be well, however he can't, and for now at least the problem is contained to Italy. Of course, the Bank of Italy could punt, and effectively push the problem to the ECB's plate, but the second that happens the fragile alliance between surreality and outright idiocy that has gripped European pundits and "analysts", who claim Europe is fixed, when in reality nobody knows what the banks have on their balance sheets, or how many more trillions in liquidity they collectively need before their capitalization is fixed (that is a trick statement, of course, because excess liquidity will never, ever help with capitalization issues, as much as the ECB pretends otherwise) will crash and burn. The problem for the ECB in coming to an indirect cash bailout of BMPS would be its own historical record from as recently as a month ago, when the second bailout of Monte Paschi was being finalized. From Reuters:
So the Italian head of the ECB was told by the Italian government headed by Monti, both former workers of Goldman Sachs about the terms of the second Monte Paschi bailout, "too late"? And upon hearing of said bailout, it was the ECB's determination that a more feasible bailout structure would be to issue equity - equity from an entity that one short month later would need another bailout and possibly nationalization (hint: equity value = zero)? One couldn't make this up! But if it was only a question of implicating Draghi, we are confident that the BMPS scandal would promptly go away after the Frankfurt-based central bank slipped a few billion €s under the table to the current head of the BOI - Ignazio Visco - delaying the eruption of the problem for another year. However, what is unique this time is that the BMPS fallout has far broader political implications due to BMPS' historical links to the centre-left, and the fact that Bersani's Democratic Party runs the local government in Siena where Monte Paschi is based, and controls the banking foundation that is the lender's biggest shareholder. As a reminder Bersani is the frontrunner to replace Mario Monti as Italian PM. Which means the immediate involvement of the entire media empire apparatus of who else but... Yup - Silvio, who is also running in next month's election, is now on the case, and where Silvio goes, the public is sure to follow. As Bloomberg reports:
The irony of course, is that the first bailout that Monte Paschi received was when Berlusconi was still PM:
However, to distract from his involvement, Silvio will be more than happy to throw none other than Draghi under the bus for having been the BOI's head at the time, and after all - it was Draghi's decision to bail out BMPS, not the Prime Minister's. Ah, the plot thickens:
And for those who still believe this is a non-issue, Beppe Grillo, the leader of the 5 Star Movement running in the campaign, and a very popular grass roots candidate among voters disenchanted by both parties, "said the bank's case will turn into a scandal worse than the collapse of food company Parmalat SpA in 2003." Needless to say the scramble by everyone to cover their backsides ahead of what is sure to be an epic media, publicity and political scandal has started:
Actually, there is:
So... there is "a question"? It only gets better:
Yes it is. And it is "widening" at a time when former Bundesbank head Weber said in Davos that everyone in Europe has succeeded in sticking their heads in the sand:
This coming from the former head of the one European central bank which several days ago requested that all of its Paris gold, and much of its New York-based gold, be repatriated. And when the next leg of the financial crisis flares up, which it will as nothing at all has been fixed, unless one considers stuffing all outstanding issues under the rug "fixing", nobody will have been able to foresee any of it. As always. And it will be, naturally, "someone else's fault." |
| Stocks New Bull Market High's Leaves Bears Foaming at the Mouth Posted: 26 Jan 2013 08:30 AM PST The stock market has so far put in a spectacular bull run for January 2013, which has surprised both bulls and bears as all of the major stock market indices set new bull market highs, including the index which I track and trade, the Dow Jones Industrial Averages which is now within touching distance of 14,000. Meanwhile delusional bears right across the globe can literally be seen foaming at the mouths as illustrated by the diatribe that continues spew out of commentary of an always imminent bear market, crash, collapse etc... When the reality is as the following charts illustrate that not only have they and everyone who listened to them missed out on what is a stocks bull market that is approaching the END of its FOURTH YEAR ! But that have actively been betting against an exceptionally strong recent bull run that is the exact mirror image of the crash that they have been so furiously proclaiming as always being imminent. |
| Posted: 26 Jan 2013 08:16 AM PST What a brilliantly written essay. Concise and powerful. Essay like this help me understand the mental illness of my fellow Massachusetts residents that we politely call "Liberalism". First, Liberals actually have a profound TRUST of government, instead of a healthy distrust and skepticism. Second, Liberals fundamentally misunderstand human nature, and believe that, if only given more government intervention and power, the failings of human nature can be perfected. Mamet displays an excellent understanding of the nature of The State and why we must be deeply mistrustful of it. http://www.thedailybeast.com/newsweek/2013/01/28/gun-laws-and-the-fools-of-chelm-by-david-mamet.html Karl Marx summed up Communism as "from each according to his ability, to each according to his needs." This is a good, pithy saying, which, in practice, has succeeded in bringing, upon those under its sway, misery, poverty, rape, torture, slavery, and death. For the saying implies but does not name the effective agency of its supposed utopia. The agency is called "The State," and the motto, fleshed out, for the benefit of the easily confused must read "The State will take from each according to his ability: the State will give to each according to his needs." "Needs and abilities" are, of course, subjective. So the operative statement may be reduced to "the State shall take, the State shall give." All of us have had dealings with the State, and have found, to our chagrin, or, indeed, terror, that we were not dealing with well-meaning public servants or even with ideologues but with overworked, harried bureaucrats. These, as all bureaucrats, obtain and hold their jobs by complying with directions and suppressing the desire to employ initiative, compassion, or indeed, common sense. They are paid to follow orders. Rule by bureaucrats and functionaries is an example of the first part of the Marxist equation: that the Government shall determine the individual's abilities. As rules by the Government are one-size-fits-all, any governmental determination of an individual's abilities must be based on a bureaucratic assessment of the lowest possible denominator. The government, for example, has determined that black people (somehow) have fewer abilities than white people, and, so, must be given certain preferences. Anyone acquainted with both black and white people knows this assessment is not only absurd but monstrous. And yet it is the law. President Obama, in his reelection campaign, referred frequently to the "needs" of himself and his opponent, alleging that each has more money than he "needs." But where in the Constitution is it written that the Government is in charge of determining "needs"? And note that the president did not say "I have more money than I need," but "You and I have more than we need." Who elected him to speak for another citizen? It is not the constitutional prerogative of the Government to determine needs. One person may need (or want) more leisure, another more work; one more adventure, another more security, and so on. It is this diversity that makes a country, indeed a state, a city, a church, or a family, healthy. "One-size-fits-all," and that size determined by the State has a name, and that name is "slavery." The Founding Fathers, far from being ideologues, were not even politicians. They were an assortment of businessmen, writers, teachers, planters; men, in short, who knew something of the world, which is to say, of Human Nature. Their struggle to draft a set of rules acceptable to each other was based on the assumption that we human beings, in the mass, are no damned good—that we are biddable, easily confused, and that we may easily be motivated by a Politician, which is to say, a huckster, mounting a soapbox and inflaming our passions. The Constitution's drafters did not require a wag to teach them that power corrupts: they had experienced it in the person of King George. The American secession was announced by reference to his abuses of power: "He has obstructed the administration of Justice … he has made Judges dependant on his will alone … He has combined with others to subject us to a jurisdiction foreign to our Constitution, and unacknowledged by our Laws … He has erected a multitude of new offices, and sent hither swarms of officers to harass out people and to eat out their substance … imposed taxes upon us without our consent… [He has] fundamentally altered the forms of our government." This is a chillingly familiar set of grievances; and its recrudescence was foreseen by the Founders. They realized that King George was not an individual case, but the inevitable outcome of unfettered power; that any person or group with the power to tax, to form laws, and to enforce them by arms will default to dictatorship, absent the constant unflagging scrutiny of the governed, and their severe untempered insistence upon compliance with law. The Founders recognized that Government is quite literally a necessary evil, that there must be opposition, between its various branches, and between political parties, for these are the only ways to temper the individual's greed for power and the electorates' desires for peace by submission to coercion or blandishment. Healthy government, as that based upon our Constitution, is strife. It awakens anxiety, passion, fervor, and, indeed, hatred and chicanery, both in pursuit of private gain and of public good. Those who promise to relieve us of the burden through their personal or ideological excellence, those who claim to hold the Magic Beans, are simply confidence men. Their emergence is inevitable, and our individual opposition to and rejection of them, as they emerge, must be blunt and sure; if they are arrogant, willful, duplicitous, or simply wrong, they must be replaced, else they will consolidate power, and use the treasury to buy votes, and deprive us of our liberties. It was to guard us against this inevitable decay of government that the Constitution was written. Its purpose was and is not to enthrone a Government superior to an imperfect and confused electorate, but to protect us from such a government. Many are opposed to private ownership of firearms, and their opposition comes under several heads. Their specific objections are answerable retail, but a wholesale response is that the Second Amendment guarantees the right of the citizens to keep and bear arms. On a lower level of abstraction, there are more than 2 million instances a year of the armed citizen deterring or stopping armed criminals; a number four times that of all crimes involving firearms. The Left loves a phantom statistic that a firearm in the hands of a citizen is X times more likely to cause accidental damage than to be used in the prevention of crime, but what is there about criminals that ensures that their gun use is accident-free? If, indeed, a firearm were more dangerous to its possessors than to potential aggressors, would it not make sense for the government to arm all criminals, and let them accidentally shoot themselves? Is this absurd? Yes, and yet the government, of course, is arming criminals. Violence by firearms is most prevalent in big cities with the strictest gun laws. In Chicago and Washington, D.C., for example, it is only the criminals who have guns, the law-abiding populace having been disarmed, and so crime runs riot. Cities of similar size in Texas, Florida, Arizona, and elsewhere, which leave the citizen the right to keep and bear arms, guaranteed in the Constitution, typically are much safer. More legal guns equal less crime. What criminal would be foolish enough to rob a gun store? But the government alleges that the citizen does not need this or that gun, number of guns, or amount of ammunition. But President Obama, it seems, does. He has just passed a bill that extends to him and his family protection, around the clock and for life, by the Secret Service. He, evidently, feels that he is best qualified to determine his needs, and, of course, he is. As I am best qualified to determine mine. For it is, again, only the Marxists who assert that the government, which is to say the busy, corrupted, and hypocritical fools most elected officials are (have you ever had lunch with one?) should regulate gun ownership based on its assessment of needs. Q. Who "needs" an assault rifle? A. No one outside the military and the police. I concur. An assault weapon is that which used to be called a "submachine gun." That is, a handheld long gun that will fire continuously as long as the trigger is held down. These have been illegal in private hands (barring those collectors who have passed the stringent scrutiny of the Federal Government) since 1934. Outside these few legal possessors, there are none in private hands. They may be found in the hands of criminals. But criminals, let us reflect, by definition, are those who will not abide by the laws. What purpose will passing more laws serve? My grandmother came from Russian Poland, near the Polish city of Chelm. Chelm was celebrated, by the Ashkenazi Jews, as the place where the fools dwelt. And my grandmother loved to tell the traditional stories of Chelm. Its residents, for example, once decided that there was no point in having the sun shine during the day, when it was light out—it would be better should it shine at night, when it was dark. Similarly, we modern Solons delight in passing gun laws that, in their entirety, amount to "making crime illegal." What possible purpose in declaring schools "gun-free zones"? Who bringing a gun, with evil intent, into a school would be deterred by the sign? Ah, but perhaps one, legally carrying a gun, might bring it into the school. Good. We need more armed citizens in the schools. Walk down Madison Avenue in New York. Many posh stores have, on view, or behind a two-way mirror, an armed guard. Walk into most any pawnshop, jewelry story, currency exchange, gold store in the country, and there will be an armed guard nearby. Why? As currency, jewelry, gold are precious. Who complains about the presence of these armed guards? And is this wealth more precious than our children? Apparently it is: for the Left adduces arguments against armed presence in the school but not in the wristwatch stores. Q. How many accidental shootings occurred last year in jewelry stores, or on any premises with armed security guards? Why not then, for the love of God, have an armed presence in the schools? It could be done at the cost of a pistol (several hundred dollars), and a few hours of training (that's all the security guards get). Why not offer teachers, administrators, custodians, a small extra stipend for completing a firearms-safety course and carrying a concealed weapon to school? The arguments to the contrary escape me. Why do I specify concealed carry? As if the weapons are concealed, any potential malefactor must assume that anyone on the premises he means to disrupt may be armed—a deterrent of even attempted violence. Yes, but we should check all applicants for firearms for a criminal record? Anyone applying to purchase a handgun has, since 1968, filled out a form certifying he is not a fugitive from justice, a convicted criminal, or mentally deficient. These forms, tens and tens of millions of them, rest, conceivably, somewhere in the vast repository. How are they checked? Are they checked? By what agency, with what monies? The country is broke. Do we actually want another agency staffed by bureaucrats for whom there is no funding? The police do not exist to protect the individual. They exist to cordon off the crime scene and attempt to apprehend the criminal. We individuals are guaranteed by the Constitution the right to self-defense. This right is not the Government's to "award" us. They have never been granted it. The so-called assault weapons ban is a hoax. It is a political appeal to the ignorant. The guns it supposedly banned have been illegal (as above) for 78 years. Did the ban make them "more" illegal? The ban addresses only the appearance of weapons, not their operation. Will increased cosmetic measures make anyone safer? They, like all efforts at disarmament, will put the citizenry more at risk. Disarmament rests on the assumption that all people are good, and, basically, want the same things. But if all people were basically good, why would we, increasingly, pass more and more elaborate laws? The individual is not only best qualified to provide his own personal defense, he is the only one qualified to do so: and his right to do so is guaranteed by the Constitution. President Obama seems to understand the Constitution as a "set of suggestions." I cannot endorse his performance in office, but he wins my respect for taking those steps he deems necessary to ensure the safety of his family. Why would he want to prohibit me from doing the same? |
| Soros Sees Interest Rates Soaring Soon ? What Does That Mean for Bonds & Gold? Posted: 26 Jan 2013 08:10 AM PST [B][B][B][B][B][B][B][B][B][B][B]"[B]Follow the [COLOR=#0000ff][U]munKNEE"[/U][/COLOR] [/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B]via [U][COLOR=#000000][U]twitter [/U][/COLOR][/U]&[B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B] Facebook [/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B]or [B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B][B]Register [/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B]to receive our daily Intelligence Report The U.S. economy is picking up steam and the Fed's quantitative-easing approach is helping and, as a result, investors should watch out for a possible spike in interest rates once growth is well under way (later this year)*warns*billionaire financier George Soros. It has been suggested that this would adversely affect bonds but not everyone agrees. Read on! According to comments on SeekingAlpha.com “Bond investors might want to study the price action in 1994 if Soros is right in that interest rates ar... |
| Soros Sees Interest Rates Soaring Soon – What Does That Mean for Bonds & Gold? Posted: 26 Jan 2013 08:03 AM PST "Follow the munKNEE" via twitter & Facebook or Register to receive our daily Intelligence Report The U.S. economy is picking up steam and the Fed's quantitative-easing According to comments on SeekingAlpha.com "Bond investors might want to study the price action in 1994 if Soros is right in that interest rates are going to take a big leap once the economy gets moving – nothing profound there, but like 1994 it could sneak up and bite fixed income longs. Soros suggests it might already be happening already and once the fog of the budget nonsense lifts, economic strength will be far clearer to see." [Read: What Do Rising Interest Rates Mean for the Price of Gold?]
Tom Luongo's reponse to a question regarding his opinion on the 30 year U.S. Treasury bond, as put forth in a post on Seeking Alpha entitled Why The Long Bond Will Continue To Defy Gravity is that: "I refuse to fight the Fed and the Fed is supporting the long bond. In the long run, however, it's toast. Book it. Beat it. Rail against it all you want, but the 30 year U.S. Treasury bond will drop drastically in price. The big question everyone wants answered is, of course, when, but I'm sorry to report that I have no more a crystal ball on this than the Mayans did about the end of the world – and if I claimed such knowledge I would recommend you stop reading anything else I ever write because I would have given you prima facie evidence that I am an idiot. So, while I may be an idiot, I'm not about to go out and consciously advertise that fact in public. Hence, I don't know when the long bond is going to approach dying, only that it will. In the meantime, your shorts of the iShares Barclay's 20+ year Treasury Bond ETF will continue to lose you money because fighting the Fed is a losing bet….[Read: Believe It or Not: U.S. Treasuries Could Be Best Performing Asset Class in the Next 1-2 Years – Here's Why It's Quite Possible] To answer the original question…[here is my] reason why I don't think the 30 year Treasury bond is going to break down in price any time soon. Just watching the violent trading action in the bond market…tells me that someone is coming in to prop up the price and kick it back towards "fair value," whatever that means in these financially repressed "markets." My guess is that's the Bank of Japan – and the Fed. (In no way do I think this is healthy, sustainable or even sane, but it is reality and my opinion on what is the right thing to do is irrelevant to the question at hand.) The Fed is trying to have its cake and eat it too. It wants inflation but it doesn't want to allow the effects of inflation to show up in the markets it can control. This is part of its psychological game plan to get money flowing and keep confidence high. By controlling prices in the bond markets, in which it is one of the few players left, it can- in the short term- control the major inflation-hedging assets: gold, oil, TIPS. This manipulation has certainly spooked the Gold community but to them I say that the fundamentals in gold have not changed and to continue buying at what amounts to bargain prices. The Chinese certainly are…. Conclusion Sometimes things are as simple as 'buy the under-valued asset and sell the over-valued one' and the 30 year U.S. Treasury Bond is as over-valued as an asset can get. Trade it if you want, but I think it's suicide. the Fed already steals enough of our money, why would you give it to them willingly?"
*http://seekingalpha.com/article/1087291-why-the-long-bond-will-continue-to-defy-gravity
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The return of the Euro debt contagion and drop in the bond markets across the world is pushing interest rates higher and it has investors concerned and rightly so – and nowhere has the concern been more prominent than in gold. [Let me explain.] Words: 759 8. Foreigners Beware: U.S. Treasury Maturity Dates are Alarming While many investors want to believe that U.S. treasuries are a safe haven, I will use this article to debunk that myth with plain hard evidence…[to support my contention that] holding U.S. bonds is the worst investment going forward. Words: 500 9. The Lessons Learned from 2008 Will Maximize Returns and Protect Your Assets This Time Round My 3 favorite barometers for gauging investor sentiment in order to predict market outlook…are SPY as a proxy for U.S. stock markets…GLD as a proxy for commodities and TLT as a proxy for U.S. bonds, and when these 3 markets make big moves, it´s time to pay attention to what they´re saying. [Let's review] how these 3 markets reacted during the crisis of 2009-2009 and then compare them to current market conditions. [Doing so] can give you an edge to be better positioned for the rest of this year. Words: 972 10. With Options So Limited Where Should We Invest? The fear factor among investors is high with investors unsure just where to put their money. Let's review the options and come to a conclusion as to where best to invest our cash at this point in time. Words: 402 11. This New 'Peak Fear' Indicator Gives You an Investment Edge We are at a major crossroads in the equity and bond markets. We could see a major 'risk-on' rally in the S&P 500 BUT if no equity rally ensues, and U.S. Treasury note yields keep falling, then something terrible is about to strike at the heart of the global capital markets…. [As such, it is imperative that you keep a close eye on this new 'Peak Price' indicator. Let me explain.] Words: 450 12. Insights into the Bond Market and How to Trade Them Although the stock market is the first place in which many people think to invest, the U.S. Treasury bond markets arguably have the greatest impact on the economy and are watched the world over. Unfortunately, just because they are influential, doesn't make them any easier to understand, and they can be downright bewildering to the uninitiated. [This article provides you with an excellent understanding of what bonds are, the advantages of owning them and how to go about trading them.] Words: 1325 13. Gold Bullion, Stocks or Bonds: Which Have More Long-term Investment Risk? In proclaiming buy-and-hold investing to be dead, the pseudo-experts masquerading as financial advisors have abandoned the fundamental principle of investing: buying undervalued assets – and then giving those assets the time necessary to mature. Instead, these charlatans have forced their clients to become short-term gamblers. Worse still, they are now consistently steering their clients toward the worst possible asset-classes, stocks and bonds, rather than the best ones [simply because they do not] understand the fundamental conceptual difference between risk and volatility. In a market populated by panicked lemmings, we cannot avoid volatility. However, we can and must reduce risk – which begins by building an allocation of history's true safe haven asset, precious metals. [Let me explain more about what risk and volatility are and are not.] Words: 1080 |
I wrote some time ago that Greece had a choice between Disaster A: staying in the euro; and Disaster B: leaving the euro. I have recently come back from four days in Greece, meeting with lots of people at all levels of society, and will share with you in this letter my analysis of their choices and the results. I'll also have a few things to say about what the developments in Greece might mean for the rest of Europe and the developed world.
China's securities regulator has 
There has been a great deal of propaganda from the Fed and mainstream media claiming that the world is on the road to recovery. Today one of the wealthiest and most street-smart pros in the business spoke with King World News about the reality of what is really taking place, the gold and silver smash, and where markets are headed from here. 
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