Saturday, December 31, 2011

Happy New Year to dear readers of this blog

Thank you for reading, and may this next year and future years be healthy and happy for you.  As always, live by the Boy Scouts motto:  Be Prepared.

Oil May Rise as Iran Threatens to Block Strait, Survey Shows

Thursday, December 29, 2011

U.S. Fifth Fleet says won't allow Hormuz disruption

Update On The "Non-Printing" ECB's Parabolically Rising Balance Sheet

This is just massive QE in disguise by the ECB.

Art Cashin Exposes The Behind The Scenes Panic In Europe

Former Fed VP Accuses Bernanke Of Bailing Out Europe Via Currency Swaps

Paper vs. Physical

Commodities prices are getting hammered--including precious metals, because the collapse of the Euro is becoming more apparent, causing the (transient) rise in the USDollar.  Spot prices for gold and silver are plummeting, yet the premiums for physical bullion and coins are widening, suggesting shortages still exist.

One has to ask oneself, why spot prices are dropping, yet supply is still tight, and prices for the physical metals haven't dropped accordingly.  The answer is the paper markets are being manipulated, even in the face of physical shortages.  The margined weak hands are liquidating.  Strong hands are holding and even adding via dollar cost-averaging.

Tuesday, December 27, 2011

Jim Sinclair on gold

"Let me tell you that when this year is over, the only hands left holding physical gold and gold shares are the strongest hands on the planet. Every possible weak hand has been shaken out. Every person with emotions even latently capable of overwhelming their intellect, overwhelming their judgement, will have already been overwhelmed. The people who are left are people who will never give up their positions.” — James Sinclair

IRAN: 'Not A Drop Of Oil Will Pass Through The Strait' If Sanctions Increase

Obama to ask for debt limit hike: Treasury official

Monday, December 26, 2011

COMEX: The March to Irrelevance

Exclusive – Mark Cutifani CEO of $16B AngloGold Ashanti: “Major Buyers Are Finding It’s Hard To Get Physical Gold”

Are the brokers broken?

Note the date of this analysis.

China, Japan to Back Direct Trade of Currencies

This is another nail in the coffin of USDollar hegemony.  The impact of the USDollar losing its global reserve currency status will be loss of purchasing power and lower standard of living for US citizens.  Need proof?  Look around.

China Insolvency Wave Begins As Nation's Biggest Provincial Borrowers "Defer" Loan Payments

The nightmare after Christmas

Friday, December 23, 2011

Are You Tempted to Sell, or Eager to Buy?

December 2011 – The Smiling Faces of Ben Bernanke & Marc Faber
Dr. Ben Bernanke went to school and never left. He is an academic who has never worked in the private sector yet controls the fate of trillions of Dollars, Euros, Yens and Pounds. Today he is smiling. Dr. Marc Faber also went to school, but he didn’t stick around. He has worked exclusively in the private sector and today is considered one of the most prescient investors on the planet. Today he is also smiling. To better appreciate all the smiling, one must understand exactly what happened or better still, what didn’t happen in Brussels last week. In the eyes of Dr. Bernanke and Dr. Faber, the historic 17th emergency summit meeting by the Europeans to solve their money problems went off without a hitch. Not only did the Euro-Elite fail to resolve their debt crisis, they failed miserably at even coming close to recognizing the problem. It’s this distinct lack of recognition that is turning frowns into smiles. Dr. Bernanke is smiling of course because he is a money printer. The continuing inability of the Euro-Elite to solve their problems virtually guarantees a 2012 recession in the Old World. In return, this will also create a recession in the US which will provide plenty of excuses for Mr. Bernanke to once again print money under the guise of QE3. Dr. Faber’s uncanny ability to understand the big picture and foresee the response from financial markets allowed him to predict the 1987 crash, the 2008-09 crash, and the resulting 2009 stock market rally. Dr. Faber is smiling today not because he agrees with Dr. Bernanke’s fondness for money printing, but rather because the global financial system is developing exactly as he has envisioned. This vision of course is a money maker for both him and his clients.

London Trader - There are Tremendous Silver Shortages

Thursday, December 22, 2011

What really caused the eurozone crisis?

Infographic - Are Guns And Ammo The New Gold?

ECB cash to give indirect boost via banks

This is EU-style QE without using the words quantitative easing.  Yet, precious metals fade as markets believe this will solve the euro zone debt crisis. Use this market misperception to your advantage.

Wednesday, December 21, 2011

The Corruption of America

The unpaid spies in the financial system

Gold Takes Out 200DMA...The Other Way

Roubini is wrong on calling a top on gold--again.

US Housing Market Was Artificially Inflated By 14% In 2007-2010 NAR Reports

It's Official: US Debt-To-GDP Passes 100%

As bad as our fiscal condition is in official terms, the unofficial debt including all obligations (entitlements, bailouts, etc.) is somewhere north of $200 trillion, according to Dr. Kotlikoff of Boston University.  Official US government debt calculations abuse GAAP accounting rules in order to obfuscate the true rot of its balance sheet.  In layman's terms, our government cooks its own accounting books.  See here.

Yes, it is that bad.  In fact, it is far worse than one could ever imagine.

Retail Investors Pull $132 Billion From Domestic Equity Funds In 2011, 33 Of 34 Sequential Weeks Of Outflows

Mark Faber: "I Am Convinced The Whole Derivatives Market Will Cease To Exist And Will Go To Zero"

London Trader - We are Witnessing a Historic Bottom in Gold
We are making a historic bottom right now.  The paper gold, or virtual gold market, has diverged so far from the physical market that it’s no longer a credible marketplace.  That’s the key thing that came out of a very important meeting I was in yesterday where we had some serious players.  The people I was meeting with are all on the buy side and have been since the lows last week.

There are massive physical orders, sitting, waiting for any more discounts, and yet everyone else seems to be short.  So you have huge fuel for a rally here. 

You have to keep in mind this recent plunge was orchestrated with borrowed gold and that borrowed gold is now gone.  That’s why gold can’t go much lower.  Any dips in price will be aggressively purchased.  As I said earlier, right now we are witnessing a historic bottom.”
What's in bold-face above is exactly what I've been forecasting for years:  the manipulated paper prices of precious metals will decouple from the physical markets due to shortages of the latter.

DSK Spoke in Beijing and Now His Black Book Has Replaced Mao’s Redbook

Tuesday, December 20, 2011

2011: The Last (Debt-Consumerist) Christmas in America

Goldman Takes Client Abuse To Next Level: Closes, And Reopens, Copper And Zinc Recommendations At Massive Losses
So far so good - as all our readers know by now, one should do what Goldman does (i.e., sells to "clients"), not what Goldman tells its clients to do. This is not surprising. What however, is hilarious is that in the same report that Goldman closes its June 2012 Cu/Zn longs, it also... opens Cu/Zn longs. That's right - "While we maintain our bullish views on copper and zinc into 2012, we close out our May 23 recommendations for these metals at a considerable loss, and resetting the recommendations at December 19 prices." So somehow, while losing clients up to a blended 15%, Goldman continues holding the feet of those who still listen to them to the fire. Because this time it will be different.

Morgan Stanley Deconstructs The Funding Crisis At The Heart Of The Recent Gold Sell Off, And Why The Gold Surge Can Resume

The LIBOR-Gold Forwards Pain Index - Gold Lease Rates Plunged - More Than Meets the Eye

Saturday, December 10, 2011

Rick Rule: We're Entering A Great Era For Resource Investing

Shadow Rehypothecation, Infinte Leverage, And Why Breaking The Tyrrany Of Ignorance Is The Only Solution
"Liquidity requires symmetric information, which is easiest to achieve when everyone is ignorant. This determines the design of many securities, including the design of debt and securitization. "Reread the last statement as it explains perhaps better than anything, the true functioning of modern capital markets and why they are terminally broken: in order to preserve the system, the banking cartel need to make everything of virtually infinite complexity so that no one has a clear understanding of what is going on!

Friday, December 9, 2011

Pullbacks in Perspective

BNP Paribas Sold $2 Billion French Swap, EBA Says
“Some of this is trading rather than pure hedging,” said Gary Jenkins, head of fixed income at Evolution Securities Ltd. in London. “If European counties [sic] the size of France or Italy actually defaulted and triggered CDS, there would be total carnage and meltdown. It would be the end of the world, and at that stage it’s likely your counterparty would be the least of your worries.”

When Things Fall Apart: Disorientation, Desperation, Chaos

The Gold "Rehypothecation" Unwind Begins: HSBC Sues MF Global Over Disputed Ownership Of Physical Gold

Gold "conspiracy theorists" 1, naive zombies 0.  Soon the scoreboard will read infinity to zero.

Embry - $2,500 to $3,000 Gold Could Send Silver to $250

Lakshman Achuthan of ECRI on forecasting the next recession

The Top 30 Global Geopolitical Hot Spots for 2012

Here's a chart for worrywarts:

Wednesday, December 7, 2011

How to Position Yourself for the Future: Step 1 - Financial Security

Attempt Made On Deutsche Bank Head's Life: Explosive Package Addressed To CEO Intercepted, ECB Return Address Given

Occupy Wall Street just got real.
From Reuters: "A suspected parcel bomb addressed to Deutsche Bank chief executive Josef Ackermann was intercepted at a Deutsche office in Frankfurt on Wednesday, a senior U.S. law enforcement official said. The package was discovered around 1 p.m. Frankfurt time (7 a.m. EST/1200 GMT) in a mailroom, the official said. Initial analyses by investigators confirmed that it contained explosives and extra shrapnel, he told Reuters.

The official said the suspected bomb carried a return address from the European Central Bank, which is also headquartered in Frankfurt."

Tuesday, December 6, 2011

UBS' Advice On What To Buy In Case Of Eurozone Breakup: "Precious Metals, Tinned Goods And Small Calibre Weapons"

MF Global fallout delays U.S. farm seed, land deals

So you zombie US citizens still think the collapse of MF Global and subsequent theft by its executives won't affect you?  Think again.  Expect higher food prices next year, courtesy of Corzine and Co. (hat tip to Biden and Obama).

The worst part is that legislators talk as if segregated client funds were mishandled.   Ummm, the funds were outright stolen.  Rule of law has completely vanished.  When a run on banks occurs, as clients withdraw funds from depository institutions they no longer trust, the experts will declare once again "no one saw the panic coming."  Right...

Iranian forces go on war alert,7340,L-4157486,00.html

A very subtle form of theft

Japan Offers Gold Coins to Bond Buyers

How ironic:  the icing (gold and silver coins) will end up being worth more than the cake (Japanese reconstruction bonds).


The transatlantic panic

Obama and Ben Commercials: "The Inflatocracy" by Swiss America

Wow, Pat Boone will soon receive a knock on his door by Homeland Security.  These commercials will not be aired on major TV networks, but thanks to Google TV, DishNet and DirecTV subscribers will start seeing these spots next week.

Monday, December 5, 2011

S&P Places 15 Euro Nations on Warning for Downgrade

Is the World Spinning Out of Control?

CFTC tightens limits on brokerages using customer funds

Um, laws against commingling and stealing from segregated client accounts are already in place.  Why doesn't the government worry about enforcing existing laws instead of ginning up new regulation, that will again--go unenforced?

Transcript for Ann Barnhardt Interview

Do some of you readers still think I'm exaggerating?  Or hyperbolic?  Or bullshitting you?  Take a deep breath--and read this interview transcript, from an industry insider.  She puts her money where her mouth is, shutting down her profitable operations in order to serve her fiduciary duties and protect her clients' funds.

Psychopathic Economics 101

Sunday, December 4, 2011

The Black Swan of Cairo

Ann Barnhardt: The Entire Futures/Options Market Has Been Destroyed by the MF Global Collapse

This is why the MF Global collapse and subsequent non-action by the regulators will lead to a run on banks.  Nothing is safe--unless you take physical possession.

Portugal raids pension funds to meet deficit targets

Don't think this is unprecedented--and don't think it can't happen again.  It will--here and in every bankrupt nation.

Direct Registration FAQ

Bernanke’s Forgotten Footnote

Eric Sprott - Silver Producers: A Call to Action