Exclusive – Marcus Grubb: “Gold Becoming More and More A Part of The Fabric of The [Global] Financial System”

January 23, 2012 | By Tekoa Da Silva |
I had the spectacular opportunity last week to speak with Marcus Grubb, Managing Director of Investment with the World Gold Council. It was an exciting interview to say the least, as the World Gold Council is the world’s preeminent gold organization whose member companies represent nearly 70% of global gold production.
During the interview, Marcus shared his thoughts on the changing global perception of gold by investors, governments, and central banks, efforts by the World Gold Council to catalyze global gold demand and delivery systems, as well as the future of gold in the world’s financial system.

Beginning the discussion with the mandate of the World Gold Council, Marcus said,“The World Gold Council is the market development organization for the world gold industry. It represents the mining producers; something close to 70% of mine production is represented by members of the World Gold Council…We have programs to promote gold demand on a worldwide basis, we produce research on the gold market, and we also invest in developing and creating new channels and new products to make gold more accessible, whether it be in jewelry, investment, technology, and we also speak to and lobby on official use of gold and communicate regularly with the central banks.”

QE3 may come in April, says Credit Suisse

Source: BI-ME with Bloomberg , Author: Posted by Bi-ME staff

Posted: Tue January 24, 2012 11:35 am

INTERNATIONAL. The Federal Reserve may implement a third round of quantitative easing this spring to bolster the economy, according to Credit Suisse Group AG’s Ira Jersey.

“We do think the Fed is going to do another round of asset purchases later in the quarter, probably aiming for April,” Jersey, director of U.S. rates strategy at Credit Suisse in New York, said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “We are growing, we just don’t feel prosperous. It is a part of the job of the Fed to assure prosperity, one of the ways to do that is to kick- start housing,”

The policy-making Federal Open Market Committee meets January 24-25. The central bank is forecast to keep its target for the federal funds rate at zero to 0.25 percent. The target has been at that level since December 2008 and the Fed has pledge to keep it there until mid-2013.

The central bank has purchased US$2.3 trillion of mortgage and government bonds in two rounds of so-called QE. In September, it announced plans to sell US$400 billion of short-term debt and use the proceeds to buy an equal amount of longer- maturity securities, in a program as nicknamed Operation Twist after a similar action in 1961 designed to contain borrowing costs for companies and consumers.

India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned

DEBKAfile Exclusive Report January 23, 2012, 5:57 PM (GMT+02:00)


India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.

The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.

$58-60 silver price by September says Dubai silver trader

Pop down to the Old Gold Souk in Deira, part of the modern city of Dubai and the hottest selling item is a 1kg bar of silver these days.
Karachi Jewellers told ArabianMoney yesterday they are selling 600 to 700 of these $1,300 bars each month with a 4.1 per cent profit margin.

More profitable than gold

‘It is far more profitable to trade silver than gold where the margin is much smaller,’ said director Ejaz Ilyas in a video to be broadcast on this website tomorrow.
‘We get a lot of passing tourists who buy 1kg silver bars. I was born in Dubai and spent most of my professional life in London but business is better here now. Even a modest shop in this souk does well.’

More QE on the Way

By Scott Silva

Editor, The Gold Speculator

There is an old saying around Wall Street: “So goes January, so goes the year.” Many traders believe that if the stock market is up in January, then the stock market will finish for the year in the black. Actually, there is some truth to the old saying. Data collected on the S&P 500 over the 65 year period of 1940-2004 show that the broad market closed higher for the year 69% of the time when stocks were up in January. Well, that’s better than flipping a coin, but it is hardly a basis for a successful trading strategy.

Fortunes are made by selecting the best investment compared to others. We have seen, for example, in 2011, stocks fared poorly compared to precious metals, investors in Treasurys lost capital and real estate values continued to decline. Many investors simply gave up and retreated to cash, which turned out to be a losing proposition as inflation cut into purchasing power of every dollar stashed away.

 

But there seems to be a change in sentiment in the air now. Despite massive debt, political gridlock, numbing high unemployment and turmoil abroad, there are some faint signs of optimism. The manufacturing indices have ticked up a bit, productivity has improved and even wages have inched up a bit. Consumer confidence is improving, and corporate profits may bring good news as the earnings season unfolds.

Even the Fed appears to be more optimistic. Last week, the Fed signaled it would hold off on new bond buying (QE3) for now, even though it trimmed its estimates for GDP growth for the New Year.

But not everyone is so sanguine about Fed restraint. Most traders and some economists believe the Fed will step in with another round of Quantitative Easing (QE3) in the first half of 2012. This round would be huge, as much as $1 Trillion and targeted to support the ailing housing market. Under QE3, the Fed would purchase Mortgage Backed Securities (MBS), the derivative instruments that bundle thousands of home mortgages into a single, collateralized package. Many MBS’s were considered “toxic” assets because they contained subprime mortgages that defaulted, making them very difficult to price in secondary markets. When enough MBS’s failed to fetch a bid, mark-to-market rules rendered them worthless, which destroyed many bank balance sheets and created the financial meltdown of 2008.

Silver Sales Up As Supply Slips

For the first time in history, Silver Eagle & Maple Leaf sales will surpass domestic silver production in the U.S. and Canada in 2011

Steve St. Angelo| January 23, 2012 - 4:52pm

The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years. 2011 will be the first year in which official coin sales will surpass domestic silver production in both countries.

Even though each country has seen declines in their domestic silver production over the past decade, U.S. silver production declined a whopping 30% yoy (year over year) in October. According to the USGS in their most recent Silver Mineral Industry Survey, silver production fell to 81,400 kilograms in October— compared to 117,000 kilograms the same time last year.

Silver Update 1/23/12 Interest Rates

China tiptoes to petrodollar recycling - China & UAE skips the US dollar and trade in Yuan

The currency swap agreement between China and the United Arab Emirates [UAE] signed during Premier Wen Jiabao’s tour of the Persian Gulf region ending today, will raise eyebrows in the western capitals, especially London and Washington. The list of countries with which China has such deals is slowly and steadily lengthening and this is the first such deal with a Gulf Cooperation Council [GCC] state.

The deal with the UAE is worth $5.5 billion — bilateral trade was $36 billion last year with Chinese exports accounting for two-thirds — and aims at “strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability”, according to the Chinese central bank. China is, in essence, providing ’seed money’ so that businessmen wouldn’t need to convert every transaction into dollars, thereby lowering the foreign exchange costs.
The cool reasoning here is practical convenience but its shadows inevitably fall on other domains. Clearly, the Middle East is being ’sensitized’ about the renminbi’s role. To be kept as reserve currency in the UAE vaults enhances renminbi’s prestige. For the UAE, keeping the mighty yuan is one of the safest thing they ever did in the world of high finance, as the appreciation of the Chinese currency in value is a near-certain happening in the future.
Beyond all that, the swap deal calls attention to China’s rapidly-growing economic links with the GCC region. It is a political statement of intent by China to boost ties with the UAE, which has been a ‘pocket borough’ of Britain, historically, in the Middle East. From the dhows, they are calling, ‘Yo, ho, Chinese are coming!’

Richard Russell: COMEX Gold & Silver Shorts in Do-or-Die Battle

David Morgan Silver Vancouver Canada January 22 2012 TheSilverWatch

Sprott Physical Silver Trust Announces Completion of its Follow-on Offering of Trust Units

TORONTO, Jan. 23, 2012 /PRNewswire/ - Sprott Physical Silver Trust (the "Trust") (NYSE: PSLV / TSX: PHS.U), a trust created to invest and hold substantially all of its assets in physical silver bullion and managed by Sprott Asset Management LP (the "Manager"), today announced that it has completed its follow-on offering of 26,450,000 units of the Trust ("Units") at US$13.20 per Unit for gross proceeds of US$349,140,000 (the "Offering"). This includes the exercise in full by the underwriters of their over-allotment option.  Purchasers in the Offering included Sprott Inc. and the Sprott Foundation, which are affiliates of the Manager.

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, and as of January 23, 2012 has contracted to purchase a total of approximately 10.57 million troy ounces of physical silver bullion. Once the Trust has taken delivery of all the silver bullion, it will publish the serial numbers of all bars held by the Trust on its website.  The net proceeds of the Offering per Unit were greater 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, as required under the trust agreement governing the Trust.

Eveillard - We are Headed for Enormous Inflation & Higher Gold

Auditing the FED's Gold

by Gary North

Recently by Gary North: Did Romney and Bain Capital Profit at the Expense of Bain's Employees? 

I have posted a video of something I thought I would never see: all five of the Republican candidates for the U.S. Senate verbally demanding an audit of the Federal Reserve System. You can see it here.
Bernanke is facing what no Federal Reserve chairman has ever faced: public awareness of the Federal Reserve System. From late December 1913, when an almost deserted Senate voted for the Federal Reserve Act, until 2008, when the recession confirmed Ron Paul's warning in late 2007, there was almost no public awareness or even a vague understanding of the Federal Reserve System. The genie is now out of the bottle, where it had been corked since 1913. Ron Paul has uncorked it.
From the November 1910 secret meeting at Georgia's Jekyll Island until Ron Paul's 2007 candidacy for the Republican nomination for President, The Federal Reserve had received a free ride from Congress. There had never been much oversight. That's because FED regulation was an oversight. (The same word is used to convey opposite meanings.)
The Texas Leftist-populist Democrat Wright Patman had been a critic. He had been the chairman of the House Banking Committee until 1975, a year before Paul arrived in Congress. He was a Greenbacker: a believer in a zero-interest economy that achieves this Utopian goal through the use of fiat paper money. Patman was not able to generate much interest in the FED.
Patman did inflict one major wound on the FED. He and California Congressman Jerry Voorhis, another Greenbacker, in the early 1940s persuaded Congress to pass a bill, which Roosevelt signed, that forbids the Federal Reserve from keeping the interest payments from the government bonds it has counterfeited fiat money to purchase. Today, the FED must return to the Treasury all of this money beyond its operating expenses. For 2011, the FED will pay back $77 billion.
A full-scale audit of the FED, if it ever comes, must include an audit of the gold every year. The auditors must see if the gold is in the two vaults. The first vault, at Ft. Knox, is more famous. The more important vault is located at 33 Liberty Street, New York City: the privately owned Federal Reserve Bank of New York. This is the "Die Hard III" vault.
The auditors must do two things. First, they must determine whether there is the same amount of gold as is listed on the FED's books at the fake price of $42.22 per ounce. Second, the auditors must follow the paper trail of ownership. They must make sure that the gold in the vaults is still legally in the possession of the FED.
There is a possibility that the FED has transferred ownership of this gold, through swaps, to European central banks, which have in turn leased – sold – their gold to private buyers. It is not enough to determine that the physical gold is in the two vaults. It is also mandatory to determine whether the FED has indirectly sold the government's gold, which it has held in trust for the government since 1933.

[Note to auditors: pursue this phrase in the FED's statements: "deep storage gold." As to why, read this.]

The European Union banned imports of oil from Iran & Banned Iran From Trading Gold and Silver on Monday and imposed a number of other economic sanctions, joining the United States in a new round of measures aimed at deflecting Tehran's nuclear development program.

By Justyna Pawlak and Hossein Jaseb

BRUSSELS/TEHRAN | Mon Jan 23, 2012 8:16am EST

In Iran, one politician responded by renewing a threat to blockade the Strait of Hormuz, an oil exporting route vital to the global economy, and another said Tehran should cut off oil to the EU immediately.

That might hurt Greece, Italy and other ailing economies which depend heavily on Iranian crude and, as a result, won as part of the EU agreement a grace period until July 1 before the embargo takes full effect.

A day after a U.S. aircraft carrier, accompanied by a flotilla that included French and British warships, made a symbolically loaded voyage into the Gulf in defiance of Iranian hostility, the widely expected EU sanctions move was likely to set off further bellicose rhetoric in an already tense region.

EU officials said they also agreed to freeze the assets of Iran's central bank and ban trade in gold and other precious metals with the bank and state bodies.

Raid on gold and silver rebuffed/silver rises above $32.00 in access market/No deal on Private Greek debt

Good morning Ladies and Gentlemen:

Before commencing we finally witnessed 3 banks enter the banking morgue. The FDIC holiday for the boys is now over.

Here are the latest entrants;

1. American Eagle Savings Bank of Boothwyn PA
2. First State Bank of Stockbridge GA
3. Central Florida State Bank, Bellview FL.

may they rest in peace.

end

I wrote to the CFTC last night suggesting to them that a probable raid was forthcoming on Friday. You could tell from the weak equity shares traded on Thursday despite gold bouncing off the $1650 level 4 times. The high OI is causing concern to the bankers as they are witnessing a large number of option holders standing for delivery in both gold and silver.

Wait to you see what happened inside the comex vaults.

Gold finished the comex session at $1663.70 for a gain of $9.60 on the day even though the bankers decided that another raid was in order. They drove the price of gold to around the $1645.00 level and immediately it started to rise above the $1650 level. Another push down had no effect and finally gold zoomed to finish the session at $1663.70. Silver however was the bright star refusing to buckle at any cost.
It finished the comex session at $31.65

In the access market, gold and silver continued its northern trajectory. Here are the final closing access market prices:

gold: $1667.00
silver: $32.20

Let us head over to the comex and assess trading, position limits, inventory levels and amounts of metal standing. Friday was an extremely busy day for the boys.

The total gold comex OI rose again by 2930 contracts and again this was fodder for the bankers.
Probably they hit gold due to silver's strong advance of late. The raid had no effect on silver as this poor man's gold showed no interest in the bankers antics. The total OI for gold rests this weekend at 441,320 contracts. The front options expiry month of January again mysteriously advanced 37 contracts today despite zero delivery notices yesterday. We thus gained another 3700 oz of gold oz standing. The next big delivery month is February which is a little over a week to go before first day notice, on Tuesday Jan 31.2012. Here the OI fell from 160,113 to 156,621 which is a little light on the rollovers. The estimated volume at the gold comex on Friday was quite tame at 152,745 if you consider some of the rolls. The confirmed volume on Thursday was a little better at 166,269 contracts.

The total silver comex OI again saw its OI fall from 102,870 to 102,055. The bankers are just refusing to supply any non backed paper. With very little non backed silver paper supply, it was easy for silver to rise above $32.00 yesterday.
The front options expiry month of January saw its OI fall from 175 to 152 for a loss of 23 contracts. We had exactly 23 delivery notices yesterday so neither gained nor lost any silver oz standing and thus no cash settlements either. The next big delivery month is March and here the OI fell by close to 2000 contracts from 53,240 to 51,351 contracts. It looks like the Sprott purchase of 10 million oz of silver (300million dollars) is scaring the dickens out of our bankers. The estimated volume at the silver comex on Friday came in at 45,753 which is a little higher than what we have been witnessing lately. The confirmed volume on Thursday was very weak at 35,826.

The USS Abraham Lincoln transits Hormuz. Scene set for US-Iranian talks

DEBKAfile Special Report January 23, 2012, 3:17 AM (GMT+02:00)

Defense Secretary Leon Panetta aboard the USS Enterprise

 

Three weeks after Tehran threatened action against any US aircraft carrier entering the Strait of Hormuz, Washington made two moves: US Defense Secretary Leon Panetta disclosed Sunday, Jan. 22, that the USS Enterprise Carrier Strike Group would steam through the strategic strait in March; a few hours later, the US Navy sent the USS Abraham Lincoln carrier through the strategic strait without incident, accompanied by British and French warships.
debkafile: Defusing the Hormuz crisis set the scene for resumed nuclear negotiations leading up to which several messages were exchanged through back channels between the Obama administration and Tehran in recent weeks - amid Israeli preparations to strike Iran's nuclear facilities.
These developments deepened the breach between the US and Israel. Two days earlier, on Friday, Jan. 20, Gen. Martin Dempsey, Chairman of the Joint US Chiefs of Staff, visited Israel and with Israeli leaders emphasized the cooperation between Washington and Jerusalem on the Iranian threat. The Netanyahu government complained that action against Iran had been postponed for years on one pretext on another, and the same thing was happening to effective sanctions against Iran's oil exports and central bank. Israel was therefore compelled to exercise its military option against the mortal peril of a nuclear Iran, said the Israeli prime minister, before it was too late.

QE-Cating

Submitted by ilene on 01/23/2012 01:43 -0500


Excerpts from this week's Stock World Weekly 
Good week for the bulls - the major indexes were all up between 2.0% and 2.8%, capping the third consecutive week of gains. Investors saw some powerful signs of positive activity in the economy. For example, initial unemployment claims dropped a stunning 50k in one week. Conversely, the fact that this earnings season has seen the lowest percentage of companies beating expectations since Q3 2008 supplied some powerful ammunition for the bears, although the bulls still had it. (Earnings beats falling behind previous quarters)
We ended last week’s newsletter, “Cracks in the Facade” discussing the possibility of additional easing by the Fed, which would likely prove bullish for the markets. Quoting Phil, “It seems like a lot, but we're back to 760 on the RUT, which was our test line going the other way last week, and we still haven't filled the gap up from Monday's close, about another 1% down. Let's keep it in perspective though – we're up from 1,200 to almost 1,300 on the S&P in less than a month. So a 20-point pullback to 1,277 would not be very bearish in a longer-term trend and, if we get volume and hold it, it's actually a bullish confirmation...

Gold-market rigging has many whistleblowers; they're just always ignored

By: Chris Powell, Secretary/Treasurer, GATA

Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.
Vancouver Resource Investment Conference
Vancouver Convention Center West
Vancouver, British Columbia, Canada
Sunday, January 21, 2012


Many people ask why, if there really is a gold price suppression scheme -- a scheme of currency market intervention to support the dollar and other currencies against the true international reserve currency, gold -- some whistleblowers haven't come forward to expose it.
In fact, the whistle has been blown on the gold price suppression scheme many times over the years, and by the highest authorities. They just haven't yet been recognized as whistleblowers by the news media and financial analysts.
Many of you may have heard of Federal Reserve Chairman Alan Greenspan's famous remark about gold in his testimony to Congress in July 1998: "Central banks stand ready to lease gold in increasing quantities should the price rise."
That is, Greenspan contradicted the usual central bank explanation for leasing gold -- supposedly to earn a little interest on a dead asset -- and admitted that gold leasing is all about suppressing the price. Greenspan's admission is still posted at the Fed's Internet site:
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
And at GATA's:
http://www.gata.org/files/GreenspanTestimony-07-24-1998.htm_.txt
But the official whistleblowing goes far beyond that.

'Gold and silver advances on inflation concerns'

By Eric McWhinnie
On Thursday, Gold and Silver prices were essentially unchanged. Despite positive economic data being released, gold prices settled at $1,654, while silver closed at $30.51. Newly released inflation data from the Bureau of Labor Statistics shows that the prices consumers paid in December were roughly the same as they paid in November. However, investors are still showing a growing concern for inflation.

The monthly Consumer Price Index for all Urban Consumers survey shows a zero percent change on “All Items” on a seasonally adjusted basis, but a drop in energy commodities (-1.9 percent) helped to dampen the numbers. The inflation picture is somewhat clearer when using annual comparisons between 2010 and 2011.



As a result, some turn to Gold and Silver for inflation protection, even central banks, as they became net purchasers of gold for the first time in 20 years in 2010. Unlike current fiat currencies, both precious metals have survived thousands of years of global turmoil. Due to monetary policies over the past decade, gold prices have climbed from $250 to $1,660 per ounce today. Meanwhile, silver prices have surged from $4.50 to over $31.



Even though gold and silver have experienced a remarkable move, it comes at the cost of the U.S. dollar. As nations continue to struggle with a global insolvency crisis, central banks continue to provide stimulus measures that devalue fiat currencies. A growing consensus of economists predict that the Federal Reserve is likely to inject another $1 trillion worth of easing to stimulate the economy. Such a move, will provide yet another blow to the U.S. dollar, and another catalyst for higher gold and silver prices.

Limits of Voluntary Deal Hit as Greek Bondholders Draw Line in the Sand; Separating Fact from Fiction in Selective Reporting

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.

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.

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My Money Where My Mouth Is

By Silver Shield, on January 22nd, 2012

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.

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.

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.

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Gold Analysis:Gold Bull Market To End In 2 Years At $6000 Or More?

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.

Money Supply to Hit $24 Trillion, More Bubbles & Higher Gold

Gold Big Picture – Gold Comparison Of Now Vs 70s Shows Big Rise In Price Yet To Come

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.

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.

Mike Maloney on Credit-Based Money, Feudalism, and Financial Enslavement

Silver Update 1/20/12 Comex Credibility

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...

Ben Davies - Funds Will Pile into Gold after Missing the Rally

CURRENCY WARS! Exclusive Interview with James Rickards

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...

James Dines - This Will be a Dangerous Collapse & Endgame

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.

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:

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...

US Dollar Evolution

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.

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.

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.”

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.

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.

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.

SOPA's War on the Financial Blogosphere, Mark-to-Market and Depression Economics w/Mish

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.

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.

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.”

Greece and a report on the PSI/IMFGlobal/Bank of America earnings farce

Thursday, January 19, 2012

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 Revolution​ize Gold and Silver Trading?

Commodities / Gold and Silver 2012 Jan 18, 2012 - 02:45 AM

By: Sam_Chee_Kong 

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.

SilverDoctors: Brink's Magically Adjusts 140,248 Ounces of Silver...

SilverDoctors: Brink's Magically Adjusts 140,248 Ounces of Silver...: Brink's reported identical adjustments of 70,124 ounces into both registered and eligible vaults Wednesday, with no corresponding accounting...

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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. ...

Silver Update 1/19/12 MF Global2

Jim Sinclair - There Will Be a Run on Gold Stored in the US

John Williams - Gold, Silver, Economy & Inflation

Nigel Farage - EU Bypassing Referendums on Fiscal Union Treaty - Farage/Barroso

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

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

This chart, courtesy of Moody's, shows the degree to which bank equity is exposed to the peripheral markets of the EU.

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.

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.

The 7 Stages of Banker's Grief - Europe on the Brink of Psychosis as Obama plays with his Dolls

Silver Update 1/18/12 Capital Controls

SilverDoctors: Time to Bunker In With Phyzz

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Chris Whalen - We Have Panic Right Now & Flight Into Gold

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.

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...

John Embry - Gold to Rapidly Triple in Price on This Move

A $2M Bet on Gold

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.

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)

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.

Roberto D'Alimonte on Domestic Divisions, calls for the Lira, and Italian D-Day in Spring of 2013

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.

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.

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.

Assassination in Iran

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):

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.

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.

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.

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.”

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