Buying Silver Is Like Buying Gold At $554 Today

by Hubert Moolman, SilverSeek.com:

I think that buying silver today is like buying gold for $554 an ounce. Let me explain: As I am writing, silver is currently trading at about 65.2% (32.6/50) of its 1980 high. If gold was trading at 65.2% of its 1980 high, it would be trading at $554 (0.652*850).
Now, I really like gold, even at today’s price of $1 738, but why should I pay $1 738, if I can get it for $554 by buying silver and then exchanging it for gold when the gold/silver ratio is at an extreme (in favour of silver). The reason for this logic comes from the fundamental relationship between gold and silver as explained in my previous article.
For my argument to be valid, silver has to outperform gold over my investment period, and at least equal gold’s performance relative to its 1980 high. That is, for example, if gold reaches five multiples of its 1980 high ($4250), then silver should do the same ($250), in this example, giving us a gold/silver ratio of 17.
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ECB cuts rate, has no bigger bond-purchase plan

Eric De Groot at Eric De Groot - 1 hour ago

The ECB, unlike the Fed, is unable to create money as needed during a crisis. Any aggressive expansion of the bond-purchase plan will force a highly public recapitalization of the ECB. A public recapitalization places confidence at risk, so in steps the Fed to purchase bonds and supply liquidity as the lending of last resort. Why do you think Geitner is traveling around Europe saying Europe is... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

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Up and Down we Go - where we stop nobody knows

Trader Dan at Trader Dan's Market Views - 2 hours ago

Yesterday gold was anticipating a stronger policy response coming out of the upcoming meeting in Brussels dealing with the sovereign debt crisis in the Eurozone. That brought buying back into a host of markets as well with equities rallying and the risk trades back on in full force. Today? Well, that was yesterday. Once current ECB President Draghi basically squashed the idea of large bond purchases by the ECB, the market promptly threw away everything it put on yesterday totally reversing the risk trades as disappointment that the liquidity punch bowl was not going to be spiked as ... more » 

Forget Europe… Germany’s Got Its Own Problems to Deal With  

Posted by : Phoenix Capital...

Post date: 12/08/2011 - 11:57

German banks post some of the highest leverage rations in Europe: higher that Italy, higher than Ireland, even higher than Greece. In fact, German banks are actually sporting leverage EQUAL to that... 

Ron Paul Revolution Enters Crucial Countdown To Iowa

by Paul Joseph Watson, InfoWars.com:

With Ron Paul now firmly established as a top tier candidate just weeks away from the crucial caucuses in Iowa and New Hampshire, the Paul campaign is set to launch what could turn out to be the biggest ever single day online money bomb in the history of U.S. politics.
Back in 2007, Ron Paul supporters made history by raising $6 million in online contributions in a single 24 hour period, beating the single day record for a national candidate.
That total could easily be topped on December 16th, when the Paul campaign launches its ‘Tea Party Money Bomb’ as part of a final mail, radio, and TV ad push in Iowa.
However, Congressman Paul has urged his supporters to donate as soon as possible so as to fund ad buys in Iowa. Paul’s TV ads have been devastating to his Republican rivals thus far, with the latest being targeted against Newt Gingrich’s “serial hypocrisy”.
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Guest Post: Another Reason for Stocks To Tank In 2012: Jobs

Market pundits would have you believe that corporate profits are the driver of stock prices. They're wrong. Ultimately, it is demand for stocks that drive prices. If demand falters for whatever reason (for example, loss of faith in a rigged market), then stocks will decline in price as organic selling pressure (people liquidating positions and accounts for whatever reason, such as paying their mortgage and buying food now that the household is surviving on one shaky income) is a constant that only rises as the economy sheds stable fulltime employment. The Federal Reserve has backstopped the stock market by destroying every other source of yield via zero-interest rates (ZIRP), effectively pushing anyone seeking a yield into long-term Treasury bonds or "risk-on" assets such as stocks and junk-rated corporate bonds. But Fed manipulation cannot overcome the much larger forces of demographics and employment for long. Despite all the brave talk of the manipulators on the Board of the Federal Reserve, they've run out of manipulative tricks. With interest rates already near zero, their most basic toolbox is empty. Now they're reduced to bleating about all the phantom tools in their possession and playing around with long-term bond yields and mortgage rates-- interventions that cannot possibly create jobs or organic (i.e. real, unmanipulated) demand for stocks and housing.

Egon von Greyerz: There Is No Deus Ex Machina Left

With most of the world’s major economies as well as the financial system bankrupt, there is only one solution that can save the world economy. Like in the Greek tragedies, Deus ex Machina is now the only way that the world can avoid a total economic collapse. This would involve God being lowered down onto the world stage and miraculously saving the plot. For those few who believe in this, may God bless them. But since this is a very unlikely solution most people will instead rely on governments and central banks to save us. But how can anyone possibly believe that totally incompetent and clueless politicians and central bankers could solve anything. They created the problem in the first place and are therefore totally unsuitable to play the role of Deus. The main objective of governments is to stay in power and thus to buy votes. Therefore they are incapable of taking the right decisions. And the opposition, aspiring to power is even less suitable since they will lie through their teeth and promise the earth in order to be elected. (We know that there are exceptions like Ron Paul, but the voters will most probably find his medicine too strong to swallow.). What about central bankers, can’t they save us? Unfortunately any sensible person who becomes a central banker loses all his senses and becomes a prisoner of the political system. So if there is no Deus ex Machina and if governments or bankers can’t rescue the world, who can and what is the solution. Let us return to the wise von Mises to look at the options available now:

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS A RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION, OR LATER AS A FINAL OR TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED”

Ludwig von Mises

Fortress Commodities Fund "We're Long Gold, Short Base Metals, And A Seller Of Crude"

While one of the bigger commodity funds out there, in this case Fortress Commodities Fund, has not done too hot recently (down 7.4% in October), which it humbly admits to and says, "the month of October was a wakeup call for us and we are adjusting accordingly" here are some must read perspectives that lead the Fortress Commodity group to conclude that "We're Long Gold, Short Base Metals, Patient Crude Strength Seller & Buyer Of Corn On Any Real Flush In Prices." Oh, and that it's "macroeconomic outlook remains pessimistic."

MNI Reports Coordinated Central Bank Intervention Sends Gold Lower Intraday

It is one thing for conspiracy websites to indicate that the Fed or the global central bank cartel are doing everything in their power to manipulate the price of gold lower. It is something different when the 'reputable', Deutsche Boerse owned Market News does just that.

• MARKET SOURCES REPORT BIS, BOE & FEDERAL RESERVE WERE SELLING GOLD AFTER IT POPPED TO SESSION HIGH AT GMT 1335 -MNI NEWS via BLOOMBERG

So much for all those sworn testimony claims that the central bankers do not manipulate the price of gold.

Presenting Today's Deux Ex Rumor

Update: And it gets better. Now Dow Jones:

• Euro-Area Countries Ready To Provide IMF With Bilateral Loans, According To Draft Seen By Dow Jones

Yet earlier today, none other than Mario Draghi said that loans to the IMF to purchase European bonds would be legally unworkable. Brilliant
With just 30 minutes until the close we were cutting it close to a rumorless, headlineless session. So here is Reuters to the rescue:

• ESM BAIL-OUT FUND TO BE GIVEN BANKING LICENCE - DRAFT
• EU DETERMINED TO STRENGTHEN BAILOUT MECHANICS - REUTERS

And from earlier:

• ESM BECOMING A BANK "OFF THE TABLE"

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