MISH'S
Global Economic
Trend Analysis
The bickering over a half percentage point reduction on the discount rate continued over the weekend as Greek Bondholders Draw Line in the Sand
Private owners of Greek debt have made their “maximum” offer for the losses they are willing to accept, the bondholders’ lead negotiator has said, implying that any further demands could kill off a “voluntary” deal and trigger a default.
One banker said Friday’s demand by official creditors, led by the International Monetary Fund, for a further interest rate cut of 50 basis points on new long-term bonds to be swapped for existing Greek debt “may have put a voluntary deal out of reach”.
Mr Dallara said the IIF’s position tabled with Greek authorities on Friday night – believed to include a loss of 65-70 per cent on current Greek bonds’ long-term value – was as far as his side was likely to go.
23 January 2012
Italy and Spain call for eurozone rescue fund booster
By Ambrose Evans-Pritchard, International business editor
8:52PM GMT 22 Jan 2012
Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis.
Italy's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to €1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel.
The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone.
In what appears to be a coordinated move by the Latin bloc, Spanish foreign minister José Manuel García-Margallo y Marfil backed the plan for a bigger rescue fund. He called for an EMU debt union and sweeping changes to the structure of the eurozone.
Mr García-Margallo exhorted the ECB to step up bond purchases in a fully-fledged campaign of quantitative easing, implicitly suggesting a blitz of up to €2 trillion on top of the unlimited credit already provided to banks at 1pc for three years.
"The European Central Bank can do much more than it has done: it has bought European debt equal to just 2pc of GDP while the Bank of England has done 20pc," he said.
8:52PM GMT 22 Jan 2012
Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis.
Italy's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to €1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel.
The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone.
In what appears to be a coordinated move by the Latin bloc, Spanish foreign minister José Manuel García-Margallo y Marfil backed the plan for a bigger rescue fund. He called for an EMU debt union and sweeping changes to the structure of the eurozone.
Mr García-Margallo exhorted the ECB to step up bond purchases in a fully-fledged campaign of quantitative easing, implicitly suggesting a blitz of up to €2 trillion on top of the unlimited credit already provided to banks at 1pc for three years.
"The European Central Bank can do much more than it has done: it has bought European debt equal to just 2pc of GDP while the Bank of England has done 20pc," he said.
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22 January 2012
My Money Where My Mouth Is
I am more bullish about silver today, than I have been at any other time since I have been involved in the silver market. As many of you know, I sold my house in 2005 to invest in gold, silver and oil stocks. I paid the penalty and sold my 401k to buy more silver. I sold my silver 4dr Wrangler this past summer to buy more silver. I have gone through the house looking for anything that I can sell to buy more silver. (To think that I sold a old DVD player for the equivalent of an ounce of silver…) Today I am announcing today that I have not only divested myself of all paper assets, I have traded my last tubes of gold for Constitutional Silver at a 57 to 1 last week. (The Gold American Eagles had a higher premium.) I am now 100% invested in physical silver.- It is tough not having a computer screen assuring me that everything is “ok” in my bank.
- It is tough leaving a job with insurance and a steady income to do this.
- It is tough putting out the amount of educational material, because I still feel there is time to save people.
- It is not easy to ween your self off of the fiat junk, but it is worth it.
Vincent Browne v The ECB
MISH'S
Global Economic
Trend Analysis
The video below is from a European Central Bank press-conference in Ireland. Journalist Vincent Browne demands that the ECB representative explain why the ECB required the Irish people to bail out a bank's uninsured creditors. The bureaucrat mouths bland reassurances, then asserts (despite all appearances to the contrary) that the question has been answered. Browne doesn't let up.
Global Economic
Trend Analysis
The video below is from a European Central Bank press-conference in Ireland. Journalist Vincent Browne demands that the ECB representative explain why the ECB required the Irish people to bail out a bank's uninsured creditors. The bureaucrat mouths bland reassurances, then asserts (despite all appearances to the contrary) that the question has been answered. Browne doesn't let up.
Nuclear Iran is past its point-of-no-return, yet oil sanctions remain on paper
DEBKAfile Exclusive Report January 21, 2012, 3:07 PM (GMT+02:00)
Israeli Prime Minister Binyamin Netanyahu advised visiting Chairman of the US Joint Chiefs of Staff, Gen. Martin Dempsey Friday, Jan.20 that the time for action against Iran was now, for two reasons: First, the conviction that Iran has passed the point of no return for developing a nuclear weapon; and second, the diminishing prospects for a US-led embargo on Iranian oil to catch on before it is too late.
The Obama administration disputes the Israeli prime minister on both points, insisting there is still time for tough sanctions to incapacitate the Iranian economy and stop Tehran before it reaches the point of no return in its drive for a nuke. Israel insists that this pivotal point was reached four years ago in 2008.
Gen. Dempsey was exhaustively briefed on the Israeli position during his whirlwind interviews Friday with President Shimon Peres, Defense Minister Ehud Barak and three conversations with Chief of Staff Lt. Gen. Benny Gantz, one with key General Staff officers.
Israeli Prime Minister Binyamin Netanyahu advised visiting Chairman of the US Joint Chiefs of Staff, Gen. Martin Dempsey Friday, Jan.20 that the time for action against Iran was now, for two reasons: First, the conviction that Iran has passed the point of no return for developing a nuclear weapon; and second, the diminishing prospects for a US-led embargo on Iranian oil to catch on before it is too late.
The Obama administration disputes the Israeli prime minister on both points, insisting there is still time for tough sanctions to incapacitate the Iranian economy and stop Tehran before it reaches the point of no return in its drive for a nuke. Israel insists that this pivotal point was reached four years ago in 2008.
Gen. Dempsey was exhaustively briefed on the Israeli position during his whirlwind interviews Friday with President Shimon Peres, Defense Minister Ehud Barak and three conversations with Chief of Staff Lt. Gen. Benny Gantz, one with key General Staff officers.
Silver’s Surge
By: Warren Bevan
Fundamental Review
This past week we saw US 10-year treasuries dip below 2% briefly. It is amazing how low the yields have gone. Even more amazing is that people actually accept that rate. It’s not even above the official rate of inflation!
Why they don’t seek out dividend yields much higher as we do, I just don’t understand. We get between 10% and 20% annually with our select dividend stocks. Now that is a return.
We saw three banks fail this past Friday after the close and kick off this years list of biggest losers. It’s been over a month since we saw a bank fail so it’s nice to get back on track.
While this week it was revealed that Newt Gingrich had asked his ex-wife for an open marriage, he himself is open to and open currency. He is calling for a review on how the US can return to a hard currency status, one which is backed by gold. Whether he’s serious or just trying to capture some of Ron Paul’s supporters is debatable though and I try to steer clear of politics for the most part.
The high and volatile cost of nickel is forcing Canada to transition to using brass coated steel to produce their $1 and $2 coins, otherwise known as a loonie and a toonie.
Iran is hoping to increases their gold production by 350% in an attempt to better their dire economic condition right now which is hefty inflation and many sanctions, neither of which are good, but gold is money and they know that and it will be accepted in trade, period.
And for fun here are all the Texas republican candidates agreeing that we need to audit the Federal Reserve. Whether it would ever actually happen is another story and one I won’t believe until I see it.
Please sign up to receive my free weekly letter along with any relevant info or articles I write, and if you like what I have to say and think I can help you make some money, and I know I can, then consider subscribing to our daily updates and trading alerts.
Until next week take care and thank you for reading.
Warren Bevan
In my free, nearly weekly newsletter I include many links and charts which cannot always be viewed through sites which publish my work. If you are having difficulties viewing them please sign up in the left margin for free at http://www.preciousmetalstockreview.com/ or send an email to warren@preciousmetalstockreview.com with “subscribe” as the subject and receive the newsletter directly in your inbox, links and all. If you would like to subscribe and see what my portfolio consists of please see here.
If you found this information useful, or informative please pass it on to your friends or family.
Free Service
The free weekly newsletter “Precious Metal Stock Review” does not purport to be a financial recommendation service, nor do we profess to be a professional advisement service. Any action taken as a result of reading “Precious Metal Stock Review” is solely the responsibility of the reader. We recommend seeking professional financial advice and performing your own due diligence before acting on any information received through “Precious Metal Stock Review”.
Fundamental Review
This past week we saw US 10-year treasuries dip below 2% briefly. It is amazing how low the yields have gone. Even more amazing is that people actually accept that rate. It’s not even above the official rate of inflation!
Why they don’t seek out dividend yields much higher as we do, I just don’t understand. We get between 10% and 20% annually with our select dividend stocks. Now that is a return.
We saw three banks fail this past Friday after the close and kick off this years list of biggest losers. It’s been over a month since we saw a bank fail so it’s nice to get back on track.
While this week it was revealed that Newt Gingrich had asked his ex-wife for an open marriage, he himself is open to and open currency. He is calling for a review on how the US can return to a hard currency status, one which is backed by gold. Whether he’s serious or just trying to capture some of Ron Paul’s supporters is debatable though and I try to steer clear of politics for the most part.
The high and volatile cost of nickel is forcing Canada to transition to using brass coated steel to produce their $1 and $2 coins, otherwise known as a loonie and a toonie.
Iran is hoping to increases their gold production by 350% in an attempt to better their dire economic condition right now which is hefty inflation and many sanctions, neither of which are good, but gold is money and they know that and it will be accepted in trade, period.
And for fun here are all the Texas republican candidates agreeing that we need to audit the Federal Reserve. Whether it would ever actually happen is another story and one I won’t believe until I see it.
Please sign up to receive my free weekly letter along with any relevant info or articles I write, and if you like what I have to say and think I can help you make some money, and I know I can, then consider subscribing to our daily updates and trading alerts.
Until next week take care and thank you for reading.
Warren Bevan
In my free, nearly weekly newsletter I include many links and charts which cannot always be viewed through sites which publish my work. If you are having difficulties viewing them please sign up in the left margin for free at http://www.preciousmetalstockreview.com/ or send an email to warren@preciousmetalstockreview.com with “subscribe” as the subject and receive the newsletter directly in your inbox, links and all. If you would like to subscribe and see what my portfolio consists of please see here.
If you found this information useful, or informative please pass it on to your friends or family.
Free Service
The free weekly newsletter “Precious Metal Stock Review” does not purport to be a financial recommendation service, nor do we profess to be a professional advisement service. Any action taken as a result of reading “Precious Metal Stock Review” is solely the responsibility of the reader. We recommend seeking professional financial advice and performing your own due diligence before acting on any information received through “Precious Metal Stock Review”.
Greek Debt Talks Stall, More Negotiations "By Phone" Later Today; IMF Germany Think 4% Coupon Too High; Greek Haircut Calculator
MISH'S
Global Economic
Trend Analysis
For weeks we have been hearing "agreement soon" on Greek bond haircuts. The theme for the day today as it was yesterday and as it was a week ago is "tomorrow".
One problem with all of these "deal is close" announcements is none of them have included an agreement from those who stand to benefit if there is a credit event. Until those CDS holders are made whole, or at least the CDS holders are satisfied, there is no deal, just noise.
The Wall Street Journal reports UPDATE: Greek Debt Talks Appear To Stall Saturday
Talks between Greece and its private sector creditors over a debt writedown plan appeared to stall Saturday as the banks' top negotiator left Athens amid signs of fresh disagreements over how much Greece would pay its bondholders in the future.
Global Economic
Trend Analysis
For weeks we have been hearing "agreement soon" on Greek bond haircuts. The theme for the day today as it was yesterday and as it was a week ago is "tomorrow".
One problem with all of these "deal is close" announcements is none of them have included an agreement from those who stand to benefit if there is a credit event. Until those CDS holders are made whole, or at least the CDS holders are satisfied, there is no deal, just noise.
The Wall Street Journal reports UPDATE: Greek Debt Talks Appear To Stall Saturday
Talks between Greece and its private sector creditors over a debt writedown plan appeared to stall Saturday as the banks' top negotiator left Athens amid signs of fresh disagreements over how much Greece would pay its bondholders in the future.
21 January 2012
Gold may remain bullish, but don't rule out silver in 2012
NEW YORK (Commodity Online): Gold may remain bullish in 2012, but don't rule out Silver and keep an eye on stocks for good value investments, says David Skarica, editor of The Gold Stock Adviser.
According to David Skarica, the United States will likely roll out more extraordinarily loose monetary policies such as quantitative easing, not solely due to necessity, but also to keep the dollar competitive with a weaker euro.
According to David Skarica, the United States will likely roll out more extraordinarily loose monetary policies such as quantitative easing, not solely due to necessity, but also to keep the dollar competitive with a weaker euro.
Italy Faces 2-Year Recession says IMF; European Recession Neither Mild Nor Short
MISH'S
Global Economic
Trend Analysis
Slowly but surely global growth estimates have been ratcheted down. Courtesy of Google Translate from an Italian news site, please consider IMF estimates two years of recession for Italy
Deep red for the Italian economy in the next two years. Against the background of a global recovery stalled, slowed by the crisis in the eurozone in particular, Italy is preparing to reach out to two years of recession in 2012 and 2013. The cold shower comes from the International Monetary Fund put in hand as usual to their predictions gave a general scissor kick to the estimates of growth around the world.
Last update at the World Economic Outlook that the Ansa news agency is able to anticipate its spread before the official next Tuesday, the IMF finds in the euro area's main patient who staggers a little and infects all international economies. "The global recovery is threatened by the growing tensions in the euro area," considered the "main reason" the deterioration of economic prospects.
Global Economic
Trend Analysis
Slowly but surely global growth estimates have been ratcheted down. Courtesy of Google Translate from an Italian news site, please consider IMF estimates two years of recession for Italy
Deep red for the Italian economy in the next two years. Against the background of a global recovery stalled, slowed by the crisis in the eurozone in particular, Italy is preparing to reach out to two years of recession in 2012 and 2013. The cold shower comes from the International Monetary Fund put in hand as usual to their predictions gave a general scissor kick to the estimates of growth around the world.
Last update at the World Economic Outlook that the Ansa news agency is able to anticipate its spread before the official next Tuesday, the IMF finds in the euro area's main patient who staggers a little and infects all international economies. "The global recovery is threatened by the growing tensions in the euro area," considered the "main reason" the deterioration of economic prospects.
SilverDoctors: Silver COT Report 1/20/12
SilverDoctors: Silver COT Report 1/20/12: The commercials increased their naked short silver positions by a net 1,320 additional contracts (6.6 million ounces) in the week ending 2/1...
SilverDoctors: Is Sprott Making a Dent into Silver Prices?
SilverDoctors: Is Sprott Making a Dent into Silver Prices?: UBS analyst Edel Tully, finally caught wind yesterday that Sprott was making a huge purchase which "may" have an impact on silver prices. T...
20 January 2012
Peter Schiff: U.S. Will Never Pay Off Debt
Posted by Brittany Stepniak - Friday, January 20th, 2012
See how one of America's most popular video bloggers, Peter Schiff – stock broker, economist and author – uses humor in a critical commentary of the U.S. government, debt, and China.
In his argument, he explains how foolish China was for lending to such a debt-ridden nation.
Does anyone truly believe we intend, and will succeed, in paying off our $15+ trillion in debt? Here's what would have to happen for that far-fetched fairytale to actually come to fruition...
See how one of America's most popular video bloggers, Peter Schiff – stock broker, economist and author – uses humor in a critical commentary of the U.S. government, debt, and China.
In his argument, he explains how foolish China was for lending to such a debt-ridden nation.
Does anyone truly believe we intend, and will succeed, in paying off our $15+ trillion in debt? Here's what would have to happen for that far-fetched fairytale to actually come to fruition...
QE3, $2,200 Gold, and the Trillion Dollar Bazooka
January 20, 2012
By Peter Krauth, Global Resources Specialist, Money Morning
It's the beginning of a new year, and there's no shortage of big headlines...
Europe is on the financial brink, Iran is a powder keg, and precious metals like gold have retreated.
It's also a time when there is no shortage of financial forecasts.
Even though these kinds of predictions about the future can be tough to make, I'll admit it's kind of fun to look forward and see what the future may hold.
Like in December 2010, when I said I expected gold to reach $1,900/oz in 2011. Some people thought that I was crazy. At the time, gold was trading for just $1,390/oz.
But just nine months later, that turned out to be a pretty good call as gold hit a new high of $1,923/oz. before eventually pulling back.
Better yet, in January 2010, I even said gold would eventually top $5,000. Of course, most people thought that call was preposterous.
Now, even Standard Chartered bank's analysts expect gold to climb to $5,000.
By Peter Krauth, Global Resources Specialist, Money Morning
It's the beginning of a new year, and there's no shortage of big headlines...
Europe is on the financial brink, Iran is a powder keg, and precious metals like gold have retreated.
It's also a time when there is no shortage of financial forecasts.
Even though these kinds of predictions about the future can be tough to make, I'll admit it's kind of fun to look forward and see what the future may hold.
Like in December 2010, when I said I expected gold to reach $1,900/oz in 2011. Some people thought that I was crazy. At the time, gold was trading for just $1,390/oz.
But just nine months later, that turned out to be a pretty good call as gold hit a new high of $1,923/oz. before eventually pulling back.
Better yet, in January 2010, I even said gold would eventually top $5,000. Of course, most people thought that call was preposterous.
Now, even Standard Chartered bank's analysts expect gold to climb to $5,000.
Nomi Prins: Bailouts + Downgrades = Austerity and Pain
Tuesday, January 17, 2012 at 5:07PM
The markets (read: traders with big books at mega financial firms and hedge funds) weren’t particularly shocked by last week’s wave of heavily pre-broadcast S&P sovereign debt downgrades. For months, the question wasn’t ‘if’, but ‘when.’ True to form, just as with the US downgrade, S&P’s reasons skated the surface of prevailing wisdom – governments have too much debt, and not enough income. That’s only a fraction of the story.
Nowadays, when any sovereign (including the US) gets downgraded by a rating agency, it's not just because its debt repayment ability is questionable (the publicized logic of rating agencies), but because it incurred more expensive debt to float its banking system. It chose to subsidize banks over people.
The S&P likes moving on Friday nights. It was on a Friday night that it downgraded US debt to AA+ from AAA. On Friday night, January 13, 2012, it downgraded France and Austria from AAA to AA+, and 7 other European countries, too; Cyprus, Italy, Portugal, and Spain by two notches; Malta, Slovakia, and Slovenia, by one notch. Portugal, Cyprus, Ireland and Greece are at junk status. Germany’s AAA rating is intact.
Nowhere in S&P’s statement about “global economic and financial crisis”, did it clarify that sovereigns were hit due to backing their largest national banks (and international, US ones) which engaged in half a decade of leveraged speculation. But here’s how it worked:
The markets (read: traders with big books at mega financial firms and hedge funds) weren’t particularly shocked by last week’s wave of heavily pre-broadcast S&P sovereign debt downgrades. For months, the question wasn’t ‘if’, but ‘when.’ True to form, just as with the US downgrade, S&P’s reasons skated the surface of prevailing wisdom – governments have too much debt, and not enough income. That’s only a fraction of the story.
Nowadays, when any sovereign (including the US) gets downgraded by a rating agency, it's not just because its debt repayment ability is questionable (the publicized logic of rating agencies), but because it incurred more expensive debt to float its banking system. It chose to subsidize banks over people.
The S&P likes moving on Friday nights. It was on a Friday night that it downgraded US debt to AA+ from AAA. On Friday night, January 13, 2012, it downgraded France and Austria from AAA to AA+, and 7 other European countries, too; Cyprus, Italy, Portugal, and Spain by two notches; Malta, Slovakia, and Slovenia, by one notch. Portugal, Cyprus, Ireland and Greece are at junk status. Germany’s AAA rating is intact.
Nowhere in S&P’s statement about “global economic and financial crisis”, did it clarify that sovereigns were hit due to backing their largest national banks (and international, US ones) which engaged in half a decade of leveraged speculation. But here’s how it worked:
SilverDoctors: Inflation: The Only Tool Left
SilverDoctors: Inflation: The Only Tool Left: The global financial crisis continues without solution and unending series of moderate calamities the Greek Govt Bond default appears to b...
Fed Expected to Enact $1-Trillion-Worth of Easing
Posted by Brittany Stepniak - Thursday, January 19th, 2012
In order to stimulate our economy, it sounds like the Fed plans to pump-it-up with a $1 trillion easing project.
And it could happen as early as this month...
CNBC reports:
"There seems little point in waiting to implement further easing, and to do so could confuse the message the Fed is trying to deliver at a point in time when it is trying to make its communication with the public clearer," he said.
Next week, the Fed's Open Market Committee will meet to discuss matters further. Meanwhile “expectations are rising that the languishing housing market will drive the central bank to buy up mortgage-backed securities.”
The aim of those purchases will be to push interest rates even further and to indirectly induce confidence that there are more “monetary tools” that can revive the economy.
In order to stimulate our economy, it sounds like the Fed plans to pump-it-up with a $1 trillion easing project.
And it could happen as early as this month...
CNBC reports:
"There seems little point in waiting to implement further easing, and to do so could confuse the message the Fed is trying to deliver at a point in time when it is trying to make its communication with the public clearer," he said.
Next week, the Fed's Open Market Committee will meet to discuss matters further. Meanwhile “expectations are rising that the languishing housing market will drive the central bank to buy up mortgage-backed securities.”
The aim of those purchases will be to push interest rates even further and to indirectly induce confidence that there are more “monetary tools” that can revive the economy.
Price Manipulation: Look for Motive
The Silver Arbitrageurs
In the 1970's Alan Rosenberg, a coin dealer, sold dollar bills that were silver certificates to a firm called Metals Quality. At the time, the Federal Reserve converted dollar silver certificates to a set amount of silver. Before the Fed finally discontinued the conversion, the converted silver was worth more than a dollar. The difference became great enough that it paid to buy up the certificates for slightly more than a dollar, convert the certificates to silver, and sell the silver for a profit. This is one of the rare instances of a true arbitrage.
Not everyone wanted to go through the trouble of handling the conversion, so people like Rosenberg collected certificates and sold them for more than one dollar each, but for less than the price of the silver represented by the certificate. It was worth it to Rosenberg to have someone else do the work of squeezing out the last bit of value.
That's where Metals Quality came in. It bought certificates from coin dealers and currency exchanges and handled the conversion to silver and sold the silver for a profit. Metals Quality paid Rosenberg for his silver certificates based on the first Comex price of silver for the day (less something for the trouble of the conversion and some profit). It made no difference whether the first price of the day was based on one contract or 100 contracts. Each contract represents 10,000 ounces of silver.
In the 1970's Alan Rosenberg, a coin dealer, sold dollar bills that were silver certificates to a firm called Metals Quality. At the time, the Federal Reserve converted dollar silver certificates to a set amount of silver. Before the Fed finally discontinued the conversion, the converted silver was worth more than a dollar. The difference became great enough that it paid to buy up the certificates for slightly more than a dollar, convert the certificates to silver, and sell the silver for a profit. This is one of the rare instances of a true arbitrage.
Not everyone wanted to go through the trouble of handling the conversion, so people like Rosenberg collected certificates and sold them for more than one dollar each, but for less than the price of the silver represented by the certificate. It was worth it to Rosenberg to have someone else do the work of squeezing out the last bit of value.
That's where Metals Quality came in. It bought certificates from coin dealers and currency exchanges and handled the conversion to silver and sold the silver for a profit. Metals Quality paid Rosenberg for his silver certificates based on the first Comex price of silver for the day (less something for the trouble of the conversion and some profit). It made no difference whether the first price of the day was based on one contract or 100 contracts. Each contract represents 10,000 ounces of silver.
Gingrich Goes for Gold
Editorial of The New York Sun | January 18, 2012
The call by Newt Gingrich for the creation of a commission on gold to examine how America can return to a system of hard money is a step forward for him and the Republican Party as we go into the most formative months of the campaign. The former speaker issued his call at Columbia, South Carolina, at a policy forum on American global leadership. He used the phrase “hard money” to speak of a gold standard of the kind the Founders of America had in mind. It would mean, he said, “you can’t just hide from your problems. You’ve got to solve them.”
The call by Newt Gingrich for the creation of a commission on gold to examine how America can return to a system of hard money is a step forward for him and the Republican Party as we go into the most formative months of the campaign. The former speaker issued his call at Columbia, South Carolina, at a policy forum on American global leadership. He used the phrase “hard money” to speak of a gold standard of the kind the Founders of America had in mind. It would mean, he said, “you can’t just hide from your problems. You’ve got to solve them.”
Vampire Hedge Funds Are Sucking Greece Dry
If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like piranhas or sharks, eager to strip the financial carcass to the bone.
Who are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well being. If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone.
Who are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well being. If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone.
The Intrinsic Value of the Dollar and Gold
By: Michael Pento
If you ask most investors what is the main driver for the price of gold they are likely to tell you that it’s the direction of the U.S. dollar. Therefore, the only due diligence most investors perform is a perfunctory glance at the Dollar Index (DXY). While it is true that the purchasing power of the dollar is a key metric to judge the direction of gold prices, the DXY will only tell you what the dollar is doing against a basket of 6 other flawed fiat currencies.
The main component of the Dollar Index is the Euro Currency, which represents a 58% weighting in the basket of currencies. It logically follows, if the Euro is tanking, the Dollar Index could increase regardless of the fundamental condition of the U.S. dollar. In order to truly access the intrinsic change in the value of the dollar you must first determine; the level and direction of real interest rates, the rate of growth in the money supply and the fiscal health of the government. When analyzing the dollar using those metrics, it is clear that the intrinsic value of the dollar is eroding in an expedited manner.
If you ask most investors what is the main driver for the price of gold they are likely to tell you that it’s the direction of the U.S. dollar. Therefore, the only due diligence most investors perform is a perfunctory glance at the Dollar Index (DXY). While it is true that the purchasing power of the dollar is a key metric to judge the direction of gold prices, the DXY will only tell you what the dollar is doing against a basket of 6 other flawed fiat currencies.
The main component of the Dollar Index is the Euro Currency, which represents a 58% weighting in the basket of currencies. It logically follows, if the Euro is tanking, the Dollar Index could increase regardless of the fundamental condition of the U.S. dollar. In order to truly access the intrinsic change in the value of the dollar you must first determine; the level and direction of real interest rates, the rate of growth in the money supply and the fiscal health of the government. When analyzing the dollar using those metrics, it is clear that the intrinsic value of the dollar is eroding in an expedited manner.
Netanyahu: Iran has decided to become a nuclear state. Action needed before it is too late.
DEBKAfile Exclusive Report January 19, 2012, 6:56 PM (GMT+02:00)
Prime Minister Benjamin Netanyahu declared Thursday night, Jan. 19 that Iran had decided to become a nuclear state. He urged action before it was too late to stop Iran completing the construction of a nuclear weapon. His statement at the end of a visit to Holland gave Gen Martin Dempsey, on his first visit to Israel as Chairman of the US Joint Chiefs of Staff, the message he will be asked to take back to President Barack Obama. It also contradicted Defense Minister Ehud Barak's statement that Tehran had not yet decided to go nuclear.
On Dec. 22, 2011, debkafile first revealed Tehran had reached a decision to go ahead and build a nuclear weapon.
Netanyahu has kept the Iranian cards close to his chest. His statement therefore caught wrong-footed the Israeli officials, including Defense Minister Ehud Barak, who in the last 48 hours had asserted that Iran had not yet decided whether to build a nuclear bomb and there was still time for US-led sanctions to work.
Prime Minister Benjamin Netanyahu declared Thursday night, Jan. 19 that Iran had decided to become a nuclear state. He urged action before it was too late to stop Iran completing the construction of a nuclear weapon. His statement at the end of a visit to Holland gave Gen Martin Dempsey, on his first visit to Israel as Chairman of the US Joint Chiefs of Staff, the message he will be asked to take back to President Barack Obama. It also contradicted Defense Minister Ehud Barak's statement that Tehran had not yet decided to go nuclear.
On Dec. 22, 2011, debkafile first revealed Tehran had reached a decision to go ahead and build a nuclear weapon.
Netanyahu has kept the Iranian cards close to his chest. His statement therefore caught wrong-footed the Israeli officials, including Defense Minister Ehud Barak, who in the last 48 hours had asserted that Iran had not yet decided whether to build a nuclear bomb and there was still time for US-led sanctions to work.
China to aid Saudi Arabia in nuclear power development
INTERNATIONAL. Ever since the end of World War Two, the U.S. has come to regard Saudi Arabia as almost its exclusive oil producing enclave.
In February 1945, after the Yalta Conference with Soviet General Secretary Iosif Stalin and British Prime Minister Winston Churchill, on his way home U.S. President Franklin Delano Roosevelt and King Ibn Saud met aboard the New Orleans-class heavy cruiser U.S.S. Quincy in the Suez Canal's Great Bitter Lake.
During the meeting, instigated by Roosevelt, he and Ibn Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security, including military assistance, training and a military base at Dhahran in Saudi Arabia, in exchange for secure access to supplies of oil.
Sixty-seven years later, my, how things have changed, as China is now muscling into the Kingdom.
On 15 January Visiting Chinese Premier Wen Jiabao and Saudi Arabian King Abdullah bin Abdul Aziz agreed to make concerted efforts to enhance bilateral relations.
In February 1945, after the Yalta Conference with Soviet General Secretary Iosif Stalin and British Prime Minister Winston Churchill, on his way home U.S. President Franklin Delano Roosevelt and King Ibn Saud met aboard the New Orleans-class heavy cruiser U.S.S. Quincy in the Suez Canal's Great Bitter Lake.
During the meeting, instigated by Roosevelt, he and Ibn Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security, including military assistance, training and a military base at Dhahran in Saudi Arabia, in exchange for secure access to supplies of oil.
Sixty-seven years later, my, how things have changed, as China is now muscling into the Kingdom.
On 15 January Visiting Chinese Premier Wen Jiabao and Saudi Arabian King Abdullah bin Abdul Aziz agreed to make concerted efforts to enhance bilateral relations.
Moody’s Warns of Further Downgrades: Big Banks
By Moran Zhang: Subscribe to Moran's RSS feed
January 19, 2012 5:55 PM EST
Moody's Investors Service warned Thursday that many European banks and global investment banks are likely to see their credit ratings further downgraded by the agency.
"The expected decline of bank ratings reflects the acceleration of interrelated pressures on the banking sector since the second half of 2011," said Greg Bauer, Moody's global banking managing director, in a statement.
"These pressures most immediately affect global capital markets intermediaries and European banks," Bauer said.
January 19, 2012 5:55 PM EST
Moody's Investors Service warned Thursday that many European banks and global investment banks are likely to see their credit ratings further downgraded by the agency.
"The expected decline of bank ratings reflects the acceleration of interrelated pressures on the banking sector since the second half of 2011," said Greg Bauer, Moody's global banking managing director, in a statement.
"These pressures most immediately affect global capital markets intermediaries and European banks," Bauer said.
Will China unleash more stimulus and boost gold, silver prices?
By Eric McWhinnie
China reported GDP growth of 8.9 percent in the last quarter of 2011 on Tuesday, which is the slowest growth increase in more than two years. Although analysts were only expecting growth of 8.7 percent, the slowdown gave investors hope that the world’s second largest economy will inject more stimulus into its economy to fuel growth. As a result, Gold jumped $24 to climb above $1,650 per ounce, while Silver surged 60 cents to settle above $30 per ounce. However, investors should reign in expectations of more stimulus being unleashed in China during the early part of 2012.
The last time China experienced a significant slowdown was towards the end of 2008. Over the next two years, China provided four trillion yuan ($586 billion) in stimulus money to boost growth. While investors may be expecting another replay of stimulus, China is indicating that the current slowdown is not significant enough, and inflation is still a concern. On Wednesday, the China Securities Journal said the nation has no reason to slash interest rates in the first quarter of 2012, because real interest rates remain negative. The journal explains, “Any change in China’s interest rates will come at a more appropriate time window, when inflation eases further and when economic growth slows down further.”
China reported GDP growth of 8.9 percent in the last quarter of 2011 on Tuesday, which is the slowest growth increase in more than two years. Although analysts were only expecting growth of 8.7 percent, the slowdown gave investors hope that the world’s second largest economy will inject more stimulus into its economy to fuel growth. As a result, Gold jumped $24 to climb above $1,650 per ounce, while Silver surged 60 cents to settle above $30 per ounce. However, investors should reign in expectations of more stimulus being unleashed in China during the early part of 2012.
The last time China experienced a significant slowdown was towards the end of 2008. Over the next two years, China provided four trillion yuan ($586 billion) in stimulus money to boost growth. While investors may be expecting another replay of stimulus, China is indicating that the current slowdown is not significant enough, and inflation is still a concern. On Wednesday, the China Securities Journal said the nation has no reason to slash interest rates in the first quarter of 2012, because real interest rates remain negative. The journal explains, “Any change in China’s interest rates will come at a more appropriate time window, when inflation eases further and when economic growth slows down further.”
Greece and a report on the PSI/IMFGlobal/Bank of America earnings farce
Good evening Ladies and Gentlemen:
Gold closed down today to the tune of $5.40 dollars finishing the comex session at $1654.10 Silver finished down 4 cents to $30.48.
Today the raid was a no brainer on behalf of the bankers as we witnessed a huge run up in open interest and that is fodder for these crooks. Gold bounced off the $1650 price level four times today. The weak gold and silver shares today probably foreshadows another raid. Let us head over to the comex and assess trading, open interest positions, inventory movements and amounts of metal standing.
The total comex gold open interest rose by 5552 contracts to rest tonight at 438,390. Please remember that we are always 24 hours back with respect to OI so in reality the closing figure of 438,390 OI is in reality the official OI for yesterday. The front options expiry month of January saw its OI fall from 31 to 16 for a loss of 15 contracts. We had 7 delivery notices filed yesterday so we lost 8 contracts or 800 oz to cash settlements. The next big delivery month is February as first day notice is less than 2 weeks away. Here the OI fell by 4000 contracts to 160,113 contracts. The estimated volume at the comex today was very weak coming in at 145,097. The confirmed volume yesterday was a touch better at 186,277 despite many rollovers on both days.
The total silver comex OI fell by 798 contracts to 102,870. Silver is trading differently these past few weeks and we are witnessing this through the OI. It appears that all the silver OI is in strong hands.
The front options expiry month of January mysteriously saw its OI rise from 81 to 175 for a gain of 94 contracts. We had 12 delivery notices yesterday so we gained 106 silver additional contracts standing for delivery or 530,000 oz. Someone was in great need of physical silver today. The next big delivery month is March and here the OI fell by 1200 contracts to 53,240 contracts. The estimated volume today was a very weak 30,713. The confirmed volume yesterday was also weak at 46,029. Leverage in silver has disappeared as business is leaving the comex to other jurisdictions.
How will China's Pan Asian Gold Exchange Revolutionize Gold and Silver Trading?
Commodities / Gold and Silver 2012 Jan 18, 2012 - 02:45 AM
PAGE which stands for Pan Asian Gold Exchange was set up in 2011 and has already begun operations with local Chinese buying and selling of gold through the internet. PAGE is located in Kunming, the capital city of Yunnan Province located in South Western China and is also the major gateway to South East Asia.
This gold exchange will enable ordinary Chinese buy/sell gold using a Renminbi account with a bank or broker. Currently there are two banks that are authorized to process the transactions or settlements and they are the Agriculture Bank of China and The Fudian Bank of Yunnan. The 10 ounce mini contracts will be known as T+D and the price is RMB 30,000 for 1 lot and it is fully backed by the Chinese government.
Also on offer is the Silver contract which is a five hundred ounce silver mini contract.
PAGE is not something that can be taken lightly as it is part of China’s 12th five year plan to catapult China to be the Global Superpower in Economics, Politics and Military.
Currently Shanghai Gold Exchange and Shanghai Futures Exchange are the only avenues for an ordinary Chinese citizen to buy gold. With the PAGE, now they will be able to buy gold through their computers online. Initially the scheme will be open to the 320 million customers of the Agriculture Bank of China.
Eventually foreigners will also be able to trade the International Spot Contracts on PAGE and hence this will help increase the liquidity of the market and certainly will have a big impact on both the LBMA and COMEX . With PAGE the purchaser will receive a 90 days International Spot Contract with the actual title bearing the name of the purchaser. All transactions initiated either by a local or foreigner will be denominated in RMB. Investors are given a choice to take physical delivery or get paid in RMB.
By: Sam_Chee_Kong
This gold exchange will enable ordinary Chinese buy/sell gold using a Renminbi account with a bank or broker. Currently there are two banks that are authorized to process the transactions or settlements and they are the Agriculture Bank of China and The Fudian Bank of Yunnan. The 10 ounce mini contracts will be known as T+D and the price is RMB 30,000 for 1 lot and it is fully backed by the Chinese government.
Also on offer is the Silver contract which is a five hundred ounce silver mini contract.
PAGE is not something that can be taken lightly as it is part of China’s 12th five year plan to catapult China to be the Global Superpower in Economics, Politics and Military.
Currently Shanghai Gold Exchange and Shanghai Futures Exchange are the only avenues for an ordinary Chinese citizen to buy gold. With the PAGE, now they will be able to buy gold through their computers online. Initially the scheme will be open to the 320 million customers of the Agriculture Bank of China.
Eventually foreigners will also be able to trade the International Spot Contracts on PAGE and hence this will help increase the liquidity of the market and certainly will have a big impact on both the LBMA and COMEX . With PAGE the purchaser will receive a 90 days International Spot Contract with the actual title bearing the name of the purchaser. All transactions initiated either by a local or foreigner will be denominated in RMB. Investors are given a choice to take physical delivery or get paid in RMB.
SilverDoctors: Brink's Magically Adjusts 140,248 Ounces of Silver...
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Keiser Report: Scam On Epic Scale (E238)
In this episode, Max Keiser and co-host, Stacy Herbert, discuss 419 scams and Tim Geithner's gimp. In the second half of the show, Max talks to financial blogger and semi-retired Wall Street executive Warren E. Pollock about MF Global, wealth confiscation and bank holidays.
SilverDoctors: Anonymous Takes Down DOJ, FBI, Numerous Media Site...
SilverDoctors: Anonymous Takes Down DOJ, FBI, Numerous Media Site...: Apparently Anonymous is not taking the SOPA legislation and yesterday's strong-arm tactics by the Fed's against Megaupload without a fight. ...
19 January 2012
Money Supply Figures Suggests Italy Headed Into Depression; Non-Performing Spanish Loans Hit 134 Billion Euros, 7.51% of All Loans, Highest in 17 Years; Eurozone Unemployment Charts
MISH'S
Global Economic
Trend Analysis
Ambrose Evans-Pritchard says The euro is pushing Italy into depression
Here is the latest money supply chart from the Banca d'Italia. Just look at M3. Horrendous.
Italy M1, M2, M3
This speaks for itself. There is no clearer indictment of the dysfunctional nature of monetary union. Italy is being pushed into depression. Criminal.
Obviously, Italy and Germany can no longer share the same monetary policy. Ergo, Germany should leave EMU, pronto.
Global Economic
Trend Analysis
Ambrose Evans-Pritchard says The euro is pushing Italy into depression
Here is the latest money supply chart from the Banca d'Italia. Just look at M3. Horrendous.
Italy M1, M2, M3
click on chart for sharper image
This speaks for itself. There is no clearer indictment of the dysfunctional nature of monetary union. Italy is being pushed into depression. Criminal.
Obviously, Italy and Germany can no longer share the same monetary policy. Ergo, Germany should leave EMU, pronto.
The Euro Emperor Has No Clothes
Anyone familiar with accounting, will recognize that banks are reluctant to mark their assets to market value as such actions would severely impact their balance sheets.
In the event of a Greek default, which may happen as soon as the middle of March, we can expect to see bank lending slow or even freeze as banks attempt to preserve capital.
Due to the potentially catastrophic impact of such an event, we can expect to see desperate Eurocrats racing around the clock to find some way to stop or slow the contagion.
Several ideas have been floating around including a massive liquidity (bailout) fund on the order of One Trillion up to Ten Trillion Euros.
Harvey Organ's - The Daily Gold and Silver Report: IMF in need for one trillion dollars/The Private Greek Bond fiasco/Goldman Sachs earnings abysmal
Wednesday, January 18, 2012
IMF in need for one trillion dollars/The Private Greek Bond fiasco/Goldman Sachs earnings abysmal/
Good evening Ladies and Gentlemen:
Gold closed up $4.30 to 1659.00. Silver however was the star of the day rising by 41 cents to close at 30.52. The bankers tried to suppress the metals in the wee hours of the morning but failed somewhat as the metals rallied. After the London fix they tried again as they knocked gold down by 6 dollars. That failed miserably as demand is too great for physical gold and that caused the paper boys to cover quickly.
Let us head over to the comex and assess trading, open interest on the front delivery months, inventory movements, and the amount of physical metals standing for delivery.
The total gold comex OI rose by a huge 7,554 contracts as investors try to secure metal any which way they can. The bankers were the obvious suppliers of the non backed paper. The front options expiry month of January saw the OI fall from 71 to 31 for a loss of 40 contracts. We only had 13 delivery notices so we lost 27 notices to cash settlements. The paper fiat must have been too good to pass up, courtesy of Blythe Masters of JPMorgan. The front delivery month of February is less than two weeks away as we are witnessing rollovers to April. The February OI rests tonight at 164,237. The estimated volume at the gold comex today was 166,309 which is below normal for the rollover period. The confirmed volume yesterday came in at 216,485.
The total silver comex OI rose by only 825 contracts as the bankers are loathe to supply the non backed paper. The front options expiry month of January saw its OI mysteriously rise by 4 contracts (from 77 to 81) despite 23 delivery notices. Generally this means that someone was in great need of physical silver and we lost nothing to cash settlements. The next big delivery month is March and here the OI rose from 53,786 to 54,449 which is normal as we are still quite far from first day notice in silver. The estimated volume at the silver comex came in at a lowish 40,754. The confirmed volume yesterday was also tame at 44,357.
IMF in need for one trillion dollars/The Private Greek Bond fiasco/Goldman Sachs earnings abysmal/
Good evening Ladies and Gentlemen:
Gold closed up $4.30 to 1659.00. Silver however was the star of the day rising by 41 cents to close at 30.52. The bankers tried to suppress the metals in the wee hours of the morning but failed somewhat as the metals rallied. After the London fix they tried again as they knocked gold down by 6 dollars. That failed miserably as demand is too great for physical gold and that caused the paper boys to cover quickly.
Let us head over to the comex and assess trading, open interest on the front delivery months, inventory movements, and the amount of physical metals standing for delivery.
The total gold comex OI rose by a huge 7,554 contracts as investors try to secure metal any which way they can. The bankers were the obvious suppliers of the non backed paper. The front options expiry month of January saw the OI fall from 71 to 31 for a loss of 40 contracts. We only had 13 delivery notices so we lost 27 notices to cash settlements. The paper fiat must have been too good to pass up, courtesy of Blythe Masters of JPMorgan. The front delivery month of February is less than two weeks away as we are witnessing rollovers to April. The February OI rests tonight at 164,237. The estimated volume at the gold comex today was 166,309 which is below normal for the rollover period. The confirmed volume yesterday came in at 216,485.
The total silver comex OI rose by only 825 contracts as the bankers are loathe to supply the non backed paper. The front options expiry month of January saw its OI mysteriously rise by 4 contracts (from 77 to 81) despite 23 delivery notices. Generally this means that someone was in great need of physical silver and we lost nothing to cash settlements. The next big delivery month is March and here the OI rose from 53,786 to 54,449 which is normal as we are still quite far from first day notice in silver. The estimated volume at the silver comex came in at a lowish 40,754. The confirmed volume yesterday was also tame at 44,357.
BRIC Urged to Create Fund, Help Save Global Economy
By Esther Tanquintic-Misa: Subscribe to Esther's RSS feed
January 19, 2012 1:12 AM EST
The question looming amid the maddening eurozone financial crisis now is, will the BRIC (Brazil, Russia, India and China) nations consider lending a helping hand to a world that has yet to officially and formally recognise its economic hold in the global market today?
After the International Monetary Fund (IMF) and World Bank (WB) both forecast an impending global financial doom far worse than the one in 2008, economists and analysts now turned their focus to BRIC, to help prevent the world's financial crash.
American economist Joseph Stiglitz, who was chief economist at the WB from 1996 until 1999, said now might be the time for the BRIC nations to join forces to create a global fund similar to the lines that created the WB in 1944.
"The fact is that money is with the emerging markets," Mr Stiglitz had earlier said in the SME Times. "I am a very strong supporter of the emerging markets and creating a new international fund."
Greek Bond Talks Edge Toward 68% Haircut Deal; Will the Deal Be Accepted?Greek Bond Talks Edge Toward 68% Haircut Deal; Will the Deal Be Accepted?
MISH'S
Global Economic
Trend Analysis
Former ECB president Jean Claude Trichet said there would be no haircuts. There were. The first Greek haircut was 21% and it was insufficient. The second Greek haircut deal was 50% and that too was insufficient. On each failed attempt, the ECB and EMU poured more money into Greece.
There is now about €200bn of Greek debt held by banks, hedge funds and other investors up from about €50bn a couple years ago.
A third renegotiation is now underway, rumored to be a 68% haircut. Clearly there would have been far fewer ramification on banks if Greece would have defaulted long ago.
Such is the stubborn arrogance of ECB, and EMU officials.
Unless another haircut is approved Greece, and still more money is poured into Greece, it will default on March 20 when a €14.5 billion bond repayment is due.
Global Economic
Trend Analysis
Former ECB president Jean Claude Trichet said there would be no haircuts. There were. The first Greek haircut was 21% and it was insufficient. The second Greek haircut deal was 50% and that too was insufficient. On each failed attempt, the ECB and EMU poured more money into Greece.
There is now about €200bn of Greek debt held by banks, hedge funds and other investors up from about €50bn a couple years ago.
A third renegotiation is now underway, rumored to be a 68% haircut. Clearly there would have been far fewer ramification on banks if Greece would have defaulted long ago.
Such is the stubborn arrogance of ECB, and EMU officials.
Unless another haircut is approved Greece, and still more money is poured into Greece, it will default on March 20 when a €14.5 billion bond repayment is due.
18 January 2012
SilverDoctors: Time to Bunker In With Phyzz
SilverDoctors: Time to Bunker In With Phyzz: From AGXIIK: As my thinking has evolved from trading paper to owning some and then more silver and gold, my conclusions are changing, shif...
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ROFLMAOAAPMP, By The Way, I Think You Suck...In A Bad Way (Why Gold-Related Investments Are Slowly Becoming Worthless)
By: John Lindauer
Bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla,
Beware of Gold-related Investments
Since the gold standard won't be back investors should be wary of buying gold or the shares of gold-related companies because someone claims gold will always have value, or suggests gold may again "back" the dollar or some other currency, or claims that having gold associated with our currency would somehow "fix" inflation or enhance the value of and stability of the dollar.
The reality of today's world is that gold won't return to its previous eminence and its long-run price prospects are poor. But as a great economist once pointed out "in the long run we're all dead." In other words, in our lifetimes gold will always be in demand at some price and that price will fluctuate around gold's trend of long-term decline. The decline is under way. It began when nations went off gold backing for their currencies, dentistry advanced, and hundreds of millions of women in underdeveloped counties began to have access to banks, stock markets, and other ways to store their wealth and earn an income from it at the same time.
In our lifetimes the price of gold will continue its long downward spiral in response to gold's basic underlying market forces. On the other hand, the price of gold on any particular day will fluctuate, often significantly, as new buyers and sellers appear - so some traders will make lots of money and some will lose.
If you must read the hole nonsense, please don't:
http://seekingalpha.com/article/319486-why-gold-related-investments-are-slowly-becoming-worthless?source=yahoo
Bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla, bla,
Beware of Gold-related Investments
Since the gold standard won't be back investors should be wary of buying gold or the shares of gold-related companies because someone claims gold will always have value, or suggests gold may again "back" the dollar or some other currency, or claims that having gold associated with our currency would somehow "fix" inflation or enhance the value of and stability of the dollar.
The reality of today's world is that gold won't return to its previous eminence and its long-run price prospects are poor. But as a great economist once pointed out "in the long run we're all dead." In other words, in our lifetimes gold will always be in demand at some price and that price will fluctuate around gold's trend of long-term decline. The decline is under way. It began when nations went off gold backing for their currencies, dentistry advanced, and hundreds of millions of women in underdeveloped counties began to have access to banks, stock markets, and other ways to store their wealth and earn an income from it at the same time.
In our lifetimes the price of gold will continue its long downward spiral in response to gold's basic underlying market forces. On the other hand, the price of gold on any particular day will fluctuate, often significantly, as new buyers and sellers appear - so some traders will make lots of money and some will lose.
The only thing certain is that long-term investors will lose as the price of gold continues to inexorably trend toward the cost of storing it. Long-term investors should sell their gold and gold-related stocks as soon as possible.
That's what I think will happen and what gold investors should do. What do you think?
If you must read the hole nonsense, please don't:
http://seekingalpha.com/article/319486-why-gold-related-investments-are-slowly-becoming-worthless?source=yahoo
SilverDoctors: Propaganda of the Day: 'Long Term Outlook for Gold...
SilverDoctors: Propaganda of the Day: 'Long Term Outlook for Gold...: Just when you thought you had seen it all with shills denigrating gold and silver with illogical and blatantly false arguments, we have this...
At last Financial Times notices that central banks do shady things with gold
By Jack Farchy
Financial Times, London
Tuesday, January 17, 2012
Central banks increased the amount of gold they lent for the first time in a decade in 2011, as they used their bullion reserves to help commercial banks raise US dollars.
Although central banks hold one sixth of all the gold ever mined in their reserves, their activities in the bullion market are opaque, with not a single institution revealing its day-to-day operations. In addition to holding gold for their reserves, some central banks also trade the metal, lending it on the open market in order to obtain a yield.
Thomson Reuters GFMS, the precious metal consultancy that publishes benchmark statistics on the gold market, on Tuesday said that the quantity of gold lent by central banks had risen last year for the first time since 2000.
The estimate by GFMS confirms a trend that bankers and gold traders have been privately discussing for the past six months. The increase in lending came as eurozone commercial banks, suffering a shortage of dollar liquidity, rushed to borrow gold from central banks and later swap it on the market in exchange for dollars.
"There is growing evidence that short-term loans from some central banks to commercial banks could well have increased considerably [in 2011], with the latter then using gold to swap for US dollars," GFMS said.
As the squeeze in the dollar funding markets intensified, short-term interest rates for lending gold fell to record lows in late 2011. The rate for lending gold for one month fell to -0.57 per cent in early December, implying that a bank would have to pay to swap it for dollars.
Financial Times, London
Tuesday, January 17, 2012
Central banks increased the amount of gold they lent for the first time in a decade in 2011, as they used their bullion reserves to help commercial banks raise US dollars.
Although central banks hold one sixth of all the gold ever mined in their reserves, their activities in the bullion market are opaque, with not a single institution revealing its day-to-day operations. In addition to holding gold for their reserves, some central banks also trade the metal, lending it on the open market in order to obtain a yield.
Thomson Reuters GFMS, the precious metal consultancy that publishes benchmark statistics on the gold market, on Tuesday said that the quantity of gold lent by central banks had risen last year for the first time since 2000.
The estimate by GFMS confirms a trend that bankers and gold traders have been privately discussing for the past six months. The increase in lending came as eurozone commercial banks, suffering a shortage of dollar liquidity, rushed to borrow gold from central banks and later swap it on the market in exchange for dollars.
"There is growing evidence that short-term loans from some central banks to commercial banks could well have increased considerably [in 2011], with the latter then using gold to swap for US dollars," GFMS said.
As the squeeze in the dollar funding markets intensified, short-term interest rates for lending gold fell to record lows in late 2011. The rate for lending gold for one month fell to -0.57 per cent in early December, implying that a bank would have to pay to swap it for dollars.
Iran's Al Qods cells for Saudi Arabia, Turkey, Kuwait to hit oil and US targets
DEBKAfile Exclusive Report January 18, 2012, 10:39 AM (GMT+02:00)
In the past 48 hours, Saudi Arabia, Kuwait and Turkey have alerted Washington to intelligence reports of Iranian Al Qods Brigades operatives heading their way for attacks on oil installations and American targets. The alert was accompanied by a query about how the US intended to respond to the approaching menace.
Reporting this, debkafile’s intelligence and counterterrorism sources say the information relayed to Washington was more detailed and specific than the customary tip-off.
Tuesday, Jan. 17, a US spokesman accused Tehran of deepening its involvement in the Syrian conflict. For the second time in a week, Washington disclosed that Al Qods commander Gen. Qassem Soleimani had visited Damascus recently, confirming Iranian arms shipments for ensuring President Bashar Assad's victory over the uprising against him.
Gen. Qassem Soleimani, Al Qods commander
In the past 48 hours, Saudi Arabia, Kuwait and Turkey have alerted Washington to intelligence reports of Iranian Al Qods Brigades operatives heading their way for attacks on oil installations and American targets. The alert was accompanied by a query about how the US intended to respond to the approaching menace.
Reporting this, debkafile’s intelligence and counterterrorism sources say the information relayed to Washington was more detailed and specific than the customary tip-off.
Tuesday, Jan. 17, a US spokesman accused Tehran of deepening its involvement in the Syrian conflict. For the second time in a week, Washington disclosed that Al Qods commander Gen. Qassem Soleimani had visited Damascus recently, confirming Iranian arms shipments for ensuring President Bashar Assad's victory over the uprising against him.
IMF Seeks $500B Boost to Lending Resources
By Simon Kennedy - Jan 18, 2012 7:09 PM GMT+0100
The International Monetary Fund is proposing to raise its lending capacity by as much as $500 billion to insulate the global economy against any worsening of Europe’s debt crisis.
The Washington-based lender is aiming to increase its resources after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement. The IMF is studying options and will not comment further until it has consulted its members, the fund said. To incorporate a cash buffer, the lender is seeking a total $600 billion.
IMF Managing Director Christine Lagarde said yesterday her staff is looking at ways to expand the fund’s war-chest, which currently has about $385 billion available. While euro-region nations have already pledged to contribute 150 billion euros ($192 billion), the U.S. has said it has no plans to make new bilateral loans and leaders of Group of 20 nations ended last year at odds over the issue.
The International Monetary Fund is proposing to raise its lending capacity by as much as $500 billion to insulate the global economy against any worsening of Europe’s debt crisis.
The Washington-based lender is aiming to increase its resources after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement. The IMF is studying options and will not comment further until it has consulted its members, the fund said. To incorporate a cash buffer, the lender is seeking a total $600 billion.
IMF Managing Director Christine Lagarde said yesterday her staff is looking at ways to expand the fund’s war-chest, which currently has about $385 billion available. While euro-region nations have already pledged to contribute 150 billion euros ($192 billion), the U.S. has said it has no plans to make new bilateral loans and leaders of Group of 20 nations ended last year at odds over the issue.
Fed Officials Open to Additional Easing as They Monitor Risks to Economy
By Craig Torres - Jan 18, 2012 6:02 PM GMT+0100
Federal Reserve officials are staying open to further monetary easing this year as they monitor risks that threaten to move the economy further away from their mandate for stable prices and full employment.
Atlanta Fed President Dennis Lockhart told reporters Jan. 9 that he hadn’t closed out “the option” for more stimulus, while New York Fed President William C. Dudley said in a Jan. 6 speech that it’s “appropriate” to evaluate whether the Fed could do more to boost growth. Both are voting members of the Federal Open Market Committee.
Among the possible triggers for action, according to Ethan Harris, co-head of global economic research at Bank of America Merrill Lynch in New York: a slump in U.S. gross domestic product caused by a European recession, a more rapid slide in U.S. inflation than anticipated, and deteriorating U.S. payroll growth.
Federal Reserve officials are staying open to further monetary easing this year as they monitor risks that threaten to move the economy further away from their mandate for stable prices and full employment.
Atlanta Fed President Dennis Lockhart told reporters Jan. 9 that he hadn’t closed out “the option” for more stimulus, while New York Fed President William C. Dudley said in a Jan. 6 speech that it’s “appropriate” to evaluate whether the Fed could do more to boost growth. Both are voting members of the Federal Open Market Committee.
Among the possible triggers for action, according to Ethan Harris, co-head of global economic research at Bank of America Merrill Lynch in New York: a slump in U.S. gross domestic product caused by a European recession, a more rapid slide in U.S. inflation than anticipated, and deteriorating U.S. payroll growth.
Iran: Russia Warns West Attack Would be Catastrophic
By Palash R. Ghosh: Subscribe to Palash's RSS feed
January 18, 2012 12:15 PM EST
As tensions between Iran and the west escalate over Tehran’s nascent nuclear weapons program, the Russian foreign minister has warned that any military attack upon Iran would be a “catastrophe.”
Sergei Lavrov also said such a measure would prompt "large flows" of refugees from Iran and would also "fan the flames" of sectarian conflicts across the Middle East.
"As for the chances of this catastrophe happening, you would have to ask those constantly mentioning it as an option that remains on the table," Lavrov told reporters in Moscow, referring directly to Israel and the U.S.
"I have no doubt in the fact that [an attack] will only add fuel to the fire of the still-simmering Sunni-Shiite conflict. And I do not know where the subsequent chain reaction will end. There will be large flows of refugees from Iran, including to Azerbaijan, and from Azerbaijan to Russia. This will not be a walk in the park.”
World Bank Warns of Global Recession
By Moran Zhang: Subscribe to Moran's RSS feed
January 18, 2012 12:18 PM EST
The World Bank warned Wednesday that the global economy is on the cusp of a new financial crisis, one similar in magnitude to the chaos following the collapse of Lehman Brothers in 2008.
The Washington-based institution slashed its global growth forecast by the most in three years and urged developing countries to prepare for further downside risks as the Eurozone's debt crisis deepens.
"The global economy is entering into a new phase of uncertainty and danger," the bank's chief economist, Justin Yifu Lin, said in a statement. "The risks of a global freezing up of capital markets as well as a global crisis similar to what happened in September 2008 are real."
The bank's latest forecast marks an abrupt downturn in its outlook. Just six months ago, the bank forecast the world economy growing at 3.6 percent in 2012; now it has shaved 1.1 percentage points off of global growth, projecting a 2.5 percent growth this year. Emerging countries are expected to grow 5.4 percent, down from 6.2 percent previously projected, while developed countries will expand 1.4 percent, down from 2.7 percent. For the 17 countries using Europe's single currency, the World Bank forecast a contraction, cutting their growth outlook to negative 0.3 percent from a positive 1.8 percent.
Iran, the US and the Strait of Hormuz crisis
Source: Stratfor.com , Author: George Friedman
Posted: Wed January 18, 2012 4:06 pm
INTERNATIONAL. The United States reportedly sent a letter to Iran via multiple intermediaries last week warning Tehran that any attempt to close the Strait of Hormuz constituted a red line for Washington.
The same week, a chemist associated with Iran's nuclear program was killed in Tehran. In Ankara, Iranian parliamentary speaker Ali Larijani met with Turkish officials and has been floating hints of flexibility in negotiations over Iran's nuclear program.
This week, a routine rotation of U.S. aircraft carriers is taking place in the Middle East, with the potential for three carrier strike groups to be on station in the U.S. Fifth Fleet's area of operations and a fourth carrier strike group based in Japan about a week's transit from the region.
Next week, Gen. Michael Dempsey, chairman of the Joint Chiefs of Staff, will travel to Israel to meet with senior Israeli officials. And Iran is scheduling another set of war games in the Persian Gulf for February that will focus on the Islamic Revolutionary Guard Corps' irregular tactics for closing the Strait of Hormuz.
While tensions are escalating in the Persian Gulf, the financial crisis in Europe has continued, with downgrades in France's credit rating the latest blow. Meanwhile, China continued its struggle to maintain exports in the face of economic weakness among its major customers while inflation continued to increase the cost of Chinese exports.
Silver Price Forecast 2012: Silver’s 2011 Big Move – Was It The End Or The Beginning?
January 18, 2012 Leave a Comment
Silver Price Forecast 2012: Silver Likely To Make Explosive Move
The price of a good often behaves in a similar manner at or around the same kind of milestone. An example of such a milestone could be a significant top. Price often forms a similar type of pattern at different significant tops – different in terms of time of occurrence. This is a reflection of how market participants themselves often behave in a similar manner when faced with the same kind of situation. This of course makes perfect sense, since it is normal, for example, to rest after you have been extremely busy for a while. For most people, this is true whether it was yesterday, or in 20 years.
In the current silver market, there are some similarities as compared with the 1970s. There are also things that are much different today, in the economic landscape, compared with that of the 1970s. One of the significant things that is different now is the fact that debt levels, relative to GDP, are extremely high compared with the seventies.
In my opinion, this is one of the main reasons why we are likely to have a massive Depression this time around.
Here, I would like to illustrate how the silver price behaves in a similar manner, today, compared with the 1970s. Below is a graphic that compares the silver price chart of January 1978—August 1979 to the period from January 2009—present (charts generated at barchart.com):
Silver Price Forecast 2012: Silver Likely To Make Explosive Move
The price of a good often behaves in a similar manner at or around the same kind of milestone. An example of such a milestone could be a significant top. Price often forms a similar type of pattern at different significant tops – different in terms of time of occurrence. This is a reflection of how market participants themselves often behave in a similar manner when faced with the same kind of situation. This of course makes perfect sense, since it is normal, for example, to rest after you have been extremely busy for a while. For most people, this is true whether it was yesterday, or in 20 years.
In the current silver market, there are some similarities as compared with the 1970s. There are also things that are much different today, in the economic landscape, compared with that of the 1970s. One of the significant things that is different now is the fact that debt levels, relative to GDP, are extremely high compared with the seventies.
In my opinion, this is one of the main reasons why we are likely to have a massive Depression this time around.
Here, I would like to illustrate how the silver price behaves in a similar manner, today, compared with the 1970s. Below is a graphic that compares the silver price chart of January 1978—August 1979 to the period from January 2009—present (charts generated at barchart.com):
IMF Proposes Trillion Dollar Lending Expansion
Here's a dead on arrival proposal: IMF Proposes Trillion Dollar Lending Expansion
Most European stocks rose, erasing earlier losses, as the International Monetary Fund was said to propose a $1 trillion expansion of its lending resources. Asian shares and U.S. index futures advanced.
The IMF is proposing an expansion of its lending resources to safeguard the global economy against any worsening of Europe’s debt crisis, according to an official at a Group of 20 nation. The lender is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors, according to the official, who spoke on condition of anonymity because the talks are private.
Most European stocks rose, erasing earlier losses, as the International Monetary Fund was said to propose a $1 trillion expansion of its lending resources. Asian shares and U.S. index futures advanced.
The IMF is proposing an expansion of its lending resources to safeguard the global economy against any worsening of Europe’s debt crisis, according to an official at a Group of 20 nation. The lender is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors, according to the official, who spoke on condition of anonymity because the talks are private.
Our exponential debt system
The word “debt crisis“ has made it into everyone’s vocabulary by now. People are talking about how we were “living beyond our means” and are debating how spending cuts, tax raises or some combination of the two could be used to salvage the situation. However, often times there is a gross misunderstanding about why there is so much debt in the first place and why it seems to constantly grow. Many people fail to see that growth within our current monetary system relies on exponential increases in debt.
To understand the debt crisis, you have to understand that in reality this is a “money crisis”. Let me explain this further.
Today, all money is created in the banking system. It originates from the central bank and is brought into existence by an extension of its balance sheet. This means that there it is a simple booking entry: new money on the liabilities side, and debt on the assets side. Yes that’s right: money is created through credit – which is nothing but a nice word for debt. In contrast to most of human history – where money has been a tangible asset with intrinsic value attached to it, such as gold and silver – today all dollars, euros, pounds and all other currencies are based on debt. This is taken on by governments, companies and private citizens all over the globe. Implicit in this is trust on the part of lenders that this debt will be repaid one day in the future.
So what's the problem? Let’s say you take out a loan for $100. The money you receive will be created from nothing once you sign the paper to take out the loan and you are then obligated to pay back $105 after say one year. Now here is the all-deciding question: Where is the interest coming from that you need to pay back the loan? At the moment the only money in circulation is your $100. The only way to solve this riddle is that somebody somewhere in the economy has to take out another loan to create the money that enables you to pay back the first loan.
To sum up: In a debt based fiat money world there will always be debt for if there was no debt there would be no money. Since debt is not paid off, the compounding interest on it forces us to grow at the same pace. Since this experiment has failed we are now facing the collapse of this debt system. Prepare yourself accordingly by diversifying into tangible assets such as gold and silver, and by educating yourself and your loved ones about the nature of the economic challanges they are likely to face in the years ahead.
To understand the debt crisis, you have to understand that in reality this is a “money crisis”. Let me explain this further.
Today, all money is created in the banking system. It originates from the central bank and is brought into existence by an extension of its balance sheet. This means that there it is a simple booking entry: new money on the liabilities side, and debt on the assets side. Yes that’s right: money is created through credit – which is nothing but a nice word for debt. In contrast to most of human history – where money has been a tangible asset with intrinsic value attached to it, such as gold and silver – today all dollars, euros, pounds and all other currencies are based on debt. This is taken on by governments, companies and private citizens all over the globe. Implicit in this is trust on the part of lenders that this debt will be repaid one day in the future.
So what's the problem? Let’s say you take out a loan for $100. The money you receive will be created from nothing once you sign the paper to take out the loan and you are then obligated to pay back $105 after say one year. Now here is the all-deciding question: Where is the interest coming from that you need to pay back the loan? At the moment the only money in circulation is your $100. The only way to solve this riddle is that somebody somewhere in the economy has to take out another loan to create the money that enables you to pay back the first loan.
To sum up: In a debt based fiat money world there will always be debt for if there was no debt there would be no money. Since debt is not paid off, the compounding interest on it forces us to grow at the same pace. Since this experiment has failed we are now facing the collapse of this debt system. Prepare yourself accordingly by diversifying into tangible assets such as gold and silver, and by educating yourself and your loved ones about the nature of the economic challanges they are likely to face in the years ahead.
Sprott Physical Silver Trust Prices Follow-on Offering of Trust Units in an Aggregate Amount of US$303,600,000
TORONTO, ONTARIO--(Marketwire - Jan. 18, 2012) - Sprott Physical Silver Trust (the "Trust") (TSX:PHS.U)(NYSE:PSLV), a trust created to invest and hold substantially all of its assets in physical silver bullion and managed by Sprott Asset Management LP, announced today that it has priced its follow-on offering of 23,000,000 transferable, redeemable units of the Trust ("Units") at a price of US$13.20 per Unit (the "Offering"). As part of the Offering, the Trust has granted the underwriters an over-allotment option to purchase up to 3,450,000 additional Units. The gross proceeds from the Offering will be US$303,600,000 (US$349,140,000 if the underwriters exercise in full the over-allotment option).
The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per Unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering.
The Units are listed on the NYSE Arca and the Toronto Stock Exchange under the symbols "PSLV" and "PHS.U", respectively. The Offering will be made simultaneously in the United States and Canada by underwriters led by Morgan Stanley and RBC Capital Markets in the United States and RBC Capital Markets and Morgan Stanley in Canada.
The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per Unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering.
The Units are listed on the NYSE Arca and the Toronto Stock Exchange under the symbols "PSLV" and "PHS.U", respectively. The Offering will be made simultaneously in the United States and Canada by underwriters led by Morgan Stanley and RBC Capital Markets in the United States and RBC Capital Markets and Morgan Stanley in Canada.
EU Threatens Hungary With Lawsuit Over Central Bank Law
By Jonathan Stearns
(Updates with Hungarian government reaction starting in seventh paragraph, Verhofstadt in ninth.)
Jan. 17 (Bloomberg) -- The European Union threatened a lawsuit against Hungary for encroaching on the central bank’s independence, pressing Prime Minister Viktor Orban to resolve a dispute that halted talks on international aid for the country.
The European Commission, the EU’s regulatory arm, also started infringement proceedings against Orban’s government for political meddling with the judiciary and the data-protection authority. The commission is sending a warning letter about each of the three matters and ordering Hungary to bring its legislation into line with EU standards to avoid court cases.
“The decisions we have taken are a reflection of our determination to make sure that EU law, both in letter and in spirit, are fully respected,” commission President Jose Barroso told reporters today in Strasbourg, France. “We do not want the shadow of doubt on respect for democratic principles and values to remain over the country any longer.”
(Updates with Hungarian government reaction starting in seventh paragraph, Verhofstadt in ninth.)
Jan. 17 (Bloomberg) -- The European Union threatened a lawsuit against Hungary for encroaching on the central bank’s independence, pressing Prime Minister Viktor Orban to resolve a dispute that halted talks on international aid for the country.
The European Commission, the EU’s regulatory arm, also started infringement proceedings against Orban’s government for political meddling with the judiciary and the data-protection authority. The commission is sending a warning letter about each of the three matters and ordering Hungary to bring its legislation into line with EU standards to avoid court cases.
“The decisions we have taken are a reflection of our determination to make sure that EU law, both in letter and in spirit, are fully respected,” commission President Jose Barroso told reporters today in Strasbourg, France. “We do not want the shadow of doubt on respect for democratic principles and values to remain over the country any longer.”
17 January 2012
Covert QE Begins in Europe
Posted by Brittany Stepniak - Tuesday, January 17th, 2012
The Fed and central banks are off to a questionable start this year...
Quantitative easing has already begun in Europe. And they've got the U.S. to thank for the bail out.
"Essentially, we just bailed out Europe’s banking system with the full faith and credit of the United States" according to the New York Post's Jonathon Trugman. He goes on:
"Most Americans associate a covert action with the CIA, not the Fed. But that’s exactly what Ben Bernanke did at the end of November...In reality, the Federal Reserve has just extended essentially unlimited lines of credit, camouflaged as a swap to the world in US dollars."
Here's a run down on why you should be concerned:
* The Fed essentially borrows or is backed up by US taxpayers, already in debt through mortgages, credit cards, student loans.
* The ECB in turn borrows from the Fed and then leverages that money up under its ECB umbrella.
* The ECB then lends it out to 523 of Europe’s most overleveraged banks.
* The desperate banks keep some to fortify their balance sheets, and use the rest to buy sovereign debt in some of the most overleveraged countries in the world, like Italy and Spain, which were just downgraded Friday by S&P.
The Fed and central banks are off to a questionable start this year...
Quantitative easing has already begun in Europe. And they've got the U.S. to thank for the bail out.
"Essentially, we just bailed out Europe’s banking system with the full faith and credit of the United States" according to the New York Post's Jonathon Trugman. He goes on:
"Most Americans associate a covert action with the CIA, not the Fed. But that’s exactly what Ben Bernanke did at the end of November...In reality, the Federal Reserve has just extended essentially unlimited lines of credit, camouflaged as a swap to the world in US dollars."
Here's a run down on why you should be concerned:
* The Fed essentially borrows or is backed up by US taxpayers, already in debt through mortgages, credit cards, student loans.
* The ECB in turn borrows from the Fed and then leverages that money up under its ECB umbrella.
* The ECB then lends it out to 523 of Europe’s most overleveraged banks.
* The desperate banks keep some to fortify their balance sheets, and use the rest to buy sovereign debt in some of the most overleveraged countries in the world, like Italy and Spain, which were just downgraded Friday by S&P.
Gold & Silver Banker-Cartel Prolonged Price Suppression Has Set the Foundation for an Explosive Move Higher in 2012
At the end of last year, there was a lot of chatter on the internet, due to the end-of-the year slam down effected on gold and silver futures by the global banking cartel, that silver prices were going go collapse to $20 an ounce and gold prices were going to collapse well below $1000 an ounce by the first quarter of 2012. We felt that these discussions and the consequent, induced panic selling out of gold/silver mining stocks and physical gold/silver at the end of 2011 was highly unwarranted and the result of people falling for the global banking cartel price suppression tricks. In fact, we sent Special Alerts to all of our clients at the end of 2011 informing them that the banking cartel often paints charts in gold and silver to fool people and that one cannot make accurate predictive behavior based upon the assessment of technical charts alone.
Today, there are still many reasons to expect a stellar next couple of years from gold and silver performance, including the mining stocks. From a technical standpoint, gold and silver appear to be on the verge of making a very significant run higher. I’m not saying that this will happen tomorrow, but it does look very probable within a short-time period. From a manipulation factor standpoint, gold and silver also look poised for a run higher too. So the two factors I use to assess gold and silver’s direction both appear aligned with one another to move gold and silver higher very soon.
Today, there are still many reasons to expect a stellar next couple of years from gold and silver performance, including the mining stocks. From a technical standpoint, gold and silver appear to be on the verge of making a very significant run higher. I’m not saying that this will happen tomorrow, but it does look very probable within a short-time period. From a manipulation factor standpoint, gold and silver also look poised for a run higher too. So the two factors I use to assess gold and silver’s direction both appear aligned with one another to move gold and silver higher very soon.
Joint US-Israel drill called off by Netanyahu, to Washington's surprise
DEBKAfile Exclusive Report January 17, 2012, 12:36 PM (GMT+02:00)
debkafile's sources disclose exclusively that, contrary to recent reports published in Washington, Jerusalem - and this site too - it was Israel Prime Minister Binyamin Netanyahu, not the Obama administration, who decided to call off the biggest ever joint US-Israeli military exercise Austere Challenge 12 scheduled for April 2012.
Washington was taken aback by the decision. It was perceived as a mark of Israel's disapproval for the administration's apparent hesitancy in going through with the only tough sanctions with any chance of working against Iran's nuclear weapon program: penalizing its central bank and blocking payments for its petroleum exports.
This was the first time Israel had ever postponed a joint military exercise; it generated a seismic moment in relations between the US and Israel at a time when Iran has never been so close to producing a nuclear weapon.
debkafile's sources disclose exclusively that, contrary to recent reports published in Washington, Jerusalem - and this site too - it was Israel Prime Minister Binyamin Netanyahu, not the Obama administration, who decided to call off the biggest ever joint US-Israeli military exercise Austere Challenge 12 scheduled for April 2012.
Washington was taken aback by the decision. It was perceived as a mark of Israel's disapproval for the administration's apparent hesitancy in going through with the only tough sanctions with any chance of working against Iran's nuclear weapon program: penalizing its central bank and blocking payments for its petroleum exports.
This was the first time Israel had ever postponed a joint military exercise; it generated a seismic moment in relations between the US and Israel at a time when Iran has never been so close to producing a nuclear weapon.
China, Hub of the Global Gold Market?
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - GoldForecaster.com
The growth of China’s presence in the global gold market has been phenomenal in the last dozen years. Prior to this century, HSBC sent a delegation from their London gold department to see the Chinese financial authorities and were rebuffed as ‘trying to sell gold to China’. Since then, the Chinese financial authorities switched on and set off with a purpose.
In 2001, the Chinese government lifted its final controls on the gold market, releasing a pent-up demand that since then has become stronger. From 2001 to 2010, China's annual consumption of gold grew at a 7.5% compounded annual growth rate. This chart shows how China's demand for gold jewelry has increased from just over 15.55 tonnes [500,000 ounces] in the late 1980’s to over 373.25 tonnes [12 million ounces] at the end of 2010, in spite of gold going from $200 $1,650 an ounce.
The growth of China’s presence in the global gold market has been phenomenal in the last dozen years. Prior to this century, HSBC sent a delegation from their London gold department to see the Chinese financial authorities and were rebuffed as ‘trying to sell gold to China’. Since then, the Chinese financial authorities switched on and set off with a purpose.
In 2001, the Chinese government lifted its final controls on the gold market, releasing a pent-up demand that since then has become stronger. From 2001 to 2010, China's annual consumption of gold grew at a 7.5% compounded annual growth rate. This chart shows how China's demand for gold jewelry has increased from just over 15.55 tonnes [500,000 ounces] in the late 1980’s to over 373.25 tonnes [12 million ounces] at the end of 2010, in spite of gold going from $200 $1,650 an ounce.
Gold is the most favoured asset in 2012: Nomura investor poll
Bullion Vault
A Survey of investors carried out by Japanese investment bank Nomura has found Buying Gold to be this year's number one investment choice.
The poll found that 19.5% of the 164 investors said they would Buy Gold and hold it to the end of the year. The next favourite assets were stocks and developed market investment grade corporate bonds, into which around 13% of respondents said they would invest money.
A Survey of investors carried out by Japanese investment bank Nomura has found Buying Gold to be this year's number one investment choice.
The poll found that 19.5% of the 164 investors said they would Buy Gold and hold it to the end of the year. The next favourite assets were stocks and developed market investment grade corporate bonds, into which around 13% of respondents said they would invest money.
Graphical Representations of Bernanke's Effort to Stimulate Bank Lending
Bernanke is trying every way he can to get banks to lend (printing coupled with a multitude of lending facilities and Fed programs).
It's easy enough to prove the printing: Base money supply is up about $1.8 trillion since the start of the recession.
Base Money Supply
It's easy enough to prove the printing: Base money supply is up about $1.8 trillion since the start of the recession.
Base Money Supply
Portugal Downgraded to Junk; Bond Yields Soar; Record Spread vs. Germany; Portugal to Follow Greece Into Default Abyss
Portugal is poised to quickly follow Greece into the default abyss following a debt downgrade to junk status by the S&P on Friday.
The Wall Street Journal reports Portugal's Bond Yields Rise Sharply After Rating Cut To Junk
Portuguese borrowing costs rose sharply Monday as some investors were forced to sell their government bond holdings after Standard and Poor's Corp. downgraded the country to junk status late Friday.
The Wall Street Journal reports Portugal's Bond Yields Rise Sharply After Rating Cut To Junk
Portuguese borrowing costs rose sharply Monday as some investors were forced to sell their government bond holdings after Standard and Poor's Corp. downgraded the country to junk status late Friday.
Revisiting Our Proposal for an Overnight Gold Fund
Saturday, January 14, 2012 at 11:18PM
In August 2010 we wrote an article entitled “Proposing An Overnight Gold Fund” in which we explored the potential for launching a fund that held long positions in gold overnight and was short gold during the day. We pointed out that “a hedge fund starting in 2001 with $100m, with the strategy of being long gold from the PM to AM fix, and short gold from the AM to PM fix...would be worth $2.16billion today, before any fees and expenses.” We have been monitoring this trading strategy since then and therefore would like to take this opportunity to update readers on its astonishing progress.
Firstly we will introduce the thinking that led us to investigate this trading strategy. There is much debate within the precious metals industry regarding the alleged suppression, or at least manipulation to an extent, by either central banks or the proprietary trading divisions of large banks, or a combination of the two.
In April 2010 the US Commodity Futures Trading Commission CFTC fined Hedge Fund Moore Capital for manipulation of the New York platinum and palladium futures market, as the firm was found to be “banging the close”, which involves entering orders in a manner designed to inflate the closing price, which other various derivatives contracts could be based on. So that is irrefutable evidence that the precious metals futures market is, at least to some extent, being manipulated. However a large concentration of this debate is based not on platinum and palladium, but on gold and silver, and particularly gold.
In August 2010 we wrote an article entitled “Proposing An Overnight Gold Fund” in which we explored the potential for launching a fund that held long positions in gold overnight and was short gold during the day. We pointed out that “a hedge fund starting in 2001 with $100m, with the strategy of being long gold from the PM to AM fix, and short gold from the AM to PM fix...would be worth $2.16billion today, before any fees and expenses.” We have been monitoring this trading strategy since then and therefore would like to take this opportunity to update readers on its astonishing progress.
Firstly we will introduce the thinking that led us to investigate this trading strategy. There is much debate within the precious metals industry regarding the alleged suppression, or at least manipulation to an extent, by either central banks or the proprietary trading divisions of large banks, or a combination of the two.
In April 2010 the US Commodity Futures Trading Commission CFTC fined Hedge Fund Moore Capital for manipulation of the New York platinum and palladium futures market, as the firm was found to be “banging the close”, which involves entering orders in a manner designed to inflate the closing price, which other various derivatives contracts could be based on. So that is irrefutable evidence that the precious metals futures market is, at least to some extent, being manipulated. However a large concentration of this debate is based not on platinum and palladium, but on gold and silver, and particularly gold.
The Next Bubble in China’s Economy
We've battled this argument before, so we apologise if we repeat ourselves. But it needs to be said because the mainstream media continues to talk gibberish about China’s economy. This is the argument: a falling inflation rate in China allows the authorities to ease monetary policy to avert a hard landing. Or, as today's Financial Review puts it:
China's government has been given room to ease credit policy further to bolster growth in the world's second largest economy after inflation fell to a yearly pace of 4.1 per cent in December. The fall in the consumer price index from 4.2 per cent in November, down from a 37-month high of 6.5 per cent in July, is likely to increase Beijing's confidence that inflationary pressures are being brought under control while policymakers look to provide additional support to the economy as export demand slows and the housing market turns down.This simplistic view fails to take into account complex monetary mechanisms of China's economy. Firstly, China pegs its currency, the yuan, to the US dollar. And because China’s economy runs a trade surplus with the US, it ends up with excess US dollars. To maintain the peg and stop the yuan from appreciating, the People's Bank of China (PBoC) must print yuan to buy these excess dollars.
The dollars make their way into the vaults of the PBoC (and are known as foreign exchange 'FX' reserves) while the yuan make their way into the domestic banking system.
So, the build up in FX reserves matches the build-up in the reserves of the domestic banking system. The more reserves a bank has, the greater its lending power.
This is inflationary. And when the government encourages its banks to lend without discrimination, you tend to get things like property bubbles forming. In an attempt to offset this wildly inflationary impact, the PBoC raised reserve requirements.
But here's the point. Placing a higher reserve requirement on the banks was not an example of monetary policy 'tightening'. It was merely a way to try and neutralise the impact of an expanding FX account.
Recently, the PBoC began to lower the reserve requirement. According to most analysts, this represents an easing of monetary policy. But we disagree.
Let us explain why...
China's huge FX reserves are no longer growing. In fact, they are widely tipped to have contracted in the final quarter of 2011. Sensing the party is over, speculative money is quietly flowing back out of China’s economy. As FX reserves fall, so do banking system reserves. Left unchecked, this represents monetary policy tightening. A lower reserve requirement merely offsets the effect of falling FX reserves.
That's all pretty technical. If you're still following, we've got a much simpler reason why looser credit policies won't work in China - a lack of demand. Banks can supply all the credit they want. But unless there's a willing borrower, it's useless. Ask Ben Bernanke.
When a bubble bursts, as the property market in China has, the effect is financial and psychological. The emotion of greed (which fuels demand for credit) wanes. Fear (which restricts the flow of credit) takes over.
China's policy makers will now attempt to do what just about every policymaker since the South Sea bubble has done - reinflate. But as history has shown, you can't reinflate the same bubble. You just create others.
Where will China's next bubble appear? Hmmm...how about gold?
China's imports of physical gold via Hong Kong have soared in recent months, as the following chart from Reuters shows. In November alone, gold imports totalled nearly 103,000 kg.
Are Chinese citizens trying to protect themselves from falling property and equity markets? With deposit rates less than the inflation rate, there's no respite by placing funds in the banks either. Gold seems like a sensible option.
And judging by the volume of imports, there's a good chance the PBoC is in there buying too.
China merely took advantage of this stupidity.
But gold is not just going to be the next bubble in China. It will be international in scope.
President Obama has just asked Congress to raise the US debt ceiling, again, by US$1.2 trillion - to US$16.394 trillion. It's getting monotonous. You can't create gold at anywhere near the same rate or ease. The result? Gold will rise against all currencies.
Which brings us to the euro. Overnight, both Spain and Italy enjoyed successful bond auctions - courtesy of Mario Draghi, head of the European Central Bank. This is one deceptive bloke. While talking tough on the ECB's mandate not to finance sovereign nations, he's gone and done it anyway.
The ECB recently changed the rules on acceptable collateral. Europe's impaired banks can now hand the ECB the lowest, illiquid asset on their books. And the ECB will give them cash in return.
The banks can then use this cash to buy high-yielding sovereign debt, which they are clearly doing. The 'spread' - the difference between the cost of funds and the yield on the purchased debt - is huge, meaning a windfall for the banks.
This is a huge ponzi scheme and will end like all the others. It's just a matter of time. That's why Greece remains so important. If Greece defaults, the ponzi is over. The hedge funds (from yesterday's discussion on Greek debt ) know this and are rightly betting on Greece getting another bailout package.
But who's really getting bailed out? A large portion of the money due to Greece from the IMF simply goes to repaying existing debt holders - the majority of which are hedge funds. The term 'bailout' is Orwellian. The IMF and EU are really providing Greece with 'Default Deferral Funds'.
The system is a mess. Attempts to fix it are only causing deepening long- term problems.
Regards,
Greg Canavan
for The Daily Reckoning Australia
Putin, a thorn in Washington's flesh
By: F. William Engdahl Special to Salem-News.com
Why Putin?
The salient question is why Putin at this point? We need not look far for the answer. Washington and especially Barack Obama’s Administration don’t give a hoot about whether Russia is democratic or not. Their concern is the obstacle to Washington’s plans for Full Spectrum Dominance of the planet that a Putin Presidency will represent. According to the Russian Constitution, the President of the Russian Federation head of state, supreme commander-in-chief and holder of the highest office in the Russian Federation. He will take direct control of defense and foreign policy.
We must ask what policy? Clearly strong countermeasures against the blatant NATO encirclement of Russia with Washington’s dangerous ballistic missile installations around Russia will be high on Putin’s agenda. Hillary Clinton’s “reset” will be in the dustbin if it is not already. We can also expect a more aggressive use of Russia’s energy card with pipeline diplomacy to deepen economic ties between European NATO members such as Germany, France and Italy, ultimately weakening the EU support for aggressive NATO measures against Russia. We can expect a deepening of Russia’s turn towards Eurasia, especially with China, Iran and perhaps India to firm up the shaky spine of resistance to Washington’s New World Order plans.
It will take more than a few demonstrations in sub-freezing weather in Moscow and St. Petersburg by a gaggle of corrupt or shady opposition figures such as Nemtsov or Kasparov to derail Russia. What is clear is that Washington is pushing on all fronts—Iran and Syria, where Russia has a vital naval port, on China, now on Russia, and on the Eurozone countries led by Germany. It has the smell of an end-game attempt by a declining superpower.
The United States today is a de facto bankrupt nuclear superpower. The reserve currency role of the dollar is being challenged as never since Bretton Woods in 1944. That role along with maintaining the United States as the world’s unchallenged military power have been the basis of the American Century hegemony since 1945.
Weakening the role of the dollar in international trade and ultimately as reserve currency, China is now settling trade with Japan in bilateral currencies, side-stepping the dollar. Russia is implementing similar steps with her major trade partners. The primary reason Washington launched a full-scale currency war against the Euro in late 2009 was to preempt a growing threat that China and others would turn away from the dollar to the Euro as reserve currency. That is no small matter. In effect Washington finances its foreign wars in Iraq, Afghanistan, Syria, Libya and elsewhere through the fact that China and other trade surplus nations invest their surplus trade dollars in US government Treasury debt. Were that to shift significantly, US interest rates would rise substantially and the financial pressures on Washington would become immense.
Faced with growing erosion of her unchallenged global status as sole superpower, Washington appears now to be turning increasingly to raw military force to hold that. For that to succeed Russia must be neutralized along with China and Iran. This will be the prime agenda of whoever is next US President.
Why Putin?
The salient question is why Putin at this point? We need not look far for the answer. Washington and especially Barack Obama’s Administration don’t give a hoot about whether Russia is democratic or not. Their concern is the obstacle to Washington’s plans for Full Spectrum Dominance of the planet that a Putin Presidency will represent. According to the Russian Constitution, the President of the Russian Federation head of state, supreme commander-in-chief and holder of the highest office in the Russian Federation. He will take direct control of defense and foreign policy.
We must ask what policy? Clearly strong countermeasures against the blatant NATO encirclement of Russia with Washington’s dangerous ballistic missile installations around Russia will be high on Putin’s agenda. Hillary Clinton’s “reset” will be in the dustbin if it is not already. We can also expect a more aggressive use of Russia’s energy card with pipeline diplomacy to deepen economic ties between European NATO members such as Germany, France and Italy, ultimately weakening the EU support for aggressive NATO measures against Russia. We can expect a deepening of Russia’s turn towards Eurasia, especially with China, Iran and perhaps India to firm up the shaky spine of resistance to Washington’s New World Order plans.
It will take more than a few demonstrations in sub-freezing weather in Moscow and St. Petersburg by a gaggle of corrupt or shady opposition figures such as Nemtsov or Kasparov to derail Russia. What is clear is that Washington is pushing on all fronts—Iran and Syria, where Russia has a vital naval port, on China, now on Russia, and on the Eurozone countries led by Germany. It has the smell of an end-game attempt by a declining superpower.
The United States today is a de facto bankrupt nuclear superpower. The reserve currency role of the dollar is being challenged as never since Bretton Woods in 1944. That role along with maintaining the United States as the world’s unchallenged military power have been the basis of the American Century hegemony since 1945.
Weakening the role of the dollar in international trade and ultimately as reserve currency, China is now settling trade with Japan in bilateral currencies, side-stepping the dollar. Russia is implementing similar steps with her major trade partners. The primary reason Washington launched a full-scale currency war against the Euro in late 2009 was to preempt a growing threat that China and others would turn away from the dollar to the Euro as reserve currency. That is no small matter. In effect Washington finances its foreign wars in Iraq, Afghanistan, Syria, Libya and elsewhere through the fact that China and other trade surplus nations invest their surplus trade dollars in US government Treasury debt. Were that to shift significantly, US interest rates would rise substantially and the financial pressures on Washington would become immense.
Faced with growing erosion of her unchallenged global status as sole superpower, Washington appears now to be turning increasingly to raw military force to hold that. For that to succeed Russia must be neutralized along with China and Iran. This will be the prime agenda of whoever is next US President.
Noda Says Japan Must Heed Lessons From Europe’s Credit-Rating Downgrades
By Lily Nonomiya and Toru Fujioka - Jan 15, 2012 4:01 PM GMT+0100
Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world’s largest, is critical after Standard & Poor’s downgraded credit ratings on France, Austria and seven other European nations.
Europe’s fiscal situation “isn’t a house burning on the other side of the river,” Noda said on TV Tokyo Holdings Corp.’s program on Jan. 14. “We must have a great sense of crisis.”
Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015 to trim the soaring debt. S&P said in November Noda’s administration hadn’t made progress in tackling the public debt burden, an indication the credit-rating company may be preparing to lower the nation’s sovereign grade.
Japan’s government, which has enjoyed borrowing costs that are around 1 percent, wouldn’t be able to manage its finances if bond yields surged to 3 percent, Noda said last week. The country risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the Organization for Economic Cooperation and Development said on Nov. 28.
Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world’s largest, is critical after Standard & Poor’s downgraded credit ratings on France, Austria and seven other European nations.
Europe’s fiscal situation “isn’t a house burning on the other side of the river,” Noda said on TV Tokyo Holdings Corp.’s program on Jan. 14. “We must have a great sense of crisis.”
Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015 to trim the soaring debt. S&P said in November Noda’s administration hadn’t made progress in tackling the public debt burden, an indication the credit-rating company may be preparing to lower the nation’s sovereign grade.
Japan’s government, which has enjoyed borrowing costs that are around 1 percent, wouldn’t be able to manage its finances if bond yields surged to 3 percent, Noda said last week. The country risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the Organization for Economic Cooperation and Development said on Nov. 28.
Iran Cracks Down on Dollar Trades
By BILL SPINDLE, BENOÎT FAUCON and FARNAZ FASSIHI
Iranian authorities sent police into the streets of the capital Monday to crack down on informal currency trading and support the rial, signaling Iranians' heightened insecurity over their dwindling buying power and Tehran's increasingly hard-handed efforts to stave off economic panic.
The move follows last week's steep Iranian Central Bank interest-rate increase, a bid to try to stem the growing demand for U.S. dollars in the country as the economy lurches amid fears over a new round of sanctions promised by the U.S. and Europe.
Iran's rial currency has declined 40% to 55% against the dollar on the black market since December. Iranian inflation, meanwhile, now exceeds 20% a month, according to the Central Bank. While the rial has been falling for almost a year, the latest drop appeared to be triggered by a recent U.S. announcement that it would penalize companies that do business with Iran's Central Bank, and a proposed plan to ban Iranian oil purchases in the European Union later this year.
Iranian authorities sent police into the streets of the capital Monday to crack down on informal currency trading and support the rial, signaling Iranians' heightened insecurity over their dwindling buying power and Tehran's increasingly hard-handed efforts to stave off economic panic.
The move follows last week's steep Iranian Central Bank interest-rate increase, a bid to try to stem the growing demand for U.S. dollars in the country as the economy lurches amid fears over a new round of sanctions promised by the U.S. and Europe.
Iran's rial currency has declined 40% to 55% against the dollar on the black market since December. Iranian inflation, meanwhile, now exceeds 20% a month, according to the Central Bank. While the rial has been falling for almost a year, the latest drop appeared to be triggered by a recent U.S. announcement that it would penalize companies that do business with Iran's Central Bank, and a proposed plan to ban Iranian oil purchases in the European Union later this year.
Irish banks will shrink and shrink
January 16, 2012 Post by David McWilliams
The European debt crisis is moving swiftly to the next phase following the downgrade of France and the collapse of the Greek negotiations with its creditors last Friday night.
It is becoming increasingly obvious that there will be no deal in Greece. This is good news because it means the end of the pass-the-parcel-ponzi-scheme, whereby the bill for more and more institutional debt was passed on to more and more innocent people who had nothing to do with the debt in the first place.
Greece will default – as it should. The bondholders will get roasted – as they should – for making bad investments. The laws of capitalism will be allowed to do their thing. Debtors and creditors will pay – as they both should – with both parties sharing the cost.
Whether this leads to Greece being pushed out of the euro remains to be seen. An opportunistic play by a desperate Greek government might be a total default, followed by the reintroduction of a new currency and then the restart button is hit. Initially, it would be an international pariah, but over time it would recover.
The European debt crisis is moving swiftly to the next phase following the downgrade of France and the collapse of the Greek negotiations with its creditors last Friday night.
It is becoming increasingly obvious that there will be no deal in Greece. This is good news because it means the end of the pass-the-parcel-ponzi-scheme, whereby the bill for more and more institutional debt was passed on to more and more innocent people who had nothing to do with the debt in the first place.
Greece will default – as it should. The bondholders will get roasted – as they should – for making bad investments. The laws of capitalism will be allowed to do their thing. Debtors and creditors will pay – as they both should – with both parties sharing the cost.
Whether this leads to Greece being pushed out of the euro remains to be seen. An opportunistic play by a desperate Greek government might be a total default, followed by the reintroduction of a new currency and then the restart button is hit. Initially, it would be an international pariah, but over time it would recover.
GEAB N°61 is available! Global Systemic Crisis - 2012: The year of the world’s great geopolitical swing
According to LEAP/E2020, 2012 will in fact be the year of the world’s great geopolitical swing: a phenomenon which will without any doubt be the bearer of serious difficulties for most of the planet but which will also allow the emergence of geopolitical conditions favourable to an improvement of the situation in the years to come. Contrary to the previous years, 2012 will not be a “wasted” year, stuck in the “world before the crisis”, through lack of audacity, initiative and imagination on the part of the world’s leaders and because of people’s great passivity since the beginning of the crisis.
In addition in this issue, our team gives an in-depth analysis of the nature and consequences of a possible QE3 which the US Federal Reserve might launch in 2012 (4). Hoped for by some, dreaded by others, QE3 is generally presented as the ultimate weapon to save the US economy and financial system which, contrary to the dominating chatter of these last weeks, continues to deteriorate (5). Whether the FED launches out with QE3 or not, QE3 will be without any doubt the major financial event of 2012 whose consequences will mark the world financial and monetary system definitively. This GEAB issue will enable you to have a precise idea on the subject.
In addition in this issue, our team gives an in-depth analysis of the nature and consequences of a possible QE3 which the US Federal Reserve might launch in 2012 (4). Hoped for by some, dreaded by others, QE3 is generally presented as the ultimate weapon to save the US economy and financial system which, contrary to the dominating chatter of these last weeks, continues to deteriorate (5). Whether the FED launches out with QE3 or not, QE3 will be without any doubt the major financial event of 2012 whose consequences will mark the world financial and monetary system definitively. This GEAB issue will enable you to have a precise idea on the subject.
When Will Silver Make a New High?
By Andrey Dashkov, Research Analyst
In last week's Metals, Mining, and Money, Jeff Clark estimated that given the magnitude of the correction that started last September, it may take until May 2012 for gold to reach a new high. This week let's take a look at how long it may take for silver to rebound.
It's a commonly known fact that silver is more volatile than gold. Already in this decade, silver has risen by a factor of 12 from its ten-year low ($48.70 vs. $4.07), while gold has seen about a sevenfold climb ($255.95 vs. $1,895).
This volatility – as you'll see in a minute – holds for corrections as well. On average, silver's retreats have been deeper and longer than gold's. The three big gold corrections we looked at last week averaged 22.8%. Take a look at the three biggest for silver, along with how long it's taken to recover and establish new highs.
In last week's Metals, Mining, and Money, Jeff Clark estimated that given the magnitude of the correction that started last September, it may take until May 2012 for gold to reach a new high. This week let's take a look at how long it may take for silver to rebound.
It's a commonly known fact that silver is more volatile than gold. Already in this decade, silver has risen by a factor of 12 from its ten-year low ($48.70 vs. $4.07), while gold has seen about a sevenfold climb ($255.95 vs. $1,895).
This volatility – as you'll see in a minute – holds for corrections as well. On average, silver's retreats have been deeper and longer than gold's. The three big gold corrections we looked at last week averaged 22.8%. Take a look at the three biggest for silver, along with how long it's taken to recover and establish new highs.
(Click on image to enlarge)
SilverDoctors: Jim Willie: Large Physical Gold Orders Are Clearin...
SilverDoctors: Jim Willie: Large Physical Gold Orders Are Clearin...: Entire 3-part Jim Willie interview With the S&P massively downgrading the Eurozone nations Friday, The Doc interviewed Jim Willie of golden...
Part1:With the S&P massively downgrading the Eurozone nations Friday, The Doc interviewed Jim Willie of goldenjackass.com regarding his thoughts on the Euro crisis and the implications to gold and silver.
Part2:Part 2 focuses on gold, physical gold and silver tightness, and the decoupling of the price of actual physical metal from the paper futures price.
Part 3:Part 3 focuses on the future of silver and gold prices.
Part1:With the S&P massively downgrading the Eurozone nations Friday, The Doc interviewed Jim Willie of goldenjackass.com regarding his thoughts on the Euro crisis and the implications to gold and silver.
Part2:Part 2 focuses on gold, physical gold and silver tightness, and the decoupling of the price of actual physical metal from the paper futures price.
Part 3:Part 3 focuses on the future of silver and gold prices.
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