Goldman Sucks: Feb 2, 2012

02 February 2012

Gold: The target is between $2,750 to $3,000 by June 2013

By David Nichols
It's not often that a financial market tells us its intentions in a clear and obvious way. But occasionally it happens.

And it just happened last Wednesday.

First, to set the stage: Gold came into last week off a 17-week correction, with the direction of the next 17 weeks still up in the air. The big correction in 2008 lasted 34 weeks, so gold was at a critical balance point heading into the Fed meeting -- it was either going to move into the next up leg now, or in 17 weeks, in early May.

This was a major balance point that could have gone either way, mostly because there is a big scary bogey still out there, namely another round of deflation and de-leveraging emanating from Europe.

The last recession in 2008, with its accompanying financial crisis, caused a massive bout of deflation, which slaughtered gold and other financial assets, while triggering a major run up in the dollar.

So it's critical to know if a similar bout of deflation is coming now. And gold is a highly sensitive barometer on this. If we pay careful attention, gold will give us the accurate forecast.

Silver Price Forecast And The Shift To Measuring Wealth In Gold Ounces Instead Of Dollars.

February 2, 2012

Silver Price Forecast:

The debt-based monetary system creates an illusion of wealth. It allows for claims on real goods to significantly exceed the actual amount of real goods. You then have a number of people believing they have wealth, since they have claims (pieces of paper or tokens) showing that they have these real assets, whereas, in reality, if everyone was to claim the real goods, there would not be enough to go around.
The high debt levels, in some way, represent the extent to which there are more claims than the actual underlying real assets.
During the period of credit extension – that has been for at least 80 years – most businesses are set up to take advantage of this system. The system allows for an easier way to increase wealth (illusionary), since only claims on real assets need to be increased, instead of the actual real assets.
As you come to the end of the credit extension cycle, most businesses are dependent on this credit extension, either directly or indirectly. When the debts become too heavy to bear (no one knows the day or the hour, but there are signs), the debt bubble will burst, and over time eliminate all those business opportunities brought about by the debt-based system, as well as the businesses dependent on it.

Gold may hit $2,000 within 3 months: James Turk

Last Updated : 02 February 2012 at 18:00 IST

James Turk, Chairman and founder of GoldMoney, claims that the 2012 bottom for Gold came during the first week in January. If the year's low is already history and if his projection that gold will hit the $2,000/oz mark within three months is on target, you do the math. "Gold is way too cheap," he tells in this exclusive interview.

The Gold Report: Given the volatile 2011 market and the fact that gold trades at seasonally lower prices in the summer, James, what led you to say you believe we've already hit the low for the gold price in 2012?

James Turk: We started this year in an unusual position. Normally, we see seasonal strength in the last quarter. We didn't get it. We'd been in a correction since the high in Silver back in April 2011. The high in gold came during the summer, which was very unusual, but basically both metals have been moving sideways. Starting from the end of a correction, value is more important than seasonality. Clearly, gold and silver both represent good, undervalued assets at the moment.

The other factor is continuing problems in the financial system. The European banks are still on the brink and many American banks are in a similar situation. Questions about the currency—whether the euro will survive—and the ongoing sovereign debt issue will cause people to look at the precious metals. I've said we saw the low in the gold price the first week of January, and the further into the year we get without going lower, the greater the probability that it was, in fact, the low for the year.

German Central Bank 228 Billion Euros in Debt Rescuing Europe; Bundesbank President Criticizes Merkel's Fiscal Pact, Says "No Grounds for Eurobonds"

MISH'S
Global Economic
Trend Analysis

Both Angela Merkel and the Bundesbank are walking an extremely fine line of economic policies and treaty arrangements that appear to be in violation of policy statements made by the German Supreme Court regarding transfer unions. Moreover, the Bundesbank president is now in what amounts to an open Feud with Merkel.

Bundesbank 228 Billion Euros in Debt Rescuing Europe

Ambrose Evans-Pritchard at The Telegraph reports Bundesbank Sinks Deeper Into Debt Saving Europe

The operations are part of the European Central Bank's 'TARGET2' network of automatic payments between the national central banks of the Euroland club. The Bundesbank has already provided €496bn (£413bn) to countries in trouble, chiefly Greece, Ireland, Italy and Spain.

The Bundesbank - the dominant body in the euro system - used to keep a stock of €270bn of private securities (refinance credit) before the start of the financial crisis. This was depleted last year as it sold assets to meet growing demands on the TARGET2 scheme.

Once the debt drama began to engulf the bigger economies, the Bundesbank was forced to borrow money to meet its obligations to offset capital flight, since it refused to sell its stash of gold. It now owes €228bn to German banks.

Survey of European Banks Shows a Sharp Cutback in Lending; Three Reasons LTRO Will Not Get Banks to Lend

MISH'S
Global Economic
Trend Analysis

The LTRO may have ignited the bond markets and the stock market but it did not do anything for bank lending. The New York Times reports Survey of European Banks Shows a Sharp Cut in Lending

Banks in the euro area cut lending sharply at the end of 2011, according to data published Wednesday, raising concern that Europe was on the verge of a credit crisis that could lead to a deeper recession than expected.

A quarterly survey of commercial banks by the European Central Bank showed a surge in the number of institutions that were becoming more restrictive about who they lent to, because the banks themselves were having trouble raising money and were under pressure from regulators to reduce risk.

“It is obvious that we see a deleveraging, a retrenching process unfolding,” Thomas Mirow, the president of the European Bank for Reconstruction and Development, said in an interview last week. He said the figures from the Bank for International Settlements showed “this is not just perception but reality.” The reconstruction bank provides credit to support the development of free markets in the former Soviet bloc.

Obama Releases Details on His Plan to Bail Out Banks, Fannie Mae, Hedge Funds, Wall Street, Fixing MERS and Screwing Taxpayers at Same Time; Key Aspects of Plan as Presented vs. Reality

MISH'S
Global Economic
Trend Analysis

Today, under guise of helping "responsible homeowners" president Obama published details of Plan to Help Homeowners and Heal the Housing Market

Key Aspects of the President’s Plan as Presented

Broad Based Refinancing to Help Responsible Borrowers Save an Average of $3,000 per Year: The President’s plan will provide borrowers who are current on their payments with an opportunity to refinance and take advantage of historically low interest rates, cutting through the red tape that prevents these borrowers from saving hundreds of dollars a month and thousands of dollars a year. This plan, which is paid for by a financial fee so that it does not add a dime to the deficit, will:
Provide access to refinancing for all non-GSE borrowers who are current on their payments and meet a set of simple criteria.
Streamline the refinancing process for all GSE borrowers who are current on their loans.
Give borrowers the chance to rebuild equity through refinancing.
Homeowner Bill of Rights: The President is putting forward a single set of standards to make sure borrowers and lenders play by the same rules
Moving the Market to Provide a Full Year of Forbearance for Borrowers Looking for Work: Following the Administration’s lead, major banks and the GSEs are now providing up to 12 months of forbearance to unemployed borrowers.

Doug Casey on the Coming War with Iran

(Interviewed by Louis James, Editor, International Speculator)
L: Doug-Sama, I've heard you say you think the US is setting Iran up to be the next fall guy in the wag-the-dog show – do you think it could really come to open warfare?
Doug: Yes, I do. It could just be saber rattling during an election year, but Western powers have been provoking Iran for years now – two decades, really. I just saw another report proclaiming that Iran is likely to attack the US, which is about as absurd as the allegations Bush made about Iraq bombing the US, when he fomented that invasion. It's starting to look rather serious at this point, so I do think the odds favor actual fighting in the not-too-distant future.
L: Could they really be so stupid?
Doug: You know the answer to that one. We're dealing with criminal personalities on both sides, and criminals are basically very stupid – meaning they have an unwitting tendency to self-destruction. One thing to remember is that most of those in power in the West still believe the old economic fallacy that war is good for the economy.
L: The old broken-window fallacy. Paraphrasing Arlo Guthrie, it's hard to believe anyone could get away with making a mistake that dumb for that long. Our friends at IHS put together a great, brief video debunking the fallacy.
Doug: People like those in power still suffer the delusion that it was World War II that ended the Great Depression for the US. Actually, it was only after the end of the war that the depression ended, in 1946. In his book World Economic Development: 1979 and Beyond, Herman Kahn documented long-term growth throughout the 20^th century. Between 1914 to 1946 – a very tough time, with WW I, the Great Depression, and WW II – the world economy still grew at something like 1.8%. I believe real growth would have been several times as great, were it not for the state and its products. But people still believe that spending money on things that explode and kill and destroy is somehow good for the economy.
L: I suppose they think it's okay if it creates jobs here and destroys lives and livelihoods "over there." But aside from the fact that it's not safe to assume today's enemies are not capable of bringing the battle onto US soil, it still ignores the fact that you're spending money on stuff that gets destroyed – like broken windows – and that impoverishes us all. Worse, the cost is not just economic.
Doug: That's right. This coming war with Iran has the potential to turn into something resembling WW III, with enormous consequences.
Now, it's hard to speak with any certainty on such matters, because most of what we have to go on are press reports. Governments keep most really critical facts on their doings to themselves, and what you read in the press is as likely as not just a warmed-over government press release – in other words, propaganda. Meaningless, if not actively deceptive. It is correctly said that in war, truth is the first casualty.

47 Signs That China Is Absolutely Destroying America On The Global Economic Stage

Have you ever watched a football game or a basketball game where one team dominates the other team so badly that calling it a "blowout" would be a huge understatement? Well, that is what China is doing to the United States. China is absolutely destroying America on the global economic stage. Once upon a time, the Chinese economy was a joke and the U.S. economy was the most powerful the world had ever seen. But over the past couple of decades the U.S. economy has decayed and declined while the Chinese economy has skyrocketed. Today, China makes more steel, more automobiles, more beer, more cotton, more coal and more solar panels than we do. China has the fastest train in the world, the fastest computer in the world and they export twice as much high-tech equipment as we do. In 2011, our trade deficit with China was the largest trade deficit that one nation has had with another nation in the history of the world, and China has now accumulated more than 3 trillion dollars in foreign currency reserves. Every single day, we lose more jobs, more businesses and more of our national wealth to China. In technical economic terms, China has "taken us out behind the woodshed" and has beaten the living daylights out of us. Unfortunately, most Americans are so addicted to entertainment that they don't even realize what is happening.
If you do not believe that China is wiping the floor with America in front of the rest of the world, just keep reading. The following are 47 signs that China is absolutely destroying America on the global economic stage....
#1 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China's high-tech exports are more than twice the size of U.S. high-tech exports.
#2 America has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.
#3 The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.

Keiser Report: Chutzpah Economics (E244)

In this episode, Max Keiser and co-host, Stacy Herbert, discuss chutzpah economics, unrequited transfers and shakedowns. In the second half of the show, Max talks to economist, Saifedean Ammous, about the standoff between Egypt and the IMF debt pushers as well as the war against the online free market by Hollywood middlemen.

SPECIAL REPORT: $500 SILVER & Hyperinflation

"A SGTreport SPECIAL REPORT featuring Chris Duane from http://dont-tread-on.me/ & David Morgan from http://www.silver-investor.com/. Chris and I explore the 1/10th ounce silver payment for a hard day's labor which was the historical norm for centuries. And how that fractional payment will actually hold true in the future for millions of Americans once silver reaches its real all-time inflation adjusted high of $500 per ounce. David Morgan also joins us to explore the very real possibility of hyperinflation in the United States by the year 2014. So buckle up, this is a good one."

SilverDoctors: China goes on Gold Binge, as World Wonders Why

SilverDoctors: China goes on Gold Binge, as World Wonders Why: Yesterday's video of the day went to Jeffrey Christian. The CPM Group Founder who told CNBS that gold and silver have probably seen thei...

SilverDoctors: Judge: No Special Priority For MF Global Customers...

SilverDoctors: Judge: No Special Priority For MF Global Customers...: Judge Martin Glenn ' We don't have the power to help the individual clients, and even if we did, we wouldn't! ' At least Judge Glen is h...

Nomi Prins - Mafia Banking Cartel Blackmail Greece into Antiquities Debt Pay Off Dea

On the Monday, January 30 edition of the Infowars Nightly News, Alex talks with author, journalist, and former Goldman-Sachs director Nomi Prins about the MF Global scandal and the decision by the strapped Greek government to rent out the country's antiquities in order to pay off a debt owed to international bankers.

Goldman Sucks

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