Thursday, November 8, 2012

For Third Year In A Row, Gold Outperfoming Stocks

Gold's performance year-to-date just surpassed that of the S&P 500 once again. If this remains the case into year-end, this will be the third year in a row that Gold has outperformed stocks. Looking forward, which 'asset' would you choose - Stocks with an implied volatility of 17% or Gold at 15.75% to the end of the year? Sharpe Ratio anyone? Perhaps asking your 'asset allocator' what his weighting is based on will be a worthwhile conversation - with the outperforming returns and lower forward-looking risk?

Chart Of The Day: When $0.99 Becomes Unaffordable, We Have A Problem

Earlier today, fast food juggernaut McDonalds reported same store sales for the month October. At -1.8%, this number was well below expectations of -1.1%, and a drop from September's 1.9%. It was driven by a 2%+ drop in comp store sales across all locations: US, Europea and APMEA, with the US performing just as bad as Europe. Most importantly, this was the first monthly drop in MCD comp sales since March 2003! So our question is: at what point does the perpetually self-deluded US population finally admit to itself that when even 99 cent meals are no longer affordable, that this country has a problem?

Obama’s Election Seals Our Fate

by Monty Pelerin, American Thinker:
The Obama re-election dooms the country. It ensures that his philosophy will be imposed for another four years.
His election ensures the continuing shift away from the Rule of Law, property rights, free men, and free markets. Obama’s vision of how the world works ensures a dire economy until an economic collapse resets everything. The rest of the world, apparently bigger Obama supporters than U.S. voters, will not be immune from the consequences.
The Fundamentals of Progress
Peace and progress are the children of freedom. The wealth of nations was explained more than two hundred years ago by Adam Smith. Property rights and markets coordinate behavior in a manner that all are made better off by the pursuit of self-interest.
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On Draghi's One Year Anniversary: Spanish Sacrifice, Banker Bonanza

Since Mario Draghi's first ECB meeting in November 2011, the ECB balance sheet has expanded by 30% (including two rounds of LTRO which funneled $1.3tn into banks). What did we get for all that money? As Bloomberg's Chart of the Day shows, not much. Critically, as some European banks look to return that stigmatizing encumbrance, it is the banks that have benefited massively from Draghi's exuberance while the people (of Spain for example) have suffered. Using the spread between EURIBOR and OIS as a proxy for short-term liquidity (funding costs), since Draghi began his ex-Goldman stint, bank funding costs have plunged (as also shown below with CDS spreads). Meanwhile, European governments' funding costs have gone nowhere - and in most cases are considerably higher. Draghi even admitted that LTRO was not expected to reach 'the people' when he dismissed inflationary fears this morning on the back of expectations that the banks haven't used the cash - is it any wonder Nigel Farage is fuming and Greeks and Spaniards are rioting? Just wait til the Irish are told 'no' to retroactive OMT...

Do We Have What It Takes To Get From Here To There? Part 1: Japan

Do we have what it takes to get from here to there? This apparently simple question offers profound insights into the dynamics of individuals, households, enterprises and nation-states. If we answer this question honestly, it establishes a "road map" of what must be in place before a progression from here to a more sustainable future ("there") can take place. For most of the world's economies and societies, the answer is a resounding "no." The U.S. Status Quo is as intellectually bankrupt as it is financially bankrupt. Our "leadership" cluelessly clings to the only model they know: incentivize "consumers" into borrowing more money to buy more "stuff" from China, in the magical-thinking belief this churn will somehow lead to sustainable "growth." This is akin to handing a parched alcoholic a fresh bottle of whiskey to wean him of his addiction. There are more than a few lessons to be learned from Japan...

We Aren't In Kansas Anymore

While the citizens of Athens rioted and threw Molotov Cocktails outside of their Parliament the elected officials narrowly passed the new austerity measures demanded by the Troika last night. They have a budget vote left, likely to be passed, and then the focus will shift to the IMF and the European Union and whether they will fund and how it will be done. The Greek government says it will run out of money on November 16 and the country has debt payments to be made on November 21. Last night’s vote in Athens was only the first page in the current chapter and there are a number of open questions left. Make no mistake; we are caught between three cliffs at present.

Just Another Paper Bullion Scam - This Time From The Royal Canadian Mint

Dave in Denver at The Golden Truth - 1 hour ago
This one is absurd. I just read through the prospectus for the new Royal Canadian Mint ETR, priced on Monday at $20 per unit. Each unit initially entitles the holder to a .619525 share of 1 oz. of silver bullion, to be safekept by the RCM. Notwithstanding the complicated formula required to calculate the share of bullion ratio on an ongoing basis for several reasons - the new RCM paper form of silver has several embedded issues which can create the inability of the holder to actually receive the physical gold which they think they are investing in. The RCM does not directly link ... more » 

Bullish Money Flows, Favorable Seasonality Coincides & Growing Pessimism Toward Gold

Eric De Groot at Eric De Groot - 5 hours ago
Unexpected gold rallies tend to materialize when seasonality aligns with bullish money flow setups. Seasonality for gold has turned bullish (table). The invisible hand continues to regain control of the trend by accumulating the dips. An up tick in the 13DWA will signal the start of the second up count and another rally in gold (chart). Table: Seasonality Chart: ... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Draghi's Dream Dashed As Spain Yields Hit Six-Week Highs

Spanish bond spreads reach back above 450bps today for the first time in six weeks. The last 3 weeks have seen peripheral bonds bleeding slowly but surely as hopes of OMT fade and Draghi's dream is dashed (as the auction this morning showed just how gamed out the conditional OMT has become - no money without a crash). This 3-week shift is the largest since Super-Mario first hinted at his omnipotence and shifts spread back above their 200DMA. GGBs also fell out of bed rather nastily as their much-needed money weas delayed and the no-brainer trade has lost over 7.5% in the last 2 days. So ELA is not monetary financing; OMT is a fully effective backstop; and unicorns are real...

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Samsung S3 Overtakes iPhone As World's Best-Selling Smartphone

Look up the phrase "inflection point" - it will be the most hated phrase by all those who day after day repeat that there is now way AAPL can ever drop because its "forward multiple is low" (hint: forward multiples are simply functions of forward earnings, and once the fadness and coolness of a memo, no matter how infectious in the past, is gone, so are "forward earnings', especially once the sellside behavioral finance lemmings crew takes the machete to their Price Targets and has to justify why it has been massively wrong... and also for those who have a calculator, calculate how many years of dividends $100 billion in cash funds before the cash hoard also runs out).

Gerald Celente: Limit Up – Deutsche Untertitel 

from trendsjournal:

Post U.S. Election Market Forecasts for Apple, Gold, Silver, Oil and Stocks

by Chris Vermeulen, The Market Oracle:
Over the past two months shares of gold (NYSE:GLD) and Apple (NASD:AAPL) have had a sizable bite taken out of their share price. Active traders along with the longer term investors have had a wild ride this fall watching these investments slide to multi month lows. The big question is when will gold and apple shares bounce?
Here we are again with another election behind us and Barack Obama in the White House again. Many think this means four years of the same thing… Printing, Inflation and higher stock prices.
Is this good or bad for Americans or the world for that matter? I doubt it, but who really knows and who cares because there is nothing anyone can do about it now. So buckle up your seat belt and focus on trading and investing with major trend both within the United States and abroad using exchange traded funds.
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Obama re-election means ‘Perfect Storm’ for gold – Nichols

While Marc Faber feels that President Obama’s re-election is a disaster for business, U.S. gold analyst Jeff Nichols reckons it sets the scene for a big kick up in the gold price.
by Lawrence Williams,
The gold price reacted sharply upwards to President Obama’s re-election, with the U.S. dollar initially falling, but then the dollar recovered as Europe’s woes continue to depress alternative currencies and gold has drifted back – but remains, at the time of writing, comfortably back up above the $1715 level – at least for now.
The Obama factor has certainly had a positive effect on the gold price whereas a Romney victory might have driven it lower, and the gold bulls certainly feel that this could be the trigger gold really needs to take off to new heights – although their predictions for the U.S. economy in general are dire suggesting that any signs of recovery will be shortlived.
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Obama decision puts America on trajectory toward financial mega-disaster

by Mike Adams, Natural News:
The re-election of Obama was more than the mere selection of one man over another; it was an endorsement of a set of economic policies that are now launching America into a trajectory that can only end in economic disaster.
With the election now etched in the history books, America has endorsed an endless government spending spree that can no longer be held in check. There is only one outcome now for the United States of America: A grand finale blowout of money creation, hyperinflation, collapse and tyranny.
This point is not a debate; it is mathematical fact. Just as 2 + 2 = 4, the economic policies pursued by President Obama and the Federal Reserve can only equal the utter financial demise of the U.S. dollar. This is explained in more detail, below.
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The Lesser Evil Won, Now Get to Work, Set an Intention and Deal with The Cancer On Democracy We Are Living With

By Rob Kall, Op Ed News:
Sure, you’re happy, thrilled, overjoyed. Of the two evils you felt you had to choose from, the one who was the lesser of the two evils, by whatever parameters you measured, has won.
Let’s be clear. having chosen the lesser of two evils, we’ve moved towards more evil.
It’s not all your fault, having participated in the process. It’s a dirty, ugly, broken system. Now, famous people, like Churchill, have made remarks, like, “it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.
The problem is, there are all kinds of flavors of democracy. The system in the US is over 200 years old. The US constitution used to be the one other nations imitated. But that’s no longer the case. It is archaic and worse, it has been enfeebled, corrupted and diseased– malignant with corporatist cancer.
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Can Stored Water Go Bad?

by Thoreau, Prep-Blog:
The short answer is: “Yes”. The long answer is the subject of this post.
In the abstract, if you have a clean container with nothing but water in it, and the container is sealed, the water should keep indefinitely. It starts with no bacteria. It is sealed, so no bacteria can enter. And there would be nothing in the container that any bacteria could use as food, to multiply. But that scenario is unrealistic.
Suppose that you buy bottled water, and keep it sealed. Will the water keep indefinitely? Perhaps not. A study of 57 different sources of bottled water, plus four samples of tap water, showed that many brands and types of bottled water contain bacteria, even in high amounts. Each water sample was tested for CFUs, colony forming units of bacteria. Each bacterial colony on a growing medium indicates at least one bacterium (because one or more bacteria are needed to give rise to each colony).
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Mario Draghi’s Full ECB Press Conference – 8 November

from ECB euro:


“Bilderberg Discuss Economic Trends and What Will Be Happening” – George Pataki

from WeAreChange:

Luke Rudkowski gets another chance to talk to former Governor of NY George Pataki about his participation with the secretive and elusive bilderberg group. The previous conversation didn’t go as well, with Pataki at first denying he ever attended the meeting. A lot of the questions raised by Luke were diverted by Pataki, but he still did reveal that the most powerful people in the world of politics, technology, agriculture, media, fiance and business come together in secret to discuss what “will be happening”. This leaves them with an advantage since most of the attendees are in control of the issues discussed and their future.

Obama won. So what will happen next?

by suburbanprep, Survival 5×5:
I did not vote for Obama. But I respect the people who did, because I respect freedom and liberty. While I believe Obama will use the next 4 years to put his liberal agenda in place, it is not the end of the world. At least I hope not. My fear is Obama does not inspire businesses to grow and expand. The lack of investor confidence is demonstrated in the huge drop in the stock market today.
Among the prepper circles, there is an often used quote from Benjamin Franklin, “When the people find they can vote themselves money, that will herald the end of the republic.” I believe Obama won yesterday because the 47% who subsist from government benefits voted to sustain those benefits. Yesterday, 50% of US citizens voted themselves money. But our government has too long sustained its lifestyle by living on credit. The financial collapse of 2008 was not caused by banker crimes. Rather, the financial collapse of 2008 occurred because the entire country lived on too much debt Too much debt inflated the real estate market to artificially high prices. When the truth arrived, the price of real estate collapsed in 2008 and 2009.
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It was… “fun to have fun!”

by Bill Holter,

The election is over… and nothing has changed.  Same House, same Senate and same President.  After the 2010 mid term elections where the population was hopping mad at anything and everything, they “threw the bums out.”  This has been so pretty much all around the world in elections held for the past year or two.  Not so last night… so onward we go and now the markets must deal with the impending debt ceiling and fiscal black hole directly ahead.
As for the debt ceiling (Treasury Quietly Warns: ‘Expect Debt Limit to Be Reached Near End of 2012′ ), there is no question that the ceiling will be raised and possibly even eliminated.  I say “eliminated” because raising the limit every year has become embarrassing and there is no point anymore to even pretend that there is a “limit.”  Bernanke has already made clear that “infinity” is the limit to QE so the Treasury might as well join the festive ride to infinity!
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Life, Risk, and Morals

by James E. Miller, Mises:
In the wake of the destruction caused by Hurricane Sandy, the New York Times saw it fit to declare “A Big Storm Requires a Big Government.” The premise was simple: government is the only entity capable of saving the people. When it comes to disaster, it must be up to public servants to swoop in, remedy the situation, and leave things just as pristine as they were before the damage. Massive coordination on the part of private individuals isn’t enough. In other words, centralized, bureaucratic planning is needed because the little people aren’t fit to take care of situation themselves.
This attitude was embodied perfectly in a woman caught on video begging New York Senator Chuck Schumer for assistance along with President Obama who wasn’t at all present. On approach, she shouts “when is the government coming?” followed by begging for food and gasoline fittingly accompanied by shouting “we are going to die!” The frantic look in her eyes showed that she truly believed the state was the only organization capable of assisting her and others.
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The Great Precious Metals Managed Retreat

from Lewis-Mariani:
Many observers, notably GATA, have characterized the more than decade long run up in the precious metals markets as a managed retreat orchestrated by the big bullion banks.
These banks typically profit by using their largetransaction size and deep pockets when the market is vulnerable to induce substantial price variations, often by triggering stop loss orders placed by short term speculators.
Price Suppression More a Reality Than a Theory
Perhaps one of the more popular criticisms of price suppression theories is that if the silver and/or gold markets were so managed in this way by the bullion banks, why have their prices risen so steadily over time?
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Investors Fear More than Just a ‘Fiscal Cliff’

by Rick Ackerman, Rick
The Dow plunged 313 points yesterday, but don’t believe news media reports that it was the nearness of the “fiscal cliff” that caused the selloff. What spooked investors is a bigger picture that recognizes the economically catastrophic implications of a second Obama term. To be clear, there is nothing Romney could have done to avoid the deflationary Depression that lies ahead. However, a Romney presidency might have at least served as a reality check, delaying the onslaught of hard times for perhaps long enough to allow Americans to put their financial houses in order before austerity hits with the force of an earthquake, as it has in Europe.
We’re not going to dwell on the choice Americans made on Tuesday. Suffice it to say, the election has substantiated conservatives’ worst fear – that, sooner or later, Big Government’s clients would come to outnumber those of us who pay for the criminal extravagances of their voracious welfare state. Actually, it turns out, drones needn’t have outnumbered taxpayers, since the quirks of the electoral college have enabled them to execute a coup even though they lacked a statistically significant majority.
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The End of the 9-5: When Work Time is Either All the Time Or When You Want

from Silver Vigilante:
In the expeditiously metastasizing economy of globalization, the traditional means of accomplishing work in everyday life now have the opportunity to be revolutionized in their present makeup. To a small degree, for the western nations, what work is has changed in the wake of the 2008 banking crisis and the poor job market, but there is no reason that the global mind – that is, all individuals who then affect an entire culture – cannot literally redefine the action of work. Life tasks can now be done at faster paces than ever. The flexibility of daily life has been transformed from solid state to liquid. Rigid, smothersome institutions are the only thing keeping this eventuality from coming to pass, because when people live a life of choice, the institutions lose control. The end of the 9-5 is upon everybody, and it is a two-way: either work all the time , or work when you want as you move through your life like white-tops upon a basketball court.
Think about how much time is lost by an individual while at work for ten hours a day. The human mind cannot sustain focus on one mind-numbing task for such an extensive period of time. And the recesses you’re allowed, just like you’re in school and still a child, are only enough to go re-up on any legal drug you can consume while you’re at your personality-choking dayjob: it’s either adderal or caffeine.
Read More @ Silver Vigilante

Just Released: Jim Willie (Part 2/2) — The rush for physical gold is on

from Gold Money News:

Report Raises Questions About Central Bank Gold Holdings

by John Browne, The Daily Bell:
For years I have cautioned that changes in the ownership of gold held in the vaults of key central banks around the globe may not have been accurately reported. A report issued last month in Germany has once again brought these issues to the fore. In today’s environment of rampant money creation and questioning of central bank activities, such uncertainty is bound to spark the curiosity of an increasing number of investors.
Since the depths of the 2008 financial crisis, central banks around the world have increased their gold holdings. As of January of this year, the International Monetary Fund estimated that official reserves had hit a six year high. Most of this growth has come from emerging and developing nations who are estimated to have swollen their gold reserves 25% by weight since 2008. Just a few years ago, India purchased 200 tonnes on offer by the IMF.
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The Invisible Experiment With Money And Gold

from Gold Silver Worlds:
The markets are completely bought and paid for, corrupt, and manipulated … “a farce”. We are in a corruption bubble, the largest corruption bubble the world has ever seen in modern history and perhaps in all history. This is the first time that the world has been united within instant communication, instant information, instant deposit or receipt of funds into any bank account or financial institution. Michael says: “I believe that we are already a one world order. I actually think we are already there, electronically certainly. I also think that a lot of the debates, wars and conflicts are manufactured, very similar to the presidential debates which are also manufactured. I believe we live in a one-world system, which financially is already completely manipulated.”
We don’t live in a free market. We haven’t lived in a free market for decades, if not since 1913. We have the most powerful agency in the world, the Federal Reserve, setting the interest rates and the value of the world’s reserve currency. Everything that stems from that is built upon deceit and fraud. This doesn’t bode well for the entire financial system as a whole and right now, we are seeing the ramifications of that deceit.
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