I have received numerous emails asking about silver. This article was prompted by a question enquiring what the silver price might be if my gold forecast of $4,500 proved to be correct. As I own some silver bullion and a number of silver mining shares, the question caused me to pause and take a closer look at silver.
The reason why I have written very little about silver in the past was because the beautiful Elliott Wave (EW) symmetry and predictable relationships visible in gold were not to be found in silver. I first wrote about silver in December 2003 in an article titled “US Dollar Implosion – Part II”.
Read More @ goldswitzerland.com
"I'm Bill Gross And I Endorse Ron Paul For President"
As
a follow up to today's must read letter from Bill Gross, the PIMCO
head explains what was the thinking behind the conclusion that is slowly
leading him to become a gold bug, the potentially erroneous assumption
that the Fed can not drop rates below zero (not if Goldman and JPM
have their way), why Bernanke has no choice but to write checks when
the Twist ends in June which will lead to bond buying for the next
12-24-36 months. Nothing new. What is new, and absolutely stunning, is Gross' endorsement for president: 'I'm a little Ron Paulish." (6'24" into the clip)... That's right. The bond king endorses Ron Paul for president. And now we've heard it all.Under the best of cases, that means a fourth straight year of trillion-dollar deficits, covering all of President Obama’s first term in office, and debt nearing a staggering $20 trillion by the end of this decade.
But if Congress continues to extend tax cuts and higher rates of spending, as it has done for the past two years, the situation will be much worse — a total of $10 trillion more in deficits each year for the next decade.
The bad news doesn’t stop there.
“Beyond the coming decade, the fiscal outlook is even more worrisome,” the Congressional Budget Office said in its report.
Read More @ washingtontimes.com
'Buffett Rule' Legislation Introduced in the Senate
Eric De Groot at Eric De Groot - 30 minutes ago
Policies designed to equalize never seem to accomplish their goal because
capital, like electricity, always finds the path of least resistance. If
taxable barriers impede capital, it will seek a new path. If all paths
contain barriers, then capital seeks a new country. The risk/reward game
cannot be legislated or “ruled” into accepted social norms of equality.
Equality exists through life,...
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European Summits: It`s All A Charade
Admin at Jim Rogers Blog - 48 minutes ago
We've been having European summits every few weeks for the past two years,
it's all a charade. They are just trying to get through the French
elections and I am not paying too much attention to it until they start to
take real action. - *in CNBC*
*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.*
Gold Chart
Trader Dan at Trader Dan's Market Views - 1 hour ago
Gold bulls breached resistance at $1750 but have been unable to keep the
market ABOVE that price. That will be necessary for them to set up a run
towards $1775- $1780 where a major upside resistance level is located.
There is a bit of weakness in Euro Gold today which is coming off of the
rather large rally in the Euro in today's session. That rally sent the
Dollar down below critical support at the 79 level on the USDX but that
market has rebounded back above 79 thus far. A close below 78.80 should set
the Dollar up for a drop towards 78.
It is indeed fascinating to watch this s... more »
[Ed. Note:
As outlined in my video 'The Ron Paul Fix is in', the establishment
corporate whore media deck is stacked against Dr. Ron Paul.]
by Brad Friedman , bradblog.com
Had the same thing been carried out by a worker for the now-defunct ACORN, Republicans — and even Newt Gingrich — would have called it massive “voter fraud.” But the 1,500 acts of fraud, by Gingrich’s own admission, were carried out by a worker hired by his campaign, so it seems the media have barely noticed it.
Nonetheless, The BRAD BLOG has received confirmation from two different state agencies that the 1,500 alleged cases of ballot petition fraud said to have been carried out on behalf of the Gingrich campaign, in their unsuccessful attempt to qualify for the Republican primary ballot in Virginia, are now being carried out by the state Attorney General’s office.
Read More @ bradblog.com
by Brad Friedman , bradblog.com
Had the same thing been carried out by a worker for the now-defunct ACORN, Republicans — and even Newt Gingrich — would have called it massive “voter fraud.” But the 1,500 acts of fraud, by Gingrich’s own admission, were carried out by a worker hired by his campaign, so it seems the media have barely noticed it.
Nonetheless, The BRAD BLOG has received confirmation from two different state agencies that the 1,500 alleged cases of ballot petition fraud said to have been carried out on behalf of the Gingrich campaign, in their unsuccessful attempt to qualify for the Republican primary ballot in Virginia, are now being carried out by the state Attorney General’s office.
Read More @ bradblog.com
Jim Sinclair’s Commentary
Economic War regardless of the rationalization
Wegelin clients pulled $4 bln, prompting sale-paper Sun Jan 29, 2012 7:58am EST
ZURICH, Jan 29 (Reuters) – The break-up of Switzerland’s oldest bank Wegelin, involved in a row with U.S. authorities over tax cheats, became necessary when clients pulled 4 billion Swiss francs ($4.35 billion) of wealth, Der Sonntag newspaper reported on Sunday, citing unspecified sources.
Under pressure from the investigation, the 270-year-old institution moved assets of 21 billion Swiss francs ($22.9 billion) to a subsidiary Notenstein Privatbank, which was then bought by cooperative bank Raiffeisen.
Wegelin is still left with U.S. assets under scrutiny from U.S. prosecutors.
In his first interview since news of the sale broke on Friday, Wegelin head Konrad Hummler told the paper he had done the right thing at the right time.
"We became the victims of a larger matter. I don’t want to say more than that," he said in a separate interview.
Citing unnamed sources, Der Sonntag said the purchase price for the bank’s good assets was somewhere between 2.5 and 3 percent of the 21 billion-franc total, putting the price tag somewhere around 500 and 600 million francs.
More…
Jim,
Thank you for all your effort and work. It is appreciated by many as these times prove to be very interesting indeed.
If gold mines become nationalized am I correct in my assumption that the shares would essentially become worthless (obviously depending on the specific mine in question)? Would it not be irrelevant whether or not one owns them in paper certificate or other?
Thanks for your consideration to my question,
CIGA Jeff
Dear Jeff,
Most all companies which would include us buy insurance against being nationalized offered by the World Bank and other quasi governmental entities at the point of the project development loan. The title to nationalized properties, if nationalized, are turned over to the insurance company by the operator that guarantees the property values and/or earnings cash flow. If nationalization ends, the property is returned by the insuring entity to the producer. There are varying forms of agreement of reimbursement by the producer to the insurance entity when the problems end and title reverts to the company. The shares of the company are far from worthless if nationalized.
No nationalized property in the history of man has ever made a profit or produced effectively. Chaves obviously never checked the economic history of nationalization.
You cure this problem by giving a proper share of the operation to the real owners of the mineral – your host country.
You invite nationalization by the practice of colonialism in mining, as all majors do.
Regards,
Jim
Hi Jim,
I was quite captivated by your interview with respect to the ISDA. I was a bit surprised neither you or Ellis mentioned what impact the pending event would have on US bond prices, especially the 30 year bond.
What is your take on the impact to the US debt market, assuming the events unfold this week as Jim expects?
I am not soliciting any financial advice, strictly an opinion based on current events.
Thanks,
CIGA Gary
Gary,
Remember what a combination of QE and Operation Twist are? That is non-economic government buying of its own debt.
In time the long bonds are toast, but selling short to the Fed has great risk. Therefore avoid them until 2014.5.
Regards,
Jim
Jim,
Thanks for the interview. Does that mean the opposite? Will we get a huge blast off in all risk assets after the forthcoming announcement?
Thanks as always,
CIGA Kevin
Kevin,
No default means the euro is ok as we walk down a road toward perdition papered by QE3 and "no default" edicts.
Jim
The Facebook IPO - Because "This Time It's Different"
While
first day jumps in IPOs make for great TV and everyone is anxiously
awaiting their allocation to the 'greatest IPO of all time' this week,
we thought it might be useful to look at some of the larger and more
recent tech IPOs to get some perspective on how close to the moon we
will get when Facebook is released. Looking at eight of the larger and
more media-promoted IPOs of the last year or two (GRPN, ZNGA, LNKD, P,
YOKU, DANG, AWAY, and FFN) we find, aside from the potential for an
average 50% pop from the lucky allocation / untradable IPO price, the man in the street that bought the IPO in the market on Day 1 now faces an average loss of 54%
with incredibly only 1 of the 8 names (ZNGA) still holding on to gains
(+11%) having managed to rally 15% in the last week. We assume that the
underwriters will price FB for a nice pop and given the euphoria we
hear from talking head after talking head, it doesn't matter where it
actually opens, it will be bid to infinity and stay there as unlike all
these other well-hyped IPOs (and paradigm changers of the past eh hem
YHOO), this one will be different.Some Good News For Those of Us Who Are Sick of the Corruption
02/01/2012 - 12:40
[...] From the somewhat guilt filled comforts of Greece, I have been
thinking about what I learned from the recent Cairo SHTF experience. I
am not putting myself forth as an expert of any sort and, frankly, many
or even most items on the list below might be flat out wrong….who the
hell knows. We were in Cairo from Jan 25th until late Feb 3rd when the
neighborhood gunfire became full-auto and regularly occurring. At that
point, we decided that Friday prayers (the next day) might not yield a
pleasant experience. We had no way of knowing that we had already seen
the worst.
Gold’s London AM fix this morning was USD 1,744, GBP 1,106.74, and EUR 1,327.65 per ounce.
Perhaps
the greatest modern champion of central economic planning was the 20th
century English economist John Maynard Keynes. Keynes, who was a
political socialist and for a time a central banker, advocated the idea
that the government should play a large, active role in the economy.
Among the consequences of Keynes’ economic theories, whether intended or
unintended, is the fact that Western economies today are characterized
by large, central governments, central banks and massive debts.
We’ve
covered a lot of ground over the past few months. Not much action in
the markets yesterday, so let’s stop here and take stock.
While
Mitt Romney walked home an inevitable victory in the winner takes all
Florida primary this week, the Ron Paul 2012 campaign was busy
campaigning in Maine and Nevada, where the Congressman’s team has been
busy building on a six figure ad buy.
Few
can define fascism. Many cannot recognize it. History provides shocking
stories of its past episodes. But its root structural feature is the
tight relationship between the state and large corporations of a nation,
which permit enormous fraud and lead to grand inefficiency, even while
aggression and war accompany its handiwork in an ugly fabric weave.
Nowhere is the bond more scummy and corrupt than with the banking
industry, not in general but in Wall Street where defense of the
USDollar has come. That defense was contracted from the USGovt to Wall
Street, whose ties developed into a vast network of corruption. That
cozy relationship led to the gutting of Fort Knox and its gold bullion
in the 1990 decade of so-called prosperity. The 0% gold leasing resulted
in vast speculation schemes, private multi-$trillion profit, and absent
collateral for the USDollar itself. The other cozy connection is with
the defense contractors, where war generates colossal cash flows, some
of which result in kickbacks to Congress. The Fascist Business Model is a
cord to strangle the neck of a nation. The rage of nationalism, the
eradication of liberties, the pursuit of conjured enemies, the constant
sense of alert, the attack on enemies with alienation of allies, all
tend to effectively conceal the theft and corruption. The other
tell-tale infection is of inefficiency, where the most insolvent lead in
policymaking, where the most connected are not the best in class, where
the most corrupt are shielded by cronies in watchdog posts. These
ordinary teams have dominated, not from capability according to the
marketplace forces or Darwinism, but from connection to the power
center. 
Despite
official denials by the Indian government, rumours are spreading that
India and China are planning to use gold to pay for future purchases of
Iranian crude oil. According to unconfirmed speculation, 
Back in 1969, a Disney cartoonist sat down at his story board and produced a booklet that the Disney organization never saw: The Official Counterfeiter. It was a presentation of fractional reserve banking and the role of the Federal Reserve System.
On
Friday from the Bilderberg conclave at Davos, appointed European
Central Bank President, Mario Draghi proclaimed that Europe had averted
financial disaster and cited the improvement in euro zone markets in
recent weeks. He said it was the ECB’s duty to guard against deflation
as well as inflation. The fact of the matter is that he and his friends
at the Fed arranged a currency swap of $1 trillion of which the ECB
dispersed $660 billion to 523 EU banks, at 1% interest for three years.
He also cut interest rates twice and extended loans for 1 to 3 years.
Mr. Draghi could be expected to take the easy Anglo-American way out. He
is fully Illuminati trained and that is where his orders emanate from.
Click Here to Listen to the Interview
While
a few days ago we reported that the US was set to place a third
aircraft carrier, ostensibly the USS Enterprise, in the Arabian Gulf in
the indefinite future, it appears that the US is wasting little time in
making preparations for this latest military escalation against Iran.
As 
It
appears from the Treasury's announcements and the Treasury's Borrowing
Advisory Committee (TBAC) recommendations that we will shortly see
Treasury FRNs. While details remain murky (what maturities, the
underlying index, reset frequency, and so on) we would be surprised if
they did not after all this analysis and the potential problems they may
face. Given the weight of short-dated maturing Treasury debt, if the
Treasury were roll/term this debt out at the same pro-rata distribution
of maturities as it has currently, then the weighted average maturity
of their debt would rise significantly. While avoiding the short-term
limit of zero-date issuance that many European sovereigns face is a
positive clearly, the problem for the Treasury lies in the non-domestic
(read Fed) demand is waning significantly for any longer-dated
Treasuries (while bid-to-covers on Bills remain very high and active for
foreign buyers). FRNs would implicitly provide the lender with upside
coupon on a rise in rates (a potential plus for foreign demand given
their angst and the low level of rates priced into the market) and would
benefit the Treasury by reducing potential demand issues at the
long-end (and potentially offering the Treasury upside if rates stayed
low for longer). The bottom line is that the structural decline
in the stock of global high-quality government bonds, coupled with an
increase in demand for non-volatile liquid assets, should make U.S.
government issued FRNs extremely attractive. Of course, the benefits
to the Treasury from issuing FRNs also relies significantly on the
Fed's monetary policy stance - savings are likely to be greater when the
change in the funds rate is negative, and especially when
such change is more negative than the expectations priced into forwards
(and it seems reasonable to assume that the risk to short-rates is
somewhat one-sided against the Treasury FRN).
Early
Tuesday morning, the Portuguese 10Y bond was trading over 300bps wider
than its close last Friday. Contagion from concerns in Greece and what
that meant for a nation that while not in as dire a position as Greece
economically was well on its way to totally unsustainable debt levels
relative to what little and shrinking GDP they can garner. Market
access is of course off the cards and there are reasonable chunks of
debt maturing that will need to be funded. Since then the PGB has
rallied an incredible 300bps, now trading a mere 5bps wider on the week
as if nothing had ever happened. We know the ECB was active yesterday
and it appears also today but what is also very notable and perhaps
explains more of the compression is the huge drop in the basis between
CDS and bonds for Portugal. The basis, as we have discussed before, was
extremely wide for Portugal (a quite illiquid sovereign bond and CDS
market) and we suspect at a spread between bonds and CDS of almost
850bps, it was just too tempting for hedgies not to buy the package en
masse. This means they would have bought PGBs (bonds) and bought CDS
protection to try and 'lock-in' the spread between the two. That demand
for the basis has pushed it 200bps narrower and given the thinness of
the PGB market, the marginal demand from basis traders has exaggerated
that rally by the 300bps we noted above. So Portuguese bond risk
remains elevated (CDS around 1400bps and and 5Y PGB around 20% yield)
but the drop in the last few days is not a risk appetite signal but
reflective of an ECB-spurred risk transfer to basis traders who
we assume are more confident in Portuguese bond contracts and CDS
triggers than Greek bonds for now. It seems they have found another
pivotal security to manipulate down to show 'improvement' as Portugal
leaves the global bond indices but is mysteriously bid this week - watch
the basis for more compression and the signal for unwinds which will
stress PGBs once again.
Following
today's sizable miss and significant revision to the ADP data it is
perhaps worth taking a step back and looking at some independent
research on the adjustments and seasonality issues in forecasting jobs
around this time of year and furthermore, why one of the pillars of this extended rally and US decoupling story (a substantially improving jobs market) could be made of salt.
Bloomberg's consensus for Friday's NFP at +145k (from +200k prior) and
a 30k standard deviation, there is plenty of uncertainty among the
economic elite (with 125k to 150k the sweet spot for their guesses) and
our favorite outlier Joe LaVorgna near the top at +210k. So while the
trend is supposedly improving (though expectations are slightly off
December's exuberance), Stone & McCarthy (SMRA) point out a
disturbing trend of sizable forecasting errors for the January payroll
print with 7 straight years of estimates overshooting by an
average of 64k - strangely consistent post the BLS switch to a
probability-based sample. But its not just forecasting error,
TrimTabs takes a deep dive into the actual daily income tax deposits
from all salaried employees (which are historically more accurate than
BLS initial estimates) sees the US economy added only 45,000 jobs in January, nearly unchanged from the 38,000 in December. Noting similar forecasting errors as SMRA, TrimTabs points out that the decline in seasonal adjustment factors
and the reality of the underlying tax data suggest "It appears that the
economy has hit stall speed due to lackluster demand and a
deleveraging consumer who would rather save than spend." as wage and
salary growth (net of inflation) weakened further to -2.1% YoY in
January from -0.5% YoY in December. "The weak job market has us concerned" seems like a truer reality than the establishment trying to keep the dream alive.
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