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A gun in the hand is better than a cop on the phone.
Gun control is not about guns; it's about control.
If guns cause crime, then pencils cause misspelled words.
Free men do not ask permission to bear arms.
If you don't know your rights, you don't have any.
Those who trade liberty for security have neither.
The Second Amendment is in place in case they ignore the others.
64,999,987 firearm owners killed no one yesterday.
Guns only have two enemies: Rust and Politicians.
Know guns, Know peace and safety. No guns, no peace nor safety.
You don't shoot to kill; You shoot to stay alive.
Criminals love gun control – it makes their jobs safer.
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Close Call For US Banks
South Carolina Lawmaker Seeks to Ban Federal Currency
cbsnew.com
South Carolina Rep. Mike Pitts has introduced legislation that would mandate that gold and silver coins replace federal currency as legal tender in his state.
As the Palmetto Scoop first reported, Pitts, a Republican, introduced legislation this month banning "the unconstitutional substitution of Federal Reserve Notes for silver and gold coin" in South Carolina.
In an interview, Pitts told Hotsheet that he believes that "if the federal government continues to spend money at the rate it's spending money, and if it continues to print money at the rate it's printing money, our economic system is going to collapse."
"The Germans felt their system wouldn't collapse, but it took a wheelbarrow of money to buy a loaf of bread in the 1930s," he said. "The Soviet Union didn't think their system would collapse, but it did. Ours is capable of collapsing also."
cbsnew.com
South Carolina Rep. Mike Pitts has introduced legislation that would mandate that gold and silver coins replace federal currency as legal tender in his state.
As the Palmetto Scoop first reported, Pitts, a Republican, introduced legislation this month banning "the unconstitutional substitution of Federal Reserve Notes for silver and gold coin" in South Carolina.
In an interview, Pitts told Hotsheet that he believes that "if the federal government continues to spend money at the rate it's spending money, and if it continues to print money at the rate it's printing money, our economic system is going to collapse."
"The Germans felt their system wouldn't collapse, but it took a wheelbarrow of money to buy a loaf of bread in the 1930s," he said. "The Soviet Union didn't think their system would collapse, but it did. Ours is capable of collapsing also."
Hope Versus Reality
Bullish expectations (shown by the top three panels) may not be quite as extreme as they were in 2007, but adjusted for underlying economic conditions (bottom panels), the current psychology probably ranks right up there with the most complacent outlook in history. The charts of housing, consumer credit and unemployment show the systemically sluggish state of the economy. We know that fundamentals always lag psychological trends, but the lag is generally only a matter of months. It’s been nearly 11 months since the outset of the Primary wave 2 rally; by these critical economic measures the rebound is barely registering.
The wide disparity between the hope of investor expectations and the reality of economic strength shows that the great bear market -- already ten years old -- remains in its early stages. As the next legdown matures, hope will turn to despair, and it will become impossible to ignore the persistence of the economic contraction.
Excerpted from Elliott Wave article entitled What Chinese Malls Tell Us About The Economic Reality. Click on this link to download the free 100 page article.
Bullish expectations (shown by the top three panels) may not be quite as extreme as they were in 2007, but adjusted for underlying economic conditions (bottom panels), the current psychology probably ranks right up there with the most complacent outlook in history. The charts of housing, consumer credit and unemployment show the systemically sluggish state of the economy. We know that fundamentals always lag psychological trends, but the lag is generally only a matter of months. It’s been nearly 11 months since the outset of the Primary wave 2 rally; by these critical economic measures the rebound is barely registering.
The wide disparity between the hope of investor expectations and the reality of economic strength shows that the great bear market -- already ten years old -- remains in its early stages. As the next legdown matures, hope will turn to despair, and it will become impossible to ignore the persistence of the economic contraction.
Excerpted from Elliott Wave article entitled What Chinese Malls Tell Us About The Economic Reality. Click on this link to download the free 100 page article.
excerpt from A Big Move, by Howard Katz.
At the same time that these fundamental forces are unfolding, we have one technical principle after another calling for a massive rise in gold. As I noted back in October, 2009, the $1,000 level, which resisted any price increases for a year-and-a-half, has now turned into a support level. Furthermore, it looks very much as though the pull back which started Dec. 3 did not make it all the way back to $1,000 but ended Feb. 5 at the $1,050 area. This leaves a gap of approximately $50 between the expected pull back and the actual point.
Such gaps are unusual. Most pull backs go right to their expected level. To create such a gap, the long term bullish force must be very powerful. It means that the bulls do not need any help from the support at $1,000. Such technical patterns are rare and are a chartist’s dream. (The fact that gold fought off two back to back bearish news items on Thursday and Friday, closing unchanged, shows the same kind of power.)
At the same time that these fundamental forces are unfolding, we have one technical principle after another calling for a massive rise in gold. As I noted back in October, 2009, the $1,000 level, which resisted any price increases for a year-and-a-half, has now turned into a support level. Furthermore, it looks very much as though the pull back which started Dec. 3 did not make it all the way back to $1,000 but ended Feb. 5 at the $1,050 area. This leaves a gap of approximately $50 between the expected pull back and the actual point.
Such gaps are unusual. Most pull backs go right to their expected level. To create such a gap, the long term bullish force must be very powerful. It means that the bulls do not need any help from the support at $1,000. Such technical patterns are rare and are a chartist’s dream. (The fact that gold fought off two back to back bearish news items on Thursday and Friday, closing unchanged, shows the same kind of power.)
World Gold Production
As you can see from the following graph, 90% of the world's gold production is outside of the United States. Compare that figure to 100% of the world's paper-money-dollar production is within the US... ie. only we can print dollars.
Now you can see why the rest of the world is forming an alliance in favor of gold and away from the dollar. They can control the supply of gold, but they can't control the supply of the dollar. The fact that the world will see a gold based currency in the next decade is a CERTAINTY. Likewise, it is also a certainty that this increased demand for gold will continue to drive prices upwards.
FDIC Opens A Massive New Office Near Chicago Just To Handle The Coming Tidal Wave Of Midwest Bank Closings They Are Expecting
The following is an article I just posted over at my sister-site Behind The Fed:
The Fed Is Above The Law
The following is an article I just posted over at my sister-site Behind The Fed:
The Fed Is Above The Law
Update: Citigroup Says Feds Ordered 7 Day Restriction On Bank Withdrawals
Announcement stokes fears of old fashioned bank runs if economy takes a turn for the worse
A new advisory being sent by America’s third largest bank to its account holders has stoked fears that major financial institutions could be preparing for old fashioned bank runs if the economy takes a turn for the worse.
Originally reported by John Carney over at the Business Insider website, Citigroup is sending the following information to customers along with their bank statements.
“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change.”
An almost identical advisory to the one being sent out can be read on page 22 of Citbank’s Client Manual effective January 1, 2010, which can be read here from Citibank’s own website.
Announcement stokes fears of old fashioned bank runs if economy takes a turn for the worse
A new advisory being sent by America’s third largest bank to its account holders has stoked fears that major financial institutions could be preparing for old fashioned bank runs if the economy takes a turn for the worse.
Originally reported by John Carney over at the Business Insider website, Citigroup is sending the following information to customers along with their bank statements.
“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change.”
An almost identical advisory to the one being sent out can be read on page 22 of Citbank’s Client Manual effective January 1, 2010, which can be read here from Citibank’s own website.
Gold Production Has Peaked
The world's supply of new gold is shrinking as the major producers are finding less of the precious metal and the days of big open-pit mines are fading, Dave Paxton, CEO of Vatukoula Gold Mines, told CNBC Friday.
Economics 101 - Lower supply + increased demand = higher prices
The world's supply of new gold is shrinking as the major producers are finding less of the precious metal and the days of big open-pit mines are fading, Dave Paxton, CEO of Vatukoula Gold Mines, told CNBC Friday.
Economics 101 - Lower supply + increased demand = higher prices
Is It Time To Invest In Real Estate?
I have many clients that are anxious to snap up foreclosed properties at these depressed prices. But I am always quick to warn them, not that it does any good, that these prices are nothing compared to where they are going to end up, as this current economic down-cycle has barely gotten underway.
Experts suggest that 5 million houses and condos that are now behind in their mortgage payments will be hitting the market over the next 5 years. (Source) This supply glut will drive prices down much further than they are today.
My advice? Learn the lessons of the 1930's. Keep your powder dry, wait for prices to hit rock bottom, and then snap up properties at 10 cents on the dollar. Those who did this during the last major economic down-cycle emerged millionaires.
History always repeats itself because human nature doesn't change. The same mistakes that lead to the Great Depression have been repeated in our lifetime, and the outcome will also be the same. So those who are prepared can exit this cycle far wealthier than they entered it.
So, how do you keep your powder dry in the meantime? Seems that you might want to invest in something that is A-ppreciating rather than DE-preciating. Looks to me like gold is the only candidate for that job.
I have many clients that are anxious to snap up foreclosed properties at these depressed prices. But I am always quick to warn them, not that it does any good, that these prices are nothing compared to where they are going to end up, as this current economic down-cycle has barely gotten underway.
Experts suggest that 5 million houses and condos that are now behind in their mortgage payments will be hitting the market over the next 5 years. (Source) This supply glut will drive prices down much further than they are today.
My advice? Learn the lessons of the 1930's. Keep your powder dry, wait for prices to hit rock bottom, and then snap up properties at 10 cents on the dollar. Those who did this during the last major economic down-cycle emerged millionaires.
History always repeats itself because human nature doesn't change. The same mistakes that lead to the Great Depression have been repeated in our lifetime, and the outcome will also be the same. So those who are prepared can exit this cycle far wealthier than they entered it.
So, how do you keep your powder dry in the meantime? Seems that you might want to invest in something that is A-ppreciating rather than DE-preciating. Looks to me like gold is the only candidate for that job.
Citi: China Sold Their Treasuries Because They Want To Buy Tons Of Gold
In regards to whether or not China truly sold down its holdings of U.S. treasuries recently, the situation remains a bit murky. But Citi's Alan Heap thinks it happened for sure.
Moreover, he thinks China has a plan for the cash they pulled out of the U.S. -- They'll use it to buy 191 tonnes of gold from the IMF.
Alan Heap @ Citi: The IMF announcement that the fund intends to sell 191t of gold sent a quiver through the market last week. However there was nothing new here. The gold is the residual from the planned sale of 403 tonnes which will partially finance new loans to developing countries.
The bank said that sales would be phased over time. But also kept open the possibility of direct transfers to other central banks.
The PBC [People's Bank of China] is the most likely central bank buyer. The bank is deeply dissatisfied with the performance of its US treasury holdings and has made clear its intention to diversify including into gold. In November and December the PBC sold USD46bn of treasures; they must be buying something.
In regards to whether or not China truly sold down its holdings of U.S. treasuries recently, the situation remains a bit murky. But Citi's Alan Heap thinks it happened for sure.
Moreover, he thinks China has a plan for the cash they pulled out of the U.S. -- They'll use it to buy 191 tonnes of gold from the IMF.
Alan Heap @ Citi: The IMF announcement that the fund intends to sell 191t of gold sent a quiver through the market last week. However there was nothing new here. The gold is the residual from the planned sale of 403 tonnes which will partially finance new loans to developing countries.
The bank said that sales would be phased over time. But also kept open the possibility of direct transfers to other central banks.
The PBC [People's Bank of China] is the most likely central bank buyer. The bank is deeply dissatisfied with the performance of its US treasury holdings and has made clear its intention to diversify including into gold. In November and December the PBC sold USD46bn of treasures; they must be buying something.
My Perspective
As we all know, the global economic crisis started neither in Greece, nor in Russia, nor in Europe. It came to us from across the ocean. - Russian Prime Minister Vladimir Putin, 16 February 2010
This is pretty much the sentiment of the rest of the world towards America. They have rightly blamed us for their economic problems. Why? Because the dollar is the currency that almost all nations use for their international trade. And since we have been illegally printing dollars out of thin air, this has the effect of stealing from our trading partners.
What does this have to do with gold?
As I have pointed out many times in the past, the Russians, Chinese, Indians and Arabs are all in the process of agreeing on a currency to replace the dollar. That currency will be tied to gold in some way. When that day comes, gold will rise in price to it's market equilibrium price from it's current suppressed price due to the new demand for gold.
Economics 101 - Fixed supply + increased demand = higher prices
What is that equilibrium price?
Well, THAT is the $64,000 question, isn't it?
Depending on who you listen to, that price at present is somewhere between $6,000 and $11,000 per ounce. But don't forget, markets never stop at equilibrium, but they trade at, or around equilibrium. Therefore, when gold finally does make a break for its real price, it would be highly unlikely that it would stop there. Markets always overreact on both the high and low sides. Because of this, I would not be surprised to see gold spike to $15,000 - $20,000 per ounce, before settling back down to whatever that equilibrium price really is.
In light of the above, if you are waiting on gold's price to correct a little bit before you buy a little more, I think you can see that whether you buy at $1000, or $1200, or $1500, it really won't matter too much in the long run. You're either going to be rich, or real rich. Either one will be okay with me.
As we all know, the global economic crisis started neither in Greece, nor in Russia, nor in Europe. It came to us from across the ocean. - Russian Prime Minister Vladimir Putin, 16 February 2010
This is pretty much the sentiment of the rest of the world towards America. They have rightly blamed us for their economic problems. Why? Because the dollar is the currency that almost all nations use for their international trade. And since we have been illegally printing dollars out of thin air, this has the effect of stealing from our trading partners.
What does this have to do with gold?
As I have pointed out many times in the past, the Russians, Chinese, Indians and Arabs are all in the process of agreeing on a currency to replace the dollar. That currency will be tied to gold in some way. When that day comes, gold will rise in price to it's market equilibrium price from it's current suppressed price due to the new demand for gold.
Economics 101 - Fixed supply + increased demand = higher prices
What is that equilibrium price?
Well, THAT is the $64,000 question, isn't it?
Depending on who you listen to, that price at present is somewhere between $6,000 and $11,000 per ounce. But don't forget, markets never stop at equilibrium, but they trade at, or around equilibrium. Therefore, when gold finally does make a break for its real price, it would be highly unlikely that it would stop there. Markets always overreact on both the high and low sides. Because of this, I would not be surprised to see gold spike to $15,000 - $20,000 per ounce, before settling back down to whatever that equilibrium price really is.
In light of the above, if you are waiting on gold's price to correct a little bit before you buy a little more, I think you can see that whether you buy at $1000, or $1200, or $1500, it really won't matter too much in the long run. You're either going to be rich, or real rich. Either one will be okay with me.
Excerpt from 1001 Reasons To Own Gold
By Jeff Clark, Senior Editor, Casey’s Gold & Resource Report
In spite of gold’s recent correction, the reasons [for ownership] haven’t decreased. In fact, the case for holding gold is stronger than ever. And over the past two weeks, a few “reasons” have surfaced that have fallen mostly under the radar. These, I believe, portend a higher gold price. In fact, it is catalysts like these that could end up in our children’s history books that, in retrospect, were obvious to see...
1. For the first time ever, China has invested in GLD, the gold exchange-traded fund. Their sovereign wealth fund, China Investment Corporation, recently invested $155 million in the ETF. The amount represents only 0.05% of the sovereign funds’ $300 billion, meaning there’s a lot more where that came from.
Those mainstream lemmings who predicted China was done buying gold now have to deal with the reality that this move more likely signals they are closer to the beginning – and not the end – of a long-term strategy to diversify into gold.
2. The Prime Minister's Office in India is creating a stream-lined process so that the country’s state-owned corporations can “aggressively pursue the acquisition of strategic mineral resources.” The Indian government, normally known for thick-layered bureaucracy, has created a centralized body that will have “rapid strategic and decision making powers.” This is telling, both from the perspective that they see some urgency to the matter, and that the acquisition targets are minerals.
By Jeff Clark, Senior Editor, Casey’s Gold & Resource Report
In spite of gold’s recent correction, the reasons [for ownership] haven’t decreased. In fact, the case for holding gold is stronger than ever. And over the past two weeks, a few “reasons” have surfaced that have fallen mostly under the radar. These, I believe, portend a higher gold price. In fact, it is catalysts like these that could end up in our children’s history books that, in retrospect, were obvious to see...
1. For the first time ever, China has invested in GLD, the gold exchange-traded fund. Their sovereign wealth fund, China Investment Corporation, recently invested $155 million in the ETF. The amount represents only 0.05% of the sovereign funds’ $300 billion, meaning there’s a lot more where that came from.
Those mainstream lemmings who predicted China was done buying gold now have to deal with the reality that this move more likely signals they are closer to the beginning – and not the end – of a long-term strategy to diversify into gold.
2. The Prime Minister's Office in India is creating a stream-lined process so that the country’s state-owned corporations can “aggressively pursue the acquisition of strategic mineral resources.” The Indian government, normally known for thick-layered bureaucracy, has created a centralized body that will have “rapid strategic and decision making powers.” This is telling, both from the perspective that they see some urgency to the matter, and that the acquisition targets are minerals.
In 2009, dollar demand for gold remained above the $US100 billion mark for the second year in succession against the backdrop of continued turbulence in financial and commodity markets. This resilience in demand was achieved in the context of average gold prices 12% higher than those in 2008, at $US972.35/oz.
Source: World Gold Council 2009 4Q Demand Trends Update
Source: World Gold Council 2009 4Q Demand Trends Update
Gold's Seasonal Patterns
Are there seasonal patterns in the gold price that can tell us when we might have the opportunity to buy low? Yes. Here’s a table showing the peaks and valleys in the gold price over our 9-year bull market:
You can see the general patterns here–
The annual low in the gold price occurred between January and May every year except one.
The annual high in the gold price occurred between September and December every year but two, with five peaks happening in December.
What’s the takeaway here?
No guarantees, but the odds suggest gold will be cheapest in the first four months of the year. So, the fact that gold has been declining at this time of year isn’t exactly out of the ordinary and could hand us a nice buying opportunity.
Source: Casey Gold & Resource Report - Feb. 2010
Are there seasonal patterns in the gold price that can tell us when we might have the opportunity to buy low? Yes. Here’s a table showing the peaks and valleys in the gold price over our 9-year bull market:
You can see the general patterns here–
The annual low in the gold price occurred between January and May every year except one.
The annual high in the gold price occurred between September and December every year but two, with five peaks happening in December.
What’s the takeaway here?
No guarantees, but the odds suggest gold will be cheapest in the first four months of the year. So, the fact that gold has been declining at this time of year isn’t exactly out of the ordinary and could hand us a nice buying opportunity.
Source: Casey Gold & Resource Report - Feb. 2010
Gold's Next Breakout Nears
Gold edged up 2.06% for the week and more importantly, back into the wedge formation. At the current rate the wedge should be resolved within three weeks to a month. Personally I think it will coincide with the end of February which has tended to be a weak month for gold historically.
While the reasons for gold to rocket from here are strong I think we still have a couple weeks of this range trade ahead of us. I would not be surprised, and actually I expect a spike lower to test the 200 day moving average before a quick reversal higher which will break the wedge formation to the upside. That will be the signal that the trek to $1,500 has begun.
It remains my view that once this small correction passes we will resume the second leg of this move higher and take out $1,500 before we see a meaningful correction. No matter what you are told, this is not a meaningful correction. When gold corrects 20% or more, that is meaningful.
Warren Bevan
www.preciousmetalstockreview.com
Gold edged up 2.06% for the week and more importantly, back into the wedge formation. At the current rate the wedge should be resolved within three weeks to a month. Personally I think it will coincide with the end of February which has tended to be a weak month for gold historically.
While the reasons for gold to rocket from here are strong I think we still have a couple weeks of this range trade ahead of us. I would not be surprised, and actually I expect a spike lower to test the 200 day moving average before a quick reversal higher which will break the wedge formation to the upside. That will be the signal that the trek to $1,500 has begun.
It remains my view that once this small correction passes we will resume the second leg of this move higher and take out $1,500 before we see a meaningful correction. No matter what you are told, this is not a meaningful correction. When gold corrects 20% or more, that is meaningful.
Warren Bevan
www.preciousmetalstockreview.com
Gold : Long Term Fundamentals Remain Promising
Regardless of the near-term prospects for gold, the long-term fundamentals promise substantial appreciation later this year and beyond. We remain firm in our conviction that gold prices will touch or surpass $1,500 in 2010 - and continue to move higher in subsequent years.
Gold at recent price levels offer investors and savers without a “core” position in the physical metal an opportunity to buy insurance against the very real possibility of future stock and bond market declines, accelerating inflation and a shrinking dollar, and turmoil in U.S. and world financial markets.
In contrast to what most “mainstream” economists believed only a few weeks ago, the industrial world economy is not improving. Instead, new cracks in the foundation are appearing. Moreover, as we have discussed in recent reports, the U.S. and other industrial economies will soon be heading into a “double dip” with declining business activity, declining consumer spending, declining employment, and declining equity markets.
This is a recipe for stagflation - a prolonged multi-year period of low growth with high inflation. And, as we saw in the decade of the 1970s, the coming stagflation will again be accompanied by a sustained and significant appreciation in the price of gold and its sister metals, silver and the PGMs, to levels that most cannot yet imagine.
The major building blocks supporting a rising gold price over the next few years are:
U.S. monetary and fiscal policies will remain extremely expansionary and, ultimately, inflationary.
Strong continuing central bank demand for gold as more countries strive to diversify their official reserve holdings.
Expanding investor interest in the United States and around the world - with more individuals and institutions viewing gold as a legitimate asset class, inflation hedge, portfolio diversifier, and insurance policy.
Expanding and maturing geographic markets - particularly China, India, and elsewhere in Asia - where incomes and wealth are rising, new distribution channels are evolving, and new gold investment products are better meeting the needs of local populations.
Shrinking global gold-mine production for at least the next five years.
Jeffrey Nichols
NicholsonGold.com
Managing Director, American Precious Metals Advisors
Senior Economic Advisor, Rosland Capital
Jeffrey Nichols, Managing Director of American Precious Metals Advisors, has been a leading gold and precious metals economist for over 25 years. His clients have included central banks, mining companies, national mints, investment funds, trading firms, jewelry manufacturers and others with an interest in precious metals markets.
Regardless of the near-term prospects for gold, the long-term fundamentals promise substantial appreciation later this year and beyond. We remain firm in our conviction that gold prices will touch or surpass $1,500 in 2010 - and continue to move higher in subsequent years.
Gold at recent price levels offer investors and savers without a “core” position in the physical metal an opportunity to buy insurance against the very real possibility of future stock and bond market declines, accelerating inflation and a shrinking dollar, and turmoil in U.S. and world financial markets.
In contrast to what most “mainstream” economists believed only a few weeks ago, the industrial world economy is not improving. Instead, new cracks in the foundation are appearing. Moreover, as we have discussed in recent reports, the U.S. and other industrial economies will soon be heading into a “double dip” with declining business activity, declining consumer spending, declining employment, and declining equity markets.
This is a recipe for stagflation - a prolonged multi-year period of low growth with high inflation. And, as we saw in the decade of the 1970s, the coming stagflation will again be accompanied by a sustained and significant appreciation in the price of gold and its sister metals, silver and the PGMs, to levels that most cannot yet imagine.
The major building blocks supporting a rising gold price over the next few years are:
U.S. monetary and fiscal policies will remain extremely expansionary and, ultimately, inflationary.
Strong continuing central bank demand for gold as more countries strive to diversify their official reserve holdings.
Expanding investor interest in the United States and around the world - with more individuals and institutions viewing gold as a legitimate asset class, inflation hedge, portfolio diversifier, and insurance policy.
Expanding and maturing geographic markets - particularly China, India, and elsewhere in Asia - where incomes and wealth are rising, new distribution channels are evolving, and new gold investment products are better meeting the needs of local populations.
Shrinking global gold-mine production for at least the next five years.
Jeffrey Nichols
NicholsonGold.com
Managing Director, American Precious Metals Advisors
Senior Economic Advisor, Rosland Capital
Jeffrey Nichols, Managing Director of American Precious Metals Advisors, has been a leading gold and precious metals economist for over 25 years. His clients have included central banks, mining companies, national mints, investment funds, trading firms, jewelry manufacturers and others with an interest in precious metals markets.
Effortlessly Changing Cash to Gold at the Bank of China
By Rocky Vega
01/28/10 Stockholm, Sweden – You may be familiar with the fact that the Chinese government has encouraged its private citizens to store a portion of their personal savings in gold, a topic we’ve covered here. It’s a different approach from the US government which vastly prefers to promote IRAs, 401(k)s and the like, over cash-to-gold conversions. Ironically, as an American, the opposite pitch from Cash4Gold is practically inescapable.
Apparently, the Chinese have gone even further than I suspected in implementing conveniently located, affordable, and effortless conversions to gold.
This information has been gleaned from a finely written piece at Jesse’s Café Américain, on China ten year ago and today.
From the post:
“I extracted paper cash from atm network and exchanged same for little one troy ounce monetary gold wafer at airport sub-branch of bank of china. The staff were courteous, and the sub-branch manager spent 5 minutes with me to explain the way to buy and sell back gold.
“Each wafer is individually numbered, and registered.
“China is progressing fast in its re-engagement with gold. Wonderful. It is interesting that gold seems to be everywhere now at the China retail level, legally bought, kept, sold back, and all tax free, at transparent pricing, in alignment with gold reform that was two decades in planning, implementation, and rollout.”
This ability to move money in and out of both currency and gold is impressive, and I’m looking forward to becoming more familiar with the concept. If you have additional details please don’t hesitate to post them below.
By Rocky Vega
01/28/10 Stockholm, Sweden – You may be familiar with the fact that the Chinese government has encouraged its private citizens to store a portion of their personal savings in gold, a topic we’ve covered here. It’s a different approach from the US government which vastly prefers to promote IRAs, 401(k)s and the like, over cash-to-gold conversions. Ironically, as an American, the opposite pitch from Cash4Gold is practically inescapable.
Apparently, the Chinese have gone even further than I suspected in implementing conveniently located, affordable, and effortless conversions to gold.
This information has been gleaned from a finely written piece at Jesse’s Café Américain, on China ten year ago and today.
From the post:
“I extracted paper cash from atm network and exchanged same for little one troy ounce monetary gold wafer at airport sub-branch of bank of china. The staff were courteous, and the sub-branch manager spent 5 minutes with me to explain the way to buy and sell back gold.
“Each wafer is individually numbered, and registered.
“China is progressing fast in its re-engagement with gold. Wonderful. It is interesting that gold seems to be everywhere now at the China retail level, legally bought, kept, sold back, and all tax free, at transparent pricing, in alignment with gold reform that was two decades in planning, implementation, and rollout.”
This ability to move money in and out of both currency and gold is impressive, and I’m looking forward to becoming more familiar with the concept. If you have additional details please don’t hesitate to post them below.
Richard Russell, author of the Dow Theory Letters, probably the most-read advisory service on Wall Street has turned bearish on the stock market. This is of course very bullish for gold. I repost the following article in its entirety.
RICHARD RUSSELL: DO REALLY BAD TIMES LIE AHEAD?
by The Pragmatic Capitalist
Question, has the Fed’s quantitative easing thrust the stock market into another bubble (a bubble that can now be bursting). Consider the following: Enthusiastic investors have pushed the S&P up 70% since last March. That’s a recovery of 52% of the 2008-09 losses.
Could this have been a stock market bubble? Consider the following: Eighty-five stocks in the S&P now have price/earnings ratios over 60, based on the last 12 month’s earnings. Some examples — Healthways (HWAY) P/E 277, Skechers USA (SKX) P/E 225, Bank of America (BAC) P/E 185, Perficient (PRFT) P/E 165, City National Bank (CYN) P/E 186, and so on.
Russell notes one of the most disturbing features of this rally – it has been on nearly non-existent volume. He also cites investing legend Joe Granville, who has nailed this market. Granville is turning bearish for the first time in several years and that has Russell very concerned:
My old buddy, Joey Granville, has been terrific on this market. Joe has ridden the market all the way up since March. Joe uses his on-balance-volume studies to set him right. Writes Joe in his latest fax, “All my technical indicators are based on VOLUME.” Now Joe has turned near-term bearish and is putting out shorts for the first time in two years.
I’m guided by volume too, I’ve been warning subscribers about this market because of the high number of “Distribution Days.” These are days when the market closes down on rising volume. Distribution days are indicative of institutional selling. Here is the latest count on distribution days — 6 for the Dow and the S&P 500; 5 for the NYSE; 3 for the Nasdaq, all occurring over the last two weeks. That’s far too many, the implication being that institutions have been selling this market under the guise of a rising Dow.
In terms of the technicals, there isn’t much to like here either. The Dow Industrials and the Dow Transports have both broken their 50 day moving averages:
The sinking market is taking a lot of late-arrivals along with it; These are the poor souls who bought stocks hoping to recoup some of the losses they suffered during 2008-09. The falling stock market, I believe, will turn consumers even more sceptical and bearish than they have been. Today, by the way, the Dow and the Transports both closed below their 50 day moving average, this for the first time since last November.
Russell has lived through many bull and bear markets and he’s still not convinced this is the making of a new bull:
Despite it all, I continue to believe that since March we have been in a bear market correction, and not a new bull market. For this reason, I take the current rotten market action very seriously. If I’m correct, it this is the beginning or a top-out in a bear market rally, then I can tell you that the “fun’s over,” and the really bad times lie ahead.
What I’m now trying to decide is whether this is just a short-term correction or whether we are seeing a serious top-out of the rise from the March lows. A bearish turn of events would be an initial decline, then a weak rally and a second decline violating the lows of the first decline. In other words, a definitive downward pointing zig-zag.
The Dow has now wiped out all of its 2010 gains and now shows a loss for the year, but more about the meaning of this tomorrow. Subscribers who wondered why I didn’t want to put the bull in the box may now see my hesitation. Bear market rallies turn on a dime, and in a few sessions you can be under water. I want my subscribers to be in the best shape possible if or when this market “has had it.” A few more weeks like this one, and we could see a real old-fashioned panic.
The VIX is 22, which tells us that nobody has been buying puts. Confidence and complacency are the mood of the day. Nobody’s ready for a lousy market ahead.
That’s about all I have to spout about today. Golly, tomorrow it’s Friday. Time flies when you’re having fun. After six months of sun, now we’re having a flood. Noah, start building another ark.
God save America,
Russell
RICHARD RUSSELL: DO REALLY BAD TIMES LIE AHEAD?
by The Pragmatic Capitalist
Question, has the Fed’s quantitative easing thrust the stock market into another bubble (a bubble that can now be bursting). Consider the following: Enthusiastic investors have pushed the S&P up 70% since last March. That’s a recovery of 52% of the 2008-09 losses.
Could this have been a stock market bubble? Consider the following: Eighty-five stocks in the S&P now have price/earnings ratios over 60, based on the last 12 month’s earnings. Some examples — Healthways (HWAY) P/E 277, Skechers USA (SKX) P/E 225, Bank of America (BAC) P/E 185, Perficient (PRFT) P/E 165, City National Bank (CYN) P/E 186, and so on.
Russell notes one of the most disturbing features of this rally – it has been on nearly non-existent volume. He also cites investing legend Joe Granville, who has nailed this market. Granville is turning bearish for the first time in several years and that has Russell very concerned:
My old buddy, Joey Granville, has been terrific on this market. Joe has ridden the market all the way up since March. Joe uses his on-balance-volume studies to set him right. Writes Joe in his latest fax, “All my technical indicators are based on VOLUME.” Now Joe has turned near-term bearish and is putting out shorts for the first time in two years.
I’m guided by volume too, I’ve been warning subscribers about this market because of the high number of “Distribution Days.” These are days when the market closes down on rising volume. Distribution days are indicative of institutional selling. Here is the latest count on distribution days — 6 for the Dow and the S&P 500; 5 for the NYSE; 3 for the Nasdaq, all occurring over the last two weeks. That’s far too many, the implication being that institutions have been selling this market under the guise of a rising Dow.
In terms of the technicals, there isn’t much to like here either. The Dow Industrials and the Dow Transports have both broken their 50 day moving averages:
The sinking market is taking a lot of late-arrivals along with it; These are the poor souls who bought stocks hoping to recoup some of the losses they suffered during 2008-09. The falling stock market, I believe, will turn consumers even more sceptical and bearish than they have been. Today, by the way, the Dow and the Transports both closed below their 50 day moving average, this for the first time since last November.
Russell has lived through many bull and bear markets and he’s still not convinced this is the making of a new bull:
Despite it all, I continue to believe that since March we have been in a bear market correction, and not a new bull market. For this reason, I take the current rotten market action very seriously. If I’m correct, it this is the beginning or a top-out in a bear market rally, then I can tell you that the “fun’s over,” and the really bad times lie ahead.
What I’m now trying to decide is whether this is just a short-term correction or whether we are seeing a serious top-out of the rise from the March lows. A bearish turn of events would be an initial decline, then a weak rally and a second decline violating the lows of the first decline. In other words, a definitive downward pointing zig-zag.
The Dow has now wiped out all of its 2010 gains and now shows a loss for the year, but more about the meaning of this tomorrow. Subscribers who wondered why I didn’t want to put the bull in the box may now see my hesitation. Bear market rallies turn on a dime, and in a few sessions you can be under water. I want my subscribers to be in the best shape possible if or when this market “has had it.” A few more weeks like this one, and we could see a real old-fashioned panic.
The VIX is 22, which tells us that nobody has been buying puts. Confidence and complacency are the mood of the day. Nobody’s ready for a lousy market ahead.
That’s about all I have to spout about today. Golly, tomorrow it’s Friday. Time flies when you’re having fun. After six months of sun, now we’re having a flood. Noah, start building another ark.
God save America,
Russell
From Bloomberg
Feb. 2 (Bloomberg) -- The U.K.’s Royal Mint, established in the 13th century, more than doubled gold-coin production last year as investors sought to diversify their assets and hedge against a weaker dollar and accelerating inflation.
Output rose to 125,469 ounces from 46,315 ounces a year before, according to data obtained by Bloomberg News under a Freedom of Information Act request. Gold averaged $974 (612 pounds) an ounce last year. Fourth-quarter production rose 54 percent to 25,078 ounces, the data show.
Sales of American Eagle gold coins by the U.S. Mint increased 66 percent last year to 1.43 million ounces, its Web site showed. The mint suspended production in November of some coins because of depleted inventories. London-based luxury department store Harrods Ltd. began selling gold bars and coins for the first time in October.
“People are obviously looking at physical gold more than paper,” Andy Davidson, an analyst at Numis Securities Ltd. in London, said by phone. “Coinage always seems to accelerate” in such conditions, he said.
“There’s concern about monetary debasement, which is a big driver for gold,” Davidson said. “People are worried about other assets devaluing.”
Feb. 2 (Bloomberg) -- The U.K.’s Royal Mint, established in the 13th century, more than doubled gold-coin production last year as investors sought to diversify their assets and hedge against a weaker dollar and accelerating inflation.
Output rose to 125,469 ounces from 46,315 ounces a year before, according to data obtained by Bloomberg News under a Freedom of Information Act request. Gold averaged $974 (612 pounds) an ounce last year. Fourth-quarter production rose 54 percent to 25,078 ounces, the data show.
Sales of American Eagle gold coins by the U.S. Mint increased 66 percent last year to 1.43 million ounces, its Web site showed. The mint suspended production in November of some coins because of depleted inventories. London-based luxury department store Harrods Ltd. began selling gold bars and coins for the first time in October.
“People are obviously looking at physical gold more than paper,” Andy Davidson, an analyst at Numis Securities Ltd. in London, said by phone. “Coinage always seems to accelerate” in such conditions, he said.
“There’s concern about monetary debasement, which is a big driver for gold,” Davidson said. “People are worried about other assets devaluing.”
We also wanted to prepare our readers and clients for the next leg of the gold bull market as it will prove to be extremely volatile. Gold bull markets are unique in that buying becomes driven by both fear and greed. Gold is quickly moving into the hands of those who are unwilling to gamble on fiat currencies or bonds as a store a value. The new owners of gold are unconcerned with its lack of yield but instead are focused on its historic ability to preserve wealth and its unquestionable value. Given the difficulty we have valuing paper money, it becomes extremely difficult to come up with a reasoned price target for gold.
Today’s gold market is significantly different from the gold market of the 1970s for two reasons:
1) Central Banks are more likely to be buyers of gold today and
2) They clearly have little ability to dramatically raise interest rates with the massive increases in government issued debt.
Thus, it is easy to envision a similar twenty-five fold increase in the gold price that was seen between 1970 and 1980, which would result in a gold price today above $6,000 per ounce. We expect the often quoted “1980 inflation adjusted high” of approximately $2,200 to be achieved in short order. These targets may well prove to be irrelevant, however, as the quality of our lives will be more greatly impacted by the continued evolution of our money and how the general public chooses to value it, or not.
Sprott Asset Management - January 2010
Today’s gold market is significantly different from the gold market of the 1970s for two reasons:
1) Central Banks are more likely to be buyers of gold today and
2) They clearly have little ability to dramatically raise interest rates with the massive increases in government issued debt.
Thus, it is easy to envision a similar twenty-five fold increase in the gold price that was seen between 1970 and 1980, which would result in a gold price today above $6,000 per ounce. We expect the often quoted “1980 inflation adjusted high” of approximately $2,200 to be achieved in short order. These targets may well prove to be irrelevant, however, as the quality of our lives will be more greatly impacted by the continued evolution of our money and how the general public chooses to value it, or not.
Sprott Asset Management - January 2010
We're gonna be rich I tell ya. Filthy, stinkin' rich!
What Will Financial Elite's Behaviour Mean for Your Investments?
by Lorimer Wilson
The major bailouts to the banks and the following major stimulus spending will further destroy the strength of the U. S. dollar and cause significant inflation. That in turn will be favorable for the future price of gold and silver, more favorable for those companies that mine such precious metals, even more so for the few gold and silver royalty companies that exist and, in particular, those that have long term warrants.
We may not like what has happened, and still is happening, with the behavior of our politicians and the country's financial elite but we can, and should, prepare now for the financial rewards their actions (and inaction) will bring our way. Just prepare for the inevitable, be patient as it unfolds and then enjoy your new found prosperity.
What Will Financial Elite's Behaviour Mean for Your Investments?
by Lorimer Wilson
The major bailouts to the banks and the following major stimulus spending will further destroy the strength of the U. S. dollar and cause significant inflation. That in turn will be favorable for the future price of gold and silver, more favorable for those companies that mine such precious metals, even more so for the few gold and silver royalty companies that exist and, in particular, those that have long term warrants.
We may not like what has happened, and still is happening, with the behavior of our politicians and the country's financial elite but we can, and should, prepare now for the financial rewards their actions (and inaction) will bring our way. Just prepare for the inevitable, be patient as it unfolds and then enjoy your new found prosperity.
Investment management firm Moonraker reported in a 2009 survey that 20 out of 22 fund managers interviewed bought physical gold for personal investment because they fear quantitative easing programs may lead to inflation. In other words, not only are they buying gold in their funds, they’re stashing some at home.
Gold $10,000
As I have been saying for years now, I expect within the next 5 years to see gold at $10,000 per ounce. Why? Because if it were not for a few big banks holding the price down, normal supply and demand forces dictate that we would already be there!
Since gold is the enemy to the government's ability to print money out of thin air, then they must keep gold from being an attractive alternative to the dollar. If foreign governments begin to prefer gold over dollars, then our economy collapses as we can no longer borrow to import goods that our economy depends on. Therefore the powers-that-be want to keep gold from being an attractive alternative to the dollar, NOT because they care about you and me, but because they care about their positions of power and don't want to get voted out!
To hold down the price of gold, the Feds print money, shuffle it to the bullion banks (Goldman, Morgan et. al.) and they "short" the market. In other word they place huge bets against gold, which has the effect of forcing the price down, unless these bets can be offset by equally large bets in the opposite direction.
With that in mind, read the following little excerpt from Ed Steer's Gold and Silver Daily Commentary.
It's going to be interesting to see if this rally in both gold and silver has any legs. Both metals were oversold... but not to the extremes I would like to have seen. I'm somewhat concerned that this rally may roll over in the days and weeks ahead. But what I'm really watching is to see if JPMorgan et al are going to short this rally. You must understand, dear reader, that if the bullion banks... specifically the '8 or less' traders... were not there to go short against all longs, there is nobody... not a single trader left in the Commercial category of the Commitment of Traders... that is prepared to go short silver [and gold] at current prices... and the prices would explode instantly. That's why the bullion banks are there... as the shorts of last resort. The moment they withdraw from the market... or begin to cover their short positions... will be an event talked [and written] about for centuries to come.
I keep saying the market will hit at least $10,000 an ounce because I am trying to shoot for the low side, but expecting this price to be much higher.
As I have been saying for years now, I expect within the next 5 years to see gold at $10,000 per ounce. Why? Because if it were not for a few big banks holding the price down, normal supply and demand forces dictate that we would already be there!
Since gold is the enemy to the government's ability to print money out of thin air, then they must keep gold from being an attractive alternative to the dollar. If foreign governments begin to prefer gold over dollars, then our economy collapses as we can no longer borrow to import goods that our economy depends on. Therefore the powers-that-be want to keep gold from being an attractive alternative to the dollar, NOT because they care about you and me, but because they care about their positions of power and don't want to get voted out!
To hold down the price of gold, the Feds print money, shuffle it to the bullion banks (Goldman, Morgan et. al.) and they "short" the market. In other word they place huge bets against gold, which has the effect of forcing the price down, unless these bets can be offset by equally large bets in the opposite direction.
With that in mind, read the following little excerpt from Ed Steer's Gold and Silver Daily Commentary.
It's going to be interesting to see if this rally in both gold and silver has any legs. Both metals were oversold... but not to the extremes I would like to have seen. I'm somewhat concerned that this rally may roll over in the days and weeks ahead. But what I'm really watching is to see if JPMorgan et al are going to short this rally. You must understand, dear reader, that if the bullion banks... specifically the '8 or less' traders... were not there to go short against all longs, there is nobody... not a single trader left in the Commercial category of the Commitment of Traders... that is prepared to go short silver [and gold] at current prices... and the prices would explode instantly. That's why the bullion banks are there... as the shorts of last resort. The moment they withdraw from the market... or begin to cover their short positions... will be an event talked [and written] about for centuries to come.
I keep saying the market will hit at least $10,000 an ounce because I am trying to shoot for the low side, but expecting this price to be much higher.
All the time I hear investors say they are going to stick with the "safe stuff," and that gold is either too volitile or too high to invest in. LOL!
Go ahead, put your money in something safe. Too bad, as you can read below, you probably won't be able to get your hands on it when you really need it.
Suspending Money Market Redemptions Is Now Legal; SEC Approves New Money Market Regulation In 4-1 Vote
Zero Hedge discussed a month ago the disastrous prospects of what would happen if the new proposal contemplated by the SEC, which would allow the suspension of redemptions from Money Market Funds, were to pass. Well, in a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC's just passed 4-1 vote. This explains the negative rate on bills: at this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of Mary Schapiro. As the SEC noted: "We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares." Too bad investors' hardships considerations ended up being completely irrelevant.
Go ahead, put your money in something safe. Too bad, as you can read below, you probably won't be able to get your hands on it when you really need it.
Suspending Money Market Redemptions Is Now Legal; SEC Approves New Money Market Regulation In 4-1 Vote
Zero Hedge discussed a month ago the disastrous prospects of what would happen if the new proposal contemplated by the SEC, which would allow the suspension of redemptions from Money Market Funds, were to pass. Well, in a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC's just passed 4-1 vote. This explains the negative rate on bills: at this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of Mary Schapiro. As the SEC noted: "We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares." Too bad investors' hardships considerations ended up being completely irrelevant.
Expect Gold To Gain More Than 30% This Year
Regarding the Fed's continued attempt to suppress the price of gold, John Embry recently had this to say, in particular, to their ability to drive down the price from $1220 in December to under $1100 by the end of the year, thereby making gold's 2009 returns less spectacular than they really were.
... All of the foregoing is just noise and standard behavior by the usual suspects who have been messing with the gold market throughout the price rise from $252/oz. to the hight of over $1220. By creating a false closing price in 2009, they have just helped to ensure a tenth consecutive higher year-end price in 2010, and quite frankli, I will be greatly disappointed if gold's price appreciation in the coming year doesn't exceed the best annual gain seen in the past decade (31.3% in 2007).
I think it is important to remember that bull markets continuously climb a wall of worry and then experience violent corrections which serve to clean out the nervous Nellies, the latecomers and the momentum investors. Gold has once again experienced just such a phenomenon and I expect it to be the precursor to yet another strong up leg early in the year.
I expect 2010 to be a banner year for gold and silver as the true depth of the world's financial malaise is more widely acknowledged. In this environment, I anticipate that gold, in particular, will garner increasing recognition as the only real money and the true safe haven as the slow motion trainwreck of the world's fiat currency system begins to accelerate.
John Embry is Chief Investment Strategist at Sprott Asset Management
Regarding the Fed's continued attempt to suppress the price of gold, John Embry recently had this to say, in particular, to their ability to drive down the price from $1220 in December to under $1100 by the end of the year, thereby making gold's 2009 returns less spectacular than they really were.
... All of the foregoing is just noise and standard behavior by the usual suspects who have been messing with the gold market throughout the price rise from $252/oz. to the hight of over $1220. By creating a false closing price in 2009, they have just helped to ensure a tenth consecutive higher year-end price in 2010, and quite frankli, I will be greatly disappointed if gold's price appreciation in the coming year doesn't exceed the best annual gain seen in the past decade (31.3% in 2007).
I think it is important to remember that bull markets continuously climb a wall of worry and then experience violent corrections which serve to clean out the nervous Nellies, the latecomers and the momentum investors. Gold has once again experienced just such a phenomenon and I expect it to be the precursor to yet another strong up leg early in the year.
I expect 2010 to be a banner year for gold and silver as the true depth of the world's financial malaise is more widely acknowledged. In this environment, I anticipate that gold, in particular, will garner increasing recognition as the only real money and the true safe haven as the slow motion trainwreck of the world's fiat currency system begins to accelerate.
John Embry is Chief Investment Strategist at Sprott Asset Management
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