What
would it take to break the gold price out of the $1,600 to $1,700 an
ounce range in which it has been trading for the past year? Another
massive blast of quantitative easing from the Federal Reserve? A final
breakdown of the euro? A war between Israel and Iran?
by Matthew Lynn, Market Watch:
They are all possibilities, of course. But the most likely candidate
is a serious debate about a return to some form of the gold standard.
In the U.S., the Republican Party has already pledged to study restoring the link between the dollar and gold if it wins the upcoming election. In Switzerland there have been parliamentary debates about restoring the link between the Swiss franc and gold.
Central banks are already increasing their holdings of gold. Don’t be surprised if it starts to play an increasing role in the ever-more fevered attempts to fix Europe’s monetary system.
What would gold be priced at if it reclaimed its role at the center of the monetary system? There are plenty of predictions out there but the truth is no one really knows.
The interesting point is this, however. Markets are anticipatory. They are always trying to get ahead of the game. It doesn’t take an actual return to the gold standard to send the price soaring. Just the debate should be more than enough.
And that is already under way.
Read More @ MarketWatch.com
by Matthew Lynn, Market Watch:
They are all possibilities, of course. But the most likely candidate
is a serious debate about a return to some form of the gold standard.In the U.S., the Republican Party has already pledged to study restoring the link between the dollar and gold if it wins the upcoming election. In Switzerland there have been parliamentary debates about restoring the link between the Swiss franc and gold.
Central banks are already increasing their holdings of gold. Don’t be surprised if it starts to play an increasing role in the ever-more fevered attempts to fix Europe’s monetary system.
What would gold be priced at if it reclaimed its role at the center of the monetary system? There are plenty of predictions out there but the truth is no one really knows.
The interesting point is this, however. Markets are anticipatory. They are always trying to get ahead of the game. It doesn’t take an actual return to the gold standard to send the price soaring. Just the debate should be more than enough.
And that is already under way.
Read More @ MarketWatch.com
from RonPaulCC2012 :
350 Million Indian Families Starve As Politicians Loot $14.5 BIllion In Food
While
The Brits are about to tax their Super-Rich, it appears one of the old
colonies remains in full anti-Robin-Hood mode. Nothing surprises us
much anymore but this note from Bloomberg too the proverbial biscuit. In the "most mean-spirited, ruthlessly executed corruption,"
India's politicians and their criminal syndicates have looted as much
as $14.5bn in food from one province alone. 57,000 tons of food meant
for the devastatingly poor of the Uttar Pradesh region is sat in a
government storage facility five football fields long. The 'theft' has
blunted the nation's only weapon against mass starvation and as Supreme
Court commissioner Naresh Saxena notes: "What I find even more shocking
is the lack of willingness in trying to stop it," as the Minister for
Food, who stands charged with attempted murder, kidnapping, armed
robbery and electoral fraud, has diverted more than 80 percent of the food. "Who is a person who holds a below poverty line ration card? A person of no influence; you can just tell him to buzz off." But there is growing tension "We could just storm the place, and every one of us could get a bag of rice each. Who would stop us?"A History Of US Defense Spending Since FDR; And Where Obama And Romney Differ
Presented with little comment, via Bloomberg Insider's Convention 2012 Issue; the history of military spending (which we discussed recently) and the $400bn divide between Obama and Romney's agenda.ETF`s Are Convenient For Commodities
Admin at Jim Rogers Blog - 23 minutes ago
Exchange traded products are convenient for commodities. I always buy
exchange traded products and it's terrific. - *in the Alts Virtual Summit,
ETFtrends*
Related: iShares Silver ETF (SLV), SPDR Gold Trust ETF (GLD)
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
If The S&P Drops 200 Points, There Will Be More QE
Admin at Marc Faber Blog - 30 minutes ago
If the S&P drops 150 or 200 points, you can be sure that there will be more
QE, not only QE3 but QE4 and so forth. - *in GoldSeek Radio*
Related: SPDR SP 500 ETF (NYSE:SPY), iShares MSCI Emerging Markets Index
ETF (EEM)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Deposit flight from Spanish banks hits 15-year high as bailout rumours grow
Eric De Groot at Eric De Groot - 1 hour ago
Can Spain avoid Greece's vicious circle? Bank deposit flight at 15-year
highs says no. Capital continues to flee and head to the relative safety
of US markets (bonds, stocks, and select real estate markets). Falling US
Treasury yields and a rising gold price reflect a broader economic decline
and global flight to safety from the periphery to core economies...
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content, and more! ]]
U.S. Firms Move Abroad
Eric De Groot at Eric De Groot - 1 hour ago
Path of least resistance motivated by excessive regulations and taxation
drives capital, investment, and corporations overseas. Headline: U.S.
Firms Move Abroad More big U.S. companies are reincorporating abroad
despite a 2004 federal law that sought to curb the practice. One big
reason: Taxes. Companies cite various reasons for moving, including
expanding their operations and...
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content, and more! ]]
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I'm PayPal VerifiedToday's Mad World Of Markets
UPDATE: USD/ES/TSY appears in QE-OFF mode
Yes, volumes are low; yes, liquidity is very thin (just look at the gaps in European Government Bond - moves); and yes, US equity market ranges remain narrow; but the somewhat paradoxical movements in the last 30 minutes are worth noting for their total schizophrenia. After being generally well-correlated (for hours/days), the relationship between EURUSD, 10Y Treasuries, US equities, and European Sovereign bond risk has broken down this morning. GDP data saw a 'risk-on' style move (EUR up, TSY yields up, Stocks up, and EGB risk lower). But from the US day-session open we now have EUR weakness with USD strength weakening the bid under US equities but at the same time Treasuries are selling off and EGBs are rallying (rather notably). It is indeed a mad world.
From Jawboning To Fingerboning - Mario Draghi Releases Op-Ed On The Future Of Europe
When jawboning is stuck on max, and mere talking and exortations to just "believe" lead to no incremental benefit for PIIGS bonds and the leve of the Dax, what is a central planner to do? Why start, er, fingerboning, and write extended missive on the future of one doomed utopian vision or another. Sure enough, the former Goldmanite has just released the following Op-ed in German Zeit, titled, "The future of the euro: stability through change", which contains this piece of sheer brilliance: "The ECB is not a political institution. But it is committed to its responsibilities as an institution of the European Union." The European Union which is first and foremost a... political institution.Fingerboning Escalates: Buba Strikes Back To Draghi OpEd With Weidmann Interview
The first shot in the fingerboning wars (a key step up from mere jawboning) has barely been fired following Draghi's earlier OpEd in Zeit (posted here in its entirety), when the Bundesbank already had its response ready for print in the form of yet another interview with its head, Jens Weidmann, who says nothing new or unexpected, but merely emphasizes that no matter how loud the chatter, how empty the promises, or how hollow the bluffing, Germany's response continues to be, especially after today's higher than expected inflation across the country, 9, 9 and once again, 9. Perhaps the most notable part of the interview is Weidmann's comparison between the ECB and the Fed, and why one is allowed to monetize bonds, while the other shouldn't be: "The Fed is not bailing out a cash-strapped country. It's also not distributing risks among the taxpayers of individual countries. It's purchasing bonds issued by a central government with an excellent credit rating. It doesn't touch Californian bonds or bonds from other US states. That's completely different from what we have in Europe....When the central banks of the euro zone purchase the sovereign bonds of individual countries, these bonds end up on the Eurosystem's balance sheet. Ultimately the taxpayers of all other countries have to take responsibility for this. In democracies, it's the parliaments that should decide on such a far-reaching collectivization of risks, and not the central banks." Of course, when the wealth of the status quo is at risk, such trivialities as democracies are promptly brushed by the sideline...BTFD...
Euro Gold Technicals Look Near Perfect
The technical picture for Euro gold looks near perfect now. Gold has been trending higher since May. The long term charts show a series of higher lows and higher highs and even in the correction of recent months there have been a series of higher lows and gold gradually consolidated between €1,200 and €1,400/oz. Gold is now comfortably above the 50, 100 and 200 day moving averages. In the last four years, there have been 3 periods of correction and consolidation which have lasted 12 to 13 months (see boxes in first chart) and we appear to be coming to the end of another such period. Break outs from such consolidations often lead to sharp moves higher and thus new record highs above €1,359/oz and possibly over €1,600/oz should be seen before the end of 2012. The fundamental back drop of the unresolved Eurozone debt crisis , deep divisions in the ECB and a high degree of uncertainty regarding the euros long term future strongly suggest that the euro will continue to fall against gold in the coming months. Further confirmation of robust demand for gold is seen in figures showing that exchange-traded products backed by the gold expanded to a record. Smart money from Paulson to Soros to PIMCO continues to diversify into gold. Gold ETFs holdings have now surpassed Italy to become the world’s third-largest gold holdings when compared with national gold reserves.As Dominoes Resume Tumbling, Valencia Follows Catalonia In Demanding EUR3.5 Billion Bailout
Spain is hotting up again. Just a day after Catalonia's beggars-are-choosers moment, Valencia is making headlines with its rear-view mirror demands for a bailout:- *VALENCIA NEEDS FUNDS TO COVER PAST YEARS' SPENDING: OFFICIAL
- *VALENCIA NEEDS OVER EU3.5BLN FROM SPAIN REGIONS FUND: OFFICIAL
- *VALENCIA TO NEGOTIATE AID AMOUNT WITHIN WEEKS, OFFICIAL SAYS
Buffett Goes To Britain: Clegg Calls For 'One-Off' Tax On Super Rich
We
have long talked of the last/next desperate acts of a government in
demise as being total repression and confiscation of assets - an ugly
endgame indeed - and so today, as The Independent reports, UK's Nick Clegg is proposing a 'Super-Rich' one-off tax. In a very Buffeett-esque speech, Clegg admonished that "people of very considerable personal wealth have got to make a bit of an extra contribution"
as the UK remains mired in a "longer economic war rather than a short
economic battle." Interesting Churchillian word-choice. The action is
designed to ensure that very high asset-wealth is reflected in the
tax-system in a way it is not right now and as one would expect he is not making much progress with his more conservative coalition partners,
though ever optimistic he adds he is trying to forget the past and aim
for the 'sunny uplands' - which we assume will be lit brightly with
the excess blubber of fat-cats if he gets his way.Goldilocks Q2 GDP Revision Leaves Algos Confused
After sliding from a stall speed-esque 2% in Q1 to sub stall speed 1.5% in the Q1 preliminary print, today's first revision was expected to be a solid bounce to the horrible preliminary economic data, with whisper numbers heard as high as 2.0% on the back of the recent plunge in the deficit (driven purely by a collapse in Chinese exports and a brief drop in crude prices in June, long since retraced). Instead the number came precisely in line with the consensus estimate of a 1.7% annualized growth, with the all important Personal Consumption Expenditures adding a modestly higher 1.20% (was 1.05% last). As expected, net exports shifted from a decline of -0.3% to an increase of 0.3%, which meant that the fudge factor was inventories, which also flip flopped, declining from the previously positive 0.32% to a negative -0.23%. In summary, the GDP number was the worst possible for a market in which good news, relative to an expectations benchmark, is good news, and bad news is great news. The only thing the algos don't know what to do is when numbers come "just right" - which is what just happened. And now- back to Congress doing nothing to resolve the Fiscal Cliff which would detract up to 4% from GDP in 2013 if nothing is done, which is assured as long as the S&P continues trading near 2012 highs.
Merkel & Monti Mumble Sweet Nothings; Market Moves Higher
With GDP not providing the kind of dismal print that assures NEW QE, market eyes rotate back to Europe and just in time as Merkel and Monti complete their meeting and mumble a few generic (yet entirely market moving) un-newsworthy headlines, via Bloomberg:- *MERKEL SAYS EURO AREA NEEDS MORE COHERENCE (yes, thank you, water is wet)
- *MERKEL SAYS ESM OF PRIMORDIAL IMPORTANCE FOR EURO AREA (indeed - with all its conditionality)
- *MERKEL SAYS EURO AREA HAS AMBITIOUS AGENDA IN WEEKS AHEAD ('ambitious' is one word!)
- *MERKEL SAYS SHE, MONTI DISCUSSED GERMAN COURT CASE AGAINST ESM (ya think)
Chart Of The Day: From Pervasive Cheap Credit To Hyperinflation
Just
what does all this easily accessible and now pervasive student debt
fund? The chart below, courtesy of Bloomberg, provides the answer: in
the past 3 decades there has been no other cost that comes even
remotely close to matching the near hyperinflationary surge in college
tuition and costs.Frontrunning: August 29
- Hurricane Isaac Whips Storm Surge on Path to New Orleans (Bloomberg)
- Republicans Vow to Transform Obama’s U.S. With Low Tax, Freedom (Bloomberg)
- Little-known Ryan to take center-stage at Republican convention (Reuters)
- An $800 billion stimulus tempest in a teapot: China State Researcher: Local Govt Investment Plans Largely Symbolic (WSJ)
- China Says Payment Delays, Defaults May Worsen (Dow Jones)
- G-7 Countries Call for Increased Oil Output to Meet Demand (Bloomberg)
- Creeping Socialism: Clegg calls for emergency tax on rich (FT)
- United Airlines computer problem delays 200 flights (Chicago Sun Times)
- Paulson, Investors Avoid Fireworks Despite Brutal Run (Bloomberg)
- Occupy Sets Wall Street Tie-Up as Protesters Face Burnout (Bloomberg)
- The nostalgic grass is always greener: Serbia Joblessness Swells as Milosevic-Era Leaders Return (Bloomberg)
Dethroned Berlusconi Pushing For Early November Election
Just
under a year ago, in early November 2011, the ECB specifically made it
a very clear prerogative that it would not buy Italian bonds under the
SMP program, or in any other way seek to lower Italian bond yields,
which promptly soared to all time highs, as long as the intransigent
Silbio Berlusconi, then career PM, remained in his position as head of
Italy. A few days after Italian bonds soared, Silvio quietly and
reluctantly stepped down, paving the way for that other Goldmanite -
unelected technocrat Mario Monti to take over the reins. We are now just
over two months until the one year anniversary of the historic
Berlusconi ouster by a central bank (whose head amusingly wrote an Op-ed
in a leftist German publication that his organization is apolitical;
just as the Fed is apolitical until Wall Street darling Chuck Schumer
tells Bernanke to "get to work Mr. Chairman"), and suddenly Silvio is
back in the picture. As Italian daily Repubblica notes, the former PM
"fears the repercussions of a conviction in the Ruby process before the
vote" currently scheduled for 2013, and as a result Berlusconi would
agree to sign off on a plan to reform the electoral law in the next few
days on the condition that early elections will be held in November.
Whether or not this means that Silvio is seeking to retain his PM
throne, or merely to regain prosecutorial immunity from engaging in
various questionable activities (mostly of a sexual nature) is unknown,
but the fact that the Italian political theater may regain its old
tragicomic luster has us smiling at the prospect of what the end of 2012
has to offer, especially since America's own presidential election
will culminate at about the same time.Today’s Items:
Remember the Bear Sterns collapse? Well,
many rumors, from informed sources, are saying that Morgan Stanley may
be the next bad boy to fall. Remember, like MF Global,
no controlling authority will not tell you that you are about to be
screwed; however, do you really want to be the last person holding this
potentially worthless stock?
According to Stephen Leeb, the mass
movement out of paper and into gold could be the catalyst that could
push gold to over $10,000 an ounce. The Chinese, as well as more
informed people, know this as they continue to stack physical. In
addition, Stephen Leeb also believes there is an unbelievably compelling
argument for silver as well; therefore, after preparing, keep stacking
physical.
Remembering that the recession officially ended in June 2009, here are some facts…
1. Median household income for the self-employed has fallen 9.4 percent since June 2009.
2. Median household income for government workers has fallen 3.5 percent since June 2009.
3. Median household income for private sector employees has fallen 4.5 percent since June 2009.
1. Median household income for the self-employed has fallen 9.4 percent since June 2009.
2. Median household income for government workers has fallen 3.5 percent since June 2009.
3. Median household income for private sector employees has fallen 4.5 percent since June 2009.
From mental distress to the economy, here
are the current top 10 states to live in. West Virginia, Tennessee,
Oklahoma, Nevada, Missouri, Mississippi, Michigan, Kentucky, Indiana,
and at number 1, Arkansas.
Here are seven… Apples, celery, strawberries, peaches, spinach, potatoes and grapes.
Here are seven items you may not have thought about… Paracord, pencil & paper, reading glasses, tie wraps, duct tape, hard candy, and condoms.
The next time you go to a professional sports event and see some people acting suspiciously… You know, men feeling up little boys and girls or taking X-rated pictures of women;
then don’t worry because it is only the perverts working with the TSA.
Yes, the Department of Homeland Insecurity, under Janet Incompentano,
continue to expand their unconstitutional searches
to make you feel more like a prisoner in a police state. Meanwhile,
to test sensors, the Department of Homeland Insecurity will begin releasing biological agents into the Boston Subway… Don’t you just feel safe folks?
The outgoing mayor, Sam Adams, is doing
his best to ensure that fluoride is put into the city’s tap water. He
said he grew up drinking fluoridated water and others should enjoy its
benefits as well. Benefits!?! Like lower IQ, damaged thyroid function and even elevated cancer… What a guy!
For many who are interested, the
SuspiciousObserves YouTube channel gives fast, up-to-date, and
fantastic, earthquake, weather, and solar information. In our busy
world, it is great to get need-to-know information quickly; so that, we
can be on our way.
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