Gold World News Flash |
- Silver Update 2/2/13 Silver Economics
- Pierre Lassonde: The Looming Gold ‘Production Cliff'
- The Greatest Bubble In History Will Lead To A Gold Exposion
- 5 Reasons To Be Positive On Equities
- Dow 14,000, GDP, Jobs, Fed, Inflation, Treasuries, & Gold
- Government Protects Criminals by Attacking Whistleblowers
- The Putrid Smell Suddenly Emanating From European Banks
- Peter Schiff ~ Dow 14,000, GDP, Jobs, Fed, inflation, treasuries, & gold – YouTube
- Silver premiums in 2008 – Wayback Machine! – YouTube
- Metal Detecting/The Forbidden Truth – YouTube
- “2013 Can Be A Year Of Solid Growth, More Jobs And Higher Wages” Pres Obama Weekly Address – YouTube
- Guest Post: Misunderstanding Gold Demand
- Gold Will Be Victorious – YouTube
- Canadian Debt levels hit another record high | Insight – Yahoo! Finance Canada
- Gold And Silver – Pushing On A String Amidst A Shaky Environment
- Biderman – Fed Printing $4 Billion per Day Boosting Stocks
- UK Tax Chaos: Govt raising twice as many taxes as it cuts – YouTube
- The Greatest Bubble In History Will Lead To A Gold Explosion
- 50 BEST PREPPER WEBSITES
- WEEKEND REPORT
- With no one selling, European central banks seen letting gold sales limits expire
- America's Modern-Day Nevada Gold Rush
- Harry Dent: Stock Market Roller Coasters and Bear Megaphones
- The Fed and its Role in the Economy: No Conspiracies, Just Bad Policy
- This Past Week in Gold
- BIG MAC INDEX
- David Ceresne: Watch out when physical market for gold and silver detaches from paper
- Canidates for 2013 Gold Stock of the Year
- 2012 Will be the Gold Stocks Year
- GOLDVIEW: Germany's Gold & Mining Industry Updates
- Unemployment, Economic data and Swiss Allocated Gold
- Gold Long-term Outlook 2013
- Gold Stocks Biggest Buying Opportunity in 25 Years
- The Gold Price Closed the Week $13 Higher at $1,669.40 Silver Also Up
| Silver Update 2/2/13 Silver Economics Posted: 03 Feb 2013 12:05 AM PST from BrotheJohnF: | |
| Pierre Lassonde: The Looming Gold ‘Production Cliff' Posted: 03 Feb 2013 12:00 AM PST by Ed Steer, Casey Research: The gold price traded in a tight five dollar price range during Far East and early London trading on Friday…and by the time the Comex opened, the price was basically unchanged from Thursday's 5:15 p.m. close in New York. Then the job numbers were released at 8:30 a.m….and the gold price blasted off, only to instantly run into a not-for-profit seller. The high of the day [$1,683.20 spot] came shortly before the equity markets opened in New York at 9:30 a.m…and by the time the London p.m. gold fix was in at 10:00 a.m. Eastern time, the price was back down to where it started at 8:30 a.m. That also appeared to be the low tick of the day, which was $1,661.10 spot…and from there, the gold price rallied until 12:15 p.m. before getting sold down into the electronic close. | |
| The Greatest Bubble In History Will Lead To A Gold Exposion Posted: 02 Feb 2013 11:30 PM PST from KingWorldNews:
Not only has the Chairman of the Federal Reserve guaranteed that current bond holders will get destroyed once the sovereign debt bubble bursts, but he has also begun to inflate yet another massive bubble in U.S. equity prices. In the summer of 2007, just before the start of the Great Recession, the Fed Funds rate and the 1-Year T-Bill were both trading north of 5%…" | |
| 5 Reasons To Be Positive On Equities Posted: 02 Feb 2013 08:48 PM PST
For the month of January, U.S. stocks experienced the best month in more than two decades [and the Dow hit 14,009 on Feb. 1st for the first time since 2007]. Per the Stock Traders' Almanac market indicator, the "January Barometer," the performance of the S&P 500 Index in the first month of the year dictates where stock prices will head for the year. Let's hope so…. [This article identifies 5 more solid reasons why equities should do well in 2013.] Words: 453 So writes Frank Holmes (www.usfunds.com) in edited excerpts from his original article* entitled Dow To 14,000… and Beyond?.
Holmes goes on to outline the 5 reason, as follows: 1. Sentiment at a High Sentiment among individuals, advisors and traders has experienced a sudden spike recently…53% of those surveyed expect equities to be the best-performing asset class over the next year. This represents a "17-point jump over the previous poll in November, and the highest reading in the four-year history of the survey," says BCA. Indices Not at Extreme Levels …It's common to question if the market has climbed so high that it might correct and revert to a long-term mean. Take a look at the oscillator [below] to see today's incredible shift in context with its historical moves. Using 10 years of data, the S&P 500 Index has moved one standard deviation from its mean over the past 60 trading days. The MSCI Emerging Markets Index is only about a half of a standard deviation from its mean over the same time frame. These charts indicate that the indices are not at extreme levels, like the low we experienced in 2009 or the high a few months later. Rather, the stocks are moving within their normal band of volatility. …BCA believes, "equities should outperform Treasurys over a cyclical horizon of two-to-three years." The research firm points to the relatively strong earnings season in the U.S. and the Federal Reserve's ongoing monetary stimulus, "which should provide a tailwind for stocks." 3. U.S. businesses and households are deleveraging After hitting a peak, you can see in each of the charts below that there has been progress in bringing down the levels of debt across businesses as well as individual households. Less debt gives consumers and companies more confidence to invest, spend and hire. 4. New Home Sales Should Increase Home builders have become increasingly optimistic, as measured by the NAHB Homebuilder Sentiment Index, which has climbed significantly higher in recent months. Historically, new home sales have eventually followed, which is positive for employment, commodity demand, collateral stimulation, cars and appliances. 5. Inflation Remains Low As you can see in the chart, inflation remains low in Japan, Europe, the U.S. and the U.K., with core consumer price inflation falling below 1.5 percent, according to BCA Research. Even though many developed nations are printing money and are experiencing the "most extreme monetary stimulus in modern times," inflation is stable.
*http://www.usfunds.com/media/files/pdfs/investor-alert/_2013/2013-02-01/Investor_Alert_02-01-2013.pdf
Related Articles: At some point we are going to see another wave of panic hit the financial markets like we saw back in 2008. The false stock market bubble will burst, major banks will fail and the financial system will implode. It could unfold something like this: Words: 660 2. World Economy & Market Forecast: More Sunshine & Less Stormy Weather Ahead It seems clear that there are a number of investors who have gained confidence in the global economy and are seeking to capture the growth opportunities taking place around the world. With the European crisis comfortably in the rear view mirror and global central banks taking the position that they will continue their easing policies, investors have taken their foot off the brake and have begun to accelerate….We see more sunshine and less stormy weather ahead [and explain why that is the case in this article]. Words: 695; Charts: 3 3. Start Investing In Equities – Your Future Self May Thank You. Here's Why As Winston Churchill once said: "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty" and in that vain I challenge all readers to fight off the negativity, see long-term opportunity in global equity markets and, most importantly, remain invested. Your future self may thank you. Words: 732; Charts: 6 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 5. What Recovery? Contradictions Between Reality & Political Claims Are Everywhere! There is no recovery, regardless of what the elite and their minions in the media want you to believe. The economy is sick. It was made so by the malpractice of government and will become even weaker as government continues to administer the poison that got us to this point. The political class's version of remedy is akin to the medical profession's practice of bloodletting. Neither does any good and both, carried to extreme, are fatal. [Let me explain more fully.] Words: 548 6. Ignore Wall Street Cheerleaders: Market Technicals, Fundamentals & Other Info Says Otherwise! [In spite of what] the typical Wall Street cheerleaders, I mean strategists, are predicting, we see the equity market ever more closer to its cyclical top, miners about to retest a major bottom and hard assets with a new catalyst. [This article analyzes 9 pieces of information, complete with charts, that show what is actually going on in the marketplace at this point in time and what the short-term future holds.] Words: 930; Charts: 8 7. What You Should Know About the "Dogs of the Dow" Investment Strategy The "Dogs of the Dow" is a simple and effective strategy that has outperformed the Dow over the last 50 years and generates almost 4% in yield. Here's how it works. Words: 486 8. 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. We are in for a tough time for the next four years if the chart below, showing a big dive in economic development expectations, is any indication – ahd here is probably why that is the case. (Words: 200; Chart: 1) | |
| Dow 14,000, GDP, Jobs, Fed, Inflation, Treasuries, & Gold Posted: 02 Feb 2013 08:05 PM PST from SchiffReport: | |
| Government Protects Criminals by Attacking Whistleblowers Posted: 02 Feb 2013 07:03 PM PST It’s now obvious to everyone that – even though criminal fraud dominates Wall Street – the Obama administration refuses to prosecute white collar crime. Ronald Reagan, George W. Bush, George H.W. Bush and Bill Clinton each prosecuted financial crime more aggressively than Barack Obama. Of course, the lack of a fair and even-handed legal system destroys prosperity and leads to the breakdown of society. National security claims are also used to keep financial fraud secret (and people who protest runaway criminality by the big banks are targeted as terrorists). And when those in the private sector blow the whistle on potential crimes, they are targeted also. But it’s not like the government isn’t aggressively using the legal system … it’s just using it to silence the truth. Specifically, the Obama administration has prosecuted more whistleblowers than all other presidents combined. Government employees also goes out of their way to smear whistleblowers, threaten reporters who discuss whistleblower information and harass honest analysts. Indeed, even high-level government employees are in danger. For example, after the head of the NSA’s spying program – William Binney – disclosed the fact that the U.S. was spying on everyone in the U.S. and storing the data forever, and that the U.S. was quickly becoming a totalitarian state, the Feds tried to scare him into shutting up:
Other NSA whistleblowers have also been subjected to armed raids and criminal prosecution. After high-level CIA officer John Kiriakou blew the whistle on illegal CIA torture, the government prosecuted him for espionage. Even the CIA director was targeted with extra-constitutional spying and driven out of office. In reality, the government is spying on Americans to crack down on dissent ... not to keep us safe. And the top interrogation experts from U.S. military and intelligence services say that all torture is lousy at producing actionable intelligence, and the U.S. used Communist torture techniques specifically aimed at creating false confessions in order to create a false justification for the Iraq war. Indeed, torture doesn't prevent terrorism but rather creates new terrorists. And the "bad guys" knew about torture long before Kiriakou blew the whistle. As a top U.S. air force interrogator notes:
As such, it is clear that the point of prosecuting whistleblowers is to protect those in power, not protect our country ... As former constitutional lawyer Glenn Greenwald notes:
And The Putrid Smell Suddenly Emanating From European Banks Posted: 02 Feb 2013 06:28 PM PST Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter By now we should have gotten used to the odor emanating from banks—bailouts, money laundering, Libor rate-rigging, the other misdeeds. But in Europe over the last few days, it was particularly dense. A nauseating whiff came from Barclays today, when it leaked out that it has been under investigation by the Financial Services Authority and the Serious Fraud Office in Britain for illegal fundraising in 2008. Allegedly, the bank secretly loaned &ound;5.3 billion ($8.4 billion) to one of Qatar’s sovereign wealth funds, which then turned around and with great public fanfare pumped that money back into Barclays—a scheme to raise capital on paper to escape a government takeover during the financial crisis. Then Crédit Agricole, France’s third largest bank, announced €3.8 billion ($5 billion) in write-downs, mostly of “Goodwill” due to the “present macro-economic and financial environment.” Goodwill reflects money paid out for certain items in excess of their value—an expense that, by a quirk of accounting, is temporarily parked as an asset on the balance sheet to be expensed eventually. After the write-off, the bank will still have about €14 billion of Goodwill clogging up its balance sheet, and more write-offs are to come. It already wrote off €2.5 billion last year, when it agreed to sell its stake in the Greek bank Emporiki for €1, which it had acquired with impeccable timing in 2006 for €2.2 billion. Greek banks... oh my! They’re being investigated by Greek financial crime prosecutors for €232 million in loans that they handed out to the ruling parties, Prime Minister Antonis Samaras’ New Democracy and the Socialist PASOK. “Suspected crimes against the state,” a court official called it. The state funds political parties based on their share of the vote, and both parties pledged hoped-for state funding as collateral for these loans. But during the election last June, New Democracy’s share of the vote dropped from 33% to 29% and PASOK’s from 43% to 12%. With it, state funding suddenly collapsed, and some of the loans are turning sour. Bitter irony: teetering Greek banks, hoping at the time to get bailed out by taxpayers in other countries, funded Greek political parties that then negotiated the bank bailouts with the EU for the benefit of bank investors [likewise, Proton Bank got bailed out in 2011 though it engaged in fraud, embezzlement, and money laundering, when a bomb exploded.... European Bailout Fund For Greek Money Laundering And Fraud] Still on Friday, SNS Reaal, fourth largest bank in the Netherlands, was bailed out again—after already having been bailed out in 2008. This time, it was nationalized. The €10 billion package would cost taxpayers initially €3.7 billion. Stockholders and junior debt holders lost out too, but holders of senior debt and covered bonds were made whole. There is never an alternative to bailouts. A collapse “would have unacceptably large and undesirable consequences,” according to Finance Minister Jeroen Dijsselbloemsaid. As brand-spanking new President of the Eurogroup, he thus confirmed: bank bailouts will be the norm in the Eurozone. They’re worried that letting even a smallish bank fail could take down the electron-thin confidence in the entire financial system—just when the debt crisis has been officially declared “over.” And so, based on the operative set of rules, the Dutch government shanghaied its strung-out taxpayers, whose belts are already being tightened by austerity, into paying, once again, for the misdeeds of the bankers. In Italy, a billowing scandal got new fuel. It kicked off with a criminal investigation into Monte dei Paschi di Siena, Italy’s third largest bank, for alleged market manipulation, false accounting, obstructing regulators, and fraud. The bank used derivatives to hide losses during the financial crisis, but these losses are now seeping from the woodwork. So Standard & Poor’s just cut the bank’s credit rating, fearing that the announced losses may just be the tip of the iceberg. That form of financial engineering came to light when new management took a gander at the books. Now a government bailout is in the works. Because there is never an alternative. Taxpayers tighten your belts! And on Thursday, Deutsche Bank waded deeper into its quagmire of “matters,” among them the Libor rate-rigging scandal, which might cost it €2.5 billion, and the carbon-trading tax-fraud scandal that broke with a televised raid by police on its headquarters. So, more write-downs are due, and the bank announced a €2.2 billion loss for the fourth quarter. “In 2013,” said co-CEO Jürgen Fitschen reassuringly, “we will be confronted with more developments in these and other matters.” And other matters! More revelations to come. Already, there are estimates that these misdeeds would eventually amount to €10 billion. Now suddenly: “Building capital is our top priority,” said the other co-CEO Anshu Jain. He wants to do it without diluting current stockholders. “But in this uncertain world, I cannot exclude anything,” he mollified his audience. Turns out, the bank intends to get rid of €16 billion in high-risk credit default swaps by end of March. It might boost its core Tier 1 capital ratio from 8% to 8.5%. More such sales are planned—a wholesale dumping of its credit correlation book, an outgrowth of the financial engineering it used to hide whatever needed to be hidden. The bitter irony of the financial crisis is just how common the putrid smell has become since. And how routine it has become for these inscrutable institutions with their opaque financial statements to transfer risks and losses to the people. In the US, too, the smell refuses to evaporate. And nothing indicates that this will change anytime soon. Weary of all this, the French—whose economy is spiraling deeper into crisis—expressed disdain for their political class; they’re dreaming of authoritarian leadership, a “real leader” who would clean up the mess and “reestablish order.” Read.... Could 87% of the French Really Want A Strongman To Reestablish Order? | |
| Peter Schiff ~ Dow 14,000, GDP, Jobs, Fed, inflation, treasuries, & gold – YouTube Posted: 02 Feb 2013 06:24 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | |
| Silver premiums in 2008 – Wayback Machine! – YouTube Posted: 02 Feb 2013 05:57 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | |
| Metal Detecting/The Forbidden Truth – YouTube Posted: 02 Feb 2013 05:29 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | |
| “2013 Can Be A Year Of Solid Growth, More Jobs And Higher Wages” Pres Obama Weekly Address – YouTube Posted: 02 Feb 2013 05:25 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | |
| Guest Post: Misunderstanding Gold Demand Posted: 02 Feb 2013 05:08 PM PST Authored by Robert Blumen, originally posted at The Cobden Center, Most gold market research is based on the premise that the supply side of the market can be characterized by the quantity supplied and demand side by the quantity demanded. The specific cause and effect relationship between these two variables and price is often unstated; and perhaps rightfully so: is it not obvious that a greater quantity demanded is the cause of a higher price, and that a greater quantity supplied is responsible for a lower price? No. This article will show that market forecasts based on quantities of gold are meaningless. Widespread statements like "Gold demand was up by 15% in 2012" are true but only if they are understood in a misleading sense. The supply and demand sides of the market consist of supply and demand schedules, not quantities. A price forecast based on quantities is a non sequitur because there is no causal connection from the quantities to the price. This error has side-tracked the majority of analysts into an obsessive focus on quantities while ignoring the actual drivers of the price. The first part of this article will examine the definitions of supply and demand and discuss their relationship to price. Most analysts define supply and demand as quantities. There are several ways to do this. If used consistently, any of these definitions are valid but none of them are useful for the purpose of price estimation. After establishing the definitions, I will show that the quantities supplied and demanded must conform to an arithmetic relationship that is logically true but has no causal connection with the gold price. Supply and demand totals can be any numbers that satisfy the arithmetic relationship, while at the same time the price can rise, fall, or stay flat. The next section will explain the true drivers of the gold price: the supply and demand schedules. These schedules are not scalar quantities and cannot be measured; they can only be observed indirectly through the gold price itself. I will show that the cause and effect relationship between quantity and price runs in the opposite direction from what is widely assumed. The quantities are driven by a temporary disequilibrium between the market price and the supply and demand schedules of investors. This disequilibrium induces market participants to supply, and to demand gold to bring their portfolio in line with their preferences. An appendix delves into materials from the CPM Group, a prominent and respected gold market research consultancy, showing how their research relies on the same error. This article does not entirely stand alone; it builds upon other articles that I have written about the gold market, and on the marginal price theory of the Austrian School. Some parts of this article will not make sense unless you are familiar with some of these concepts. I chose to do this partly to avoid repeating ideas that I have already published, and partly to control the length. I have linked to background material that I believe is relevant. The Usual Explanation First, let's look at the examples. Most published analysis of the gold market is concerned with supply and demand numbers. From the Telegraph, under the headline, Gold demand increases 15pc:
Almost every page of the World Gold Council's Third Quarter 2012 Gold Demand Trends deals with either the quantity supplied or demanded by a sector of the market. The following sentences are selected at random for illustrative purposes:
The World Gold Council's web site contains the following: Since 2003, investment has represented the strongest source of growth in demand. The last five years to the end of 2011 saw an increase in value terms of around 534%. In 2011 alone, investment attracted net inflows of approximately US$82.9bn. My third example cites CPM Group's 2012 Gold Yearbook Press Release:
The bearish financial planner Arthur Stein also believes that gold demand is declining (based on the World Gold Council's figures) which will result in a lower price:
Market Sectors and Flows Most gold analysts divide the market into sectors. This section will discuss how this is done and what the quantities mean in relation to the sectors. A typical sector breakdown is: mines, industry, jewelry, investors, and the official sector (central banks). Some writers break the investment sector down into bars, coins, and ETFs. The choice of sectors is not critical to the points that follow; none of the conclusions would change if, instead of these sectors, flows between countries were used instead. Some reports combine the two approaches, dividing the developed world market into sectors and treating the rest of the world on a country or regional basis. Any of these breakdowns would serve equally well. Below is a list of the sectors, their buying, and their selling:
The quantity balance between sectors is at the core of most market analysis. The quantity balance is an equation relating all of the flows in the market to each other. (A flow is the quantity bought and sold, while a stock is a quantity held by someone over time). Quantity balance is the requirement that every movement of gold must be accounted for on the buy side and the sell side. It is similar to the way that double-entry bookkeeping works. This section will derive the quantity balance equation. The following section will discuss its significance. Over a one-year period, every trade that takes place between a buyer and a seller is counted in the following way: the quantity of gold bought (and sold) is added to the buying sector's gross quantity bought and to the selling sector's gross quantity sold. At the end of the year, net flows for each sector are calculated. The definition of the net flow for a single sector is: sector net flow = sector total buying – sector total selling Sector net flow can be a positive number, meaning that the members of the sector bought more than it sold; or a negative number, indicating that the members of that sector sold, in aggregate, a greater quantity of gold than they bought. Assuming that mines sell all of their production, which is nearly always true, mine sector net flow is always a negative number. mine net flow = mine buying – mine selling = 0 – mine selling = – quantity mined For every trade, the quantity bought is equal to the quantity sold. This means that the sum of all sector net flows is zero. By the rules of algebra, this arithmetic identity can be rearranged in several ways: (1) quantity mined + net industry + net jewelry + net investor + net official = 0 (2) net industry + net jewelry + net investor + net official = quantity mined The CPM Group uses a different sector breakdown than I have used here, so their quantity balance is a little bit different. They use the following market sectors: total supply (mine plus scrap), fabrication demand (industry plus jewelry), official sector and investment. Their quantity balance in their partitioning is summarized in equation (3), below. (3) quantity mined + industry sold + jewelry sold = industry bought + jewelry bought + net official + net investor In this breakdown, official and investor sectors have a net flow on the right side of the equation but the jewelry and industry sectors have gross purchases on the left of the equation and gross sales on the right. The preceding equations are all saying the same thing: all the gold that comes out of mines ends up as net inflow into one or more market sectors. These identities all follow directly from the laws of arithmetic. They contain no new information. They are only a restatement of the original assumptions, namely, that miners sell all of their production, and that no gold is destroyed during a trade. The mine sector net flow is always negative but the other sector net flows could be positive, negative or zero. Gold can be destroyed not in the physical sense, but in the economic sense. This means that the industrial process renders some of the metal into a form where it would be too costly to recover. The boundary where recovering gold from industrial use is cost effective depends on many factors, especially the price of gold, which can change over time. Gold destruction occurs only in the industry market sector. The rate of gold production always exceeds gold destruction. Consequently the total of gold held above ground grows over time. The False Logic of Quantities I believe that the error of attributing gold price moves to quantities is based on the following invalid thought process on the demand side (with similar thoughts on the supply side not shown here):
Arthur Stein is representative of this type of reasoning. Quoting at length from his bearish forecast,
The main problem with this view, as I will show in the next section, is that there is no cause and effect relationship between the quantities and price. Flows not the Cause of Price The financial media commonly reports that buying is the cause of the price going up. Stories in the financial media usually report only one side or the other side of the market. For example, an increasing number of small investors buying coins is often cited as the cause of gold price strength. However, the same story could equally well have been written as a bearish report about the increasing number of investors willing to sell their coins. Either story would be true, at least from a quantitative standpoint and both would be wrong in attributing the movement in the gold price to one side of the market only. If the reporter accurately described a large volume of coin buying and an equal volume of coin selling, then what conclusion about the price should the reporter draw? Exactly none. Buying as such is not the cause of the higher gold price, nor is selling the cause of price declines. If buying could take place without selling or selling without buying, then one or the other could be an independent cause of price moves. But neither can occur without the other. Buying and selling occur always in equal quantities, and, at the same time. For every purchase of gold by a buyer, an equal quantity is sold by the seller. The quantity of buying, which is always the same as the quantity of selling, is not the cause of the gold price. While everyone agrees that the gold price is driven by supply and demand, not everyone who voices agreement means the same thing. The correct version is: the gold price is driven by supply schedules and demand schedules. Most analysis of the gold market is based on an incorrect interpretation of the statement, namely, the gold price is driven by the quantity supplied and the quantity demanded. An increase in gold demand is the cause of a higher price if an increase in demand, means a change in the preference rankings of coin buyers for more gold/less cash. In that case, all other things equal, transactions would occur at a higher price. The quantity balance equations are logically valid at all times, but they are accounting identities, not statements of cause and effect. The quantity bought and sold is not an explanation of why the price moved. All inter-sector flows must balance, but flow is not the cause of the price; it is a summary quantity of gold traded, at whatever price. Any combination of positive, negative, or net inflows or outflows into any one or more sectors could occur during a year where the gold price was higher, lower, or unchanged. Suppose during the last year that net investor inflow is a positive number and net official inflow is negative. This indicates that over one year, investors purchased gold from central banks. But this fact is an arithmetic identity, not a cause of the gold price movements during this year. If, the following year, central banks on net purchased gold from investors, we are still no closer to knowing at what price the gold was purchased, and whether that price is higher or lower than the current price.
The True Cause of the Gold Price: Marginal Preferences The theory of equilibrium price formation is necessary to understand the remainder of this article. I will not attempt a detailed explanation of the theory here, but the interested reader may find it in one of the following references: Rothbard shows in detail how supply and demand schedules are derived from individual preference rankings in Man Economy and State, starting with his discussion in Chapter 2 sections 4-5, and Chapter 2, section 8: Stock and the Total Demand to Hold, and then later as applied to money in Chapter 11 (Money and its Purchasing Power) sections 2-5. Each investor strives to maintain their desired holdings of all potential assets, including cash (i.e. one or more national currencies such as the US dollar or euro). As their preferences change, and as market prices change, investors adjust their portfolio holdings, at the margin, to bring them in line with their preferences. The price of an asset emerges as investors balance, bid for assets they wish to hold more of and offer assets they prefer to hold less of. Supply and demand as they contribute to the price must be understood not as quantities but as schedules. Market prices balance the aggregated supply and demand schedules of the entire market. These aggregated schedules are also known as the more widely used supply and demand curves. In the standard micro-economic presentation, the supply and demand curves intersect at a point, marking the price and the quantity. I have written about the application of supply and demand schedules to the gold market in Does Gold Mining Matter? There I explain that the supply schedule for gold (in dollar terms) is dominated by the owners of the world's existing stockpile of gold, and that mined gold during any one year period has a relatively small impact on the supply schedule. The price is set primarily by the reservation demand schedules of the owners of the existing gold. In the same piece, I show that the quantity mined, which many analysts incorrectly believe is "the supply", has little influence on the gold price. The quantity balance constraint cannot be a cause of the gold price because balance equations contain only quantities. The gold price is the quantity of money exchanged for the quantity of gold. Any explanation of the gold price must contain some reference to the quantity of money involved. Equilibrium price theory provides a complete theory of the cause of the gold price, taking into account the gold and money sides of the market. If the gold price is higher now than it was at some point in the past, that can only be due to a shift in preference schedules. One of the following must be true: 1) either buyers valued the gold more highly and thus were willing to pay higher price, or 2) sellers valued their gold more highly and were only willing to part with it at a higher price. Historical net flows provide a summary of where in the market were the buyers who valued gold the most highly, and the sellers who valued it the least. Up to this point I have argued that the quantities supplied and demanded are not the cause of the gold price. The true causal relationship between price and quantity is nearly in the opposite direction. Transactions occur in the market because there are some investors whose mix of cash and gold holdings is not consistent with their preferences. Trading will occur until everyone has adjusted their portfolios, at the margin, to their preferred holdings. If no one changed their preferences after this moment, and no new gold were mined, then no more trading would occur. Trading continues because people are always changing their minds about what they want to own. Individuals who did not previously consider themselves gold investors enter the market; others no longer consider gold a good investment sell out. The more individual investors that have changed their preference rankings since the last market price, the greater the disequilibrium in the market, and the more change in the ownership of gold and cash is necessary in order for investors to reach their desired holdings. The volume of trading reflects the extent that holdings of some individuals no longer reflect their preferences. Attributing a higher gold price to an increase in coin buying alone ignores the equal quantity of coin selling that is necessary for more coin buying to occur. More coin buying means more coin selling. The media story about coin buyers driving the gold price higher could be correct, if the buyers are the only ones whose preferences have changed. In that case they are willing to pay up, higher into the supply side of the market. But action in the coin shops could also result from sellers liquidating at lower prices, or a simultaneous set of changes by some buyers and some sellers that cancelled each other out in price action, leaving the price unchanged after a large volume of trading. Demand Schedules Not Measurable So far I have argued that the gold price is an outcome of the preference schedules of investors. A preference schedule is not a number. It is a spiky curve representing a range of quantities and prices. Schedules are not directly measurable in the way that quantities are, because they include hypothetical quantities that would be supplied and demanded at prices above and below the market. In order to have the complete supply and demand schedules, the analyst would have to know how much gold would be sold and purchased at every price. When gold trades, we know only the quantity supplied and demanded at one price. Laura Davidson explains this point in her excellent piece The Causes of Price Inflation and Deflation. In reading the quoted passage, it may help to understand that reservation demand for money is another term that means the same thing as the term that I have been using, cash holding preference, except measured against all goods in general.
The same point can be made for any good that is demanded in order to be held in stockpiles. Examples include not only gold but most financial assets such as stocks and bonds. Reservation demand can be inferred, indirectly, by observing the price. Davidson continues,
While I have spent most of this article discussing demand, the supply side of the market works the same way. Supply schedules and demand schedules together drive the gold price. Supply schedules are immeasurable as are demand schedules. Conclusion The main point that I have tried to show is that the demand numbers used in most gold market reports do not measure the demand side of the price formation process. The same could be said about the supply number. These two numbers are connected through the quantity balance constraint but they are not the cause of the gold price. Gold market analysts have a tougher job than other financial analysts. In Value Investors Hate Gold, I argue that it is more difficult to analyze the yellow metal than equities because quantitative measures such as yield, cash flows, balance sheet leverage, and growth rates provide a fundamental basis for analysis. Gold has none of those things. The fundamentals of gold are the current purchasing power of money; expectations about the future purchasing power of money; the growth rates | |
| Gold Will Be Victorious – YouTube Posted: 02 Feb 2013 04:05 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | |
| Canadian Debt levels hit another record high | Insight – Yahoo! Finance Canada Posted: 02 Feb 2013 03:34 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | |
| Gold And Silver – Pushing On A String Amidst A Shaky Environment Posted: 02 Feb 2013 03:06 PM PST The January monthly charts are now complete. Not sure that anything new can be learned, but it is always worth looking, never presuming anything. Remember, the point of reading developing market activity is to make factual observations of the information that the market is generating. The information takes the form of highs and lows for successive bars, over any/all time frames, where price closed, [telling us who won the battle for that bar], along with volume, the energy/effort of each bar. It reflects the bottom-line decision-making of all participants, but our interest is learning what smart money, [those who control/ influence the market the most], is saying in their net decisions, for they always try to mask their intent. Their "fingerprints" are all over the market, usually in the form of high volume days, for it is not the public that generates high volume. We proceed: January was a smaller range bar with the close just above mid-range. The smaller range, also being the 4th bar lower in a correction, tells us that sellers were unable to extend the range lower. Therefore, buyers are influencing price direction when it moves to these lower levels. That can change next week, next month, but it is what we know for certain for right now, the present tense. The fact that price closed just above mid-range the bar also tells us buying is not that strong, just as selling is not. Putting this into context, price is in a protracted trading range, [TR], and the current price is in the middle of that range, so we could be pushing on a string to formulate any decisive conclusion. This, despite the strong forces/convictions of those on the long side, opposed by central bankers/governments, ostensibly selling forces, or so they lead one to believe. Speaking of pushing on a string, no matter how we looked at this chart and could make comments, the net effect is that price is dead center of the TR, and the center of anything is neutral. The past five months' activity is above the 50% area within the TR, and with closes clustering in the same area for the past seven weeks without going lower, the edge is marginally on the buyer's side. On a daily chart, the edge is on the side of sellers for the trend is down, denoted by a series of lower highs and lower lows. Recently, gold has been weaker relative to silver, so how silver is performing could be more pertinent. What can be said of this chart, recalling how the monthly range was smaller as price moved lower, we see how price held a very small range, 5 bars ago, and above the half-way point of the down channel, while staying closer to the upper channel line. Within the down trend, this is a potential red flag for sellers, or a sign of caution for which to be aware. When we analyzed silver, the last three bars on the daily chart stood out as overlapping. After making remarks about them, we decided to do the same for gold. Whenever you see overlapping bars, it tells of a battle being waged between buyers and sellers. In order to determine if one side has an edge, we look at a smaller time frame to judge the composition of the daily bars. What we see is that the strongest volume activity, and by extension, the greatest influence from smart money sources, occurs at the lows. Logic tells us that smart money buys at lows and sells at highs. Even a 5th grader would have to conclude that strong hands were buying the dips. The caveat to this final time frame is that it is the smallest and therefore least reliable. However, it can sometimes be the forerunner of what is to happen next. For that to be true, subsequent developing activity would have to start working higher, almost right away. What is needed now is confirmation, for that is how markets work. One factor lead to and confirms the other. We did take an initial position from the long side at 1663, Thursday evening, should one want to question the validity of this commentary. We prefer to believe that our decision was led by developing market activity, and we are just following along. Time will tell. As with gold, the same protracted TR is clear. We happen to prefer silver over gold, in general, but like both, and we "see" a slightly clearer picture within the TR. A trading range can go on for months, even years, so no conclusion is being made for either metal, at this time. What we know for certain is that as price moves farther along the Right Hand Side, [RHS] of a TR, the closer it is to resolve. No resolve here is apparent, but distinctions can still be made while in process. The two month rally, to 2 on chart, began from the bottom of the range when sellers had every opportunity to put buyers into a hole, but did not, [could not]. The rally followed three cluster closes, mentioned because they can be important indicators. Note how the range at the top, 2, was smaller as it approached resistance. Here was the market giving a warning that the rally was meeting opposition, and it did. The subsequent correction has been labored, by comparison to the rally. Four bars, twice as long to correct, and not even fully correct the rally. The lower low of January was just marginal, indicating no ability of sellers to push price still lower, and the close was in the upper half of the range, unlike gold's lesser convincing close. While still locked within the confines of a trading range, edge to buyers, at this point. The horizontal line from LLBH, [Last Low Before High], is broken into dashes to show it extends into the future long before price ever retraced back to it. The LLBH did prove to be valid support, moving forward. Trading range = neutral. Down channel = negative. A clustering of closes can be a pause before resuming the previous direction, or it can lead to a turnaround. From a futures perspective, silver is slightly negative. From a buy-the-physical perspective, it remains a no-brainer. Keep on buying, at any level, at any price. When the SHTF happens, there may be little opportunity to ever buy at these price levels again. Same for gold. No one knows when any economic breakdown will occur, and it may take many more months, even a few years, but insurance is only justified when one needs it the most. It is too late to get it when it becomes so obvious that one should have had it. "Better a year early than a day late" is so true, under current conditions. Look for closes on the extreme of a range, particularly when in conjunction with some other chart point. They can be traps for sharp reversals. The daily trend in silver is down. That pretty much covers it, regardless of sentiment. Pay attention to the message of the market. It is superior to sentiment. When the last three overlapping bars on the daily chart are dissected into 20 minute segments, we see how the strongest volume occurs at the lows. Usually, increased volume denotes a change of risk, from weak hands into stronger hands. This is a more subtle read of developing market activity on a smaller time frame, but not any less valid. The primary difference is that smaller time frame analysis are acknowledged as less reliable, unless the analysis leads to a similar direction on the next higher time frame in a lock-step fashion For disclosure, we also took an initial position long in silver at 31.45 during evening trade on the 31st of January. One may see it as bias, and that could well be true. We did so because of the volume activity at the lows on the 30th, the failed probe lower on the 31st, after a fast move lower from the day's high with no further downside follow-through, and what appears to be a low-risk entry should the assessed read of market activity be valid. We just like to practice what we preach, on any time frame. It may be a short-lived trade, for we remain mindful of the higher TR time frames. | |
| Biderman – Fed Printing $4 Billion per Day Boosting Stocks Posted: 02 Feb 2013 03:06 PM PST 'Too soon to short equities. Gravity? What gravity?' This marks a change in Chuck Biderman's former insistence that a market swoon is inevitable, if not imminent. Biderman now realizes his 'mistake.' Fed money printing in unprecedented, virtually unlimited proportions and for an unheard of duration is boosting stocks and driving down bond yields irrationally pure and simple, forcing money managers of all stripes into stocks in order to chase gains and feeble low yields. The rising stock markets boost the 'wealth effect,' duping smaller investors into believing the action of the Big Markets suggests the smart money knows the fearful financial crisis is over and, since the S&P 500 is the 'best barometer of market health in the world,' something good 'must be' coming. (We are reminded of the doomed party scene on the roof of a N.Y. skyscraper just under the gargantuan alien mother ship in the movie Independence Day – just before it lets loose with a death ray. The link above goes to that scene on YouTube as a reminder, but we digress.) "Talk about leverage? This is the ultimate leverage," the money flow and liquidity guru says. But Biderman warns again, "At some point gravity wins out." Biderman plans to not increase his stock market shorts until the artificial Fed helium (money printing) is either exhausted by the Fed or repudiated by the bond and other market participants (or more likely first by our foreign trading partners, uh, we mean competitors). For now they seem oblivious to any ill consequences of currency debasement, apparently preferring not to fight a Federal Reserve with a, so far, unlimited checkbook (or in the case of other countries, focused on trying to debase their own currencies at the same time). "Rigged markets never end well," the Peoples Republic of California-stan market sage admonished, "but staying solvent until the market does crack is essential to financial survival." Thus, Biderman, who would prefer to be solidly net short stocks in general, says it is too soon to short Helicopter Ben's, Mario 'whatever it takes' Draghi's and soon to be Shinzo 'deflation exorcist' Abe's artificial, manufactured, uber liquidity goosed financial good times, uh, we mean ***illusion*** of growth and prosperity. Ever heard the old saying, "don't fight the Fed?" It is time to start believing it even for those who see behind the curtain, apparently. We are reminded of Eclectica Capital's genius ramrod Hugh Hendry's comment to the effect of: "My curse is to see things coming too early most of the time and then being profoundly paranoid about it." No wonder non-G7 central banks, China, royalty in the Middle East and very recently even Big Wealth in Japan are now some of the largest buyers of physical gold. China forbids the export of the yellow metal now, making China a one-way market – in is good, out is verboten. There is a very, very good reason China, with its three trillion greenbacks worth of built up fiat currency firepower has become the first "Gold Hotel California" or "Gold Roach Motel" of the 21st century. The command and control there is thinking a bit longer term and methodically wants to convert as much of the west's debt based fiat paper promises into hard assets as possible – before the time comes to do so urgently. (Edit Saturday to add a Bonus 3rd segment which we deem essential viewing in context with the first two segments. ) Our thanks to Chuck Biderman, as our friend Rick Santelli calls him, for his work in liquidity theory. Segment 1 Too Early to Turn Bearish...
Segment 2 Fed Creating $4 Billion per Day...
Segment 2
Bonus segment. "The true arrogance of the Obama administration is that it believes that the world will always treat the U.S. dollar as being as good as gold. … However if the U.S. government stays as arrogant as it is, at some point soon the Black Swan will fly and the rest of the world will get smart and dump the dollar." - Charles Biderman, January 2013.
Recently we commented on the current action of the Big Markets in nominal terms and how that nominal performance looks when taking into account dollar debasement - by showing the Dow Jones Industrials in terms of gold. Below is one of the charts we showed then. The DOW essentially priced in U.S. dollar gold. In nominal terms the DOW is indeed testing new five year highs, but in terms of gold metal, which is discounting the extreme money printing by the world's central banks (which they say is necessary to save the global financial system) - the DOW Jones Industrials looks like this: We are reminded of Hayman Capital's Kyle Bass' comment at the recent Tiger 21 conference. "One of the best performing equity markets in the last decade has been Zimbabwe, but your entire equity portfolio now buys you three eggs?" Bass asked rhetorically. "You have to really focus on the insidious nature of what inflation is and how real returns might be negative in equities and bonds – and you're losing purchasing power," he continued. Bass agrees with Biderman in one respect. He says that as long as the Fed keeps printing as much money as the profligate U.S. Congress is overspending, stocks ought to keep moving higher.
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| UK Tax Chaos: Govt raising twice as many taxes as it cuts – YouTube Posted: 02 Feb 2013 02:54 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | |
| The Greatest Bubble In History Will Lead To A Gold Explosion Posted: 02 Feb 2013 02:38 PM PST  With continued volatility in key markets, including gold and silver, today Michael Pento has written exclusively for King World News about the greatest bubble in history and how it will lead to an explosion in gold. Here is Pento's tremendous piece: "Ben Bernanke was instrumental in creating a bubble in U.S. Treasuries. His actions have served to inflate it to the point that it has now become the greatest bubble in the history of global investment." This posting includes an audio/video/photo media file: Download Now | |
| Posted: 02 Feb 2013 01:58 PM PST Rise Of The Preppers: 50 Of The Best Prepper Websites And Blogs On The Internet
Are you preparing for the collapse of society? If so, the truth is that you are definitely not alone. The number of preppers in the U.S. has absolutely exploded in recent years. It has been estimated that there are now approximately 3 million preppers in the United States, and "Doomsday Preppers" is currently the highest rated show on the National Geographic channel. In fact, you could be living next to a prepper and never even know it. All over America, families are transforming spare rooms into long-term food storage pantries, planting survival gardens, unplugging from the grid, converting their homes over to alternative sources of energy, taking self-defense courses and stocking up on just about everything that you can imagine. The re-election of Barack Obama and other recent events seem to have given the prepper movement even more momentum. For example, in January the U.S. Mint broke all kinds of records and sold nearly half a billion dollars worth of gold and silver coins to the public. Not only that, Americans bought enough guns during the last two months of 2012 alone to supply the entire armies of China and India. When it comes to prepping, nobody can match the passion that Americans put into it. So what are all of these people prepping for? Well, the truth is that no two preppers have the exact same motivation. There is a general consensus among preppers that our world is becoming increasingly unstable, but when you sit down and talk with them you find out that there are a whole host of different civilization-killing events that various preppers are concerned about. Some are preparing for the collapse of the economy. Others are extremely concerned about the potential for crippling natural disasters andcatastrophic earth changes. To other preppers, the rise of the "Big Brother" surveillance grid that is being constructed all around us is the greatest danger, and many of them warn of the tyrannical agenda of the New World Order. Terrorism, killer pandemics, EMP attacks, World War III, martial law, solar megastorms, asteroid strikes and societal chaos are some of the other things that many preppers are worried about. There are even some preppers that are not worried about any "threats" at all – they just want to get "back to the land" and want to become less dependent on the system. Whatever the motivation, it is undeniable that the prepper movement has gotten very large and that it continues to grow. In fact, there was a recent article in the New York Times about preppers that was actually written by a prepper entitled "The Preppers Next Door"…
I was absolutely amazed that one of the key mouthpieces of the establishment, the New York Times, would publish an article that was mostly positive about preppers, because the truth is that prepping is essentially a huge expression of a lack of faith in the establishment. Even the article admitted as much…
And that is exactly right. There are millions of us that are entirely convinced that the world around us is becoming increasingly unstable and that "the system" will not be there to take care of us when everything falls to pieces. With each passing day, even more Americans lose faith in the system and begin prepping. If you are one of those new preppers, there are actually dozens of great websites out there on the Internet where you can get an education about prepping for free. The list of websites and blogs that I have compiled below contains more articles and resources than you could ever possibly need. Hopefully many of you will find this list to be extremely helpful. The following are 50 of the best prepper websites and blogs on the Internet… 4. SHTFPlan.com 12. The Great Northern Prepper 13. Prepper Website 15. Doom And Bloom 17. Prepper.org 19. SHTFblog.com 20. Survival Cache 22. Rural Revolution 24. Prep-Blog.com 26. TEOTWAWKI Blog 33. Prepography 34. Bacon And Eggs 35. SHTF School 37. Maximum Survival 38. Survivor Jane 40. SaltnPrepper 41. SGTReport 42. SHTF Wiki 43. Jewish Preppers 45. Survival Week 46. Prepper Forums The sad truth is that our world is becoming increasingly unstable in a whole bunch of different ways and we all need to learn how to prepare for the difficult years ahead. Unfortunately, most Americans simply are not prepared for much of anything. For example, a large percentage of Americans do not even have enough savings to get them through a single financial emergency. According to one recent report, approximately 44 percent of all households in the United States are just one unexpected event away from financial disaster. Most American families do not have much food stored up either. One recent survey discovered that 55 percent of all Americans have less than three days supply of food in their homes. Could that possibly be accurate? Do people really keep that little food in their homes? Another survey asked Americans how long they think they could survive if the entire electrical grid went down and there was no more power for an extended period of time. Incredibly, 21 percent of those who responded said that they would survive for less than a week, and an additional 28 percent of those who responded said that they would survive for less than two weeks. Close to 75 percent of those who responded said that they would be dead before the two month mark. So who are the crazy ones? Are the people trying to become more independent and self-sufficient crazy, or are the people who have complete and total faith that the system will take care of them no matter what happens actually the crazy ones? I don't know about you, but I would prefer for myself and my family to at least have a chance to survive if society melts down for some reason. What about you? Are you a prepper? Do you know some preppers? Do you believe that people should be prepping? | |
| Posted: 02 Feb 2013 12:25 PM PST Considering the extreme complacency in the stock market, (I'm starting to hear multiple calls for a new secular bull market) it would probably be fitting that the next crisis is now sneaking up on us completely out of the blue as the Japanese currency begins to collapse. By the way secular bear markets don't end until PE ratios reach extreme levels of undervaluation. Notice in the lower chart the extreme levels from which this bear market began (PE's above 40). I think we can safely assume that this bear market is not going to be any different than any other one. It certainly didn't end with a PE ratio of 15 when every other bear market in history ended below 10 and every one of them began from much lower valuation levels (usually with PE ratios about 20-25). This bear market has much bigger excesses to clear than any other bear in history. The rubber band got much further stretched to the upside this time. Normal regression to the mean forces will demand that the bear market should be deeper and more severe than probably any other bear in history. So I don't think we need to take anyone calling for a new secular bull market in stocks seriously. I think we all know this is about currency debasement, as there is no new technology to drive a new secular bull market yet. I warned traders that we were about to enter the euphoria phase of the cyclical bull. This is an ending phase by the way. But the end of a bull can span many months and even a year or more, which is why I keep warning the shorts to be patient. More in the weekend report.       | |
| With no one selling, European central banks seen letting gold sales limits expire Posted: 02 Feb 2013 12:14 PM PST European Central Banks Seen Shunning Fresh Gold Sales Limits By Jan Harvey http://uk.reuters.com/article/2013/02/01/uk-gold-cbga-idUKBRE9100RP20130... LONDON -- European central banks are unlikely to renew an agreement to limit gold sales when their current pact expires next year, a leading gold market consultant said, after selling evaporated over the agreement's previous term. The amount of gold the region's central banks can sell in any given period has been capped by a series of Central Bank Gold Agreements (CBGAs) since 1999, after a spate of disposals by the official sector, including a 395-tonne tonne sale by the Bank of England, shook up the bullion market. But George Milling-Stanley, an independent consultant and former managing director of government affairs with the World Gold Council, said he saw little chance of signatories opting to extend a ceiling on bullion sales for a fourth time. ... Dispatch continues below ... ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 31, 2013. Tthe gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 31, 2013, 15.00 UK time. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata "At this point the chances are pretty slim that there will be another agreement," he said. "The real reason we got a third CBGA was because the International Monetary Fund wanted to sell within the context of an existing sales structure, rather than disrupting the market." "Given that there is no prospect of IMF sales at this point that need to be accommodated, my sense from the central bankers in Europe I talk to is that no one has any interest in major sales at the moment." Central banks moved from being net sellers of gold to net buyers on an annual basis in 2010 for the first time since 1989. Gold buying from the official sector rose to a 48-year high of 536 tonnes last year, according to metals consultancy GFMS. Much of that interest came from central banks in Asia and the developing world, which traditionally held a lower proportion of their reserves in gold than central banks in Europe. At the end of 2008, South Korea held just 0.1 percent of its forex reserves in gold, against a 64 percent weighting in German reserves and 62 percent weighting in Italian holdings. Some analysts have suggested that letting any agreement lapse would send an unwelcome signal to the wider market that more bullion sales from Europe's gold-heavy central banks may be on the way. Milling-Stanley disagreed. "The only thing that would make them sign an agreement was if they felt it would be market disruptive not to, and I don't think that at this point it would," he said. "I am hopeful that the 15 years in which we've had this structure in place has educated the market into the belief that if the central banks wanted to sell gold, they have a structure in place to do so, and that if there isn't an agreement, it's because central banks don't want to sell gold," Milling-Stanley said. "If the central banks made that clear to the market ... I don't think it's going to be disruptive." Central bank buying was one of the factors that sent gold prices to record highs at $1,920.30 an ounce in late 2011. Prices have since fallen back, however, and have struggled to break back above $1,800 an ounce in the last year. Several leading forecasters, including Goldman Sachs and Credit Suisse, have said gold's 12-year bull cycle could be topping out. Prices are more than five times higher than they were when the first CBGA was signed by 15 central banks, including those of Germany, Italy and France as well as the European Central Bank, in 1999. That limited sales to 400 tonnes of gold per year, for a five-year period. Signatories struggled to stay within those limits, selling an average of just over 400 tonnes a year and exceeding its limit twice in five years. With gold now held in much more esteem as a reserve asset after the financial crisis boosted volatility in the currency markets, sales have since fallen well short. Excluding IMF sales, signatories have sold an average of just 4.7 tonnes a year under the current CBGA. "There is still among most European central banks, even in those that are facing major economic problems, a sense that selling gold would undermine the faith in the government and the country," Milling-Stanley said. "People feel better about buying the bonds of a country if there is gold that might potentially be unlocked to back them in the event of a crisis happening." 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 How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... | |
| America's Modern-Day Nevada Gold Rush Posted: 02 Feb 2013 11:02 AM PST These days, monetary policy moves stock prices more than economic data releases, says Mike Niehuser, founder of Beacon Rock Research. While the potential for higher gold prices is compelling, the decline in the number of discoveries and grades of resources makes mining stock selection intriguing. Niehuser has scoped out jurisdictions and finds the stars are aligning to put Nevada on top. In this interview with The Gold Report, Niehuser shares the names of companies that he feels have the right stuff. The Gold Report: Now that the election is in the rearview mirror and we are well into the new year, what are your thoughts about gold prices and mining stocks for 2013? | |
| Harry Dent: Stock Market Roller Coasters and Bear Megaphones Posted: 02 Feb 2013 10:57 AM PST Booms and busts in the economy are based on predictable demographic cycles such as those studied by Harry Dent, founder of HS Dent, chairman of SaveDaily.com and author of "The Great Crash Ahead: Strategies for a World Turned Upside Down." In this Gold Report interview, Dent predicts a global crash between mid-2013 and early 2015, in an ongoing decade of economic coma. For now, gold and gold equities are great investments, but when the crash comes, read on to find out what he suggests will be a good sector until the echo generation enters the workforce and starts buying potato chips and houses. The Gold Report: Harry, you base your economic predictions largely on demographics and demographic cycles. As the baby boomers enter old age and spend less, will that quash any hope of an upward trend in the overall economy? | |
| The Fed and its Role in the Economy: No Conspiracies, Just Bad Policy Posted: 02 Feb 2013 10:50 AM PST In the comment section of my last post, one of my critics identified as JG made a point that I believe truly highlights the differences between Keynesians and the Austrians: @ Anderson,"The Fed wants to drive money toward those assets by keeping their prices artificially high..."True, the commenter was trying to lump me in with conspiracy theorists who seem to believe that the Fed principals conspire to wreck the economy and that they know exactly what they are doing and that is part of their dastardly plan. Now, I would agree that a bad economy in which an increasing number of people become dependent upon the government is good for President Obama in particular and the Democratic Party in general, especially if people come to believe that their state of dependence exists because the government is not taxing others enough or if businesses are conspiring to destroy the economy. We certainly see a lot of that from the Democrat/Keynesian camp, which is not without conspiracy theories of its own. If I might use somewhat simplistic models that I believe do reflect the differences in thinking between Keynesians and Austrians, the differences are portrayed as followed: Keynesians: They believe that a market economy is internally flawed and will hurdle toward underconsumption at every turn. Their underconsumption lynchpin (wild swings in private investment, depending upon the "animal spirits" of investors) differs from that of the Marxists (capitalist profits suck the purchasing power from the proletariat, which leads to internal collapses of capitalist economies), but the results are similar. I believe this has been a fair interpretation of the Keynesian position. I now turn toward the Austrians. Austrians: They believe that market economies are internally stable, and that government interventions, such as the ones made by the Fed, not only are counterproductive but actually help cause the downturns in the first place. No one is blessed at any time with "perfect information," but a price system actually sends the information that entrepreneurs and managers need to make production and exchange decisions regarding the future. Not all people respond properly to price signals, but the errors tend to be random, not systematic.Keynesians counter with the "idle resources" argument that states that in a depressed economy such as ours, there are "idle resources" that are made idle by a lack of aggregate demand. When government resorts to what essentially are financial tricks such as the Fed purchasing securities, it is doing nothing more than engaging in unorthodox actions that are needed at this particular time because of very specific conditions that for the most part don't exist, i.e. the "liquidity trap." Without those actions, the economy will plunge into the abyss of a miserable, high-unemployment steady state in which we will be mired forever. The Austrian response is that many of the "idle resources" are idle because they were malinvestments. The market does not support them because the patterns of purchasing and preferences shown by consumers do not and cannot keep those resources unemployed. Instead, entrepreneurs guided by price signals and interest rates (that follow a natural rate of interest, not something set by the Fed) will move resources from lower to higher-valued uses. At the base of the thinking, I believe we can say the following: Keynesians believe that a market is not self-correcting in the event of a downturn, while Austrians believe that it is. There really is no middle ground between the two lines of thinking, which is why we see the kinds of responses we observe on this blog and elsewhere.  | |
| Posted: 02 Feb 2013 09:38 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. | |
| Posted: 02 Feb 2013 09:20 AM PST Do you believe the BLS and Ben Bernanke or do you believe what you actually pay at McDonalds? It's sad that the masses are so terrible at math that they don't even realize what has been done to them by the bankers. Ignorance is a choice. The Big Mac Index Reveals the REAL Facts On U.S. Inflation!"Follow the munKNEE" via twitter & Facebook A look at the trend in prices of the Big Mac clearly shows that investors are being penalized with higher inflation, lower income from bonds and certificates of deposit and being led to believe that the economy is growing better than it really is. [Let me explain.] So writes James Cornehlsen, CFA (www.dunnwarren.com/) in edited excerpts from his original article* entitled The Big Mac And Your Financial Health: Rising Burger Prices Show A Worrying Trend.
Cornehlsen goes on to say, in part: The Economist… created the Big Mac Index in 1986…[which] was created to compare the price of currencies between different countries. The index is based on the theory of purchasing-power parity, which says that exchange rates should eventually adjust to make the price of a basket of goods the same in each country. The Big Mac Index basket contains just one item: the Big Mac hamburger. It works by calculating the exchange rate that would leave a Big Mac costing the same in each country. Because it contains beef, dairy (cheese), wheat (bun), cost of labor, and the cost of real estate, I believe it is a good representation of prices in the United States and abroad. Using the Big Mac Index to Measure Inflation [For our purposes in this article,] rather than use the Big Mac index for comparing the value of currencies between countries, we… [have graphed] the price of the Big Mac within the U.S. each year since 1986 to see how it has change over time….[and it shows (see chart below) that] prices have accelerated much faster than the official reported Consumer Price Index (CPI) from the Bureau of Labor Statistics.
On the BLS's website, CPI is defined as "a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. The basket includes food & beverages, housing, apparel, transportation, medical care, recreation, education & communication, and other goods & services". However, there are two broad concerns with the CPI.
 The Big Mac Index vs. the Consumer Price Index Since 1986, the price of a Big Mac has increased 171% from $1.60 to $4.33 today. During this same time period, the consumer price index has increased at a much lower rate of 109%….In 1986, $1 would have purchased over half of a Big Mac. Today you would have to cut the Big Mac into five pieces and only eat one of the five pieces for $1. Consequently, each dollar we have is buying a lot less. (click to enlarge)  Big Mac Index Implications Related to Inflation Individuals on Social Security are provided a cost of living index. This index is based on the Consumer Price index. If an individual received $1,000 per month in 1999, they are receiving $1,360 today. In contrast, if the Big Mac Index were used, beneficiaries would be receiving $1,770. By using the consumer price index, the government is paying out $410 less than they would otherwise pay based on the rise in the price of a Big Mac….By understating inflation, the federal government is effectively reducing the amount owed to retirees and thereby cutting the long-term deficit. Big Mac Index Implications Related to Bond Prices Ed Easterling, founder of Crestmont Research, links inflation to the rate of interest rates. By printing money to buy bonds, the government has pushed the interest rate of a 10-year government bond down to about 1.70%. However, Ed Easterling shows that the 10-year government bond rate should be about 1% above inflation.
Propping Up GDP Numbers by Underestimating Inflation Lastly, Gross Domestic Product (GDP) is the measure used for the growth rate of the overall economy. GDP is adjusted for inflation. An understatement of assumed inflation makes the reported GDP headline number look better, and using the Big Mac Index instead of the official CPI would reduce the latest GDP growth rate of 1.26% and cause the report to show that GDP declined. Consequently, economic growth looks stronger using CPI rather than the Big Mac Index. Conclusion The price of a Big Mac is rising faster than the official rise in consumer prices and has been since the late 90′s….[and] foreshadows how the printing of money is eroding the financial system's arterial walls. The impact is broad based:
[Bottom line:] investors are being penalized (mostly without their knowledge) with higher inflation, lower income from bonds and certificates of deposit and being led to believe that the economy is growing better than it really is….
*http://advisorperspectives.com/dshort/guest/James-Cornehlsen-121217-Big-Mac-Inflation-Risk.php | |
| David Ceresne: Watch out when physical market for gold and silver detaches from paper Posted: 02 Feb 2013 08:46 AM PST By David Ceresne Shortages and volatile markets are forcing the precious metal industry into turbulent times. How is the precious metal industry adapting? Global mints and refiners have increased premiums on all products. How are investors reacting? Buying is at an all-time high and premiums are no longer the primary concern. In fact, delivery time on products now is the most important factor for buyers. This shift demonstrates the demand for precious metals, whatever the premium may be. It's simple. Relentless demand and shrinking supply are changing the precious metal landscape. We are witnessing a deviance from paper price to physical price. But why? To understand the changing landscape, we need to analyze the precious metal supply chain. Looking to global mints can let us know what changes must be made. ... Dispatch continues below ... ADVERTISEMENT How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... To start, where are mints getting their metal? It boils down to three sources. 1) Mining companies. Above-ground and easily mineable metals are a thing of the past. Mining companies must dig deeper than ever to extract precious metals. Changing mining conditions and high input costs are affecting the precious metal supply. As mining conditions change and inflation continues to rise, the extraction of metal through mining appears to become less feasible. Political factors also play a role. Laws, politics, and tax rules can slow down or even stop the extraction of precious metals in key markets. 2) Recycled products. It is estimated that 85-95 per cent of world silver output is now disposed of, primarily through industrial applications. Middle-class people all over Europe are trading in their gold and silver for cash, disposing of everything from jewelry to silverware. In North America the story is the same. But much of that supply has already been depleted as people sell personal items to help pay the bills. This causes a big strain on the physical gold and silver markets. People are also liquidating their retirement accounts and selling assets to buy precious metals. Supply is depleting as demand increases. 3) Global trading floors. Mints and refiners will purchase silver and gold from global trading floors. If you have purchased precious metals before, many of your products may have been melted down from large bars into smaller-denominated coins and bars. But the next time mints ask for metal to melt, will it be there? With current demand for metals, the answer is no. Then what? If there is no silver or gold to procure, we will head toward a "force majeure" (http://en.wikipedia.org/wiki/Force_majeure). At this point the paper price will have no relevance to the physical price. As people rush for the door, dealers will undoubtedly sell. But at what price? This will be for the true markets to decide. ----- David Ceresne is president of Precious Metal House (http://www.preciousmetalhouse.com/), a coin and bullion dealer in Toronto. 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 GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 31, 2013. Tthe gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 31, 2013, 15.00 UK time. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata | |
| Canidates for 2013 Gold Stock of the Year Posted: 02 Feb 2013 06:47 AM PST Is your precious-metals portfolio ready for 2013? We want to get positioned in the best performers ahead of the industry's next big move to maximize profit while minimizing risk. Some readers may question if gold stocks really have snapped out of their funk. We could discuss this topic for many pages, but the bottom line for us at Casey Research is simple: if you believe gold and silver prices are going higher, then equity prices will follow. Precious metals are headed higher for reasons we've outlined before: intractable levels of government debt, reckless deficit spending, and worldwide money printing. GDP growth won't be near strong enough to meet future liabilities, and neither politicians nor the public will agree to austerity measures that will be austere enough. Gold and silver will move higher as the value of currencies declines as governments attempt to pay existing and future obligations. With that in mind, some stocks will certainly do better than others. Recall 2011, when gold continued higher while stocks as a group performed poorly. However, there were still profits to be made… You can see that while the equity ETFs performed poorly last year, select producers still returned big gains. This is why it pays to be picky. We won't always be right about which companies will be a given year's trophy, yet there are definitely steps we can take to improve our odds. As 2013 swings into gear and you review your precious-metals portfolio, keep the following in mind…
Today it's more important than ever to own the right gold stocks; but between market volatility and increasing political uncertainty in several major gold-mining nations, how can an investor separate the best gold stocks from the rest? You can get started for free right here. | |
| 2012 Will be the Gold Stocks Year Posted: 02 Feb 2013 05:08 AM PST Is your precious-metals portfolio ready for 2013? We want to get positioned in the best performers ahead of the industry's next big move to maximize profit while minimizing risk. Some readers may question if gold stocks really have snapped out of their funk. We could discuss this topic for many pages, but the bottom line for us at Casey Research is simple: if you believe gold and silver prices are going higher, then equity prices will follow. | |
| GOLDVIEW: Germany's Gold & Mining Industry Updates Posted: 02 Feb 2013 04:51 AM PST GOLDVIEW is one of the publications of the European Gold Centre. The editor is Henk J. Krasenberg who has been following the precious metals and miners for a couple of decades. He is one of the veterans in the industry. In this article we summarize some highlights from the latest edition of GOLDVIEW. Germany's gold case: suspiciousThe most recent edition was dedicated to the German central bank gold reserves. The whole story has captured quite some attention in the gold community in the past weeks. The aim is not to repeat what has been written about it extensively. As an insider, Henk Krasenberg's view on this case is interesting to share. Basically, he is not convinced about a conspiracy theory although he became very suspicious lately. He says:
He shared in GOLDVIEW the actuals of the gold reserves, from which the importance of Germany's case appears. Germany has the second largest gold holding in the world. Their gold holdings cover some 72% of the country's reserves. Gold & Silver mining updatesApart from macro gold trends and insights, GOLDVIEW contains news updates out of the mining industry. The editor does not republish mainstream news, but rather focuses on industry inside updates from a selection of companies. The latest edition featured two special companies: Explor Resources and Orvana Minerals. Explor Resources is a pure exploration company and has no ambitions to become a producer. The company focuses on a prospective property and keeps on exploring until it is ready to become a producing mine for another miner. This is not the first realization of CEO Chris Dupont of this type. Explor's flagship project is the "Timmins Porcupine West" property in Ontario. Explor expects their total resource to increase to 1.5 million ounces by the end of 2012 and to 3.0 million ounces by the end of 2013. Henk Krasenberg writes: "In my view, Explor Resources is a perfect example of what we know as a pure exploration company. A company that has proven expertise and is very well managed. The TWP property bears a strong resemblance to the nearby Hollinger-McIntyre Mine which produced over 30 million ounces. It is in the right area and the achieved exploration results indicate the company has a high quality and very promising project on hand." Orvana Minerals is the other featured miner. The company operates with the baseline: "We don't explore, we build, operate and expand mines." Henk writes: "It has a 'Multi Project Producer Strategy' and aims to become a multi-mine gold and copper producer as objective. The project mix of the company has a significantly growing gold and copper production over the next few years, spread geographically over Spain, Bolivia and the USA. For FY2013, Orvana forecasts total production of 75,000 ounces of gold, 18 million pounds of copper and 850,000 ounces of silver." | |
| Unemployment, Economic data and Swiss Allocated Gold Posted: 02 Feb 2013 03:20 AM PST KWN – 31 january 2013 In this week's interview Egon von Greyerz discusses the rising unemployment in western economies, the continued stream of weak economic data and Swiss Banks 'suddenly' offering allocated Gold and Silver accounts to High net worth individuals, Hedgefunds and institutional investors. Why? "Eric, back in 2009 I wrote an article titled, 'The Dark Years Are Here.' In that article I said 2011 to 2012 would be the start of economic, political, and social upheaval. I noted that this could last for a couple of decades." "At that time I mentioned three critical areas: Unemployment, which has exploded, serious problems in credit markets, also the risk of hyperinflation and the effect that would have on the world economy and investments. Looking around me now, Eric, it's all happening…. | |
| Posted: 02 Feb 2013 02:31 AM PST Gold moved sideways for the last six weeks, with each rally and correction sparking either new hopes or new fears about the yellow metal. But focusing on such short-term volatility can rarely bring any good when it comes to long-term investments. That's one of the things that we often stress - one should always analyze the market form different perspectives and keep in mind their order of importance. This week we will focus on the long term. Another thing, that we have already mentioned, is that such universal commodities, traded on many exchanges and in many currencies, like gold ought to be assessed taking other currencies into consideration. Hence, to get a clearer, distilled from the short-term noise picture of the situation in gold, today we will focus mostly on long- and medium-term charts, as well as on the yellow metal priced in currencies other than the U.S. dollar. | |
| Gold Stocks Biggest Buying Opportunity in 25 Years Posted: 02 Feb 2013 02:20 AM PST Mike Kapsch writes: Don’t look now but gold stocks are cheap, really cheap. Just take a look at this chart: | |
| The Gold Price Closed the Week $13 Higher at $1,669.40 Silver Also Up Posted: 01 Feb 2013 08:34 PM PST Gold Price Close Today : 1,669.40 Gold Price Close 25-Jan : 1,656.40 Change : 13.00 or 0.78% Silver Price Close Today : 31.96 Silver Price Close 25-Jan : 31.18 Change : 0.78 or 2.50% Gold Silver Ratio Today : 52.24 Gold Silver Ratio 25-Jan : 53.12 Change : -0.88 or -1.66% Franklin didn't publish commentary today, if he publishes later it will be posted here. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't.  |
With continued volatility in key markets, including gold and silver, today Michael Pento has written exclusively for King World News about the greatest bubble in history and how it will lead to an explosion in gold. Here is Pento's tremendous piece: "Ben Bernanke was instrumental in creating a bubble in U.S. Treasuries. His actions have served to inflate it to the point that it has now become the greatest bubble in the history of global investment.
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