By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 26 February, 2010
Further to our piece on the €:$ Exchange rate last issue, we have found that the topic, at last, is hitting mainstream. It is always difficult to be weaned off what you thought was a reliable formula giving you the inside track on the gold price. The oil: gold relationship was a case in point. Many tried to use it as a measure of the next gold price. But in the case of the €:$ exchange rate dictating the direction of gold the consequences of following this line will shortly prove to be very expensive for Traders on COMEX and elsewhere. Full Story
By: Sol Palha, Tactical Investor - 26 February, 2010
From high to Low Silver has dropped over 24%. From high to low Gold has so far shed only roughly 12%. Silver also did not take out its 2008 highs when Gold went on to put in a series of new all time highs. This is another massive intra market negative divergence signal and yet another reason to suggest that Gold could correct/consolidate for several months. On a positive note gold has held up remarkably well in the face of a very strong rally from the dollar. If it continues to hold up like this, then when the dollar rally finally fizzles out, one can expect gold to literally explode upwards. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 26 February, 2010
While we don't seem to have succeeded in getting any gold questions put to Federal Reserve Chairman Ben Bernanke during his testimony to Congress this week, we'll likely have success if enough of us who are U.S. citizens write to our members of Congress to ask them to put gold questions to Bernanke. He will have a much harder time ducking questions submitted in writing. Full Story
By: John Browne, Senior Market Strategist, Euro Pacific Capital - 26 February, 2010
The world is currently in the eye of an economic hurricane. The leading edge of the storm, which made landfall in the second quarter of 2008, raged until the first quarter of 2009, and nearly demolished the world's financial system. By sand-bagging with trillions of freshly-printed paper currencies, fudging accounting rules, subsidizing key financial houses and markets, and calming the masses with half-baked rhetoric, a worldwide collapse was averted. Full Story
By: Vedran Vuk, Casey Research - 26 February, 2010
There is a silver lining to every snowstorm – getting to know your neighbors both good and bad. With forty inches on my block this week, I’ve learned a lot about my neighbors and, strangely enough, socialism. Full Story
By: Scott Wright, Zeal Intelligence LLC - 26 February, 2010
Last week the World Gold Council (WGC) released its highly-anticipated Gold Demand Trends (GDT) report for Q4 and full-year 2009. GDT reports contain analysis of independent data compiled by GFMS Limited detailing supply and demand trends in the global gold market. They are jam-packed with key fundamental reads that undergird gold’s secular bull. Full Story
The inexorable Momentum of Destructive Megatrends is impelling us toward an Economic and Markets Armageddon, about which we and a few other notable commentators have been writing for some time. The Denouement will not be at all pretty or short-lived. Full Story
By: Doug Casey and Louis James - 26 February, 2010
Doug, a hot topic of conversation this week is the man who flew his airplane into the IRS building in Austin, Texas. What do you make of it? Is the guy a hero for the downtrodden taxpayer? Or a terrorist? Or just some lone lunatic? Full Story
By: Rick Ackerman, Rick's Picks - 26 February, 2010
The technical evidence was subtle, but gold appeared to have its best day in months on Thursday. The night before, we had told subscribers to brace for a new wave of selling that would bring the April Comex contract down to at least $1073, exactly $23 below the previous day’s settlement price. When the dust had settled, however, the futures had fallen no lower than $1088 – off a mere $8 from the previous day’s close. Full Story
By: Richard Daughty, The Mogambo Guru - 26 February, 2010
The proverbial boogeyman, the phrase “end of the world as we know it”, is not particularly significant to me because it is, literally, always true, because any progress at all, anywhere, means that tomorrow will never be like today, and so “the end of the world as we know it” can be extended to mean “and it will be better and better!” Full Story
William Bruce Pitzer is a name you would not easily forget, and especially if you had just been asked to murder him—so said Lieutenant Colonel Dan Marvin, US Army Retired. Full Story
Today’s announcement by the Chinese government that they plan to buy the remaining 191 tonnes of IMF gold (if it even exists) is possibly the most important event in the ten-year gold bull market, and perhaps could turn out to be the inflection point from when the public believes the propaganda about gold and starts to disbelieve, yielding the commencement of the latter stages of the PM bull and the early stages of American economic, political, and social chaos. Full Story
At current market prices, a gold medal is exchangeable for about $494, a silver for about $260, and a bronze for just $3. If the gold medal was solid gold with the same mass, it would be exchangeable for almost $20,000. Full Story
One of the first orders of business that goes on during most initial meetings with a mainstream financial advisor is an inventory of assets, income, and other particulars. What generally follows next is series of pie charts that lumps you into one of three or four categories along with ‘projections’ of your future wealth if you’ll only contribute $3,000/year to that IRA for two decades. We’ve all heard the spiel. By contributing a mere pittance, you too can retire to millionaire acres in just 30 years. While there have been many candidates for financial crime of the century (even though we’re only 10 years in), this one has to rank right up there. Full Story
By: The Energy Report and Siddharth Rajeev - 25 February, 2010
Siddharth Rajeev, vice president of research for Fundamental Research Corp., talks about several of the bright spots he sees on the economic horizon in this exclusive interview with The Energy Report. Sid anticipates: recovery in 2010, with rising interest rates by the end of the year. . .longer-term growth in demand for uranium, which this year's commodity corrections somehow managed to overlook... Full Story
As you probably read, the International Monetary Fund announced they would proceed with selling the remaining 191.3 tonnes of gold from the 403.3 tonnes planned. The money is to be used for lending to poor countries. Lending implies the money will be repaid, which, in the case of the IMF, is a joke that isn’t funny. But that’s a topic for another day. Full Story
PRICING YOUR money in gold – in a world where everyone else does the same, and at fixed exchange rates, too – makes for a big problem if the welfare state begins gobbling up more wealth, year after year, than it earns in taxation. Full Story
By: Richard Daughty, The Mogambo Guru - 25 February, 2010
Rep. Ron Paul is a Representative from Texas who I mistakenly called a Senator in a previous Mogambo Guru newsletter, which I understand is kind of an insult, and for which I apologize to Rep. Paul. The point being not that I am old and get confused, or that my editor is not catching those kinds of errors just because he doesn’t read it anymore because he is apparently sick and tired of reading my Stupid Mogambo Crap (SMC). Full Story
By: Rick Ackerman, Rick's Picks - 25 February, 2010
Stocks are in a warp now, moving in a parallel universe with no apparent connection to reality. The worst housing news in nearly 50 years pushed shares lower for a relative blink of an eye yesterday, then it was back to the races after Helicopter Ben affirmed for the umpteenth time that the Fed would not be tightening any time soon. Full Story
"Gold's positive fundamentals, the high level of investor interest in key geographic markets and global monetary economic developments promise to push the yellow metal much higher," according to Jeffrey Nichols, managing director of American Precious Metals Advisors. Full Story
One of the most disturbing aspects of the recent economic collapse and the ongoing financial market crisis is that there is still widespread disagreement over who or what caused it. Full Story
When asked why there are $605 Trillion derivatives outstanding (1) how do you articulate an answer to this horrendous and almost unimaginable number? The US is the largest economy in the world but tallies only 2.3% in comparison. Global bank reserves amount to only 1.2% of this accumulation. The gargantuan size appears to defy all logic. Full Story
By: Bob Chapman, The International Forecaster - 24 February, 2010
People should not underestimate the rational of those in high places because their agenda may be totally different then what they say it is. That includes the predicament of Dubai and Greece and a host of other nations that include the US and UK. The credit crisis, borne of the subprime crisis just didn’t happen; it was planned that way. Are we supposed to believe that the Fed took interest rates close to zero and that they flooded the monetary system with money and credit, because they were incompetent or stupid, hardly? Full Story
Two events took place last week that would have been inconceivable a year ago. First, on February 20, Ron Paul won CPAC's straw poll for the Republican Party's nominee for President of the United States in 2012. CPAC is the Conservative Political Action Conference. He routed Mitt Romney: 31% to 22%. Sarah Palin did far worse: 7%. Full Story
As expected the gold price was taken lower to the $1,100 level right on cue. I talked about this possibility in my latest weekly letter on the weekend. The mass of gold options laying at the $1,100 level were made next to worthless, leaving the option writers/shorts, to collect nearly the full premium. Full Story
By: Peter Schiff, Euro Pacific Capital, Inc. - 24 February, 2010
If the global economy were a three ring circus, then the center ring attraction would be the currency and debt battle quietly and slowly building between the United States and China. But for the past month the world's attention has been distracted by a much more entertaining sideshow in which European unity, and the ongoing viability of the euro, is being tested by the Greek debt crisis. Full Story
By: Vedran Vuk, Casey Research - 24 February, 2010
Ben Bernanke has got to be laughing it up after being reappointed to another term as Federal Reserve chairman. What else could we expect from the ex-lawyers and lifetime Beltway bandits voting on global monetary policy? Full Story
In an unprecedented modern move, the Federal government is considering a new investment tax as a way of paying for a huge annual deficit. The investment tax would cost investors .25% on purchases of stocks and exchange-traded funds outside of retirement accounts and would generate an estimated $90 – $100 billion in annual income for the US Treasury. Full Story
By: Richard Daughty, The Mogambo Guru - 24 February, 2010
People hear my clear, clarion call for them to buy gold, silver and oil as their protection from the monetary and fiscal stupidities which abound – abound! – all around us, and they have questions, such as the one that is burned into my brain from an altercation this morning outside of the hardware store, where I was telling some idiot to buy gold, silver and oil, and which elicited the response, “Why are you yelling at us in such a deafening manner? Can’t you see that we are standing right here, you moron?” which is, if you count, actually TWO questions! Full Story
By: Rick Ackerman, Rick's Picks - 24 February, 2010
Consumer confidence plunged more than 10 points in February, even as it was reported that Wall Street bonuses rose 17% in 2009. If a seer had told us a year ago that the two stories would run side-by-side on the same day, we’d have predicted there’d be rioting in the streets. Instead, the streets were calm, at least as far as we could tell, and investors took the news in stride, sending the Dow down a measly 100 points. Full Story
Neither the US financial press nor the US bank leaders take the sovereign debt crisis seriously. Even the USCongress seems totally unaware of the growing global intolerance for government debt out of control. The issue is rollover of short-term debt, size of the overall debt burden, borrowing costs to sustain the debt, annual deficits that accumulate further debt, and size of debt versus economic size. Full Story
Summing up, gold, silver, and PM stocks are currently following the general stock market more closely than they follow the USD Index. This is a positive factor in the very-short-term, as it provides additional positive signals for short-term Speculators. Full Story
While investors contemplate the recent increase in the Federal Reserve Discount rate, astute investors realize this arbitrary figure means nothing in regards to fighting inflation or decreasing the money supply. Although the Federal Discount rate may have made an impact in 2008, its impact on the market was lost after the Fed expanded the balance sheet to buy illiquid assets in late 2008 through 2009. Full Story
Major policy changes usually start out as trial balloons, ideas placed with sympathetic media outlets that float around and draw reactions from the affected parties. This gives policymakers a risk-free look at what would happen if they claim credit for a given idea. So the article that appears in today’s Wall Street Journal under the headline Low Inflation Always Best? Some Urge a Policy Rethink is pretty much what you’d expect to see as the U.S. searches for a way out of History’s Biggest Credit Collapse. Full Story
Throughout this bull market, Silver has formed the same corrective pattern over and over again. Currently, Silver is repeating the same pattern but on a much larger scale. Note that Silver’s decline in 2008 and ensuing recovery are a larger fractal of preceding corrections. Full Story
It is quite worrying to switch on German TV and see an advert for ‘gelt fur geld’ or cash-for-gold. Four years ago TV adverts for courses in how to flip US real estate were a signal that the market was near the top. Full Story
By: Steven Saville, Speculative Investor - 23 February, 2010
"They are too big to fail" was the reason given for using trillions of dollars in money and guarantees to 'bail out' several large US banks during 2008-2009. Their failure, it was argued, would all but bring the entire economy to a standstill; such were the size and scope of their operations. Providing the banks whatever financial support they needed to remain in business was therefore touted as serving the "public interest". However, the "too big to fail" argument was a giant, multi-faceted lie. Full Story
By: Richard Daughty, The Mogambo Guru - 23 February, 2010
It all started when I read the AP online story about how Greece, now bankrupt from insane fiscal policy, is such a basket case that the story was synopsized as “European leaders on Thursday offered moral support for Greece – but no money – as they sought to calm speculation that the Greek debt crisis may spread to other vulnerable countries and damage the euro currency.” Full Story
By: Rick Ackerman, Rick's Picks - 23 February, 2010
Here’s a fine example of unintentional irony, from atop the front page of Monday’s Wall Street Journal: “Debt Deals Haunt Europe”. And the sub-heading: “Investors Re-Examine Complex Financial Maneuvers Used to Hide Borrowings”. As you might expect, the story was all about Greece and the so-called PIIGS – Portugal, Ireland, Italy and Spain... Full Story
By: The Gold Report and Ian Gordon - 22 February, 2010
Never mind that fruit trees are blossoming all over the Northern Hemisphere. It doesn't matter that Punxsutawney Phil of Pennsylvania saw his shadow on February 2. We're in for a lot more of a long, harsh Winter—a real whopper in terms of the Kondratieff cycle that the Longwave Group's Ian Gordon has become expert at analyzing and interpreting. Full Story
Just as I begin writing this we get the headline China is raising reserve requirements at its banks and equity futures, including gold, fall out of bed. Why is this? Well, for one thing, and besides the fact it appears Chinese officials intend to manage monetary policy in a vacuum, Bloomberg headlines also read 50% of commercial space in Beijing is vacant, with more of the same expected for additional buildings still under construction. Full Story
By: Dr. Ron Paul, U.S. Congressman - 22 February, 2010
Last week marked the one year anniversary of the American Reinvestment and Recovery Act, or the stimulus bill, passing into law. While the debate over its success has been focused on whether or not it is stimulating the economy and on various questionable uses of funds, in my estimation this legislation is accomplishing exactly what it was intended to accomplish – grow the government. Full Story
There has been a sense in the gold market through the month of February that gold is going down, a sense of negativity and discouragement. Gold bugs are giving up and pulling out. The U.S. dollar index hit 81 on Friday. The Fed is tightening. “What more,” say the bears, “is there to say?” Full Story
We are entering a time of year that in recent decades has been good for energy prices and energy equities. Combine that with new estimates that domestic and global energy demand will rise in 2010, and we have the makings of a promising period for investors. March tends to be one of the best months of the year for both crude oil and natural gas. Full Story
What a difference a month makes! It was only a month ago a leading financial publication came out with the story, "U.S. economy still hemorrhaging jobs despite stimulus." The press was all over the employment data and concluded that the stimulus had utterly failed. They were of course making the classic mistake of treating the employment numbers as coincident indicators, when in fact employment is the ultimate lagging indicator. Full Story
I was doing some research on the Central Fund of Canada (ticker: CEF), which is a form of "paper" Gold and silver with a long track record and a much better counterparty risk profile than dangerous Gold ETFs like GLD. Full Story
By: Rick Ackerman, Rick's Picks - 22 February, 2010
The price of gold has corrected 15% since Comex futures hit an all-time high of $1229 per ounce in early December. How much more weakness will it take for gold to finish basing for the next big move -- a rally that we expect to carry into the mid-$1400s? A definitive answer could come this week, since the U.S. dollar, which has been in a bear rally since Thanksgiving, is close to some key Hidden Pivot resistance points. Full Story
1st Hour: Headline news & the Market Weatherman Report. Spotlight Stock Picks. Host Chris Waltzek & The International Forecaster discussion and listener's questions. 2nd Hour: -Dr. Burton Malkiel, A Random Walk Down Wall Street -Dr. Marc Faber, GloomBoomDoom.com Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 21 February, 2010
When India announced its purchase of 200 tonnes, it added a statement that it may buy more of the I.M.F. gold. This implied that it was limited by the I.M.F to 200 tonnes. But the I.M.F. never said that. Rather it said it would announce the sale of any other portion of their gold to the public. It has been several months since another sale has taken place. Now with this announcement, we are given the impression that central banks have not come forward to buy and are not buyers. Talk about ‘spin’! Full Story
By: Bob Chapman, The International Forecaster - 21 February, 2010
The US Federal Reserve is sitting on significant paper losses on the real estate assets it acquired in the Bear Stearns rescue, with much of the red ink coming from debt used to back some of the most high-profile buy-out deals of the bubble years. Full Story
By: John Mauldin, Millennium Wave Advisors - 21 February, 2010
Last week we talked about Greece. But the problems are more than just Greece. We look at two very different views of the euro, and then opposing thoughts on Spain. Is Spain a problem or not? And how can the US keep on spending? Is there a limit? There is a lot to cover in what has been an interesting, if confusing, week. Full Story
All over the Western world, central banks are under pressure from their governments to inflate. Governments are not satisfied with short-term interest rates at historic lows, such as a federal funds rate of 0% to 0.25% in the United States. Politicians want rapid economic growth, and they are convinced that this is possible after a major recession only with more fiat money. In short, they have accurately understood the message of their college-level textbooks. Full Story
By: Richard Daughty, The Mogambo Guru - 21 February, 2010
Fortunately, mastery of such complexity is unnecessary for me, as I just buy gold, silver and oil, which will benefit mightily as the government and the Fed ruin everything with their deficit-spending of more and more fiat money. Whee! This investing stuff is easy! Full Story
Now that we are in the thick of earnings season for miners. I am seeing some excellent profits being reported by the miners, but their share prices are still well below when gold was closer to the $700 range. And don’t get me started on the junior and some exploration companies. They remain a terrific value if you can find the right ones. Full Story
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