By: Peter Schiff, CEO of Euro Pacific Capital - 12 August, 2011
This week's wild actions on Wall Street should serve as a stark reminder that few investors have any clue as to what is really going on beneath the surface of America's troubled economy. But this week did bring startling clarity on at least one front. In its August policy statement the Federal Reserve took the highly unusual step of putting a specific time frame for the continuation of its near zero interest rate policy. Full Story
By: David Galland, Managing Director Casey Research - 12 August, 2011
I am beginning to feel a bit like one of the French unfortunates stumbling through the fog in the Ardennes, circa 1914. Except that, instead of Germans full of deadly intent coming at me in the gloomy forest, it is a flock of black swans. Full Story
By: Richard (Rick) Mills, Ahead of the herd - 12 August, 2011
Mine production costs are dropping, with gold trading around $1750 and silver at $38, gold and silver miners are going to look pretty good to investors next quarter. Junior precious metal companies, the owners of the worlds next mines, are going to have their turn in the spotlight and should be on every investors radar screen. Are they on yours? Full Story
A brutal cyclical common equity bear market within this secular bear market for common stocks has already begun. Meanwhile, the parabolic phase in the uncommon Gold secular bull market has just begun with the latest thrust higher. Please don't mistake the forest for the trees: Gold should be correcting now and common stocks are due for a dead cat bounce higher. But these shorter-term considerations are not where the big money is made for retail investors now are they? Full Story
By: Adam Hamilton, Zeal Intelligence - 12 August, 2011
With the plunging stock markets terrifying traders, many are running for the hills. Steep selloffs always generate intense fear, a scary emotion from which we humans are naturally hardwired to flee. But in the stock markets, major fear spikes should be embraced. They mark the best opportunities ever seen to buy low, the necessary prerequisite to selling high and multiplying your wealth. Full Story
THERE ARE some who seem to think only western speculators buy gold – either that or paranoid conspiracy theorists preparing for Armageddon. This couldn't be further from the truth. In fact, China and India alone account for more than half of the world's gold demand, while central banks – not exactly known for being gung ho – are increasingly using their reserves to buy gold. Full Story
As disruptive as the worsening Eurozone Sovereign Debt Crises and the S&P downgrade of U.S. Debt are*, they do serve one useful Public Function – they usher into Public Consciousness the New Economic and Financial Reality – The New Abnormal we call it. Full Story
By: David Coffin & Eric Coffin, HRA Advisories - 12 August, 2011
Europeans came up with a Band-Aid for the Greek crisis, and the markets applauded. Markets were buoyed by the fact the facilities set up for Greece were clearly designed to be used for some of the other Euro area basket cases if need be. Core country leadership reiterated their unwillingness to force default or push peripheral countries out of the Eurozone. This is admirable perhaps, but it does narrow the options for future arm twisting quite a bit. Full Story
This is one of those weeks where it is truly difficult to know where to begin. This is August. Nothing is supposed to happen in August. But this week gold shot up when markets plummeted, and gold shot up when markets soared. It was one of those weeks when gold could do no wrong. Full Story
If my analysis is correct, then most of the volatility is due to one giant sick game of unbridled speculation. The speculators include not just the obvious and visible speculators, but also the commercials pretending to be hedgers. These commercial speculators in drag include the largest banks, like JPMorgan. How has it gotten to the point where our insured deposit taking institutions are among the biggest speculators? This speculative trading activity on the part of banks has greatly increased the current price volatility and increased the dangers of systemic risk. How is that good? Full Story
In response to the deficit limit circus and the credit downgrade of the US government, the Federal Reserve pledged to repress investment and savings yields across the United States, and thereby victimize investors, for at least the next two years (even if the press release wasn't quite phrased that way). Full Story
By: Jeff Berwick, The Dollar Vigilante - 11 August, 2011
The last time gold stocks traded at this low of a valuation compared to gold was during the 2008 crisis. This time around the money supply is much more inflationary than in 2008, interest rates have been promised to be at a savings-killing 0% for another few years and gold stock valuations are much lower than in 2008. That means that they could be nearing take-off. Full Story
A lot has taken place in the past week. On Friday evening Standard and Poor’s surprised the markets by downgrading US debt. They had warned this was coming, but doing it so fast after the debt ceiling vote took some by surprise. Full Story
The title statement has nothing to do with an expected recovery rally, which has been trying my patience as every time I mention it the Dow drops another oh... 500 or so points. The title statement just means that even if the worst fears of investors are realized (and fear is front burner now, think about it), the system is merely trying to fix itself. Full Story
Behavioral finance tells us that behind every mathematical proof of a financial concept is a human element. Human nature plays itself out each day, as we interact with our portfolios, investments, and the markets to find the “equilibrium price” as determined by all of our errant thoughts. Full Story
The gold price shows every sign of going exponential as predicted by Jim Sinclair (click here). We have surged from $1,700 past $1,800 in a matter of days, so much for the normal low season in the summer for precious metals. Full Story
By: Gary Dorsch, Editor, Global Money Trends newsletter - 10 August, 2011
Of the big-3 credit rating agencies, only the S&P rating agency had the courage and fortitude to speak the truth, about the severe deterioration of America’s financial status. S&P shocked the political establishment in Washington, by following through with its threat to downgrade US Treasury debt to AA+ on the evening of August 5th. S&P added that the US Treasury debt could be downgraded further, if the crooked and inept politicians in Washington haven’t taken any meaningful moves to cut the size of its mounting debt. Full Story
The events of the last ten days are surely for the history books. The story must be told through a prism of the epic battle between inflation and deflation. The Jackass hates the parlance, since each term is abused. Inflation is the expansion of the monetary supply, while deflation is the decline in that supply. The Powerz would prefer that the public misconstrue what inflation is, so that they can continue to exploit it for their private gain and control of entire banking systems. The US Federal Reserve would prefer that the public remain clueless on the inflation threat, by citing the deflation threat in a manner to justify their Weimar-like hyper inflation. They have expanded the US$ money supply through USTreasury debt monetization severely, to the tune of $2 trillion in two years. That is bigtime inflation!! The downstream consequence is a fast notable rise in the cost structure across the entire global economy, complete with loud outcry. The reaction has been to protect against the price inflation (higher costs) and bond deflation (lost value) by the widespread purchase of both Gold & Silver (bonafide safe haven). Full Story
Investors know that the yield curve can be used to forecast market movements. When the difference in yield between short-dated debt and long-dated debt grows or shrinks, the next major move is a bearish or bullish signal for risk-related investments. Full Story
By: The Gold Report and Michael Ballanger - 10 August, 2011
"Buy the TSXV" was the advice Michael Ballanger, investment advisor for Union Securities Ltd., sent to his clients the morning after the Dow Jones Industrial Average lost 698 points, the worst loss since 2008. In this exclusive Market Conditions Update for The Gold Report, he explains why he sees the current climate as "extremely gold-and-silver friendly." Full Story
By: John Browne, Senior Market Strategist at Euro Pacific Capital - 10 August, 2011
Last week Fed Chairman Bernanke raised eyebrows and denied history when he asserted in front of Congress that gold doesn't qualify as money. Yesterday he took the unprecedented step of announcing that the Federal Reserve would keep interest rates near zero for at least the next two years. In very short order thereafter it required much more of the money that he believes in (U.S. dollars) to buy the money that he doesn't believe in (gold). Full Story
Summing up, the U.S. rating downgrade resulted in declines in the general stock market and took the indices much lower. However, AA+ rating is not the end of the world and investors may soon realize that have overreacted. Was the final bottom reached? That is still unclear, however at least a short-term move higher appears likely. Meanwhile, fueled by fear, gold might move just a little higher, but as soon as things calm down, the yellow metal is likely to decline - likely after topping close to $1,800. Full Story
The trigger that apparently caused the market meltdown was the ever-so-slight suggestion from Standard & Poor's that the US government’s fiscal health might not be all that it is cracked up to be. This was not a case of the little boy noting the emperor has no clothes. It is more like the little boy suggested that the emperor's clothes, while beautiful, might have been more carefully tailored to suit the imperial dignity. Hysteria followed, and the entire Obama cult called for the kid to be stoned. Finally the emperor himself spoke in defense of his rainment. That’s when the market crashed. Full Story
By: Bob Chapman, The International Forecaster - 10 August, 2011
One thing is for sure the Fed leads by deception. We have seen the act since 2007 when it supposedly set out to solve the credit crisis. Quantitative easing and zero interest rates may have provided the Fed with additional time, but they did little to solve the long-term problems, or to help bring about recovery. In fact, these measures insure that we will have future problems, particularly with inflation. Those who understand what the Fed is up to also understand that the Fed has little credibility and its reputation may have been totally lost. Full Story
We are witnessing the break-up of the ice pond. The public is skating on the pond. They hear the cracking sounds. A few wise skaters have started heading for the shore. Gold hit $1,750 on Monday in response to Friday's cracking. Tens of millions of Americans and an equal number of Europeans are going to be trapped when the Great Default comes. Yes, Alan Greenspan has denied that this will ever happen. "The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan on NBC's Meet the Press. Does this reassure you? Full Story
Twenty-nine months into the Mother of All Bear Rallies, it was unlikely that mere mortals would have been able to predict the precise start of the stock market's collapse, inevitable and long overdue though it may have seemed. However, no one should be surprised by the selloff’s ferocity, nor by the prospect that the first wave down may have run its course in mere days. Traders who have been waiting for the Big One for years undoubtedly are re-discovering how hard it can be to reap a windfall even when you are right about the trend. Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 9 August, 2011
Last Friday the S & P ratings Agency dared to downgrade U.S. debt from triple to double ‘A’, and quite rightly. It was not a reflection of the ability of the U.S. to pay their obligations, but of the politics that allowed partisan interests to take higher priority. The message was sent to Congress over the entire period of the ‘debt-ceiling’ soap opera, even by the most responsible of U.S. monetary figures, Treasury Secretary, Timothy Geithner and Federal Reserve Chairman Ben Bernanke –to no avail. Full Story
By: Jeff Clark, Editor BIG GOLD, Casey Research - 9 August, 2011
Imagine the condition of our world if gold reached $5,000 an ounce – and kept soaring. We’ll likely be in a mania if that happens – but what kind of mania will it be? There’ll be some greed to be sure, but I think there’s a good chance a deeper reason will be at play. And it’s the same reason that will drive you to keep buying gold at $2,000 an ounce. Full Story
There’s an old contrarian investing maxim from Baron Rothschild that says “the time to buy is when there’s blood in the streets, even if the blood is your own.” The idea is that the best investors strategize when others panic, allowing them to buy stocks on “sale.” The legend of Warren Buffett was built on this philosophy during the market turmoil of the mid-1970s. Full Story
All hail the punisher! Gold bullion beat the dollar to a pulp, again, last night! The price chart looks like the entire New York Yankees baseball team took gold baseball bats to a dollar bug terrorist in the interrogation room! The bottom line, sadly, is that Elmer Fudd Public Investor is now being devalued, all the way to the breadline. Full Story
By: Steve Saville, The Speculative Investor - 9 August, 2011
If you look at a multi-decade chart comparing the yield on a 3-month Treasury Bill with either the Fed Funds Rate (FFR) or the Discount Rate, you will see that the short-term interest rate set by the Fed almost always follows the short-term "risk free" interest rate set by the market. Therefore, if this chart is all you have to go on you will probably conclude that the market sets interest rates and the Fed does little more than tag along behind the market, which is exactly the conclusion reached by the author of the article posted HERE. However, when assessing the Fed's role we have a lot more to go on than a simplistic chart comparison of the T-Bill yield and the Discount Rate. Full Story
My most recent Merk commentary, published July 25, was motivated by the possibility of an impasse on the federal debt ceiling. Now that President Obama has signed a bill raising the ceiling, I am motivated to write once again. Standard and Poor’s has registered its concern by lowering its long-term sovereign credit rating on the United States from AAA to AA+. Full Story
Here we are again back at the edge of the abyss …yet again. This is not the first time we have not enjoyed this view of this elusive abyss and nor will it be the last unfortunately. This debt crisis is far from over and this Gold Bull is far from over. Full Story
In recent months we’ve been talking and writing about a potential acceleration in Gold. The chart said we were close and in all honesty Gold has actually been in a state of gradual acceleration since the 2008 low. Furthermore, we’d noted that in most secular bull markets, accelerations usually begin in the 11th or 12th year and are totally obvious by the end of the 13th year. Given the move of the past five weeks, there is no reason to think otherwise. An acceleration in the bull market has begun and will take Gold to $2000/oz and quite a bit higher in the next 18 months. Full Story
By: Jeff Berwick, The Dollar Vigilante - 9 August, 2011
There has been no valid option for the US Government for years now. The debts and obligations are too great to be serviced. Therefore, there are only two options... Face reality and default on its debt and reduce the size of the Federal Government by at least 90%... Or continue to be in a state of denial and head back to the all-you-can-eat buffet... Ben Bernanke will let you know the choice he will make on your behalf on Tuesday. If he announces QE3 then it will be death via a massive coronary: dollar hyperinflation. Full Story
Anybody who has been following Jim Sinclair over the years will know that this veteran gold bug first predicted that gold would break $1,650 in early 2011 a decade ago. He missed that by a few months but still his record is outstanding. Full Story
And how did Treasury paper do following Standard & Poor’s bombshell downgrade of U.S. debt? Why, T-Bonds, Bills and Notes came through unscathed, thank you. Actually, they did much better than that, rallying so sharply yesterday that one might have inferred the U.S. was the last citadel against the panic, confusion and fear that rein elsewhere in the world. Which is more or less true, relatively speaking. We hesitate to describe yesterday’s tidal surge in Treasurys as counterintuitive, however, since, officially, U.S. debt is still rated AA+. That’s a tad optimistic, if not to say delusional, given the fact that U.S. borrowing is eventually headed north of $20 trillion. Full Story
By: The Gold Report and David Morgan - 8 August, 2011
The new normal could be $75/oz. silver. In this exclusive interview with The Gold Report, David Morgan, editor of The Morgan Report, maps out a path for silver that could sink as low as $5/ounce (oz.) during the summer pullback and then bounce up to $75/oz. to establish a new base level. A consistent Silver Institute Production Cost Standard could help investors make smarter decisions during the coming upswing. Full Story
The S&P is one ugly duck but I wouldn’t be shorting anything here. In fact we covered all our swing trades today as I mentioned above. We’re very VERY oversold here and we closed on support tonight on extremely heavy volume. Full Story
By: Chris Martenson and Frank Barbera - 8 August, 2011
With the astonishing recent price rise in gold, many investors are asking themselves: is now the time to move capital into mining stocks? Frank Barbera, respected precious metal mining stock expert and editor of the Gold Stock Technician newsletter, has a viewpoint that will likely surprise many. While extremely bullish in the long-term, Frank sees too many risks in the near term and advises smart money to wait. Full Story
Don't shoot the messenger. The downgrade of U.S. government debt by S&P is the result of policies pursued over many years that rely on the U.S. being the world's reserve currency. Policy makers have forgotten that the status must be earned; it's not a birthright. Full Story
By: Jeff Berwick, The Dollar Vigilante - 8 August, 2011
Late Friday evening, Standard and Poor's was the first US credit ratings agency to actually whisper that, possibly, the emperor has no clothes. The emperor, in fact, has been standing there naked for years. All one has to do is look at the growth in US Government debt and that fact is clear. Full Story
What is still not too late? Citigroup is telling us that if something’s not done soon to turn things around then the price of gold could go to $5,000 an ounce and that gold at present was not over valued. And the S&P has stated it does not believe this country will ever get its financial house in order. Full Story
Headline news & the Market Weatherman Report. Spotlight Stock Picks. Host Chris Waltzek & Bob Chapman, The International Forecaster discussion and answer listener's questions. GUEST BIOS: Robert Prechter Jr., Elliott Wave International Peter Eliades, Stockmarket Cycles Full Story
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - 7 August, 2011
A Junior mining stock is a mining company in its early days. It may have successfully explored and found a good deposit; it may have completed a feasibility study on the deposit and have raised the finance to develop it into a mine. The earlier an investor finds such a company (that does become a healthy profitable company) the more return an investor is likely to make. The risks on such a company are great so an investor needs to have his finger on the pulse of the company to keep and profit on his investment. Full Story
What happens to gold if the markets crash? This is the question that many would like an answer to, as it is looking rather likely after the announcement, conveniently made after the markets closed on Friday, that Standard and Poor were lowering their rating for US debt. Full Story
James Turk, Director of The GoldMoney Foundation, talks to Jim Sinclair, host of www.jsmineset.com/, about his successful gold price predictions, US debt problems, how to ride the trend and the second phase of the gold bull. It's a gear change from arithmetic to exponential growth as public perceptions about the safety of the US dollar changes. The debt ceiling debate is a wake up call for people all over the world. The video was recorded on August 5 2011 at the GATA conference in London. Full Story
By: Chris Powell, Secretary/Treasurer, GATA - 7 August, 2011
Those of you who have been following GATA for a long time are owed a bit of an apology from me today. For I will say some things you have heard before, as they may be new to others here, as I'm reminded of the advice given to me some years ago by a friend who was twice elected to Connecticut's state legislature, three times to the U.S. House of Representatives, and three times as governor of Connecticut. He told me that repetition is crucial in politics, and that, tedious as it may seem, just when you think you're going to have to kill yourself if you say something over again, that's when people are just starting to listen. Full Story
Financial columnists of the sky-is-sagging perspective have searched for an accurate metaphor to describe the current economy. We have all failed. "A slow-motion train wreck" doesn't work, because train wrecks as bad as what we are facing are high-speed. Then there is the "car without brakes." But at least the driver can take his foot off the gas pedal. Congress is accelerating. I have promoted "the burning trestle." But, again, the engineer could put on the brakes. No such luck. Congress is accelerating. How about "the Titanic"? That's closer to it. Full Story
By: Bob Chapman, The International Forecaster - 7 August, 2011
The entire concept of keeping the economy functioning is based upon US dollar debasement via the creation of excess money and credit, which is accompanied by departments of government and Wall Street. Once in the past 11 years in particular we have seen lies, fraud, bogus statistics and Mickey Mouse bookkeeping. For good measure the powers behind government have thrown in the gutting of America’s industrial base by outsourcing and offshoring. As an extra temporary measure the Fed has bailed out the financial sectors in the US and Europe and continues to bail out the US Treasury. Who cares about currency debasement because it’s a cost of doing business. Full Story
U.S. Treasury Securities are no longer risk-free. This news comes after Standard and Poor’s cut the triple-A rating it has awarded the U.S. since 1941 (Moody’s has been in the AAA camp since 1917). Given the U.S.’s status as the world’s reserve currency printer – not to mention the safe haven flows arriving in the U.S. due to the recent upheaval in Euroland - the immediate impact of the downgrade is highly uncertain. However, what can be said is that should Moody’s or Fitch also cut, capital may be required to exit U.S. debt due to restrictive ownership covenants. Full Story
In this video, recorded August 4 2011, Eric Sprott, Chairman of Sprott Asset Management, and James Turk, Director of the GoldMoney Foundation, talk about how there isn't enough silver in the silver market to back existing "paper silver" commitments. Sprott thinks that "silver will be the investment of this decade". Full Story
By: John Mauldin, Millennium Wave Advisors - 7 August, 2011
As will be clear below, I had finished an earlier version of this week’s e-letter, but the events of the last few minutes require a few paragraphs. As I write at the end of the letter, Bloomberg kept their satellite truck here in Maine, as they had got advance warning of the downgrade by S&P of US debt and wanted to interview a number of the economists here, including your humble analyst. Full Story
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