saveyourassetsfirst3 |
- Own Physical Gold & Silver As Currency Wars Will Destroy Our Money
- Deepcaster: Investment-Critical Baseline Realities in a World of Currency Devaluation
- Miners Are Just Doing What Miners Do
- Global Silver Mining Trends- A Comprehensive Analysis of World Silver Production Since 2001
- Yes - Something Did Change Last Week In Precious Metals Markets
- What Microsoft Wants From Dell?
- Investing Can Be A Hairy Situation
- Whats a Companys Gold Worth?
- Links 2/3/13
- Lost Dutchman’s Gold Mine
- Gold Daily and Silver Weekly Charts
- Gold And Silver – Pushing On A String Amidst A Shaky Environment
- Biderman – Fed Printing $4 Billion per Day Boosting Stocks
- WEEKEND REPORT
- Jim Puplava On Inflation
- Silver Wheaton
- Join GATA at the California Resource Investment Conference on Feb. 24-25th
- Lars Schall interviews Pepe Escobar: The Real Currency, Gold and Energy War in Mali
- Doug Noland: Late 90s-Like
- Pierre Lassonde: The Looming Gold 'Production Cliff'
| Own Physical Gold & Silver As Currency Wars Will Destroy Our Money Posted: 03 Feb 2013 09:40 AM PST This article is based on a Q&A with Andy Hoffman, marketing director at Miles Franklin, the largest bullion dealer in the US. The general macro economic outlook of Andy Hoffman is based on the expectation we will see "more of the same," including more money printing, weaker economies, higher unemployment, social unrest … and importantly weaker currencies. With the Dow Jones index almost at all-time highs (14,009 closing price on February 1st) and the VIX indicator close to all time lows (12.90 on February 1st), weakness is not reflected in equity prices.
This is clearly an artificial situation and cannot go on forever. These conditions have continued for much longer than expected. Andy Hoffman can hardly believe the slow motion pace at which conditions are deteriorating, saying "this will continue until it stops." Case in point is the debt situation which went from arithmetic to parabolic growth. Somewhere it will stop; the point is nobody knows when and how exactly. The first signs of higher interest rates are there in the US and Japan, with the 10 year Treasury yield moving to 2% very recently. Governments will react with even more monetary easing (QE). Japan has just announced QE11. Similarly, for gold and silver, the key question is for how long paper gold and silver (in the form of futures and ETF's) can control the price. It will be possible until physical demand will take over. Nobody knows how long exactly when it will happen and what the (final) trigger will be. However, one thing is clear: the longer this game goes on, the stronger the reaction afterwards. There you have one of the key reasons to own physical gold and silver. The danger of today's fiat (promise) based currenciesMiles Franklin believes people should prepare for the worst case scenario when it comes to their financial assets (money in the first place). Recent research has shown that 600 paper based currencies in recorded history have ALL failed, for different reasons. Physical gold and silver exist for 5,000 years and have preserved their purchasing power. The above chart tells us that gold has preserved historically well the purchasing power of people. More importantly perhaps, in times of financial instability like today, it increases our purchasing power. The gain in purchasing power comes from the loss in value of the currency in which gold is denominated. In fact, the gold price increase is simply the RESULT of the decrease in value of the currency in which gold is denominated.
The global economic scene is focused on additional monetary easing and continuing currency debasement in order to inflate their debts away. Consequently gold is set to rise higher. Precious metals owners should be rewarded with much more than only preservation of purchasing power, assuming the continuation of the current trend. The US is the most indebted nation, worldwide and historically, with declining manufacturing and labor participation rates. The only thing that makes the US strong today is that the fact that so many nations own the dollar. Today's monetary system is historically unique given that it is backed by nothing but a promise to pay the holders of banknotes back. That is what "fiat currencies" are: promise based currency backed by nothing tangible. This is the only time in history where ALL countries globally are living on a paper based (fiat based) currency system. What we know from history is that every single fiat currency in history has collapsed. Ultimately, all these fiat currencies disappear, each in its own way. Some people believe that the Yen is going to collapse and the US dollar will be fine. Andy Hoffman classifies this as a myth, being convinced that the dollar will collapse as well. The underlying belief at Miles Franklin is that today's gold bull market is much stronger than the one in the 70's. In particular, the scale today is much bigger. Andy Hoffman points to some obvious differences:
The global currency war is starting a historic break outMiles Franklin's blog reports on a daily basis how the economic situation is evolving. The blog posts are accessible. With trustful news and global events as the underlying source of information, one of the latest blog posts "The final currency war" is a must read. It shows how the global currency war has taken off more or less openly and officially. Japan's latest announcement to increase their monetary stimuli and their commitment to debase their currency is potentially that last trigger for the global currency war to break out. Andy Hoffman points to the suppression techniques of central banks to massively attack gold and silver, aiming to hide the underlying state of the economy. Suppression is extremely obvious and happens in full daylight. When QE3 and QE4 were announced in the US, dollar gold surged but was hit substantially almost immediately. Andy says: "They are so terrified. Gold and silver are not allowed to break out. Still the metals are up 12 years in a row. An increasing number of people know what is going on. Since December 13th, the day QE4 was announced, Miles Franklin had extremely busy weeks; sales were literally on fire. So, the price drops should act to slow down or stop the massive buying. As a bullion dealer, we can only confirm the huge disconnect between the paper and the physical market." | ||
| Deepcaster: Investment-Critical Baseline Realities in a World of Currency Devaluation Posted: 03 Feb 2013 09:30 AM PST Submitted by Deepcaster: "Money printing creates illusory wealth and buys time, but if it was truly the answer to a deleveraging cycle, Zimbabwe would be a member of the G10." The recent Equities Rally and Glimmers of Economic Recovery are Artificial because they have been bolstered up on a Tide of Central Bank created liquidity [...] | ||
| Miners Are Just Doing What Miners Do Posted: 03 Feb 2013 08:31 AM PST The present anxiety seems focused on the HUI miner's index and it's frightening under performance of seemingly every asset class and market sector imaginable. This post will make the case that the HUI is behaving exactly within the historical context of it's bull market and should be relatively near it's ultimate low both in terms of price and timing. I will admit that the most recent 4 months, in particular, have indeed been agonizing. Painfully agonizing. But viewed in the context of similar HUI setups, such as occurred in January - March 2003, March -May 2005, September 2006 and July 2007, perhaps one can recognize our present situation as something we've not only seen before, but also have every sensible expectation for a bullish resolution. To get to the specifics, let's look at some weekly charts of the HUI miner's index from the inception of its bull in late 2000, track the major rallies and retracements right up to our current 2013 time frame, and see if my optimism appears justified. Sound good? OK, let's begin with this weekly chart of HUI which covers the initial window of time (2000 - 2003).
What we see is a powerful rally that appreciated from $35.31 to $154.99 (a 339% gain) and then retested a 50% retracement one time. Our next chart puts the action of latter 2002 through 2005 into view. Using the test of the 50% retracement in the previous chart as our low, we see another powerful rally that yielded a low to peak gain of 179%.  What we also observe is that the 50% retracement of this enormous rally was tested not once, or twice....but three times. We also measure that price rebounded northward off the 50% retracement level to yield a 48.5% gain - which was entirely taken back with a third test of the 50% level. The next mega rally is seen in the following chart spanning all of 2005 - 2007.  Again, I have used the 50% retracement level of the previous rally to spot the low of this rally. We see another awesome gain of 142%. We also note some gyrating bounces off the 50% retracement of this rally that provide gains in the neighborhood of 37%. Curiously, we also have three tests of the 50% retracement - as we saw in the previous chart. Equally curious is the placement of these tests. The first two are somewhat close together on the left side of the consolidation while the third test is the concluding low. Our next chart gives us a clear view of how the HUI behaved in 2007 - 2010. A strong rally off the previous 50% retracement level provides a healthy 82% gain in just under 7 months.  This rally retests the 50% retracement three times - each 6 weeks apart - then the unthinkable happens.....the bottom falls out and price plummets. The eight year cycle low in gold and the massive deflation occurring in the financial markets inflict massive damage on the mining sector (and every other sector, for that matter). And of all things, the 50% retracement level that would otherwise be expected to hold price at $400 in the consolidation phase became the exact retracement level that eventually held price from falling much below $167. (Price stopped falling at the 150% level on the chart above). Well, it's time to look at the most important chart of the day. This is the weekly HUI miner's index from 2008 - 2013.  Wow - look at that 325% gain! But hold on.......there is that 50% retracement metric again. And the 40%ish rebound that always seems to get taken away just as the bulls think they have it in the bag, again. And three retests, again. Right at the 50% level. And the curious placement of the retests. The first two on the far left and a final 'blow you mind' at the far right just as the consolidation comes to its exhausting conclusion. Hummmmm....... are you thinking what I'm thinking? Well, in case you are not sure, here is what I am thinking: the HUI has yielded 5 huge rallies during it's bull to date. Each retraced 50% before beginning a new rally, except for the 2008 example which tried to hold the 50% level and failed. Several rallies featured a 'fake out' rebound sporting a gain in the range of 40%. And the final or third retest of the 50% retracement level always located the genesis of the next huge rally. Well, except for 2008, that is. I really don't think this is 2008 all over again. Not with the world's Central Banks devaluing their currencies as aggressively as they are. And, we are years before gold's next 8 year cycle low is due. So, I think we are at the tail end of another HUI consolidation that, like all the others, will catapult the miner's index hundreds of percent higher over the next year and begin not too long from now. $10.00 one week trial subscription.       This posting includes an audio/video/photo media file: Download Now | ||
| Global Silver Mining Trends- A Comprehensive Analysis of World Silver Production Since 2001 Posted: 03 Feb 2013 07:55 AM PST A MUST READ analysis of global silver mining production since 2001 over the world's top silver producing nations. Over the course of silver's secular bull, the miners have steadily increased production in order to meet fast-growing demand. And in 2012 … Continue reading | ||
| Yes - Something Did Change Last Week In Precious Metals Markets Posted: 03 Feb 2013 07:33 AM PST  By Tim Iacono: It was another interesting week for gold and silver markets as chronicled on Friday in Did Anything Change This Week For Precious Metals Markets? With a bit more time to ponder the subject, it seems the question posed in that title can be answered a bit more definitively now. Yes - something did change last week in precious metals markets. In short, recent economic data has revealed how fragile the U.S. economy is and this makes it far less likely that the Federal Reserve will stop printing money or start raising interest rates anytime soon. As investors watch the Fed's balance sheet rise in the months ahead and wonder what elected officials in Washington will do about the nation's intractable debt troubles without choking off the recovery, investor interest is sure to return to precious metals. That's the message that can be gleaned from the surprise drop Complete Story » | ||
| What Microsoft Wants From Dell? Posted: 03 Feb 2013 06:39 AM PST By By now, you're most likely acquainted with the reports that Michael Dell is aiming to take his company off the market and make it private again. Reports are even suggesting that the deal could be announced as soon as this Monday. The deal would be the biggest leveraged buyout of the Post-Crisis era, as well as one of the largest ever. For this very reason, the existing problems at Dell (DELL) won't be easy to resolve. Microsoft (MSFT) is also engaged, apparently prepared to contribute $2 billion or more of equity in the form of a preferred security. Other stories place Microsoft's contribution at between $1 and $3 billion. It appearsthat Michael Dell is essentially about to empty his money box, meaning his ~16% stake in the company, financing by the private-equity firm Silver Lake Partners, and arrange an additional $16 billion in debt, both secured and unsecured, Complete Story » | ||
| Investing Can Be A Hairy Situation Posted: 03 Feb 2013 05:43 AM PST By Let's admit it - hair removal is a time-consuming, inconvenient, and repetitive nuisance task. Permanent methods for removal are costly, inconvenient and personally encroaching. Home-use hair removal products are a middle-of-the-road option providing middle-of-the-road results: better than traditional methods but not as good as professional. The market for non-invasive home-use products, including hair removal devices, is projected to be a multi-billion dollar market. The hair removal devices, whether by heat or light, operate by heating the hair. The heat in the hair then heats the hair follicle which is then damaged by the heat. Once damaged, hair tends to grow back slower and thinner. The no!no! 8800 is the latest model and most prominent product of PhotoMedex (PHMD). The no!no! branded line is the largest and, to date, only profitable business line in its global consumer unit. The no!no! brand, as of August 2011, has more sales of global home-use Complete Story » | ||
| Posted: 03 Feb 2013 04:30 AM PST Casey Research | ||
| Posted: 03 Feb 2013 01:58 AM PST Bank of America is still eating my life… Maisto Fresh Metal Tailwinds 1:97 Scale Die Cast United States Military Aircraft – US Air Force Medium Altitude, Long Endurance, Unmanned Aerial Vehicle (UAV) RQ-1 Predator with Display Stand (Dimension: 6″ x 3-1/2″ x 1″) Amazon (Richard Smith). You must must must read the reviews. I went to the one stars. A treasure trove. Jocks Beat Bookworms On Brain Test Science Daily (Chuck L). Junk study. I can't believe people get funding for stuff like this. Today's Front Pages: 780 front pages from 81 countries Newseum (furzy mouse). This by contrast is completely cool. Power and the Internet Bruce Schneier Uninvited From TEDx Manhattan: An Open Letter The BLK Project (Lambert). Quelle surprise! The culturally non-white are not welcome at TED. Oh, and TED apologized but did not reverse its decision. Tacky and telling. Can a Small Community Throw a Monkey Wrench Into the Global Fracking Machine? Alternet (furzy mouse) As Self-Immolations Near 100, Tibetans Question the Effect New York Times The Monroe Doctrine Turned on Its Head? Counterpunch (Chuck L) Italian court investigates derivatives at five banks Reuters (Richard Smith) Mis-selling scandal: banks let off the hook Independent (Chuck L) White House releases photo of Obama shooting gun at Camp David Guardian. I've never seen skeet guns, just real rifles. My God, these are silly! Really big to shoot clay pigeons???? You can see the all the manhood issues at work…I grew up in a household with guns, where their sole purpose was to kill things for the purpose of eating them. Later that was relaxed when my father took up trapping (yes, how utterly redneck) at the behest of a friend who had a sheep farm and was losing too many lambs to varmints. So my father took to trapping and caught mainly coyotes (he used only humane traps, BTW) although he also got a silver fox (a big deal if you are a trapper) and a Rottweiler (which was very grateful when he set her loose). Deep Military Cuts Begin as Congress Dawdles Military (furzy mouse) US military struggling to stop suicide epidemic among war veterans Guardian Alabama bunker standoff leaves town baffled Los Angeles Times New York Sued Over Arrest And Interrogation Of Seven-Year-Old Boy Over Missing $5 Bill At School Jonathan Turley (Chuck L) More than 40% of Americans are one crisis and less than 90 days from poverty Daily Kos (Carol B). The "one crisis" understates the situation. More than 40% of Americans would last less than 3 months if they suddenly lost their income. Half-Full Glasses Mark Thoma. One of my buddies, by contrast, says, "Things always look darkest before they go completely black. Ezra Klein Strikes Out Big on Immigration and Demographics Dean Baker Banks, at Least, Had a Friend in Geithner Gretchen Morgenson, New York Times Few Convictions After Crash, Even Here New York Times. Now Iceland is being used as an excuse for America. Help me. I suspect Michael Hudson could address this. FDIC Sues Bank Directors: What's Wrong with this Picture? John Lounsbury Dozens suspended in Harvard University cheat scandal News.com.au Welcome to Galt's Gulch Chile! (furzy mouse) Letters to Vogue: 'Come, Come, Nuclear Bombs' Et tu, Mr. Destructo? Go look at the pix. Yes, the house has nice bones, as they say in the trade, but it looks like a fashion victim. It's pretty bad when you yearn for the days when the rich had better taste. Antidote du jour (martha r):         | ||
| Posted: 02 Feb 2013 10:30 PM PST aquadesign | ||
| Gold Daily and Silver Weekly Charts Posted: 02 Feb 2013 05:00 PM PST Le Café Américain | ||
| Gold And Silver – Pushing On A String Amidst A Shaky Environment Posted: 02 Feb 2013 02:06 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 02:06 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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| Posted: 02 Feb 2013 11:25 AM 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.    | ||
| Posted: 02 Feb 2013 09:27 AM PST
Jim Puplava talks about inflation and its effect on so called "safe deposits" like bank deposit and CDs. If you've made any purchases lately you know that there is a disconnect between the high levels of inflation you have to face every day and the officially reported rate of inflation. The only thing bank deposits and CDs guarantee at today's interest rates is that you are going backwards – your wealth is diminishing. George Soros talking about the reevaluation of the dollar versus the Chinese currency. Many countries are trying to diversify away from the dollar by buying commodities and precious metals. Before making any investment make sure you consult with your financial adviser. Not all investments are suitable for all people. All investments have some degree of risk and their is the potential for loss. Although we believe the information contained here is accurate and complete we make not guarantees or warranties for the information found on this web site Video Rating: 4 / 5 | ||
| Posted: 02 Feb 2013 08:42 AM PST
Silver looks like it is poised to start a dramatic rise. Although buying the physical precious metal has been getting a lot of attention here's another way to capture some of the potential profit. Sean Brodrick explains. Remember to always consult with your financial adviser before making any investment. Not all investments are appropriate for all people and all situations. There is risk and a possibility of loss with all investments. Although the information provided here is believed to accurate and complete we make no warranty as to its correctness or suitability. The information provided on this site is for informational purposes only. | ||
| Join GATA at the California Resource Investment Conference on Feb. 24-25th Posted: 02 Feb 2013 05:39 AM PST  People longing for a break from the bitter cold may especially enjoy Cambridge House's California Resources Investment Conference next month, to be held Saturday and Sunday, February 23 and 24, at the Hyatt Regency Indian Wells Resort and Spa in Indian Wells, California, just down the road from Palm Springs. In addition to GATA Chairman Bill Murphy and your secretary/treasurer, speakers will include GATA favorites Frank Holmes of U.S. Global Investors, Rick Rule of Sprott Global Resource Investments, David Morgan of Silver-Investor.com, and Al Korelin of the Korelin Economics Report. Dozens of resource companies will be exhibiting. | ||
| Lars Schall interviews Pepe Escobar: The Real Currency, Gold and Energy War in Mali Posted: 02 Feb 2013 05:39 AM PST  Pepe Escobar, who was born 1954 in Brazil, is one of the most outstanding journalists of our time with three decades of experience in covering politics and conflicts around the globe. He works for Hong Kong/Thailand-based Asia Times as "The Roving Eye." Moreover, he is the author of three books: "Globalistan: How the Globalized World is Dissolving into Liquid War," "Red Zone Blues: a snapshot of Baghdad during the surge," and "Obama does Globalistan." | ||
| Posted: 02 Feb 2013 05:39 AM PST  Unrelenting trade and "capital" account deficits have ensured the ongoing injection of dollar financial claims into inflated global financial systems, markets and economies. Unending dollar flows have, in particular, bolstered "developing" Credit systems, economies and Bubbles. China and "developing" central banks have, then, continued the recycling of Trillions of surplus dollar balances directly back into U.S. Treasury and agency debt markets, in the process helping to monetize U.S. income growth, inflate securities markets and sustain the U.S. | ||
| Pierre Lassonde: The Looming Gold 'Production Cliff' Posted: 02 Feb 2013 05:39 AM PST ¤ Yesterday in Gold and SilverThe 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. Gold finished the Friday session at $1,667.60 spot...up a whole $3.80. Volume was immense at 185,000 contracts...so you just have to know that JPMorgan et al threw everything they had at the gold price to prevent it from getting anywhere near the $1,700 spot mark...or beyond. Here's the New York Spot Gold [Bid] chart on its own so you can see the price action that mattered in more detail. The price path for silver on Friday was essentially the same as for gold, but with one important difference. The attempt to sell it down at the London p.m. gold fix wasn't nearly as successful...and it rallied quit a bit after that...and only got sold down a bit in electronic trading. Silver closed on Friday at $31.84 spot...up 37 cents. Net volume was around 49,000 contracts, so it's obvious that silver's attempted rally did not go unopposed, either. Here's the New York price action in silver on its own... The dollar index opened at 79.20 on Friday morning in the Far East...and then slid 25 basis points by the time the job numbers were released in New York at 8:30 a.m. Eastern time. Then like the precious metals, the dollar index blasted higher...and by shortly before 10:00 a.m. in New York, it had reached its zenith at 79.28...but by 11:15 a.m. it had fallen to its low of 78.93. From there it rallied into the close...finishing the Friday session at 79.19...basically unchanged from where it started the day. Good luck co-relating the action of the dollar index and the precious metals yesterday, as there was none that I could see. The gold stocks gapped up almost two percent at the open...only to get sold back down to unchanged minutes after the 10:00 a.m. Eastern time London p.m. gold fix...the low in the gold price. From there they recovered in fits and starts, with the HUI finishing at 400.00 right on the button...up 1.55% on the day. With only one exception that I could see, all the silver shares finished with green arrows on my stock list...and Nick Laird's Intraday Silver Sentiment Index closed up 1.63%. (Click on image to enlarge) Here's the historic Silver Sentiment Index to put this past week's price action in some perspective. (Click on image to enlarge) The CME's Daily Delivery Report for 'Day 3' showed that another 1,106 gold...along with 6 silver contracts were posted for delivery on Tuesday within the Comex-approved depositories. In gold, the big short/issuer was the Bank of Nova Scotia with 1,000 contracts. Only three long/stoppers were involved in yesterday's report. They were Deutsche Bank with 627 contracts...HSBC USA with 362 contracts...and JPMorgan with 117 contracts. In the first three days of the February delivery month...10,248 gold contracts have been posted for delivery...over a million ounces. I expect these volumes to fall off precipitously starting early next week...as the bulk of the deliveries occur during the first week of the delivery month. The link to yesterday's Issuers and Stoppers Report is linked here...and it's worth a quick look. There were no reported changes in GLD yesterday...but over at SLV, an authorized participant added 1,498,949 troy ounces of silver...and that's after a withdrawal of 2.2 million ounces on Thursday. There was no sales report from the U.S. Mint yesterday. Over at the Comex-approved depositories on Thursday, they reported receiving a very chunky 2,550,785 troy ounces of silver...and didn't ship a single ounce out the door. The link to that activity is here...and it, too, is worth a look. In case you've missed it, there was lots of silver in motion this past week...and record amounts for the month of January in total. One has to wonder what is going on...and I just know that Ted Butler will have more to say about this situation in this weekly review later today. Late next week we'll find out the new short position in SLV...and what was up with that 18.3 million ounces of silver that was deposited on January 16th. Was it deposited to cover a short position...or for a new buyer? Whichever it was, it's certainly bullish for the price of silver going forward. Stay tuned. Well, the Commitment of Traders Report was a surprise in gold and an even bigger surprise in silver silver. Based on the reporting week's price action, both Ted Butler and myself were expecting declines in the Commercial net short positions in both metals. We turned out to be half right...and I'll start with gold first this week. There was a big decline in the Commercial net short position in gold...even bigger than what either Ted or myself were expecting. The Commercial net short position declined by a monstrous 28,853 contracts, or 2.89 million ounces of gold...and now sits at 16.71 million ounces. That was more than double the decline I was expecting. The 'Big 4' bullion banks are short 10.85 million ounces of gold...and the '5 through 8' traders are short an additional 5.69 million ounces of gold. So the 'Big 8' short holders in gold are short 16.54 million ounces...or 99% of the Commercial net short position in that metal. Once you removed all the market-neutral spread trades you can from the open interest, the 'Big 4' bullion banks are short 30.0% of the entire Comex futures market in gold...and the '5 through 8' traders add another 15.7 percentage points to that total. So the 'Big 8' are short 45.7% of the entire Comex gold market...and that's a minimum number. It's my opinion that three of the 'Big 4' bullion banks are JPMorgan Chase, the Bank of Nova Scotia...and HSBC USA. The bullion bank in number four position is up for grabs...but if I had to pick a candidate, it would be either Citigroup, Deutsche Bank or Morgan Stanley. And now for silver... Instead of a decline in the Commercial net short position as there was in gold, there was a substantial increase...2,869 contracts to be precise...or 14.3 million ounces of silver. This is exactly opposite of the number that I was expecting. Considering the fact that silver declined by an appreciable amount during the Tuesday to Tuesday reporting week, this is amazing...and Ted Butler and I are still scratching our heads over it. My first thought was that the CFTC made an error in reporting...and until Ted Butler's theory below pans out, or next Friday's COT Report is issued...that's my preferred explanation. Ted's thinking on this is radically different. First of all, instead of covering short positions during the reporting week, JPMorgan added another 2,000 contracts to their already obscene and grotesque short position, which now sits at a bit more than 33,000 contracts. The small traders decreased their long positions and increased their short positions on that price decline...which is precisely what one would expect of them. But the big surprise was that the brain dead technical funds increased their long position by 3,711 contracts, instead of reducing it...which is NOT the action that one would normally expect on a week over week price decline. Ted is speculating that a surprise buyer shows up in the Non-Commercial category...and this forced JPMorgan et al to short massive amounts of the metal in order to prevent the price from blowing up. I sure hope he's right...but I will be waiting to see if there is any corrections made to the silver portion of the COT Report as the week progresses. Maybe we'll have to wait until next Friday's report to find out. This will coincide with the updated short position in GLD and SLV over at shortsqueeze.com...so there's lots of eagerly awaited silver news coming out next week, so stay tuned. Anyway, assuming the silver numbers are correct, the 'Big 4' are short 260.0 million ounces of silver...and the '5 through 8' short holders are short an additional 55.0 million ounces of silver. The Commercial net short positions checks in at 251.3 million ounces, so the 'Big 4' are short 96.7% of that amount. Once you subtract out the market-neutral spread trades, it shows that the 'Big 4' traders are short 51.2% of the entire Comex futures market in silver...and the '5 through 8' traders are short an additional 10.8 percentage points. So the 'Big 8' are short 62% of the entire Comex futures market in silver on a net basis. JPMorgan is short almost 33% of the entire Comex futures market in silver all by itself! And no matter how you slice it or dice it, that is what I call an obscene and grotesque concentrated short position! Here's Nick Laird's "Days of World Production to Cover Short Positions" chart updated with Tuesday's numbers. (Click on image to enlarge) The long-term interactive COT charts for silver and gold are here and here respectively. Speaking from personal experience, the silver charts are slow to load if you have an older computer and/or browser. I have the usual large number of stories for a weekend, so I hope you can find the time in what's left of it to read the ones that interest you. A fair number of them are ones that I've been saving for this weekend column because of length or subject matter. But for how much longer can these attempts be squashed? My guess is...not much longer. Jumping exports give silver impetus in India. Reserve Bank of India devising products for turning gold into paper. Candidates for 2013 Gold Stock of the Year. More silver on the move in SLV and the Comex yesterday. ¤ Critical ReadsSubscribeKyle Bass Tells 'Nominal' Stock Market Cheerleaders: Remember ZimbabweAmid the euphoria of the crossing of the Dow's Maginot Line at 14,000, Kyle Bass provided a few minutes of sanity in an interview with CNBC's Gary Kaminsky. Bass starts by reflecting on the ongoing (and escalating) money-printing as the driver of stock movements currently and would not be surprised to see them move higher still (given the ongoing printing expected). However, he caveats that nominally bullish statement with a critical point, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs" as purchasing power is crushed. Investors, he says, are "too focused on nominal prices" as the rate of growth of the monetary base is destroying true wealth. This 6:32 minute video interview is embedded in a Zero Hedge story from yesterday...and I thank Phil Barlett for being the first person through the door with this story. It's a must watch...and the link is here. One thing I did notice, was that he never mentioned gold once, even though he was given the opportunity to do so.  WSJ: Fed Easing Isn't Doing Us Any GoodWall Street Journal editors are none too impressed with the Federal Reserve's decision Wednesday to stick with its massive easing program. This article showed up on the moneynews.com Internet site yesterday morning...and it's courtesy of West Virginia reader Elliot Simon. The link is here.  Doug Noland: Late 90s-LikeUnrelenting trade and "capital" account deficits have ensured the ongoing injection of dollar financial claims into inflated global financial systems, markets and economies. Unending dollar flows have, in particular, bolstered "developing" Credit systems, economies and Bubbles. China and "developing" central banks have, then, continued the recycling of Trillions of surplus dollar balances directly back into U.S. Treasury and agency debt markets, in the process helping to monetize U.S. income growth, inflate securities markets and sustain the U.S. Bubble Economy. All along the way, perilous global imbalances know only one direction: bigger. And the greater the imbalances, the lower global central bankers peg rates and the more they resort to unfathomable "quantitative easing"/"money printing." I'm OK if every analyst in the world disagrees. It doesn't change the reality that we've experienced another historic transformation in U.S. and global finance - and we are these days witnessing the consequence: history's greatest synchronized Credit, market and economic Bubbles. Kyle Bass would see eye-to-eye with Doug Noland on this...and both are saying the same thing, but in different ways. Both warn of the danger...and the ultimate end game. Doug's Friday Credit Bubble Bulletin is always a must read for me...and it's posted over at the prudentbear.com Internet site. I thank reader U.D. for sending it...and the link is here.  On This Day In History, Gas Prices Have Never Been HigherBetween Hess' plant closing and scheduled maintenance, the squeeze appears to be on the refining space and wholesale gasoline prices are smashing higher. Along with flares in geopolitical risk (Ankara today and Israel/Syria earlier in the week) driving underlying crude prices, Gas prices (at the pump) are surging - to record highs for the first week of February as per AAA, hitting an all time high of $3.465 for this day and just surpassing last year's price of $3.455; and based on where wholesale prices are (given the lag), we could be seeing $4.00 gas at the pump in the next few weeks. This short article was posted on the zerohedge.com Internet site yesterday...and the charts are well worth the trip. I thank Elliot Simon for sharing this story with us...and the link is here.  Former Peregrine CEO Wasendorf gets 50 years in prisonA U.S. judge on Thursday sentenced the founder of Peregrine Financial Group to 50 years in prison for looting hundreds of millions of dollars from the brokerage, saying his customers would probably never recover the money they lost. |
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