Glenn Beck, Edward Griffin and the Fed The Fed, Gold, Silver and a lotta other stuff. You gotta watch this!
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Close Call For US Banks
Housing market: 13% of all U.S. homes are vacant High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values. And it's only getting worse: The national vacancy rate crept up to just over 13% according to last week's decennial census report. That's up from 12.1% in 2007. "More vacant homes equal more downward pressure on home prices," said Brad Hunter, chief economist for Metrostudy, a real estate information provider. Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%). Rest of story here.
You Still Got Your 401k Money In Stock Funds?
this from today's column by Rick Ackerman
Stocks have become intoxicated with easy money, revved up like a Lamborghini driven by a guy with a blood alcohol level of 3.0. The heedless, suicidal ascent of shares has become so blatant that even CNBC’s talking heads no longer try to reassure us that stocks always climb a wall of worry. No such thing is happening here, and everyone knows it. Stocks are climbing simply because making them climb has become the obsessive concern of a central bank that long ago exceeded the threshold of reckless desperation. At 220 mph, the Lambo is headed into a tight turn with no brakes.
this from today's column by Rick Ackerman
Stocks have become intoxicated with easy money, revved up like a Lamborghini driven by a guy with a blood alcohol level of 3.0. The heedless, suicidal ascent of shares has become so blatant that even CNBC’s talking heads no longer try to reassure us that stocks always climb a wall of worry. No such thing is happening here, and everyone knows it. Stocks are climbing simply because making them climb has become the obsessive concern of a central bank that long ago exceeded the threshold of reckless desperation. At 220 mph, the Lambo is headed into a tight turn with no brakes.
Goldman Sachs fires 2000
Goldman, a bellweather for all things financial in the West and US, is laying off about 10 pct of their staff due to deteriorating financial markets and underwriting, mergers and so on. Clearly they feel things are weakening and are cutting costs. With the EU bond situation continuing to get worse, not better, why is Goldman cutting staff? They are the biggest ones out there who can do things to help stabilize the banking system. Are they seeing darkness ahead? I think we can kiss any idea of a world economic recovery goodbye this year...
Goldman, a bellweather for all things financial in the West and US, is laying off about 10 pct of their staff due to deteriorating financial markets and underwriting, mergers and so on. Clearly they feel things are weakening and are cutting costs. With the EU bond situation continuing to get worse, not better, why is Goldman cutting staff? They are the biggest ones out there who can do things to help stabilize the banking system. Are they seeing darkness ahead? I think we can kiss any idea of a world economic recovery goodbye this year...
The Lesson from Japan
Premiums for gold and silver there have risen in response to the disasters, which isn’t surprising. Japanese investors scrambled for physical metals after the earthquake, immediately pushing premiums to three-year highs. And it wasn’t just buyers in the earthquake, tsunami and nuclear-plant zones; those in less affected parts of the nation have been rushing to buy precious metals, too. The end result is that available supply has been glutted.
The reactionary buying in Japan could not just support metals prices, but push them higher. This is certainly due to the draining of supply, but also because it’s complicating delivery and exacerbating fabrication problems. The country is a net gold exporter, but there may not be many planes and boats loaded with bullion leaving ports anytime soon, given that many modes of transportation are down and the distribution of more urgent food and other supplies is complicated.
This could dry up gold supplies elsewhere in Asia, as Japan exported 2.7 million ounces last year. While this is only roughly 2.3% of global supply, these ounces are concentrated in Asia, a region that has already seen many countries’ citizens hoarding precious metals. If supply becomes scant across Asia, it’s easy to see how this could light a fire under prices.
As Mark Pervan, head of commodities research at ANZ, said, "This is a buy-on-the-dip opportunity. Investors, not just Japan but globally, have been looking for a trigger to get back into the market. The rise in premiums in Japan could be it."
The lesson is this: When disaster strikes, it’s almost certainly too late to buy. Not only will you pay a higher premium, you may have difficulty getting your hands on bullion. You have to purchase your insurance before adversity hits.
And the warning is this: We saw how supply dried up and premiums skyrocketed during the market meltdown of 2008. Europe saw the same result when Greece imploded. We’re now seeing it happen in Asia due to Japan’s woes. We keep seeing this picture repeat. While no one wants to bet on calamity, is the U.S. really immune from trouble? Are you?
Premiums for gold and silver there have risen in response to the disasters, which isn’t surprising. Japanese investors scrambled for physical metals after the earthquake, immediately pushing premiums to three-year highs. And it wasn’t just buyers in the earthquake, tsunami and nuclear-plant zones; those in less affected parts of the nation have been rushing to buy precious metals, too. The end result is that available supply has been glutted.
The reactionary buying in Japan could not just support metals prices, but push them higher. This is certainly due to the draining of supply, but also because it’s complicating delivery and exacerbating fabrication problems. The country is a net gold exporter, but there may not be many planes and boats loaded with bullion leaving ports anytime soon, given that many modes of transportation are down and the distribution of more urgent food and other supplies is complicated.
This could dry up gold supplies elsewhere in Asia, as Japan exported 2.7 million ounces last year. While this is only roughly 2.3% of global supply, these ounces are concentrated in Asia, a region that has already seen many countries’ citizens hoarding precious metals. If supply becomes scant across Asia, it’s easy to see how this could light a fire under prices.
As Mark Pervan, head of commodities research at ANZ, said, "This is a buy-on-the-dip opportunity. Investors, not just Japan but globally, have been looking for a trigger to get back into the market. The rise in premiums in Japan could be it."
The lesson is this: When disaster strikes, it’s almost certainly too late to buy. Not only will you pay a higher premium, you may have difficulty getting your hands on bullion. You have to purchase your insurance before adversity hits.
And the warning is this: We saw how supply dried up and premiums skyrocketed during the market meltdown of 2008. Europe saw the same result when Greece imploded. We’re now seeing it happen in Asia due to Japan’s woes. We keep seeing this picture repeat. While no one wants to bet on calamity, is the U.S. really immune from trouble? Are you?
Investment Legends: “Dollar Collapse Inevitable”
interviewed & written by Jeff Clark
BG: Price inflation is creeping up, but the enormous amount of money printing hasn't really hit the system yet. Does that happen in 2011, further down the road, or not at all?
Jim Rogers: It is happening. The U.S. and CNBC lie about it. Most other countries do not lie and acknowledge it is worsening.
Bill Bonner: Most likely, substantial consumer price inflation will not show up in 2011. The explosion of money printing is being contained by the bomb squad of deleveraging. That will probably continue in 2011. But not forever.
Peter Schiff: 2010 was the year that China began cutting back its Treasury purchases in favor of gold, hard assets, and emerging market currencies. The Fed has stepped in as a major purchaser of Treasuries. This represents a new phase on the path to dollar collapse, and it will manifest in 2011 in the form of more "unexplainable" inflation – as we are now seeing in the prices of everything from corn to gasoline.
Rest of article here.
interviewed & written by Jeff Clark
BG: Price inflation is creeping up, but the enormous amount of money printing hasn't really hit the system yet. Does that happen in 2011, further down the road, or not at all?
Jim Rogers: It is happening. The U.S. and CNBC lie about it. Most other countries do not lie and acknowledge it is worsening.
Bill Bonner: Most likely, substantial consumer price inflation will not show up in 2011. The explosion of money printing is being contained by the bomb squad of deleveraging. That will probably continue in 2011. But not forever.
Peter Schiff: 2010 was the year that China began cutting back its Treasury purchases in favor of gold, hard assets, and emerging market currencies. The Fed has stepped in as a major purchaser of Treasuries. This represents a new phase on the path to dollar collapse, and it will manifest in 2011 in the form of more "unexplainable" inflation – as we are now seeing in the prices of everything from corn to gasoline.
Rest of article here.
FT notices gold's rise in favor, Fed's fall, if ever patronizingly
Here's a Financial Times story that showed up as a GATA release yesterday. The FT headline reads "Utah Raises Standard in Anti-Fed Campaign". Shops in Salt Lake City will soon be able to accept gold Buffalo and Eagle coins [no foreign-minted Napoleons or Krugerrands allowed] after a bill to make gold and silver legal tender passed Utah's House and Senate.
This proto-gold standard in the American west is a rebuke and challenge to the Fed, and a reminder that easy monetary policy since 2007 has won the central bank many more enemies than friends. This is a must read story as well...and the link to the GATA release is here.
Here's a Financial Times story that showed up as a GATA release yesterday. The FT headline reads "Utah Raises Standard in Anti-Fed Campaign". Shops in Salt Lake City will soon be able to accept gold Buffalo and Eagle coins [no foreign-minted Napoleons or Krugerrands allowed] after a bill to make gold and silver legal tender passed Utah's House and Senate.
This proto-gold standard in the American west is a rebuke and challenge to the Fed, and a reminder that easy monetary policy since 2007 has won the central bank many more enemies than friends. This is a must read story as well...and the link to the GATA release is here.
The World’s Best Gold Experts: “Buy and Hold!”
excerpt:
BG: How volatile do you expect gold to be? What's your low price that would present a good buying opportunity?
Rick Rule: Volatile on steroids! If we have a replay of the liquidity crisis of 2007-2008, gold could crack $1,000 on the downside. I don't time these things; I build cash when values in other sectors are not available, and bullion for me is a form of cash.
James Turk: I do not expect gold to be volatile. It looks to me that the gold price is ready to accelerate to the upside, and I do not expect there to be any significant price corrections because the demand for physical metal is just too strong. There is always a lot of money on the sidelines ready to buy any dip.
Any price below $1,500 represents a good buying opportunity because I do not expect gold to remain below that price much longer….
full article
excerpt:
BG: How volatile do you expect gold to be? What's your low price that would present a good buying opportunity?
Rick Rule: Volatile on steroids! If we have a replay of the liquidity crisis of 2007-2008, gold could crack $1,000 on the downside. I don't time these things; I build cash when values in other sectors are not available, and bullion for me is a form of cash.
James Turk: I do not expect gold to be volatile. It looks to me that the gold price is ready to accelerate to the upside, and I do not expect there to be any significant price corrections because the demand for physical metal is just too strong. There is always a lot of money on the sidelines ready to buy any dip.
Any price below $1,500 represents a good buying opportunity because I do not expect gold to remain below that price much longer….
full article
The Man Who Stopped the Mint
[Source] Throughout the years, many interesting tales filled with history and romance have been linked to coins of the United States. One of the most notable is the one about Josh Tatum, who single-handedly caused the Mint to stop production of the nickel. The following story contains the facts surrounding what took place at that time.
In 1883, the Mint changed the design of the five cent piece. In doing so, it unknowingly presented a great opportunity to an "enterprising" young man by the name of Josh Tatum.
Mr. Tatum noticed that the new nickel was about the same size as the five dollar gold coin. He also realized that there was nothing on the coin to denote what the denomination was. The coin, which was originally named the Liberty nickel, would soon become known as the "V" nickel due to the fact that a large Roman numeral for "five" was stamped on the reverse of the coin. Young Tatum must have really become excited when he realized the potential our newest coin offered. He went right to work and struck up a partnership with a friend who was skilled in the art of electroplating over base metal. Using a 24-carat gold electroplate, they were able to convert many thousands of the new five-cent pieces into what appeared to be five-dollar gold coins.
The stage was set, and being a man of action, Josh was off and running. He went from town to town, hitting every store he could find, purchasing five-cent items. Each time he would lay down one of the newly-created "five dollar gold coins," the clerk would respond by returning $4.95 change. This was apparently a very profitable business, but as the saying goes, "All good things must come to an end," and Tatum's venture was no exception. After it was finally realized that the five dollar gold coins were only nickels, Josh was quickly apprehended and prosecuted for his crime.
A very strange thing happened in court. Tatum was acquitted of the major charge because none of the witnesses would or even could admit that he actually told them the coins were five dollar gold pieces. You see, he couldn't! Josh Tatum was a deaf mute and was unable to say anything. All he ever did was put the coins on the counter and accept, in return, the purchased five cent items and a gift of $4.95, the "change" which he happily accepted.
Tatum's efforts prompted the government to immediately suspend the minting of the new nickel and change the die to include the word "cents" under the Roman numeral "V" on the coin's reverse. By the way, many of the original electroplated coins created by Josh Tatum are still available, and many coin dealers sell what has become known as the "Racketeer" nickel, ironically for a price of $4.95.
[Source] Throughout the years, many interesting tales filled with history and romance have been linked to coins of the United States. One of the most notable is the one about Josh Tatum, who single-handedly caused the Mint to stop production of the nickel. The following story contains the facts surrounding what took place at that time.
In 1883, the Mint changed the design of the five cent piece. In doing so, it unknowingly presented a great opportunity to an "enterprising" young man by the name of Josh Tatum.
Mr. Tatum noticed that the new nickel was about the same size as the five dollar gold coin. He also realized that there was nothing on the coin to denote what the denomination was. The coin, which was originally named the Liberty nickel, would soon become known as the "V" nickel due to the fact that a large Roman numeral for "five" was stamped on the reverse of the coin. Young Tatum must have really become excited when he realized the potential our newest coin offered. He went right to work and struck up a partnership with a friend who was skilled in the art of electroplating over base metal. Using a 24-carat gold electroplate, they were able to convert many thousands of the new five-cent pieces into what appeared to be five-dollar gold coins.
The stage was set, and being a man of action, Josh was off and running. He went from town to town, hitting every store he could find, purchasing five-cent items. Each time he would lay down one of the newly-created "five dollar gold coins," the clerk would respond by returning $4.95 change. This was apparently a very profitable business, but as the saying goes, "All good things must come to an end," and Tatum's venture was no exception. After it was finally realized that the five dollar gold coins were only nickels, Josh was quickly apprehended and prosecuted for his crime.
A very strange thing happened in court. Tatum was acquitted of the major charge because none of the witnesses would or even could admit that he actually told them the coins were five dollar gold pieces. You see, he couldn't! Josh Tatum was a deaf mute and was unable to say anything. All he ever did was put the coins on the counter and accept, in return, the purchased five cent items and a gift of $4.95, the "change" which he happily accepted.
Tatum's efforts prompted the government to immediately suspend the minting of the new nickel and change the die to include the word "cents" under the Roman numeral "V" on the coin's reverse. By the way, many of the original electroplated coins created by Josh Tatum are still available, and many coin dealers sell what has become known as the "Racketeer" nickel, ironically for a price of $4.95.
Japan
I just have a short comment at the end of this post regarding the Japan situation. But first, the following is a short excerpt from Chris Laird. Click on the title for the full story.
Big problem for USD looming this Summer
But, PIMCO's Bill Gross stated that when the US has to end QE2, he wonders who is going to buy US bonds this Summer, after July.
Now, we might just get our first big USD scare and this is how it could happen:
First, suppose the US lets QE2 end. Then, if there is no QE3, the US treasury market might start to struggle. We might just see China and others let the USD rattle around in trouble to see if it is really as strong as it was up to now.
Supposedly the Japanese will jump in as needed, and might even singlehandedly support the USD from falling like they did in late 2004 and 2005.
But that is a problem for Japan this time because they are already being downgraded and have the highest debt in the developed world.
My comment: Now, you can add on top of that the earthquake, tsunami and nuclear issues and it's pretty sure that this avenue of escape for the dollar has been effectively closed! Almost seems like a higher power has it in for the dollar, doesn't it? Hummm.......
I just have a short comment at the end of this post regarding the Japan situation. But first, the following is a short excerpt from Chris Laird. Click on the title for the full story.
Big problem for USD looming this Summer
But, PIMCO's Bill Gross stated that when the US has to end QE2, he wonders who is going to buy US bonds this Summer, after July.
Now, we might just get our first big USD scare and this is how it could happen:
First, suppose the US lets QE2 end. Then, if there is no QE3, the US treasury market might start to struggle. We might just see China and others let the USD rattle around in trouble to see if it is really as strong as it was up to now.
Supposedly the Japanese will jump in as needed, and might even singlehandedly support the USD from falling like they did in late 2004 and 2005.
But that is a problem for Japan this time because they are already being downgraded and have the highest debt in the developed world.
My comment: Now, you can add on top of that the earthquake, tsunami and nuclear issues and it's pretty sure that this avenue of escape for the dollar has been effectively closed! Almost seems like a higher power has it in for the dollar, doesn't it? Hummm.......
Debunking the Gold Bubble Myth
Here's a link to Sprott Asset Managment's February Markets At A Glance publication. It's well worth your time! Here's an execrpt:
"The fact is, despite all this talk about the gold bubble, the capital flows into gold vis-à-vis other financial assets have simply not been large enough to indicate any speculative mania. Investors can rest assured that they are not participating in any speculative bubble by owning gold. They are merely protecting their wealth."
Here's a link to Sprott Asset Managment's February Markets At A Glance publication. It's well worth your time! Here's an execrpt:
"The fact is, despite all this talk about the gold bubble, the capital flows into gold vis-à-vis other financial assets have simply not been large enough to indicate any speculative mania. Investors can rest assured that they are not participating in any speculative bubble by owning gold. They are merely protecting their wealth."
Upcoming Rocket Lauch In Gold Will Shock The Markets
The following is an excerpt from a King World News interview with the legendary James Turk:
When asked about gold specifically Turk stated, “You have almost six months of work underneath the market in the $1,300’s. That provides a massive base that has created the launch pad which will send gold higher.
There is a little bit of a battle going on at the previous high of $1,430, but the momentum is clearly starting to shift in favor of the bulls. The gold bulls have been very patient as gold has essentially moved sideways for the past six months, but their patience is about to be rewarded.
For KWN readers globally if we have gold move to $1,800 and silver to $50, the gold/silver ratio would fall slightly to 36 to 1. In that scenario, all precious metals holders will be happy.
In other words Eric, both precious metals will be rising more or lesss at the same rate. This will be in contrast to the last six months where silver was significantly outperforming gold with the ratio falling from 60 to 39.5 during that time.
Although a lot of people have been focused on the move in silver, but the coming rocket launch in gold will shock the markets.”
Turk is right, the coming move in gold will shock the markets. This will be the wake-up call for investors who have ignored the gold market up to this point.
Full article can be viewed here.
The following is an excerpt from a King World News interview with the legendary James Turk:
When asked about gold specifically Turk stated, “You have almost six months of work underneath the market in the $1,300’s. That provides a massive base that has created the launch pad which will send gold higher.
There is a little bit of a battle going on at the previous high of $1,430, but the momentum is clearly starting to shift in favor of the bulls. The gold bulls have been very patient as gold has essentially moved sideways for the past six months, but their patience is about to be rewarded.
For KWN readers globally if we have gold move to $1,800 and silver to $50, the gold/silver ratio would fall slightly to 36 to 1. In that scenario, all precious metals holders will be happy.
In other words Eric, both precious metals will be rising more or lesss at the same rate. This will be in contrast to the last six months where silver was significantly outperforming gold with the ratio falling from 60 to 39.5 during that time.
Although a lot of people have been focused on the move in silver, but the coming rocket launch in gold will shock the markets.”
Turk is right, the coming move in gold will shock the markets. This will be the wake-up call for investors who have ignored the gold market up to this point.
Full article can be viewed here.
WSJ Pro-Gold Article
Falling under the heading of "You Ain't Gonna Believe This S#@^" is a pro-gold article from the Wall Street Journal. Here's the link. Better read it before they change their mind and yank the story from the site!
Here's a short excerpt:
But they're far from bubble territory. Gold, which is currently above $1,400 an ounce, would need to top $2,000 to match its all-time high, adjusted for inflation. Indeed, gold is still something of a contrarian investment. Ten years ago, gold was almost universally hated as an investment. I know firsthand because people thought I was crazy for buying it. Today, gold is still eyed with suspicion by most.
Falling under the heading of "You Ain't Gonna Believe This S#@^" is a pro-gold article from the Wall Street Journal. Here's the link. Better read it before they change their mind and yank the story from the site!
Here's a short excerpt:
But they're far from bubble territory. Gold, which is currently above $1,400 an ounce, would need to top $2,000 to match its all-time high, adjusted for inflation. Indeed, gold is still something of a contrarian investment. Ten years ago, gold was almost universally hated as an investment. I know firsthand because people thought I was crazy for buying it. Today, gold is still eyed with suspicion by most.
Why You Should Own Gold - Reason # 818.
According to ABC News, North Korea is nearing completion of an electromagnetic pulse bomb. Here's a little excerpt from the story:
The North is believed to be nearing completion of an electromagnetic pulse bomb that, if exploded 25 miles above ground would cause irreversible damage to electrical and electronic devices such as mobile phones, computers, radio and radar, experts say.
"We assume they are at a considerably substantial level of development," Park Chang-kyu of the Agency for Defense Development said at a briefing to the parliament Monday.
Such a device, if exploded above US soil could wipe out communications for days, weeks or months. What that means is this: If you want to eat, you better have cash or a monetary equivalent with which to do business because your bank and investment accounts will be frozen. Your stocks, bonds and retirement plans won't do you a bit of good because they will be unaccessible!
Now, tell me again why you haven't bought gold? Oh yeah, that's right..... it is too high priced right now to buy. And you're the same person that wouldn't buy it at $300/ounce because it was "too low" priced to buy.
Heh heh heh! You people just make me look sooo smart! Thanks a million! (And I do mean literally... "a million!")
According to ABC News, North Korea is nearing completion of an electromagnetic pulse bomb. Here's a little excerpt from the story:
The North is believed to be nearing completion of an electromagnetic pulse bomb that, if exploded 25 miles above ground would cause irreversible damage to electrical and electronic devices such as mobile phones, computers, radio and radar, experts say.
"We assume they are at a considerably substantial level of development," Park Chang-kyu of the Agency for Defense Development said at a briefing to the parliament Monday.
Such a device, if exploded above US soil could wipe out communications for days, weeks or months. What that means is this: If you want to eat, you better have cash or a monetary equivalent with which to do business because your bank and investment accounts will be frozen. Your stocks, bonds and retirement plans won't do you a bit of good because they will be unaccessible!
Now, tell me again why you haven't bought gold? Oh yeah, that's right..... it is too high priced right now to buy. And you're the same person that wouldn't buy it at $300/ounce because it was "too low" priced to buy.
Heh heh heh! You people just make me look sooo smart! Thanks a million! (And I do mean literally... "a million!")
Save, Invest, Speculate, Trade or Gamble?
By Doug Casey, The Casey Report
For some time I've been saying that the economy is in the “eye of the storm” and that when it emerged, the weather would be far rougher than in 2008. The trillions of currency units created since the Greater Depression began in 2007 have papered over the situation, but only temporarily.
In some ways, the immediate and direct effects of this money creation appear beneficial. For instance, by averting a sharp and complete collapse of financial markets and the banking system – or by allowing a return to some approximation of normalcy in the daily lives of most people.
However, a competent economist (as distinguished from a political apologist, many of whom masquerade as economists) will correctly assess the current prosperity as an illusion. They’ll recognize it as a natural cyclical upturn – a “dead cat bounce.” The Greater Depression hasn’t been chased away by Quantitative Easing – it’s developing and about to get much more severe.
What we’re really interested in, however, are not the immediate and direct effects of “Quantitative Easing” (I love the way they fabricate these euphemisms…) but the indirect and delayed effects. In particular, how do we profit from them? What is likely to happen next in the economy? Which markets are likely to go up, and which are likely to go down?
Read the rest of the article here.
By Doug Casey, The Casey Report
For some time I've been saying that the economy is in the “eye of the storm” and that when it emerged, the weather would be far rougher than in 2008. The trillions of currency units created since the Greater Depression began in 2007 have papered over the situation, but only temporarily.
In some ways, the immediate and direct effects of this money creation appear beneficial. For instance, by averting a sharp and complete collapse of financial markets and the banking system – or by allowing a return to some approximation of normalcy in the daily lives of most people.
However, a competent economist (as distinguished from a political apologist, many of whom masquerade as economists) will correctly assess the current prosperity as an illusion. They’ll recognize it as a natural cyclical upturn – a “dead cat bounce.” The Greater Depression hasn’t been chased away by Quantitative Easing – it’s developing and about to get much more severe.
What we’re really interested in, however, are not the immediate and direct effects of “Quantitative Easing” (I love the way they fabricate these euphemisms…) but the indirect and delayed effects. In particular, how do we profit from them? What is likely to happen next in the economy? Which markets are likely to go up, and which are likely to go down?
Read the rest of the article here.
The ONLY Solution
As you know, I am a bit outspoken. Because of this, I get a lot of phone calls and emails about what the solution to all of our economic and political problems are. However, the problems that face our economy, nation and world are spiritual at their root. Therefore, economic and political bandaids cannot fix spiritual problems.
Sorry if the above offends you, but before you go, check out the following interview with the late Art Katz. The simplicity of the solution is staggering.
Enjoy.
I'm proud to say I actually met Art several years ago and consider him one of my inspiriations in the faith. You can learn a lot from a Jew! Check out my other website www.lostteachings.org for more on all things spiritual.
As you know, I am a bit outspoken. Because of this, I get a lot of phone calls and emails about what the solution to all of our economic and political problems are. However, the problems that face our economy, nation and world are spiritual at their root. Therefore, economic and political bandaids cannot fix spiritual problems.
Sorry if the above offends you, but before you go, check out the following interview with the late Art Katz. The simplicity of the solution is staggering.
Enjoy.
I'm proud to say I actually met Art several years ago and consider him one of my inspiriations in the faith. You can learn a lot from a Jew! Check out my other website www.lostteachings.org for more on all things spiritual.
The Driver for Gold You’re Not Watching
Jeff Clark, BIG GOLD
You already know the basic reasons for owning gold – currency protection, inflation hedge, store of value, calamity insurance – many of which are becoming clichés even in mainstream articles. Throw in the supply and demand imbalance, and you’ve got the basic arguments for why one should hold gold for the foreseeable future.
All of these factors remain very bullish, in spite of gold’s 450% rise over the past 10 years. No, it’s not too late to buy, especially if you don’t own a meaningful amount; and yes, I’m convinced the price is headed much higher, regardless of the corrections we’ll inevitably see. Each of the aforementioned catalysts will force gold’s price higher and higher in the years ahead, especially the currency issues.
But there’s another driver of the price that escapes many gold watchers and certainly the mainstream media. And I’m convinced that once this sleeping giant wakes, it could ignite the gold market like nothing we’ve ever seen.
The fund management industry handles the bulk of the world’s wealth. These institutions include insurance companies, hedge funds, mutual funds, sovereign wealth funds, etc. But the elephant in the room is pension funds. These are institutions that provide retirement income, both public and private.
Global pension assets are estimated to be – drum roll, please – $31.1 trillion. No, that is not a misprint. It is more than twice the size of last year’s GDP in the U.S. ($14.7 trillion).
We know a few hedge fund managers have invested in gold, like John Paulson, David Einhorn, Jean-Marie Eveillard. There are close to twenty mutual funds devoted to gold and precious metals. Lots of gold and silver bugs have been buying.
So, what about pension funds?
According to estimates by Shayne McGuire in his new book, Hard Money; Taking Gold to a Higher Investment Level, the typical pension fund holds about 0.15% of its assets in gold. He estimates another 0.15% is devoted to gold mining stocks, giving us a total of 0.30% – that is, less than one third of one percent of assets committed to the gold sector.
Shayne is head of global research at the Teacher Retirement System of Texas. He bases his estimate on the fact that commodities represent about 3% of the total assets in the average pension fund. And of that 3%, about 5% is devoted to gold. It is, by any account, a negligible portion of a fund’s asset allocation.
Now here’s the fun part. Let’s say fund managers as a group realize that bonds, equities, and real estate have become poor or risky investments and so decide to increase their allocation to the gold market. If they doubled their exposure to gold and gold stocks – which would still represent only 0.6% of their total assets – it would amount to $93.3 billion in new purchases.
How much is that? The assets of GLD total $55.2 billion, so this amount of money is 1.7 times bigger than the largest gold ETF. SLV, the largest silver ETF, has net assets of $9.3 billion, a mere one-tenth of that extra allocation.
The market cap of the entire sector of gold stocks (producers only) is about $234 billion. The gold industry would see a 40% increase in new money to the sector. Its market cap would double if pension institutions allocated just 1.2% of their assets to it.
But what if currency issues spiral out of control? What if bonds wither and die? What if real estate takes ten years to recover? What if inflation becomes a rabid dog like it has every other time in history when governments have diluted their currency to this degree? If these funds allocate just 5% of their assets to gold – which would amount to $1.5 trillion – it would overwhelm the system and rocket prices skyward.
And let’s not forget that this is only one class of institution. Insurance companies have about $18.7 trillion in assets. Hedge funds manage approximately $1.7 trillion. Sovereign wealth funds control $3.8 trillion. Then there are mutual funds, ETFs, private equity funds, and private wealth funds. Throw in millions of retail investors like you and me and Joe Sixpack and Jiao Sixpack, and we’re looking in the rear view mirror at $100 trillion.
I don’t know if pension funds will devote that much money to this sector or not. What I do know is that sovereign debt risks are far from over, the U.S. dollar and other currencies will lose considerably more value against gold, interest rates will most certainly rise in the years ahead, and inflation is just getting started. These forces are in place and building, and if there’s a paradigm shift in how these managers view gold, look out!
I thought of titling this piece, “Why $5,000 Gold May Be Too Low.” Because once fund managers enter the gold market in mass, this tiny sector will light on fire with blazing speed.
My advice is to not just hope you can jump in once these drivers hit the gas, but to claim your seat during the relative calm of this month's level prices.
Jeff Clark is the editor of BIG GOLD, Casey Research's monthly advisory on gold, silver, and large-cap precious metals stocks. If this is the kind of in-depth information you’d like to utilize for your investments, give BIG GOLD a risk-free try with 3-month money-back guarantee.
Jeff Clark, BIG GOLD
You already know the basic reasons for owning gold – currency protection, inflation hedge, store of value, calamity insurance – many of which are becoming clichés even in mainstream articles. Throw in the supply and demand imbalance, and you’ve got the basic arguments for why one should hold gold for the foreseeable future.
All of these factors remain very bullish, in spite of gold’s 450% rise over the past 10 years. No, it’s not too late to buy, especially if you don’t own a meaningful amount; and yes, I’m convinced the price is headed much higher, regardless of the corrections we’ll inevitably see. Each of the aforementioned catalysts will force gold’s price higher and higher in the years ahead, especially the currency issues.
But there’s another driver of the price that escapes many gold watchers and certainly the mainstream media. And I’m convinced that once this sleeping giant wakes, it could ignite the gold market like nothing we’ve ever seen.
The fund management industry handles the bulk of the world’s wealth. These institutions include insurance companies, hedge funds, mutual funds, sovereign wealth funds, etc. But the elephant in the room is pension funds. These are institutions that provide retirement income, both public and private.
Global pension assets are estimated to be – drum roll, please – $31.1 trillion. No, that is not a misprint. It is more than twice the size of last year’s GDP in the U.S. ($14.7 trillion).
We know a few hedge fund managers have invested in gold, like John Paulson, David Einhorn, Jean-Marie Eveillard. There are close to twenty mutual funds devoted to gold and precious metals. Lots of gold and silver bugs have been buying.
So, what about pension funds?
According to estimates by Shayne McGuire in his new book, Hard Money; Taking Gold to a Higher Investment Level, the typical pension fund holds about 0.15% of its assets in gold. He estimates another 0.15% is devoted to gold mining stocks, giving us a total of 0.30% – that is, less than one third of one percent of assets committed to the gold sector.
Shayne is head of global research at the Teacher Retirement System of Texas. He bases his estimate on the fact that commodities represent about 3% of the total assets in the average pension fund. And of that 3%, about 5% is devoted to gold. It is, by any account, a negligible portion of a fund’s asset allocation.
Now here’s the fun part. Let’s say fund managers as a group realize that bonds, equities, and real estate have become poor or risky investments and so decide to increase their allocation to the gold market. If they doubled their exposure to gold and gold stocks – which would still represent only 0.6% of their total assets – it would amount to $93.3 billion in new purchases.
How much is that? The assets of GLD total $55.2 billion, so this amount of money is 1.7 times bigger than the largest gold ETF. SLV, the largest silver ETF, has net assets of $9.3 billion, a mere one-tenth of that extra allocation.
The market cap of the entire sector of gold stocks (producers only) is about $234 billion. The gold industry would see a 40% increase in new money to the sector. Its market cap would double if pension institutions allocated just 1.2% of their assets to it.
But what if currency issues spiral out of control? What if bonds wither and die? What if real estate takes ten years to recover? What if inflation becomes a rabid dog like it has every other time in history when governments have diluted their currency to this degree? If these funds allocate just 5% of their assets to gold – which would amount to $1.5 trillion – it would overwhelm the system and rocket prices skyward.
And let’s not forget that this is only one class of institution. Insurance companies have about $18.7 trillion in assets. Hedge funds manage approximately $1.7 trillion. Sovereign wealth funds control $3.8 trillion. Then there are mutual funds, ETFs, private equity funds, and private wealth funds. Throw in millions of retail investors like you and me and Joe Sixpack and Jiao Sixpack, and we’re looking in the rear view mirror at $100 trillion.
I don’t know if pension funds will devote that much money to this sector or not. What I do know is that sovereign debt risks are far from over, the U.S. dollar and other currencies will lose considerably more value against gold, interest rates will most certainly rise in the years ahead, and inflation is just getting started. These forces are in place and building, and if there’s a paradigm shift in how these managers view gold, look out!
I thought of titling this piece, “Why $5,000 Gold May Be Too Low.” Because once fund managers enter the gold market in mass, this tiny sector will light on fire with blazing speed.
My advice is to not just hope you can jump in once these drivers hit the gas, but to claim your seat during the relative calm of this month's level prices.
Jeff Clark is the editor of BIG GOLD, Casey Research's monthly advisory on gold, silver, and large-cap precious metals stocks. If this is the kind of in-depth information you’d like to utilize for your investments, give BIG GOLD a risk-free try with 3-month money-back guarantee.
Louis Yamada - $80 Silver, $2,000 Gold & $140 Oil
Smith Barney's technical research chief, Louise Yamada, told King World News that her target prices for gold are $1,500 and then $2,000, for silver $40 and eventually $80, and for oil $115 and eventually $140. You can find excerpts from the interview at the KWN Internet site...and the link is here.
Smith Barney's technical research chief, Louise Yamada, told King World News that her target prices for gold are $1,500 and then $2,000, for silver $40 and eventually $80, and for oil $115 and eventually $140. You can find excerpts from the interview at the KWN Internet site...and the link is here.
Gold Cheap Versus Oil Signals Bullion to Rally
Gold, trading near a record high, will outperform oil as surging inflation underscores the metal’s role as an investment hedge, according to Credit Suisse Group AG.
The CHART OF THE DAY shows prices of gold for immediate delivery and New York-traded crude since 2008. The lower panel tracks the ratio of gold to oil, which shows an ounce of bullion buys about 15 barrels of the fuel now, compared with 26 barrels two years ago.
“We see potential for gold to outperform oil over the coming months,” Stefan Graber, Zurich-based analyst with Credit Suisse, said in an e-mailed interview yesterday. “We think an ounce of gold could potentially buy a few additional barrels of oil. This assessment is based on our positive view on gold versus a neutral view on the oil market.”
Rest of story here.
Gold, trading near a record high, will outperform oil as surging inflation underscores the metal’s role as an investment hedge, according to Credit Suisse Group AG.
The CHART OF THE DAY shows prices of gold for immediate delivery and New York-traded crude since 2008. The lower panel tracks the ratio of gold to oil, which shows an ounce of bullion buys about 15 barrels of the fuel now, compared with 26 barrels two years ago.
“We see potential for gold to outperform oil over the coming months,” Stefan Graber, Zurich-based analyst with Credit Suisse, said in an e-mailed interview yesterday. “We think an ounce of gold could potentially buy a few additional barrels of oil. This assessment is based on our positive view on gold versus a neutral view on the oil market.”
Rest of story here.
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