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Black September is Here Again!

01 Tuesday Sep 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, agricultural commodities, alternate energy, Alternate Fuel Sources, alternative Energy, banking crisis banks bear market bull central deflation depression economic trends economy financial futures gold inflation crash Markets precious metals price protection recession safety silver plati, banks, bear market, Bear Trap, bonds, bull market, China, Comex, commodities, Copper, crash, Credit Default, Crude Oil, Currencies, currency, Currency and Currencies, dollar denominated, dollar denominated investments, Dow Industrials, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, follow the money, follow the news, Forex, Fundamental Analysis, futures, futures markets, gata, GLD, gold, Gold Bullion, Gold Investments, gold miners, Gold Price Manipulation, Government Spending, hard assets, heating oil, How To Invest, How To Make Money, hyper-inflation, India, inflation, Investing, investments, Jschulmansr, Junior Gold Miners, Latest News, Long Bonds, majors, Make Money Investing, manipulation, Market Bubble, market crash, Markets, mid-tier, mining companies, mining stocks, NASDQ, natural gas, Natural Resources, oil, Paladium, palladium, physical gold, platinum, platinum miners, precious, precious metals, price, price manipulation, prices, producers, production, risk, run on banks, S&P 500, safety, Saudi Arabia, silver, silver miners, Silver Price Manipulation, small caps, sovereign, spot, spot price, stagflation, Stimulus, stock market, Stocks, The Fed, Tier 1, Tier 2, Tier 3, TIPS, Treasury, U.S., U.S. Dollar, U.S. Government unfunded Debt, U.S. Treasury Dept, warrants, XAU

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ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, bonds, Brian Tang, bull market, CDE, CEF, central banks, China, cobalt, Comex, commodities, Copper, crash, Currencies, currency, Currency and Currencies, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, geothermal, GG, GLD, gold, Gold Bullion, Gold Investments, gold miners, Gold Price Manipulation, Green Energy, GTU, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, John Embry, Jschulmansr, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NAK, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, power, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, SWC, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

Well the dog days of summer are over and September is blowing in. As the brilliant colors of autumn are starting to bloom with the leaves turning orange, gold and crimson; the leaves are starting to drop. That’s not all that is starting to fall, stocks are beginning their seasonal drop. If you haven’t taken profits please do so. We will see one more push up in stocks as they form the right shoulder of the head and shoulders formation on the chart. We have just finished the head with the right shoulder to follow (DJIA). 9200 (DJIA) is the first support, next roughly 9125-9080. A decisive break below the 50 day moving average or 9000 will be absolute confirmation of the new bear market downtrend. Commercial real estate is one of the next factors (shoe) about to drop. In addition the tax break for buying a new home is about to end, and the auto industry will not have cash for clunkers to fall back on. Late Breaking China has said NO to Credit derivatives and any losses from them. This is definitely not good for the US markets. So get rid of your more speculative stocks move to good yielding stocks in industries that people have to buy the products in good times or bad times. On the rest move your stops very close w/in 10% trailing. Maybe also look at selling covered calls or puts to lock in profits and earn a little income on the side.

Gold and Precious metals are coiled up ready to spring dramatically to the upside. Countdown is almost over, ignition commencing. We have a nice little triangle in Gold. Personally, I feel we will see the breakout to the upside after a little false breakout to the downside. In other words I fell it will go down like this, first we will see Gold test the $930 level as the Big 3 shorts make one more desperate effort to save themselves. However I feel that Gold will hold and climb back to $950 and then break above $965. When that happens the next resistance will be $980, then $1000, and then a 2nd test for the all time high at $1032. I think it will successfully break that level and hit at least $1250 before the end of the year with a potential to actually hit $1325. Keep accumulating companies with a low cost of production, junior and mid tier producers with current or about to start production. There are still many bargains which I will start featuring here on the blog.

I apologize for the recent lack of posts over the past month. Since I lost my day job, I decided to go back to school again so to speak by taking a few intensive trading and technical analysis courses to refresh up again. Since my new job will be trading the markets, I will be sharing my picks and option trades, forex trades, along with choice stock picks. Wishing all of us Great Investing! -jschulmansr

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Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out:

  • · Who’s been driving this record bull-run in gold?
  • · What Happens When Inflation Kicks In?
  • · Why most investors are WRONG about gold…
  • · When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

==============================================

John Licata Still Eyeing $1200 Gold in 2009 – GoldSeek.com

Bullish on gold since it carried a $400-per-ounce price tag, Blue Phoenix Chief Investment Strategist John Licata expects the king of metals to ring in the New Year with a $1,200-per-ounce crown. As he told The Gold Report in April, he still considers gold one of the best asset plays in the world. With recovery on the horizon, he’s also high on silver—in part because a pickup in manufacturing will drive up demand. While he says it’s premature to claim economic recovery, he isn’t looking to copper to serve as the traditional harbinger of a return from recession this time. His rationale? Good economic news—while too inconsistent to make recovery imminent—is already baked in to copper’s climb already this year.

The Gold Report: You weren’t too bullish on seeing a recovery in 2009 when we caught up with you in April. We’ve seen some good Q2 reporting from a variety of companies and some encouraging economic data. The government is starting to claim we’re in recovery. What’s your take on this?

John Licata: I do think we’ve seen some better domestic economic data, but it’s premature to think we’re totally out of the woods. In terms of corporate earnings, a lot of company profits might have surprised to the upside, but they’re still down 50% to 70% from quarters before or the prior year.

Many companies have been trying to compare Q1 and Q2. You’re still not seeing dramatic differences to the upside. Quite frankly, some companies are still living within cash flow and I think that’s one of the reasons why we could have a problem with supply and demand imbalances as we come to the end of 2009 and enter 2010.

Unemployment is likely to keep rising. Although the last numbers were much better than anticipated, I don’t think we’ve seen the green light that will cause people to start hiring again. We could hit 10% unemployment by the end of the year, and that’s going to be a precursor to some weaker retail heading into the holiday season. Net-net, you probably could put the word ‘inconsistent’ toward most of the economic data coming out of the U.S.

The industrial numbers that came out of China a couple of weeks ago [August 10] were actually below expectations as well. While everyone wants to be bullish and the data is somewhat better than many expected, it’s still not great. So I think to claim victory right now is definitely premature.

TGR: You mentioned a supply-demand imbalance. What do you see on that front?

JL: Companies are not putting money back into infrastructure. For that reason, once demand actually starts to increase, supply levels will be shockingly different from what people might expect.

TGR: Are you differentiating between the BRIC countries and North America in that regard?

JL: I’m not just looking at the BRIC countries as the barometer for the economic pulse. I don’t even think China is the saving grace for commodities. But I do think what is going to be indicative for a recovery is to see demand pick up, to start seeing jobs pick up again, more consistently; not just one month out of six. We need to see consistent job growth.

TGR: When do you think demand might pick up?

JL: Q3, perhaps Q4, is when we probably can start seeing demand start picking up and I think that’s when we’re going to start to see overall a global economic recovery. I’m skeptical that it can happen before Q4.

TGR: Is that worldwide demand pickup you’re anticipating?

JL: I’m referring to North America.

TGR: Can demand pick up before unemployment abates?

JL: It can happen before, but I think demand and employment will increase in tandem.

TGR: In our previous conversation, you compared the investment opportunities in oil, natural gas and gold to one another. At this point, which of these three sectors do you think offer the greatest return?

JL: Because of the upside that I think could happen over the next 12 months, I would rate natural gas first, gold second and oil third. For right now, I’m conservatively optimistic on oil. Although short term we might have a pullback, I’m still bullish on the price of oil. I think oil will trade north of $80 by year end, and I think we’ll again see triple-digit oil within the next two years. A lot of major wells in the world are not as productive as they once were and when it comes to demand increasing because the overall economic health around the world is picking up, we could be in trouble in terms of supplies. That relates to the metals as well as energy.

TGR: Speaking of metals, your outlook for gold?

JL: I continue to maintain that we could see $1,200 gold prices by year-end. I think gold is very much on the way to hitting that pretty aggressive price target. The miners themselves seem pretty confident on the upside for gold.

TGR: In April, you described gold as one of the best asset plays in the world and your recommendation to investors was to focus initially on physical gold. Have you changed that viewpoint?

JL: No. I’ve been bullish on gold since it was below $400. But now I am starting to see some opportunities in the equity side of the gold market that are becoming very appealing and I didn’t see that when we last spoke.

TGR: Are you still bullish on platinum and palladium, too?

JL: I am still enthusiastic, but not as bullish on either of them just because we have seen a bit of a run since April. I’d rather be in silver. I think silver gets forgotten when we start talking about precious metals. As opposed to platinum or palladium, I would rather be in the silver space.

TGR: Is there anything in particular in silver that you’re finding appealing?

JL: I just think if we’re talking about an economic recovery in the back half of this year into 2010 and silver is mostly used for industrial purposes, I honestly think that silver prices are just forgotten. When people start talking about the inflation hedge, they jump into gold. If they start talking about the economy improving, they jump into copper. They tend to forget that silver is actually used for much manufacturing. So I think that is the forgotten metal and I do think that silver prices can move a lot higher, especially as gold prices march through $1,000.

TGR: As you say, people look to copper as the leading metal to point to in terms of a recovery. What’s your feeling about copper?

JL: You hit the nail on the head. Everyone starts to talk about copper, but nothing has jumped out at me to say that copper prices have much more upside. Copper prices are up nearly 100% year-to-date, so I think a lot of the recovery that many people are talking about has been priced in already.

The Baltic Dry Index, an index that just had the biggest monthly drop since October (down 28% in August), has been down because people fear that China might cut back on buying iron ore and coal. If that happens, copper prices won’t be immune. Copper supplies have been tight for the last couple of quarters. If anything, we’re trading about 35 cents or 40 cents above the recent 50-day moving average. I think copper is over-extended right now.

TGR: Any last comments before we meet again?

JL: Only that while it’s a difficult marketplace and I do expect tight markets around the world to continue, some of the plays we’ve talked about have the makings of a pretty successful portfolio.

After studying economics and graduating from Saint Peter’s College in New Jersey (where he received the Wall Street Journal Award for economic excellence), John J. Licata set his sights on Wall Street. During his career, John has held both trading and research positions on the NYMEX, Dow Jones, Smith Barney and Brokerage America. Early in 2006, he founded Blue Phoenix, Inc., an independent energy/metals research and consulting firm based in New York City. John, the company’s Chief Investment Strategist, has appeared regularly in the media (CNBC, Bloomberg TV/Radio, Business News Network (BNN), Barron’s, The Wall Street Journal, Chicago Sun, Los Angeles Times, etc.) over the years for his insights/forecasts in the commodity spectrum.

Streetwise – The Gold Report is Copyright © 2009 by Streetwise Inc. All rights are reserved. Streetwise Inc. hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

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Scammed Again By Uncle Sam?

18 Wednesday Mar 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, Bailout News, banking crisis, banks, bear market, central banks, China, Copper, Currencies, currency, Currency and Currencies, depression, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, follow the news, Forex, Fundamental Analysis, futures, futures markets, gata, GLD, gold, Gold Bullion, Gold Investments, gold miners, Gold Price Manipulation, hard assets, How To Invest, How To Make Money, hyper-inflation, IMF, India, inflation, Investing, investments, Japan, Jschulmansr, Latest News, Long Bonds, majors, Make Money Investing, manipulation, Market Bubble, market crash, Markets, mid-tier, mining companies, mining stocks, monetization, oil, palladium, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, recession, Saudi Arabia, Short Bonds, silver, silver miners, Silver Price Manipulation, spot, spot price, stagflation, Stimulus, Stocks, TARP, Tier 1, Tier 2, Tier 3, TIPS, Today, U.S., U.S. Dollar

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ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, CDE, CEF, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, gold miners, GTU, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, John Embry, Jschulmansr, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NAK, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, SWC, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

Today Gold dropped $27.70 down to support at the $885 – $890 levels. We need to ask ourselves why? I would like to propose that we are absolutely being “Scammed by Uncle Sam!”. Let me explain… Again today Gold Lease Rates (1 month) are negative. “So what’s the  big deal about that?” you are asking. The big deal is this, when the lease rate is negative it means that someone will actually pay you a fee in addition to giving a Gold loan. Now you or I or anybody with a sane mind is not going to make a loan to you for a fee (they have to pay), to borrow Gold from them. This doesn’t even count the risk of never being repaid and losing the Gold! However, (and you can read more detail in today’s first article); this provides a way for someone to supress Gold prices if they wanted to, and you guessed who – “Scammed Again By Uncle Sam”. While the first article today explains “the how”, I am going to venture the “why”. Right now if you pay attention to what is going on, the U.S. and the Fed desperately need to appease some large holders of our debt and dollars by making a way for them to convert their dollar holdings into Gold. They also realize that their current (US) monetary policies are going to force Precious metals prices (especially Gold) much higher than today’s $1000 level while at the same time deteriorating the value of the U.S. dollar. By supressing the price of Gold temporarily the Fed and Treasury will benefit as follows. First as the foreign holders sell off their Treasuries and Bonds this creates a demand for U.S. Dollars to fulfill the transactions. This in turn brings those Dollars back into our economy helping to create more liquidity. Now depending on the velocity of money, that can be in itself inflationary. However with the velocity of money being dependent on Capital Investment, what are we currently seeing? Right now there is no real demand for new goods and services, which means that there is no real incentive to invest in New Factories, Expanding current production levels, or even opening new businesses. So then what happens? The holders instead of sitting on their dollars look for safe places to park those dollars until the economy turns around again. Where do they park the money, banks have proven to be risky?, the stock market? even riskier still, so they park their money in a “safe haven”, buying up Treasuries and Bonds. This helps to offest the selling pressure on Treasuries caused from the original U.S. Debt holder’s sales, and it also creates further demand for U.S. Dollars. With the unprecendented spending currently going on by Mr. Obama and cohorts, the Fed and the Treasury needs to create an increased demand for all of the new Debt Issuances coming into the market. ( They are also creating further false demand buy buying up their own new debt  (300 Billion purchase just announced today). In my mind these purchase in the long term will also create more inflation. So currently the U.S. government has every reason to keep trying to artificially depress the Gold Prices. Sooner or later however their Gold price manipulation will explode in their faces as already seen in a smaller degree,  the demand for Gold is snatching up all of the physical gold being dumped. That is why we will bounce off of these price levels for the fourth time. When it breaks and when inflation (already here- currently running 8% to 15%) is officially acknowledged,watch out Gold will shoot up like the latest Space shuttle launch! Use this limited time frame to keep adding to and accumulating your long positions in Precious Metals- Good Investing! – jschulmansr

ps- For complete details and Information on how Gold Prices are being manipulated and the Silver market also- go to GATA.org.

pps-****NEWS FLASH****

Gold is now up $26.60 New York Spot at $942.50 after Fed Announcement of Leaving Interest Rates Unchanged!

 =========================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold…

·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

=========================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people. To Sign up (Free) and receive your shares click here.

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=========================================================

 

 

 Gold Price Manipulation More Blatant- Numismaster.com

By: Patrick A. Heller of Numismater.com

On Friday, March 6, gold lease rates turned negative for the day. What that means is that anyone who wanted to lease gold would actually be paid a fee in addition to getting a free gold loan.
No sane person would choose to lose money loaning physical gold, in addition to the risk of never getting the gold back from the other party. However, if someone (such as the U.S. government) wanted to suppress the price of gold, this is one tactic to try to accomplish that purpose.
I can come to no other conclusion than that a large quantity of physical gold surreptitiously appeared on the market on March 6 with the sole purpose to drive down the price of gold. The quantities were large enough that they almost certainly could not come from private parties. With most of the world’s central banks now being net buyers of gold reserves, they would not be the source of this gold. By process of elimination, the suspicion falls upon the U.S. government as the ultimate party responsible for this blatant action to manipulate the price of gold.

Of course, the U.S. government would not want to be identified as the cause of this leasing anomaly. Instead, such manipulation was almost certainly conducted by multiple trading partners of the U.S. government.

This sledge hammer tactic worked at driving the price of gold further away from the $1,000 level – at least temporarily. Last week, spokesmen for a number of troubled U.S. companies were suddenly issuing statements about a return to profitability (such as Citigroup and JPMorgan Chase) or not needing further government bailouts (such as General Motors). Stock values climbed as gold’s price retreated.

But (and there was always a but), these massive efforts to suppress the price of gold seem to be running out of steam. First off, these “positive statements” had serious qualifiers such as the chairman of Citigroup claiming that, ignoring extraordinary items like bad loans, the bank earned an operating income in the first two months of 2009.

Then insurance company AIG bowed to pressure and revealed that a huge portion of the $150+ billion in bailout funds it had received had really been passed along as bailout money to other companies (including Citigroup and JPMorgan Chase). In fact, almost all of this money was redirected to the U.S. government’s trading partners who probably have been complicit in the manipulation of the gold price.

Once the public learned that such companies have received more federal government bailout money that previously revealed, the stock market rally stalled. The price of gold started to recover. Unless the U.S. government can come up with another tactic quickly, I expect the price of gold to generally rise over time.

In the meantime, demand for physical gold has taken off again. The U.S. Mint is so far behind at meeting demand for bullion gold and silver American Eagle issues that it last week announced an indefinite suspension of plans to strike 2009-dated proof and uncirculated versions for collectors. Even further, the U.S. Mint also announced that it would not even accept orders from primary distributors for any gold or silver Eagles this week.

On the wholesale market, supplies of gold and silver American Eagles quickly disappeared. The premiums of these coins shot upward. Some retailers now have to decline orders as they don’t know when they might be able to fill them or what premiums they will have to pay to acquire merchandise. My earlier prediction that by the end of April it would become almost impossible to find any physical gold or silver bullion-priced items for reasonable delivery is starting to come true.

At the American Numismatic Association’s National Money Show in Portland, Ore., this past weekend, demand for U.S. gold $10s and $20s was still solid. With some such collector coins now trading at all-time high prices, however, some dealers are advising their customers to consider selling or swapping for gold bullion. As a consequence, I think most of the surge in prices has already occurred. It might be a good time to take a profit.

 

 

 

=========================================================

My Note: Very Interesting Advice! “take profit on collector coins and buy bullion”-jschulmansr

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What’s Another $1.5 Trillion? – Seeking Alpha

By: Tim Iacono of Iacono Research

The Federal Reserve announced today that they will join the central banks of England and Switzerland, printing money out of thin air to buy long-term government debt so as to keep interest rates low and boost lending in their ongoing attempt to revive an economy that is faltering badly due to an orgy of credit and debt a few years ago.
Apparently the gold market and currency markets have heard the news (the chart to the right will be updated as needed over the next hour or so – update #1 from $925 to $932 already complete).
The printing presses will be working ’round the clock to fund purchases of up to $300 billion in long-term Treasuries over the next six months which, in combination with an increase in purchases of mortgage backed securities and agency debt also announced today (an additional $850 billion total), should see the Fed’s balance sheet swell to once unthinkable levels.

Lest anyone think that any of this is getting a bit out of control, the central bank also provided assuring words that they will keep an eye on the “size and composition” of their balance sheet in light of economic developments.

In what appeared to be just an afterthought, relegated to the third paragraph after occupying the top spot for years, the Fed also announced that short-term interest rates will be left at the freakishly low level of between zero and 0.25 percent and that they won’t be going up anytime soon.

And if this doesn’t work, we might just see the Fed’s balance sheet hit that $10 trillion level that someone mentioned the other day.

 

 

=========================================================

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini
 
 

 

=========================================================

My note: Only one answer to being scammed buy more! Please take advantage of the price now, they may try to bump it down one more time, but we are going back and testing all time highs $1050 level, if a “short squeeze” develops then $1250. Jump aboard now! -Good Investing – jschulmansr

=========================================================
Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold…

·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

=========================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people. To Sign up (Free) and receive your shares click here.

 

========================================================= 

Follow Me on Twitter and be notified whenever I make a new post!

Schedule automatic tweets, Thankyou for following me messages and much more! Be More Productive- Free signup… TweetLater.com

 

========================================================= 

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

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And the Winner Is…

13 Friday Mar 2009

Posted by jschulmansr in 10 year Treasuries, agricultural commodities, alternate energy, Bailout News, banking crisis, banks, Barack, Barack Hussein Obama, Barack Obama, bear market, bull market, capitalism, CDE, CEF, central banks, China, Comex, Contrarian, Copper, Currencies, currency, Currency and Currencies, deflation, depression, DGP, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, Finance, financial, follow the news, Forex, Fundamental Analysis, futures, futures markets, gata, GDX, GLD, gold, Gold Bullion, Gold Investments, gold miners, GTU, hard assets, How To Invest, How To Make Money, hyper-inflation, IAU, IMF, India, inflation, Investing, investments, John Embry, Jschulmansr, Latest News, majors, Make Money Investing, market crash, Markets, mid-tier, mining companies, mining stocks, NAK, oil, palladium, physical gold, platinum, platinum miners, precious metals, price, prices, producers, production, rare earth metals, recession, risk, safety, Saudi Arabia, silver, silver miners, Silver Price Manipulation, spot, spot price, stagflation, Stimulus, Stocks, TARP, Technical Analysis, The Fed, Tier 1, Tier 2, Tier 3, TIPS, Today, U.S. Dollar, uranium, Uranium Miners, XAU

≈ Comments Off on And the Winner Is…

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ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, CDE, CEF, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, gold miners, GTU, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, John Embry, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NAK, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, SWC, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

Wow! again what a week in all of the markets. Gold is continuing to slowly build into a major rally, look for $1050 to go down this time! We have seen the retracement in the stocks (normal retracement) in a very bear marketas I also mentioned earlier. I still have my 720 Sp 500 puts and look for a nice pop before next weeks expiration. Continue to accumulate more mining stocks and I hope you got in to DGP when I did and let you know via twitter on Monday. The winner if you haven’t guessed is Gold! We have a new player entering into the melee. Crude Oil has finally flashed it’s first buy signal in 18 months. Look for strong resistance at the $50 mark. If it clears then we’re back to $80 minimum, probably $100 in the first leg. I would play this one slowly as there still is a huge pool sitting out there in tankers to be used up first before we can get into a serious rally in Crude Oil and distillates. One thing to mention is our President Obama, at least he waited until the close of markets before speaking yesterday, it almost seems he is determined to drive the stock markets down. If the Dow doesn’t hold here then the 5000 range for the Dow is not out of the question in fact a very real possibility; a full 70% retracement would actually take us down to the 4500 level. Protect yourself and Buy Gold any form and BUY it NOW! Good Investing! jschulmansr

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·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold

·        When and How to buy gold — at low cost with no hassle

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Can the U.S. survive $80 crude oil?- INO.COM
 

Source: INO.com

For the first time since September of 2007, the crude oil (NYME_CL) market has flashed a positive signal that it is headed higher. This is the first buy signal that we have seen in over 18 months in the energy markets. 

 

The big question is, if crude oil is headed higher, how much of a price increase can the US economy afford and withstand?

Here is a raw commodity that is used by everyone and the US has no control over. This key commodity to commerce just happens to be in areas that are normally hostile to the US. If we see a hiccup in the supply chain that changes this market dynamic, even for a short time period, we could see oil move back to the $80/barrel range in a heart beat.

So how will this affect the US equity markets? If crude oil heads back to the $75-$80 range, I expect that the major indices will head south. I call it the 551 syndrome. 5000 on the Dow, 500 on the S&P 500, and finally 1000 on the NASDAQ.

In this short video I will share with you the potential target zones we could see in the next 6 to 12 months in crude oil.

So with the trend in crude oil in a positive trajectory and the trend in the US equity markets in a negative trajectory, I think the two will feed off themselves. Look for traders and hedge funds to move aggressively in both these areas with abandon.

Lastly with no reinstatement of the up-tick rule, expect stocks to once again get pummeled to oblivion.

Enjoy the video and all the best in trading,

Adam Hewison
President, INO.com
Co-founder, MarketClub

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Sell the Swiss Franc, Buy Gold- Seeking Alpha 

Source: FP Trading Desk

“Forceful relaxation” – it brings to mind a trader at a Mexican beach resort, not Swiss monetary policy, but that is exactly what the Swiss National Bank (SNB) announced in its Monetary Policy Assessment Wednesday, joining a growing chorus of central banks engaging in quantitative easing. Sell the franc and buy gold.

The SNB cut its target range for three-month Libor by 25 basis points to a range of 0–0.75% and announced plans to purchase domestic bonds from the private sector and sell francs in the open market. The resulting biggest ever one-day drop in the franc versus the euro and dollar is likely to be followed by franc depreciation over the next year.

Swiss lending to foreigners brings new meaning to Lord Polonius’s advice to Laertes to “neither a borrower nor a lender be.” The Swiss risk losing more than the friendship of the Hungarians who borrowed extensively in Swiss Franc between 2006 and 2008. They also risk losing their money as Eastern Europe struggles under a mountain of debt. All told, Swiss banks claims on foreigners rose from five times Swiss GDP in 2000 to roughly eight times GDP in mid-2007, according to the Bank for International Settlements (BIS).

The majority of these claims are denominated in US dollars, and that factor will continue to put pressure on the franc versus the dollar over the next year. Swiss banks’ net US dollar books approached $300 billion by mid-2007, according to the BIS.

Now that the SNB is actively trying to push the franc down to raise inflation expectations in Switzerland, watch out. This policy raises the prospects for franc depreciation and increases the case for owning gold versus all reserve currencies.

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Related: This is one of a multitude of reasons to Buy Gold-see next article below – jschulmansr

Swiss Action sparks talk of ‘Currency War’ – Financial Times

Source: Financial Times

By Peter Garnham in London

Published: March 12 2009 20:14 | Last updated: March 12 2009 20:14

The Swiss National Bank moved to weaken the Swiss franc on Thursday, the first time a big central bank has intervened in the foreign exchange markets since Japan sought to weaken the yen in 2004.

The bank’s move, which sparked fears that other countries could follow suit, comes as the value of the Swiss franc has soared as investors seek a haven from the recent market turmoil. In October, after the collapse of Lehman Brothers, it rose to a record high of about SFr1.43 against the euro, a level it has come close to again in recent weeks.

 

But it fell to its lowest level this year on Thursday after the SNB said the currency’s strength represented an “inappropriate tightening of monetary conditions” as it battled against a slowdown in the Swiss economy.

“In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market to prevent any further appreciation of the Swiss franc against the euro,” the central bank said.

The Swiss franc dropped 2.6 per cent to SFr1.5192 against the euro and dropped 3.2 per cent to $1.1894 against the dollar.

Analysts said the move was likely to increase talk that countries were set to engage in a bout of competitive devaluation.

“Let the currency wars begin,” said Chris Turner at ING Financial Markets.

Countries around the world faced with the constraint of zero interest rate levels might feel it was acceptable to intervene to weaken their currencies in order to ease monetary conditions, he said, adding that other export-dependent economies such as Japan would “probably be at the head of the queue”.

Michael Woolfolk at Bank of New York Mellon agreed.

“Market intervention by a major central bank such as the SNB opens up the door for other central banks, namely the Bank of Japan, to follow suit,” he said. “The yen is widely perceived in Japan to be overvalued.”

The SNB also cut its interest rates by 25 basis points, taking its three-month Libor target range down to zero to 0.75 per cent, and announced plans to adopt a quantitative easing approach to monetary policy.

Analysts said the move towards quantitative easing was sparked by a drastic revision to the central bank’s forecast for growth, which is now expected to fall between 2.5 and 3 per cent in 2009, much worse than its previous forecast of a drop of between 0.5 and 1 per cent.

The SNB said economic conditions had deteriorated sharply since its last policy meeting in December and that there was a risk of deflation over the next three years.

“Decisive action is thus called for, to forcefully relax monetary conditions,” the central bank said.

Additional reporting by Haig Simonian in Zurich

Copyright The Financial Times Limited 2009

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John Embry: Gold and Silver Are the Ultimate Insurance Policy- Seeking Alpha

By: Andrew Mickey of Q1 Publishing

John Embry: Exclusive Interview with Canada’s Foremost Gold Investor

Is gold the next “hot” investment? Or will it never break through the $1,000 threshold?

Some of the world’s leading investors are currently placing their bets.

For instance, hedge fund manager David Einhorn recently bet big on gold. Einhorn manages $6 billion at Greenlight Capital and has averaged a 20% annualized return by booking only one losing year since 1996 (last year). His fund recently bought more than $200 million of SPDR Gold Trust ETF (NYSE:GLD) and more than $75 million worth of Market Vectors Gold Miner ETF (NYSE:GDX).

On top of that, the big money managers have already pumped billions of dollars directly into gold mining companies to fund takeovers and new mines and expansion.

It’s looking like a lot of smart and big money is betting on gold. And as the financial markets, economy, and future outlook worsen, gold is holding up as a last bastion of hope for many investors.

How can you get in on it? Is it just gold? What about silver? Where are the real values to be had? What about other hard assets – water, agriculture, etc.?

It’s best to start getting prepared now.

Most recently, Q1 Publishing’s own Andrew Mickey, editor of the Prosperity Dispatch, had a private one-on-one conversation with John Embry, one of the leading gold investors in the world.

Embry has been following the gold sector for 35 years (that’s since the early 1970’s) and is one of the leading authorities on gold. Embry is currently the Chief Investment Strategist for Sprott Asset Management – a legendary name to long-time gold investors.

Prior to joining Sprott, Embry oversaw more than $5 billion in assets including the Royal Precious Metal Fund as VP, Equities and Portfolio Manager for RBC, a top-tier Canadian bank. Under his watch, the Royal Precious Metals Fund returned 153% in 2002 and was ranked #1 across all funds in Canada (remember 2002 was a horrible year for stocks as tech stocks continued to fall).

Andrew Mickey: Precious metals have been getting a lot of attention lately. But it seems like there has been a divergence between gold and silver. We’ve been watching the gold to silver ratio (the number of ounces of silver which can be bought for an ounce of gold) get wider and wider. Gold to platinum too. Do you see the divergence tied to the industrial aspect of metals like platinum and silver, gold is the supreme precious metal, or is there something else going on behind the scenes?

John Embry: No – it’s a very strong manipulative aspect at work. If you go to the COMEX and look at the trading patterns and the short positions and such, clearly the prices are being messed around with.

Silver is a smaller market and can be messed around with more easily. I think silver probably has a bit more upside potential because the price is so far behind where it should be.

Andrew Mickey: So do you see silver as one of the bright spots?

John Embry: Oh yeah, it’s an extreme bright spot. I could easily see it three times where it is now in the not-that-distant future.

Andrew Mickey: As far as gold supply, there is one period in the world gold supply where gold production kind of crested around 2007 or 2008. Are we facing a “Peak Gold” kind of situation?

John Embry: Yeah, we have most assuredly crested in terms of mine supply without question.

Andrew Mickey: So, when you look at five, ten years out…let’s say in a world where gold is $2000 or $3000 or higher, how much more gold can realistically be produced in a year?

John Embry: Zero, I think. In fact, I think you probably need a lot more lead time – maybe five to ten years.

Just look at what happened in the ‘70s. The gold price went from $35 to $800 and, believe it or not, gold production was at a lower level worldwide after that 10-year period.

Now, the big question is what will happen this time? Number one, a lot of the existing mines are being depleted quite rapidly. Number two, when the gold price goes up a lot, mines generally tend to sort of drop the grade they mine because they can make a lot of money with lower grade and they can keep the good stuff for the bad times.

So by definition, they will be mining in the same number of tons but they will be taking the gold grade out of it, so collectively they will be mining less gold. They will make more money because the price is up but they will be mining less.

The other problem is that so many of the new interesting deposits that may or may not be developed in the future are located in these God-awful third world countries. They are having a real battle now with the governments, getting permitting, deciding who makes the money out of the mine, environmental issues etc. The gold deposits are all over the place and the governments are going to delay projects.

Say you find an ore body today. It would probably take a minimum of five years before the gold hits the market with all the attendant problems there are getting it into production. So all that’s already baked in the cake. The gold price could be doing anything it wanted for the next four or five years…gold production isn’t going to increase much – if any – at all.

Andrew Mickey: Amazing, gold production declining in the last great bull market for gold. So what does this mean for gold stocks, from your perspective? Where should we focus our investments across the whole range – from explorers all the way up to the majors?

John Embry: Right now, I think the majors are reasonably priced compared to the overall list. People have sort of focused on liquidity so they have gone after the majors and they bid them up aggressively and left a lot of the more illiquid situations behind.

That will all change. As gold becomes more popular and the price rises, at that point, money will filter down the food chain from the larger companies and they will go looking for the good quality smaller ones.

I particularly like some of the smaller producers now for a lot of reasons.

For one, they are going to make a ton of money in the current environment, particularly if they are producing outside the United States. Like some of the ones that are producing in Canada. The gold price yesterday was I believe $1,230 Canadian.

Another reason is because all of the costs of gold mining are dropping right now. Energy costs, steel prices, and all the things that went up so much and really hurt gold miners’ profitability. They are all going the other way now and at the same time the price of gold is going up. So I think that people are going to be pleasantly surprised going forward by the profitability of some of these mines, which have struggled up until recently.

So I am pretty bullish on small producers and anybody who has got a legitimate ore body that can be exploited sometime within the foreseeable future. I think they are going to be viewed positively too.

But the key thing to focus on is when their production will begin. If they don’t have to worry about getting through the environmental hurdles and getting the finance and et cetera, et cetera, they are going to make a lot of money.

Andrew Mickey: What do you see as the potential risks of politics and environmental concerns preventing anyone from starting production?

John Embry: They are not necessarily preventing a company from going into production, but they are certainly delaying it.

My favorite example is that probably the best ore body that’s been discovered in the last 10 years is Aurelian’s in Ecuador; which was subsequently acquired by Kinross (KGC). But the fact is, as long as the current government in Ecuador stays in power…I just don’t see the thing entering production.

So that’s what I am talking about. It’s such a fabulous mine if it were in a good geopolitical environment. It would be being built as we speak, but there is no progress towards building it at this point.

Andrew Mickey: The gold ETF (like the GLD) has been the number one recommended way to invest in gold in the U.S.

It’s a hot subject of debate by those who are new to gold and those which have been following it for while. The new people to gold always recommend the GLD. What are your thoughts?

John Embry: Well, they are just plain wrong in my opinion.

I think gold and silver are the ultimate insurance policy. When things got really bad in the system you want to make sure the vehicle you own has the gold and silver that it allegedly is supposed to have.

Now, I may buy gold and have it in my own possession. I know I have it. And then there are other gold and silver vehicles like Central Fund of Canada (NYSE:CEF) or Central Gold-Trust (NYSE:GTU), to cite a couple, where the gold is allocated. It’s in a vault and there are regular audits to prove everything that’s behind the vehicle is in fact there. So you are getting what you pay for.

Now, in the case of the ETF I am not totally sure. I mean if you read their prospectuses closely enough you’ll see there is some wiggle room. What they are trying to do is just track the gold price so you don’t necessarily need the physical gold. They could be using paper derivative types of products to back the stock.

What really made me kind of uncomfortable recently, was there was this dramatic ramp up in the amount of money going into the GLD ETF in particular. I looked around and I am going like, where is gold coming from?

As you know, the gold market is acknowledged by virtually everybody to be tight. I know mine supply is falling, I know that – I didn’t see any appreciable change in any of the inventory levels or any of the recognized exchanges like COMEX etc., and there was no particular acceleration in the Central Bank dispositions. So my question is, if suddenly all this new buying appeared because of the ETF having to sort of stock up, where did the gold come from?

I am not sure it bought any gold. I think they might have gone to COMEX and just bought a paper contract.

I don’t know. I just think there are better vehicles than ETFs.

Andrew Mickey: Switching gears a little bit here, let’s talk about the big picture. Everyone wants to know what’s going on.

It’s a crazy time. What’s your take? What going on in the general markets and where are we headed?

John Embry: I think we are probably headed for the worst economic debacle since the Depression – if not worse than that.

And the response for that by governments around the world is going to be, I think, a blizzard of paper money creation. They will run massive deficits, trying to prop up these economies.

So I think the major development is going to be ongoing issues of currency debasement. The value of paper money against real tangible assets is going to fall considerably. Right now, we are going through this deflationary scare. It won’t last. It will change into a hyperinflationary environment in the not too distant future.

Andrew Mickey: A kind of stagflationary situation like we saw in the 1970’s?

John Embry: No, worse than that. I think the inflation would be more intense. The decline in economic activity will probably be worse.

Andrew Mickey: What are the kinds of conditions that bring us to that state? Is it avoidable?

John Embry: Basically, we have already put the conditions in place. We ran economies with constantly too much leverage and debt.

Eventually, you reach a certain point where you can’t really add any more debt because the capacity for the system to handle it has been exhausted. Once it reverses, it’s very hard to change. They are going to try to change it by simply debasing the money.

Andrew Mickey: You seem to focus on the debasement of currencies as a government “solution” – for lack of a better term – to the problem. What are some of the best ways to protect ourselves from this situation? Which are you employing?

John Embry: Our strategy is pretty simple. What we really like is the monetary precious metals gold and silver. We don’t like anything in the financial sphere at this time. The companies that we like are the more solid companies providing basic services and what have you. We like the ones which don’t have overly leveraged balance sheets.

Andrew Mickey: What about other real asset classes. There are other sectors I know you follow outside of precious metals like agriculture. That’s the one thing that I’ve been completely excited about for years, but had to turn and run from over the summer. What’s your take on it now? Is it time to wade back in?

John Embry: Well, I am with you on agriculture. It’s a necessity that we must eat.

I guess one of the positive aspects of global growth is that the third world became a bit more affluent. Improvement in their diets put more demand into the world for basic food stuffs. Now that’s slowed down a bit.

I think the real arbiter in the short run might be the climate. I see a lot of industry people bringing this up, changing sunspots. These changes in the sunspots suggest that we may be facing drought conditions in a lot of the world all at the same time.

If that’s the case, I think you are going to see massive food shortages which would underrate a considerable price appreciation in the food because there will be a real fight for it.

Andrew Mickey: So, I don’t want to get too technical with this subject, I assume that you’re referring to increasing activity in sunspots?

John Embry: Yes, there is increasing activity in sunspots; which apparently, sort of cools the world out. It’s really interesting because there has always been, as you know, there is debate about global warming.

I do believe that all this carbon release is creating global warming, but at the same time, we have this mass of long cycles in nature which sort of move from the ice age then back to a period where it gets too hot. In that cycle, we are headed towards cooling again and the sunspot is just one aspect of it.

Andrew Mickey: Can the sunspots cause some of the farming areas to change?

John Embry: Yes, they do. They have a role – for whatever reason – they have a major impact on increasing odds of getting hit by a drought. We have a lot of droughts going on in the world currently. There are droughts in Australia, South America, Northern China and Africa. But Africa has always had a drought.

There is a lot of food supply interruption. If a drought were to strike North America then that would really create a problem. I have seen some work suggesting that we are due for a drought based on certain cycle work.

Andrew Mickey: Okay, this is more or less an agricultural cycle that you are referring to I imagine. How long is this kind of agriculture cycle? Is it like an 80-year almost Dust Bowl scenario type?

John Embry: Well, yes…I hesitate to go there because…it’s like Murphy’s Law, “everything goes wrong at the same time.” And with the financial world right now in a mess the last thing we need is a sort of replay of the ‘30s in the agricultural space.

The pessimists among us think that there is a good probability that drought conditions could strike North America, and that would be the last thing I want to see.

Andrew Mickey: What about farmland then? It’s an asset class which has had extremely consistent returns over the past 50 to 60 years. But, we’ve been waiting for a time like this.

John Embry: Farmland prices have fallen off a cliff. I just saw a guy in Minneapolis; again, he was saying that farmland is on offer everywhere right now.

This is a great thing. I am now in favor of buying farmland at the right price and that price is probably – as we are cleaning this whole mess up – the right price is going to be reached.

Andrew Mickey: The same is true for all kinds of natural resources. Oil, natural gas, copper, iron ore, uranium, etc. They’re all over the world and the government s which control them are in position to really inhibit or assist private companies who want to exploit them.

Recent US policy changes favor certain alternative energies. The one that really concerns me is uranium. In your opinion, when we look at uranium, should we look at it as declining uranium supply from current mines and or how new power plants can come on line if they can’t get it? Which is the real problem? Or is it both?

John Embry: Excellent question. I do think there is a problem. The Cigar Lake up in Northern Saskatchewan has gone through all sorts of problems. Another major problem area is with the Olympic Dam mine in Australia. It has been having problems too.

So again, there’s an issue with existing production.

In that light, I think that’s going to make new discoveries. Quality discoveries in uranium which are really worthwhile and the problem, again, is how long it’s going to take to exploit them. There just aren’t too many good deposits. We had that huge run in uranium a couple of years ago, but a lot of the deposits were really junky.

The great advantage in uranium is that the true cost of producing the power, is in building the reactor. So, there’s a lot of flexibility there. They don’t care about what they have to pay for uranium just as long as they can get it.

So I think that’s one of the aspects I like about uranium. The price is sort of inelastic in that sense. Just because the price goes up doesn’t mean it’s going to start to reduce demand.

Andrew Mickey: With respect to potash, nitrogen and phosphate, where do you see opportunities there? Most people are familiar with potash, the high capital costs to build a mine and the like. Are there any opportunities in nitrogen and phosphate because it’s too easy, how do you guys kind of look at those

John Embry: Well, we actually – we meaning our Sprott Resource Corp – have been looking around for interesting opportunities in phosphate and what have you. We believe that as this whole agricultural thing unfolds that it will be a good business.

But right now, farmers are having trouble getting money like everybody else is. So really, there is a bit of a low in the fertilizer business. Looking for longer term opportunities, the short term is going to be a little problematic.

Andrew Mickey: Are there any other things that you think individual investors should keep in mind as this is the first time in a long time that any of us had to go through a downturn like this?

John Embry: Well, it’s downright ugly out there. I was born in United States and I am a huge admirer of the U.S. I think what’s happened is tragic. Consequently, people are looking to protect themselves and I really do think that precious metals in particular and solid commodity opportunities are going to be one way that’s going to pay off in the end.

Andrew Mickey: What’s your take on all the stimulus packages and infrastructure building and everything that’s going on there?

We have been really bearish on infrastructure companies. How can the government support these businesses which are mostly private?

John Embry: I think that you are right. Typically, the market overacts to these things and obviously the infrastructure spending is partly implied; because, it’s been neglected to such a great extent in North America.

We have the same problem in Canada. Our roads are falling apart. Really, they could spend a ton of money in the sector. Problem is, they don’t have the money. They are going to have to create it out of thin air.

Andrew Mickey: One last thing. Are you currently looking at or investing in water? If so, would you be looking into water rights or a pipe manufacturer for example?

John Embry: We haven’t done as much as we should have. I think water is going to be a major issue going forward.

As for ways to invest in water, I’m more interested in water rights. The good thing about Canada is, there is lots of water up here. The problem is going to be down in the U.S., particularly in Southwest and other areas. I just look at that and I shake my head.

Andrew Mickey: Well, thanks very much for spending some time with us. Is there anything else that you would like to add?

John Embry: Just that I think that it’s important that your readers know all this. The world is a lot different than it was 10 years ago.

Andrew Mickey: And probably it will be a lot different in another 10 years.

John Embry: Well, it would be a lot different looking back from five years from now too, you bet, but I think we will be stood in good stead, certainly being in precious metals and end products, I think those are the two that I like the best.

Andrew Mickey: Well, thanks for your time, I appreciate it.

John Embry: My pleasure. Anytime.

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Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold

·        When and How to buy gold — at low cost with no hassle

Get this in-depth report now, plus a gram of free gold, at BullionVault here…

===========================================================

Have a Great Weekend!-jschulmansr

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

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It’s Not Over Yet!- Obama Where Is Your Birth Certificate?

02 Monday Mar 2009

Posted by jschulmansr in 2008 Election, Bailout News, banking crisis, banks, Barack Obama, China, communism, Conservative, Conservative Resistance, Contrarian, depression, Economic Recovery, economic trends, economy, Electoral College, financial, follow the news, Free Speech, Fundamental Analysis, gold, Gold Bullion, Gold Investments, id theft, Joe Biden, Jschulmansr, Latest News, manipulation, market crash, Markets, physical gold, precious metals, Presidential Election, price, price manipulation, Saudi Arabia, silver, socialism, stagflation, Stimulus, The Fed, Today, U.S., u.s. constitution, U.S. Dollar

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It’s not over yet. Obama where is your birth certificate. I mostly blog about Precious Metals Investing, yet even I have some questions for Mr. Obama. No, while I am a conservative I am not a “radical fringe looney conservative” or even a “sore” loser. I have some legitimate concerns. First we have a new President who has never established eligibility to hold his office, this same man is now embarking on the largest spending spree this country has ever seen!

This is supposed to rescue our economy and set things straight with the American Economy. I have several concerns over this such as how now  Obama is ignoring the “earmarks” in the latest bill, this after a campaign promise “no more earmarks”. Next the way we are going to finance this is thru higher taxes, less tax breaks, and a whole lot more debt which America can sorely afford. Are we not selling off our future to the Chinese and Middle Eastern buyers of our governmental debt? I could go a lot more into these economic matters which we have all heard “ad nauseum” over how bad this is for us and especially for the future generations coming up behind us. One fact remains it is under the direction and orders of Mr. Obama.

My next real concern is the fact that almost unannounced and certainly without the press fanfare or opposition, even the vilification the Mr. Bush for his war in Iraq, notably from even Mr. Obama himself! Mr. Obama is sending even more troops into Afghanistan. Oh I forgot, he is going to announce the timetable of withdrawal from Iraq, so at least we will only be fighting on one front; but is this “withdrawal” actually going to turn into a reassignment for the American troops. Also, these troops will be even more cut off from lines of supply than in Iraq. So realistically how much more will this war cost us? Also, do we even have a plan on how we are going to win? Are we going to take over part of Pakistan too? Don’t get me wrong, I want to see Bin Laden and Al Queda destroyed, but all of this is happening under the command of the Commander in Chief, our President Mr. Obama who has yet to even prove eligibility by providing his Birth Certificate. What is up with That?

I f I have to show my Birth Certificate, I gladly do so, not to mention I am legally bound to do so. Why isn’t our president required as the leader and example of our country. If you or I do not show our Birth Certificates when asked face heavy potential liabilities and punishments. How does Mr. Obama get away with this?

FInally, as a Pecious metals analyst, this is great for the long term prospects of Gold and for my investments. Yet I would rather lose all or have losses with my investments than have my country destroyed by a man who can’t even prove he is a bona fide U.S. citizen!

I will have an update later today on Precious metals, if fact Gold retested support early today and then came back to close about $2.50 down to $940 (April Contact). Below in todays articles: It’s not over yet! Good Investing! -jschulmansr

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account– just click here and then again on the Gold Bar!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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 The Birther’s Obama Conspiracy Theory – AOL News

Source: AOL NEWS

‘The Birthers’ Continue to Hound Obama

AOL
posted: 14 HOURS 18 MINUTES AGO
comments: 11534
filed under: Political News, The Obama Presidency
(March 1) – Ever since Barack Obama became a prominent political fixture in the country, he has encountered a large number of rumors and smears concerning him and his family.
There was the one rumor about him being a secret Muslim (he is a practicing Christian). And there was the one allegation his wife, Michelle, was caught on videotape using the word “whitey” (no such clip has ever surfaced).
Most of the charges were, for the most part, put to rest by vigorous responses from the Obama team during the campaign.
But one conspiracy theory lives on — despite overwhelming evidence debunking it.
Politico.com reports that the Birthers — a persistent group of conservatives who believe Obama is ineligible to be president because of alleged questions surrounding his birth status — continue to operate and thrive on the fringe.
“Some individuals and groups who are opposed to Obama’s presidency want an ‘acceptable’ reason to cite to convince other individuals and groups who might be on the fence to join in their way of thinking,” said Patricia Turner, who studies rumors at the University of California, Davis.
For the record, officials in Hawaii declared last October that there was no doubt Obama was born in the state. Officials verified that the health department holds the commander in chief’s original birth certificate.
But others are still undeterred.
A lawsuit filed in California by a group called the United States Justice Foundation seeks records from Occidental College, where Obama attended school for a period, in order to verify his nationality — and thus his presidential eligibility, WorldNetDaily reports.
Get the full story about the Birthers at Politico.com to find out about the group’s possible impact on the White House and weigh in, below, on the controversy.
Go to this site to add your vote in the polls about Obama’s Eligibility
==============================
Obama Eligiblility tops AOL NEWS – World Net Dailey

By Drew Zahn
© 2009 WorldNetDaily

 

Internet giant America Online headlined its daily news coverage today with a story and polls covering the “Birthers,” a group of people it describes as “fringe conservatives convinced that Barack Obama is ineligible to be president because of supposed questions surrounding his birth status.” 

 

The AOL coverage quotes an extensive Politico article and cites WorldNetDaily as the source for news on the United States Justice Foundation’s most recent attempt to demand Obama give legal evidence of his constitutional eligibility to serve as president.
 

Politico’s coverage of the questions that still linger over Obama’s birth, however, is far from kind. 

 

 

“Viewed as irrelevant by the White House , and as embarrassing by much of the Republican Party,” writes Politico blogger Ben Smith, “the subculture still thrives from the conservative website WorldNetDaily, which claims that some 300,000 people have signed a petition demanding more information on Obama’s birth.” 

 

Smith then states unequivocally that there is no basis for questioning Obama’s eligibility, that Obama “was in fact born in Honolulu in 1961” and that “long-settled law” resolves his dual citizenship at birth, another fount of legal questions surrounding the sitting president’s eligibility to serve in the Oval Office. Smith cites Hawaii officials who have testified that there do exist records – though unreleased to the public or the courts – verifying Obama’s American birth.

To add fuel to his argument, Smith then quotes from several sources, including radio host Michael Medved, to compile a list of descriptions for those he brands as conspiracy theorists, including the following: embarrassing, destructive, crazy, nutburger, demagogue, money-hungry, exploitative, irresponsible, filthy conservative imposters, the worst enemy of the conservative movement, weird, demented, sick, troubled and not suitable for civilized company.

Politico quotes David Emery, an urban legends writer for About.com, who suggests those that want to see proof of Obama’s eligibility are fueled by revulsion and rage.

“Thanks to the relentless agitation of the conspiracy theorists and the sheer quantity of hypothetical scenarios and legal arguments floating around,” Emery states, “they’ve clearly succeeded in planting unreasonable doubts in reasonable people’s minds.”

As WND has reported on several occasions, however, none of the so-called “evidence” of Obama’s constitutional eligibility produced thus far is beyond reasonable doubt nor as iron-clad as simply producing an authentic birth certificate, something everyday Americans are required to do regularly, but the president still refuses to do.

As Jerome Corsi, WND senior staff writer, explained, “The main reason doubts persist regarding Obama’s birth certificate is this question: If an original Hawaii-doctor-generated and Hawaii-hospital-released Obama birth certificate exists, why wouldn’t the senator and his campaign simply order the document released and end the controversy?

“That Obama has not ordered Hawaii officials to release the document,” Corsi writes, “leaves doubts as to whether an authentic Hawaii birth certificate exists for Obama.”

In its poll, AOL is asking readers: “Do you have any doubt about Obama’s eligibility to be president because of his birth status?”

With more than 250,000 responses, results were nearly split with 47 percent saying yes, and 53 percent saying no.

Readers were also asked, “How damaging is this conspiracy theory to Obama?”

With more than 178,00 responses, 52 percent said “Not at all,” 28 percent said “Somewhat,” and 20 percent said “Very.”

WND has reported on dozens of legal challenges to Obama’s status as a “natural born citizen.” The Constitution, Article 2, Section 1, states, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

Some of the lawsuits question whether he was actually born in Hawaii, as he insists. If he was born out of the country, Obama’s American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time.

Other challenges have focused on Obama’s citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. The cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.

Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 300,000 others and sign up now!

Several of the cases have involved emergency appeals to the U.S. Supreme Court in which justices have declined even to hear arguments. Among the cases turned down without a hearing at the high court have been petitions by Philip Berg, Cort Wrotnowski, Leo Donofrio and Orly Taitz.

The USJF case mentioned in the AOL article was filed on behalf of presidential candidate Ambassador Alan Keyes and others.

As part of the case, a subpoena was served on Occidental College for its records. School officials immediately contacted lawyers for Obama and said the demand would have to be answered unless they intervened.

Obama’s lawyers then submitted a demand to the court arguing the case was moot because the election was over and the correct place to resolve such concerns was in Congress. The lawyers also alleged a variety of procedural errors.

In his response, Kreep pointed out that Obama’s lawyers failed for 27 days to notify the USJF of alleged procedural errors. He said the housing and academic records are of prime importance.

“From those records, statements as to whether MR. OBAMA is, indeed, a ‘natural born citizen’ may be found,” he said.

At the end of February, at least two active-duty soldiers serving in Iraq as well as a retired major general offered to be plaintiffs in a lawsuit challenging Obama’s eligibility.

WND reported earlier when 1st Lt. Scott Easterling confirmed to Orly Taitz that he wanted to be a plaintiff in the legal action she is preparing on behalf of members of the U.S. military, both active and retired. A second soldier who asked that his name be withheld for now became part of the action a day later.

Then retired Maj. Gen. Carroll D. Childers submitted a statement to Taitz and her DefendOurFreedoms.us website, agreeing to be a plaintiff in her pending action.

Taitz explained the issue isn’t resolved as many Obama supporters claim.

The “Certification of Live Birth” posted on the Internet actually doesn’t confirm a birth location, she said.

“[Hawaii] statute 138 allows foreign born children of HI residents to get HI [Certificates of Live Birth] and get them based on a statement of one relative only,” she said.

She also said Hawaiian officials, while they confirmed a birth certificate exists, did not exclude the possibility it was “one obtained for a foreign born child.”

She also cited Obama’s immigration to Indonesia at age 5, when he was considered an Indonesian citizen.

Although Obama officials have told WND all such allegations are “garbage,” here is a partial listing and status update for some of the cases over Obama’s eligibility:

  • New Jersey attorney Mario Apuzzo has filed a case on behalf of Charles Kerchner and others alleging Congress didn’t properly ascertain that Obama is qualified to hold the office of president.
  • Pennsylvania Democrat Philip Berg has three cases pending, including Berg vs. Obama in the 3rd U.S. Circuit Court of Appeals, a separate Berg vs. Obama which is under seal at the U.S. District Court level and Hollister vs. Soetoro a/k/a Obama, brought on behalf of a retired military member who could be facing recall to active duty by Obama.
  • Leo Donofrio of New Jersey filed a lawsuit claiming Obama’s dual citizenship disqualified him from serving as president. His case was considered in conference by the U.S. Supreme Court but denied a full hearing.
  • Cort Wrotnowski filed suit against Connecticut’s secretary of state, making a similar argument to Donofrio. His case was considered in conference by the U.S. Supreme Court, but was denied a full hearing.
  • Former presidential candidate Alan Keyes headlines a list of people filing a suit in California, in a case handled by the United States Justice Foundation, that asks the secretary of state to refuse to allow the state’s 55 Electoral College votes to be cast in the 2008 presidential election until Obama verifies his eligibility to hold the office. The case is pending, and lawyers are seeking the public’s support.
  • Chicago attorney Andy Martin sought legal action requiring Hawaii Gov. Linda Lingle to release Obama’s vital statistics record. The case was dismissed by Hawaii Circuit Court Judge Bert Ayabe.
  • Lt. Col. Donald Sullivan sought a temporary restraining order to stop the Electoral College vote in North Carolina until Barack Obama’s eligibility could be confirmed, alleging doubt about Obama’s citizenship. His case was denied.
  • In Ohio, David M. Neal sued to force the secretary of state to request documents from the Federal Elections Commission, the Democratic National Committee, the Ohio Democratic Party and Obama to show the presidential candidate was born in Hawaii. The case was denied.
  • In Washington state, Steven Marquis sued the secretary of state seeking a determination on Obama’s citizenship. The case was denied.
  • In Georgia, Rev. Tom Terry asked the state Supreme Court to authenticate Obama’s birth certificate. His request for an injunction against Georgia’s secretary of state was denied by Georgia Superior Court Judge Jerry W. Baxter.
  • California attorney Orly Taitz has brought a case, Lightfoot vs. Bowen, on behalf of Gail Lightfoot, the vice presidential candidate on the ballot with Ron Paul, four electors and two registered voters.

In addition, other cases cited on the RightSideofLife blog as raising questions about Obama’s eligibility include:

  • In Texas, Darrel Hunter vs. Obama later was dismissed.
  • In Ohio, Gordon Stamper vs. U.S. later was dismissed.
  • In Texas, Brockhausen vs. Andrade.
  • In Washington, L. Charles Cohen vs. Obama.
  • In Hawaii, Keyes vs. Lingle, dismissed.

WND senior reporter Jerome Corsi had gone to both Kenya and Hawaii prior to the election to investigate issues surrounding Obama’s birth. But his research and discoveries only raised more questions, the biggest being why, if there exists documentation of Obama’s eligibility, hasn’t it been released to quell the rumors.

Instead, a series of law firms have been hired on Obama’s behalf around the nation to prevent any public access to his birth certificate, passport records, college records and other documents.

If you’d like to sound off on this issue, please take part in the WorldNetDaily poll.

Sign the petition

==============================

Watch for Post later today after Markets are closed- My One Question is simply Mr. Obama why won’t you show us your Birth Certificate?- Good Investing! – jschulmansrHere is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account– just click here and then again on the Gold Bar!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

Follow Me on Twitter and be notified whenever I make a new post!

==================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

 

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Catch Me If You Can!

18 Wednesday Feb 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, banking crisis, banks, bull market, central banks, China, Comex, commodities, Currencies, currency, Currency and Currencies, DGP, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gata, GDX, GLD, gold, Gold Bullion, Gold Investments, gold miners, hard assets, How To Invest, How To Make Money, hyper-inflation, IAU, IMF, India, inflation, Investing, investments, Japan, Jschulmansr, Junior Gold Miners, Latest News, majors, Make Money Investing, market crash, Markets, mid-tier, mining companies, mining stocks, monetization, palladium, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, Saudi Arabia, silver, silver miners, spot, spot price, stagflation, Stimulus, Stocks, Technical Analysis, The Fed, Tier 1, Tier 2, Tier 3, Today, U.S., U.S. Dollar

≈ Comments Off on Catch Me If You Can!

Tags

Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gata, GDX, GLD, gold, gold miners, hard assets, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, small caps, sovereign, spot, spot price, stagflation, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

As I write this Gold is taking a breather and consolidating at the $960 level, this is before I believe the next launch to test the $1000 mark+ which can easily come in the next few days. Gold is certainly saying “catch me if you can!”. Todays articles include several different vehicles with which to cash in on gold! Good Investing – jschulmansr

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Jschulmansr Recommended:

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

===================================

Riding the Gold and Silver Uptrend with ETF’s – Seeking Alpha

By: The Sun of The Sun’s Financial Diary

As I mentioned earlier, gold has had a tremendous run lately. The main force behind the gold rally is the deterioration of economies around world. Despite the passage of the $789 billion economic stimulus package over the weekend, gold price has continued to climb since the holiday.

Currently, spot gold is traded at $967 an ounce, up more than $10 from last Friday’s close, breaking the key $950/ounce level. That’s the seven-month high for gold. Also, major stock benchmarks are likely to test the November lows amid jitters in the financial sector.

 Even though there are predictions that gold could back fall after the stimulus plan became a law, that hasn’t happened. In contrast, investors are increasing their holdings of gold as a safe haven to preserve their wealth while the stock market continues to decline. Right now, gold is trading well above its 50- and 200-day moving averages, a clear indication of the uptrend of gold. (click to enlarge)

Gold rally

Investors’ appetite for physical gold, such as bars and coins, has driven up share prices of exchange-traded funds (ETFs) specializing in precious metal as well. For instance, take a look at SPDR Gold Trust Shares (GLD), the world’s largest gold-backed ETF. GLD gained 3% in 2008 and 6.9% so far in 2009.

The reason investors are also chasing GLD is that it offers investors an easy way to invest in the bullion without having to hold the metal themselves (you will have many more things to consider, such as storage and insurance, if you want to hold physical gold yourself). If you invest in GLD instead, your investment will reflect directly the price of gold because GLD’s share price is determined based on 1/10th of an ounce of gold. SPDR Gold Trust buys and stores physical gold to back GLD prices. In fact by tracking holdings of SPDR Gold Trust, you can get a sense of the demand for gold. Currently holding 985.86 tonnes of gold, a record level for GLD, the indication is that demand is strong.

If you are interested in investing in precious metal ETFs, check out these funds in gold and silver:

  • SPDR Gold Shares
  • iShares COMEX Gold Trust (IAU)
  • Market Vectors Gold Miners ETF (GDX)
  • PowerShares DB Gold (DGL)
  • iShares Silver Trust (SLV)
  • PowerShares DB Gold Double Long ETN (DGP)
  • PowerShares DB Precious Metals (DBP)
  • PowerShares DB Silver (DBS)

Among them, GLD has the largest daily trading volume according to Morningstar data, followed GDX and SLV. Remember, volume matters when trading an ETF. Not only because of the bid/ask spread, but also for the survival of the fund.

Stock chart from INO Stock Analysis

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My Disclosure: Long DGP and GLD – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

======================================

Want a Way Out of the Economic Stupidity? Buy Gold – Seeking Alpha

By: Adam Lass of Wave Strength Options Weekly

For every analyst arguing one side of the above arguments, you have another analyst strongly arguing the opposite. And often you have the majority of analysts taking one position in the above arguments and then flip-flopping like a politician to the opposite position just two months later if things move the opposite way from their predictions.

Make 203% as Washington becomes a global laughing stock

According to our nation’s new “Intel Czar,” the economy is the number one threat to the U.S. right now.

In testimony before the Senate Intelligence Committee, National Intelligence Director Dennis Blair warned that: “The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests.”

Now, one ought to keep in mind that Blair was addressing the committee just a day or so before Congress would be disgorging the bolus known as the 2009 Stimulus Act. As such, Blair, with his 49-page statement, was just one more player in the administration’s full court press.

Our Own Worst Enemy

Still, Blair does make some interesting points: Suddenly, al-Qaeda is no longer the top-listed actor. Indeed, most of the “Axis of Evil” has fallen several notches down the old hit parade.

North Korea’s current or Iran’s future nukes? Still salient, but not “Number One with a Bullet,” as old Casey Kasem used to say. Russian territorial belligerence and Chinese currency intransigence? Worrisome in the long run, but still not the top threat.

No, Washington’s Numero Uno spy tells us that our worst problems stem from the rot within. Or, to quote the ever-so-sage Walt Kelly: “We have met the enemy, and he is us.”

Our Newest Secret Weapon: The Dollar Bomb

The grand economic downturn (wow, that is such an elaborate way to avoid saying “depression”) presents two key security issues. The first seems obvious enough: We need cash to fully fund our military.

I suspect that this is less of a problem than it seems at first blush. Coming up with more dollars these days is actually remarkably easy: Washington just prints as many as it wants.

In fact, this may even turn out to be a bit of a blessing in disguise (okay, it’s a really good disguise, but bear with me here). A great way to get more bang for your newly imagined bucks would be to hand them off to military contractors, who could then hire more workers to build more armored troop carriers, which could then be blown up in Afghanistan. Then we just do it all again!

Bingo: You’ve cut unemployment and sopped up excess industrial capacity in one fell swoop! Hey, it worked for LBJ and Nixon, right? Right? Hey, stop throwing those “Whip Inflation Now” buttons at me!

The Price of Weakness

Let’s move on to issue two: The longer this debacle continues, the more folks in odd corners of the world might get the idea that maybe those “‘Mericans ain’t so smart after all.”

Much like Britain in its day (an apt comparison, since we pretty much bought our empire used from the Brits at the end of WWI), global control pretty much depends on the projection of the image of power. When that image falters, suddenly café agitators round the world have a much easier time persuading recruits to run around with Kalashnikovs and C4 undergarments.

And indeed, if you dig deep into Admiral Blair’s report, he does mention that al-Qaeda’s successful recruitment of Westerners over the past two years is making it increasingly difficult to play “Spot the Terrorist” at airports.

Hard to March When You’ve Shot Yourself in the Foot

But a mere economic downturn could not make us look but so dumb. Seriously, these things happen all the time, without risking national security. No, what makes us look inane and weak is the way in which our ineptitude has exacerbated a downturn into a full-blown crisis.

An example: Over the past few days, Justice and I have both bemoaned the current Secretary of Treasury’s glacial pace. It’s not so much that we want to see trillions in funny money dumped on us. It’s just that we wish they would rip the damn bandage off and move on already.

After weeks of promising to reveal his latest scheme, the best we got was a promise to come up with a schedule for formulating a plan, along with some vague threats to further “stress test” banks that have obviously already failed any sort of common sense test.

“It’s the Other Guy’s Fault. Oh Wait, I Am the Other Guy”

After calming down a bit, I actually went so far as to check with some connections I have in Washington as to why Geithner is moving so slowly. The current excuse coming out of the Treasury? The “New Team” has been unable to hire adequate expertise to figure out what to do next.

As I pointed out last week, the “New Team” is pretty much the “Same Old Team” that screwed things up in the first place. Indeed, the whole reason we were told to tolerate them was because their prolonged exposure supposedly ensured their expertise on the topic.

No wonder folks outside our borders are beginning to think we are stupid.

Turning Ineptitude Into Gold

There is one place where they are treasuring our fiscal inanities. Canada is enjoying a (relative) boom at our expense. Whereas the benchmark drop for most of the world’s markets has been hovering around 7.3% so far in 2009, Toronto’s TSX composite is down a mere 2.7%.

What’s propping things up north of the border? Gold, my friends.

Barrick Gold (ABX) and 11 of their fellow miners are up some 5.2% as a group this year. And it looks like this boom is nowhere near clapped out.

And why should it be, when guys like Euro Pacific Capital’s Peter Schiff are calling for gold to increase another 60% before the dust settles. Think that’s a speculative call? Heck, you can make a pure value argument for these guys.

After being bludgeoned by 14 months of recession and a 47% share price crash, one might imagine that U.S. stocks ought to be pretty darned cheap right now. And despite all this damage, the S&P 500’s trailing P/E is hanging out around 29.1, some 40% higher than at the market’s absolute top back in October 2007. Barrick’s P/E of 18.88 beats that by some 35%!

Now if you were looking for a way to turn our foolishness into treasure, you could simply do as the Canadians do, and buy shares of ABX. That increase in gold ought to bump up the share price some $20 between now and mid-summer.

If you were interested in a bit of leverage, you could easily pick up mid-dated ABX call options. That same $20 spike would offer you gains as high as 203%.

Disclosure: no positions- Adam Lass

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My Note: Of course I agree with the above article but “no positions?”. You gotta play if you want to get paid!… – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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The following is a Very Interesting Article! – jschulmansr

In Today’s Enviroment, Neither Technical Nor Fundamental Analysis Alone Will Work-Seeking Alpha

By: J.S. Kim of SmartKnowledgeU

 

In an extremely difficult investment environment, it is often difficult to know who to believe. Deflation or inflation? Have financial stocks bottomed or do they have much more to fall? When gold corrects sharply, is the gold bull over or still alive? Is oil heading to $20 a barrel or $80 a barrel?

For example, when we look at oil prices, oil has plunged from $147 a barrel to less than $35 a barrel in 7 months! During this time, the deflationists have been out en masse in the mainstream media, claiming that plunging oil prices were directly attributable to plunging demand worldwide from economies that were stagnant. For example, here’s a link to a story that seems to infer that plunging oil prices are caused primarily by plunging U.S. demand and growing U.S. inventories. Though it would be ignorant to ignore the effect of a slowing global economy on demand for crude oil and its effect on lower crude oil prices in the futures markets, it would be equally ignorant to attribute the majority of crude oil’s plunge to a shrinking global economy as well.

How many people really believed that when we had $147 a barrel crude oil prices that this price was solely attributable to skyrocketing demand?

Instead, I can assure you that these stories have been planted to distract you from the real culprit of plunging oil prices –fraud, manipulation of crude oil futures, and political scheming to try to save the U.S. dollar. The plunge in oil prices, after the fraud that caused the run-up to $147 a barrel, is most likely more significantly attributable to the root of this global crisis – a monetary crisis – than slowing GDP rates of world economies. There is much more to the story of any continuing and extended weakness in the United States Oil Fund, LP (NYSE:USO) than just sluggish demand from slowing world economies. Has global demand really shriveled so drastically to account for a 76% free fall in crude oil futures prices?

I’ve taken the stance for a long time now that the extreme volatility we have experienced in gold, silver, and oil futures markets is most likely nearly entirely driven by Wall Street manipulation and free market interventions executed by the U.S. Treasury and the U.S. Federal Reserve. For years, I’ve argued that Central Bank and government intervention into these markets have created massive distortions. In fact, the free-market interventions are so obvious now that even mainstream investment figures such as Donald Coxe, chairman and chief strategist of Harris Investment Management in Chicago, have made similar claims in recent months.

Unfortunately, if you rely solely on technical analysis and fundamental analysis in today’s investment arena without accounting for or anticipating government and Central Bank interference into free markets, you will not understand how to make money. The problem with U.S. regulatory agencies is that they have been asleep at the wheel for the last decade and have been non-responsive to those individuals that have been awake. Repeated requests to investigate fraud in stock markets and commodity markets have been ignored over the past decade by top U.S. regulatory agencies, even when the requests were accompanied by overwhelming evidence.

U.S. Representative Gary Ackerman [D, NY] demonstrated his understanding of the worthlessness of these regulatory agencies when he berated the SEC for aiding and abetting massive fraud in U.S. Securities markets. (Click to view)

I strongly believe that fraud on a similar scale is taking place right now and has taken place for years on the COMEX gold and silver futures markets. In the future, if U.S. Congressmen finally realize this, you will see U.S. Congressional hearings of a similar contentious nature occur with the U.S. Commodity Futures Trading Commission. Currently, there is a mountain of circumstantial evidence of very large players attempting to manipulate gold and silver futures contract prices, even during this recent spike in gold and silver futures prices.

Remember, Harry Markopolos presented evidence of the Bernard Madoff $50 billion fraudulent Ponzi scheme to the SEC over a period of 9 years and was repeatedly stonewalled and ignored by the SEC (Securities Exchange Commission). Markopolos stated in testimony before the U.S. Congress that the SEC was protecting fraudsters instead of prosecuting them and “that’s why they shy away from the big cases.”

Asked by lawmakers if his warnings to the SEC could have been more explicit, Markopolos said, “I even drew pictures so I don’t know how I could’ve been more explicit.” He added the agency “roars like a lion and bites like a flea…The SEC was never capable of catching Mr. Madoff. He could have gone to $100 billion” without being discovered, Markopolos testified. “It took me about five minutes to figure out he was a fraud.”

Just like Markopolos, it did not take me long to conclude that massive fraud is and has been occurring in the New York-based gold and silver futures COMEX markets. And just like Markopolos, I also presented what I believed to be strong evidence of this fraud to the commissioners of the overseeing regulatory agency, the Commodities Futures Trading Commission [CFTC]. While my efforts were acknowledged by the CFTC, in their own words, as “great info”, no action has been taken upon my request for an investigation into fraudulent activity in the gold futures markets. I felt that I certainly presented enough compelling circumstantial evidence enough to warrant an investigation, but so did Markopolous, and he was ignored for nine years.

On the other hand, Ted Butler’s tireless efforts in presenting fraudulent COMEX activity to the CFTC has resulted in an internal investigation but as of yet, there still has been zero action as a result of this investigation. In the end, all investigations are ultimately worthless to the common investor unless the investigations are sincere. As Markopolos stated in recent U.S. Congressional testimony, he believes that the regulatory agencies’ intent will never be sincere until a drastic overhaul of the agencies occurs.

Markopolos hit the nail on the head for the biggest reason why the efforts of people such as myself and and many others to expose fraud in certain markets is being ignored by regulatory agencies: “What you’ll see is the [regulatory agencies are] busy protecting the big financial predators from investors and that’s their modus operandi right now.” In the case of gold and silver futures markets, when the agencies involved in the fraud most likely include the U.S. Treasury and the U.S. Federal Reserve, you will never see a true investigation materialize. So if, as investors, we are all fighting an uphill battle against fraud that has been imprinted within the “system” for a while, what is my point, right? My points are the following:

(1) Fraud has been part of the system for a while now, it will continue to be part of the system, and every investor needs to anticipate fraudulent activity to be profitable in these markets. Reliance on technical and fundamental analysis only will most likely lead to poor analysis.

(2)During periods of great economic crisis such as the one we are facing today, fraudulent activity will increase.

(3) Fraudulent activity manifests itself in the form of great distortions in stock markets and commodity markets. Why do you think you have seen financial stocks bounce around from $40 a share one month to $85 two months later, back down to $30 a share six months later, and up to $90 a share one month later? Why do you think you’ve seen gold plunge from over $1,000 an ounce in futures markets to $680 an ounce and then climb right back to more than $950 an ounce?

So the lessons to be learned are these:

(1) Volatility, due to massive fraud and free market intervention, is here to stay.

(2) To know how to play this volatility, you have to be able to analyze the situations properly and understand if fraudulent schemes are sustainable over the long-term or if they are only sustainable over the short-term.

(3) By taking step (2) into consideration above, you will know if rising financial share prices are a house of cards ready to tumble again or if they are a good long term play; if tumbles in gold prices should be interpreted as the end of a gold bull or a great buying opportunity; if oil prices are likely to remain low for a while or if a rapid spike in prices is likely in the future; and so on.

Do this, and you can make volatility your friend and not your enemy, because for now, volatility is here to stay.

My Note: I highly Recommend visiting SmartKowledgeU and signing up for the free newsletter, I did… – jschulmansr

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One other note: In Comex Silver it is a few large banks which represent over 90% of the short interest, and Gold has a similar situation where the shorts there are in on an average around $750 – $850oz, where the short positions where initiated. How long will they be able to hang in there? If Comex actually follows thru along with the CFTC in their investigation and these positions come to light… Wow what a potential “Short Squeeze”! We could see a frenzy where Gold will shoot to $1500 and Silver to $25-$50 oz  easy. – We will see… – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Gold Around the Globe: Setting Records – Seeking Alpha

Source: Monday Morning

Gold’s performance in 2008 could look like a real yawner.

After all, it only managed to eke out a 5.7% gain. Not the kind you’d normally brag about over cocktails.

As we rang in the 2009 New Year, gold at $850 an ounce (in U.S. dollars) was roughly 15% below its all-time record high, set in March 2008.

But everything in life is perspective. In a year when oil lost 59%, the Standard & Poor’s 500 Index was down 38%, and the Dow Jones Industrial Average gave back 30%, things could certainly be worse for gold bullion investors. Much worse, in fact. Just ask the typical investor about his portfolio: He’s likely to grumble, and change the subject.

As it turns out, 2008 marks the eighth consecutive year that gold has clocked a positive annual return. It’s now starting to look like the trade of the decade.

Truth be told, many are disappointed with gold’s behavior during the October-November stock-market panic, too. But here again, it’s all relative. When we compare the Standard & Poor 500 Index (a proxy for the market) with the SPDR GLD Trust (an ETF proxy for Gold) (GLD), we know where we’d rather have our money.

As this chart shows, from September to December, gold, despite its volatility, ended essentially flat in U.S. dollar terms, yet shows a marked recovery since the end of November. The S&P, on the other hand, looks like an Alpine ski hill heading for Jackson Hole. The divergence between the two is remarkable.

During last fall’s violent stock market downdraft, the U.S. Dollar Index (USDX) put on a spectacular, unprecedented two month – 15% rally. Spectacular, because to get even a 10% move over an entire year is a big deal for any major currency.

But gold is still (mistakenly) considered by many as the “anti-dollar.” So its behavior during a U.S. dollar rally does not come as a complete shock in hindsight.

Yet the gold price we see is misleading in two significant ways.

First, try going out there and buying an ounce of physical gold. In normal times, the average coin dealer will charge in the neighborhood of 3% above spot price. This past November, that premium shot up by 3-5 times, with many charging 10%-15% above spot, plus eight weeks or more for delivery. So when buying an ounce of gold, how realistic is the spot price, especially during a panic? In the midst of the mayhem, one larger Canadian precious metals dealer, Kitco, saw its list of products shrivel overnight from about 16 items to merely three, due to a lack of supply.

Second, gold is quoted in U.S. dollars around the world. But India is the single-largest gold market, with the rest of Asia showing a strong affinity for the universally cherished yellow metal. Throw in Europe and Latin America, and you can see how most of the world looks at gold through entirely different lenses – through their own currencies.

To be fair, let’s gain some distance from our own provincial viewpoint by taking a small trip around the globe. This way, we can get a handle on how the price of gold has behaved elsewhere.

Euro Gold

During the anomalous spike in the U.S. dollar last fall, the European euro lost considerable ground against it. So gold priced in euros shot up. March saw the record of near € 650 gold bettered in September by € 670 gold. Europeans were clearly happy with gold’s behavior, which currently sits around an all-time euro high of € 720.

UK Gold

Gold priced in British pounds sterling has performed astoundingly well. Brits saw gold at £500 per ounce in March, then £530 in September, and £600 by year’s end. Gold, now at £650, is still setting new record levels, dating back to 1717 when they began keeping records.

Canadian Gold

Canadian gold investors have few gripes. In March of last year, gold was trading at C$1,003; by late September, the price was up by nearly C$50. And right now, it hovers at a record C$1,160 level. Despite the amazing strength the Canadian dollar has shown in recent years, gold has performed very well in this resource-based currency.

Brazilian Gold

Brazil is the most populous country in Latin America. And gold’s performance in the Brazilian real did not disappoint either. The record set in March at R$ 1,719 per ounce was easily surpassed in September with a sharp spike to R$2,069. Today, it sits at R$2,115; which is R$415, or 24%, above its March levels.

Indian Gold

India’s currency is the rupee (INR). And for traditional, cultural, and even practical reasons, Indians are the biggest gold investors on the planet. As in much of the rest of the world, gold set a record near INR41,000 in March. It then pulled back in July, but spiked to a new record near INR43,000 in September. At roughly INR45,800 today, gold is priced way above its previous March and September 2008 record levels.

Chinese and Japanese Gold

If anyone should be disappointed with the performance of gold over the past year, it is investors in China and Japan. Gold’s record in March, at CNY (yuan) 7,050, has not been bettered yet. September saw a spike back near the CNY6,250 level, and gold currently rests at a price of roughly CNY6,400 per ounce.

Japan’s gold price hasn’t fared much better. The March record near ¥100,000 per ounce remains unchallenged. Gold managed a rally to ¥95,000 in September, but has since fallen back to the ¥84,850 level.

So as the U.S. dollar rose late last year, the Chinese yuan and Japanese yen were the two major currencies that tagged along, making gold investors relative losers in those nations. The Chinese and Japanese 2008 gold experience differs little from the American one. And yet, gold in U.S. dollars is currently just 8% shy of its all time record at $1,023.50.

Despite the recent American, Chinese and Japanese gold experience, most of the rest of the world’s gold investors are a happy lot. When converting the price back into their home currency, those investors are basking in its glow, while gold sits at or near all-time record highs.

For now, however, gold is still priced in dollars for many market participants. The same is true for all other commodities. I expect that will change over the next several years. Scores of foreign central banks have indicated their intentions to lower levels of dollar-denominated reserves to reduce exposure. Meanwhile, Kuwait has dropped its dollar peg, opting instead for a basket of currencies. And Iran already trades some of its oil for non-U.S. dollar currencies.

As the U.S. dollar continues to lose value – and hence, its influence – on the world stage, commodities are increasingly likely to be priced either in local money, or to be quoted in a variety of currencies.

Heck, commodities may even be priced in quantities of gold before this is all over. Gold investors can only hope. For now, as new price records are regularly being established, most aren’t complaining about the value of their gold.

With their sights set on breathtaking new heights to come, American, Chinese, and Japanese gold investors are sure to see their patience rewarded, as have already so many of their fellow investors the world over.

Original post

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Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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 In yesterday’s post I included a partial list of tier 2, tier 3 junior mining companies to check out, and after doing your due diligence; potentially invest in. Some Bargains in there at or near book values.

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Look to Junior Miners as Gold Feeding Frenzy Ensues – Seeking Alpha

By: James West of Midas Letter

Ever seen what happens to a piece of meat thrown into a tank full of vicious piranhas?  

The water is whipped into a froth and within seconds the meatless bone sinks to the bottom. There’s virtually nothing left.

The same thing is about to happen in the gold bullion market.

After some apparent weakness in Asian markets, gold powered higher Monday as news of the Japanese economic rout sent global markets into freefall. The only thing that stopped it from happening in the Unites States was the mixed blessing of a holiday keeping markets closed.

I say mixed, because a second day of selling overseas means the American market will have two days of pent up selling pressure to be unleashed as the market opened Tuesday morning.

The news keeps getting worse out of global G7 economies, and that has investors flocking to gold in recognition of its safe haven role.

ETFs are the biggest consumers of physical gold right now, and last week global ETFs took down the equivalent of 5% of the annual world gold production in just one week.

SPDR Gold Trust GLD.PGLD.A, popularly known as GLD, said the gold bullion it owned rose by more than 100 tonnes to 970.57 tonnes as of Thursday, which marked the biggest weekly gain in the history of the gold-backed exchange-traded fund.

One does want to bear in mind that all ETFs are not created equally. There are very few, in fact, that hold their full portfolio worth completely in physical bullion. It is incumbent upon the investor to read carefully the information provided by ETF vendors. While there has yet to be an instance of ETF-related fraud (that I’m aware of), ETFs are nonetheless a paper representation of the physical bullion, and therefore presents the opportunity for subterfuge.

This is the phase of the secular gold bull that silences all gold critics, and puts smiles on the faces of gold bugs that is so wide their heads threaten to fall in half! This is also the phase where the herd mentality starts to get folks looking around for the nearest bandwagon to jump on. Most of the bandwagons have rattled off into the sunset, though, so there will be a lot of head scratching as the left behind try to figure out how to get in the game.

Investors need to beware though. As gold demand increases so will volatility, as the sheer number of investors means profit-taking is likely to cause same-day leaps and drops by as much as $100 per ounce.

That’s because there are a lot of investors who will be taking profit off the table as the price ratchets higher, and the see-saw effect threatens tender hearts with life-threatening cardiac sincerity.

If you’re late to the game, the trick might be to a look a little further down the road than where the vultures are already fighting over the last few American Eagles or Krugerrands to what will inevitably be the next meal for the hungry mob – mining companies.

In particular, mining companies that boast near-to-production Canadian National Instrument 43-101 compliant resources. There are more than a few of them out there. With the intense interest that will follow a gold price spike, these companies will be able to raise a lot of capital at premium levels, and that will speed up the timeline to production in a lot of cases.

Other companies are not going to themselves go into production, and instead are developing huge deposits for joint venture or outright sale to major and mid-tier mining companies. Important here is the existence of agreements with aboriginal groups (if applicable) and stable democratic jurisdictions. Projects in Canada, the United States, Australia, and Mexico rank highest, with those in Peru, Chile, Colombia and Argentina, followed by African nations. Highest risk are those with socialist governments or military regimes, such as Ecuador, Venezuela, Russia, Mongolia.

Information is the key to successfully investing in the juniors, and keeping abreast of developments on a day-by-day basis is the secret to not losing your shirt.

Investing in juniors is risky, but in the current environment, investing in blue chip stocks, treasuries, mutual funds and financials is far riskier.

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Gold Set To Rise Even Higher – Seeking Alpha

By: Mark O’Byrne of Gold and Silver Investments

After another strong week last week (both gold and silver were up some 3%) despite falling stock markets, gold continues its outperformance of other asset classes due to safe haven demand. It has surged again overnight in Asia and is now at 7 month highs and looks very likely to target its record high of $1,000/oz in the coming days.

Resistance at $950/oz was sailed through very easily overnight and the next level of resistance is $980/oz prior to a likely challenge of $1,000/oz in the coming days.

click to enlarge

With the global economy slowing very sharply, international demand remains very strong as seen in gold coin, bar, certificate and exchange traded fund demand. ETF holdings of the world’s largest gold-backed exchange-traded reached a record 985.86 tonnes as of February 13, up 15.29 tonnes or 1.6% from the previous day. The trust’s gold holdings are up a very significant 205 tonnes, or 26% in just the first six weeks of the year (see chart below).

Besides increasing retail, pension and institutional demand, many central banks are increasingly favourable to gold. Russia’s central bank has increased gold’s share in reserves, and plans to continue this trend in 2009, first deputy chairman told Reuters in an interview on Monday. The ECB Eurosystem’s reserves of gold and gold receivables increased EUR 1 million to EUR218.320 billion in the week ended Jan. 30.

Gold’s strength in recent days is particularly impressive as it comes in conjunction with a stronger dollar. However, this “strength” is more a function of a weakening in most fiat currencies internationally versus the dollar.

Gold has risen above £675/oz and €760/oz reached new record highs in many other currencies such as the South African rand and the Canadian dollar.

This bodes well for gold prices in the coming weeks as when the dollar begins to weaken again in the coming weeks, which seems very likely, then gold should rise even more sharply and target levels above $1,200/oz in the coming months.

Importantly, the commonly quoted COMEX gold price is actually lagging considering the extent of international demand as seen in the charts above.

And this marked rise in demand comes at a time when world gold production is actually falling.

While investment demand remains very strong and is increasing, there are growing fears about the declining supply of gold – the world’s mine gold supply has been falling in recent years and it fell to 2,385 tonnes last year, down 3.6 per cent from 2007 (despite the rise in prices in recent years).

This is a recipe for markedly higher prices in the coming months and the inflation adjusted high of some $2,400/oz looks more and more likely in the next few years.

Disclosure: no positions

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Gold -“Catch Me If You Can” – Whichever way you invest remember to do your due diligence especially if investing in the “junior” gold mining companies. I usually only invest in those companies which have production or are set to start producing in the very near term future…       – Good Investing! – jschulmansr


Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

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Wake Up Call!

16 Monday Feb 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, Bailout News, banks, Barack Obama, bear market, bull market, capitalism, central banks, China, Comex, commodities, Copper, Currencies, currency, Currency and Currencies, depression, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures markets, GDX, GLD, gold, Gold Bullion, Gold Investments, gold miners, hard assets, How To Invest, How To Make Money, hyper-inflation, inflation, Investing, investments, Japan, Jschulmansr, Junior Gold Miners, Latest News, majors, Make Money Investing, market crash, Markets, mid-tier, mining companies, mining stocks, monetization, palladium, Peter Brimelow, physical gold, platinum, platinum miners, precious metals, price, prices, producers, production, rare earth metals, recession, resistance, risk, run on banks, safety, Saudi Arabia, silver, silver miners, small caps, spot, spot price, stagflation, Stimulus, Stocks, The Fed, TIPS, Today, U.S. Dollar, uranium

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The U.S. Markets are closed today yet something very interesting is starting to happen. Can you sense it? The shift from deflation to inflation. The “smart money” big investors are sensing it and starting to jump into Gold in a big way! Gold Prices are holding steady overseas above the $935 support level. Todays articles show the why and how of this move by big money into Gold, read on… and Good Investing! – jschulmansr

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 Something still stirring in precious-metals pond – Market Watch

By: Peter Brimelow of Market Watch

With some wild swings, gold gained about 3% on the week, closing Friday at $941. The Phx Gold Silver Index (XAU:

Technicians were impressed. Long-term chartist Martin Pring is deflationary-minded at present. Two weeks ago, he remarked that if certain trend lines were broken, “I would be dragged kicking and screaming into the bullish camp”. But now he simply says in his recent weekly Intermarket Review: “Not much to add to my recent bullish comments. Both the metals and shares recently broke out of giant patterns … With our Global Gold Index at a new all-time high – enjoy the ride!”
Pring also flags a powerful conceptual reason for the gold move. Discussing a chart of the inflation proofed Treasuries, and using the iShares:Lehm TIPS TIPT as a proxy, Pring says: “Here we see the inflation protected bonds, or TIPs. Who needs these in a deflation? But look, the price just broke to the upside … and volume is expanding! When we look at the longer term we see it’s still in a primary bear market … However this week’s breakout suggests a turn is likely.”
In other words, the bond market is getting seriously concerned about inflation. See Website
The Privateer, being Australian, is even more direct in its weekly remarks: “Why is gold going up? It is certainly not in spite of the global mania for bailout programs now sweeping the world. It is because of these programs. The more ‘liquid’ the global financial powers that be make their money — by creating it in ever larger swathes — the more they run the risk that the world starts to look elsewhere for a viable and trustworthy way to exchange goods and services.”
The Privateer’s invaluable $US 5X3 point and figure chart has now broken above its last downtrend, although its proprietor would like more progress: “This week the chart got up to and just above the second of the two downtrends. The ‘poke’ above the line which came with Gold’s close above $U.S. 945 on Feb. 12 is not yet decisive, a close above $U.S. 960 would be.” See Website
Silver, which I reported last week was exciting the gold bugs by showing unusual leadership characteristics, persisted — rising 3.5% on the week, including on Friday despite gold’s fall, and pushing the Gold/Silver ratio to 68.9 from last week’s 69.5.
But the star of the week was the reported bullion holdings of Spdr Gold Trust. (GLD:
GLD is regarded with deep suspicion by the radical gold bugs who think the metal’s price is manipulated. But at the least it has to been seen as a measure of the Western Hemisphere investment appetite for gold.
In contrast, Le Metropole Cafe monitors Indian gold imports and reports that, unusual in the past few years, the world’s largest gold consumer is standing aside for now. See Website
Interestingly, two sentiment indicators did not react much this past week. Mark Hulbert’s HGNSI on Friday stood unchanged at 60.90%. MarketVane’s Bullish Consensus actually lost a point on Friday to 78%, gaining only 3 points on the week. See Website
In serious gold moves, MarketVane excursions into the 90s are reportedly common.
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Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Major Investors Piling into Gold – Seeking Alpha
By: James West of Midas Letter

Endeavour Financial Corp (TSX:EDV) closed a $100 million equity offering last week, and several other “bought deal” financings point to a strengthening trend: major investors are piling into gold.

The Offering was underwritten by a syndicate co-led by GMP Securities L.P. and Canaccord Capital Corporation (the “Underwriters”). Endeavour will use the funds to support its investment activity in the mining sector with an emphasis in the short term on precious metals.

The first quarter of 2009 has seen well over $1 billion flow into near term and existing mining companies, which is a reflection of the strong gold price amid safe haven demand. With estimates of U.S. government spending reaching as high as $2 trillion, large value investors are increasingly deterred by U.S. Treasury related securities in favour of precious metals.

  • Newmont Mining (NYSE:NEM), one of the world’s largest gold mining companies, raised US$1.7 billion in a combined common share/convertible debt deal which it will use primarily to fund the acquisition of the remaining 33.33% interest in the Boddington project in Western Australia that it does not already own and the additional capital expenditures that will result from its increased ownership in the Boddington project, as well as for general corporate purposes. Citigroup Global Markets and J.P. Morgan Securities led the placement.
  • Freeport McMoran Copper and Gold (NYSE:FCX) raised US$740 million through the issuance of 26.8 million common shares at $28 per share;
  • Kinross Gold Corporation (KGC) announced a “bought deal” financing for US$360 through the issuance of 24,035,000 million common shares US$17.25 per common share. The underwriters were led by UBS Securities Canada Inc.;
  • Osisko Mining Corporation (OSKFF.PK) entered into another “bought deal” led by Thomas Weisel Partners and BMO Capital Markets. The offering of 77 million units at $CA4.55 a share will gross CA$350.4 million. Osisko is developing the 6.28 million ounce Canadian Malartic Project Quebec.

Smaller deals are becoming more common for junior emerging gold companies as well. Among the recent actions:

  • Centamin Egypt (CELTF.PK) raised $CA69 million through the issuance of 106.2 million shares at CA$0.65 per share for development and construction of the Sukari Project in Egypt. This financing was led by Thomas Weisel Partners and Cormark Securities.
  • Romarco Minerals Inc. (TSX.V:R) announced a bought deal Friday worth $20 million for the development of the Haile Gold Mine in South Carolina. Romarco issued 54 million units at $0.38 each. The financing was led by a syndicate of underwriters led by Macquarie Capital Markets Canada Ltd. and including Paradigm Capital Inc. and GMP Securities L.P.
  • International Tower Hill Mines (THM) sold 2 million common shares at $2.50 per share for gross proceeds of CA$5 million, which will be directed towards further development of its projects in Alaska and Nevada. The placement was a “bought deal” led by a syndicate of underwriters led by Canaccord Capital Corporation and including Genuity Capital Markets and GMP Securities L.P.
  • Exeter Resource Corporation (AMEX:XRA) raised CA$25.2 million at $2.40 a share for development of its assets in Argentina and Chile.

And it isn’t just gold that is attracting big financing. On February 10th, Uranium One (SXRZF.PK) announced a $270 million investment by a Japanese Consortium comprised of Tokyo Electric Power Company, Incorporated (TKECF.PK), Toshiba Corporation (TOSBF.PK), and The Japan Bank for International Cooperation.

Concurrently with the execution of the subscription agreement, Uranium One has also entered into a long-term off-take agreement and a strategic relationship agreement with the Japanese consortium, both of which will become effective upon closing of the private placement.

The off-take agreement provides the consortium with an option to purchase, on industry-standard terms, up to 20% of Uranium One’s available production from assets in respect of which Uranium One has the marketing rights.

Junior Uranium company First Uranium Corp. (FURAF.PK) was also the beneficiary of a bought deal financing led by Macquarie Capital Markets this week, which saw First Uranium place 20.5 million units of its shares at $3.00 per unit for gross proceeds of $61.5 million. First Uranium will direct the funds towards the development of the Ezulwini Mine in South Africa.

Endeavour Financial is followed by many analysts and newsletter writers for its robust project pipeline.

Brien Lundin, who publishes the Gold Newsletter, says one of the main reasons he follows Endeavour Financials is because of management – especially Mr. Frank Giustra. He says this team now senses a market bottom, as they are raising capital to go after assets that now cost a fraction of what they did last year, or even six months ago. He intimates strongly that his subscribers should do the same, using Endeavour as their proxy. A mix of entrepreneurial expertise and value investing, he outlines what the smart money is doing now.

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Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Gold: Now Demonstrating Trust in Obama – Seeking Alpha

By: Boris Sobolev of Resource Stock Guide

Gold is Starting to Believe the Obama Administration

Despite making loud headlines about stimulating the economy, the US government has been unable to raise the level of optimism among the general public, while the stock market seemed to drop into a deep state of apathy.  

 

Last week we received the long-awaited economic stimulus packet as well as the so-called plan for the rescue of the US financial system. We have already voiced our skepticism regarding the structure of the stimulus and its potential effect on the economy in a prior article.

 

As far as the size of the $787 billion package, it is clear that it is too small and too spread out into 2010 and beyond to be called a stimulus. $787 billion is just 5.6% of the GDP and when spread over two years will account for just 2.8% at a time when many industrial economies around the world are contracting by 5-10% per year. It can only be called a life support package, not a stimulus.

Japan, which got into a deflationary spiral as a result of a real estate bust, spent much more than 100% of its GDP since 1991 just to see its economy stagnate. Construction related investment alone ate up $6.3 trillion of public funds over the 17 years since 1991. Infrastructure spending accounted for $350 billion to $400 billion per year for the first half of the 1990s for an economy half the size of the United States.

The results of the Japanese fiscal stimulus were unimpressive, although it could be argued that without this stimulus, it could have been much worse.

With the United States facing similar post bubble dynamics as Japan did twenty years ago, how can we expect greater effectiveness of the Obama stimulus plan when it is insufficient and much of is clearly misdirected?

In reality, this economic stimulus package has to be viewed as only the first one of many yet to come. By having the US dollar as a world reserve currency, the US government can be much more effective than its Japanese counterpart in printing its own currency.

We will soon be quantifying the size of the government stimulus plans in trillions rather than in billions. Within the next 3 to 4 years, government spending can easily reach $10 trillion, doubling the size of the US government debt.

One of the main problems with this crisis is that the majority of the debt bubble is related to residential real estate, which does not produce cash flow, but only seems to eat it up. As home prices decline and unemployment rises, debt serviceability is worsening dramatically.

In order to avoid social unrest and to maintain popularity, the Democratic majority will face two realistic options which could begin to address the economic disaster:

  1. Forgive portions of mortgage debt which cannot be serviced. But who will pay for the losses – clearly not the weak banks. Uncle Sam would pick up the tab by printing more currency.
  2. Print new dollars to increase the nominal income of the indebted population through tax cuts, job creation, jobless benefits and various social spending.

There is no other politically possible way out of this mess other than to run the printing press. The way of the free market via bankruptcies is not popular so there is no sense to even discuss it.

Within hours President Obama will sign the stimulus into law, but we are sure that this is just the beginning of the government spending campaign.

As far as the US banks, the new US Treasury Secretary seems to be mimicking his predecessor, Hank Paulson. The essence of the announced “plan” is as follows: “We are absolutely sure that we will save our banking system, but are yet unsure of how we will do so. We will find out very soon, however. Stay tuned”.

While not knowing what to do with the banking system, the government is trying to temporarily act as one. The only specific point in Geithner’s announcement is the plan to increase the Term Asset-Backed Securities Loan Facility (TALF) facility from $200 billion to $1 trillion. This joint initiative with the Federal Reserve expands the resources of the previously announced, but not yet implemented TALF.

In essence, TALF will support the purchase of loans by providing the financing to private investors. In theory, this should help unfreeze and lower interest rates for auto, small business, credit card and other consumer and business credit. Treasury will use $100 billion to leverage $1 trillion of lending from the Federal Reserve. The TALF, which will potentially have greater effect than the stimulus plan, passed in a blink of an eye without any debate.

The markets around the world have deteriorated in deep state of indifference to the first round of actions of the new US government. Only gold is starting to demonstrate its trust in the Democratic majority. Since the inauguration, investors poured $6 billion into gold purchases through GLD alone. This is an increase of 210 tonnes in gold holdings or 24% in less than a month.

click to enlarge

Huge investment demand around the world has put an end to a steep gold correction of the second half of 2008. Most intermediate and long term technical indicators for gold have turned decisively bullish. A test of new highs by gold is very probable this spring.

In sum, gold investors are starting to believe that the Obama Administration sees one way out of economic problems which will for sure resurrect inflation.

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My Note: Did you catch that? They’re believing alright, not that Obama will get the situation fixed, just that he will cause inflation; yes even hyper-inflation , maybe even stagflation! Jump into Gold now before it’s too late… -jschulmansr

 

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Moody’s, S&P Dole Out Global Downgrades – Time to Go Gold? – Seeking Alpha

By: Mark O’Byrne of Gold and Silver Investments

 Gold rose again on Thursday, briefly rising above $950/oz and was up 0.6% on the day. Determined selling on the open in Asia saw gold fall and profit taking has seen gold fall in Asia and in early trading in London. This is to be expected as gold had risen by more than 15% in less than a month.

 

 

US, UK Credit Ratings Look Set to Be Downgraded

The credit rating agency Moody’s has said that the UK and US credit ratings were being “tested”. In a novel and somewhat bizarre departure, Moody’s has split various “AAA” sovereign countries into three categories based on their strength in weathering the economic storm, denoting Ireland and Spain as the weakest, with the UK and US somewhere in the middle and Germany, France, Canada and the Scandinavian nations at the top.

This will in time be seen as gimmickry. Standard and Poor’s have already downgraded Spain to AA+ and did not create sub grades within the credit rating system.

Some have criticized Moody’s for being “unfair” to Ireland, Spain, the UK and US and have argued that these agencies previously gave almost everybody good ratings, and underestimated risks, but were now going to the other extreme.

This is errant nonsense and the unfortunate fact is that Moody’s, the other credit rating agencies and the vested interests in the financial services industry continue to underestimate risks, as they have done for months and years.

Given the massive deterioration in the public finances and economies of these nations, by right they should be downgraded and unfortunately in the coming months they will inevitably be downgraded.

But Moody’s and all the rating agencies realize that this would compound an already disastrous financial and economic crisis. Many pension funds internationally have mandates or investment guidelines to only invest in “AAA” rated government bonds and if these countries bonds were downgraded, they would be forced to sell those bonds en masse. This would likely see a crash in the already very overvalued government bond markets and see long term interest rates rise quickly and sharply.

The creditors of the US in Russia and China have rightly criticized the ratings agencies for their highly irresponsible practices in recent years and are increasingly nervous about their US denominated assets.

Ratings agency Standard and Poor’s in January downgraded Spain’s sovereign debt rating to “AA+” from “AAA” in January, citing insufficient means to deal with weak growth and a ballooning budget deficit. As they did the sovereign rating of New Zealand. The fiscal position in the UK and US is arguably much worse than in these two countries (Martin Wolf of the Financial Times recently said that major US banks, with their humongous Wall Street liabilities, are insolvent) and thus it seems inevitable that the UK and US will be downgraded in the coming months.

If the US is downgraded, then in effect the reserve currency of the world is being downgraded and this has huge implications for the international monetary system. Not surprisingly there have been op-ed pieces in the Financial Times and the Wall Street Journal calling for a return to some form of gold standard.

The governments of the world are nationalizing and socializing the meltdown in the shadow banking system and the international system with potentially disastrous consequences for us all.

Conditions are set to get markedly worse before they get better and the experience of Argentina and other previously wealthy South American countries may be instructive. The IMF is called in and there are structural adjustments, social services are affected or discontinued, banks nationalized, savings inaccessible, food and energy insecurity rise.

This is a potential reality for large western economies, especially if governments keep trying to inflate their way out of the current crisis. This is leading to massive currency debasement and will potentially lead to very significant stagflation and maybe even what could be called hyper stagflation.

Now more than ever, it is essential that individual savers and investors, companies, pension funds and sovereign wealth funds have an allocation to and directly own actual physical gold bullion. Paper exchange traded funds with all the attendant counter party, custodian, sub custodian, auditing and indemnification risk are speculative trading vehicles and not physical gold.

In these unprecedented economic times, it is irresponsible and extremely high risk not to have an allocation to gold bullion in an investment portfolio.

Disclosure: no positions

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My Note: No Positions??? Mr. O’Byrne I think you need to follow your own advice above! Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Is Gold the only salvation from this Financial Armageddon? – MineWeb

Source: MineWeb

Indications are that the global financial situation could yet get far worse before it starts getting better – particularly in Europe – and gold may again prove to be the only real way of protecting wealth in a continuing global financial meltdown.

Author: Lawrence Williams
Posted:  Monday , 16 Feb 2009
LONDON – 
 

 

“It ain’t over ’til its over” is one of the best known quotations from baseball catcher and coach Yogi Berra and as the global financial crisis unwinds it is very apposite yet again.  We ain’t anywhere near the end yet and possibly the worst is yet to come as far as European banks in particular are concerned.  Markets have breathed sighs of relief as various banks have been bailed out and stimulation packages are being approved if not already implemented. 

 

But, one gets the feeling that any relief is premature.  The debt situation in a huge number of debtor nations – virtually the whole of Eastern Europe falls into this category – is dire and has not really yet fallen into the sights of the investment world – but bankers must be quaking in their shoes as surely they are aware of the potential financial Armageddon that still lies ahead. 

And this time it is the already shaky Western European banking sector that is most at risk.  US Banks, accused of starting this all, maybe far less vulnerable to the times ahead.  True the US financial sector may have got us into this mess, but European bankers followed suit and, in the event, may be shown to have behaved far more recklessly than their American counterparts.  It would seem that some of the potential shortfalls being faced would be beyond the financial ability of Central Banks, Governments and transnational agencies like the IMF to sort out.  The system is like a house of cards.  One major failure could bring the whole house tumbling down. 

This is the kind of situation that leads to global nightmares – wars even.  Radical extremists get elected to positions of power – as with the rise of National Socialism in Germany after the crash of the Weimar Republic with its hyperinflation.  We could be in for a very sticky time ahead as the real implications, and depth, of the financial meltdown catch up with us. 

The problems ahead may not be beyond the wit of man to devise a solution which can ‘save the world’, but that is unlikely to come from UK Prime Minister Gordon Brown who appears to have laid claim to this cachet in a freudian moment of rhetorical madness.  Don’t forget this is the same Gordon Brown who decimated the UK’s gold reserves by selling half of them off (395 tonnes) at gold’s low points from 1999-2002 – amounting to some $12bn at today’s prices – a sum the UK treasury would give its eye teeth for in the current financial crisis, although this is small beer relative to the sums squandered by the UK banks.  But it is an indicator of Gordon Brown’s acumen, or lack of it, in dealing with global financial trends. 

Indeed Gordon Brown’s thinking is probably echoed by many others in the European and perhaps the US financial hierarchy which doesn’t bode well for any rescue package that will actually work to stem the flow of toxic debt which has built up all around the world and may almost certainly amount in total to a greater sum than all the world’s financial reserves combined,  But then that is the nature of banking.  It only takes a run on almost any bank to bring the whole institution crashing down, and to allow any country to fail – and there are signs that the European Central Bankers may let some Eastern European states go under, thus triggering a domino effect of defaults worldwide, to bring the world banking system to its knees – or worse.  There are even fears that past high flyers like the Irish Republic could be forced to default on its debts, and undoubtedly the situation for, say, the Baltic states is far worse still. 

What solution is there out there.  Printing money on an unprecedented scale will expose the world to huge inflationary pressures for years to come, but this may be the only way forward using more conventional solutions.  Perhaps a huge revaluation in the price of gold could help bolster some treasuries and bring some confidence back into the system.  And, as with any bank run it is confidence which is needed to stem the tide, not necessarily actual money! 

But where does all this leave the investor?  Not in a happy position.  The logic of further financial collapses and bank failures would be to knock the markets down and down, which in turn takes wealth out of the system and decimates pensions upon which an increasingly aging society is dependent. 

Buy gold may be an answer to protect oneself, but as we saw last year, gold too can be vulnerable as in times  of reduced liquidity funds and individuals have to sell any liquid assets to cover their positions.  But then gold is probably not as vulnerable as other assets – again as we have seen over the past year.  Those who were invested in gold at the beginning of 2008, for example, and did not sell during the year, at least maintained the value of their holdings while virtually all other investment options crashed, although this was not true of most gold stocks. 

Now we are seeing professional and institutional investors moving into gold in a big way just to try and protect their, and their clients’  wealth.  As we have pointed out here frequently, gold ETFs are seeing an unprecedented inflow of funds, although there are those out there who would say it is better to hold physical gold than any form of paper gold because of a growing distrust of financial institutions and paper solutions. 

And perhaps rather gold than other precious metals – notably silver.  Silver would be sure to be dragged up on gold’s coattails, but perhaps not as much  this time – even though history tells us that silver’s volatility leads it to perform better than gold in percentage terms on the upside and worse on the downside.  We are in a different situation with silver not really a monetary metal any longer.  Industrial demand pressures on silver may well mitigate any price rises here. 

Gold’s performance, though, is perhaps also dependent on investment demand outstripping a fall off in the jewellery market and an increase in liquidation of such holdings into the scrap sector.  If the big Asian economies like India and China, where mark-ups on gold jewellery are minuscule compared with the West, falter significantly then reduced demand and increased supply from this sector will need to be soaked up by the investment sector.  At the moment this seems to be capable of doing this hence the recent gold price strength, but unless sentiment changes in India in particular, where buyers seem to be waiting for lower prices, the fall in gold purchases there may limit global gold price growth.  If liquidity becomes a problem in the North American markets again, this could also dent upward movement. 

But overall, physical gold, gold ETFs and selected gold stocks would seem to be the best wealth protectors out there.  As commentators have pointed out, prices may remain relatively volatile, but currently the overall price trend tends to be upwards movement, followed by stabilisation, before the next upwards resistance levels are tested.  Gold does look to be steadily climbing back towards the psychological $1,000 an ounce level but it has had trouble sustaining increases beyond this level in the past.  Perhaps it will be third time lucky for the gold bulls.

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My Note: Prudence dictates at least 10% of your portfolio should be in Gold. Personally, I have that and also a lot of my discretionary funds invested in precious metals Stocks, ETF’s, Bullion…jschulmansr

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

 

 

 

GLD

GLD, , ) GLD . These rocketed a startling 13.7% to 985 tonnes, setting records each day.

XAU

Delayed quote dataHUI, , ) added 1.36% to 311.16. The stock market, in case you missed it, lost ground.

Commentary: Gold’s gains for week catch bugs’ interest

By Peter Brimelow, MarketWatch
NEW YORK (MarketWatch) — Something was indeed stirring in the precious metals pond, as I reported a week ago. Key investment letters say it still is. See Feb. 8 column

 

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

 

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Can You Sense It? The Calm Before The Storm

03 Tuesday Feb 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, Bailout News, banking crisis, banks, bear market, capitalism, China, Comex, Credit Default, Currencies, Currency and Currencies, deflation, depression, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, Gold Bullion, Gold Investments, gold miners, hard assets, How To Invest, How To Make Money, hyper-inflation, India, inflation, Investing, investments, Junior Gold Miners, Latest News, Make Money Investing, market crash, Markets, mining companies, mining stocks, oil, palladium, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, run on banks, Saudi Arabia, Short Bonds, silver, silver miners, small caps, spot, spot price, stagflation, Stimulus, Stocks, TARP, The Fed, Today, U.S. Dollar, Uncategorized

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agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Brimelow, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

Can you sense it? There seems to be an eerie calm in all of the markets. Could this be the calm before the coming financial storm round 2? Since Gold is considered a safe haven investment in times of financial uncertainty, it would seem to tell us something is about to break wide open. As I enter this post Gold is up $5 oz to $912.50. We saw some retracement yesterday but support levels at $900 oz held. It appears that prices are taking a breather. This comes after an approximate $95 dollar an oz rise in just the past 14 days! As I mentioned in my post from a few days ago It’s Official Gold is in a new Bull Market. 

Quick sample of some recent headlines:

  • The Associated Press writes, “Gold Prices Soar as Investors Flee Wall Street.”

  • The Bullion Vault claims, “Gold Prices Poised to Move Higher.”

  • Forbes observes, “Gold Prices Resume Long-Term Uptrend

  • So What’s next? Read on…-Good Investing! -jschulmansr 

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    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

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    Gold Prices Could Hit $1500, fears Merrill Lynch CIO- Business 24/7

    By: Shashank Shekhar of Business 24/7

     

    Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday.

    Dugan termed his apprehensions of gold striking such a high as a “fear” that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors.

    With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of “the most trusted currency”, Dugan said. “We have never seen such a rush to buy gold. It’s bringing in security and it’s still affordable.”

    Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. “While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems,” Dugan said.

    With reports of declining returns from other investment options, “cash” – keeping money safe in banks and investing in government bonds – is the option in front of investors, Dugan said.

    “Fear” and eventual decline of the greenback are the two factors that will drive gold prices, he said. While commodity markets could also bounce back in the first half of the year, a rebound is likely to be short-lived in the absence of strong US consumer demand.

    Precious metals, led by gold, could enjoy a more sustained rally with gold benefiting from a weakening of the dollar in the second half of the year, Dugan said.

    Dugan said the greenback, which has been strengthening for the past few months, will decline in value by the middle of this year. “That’s when people will begin to realise that President Obama’s policies are not having the desired impact,” he said.

    Investors could also look to private equity, which produced strong returns during the downturns in 1991 and 2001, on an opportunistic basis. Some hedge fund strategies may be worth following but hedge funds should be treated with caution, Dugan said.

    Returns from private equity should remain in single digits in 2009 and a return of beyond 10 per cent should be treated as “fair value”, he said. “Investors should remain cautious. They need to be prepared to take profits. We think any such rally would run out of steam by the second half of the year.”

    Low risk assets could offer private investors the best prospects of attractive returns in 2009 as the world’s leading industrialised nations face recession, Dugan said. With governments around the world striving to tackle the economic crisis, private investors could find value in a cautious approach towards asset allocation. Options include high-grade corporate bonds and high-quality, high-yielding equities in defensive industries.

    “Investors will look to long-term US government bonds as an important barometer of the progress of global recovery,” said Dugan. “Sharply rising bond yields will show that the governments have overspent.”

    While earnings downgrades are likely to dominate the first quarter of 2009, a rally in global equity markets could be on the cards for the first half of the year with consumer and cyclical stocks among the potential beneficiaries, Dugan said.

    Broad equities indices could also offer trading opportunities to private investors. “Equities could outperform as an asset class in 2009 unless there is a serious deflation risk. Our view is that deflation will be avoided,” he added.

    Selective investment in high-grade corporate bonds could also provide attractive returns, Dugan said.

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    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

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    Is a New Cyclical Bull Market on It’s Way? – Seeking Alpha

    By: Simit Patel of Informed Trades.com

     Puru Saxena of Money Matters recently wrote an article entitled ‘Birth of a New Cyclical Bull?‘ in which he offers arguments for why we may see 2009 be a bullish year for equities. His basic points:

     Inflationary actions by the Fed and a declining TED Spread have proven effective in fighting falling asset prices and reducing risk

    • Treasury bonds need to have higher yields or money will go into equities
    • Equities have “overshot” to the downside, thus resulting in excessively low valuations

    I agree with Saxena’s basic premise that the Fed’s actions will be successful in creating inflation in the aggregate; it is only a matter of which asset class will reap the benefits of that inflation, and who will pay for it. The chart below compares various asset classes against one another for the month of January.

    click to enlarge

    A key question we may wish to begin asking and examining is just how much inflation the Fed has really created for us, something that will become more apparent as lending resumes and money that is “on the sidelines” returns to the game. I’m of the viewpoint that the global economy is currently improperly structured, and needs a complete restructuring, one that will likely require abandonment of the US dollar as world reserve currency, a corresponding decline in US consumption, and a significant restructuring of the FIRE (finance, insurance, real estate) economy in the United States.

    From that perspective, an equities rally will be unsustainable, unless there is currency debasement to the extent that all markets rise nominally. If that is the case, though, the inflation will result in significant dollar devaluation.

    Trading Implications: The fall in Treasuries was the story for January, and will be of importance so long as it continues. If money comes out of Treasuries and into equities and commodities, it increases the likelihood of seeing consumer price inflation. As I’ve stated before, though, I expect commodities to outperform equities once money comes out of Treasuries and dollar devaluation resumes. And as all currencies around the world are having trouble, gold will rise as fiat currencies continue to struggle.

    Disclosure: Long gold.

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     Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ===============================

    U.S. Debt Default, Dollar Collapse Altogether Likely – Seeking Alpha

    By: James West of Midas Letter

    The prospect of the United States defaulting on its debt is not just likely. It’s inevitable, and imminent.

     

    The regulatory black holes into which sanity and reason disappear on a daily basis are soon to collapse under the mass of their sheer size. The circle jerk going on among G7 governments has to end – the steady advance of gold, even in the face of a managed price, exposes the real value of the U.S. dollar, as opposed to its apparent value expressed in the dollar index.

    Is 2009 the year that the United States formally defaults? And with that, will the dollar collapse be rolled back ten for one or more?

    There are a lot of reasons to support that theory. To Wall Street economists, such an event is heresy and therefore unthinkable. Yet Wall Street is the very La-la-land that bred the idea of a perpetually indebted nation in the first place.

    Number one among the indicators favoring this scenario is what is happening in the U.S. Treasuries auction market.

    Last Thursday, an $30 billion auction in five-year notes failed to stir the interest of traditional primary dealers. The auction itself was saved by an anonymous “indirect” bid.

    Buyers are discouraged by the prospect of what is expected to amount to $2 trillion total issuance for the full year of 2009. The further out the maturities on notes, the more bearish the sentiment towards them. The only way to entice buyers is through the increase in yields.

    But with yields at 1.82 per cent, five-year notes were met with a demand for 1.98 times the amount offered – the lowest bid-to-cover ratio since September. A sell-off in treasuries began in earnest upon the conclusion of that auction.

    The U.S. Federal Reserve suggested last week that it was going to step up its treasury-buying activity, and the mainstream media interprets this as a form of market support. What it actually is evidence of growing anxiety and desperation on the part of the Fed as the realization dawns that demand for treasuries is progressively evaporating.

    The increased demand for gold as an investment witnessed throughout the last two weeks that has pushed gold to a 4 month high is further evidence that investors across the board are gravitating more towards gold and away from U.S. debt.

    So what is the catalyzing event that will precipitate outright capitulation?

    I think the spin-controlled version of events will make the collapse of the derivatives market the red herring that facilitates the aw-shucks-we-have-no-choice shoe-gazing moment possible, and that’s exactly the parachute the government needs to retain a veneer of credibility – at least in its own delusional mirror.

    The announcement that the CFTC was about to become the target of a regulatory overhaul supports this theory. Consistent with his unfortunate proclivity to hiring foxes to guard chickens, Barack Obama’s choice for CFTC commissioner Gary Gensler was the undersecretary of the U.S. Treasury when the Commodity Futures Modernization Act of 2000 was passed, and is one of its architects. This was the piece of legislation that was put forth to appease the opposition to “dark market” trading in certain OTC derivatives first noisily derided by CFTC commissioner Brooksley Born in 1998.

    Ignoring Born’s admonishments with this act, it exempted credit default swaps (CDO’s) from regulation, resulting in the somewhere between 58 and 300 trillion dollars in value presently under threat if the positions were to be unwound. Because of their unregulated status, counterparties in the largest transactions can simply “roll forward” contracts, instead of the losing party in the transaction covering their loss with a transfer of money. It is this massive “nominal” value that could be the Achilles heel of what’s left of the U.S. banking system, and by extension, the U.S. dollar.

    I don’t arrive at this conclusion because I like making catastrophic outlandish predictions. Its merely the result of following certain logical paths to their most likely outcome based on what has happened in the past.

    In discussions on this topic with editors of top tier financial publications, such speculation is dismissed out of hand, and the argument to refute the likelihood of such outcomes is never brought forward.

    Gold exchange traded funds (ETFs) are now the largest holders of physical gold, and as a proxy for investors who don’t want to be encumbered with taking delivery of the physical, provide a simple way to participate in the gold market.

    United States citizens should bear in mind, however, that should the banking system be brought down completely by the collapse of the futures market, proxies for gold such as ETF’s and bullion funds could theoretically be targeted by a government desperate for possession of value. The risk from security in holding physical bullion is matched by the risk of confiscation by government in these volatile times. Don’t forget, the government confiscated and outlawed private ownership of gold in 1933 in support of an ill-conceived gold standard, which to some extent, was that era’s spin to halt the flight of gold (and real value) from U.S. soil.

    Don’t think for a minute such drastic events are outside the realm of possibility. If somebody had told you in 1998 that a bunch of angry crazy pseudo-Muslims were going to fly jetliners into the World Trade Center, what would you have said?

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    My note: Very Scarey, 10-1 Trade In on Dollars? Gold Confiscated? This is one of the reasons why I use Bullion Vault, check them out for the details…jschulmansr

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    Good Investing! – Jschulmansr

    =======================================


    Nothing in today’s post should be considered as an offer to buy or sell or as a recommendation for  any securities or other investments, it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

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    Are You Ready For This? – It’s Back and Ready To Rally!

    29 Thursday Jan 2009

    Posted by jschulmansr in Bailout News, banking crisis, banks, bear market, bull market, capitalism, central banks, China, Comex, commodities, Copper, Currencies, currency, Currency and Currencies, deflation, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, Gold Bullion, Gold Investments, gold miners, How To Invest, How To Make Money, India, inflation, Investing, investments, Jim Rogers, Jim Sinclair, Latest News, Make Money Investing, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, mining stocks, palladium, Peter Brimelow, physical gold, platinum, platinum miners, precious, precious metals, price, price manipulation, prices, producers, production, protection, run on banks, safety, Saudi Arabia, security, silver, silver miners, spot, spot price, stagflation, Stimulus, Stocks, TARP, Technical Analysis, Today, U.S. Dollar

    ≈ Comments Off on Are You Ready For This? – It’s Back and Ready To Rally!

    Tags

    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Brimelow, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Are You Ready For This! You are asking yourself “am I ready for what?””What’s ready to Rally?” Gold my friend is the answer! As I write Gold is consolidating right around the $900 level. If you had listened to me you would be sitting on profits of $50- $100 oz. already! Well don’t worry Gold still has plenty of room to move as you will see in today’s post. – Good Investing! – jschulmansr

    ======================================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =====================================

    Gold Price Could Double – World Gold Council

    Source: World Gold Council

    The value of gold could soar due to increased demand following the global financial crisis, it has been suggested.

    According to Citigroup, the price of gold could double by the summer, the Daily Mail reports.

    “We continue to remain unequivocally bullish on the medium to long-term view on gold and still believe that we can ultimately see levels in excess of $2,000 (?1,398),” the firm told the paper.

    Such levels would mean the price of gold would more than double its current value.

    The paper notes that since September, the value of the precious metal has already risen by $122.

    Citigroup added that price rises will either come via inflation following liquidity injections by governments around the world, or by continuing investment from those who view gold as a safe haven.

    In related news, a recent poll conducted by Bloomberg showed that 28 of 31 traders, investors and analysts questioned said now is a good time to purchase gold.
    =================================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =================================

    $850B Stimulus Plan Signals Gold Take-Off – Seking Alpha

    By: Peter Cooper of Arabian Money.net

    Last night the US passed its much anticipated $850 billion Obama stimulus package, representing another huge monetary expansion. Countries all around the world have been at it, and the volume of money in circulation is increasing at a record level.

    Meantime, gold prices have been perky and past $900 earlier this week. Now gold has fallen back a little. The gold chart has completed an almost perfect inverse head-and-shoulders pattern which should mark the reversal of the falling trend that started at $1,050 an ounce last March.

    Gold technicals

    Aside from the technicals of the gold chart, let us also get back to fundamentals: the supply of gold and silver is pretty much fixed. Money supply is undergoing huge and unprecedented expansion.

    At present, governments are printing money like fury and little is happening to their economies because banks, companies and individuals are hoarding cash. But eventually pulling on this string will work, and money will flood into the economy in an uncontrollable way.

    It is at this point that gold prices will go ballistic. That should not be more than nine months to a year away based on past precedent.

    However, before that golden age occurs there will be increasing speculation about the future of the gold (and silver) price. More and more investors will read articles like this one and be impressed by the argument – which is far sounder than trying to come up with a new bull market for equities, bonds or real estate.

    Bond crash

    Sometime soon the bond markets of the world are also going to weaken much further, and that will give precious metals another reason to rise in value as an alternative safe haven class.

    For investors in precious metals then it is just a matter of holding on and taking advantage of price dips to stock up with bullion and shares, although it is surely arguable that the best buying opportunities are behind us now as the price trend is about to head back up.

    Trying to time the market exactly or using borrowed money is not a clever approach in volatile markets, but a diversified precious metals portfolio is going to be a winner over the next two years.

    ===============================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ==============================

    Gold $2200: What’s in a number? – Seeking Alpha

    By: Adrian Ash of Bullion Vault

    Gold must hit $2,200 an ounce to match its real peak of Jan. 1980. Or so everyone thinks…

    WHAT’S IN A NUMBER…? Ignoring the day-to-day noise, more than a handful of gold dealers and analysts reckon gold will hit $2,200 an ounce before this bull market is done.

    Why? Because that’s the peak of 1980 revisited and re-priced in today’s US dollars.

    Which sounds simple enough. Too simple by half.

    First, betwixt spreadsheet and napkin, there’s often a slip. Several targets you’ll find out here on the net put the old 1980 top nearer $2,000 in today’s money. Another Gold Coin dealer puts the figure way up at $2,400 an ounce.

    Maybe they got the jump on this month’s Consumer Price data. Maybe $200 to $400 an ounce just won’t matter when the next big gold top arrives. But maybe, we guess here at BullionVault, an extra 20% gain (or 20% of missed profits) will always feel crucial when you’re looking to buy, sell or hold. Perhaps that’s the problem.

    Either way, having crunched (and re-crunched) the numbers just now, even we can’t help but knock out a target…

    To match its inflation-adjusted peak of $850 an ounce – as recorded by the London PM Gold Fix of 21st Jan. 1980 – the price of gold should now stand nearer $2,615.

    Second, therefore, the lag between current Gold Prices and that old nominal high scarcely looks a good reason to start piling into gold today. “Ask the investor who rushed out to Buy Gold precisely 29 years ago, at $845 an ounce, about gold as an inflation hedge,” as Jon Nadler – senior analyst at Kitco Inc. of Montreal, the Canadian dealers and smelters – said on the 29th anniversary of gold’s infamous peak last week.

    “They could sell it for about $845 today…[but] they would need to sell it for something near $2,200 just to break even, when adjusted for inflation.”

    This lag, of course, can be turned any-which-way you like. For several big-name Gold Investment gurus, including Jim Rogers and Marc Faber, it mean gold has got plenty of room left to soar, compared at least with the last time investors began swapping paper for metal in a bid to defend their savings and wealth.

    But for the much bigger anti-gold-buggery camp – that consensual mob of mainstream analysts, op-ed columnists, news-wire hacks and financial advisors – gold’s inflation-adjusted “big top” just as easily stands as a great reason not to Buy Gold. Ever.

    “An investor in gold [buying at the end of 1980] experienced a reduction in purchasing power of 2.4% per annum,” notes Larry Swedroe, a financial services director at BAM Services in Missouri, writing at IndexUniverse.com and recommending Treasury inflation-protected TIPs instead.

    “[That was] a cumulative loss of purchasing power of about 55%…Even worse, that does not consider the costs of investing in gold…[and] while gold has provided a slightly positive real return over the very long term, the price movement is far too volatile for gold to act as an effective hedge against inflation.”

    Volatility in Gold can’t be denied. Indeed, it’s the only thing we ever promise to users of BullionVault. (They can judge our security, cost-efficiency and convenience for themselves.) Traditionally twice as volatile as the US stock market, the price of gold has become five times as wild since the financial crisis kicked off. But price volatility has also leapt everywhere else, not least in the S&P 500 index – now 8 times wilder from the start of 2008. The Euro/Dollar exchange rate is more than four times as volatile as it was back in Aug. ’07, when the banking meltdown began. Even Treasury bonds have gone crazy, making daily moves in their yield more vicious still than even the Gold Price or forex!

    So putting sleepless nights to one side (you may need to ask your pharmacist), the key point at issue remains “long term” inflation.

    This chart shows the value of Gold Bullion – measured in terms of purchasing power, as dictated by the official US consumer price index – since the data series begins, back in 1913. (Hat-tip to Fred at the St.Louis Fed; the current CPI calculations and headline rate might bear little resemblance to personal experience of retail inflation, but for long-run data where else can we go?)

    Starting at 100, our little index of gold’s real long-term value has then averaged 97.8 over the following 96 years…pretty much right where it began. As you can see, however, that long-term stability includes wild swings and spikes. And whether gold is tied to official government currency (as it was pre-1971) or allowed to float freely on the world’s bullion market, volatility looks the only sure thing.

    The starting-point, 1913, just happens to be when the Federal Reserve was first founded. It was given the easy-as-pie challenge of furnishing the United States with an “elastic currency”.

    Okay, so it ain’t quite made of rubber just yet. But the Dollar’s own value in gold – by which it used to be backed, pre-1971 – just keeps brickling and bouncing around like it’s being used to play squash.

    What the chart above offers, however, is a picture of gold’s real long-run value outside of Dollar-price fluctuations.

    “With the right confluence of economic and geopolitical developments we should see gold break through $1,500 and then $2,000 and then possibly still higher round numbers in the next few years,” said Jeffrey Nichols, M.D. of American Precious Metals Advisors, at the 3rd Annual China Gold & Precious Metals Summit in Shanghai last month – “particularly if we get the type of buying frenzy or mania that often occurs late in the price cycles of financial and commodity markets.”

    “This is hardly an audacious forecast when looked at relative to the upward march in consumer prices over the past 28 years. After all, the previous high of $875 an ounce in January 1980, when adjusted for inflation since then, is today equivalent to more than $2,200.”

    Audacious or not, as Nichols points out, the thing to watch for would be a “buying frenzy” – a true “mania” amongst people now Ready to Buy Gold that sent not only its price but also its purchasing power shooting very much higher.

    Because for gold to reach $2,200 an ounce in today’s money (if not $2,615…) would mean something truly remarkable in terms of its real long-run value.

    • Inflation-adjusted, that peak gold price of 21 Jan. 1980 saw the metal worth more than 5 times its purchasing power of 1913;
    • In March 2008, just as Bear Stearns collapsed and gold touched a new all-time peak of $1,032 in the spot market, the metal stood at its best level – in terms of US consumer purchasing power – since December 1982;
    • Touching $2,200 an ounce (without sharply higher inflation undermining that peak), gold would be worth almost 6 times as much as it was before the Federal Reserve was established in real terms of domestic US purchasing power.

    “I own some gold,” said Jim Rogers, for instance, in an interview recently, “and if gold goes down I’ll buy some more…and if gold goes up I’ll buy some more.

    “Gold during the course of the bull market, which has several more years to go, will go much higher.”

    But “much higher” in nominal Dollar terms is not the same as “much higher” in terms of real purchasing power, however. More to the point, that previous peak of $850 an ounce – as recorded at the London PM Gold Fix on 21 Jan. 1980 – lasted hardly two hours.

    Defending yourself with gold is one thing, in short. Assuming gold is the perfect inflation hedge is quite another. And taking peak profits in gold – as with any investable asset – is surely impossible for everyone but the single seller to mark that very top price.

    That doesn’t diminish gold’s real long-term value to private investors however, as we’ll see in Part II – to follow.

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ==============================

    Is Gold Really Pausing? – MarketWatch

    By: Peter Brimelow of MarketWatch.com

     Will Mark Hulbert’s recent column, pointing out that the Hulbert Gold Newsletter Sentiment Index (HGNSI) was over-extended, signal an important top? Or just a ripple? See Hulbert’s Jan. 27 column.

    Either way, there will be a group of angry readers. Of the 220 comments about the column, as I write, the furious bulls outnumber the fanatical bears about 3 to 1.
    But both sides are pretty riled up. This is only money, people!
    Early Monday in New York, gold cleared $915. But Wednesday evening, it was down $30-plus from its high. And the US$ 5×3 point and figure chart kindly supplied by Australia’s The Privateer service has turned down. See chart.
    There is a possibility that the action around the weekend was a false breakout.
    If it turns out to be a bull trap, GoldMoney’s James Turk will turn out to have been wise in his latest Freemarket Gold & Money Report. Turk accepts the radical thesis that the price of gold is manipulated by an alliance of private and public sector actors.
    He writes: “Gold must still contend with the gold cartel and its ongoing efforts to cap the gold price. It may try to ‘circle the wagons’ above $900, which would seem a logical point for them to make another stand now that $850 has been exceeded. If the gold cartel is successful in stopping gold for any length of time, new longs may get discouraged by the lack of progress and take profits. That selling, along with new shorts by the gold cartel, could begin a cycle of selling that gains momentum and drives gold back to its last level of support, which is $850.” See GoldMoney Web site.
    Will gold stumble? In favor of the bears, oddly enough, is the section of Bill Murphy’s radical goldbug LeMetropoleCafe Web site that follows India. The Indians are definitely out of the world gold market, it appears. On downswings, their support is usually crucial. See LeMetropoleCafe Web site.
    But the radical gold bugs think strange things are happening. Murphy’s site noted Tuesday that the extraordinary premiums being paid in the West for gold items did not go away on this month’s rise. And the Comex gyrations, closely examined, continue to suggest the presence of large, determined buyers.
    For perspective on Mark Hulbert’s HGNSI, look at MarketVane’s Bullish Consensus for gold. This surveys futures traders. It peaked at 74% on Monday, and came in tonight at 72%.
    Sometimes gold peaks do occur with this reading in the 70s. That happened at the turn of the year, and again last September.
    But the normal behavior, especially before a big sell-off, is for the upper 80s at least to be reached. Last February/March, as gold attempted $1,000, the Bullish Consensus spent no less than four weeks in the 90s. See MarketVane Web site.
    So the radical gold bugs conclude that gold may pause. But it’s not seen a major blow-off yet. End of Story
    ===============================
    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ===============================

    Gold headed south for the short term?- MarketWatch

    By: Mark Hulbert of MarketWatch.com

    ANNANDALE, Va. (MarketWatch) — Gold certainly deserved a rest Wednesday.
    After all, it had mounted an impressive rally over the previous two weeks, gaining some $100 per ounce. So we can definitely excuse gold bullion  for forfeiting $9 in Wednesday trading.
    The more crucial question, however, is whether the decline was merely the pause that refreshes, or the beginning of a more serious drop.
    Unfortunately for those hoping gold’s recent rally to continue, the conclusion of contrarian analysis is that the metal’s short-term trend is more likely to be down.
    Consider the latest readings of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold-market exposure among a subset of short-term gold-timing newsletters tracked by the Hulbert Financial Digest. As of Tuesday night, the HGNSI stood at 60.9%.
    This is identical to where the HGNSI stood at the end of December, when I last devoted a column to gold sentiment. ( Read my Dec. 29 column.)
    Over the two weeks following that column, of course, bullion dropped by around $70 an ounce.
    Contrarian concern about gold’s short-term trend isn’t just based on this one data point, however. I have more than 25 years of daily data for the HGNSI, and rigorous econometric tests show that the inverse correlation between HGNSI levels and the gold market’s subsequent short-term direction is statistically significant at the 95% confidence level.
    This is why the HGNSI’s current level is so ominous.
    To put it in context, consider that this sentiment gauge’s average reading over the last five years has been 32.6%, only slightly more than half where it stands now. Over the last five years, furthermore, the HGNSI has been higher than where it is now just 13% of the time.
    This does not mean gold can’t go higher from here. But it does suggest that the odds are against it doing so.
    Lest I incur undeserved gold-bug wrath by writing that, let me hasten to add that this bearish conclusion applies to just the next several weeks. Sentiment affects the short-term trend of the market, not the long term.
    So my conclusion is entirely consistent with gold being in a major, long-term bull market.
    But even if it is, the implication of my contrarian analysis is that gold is not ready, at this very moment, to commence on that march upward. End of Story
    Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
    =============================
    My Note- While feeling that Gold price make take a breather here consolidate and maybe even drop a little, both Mark Hulbert and Peter Brimlow agree; Gold is in a long term Bull Market! Any dips in price should be taken as an opportunity to buy more gold!…

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    That’s all for now, hit the subscribe button to keep up with all the latest Gold, Market News and more…Enjoy! – jschulmansr
    Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments, it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

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    Has World War III Started?

    09 Friday Jan 2009

    Posted by jschulmansr in agricultural commodities, alternate energy, Austrian school, banking crisis, banks, Barack Obama, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, Currency and Currencies, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, gold miners, hard assets, heating oil, How To Invest, How To Make Money, India, inflation, Investing, investments, Keith Fitz-Gerald, Latest News, Make Money Investing, Marc Faber, market crash, Markets, mining companies, mining stocks, Moving Averages, natural gas, Nuclear Weapons, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, Siliver, silver, silver miners, small caps, socialism, sovereign, spot, spot price, stagflation, Stocks, Technical Analysis, timber, Today, U.S. Dollar, uranium, volatility, warrants, Water

    ≈ Comments Off on Has World War III Started?

    Tags

    agricultural commodities, alternate energy, Austrian school, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Has World War III already started? According to Marc Faber it has! Check out his interview. Next do you think the government can lose? According to this pundit not only will it lose it is going to lose big! Finally, for years now China has been coming to the rescue by buying Treasuries and US Debt, what will happen when they and other countries stop? Continuation of series from yesterday’s post. Just In! Peter Schiff Interviwed on Russian TV- Get Prepared!  adjust your portfolios and if you own Precious Metals hang on for the ride of your life!- Good Investing!- jschulmansr

    Marc Faber on the Economy, Gold, WWIII – Seeking alpha

    By: Tim Iacono of Iacono Research

    Another good interview with Dr. Marc Faber, this one over at Bloomberg where he’s been a regular for many years (recent appearances at the likes of CNBC are somewhat unusual as he tends to go against conventional wisdom, something that abounds at CNBC).
    IMAGE

    Click to play in a new window

    There’s lots of good stuff in this one – the outlook for the global economy, oil, gold, base metals, natural resource stocks, World War III having already started…

    On the subject of alternatives to the government solutions for the current problems, he was asked how he expected the populace to stand for the government doing nothing?

    That’s the problem of society. If people can not accept the downside to capitalism, then they should become socialists and then they have a planned economy. They should go to eastern Europe twenty years ago and to Russia and China for the last 70 years.

    How do you tell that to somebody in Detroit who’s losing his home today?

     

     

     

    Why is he losing his home? Because of government intervention. The government – the Federal Reserve – kept interest rates artificially low and created the biggest housing bubble, not just in the U.S. but worldwide. That is what I’d explain to the worker in Detroit.

    ============================================

    How the Federal Government will Lose in 2009 – Seeking Alpha

    By: Rob Viglione of The Freedom Factory

    Through a combination of incompetence and greed, the federal government has placed itself in a position of checkmate. There is no way to finance its budget deficits without devaluing the dollar or causing interest rates to rise. With $10.6 trillion in debt, $8.5 trillion in new money created or given away in 2008, and multiple years of trillion dollar deficits planned by Obama, government has no way to fund its extravagances without either printing a lot more money or borrowing unprecedented sums.

    This means that either Treasury bonds will crash, or the dollar will suffer significant devaluation relative to foreign exchange or precious metals, especially gold.

    TV Does Great Interview With Peter Schiff (Russian TV, That Is)

    =====================================================

    Remember Dare Something Worthy Today Too!

     

    Market forces are telling the world to shed unproductive assets and shrink capacity, yet central banks and governments around the world, in particular the U.S., are refusing to listen. Rather than allow markets to snap back to sustainable equilibrium from previously artificial highs, the federal government clings to the notion that forcibly shuffling resources, propping up asset prices, and diluting the money supply will magically save the day.

    There are consequences to everything. The consequences of shuffling resources (taxing productive ventures and doling out those resources to failing ones, i.e. bailouts) are stunted growth for good businesses and propagation of bad ones. Artificially propping up asset prices means that those who are generally less competent remain the custodians of society’s capital, and diluting the money supply inflates aways everyone’s wealth over time, particularly harming the poor and middle class.

    For decades the federal government has gotten away with this reshuffle and inflate game, but the pawns are drowning, the rooks helpless, and the knights ready to turn on the King. Perhaps this is overly dramatic. Clearly, I doubt the capability of the Federal Reserve, Congress, and Obama to “fix” the economy; rather, I strongly believe they are destroying it by forcing us all to drink this Keynesian Kool-Aid. However, whether or not the economy recovers amidst this historic central government action, there are two phenomena we can exploit to our advantage:

    • Short the US dollar
    • Short US Treasuries

    In “When will the great Treasury unwinding begin?” I show how government debt has been bid to unsustainable levels and will likely fall. The one concern I see stated all too often is that the Federal Reserve will keep buying Treasuries to artificially depress interest rates. This will, it is claimed, keep bond prices inflated. The one undeniable counter to this is that government must somehow fund its $1.2 trillion estimated 2009 deficit. It cannot do this by issuing and then buying the same bonds. It can only raise revenue by selling bonds to other parties, or by diluting the money supply by cranking up the printing presses. There are no other options. There you have it – we have the government in checkmate!

    The likely outcome is that they will try to do both. That is why I am heavily shorting both 30-Year Treasury bonds and the dollar. Both assets will likely lose as the government becomes increasingly desperate and the world’s biggest buyers realize there are better alternatives available. Make your bets now before it becomes treasonous to bet against Big Brother!

    Disclosure: Long UDN, short TLT, long GLD.

    ==============================================

    Five New Forces to Drive Gold Higher – Seeking Alpha

    By: James West of The Midas Letter

    Gold naysayers habitually point to the relatively weak performance of gold relative to the broader market over the last 5 years. Given the market today, that argument is increasingly wrong, and the naysayers are soon to either admit their mistake, or pretend that they were never naysayers at all. That’s because during the last 3 months, five major new forces have emerged to compound the previous strong drivers of the gold price up to now.

    These new forces are as follows:

    1. China has stopped buying U.S. debt.
      An interesting piece in the New York Times today signals that China, up until now the biggest buyer of U.S. Treasuries and bonds issued by Fannie and Freddie, is moving towards an end to that policy. China holds over US$1 trillion of such paper, and as interest rates collapse, there is less and less incentive for them to buy American.China has made several adjustments to programs that used to give banks and other financial institutions within the country incentive to buy U.S. assets, which means essentially that these same customers for assets will now be looking for Chinese products.The effect this will have on gold is two-fold. In the first place, reduced demand for U.S. debt will hamper Obama’s plans to keep printing money, because the one limiting factor that still seems to be respected in terms of how much paper can be printed, is the idea that there must be a counterparty to every issuance of T-Bills to warrant continued printing. Theoretically, less demand for T-Bills will force a rise in interest rates to attract investors. But that does not appear forthcoming, which will make the U.S. dollar weak relative to other currencies – especially gold.The second effect is that by eliminating incentives for Chinese banks to acquire U.S. denominated assets, investors there will divert more funds to holding gold as a hedge against their current U.S. dollar holdings, which will be diminishing in value.
    2. Future discoveries of gold deposits will diminish dramatically.
      The biggest source of gold ounce inventory for major gold producers is the discoveries made by the several thousand juniors who scour the earth in search of favorable geology. With the collapse in base metals prices, many of these juniors are under increasing pressure to consolidate and downsize, and many more will disappear altogether.That means less money going into gold exploration, and that means the number of new discoveries that can be acquired by majors is going to go down sharply in the coming years. In theory, as gold continues to outperform all other asset classes, there will be a rush back into junior gold exploration, but that won’t happen until gold is taken much higher and investment demand for it soars.
    3. Existing by-product gold production will fall sharply
      In copper, zinc and other base metals mines around the world, gold occurs in metallic deposits as a by-product of some other dominant mineral. In the United States, 15 percent of gold production is derived from mining copper, lead and zinc ores.With the collapse in prices for these metals, the by-product production of gold is most often insufficient to justify the continued operation of the mine profitably, and it is likely that a significant amount of this by-product gold production will cease along with the shutdown of these operations. The result will be less gold production from existing operations, contributing to the now even faster growing gap between supply and demand.
    4. Gold is becoming mainstream
      One of the biggest contributors to gold’s unpopularity as a main street investment is that it has been mercilessly derided and ridiculed by mainstream investment media and institutions. There is very little opportunity for an investment advisor to insinuate himself into a gold purchase transaction, since most anybody who wants to hold the metal can visit their local bullion exchange or mint and buy as much as they’d like. Because the massive investment institutions that dominate the investment advisory business can’t make a fee out of advising you to buy gold, they try to convince you to purchase other asset classes which their firm has either originated or is a participant in a syndication of investment banks selling such products.Thanks to the widespread coverage of the questionable integrity of these complex securities, and since many main street investors have been burned by their investment advisors (they feel), there is increasing main street advice being doled out to buy gold. One need only search Google news on any given day to discover that headlines critical of gold are now replaced with headlines singing its praises.
    5. Gold is the best performing asset class of the decade
      Now that the global financial meltdown has got up a head of steam, investors are hard pressed to find any investment that has performed well over the last ten years as consistently as gold. The chart below outlines this performance and appears here courtesy of James Turk’s GoldMoney.com.
    Gold Performance: 2001-2008 (click to enlarge)
    Gold Performance 2001 - 2008

    As you can see, any investment still returning an average of 10 – 17 percent is a winner, compared to everything else you can generate a chart for. As this intelligence permeates the none-too-quick popular investment imagination, and, combined with the other 4 factors, gold is going to be where the world’s next crop of millionaires is minted.

    ===========================================

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