By: The Gold Report and John Williams - 8 February, 2013
There is no economic recovery, and there are no signs that a recovery is coming, says Shadowstats.com author John Williams. In this Gold Report interview, he blames mal-adjusted inflation statistics for creating an alternate reality that overestimates economic activity in a way that is unsustainable. Williams warns that eventually the painful truth will be so difficult that even government manipulation won't be able to deny it and that is when hyperinflation will take its toll on those who have not taken his advice for preserving purchasing power and securing wealth. Full Story
We are now in the early stages of shifting from an extreme condition of complacency. This has been coupled with elevated levels of a potential economic or geo-political shock to the market and OVER OPTIMISTIC INVESTOR SENTIMENT. Conditions are suggesting we have a RISK-OFF environment looming ahead of us before the Ides of March. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 8 February, 2013
GATA's work has come to the attention of a public policy study organization in Russia, the Strategic Culture Foundation, whose researcher, Valentin Katasonov, notes particularly GATA's publication of secret records from the International Monetary Fund confirming gold price suppression by Western central banks. Full Story
EVERYWHERE we look, investors suddenly see nothing but blue skies, plain sailing ahead. Their change of heart makes us nervous, writes Adrian Ash at BullionVault. New York's S&P index is back where it stood in July 2007 – right before the global credit crunch first bit, eating more than half the stock market's value inside 2 years... Full Story
Investors are increasingly concerned, understandably, about the Reliability of Official or Quasi-Official (e.g., those emanating from Too-Big-To-Fail Banks and Ratings Agencies) Statistics and other Financial and Economic News. Full Story
By: Peter Schiff, CEO of Euro Pacific Capital - 8 February, 2013
With the announcement this week of its massive $5 billion lawsuit against ratings agency Standard & Poor's, the Federal Government took a bold step to squelch any remaining independence of thought or action in the financial services industry. Given the circumstances and timing of the suit, can there be any doubt that S&P is paying the price for the August 2011 removal of its AAA rating on U.S. Treasury debt? Full Story
Jan Skoyles looks at an age-old trial which worked to assess the value of the money supply. She suggests that in times of such blatant monetary debasement, the scope of the trial should be expanded so as to make the stewards of the monetary system less susceptible to the temptations of easy monetary policy. Full Story
By: Adam Hamilton, Zeal Intelligence - 8 February, 2013
With gold stocks languishing near lows in a desolate sentiment wasteland, investors are wondering why this sector has fallen so deeply out of favor. One theory is capital that would have traditionally flowed into major gold producers has been diverted into the GLD gold ETF instead. Taken to extremes, this logically leads to the conclusion gold stocks will never thrive as long as GLD exists. Is it cannibalizing the miners? Full Story
A trend is a trend until it stops. Could this be the case for bonds? Is the bond bubble about to burst? And if so, what are the implications for precious metals? Anyone following the financial press can see that analysts are rumbling that bond prices will fall when interest rates rise and that it will happen sooner than later. And we generally agree – you can’t lower interest rates below zero (who knows, maybe the Fed will surprise us calling that an unconventional but necessary move?) and since they are practically there, the ceiling is very close to the current bond valuations. Full Story
Thanks to a series of colossal failures that were impossible to hide, we now know that Futures Commission Merchants (FCMs) could instantly access billions of dollars that did not belong to them. Thanks to incriminating emails and ongoing settlements, we now know that a horde of banks can collude to rig key interest rate benchmarks for decades. This is what we now know after decades of malfeasance. Just imagine, then, what still goes on behind the curtain. Full Story
The local silver coin dealer may prove to be the ultimate silver price indicator. The lower the managed paper price of silver, the more physical metal is reduced due to increased demand. Furthermore, the higher the demand for silver, the higher the physical premium moves. Full Story
The gold and silver stocks as a group have certainly been a disaster over the past two years. Both GDX and GDXJ are down with GDXJ leading the spiral. Yet, the metals are actually higher. Gold is up quite a bit while Silver is up marginally. Because of the volatility in this sector we can certainly choose any period to emphasize a point. However, it is becoming clear that the mining equities are struggling to outperform the metals. Full Story
What is deflation? According to dictionary.com, it is “a fall in the general price level or a contraction of credit and available money”. Falling prices. That sounds good, especially if you have set some cash set aside and are thinking about a major purchase. But as some additional research with Google demonstrates, that would be a naïve and simple-minded conclusion. It quickly becomes evident that deflation is a serious economic disease. Full Story
Friend of gold Jim Sinclair, and executive to a mining firm with interests in Tanzania, put it so well. He captures the theme of this article when he said, "It is the constant drop in the dollar's usage as a contract mechanism internationally. No one sees this but it is the Hammer of Thor on the head of the dollar." The rejection of the USDollar in global trade will mean the end of the abused privilege in a currency turned toxic. Its rejection is the marquee event in the financial world for 2013, following isolation. It is unstoppable and all-encompassing, certain to have geopolitical consequences, as it alters the economic and financial landscape in harsh ways much like a band of violent marauders brandishing machetes alter the neckline of their victims. See the Tonton Macoute in Haiti. The greenback is cornered; it is done! Full Story
Last week COTW noted that the US monetary base had broken out of an 18 to 20 month sideways pattern. The US monetary base first hit $2.7 trillion back in June 2011 and since then it has ranged between $2.7 trillion and $2.6 trillion. That is until January 2012 when the monetary base hit just under $2.71 trillion. The sharp rise in the US monetary base since 2008 has coincided with the quantitative easing (QE) programs of first QE1 then QE2. Full Story
By: John Browne, Senior Economic Consultant at Euro Pacific Capital - 7 February, 2013
In recent years, a high degree of economic, financial, and political uncertainty has resulted in acute volatility in stocks, real estate, commodities and precious metals. I believe that another aggravating factor has been the increasing skepticism through which the investing public views government statistics and statements. Full Story
What do May 2004, January 2005, August 2005, June 2006, October 2008, February 2010, September 2011, December 2011, June 2012, and December 2012 have in common? Full Story
Whatever it is, it is. If you are a strong believer in your principles and if you are able to manage without being overtaken by casino mentality, you are good. Go forth and speculate, but don’t swallow anybody else’s playbook (including or in some cases especially, the goldbugs’) whole. You are a real believer in sound money and sound systems? Then you are not leveraged to the system because you have managed personal debt and outright own things of value, including possibly, the monetary metal. Full Story
By: The Gold Report and Ian Gordon - 7 February, 2013
Ian Gordon has said it before: we're on the edge of an economic maelstrom that will breathe new life into the gold exploration industry. While his cautionary tales may be beginning to sound like the boy who cried wolf, Gordon, the founder and chairman of Longwave Group, gives some persuasive evidence to support his doomsday scenario for the greater market. In this Gold Report interview, Gordon talks about what he forecasts as an unprecedented period of growth and investment in gold, which is just about to get underway as the market sinks. Full Story
IMAGINE you could sell someone something, but keep ownership of it, and then use it yourself, writes Adrian Ash at BullionVault. You could lend it out for interest, say, or raise loans of your own by pledging it as collateral. Or even sell it to raise cash when things get tight. And if your business fails entirely, the "owner" will just have to cue up with all of your other creditors, and be thankful with whatever small change is paid out by the courts. Full Story
We often hear the claim that gold producers have not met investors' expectations for the past couple years. While there are many potential reasons for this, one explanation for their underperformance lies in the fact that producers diluted their share structures, leaving shareholders with smaller gains than they would have otherwise harvested. Full Story
By: John Mauldin, Millennium Wave Advisors - 6 February, 2013
Greece is a small country with large implications. Last week we began to explore what I learned from my recent trip to Greece. In this week’s letter we will finish those observations and in particular look at some of the comments from my meetings with over 40 people: owners of small businesses and large ones, billionaires, taxi drivers, politicians, central bankers, investors, ex-patriots, wives, and mothers. I believe we can arrive at some small understanding of the problems Greece faces. Then we will consider the broader consequences for Europe. Full Story
Is silver price manipulated? It might be, but given that it would be so difficult to prove it, that is not the right question to ask in our view. The correction question would be if anything can be done to make sure that you make money on your silver investments whether silver is manipulated or not. The answer to this important question is yes, it can be achieved thanks to diversification of strategies (you will find details in our gold portfolio report) and keeping at least part of one’s silver holdings in the physical form. Full Story
China replaced India sometime last year as the world’s largest consumer of gold and gold imports to mainland China from Hong Kong are presently running at more than twice the amount recorded a year ago. Full Story
Florida Avenue is the main drag in our little town in central Florida. In less than a mile, you're likely to see three or four folks standing on the sidewalk wearing headphones, bopping to music, and waving big glittery signs or arrows with "We Buy Gold" written across them. It's a common sight across many cities today. Full Story
The single most difficult aspect about analyzing market moves in Europe is the impact of the political class on just about everything. Worldwide, politicians are not exactly famous for honesty. However, Europe is a very special case… where just about everyone is lying on just about everything involving the economy and banking system. Full Story
LAST WEEK'S unemployment figure for the US showed an uptick to 7.9% – not a significant change. This was offset by revisions of job growth in November and December of 2012 that equaled nearly 250,000 jobs. It is a very positive sign of course, but wait one moment. The participation rate was adjusted again for that same time period. And by taking a quick glance at the participation rate, it would indicate a number greater than those who just started working, stopped looking for work. Full Story
When this misadventure in monetary policy ends, as both math and history says it must, it will be messy, uncontrolled, and very painful for holders of just about every sort of finanical instrument out there (stocks, bonds, derivatives, etc). That's why understanding the root causes and risks of QE is so important, in order to identify the best shelters for protecting the purchasing power of your wealth through this transition. Full Story
In this super-crisis, central bank interest rate & quantitative easing (QE) policies have been the main drivers of the gold price. Many gold analysts and investors thought the bond market would crash, setting off a 1970s-style surge in gold stocks. That hasn’t happened, because the US central bank is committed to maintaining low interest rates (high bond prices), until 2015. The financial system would close down if the bank stopped buying bonds now. If that happened, guns would quickly replace silver, as the poor man’s gold. Full Story
In 'The Road to Serfdom', F.A. Hayek showed how governments, supported by a collectivist mindset, always tend towards totalitarianism. Even the most libertarian government thus far created, the government of the United States, has slipped incrementally towards totalitarianism over the past two centuries, more noticeably since 911 and most alarmingly since the 2008 financial crisis. This is because it is an inherent trait of a government. Planned or random crisis events inevitably accelerate the process. Full Story
By: Steve Saville, The Speculative Investor - 5 February, 2013
To illustrate the difficulty of measuring performance in terms of the US dollar, today we are presenting three inflation-adjusted (IA) gold charts. Our method of inflation adjustment was outlined in the December-2010 article posted HERE. First, we present the long-term monthly chart that we normally use to show gold's 'real' performance. This chart puts historical prices into current (in this case, December-2012) dollar terms, which means that prices from past times are adjusted upward to reflect the estimated decline in the dollar's purchasing power from the past time to the present. Full Story
After we referred to "Draghi's Genius" last August we received pity and ridicule as feedback. It is no longer taboo to be bullish on the euro, but in our 2013 outlook we took it a step further, predicting the euro will be a "rock star." Despite the recent run-up, we may not have seen anything yet. Let me explain. Full Story
If we are to believe market commentators, then Gold is being held back because the FED’s QE may be ending sooner than expected. The argument is that if the economy improves, the FED will back out of asset purchases (QE), and the gold bull market will end. But the FED has said it would continue to purchase assets to the tune of $85B per month, for as long as the unemployment rate remained above the 6.5% mark. Full Story
It’s curious, isn’t it? So-called “paper gold” (a futures contract) has a price that is not only very close to physical gold, but it remains locked to it. This is despite the fact that “paper gold” is reviled in the gold community. Full Story
Our previous newsletter for the DOW on Sept 25th 2012 indicated that we were tracing out two ending diagonal (ED) patterns for the DOW. The smaller ED pattern completed shortly after the Sept 25th newsletter and the decline completed at our target in Nov. The following rally that started on Nov 17 2012 was the start of wave (5) up for the DOW and S&P500 as the final rally to complete the larger ED pattern. Full Story
Neither Keynes nor Lenin would have envisioned currency debasement on a global basis yet that is exactly where we find ourselves today. As mentioned in last month's The Gold Owners Guide to 2013, it is as if John Law had been reincarnated simultaneously in every major nation state in the world. At this stage, it is difficult to gauge the potential effects though, as you are about to read, there is plenty of speculation. Full Story
The markets have entered surreal and unsustainable states thanks to manipulation associated with official US repression policy (comply or you will be punished), with direct monetization increasingly being applied to an expanding array of key targets. It’s well known both debt and precious metals markets are heavily manipulated, however now the stock market has fallen into this category with the help of the New York hedge fund community, at the behest of their masters, money center banks. Full Story
There are key aspects of economics that neo-classical monetarists do not apparently comprehend; the most important, given their job-description, being the relationship between money and prices. They are like motorists who drive on the basis of the chaos and destruction viewed in the rear-view mirror. This is what happens when you use historic prices to guide monetary policy. Full Story
By: Peter Schiff, CEO of Euro Pacific Precious Metals - 4 February, 2013
The financial world was shocked this month by a demand from Germany's Bundesbank to repatriate a large portion of its gold reserves held abroad. By 2020, Germany wants 50% of its total gold reserves back in Frankfurt - including 300 tons from the Federal Reserve. The Bundesbank's announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany's behalf. One cannot help but wonder if the refusal triggered the demand. Full Story
Silver has no counter-party risk. It is not someone else’s liability. Silver Eagles or Canadian Silver Maple Leaf coins are recognized around the world and have intrinsic value everywhere. The same is NOT true for hundreds of paper currencies that have become worthless, usually because the government or central bank printed them to excess to pay the debts of governments that did not control spending. Full Story
Never before have we seen major indicators in such a conflicting state. Taken in isolation many important indicators are giving clear signals, but they are in conflict with one another to the extent that the outlook is a clouded mess. When such situations arise it usually leads to choppy, treacherous market conditions until such time as the indicators align in a more unified manner. Full Story
By: Doug Casey and Peter Schiff - 4 February, 2013
Two highly successful libertarian iconoclasts – Peter Schiff and Doug Casey – in a wide-ranging, thought-provoking conversation covering precious metals, the status of Peter's father, Irwin Schiff, the near future of the US dollar, and much more. Full Story
How can an investor know when to exit his long positions and return to a net short or all-cash position? Answer: By employing a disciplined technical trading approach to the stock market. For instance, even if you believe 2013 will be an extremely volatile year as it progresses due to the conflicting cyclical and economic currents (as I do), you can still maintain a net bullish investment posture as long as your stocks and ETF positions are, for instance, staying above the rising 10-month or 30-month moving averages. Full Story
Will the real rotation in the US financial markets be a move into gold and energy stocks this year rather than a big shift out of bonds and into the stock market? It’s an intriguing prospect raised by Wall Street newsletter writer Mike Swanson. He thinks US equities are not far off reaching a top for the year and thereafter a sidewards drift in a narrow trading range is all this market has to offer. Full Story
It’s certainly a challenging time still for gold and silver but the long-term reasons for holding physical gold remain in place. I hold them to protect my purchasing power in this time of worldwide government overspending. All other reasons stem from this central theme as currencies are being debased on a global scale. Full Story
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