BACK IN 2001, Argentina was hit by a crisis similar to Greece's today. Imposing a strict currency peg of 1 Peso to 1 US Dollar meant the currency was over-valued. Or the state should have reined in its spending. Or the economy needed to be more productive. Or all three, depending on your view. Full Story
Over the course of gold’s secular bull the demand for this precious metal has skyrocketed. And as a result gold’s primary supply source, mine production, has been forced to respond. Thankfully with the price of gold soaring to all-time highs, there’s been no shortage of mining companies hitting the hills to look for the next deposit. Full Story
Despite the celebrations among Democrats, yesterday a majority of Supreme Court justices ruled that the Constitution does not allow the government to force Americans to buy health insurance. However in providing the swing vote to uphold the Affordable Care Act (aka Obamacare) Chief Justice John Roberts broke with the four other justices who shared that view by declaring that the methods chosen to get individuals to buy insurance were not penalties but taxes. Full Story
Today’s market session is very volatile, not only in case of euro, dollar and stock indices, but also in case of precious metals. The rally in the mining stocks is much less significant than one might expect based on gold’s and stocks’ rally. Should this be of concern to precious metals investors? Full Story
By: The Gold Report and Chris Wilson - 29 June, 2012
Chris Wilson, president of Exploration Alliance, a niche consulting group, believes education is an investment basic. In this exclusive interview with The Gold Report, Wilson shares his guidelines for winnowing out the crowded junior mining sector to find the companies worth serious investigation and urges investors to know their porphyries from their narrow veins. Full Story
Today will be the first day in a commodity rally that should last roughly 2 years topping in mid-to-late 2014 when the dollar puts in its next three year cycle low. The next two or three weeks should produce an exceptionally violent rally from extreme oversold conditions followed by a consolidation period as the dollar bounces weakly out of its intermediate bottom and rolls over quickly signaling that its three year cycle has topped. Full Story
The indisputable fact is that Piling Debt (in order to continue bailing out the Mega-Banks) upon already unpayable Debt, is Unsustainable. But one can Garner the Golden ‘Nuggets’ of Information and, indeed, Profit Opportunities, if one correctly forecasts the consequences of certain ongoing Trends. Full Story
Most investors are aware that the 4-year cycle peak comes into play this year. What few realize is how both Washington and Wall Street are using this cycle as a fulcrum for gaining political as well as economic advantage. In this commentary we’ll look at how the hedge fund industry is manipulating certain key markets for political ends as much as financial gain, and how even the president has been forced to respond. It will quickly become apparent how the puerile and self-serving actions of the top hedge fund managers serves to create friction for everyone concerned. Full Story
Our financial predicament explained, from reszatonline.wordpress.com: Helga is the proprietor of a bar. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, pay later. Full Story
The parallel most analysts draw with this summer is the summer of 2008. Nobody then could fully appreciate the carnage to come in financial markets but there were plenty of warning signs. It was trouble in the banking sector that gave us the biggest warning then, namely subprime lending and the first bank run in the UK for more than a century at Northern Rock. Full Story
Recall that a little more than a week ago, in a headline atop one of these commentaries, we invited you to “Join Us as We Short Every Stupid Rally.” And why not? Stocks are probably in a bear market now, and making money on the short side should be as easy as stringing beads, right? Well, not exactly. In the several years that have passed since we last experienced a full-blown bear, we’d forgotten how devious he can be. Full Story
In Part I of this series we looked at the decaying state of confidence and how this is assisting in the deflationary process that is slowly, inexorably, moving forward, with limited action from central bankers and very little action at all from politicians. We looked at Christine Legarde’s comments that highlighted the need for value and measures of value to keep the monetary system under control. And then we looked at the loss of money velocity, deflation and the damage it’s doing to the solvency of banks and nations. Full Story
In an interview with Louis James, world traveler and legendary speculator Doug Casey makes a compelling case for becoming a "permanent tourist" to be best able to survive the coming economic crash. Full Story
Two hundred and eighty-nine trillion dollars. An unimaginable amount. That is the total of derivatives outstanding at the top five US bank holding companies as of March 31, 2012, according to the Office of the Comptroller of the Currency (OCC). Full Story
The world economy today stands at the doorstep of great change. A gathering crisis looms in Europe, splitting the Continent into two competing blocs. While leaders there face off against one another in a high stakes game of chicken, the rest of the world powerlessly watches the train wreck slowly unfold. Full Story
Gold is trading about where it finished last year at. Obviously this means that on a close to close basis it hasn’t moved very much in the first half of 2012. It might not in the second half either. Yes, there have been rallies, but as gold bulls know they haven’t held. Full Story
In 2009, I wrote that the stimulus, tarp, and zero interest rates were going to result in a rally in the stock market, but that the fundamental causes of the 2008 financial crisis, of which the housing bubble collapse was only one outcome, were still present, and that the financial stimulus, which is effectively a tax on future generations, would compound those symptoms. Full Story
I remember that I involuntarily screamed and spasmodically clutched my chest in some kind of sudden cardiac event when I learned to my horror that the evil Federal Reserve has announced a continuation of their insane money-creation schemes for another year at least. Full Story
Look around the world as ArabianMoney always does in the summer because the excessive heat of the Middle East drives us all to seek out cooler climates, and you very quickly realize this year that the main issue is deflation, not inflation. Full Story
By: Brent Cook and The Gold Report - 27 June, 2012
Taking part in the Cambridge World Resource Investment Conference, geologist and minerals maven Brent Cook, who also serves as Exploration Insights president, CEO, publisher and author, said he found more investors there looking for reasons to sell than to buy. In this exclusive interview with The Gold Report, he suggests that those who postpone buying decisions for too long risk missing the boat on some real "gems." Finding gems in the garbage takes serious due diligence; he advises investors to evaluate potential juniors the same way the majors do when they're hunting for companies whose assets will help replenish their dwindling reserves. Full Story
John Butler, chief investment officer at Amphora, explains, “A key reason why gold has not been acting like a safe-haven asset in recent months is because banks are so capital impaired that they are scrambling to reduce their holdings of risky assets in favour of so-called ‘zero-risk-weighted’ assets, against which they needn’t set aside any regulatory capital. As it stands, gold has a 50 percent risk-weighting. But some government bonds, including US Treasuries, German Bunds and British gilts, are zero-risk-weighted.” Interestingly, Standard and Poor’s downgraded the United States’ credit rating for the first time ever last year. Yesterday, Egan-Jones credit ratings agency downgraded Germany by one notch from AA- to A+ with a negative watch. The effort to reevaluate the meaning of “zero risk” appears to be long overdue. Full Story
Today most gold comes from hard rock deposits where gold is disseminated or associated with other metals and mined either through open pit or underground mining. Gold deposits form when gold is dissolved in hot pressurized fluids deep in the crust, and then transported upwards on fissures and cracks where it is deposited closer to surface. Full Story
The result is value destruction as disinvestment, deleveraging, and flight to cash, since all of the real asset markets are so thoroughly compromised. There is no longer a sense that the markets operate in anything remotely close to freely, and their regulation is so tremendously partisan that unless you’re in with the Too Big To Fail institutional or sovereign club, you can’t possibly use technical or fundamental analytics to invest safely or successfully. Full Story
By: Jim Willie CB, Hat Trick Letter - 27 June, 2012
Operation Twist cements ZIRP and closes the door on any Exit Strategy. Nothing exists in the twist of substance, a mere shift of the shell game movement. The most powerful effect of a maintained Zero Percent Interest Policy is that it ensures a systemic failure with capital destruction, rising costs, falling profit margins, and deterioration in the USEconomy. It guarantees growing federal deficits without any potential of resolution, and finally a USGovt debt default. Full Story
A fiscal union, a banking union, a United States of Europe has arrived! Don’t believe it? Just like many newborns, this one has its shares of wrinkles, but what you see is what you get. We discuss a tough love approach to move forward in Europe, as well as implications for currencies. Full Story
By: Frank Holmes, U.S. Global Investors - 27 June, 2012
Over the past several months, the markets have tested investors’ conviction to gold. Since February, the price of the yellow metal has steadily stepped lower, rallying somewhat in May before falling again when Ben Bernanke disappointed by not providing the U.S. with more stimulus. Meanwhile, the dollar gained ground as global investors fled the euro. Full Story
Gold is in a bull market because the system has not yet changed the way it does its business of routinely substituting debt for actual productive endeavor. Policy makers play it coy and gold corrects. It's just a barometer after all. In the stock world, the producers of this barometer actually benefit from a deflationary backdrop that sees their unique counter cyclical fundamentals come to the forefront. Full Story
By: Steve Saville, Speculative Investor - 27 June, 2012
Gold and "risk" assets rally whenever traders get the faintest scent that more QE (a central bank program designed to increase the money supply) is coming. Our view is that while more QE will eventually happen, buying in anticipation of such a policy move is fraught with danger. Full Story
By: Chris Powell, Gold Anti-Trust Action Committee Inc. - 27 June, 2012
But the purpose of all this market rigging is to suppress not only the price of gold but to suppress commodity prices generally. It is just the latest manifestation of the everlasting war of the highest levels of the financial class against the producing class, only this time the producing class hasn't yet figured out what's going on. Most tragically, much of the gold mining industry itself doesn't understand what is being done to it -- doesn't understand that it's not just digging metal out of the ground but minting money and competing with all other issuers of money and that this competition is far more cutthroat than imagined. Full Story
If monsoon rain fails then rural demand will suffer, prices of vegetables and other food stuff will zoom. Capital good sector will suffer as replacement demand will reduce. Gold and silver demand will fall further rural demand is the consumer. Full Story
Summing up, the situation for the general stock market appears bearish from the medium-term point of view. The Fed wants to see lower prices of stocks and commodities and it seems that they will. The situation for gold is also rather bearish for the medium term as the gold to bonds and Dow to gold ratio charts suggest that another decline may be in the cards. Full Story
By: Scott Silva, The Gold Speculator - 26 June, 2012
Gold is also trading below $1600/oz. But more poor US economic data is coming for sure, and the Fed will jump in with more quantitative easing, adding more to its balance sheet which will further devalue the currency. So, in today’s market, take a page from Gordon Gekko’s playbook. Buy, buy, buy gold. Because, as we all know, “Greed is good.” Full Story
The charts below tell the story of the past and what is about to come as the world is being flooded with newly printed money. Below are the CPI rates in important countries. Full Story
This is why the ECB freaked out and pumped so much money into the EU banking system. You don’t spend over $1 trillion in nine months unless something very very bad is coming down the pike. The fact countries are now actively putting together contingency plans to get their citizens out of EU should give you an idea of how fragile the entire system is over there. Full Story
GDX is currently trading about 12% above its $39 area lows, while gold is only about 3% above its $1525 area lows, and silver is almost right on its lows. The outperformance of senior gold stocks is extremely bullish, for the entire precious metals sector! Full Story
But now the once arch-Keynesian London Economist has recently proclaimed that "Keynes is Dead." After over a decade of facing trenchant theoretical critiques and refutation by stubborn economic facts, the Keynesians are now in general and massive retreat. Once again, the money supply and bank credit are being grudgingly acknowledged to play a leading role in the cycle. The time is ripe – for a rediscovery, a renaissance, of the Mises theory of the business cycle. It can come none too soon; if it ever does, the whole concept of a Council of Economic Advisors would be swept away, and we would see a massive retreat of government from the economic sphere. But for all this to happen, the world of economics, and the public at large, must be made aware of the existence of an explanation of the business cycle that has lain neglected on the shelf for all too many tragic years. Full Story
I am bullish on global economy from the next quarter on the premise that lower commodity prices will necessarily translate into higher global growth. If this does start to happen then the world will enter a period of stagflation which could last well into end 2013. Full Story
For the last few years we’ve watched as the Credit Crunch morphed into the Sovereign Debt crisis in Europe, which may re-cross the Atlantic to hit the U.S. Treasury market. During that time, we have watched a series of patch-up jobs on the crisis that have only succeeded in prolonging the crisis without any real structural remedies. We’ve also watched how central bankers have seen the ‘buck’ passed to them, when their role is strictly in support of government action that should have led the way. Central bankers are running out of tools to tackle the task they should never have been asked to tackle alone. Full Story
By: The Gold Report and Erica Rannestad - 25 June, 2012
A third round of quantitative easing won't help support platinum and palladium prices, according to Erica Rannestad, platinum group metals specialist with CPM Group in New York. So, what will drive the platinum group metals, which have been suffering from lags in demand and increasing interest from short sellers? Rannestad discusses the outlook for these specialized metals in this exclusive Gold Report interview, including what they have in common with gold. Full Story
A recent study about high, long-term government budget deficits published by the Washington Post indicates that such situations can be statistically linked to significantly lower future growth levels. The National Bureau of Economic Research looked at 26 past examples of when the level of government was running over 90 percent for a five year period or longer. Full Story
Three months ago Ben Bernanke gave a series of lectures and defended the Fed’s actions during the financial crisis. In what was tantamount to a post-crisis victory lap, Bernanke contended that “we did stop the meltdown”, and “we avoided what would have been, I think, a collapse of the global financial system.” These sentiments echoed similar self-congratulatory remarks made by Mr. Bernanke in 2011 and 2010. Full Story
Crude oil prices appear primed for a nearly 30% collapse, implying that the global economic slowdown is starting to take hold. Our minimum downside projection for August Crude, currently trading for around $80 a barrel, is $55.69. That target was derived using our proprietary method of technical analysis and would imply a decline of 27% from current levels. Please note that this is our minimum bear-market price objective and that crude’s ultimate bottom could be significantly lower. Full Story
For the first time in my career, I see the international establishment, sometimes called the New World Order, facing a crisis so large that its very survival is at stake. For the first time, these people are scared. Full Story
Speaking at a Brussels conference back in April 2011, Eurogroup President Jean Claude Juncker notably stated during a panel discussion that "when it becomes serious, you have to lie." He was referring to situations where the act of "pre-indicating" decisions on eurozone policy could fuel speculation that could harm the markets and undermine their policies' effectiveness.1Everyone understands that the authorities sometimes lie in order to promote calm in the markets, but it was unexpected to hear such a high-level official actually admit to doing so. Full Story
I have often said that when someone is appointed to be a member of the Federal Reserve, they are taken into a back room and given a complete DNA change. They simply are not like you and me once they step out of that room, with the exception of Fisher and Lacker and a few colleagues who seem to be able to resist the infection. This week we will look at the recent action of the Fed and use that as a springboard to think about how effective Fed policy can be in an age of deleveraging. And if there is time, we simply must look at Europe. I started this letter in Texas and will finish it this morning in Spain. Full Story
"GOLD PRICE PLUMMETS" is the obvious headline right now. But fact is, the gold price has in truth been surprisingly strong so far this year. First up, the US gold futures and options market. These contracts rarely run to physical settlement, but still they wag the dog of physical prices near-term. Because the price of gold for future delivery of course affects how much people ask or bid for metal today. Full Story
Congratulations. Let’s all take a collective deep sigh of relief. Instead of a new crisis, we're just going to keep having the same old one. Greeks voted to stay in the European Union with a narrow victory for the center-right New Democracy party. A global crisis has been averted—for now. But as we take a deep sigh of relief let’s keep in mind that the euro is already on a slippery slope to oblivion. Full Story
By: The Gold Report and Ian Gordon - 24 June, 2012
Ian Gordon of Longwave Analytics and Longwave Strategies believes we're on the precipice of very difficult and frightening times and predicts complete financial collapse. But it's in those periods of darkness that gold really shines. Gordon, who recently published a special edition of his Investment Insights entitled "The Gold Rush of the 1930s Will Rise Again," believes that companies with gold in the ground now will be the ones to prosper. In this exclusive Gold Report interview, Gordon discusses where he thinks the Dow will bottom. Full Story
Gold fell 3.8% this past week, mostly on Thursday after Wednesday’s break of the uptrend line. It was a very ugly day out there Thursday and one best forgotten. It’s all paper games though and the physical remains under heavy accumulation. Full Story
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