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• RBI panel moots gold bank and gold pension plan for India
• It's a good time for gold but not in dollars - Gartman
• Gold, silver slip as Fiscal Cliff euphoria recedes
• More Good News For Silver
• Chart Of The Day: The Long View On Asset Class Returns
• Fund Money Flows Continue Wreaking Havoc
• Jim Sinclair: IMF States Entire Derivatives Market is a WMD Time Bomb
• Why stocks around the world were soaring today
• Some of the world's best-known precious metals experts share their all-time best advice
• An important but little-known "hedge fund" took massive losses last quarter
• Another Centamin gold shipment held in customs
• Warren Buffet to Re-Enter Silver Market, Build World's Largest Solar Project
• Hyperinflation 201
• Turkey imports 120.78 tons of Gold in 2012
• Peter Schiff: First The Currency Cliff, Then Higher Inflation And Interest Rates
• Greg Mannarino: Ratings Agencies Will Downgrade the Dollar in 2013, Bursting US Debt Bubble
• Channel Resources Receives Extension to Tanlouka Exploration Permit, Provides Tanlouka Project Update
• La décision dont vous n'avez sûrement pas entendu parler et qui annonce pourtant le retour en force de l'or comme monnaie
• Alf Field 2013 Gold Analysis: Gold Set Up for Spectacular 2013
• Credit Suisse terms Gold a wounded bull
• SDBullion Deal of the Day: Free Shipping On All Orders Over $5,000.00!!
• Copper edges up in London as relief underpins prices
• What could be Silver this year?
• Higher low in place for gold stocks as 2013 beckons
• Base or Precious metals: Is it time to choose a side?
• Federal Reserve's Expectations of Growth Over the Past 10 Years Have Greatly Overstated Actual Growth
• Dow Gold and Gold Silver Ratio Charts Remain Bullish
• Fear Index December 2012: no free lunch
• Gold, silver tick lower as euphoria of fiscal cliff deal fades
• Dec 2012 American Eagle silver coins sales 3rd highest in history
• SilverDoctors.com & SDBullion.com Under DOS Attack
• First months crucial for Gold in 2013
• Krugman One Ups Keiser With Platinum Crash Dummy
• Gold price drifts lower as ‘tax-cutting’ bill emerges as a multi-billlion dollar boondoggle for corporate America
• Perth Mint to release handful of 2013 Silver coins
• Economic Armageddon Is Coming
• Thailand Gold prices signal early gains
• Latvia’s Economic Disaster as a Neoliberal Success Story: A Model for Europe and the US?
• RBI to promote new Gold schemes to deter physical demand
• At Least India's Government Admits its War on Gold and Wages it in the Open

RBI panel moots gold bank and gold pension plan for India Posted: 03 Jan 2013 04:39 PM PST A Reserve Bank of India Working Group has come out with a draft report suggesting, among other things, a gold bank to curb imports and put to use idle gold.

It's a good time for gold but not in dollars - Gartman Posted: 03 Jan 2013 04:36 PM PST "You want to own gold in yen terms," he says.

Gold, silver slip as Fiscal Cliff euphoria recedes Posted: 03 Jan 2013 12:39 PM PST Gold bullion prices fell to $1,680 after rallying to a two-week high in trade yesterday

More Good News For Silver Posted: 03 Jan 2013 12:02 PM PST ByMacro Investor: As I have written time and time again, silver gets unfairly grouped with gold. Gold has little to no commercial use and is used primarily for investments, while 65% of silver use is for industrial purposes and photography, and only 20% or less is for investment. This makes silver more like a real commodity. When industrial growth is back, so is silver. In particular, a lot of silver is used in automobiles. Reports the Silver Institute: Silver stays with you on the road, too. Every time you drive a car or ride in a motor vehicle, you are taking advantage of a number of the myriad uses of this element. Over 36 million ounces of silver are used annually in automobiles. This morning, a host of good news came out in the automotive sector, courtesy of our very own Market Currents reports. Thursday, January 3, Complete Story »

Chart Of The Day: The Long View On Asset Class Returns Posted: 03 Jan 2013 11:47 AM PST By Cullen Roche: Here's a good look at the 30,000 foot view of three major asset classes – gold, t-bonds and stocks. The following is the rolling 10 year average total returns since 1937. Gold was pegged prior to the '60s, so the data is a little light there. But I think the chart tells an interesting story for those of us who believe in mean reversion. My big conclusions: Bonds are likely to perform much worse in the next 10 years than they have in the last 10 years. The gold rally probably isn't over yet, but we're closer to the beginning of a downside mean reversion than we are to a big upswing. That means gold is also likely to perform worse in the coming 10 years than it has in the last 10 years. Equities are coming off of Complete Story »

Fund Money Flows Continue Wreaking Havoc Posted: 03 Jan 2013 11:32 AM PST In yesterday's post I mentioned to not put too much into a single day's price action as hedge funds are allocating money into various markets and yanking it out of others to start off the New Year. The result so far has seen gold giving back all of its gains from yesterday, plus some, with silver surrendering nearly all of its gains as I write this. Silver looked shaky to me yesterday given the fact that the other base metals were so strong. In that environment, it should not have faded 50 cents off its best level of the session. Even copper is surrendering some of its sharp increase from yesterday along with palladium, which is getting smacked. Platinum however is going the other way and that is up. Don't forget that we are now in an age in which the word "SUBTLE" is unknown amongst the giant hedge funds. They come crashing into and flying out of markets in the blink of an eye (check that - faster than that thanks to their algos) with very little regard if any to the disturbances that their buying and selling create in the markets in which they decide to play. This positioning is going to continue into tomorrow but maybe by the time the dust settles on the trading floors at the close we will have a better indication as to what to expect the start of the first FULL week of trading next Sunday evening/Monday morning. Part of the weakness in gold and silver today is coming from two fronts - the first of which is the lowering of projected gold prices for 2013 and 2014 by analysts at some of the major investment banks. The chatter on that front is that the economy is improving enough to reduce the FEAR FACTOR that has supported gold prices. With that removed, returns on stocks look promising to many hedge fund managers and that has them looking more at equities and the base metals rather than the precious metals. Apparently the minutes from the latest FOMC meeting, in which there was some debate among the various governors about the duration of the QE3 and QE4 programs has gotten some looking for a cessation of the easy money policies of the Fed sooner than the market was expecting. I do not buy into that notion since the only thing propping up the economy has been easy money policies but as said before, everything nowadays in these markets is ultra short term thinking. I have jokingly told some friends that a LONG TERM TRADE in these new normal is 60 minutes! The other reason is the inability of the gold shares to sustain any sort of upward momentum. Yesterday, the HUI gapped above resistance at 450- 452 but then immediately began to attract selling. Today, that selling has intensified as the index has been steadily sinking lower since the start of the session. I am going to refrain from too much on the technical analysis front today for the above-mentioned reasons but let's just say for now that the $1700 level is now become reinforced as a formidable overhead resistance level that MUST be breached for a trend to begin in gold. Prior to that however, gold must clear and STAY ABOVE $1680 if it is going to go anywhere in US Dollar terms. Gold in Euro terms and in Yen terms looks significantly better right now than it does in US Dollar terms. The Dollar is experiencing a sharp rally higher today and that is bringing general selling pressure across the commodity sector but oddly enough, if this were a RISK OFF trade, the bonds would be moving sharply higher - they are not! Iinstead they just fell apart as I wrote this. I am watching the price action in the long bond with EXTREME INTEREST right now as it is right on the verge of a major breakdown. As of now, I am not clear what message this is sending but I find it ironic that long term rates on Treasuries are moving higher today after all the backslapping and self-congratulations we witnessed among the political class yesterday after their "triumph" of avoiding the fiscal cliff, for two months. Maybe, just maybe, the larger market is getting sick and tired of the dysfunctional government in the US and their inability to GET SPENDING UNDER CONTROL in a serious, adult-like fashion. Could it be the markets are sending a message to "GET YOUR HOUSE IN ORDER OR ELSE"? Again, I am not sure but if these bonds do break down, all bets are off as to the US economy in the months ahead. The last thing that policy makers or the economy wants to see at this juncture is higher long term interest rates. By the way, as I am finishing this commentary up, the FOMC minutes suggesting that the bond buying program, especially QE4, might end sooner than the end of the year, just wiped out the floor of support under this market. If the FEd is not going to buy these worthless IOU's in the quantity that it first announced for that duration that it also announced, then one has to wonder who in their right mind would want to hold them given the fact that interest rates are just too damn low on them. Rates will have to rise if the Fed no longer sucks up $40 billion a month of these things. That Dollar rally is probably coming as a bit of relief to the currency with traders thinking that those same FOMC minutes are supportive to the currency, given the thinking that the Fed might not be proceeding to debauch the currency at the same rate as previously expected. Let's see what tomorrow brings...and how long any of this lasts. It could all be forgotten by the time New York opens tomorrow morning for all that any of us know. I am reminded of that famous scene in the Original "Planet of the Apes" in which Charlton Heston, cries out, "IT'S A MADHOUSE, A MADHOUSE". He must have been talking about today's financial markets.

Jim Sinclair: IMF States Entire Derivatives Market is a WMD Time Bomb Posted: 03 Jan 2013 11:20 AM PST Gold and derivatives expert Jim Sinclair has sent subscribers an alert this morning warning on the severity of the global derivatives market, which Sinclair has dubbed the Global Derivative Graveyard Problem. The IMF, which currently estimates the global derivatives market to be approximately $600 trillion (rather than the true $1.26 QUADRILLION notional), has come out [...] Check out these similar articles: Jim Sinclair: Gold Price is Going Much Higher Than Even I Anticipated, Largest Gains of Entire Bull Market Are At Hand! Wynter Benton: Silver Takedown Proof of JPM's Silver Derivative Bomb Jim Sinclair Blasts Hugh Hendry, States Unlike 1930′s, Gold Will Not Be Confiscated in Current Bull Market

Why stocks around the world were soaring today Posted: 03 Jan 2013 10:58 AM PST From Bloomberg:   U.S. stocks rose, sending the Standard & Poor's 500 Index to its biggest two-day gain since July, as lawmakers passed a bill averting spending cuts and tax increases threatening a recovery in the world's biggest economy.   All 10 groups in the S&P 500 rose at least 1.1 percent and 29 out of 30 stocks in the Dow Jones Industrial Average rallied. Apple (AAPL) Inc. and Facebook Inc. (FB) jumped more than 2.5 percent, pacing gains with technology companies. U.S. Steel Corp. climbed 7.5 percent after the shares were upgraded at Credit Suisse Group AG. Zipcar (ZIP) Inc. soared 48 percent after Avis Budget Group Inc. agreed to buy the company.   The S&P 500 jumped 1.7 percent to 1,450.91 at 2:47 p.m. in New York. The benchmark index is up 3.5 percent over two days. The Dow climbed 213.45 points, or 1.6 percent, to 13,317.59 today. The Nasdaq Composite Index soared 2.3 percent, the most since June 29, to 3,089.04. Trading in S&P 500 companies was 31 percent above the 30-day average at this time of day. U.S. exchanges were closed yesterday for the New Year's holiday.   "We sold off on the uncertainty of what it means to go over the fiscal cliff and that's been removed," James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $325 billion, said in a telephone interview. "We're re-valuing the market based on what's closer to the underlying economy and most of the economic reports have been pretty good."   The House of Representatives passed a bill just after 11 p.m. in Washington yesterday by a vote of 257-167, undoing income tax increases for more than 99 percent of households. The S&P 500 surged 1.7 percent on Dec. 31, the biggest rally on the final day of a year since 1974, as Republican and Democratic lawmakers made last-minute concessions to finalize the deal.   Yearlong Impasse   The bipartisan vote broke a yearlong impasse over how to prevent more than $600 billion in tax increases and spending cuts that could lead the economy back into recession. President Barack Obama said he will sign the bill into law.   The measure isn't the grand bargain on deficit reduction lawmakers wanted when they created the tax-and-spending deadlines over the past three years. While avoiding most of the immediate pain, it is only one step toward curbing the federal deficit -- an issue that will return with a February fight over raising the $16.4 trillion debt limit.   "It's a relief rally that we didn't stay over the cliff," Peter Tuz, who helps manage about $600 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said by phone. "There's some clarity regarding tax rates going forward, which is a good thing," he said. "We had a strong year in 2012 and people might have taken some money off the table and here it comes back to the market today."   Tax Rates   Households making less than $450,000 per year would be spared an income tax rate increase under the agreement. The wealthy would see a rise in their top rate, to 39.6 percent from 35 percent.   The top tax rates on capital gains and dividends would go up to 23.8 percent, from 15 percent last year. For an individual with $10,000 invested in the S&P 500 (SPX), payouts would fall to $167.64 a year from $187. An investor who sells the stock at a $5,000 profit would face capital gains obligations of about $1,190 compared with $750.   The S&P 500 advanced 13 percent in 2012, extending the bull market rally to 111 percent since March 9, 2009. Stocks of financial institutions and consumer discretionary companies advanced more than 21 percent last year. The S&P 500 is 7.8 percent from surpassing the all-time record of 1,565.15 that it reached in October 2007.   Manufacturing Expands   Manufacturing in the U.S. expanded in December. The Institute for Supply Management's U.S. factory index rose to 50.7 in December from 49.5 a month earlier, the Tempe, Arizona-based group said today. Economists in a Bloomberg survey projected a reading of 50.5 for December, according to the median of 71 forecasts. The dividing line between expansion and contraction is 50.   Spending on U.S. construction projects unexpectedly dropped in November, restrained by declines in non-residential building and public works, a separate report showed.   Investors bought shares of companies most tied to economic growth, sending the Morgan Stanley Cyclical Index (CYC) and Dow Jones Transportation Average to their highest levels since July 2011. The Morgan Stanley gauge, which tracks 30 U.S. companies, added 2.3 percent, while the Dow Jones Transportation Average, which includes companies like FedEx Corp. and Union Pacific Corp., jumped 1.5 percent.   Banks Rally   Financial companies rallied 2.2 percent. Bank of America Corp. (BAC), the second-biggest U.S. bank by assets, rose 2.7 percent to $11.92. Citigroup Inc. (C) added 3.7 percent to $41.02.   Technology companies climbed 2.3 percent, the most out of 10 S&P 500 groups. Apple, the world's most valuable company, jumped 2.5 percent to $545.27. Facebook, the company that runs the largest social-networking website, advanced 5.3 percent to $28.04.   All 11 companies in the S&P Supercomposite Homebuilding Index rose as the gauge added 1.9 percent. M/I Homes Inc. surged 2.4 percent, the most in the measure, to $27.14.   Wynn Resorts Ltd. jumped 5.6 percent to $118.83, and Las Vegas Sands Corp. increased 5.3 percent to $48.63. Macau casino revenue rose 20 percent to a record last month, beating analyst estimates, as Christmas promotions drew more holiday-makers to the world's biggest gambling hub.   Macau Casinos   Casino revenue in the Chinese city jumped to 28.2 billion patacas ($3.5 billion) in December, trumping the previous record of 27.7 billion patacas in October, according to data from Macau's Gaming Inspection and Coordination Bureau today.   U.S. Steel, the largest U.S. producer of metal by volume, gained 7.5 percent to $25.64. The stock was upgraded to outperform from neutral at Credit Suisse, which said the U.S. steel sector may be poised for a bounce.   Zipcar surged 48 percent to $12.21. Avis Budget, an automobile rental company, agreed to buy the car-sharing firm for $491 million, or $12.25 a share, targeting consumers looking for an alternative to owning their own auto. The offer is 49 percent higher than the Cambridge, Massachusetts-based company's Dec. 31 closing price.   Blackstone Group LP's Byron Wien, whose prediction for the U.S. stock market in 2012 proved accurate, said the S&P 500 will fall below 1,300 this year and European stocks will decline 10 percent.   Gold will climb to $1,900 an ounce and financial stocks will reverse their gains from last year, Wien, chairman of Blackstone's advisory services unit, said in his annual "10 Surprises" list published since 1986. The Shanghai Composite Index will rally 20 percent in 2013, he said. His current forecast for the S&P 500 implies an 8.9 percent drop from last year's closing level.   'Largely Unresolved'   "A profit margin squeeze and limited revenue growth cause 2013 earnings for the S&P 500 to decline below $100, disappointing investors," Wien wrote in an e-mailed statement today. "The structural problems of Europe remain largely unresolved and the mild recession that began there in 2012 continues."   The 79-year-old former Morgan Stanley senior strategist correctly forecast the U.S. stock market a year ago when he said the S&P 500 would exceed 1,400. It closed 2012 at 1,426, rallying 13 percent. Wien also predicted rallies of 15 percent or more in equities in China, India and Brazil in 2012. While India's Sensex Index gained 26 percent, Brazil's Bovespa climbed 7.4 percent and the Shanghai Composite advanced 3.2 percent.   To contact the reporter on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net.   To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net.   More Cruxallaneous:   Must-read: An incredible tribute to Ron Paul   What history says about the markets heading into Obama's second term   A trader's road map for stocks and gold going into the New Year

Some of the world's best-known precious metals experts share their all-time best advice Posted: 03 Jan 2013 10:58 AM PST From The Gold Report:   The Gold Report shares investing ideas from some of the smartest people in the precious metals mining sector -- analysts, money managers, and newsletter writers including Rick Rule, James Dines, Doug Casey, and Porter Stansberry.   That was founder Gordon Holmes' vision in 2003 when he started the publication after receiving these words of wisdom from GoldMoney Chairman James Turk: "Buy gold." As the former publisher of Buyside magazine, Holmes set out to create a publication that would interview a wide array of experts and feature in-depth stories about macro-trends and individual investing ideas, but let the readers make their own decisions. In 2008, Karen Roche joined the team as president and grew the parent company, Streetwise Reports, to four newsletters, including The Critical Metals Report, The Energy Report, and The Life Sciences Report.     To celebrate the New Year, Roche asked some of our most popular interviewees to share "The Best Investing Advice They Ever Heard." Most of it falls into a few basic areas we already know: "Buy low and sell high before the cycles start all over again." Some is contradictory: "Be cautious, but take risks." Some made us laugh out loud.   Consider it our New Year's gift to you as we all get ready for an exciting 2013 in the world of junior mining investing...   Read full article...   More from the "gurus":   Doug Casey's 10 best tips on speculation... and life   What resource master Rick Rule is thinking now   Porter Stansberry: If you can't answer this question, you could be in serious trouble

An important but little-known "hedge fund" took massive losses last quarter Posted: 03 Jan 2013 10:58 AM PST From Bruce Krasting:   One of the biggest leveraged hedge funds in the world got hit with a 2×4 during the 4th quarter. This fund has a mixed bag of assets, but was heavily exposed to big FX positions.   The fund made a big "bet" recently when they went short EURYEN. This turned sour in a very big way; the EURYEN moved an incredible 14 big figures against them in just 60 trading days.   Street players, who know of this currency spec, refer to it as a "size" position.   At the end of Q3, it came to a lumpy short $40 billion. There were rumors that the fund added to the short during the quarter (not confirmed yet). But even if the book was kept static, the mark-to-market loss comes to $5 billion-plus. That's serious money to anyone.   I think the well-paid managers of the fund are kicking themselves in the ass over this speculation. They got creamed on this stinker, and this could be just the beginning of the losses.   Adding to the carnage was a monster-sized bet short EURUSD. Last reported, this mega-position was $220 billion short! It's possible that this number is now close to one-quarter trillion. It was a good quarter for the EURUSD, and that means a bad quarter for the fund. The six-plus big figure move up in the euro versus the dollar translates into a paper loss of a staggering $11 billion!   All in, the losses from FX come to $16.5 billion. The fund has reserves of about $50 billion, so the quarterly swing is not a crisis, but it's an eye-opener. 30%-plus of those reserves went out the window in one quarter. Wow!   The fund in question has a strong capital base and loyal investors. But the management will have to explain to those investors how it managed to lose such a large percentage of its "cushion" in such a short period of time. Those investors will, no doubt, ask the very pertinent question: "Why is the fund making such big FX bets?"   Management is also going to have to address the issue of leverage – this fund is now running at 10-to-1. The high level of leverage, and the mega billions involved (much of which is tied up in derivatives), makes this fund a high-risk/return player. Investors will have to ask themselves, "Do we still want to be on this roller coaster?"   So who is it that is running such a big FX book? And who are the investors that are on such a wild ride?   That would be the Swiss National Bank. The "investors" are the Swiss people...   Read full article...   More on currencies:   Ron Paul: Why is gold is becoming money again   Trader alert: An important trend may have reversed last week   Not just inflation: A surprising new risk of the U.S. dollar and other fiat currencies

Another Centamin gold shipment held in customs Posted: 03 Jan 2013 10:47 AM PST Following the severe delays in a prior shipment of gold from its important Sukari mine in Egypt, reports say that its next shipment of gold has been similarly delayed since December 18th.

Warren Buffet to Re-Enter Silver Market, Build World's Largest Solar Project Posted: 03 Jan 2013 10:37 AM PST Silver investors are likely familiar with Warren Buffet's foray into physical silver, and how he was forced out of his 130 million ounce silver position in 2006- roughly the same time-frame as the launch of the silver ETF SLV.  Could buffet be attempting to re-enter the silver market, under the cover of solar energy?  MidAmerican [...] Check out these similar articles: Warren Buffet Injects $5 Billion into Bank of America Why Warren Buffett Envies Gold Investors 12-Day Silver Strike Ends At Worlds 3rd Largest Producer

Hyperinflation 201 Posted: 03 Jan 2013 10:28 AM PST Tweet As a continuum to "Hyperinflation 101" I will try to wrap it up with this piece.  If you agree with what I wrote yesterday regarding the "cause" of hyperinflation at its most basic being a break, or lack of confidence in a fiat currency then you are ready for what follows.  If you do not agree and instead have the view that dictionary definitions or the pablum spoon fed to you by Washington and Wall Street (CNBC) are correct then please keep reading, you may have an "a Ha" moment. Just to backtrack a little, "fiat" money by definition is a currency that is not "backed" by anything real or tangible.  It has value, whatever value, based on confidence or the belief… that it has value.  This "confidence" or "belief" at its most basic and primal level is that the currency will SPEND.  Once a population believes that a currency will one day NOT "spend"… this is exactly what they will do… spend it as fast and furiously as they can!  They will spend EVERY last currency unit that they have for "stuff"… any "stuff" because "any stuff" can either be used or bartered and at least has SOME value and "some" value is more than NO VALUE.  THIS is effectively what hyperinflation is… to the man on the street. Another way of saying "loss of confidence" is to use the word "panic".  In the case of hyperinflation, a panic involves exiting a currency.  In today's world, please remember that there are no currencies anywhere on the planet that are "hard" currencies (backed by Gold or Silver) other than Gold and Silver themselves.  Years ago when money WAS backed by Gold, a "panic" would involve a run on the bank where it would run out of Gold and be forced to close their doors.  This happened in the 1930′s and resulted in mass "deflation" where Dollars (which 20 of them were readily exchangeable for 1 ounce of Gold) became scarce and people hoarded them.  The reverse situation exists today.  (Yes I know, the banks are hoarding them which is why velocity is so low).  This is a very very important distinction, back then Gold and Dollars were officially interchangeable as where today they are officially "mortal enemies" and the exact opposites of each other. My point is this, back in the good old days, a "panic" would usher in a deflation, today a true and uncontrolled panic will, must by definition usher in a hyperinflation.  Follow this logic through and it doesn't matter what government or central bank you think of because they are all sleeping in the same fiat bed and have all contracted the same disease.  They all go to the same doctors and are covered by the same insurance company.  In a word, they will all die the same deaths at identical times for identical reasons. OK, mathematically the Treasury is broke.  They can never tax enough or cut spending enough to actually pay back lenders with current Dollars.  For that matter, the Dollars for future interest payments do not even exist today for future payment… they must be created (printed) but that is a story for another day.  Keeping it simple and within an easy box to understand, the Treasury has simply borrowed and guaranteed too much to ever be repaid in current Dollars.  The ONLY way to make payment is to print more which is another way of saying that the only way to make payment is to BORROW more.  But round and round we go… too much borrowing IS the problem… logically "borrowing more" cannot fix the problem of having already borrowed too much!  In a deflation "the money" becomes more valuable, I becomes worthless in a hyperinflation.  In a fiat system, the money can NEVER become more valuable over a longer time frame and devalues into obscurity or uselessness.  The only question is how long does this take to happen? I could go off on all sorts of tangents, examples and proof how we are mathematically upside down and financially screwed, I assume that you already understand this.  What I am trying to do is break it down to such a basic, grounded and simple equation that no one can misunderstand.  Here it is: if the issuer of a fiat currency is fiscally, financially and mathematically BROKE then what does that mean for their fiat currency.  Remember the words "the full faith and credit"?  How much "faith" and how much "credit" would you give to an obvious bankrupt?  None… right?  (Yet every single day you wake up and wonder "what's Gold doing"?  You have it 180 degrees BACKWARDS!  You should be wondering each morning whether or not the Dollar is being devalued further… you should be wondering whether or not the mathematically certain panic OUT of Dollars has begun.  But no, you wonder where or not "Gold went up".)  Down and dirty, "How much is the IOU of a bankrupt lender worth?"  The answer to this question gives you the ultimate "value" of the currency issued by the bankrupt which is exactly the same value as a hyperinflated currency… ZERO! Let me put it this way, absolutely positively we are set up for a panic out of Dollars and all other fiat currencies because the very same Dollars that are issued by a bankrupt government are what all these other central banks use as their "reserves."  Just look at the latest 3 ring circus in Washington where they avoided the "fiscal cliff" by adding another $4 trillion in debt over the next 10 years  while giving subsidies to Hollywood, Nascar and asparagus farmers… they can't even do a "fiscal fix" without adding more PORK.  Next they will raise the imaginary debt ceiling.  The only real question that comes to my mind is "when"… "when" does the panic begin? I know that I strayed a little from "hyperinflation" but in the case of a world where all money, all accounts, all savings… everything "financial" is fiat, a panic means hyperinflation.  It means hyperinflation because the ONLY policy tool available is… you guessed it… print and thus borrow more and dilute the paper even further!  I had planned to explain "why" I don't believe that hyperinflation can be a long term phenomenon but got caught up in the layman's nuts and bolts deeper than I anticipated.  I will finish this tomorrow and explain why I believe this will most likely be a very short term event and one where you are either positioned correctly and survive… or you are not and you will find it nearly impossible to survive. Similar Posts: Hyperinflation 101 Debt and Hyperinflation Hyperinflation Nation

Turkey imports 120.78 tons of Gold in 2012 Posted: 03 Jan 2013 10:27 AM PST Turkish gold imports rose 51 percent to 120.78 tonnes in 2012 from 79.7 tonnes a year earlier..

Peter Schiff: First The Currency Cliff, Then Higher Inflation And Interest Rates Posted: 03 Jan 2013 09:35 AM PST In a new video message, Peter Schiff reacts on the longer term outlook of the outcome of the "fiscal cliff debate". Obviously we don't want to spend time and effort in analyzing what has been decided, but rather what is to come. We have found some interesting insights in Peter Schiff his point of view although most of them are not new. Peter Schiff is convinced that America is going to raise the debt ceiling again. That is the most irresponsible and reckless type of action, but the only one he expects. Because of this, the dollar is going to come under pressure. Currently the focus is on the European crisis. However, the coming US crisis is much worse. At least, the Europeans deal one way or another with their problems. The American politicians are less disciplined; they keep on spending what they do not have and keep on increasing the already huge deficits. There is no pressure on America yet, but there will eventually be, says Schiff. As soon as the world really worries about the American debt, they will sell their dollars. The dollar is the reserve currency for now, but it does not mean it will be the reserve currency forever. The US cannot run deficits forever. With that type of deficits, the US dollar cannot stay the anchor of the world's monetary system. There will be consequences to the American economy of the increasing deficits. Peter Schiff believes that things will play out in the following order: the crisis will first hit in the exchange markets, then in consumer prices (price inflation) and finally in the long term interest rates. Some people argue that we are leaving these debts to our children but Schiff disagrees. We will pay these debts, and we will do starting almost right now. The recent bill is a gigantic increase in the inflation tax. We will pay for it by debasing the currency. Schiff believes it is not going to be just a small decline. This will be a precipitous decline as the  dollar goes over a currency cliff and takes the bond market with it. It is not going to happen years down the road; it is going to happen soon. It will be much bigger than the 2008 crisis. Do you hold gold in a safe jurisdiction?

Greg Mannarino: Ratings Agencies Will Downgrade the Dollar in 2013, Bursting US Debt Bubble Posted: 03 Jan 2013 09:30 AM PST In his latest market update, Greg Mannarino states that the market pop in the wake of the 2 month fiscal cliff agreement is merely a relief rally that has no real legs.  He points out that the agreement does absolutely nothing to address spending. Mannarino states that the Fed's $85 billion in monthly counterfeitting to [...] Check out these similar articles: Greg Mannarino – When Debt Bubble Bursts, People Are Going to Suffer on a Biblical Scale Greg Mannarino: It's Time To Bet Against The Markets, Here's How Greg Mannarino: Current Gold & Silver Correction is a GIFT!!

Channel Resources Receives Extension to Tanlouka Exploration Permit, Provides Tanlouka Project Update Posted: 03 Jan 2013 09:20 AM PST VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 3, 2013) - Channel Resources Ltd. ("Channel" or the "Company") (TSX VENTURE:CHU) is pleased to announce that it has received a two-year extension to the exploration permit for the Tanlouka gold project in Burkina Faso, West Africa (the "Tanlouka Project") from an original expiry date of January 27, 2014 to January 27, 2016, by which time a mining lease can be established to allow for development to take place. "This extension to the Tanlouka exploration permit gives the Company further opportunity to expand on its maiden resource at Mankarga 5 and to capitalize on the significant exploration potential elsewhere on the project before proceeding to development," commented Colin McAleenan, Channel's President and CEO. "We appreciate the Government of Burkina Faso's timely action on this issue, which further demonstrates its commitment to the development of the mining industry as a major economic driver for the country." Tanlouka Project Update The Tanlouka Permit is situated approximately 80 kilometres east of the capital city of Ouagadougou, and is proximal to a major highway, in an area of low population density with good local infrastructure. It is located along the eastern margin of the Markoye Shear Zone, a 450 kilometre-long first order crustal scale structure that hosts many of the largest gold deposits in Burkina Faso. Mankarga 5 Deposit Channel published its first National Instrument 43-101 Mineral Resource Estimate (the "Estimate") for Mankarga 5 deposit in July of 2012, achieving an important milestone in demonstrating the potential of the Tanlouka Project only two years after drilling the first hole in the area and with a discovery cost of approximately $5 per ounce. This Estimate contains Indicated and Inferred resources for both oxide and sulphide mineralization as tabulated below: Class Rock Type Cut-off Grade  (g/t Au) Quantity (tonnes) Grade (g/t Au) Contained Gold (ounces) Indicated Oxide 0.18 2,252,000 0.89 64,000   Sulphide 0.27 11,814,000 0.95 361,000     Total 14,066,000 0.94 425,000 Inferred Oxide 0.18 6,933,000 0.78 174,000   Sulphide 0.27 22,140,000 0.78 555,000     Total 29,073,000 0.78 729,000 Gold grades have been determined using Inverse Distance Squared interpolation techniques into a 3-Dimensional block model constrained by mineralization wireframes utilizing 20 metre (along strike) by 20 metre (across strike) by 5 metre (vertical) blocks, with statistically derived top cuts applied to three-metre composited grades. Whittle pit constraints assumed wall slopes of 26.5° for oxide and 45° for sulphide mineralization. The base-case Mineral Resource Estimate assumes mining costs that are based on heap-leach processing for oxide material and cyanide leach processing for sulphide material. Metallurgical recoveries were based on results of preliminary testing by SGS Canada Inc. on samples of Mankarga 5 sulphide and oxide mineralization. Specific gravity assumptions of 2.17 for oxide, 2.62 for sulphide and 2.70 for waste rock are based on measurements by the Company on 3,494 core samples from the Mankarga 5 deposit (approximately one sample for every 4.5 metres of core drilled). The Estimate is resilient to increases in cut-off grade; for instance, if the cut-off grade is increased to 0.50 grams per tonne gold ("g/t Au") for both oxide and sulphide categories, a total of 11,544,000 tonnes of Indicated Resources at a grade of 1.06 g/t Au (395,000 ounces gold) and 19,278,000 tonnes of Inferred Resource at a grade of 0.97 g/t Au (604,000 ounces gold) are estimated. The Mankarga 5 deposit remains open both along strike and to-depth, with excellent potential to significantly increase the quantity of gold ounces recognized in this deposit. Further work is planned to prepare the Mankarga 5 deposit for economic assessment including additional drilling and further metallurgical studies to expand on preliminary work reported in a news release on July 7, 2012. While these initial metallurgical results demonstrated the free-milling nature of gold mineralization in both oxide and sulphide samples, column leach tests on both types of rock and transition material will allow for more definitive estimates of gold recoveries from heap-leach operating scenarios. Tanwaka Zone Soil sampling surveys on 100 metre by 25 metre grids have been conducted on two regional soil anomalies in the Manesse and Tanwaka zones. Results from Manesse are pending; however, the Company announced results from the Tanwaka survey on November 21, 2012, which showed gold-in-soil anomalies that encompass approximately twice the area of those associated with the Mankarga 5 deposit. When these soil anomalies are coupled with structural information derived from high-resolution magnetic data, very compelling drill targets emerge in at least two major settings in the Tanwaka zone. Grab samples taken from artisanal workings within the anomalous zones yielded assays of up to 35.1 g/t Au. Channel has followed up on these results from Tanwaka with some limited trenching, for which results are pending, and the planning of drill programs to test the extent of mineralization. On a project-wide basis, corporate social responsibility ("CSR") related activities have also been initiated, including community outreach programs, surveys of culturally sensitive areas within the permit, the establishment of a drinking water supply in the Mankarga area, and a contribution of grain to some of the area's most in-need groups as a response to the Sahel region's food shortage last year. While these exploration and pre-development activities have taken place, the Company has also prepared for the project's future advancement through a build-up of local corporate and project infrastructure. As Channel earned its 90% interest in the project, a Burkina Faso subsidiary, Tanlouka SARL, was formed to hold the interest and to directly manage the project and an office has been opened in Ouagadougou. The Company's existing exploration 'base' in the town of Mogtedo, just north of the project permit, has been upgraded and a new compound, complete with core storage facilities, has been constructed proximal to the Mankarga 5 deposit to facilitate future drilling programs. "The Tanlouka Project has exhibited a great deal of potential for further growth, both in the expansion of known resources at Mankarga 5 and also in the prospects for further discovery at Tanwaka and Manesse. We are very pleased with the progress that our team has made over a relatively short period of time," continued Colin McAleenan. "Work programs to advance exploration and pre-development programs over the next year and beyond have been planned, and Channel is well positioned to unlock the value of the Tanlouka Project despite the very difficult market conditions that have prevailed over the last year." For further information and illustrative figures, please refer to the Company's recently updated corporate presentation, located on the Company's website at http://www.channelresources.ca/i/pdf/chu-presentation.pdf. All technical information in this news release has been prepared under the supervision of Colin H. McAleenan, P.Geo, who is the Company's "Qualified Person" under the definition of NI 43-101. Mineral Resources which are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates presented in this report are by nature imprecise and depend, to a certain extent, upon geological interpretation and statistical inferences that are based on drilling information that may ultimately prove to be unrepresentative or unreliable. They may be materially affected by geology, environment, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Figures may not sum due to rounding. Significant figures do not indicate added level of precision. The 2012 resource model and Mineral Resource Estimate for the Mankarga 5 deposit at the Tanlouka Project were prepared by Mr. Jeffrey K. Smith, P.Geo., Principal Geologist at AMEC in Toronto, Ontario, who is an independent Qualified Person as defined in National Instrument 43-101 and who has conducted a site audit at the Tanlouka Project and reviewed data collection, quality control, geological interpretations and modeling procedures used by the Company. The estimate by AMEC is consistent with the standards set out in Canadian Securities Administrators' National Instrument 43-101 and the Company is treating both the indicated and inferred gold resource estimate as a National Instrument 43-101 resource estimate. The Company filed a National Instrument 43-101 Technical Report for the Tanlouka Project Resource Estimate on the SEDAR system on September 4, 2012. References to metallurgical test work and results for the Mankarga 5 deposit mineralization refers to work conducted under the guidance of Mr. Jake Lang, B.E.Sc., Manager Metallurgy, SGS Canada Inc. Mineral Services Vancouver British Columbia, Canada. Some of the statements contained herein are forward-looking statements involving known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various degrees of risk. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the price of minerals, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise. Further disclosure on risk factors is available in the Company's various corporate filings at www.sedar.com. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. January 3, 2013 (Source: Marketwire) http://www.marketwire.com/press-release/channel-resources-receives-extension-tanlouka-exploration-permit-provides-tanlouka-project-tsx-venture-chu-1742211.htm Disclosure:  Channel Resources is a Vulture Bargain Candidate of Interest (VBCI) and and is our Vulture Bargain #17.  Members of the GGR team are actively accumulating and hold long positions in CHU.V.

La décision dont vous n'avez sûrement pas entendu parler et qui annonce pourtant le retour en force de l'or comme monnaie Posted: 03 Jan 2013 08:51 AM PST Le comité de Bâle vient de décider que l'or sera dorénavant comptabilisé pour 100% de sa valeur, au même titre que les obligations souveraines notées AAA ou le cash en dollar. Lire

Alf Field 2013 Gold Analysis: Gold Set Up for Spectacular 2013 Posted: 03 Jan 2013 08:30 AM PST Alf Field, the man who Jim Sinclair has labeled the best gold chartist alive, has released his latest gold analysis for 2013. Field states that there is a high probability that the 3 month correction in gold that began at $1797 is now completed, and that gold is perfectly set up from a technical perspective [...] Check out these similar articles: Alf Fields Releases New Outlook on Gold Alf Fields: Gold Correction Completed, Price to Target $4,500 Stewart Thomson: A Glass Of Golden Bubbly- Miners, Gold, & Silver Set to Explode in 2013

Credit Suisse terms Gold a wounded bull Posted: 03 Jan 2013 08:25 AM PST Credit Suisse cut its forecast for gold by over 5 per cent to $1,740 per oz from $1,840 and that of silver to $32.20 an ounce from $33.10 an ounce.

SDBullion Deal of the Day: Free Shipping On All Orders Over $5,000.00!! Posted: 03 Jan 2013 08:18 AM PST Doc's Deal of The Day Free Shipping On Orders Of $5,000.00 Or More!! To Order Call 614.300.1094! ANY SILVER PURCHASE OF A 100 OUNCES OR MORE WILL EARN YOU 100 SD OUNCES (POINTS) TO REDEEM TOWARDS ITEMS FROM THE SD STORE!! ALL YOU NEED TO DO IS MENTION YOUR USERNAME AT THE TIME OF PURCHASE! Check out these similar articles: Free Shipping On All Domestic Silver Orders Of $3000 Or More!! Doc's Silver Smash Special: Free Shipping on Silver Orders Over $3,000! $9.99 Shipping On All Orders!!

Copper edges up in London as relief underpins prices Posted: 03 Jan 2013 08:07 AM PST Commodities made a powerful start to the new year, with oil, gold and copper hitting multi-week highs on Wednesday and copper continued that momentum on Thursday.

What could be Silver this year? Posted: 03 Jan 2013 08:00 AM PST The knock down the silver price experienced towards the end of last year may have spooked many considering silver investment, however market analysts and the fundamentals are all pointing to big gains in the next year suggesting now might be the opportune time to buy silver bullion.

Higher low in place for gold stocks as 2013 beckons Posted: 03 Jan 2013 08:00 AM PST With all of the volatility of the past nine months, few market observers would think the gold equities have begun a series of higher lows or even a new bull market. However, this action is typical of this sector.

Base or Precious metals: Is it time to choose a side? Posted: 03 Jan 2013 07:39 AM PST If you believe the global economy could collapse any day now, stick to gold says Haywood's Stefan Ioannou, if you are looking for a slow, if steady recovery, turn to base metals. An interview with the Gold Report.

Federal Reserve's Expectations of Growth Over the Past 10 Years Have Greatly Overstated Actual Growth Posted: 03 Jan 2013 07:30 AM PST As we begin 2013, we reflect on some economic predictions that never came true. After the Fed's unprecedented actions in 2008, some predicted massive double digit inflation by now. Yet headline consumer price inflation, as of November 2012, was below 2 percent. And as for inaccurate predictions, the Federal Reserve's expectations of growth over the [...] Check out these similar articles: Michigan Sells $3.3 Billion in Variable-Rate Bonds to Pay Back Federal Unemployment Benefits Loan CNBC MOPE: Actual Existence of Gold Reserves is Irrelevant, It's the Bookkeeping That Matters! NFP: +18k on Expectations of +150k, Unemployment Rate 9.2%

Dow Gold and Gold Silver Ratio Charts Remain Bullish Posted: 03 Jan 2013 07:21 AM PST Silver is more attractive than gold from a returns point of view. Today's AM fix was USD 1,684.50, EUR 1,285.09 and GBP 1,039.69 per ounce. Yesterday's AM fix was USD 1,681.50, EUR 1,270.11 and GBP 1,031.22 per ounce. Silver is … Continue reading →

Fear Index December 2012: no free lunch Posted: 03 Jan 2013 06:45 AM PST The US fiscal cliff debate is over, and if you'll excuse me for resorting to a well-worn gold bug cliché, the can has just been given another kick down the road. The problem is of course that ...

Gold, silver tick lower as euphoria of fiscal cliff deal fades Posted: 03 Jan 2013 06:41 AM PST Wholesale gold bullion prices drifted lower to $1,680 an ounce by the end of Thursday morning in London, having rallied to a two-week high yesterday following news of the deal to avert the so-called fiscal cliff in the U.S.

Dec 2012 American Eagle silver coins sales 3rd highest in history Posted: 03 Jan 2013 06:35 AM PST The U.S. Mint has begun accepting orders for 2013-dated American Eagle gold bullion coins.

SilverDoctors.com & SDBullion.com Under DOS Attack Posted: 03 Jan 2013 06:28 AM PST Access to SilverDoctors & SDBullion has been spotty this morning as both SilverDoctors.com and SDBullion.com are under direct DOS attack.  We are working vigiourously to restore our servers.  Thank you for your patience and understanding.  We hope to have both sites back up and running ASAP. Those wishing to place an order for gold or [...] Check out these similar articles: SDBullion.com's Black Friday Blowout! Silver Eagles $2.49 Over Spot, Buffaloes .89 Over, Any Qty!! Doc's Deal of the Day: SMALL STACK ATTACK!! Welcome To The New Home Of SilverDoctors.com

First months crucial for Gold in 2013 Posted: 03 Jan 2013 06:14 AM PST Gold investments would remain as one of the most profiatble asset for investors this year, according to analysts from Bulgarian global stock and commodity markets.

Krugman One Ups Keiser With Platinum Crash Dummy Posted: 03 Jan 2013 05:56 AM PST Technically speaking it would be a "two-upping" of Max.  Forget Crash JP Morgan ~ Buy Silver, that's small potatoes.  Forget the Basel III gold as money meme and a fractional Fekete Tier 1 capital status, that's old news.  How about Crash … Continue reading →

Gold price drifts lower as ‘tax-cutting’ bill emerges as a multi-billlion dollar boondoggle for corporate America Posted: 03 Jan 2013 05:41 AM PST After yesterday's ramp in stocks on the back of the so-called fiscal cliff being averted there seems to be a bit more reality creeping back into the market. The gold price has drifted lower by about... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Perth Mint to release handful of 2013 Silver coins Posted: 03 Jan 2013 05:32 AM PST The new products begin with the Gilded Edition of the 2013 Australian Silver Koala. This year's design features an adult koala sitting in the fork of a eucalyptus tree.

Economic Armageddon Is Coming Posted: 03 Jan 2013 05:05 AM PST The US and other modern industrialized nations are headed for economic collapse. Political excesses created unwieldly and insolvent social welfare states in every modern democracy. The notion of providing for those who cannot or do not provide for themselves has limits. As Lady Margaret Thatcher expressed the problem: The trouble with Socialism is, sooner or

Thailand Gold prices signal early gains Posted: 03 Jan 2013 04:32 AM PST Earlier, Gold Traders Association of Thailand said the price of gold in Thailand could climb 10 per cent this year from its top spot at 27,000 baht per ounce last year.

Latvia’s Economic Disaster as a Neoliberal Success Story: A Model for Europe and the US? Posted: 03 Jan 2013 03:53 AM PST By Jeffrey Sommers and Michael Hudson. Michael Hudson was Professor of Economics and Director of Research at the Riga Graduate School of Law. He is a research professor of Economics at University of Missouri, Kansas City. His latest book is Finance Capitalism and Its Discontents. Jeffrey Sommers is visiting faculty at the Stockholm School of Economics in Riga. He is an Associate Professor of Political Economy & Public Policy at the University of Wisconsin – Milwaukee. The authors have advised Latvian politicians and government officials up to the Prime Minister level. Both have published extensively in the Latvian press. A generation ago the Chicago Boys and their financial supporters applauded General Pinochet's anti-labor Chile as a success story, thanks mainly to its transformation of their Social Security into Employee Stock Ownership Plans (ESOPs) that almost universally were looted by the employer grupos by the end of the 1970s. In the last decade, the Bush Administration, seeking a Trojan Horse to privatize Social Security in the United States, applauded Chile's disastrous privatization of pension accounts (turning many over to US financial institutions) even as that nation's voters rejected the Pinochetistas largely out of anger at the vast pension rip-off by high finance. Today's most highly celebrated anti-labor success story is Latvia. Latvia is portrayed as the country where labor did not fight back, but simply emigrated politely and quietly. No general strikes, nor destruction of private property or violence, Latvia is presented as a country where labor had the good sense to not make a fuss when faced with austerity. Latvians gave up protest and simply began voting with their backsides (emigration) as the economy shrank, wage levels were scaled down, and where tax burdens remained decidedly on the backs of labor, even though recent token efforts have been made to increase taxes on real estate. The World Bank applauds Latvia and its Baltic neighbors by placing them high on its list of "business friendly" economies, even though at times scolding their social regimes as even too harsh for the Victorian tastes of the international financial institutions. Can this really be a model for the United States or Europe's remaining social democracies? Or is it simply a cruel experiment that cannot readily be emulated in larger countries un-traumatized by Soviet era memories of occupation? One can only dream … But the dream is attractive enough. In a page one The New York Times feature article accompanying that paper's celebration of the Obama Administration's Fiscal Cliff commitment to budget cutting, Andrew Higgins provides the latest attempt to applaud Latvia's economic and demographic plunge as the "Latvian Miracle." The newspaper thus has fallen in line with the surrealistic Orwellian attempts to depict Latvia's austerity and asset stripping as an economic success as rendered in the brochures distributed by the Institute for International Finance (the now notorious Peterson bank lobby "think tank") and international financial institutions from the IMF to the European Union banking bureaucracy. What they mean by "success" is slashing wage levels and leaving the tax burden primarily on labor and lightly on capital gains, without spurring a revolution or even Greek style general strikes. The success is one of psy-ops and engineering of consent Edward Bernays style, rather than of successful economic policy. Latvia is the country that has come closest to imposing the Steve Forbes tax and finance model advanced during his failed Presidential campaign : a two-part tax on wages and social benefits that are near the highest in the world, while real estate taxes are well below US and EU averages. Meanwhile, capital gains are lightly taxed, and the country has become successful as a capital flight and tax avoidance haven for Russians and other post-Soviet kleptocrats that has permitted Latvia to "afford" de-industrialization, depopulation and de-socialization. Higgins' article nurtures two enduring misperceptions of the Latvian Crash of 2008 cultivated by its government advisors picked from the ranks of global bank lobbyists and austerity hawks. First, this star pupil of the international financial community "proves" that austerity works. Second, Latvians have accepted austerity at the polls. A Potemkin Village of austerity progress has been built by neoliberal lobbyists such as Anders Aslund for visiting journalists and policymakers. In the main, these visitors have accepted this Theresienstadt-like "tour" for reality. Typically trafficked tales of Latvia as a Protestant morality play (an image we presented in our June Financial Times article on Latvia) depict plucky but stoic Balts confronting the crisis and wage reductions not with Mediterranean histrionics, but by getting busy with work. This idea appeals to certain smug middle-class prejudices and stereotypes in countries whose populations have not had to suffer economic experiments in neoliberal horror. While there is some truth in the characterization of Balts as taciturn and slow to protest, the cultural traits argument is a poor attempt at developing a short hand for explaining Latvia's situation. They are authored by people bereft of an on-the-ground understanding of what has happened to Latvia. Meanwhile, "work" (employment) would be nice, Latvia's unemployment remains high at 14.2% despite a significant portion of its population having departed the country. Anyone with actual experience in Latvia will see the dissonance between myth and reality regarding the government's response to the crisis. First, Latvians most emphatically did protest both the corruption and proposed austerity following the fall 2008 crash. This was most evident at the massive January 13, 2009 protest in Riga attended by 10,000 people. This was followed by a series of protests by students, teachers, farmers, pensioners and health workers in the next months. It is not in the character of neoliberal regimes to be sympathetic to such protests, peaceful or not. Committed monetarists, they were not going to yield on policy. So Latvians moved on to the next stage of protest. 'No People, No Problem': the Great Latvian Exodus A harsh austerity regime was imposed and protests did abate. What happened? In a word, emigration. At least 10% of Latvians have left since EU accession in 2004 and access to the Schengen Zone. This exodus accelerated following the economic crash in late 2008. The problem was evinced in one Latvian student protest placard that read, "the last student out at the airport, please turn off the lights!" Latvia's population is small enough for the bigger EU countries to absorb its departing workforce. And on balance, the nation has been experiencing emigration since its independence from the Soviet Union in 1991, when neoliberal policies replaced a failing Soviet economy. Yet, rather than lessening over time as one would expect, Latvia, which can ill afford emigration, saw people leaving in ever greater numbers nearly two decades out from independence. Latvians were reproducing at replacement rates when the USSR collapsed. Its 2.7 million population in 1991 dwindled to an official 2.08 million in 2010 through a combination emigration and a financial environment too precarious to permit marriage and children. And, this "official" number from the 2010 census is quite optimistic. Demographic reports originally showed a figure of 1.88 million in 2010. Some Latvian demographers even stated their belief that this lower number was inflated. Latvian demographers report government pressure on census takers to come up with a number above the psychologically significant 2 million threshold. This success (yet another neoliberal Potemkin Village illusion) reportedly was achieved, in part, by using a government website to count Latvians as resident in the country even when they were just visiting to see relatives or check on property. Regardless of the veracity of the lower or higher numbers, both are unsustainably low and represent a slow euthanizing of the country. While many Russians quickly left at Latvia's independence, most subsequent emigrants have done so for economic reasons. Within a half-year of the initial protests, emigration accelerated and the number of children born in the country plunged as Latvia's economy crashed and its government intensified fiscal austerity. Austerity's defenders rejoin that the country had two national elections and could have changed economic course. But they spin the details that explain just why Latvia's policymaking elite have managed to remain remarkably constant over the past twenty years. Latvia's two parliamentary elections both before and since the crisis have turned on endless ethnic politics. Austerity policy has been associated with mostly ethnic Latvian parties, while more social democratic alternatives have been associated with ethnic Russian parties. To be sure, both ethnic communities were divided over economic policy, but it was mainly the ethnic framing of economic policy that ensured austerity policies would prevail in a country still traumatized by the Soviet occupation and divided over what economic policy to take in the wake of the 2008 crisis. Latvia's economic collapse was the deepest of any nation when the financial bubble burst in 2008. Hot money flows had inflated its property markets to world-high levels, thanks to its neoliberal minimal taxation of real estate that was the complemented by onerous taxation of labor. Given how deep the plunge was, there was room for the inevitable bounce up thereafter – hailed as a recovery. When one looks at the details, the so-called recovery was much centered on four sectors. First, is Latvia's correspondent (offshore) banking sector that attracts and processes capital flight. Already a site for illicit transfer of Soviet oil and metals to world markets before independence, Latvia became a major destination for oligarch hot money. The Latvian port of Ventspils was an export terminal for Russian oil, providing foreign exchange that was a Soviet and later Russian embezzler's dream. Figures such as the notorious Grigory Loutchansky of Latvia and his Nordex became notorious for money laundering. Even Americans were involved, such as Loutchansky's partner, Marc Rich (later pardoned by Bill Clinton) who later took over the Nordex operation. The Latvian government signaled its intentions to defend this offshore banking sector at all costs (including imposing austerity on its people) when it bailed out Latvia's biggest offshore bank, Parex. European Commission and IMF authorities gave a massive foreign loan for Latvia that in part enabled the government to function after bailing out Parex and thus its correspondent (offshore) accounts and continued payment of above-market interest rates to "favored" (read: "well connected") customers. Although not in the league with London, New York and Zurich as a criminogenic flight capital center, Latvia has carved out a substantial niche in the global money laundering system. According to Bloomberg: "As non-European inflows into Cyprus stagnate, about $1.2 billion flooded into Latvia in the first half of the year. Non-resident deposits are now $10 billion, about half the total, regulators say, exceeding 43 percent in Switzerland, according to that nation's central bank." These are big amounts in view of the fact that Latvia has only about a quarter of Switzerland's population and merely a tenth of its GDP. While this activity might make many bankers rich, it does little to develop Latvia's economy. Moreover, it represents a beggar thy neighbor policy that permits Latvia to benefit from taking capital out of developing post-Soviet neighboring countries. Second, Latvia's emergency response to the crisis was to ratchet up clear cutting of forests. Latvia inherited massive woodland reserves from the Soviet policy of converting farmland to forest. Export growth in this category reflects asset stripping post-Soviet style. That patrimony is being drawn down. While significant, one must remember that given Latvia's far northern latitude, it takes fifty to a hundred years to replace trees to maturity. So this resource cannot be indefinitely sustained. Moreover, the move to develop more value-added processing of Latvia's forests has been frustratingly slow. Promises by the chief consumers of Latvian logs (e.g., Sweden and others) to process logs into timber, paper and other products, have mostly been talk, with little action. Third, the fact that Latvia's neoliberalized economy has been de-industrialized over the past two decades means that nearly any increase in post-crash manufacturing represents growth in percentage terms. Latvia has nearly no effective labor protections, and only the weakest unions to advocate for decent working conditions and salaries (or even sometimes to be paid at all). Wages can be pushed down from what already were poverty levels, while businesses deploy labor in any fashion they see fit, without regulatory structures to protect workers. Simultaneously, Latvia's labor costs are far higher than are economically necessary, thanks to the punishingly high set of labor and social taxes designed to keep capital gains and real estate taxes comparatively low. Even so, wages and "flexibility" have made Latvian labor cheap enough to encourage some enterprise. Yet, there are also real centers of innovation and entrepreneurial talent, but they mostly succeed in spite of Latvian government policy, not by support from it. Europe's recent star export performers on a percent basis have been Latvia and Greece – a metric that makes sense only as a bounce up from a big post crash . Latvia's per capita purchasing power is well below that of even Greece. The modest uptick in manufacturing and exports is positive, but Latvia still is ranked last in Europe for innovation and R&D investment as percentages of GDP. The lack of investment in innovation,combined with anti-labor tax and finance policy, thus limits manufacturing's potential for much faster growth as Latvian labor costs are higher than needed, due to regressive taxation. Fourth, there has been growth in the previously underdeveloped agricultural and transit sectors. This has been encouraged by food-price inflation in recent years and better policy and planning from the Ministry of Transportation. Although transit historically has been among the most corrupt parts of the Latvian economy and government, centers of excellence have emerged in that ministry that have leveraged up Latvia's transit potential. Russia's agreement to use its rail lines to permit supply of American troops in Afghanistan via Latvian ports hasn't hurt either. The most revealing part of the New York Times' mostly puff piece on behalf of budget cutting that can be seen as a model for America to grin and bear the coming austerity, only comes in the concluding comments by economists in Latvia who reported: "The idea of a Latvian 'success story' is ridiculous." "Latvia is not a model for anybody." "You can only do this in a country that is willing to take serious pain for some time and has a dramatic flexibility in the labor market." In short, it can't be done in any real democracy. For governments able to ignore the will of the people (an expanding trend in rich developed countries), the Latvian model can only be applied if one's country is: – Small enough, willing enough, and able to let at least 10% of population emigrate, headed by the most talented and multilingual freshly minted graduates; – Demographically secure enough to see family formation, marriage and birth rates plummet; – An ethnically divided population that enables politicians to play the ethnic card to distract population from economic issues; and – A depoliticized Post-Soviet population willing to give up protest after short period. Any larger country attempting this level of austerity would need to find an outlet for the some 10% of its people leaving. For the United States, that would mean countries willing to take 20 million American workers. Last time the authors checked, neither Canada nor Mexico had the willingness or capacity to take these numbers, and not enough American students have yet studied Mandarin to do China's laundry. Latvia still has a well-educated population with highly developed design sensibilities. Its skilled workers are known for their creativity and attention to detail. With better economic policy, less anti-labor tax policy, less subsidy of real estate and finance and more investment in innovation – the opposite of what The New York Times celebrates as Latvia's success story – it could replicate the successes of its Scandinavian neighbors. The alternative is for its neoliberalized economy to produce "recovery" in a way reminiscent of Tacitus' characterization, put in the mouth of the Celtic chieftain Calgacus before the battle of Mons Graupius: Rome's victories "make a desert and they call it peace." Neoliberals call austerity and emigration "stability" and even economic growth and recovery, as long as people don't complain or demand an alternative.

RBI to promote new Gold schemes to deter physical demand Posted: 03 Jan 2013 03:23 AM PST India is the world's largest gold consumer and it is estimated that about 10% of the world's gold is in India's possession.

At Least India's Government Admits its War on Gold and Wages it in the Open Posted: 03 Jan 2013 03:20 AM PST ¤ Yesterday in Gold and Silver The gold price dipped a bit and then rallied up until mid-afternoon in Hong Kong on their Wednesday, before trading sideways into the London silver fix...which occurred moments before noon GMT.  The price took off from there, but ran into selling pressure all three times it appeared that it was about to break away to the upside...with the last rally attempt ending at the 3:00 p.m. London gold fix...which was 10:00 a.m. in New York. From that high...$1,695.90 spot...it was pretty much all down hill until 4:00 p.m. Eastern...and then gold traded sideways into the 5:15 p.m. electronic close. Gold finished the Wednesday trading session at $1,685.60 spot...up $10.40 on the day.  It's obvious, at least to me, that gold would have traded and closed comfortably above the $1,700 spot price mark if JPMorgan Chase et al had stood by with their hands in their pockets...which they obviously didn't.  Volume was around 150,000 contracts. Silver followed pretty much the same pattern as gold, except the price rose quietly, but steadily all through Far East and early London trading.  Once the silver 'fix was in' at noon in London, the rally gained more strength, but ran into selling pressure shortly after the Comex open in New York...followed by the high tick of the day [$31.59 spot] at the London p.m. gold fix. Then, between 10:30 and 11:25 a.m. Eastern time, a thoughtful seller sold silver down almost 50 cents...and from that point, every subsequent rally was capped almost before it could get started.  This forced silver to trade sideways for the rest of the day. Silver closed at $30.98 spot...up 63 cents from Monday's close.  Volume was around 39,500 contracts.  One can only imagine how high silver might have gone if left to its own devices, which it obviously wasn't. The platinum and palladium charts had similar price paths. The dollar index closed on Monday at 79.76...and then got sold down almost 50 points to its low, which came about half an hour before London opened for the day on their Wednesday morning.  A smallish rally developed from that point...and then about 10:40 a.m. in New York, away it went the index to the upside, hitting its high of the day [79.92] at precisely 1:00 p.m. Eastern time...gaining back all it had lost in Far East trading earlier in the day.  From its 1 p.m. high, the index drifted lower, closing at 79.86...up a whole 10 basis points from Monday's close. You'd be hard pressed to get any co-relation between the dollar index and the precious metal prices.  Even the sell-offs in gold and silver after the London p.m. gold fix don't fit the dollar index movements all that well. The gold stocks gapped up over two percent at the open...and then slid a bit until minutes after 11:00 a.m. Eastern.  From there they more or less traded sideways into the close...and the HUI finished up 1.42%. Not surprisingly, with silver up as much as it was, the silver stocks did much better...and Nick Laird's Silver Sentiment Index closed up 2.81%.  And as well as the large cap stocks did...most of the junior producers did even better. (Click on image to enlarge) The CME's Daily Delivery Report showed that 5 gold and 1 silver contract were posted for delivery on Friday.  As I mentioned on Monday...the January delivery month is almost a non-event.  Yesterday was 'Day 2' for deliveries...and that was all there was.  I doubt very much that this will change as the month progresses...but you never know when a big buyer will show up out of the blue and demand delivery from the Comex-approved depositories. There was a smallish withdrawal of 29,052 troy ounces of gold from GLD yesterday...but no reported changes in SLV. The U.S. Mint had a rather strange, but eye-opening, sales report yesterday.  They sold an absolutely stunning 50,000 ounces of gold eagles...along with an equally impressive 8,000 one-ounce 24K gold buffaloes...but zero silver eagles.  If you're wondering how this can be possible on the first sales day of the new year, it's my guess that these gold sales actually occurred in December, but were pushed into January in order not to make the sales month look as good as it obviously was. The bullion dealers all over the U.S.A. were reporting almost record sales figures in December...and the U.S Mint sales in gold, although strong, didn't come close to matching the rhetoric from the dealers.  Now I know why.  When we see the first true sales numbers in January for gold...and especially silver eagles, they should be equally as impressive.  However, I find it very disturbing that the mint is now obviously playing games with their sales numbers.  But, having said that, this is the third December/January time period in a row where I've seen them shove December sales into January.  You have to wonder if there's any adult supervision going on at the mint. Over at the Comex-approved depositories on Monday, they reported receiving 979,143 troy ounces of silver...and shipped 376,315 ounce of the stuff out the door.  The link to that activity is here. Ohio reader Brian Farmer has been beating on the front door of the Reserve Bank of Australia lately...and discovered that it, too, holds almost all of its reserves in London.  Here is the e-mail that he received in response to his enquiry... Dear Brian, Thank you for your email. The Reserve Bank has confirmed the following: As at end-June 2011 the Reserve Bank of Australia held 80 tonnes of gold in London Good Delivery bars. The Reserve Bank holds 99.9 per cent of its gold reserves in the United Kingdom at the Bank of England. The remaining 0.1 per cent is held at the Reserve Bank's Head Office in Sydney.  London is a major global gold trading market and the Bank of England provides a secure and cost-effective storage location for central banks and market participants. The Reserve Bank has processes in place to ensure that the gold reserves are maintained appropriately. It is not considered necessary from management, security or operational  perspectives to relocate the gold bars to a facility in Australia. The Reserve Bank has reviewed its approach to releasing details about its management of the physical reserves of gold and decided to release the above information. Regards, Chris Collins | Manager | Media & Public Relations Office   RESERVE BANK OF AUSTRALIA | 65 Martin Place, Sydney NSW 2000 p: +61 2 9551 9830 | f: +61 2 9551 8033 | w: www.rba.gov.au I have the usual number of stories for a weekday...and I hope you can find the time to read the ones that you find of interest. Email Print It was obvious to me that all four precious metals ran into not-for-profit sellers in New York India's central bank cites CPM Group about paper gold's magical properties. Race to Debase: 2012...Fiat Currencies vs. Gold & Silver. Conversations with Casey: Doug Casey on 2013. U.S. Mint reports surprise gold eagle sales. ¤ Critical Reads Subscribe CBO: Fiscal cliff deal adds $4 trillion to deficits The fiscal cliff deal approved by Congress will increase deficits over the next decade by close to $4 trillion, according to the Congressional Budget Office. That estimate is relative to a benchmark where all the Bush tax cuts expire and the fiscal cliff stays in place. Technically, that's what would happen if Congress had done nothing to avert the cliff. But that was never a likely scenario. For one thing, most economists said that such abrupt fiscal tightening would hurt economic growth in the near term. Plus, few expect Congress to stick to such a strict fiscal regimen anyway. This story showed up on the cnn.com Internet site late yesterday morning Eastern time...and I thank West Virginia reader Elliot Simon for today's first story.  The link is here. View full GSD edition Chris Christie Went Ballistic on John Boehner regarding Hurricane Sandy relief bill New Jersey Gov. Chris Christie launched a ruthless assault on Republican House Speaker John Boehner Wednesday, tearing into the GOP leader for his decision to pull the plug on a Hurricane Sandy relief bill.  The speech/press conference was like something out of a movie, a righteous tirade against the way that Washington does business, that people wish would happen in real life. "There is only one group to blame," Christie said. "The House Majority and John Boehner."  "Last night, the House Majority failed the basic test of leadership and they did so with callous disregard to the people of my state," he said. "It was disappointing and disgusting to watch." This businessinsider.com story from early yesterday afternoon Eastern time was sent to me by Roy Stephens...and the link is here. View full GSD edition The World from Berlin: Today's American Politics a 'Tiresome Farce' Barack Obama's announcement that a deal to avert the "fiscal cliff" has been reached was hailed as a victory for the Democratic president. German editorialists, however, are less certain. They warn that the bitter political wrangling in Washington is likely to damage the country in the long term. Once Obama signs the bill, the country will no longer face the some $500 billion (€377 billion) in increased taxes and $109 billion in defense and domestic spending cuts that would have taken hold. Instead, it ensures that the existing tax cuts for most people remain in place, while the tax rate for incomes above $400,000 for individuals and $450,000 for couples will increase from a current 35 percent to 39.6 percent. Taxes will also increase for the wealthy on dividends, capital gains and inheritances. Still, neither side of the aisle was particularly pleased with the deal, which is seen as a mere postponement of further budgetary negotiations in the coming two months after the new Congress convenes. While the Republicans were forced to accept higher income taxes for the wealthy and fewer spending cuts than they had demanded, the Democrats had hoped to increase taxes starting at an income level of $250,000. German editorialists were a bit less optimistic, however, writing that the political games in Washington are harming the country. This article, posted on the German website spiegel.de yesterday, is also courtesy of Roy Stephens...and the link is here. View full GSD edition Al Qaeda Disbands: Says Job of Destroying U.S. Economy Now in Congress's Hands The international terror group known as Al Qaeda announced its dissolution today, saying that "our mission of destroying the American economy is now in the capable hands of the U.S. Congress." In an official statement published on the group's website, the current leader of Al Qaeda said that Congress's conduct during the so-called "fiscal-cliff" showdown convinced the terrorists that they had been outdone. "We've been working overtime trying to come up with ways to terrorize the American people and wreck their economy," said the statement from Al Qaeda leader Ayman al-Zawahiri. "But even we couldn't come up with something like this." "As terrorists, every now and then you have to step back and admire when someone else has beaten you at your own game," he said. "This is one of those times." This short year-end 'story' from The Borowitz Report was posted in The New Yorker on December 28th...and I thank Roy Stephens for finding it for us.  The link is here. View full GSD edition Portugal warns EU-IMF troika to back off on austerity demands President Anibal Cavaco Silva called for urgent action to halt the "recessionary spiral", warning Europe's leaders that the current course had become "socially unsustainable". In a speech to the nation, he said Portugal would "honour its international obligations", but in the same breath called for a tough line with the European Union-International Monetary Fund Troika over the pace of fiscal tightening under Portugal's €78bn (£63bn) loan package. "We have arguments, and we should use them firmly," he said. "Fiscal austerity is leading to declining output and lower tax revenue. We must stop this vicious circle," he said, cautioning the Troika that there would be no way out of the crisis until policy was set in the interests of the "Portuguese people" as well as foreign creditors. His sombre speech was a reminder that Europe's crisis is far from over. This Ambrose Evans-Pritchard commentary was filed on the telegraph.co.uk Internet site early yesterday evening GMT...and it's certainly a must read.  I thank Manitoba reader Ulrike Marx for sharing it with us...and the link is here. View full GSD edition Greek debt crisis 'far from over' In the three years that Greece has been engulfed by the drama of its debt, crises have come and gone. But the next 12 months are likely to be more critical yet with politicians and pundits predicting that 2013 will ultimately define whether Athens remains in the eurozone. For once, Greeks are in accord with the German chancellor, Angela Merkel, who, adding to the prevailing pessimism, emphasised in her new year address that the worst crisis to ravage Europe since the second world war "is far from over". Few doubt that the continent's most powerful leader had Greece – the country she recently confessed to thinking more about than ever before and not "without a certain inner involvement" – in mind. The uncertainty that has enveloped the nation since the debt drama erupted beneath the Acropolis has not been alleviated by the passage of time. After five straight years of recession, the eurozone's weakest link moves into 2013 with an economy set to further contract, unemployment at a record 26%, one in three living on or below the poverty line, and the worst of austerity yet to come. In the run-up to Christmas, even the Greek finance minister, Yannis Stournaras, felt fit to admit that despite being the recipient of €240bn in EU and IMF rescue funds – the biggest bailout in global history – Greece could still default on its massive pile of debt, a move that would result automatically in exit from the 17-nation bloc. This article was posted on the guardian.co.uk Internet site late yesterday morning GMT...and I thank Roy Stephens for sharing it with us.  The link is here. View full GSD edition Japan plans 'nationalisation' of factories to save industry Japan's government is to take the unprecedented step of buying factories and machinery directly with taxpayer funds, the latest in a series of radical steps to lift the country out of its deep slump. Premier Shenzo Abe is to spend up to one trillion yen (£7.1bn) buying plant in the electronics, equipment, and carbon fibre industries to force the pace of investment, according to Nikkei news. The disclosure came just a day after Mr Abe vowed to revive Japan's nuclear industry with a fresh generation of reactors, insisting that they would be "completely different" from the Fukishima Daiichi technology. The industrial shake–up shows the ferment of fresh thinking in the third–largest economy after years of paralysis. Output shrank 0.9pc in the third quarter and industrial production has fallen 3.3

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