08 January 2012
SilverDoctors: As Default Nears, Italy Begins Capital Controls
SilverDoctors: As Default Nears, Italy Begins Capital Controls: New Italian PM Mario Monti has mandated a cap on cash transactions in Italy of 1,000 euros, and reportedly wishes to gradually reduce this t...
07 January 2012
SilverDoctors: JP Morgan to Fail in Q1 Due to Bad Bets on Collaps...
SilverDoctors: JP Morgan to Fail in Q1 Due to Bad Bets on Collaps...: From AGXIIK : Q1 2012 Timeline: A Collapsing Euro , JPM/GS to Raid GLD/SLV Unicredit just took a 60% haircut on share price to get a few...
SilverDoctors: Goldman Sachs to Sell $15,000,000 in Gold-Linked B...
SilverDoctors: Goldman Sachs to Sell $15,000,000 in Gold-Linked B...: The Squid is attempting to siphon additional funds away from physical gold and silver and the mining shares. Yahoo reported yesterday that ...
Thousands of US troops land in Israel. Aircraft carrier coming soon
DEBKAfile Exclusive Report January 6, 2012, 6:41 PM (GMT+02:00)
Thousands of US troops began descending on Israel this week. Senior US military sources told debkafile Friday, Jan. 6 that many would be staying up to the end of the year as part of the US-IDF deployment in readiness for a military engagement with Iran and its possible escalation into a regional conflict. They will be joined by a US aircraft carrier. The warplanes on its decks will fly missions with Israeli Air Force jets. The 9,000 US servicemen gathering in Israel in the coming weeks are mostly airmen, missile interceptor teams, marines, seamen, technicians and intelligence officers.
The incoming American soldiers are officially categorized as participants in Austere Challenge 12, the biggest joint US-Israeli war game ever held.
Thousands of US troops began descending on Israel this week. Senior US military sources told debkafile Friday, Jan. 6 that many would be staying up to the end of the year as part of the US-IDF deployment in readiness for a military engagement with Iran and its possible escalation into a regional conflict. They will be joined by a US aircraft carrier. The warplanes on its decks will fly missions with Israeli Air Force jets. The 9,000 US servicemen gathering in Israel in the coming weeks are mostly airmen, missile interceptor teams, marines, seamen, technicians and intelligence officers.
The incoming American soldiers are officially categorized as participants in Austere Challenge 12, the biggest joint US-Israeli war game ever held.
Gold traders more bullish after bear market averted
INTERNATIONAL. Gold traders are the most bullish in a month as Europe’s deepening debt crisis and increasing tensions over Iran drove the metal to its longest winning streak since October.
Ten of 22 surveyed by Bloomberg expect the metal to gain next week and five were neutral, the highest proportion since December 9. The U.S. Mint sold 45,500 ounces of American Eagle gold coins this month, compared with 65,500 ounces in the whole of December and 41,000 in November, data on its website showed.
Britain and France will press the European Union to stop Iranian crude imports at a January 30 meeting, in response to the country’s nuclear program. Iran is threatening to retaliate by blocking the Strait of Hormuz, a key chokepoint for global oil supplies.
Greek Prime Minister Lucas Papademos warned his nation may face economic collapse as soon as March. Investors are holdin a near-record amount of gold through exchange-traded products after the metal rose for an 11th consecutive year.
“European sovereign-debt risk and the geopolitical risk of the Iranian situation escalating should support gold,” Mark O’Byrne, executive director of Dublin-based GoldCore Ltd., a brokerage that sells everything from quarter-ounce British Sovereigns to 400-ounce bars, told Bloomberg. “Gold’s safe-haven attributes will continue to be in demand.”
Ten of 22 surveyed by Bloomberg expect the metal to gain next week and five were neutral, the highest proportion since December 9. The U.S. Mint sold 45,500 ounces of American Eagle gold coins this month, compared with 65,500 ounces in the whole of December and 41,000 in November, data on its website showed.
Britain and France will press the European Union to stop Iranian crude imports at a January 30 meeting, in response to the country’s nuclear program. Iran is threatening to retaliate by blocking the Strait of Hormuz, a key chokepoint for global oil supplies.
Greek Prime Minister Lucas Papademos warned his nation may face economic collapse as soon as March. Investors are holdin a near-record amount of gold through exchange-traded products after the metal rose for an 11th consecutive year.
“European sovereign-debt risk and the geopolitical risk of the Iranian situation escalating should support gold,” Mark O’Byrne, executive director of Dublin-based GoldCore Ltd., a brokerage that sells everything from quarter-ounce British Sovereigns to 400-ounce bars, told Bloomberg. “Gold’s safe-haven attributes will continue to be in demand.”
UK sends new warship to Gulf amid Iran tensions
INTERNATIONAL. Britain's newest warship is heading to the Gulf for its first mission at a time of tensions over Iran's threat to close the strategic Strait of Hormuz, a key transport route for oil.
The Royal Navy's Type 45 destroyer HMS Daring, which has a "stealth" design to help avoid detection by radar, is to join other British ships in the region, the Ministry of Defence confirmed Saturday.
Although its deployment has been planned for more than a year, it comes as Britain and its allies have expressed deep concern about Iran's threat to close the shipping lane through which 20 percent of the world's oil flows.
Iran has threatened to take the move if it is hit with fresh sanctions over its disputed nuclear programme.
Defence Secretary Philip Hammond said on a visit to Washington this week that both Britain and the United States would ensure that their response to any provocation was "very measured, that there isn't an accidental escalation".
But he added: "What we cannot answer for is whether there is a plan on the other side to escalate."
The threat to close the Strait of Hormuz has pushed up the price of oil.
The Royal Navy's Type 45 destroyer HMS Daring, which has a "stealth" design to help avoid detection by radar, is to join other British ships in the region, the Ministry of Defence confirmed Saturday.
Although its deployment has been planned for more than a year, it comes as Britain and its allies have expressed deep concern about Iran's threat to close the shipping lane through which 20 percent of the world's oil flows.
Iran has threatened to take the move if it is hit with fresh sanctions over its disputed nuclear programme.
Defence Secretary Philip Hammond said on a visit to Washington this week that both Britain and the United States would ensure that their response to any provocation was "very measured, that there isn't an accidental escalation".
But he added: "What we cannot answer for is whether there is a plan on the other side to escalate."
The threat to close the Strait of Hormuz has pushed up the price of oil.
'Silver ensures bullish outlook among precious metals'
By P Radomski
The new year started off with a bang with precious metals out-shining the competition. Is this a harbinger of things to come? We think so and we are not alone. Forecasts for Gold for 2012 include a price per ounce of $2,200 by Morgan Stanley, $2,050 by UBS, and $2,000 by Barclays.
The year 2011, for other than gold investors, has been a disappointment, more like a train wreck. Growth has been paltry, unemployment remained high, sovereign debt in the stratosphere. The U.S. political system has been dysfunctional unable to make easy decisions, never mind the hard ones. There was no housing rebound and the eurozone looked like it was a house of cards. But look on the bright side. Despite a prophecy by Harold Camping, the world did not end on May 21.
There was also some other good news. There was no double dip in 2011. Osama bin Laden was "laid to rest in a solemn ceremony concluding upon impact with the Indian Ocean at a terminal velocity of 125 miles per hour," (at least that's the official version) in the words of Dave Barry, humor columnist for The Miami Herald. Moammar Gadhafi and other dictators also suffered major setbacks (to put it mildly.)
The new year started off with a bang with precious metals out-shining the competition. Is this a harbinger of things to come? We think so and we are not alone. Forecasts for Gold for 2012 include a price per ounce of $2,200 by Morgan Stanley, $2,050 by UBS, and $2,000 by Barclays.
The year 2011, for other than gold investors, has been a disappointment, more like a train wreck. Growth has been paltry, unemployment remained high, sovereign debt in the stratosphere. The U.S. political system has been dysfunctional unable to make easy decisions, never mind the hard ones. There was no housing rebound and the eurozone looked like it was a house of cards. But look on the bright side. Despite a prophecy by Harold Camping, the world did not end on May 21.
There was also some other good news. There was no double dip in 2011. Osama bin Laden was "laid to rest in a solemn ceremony concluding upon impact with the Indian Ocean at a terminal velocity of 125 miles per hour," (at least that's the official version) in the words of Dave Barry, humor columnist for The Miami Herald. Moammar Gadhafi and other dictators also suffered major setbacks (to put it mildly.)
March Silver in Backwardation
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Backwardation means (and I am oversimplifying a bit here) that a futures contract is cheaper than buying the physical good in the cash market. To understand the meaning of this, the first question is this. Is it possible to warehouse the good? If not, then the futures market is simply the market's opinion of what the price is likely to be on the contract expiration. I am not going to discuss this case any further, as it is not that interesting and it is not germane to silver.
Silver, unlike interest rate futures for example, can be warehoused. This means it is possible to simultaneously buy physical silver in the spot market and sell a future in the futures market. One has no net exposure to the *price*. One is exposed only to the *spread*. This is a simple arbitrage. One can "carry" a good (buy spot, sell future).
January 6, 2012 - 7:02am
March silver has been flirting with backwardation since the end of 2011, and today it has moved more firmly into backwardated territory. This is extremely bullish for silver, and let me explain why.Backwardation means (and I am oversimplifying a bit here) that a futures contract is cheaper than buying the physical good in the cash market. To understand the meaning of this, the first question is this. Is it possible to warehouse the good? If not, then the futures market is simply the market's opinion of what the price is likely to be on the contract expiration. I am not going to discuss this case any further, as it is not that interesting and it is not germane to silver.
Silver, unlike interest rate futures for example, can be warehoused. This means it is possible to simultaneously buy physical silver in the spot market and sell a future in the futures market. One has no net exposure to the *price*. One is exposed only to the *spread*. This is a simple arbitrage. One can "carry" a good (buy spot, sell future).
Physical Silver Surges To Record 30% Premium Over Spot, In Backwardation
One of the main reasons why we have been not so focused on paper representations of real currencies (i.e., gold and silver) is that ever since the MF Global debacle, in which it became all too clear that if physical gold can be "hypothecated" via conflicting ownership, then there is no way that paper versions of precious metals are viable and indeed credible. After all, the only real owner at the end of the day is the certificate holder, which as we have explained before, is none other than DTCC's Cede & Co. Good luck collecting when the daisy chain of counterparties starts falling. Which leaves physical. And for a good sense of what the "real" price of the metal is, not one determined by institutions whose interest it is to preserve the hegemony of paper, one can either try to procure gold and silver at a retail merchant, or one can look to the premium of a dedicated physical ETF over spot. Such as Eric Sprott's PSLV which as of today is trading at an all time high premium of 30%! In other words, someone is willing to pay up to 30% over spot for the right to be closer to the physical metal than merely have a paper claim on a paper claim (pre hyper rehypothecation and what not). Incidentally the last NAV premium over spot record was back in April 2011 just as silver went parabolic and the entire commodity complex experienced the infamous May 1 takedown when it collapsed by $8 dollars in milliseconds on glaringly obvious coordinated intervention. Said otherwise, like back then, so now there is an actual shortage, manifesting itself in the premium. And while last time its was the price plunge which eased supply needs, we are not so sure how one will be able to spin a collapse of the current, far lower paper silver price.
SilverDoctors: SilverDoctors Reaches The Sheople (Yahoo Finance)
SilverDoctors: SilverDoctors Reaches The Sheople (Yahoo Finance): Who knew Yahoo Finance followed SilverDoctors? Investors are becoming more interested in physical silver. According to data from the U.S...
06 January 2012
The Can Is Reaching the End of the Alley/10 yr European bond yields rise/Italian over 7% again/
Good evening Ladies and Gentlemen:
Gold closed today up $6.60 to finish the comex session at $1619.00. Silver also finished higher by 20 cents at $27.27. During the early hours within the Euro trading period, gold rose to its zenith at $1626 exactly at the first morning gold London fix and then the bankers went to work knocking gold all the way down to below 1600.00 dollars. However that was short lived as physical buyers came out of the woodwork buying gold as the European debt contagion was catching fire. I will discuss all of these facts with you today. I consider the various commentaries today critical in understanding the mess within Europe.
Right now gold in the access market here are the prices for gold and silver:
gold: $1621.00
silver: $29.19
Today we have a plethora of news for you to digest as we plow through the mine fields discovering the eventual price of gold and silver. Let us head over to the comex and assess trading, inventory movements and amounts of metal standing for delivery.
The total gold comex OI fell by 2054 contracts today as the banking cartel put on a lame attack.
Tonight's new gold OI stands at 421,221 which is very low considering the relatively high price of gold today. The front options expiry month of January saw its OI rise by 15 contracts despite 2 deliveries yesterday. Thus we gained 17 contracts or 1700 oz of gold ounces standing and lost nothing to cash settlements. The front delivery month of February saw its OI fall quite precipitously to 224,763 from 234,311. We are now starting to see the remaining paper players roll into a future month. The estimated volume at the gold comex today was very good at 172,582. The confirmed volume yesterday was also very high at 184,043 contracts.
The total silver comex OI fell by 1413 contracts to rest tonight at 105,688. It seems that the OI around 105,000 is stable and in strong hands. The front options expiry month of January saw its OI fall from 78 to 62 for a loss of 18 contracts. We had 59 delivery notices yesterday so we again gained more silver ounces standing and lost nothing to cash settlements. The next front delivery month of March saw its OI fall 1571 contracts to rest tonight at 57,220. We got some early rollovers. The estimated volume at the silver comex continues to be weak coming in at 37,623. The confirmed volume yesterday was also weak at 38,679.
Gold closed today up $6.60 to finish the comex session at $1619.00. Silver also finished higher by 20 cents at $27.27. During the early hours within the Euro trading period, gold rose to its zenith at $1626 exactly at the first morning gold London fix and then the bankers went to work knocking gold all the way down to below 1600.00 dollars. However that was short lived as physical buyers came out of the woodwork buying gold as the European debt contagion was catching fire. I will discuss all of these facts with you today. I consider the various commentaries today critical in understanding the mess within Europe.
Right now gold in the access market here are the prices for gold and silver:
gold: $1621.00
silver: $29.19
Today we have a plethora of news for you to digest as we plow through the mine fields discovering the eventual price of gold and silver. Let us head over to the comex and assess trading, inventory movements and amounts of metal standing for delivery.
The total gold comex OI fell by 2054 contracts today as the banking cartel put on a lame attack.
Tonight's new gold OI stands at 421,221 which is very low considering the relatively high price of gold today. The front options expiry month of January saw its OI rise by 15 contracts despite 2 deliveries yesterday. Thus we gained 17 contracts or 1700 oz of gold ounces standing and lost nothing to cash settlements. The front delivery month of February saw its OI fall quite precipitously to 224,763 from 234,311. We are now starting to see the remaining paper players roll into a future month. The estimated volume at the gold comex today was very good at 172,582. The confirmed volume yesterday was also very high at 184,043 contracts.
The total silver comex OI fell by 1413 contracts to rest tonight at 105,688. It seems that the OI around 105,000 is stable and in strong hands. The front options expiry month of January saw its OI fall from 78 to 62 for a loss of 18 contracts. We had 59 delivery notices yesterday so we again gained more silver ounces standing and lost nothing to cash settlements. The next front delivery month of March saw its OI fall 1571 contracts to rest tonight at 57,220. We got some early rollovers. The estimated volume at the silver comex continues to be weak coming in at 37,623. The confirmed volume yesterday was also weak at 38,679.
Gartman admits he made a bad call on gold
John Shmuel Jan 5, 2012 – 10:53 AM ET | Last Updated: Jan 5, 2012 2:05 PM ET
Investment letter writer Dennis Gartman has declared that he was wrong about gold.
In his daily investment letter Thursday, Mr. Gartman officially reversed his outlook for gold, saying he now views the precious metal as being in a bull market.
The new position follows a month where Mr. Gartman was the subject of some high-profile name calling from fellow investment letter writer, Peter Grandich. Mr. Grandich called Mr. Gartman “one of the Three Stooges” of gold forecasting after the latter declared that gold was officially in a bear market (if you’re wondering, the other two accused of being in that trio are Jeff Christian of CPM Group and Jon Nadler of Kitco).
Mr. Gartman’s reversal comes as he has failed to buy back gold below the price he sold it at a few weeks ago. He said that now that gold priced in euros has taken out its previous interim high, he sees the metal returning to a bull market.
“The bear run that began in August has now officially ended, for the string of lower lows and lower highs is over,” he said in his Gartman Letter. “This does not help us in hoping for/expecting/indeed demanding some weakness into which to buy, but it does give us “permission” to become officially bullish once again.”
Investment letter writer Dennis Gartman has declared that he was wrong about gold.
In his daily investment letter Thursday, Mr. Gartman officially reversed his outlook for gold, saying he now views the precious metal as being in a bull market.
The new position follows a month where Mr. Gartman was the subject of some high-profile name calling from fellow investment letter writer, Peter Grandich. Mr. Grandich called Mr. Gartman “one of the Three Stooges” of gold forecasting after the latter declared that gold was officially in a bear market (if you’re wondering, the other two accused of being in that trio are Jeff Christian of CPM Group and Jon Nadler of Kitco).
Mr. Gartman’s reversal comes as he has failed to buy back gold below the price he sold it at a few weeks ago. He said that now that gold priced in euros has taken out its previous interim high, he sees the metal returning to a bull market.
“The bear run that began in August has now officially ended, for the string of lower lows and lower highs is over,” he said in his Gartman Letter. “This does not help us in hoping for/expecting/indeed demanding some weakness into which to buy, but it does give us “permission” to become officially bullish once again.”
Saudis, Gulf states on war alert for early US-Iran clash
DEBKAfile Exclusive Report January 5, 2012, 10:35 AM (GMT+02:00)
The armies of Saudi Arabia and fellow Gulf Cooperation Council states stood ready Thursday Jan. 5, for Washington to stand up to Iranian threats and send an aircraft carrier or several warships through the Strait of Hormuz into the Persian Gulf. Riyadh has been leaning hard on the Obama administration not to let Tehran get away with its warning to react with "full force" if the USS Stennis aircraft carrier tried to reenter the Gulf or Iran's pretensions to control the traffic transiting the world's most important oil route.
Wednesday night, the Iranian parliament began drafting a bill prohibiting foreign warships from entering the Gulf without Tehran's permission.
debkafile's Washington sources report that Saudi Arabia has warned the Obama administration that Iranian leaders mean what they say; their leaders are bent on provoking a military clash with the United States at a time and place of their choosing, rather than leaving the initiative to Washington. To this end, Iranian officials are ratcheting up their belligerence day after day.
The armies of Saudi Arabia and fellow Gulf Cooperation Council states stood ready Thursday Jan. 5, for Washington to stand up to Iranian threats and send an aircraft carrier or several warships through the Strait of Hormuz into the Persian Gulf. Riyadh has been leaning hard on the Obama administration not to let Tehran get away with its warning to react with "full force" if the USS Stennis aircraft carrier tried to reenter the Gulf or Iran's pretensions to control the traffic transiting the world's most important oil route.
Wednesday night, the Iranian parliament began drafting a bill prohibiting foreign warships from entering the Gulf without Tehran's permission.
debkafile's Washington sources report that Saudi Arabia has warned the Obama administration that Iranian leaders mean what they say; their leaders are bent on provoking a military clash with the United States at a time and place of their choosing, rather than leaving the initiative to Washington. To this end, Iranian officials are ratcheting up their belligerence day after day.
French debt costs rise at bond sale as AAA decision looms
INTERNATIONAL. France sold 7.96 billion euros (US$10.2 billion) of debt, with borrowing costs rising in its first bond auction of the year as credit companies threaten to cut the nation’s AAA rating.
The government sold 4.02 billion euros of benchmark 10-year bonds at an average yield of 3.29 percent, from 3.18 percent on December 1. France, which also auctioned 2023, 2035 and 2041 securities, had aimed to sell a maximum of 8 billion euros. French 30-year bonds pared their declines.
“This is proving to the market again that they can still raise finance without too many difficulties,” said Eric Wand, a fixed-income strategist at Lloyds Bank Corporate Markets in London. “There’s still the threat of a downgrade hanging over France and until we get that situation cleared up you can’t signal the all-clear and it’s still going to be vulnerable.”
France has the biggest debt burden of the six top-rated euro nations, at 85% of gross domestic product. The extra yield investors demand to hold French bonds instead of benchmark German bunds rose to 204 basis points on November 17, the most since 1990, as concern deepened Europe’s debt crisis was spreading.
While the gap was 145 basis points at 12:24 p.m. Paris today, it compares with a premium of 44 basis points for AAA rated Finland and 37 basis points for the Netherlands.
The euro extended its decline against the dollar, reaching the weakest level in 15 months, after French borrowing costs rose. The 17-nation common European currency was 0.8% weaker at $1.2831 against the dollar at 12:10 p.m. London time.
The government sold 4.02 billion euros of benchmark 10-year bonds at an average yield of 3.29 percent, from 3.18 percent on December 1. France, which also auctioned 2023, 2035 and 2041 securities, had aimed to sell a maximum of 8 billion euros. French 30-year bonds pared their declines.
“This is proving to the market again that they can still raise finance without too many difficulties,” said Eric Wand, a fixed-income strategist at Lloyds Bank Corporate Markets in London. “There’s still the threat of a downgrade hanging over France and until we get that situation cleared up you can’t signal the all-clear and it’s still going to be vulnerable.”
France has the biggest debt burden of the six top-rated euro nations, at 85% of gross domestic product. The extra yield investors demand to hold French bonds instead of benchmark German bunds rose to 204 basis points on November 17, the most since 1990, as concern deepened Europe’s debt crisis was spreading.
While the gap was 145 basis points at 12:24 p.m. Paris today, it compares with a premium of 44 basis points for AAA rated Finland and 37 basis points for the Netherlands.
The euro extended its decline against the dollar, reaching the weakest level in 15 months, after French borrowing costs rose. The 17-nation common European currency was 0.8% weaker at $1.2831 against the dollar at 12:10 p.m. London time.
Safe haven status returning to gold as euro sinks after weak bond sales
INTERNATIONAL. Wholesale market prices to buy gold touched a two-week high at US$1,625 per ounce as London opened for business on Thursday, before pulling back to US$1,609 as commodities and world stock markets fell, led by Eurozone banking shares.
The 17-nation Euro currency fell to its lowest level in 16 months vs. the US Dollar.
Prices to buy gold and other precious metals had remained "well bid throughout" Asian trade on Thursday said a note from a Hong Kong dealer.
"Jewellers were restocking [and] demand was good in southern India," says bullion merchant Chanda Venkatesh of CapsGold in Hyderabad, speaking to Reuters and citing a southern Indian festival.
"Jewelry demand for gold is pretty good," agreed another dealer, but added that the price for gold futures holders to 'exchange for physical' (EFPs) fell hard overnight, possibly ahead of bullion sales due to New Year rebalancing in the big commodity-tracking investment indices.
"Gold appears at present to be living up more to its status as a safe haven again," says a note from Commerzbank, citing "geopolitical risks" in Western sanctions against Iran, plus the ongoing Eurozone debt crisis.
In Iraq today, at least 50 people were killed in a series of bomb attacks, extending the death-toll since US troops pulled out in mid-December, while protests over rising fuel prices in Nigeria, the world's 10th largest oil producer, were broken up by police.
Base metal and other commodity prices fell hard, but European crude oil contracts pushed higher to US$113 per barrel despite the rising US Dollar.
Silver prices fell back 3% from a 3-week high at US$29.70 per ounce.
"[Wednesday] saw gold finally beginning to break away from trading in step with risk assets," said one London dealer this morning.
The correlation between gold prices and the VIX volatility index of daily movement in US equities – positive during most of 2011 – recently fell to its most negative reading in two years, notes Reuters Technical analyst Wang Tao.
"We believe that gold prices will recover in 2012, and we maintain our bullish posture," says HSBC analyst James Steel, despite cutting his average forecast for this year from $2025 per ounce to $1850 this week.
Eurozone investors looking to buy gold today saw the price touch 3-week highs above €40,000 per kilo as the single currency slumped on the forex market to its lowest level against the Dollar since Sept. 2010 at US$1.28.
The 17-nation Euro currency fell to its lowest level in 16 months vs. the US Dollar.
Prices to buy gold and other precious metals had remained "well bid throughout" Asian trade on Thursday said a note from a Hong Kong dealer.
"Jewellers were restocking [and] demand was good in southern India," says bullion merchant Chanda Venkatesh of CapsGold in Hyderabad, speaking to Reuters and citing a southern Indian festival.
"Jewelry demand for gold is pretty good," agreed another dealer, but added that the price for gold futures holders to 'exchange for physical' (EFPs) fell hard overnight, possibly ahead of bullion sales due to New Year rebalancing in the big commodity-tracking investment indices.
"Gold appears at present to be living up more to its status as a safe haven again," says a note from Commerzbank, citing "geopolitical risks" in Western sanctions against Iran, plus the ongoing Eurozone debt crisis.
In Iraq today, at least 50 people were killed in a series of bomb attacks, extending the death-toll since US troops pulled out in mid-December, while protests over rising fuel prices in Nigeria, the world's 10th largest oil producer, were broken up by police.
Base metal and other commodity prices fell hard, but European crude oil contracts pushed higher to US$113 per barrel despite the rising US Dollar.
Silver prices fell back 3% from a 3-week high at US$29.70 per ounce.
"[Wednesday] saw gold finally beginning to break away from trading in step with risk assets," said one London dealer this morning.
The correlation between gold prices and the VIX volatility index of daily movement in US equities – positive during most of 2011 – recently fell to its most negative reading in two years, notes Reuters Technical analyst Wang Tao.
"We believe that gold prices will recover in 2012, and we maintain our bullish posture," says HSBC analyst James Steel, despite cutting his average forecast for this year from $2025 per ounce to $1850 this week.
Eurozone investors looking to buy gold today saw the price touch 3-week highs above €40,000 per kilo as the single currency slumped on the forex market to its lowest level against the Dollar since Sept. 2010 at US$1.28.
Soros says EU break-up would be catastrophic: report
"Today, the euro is potentially endangering the political cohesion of the European Union," the Business Line newspaper cited Soros as saying in the south Indian city of Hyderabad.
"If the common currency were to break down, it will lead to the break up of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system."
MF Global trustee tussles with regulators: report
Freeh, a former director of the Federal Bureau of Investigation and who represents MF Global's parent company, has asserted attorney-client privilege in deciding not to release certain documents to the CFTC, according to his office and people familiar with the matter, the Journal said.
The dispute is complicating efforts to learn how the firm lost the customer funds and to return the money to its owners and could slow the investigation, the Journal said, citing people familiar with the investigation.
Market Outlook 2012 - Thoughts of a Professional Investor
By: Deric O. Cadora | Thu, Jan 5, 2012
An exercise I find quite useful to perform at the beginning of each year involves putting together an executive summary of the prognostications found in my Member Letter. In this fashion, any major discrepancies in the big picture outlook can be identified and addressed. The methodology discussed in the Member Letter involves cycle analysis, primarily for the dollar, stocks, gold, and the CRB. The outlook for each of these asset classes is outlined below.
The U.S. Dollar in Decline
More so than the last few years, I believe 2012 and even 2013 will be dominated by the behavior of the U.S. Dollar. A currency war is underway... a race to devalue... and I have little doubt the United States will "win" this war. As anticipated in the 2011 Outlook, the dollar formed a major low last spring, though the low was not quite immersed in the sense of crisis I expected. That crisis, I believe, will arrive with the next 3-year cycle low in the autumn of 2014.In fact, the rally out of the 2011 low may be exhausting itself as I type. Public sentiment for the dollar is running very hot, and dollar cycles are behaving exactly as would be expected in the vicinity of a major trend change. Furthermore, as I will discuss below, commodities just left behind a major cyclical low in December, lending credence to the presence of a turning point for the dollar.
Given the macroeconomic backdrop in Europe, almost no one believes the dollar can fall. Therefore, once a trend change becomes obvious, everyone will be rushing for the exit simultaneously. The key level to watch during the decline is, of course, the 3-year cycle low from May 2011. Once that level is breached, we will have a failed cycle on our hands and should see generally lower prices for the buck until the next major cycle low in 2014.
Commodities - An Inflationary Storm Has Arrived
Gold – Is It Still Worth Buying?
By Esther Tanquintic-Misa:
January 5, 2012 9:15 PM EST
After a strong year in 2011, with gains registered at roughly 15 per cent in just 12 months, gold has been forecast to average $1,850 a troy ounce for 2012 and 2013 by HSBC. The question now hangs: Is gold - long considered a safe haven to guard one's assets - still worth buying?
The answer could still be yes.
"For investors who have a strong opinion on where gold is headed, or for traders looking to make a quick return, there is a wealth of options available. Perhaps the most direct method comes from the February GC Gold futures contract offered on the COMEX. The February contract is currently the most heavily traded future and will offer the best liquidity," Jared Cummans wrote on www.seekingalpha.com.
January 5, 2012 9:15 PM EST
After a strong year in 2011, with gains registered at roughly 15 per cent in just 12 months, gold has been forecast to average $1,850 a troy ounce for 2012 and 2013 by HSBC. The question now hangs: Is gold - long considered a safe haven to guard one's assets - still worth buying?
The answer could still be yes.
"For investors who have a strong opinion on where gold is headed, or for traders looking to make a quick return, there is a wealth of options available. Perhaps the most direct method comes from the February GC Gold futures contract offered on the COMEX. The February contract is currently the most heavily traded future and will offer the best liquidity," Jared Cummans wrote on www.seekingalpha.com.
Why Has Gold Been Down?
By Jeff Clark, Casey Research
In spite of some short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We're certainly not spending less money in the US, and now we're bailing out Europe via currency swaps with the European Central Bank. Shouldn't gold be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why gold remains in a funk.
The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.
The dollar has been rising. Money fleeing the Eurozone has to go somewhere, and some of it is heading into US bonds, which means first converting the foreign currency into dollars.
It's tax-loss selling season, something that's also impacting gold stocks. Funds and individual investors are selling underwater positions for tax purposes. Funds also sell their big winners to lock in gains for the year and dress up quarterly reports.
In spite of some short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We're certainly not spending less money in the US, and now we're bailing out Europe via currency swaps with the European Central Bank. Shouldn't gold be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why gold remains in a funk.
The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.
The dollar has been rising. Money fleeing the Eurozone has to go somewhere, and some of it is heading into US bonds, which means first converting the foreign currency into dollars.
It's tax-loss selling season, something that's also impacting gold stocks. Funds and individual investors are selling underwater positions for tax purposes. Funds also sell their big winners to lock in gains for the year and dress up quarterly reports.
These 5 forecasters see Gold hitting $3000 in 2012 and beyond
By Lorimer Wilson
Back in 2009 I began keeping track of those financial analysts, economists, academics and commentators who were of the opinion that it was just a matter of time before Gold reached a parabolic peak price well in excess of the prevailing price. As time passed the list grew dramatically and at last count numbered 140 such individuals who have gone on record as saying that gold will go to at least $3,000 - and as high as $20,000 - before the gold bubble finally pops.
Goldrunner: $3,000
Goldrunner uses fractal analysis off the gold bull market of the 1970s to arrive at his assessment of where gold is now in the bull run and where it is going. In his November, 2011 article he set forth the basics of his technical analysis and said:
"Early this year we suggested a 50% rise in Gold to $1860 - $1,920 into mid-year. Now, we see the Gold tsunami realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012."
Bob Chapman: $2,500 - $3,000
In Chapman's August, 2011 issue of the International Forecaster he had this to say about gold:
"Debt monetization will Lead to ever-higher inflation...and explain the systemic problem of many nations, which have nowhere to turn to except the creation of money and credit to temporarily keep their economies going...[and] when you put it all together you get higher gold and Silver prices...We would expect a move to $2,000 to $2,200, some backing and filling and a move to $2,500 to $3,000 by the end of February 2012, as we earlier predicted."
Ian McAvity: $2,500 - $3,000
Ian McAvity, author of the newsletter, Deliberations on World Markets, speaking on Mineweb.com's Gold Weekly podcast in June of 2010, said that while he is a gold bug, buying gold in the current economic climate is very much like buying life insurance for a short term capital gain. McAvity says that he expects gold to head north toward the $3,000 level over the next two years [i.e. sometime in 2012] but, says he cannot yet quantify "the magnitude of the crisis that takes it higher". According to McAvity, one of the most critical factors for the gold price currently is the return on risk-free capital which is currently negative in real terms saying:
"As long as the yield on treasury bills is 40 to 50 basis points, then the perceived inflation rate is 200 to 300 basis points - basically holding paper is negative. And that is one of the strongest underlying features of the gold market and we basically have the central bankers and their quantitative easing load saying that they're going to try and keep interest rates as close to zero as possible, until they successfully borrow their way out of debt. The concept of borrowing your way out of debt is I guess, the new math that I haven't quite grasped yet."
Back in 2009 I began keeping track of those financial analysts, economists, academics and commentators who were of the opinion that it was just a matter of time before Gold reached a parabolic peak price well in excess of the prevailing price. As time passed the list grew dramatically and at last count numbered 140 such individuals who have gone on record as saying that gold will go to at least $3,000 - and as high as $20,000 - before the gold bubble finally pops.
Goldrunner: $3,000
Goldrunner uses fractal analysis off the gold bull market of the 1970s to arrive at his assessment of where gold is now in the bull run and where it is going. In his November, 2011 article he set forth the basics of his technical analysis and said:
"Early this year we suggested a 50% rise in Gold to $1860 - $1,920 into mid-year. Now, we see the Gold tsunami realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012."
Bob Chapman: $2,500 - $3,000
In Chapman's August, 2011 issue of the International Forecaster he had this to say about gold:
"Debt monetization will Lead to ever-higher inflation...and explain the systemic problem of many nations, which have nowhere to turn to except the creation of money and credit to temporarily keep their economies going...[and] when you put it all together you get higher gold and Silver prices...We would expect a move to $2,000 to $2,200, some backing and filling and a move to $2,500 to $3,000 by the end of February 2012, as we earlier predicted."
Ian McAvity: $2,500 - $3,000
Ian McAvity, author of the newsletter, Deliberations on World Markets, speaking on Mineweb.com's Gold Weekly podcast in June of 2010, said that while he is a gold bug, buying gold in the current economic climate is very much like buying life insurance for a short term capital gain. McAvity says that he expects gold to head north toward the $3,000 level over the next two years [i.e. sometime in 2012] but, says he cannot yet quantify "the magnitude of the crisis that takes it higher". According to McAvity, one of the most critical factors for the gold price currently is the return on risk-free capital which is currently negative in real terms saying:
"As long as the yield on treasury bills is 40 to 50 basis points, then the perceived inflation rate is 200 to 300 basis points - basically holding paper is negative. And that is one of the strongest underlying features of the gold market and we basically have the central bankers and their quantitative easing load saying that they're going to try and keep interest rates as close to zero as possible, until they successfully borrow their way out of debt. The concept of borrowing your way out of debt is I guess, the new math that I haven't quite grasped yet."
SilverDoctors: 'US Deploys Troops in Israel for Iran War'
SilverDoctors: 'US Deploys Troops in Israel for Iran War': If the US launches an Iranian invasion WWIII will be underway almost instantly- a perfect excuse in the minds of TPTB on which to blame the ...
SilverDoctors: HSBC & Brink's Receive Another 2 Million Ounces of...
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SilverDoctors: PSLV Premium to Net Asset Value Nears 30%!
SilverDoctors: PSLV Premium to Net Asset Value Nears 30%!: In the wake of the freezing/ confiscation of gold and silver in the MFG collapse (see MFG client Jason Fine who had 15,000 ounces of his own...
SilverDoctors: Ted Butler: Commercials Have No Interest in Shorti...
SilverDoctors: Ted Butler: Commercials Have No Interest in Shorti...: Ted Butler has allowed the publication of a few paragraphs from his latest private subscription report, which includes some doozies. Butle...
SilverDoctors: Ann Barnhardt: MFGlobal Will End in Bank Holiday
SilverDoctors: Ann Barnhardt: MFGlobal Will End in Bank Holiday: Ann Barnhardt and I (Warren Pollock) have an open conversation organized to provide background to this crisis, the setting of legal precede...
SilverDoctors: KPMG plans timely return of MF Global assets
SilverDoctors: KPMG plans timely return of MF Global assets: 2 months and counting after their accounts were frozen and confiscated is a 'timely return'!?! More like the cartel has just realized that ...
SilverDoctors: MF Global Client Learns Mr. Dimon Confiscated His ...
SilverDoctors: MF Global Client Learns Mr. Dimon Confiscated His ...: Maybe its because The Doc worked Sunday and Monday this week, but it's been a long week and we could use some levity. Perhaps this man jus...
05 January 2012
China will slowdown to 3.5% GDP growth, will devalue Yuan to boost exports: Rickards
NEW YORK (Commodity Online): China’s Premier Wen Jiabao has just warned that China’s economy is now facing challenges, including higher-than-desired inflation and an economic slowdown.
Our guest James Rickards, the author of Currency Wars: The Making Of The Next Global Crisis, says this slowdown will be significantly worse than most people think. He believes it will trigger a policy response from the United States that will likely Lead to a third round of “quantitative easing” by the Fed.
Rickards thinks China’s economy could slow to a 3.5% growth rate. This doesn’t sound bad, but it would be a disaster relative to the 10% growth rate of the last few decades, and it is much more of slowdown than most analysts are looking for.
In response, Rickards says, the Chinese government would likely devalue China’s currency relative to the dollar, to help stimulate exports. This would counter Washington’s ongoing attempts to do the same thing. Rickards believes that the U.S. would respond with another round of quantitative easing designed to produce inflation, likely through a technique called “nominal GDP targeting.”
Our guest James Rickards, the author of Currency Wars: The Making Of The Next Global Crisis, says this slowdown will be significantly worse than most people think. He believes it will trigger a policy response from the United States that will likely Lead to a third round of “quantitative easing” by the Fed.
Rickards thinks China’s economy could slow to a 3.5% growth rate. This doesn’t sound bad, but it would be a disaster relative to the 10% growth rate of the last few decades, and it is much more of slowdown than most analysts are looking for.
In response, Rickards says, the Chinese government would likely devalue China’s currency relative to the dollar, to help stimulate exports. This would counter Washington’s ongoing attempts to do the same thing. Rickards believes that the U.S. would respond with another round of quantitative easing designed to produce inflation, likely through a technique called “nominal GDP targeting.”
Gold and Silver: The best way to invest and the danger of buying on dips
By William Bancroft
As we enter the New Year only the firmest of Gold and Silver investors are holding with serene assurance, as the gold and silver prices have been trending down for a couple of months.
Gold has sold off by nearly 13% since it recovered to $1,800/ounce in early November. The mainstream media has been pronouncing the death of the gold bull market, and CNBC even suggested gold be re-rated as a risk asset.
Silver prices have also disappointed precious metal investors. Gold’s more volatile cousin has lost 20% in value from its own early November recovery to $35/ounce.
Such price drops do get us thinking, an investor can never fall idly in love with a position, but are they again part and parcel of silver investing this last 12 years?
Plenty of notable investors have made their voices heard beyond what we continue to urge are continuing bull markets for owners of gold and silver bullion. The silver price has undergone many corrections en route to gains of over 560% over the last ten years. The fundamentals driving the precious metals are stronger today than ever.
But what does this all mean for our two favourite ways to invest in gold and silver?
Averaging into gold and silver investment
Our favoured means of investing in gold and silver for most people, is for individuals to steadily buy a little each month in what would be called ‘averaging’ into a position.
Dollar cost averaging, or for UK investors, pound cost averaging, has been promoted as the best way of building a position for ages. We find the best advocacy of it by Benjamin Graham and David Dodd, the Godfathers of value investing, in their books ‘Security Analysis’ and ‘The Intelligent Investor’.
All this really means is that you invest a certain amount each month and buy gold and/or silver regardless of the current price.
As we enter the New Year only the firmest of Gold and Silver investors are holding with serene assurance, as the gold and silver prices have been trending down for a couple of months.
Gold has sold off by nearly 13% since it recovered to $1,800/ounce in early November. The mainstream media has been pronouncing the death of the gold bull market, and CNBC even suggested gold be re-rated as a risk asset.
Silver prices have also disappointed precious metal investors. Gold’s more volatile cousin has lost 20% in value from its own early November recovery to $35/ounce.
Such price drops do get us thinking, an investor can never fall idly in love with a position, but are they again part and parcel of silver investing this last 12 years?
Plenty of notable investors have made their voices heard beyond what we continue to urge are continuing bull markets for owners of gold and silver bullion. The silver price has undergone many corrections en route to gains of over 560% over the last ten years. The fundamentals driving the precious metals are stronger today than ever.
But what does this all mean for our two favourite ways to invest in gold and silver?
Averaging into gold and silver investment
Our favoured means of investing in gold and silver for most people, is for individuals to steadily buy a little each month in what would be called ‘averaging’ into a position.
Dollar cost averaging, or for UK investors, pound cost averaging, has been promoted as the best way of building a position for ages. We find the best advocacy of it by Benjamin Graham and David Dodd, the Godfathers of value investing, in their books ‘Security Analysis’ and ‘The Intelligent Investor’.
All this really means is that you invest a certain amount each month and buy gold and/or silver regardless of the current price.
Dow/Gold ratio suggest a mega bull rally in gold is coming
By Hubert Moolman
For Gold to rise to levels significantly higher than the recent high of $1,920, a new impetus is needed. Without additional energy from such an impetus, gold could just trade sideways for a very long time, or even fall further. See the chart below.
There is only so much value in the world economy, and it is split between all the different instruments (like gold, silver, stocks bonds, etc.) where value resides.
For gold (and silver) to rise significantly, relative to other instruments of value, value will have to be diverted away from those other competing instruments. The printing of more money does benefit gold, but it does not necessarily benefit gold more than other assets-such as commodities, for example.
For Gold to rise to levels significantly higher than the recent high of $1,920, a new impetus is needed. Without additional energy from such an impetus, gold could just trade sideways for a very long time, or even fall further. See the chart below.
There is only so much value in the world economy, and it is split between all the different instruments (like gold, silver, stocks bonds, etc.) where value resides.
For gold (and silver) to rise significantly, relative to other instruments of value, value will have to be diverted away from those other competing instruments. The printing of more money does benefit gold, but it does not necessarily benefit gold more than other assets-such as commodities, for example.
'Four reasons why still to invest in silver'
By Joseph C Ford
Silver is like Gold because it has lots of uses. It can be used as jewelry, dental fillings, for making coins and etc. Since Silver is very useful in such industry, the idea of investing silver is one of the best ideas for starting and building a business. Because of its uses, there are some people who choose investing silver. But aside from many uses of silver, there are major reasons why there are lots of investors who are attracted to invest silver. Here are the common reasons why they choose silver for business:
Inflation
No one wants to encounter inflation! Especially in business! Since most of us want to avoid inflation, investing silver (and all precious metals) is a wise choice to protect against inflation. Silver and other precious metal are fairly rare and highly valued for jewelry and industrial practices, it will always be valuable, regardless of the economic climate.
When your country's market is at the middle of difficulty, expect that your government's currency tends to become less valuable compared to other governments. It will result in a devaluation of the currency. Other alternative of the government, they may issue more money. So if there more money in the general population, it means that the price of everything goes up, also resulting in inflation. If the currency (cash) becomes less valuable to inflation, it means that you can trade in your silver for more cash (the price of silver and other precious metals inflates just like the price of everything).
However, there is a little more than understanding inflation to learning why investing in silver is appealing for some investors.
Market Size
Gold is extremely popular today. That means that the typical investor tends to wish to use gold to drive back inflation rather than silver. Most investors only decide to buy silver if they suspect that the silver market in particular is going to move up. Why might this happen? It is because the size of the market of sterling Silver is small. Actually, gold's availability to invest is twice compared to silver, and over the final 20 years Gold has been 20-100 times more costly than silver.
This results in volatility. This could trigger amazing profits or losses. There are several primary things that drive the price of silver:
Supply and Needs. A lot of appearing out of mines today is used for industrial purposes rather than being changed into bullion. If silver manufacturing drops off below industrial demand, this could guide spike silver prices. You have to consider investment demand. Since there is a relatively small supply of silvers, a few powerful investors can really drive the amount up if they are bullish on this market.
Silver is like Gold because it has lots of uses. It can be used as jewelry, dental fillings, for making coins and etc. Since Silver is very useful in such industry, the idea of investing silver is one of the best ideas for starting and building a business. Because of its uses, there are some people who choose investing silver. But aside from many uses of silver, there are major reasons why there are lots of investors who are attracted to invest silver. Here are the common reasons why they choose silver for business:
Inflation
No one wants to encounter inflation! Especially in business! Since most of us want to avoid inflation, investing silver (and all precious metals) is a wise choice to protect against inflation. Silver and other precious metal are fairly rare and highly valued for jewelry and industrial practices, it will always be valuable, regardless of the economic climate.
When your country's market is at the middle of difficulty, expect that your government's currency tends to become less valuable compared to other governments. It will result in a devaluation of the currency. Other alternative of the government, they may issue more money. So if there more money in the general population, it means that the price of everything goes up, also resulting in inflation. If the currency (cash) becomes less valuable to inflation, it means that you can trade in your silver for more cash (the price of silver and other precious metals inflates just like the price of everything).
However, there is a little more than understanding inflation to learning why investing in silver is appealing for some investors.
Market Size
Gold is extremely popular today. That means that the typical investor tends to wish to use gold to drive back inflation rather than silver. Most investors only decide to buy silver if they suspect that the silver market in particular is going to move up. Why might this happen? It is because the size of the market of sterling Silver is small. Actually, gold's availability to invest is twice compared to silver, and over the final 20 years Gold has been 20-100 times more costly than silver.
This results in volatility. This could trigger amazing profits or losses. There are several primary things that drive the price of silver:
Supply and Needs. A lot of appearing out of mines today is used for industrial purposes rather than being changed into bullion. If silver manufacturing drops off below industrial demand, this could guide spike silver prices. You have to consider investment demand. Since there is a relatively small supply of silvers, a few powerful investors can really drive the amount up if they are bullish on this market.
Opening 2012 Gold and Silver Eagle Sales Top Prior Year Levels
January 4, 2012 By
The United States Mint began accepting orders for 2012-dated American Gold and Silver Eagle bullion coins on January 3, 2012. The opening sales numbers exceed the levels seen for the prior year.
Bullion coins produced by the US Mint are distributed through a network of authorized purchasers who are able to buy the coins in bulk quantities based on the market price of the precious metals plus a mark up. The bullion coins are then distributed to secondary dealers and the broader public.
On the opening day of availability, January 3, 2012, authorized purchasers ordered 3,197,000 of the one ounce Silver Eagle bullion coins. Through January 4, 2012, orders for Silver Eagle bullion coins have now reached 3,372,000. These amounts include both the 2012 Silver Eagles as well as some 2011-dated coins. Before the close of last year, the US Mint had indicated that there was a remaining inventory of 2011-dated coins. As long as this inventory remained, authorized purchasers would be required to order one 2011-dated coin for every four 2012-dated coins ordered.
This year’s opening sales for Silver Eagles surpass the numbers seen in the two prior years. The stronger sales may be the result of the lack of an allocation program imposed by the Mint. For the start of sales in 2010 and 2011, the US Mint rationed available quantities of the coins amongst authorized purchasers. This year, the Mint indicated that supplies would not be rationed as sufficient quantities of the coins would be available.
The United States Mint began accepting orders for 2012-dated American Gold and Silver Eagle bullion coins on January 3, 2012. The opening sales numbers exceed the levels seen for the prior year.
Bullion coins produced by the US Mint are distributed through a network of authorized purchasers who are able to buy the coins in bulk quantities based on the market price of the precious metals plus a mark up. The bullion coins are then distributed to secondary dealers and the broader public.
On the opening day of availability, January 3, 2012, authorized purchasers ordered 3,197,000 of the one ounce Silver Eagle bullion coins. Through January 4, 2012, orders for Silver Eagle bullion coins have now reached 3,372,000. These amounts include both the 2012 Silver Eagles as well as some 2011-dated coins. Before the close of last year, the US Mint had indicated that there was a remaining inventory of 2011-dated coins. As long as this inventory remained, authorized purchasers would be required to order one 2011-dated coin for every four 2012-dated coins ordered.
This year’s opening sales for Silver Eagles surpass the numbers seen in the two prior years. The stronger sales may be the result of the lack of an allocation program imposed by the Mint. For the start of sales in 2010 and 2011, the US Mint rationed available quantities of the coins amongst authorized purchasers. This year, the Mint indicated that supplies would not be rationed as sufficient quantities of the coins would be available.
SilverDoctors: Jim Sinclair's Outlook for 2012
SilverDoctors: Jim Sinclair's Outlook for 2012: The legendary Jim Sinclair offers his predictions for 2012 in his latest interview with the Ellis Martin report.
SilverDoctors: Safe Haven Status "Returning to Gold" as Euro Sink...
SilverDoctors: Safe Haven Status "Returning to Gold" as Euro Sink...: by Adrian Ash WHOLESALE MARKET prices to buy gold touched a two-week high at $1625 per ounce as London opened for business on Thursday, ...
SilverDoctors: Euro, Iran and Asian New Year Buying Fuels Gold
SilverDoctors: Euro, Iran and Asian New Year Buying Fuels Gold: Gold is trying to consolidate above psychological levels of $1,600/oz, £1,000 and €1,200/oz. The 200 day moving average is $1,631.60 which...
SilverDoctors: L-Pap: Greece Faces Disorderly Default by March
SilverDoctors: L-Pap: Greece Faces Disorderly Default by March: Greece's new PM is now openly threatening a disorderly Greek default by March if they are not given better terms on their ^nth bailout. AT...
SilverDoctors: HSBC Receives Identical 582,852 Ounce Silver Depos...
SilverDoctors: HSBC Receives Identical 582,852 Ounce Silver Depos...: Twilight-zone coincidences in COMEX silver warehouses continued Tuesday, with 3 more nearly identical deposits in 600,000 oz increments to r...
04 January 2012
Israeli drone over Turkish-Syrian border. Battles in Syrian-Jordanian-Israeli border triangle
Israeli Eitan drone
A request by local Turkish officers to fire anti-air missiles to down the Israeli Eitan went unanswered by the Turkish general staff until the drone was gone. According to the Turkish sources, two Turkish F-16 fighter jets were scrambled from the Diyarbakir 2nd Air Force Command Strike Center and stayed overhead as long as the Israeli drone was present.
debkafile reports this is the first time Israeli UAV's have been reported monitoring events on the Turkish-Syrian border. On Dec. 16, our sources disclosed 21 Syrian Scud missile launchers had been stationed opposite Hatay province as a warning to Turkey, NATO and Arab forces to stay out of the Syrian uprising.
MF Global sold assets to Goldman before collapse: sources
By Lauren Tara LaCapra and Matthew Goldstein | Reuters
(Reuters) - MF Global unloaded hundreds of millions of dollars' worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co , one of the sources said.
The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltd filed for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase.
At the same time MF Global, which was run by former Goldman Sachs head Jon Corzine, was selling securities to Goldman to raise badly needed cash, the futures firm was also drawing down a $1.2 billion revolving line of credit it had with JPMorgan, according to one of the former MF Global employees.
JPMorgan spokeswoman Mary Sedarat said the bank did not withold money because of the line of credit. She declined further comment on details of the transactions.
JPMorgan has fought aggressively in bankruptcy court to protect its interests, and received a lien on some of MF Global's assets in exchange for granting the firm $8 million to fund its bankruptcy costs. The lien puts JPMorgan's interests ahead of MF Global customers who have not yet received an estimated $900 million worth of money from their accounts, which remain frozen as regulators search for missing funds.
(Reuters) - MF Global unloaded hundreds of millions of dollars' worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co , one of the sources said.
The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltd filed for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase.
At the same time MF Global, which was run by former Goldman Sachs head Jon Corzine, was selling securities to Goldman to raise badly needed cash, the futures firm was also drawing down a $1.2 billion revolving line of credit it had with JPMorgan, according to one of the former MF Global employees.
JPMorgan spokeswoman Mary Sedarat said the bank did not withold money because of the line of credit. She declined further comment on details of the transactions.
JPMorgan has fought aggressively in bankruptcy court to protect its interests, and received a lien on some of MF Global's assets in exchange for granting the firm $8 million to fund its bankruptcy costs. The lien puts JPMorgan's interests ahead of MF Global customers who have not yet received an estimated $900 million worth of money from their accounts, which remain frozen as regulators search for missing funds.
An Exercise In Futility (Thank you for contacting the New York Fed)
Part 4 of the exercise:
On November 24, 2011 I wrote to the same people:
I find it quite bizarre: you are several people working in press / public relations departments for the N.Y. Fed, the Board of Governors of the Federal Reserve, and the US Treasury / Exchange Stabilization Fund. I am a journalist for finance. I have asked each of you a very, very simple question. And not a single one of you can even reply to me with a single sentence?
Since it is now proved beyond doubt that a US/German gold agreement was reached in 1975 to “manage” the price of gold:
http://www.gata.org/node/10686,
I consider it a legitimate question that I have forwarded to you months ago.
Before I will ask it again, please be assured that this question will be raised more often in the future going forward. It won’t go away. You can’t be silent about it forever.
Here is the question one more time:
Does the United States of America and/or the US Treasury/ESF, N.Y. Fed, the Federal Reserve System have any kind of swap arrangement with the Deutsche Bundesbank and/or the Federal Republic of Germany related to that part of the souvereign German gold reserve that is held at the N.Y. Fed?
By the way, after I heard nothing from the New York Fed and Federal Reserve in Washington, I asked GATA Chairman Bill Murphy about it.
Murphy replied: “I think their lack of response and lack of denial — I mean, that’s pretty simple to deny, really simple — that they haven’t come back to you at all is indicative of the answer.”
Kind regards,
Lars Schall.
Of course, I received an automatic response from the New York Fed that said:
Thank you for contacting the New York Fed. We will respond to your e-mail as soon as possible. For more information, please visit our website at http://www.newyorkfed.org./
In response to your message:
Dear Ladies and Gentlemen,
as a financial journalist from Germany I try to get some specific answers to specific questions…
Part 5 of the exercise:
On December 30, 2011 I wrote to the same people:
Dear Ladies and Gentlemen,
at the end of the year, everyone is doing New Year resolutions. One of mine is that you’ll get in 2012 at the last day of every single month the same old question from me:
Does the United States of America and/or the US Treasury/ESF, N.Y. Fed, the Federal Reserve System have any kind of swap arrangement with the Deutsche Bundesbank and/or the Federal Republic of Germany related to that part of the souvereign German gold reserve that is held at the N.Y. Fed / within the United States?
This way a story will build up very naturally all by itself that will make you look foolish at the end.
All the best in 2012!,
Lars Schall.
On November 24, 2011 I wrote to the same people:
I find it quite bizarre: you are several people working in press / public relations departments for the N.Y. Fed, the Board of Governors of the Federal Reserve, and the US Treasury / Exchange Stabilization Fund. I am a journalist for finance. I have asked each of you a very, very simple question. And not a single one of you can even reply to me with a single sentence?
Since it is now proved beyond doubt that a US/German gold agreement was reached in 1975 to “manage” the price of gold:
http://www.gata.org/node/10686,
I consider it a legitimate question that I have forwarded to you months ago.
Before I will ask it again, please be assured that this question will be raised more often in the future going forward. It won’t go away. You can’t be silent about it forever.
Here is the question one more time:
Does the United States of America and/or the US Treasury/ESF, N.Y. Fed, the Federal Reserve System have any kind of swap arrangement with the Deutsche Bundesbank and/or the Federal Republic of Germany related to that part of the souvereign German gold reserve that is held at the N.Y. Fed?
By the way, after I heard nothing from the New York Fed and Federal Reserve in Washington, I asked GATA Chairman Bill Murphy about it.
Murphy replied: “I think their lack of response and lack of denial — I mean, that’s pretty simple to deny, really simple — that they haven’t come back to you at all is indicative of the answer.”
Kind regards,
Lars Schall.
Of course, I received an automatic response from the New York Fed that said:
Thank you for contacting the New York Fed. We will respond to your e-mail as soon as possible. For more information, please visit our website at http://www.newyorkfed.org./
In response to your message:
Dear Ladies and Gentlemen,
as a financial journalist from Germany I try to get some specific answers to specific questions…
Part 5 of the exercise:
On December 30, 2011 I wrote to the same people:
Dear Ladies and Gentlemen,
at the end of the year, everyone is doing New Year resolutions. One of mine is that you’ll get in 2012 at the last day of every single month the same old question from me:
Does the United States of America and/or the US Treasury/ESF, N.Y. Fed, the Federal Reserve System have any kind of swap arrangement with the Deutsche Bundesbank and/or the Federal Republic of Germany related to that part of the souvereign German gold reserve that is held at the N.Y. Fed / within the United States?
This way a story will build up very naturally all by itself that will make you look foolish at the end.
All the best in 2012!,
Lars Schall.
EXCLUSIVE-Big banks may line up to block sale of LME
* Potential bidders CME, ICE would entail U.S. regulation
* Tough regulator could curb holdings of dominant positions
* Blocking stake of 25.1 pct seen achievable
By Melanie Burton and Susan Thomas
LONDON, Jan 3 (Reuters) - Top bank stakeholders of the London Metal Exchange are likely to amass enough support to block a sale they fear would bring a more heavily regulated owner and hurt their lucrative warehousing businesses, senior industry sources say.
The LME said in September that at least 10 parties had expressed interest in buying it, and analysts estimate it could be worth as much as $1 billion. As a member-owned organisation, the exchange requires approval from members holding 75 percent of outstanding ordinary or "A" shares for any sale.
Potential buyers are likely to include CME Group Inc , IntercontinentalExchange and SGX Singapore Exchange. The first two in particular have stricter U.S. regulators, which could threaten members' businesses.
Big banks such as J.P. Morgan and Goldman Sachs have invested heavily in physical metals business since the economic downturn began by buying warehouses and beefing up their trading teams and financing operations.
Shunting metal around has been a money spinner for them as slowing global growth pulls down commodity prices and leads to stockpiles of surplus material.
* Tough regulator could curb holdings of dominant positions
* Blocking stake of 25.1 pct seen achievable
By Melanie Burton and Susan Thomas
LONDON, Jan 3 (Reuters) - Top bank stakeholders of the London Metal Exchange are likely to amass enough support to block a sale they fear would bring a more heavily regulated owner and hurt their lucrative warehousing businesses, senior industry sources say.
The LME said in September that at least 10 parties had expressed interest in buying it, and analysts estimate it could be worth as much as $1 billion. As a member-owned organisation, the exchange requires approval from members holding 75 percent of outstanding ordinary or "A" shares for any sale.
Potential buyers are likely to include CME Group Inc , IntercontinentalExchange and SGX Singapore Exchange. The first two in particular have stricter U.S. regulators, which could threaten members' businesses.
Big banks such as J.P. Morgan and Goldman Sachs have invested heavily in physical metals business since the economic downturn began by buying warehouses and beefing up their trading teams and financing operations.
Shunting metal around has been a money spinner for them as slowing global growth pulls down commodity prices and leads to stockpiles of surplus material.
The World from Berlin 'Iran Is Playing with Fire'
With international pressure mounting against Iran to end its nuclear ambitions, the country has begun ominously rattling its sabers in the Persian Gulf. German commentators on Monday urge caution on both sides.
Tensions between Iran and the West escalated again on Monday as Tehran announced it had test-fired two long-range missiles in international waters near the strategic Strait of Hormuz.
"We have successfully test-fired long-range shore-to-sea and surface-to-surface missiles, called Qader (capable) and Nour (Light) today," Deputy navy Commander Mahmoud Mousavi told state television.
Amid ongoing international criticism of Iran's nuclear program, the missile launches were Tehran's latest show of force in military exercises started in response to the pressure. Monday's maneuvers came after the country announced the launch of a medium range missile the day before.
The so-called war games could bring Iranian ships near US naval forces operating in the Persian Gulf. Both the US and Israel have not ruled out a military response in the conflict over Iran's nuclear ambitions, and US forces based in Bahrain have said they will not allow a closure of the important Strait of Hormuz -- through which 40 percent of the world's crude oil is transported.
Iranian officials have made conflicting statements about possibly blocking the passage if sanctions were imposed on its oil exports, which are vital to the country's economy. Despite threats to the contrary from Iranian officials last week, on Monday military officials insisted there were no plans to close the waterway. "No order has been given for the closure of the Strait of Hormuz. But we are prepared for various scenarios," navy chief Habibollah Sayyari told state television. Deputy navy Commander Mahmoud Mousavi called the military excercises a "tactical" expression of the country's ability to control the strait if necessary.
Fuel Rod Breakthrough
Tehran continues to deny that it is attempting to build nuclear weapons, insisting their program is for generating electricity alone. On Sunday, Iranian state television announced a breakthrough in their nuclear progress, reporting the country had produced uranium fuel rods for power plant use for the first time.
The conflict with the West over the program has intensified since US President Barack Obama approved new sanctions on Saturday against financial institutions that do business with Iran's central bank. Obama will have the option of applying the sanctions flexibly, and depending on how strictly they are enforced, the sanctions could block oil refiners from buying crude oil from Iran, the world's fourth largest producer of the crucial product.
The United Nations Security Council has already implemented four rounds of international sanctions against Iran in hopes of discouraging the country's nuclear ambitions. The European Union is now also considering a ban on Iranian crude oil imports. But on Saturday Iranian media reported that a nuclear negotiator would likely signal a new willingness to resume EU talks on the matter.
With international talks stalled for almost a year now, EU officials welcomed news of the offer. But Iran would not be allowed to impose any pre-conditions on such negotiations, a spokesperson for EU foreign affairs representative Catherine Ashton said on Sunday.
German Foreign Minister Guido Westerwelle's had a similar reaction, encouraging Iran to abandon vague proclamations and urging the country to undertake "concrete, verifiable action" in the matter.
German commentators on Monday warned both sides to exercise caution in the potentially explosive conflict.
Tensions between Iran and the West escalated again on Monday as Tehran announced it had test-fired two long-range missiles in international waters near the strategic Strait of Hormuz.
"We have successfully test-fired long-range shore-to-sea and surface-to-surface missiles, called Qader (capable) and Nour (Light) today," Deputy navy Commander Mahmoud Mousavi told state television.
Amid ongoing international criticism of Iran's nuclear program, the missile launches were Tehran's latest show of force in military exercises started in response to the pressure. Monday's maneuvers came after the country announced the launch of a medium range missile the day before.
The so-called war games could bring Iranian ships near US naval forces operating in the Persian Gulf. Both the US and Israel have not ruled out a military response in the conflict over Iran's nuclear ambitions, and US forces based in Bahrain have said they will not allow a closure of the important Strait of Hormuz -- through which 40 percent of the world's crude oil is transported.
Iranian officials have made conflicting statements about possibly blocking the passage if sanctions were imposed on its oil exports, which are vital to the country's economy. Despite threats to the contrary from Iranian officials last week, on Monday military officials insisted there were no plans to close the waterway. "No order has been given for the closure of the Strait of Hormuz. But we are prepared for various scenarios," navy chief Habibollah Sayyari told state television. Deputy navy Commander Mahmoud Mousavi called the military excercises a "tactical" expression of the country's ability to control the strait if necessary.
Fuel Rod Breakthrough
Tehran continues to deny that it is attempting to build nuclear weapons, insisting their program is for generating electricity alone. On Sunday, Iranian state television announced a breakthrough in their nuclear progress, reporting the country had produced uranium fuel rods for power plant use for the first time.
The conflict with the West over the program has intensified since US President Barack Obama approved new sanctions on Saturday against financial institutions that do business with Iran's central bank. Obama will have the option of applying the sanctions flexibly, and depending on how strictly they are enforced, the sanctions could block oil refiners from buying crude oil from Iran, the world's fourth largest producer of the crucial product.
The United Nations Security Council has already implemented four rounds of international sanctions against Iran in hopes of discouraging the country's nuclear ambitions. The European Union is now also considering a ban on Iranian crude oil imports. But on Saturday Iranian media reported that a nuclear negotiator would likely signal a new willingness to resume EU talks on the matter.
With international talks stalled for almost a year now, EU officials welcomed news of the offer. But Iran would not be allowed to impose any pre-conditions on such negotiations, a spokesperson for EU foreign affairs representative Catherine Ashton said on Sunday.
German Foreign Minister Guido Westerwelle's had a similar reaction, encouraging Iran to abandon vague proclamations and urging the country to undertake "concrete, verifiable action" in the matter.
German commentators on Monday warned both sides to exercise caution in the potentially explosive conflict.
Greece will leave euro if second bailout fails, says Kapsis
Greece will have to leave the eurozone if it fails to clinch a deal on a second, 130 billion euro bailout with its international lenders, a government spokesman said on Tuesday.
It was an unusually public stark warning from the embattled country, aimed at shoring up domestic support for tough measures and possibly also at the lenders themselves.
"The bailout agreement needs to be signed otherwise we will be out of the markets, out of the euro," spokesman Pantelis Kapsis told Skai TV. "The situation will be much worse."
Greece is racing against the clock to agree with the EU, the IMF and private bondholders on the details of the rescue plan before a major bond redemption in March. It risks a default if there is no deal by this date.
Athens and its EU partners have repeatedly ruled out a euro exit, which could drag the bloc even deeper into crisis, and usually avoid saying this is a possible scenario.
But top Greek officials, who need to push through unpopular reforms to clinch the bailout deal, have warned over the past few days that a return to the drachma would be "hell" and that the country must stick to austerity to avoid it.
It was an unusually public stark warning from the embattled country, aimed at shoring up domestic support for tough measures and possibly also at the lenders themselves.
"The bailout agreement needs to be signed otherwise we will be out of the markets, out of the euro," spokesman Pantelis Kapsis told Skai TV. "The situation will be much worse."
Greece is racing against the clock to agree with the EU, the IMF and private bondholders on the details of the rescue plan before a major bond redemption in March. It risks a default if there is no deal by this date.
Athens and its EU partners have repeatedly ruled out a euro exit, which could drag the bloc even deeper into crisis, and usually avoid saying this is a possible scenario.
But top Greek officials, who need to push through unpopular reforms to clinch the bailout deal, have warned over the past few days that a return to the drachma would be "hell" and that the country must stick to austerity to avoid it.
Eurozone is closer to break-up, warns Standard Chartered's Peter Sands
The chief executive of Standard Chartered has warned that there is an increasing likelihood of a country falling out of the eurozone because of the inability of politicians to resolve the crisis.
The head of one of Britain's "Big Five" banks warned that any break-up of the single currency would have dire consequences for the global economy because it would be difficult to judge how the contagion would unravel.
"Obviously we close 2011 with a huge amount of focus on the trials and tribulations of the eurozone," Mr Sands said.
"I actually think the big news of last month's summit was that unfortunately once again the eurozone political leadership didn't really produce something that was that compelling or credible as a plan to deal with the problems and to re-engergise growth in the eurozone.
"We enter 2012 with a very difficult outlook for the eurozone [and] with an increasing possibility of countries actually leaving the eurozone.
"Nobody should underestimate what a big deal that would be, because it would be very difficult to manage the contagion risk, even if it was only Greece. The disruption from that would really be quite significant.
The head of one of Britain's "Big Five" banks warned that any break-up of the single currency would have dire consequences for the global economy because it would be difficult to judge how the contagion would unravel.
"Obviously we close 2011 with a huge amount of focus on the trials and tribulations of the eurozone," Mr Sands said.
"I actually think the big news of last month's summit was that unfortunately once again the eurozone political leadership didn't really produce something that was that compelling or credible as a plan to deal with the problems and to re-engergise growth in the eurozone.
"We enter 2012 with a very difficult outlook for the eurozone [and] with an increasing possibility of countries actually leaving the eurozone.
"Nobody should underestimate what a big deal that would be, because it would be very difficult to manage the contagion risk, even if it was only Greece. The disruption from that would really be quite significant.
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The Possibility of $1,000 Silver before Hyperinflation
Global Investments Ltd
January 3, 2012 - 9:58am
2011 was both an amazing and disappointing year for silver investors. The most disappointed of all are those who bought in during the April highs, when silver almost reached $50. However, what these investors need to remember is that not too long ago, people were fretting over changes in prices of ten cents or less. Not too far down the road, the difference between $29 silver and $50 silver will also seem rather minimal.
A look at some of the fundamentals which underpin the silver market will help remind our readers why G.I. Metals DMCC holds that silver will ultimately outperform gold, and what type of highs we might eventually see in an inflationary - and not hyperinflationary - environment. With current levels of central bank intervention to solve sovereign debt problems, we expect to see more economic contraction for the first part of 2012, followed by even more excessive money printing which will lead to inflationary, and eventually hyperinflationary, conditions. This only requires a greater level of velocity to occur, along with a loss of confidence in the world reserve currency, which we expect will begin to happen when bond speculators' attention is moved from Europe to America.
A revision of these fundamentals will also help remind us that physical ownership of silver should not be viewed as much as a short-term investment, but rather, a mid-term form of wealth preservation and growth. We see these types of scenarios most likely playing out within the next 1 to 3 years.
Silver as a Hedge and Multiplier of Wealth
Silver, like gold, has historically been recognized as real money and a store of wealth. The opportunities expected to arise from investing in silver now, however, are even more pronounced than those of gold. Because silver has not received the same attention as gold in the media, fewer investors know about it. This is beginning to change, but silver is still very early on in its bull market as compared to gold, which has progressed further in the second phase of its bull market. Presently, the silver spot price is largely dictated by the movements of derivative-based vehicles such as ETFs, futures and options, which are highly leveraged and cannot accurately track the true value of their underlying asset. Expressed simply, lots of paper is being exchanged, but little physical silver is actually even held by these institutions responsible for distributing these paper promises.
January 3, 2012 - 9:58am
2011 was both an amazing and disappointing year for silver investors. The most disappointed of all are those who bought in during the April highs, when silver almost reached $50. However, what these investors need to remember is that not too long ago, people were fretting over changes in prices of ten cents or less. Not too far down the road, the difference between $29 silver and $50 silver will also seem rather minimal.
A look at some of the fundamentals which underpin the silver market will help remind our readers why G.I. Metals DMCC holds that silver will ultimately outperform gold, and what type of highs we might eventually see in an inflationary - and not hyperinflationary - environment. With current levels of central bank intervention to solve sovereign debt problems, we expect to see more economic contraction for the first part of 2012, followed by even more excessive money printing which will lead to inflationary, and eventually hyperinflationary, conditions. This only requires a greater level of velocity to occur, along with a loss of confidence in the world reserve currency, which we expect will begin to happen when bond speculators' attention is moved from Europe to America.
A revision of these fundamentals will also help remind us that physical ownership of silver should not be viewed as much as a short-term investment, but rather, a mid-term form of wealth preservation and growth. We see these types of scenarios most likely playing out within the next 1 to 3 years.
Silver as a Hedge and Multiplier of Wealth
Silver, like gold, has historically been recognized as real money and a store of wealth. The opportunities expected to arise from investing in silver now, however, are even more pronounced than those of gold. Because silver has not received the same attention as gold in the media, fewer investors know about it. This is beginning to change, but silver is still very early on in its bull market as compared to gold, which has progressed further in the second phase of its bull market. Presently, the silver spot price is largely dictated by the movements of derivative-based vehicles such as ETFs, futures and options, which are highly leveraged and cannot accurately track the true value of their underlying asset. Expressed simply, lots of paper is being exchanged, but little physical silver is actually even held by these institutions responsible for distributing these paper promises.
Iran provokes showdown, warns US carrier not to return to Persian Gulf
In another heated escalation over the strategic Strait of Hormuz, Iran Tuesday, Jan. 3, threatened to take action if the US aircraft carrier which "moved to the Sea of Oman because of our drill returns to the Persian Gulf." Army chief Lt. Gen. Ataolla Salehi said:" Iran will not repeat this warning."
He referred to the USS Stennis as "the enemy's carrier," which "I recommend and emphasize… not return to the Persian Gulf." He avoided naming the US vessel or the details of action Iran might take if it returned.
debkafile's military sources report that the Stennis transited the Strait of Hormus Wednesday, Dec. 28 and entered the Sea of Oman where Iran was staging a naval drill. Washington was demonstrating freedom of navigation in the international strait through which one-fifth of the worlds exported oil is shipped and underlining Iran's inability to close it to merchant shipping and US warships.
Iran said that its surveillance aircraft and warships tracked and filmed the US carrier's movements in and around Hormuz which it claims to fully control.
Saturday, Dec. 31, Iran announced a long-range missile test-fire would take place over the strait, thereby causing a five-hour stoppage of shipping traffic. Later, an Iranian general said the missile test was delayed. debkafile's Iranian and military sources reported that this was a trick to prove Iran capable of closing the Strait of Hormuz in defiance of strong warnings from Washington.
He referred to the USS Stennis as "the enemy's carrier," which "I recommend and emphasize… not return to the Persian Gulf." He avoided naming the US vessel or the details of action Iran might take if it returned.
debkafile's military sources report that the Stennis transited the Strait of Hormus Wednesday, Dec. 28 and entered the Sea of Oman where Iran was staging a naval drill. Washington was demonstrating freedom of navigation in the international strait through which one-fifth of the worlds exported oil is shipped and underlining Iran's inability to close it to merchant shipping and US warships.
Iran said that its surveillance aircraft and warships tracked and filmed the US carrier's movements in and around Hormuz which it claims to fully control.
Saturday, Dec. 31, Iran announced a long-range missile test-fire would take place over the strait, thereby causing a five-hour stoppage of shipping traffic. Later, an Iranian general said the missile test was delayed. debkafile's Iranian and military sources reported that this was a trick to prove Iran capable of closing the Strait of Hormuz in defiance of strong warnings from Washington.
Nominal GDP targeting: economic buzz phrase of 2012?
“We can expect more of the same – specifically, serial bailouts of governments and banks that, if not already insolvent are bordering on insolvency. It is a distressing prospect.”
So says James Turk, in his 2012 prediction piece for the GoldMoney website.
This comes as Friday bought confirmation that Greece’s budget deficit is heading into double digits, while the latest figures from the Federal Reserve show non-US investors dumped a record amount of US Treasuries over the past month. As ZeroHedge comments: “foreign holdings of US paper have been virtually flat in all of 2011, something which is in stark contrast with what the price of the 10 Year would indicate vis-à-vis investor demand.” The USA’s federal debt-to-GDP ratio now stands at 100%, while President Obama has made a new pro forma request for a $1.2 trillion increase in the US government’s debt ceiling.
Gold and silver prices enjoyed a nice bounce on Friday, with gold recovering back above $1,550 and silver briefly moving above $28; however, the white metal finished the day back under $28. $1,600 and $30 represent the price levels in the two metals that bulls will be looking to recapture quickly in order to avoid any further downside setbacks.
The bull’s cause will be greatly aid – particularly as far as silver is concerned – by any new weakness in the US dollar. The Dollar Index (USDX) fell 0.2% on Friday to 80.2, with that index struggling to break above 80. Ultimately, the dollar’s short-term fortunes are the inverse of the euro’s. If markets become more confident about the situation in Europe, then the dollar will weaken and the euro will rise, which should be bullish for precious metals and commodities. If on the other hand the situation in Europe deteriorates, then the dollar could strengthen further against the euro, which could cause further short-term difficulties for the metals (particularly silver and the platinum-group metals).
So says James Turk, in his 2012 prediction piece for the GoldMoney website.
This comes as Friday bought confirmation that Greece’s budget deficit is heading into double digits, while the latest figures from the Federal Reserve show non-US investors dumped a record amount of US Treasuries over the past month. As ZeroHedge comments: “foreign holdings of US paper have been virtually flat in all of 2011, something which is in stark contrast with what the price of the 10 Year would indicate vis-à-vis investor demand.” The USA’s federal debt-to-GDP ratio now stands at 100%, while President Obama has made a new pro forma request for a $1.2 trillion increase in the US government’s debt ceiling.
Gold and silver prices enjoyed a nice bounce on Friday, with gold recovering back above $1,550 and silver briefly moving above $28; however, the white metal finished the day back under $28. $1,600 and $30 represent the price levels in the two metals that bulls will be looking to recapture quickly in order to avoid any further downside setbacks.
The bull’s cause will be greatly aid – particularly as far as silver is concerned – by any new weakness in the US dollar. The Dollar Index (USDX) fell 0.2% on Friday to 80.2, with that index struggling to break above 80. Ultimately, the dollar’s short-term fortunes are the inverse of the euro’s. If markets become more confident about the situation in Europe, then the dollar will weaken and the euro will rise, which should be bullish for precious metals and commodities. If on the other hand the situation in Europe deteriorates, then the dollar could strengthen further against the euro, which could cause further short-term difficulties for the metals (particularly silver and the platinum-group metals).
Budget collapse: too much free money
By Lewis Lehrman, on 2 January 12
A view from America, previously published at The American Spectator.
The super-committee of Congress is the latest group to confess abject defeat by the Treasury budget deficit. Who can be surprised by this total failure? During the past generation Congress has made as many as fifteen legislative attempts to control government spending — aimed ultimately at a balanced budget. The most notable efforts were those sponsored by the all-time budget hawk, Senator Phil Gramm of Texas. But every administrative and legislative effort by the authorities, no matter how well-intentioned, has collapsed. Why is this so?
Nobel economist Milton Friedman believed the solution to the budget deficit problem was to deny Congress tax revenues. So he advised Congressmen and Presidents to oppose all tax increases — thereby denying bloated government the funds with which to increase spending. But Friedman’s advice has failed, too. We know this because marginal tax rates have been reduced from as high as 70% in 1964 to 15-20-39% in 2011 — depending on the type of income. But congressional spending has nevertheless increased every year — such that, today, only 60% of the Federal budget is financed by taxes, the remainder by Treasury debt. Total direct Federal debt is now about equal to total U.S. output.
The intractable budget deficit and the inexorable rise of government spending has a simpler explanation. Congress and the Treasury are in possession of several open-ended charge accounts — “permanent credit card financing” — with no limits. With its charge cards the Treasury can borrow new credit (money) from the banking system — much of what it needs every year to finance the ever-rising budget deficit.
A look at the current Federal Reserve Balance Sheet shows that the Fed has created about $1.7 trillion of new credit (money) with which to purchase Treasury debt. Foreign central banks have created about $2.7 trillion of new credit to purchase U.S. Treasury bonds. This global, electronic, money-printing exercise has financed almost 30% of the total direct debt of the U.S. Treasury. In 2002, Ben Bernanke, now Chairman of the Fed, did not mince words to describe this process:
[U]nder a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero…. [T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.
He might have added that these “no cost” dollars, printed by the Fed, are the enablers of the perennial U.S. budget deficit.
But the Fed is not the only credit card used by the Treasury to finance the budget deficit. Because the dollar is the world’s reserve currency, foreign central banks also finance U.S. budget deficits (as the custody account of the Fed balance sheet shows). Domestic and foreign commercial banks, too, supply vast amounts of new credit to the U.S. Treasury because domestic, foreign, and international bank regulators, such as the Basel authorities, define U.S. sovereign bonds as high quality assets for which bank reserves are not necessary. Therefore financial institutions can qualify their overleveraged balance sheets by loading up on Treasury Securities. Indeed, only 10-20% of the total direct debt of the U.S. Treasury is now owned by the non-bank, non-government private market. Given the reserve currency role of the dollar, the Federal Reserve and foreign central banks have been given every institutional incentive to finance the U.S. budget deficit. Beginning with World War I, every monetary discipline has been removed by domestic and international authorities, such that runaway government spending everywhere relies on the ultimate credit card — newly created money in the banking system.
A view from America, previously published at The American Spectator.
The super-committee of Congress is the latest group to confess abject defeat by the Treasury budget deficit. Who can be surprised by this total failure? During the past generation Congress has made as many as fifteen legislative attempts to control government spending — aimed ultimately at a balanced budget. The most notable efforts were those sponsored by the all-time budget hawk, Senator Phil Gramm of Texas. But every administrative and legislative effort by the authorities, no matter how well-intentioned, has collapsed. Why is this so?
Nobel economist Milton Friedman believed the solution to the budget deficit problem was to deny Congress tax revenues. So he advised Congressmen and Presidents to oppose all tax increases — thereby denying bloated government the funds with which to increase spending. But Friedman’s advice has failed, too. We know this because marginal tax rates have been reduced from as high as 70% in 1964 to 15-20-39% in 2011 — depending on the type of income. But congressional spending has nevertheless increased every year — such that, today, only 60% of the Federal budget is financed by taxes, the remainder by Treasury debt. Total direct Federal debt is now about equal to total U.S. output.
The intractable budget deficit and the inexorable rise of government spending has a simpler explanation. Congress and the Treasury are in possession of several open-ended charge accounts — “permanent credit card financing” — with no limits. With its charge cards the Treasury can borrow new credit (money) from the banking system — much of what it needs every year to finance the ever-rising budget deficit.
A look at the current Federal Reserve Balance Sheet shows that the Fed has created about $1.7 trillion of new credit (money) with which to purchase Treasury debt. Foreign central banks have created about $2.7 trillion of new credit to purchase U.S. Treasury bonds. This global, electronic, money-printing exercise has financed almost 30% of the total direct debt of the U.S. Treasury. In 2002, Ben Bernanke, now Chairman of the Fed, did not mince words to describe this process:
[U]nder a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero…. [T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.
He might have added that these “no cost” dollars, printed by the Fed, are the enablers of the perennial U.S. budget deficit.
But the Fed is not the only credit card used by the Treasury to finance the budget deficit. Because the dollar is the world’s reserve currency, foreign central banks also finance U.S. budget deficits (as the custody account of the Fed balance sheet shows). Domestic and foreign commercial banks, too, supply vast amounts of new credit to the U.S. Treasury because domestic, foreign, and international bank regulators, such as the Basel authorities, define U.S. sovereign bonds as high quality assets for which bank reserves are not necessary. Therefore financial institutions can qualify their overleveraged balance sheets by loading up on Treasury Securities. Indeed, only 10-20% of the total direct debt of the U.S. Treasury is now owned by the non-bank, non-government private market. Given the reserve currency role of the dollar, the Federal Reserve and foreign central banks have been given every institutional incentive to finance the U.S. budget deficit. Beginning with World War I, every monetary discipline has been removed by domestic and international authorities, such that runaway government spending everywhere relies on the ultimate credit card — newly created money in the banking system.
Gold and Silver Rise
By Paul A. Ebeling, Jnr. | January 3, 2012 3:15 AM EST
LiveTradingNews
Gold and Silver rise on safe haven demand
Gold and Silver gained after reports over the weekend that Iran produced its 1st nuclear fuel rod, causing investors to buy the precious metal as a safe haven.
Gold for immediate delivery advanced 0.2% to 1,566.27 oz, and Silver was + 0.1% at 27.8625 oz.
Gold rose 10% last year, the 11th straight annual gainer, and Silver fell 9.9% on the year..
Gold reserves increased in November in Belarus, Turkey, Tajikistan, Macedonia, Mauritius and Morocco, and declined in Mexico, according to data on the International Monetary Fund's website.
LiveTradingNews
Gold and Silver rise on safe haven demand
Gold and Silver gained after reports over the weekend that Iran produced its 1st nuclear fuel rod, causing investors to buy the precious metal as a safe haven.
Gold for immediate delivery advanced 0.2% to 1,566.27 oz, and Silver was + 0.1% at 27.8625 oz.
Gold rose 10% last year, the 11th straight annual gainer, and Silver fell 9.9% on the year..
Gold reserves increased in November in Belarus, Turkey, Tajikistan, Macedonia, Mauritius and Morocco, and declined in Mexico, according to data on the International Monetary Fund's website.
Iran threatens action if US carrier returns
Source: BI-ME with Reuters , Author: Posted by BI-ME staff
Posted: Tue January 3, 2012 11:57 am
INTERNATIONAL. Iran will take action if a US aircraft carrier which left the area because of Iranian naval exercises returns to the Gulf, the state news agency quoted army chief Ataollah Salehi as saying on Tuesday.
"Iran will not repeat its warning ... the enemy's carrier has been moved to the Sea of Oman because of our drill. I recommend and emphasize to the American carrier not to return to the Persian Gulf," Salehi told IRNA.
"I advise, recommend and warn them (the Americans) over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once," the semi-official Fars news agency quoted Salehi as saying.
Salehi did not name the aircraft carrier or give details of the action Iran might take if it returned.
Iran completed 10 days of naval exercises in the Gulf on Monday, and said during the drills that if foreign powers imposed sanctions on its crude exports it could shut the Strait of Hormuz, through which 40 percent of the world's traded oil is shipped.
The U.S. Fifth Fleet, which is based in Bahrain, said it would not allow shipping to be disrupted in the strait.
Iran said on Monday it had successfully test-fired two long-range missiles during its naval drill, flexing its military muscle in the face of mounting Western pressure over its controversial nuclear program.
Iran also said it had no intention of closing the Strait of Hormuz but had carried out "mock" exercises on shutting the strategic waterway.
Posted: Tue January 3, 2012 11:57 am
INTERNATIONAL. Iran will take action if a US aircraft carrier which left the area because of Iranian naval exercises returns to the Gulf, the state news agency quoted army chief Ataollah Salehi as saying on Tuesday.
"Iran will not repeat its warning ... the enemy's carrier has been moved to the Sea of Oman because of our drill. I recommend and emphasize to the American carrier not to return to the Persian Gulf," Salehi told IRNA.
"I advise, recommend and warn them (the Americans) over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once," the semi-official Fars news agency quoted Salehi as saying.
Salehi did not name the aircraft carrier or give details of the action Iran might take if it returned.
Iran completed 10 days of naval exercises in the Gulf on Monday, and said during the drills that if foreign powers imposed sanctions on its crude exports it could shut the Strait of Hormuz, through which 40 percent of the world's traded oil is shipped.
The U.S. Fifth Fleet, which is based in Bahrain, said it would not allow shipping to be disrupted in the strait.
Iran said on Monday it had successfully test-fired two long-range missiles during its naval drill, flexing its military muscle in the face of mounting Western pressure over its controversial nuclear program.
Iran also said it had no intention of closing the Strait of Hormuz but had carried out "mock" exercises on shutting the strategic waterway.
Could gold repeat another double digit rise in 2012?
In a word: sure. But much depends on the strength of the dollar, physical demand out of Asia and any new crises that may develop.
The forecast for gold to return to seeing a “two” as the front number in 2012 is shared by several investment banks. Morgan Stanley, TD Securities, Bank of America-Merrill Lynch and SEB Merchant Banking are among some of the banks who see gold either averaging above $2,000 or at least trading to that level at some time during next year.
Based on gold prices around $1,600, a move to $2,000 would be about a 23% rise.
Leibovit said he sees inflation coming down the road, the question is, “when does it kick in?” Gold could continue to weaken into January, but he said gold investors need to consider a longer term view than six months or even a year. They should be taking at least a three to five year perspective.
Tom Winmill, portfolio manager of the Midas Fund, said there’s a good chance for gold to see another strong year.
“It’s very possible that it can be very strong year after year after year. We think the key component to gold is that it’s denominated in dollars. How high it can go will be dependent on how much money is created. With the two QEs, $2.2 trillion was created. There will be more money created down the road…. We (the U.S.) will be adding more money because we are borrowing. The borrowing represents the future creation of new money,” he said.
For 2012, Winmill is forecasting $1,950 by the end of the year, with a high of $2,200 and a low of $1,650.
The low interest rate environment is important to the gold outlook, Winmill said. “You can’t view rates in a vacuum – at Midas we view inflation rate next to the real yield…. The two-year bonds yield is 25 basis points. The 12 month CPI is (3.2%), so the negative real rate is (3%). That is destroying savings. Our view is as people become more aware of the destruction of wealth they will there will be a stampede into hard assets – gold, diamonds, real estate,” he said.
The forecast for gold to return to seeing a “two” as the front number in 2012 is shared by several investment banks. Morgan Stanley, TD Securities, Bank of America-Merrill Lynch and SEB Merchant Banking are among some of the banks who see gold either averaging above $2,000 or at least trading to that level at some time during next year.
Based on gold prices around $1,600, a move to $2,000 would be about a 23% rise.
Leibovit said he sees inflation coming down the road, the question is, “when does it kick in?” Gold could continue to weaken into January, but he said gold investors need to consider a longer term view than six months or even a year. They should be taking at least a three to five year perspective.
Tom Winmill, portfolio manager of the Midas Fund, said there’s a good chance for gold to see another strong year.
“It’s very possible that it can be very strong year after year after year. We think the key component to gold is that it’s denominated in dollars. How high it can go will be dependent on how much money is created. With the two QEs, $2.2 trillion was created. There will be more money created down the road…. We (the U.S.) will be adding more money because we are borrowing. The borrowing represents the future creation of new money,” he said.
For 2012, Winmill is forecasting $1,950 by the end of the year, with a high of $2,200 and a low of $1,650.
The low interest rate environment is important to the gold outlook, Winmill said. “You can’t view rates in a vacuum – at Midas we view inflation rate next to the real yield…. The two-year bonds yield is 25 basis points. The 12 month CPI is (3.2%), so the negative real rate is (3%). That is destroying savings. Our view is as people become more aware of the destruction of wealth they will there will be a stampede into hard assets – gold, diamonds, real estate,” he said.
The biggest hedge fund is long gold in 2012, Jim Rogers says gold headed to $1200/oz
NEW YORK (Commodity Online): Bridgewater, the biggest hedge fund in the world with $125 billion in investments, is long Gold for 2012. The fund is also positioned for stronger emerging market currencies in Asia and low yields in high quality government bond markets.
Barclays Capital and Bank of America Merrill Lynch (BofAML) also puts Gold price to average $2000/oz in 2012 with BofAML noting that the recent correction “was not necessarily driven by a broad-based reassessment of fundamentals."
Legendary investor Jim Rogers is bullish for gold over the long-term but in the short-term, he prefers to be bearish. "In my view, gold could go to $1,200-$1,300 (an ounce)... Gold has been up 11 years in a row which is extremely unusual in any financial asset, so gold is overdue for a correction”, Rogers was quoted by Reuters.
Barclays Capital and Bank of America Merrill Lynch (BofAML) also puts Gold price to average $2000/oz in 2012 with BofAML noting that the recent correction “was not necessarily driven by a broad-based reassessment of fundamentals."
Legendary investor Jim Rogers is bullish for gold over the long-term but in the short-term, he prefers to be bearish. "In my view, gold could go to $1,200-$1,300 (an ounce)... Gold has been up 11 years in a row which is extremely unusual in any financial asset, so gold is overdue for a correction”, Rogers was quoted by Reuters.
Who holds the world's biggest gold reserves?
NEW YORK (Commodity Online): Following uncertainty in the equity markets and the global economy, countries and organizations believe that Gold is a safe haven and investing in gold is a sure ticket to preserving hard-earned wealth. A store of value and a safe one at that, gold as a commodity has been appreciating and giving investors ample returns barring a few instances.
In fact, the biggest institutional holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world's gold, holding about 30,700 tons.
United States: The United States Bullion Depository in Kentucky—otherwise known as Fort Knox—is the most famous gold stockpile in the world. It holds the majority of the nation’s gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office. Altogether, the total gold reserves of the U.S. equal 8,965.6 tons and would be valued at approximately $522.16 billion in today's market.Germany: The Deutsche Bundesbank, Germany's central bank, has 3,747.9 tons of gold reserves, which are valued at about $218.28 billion. According to the World Gold Council, Germany’s gold coffers account for 71.4 percent of total foreign reserves.
The International Monetary Fund: The International Monetary Fund (IMF) oversees international economic operations of 185 member countries. Its gold policies have changed in the last 25 years, but the reserves remain to stabilize international markets and aid national economies. In one such instance, the IMF sold a portion of its reserves in December 1999 to aid the Heavily Indebted Poor Countries Initiative. The 3,101 tons of IMF Gold would fetch roughly $180.6 billion in the open market.
Italy: The Banca D'Italia manages Italy's foreign reserves, which have been reported at 2,701.9 tons by the World Gold Council and comprise the fourth largest gold reserve in the world. These holdings are worth $138.33 billion and account for 71.2 percent of the country's foreign reserves.
France: The French National Bank, Banque De France, is home to the country's gold holdings, which comprise 66.2 percent of its foreign reserves. With 2,683.8 tons of gold in reserve, France's holdings are worth approximately $156.31 billion.
Source: World Gold Council (data updated on August 2011)
In fact, the biggest institutional holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world's gold, holding about 30,700 tons.
United States: The United States Bullion Depository in Kentucky—otherwise known as Fort Knox—is the most famous gold stockpile in the world. It holds the majority of the nation’s gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office. Altogether, the total gold reserves of the U.S. equal 8,965.6 tons and would be valued at approximately $522.16 billion in today's market.Germany: The Deutsche Bundesbank, Germany's central bank, has 3,747.9 tons of gold reserves, which are valued at about $218.28 billion. According to the World Gold Council, Germany’s gold coffers account for 71.4 percent of total foreign reserves.
The International Monetary Fund: The International Monetary Fund (IMF) oversees international economic operations of 185 member countries. Its gold policies have changed in the last 25 years, but the reserves remain to stabilize international markets and aid national economies. In one such instance, the IMF sold a portion of its reserves in December 1999 to aid the Heavily Indebted Poor Countries Initiative. The 3,101 tons of IMF Gold would fetch roughly $180.6 billion in the open market.
Italy: The Banca D'Italia manages Italy's foreign reserves, which have been reported at 2,701.9 tons by the World Gold Council and comprise the fourth largest gold reserve in the world. These holdings are worth $138.33 billion and account for 71.2 percent of the country's foreign reserves.
France: The French National Bank, Banque De France, is home to the country's gold holdings, which comprise 66.2 percent of its foreign reserves. With 2,683.8 tons of gold in reserve, France's holdings are worth approximately $156.31 billion.
Source: World Gold Council (data updated on August 2011)
SilverDoctors: Jamie Dimon Earned $42 Million in 2011 for Droppin...
SilverDoctors: Jamie Dimon Earned $42 Million in 2011 for Droppin...: Jamie Dimon and Lloyd Blankfein took home a combined $63.7 million in 2011 as appreciation for destroying their market caps by 23% and 46% r...
SilverDoctors: CME's Terry Duffy: CME Won't Guarantee MFG Client ...
SilverDoctors: CME's Terry Duffy: CME Won't Guarantee MFG Client ...: Warren Pollock has interviewed the Commodity Customer Coalition's CEO James Koutoulas on MFGlobal and JPM's theft of MFG clients' segregated...
30 December 2011
Iran raises anti-US threat level. Israel's C-of-S warns of potential for regional war
Thursday afternoon, Dec. 29, Tehran raised the pitch of its threats to the United States when Dep. Chief of the Revolutionary Guards Gen. Hossein Salami declared: "The United States is in no position to tell Tehran what to do in the Strait of Hormuz," adding, "Any threat will be responded [to] by threat… We will not relinquish our strategic moves in Iran's vital interests are undermined by any means."
The Iranian general spoke after the USS John C. Stennis aircraft carrier and its strike group passed through the Strait of Hormuz to the Sea of Oman and into the area where the big Iranian naval war game Veleyati 90 is taking place.
At around the same time, Israel's chief of staff Lt. Gen. Benny Gantz spoke of "the rising potential for a multi-arena event," i.e. a comprehensive armed conflict. Facing in several directions as we are "between terrorist organizations and Iran's progress toward a nuclear weapon… we can't afford to stay on the defensive and must come up with offensive measures," he said.
Earlier Thursday, Dec. 29, debkafile reported that an Iranian plan to mine the Strait of Hormuz had put US and NATO forces in the Persian Gulf on the alert.
US and NATO task forces in the Persian Gulf have been placed on alert after US intelligence warned that Iran's Revolutionary Guards are preparing Iranian marine commandos to sow mines in the strategic Strait of Hormuz.
The new deployment, debkafile's military sources report, consists of USS Combined Task Force 52 (CTF 52), which is trained and equipped for dismantling marine mines and NATO Maritime Mine Counter measures Group 2 (SNMCMG2). The American group is led by the USS Arden mine countermeasures ship; NATO's by the British HMS Pembroke minesweeper. Other vessels in the task forces are the Hunt-class destroyer HMS Middleton and the French mine warfare ships FS Croix du Sud and FS Var.
The Iranian general spoke after the USS John C. Stennis aircraft carrier and its strike group passed through the Strait of Hormuz to the Sea of Oman and into the area where the big Iranian naval war game Veleyati 90 is taking place.
At around the same time, Israel's chief of staff Lt. Gen. Benny Gantz spoke of "the rising potential for a multi-arena event," i.e. a comprehensive armed conflict. Facing in several directions as we are "between terrorist organizations and Iran's progress toward a nuclear weapon… we can't afford to stay on the defensive and must come up with offensive measures," he said.
Earlier Thursday, Dec. 29, debkafile reported that an Iranian plan to mine the Strait of Hormuz had put US and NATO forces in the Persian Gulf on the alert.
US and NATO task forces in the Persian Gulf have been placed on alert after US intelligence warned that Iran's Revolutionary Guards are preparing Iranian marine commandos to sow mines in the strategic Strait of Hormuz.
The new deployment, debkafile's military sources report, consists of USS Combined Task Force 52 (CTF 52), which is trained and equipped for dismantling marine mines and NATO Maritime Mine Counter measures Group 2 (SNMCMG2). The American group is led by the USS Arden mine countermeasures ship; NATO's by the British HMS Pembroke minesweeper. Other vessels in the task forces are the Hunt-class destroyer HMS Middleton and the French mine warfare ships FS Croix du Sud and FS Var.
The Depth Of Despair In The Gold Community
December 29, 2011, at 5:21 pm
by Jim Sinclair in the category General Editorial
My Dear Friends,
Today was the first day that we got some good action in the gold price. It will be very interesting to see if sellers appear as they have been during Asian hours. Just because the manipulators use the illiquid Asian hours to paint gold do not assume it reveals the nationality of the selling. The gold market as we all know on a day to day basis is totally rigged. In fact, find a market anywhere that is not bullied by some young buck who considers himself the Master of the Universe.
Gold is coming up on a tight group of four very major support areas that will hold the price from which the next advance is to take place. We have reached a point in terms of the depth of despair in the gold community that was never reached in the 1968 to 1980 reactions.
That is all this is. Just another reaction in a Gold price headed for Alf’s $4500.
I imagine when gold reacts off $2100 the stampede to the bath tub with their razor blades will be on again. Gold has in no way topped. The gold reaction per day in terms of percentage was nothing whatsoever. We have in no way reached the level called “thrilling with bullish bliss” common of a top. Every dollar we have won has been paid for in blood. All the short of gold wunderkin Masters of the Universe will have to be destroyed before gold is fully priced. The community, if you can still call it that, is in a psychotic episode that is soon to end.
Regards,
Jim
by Jim Sinclair in the category General Editorial
My Dear Friends,
Today was the first day that we got some good action in the gold price. It will be very interesting to see if sellers appear as they have been during Asian hours. Just because the manipulators use the illiquid Asian hours to paint gold do not assume it reveals the nationality of the selling. The gold market as we all know on a day to day basis is totally rigged. In fact, find a market anywhere that is not bullied by some young buck who considers himself the Master of the Universe.
Gold is coming up on a tight group of four very major support areas that will hold the price from which the next advance is to take place. We have reached a point in terms of the depth of despair in the gold community that was never reached in the 1968 to 1980 reactions.
That is all this is. Just another reaction in a Gold price headed for Alf’s $4500.
I imagine when gold reacts off $2100 the stampede to the bath tub with their razor blades will be on again. Gold has in no way topped. The gold reaction per day in terms of percentage was nothing whatsoever. We have in no way reached the level called “thrilling with bullish bliss” common of a top. Every dollar we have won has been paid for in blood. All the short of gold wunderkin Masters of the Universe will have to be destroyed before gold is fully priced. The community, if you can still call it that, is in a psychotic episode that is soon to end.
Regards,
Jim
Investigation Into MF Global Expected to Heat Up
By BEN PROTESS
When customer money disappeared from MF Global over Halloween weekend, it seemed implausible the cash would remain at large come New Year’s Day.
But two months later, the hunt for roughly $1.2 billion in client money continues. Some MF Global customers, including farmers and hedge funds, are still without about a third of the money in their accounts at MF Global, the brokerage firm once run by Jon S. Corzine, the former governor of New Jersey.
Against this backdrop, and as 2012 gets ready to begin, the investigation into the MF Global debacle is expected to heat up.
In the coming months, federal authorities are likely to answer crucial questions, including the exact whereabouts of the customer money and who at MF Global caused it to disappear. At some point next year, because MF Global violated rules prohibiting the mingling of customer money and the firm’s, authorities may also file enforcement actions.
The Federal Bureau of Investigation is exploring whether MF Global violated criminal laws, though no one has been accused of any wrongdoing.
Despite the lingering questions, federal investigators have made some strides in unraveling the mystery. Based on interviews with multiple people close to the case, here’s where things stand with the investigation into MF Global and the search for the missing money.
Summer 2011
MF Global, like other brokerage firms, was legally borrowing customer money to buy assets like corporate bonds. Under the law, the firm must put sufficient collateral, using assets like United States Treasury securities, in the place of the customer cash.
August 2011
MF Global may have borrowed customer money, even briefly, without providing sufficient collateral.
Oct. 21
Authorities suspect that MF Global was tapping customer accounts on Oct. 21, more than a week before the firm filed for bankruptcy. But these transfers may have been legitimate. Because brokerage firms often keep an extra cushion of their money in customer accounts, MF Global may have simply been drawing down that buffer.
Oct. 27
By Oct. 27, the firm had depleted that buffer. The firm was moving customer money from the futures side of the firm to the securities side. The firm may have then used the money to settle its securities trades.
At the time, MF Global was frantically closing out trades to generate liquidity ahead of a possible sale of the firm. Federal authorities are examining whether the firm began moving client money to the Depository Trust & Clearing Corporation, a clearinghouse that served as a middleman while MF Global unwound its trades.
It is unclear whether MF Global officials knowingly used customer money or believed the buffer was still intact. Sloppy record keeping may have obscured the fact that they were misusing customer money.
Nevertheless, the firm stopped backing the loans it took from customers. So in essence, the firm was receiving free loans from clients.
Oct. 28
On the morning of Oct. 28, the last business day before MF Global filed for bankruptcy, JPMorgan Chase alerted Mr. Corzine that the firm had overdrawn an account at the bank in London.
Chip Somodevilla/Getty ImagesJon S. Corzine, MF Global’s former chief executive, being sworn in at a Senate hearing on the firm’s demise.“At that time, I was trying to sell billions of dollars of securities to JPMorgan Chase in order to reduce our balance sheet and generate liquidity,” Mr. Corzine recently told a Congressional committee. “JPMorgan Chase told me that they would not engage in those transactions until overdrafts in London were cleaned up.”
Mr. Corzine said he passed along the request to his staff. Someone at MF Global then instructed Edith O’Brien, a treasurer at MF Global’s Chicago office, to replenish the overdrawn account.
Authorities suspect that MF Global, perhaps unwittingly, used roughly $200 million of client money to do so.
After the transfer, JPMorgan questioned Mr. Corzine about the source of the money. Ms. O’Brien, Mr. Corzine told a Congressional committee, assured him that MF Global was not improperly using customer cash.
Ms. O’Brien is now considered a “person of interest” in the investigation, according to two people close to the case. She has not been accused of any wrongdoing, and there is no indication that she knowingly transferred customer money.
Oct. 30
Later that weekend, MF Global was closing in on a deal to sell part of the firm to a rival brokerage house.
About 6 p.m. that day, MF Global’s general counsel, Laurie Ferber, notified the CME Group that there was an apparent shortfall. Ms. Ferber blamed an accounting error, according to CME, the exchange where MF Global did business and one of the firm’s main regulators.
But by 2 a.m., Ms. O’Brien and other MF Global officials told CME that $700 million was sent from customer accounts to the firm’s securities unit.
Oct. 31
By 10 a.m., MF Global filed for bankruptcy. Federal regulators, meanwhile, began the search for the missing customer money.
The week of Dec. 12
Mr. Corzine, a former United States senator from New Jersey, returned to Capitol Hill to face questioning from his former colleagues.
Andrew Harrer/Bloomberg NewsTerrence Duffy, executive chairman of the CME Group.“I don’t know of any loan that was backed by customer funds,” Mr. Corzine said. “I wouldn’t have authorized it.”
Terrence Duffy, executive chairman of the CME Group, told lawmakers that MF Global had used customer money to lend from one arm of the firm to another — and that Mr. Corzine had been aware of it.
Mr. Corzine rejected Mr. Duffy’s claims.
“I never gave any instructions to misuse customer money, never intended to give any instructions or authority to misuse customer funds, and I find it very hard to understand how anyone could misconstrue what I’ve said as a way to misuse customer money.”
When customer money disappeared from MF Global over Halloween weekend, it seemed implausible the cash would remain at large come New Year’s Day.
But two months later, the hunt for roughly $1.2 billion in client money continues. Some MF Global customers, including farmers and hedge funds, are still without about a third of the money in their accounts at MF Global, the brokerage firm once run by Jon S. Corzine, the former governor of New Jersey.
Against this backdrop, and as 2012 gets ready to begin, the investigation into the MF Global debacle is expected to heat up.
In the coming months, federal authorities are likely to answer crucial questions, including the exact whereabouts of the customer money and who at MF Global caused it to disappear. At some point next year, because MF Global violated rules prohibiting the mingling of customer money and the firm’s, authorities may also file enforcement actions.
The Federal Bureau of Investigation is exploring whether MF Global violated criminal laws, though no one has been accused of any wrongdoing.
Despite the lingering questions, federal investigators have made some strides in unraveling the mystery. Based on interviews with multiple people close to the case, here’s where things stand with the investigation into MF Global and the search for the missing money.
Summer 2011
MF Global, like other brokerage firms, was legally borrowing customer money to buy assets like corporate bonds. Under the law, the firm must put sufficient collateral, using assets like United States Treasury securities, in the place of the customer cash.
August 2011
MF Global may have borrowed customer money, even briefly, without providing sufficient collateral.
Oct. 21
Authorities suspect that MF Global was tapping customer accounts on Oct. 21, more than a week before the firm filed for bankruptcy. But these transfers may have been legitimate. Because brokerage firms often keep an extra cushion of their money in customer accounts, MF Global may have simply been drawing down that buffer.
Oct. 27
By Oct. 27, the firm had depleted that buffer. The firm was moving customer money from the futures side of the firm to the securities side. The firm may have then used the money to settle its securities trades.
At the time, MF Global was frantically closing out trades to generate liquidity ahead of a possible sale of the firm. Federal authorities are examining whether the firm began moving client money to the Depository Trust & Clearing Corporation, a clearinghouse that served as a middleman while MF Global unwound its trades.
It is unclear whether MF Global officials knowingly used customer money or believed the buffer was still intact. Sloppy record keeping may have obscured the fact that they were misusing customer money.
Nevertheless, the firm stopped backing the loans it took from customers. So in essence, the firm was receiving free loans from clients.
Oct. 28
On the morning of Oct. 28, the last business day before MF Global filed for bankruptcy, JPMorgan Chase alerted Mr. Corzine that the firm had overdrawn an account at the bank in London.
Chip Somodevilla/Getty ImagesJon S. Corzine, MF Global’s former chief executive, being sworn in at a Senate hearing on the firm’s demise.Mr. Corzine said he passed along the request to his staff. Someone at MF Global then instructed Edith O’Brien, a treasurer at MF Global’s Chicago office, to replenish the overdrawn account.
Authorities suspect that MF Global, perhaps unwittingly, used roughly $200 million of client money to do so.
After the transfer, JPMorgan questioned Mr. Corzine about the source of the money. Ms. O’Brien, Mr. Corzine told a Congressional committee, assured him that MF Global was not improperly using customer cash.
Ms. O’Brien is now considered a “person of interest” in the investigation, according to two people close to the case. She has not been accused of any wrongdoing, and there is no indication that she knowingly transferred customer money.
Oct. 30
Later that weekend, MF Global was closing in on a deal to sell part of the firm to a rival brokerage house.
About 6 p.m. that day, MF Global’s general counsel, Laurie Ferber, notified the CME Group that there was an apparent shortfall. Ms. Ferber blamed an accounting error, according to CME, the exchange where MF Global did business and one of the firm’s main regulators.
But by 2 a.m., Ms. O’Brien and other MF Global officials told CME that $700 million was sent from customer accounts to the firm’s securities unit.
Oct. 31
By 10 a.m., MF Global filed for bankruptcy. Federal regulators, meanwhile, began the search for the missing customer money.
The week of Dec. 12
Mr. Corzine, a former United States senator from New Jersey, returned to Capitol Hill to face questioning from his former colleagues.
Andrew Harrer/Bloomberg NewsTerrence Duffy, executive chairman of the CME Group.Terrence Duffy, executive chairman of the CME Group, told lawmakers that MF Global had used customer money to lend from one arm of the firm to another — and that Mr. Corzine had been aware of it.
Mr. Corzine rejected Mr. Duffy’s claims.
“I never gave any instructions to misuse customer money, never intended to give any instructions or authority to misuse customer funds, and I find it very hard to understand how anyone could misconstrue what I’ve said as a way to misuse customer money.”
Spain says deficit bigger than expected, hikes taxes
In its first decrees since sweeping to victory in November, the centre-right government said the public deficit for 2011 would come in at 8 percent of gross domestic product, well above an official target of 6 percent.
It announced initial public spending cuts of 8.9 billion euros ($11.5 billion) and tax hikes aimed at bringing in an additional 6 billion euros a year to tackle the shortfall.
"This is just the beginning ... We're facing an extraordinary and unexpected situation, forcing us to take extraordinary and unexpected measures," Deputy Prime Minister Soraya Saenz de Santamaria said.
Spain has been under market scrutiny over its ability to control its public finances, and Madrid has seen risk premiums soar to record highs on contagion fears as the euro zone debt crisis spread.
Ten days ago the Treasury said the central government budget deficit was on course to meet a full-year target of 4.8 percent of GDP, which analysts said would push Spain's overall public deficit above its 6 percent target for the year.
But the scale of the overshoot took some economists by surprise and led them to forecast a deeper recession, ending the year on a downbeat note for the euro zone as a whole.
"This is a strong shock. I didn't expect this kind of deficit increase. How can we achieve the objective using personal income taxes and capital taxes? This means making the recession much worse," economist at Barcelona ESADE university Robert Tornabell.
While Italy's debt mountain has been the biggest concern in financial markets in recent months, Spain had been seen as faring somewhat better. Measures taken by the previous Socialist government, while costing it the election, have kept the markets from pushing Spanish yields to unsustainable levels.
But as recession looms across the euro zone, the new government faces a rocky few years. After Friday's initial round of tax hikes and spending cuts, it plans to unveil a final 2012 budget by the end of March.
The Socialists cut the budget shortfall from 11.2 percent of gross domestic product in 2009, and the conservatives must take up the baton and bring the deficit down to 4.4 percent in 2012 and 3 percent in 2013.
If the final 2011 deficit hits the 8 percent mark, as the conservatives say, the government will need to make total savings worth more than 35 billion euros in 2012 to meet the official target.
TAX THE RICH
Spain's economy, the fourth-largest in the euro zone, is likely to have shrunk as much as 0.3 percent in the fourth quarter, Economy Minister Luis de Guindos said this week, and many economists expect output to keep shrinking in early 2012.
(Additional reporting, writing by Paul Day; Editing by Hugh Lawson)
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