James Dines has been in the business of making bold calls for over 50 years. In this deep-diving interview, he minces no words about the dire risks the US economy - and the world at large - faces at this juncture.
Simply put, he sees the excessive credit in the financial system as having placed the global economy on a collision-course with hyperinflation.
Unlike past periods of turmoil, there are no truly 'safe' places for investment capital to hide. Geographic markets and almost all asset classes are positively correlated these days. They share many of the same risks and if a systemic crash occurs, they will crash together.
At this point, says Mr Dines, you want to invest in assets that can not be printed away by government desperation. You want to hold hard assets; "wealth in the ground" as Dines says (physical commodities, mining companies, etc). They're your best best to make money faster at a rate faster than inflation is going to happen.
05 February 2012
SilverDoctors: When Greece Defaults, the Credit Default Swap Domi...
SilverDoctors: When Greece Defaults, the Credit Default Swap Domi...: OfTwoMinds' Charles Hugh Smith today advised that Greece's impending default is set to release a domino-like chain reaction of credit-defaul...
SilverDoctors: ECB Head Junker: Greece Default Cannot be Ruled Ou...
SilverDoctors: ECB Head Junker: Greece Default Cannot be Ruled Ou...: The ECB head Jean-Claude Juncker Sunday threatened to preempt the ISDA, stating that a Greek default cannot be ruled out. When the ECB's he...
SilverDoctors: BOA Refuses to Accept Cash for Mortgage Payment, C...
SilverDoctors: BOA Refuses to Accept Cash for Mortgage Payment, C...: Apparently BOA will not accept cash payments on mortgages. This should be good for their PR. Feb 3 2012 Bank of America Lakeport, Ca. I ...
04 February 2012
Keiser Report - Episode 245
In this episode, Max Keiser and co-host, Stacy Herbert, discuss the vaporized and the deleted – the new American soap opera in which the assets, wealth, jobs and economy of the 99% have been stolen. In the second half of the show, Max talks to Daniel Collins of TheChinaMoneyReport.com about China’s imports of...
Americans talk about an Israeli strike on Iran, but prepare own offensive
DEBKAfile Exclusive Report February 4, 2012, 11:16 AM (GMT+02:00)
US Secretary of State Leon Panetta has been outspoken about a possible Israeli offensive against Iran taking place as of April and one American TV channel theorized simplistically Friday, Feb. 3, about Israel's tactics. At the same time, no US source is leveling on the far more extensive American, Saudi, British, French and Gulf states' preparations going forward for an offensive against the Islamic Republic.
Tehran too is gearing up for conflict: The Iranian Guards Ground Forces chief Brig. Gen. Mohammad Pakpour Saturday, Feb. 4 announced the start of a three-week exercise in southern Iran and the Strait of Hormuz under conditions of war. debkafile: The "exercise" is in fact an Iranian military buildup ahead of a possible American or Israel attack.
debkafile's military sources report a steady flow of many thousands of US troops for some weeks to two strategic islands within reach of Iran, Oman's Masirah just south of the Strait of Hormuz and Socotra, between Yemen and the Horn of Africa. (DEBKA-Net-Weekly 526 of Jan. 27 was the first world publication to reveal the massive concentration of American might on the two islands.)
This concentration was held by the White House as sufficiently urgent to relent on its refusal to admit the ousted Yemeni leader Ali Abdullah Salah to America for medical treatment. He won permission in exchange for his consent to the Socotra military buildup.
There are now two potential triggers for a Middle East confrontation with Iran. They are closely interrelated: The urgent need for action this year to preempt Iran's nuclear bomb program before it is too late and the Syrian army's appalling and escalating butchery of civilians.
1,000 Israeli paratroops jump in big drill
Tehran too is gearing up for conflict: The Iranian Guards Ground Forces chief Brig. Gen. Mohammad Pakpour Saturday, Feb. 4 announced the start of a three-week exercise in southern Iran and the Strait of Hormuz under conditions of war. debkafile: The "exercise" is in fact an Iranian military buildup ahead of a possible American or Israel attack.
debkafile's military sources report a steady flow of many thousands of US troops for some weeks to two strategic islands within reach of Iran, Oman's Masirah just south of the Strait of Hormuz and Socotra, between Yemen and the Horn of Africa. (DEBKA-Net-Weekly 526 of Jan. 27 was the first world publication to reveal the massive concentration of American might on the two islands.)
This concentration was held by the White House as sufficiently urgent to relent on its refusal to admit the ousted Yemeni leader Ali Abdullah Salah to America for medical treatment. He won permission in exchange for his consent to the Socotra military buildup.
There are now two potential triggers for a Middle East confrontation with Iran. They are closely interrelated: The urgent need for action this year to preempt Iran's nuclear bomb program before it is too late and the Syrian army's appalling and escalating butchery of civilians.
Iran’s currency war heats up and the rush to metals
By Dr Jeffrey Lewis
The EU and the United States have implemented fresh sanctions against Iran targeting its oil exports. The tough measures are intended to curtail Iran’s nuclear program that Western nations believe is aimed at making nuclear weapons, while Iran claims that their nuclear program is for peaceful energy generation purposes instead.
The sanctions were met with an increasingly intense currency war as Iran and Russia plan to replace the U.S. Dollar with their own currencies for bilateral trade. The replacement of the U.S. Dollar for Iran’s trade with Russia was agreed upon after Iran had already replaced the Dollar in its oil transactions with India, China and Japan, according to the Iranian state run Fars news agency.
Making yet another case for holding Gold and Silver is that the European Union nations have been banned from trading in gold, silver, diamonds and petrochemical products with the Iranian central bank and with eight other entities to be named on January 26th.
The EU and the United States have implemented fresh sanctions against Iran targeting its oil exports. The tough measures are intended to curtail Iran’s nuclear program that Western nations believe is aimed at making nuclear weapons, while Iran claims that their nuclear program is for peaceful energy generation purposes instead.
The sanctions were met with an increasingly intense currency war as Iran and Russia plan to replace the U.S. Dollar with their own currencies for bilateral trade. The replacement of the U.S. Dollar for Iran’s trade with Russia was agreed upon after Iran had already replaced the Dollar in its oil transactions with India, China and Japan, according to the Iranian state run Fars news agency.
Making yet another case for holding Gold and Silver is that the European Union nations have been banned from trading in gold, silver, diamonds and petrochemical products with the Iranian central bank and with eight other entities to be named on January 26th.
SilverDoctors: CME NOT Systemically Important Enough to Fall Unde...
SilverDoctors: CME NOT Systemically Important Enough to Fall Unde...: Dodd-Frank Act was once billed as, "the act which brought the most significant changes to financial regulation in the United States since ...
SilverDoctors: Turd Interviews ShadowStats' John Williams
SilverDoctors: Turd Interviews ShadowStats' John Williams: Our friend Turd at TFMetalsreport has released an excellent podcast with ShadowStats' John Williams. John discusses his prediction for a hy...
03 February 2012
Greece PSI still nowhere in sight/SLV short 26million oz/China heading for hard landing/ MFGLobal on the missing funds/
Thursday, February 2, 2012
Good evening Ladies and Gentlemen:
Gold finished higher by $11.40 to $1758.50. At first, gold had been repelled from the banker's strong resistance $1750 line in the sand early in the European session. However it then recovered to pierce this resistance and finish well above the resistance to close at its high. The fact that gold did this prior to the jobs report is definitely an extremely bullish sign. Silver finished higher by 43 cents to $34.15. Tomorrow is the jobs report and as always the bankers monkey around with the gold and silver metal prior to its release. Expect a big revision from the adjustments to the B/D model which occur in the January month and announced always on the first Friday of February. Let us head over to the comex and assess trading, inventory movements and amounts of metal standing.
The total gold comex OI rose by 4961 contracts to finish the comex session at 430,094 from 425,133.
The front delivery month for gold saw its OI fall from 3458 to 1783 for a loss of 1675 contracts. Since we lost 1036 contracts through delivery notices we lost another 639 notices or 63900 oz to cash settlements.
Blythe must have been very busy today. The next big delivery month is April and here the OI rose to 237,961 from 231,072. The estimated volume at the gold comex today was 145,684. The confirmed volume yesterday registered 132,408 which are both very weak volume numbers.
The total silver comex OI rose by 174 contracts. The front options expiry month of February saw its OI rise from 141 to 191 for a gain of 50 contracts even though there was no delivery notices yesterday. Thus we gained additional silver ounces standing and lost nothing to cash settlements. Generally this is a sign that London England has run out of silver metal. We are now approaching the next delivery month of March which is less than 4 weeks away and here the OI fell from 47,300 contracts to exactly 46,000 contracts for a loss of 1,300 contracts. No doubt that some rolled over from March to May. The estimated volume at the silver comex was 58,718 contracts and the confirmed volume yesterday was 51,265. The volume here has been rising and this may be due to the high frequency day traders who are jumping on the bandwagon thinking that silver is in play due to lack of metal from London. They are day traders and you see from the OI numbers that they exit their positions at the end of the day.
I Can’t Take It Anymore! When Will The Government Quit Putting Out Fraudulent Employment Statistics?
On Friday, the entire financial world celebrated when it was announced that the unemployment rate in the United States had fallen to 8.3 percent. That is the lowest it has been since February 2009, and it came as an unexpected surprise for financial markets that are hungry for some good news. According to the Bureau of Labor Statistics, nonfarm payrolls jumped by 243,000 during the month of January. You can read the full employment report right here. Based on this news, pundits all over the world were declaring that the U.S. economy is back. Stocks continued to rise on Friday and the Dow is hovering near a 4 year high. So does this mean that our economic problems are over? Of course not. A closer look at the numbers reveals just how fraudulent these employment statistics really are. Between December 2011 and January 2012, the number of Americans "not in the labor force" increased by a whopping 1.2 million. That was the largest increase ever in that category for a single month. That is how the federal government is getting the unemployment rate to go down. The government is simply pretending that huge numbers of unemployed Americans don't want to be part of the labor force anymore. As you will see below, the employment situation in America is not improving. Yet everyone in the mainstream media is dancing around as if the economic crisis has been cancelled. I can't take it anymore! It is beyond ridiculous that so many intelligent people continue to buy in to such fraudulent numbers.The truth is that the labor force participation rate declined dramatically in January. For those unfamiliar with this statistic, the labor force participation rate is the percentage of working age Americans that are either employed or that are unemployed and considered to be looking for a job.
NYTimes patronizes gold, whitewashes fiat, overlooks the big questions
Submitted by cpowell on Fri, 2012-02-03 02:29. Section: Daily Dispatches
In a Focus On Gold, History Repeats Itself
By Floyd Norris
The New York Times
Thursday, February 2, 2012
http://www.nytimes.com/2012/02/03/business/in-rise-of-gold-bugs-history-...
As it was in 1980, could it be again in 2012?
The 1980 presidential election was fought by a Democratic incumbent weakened by a poor economy amid worries that the United States had lost its ability to compete in the world. Gold prices had risen to unprecedented levels as the election approached, and the Republican nominee hinted he might propose a return to a gold standard.
That Republican, Ronald Reagan, won the election and soon appointed a commission to study the role of gold in monetary systems. To gold bugs, it appeared to be the best chance in decades to move the country toward gold and away from what they like to call "fiat money," a currency anchored by nothing more than government dictates.
Last month, Newt Gingrich, seeking to widen his support in the days leading up to the South Carolina primary, promised that he would appoint a new gold commission. "Part of our approach ought to be to re-establish something Ronald Reagan did in 1981 and that is to have a commission on gold to look at the whole concept of how do we get back to hard money," he said in a speech.
In a Focus On Gold, History Repeats Itself
By Floyd Norris
The New York Times
Thursday, February 2, 2012
http://www.nytimes.com/2012/02/03/business/in-rise-of-gold-bugs-history-...
As it was in 1980, could it be again in 2012?
The 1980 presidential election was fought by a Democratic incumbent weakened by a poor economy amid worries that the United States had lost its ability to compete in the world. Gold prices had risen to unprecedented levels as the election approached, and the Republican nominee hinted he might propose a return to a gold standard.
That Republican, Ronald Reagan, won the election and soon appointed a commission to study the role of gold in monetary systems. To gold bugs, it appeared to be the best chance in decades to move the country toward gold and away from what they like to call "fiat money," a currency anchored by nothing more than government dictates.
Last month, Newt Gingrich, seeking to widen his support in the days leading up to the South Carolina primary, promised that he would appoint a new gold commission. "Part of our approach ought to be to re-establish something Ronald Reagan did in 1981 and that is to have a commission on gold to look at the whole concept of how do we get back to hard money," he said in a speech.
China's gold output and demand could be far greater than ‘official' data suggest
Comment from Jeff Nichols suggests that Chinese gold production and consumption may be considerably higher than the statistics released by the country would indicate.
Author: Lawrence WilliamsPosted: Thursday , 02 Feb 2012
Following the recent Mineweb article on Chinese gold production and consumption (see China enhances position as world No. 1 gold producer - but where's it all going?) we have received the following comment s from specialist precious metals analyst, Jeff Nichols of American Precious Metals Advisors and Rosland Capital, which suggests that both Chinese gold production and consumption may be considerably higher than that suggested by official and semi-official statistics coming out of the Asian giant.
Nichols avers that China's domestic gold mine output is, without a doubt, much higher than reported. Actual gold mine output could easily be close to 400 tons and possibly more for the following reasons:
- The China Gold Association (CGA) numbers reflect production by their members only -- but omit gold mined by non-members. These include many small, unofficial mining operations some of which are illegal existing in the "underground economy". The CGA data also excludes production from mines owned and operated by the military, which is significant according to sources. Not to be overlooked is by-product output from copper, silver, and other metal mining activity. Again, this is significant though hard to know just how significant.
Israel: Iran's nuclear arms program is complete, its missiles can reach US
DEBKAfile Special Report February 2, 2012, 3:21 PM (GMT+02:00)
IDF
Iran has completed the development of a nuclear weapon and awaits nothing more than a sign from Supreme Leader Ayatollah Ali Khamenei to start assembling its first nuclear bomb, said Israeli Military Intelligence Chief Major General Aviv Kochavi on Thursday, February 2. Assembling a bomb would take up to a year, Kochavi estimated. With 100 kilograms of uranium enriched to 20 percent grade and another 4 tons of uranium enriched to 3.5 percent already in stock, Iran would need another two years to make four nuclear bombs.
Therefore, by the end of 2012 or early 2013 Iran may have a single nuclear bomb, but by 2015 the figure would jump to four or five.
The officer was essentially amplifying the words of his predecessor, Maj. Gen. (res.) Amos Yadlin, who said on Jan. 26 that as long ago as 2007 or 2008, Iran had already passed the point of no return in developing nuclear weapons. Kochavi agreed with him that none of the sanctions imposed thus far had persuaded Iran to slow down, least of all shut down, its drive for a nuclear weapon.
His comments coincided with the findings published Thursday by the Enterprise Institute, an American think tank, that Iran would be able to manufacture a 15-kiloton nuclear bomb as soon as August of this year, just seven months from now.
IDF
Military Intelligence Chief Maj. Gen. Aviv Kochavi
Therefore, by the end of 2012 or early 2013 Iran may have a single nuclear bomb, but by 2015 the figure would jump to four or five.
The officer was essentially amplifying the words of his predecessor, Maj. Gen. (res.) Amos Yadlin, who said on Jan. 26 that as long ago as 2007 or 2008, Iran had already passed the point of no return in developing nuclear weapons. Kochavi agreed with him that none of the sanctions imposed thus far had persuaded Iran to slow down, least of all shut down, its drive for a nuclear weapon.
His comments coincided with the findings published Thursday by the Enterprise Institute, an American think tank, that Iran would be able to manufacture a 15-kiloton nuclear bomb as soon as August of this year, just seven months from now.
Kyle Bass is “Against Selling” any of UT’s Gold
By jturbin
February 3, 2012 11:02 AM EST
Last year the University of Texas Investment Management Co. took delivery of over more than 6,000 gold bars – worth nearly $1 billion at the time – based in part on advice from noted hedge fund manager Kyle Bass.
Yesterday, Mr. Bass stated at a meeting among the endowment’s fund directors that he is “against selling any of the gold,” according to a Bloomberg report. Bass cited “the need for a hedge against mounting risks driven by government deficits in the U.S. and Europe,” the report noted.
Bloomberg went on to say that “The $19.1 billion in endowment funds overseen by the University of Texas Investment Management Co., or Utimco, lost almost 3.8 percent on invested assets in the four months through December, preliminary figures distributed today show.” The report did not specify which positions contributed most to the fund’s decline, but with gold falling from $1,825 to $1,564 from September 1 – December 31, the yellow metal undoubtedly played a role.
States seek currencies made of silver and gold
@CNNMoney February 3, 2012: 10:53 AM ET
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, more than a dozen states have proposed using their own alternative currencies of silver and gold.
NEW YORK (CNNMoney) -- A growing number of states are seeking shiny new currencies made of silver and gold.
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.
"In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System ... the State's governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.
Unlike individual communities, which are allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make "gold and silver Coin a Tender in Payment of Debts."
To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.
The state gold rush: Utah became the first state to introduce its own alternative currency when Governor Gary Herbert signed a bill into law last March that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment. Under the law, the coins -- which include American Gold and Silver Eagles -- are treated the same as U.S. dollars for tax purposes, eliminating capital gains taxes.
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, more than a dozen states have proposed using their own alternative currencies of silver and gold.
NEW YORK (CNNMoney) -- A growing number of states are seeking shiny new currencies made of silver and gold.
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.
"In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System ... the State's governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.
Unlike individual communities, which are allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make "gold and silver Coin a Tender in Payment of Debts."
To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.
The state gold rush: Utah became the first state to introduce its own alternative currency when Governor Gary Herbert signed a bill into law last March that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment. Under the law, the coins -- which include American Gold and Silver Eagles -- are treated the same as U.S. dollars for tax purposes, eliminating capital gains taxes.
China gold demand soars to 891 tonnes, India's 868 tonnes in 2011: RSBL
By Sreekumar Raghavan
MUMBAI (Commodity Online): India, traditionally , the largest consumer of gold, witnessed a significant drop in demand and consumption in 2011 but China, the largest producer of the yellow metal, witnessed a stunning surge in demand.
The reason for the spike in Chinese imports in recent months, traders say, is that throughout the supply chain the Chinese Gold industry was aggressively building inventory ahead of Lunar New Year, after experience in 2011 when the country ran short, according to an assessment by Mr Prithviraj Kothari, Director, Riddi Siddhi Bullions Ltd (RSBL).
In an interview to Commodity Online, Mr Kothari said that the effect of building of up China gold inventory was stunning. “The 189 tonnes of imports in October and November compares with total imports for the whole of 2009 of just 45 tonnes.”
MUMBAI (Commodity Online): India, traditionally , the largest consumer of gold, witnessed a significant drop in demand and consumption in 2011 but China, the largest producer of the yellow metal, witnessed a stunning surge in demand.
The reason for the spike in Chinese imports in recent months, traders say, is that throughout the supply chain the Chinese Gold industry was aggressively building inventory ahead of Lunar New Year, after experience in 2011 when the country ran short, according to an assessment by Mr Prithviraj Kothari, Director, Riddi Siddhi Bullions Ltd (RSBL).
In an interview to Commodity Online, Mr Kothari said that the effect of building of up China gold inventory was stunning. “The 189 tonnes of imports in October and November compares with total imports for the whole of 2009 of just 45 tonnes.”
Silver gains 20% in January 2012; is it a beginning?
By Debbie Carlson
Commodities put in a strong January performance, but few markets earned as much as silver did in the first month of 2012, gaining 20% during the period. That put silver in second place for the strongest commodity futures markets, beaten only by orange juice.
As February dawns, Silver continues to build on its gains, but it is hitting some resistance as it targets the $34 an ounce level. On Wednesday, March silver futures on the Comex division of the New York Mercantile Exchange settled at $33.837 an ounce.
Silver has been on a solid uptrend since hitting a low of Dec. 29 of $26.1450 for the March contract.
Adrian Day, president, Adrian Day Asset Management, said much of the reason why silver rallied so much in January was because it had fallen so much during December. On Nov. 30 March silver settled at $32.804 and on Dec. 30 it closed at $27.915, a 15% swoon in one month alone. Silver wasn’t alone in its December descent, many other markets including Gold and other commodities tanked in December. Likewise, many commodities rose last month.
Day said silver’s trip under $30 may have enticed bargain hunters who were able to pick up the metal at prices not seen since late September.
Commodities put in a strong January performance, but few markets earned as much as silver did in the first month of 2012, gaining 20% during the period. That put silver in second place for the strongest commodity futures markets, beaten only by orange juice.
As February dawns, Silver continues to build on its gains, but it is hitting some resistance as it targets the $34 an ounce level. On Wednesday, March silver futures on the Comex division of the New York Mercantile Exchange settled at $33.837 an ounce.
Silver has been on a solid uptrend since hitting a low of Dec. 29 of $26.1450 for the March contract.
Adrian Day, president, Adrian Day Asset Management, said much of the reason why silver rallied so much in January was because it had fallen so much during December. On Nov. 30 March silver settled at $32.804 and on Dec. 30 it closed at $27.915, a 15% swoon in one month alone. Silver wasn’t alone in its December descent, many other markets including Gold and other commodities tanked in December. Likewise, many commodities rose last month.
Day said silver’s trip under $30 may have enticed bargain hunters who were able to pick up the metal at prices not seen since late September.
'Next target for Gold at $ 1,800/oz, for Silver at $37/oz'
By Richard Russell
The great GOP debate continues with Gingrich finally dropping behind the Mitt.
Meanwhile, the stock market is caught in the puzzle of will Europe emerge whole from its current troubles, or will the Eurozone fall apart like a deflating balloon? That plus the following question: Does the US face another four years of a socialist president who seeks to solve all problems by either taxing "the rich" or throwing trillions of man-made dollars at the screw-up in question?
The poor man in the street is facing questions and doubts. Will he be at the same job a year from now? And if he gets a pink slip will he be able to find another job?
If the year 2012 has a title, the title should be "uncertainty."
Nobody's asking, "What happens if there's a recession in the next year?" Or "What if unemployment is 9% or more at presidential election time?" If either of the above occur, the GOP could run a donkey, and it would be our next president. Obama must have a good economy to win.
The great GOP debate continues with Gingrich finally dropping behind the Mitt.
Meanwhile, the stock market is caught in the puzzle of will Europe emerge whole from its current troubles, or will the Eurozone fall apart like a deflating balloon? That plus the following question: Does the US face another four years of a socialist president who seeks to solve all problems by either taxing "the rich" or throwing trillions of man-made dollars at the screw-up in question?
The poor man in the street is facing questions and doubts. Will he be at the same job a year from now? And if he gets a pink slip will he be able to find another job?
If the year 2012 has a title, the title should be "uncertainty."
Nobody's asking, "What happens if there's a recession in the next year?" Or "What if unemployment is 9% or more at presidential election time?" If either of the above occur, the GOP could run a donkey, and it would be our next president. Obama must have a good economy to win.
The effect of FOMC statement on precious metals
By Dr Jeffrey Lewis
Among the recent price consolidation, it should not be forgotten that the U.S. Federal Open Market Committee of the Federal Reserve Board decided to leave rates at 0.0% to 0.25% until at least late 2014, according to the FOMC statement released on January 25th.
In their statement, “the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
In addition, the Fed indicated on January 25th that it would release the projected direction of interest rates by its seventeen members and would take the historic move of setting an inflation target of two percent. Nevertheless, putting off the first possible adjustment to rates until late 2014 somewhat eclipsed the Fed’s apparent intention of increasing transparency, while at the same time sending further signals for diversifying out of paper.
Bernanke reassures market that the Fed has options
In the press conference following the FOMC statement, Fed Chair Ben Bernanke clarified that the decision to leave interest rates unchanged for over three years was not cast in stone. He noted that the bank’s capacity to forecast out that far was limited, but that the Fed could adjust rates depending upon economic conditions.
Among the recent price consolidation, it should not be forgotten that the U.S. Federal Open Market Committee of the Federal Reserve Board decided to leave rates at 0.0% to 0.25% until at least late 2014, according to the FOMC statement released on January 25th.
In their statement, “the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
In addition, the Fed indicated on January 25th that it would release the projected direction of interest rates by its seventeen members and would take the historic move of setting an inflation target of two percent. Nevertheless, putting off the first possible adjustment to rates until late 2014 somewhat eclipsed the Fed’s apparent intention of increasing transparency, while at the same time sending further signals for diversifying out of paper.
Bernanke reassures market that the Fed has options
In the press conference following the FOMC statement, Fed Chair Ben Bernanke clarified that the decision to leave interest rates unchanged for over three years was not cast in stone. He noted that the bank’s capacity to forecast out that far was limited, but that the Fed could adjust rates depending upon economic conditions.
SilverDoctors: Silver Rebounding After Post NFP Raid
SilverDoctors: Silver Rebounding After Post NFP Raid: Somewhere Andrew Maguire's old buddies are having a beer and laughing at their continual fleecing of the sheople with the cartel's standard ...
02 February 2012
Gold: The target is between $2,750 to $3,000 by June 2013
By David Nichols
It's not often that a financial market tells us its intentions in a clear and obvious way. But occasionally it happens.
And it just happened last Wednesday.
First, to set the stage: Gold came into last week off a 17-week correction, with the direction of the next 17 weeks still up in the air. The big correction in 2008 lasted 34 weeks, so gold was at a critical balance point heading into the Fed meeting -- it was either going to move into the next up leg now, or in 17 weeks, in early May.
This was a major balance point that could have gone either way, mostly because there is a big scary bogey still out there, namely another round of deflation and de-leveraging emanating from Europe.
The last recession in 2008, with its accompanying financial crisis, caused a massive bout of deflation, which slaughtered gold and other financial assets, while triggering a major run up in the dollar.
So it's critical to know if a similar bout of deflation is coming now. And gold is a highly sensitive barometer on this. If we pay careful attention, gold will give us the accurate forecast.
It's not often that a financial market tells us its intentions in a clear and obvious way. But occasionally it happens.
And it just happened last Wednesday.
First, to set the stage: Gold came into last week off a 17-week correction, with the direction of the next 17 weeks still up in the air. The big correction in 2008 lasted 34 weeks, so gold was at a critical balance point heading into the Fed meeting -- it was either going to move into the next up leg now, or in 17 weeks, in early May.
This was a major balance point that could have gone either way, mostly because there is a big scary bogey still out there, namely another round of deflation and de-leveraging emanating from Europe.
The last recession in 2008, with its accompanying financial crisis, caused a massive bout of deflation, which slaughtered gold and other financial assets, while triggering a major run up in the dollar.
So it's critical to know if a similar bout of deflation is coming now. And gold is a highly sensitive barometer on this. If we pay careful attention, gold will give us the accurate forecast.
Silver Price Forecast And The Shift To Measuring Wealth In Gold Ounces Instead Of Dollars.
February 2, 2012
Silver Price Forecast:
The debt-based monetary system creates an illusion of wealth. It allows for claims on real goods to significantly exceed the actual amount of real goods. You then have a number of people believing they have wealth, since they have claims (pieces of paper or tokens) showing that they have these real assets, whereas, in reality, if everyone was to claim the real goods, there would not be enough to go around.Silver Price Forecast:
The high debt levels, in some way, represent the extent to which there are more claims than the actual underlying real assets.
During the period of credit extension – that has been for at least 80 years – most businesses are set up to take advantage of this system. The system allows for an easier way to increase wealth (illusionary), since only claims on real assets need to be increased, instead of the actual real assets.
As you come to the end of the credit extension cycle, most businesses are dependent on this credit extension, either directly or indirectly. When the debts become too heavy to bear (no one knows the day or the hour, but there are signs), the debt bubble will burst, and over time eliminate all those business opportunities brought about by the debt-based system, as well as the businesses dependent on it.
Gold may hit $2,000 within 3 months: James Turk
James Turk, Chairman and founder of GoldMoney, claims that the 2012 bottom for Gold came during the first week in January. If the year's low is already history and if his projection that gold will hit the $2,000/oz mark within three months is on target, you do the math. "Gold is way too cheap," he tells in this exclusive interview.
The Gold Report: Given the volatile 2011 market and the fact that gold trades at seasonally lower prices in the summer, James, what led you to say you believe we've already hit the low for the gold price in 2012?
James Turk: We started this year in an unusual position. Normally, we see seasonal strength in the last quarter. We didn't get it. We'd been in a correction since the high in Silver back in April 2011. The high in gold came during the summer, which was very unusual, but basically both metals have been moving sideways. Starting from the end of a correction, value is more important than seasonality. Clearly, gold and silver both represent good, undervalued assets at the moment.
The other factor is continuing problems in the financial system. The European banks are still on the brink and many American banks are in a similar situation. Questions about the currency—whether the euro will survive—and the ongoing sovereign debt issue will cause people to look at the precious metals. I've said we saw the low in the gold price the first week of January, and the further into the year we get without going lower, the greater the probability that it was, in fact, the low for the year.
German Central Bank 228 Billion Euros in Debt Rescuing Europe; Bundesbank President Criticizes Merkel's Fiscal Pact, Says "No Grounds for Eurobonds"
MISH'S
Global Economic
Trend Analysis
Both Angela Merkel and the Bundesbank are walking an extremely fine line of economic policies and treaty arrangements that appear to be in violation of policy statements made by the German Supreme Court regarding transfer unions. Moreover, the Bundesbank president is now in what amounts to an open Feud with Merkel.
Bundesbank 228 Billion Euros in Debt Rescuing Europe
Ambrose Evans-Pritchard at The Telegraph reports Bundesbank Sinks Deeper Into Debt Saving Europe
The operations are part of the European Central Bank's 'TARGET2' network of automatic payments between the national central banks of the Euroland club. The Bundesbank has already provided €496bn (£413bn) to countries in trouble, chiefly Greece, Ireland, Italy and Spain.
The Bundesbank - the dominant body in the euro system - used to keep a stock of €270bn of private securities (refinance credit) before the start of the financial crisis. This was depleted last year as it sold assets to meet growing demands on the TARGET2 scheme.
Once the debt drama began to engulf the bigger economies, the Bundesbank was forced to borrow money to meet its obligations to offset capital flight, since it refused to sell its stash of gold. It now owes €228bn to German banks.
Global Economic
Trend Analysis
Both Angela Merkel and the Bundesbank are walking an extremely fine line of economic policies and treaty arrangements that appear to be in violation of policy statements made by the German Supreme Court regarding transfer unions. Moreover, the Bundesbank president is now in what amounts to an open Feud with Merkel.
Bundesbank 228 Billion Euros in Debt Rescuing Europe
Ambrose Evans-Pritchard at The Telegraph reports Bundesbank Sinks Deeper Into Debt Saving Europe
The operations are part of the European Central Bank's 'TARGET2' network of automatic payments between the national central banks of the Euroland club. The Bundesbank has already provided €496bn (£413bn) to countries in trouble, chiefly Greece, Ireland, Italy and Spain.
The Bundesbank - the dominant body in the euro system - used to keep a stock of €270bn of private securities (refinance credit) before the start of the financial crisis. This was depleted last year as it sold assets to meet growing demands on the TARGET2 scheme.
Once the debt drama began to engulf the bigger economies, the Bundesbank was forced to borrow money to meet its obligations to offset capital flight, since it refused to sell its stash of gold. It now owes €228bn to German banks.
Survey of European Banks Shows a Sharp Cutback in Lending; Three Reasons LTRO Will Not Get Banks to Lend
MISH'S
Global Economic
Trend Analysis
The LTRO may have ignited the bond markets and the stock market but it did not do anything for bank lending. The New York Times reports Survey of European Banks Shows a Sharp Cut in Lending
Banks in the euro area cut lending sharply at the end of 2011, according to data published Wednesday, raising concern that Europe was on the verge of a credit crisis that could lead to a deeper recession than expected.
A quarterly survey of commercial banks by the European Central Bank showed a surge in the number of institutions that were becoming more restrictive about who they lent to, because the banks themselves were having trouble raising money and were under pressure from regulators to reduce risk.
“It is obvious that we see a deleveraging, a retrenching process unfolding,” Thomas Mirow, the president of the European Bank for Reconstruction and Development, said in an interview last week. He said the figures from the Bank for International Settlements showed “this is not just perception but reality.” The reconstruction bank provides credit to support the development of free markets in the former Soviet bloc.
Global Economic
Trend Analysis
The LTRO may have ignited the bond markets and the stock market but it did not do anything for bank lending. The New York Times reports Survey of European Banks Shows a Sharp Cut in Lending
Banks in the euro area cut lending sharply at the end of 2011, according to data published Wednesday, raising concern that Europe was on the verge of a credit crisis that could lead to a deeper recession than expected.
A quarterly survey of commercial banks by the European Central Bank showed a surge in the number of institutions that were becoming more restrictive about who they lent to, because the banks themselves were having trouble raising money and were under pressure from regulators to reduce risk.
“It is obvious that we see a deleveraging, a retrenching process unfolding,” Thomas Mirow, the president of the European Bank for Reconstruction and Development, said in an interview last week. He said the figures from the Bank for International Settlements showed “this is not just perception but reality.” The reconstruction bank provides credit to support the development of free markets in the former Soviet bloc.
Obama Releases Details on His Plan to Bail Out Banks, Fannie Mae, Hedge Funds, Wall Street, Fixing MERS and Screwing Taxpayers at Same Time; Key Aspects of Plan as Presented vs. Reality
MISH'S
Global Economic
Trend Analysis
Today, under guise of helping "responsible homeowners" president Obama published details of Plan to Help Homeowners and Heal the Housing Market
Key Aspects of the President’s Plan as Presented
Global Economic
Trend Analysis
Today, under guise of helping "responsible homeowners" president Obama published details of Plan to Help Homeowners and Heal the Housing Market
Key Aspects of the President’s Plan as Presented
- Broad Based Refinancing to Help Responsible Borrowers Save an Average of $3,000 per Year: The President’s plan will provide borrowers who are current on their payments with an opportunity to refinance and take advantage of historically low interest rates, cutting through the red tape that prevents these borrowers from saving hundreds of dollars a month and thousands of dollars a year. This plan, which is paid for by a financial fee so that it does not add a dime to the deficit, will:
- Provide access to refinancing for all non-GSE borrowers who are current on their payments and meet a set of simple criteria.
- Streamline the refinancing process for all GSE borrowers who are current on their loans.
- Give borrowers the chance to rebuild equity through refinancing.
- Homeowner Bill of Rights: The President is putting forward a single set of standards to make sure borrowers and lenders play by the same rules
- Moving the Market to Provide a Full Year of Forbearance for Borrowers Looking for Work: Following the Administration’s lead, major banks and the GSEs are now providing up to 12 months of forbearance to unemployed borrowers.
Doug Casey on the Coming War with Iran
(Interviewed by Louis James, Editor, International Speculator)
L: Doug-Sama, I've heard you say you think the US is setting Iran up to be the next fall guy in the wag-the-dog show – do you think it could really come to open warfare?
Doug: Yes, I do. It could just be saber rattling during an election year, but Western powers have been provoking Iran for years now – two decades, really. I just saw another report proclaiming that Iran is likely to attack the US, which is about as absurd as the allegations Bush made about Iraq bombing the US, when he fomented that invasion. It's starting to look rather serious at this point, so I do think the odds favor actual fighting in the not-too-distant future.
L: Could they really be so stupid?
Doug: You know the answer to that one. We're dealing with criminal personalities on both sides, and criminals are basically very stupid – meaning they have an unwitting tendency to self-destruction. One thing to remember is that most of those in power in the West still believe the old economic fallacy that war is good for the economy.
L: The old broken-window fallacy. Paraphrasing Arlo Guthrie, it's hard to believe anyone could get away with making a mistake that dumb for that long. Our friends at IHS put together a great, brief video debunking the fallacy.
Doug: People like those in power still suffer the delusion that it was World War II that ended the Great Depression for the US. Actually, it was only after the end of the war that the depression ended, in 1946. In his book World Economic Development: 1979 and Beyond, Herman Kahn documented long-term growth throughout the 20th century. Between 1914 to 1946 – a very tough time, with WW I, the Great Depression, and WW II – the world economy still grew at something like 1.8%. I believe real growth would have been several times as great, were it not for the state and its products. But people still believe that spending money on things that explode and kill and destroy is somehow good for the economy.
L: I suppose they think it's okay if it creates jobs here and destroys lives and livelihoods "over there." But aside from the fact that it's not safe to assume today's enemies are not capable of bringing the battle onto US soil, it still ignores the fact that you're spending money on stuff that gets destroyed – like broken windows – and that impoverishes us all. Worse, the cost is not just economic.
Doug: That's right. This coming war with Iran has the potential to turn into something resembling WW III, with enormous consequences.
Now, it's hard to speak with any certainty on such matters, because most of what we have to go on are press reports. Governments keep most really critical facts on their doings to themselves, and what you read in the press is as likely as not just a warmed-over government press release – in other words, propaganda. Meaningless, if not actively deceptive. It is correctly said that in war, truth is the first casualty.
L: Doug-Sama, I've heard you say you think the US is setting Iran up to be the next fall guy in the wag-the-dog show – do you think it could really come to open warfare?
Doug: Yes, I do. It could just be saber rattling during an election year, but Western powers have been provoking Iran for years now – two decades, really. I just saw another report proclaiming that Iran is likely to attack the US, which is about as absurd as the allegations Bush made about Iraq bombing the US, when he fomented that invasion. It's starting to look rather serious at this point, so I do think the odds favor actual fighting in the not-too-distant future.
L: Could they really be so stupid?
Doug: You know the answer to that one. We're dealing with criminal personalities on both sides, and criminals are basically very stupid – meaning they have an unwitting tendency to self-destruction. One thing to remember is that most of those in power in the West still believe the old economic fallacy that war is good for the economy.
L: The old broken-window fallacy. Paraphrasing Arlo Guthrie, it's hard to believe anyone could get away with making a mistake that dumb for that long. Our friends at IHS put together a great, brief video debunking the fallacy.
Doug: People like those in power still suffer the delusion that it was World War II that ended the Great Depression for the US. Actually, it was only after the end of the war that the depression ended, in 1946. In his book World Economic Development: 1979 and Beyond, Herman Kahn documented long-term growth throughout the 20th century. Between 1914 to 1946 – a very tough time, with WW I, the Great Depression, and WW II – the world economy still grew at something like 1.8%. I believe real growth would have been several times as great, were it not for the state and its products. But people still believe that spending money on things that explode and kill and destroy is somehow good for the economy.
L: I suppose they think it's okay if it creates jobs here and destroys lives and livelihoods "over there." But aside from the fact that it's not safe to assume today's enemies are not capable of bringing the battle onto US soil, it still ignores the fact that you're spending money on stuff that gets destroyed – like broken windows – and that impoverishes us all. Worse, the cost is not just economic.
Doug: That's right. This coming war with Iran has the potential to turn into something resembling WW III, with enormous consequences.
Now, it's hard to speak with any certainty on such matters, because most of what we have to go on are press reports. Governments keep most really critical facts on their doings to themselves, and what you read in the press is as likely as not just a warmed-over government press release – in other words, propaganda. Meaningless, if not actively deceptive. It is correctly said that in war, truth is the first casualty.
47 Signs That China Is Absolutely Destroying America On The Global Economic Stage
Have you ever watched a football game or a basketball game where one team dominates the other team so badly that calling it a "blowout" would be a huge understatement? Well, that is what China is doing to the United States. China is absolutely destroying America on the global economic stage. Once upon a time, the Chinese economy was a joke and the U.S. economy was the most powerful the world had ever seen. But over the past couple of decades the U.S. economy has decayed and declined while the Chinese economy has skyrocketed. Today, China makes more steel, more automobiles, more beer, more cotton, more coal and more solar panels than we do. China has the fastest train in the world, the fastest computer in the world and they export twice as much high-tech equipment as we do. In 2011, our trade deficit with China was the largest trade deficit that one nation has had with another nation in the history of the world, and China has now accumulated more than 3 trillion dollars in foreign currency reserves. Every single day, we lose more jobs, more businesses and more of our national wealth to China. In technical economic terms, China has "taken us out behind the woodshed" and has beaten the living daylights out of us. Unfortunately, most Americans are so addicted to entertainment that they don't even realize what is happening.
If you do not believe that China is wiping the floor with America in front of the rest of the world, just keep reading. The following are 47 signs that China is absolutely destroying America on the global economic stage....
#1 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China's high-tech exports are more than twice the size of U.S. high-tech exports.
#2 America has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.
#3 The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.
If you do not believe that China is wiping the floor with America in front of the rest of the world, just keep reading. The following are 47 signs that China is absolutely destroying America on the global economic stage....
#1 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China's high-tech exports are more than twice the size of U.S. high-tech exports.
#2 America has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.
#3 The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.
Keiser Report: Chutzpah Economics (E244)
In this episode, Max Keiser and co-host, Stacy Herbert, discuss chutzpah economics, unrequited transfers and shakedowns. In the second half of the show, Max talks to economist, Saifedean Ammous, about the standoff between Egypt and the IMF debt pushers as well as the war against the online free market by Hollywood middlemen.
SPECIAL REPORT: $500 SILVER & Hyperinflation
"A SGTreport SPECIAL REPORT featuring Chris Duane from http://dont-tread-on.me/ & David Morgan from http://www.silver-investor.com/. Chris and I explore the 1/10th ounce silver payment for a hard day's labor which was the historical norm for centuries. And how that fractional payment will actually hold true in the future for millions of Americans once silver reaches its real all-time inflation adjusted high of $500 per ounce. David Morgan also joins us to explore the very real possibility of hyperinflation in the United States by the year 2014. So buckle up, this is a good one."
SilverDoctors: China goes on Gold Binge, as World Wonders Why
SilverDoctors: China goes on Gold Binge, as World Wonders Why: Yesterday's video of the day went to Jeffrey Christian. The CPM Group Founder who told CNBS that gold and silver have probably seen thei...
SilverDoctors: Judge: No Special Priority For MF Global Customers...
SilverDoctors: Judge: No Special Priority For MF Global Customers...: Judge Martin Glenn ' We don't have the power to help the individual clients, and even if we did, we wouldn't! ' At least Judge Glen is h...
Nomi Prins - Mafia Banking Cartel Blackmail Greece into Antiquities Debt Pay Off Dea
On the Monday, January 30 edition of the Infowars Nightly News, Alex talks with author, journalist, and former Goldman-Sachs director Nomi Prins about the MF Global scandal and the decision by the strapped Greek government to rent out the country's antiquities in order to pay off a debt owed to international bankers.
SilverDoctors: Alf Field: Silver to Reach $158 in Current MAJOR W...
SilverDoctors: Alf Field: Silver to Reach $158 in Current MAJOR W...: Alf Field, the technical analyst revered and quoted by the legendary Jim Sinclair, has released his revised outlook for silver due to popul...
SilverDoctors: Greece Debt Deal Could Be Reached in Hours
SilverDoctors: Greece Debt Deal Could Be Reached in Hours: Get a good night's sleep tonight Jamie and Lloyd. The first domino may have toppled by Sunrise Thursday in Manhattan. BRUSSELS—A long-awai...
SilverDoctors: Jan Silver Eagle Sales Pass 6 Million, Fall Just S...
SilverDoctors: Jan Silver Eagle Sales Pass 6 Million, Fall Just S...: The US Mint has released Silver Eagle sales totals for January of 6,107,000 ounces. The number falls just short of the US Mint's monthly...
SilverDoctors: Gold Challenges Resistance at $1,750/oz
SilverDoctors: Gold Challenges Resistance at $1,750/oz: Gold has risen to 8 week highs despite positive manufacturing data, higher factory activity in Germany, China and the US and the hope that ...
SilverDoctors: Chinese & Indian Gold Demand Rising as Zero Rates ...
SilverDoctors: Chinese & Indian Gold Demand Rising as Zero Rates ...: "We can't put $100 trillion of credit in a system-wide mattress," says Bill Gross, founder and co-manager of the giant Pimco bond-funds grou...
01 February 2012
SilverDoctors: ISDA on Greek Default Definition
SilverDoctors: ISDA on Greek Default Definition: You ask the ISDA what their definition of a Greek default is (if a 70% haircut is not a default!)? Well, that depends on what your definit...
After a Delay, MF Global’s Missing Money Is Traced
By BEN PROTESS and AZAM AHMED
Louis Freeh, a former F.B.I. director, and James Giddens, below, a partner at Hughes, Hubbard & Reed, are MF Global trustees.Alex Wong/Getty ImagesLouis Freeh, a former F.B.I. director, and James Giddens, below, a partner at Hughes, Hubbard & Reed, are MF Global trustees.
Chip Somodevilla/Getty Images
Investigators have determined what happened to nearly all of the customer money that disappeared from MF Global around the time of its bankruptcy last Oct. 31, but have not publicly disclosed their progress, fearing that doing so might cripple efforts to recover the cash and pursue potential wrongdoing, people briefed on the investigation said.
While authorities have traced hundreds of millions of dollars to banks, MF Global’s trading partners and even the firm’s securities customers, investigators remain uncertain about whether they can retrieve the money.
Some recipients were entitled to payouts from MF Global, which could make clawing back the money difficult. For instance, securities customers withdrawing their money as MF Global began to collapse were paid from accounts that belonged to futures clients, according to other people briefed on the matter.
But the Commodity Futures Trading Commission, the regulator leading the investigation, will examine whether anyone accepted customer cash without verifying the source of the money, one of the people briefed on the matter said.
This person and others who discussed the case did so on the condition of anonymity because the investigation is not public.
The findings shift the pressing question surrounding the collapse of MF Global from what happened to the money to how to recover it and who is at fault.
Answers will not come easy. A significant impediment has been clashes among the parties trying to resolve the MF Global mess: three federal agencies and two bankruptcy trustees.
At the center of the squabbling are e-mails sent by top executives at MF Global — communications that have been withheld from federal authorities, according to the people briefed on the matter. Investigators suspect the e-mails, sent just before the firm collapsed, contain clues about who transferred the money from protected customer accounts.
Louis Freeh, a former F.B.I. director, and James Giddens, below, a partner at Hughes, Hubbard & Reed, are MF Global trustees.Alex Wong/Getty ImagesLouis Freeh, a former F.B.I. director, and James Giddens, below, a partner at Hughes, Hubbard & Reed, are MF Global trustees.
Chip Somodevilla/Getty Images
Investigators have determined what happened to nearly all of the customer money that disappeared from MF Global around the time of its bankruptcy last Oct. 31, but have not publicly disclosed their progress, fearing that doing so might cripple efforts to recover the cash and pursue potential wrongdoing, people briefed on the investigation said.
While authorities have traced hundreds of millions of dollars to banks, MF Global’s trading partners and even the firm’s securities customers, investigators remain uncertain about whether they can retrieve the money.
Some recipients were entitled to payouts from MF Global, which could make clawing back the money difficult. For instance, securities customers withdrawing their money as MF Global began to collapse were paid from accounts that belonged to futures clients, according to other people briefed on the matter.
But the Commodity Futures Trading Commission, the regulator leading the investigation, will examine whether anyone accepted customer cash without verifying the source of the money, one of the people briefed on the matter said.
This person and others who discussed the case did so on the condition of anonymity because the investigation is not public.
The findings shift the pressing question surrounding the collapse of MF Global from what happened to the money to how to recover it and who is at fault.
Answers will not come easy. A significant impediment has been clashes among the parties trying to resolve the MF Global mess: three federal agencies and two bankruptcy trustees.
At the center of the squabbling are e-mails sent by top executives at MF Global — communications that have been withheld from federal authorities, according to the people briefed on the matter. Investigators suspect the e-mails, sent just before the firm collapsed, contain clues about who transferred the money from protected customer accounts.
Asia Gold Prices Up
By Esther Tanquintic-Misa: Subscribe to Esther's RSS feed
February 1, 2012 12:44 AM EST
If for anything, the recently concluded weeklong Lunar New Year holiday helped propel prices of gold in the Asian trading floor to rise on Tuesday, prompted by China's holiday bingeing of the precious yellow metal.
"People (in China) are still very interested in buying gold," a Beijing-based analyst said in The Wall Street Journal, noting Asian appetite into gold facilitated its prices to soar 10.9 per cent higher since the start of the year.
This, as China's 2011 gold production jumped to 5.89 per cent to 360.96 tonnes over a year ago, the China Gold Association said on Tuesday. The latest data marked a record high and ranked as the highest in the world for the fifth consecutive year, the association added.
The continuing fiscal crisis affecting the world today will support China's appetite for gold, long considered a safe haven to protect one's fiscal image, to further widen, the analyst said.
On Tuesday, spot gold traded at $1,734.92 a troy ounce at 0525 GMT, a $4.62 growth from its previous settlement.
However, analysts said investors may move to cash over safe-haven assets in the next few days, still due to the unending Greek debt restructuring talks. Once the U.S. dollar regains strength this week, dollar-denominated commodities become all the more expensive to investors holding other currencies.
February 1, 2012 12:44 AM EST
If for anything, the recently concluded weeklong Lunar New Year holiday helped propel prices of gold in the Asian trading floor to rise on Tuesday, prompted by China's holiday bingeing of the precious yellow metal.
"People (in China) are still very interested in buying gold," a Beijing-based analyst said in The Wall Street Journal, noting Asian appetite into gold facilitated its prices to soar 10.9 per cent higher since the start of the year.
This, as China's 2011 gold production jumped to 5.89 per cent to 360.96 tonnes over a year ago, the China Gold Association said on Tuesday. The latest data marked a record high and ranked as the highest in the world for the fifth consecutive year, the association added.
The continuing fiscal crisis affecting the world today will support China's appetite for gold, long considered a safe haven to protect one's fiscal image, to further widen, the analyst said.
On Tuesday, spot gold traded at $1,734.92 a troy ounce at 0525 GMT, a $4.62 growth from its previous settlement.
However, analysts said investors may move to cash over safe-haven assets in the next few days, still due to the unending Greek debt restructuring talks. Once the U.S. dollar regains strength this week, dollar-denominated commodities become all the more expensive to investors holding other currencies.
'Gold and silver will shine over the next few months'
Last Updated : 01 February 2012 at 11:30 IST
By Patrick A. Heller
Through the COMEX close on Monday, January 30, the prices of Gold and Silver had increased more than 10% and 20% over the course of the month. Had these results been realized by any of the major stock indices, you can be sure they would garner headline coverage. But strong markets in gold and silver continue to receive comparatively minimal reporting by the mainstream financial media.
Actually, the value of gold and silver haven’t changed at all. Ounces of physical gold and silver are still worth the same today as they were a month ago. What has changed is that the values of paper currencies, stocks, and bonds have mostly fallen in January.
In mid-January, the US Dollar Index reached its highest level since September 2010. This temporary strength resulted from the weakness in the Euro. The falling value of the Euro was related to the financial problems in many European nations, where sovereign credit ratings were dropped for at least ten countries in that continent within the past month. Governments such as France, Italy, Spain, and Austria were among those hit by credit downgrades.From its peak two weeks ago, the US Dollar Index has dropped 2%.
Greece Prime Minister Calls "Crisis Meeting" Attacks EU, IMF; Does Germany Want a Deal?
MISH'S
Global Economic
Trend Analysis
Things are going so well in Greece (just one step away from a deal for weeks on end), that Greek officials attack EU and IMF as debt talks stall
Greek officials launched a vociferous behind the scenes attack on European Union and International Monetary Fund negotiators as talks in Athens over the country's mounting debts appeared to stall.
Prime minister Lucas Papademos told aides that a crisis meeting of party leaders would be called as early as Thursday to thrash out a response to an increasingly intransigent negotiating team sent by Brussels, which is demanding severe austerity measures before sanctioning a further €130bn (£109bn) of bailout funds.
Papademos and his team of aides returned in sombre mood on Tuesday from a round of talks in Brussels and Frankfurt at the offices of the European Central Bank (ECB), despite relief that a German proposal to install an EU commissioner in Athens, with special oversight of Greek finances, had been quashed.
On the negotiations over the bailout funds, Greek MPs have objected to demands by the troika for further wage cuts and reductions in the minimum wage.
Global Economic
Trend Analysis
Things are going so well in Greece (just one step away from a deal for weeks on end), that Greek officials attack EU and IMF as debt talks stall
Greek officials launched a vociferous behind the scenes attack on European Union and International Monetary Fund negotiators as talks in Athens over the country's mounting debts appeared to stall.
Prime minister Lucas Papademos told aides that a crisis meeting of party leaders would be called as early as Thursday to thrash out a response to an increasingly intransigent negotiating team sent by Brussels, which is demanding severe austerity measures before sanctioning a further €130bn (£109bn) of bailout funds.
Papademos and his team of aides returned in sombre mood on Tuesday from a round of talks in Brussels and Frankfurt at the offices of the European Central Bank (ECB), despite relief that a German proposal to install an EU commissioner in Athens, with special oversight of Greek finances, had been quashed.
On the negotiations over the bailout funds, Greek MPs have objected to demands by the troika for further wage cuts and reductions in the minimum wage.
SilverDoctors: Blythe Replaces Faissola who is Vice Chairman of I...
SilverDoctors: Blythe Replaces Faissola who is Vice Chairman of I...: Things are getting hairier than hairy. Two days ago we reported that B lythe is taking over for Deutsche Bank's Michele Faissola as hea...
31 January 2012
SilverDoctors: Cartel Defends $1750 Gold & $34 Silver With Waterf...
SilverDoctors: Cartel Defends $1750 Gold & $34 Silver With Waterf...: Absolutely classic cartel raid in gold and silver today as they attempt to defend $1750 gold and $34 silver. Just prior to 10am EST, silve...
Super Powers Can Handle Super Debt?
World renowned Harvard economist Niall Ferguson says the USA is now unlikely to default on its debt (actually only partially) and that the reason they won’t “run out” of money has nothing to do with their status as a currency issuer, but has everything to do with being a super power which gives them the ability to handle “super debts” (via Business Insider):
“I think we are going to get some defaults one way or the other. The U.S. is a different story. First of all I think the debt to GDP ratio can go quite a lot higher before there’s any upward pressure on interest rates. I think the more I’ve thought about it the more I’ve realized that there are good analogies for super powers having super debts. You’re in a special position as a super power. You get, especially, you know, as the issuer of the international reserve currency, you get a lot of leeway. The U.S. could conceivably grow its way out of the debt. It could do a mixture of growth and inflation. It’s not going to default. It may default on liabilities in Social Security and Medicare, in fact it almost certainly will. But I think holders of Treasuries can feel a lot more comfortable than anyone who’s holding European bonds right now.”
“I think we are going to get some defaults one way or the other. The U.S. is a different story. First of all I think the debt to GDP ratio can go quite a lot higher before there’s any upward pressure on interest rates. I think the more I’ve thought about it the more I’ve realized that there are good analogies for super powers having super debts. You’re in a special position as a super power. You get, especially, you know, as the issuer of the international reserve currency, you get a lot of leeway. The U.S. could conceivably grow its way out of the debt. It could do a mixture of growth and inflation. It’s not going to default. It may default on liabilities in Social Security and Medicare, in fact it almost certainly will. But I think holders of Treasuries can feel a lot more comfortable than anyone who’s holding European bonds right now.”
MF Global Was Doing Great Until It Wasn’t
By Matt Levine
“Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone,” but every banker also seems to forget the modern corollary, which is that, if you have to prove you are worthy of credit, however good may be your arguments, don’t do it over email. Here’s someone who forgot that and does it surprise you to find his name in the same sentence as “House Financial Services Subcommittee on Oversight and Investigations”?:
“Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone,” but every banker also seems to forget the modern corollary, which is that, if you have to prove you are worthy of credit, however good may be your arguments, don’t do it over email. Here’s someone who forgot that and does it surprise you to find his name in the same sentence as “House Financial Services Subcommittee on Oversight and Investigations”?:A week before MF Global Holdings Ltd. collapsed, its chief financial officer told Standard & Poor’s in an e-mail that the futures broker had “never been stronger.”
S&P provided the House Financial Services Subcommittee on Oversight and Investigations with an excerpt of the e-mail from MF Global CFO Henri Steenkamp. S&P also informed the panel that Jon Corzine, then MF Global’s chief executive officer, met with its analysts on Oct. 20 to reassure them that his $6.3 billion bet on European sovereign debt was no threat to the firm, according to a Jan. 17 letter obtained by Bloomberg News.
U.S. lawmakers will turn their attention to the role of the ratings companies in the failure of MF Global at a Feb. 2 hearing after summoning Corzine, the former governor of New Jersey and Goldman Sachs Group Inc. co-chairman, to two hearings in December. S&P ranked MF Global as investment grade until its failure, while Moody’s downgraded it to junk status four days earlier.
“MF Global is in its strongest position ever,” Steenkamp told S&P on Oct. 24, according to the letter to Representative Randy Neugebauer, a Texas Republican, from Craig Parmelee, a managing director at S&P in New York.
Iran sanctions: India exploring Russia payment route
With the U.S. and the EU imposing fresh sanctions against Iran, India is exploring all possibilities to keep the Iranian oil flowing as it is critical to its energy security. One of the options being discussed is firming up an arrangement with Russia’s Gazprombank for paying to Iranian oil.
In the wake of the U.S. and the European Union approving fresh sanctions and an oil embargo against Iran, India has no choice but to step up its efforts to find new ways to pay for Iranian hydrocarbons.
Unlike Turkey, the current mediator between Indian and Iranian oil companies, one of the most convenient options seems to be using the Russian banking system, which is not facing a lot of pressure. To keep Iranian oil flowing as it contributes around 12 percent of New Delhi’s oil imports, India had started preparing in advance for the introduction of the EU oil embargo against Iran. An Indian multi-ministerial delegation visited Tehran from January 16 to 21 to discuss with Iranian colleagues the possibility of changing the current payment methods for Iranian oil.
According to Indian media reports, India is exploring the possibility of opening a bank account in another country, perhaps with Russia’s Gazprombank. The desire for such an arrangement was expressed by Indian Oil Corporation and Bharat Petroleum Corporation, India’s two largest oil refiners. Indian Prime Minister Manmohan Singh discussed the question of opening accounts with Russian politicians during his visit to Moscow in December. Gazprom has not yet released information about a possible deal. Another proposed way to change the payment scheme for Iranian oil would be to transition to a barter system. India would invest in other sectors of Iran’s economy and in return receive an equivalent amount of Iranian oil.
The other alternatives that are being explored include paying for Iranian oil in Indian currency or Japanese yen. There is also a possibility of paying through gold. Tehran receives around $12 billion annually from New Delhi for oil (12% of India’s total oil consumption), and both countries wish to maintain trade volumes. However, with the progressively worsening economic sanctions against Iran, imposed unilaterally by the U.S. and the European Union, there are fewer opportunities for India-Iran cooperation. For India’s oil companies, this situation could lead to serious economic losses.
In the wake of the U.S. and the European Union approving fresh sanctions and an oil embargo against Iran, India has no choice but to step up its efforts to find new ways to pay for Iranian hydrocarbons.
Unlike Turkey, the current mediator between Indian and Iranian oil companies, one of the most convenient options seems to be using the Russian banking system, which is not facing a lot of pressure. To keep Iranian oil flowing as it contributes around 12 percent of New Delhi’s oil imports, India had started preparing in advance for the introduction of the EU oil embargo against Iran. An Indian multi-ministerial delegation visited Tehran from January 16 to 21 to discuss with Iranian colleagues the possibility of changing the current payment methods for Iranian oil.
According to Indian media reports, India is exploring the possibility of opening a bank account in another country, perhaps with Russia’s Gazprombank. The desire for such an arrangement was expressed by Indian Oil Corporation and Bharat Petroleum Corporation, India’s two largest oil refiners. Indian Prime Minister Manmohan Singh discussed the question of opening accounts with Russian politicians during his visit to Moscow in December. Gazprom has not yet released information about a possible deal. Another proposed way to change the payment scheme for Iranian oil would be to transition to a barter system. India would invest in other sectors of Iran’s economy and in return receive an equivalent amount of Iranian oil.
The other alternatives that are being explored include paying for Iranian oil in Indian currency or Japanese yen. There is also a possibility of paying through gold. Tehran receives around $12 billion annually from New Delhi for oil (12% of India’s total oil consumption), and both countries wish to maintain trade volumes. However, with the progressively worsening economic sanctions against Iran, imposed unilaterally by the U.S. and the European Union, there are fewer opportunities for India-Iran cooperation. For India’s oil companies, this situation could lead to serious economic losses.
Iran well prepared for the worst
By David Isenberg
Most discussions of possible United States military operations in the Persian Gulf, should Iran try to prevent maritime traffic from going through the Strait of Hormuz, generally say that while it would not be a cakewalk, it would not be an enormously difficult task either.
But that conventional wisdom is wrong, according to a recent report issued by an independent, non-profit public policy research institute in Washington DC. The report found that the traditional post-Cold War US military ability to project power overseas with few serious challenges to its freedom of action may be rapidly drawing to a close.
While such conclusions have been voiced before, most notably in
regard to capabilities being developed by the People's Republic of China - which is developing an anti-access/area-denial (A2/AD) battle network that could constrain the US military's ability to maneuver in the air, sea, undersea, space and cyber-space operating domains - China is hardly the only country that has developed such options.
According to the report published by the Center for Strategic and Budgetary Assessments (CSBA), "Iran, in particular, has been investing in new capabilities that could be used to deter, delay or prevent effective US military operations in the Persian Gulf. Iran's acquisitions of weapons that it could use to deny access to the Gulf, control the flow of oil and gas from the region, and conduct acts of aggression or coercion, are of grave concern to the United States and its security partners."
The report, "Outside-In: Operating from Range to Defeat Iran's Anti-Access and Area-Denial Threats" [1] notes that Iran has been preparing for a possible military confrontation with the United States for decades. Instead of engaging in a direct military competition, which would be pitting its weaknesses against US strengths, Iran has developed an asymmetric "hybrid" A2/AD strategy that mixes advanced technology with guerilla tactics to deny US forces basing access and maritime freedom of maneuver.
Even if Iran did not disrupt Gulf maritime traffic for long, it could still have a devastating impact. A recent report by the International Monetary Fund (IMF) found that Iran's closure of the Strait of Hormuz would "neutralize a large part of current OPEC [Organization of Petroleum Exporting Countries] spare capacity," saying "alternative routes exist, but only for a tiny fraction of the amounts shipped through the strait, and they may take some time to operationalize while transportation costs would rise significantly."
Most discussions of possible United States military operations in the Persian Gulf, should Iran try to prevent maritime traffic from going through the Strait of Hormuz, generally say that while it would not be a cakewalk, it would not be an enormously difficult task either.
But that conventional wisdom is wrong, according to a recent report issued by an independent, non-profit public policy research institute in Washington DC. The report found that the traditional post-Cold War US military ability to project power overseas with few serious challenges to its freedom of action may be rapidly drawing to a close.
While such conclusions have been voiced before, most notably in
regard to capabilities being developed by the People's Republic of China - which is developing an anti-access/area-denial (A2/AD) battle network that could constrain the US military's ability to maneuver in the air, sea, undersea, space and cyber-space operating domains - China is hardly the only country that has developed such options.
According to the report published by the Center for Strategic and Budgetary Assessments (CSBA), "Iran, in particular, has been investing in new capabilities that could be used to deter, delay or prevent effective US military operations in the Persian Gulf. Iran's acquisitions of weapons that it could use to deny access to the Gulf, control the flow of oil and gas from the region, and conduct acts of aggression or coercion, are of grave concern to the United States and its security partners."
The report, "Outside-In: Operating from Range to Defeat Iran's Anti-Access and Area-Denial Threats" [1] notes that Iran has been preparing for a possible military confrontation with the United States for decades. Instead of engaging in a direct military competition, which would be pitting its weaknesses against US strengths, Iran has developed an asymmetric "hybrid" A2/AD strategy that mixes advanced technology with guerilla tactics to deny US forces basing access and maritime freedom of maneuver.
Even if Iran did not disrupt Gulf maritime traffic for long, it could still have a devastating impact. A recent report by the International Monetary Fund (IMF) found that Iran's closure of the Strait of Hormuz would "neutralize a large part of current OPEC [Organization of Petroleum Exporting Countries] spare capacity," saying "alternative routes exist, but only for a tiny fraction of the amounts shipped through the strait, and they may take some time to operationalize while transportation costs would rise significantly."
SilverDoctors: Goldman, JPM Attempting to Exempt Swaps Books from...
SilverDoctors: Goldman, JPM Attempting to Exempt Swaps Books from...: Goldman and JP Morgan are attempting to exempt themselves from Frank-Dodd legislation regarding credit default swap regulation, stating that...
Venezuela Receives Last Shipment of Repatriated Gold Bars
By Nathan Crooks - Jan 31, 2012 1:08 AM GMT+0100
Venezuela today received the last shipment of gold bars in an operation that repatriated 160 tons of the South American country’s reserves of the metal held abroad, said Nelson Merentes, president of the country’s central bank.
Fourteen tons of gold arrived at the Caracas airport today on a flight from Europe, Merentes said. The gold bars were transported in a caravan, broadcast on state television, to vaults at the central bank where street banners proclaimed “Mission Complete.”
“In two months, we’ve brought 160 tons of gold valued at around $9 billion back to Venezuela,” Merentes said on state television from the Caracas airport. “Today marks the last day of the mission.”
Venezuela today received the last shipment of gold bars in an operation that repatriated 160 tons of the South American country’s reserves of the metal held abroad, said Nelson Merentes, president of the country’s central bank.
Fourteen tons of gold arrived at the Caracas airport today on a flight from Europe, Merentes said. The gold bars were transported in a caravan, broadcast on state television, to vaults at the central bank where street banners proclaimed “Mission Complete.”
“In two months, we’ve brought 160 tons of gold valued at around $9 billion back to Venezuela,” Merentes said on state television from the Caracas airport. “Today marks the last day of the mission.”
MFGlobal and our vaporizing 1.2 billion dollars/Greece and Portugal/Gold and silver raid prior to first day notice
Good evening Ladies and Gentlemen:
I guess our boys decided that a raid on silver and gold was necessary prior to first day notice. The object of the exercise was to dampen the spirits of the long holders into taking cash and depositing it into the brokerage account in order to take delivery of gold and silver. Gold closed down by 3.00 dollars to $1729.80 whereas silver fell by 25 cents to $33.50. I would have to say that the raid was a total wipe out for our bankers.
Let us head over to the comex and assess trading. First day notice is tomorrow. However I still do not have delivery notices going into tomorrow. This will be important so I will post it tonight in my comments sections.
The total comex gold OI today fell by 3551 contracts from 433,710 to 430,159. On Friday we had a very good day for gold so again a few bankers bit the dust. The front options expiry month of January is now complete. The big delivery month of February saw its OI rest tonight at a monstrously high 29,103 contracts. I will still need tomorrow's OI data to see how many rolled into April. The next front month of April saw its OI rise from 175,305 to 213,997 for a rollover of 38,692 contracts. This snapshot would be as of Friday as all OI numbers are 24 hours back. The estimated volume at the gold comex today was very very light at 184,065. I would have thought that more rolled to the April month today. The confirmed volume on the gold comex on Friday was very high at 343,879 but many were rollovers.
The total silver comex OI fell marginally by 121 contracts from 102,006 to 101,885. Since silver had a great day on Friday we again lost some bankers who could not stand the heat. The front options expiry month of January is now off the board. The new front options expiry is now February and here the OI rose from 124 to 159 as these guys will be given a futures contract for February and thus automatically stand for metal. The next big delivery month for silver is March and here the OI stayed quite constant rising by 500 contracts to 49,053. The estimated volume at the silver comex today was anemic at 31,583 contracts. The confirmed volume on Friday was also anemic at 34,752.
Keiser Report
In this episode, Max Keiser and co-host, Stacy Herbert, discuss banking zombies and clowns and their magical thinking on zero rates while starving the economy of interest income. In the second half of the show, Max talks to Ned Naylor-Leyland about the silver, gold, backwardation, manipulation and more.
No Pushing In The Default Line, Please
By: Michael Ashton | Mon, Jan 30, 2012
Europe continues to smolder, but it is about to burst into outright flame. The 'private sector initiative' (PSI) discussions, which were supposed to be completed the Friday before last, continue. The leaks of an imminent deal continue, and eventually I am certain that a deal will be announced because eventually we will be down to just one bondholder still represented by the IIF. It is pretty clear by now - or it should be - that the PSI is no panacea. The only ray of hope to that process is that the approval of a 'haircut' (in the same way that Hannibal Lecter gave haircuts) would give the EU a fig leaf to approve a deal to send good money after bad, if it could overlook the failure to implement austerity measures that currently has German Finance Minister Schaeuble in a tizzy.
It would be a colossal mistake to agree to another €130bln bailout, even if the chances of it actually being disbursed would be slim (after all, remember the PSI process is necessary for the disbursement of the past-due tranche of the current bailout). And, honestly, I think the only reason they are continuing the charade is to give themselves more time to ready the Plan B default and/or Euro exit.
However, the market may not give them the time. Today Portugal's 10-year rate rose nearly 200bps (see Chart, source Bloomberg), likely triggered in part by a headline saying "ECB cuts off bond buying as pressure mounts."
It didn't actually cut off bond buying, but it bought very little last week. It seems fairly clear that the limits of the ECB's ability to sterilize the transaction are nearby, if they have not already been reached, and no doubt some cooler heads have pointed out that failing to have enough buyers for a 7-day ECB tender would be much worse than allowing bond yields to reach free-market levels. After all, what's the difference to Portugal of 15% or 17% on 10-year notes? Neither level makes Portugal's situation even vaguely sustainable.
Europe continues to smolder, but it is about to burst into outright flame. The 'private sector initiative' (PSI) discussions, which were supposed to be completed the Friday before last, continue. The leaks of an imminent deal continue, and eventually I am certain that a deal will be announced because eventually we will be down to just one bondholder still represented by the IIF. It is pretty clear by now - or it should be - that the PSI is no panacea. The only ray of hope to that process is that the approval of a 'haircut' (in the same way that Hannibal Lecter gave haircuts) would give the EU a fig leaf to approve a deal to send good money after bad, if it could overlook the failure to implement austerity measures that currently has German Finance Minister Schaeuble in a tizzy.
It would be a colossal mistake to agree to another €130bln bailout, even if the chances of it actually being disbursed would be slim (after all, remember the PSI process is necessary for the disbursement of the past-due tranche of the current bailout). And, honestly, I think the only reason they are continuing the charade is to give themselves more time to ready the Plan B default and/or Euro exit.
However, the market may not give them the time. Today Portugal's 10-year rate rose nearly 200bps (see Chart, source Bloomberg), likely triggered in part by a headline saying "ECB cuts off bond buying as pressure mounts."
It didn't actually cut off bond buying, but it bought very little last week. It seems fairly clear that the limits of the ECB's ability to sterilize the transaction are nearby, if they have not already been reached, and no doubt some cooler heads have pointed out that failing to have enough buyers for a 7-day ECB tender would be much worse than allowing bond yields to reach free-market levels. After all, what's the difference to Portugal of 15% or 17% on 10-year notes? Neither level makes Portugal's situation even vaguely sustainable.
China buying Gold like cheap cabbage, COMEX Gold speculator positions surge
The spot market price of buying Gold climbed to $1728 an ounce Monday morning London time – a slight drop from last week's close – while stock markets, commodities and the Euro all fell and government bond prices rose as European leaders met for their latest summit in Brussels.
The cost of buying Silver fell to $33.08 at one point – a 2.6% drop from where it ended last week.
Gold fell as low as $1718 per ounce Monday morning, dropping steadily during Asian trading, though this represented a loss of only 1% on Friday's closing price.
CHINA
"Everybody seemed to be expecting profit taking out of Shanghai after the two Chinese bourses came back online," said one Hong Kong dealer.
"As far as we can see, there wasn't much of that."
During last week's Lunar New Year holiday, China saw a "gold rush", with consumers spending more on buying gold than during the 2011 festival, according to a China Daily report.
"People seem crazy about gold, snatching it up more like a cheap cabbage than such a precious metal," it quotes Beijing resident Miao Miao.
The value of sales at two of Beijing's top gold retailers, Caibai and Guohua, reportedly hit 600 million Yuan ($95.28 million) – a 49.7% rise on last year's sales, almost 50% increase in purchases!The gold price in Dollars meantime rose around 25% over the same period.
Is Gold the hottest currency in the world?
The price of Gold is roaring back from its latest temporary correction, sending the bears into full withdrawal. If you sold your gold in December as it fell to $1525 an ounce, you’re probably feeling foolish at the incredible $210 rise to $1735– a 15% move in no time at all.
Gold, you see, is not a commodity like oil and Copper and wheat. It is rather an alternative currency– one that finds buyers when paper currencies like the Euro are being hugely increased in supply by the ECB to forestall a sovereign cum bank crisis in Europe. There’s $650 billion in European bank and sovereign debt coming die before March 31, 2012 which can be sopped up by the $650 billion gift from ECB to the banks at the bargain rate of 1%. And more available from the European central bank– Europe’s very own Quantitative Easing program.
As the supply of gold cannot keep up with paper money(supply increases very little despite exploration), and it can be bought without loss of any real interest income, it seems clear t hat the gold bull market is alive and well. Central banks obviously are of the mind that gold’s rise will make up for t he decline in paper money and the lack of income on central bank liquid investments.
Portugal's Debt Will Be Restructured; 3-Year Government Bond Yield Tops 25%; CDS at Record High, Implies 72% Chance of Default
MISH'S
Global Economic
Trend Analysis
Inquiring minds are watching Portuguese government bonds soar into the stratosphere, with record-high bond yields across the entire yield curve.
In all the images below, the numbers are accurate but the charts reflect yesterday. I have mentioned this to Bloomberg a number of times to no avail.
Portugal 2-year Government Bonds
Portugal 3-year Government Bonds
Global Economic
Trend Analysis
Inquiring minds are watching Portuguese government bonds soar into the stratosphere, with record-high bond yields across the entire yield curve.
In all the images below, the numbers are accurate but the charts reflect yesterday. I have mentioned this to Bloomberg a number of times to no avail.
Portugal 2-year Government Bonds
Portugal 3-year Government Bonds
You Ain't Seen Nothin' Yet; Another Trillion (or Two) Euro LTRO Coming Next Month
MISH'S
Global Economic
Trend Analysis
Last month, European banks tapped the ECB for €489bn in a long-term refinance operation dubbed LTRO. On February 29, another round of LTRO is coming up and expect banks to go for the gusto. Banks like cheap money to speculate and that is exactly what they will do.
The Financial Times reports Banks set to double crisis loans from ECB
Global Economic
Trend Analysis
Last month, European banks tapped the ECB for €489bn in a long-term refinance operation dubbed LTRO. On February 29, another round of LTRO is coming up and expect banks to go for the gusto. Banks like cheap money to speculate and that is exactly what they will do.
The Financial Times reports Banks set to double crisis loans from ECB
European banks are preparing to tap the European Central Bank’s emergency funding scheme for up to twice as much as the ECB supplied in its debut €489bn auction last month, providing further evidence of the sector’s liquidity squeeze.
Several of the eurozone’s biggest banks have told the Financial Times that they could well double or triple their request for funds in the ECB’s three-year money auction on February 29.
“Banks are not going to be as shy second time round,” said the head of one eurozone bank at last week’s World Economic Forum in Davos. “We should have done more first time.”
Three bank chief executives, all of whom asked to remain anonymous, said they were planning to increase their participation twofold or threefold.
Making Money On Poverty: JP Morgan Makes Bigger Profits When The Number Of Americans On Food Stamps Goes Up
How would you feel if someone told you that one of the largest banks on Wall Street makes more money whenever the number of Americans on food stamps goes up? Unfortunately, this is something that is actually true. In the United States today, one out of every seven Americans is on food stamps. In fact, the number of Americans on food stamps has increased by a whopping 14 million since Barack Obama entered the White House. All of this makes JP Morgan very happy, because JP Morgan has been making money by the boatload on food stamps. Right now, JP Morgan Chase issues food stamp debit cards in 26 U.S. states and the District of Columbia. The division of JP Morgan Chase that issues these debit cards made an eye-popping 5.47 billion dollars in net revenue during 2010. JP Morgan is paid per customer, so when the number of Americans on food stamps goes up, they make more money. But doesn't this give JP Morgan an incentive to try to keep the number of Americans on food stamps as high as possible? Of course it does. JP Morgan is interested in making money as rapidly as possible. If JP Morgan can get more Americans enrolled in the food stamp program and keep them enrolled in it for as long as possible, that is good for business.And the Obama administration is certainly doing what it can to help out. Even though a whopping 46 million Americans are now on food stamps, the Obama administration plans to give out large amounts of money to organizations that are able figure out ways to get even more people enrolled in the program....
SilverDoctors: ISDA is Behind the Attempt to Appeal Position Limi...
SilverDoctors: ISDA is Behind the Attempt to Appeal Position Limi...: The International Swaps and Derivatives Association (ISDA) will be responsible for a very important decision shortly. As Jim Sinclair sta...
SilverDoctors: Jim Sinclair: The Impending Undeclared Default Of ...
SilverDoctors: Jim Sinclair: The Impending Undeclared Default Of ...: The Legendary Jim Sinclair has released a MUST LISTEN BREAKING NEWS interview recorded tonight with the Ellis Martin report on the IMPENDI...
30 January 2012
China Doubles Gold Holdings: No Other Asset is Safe
Posted by Brittany Stepniak - Monday, January 30th, 2012
Due to the latest phenomena in China, some experts are calling this the “Gold Era”.
The Chinese are buying gold in record numbers and the trend has been increasing exponentially within the past year as the race for wealth-guarding picks up pace.
It has been estimated that China purchased approximately 490 tons of gold in the 2011 year – double the estimated 245 tons purchased just one year earlier in 2010.
With stories of China's gold hoarding blowing up headlines around the world, people are beginning to ask: “Who's buying all the gold?”...and “Why are they buying in such massive quantities?”
Usual Suspect #1: The People's Bank of China (PBOC).
According to Zhang Jianhua from the PBOC. “No asset is safe now...The only choice to hedge risks is to hold hard currency—gold.” Jianhua also commented on it being a wise move to purchase the expensive yellow-metal on price dips.
After Mr. Jianhua made these statements, global analysts immediately assumed they meant that the fifth-largest holder of gold would be on the prowl for even more of the glistening precious metal. Hence, an easy explanation as to "who's buying all the gold."
However, others argue that there is little proof to support that theory. Perhaps most the most important thing to remember before jumping to conclusions is the simple fact that it'd be an extremely rare scenario that China's government would want to purposefully disclose their short-term investment strategies, at the risk of hurting itself.
Second, the central bank has less purchasing power these days. China’s foreign reserves declined in Q4 2011, falling $20.6 billion from Q3. The first quarterly outflow since 1998 was not large, but the trend was troubling. The reserves declined a stunning $92.7 billion in November and December.
What Made Gold Break Out?
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch -
Last week, gold broke through heavy overhead resistance, as did silver, to look very positive for the days ahead. Many technical analysts didn’t feel that gold had that kind of momentum but then came the break. It wasn’t a struggling break; it was robust sweeping resistance aside as though it wasn’t even there.
Fed’s Announcement Last Week
You’re probably saying now that it was the announcement from the Fed that interest rates would be held at current levels for another year more, through to the end of 2014. The superficial assumption is that this means that the dollar will earn nothing, so risk assets should outperform dollar deposits. That’s true, but a great deal more was implied in their statement (as we detailed in the latest issues of the Gold Forecaster & Silver Forecaster). The Fed pointed to long rates rising to above 4% over time, while inflation remained at 2% –and could fall further. Why?
If long-term rates are going to rise while inflation is dropping and short-term rates are flat, it’s more than likely that there will be a robust recovery. In those conditions it is more than likely that it is the dollar that will become suspect with dollar investors moving out of Treasuries. This could cause long-term rates to rise as they sell. The dollar would suffer in the process. What’s of considerable importance is that a rise in long-term rates means that the Treasury markets will fall to reflect interest rate rises. Currently, long-term bonds are at very high prices, so a fall could prove particularly harmful to those markets as well as the broad economy –including housing at a time when that will hurt that struggling market even more.
It is difficult not to see a sad picture for both the dollar and other facets of the developed world economies going forward, despite the noble efforts of the Fed.
What Made Gold, Silver Rise Beyond the Announcement
Investors who are aware that the U.S. gold market is not the hub of the gold market, must be asking why did the price jump in U.S. time? The sophisticated nature of the developed world market allows the U.S. trading markets to act like the waves on the sea shore and move prices quickly and dramatically. It takes the 24-hour market to smooth out the moves to reflect the true demand and supply picture. That’s why London pulled back the gold price on Monday this week. But the jump of $65 after the announcement reflected short covering and new long positions being established in those markets. The jump through $1,700 has been held in position and looks like staying there now.
Spring Festival sparks a 'gold rush' in China
 |
| Customers swarm to buy gold products at Caishikou Department Store in Beijing, capital of China, Jan 25, 2012.[Photo/CFP] |
Sales of gold, silver and jewelry rose 57.6 percent during the week-long holiday at Caibai, one of Beijing's best-known gold retailers, according to data released by the Ministry of Commerce (MOC) on Saturday.
Other jewelry stores across the country also saw sales boom during the period, with customers favoring New Year-themed gold bars, gold ingots and other types of Dragon-themed jewelries.
"Long treasured by Chinese, gold is no longer owned only by a privileged few, but has become a new investment channel open to all," said Guan Qiang, assistant manager at Caibai.
The Spring Festival gives people a chance to preserve and present gold as gifts, offering hopes that it will increase in value and not be impacted by inflation, Guan said.
During the week-long holiday, which lasted from January 22 to 28, the sales volume in Caibai and Guohua, another of Beijing's top gold retailers, reached about 600 million yuan ($95.28 million).
The figure showed a 49.7-percent increase over that of last year's Spring Festival, said a report released by the Beijing Municipal Commission of Commerce.
Caibai began selling gold bars as investment items during the 2008 Beijing Olympic Games, but the trend of buying gold or silver bars during the Spring Festival has really taken off in the past two years, Guan said.
For Guan and his colleagues, the Spring Festival rush was an exciting but exhausting experience, as customers flooded the store and surprised clerks with their purchasing enthusiasm.
"With customers crowding and rushing in, we did not even have time to eat and drink," said a sales clerk at the gold bar counter surnamed Li.
She said each shop assistant had received hundreds of customers per day and wrote several times more orders than on ordinary days.
"You can hardly even see the gold bars, necklaces and pendants in the display case. People seem crazy about gold, snatching it up more like a 'cheap cabbage' than such a precious metal," said Beijing resident Miao Miao.
Subscribe to:
Posts (Atom)