The decision to issue a dividend is the right thing to do for shareholders. This is icing on the cake.
Now that SLW is at $45, the salient question is: where were the "experts" when SLW was trading below $3 in 2008?
http://finance.yahoo.com/news/Silver-Wheaton-Declares-prnews-2396448005.html?x=0&.v=1
See disclaimers in the side bar.
Disclosure: long SLW shares.
Friday, March 4, 2011
Utah Considers Return to Gold, Silver Coins
Thanks to Dick for submitting this article.
http://www.foxnews.com/politics/2011/03/03/utah-considers-return-gold-silver-coins/
http://www.foxnews.com/politics/2011/03/03/utah-considers-return-gold-silver-coins/
Thursday, March 3, 2011
Budget Forecasts, Compared With Reality
http://www.nytimes.com/interactive/2010/02/02/us/politics/20100201-budget-porcupine-graphic.html
It is interesting that the New York Times op-eds are becoming increasingly skeptical of Obama's promises. They're generally perceived as left-leaning, and supportive of the Democrats' agenda.
It is interesting that the New York Times op-eds are becoming increasingly skeptical of Obama's promises. They're generally perceived as left-leaning, and supportive of the Democrats' agenda.
http://www.gata.org/node/9658
"It did deliver price stability over very long periods of time, but over shorter periods of time it caused wide swings in prices related to changes in demand or supply of gold. So I don't think it's a panacea," Bernanke told DeMint.Reading between the lines, it appears gold is way underpriced, and the Fed has been running the printing presses in overdrive.
Additionally, Bernanke said there were a number of practical issues that would prevent the return of gold as the world standard. Namely, there's not enough gold in the world to effectively support the U.S. money supply.
A Conspiracy With a Silver Lining
I am printing the full content in case the link is taken down.
http://opinionator.blogs.nytimes.com/2011/03/02/a-conspiracy-with-a-silver-lining/?hp
http://opinionator.blogs.nytimes.com/2011/03/02/a-conspiracy-with-a-silver-lining/?hp
As Americans know all too well by this point, commodity prices — for corn, wheat, soybeans, crude oil, gold and even farmland — have been going through the roof for what seems like forever. There are many causes, primarily supply and demand pressures driven by fears about the unrest in the Middle East, the rise of consumerism in China and India, and the Fed’s $600 billion campaign to increase the money supply.
Nonetheless, how to explain the price of silver? In the past six months, the value of the precious metal has increased nearly 80 percent, to more than $34 an ounce from around $19 an ounce. In the last month alone, its price has increased nearly 23 percent. This kind of price action in the silver market is reminiscent of the fortune-busting, roller-coaster ride enjoyed by the Hunt Brothers, Nelson Bunker and William Herbert, back in 1970s and early 1980s when they tried unsuccessfully to corner the market. When the Hunts started buying silver in 1973, the price of the metal was $1.95 an ounce. By early 1980, the brothers had driven the price up to $54 an ounce before the Federal Reserve intervened, changed the rules on speculative silver investments and the price plunged. The brothers later declared bankruptcy.
Accusations that JPMorganChase and HSBC allegedly manipulated precious metal markets are worth looking into.
The Hunts may be gone from the market, but there are still plenty of people suspicious about the trading in silver, and now they have the Web to explore and to expand their conspiracy narratives. This time around — according to bloggers and commenters on sites with names like Silverseek, 321Gold and Seeking Alpha — silver shot up in price after a whistleblower exposed an alleged conspiracy to keep the price artificially low despite the inflationary pressure of the Fed’s cheap money policy. (Some even suspect that the Fed itself was behind the effort to keep silver prices low, as a way to keep the dollar’s value artificially high.) Trying to unravel the mysterious rise in silver’s price is a conspiracy theorist’s dream, replete with powerful bankers, informants, suspicious car accidents and a now a squeeze on short sellers. Most intriguingly, however, much of the speculation seems highly plausible.
The gist goes something like this: When JPMorgan Chase bought Bear Stearns in March 2008, it inherited Bear Stearns’ large bet that the price of silver would fall. Over time, it added to that bet, and then the international bank HSBC got into the market heavily on the bear side as well. These actions “artificially depressed the price of silver dramatically downward,” according to a class-action lawsuit initiated by a Florida futures trader and filed against both banks in November in federal court in the Southern District of New York.
“The conspiracy and scheme was enormously successful, netting the defendants substantial illegal profits” in the billions of dollars between June 2008 and March 2010, according to the suit. The suit claims that JPMorgan and HSBC together “controlled over 85 percent the commercial net short positions” in silvers futures contracts at Comex, a Chicago-based exchange on which silver is traded, along with “25 percent of all open interest short positions” and a “a market share in excess of 9o percent of all precious metals derivative contracts, excluding gold.”
In the United States, trading in precious metals and other commodities is regulated and closely monitored by a federal agency, the Commodity Futures Trading Commission. In September 2008, after receiving hundreds of complaints that silver future prices were being manipulated downward by JPMorgan and HSBC, the commission’s enforcement division started an investigation. In November 2009, an informant, described in the law suit only as a former employee of Goldman Sachs and a 40-year industry veteran, approached the commission with tales of how the silver traders at JPMorgan were bragging about all the money they were making “as a result of the manipulation,” which entailed “flooding the market” with “short positions” every time the price of silver started to creep upward. The idea was that by unloading its short positions like a time-released capsule, JPMorgan’s traders were keeping the price of silver artificially low.
Soon enough, the informant was identified as Andrew Maguire, an independent precious metals trader in London. On Jan. 26, 2010, Maguire sent Bart Chilton, a member of the futures trading commission, an e-mail urging him to look into the silver trading that day. “It was a good example of how a single seller, when they hold such a concentrated position in the very small silver market can instigate a sell off at will,” Maguire wrote.
On Feb. 3, 2010, Maguire gave the futures trading commission word about an impending “manipulation event” that he said would occur two days later, when the Labor Department’s non-farm payroll numbers would be released. He then spelled out two trading scenarios about which he had been told. “Both scenarios will spell an attempt by the two main short holders” — JPMorganChase and HSBC — “to illegally drive the market down and reap very large profits,” Maguire wrote in an e-mail to a trading-commission investigator.
On Feb. 5, Maguire took a victory lap, writing in another e-mail to the trading commission that “silver manipulation was a great success and played out EXACTLY to plan as predicted.” He added, “I hope you took note of how and who added the short sales (I certainly have a copy) and I am certain you will find it is the same concentrated shorts who have been in full control since JPM took over the Bear Stearns position … I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC’s allowing by your own definition an illegal concentrated and manipulative position to continue.”
In March 2010, Maguire released his e-mails publicly, in part because he felt the trading commission’s enforcement arm was not taking swift enough action. He was also unhappy over not being invited to a commission hearing on position limits scheduled for March 25. Then came the cloak and dagger element: the day after the hearing, Maguire was involved in a bizarre car accident in London. As he was at a gas station, a car came out of a side street and barreled into his car and two others; London police, using helicopters and chase cars, eventually nabbed the hit-and-run driver. Reports that the perpetrator was given a slap on the wrist inflamed the online crowds that had become captivated by Maguire’s odd story.
In any case, the class-action lawsuit contends that between March 2010 and November 2010, JPMorgan Chase and HSBC reduced their short positions in the silver market by 30 percent, causing the metal’s price to rise dramatically, but leaving them still with a large short position. Now, with the value of silver rising nearly every day, the two banks are caught in a “massive short squeeze,” according to one market participant, that appears to be costing them the billions they made originally plus billions more. Whether these huge losses will show up on the books of JPMorgan Chase and HSBC remains to be seen. (Parsing through the publicly filed footnotes of derivative trades is no easy task.)
Nonetheless, the conspiracy-minded have claimed that the Fed must have somehow agreed to make JPMorgan and HSBC whole for any losses the banks suffered if and when the price of silver rose above the artificially maintained low levels — as in right now, for instance. (About all this, a JPMorganChase spokesman declined to comment.)
Some two-and-a-half years later, the Commodity Futures Trading Commission’s investigation is still unresolved, and at least one commissioner — Bart Chilton — thinks that after interviewing more than 32 people and reviewing more than 40,000 documents, there has been enough investigating and not enough prosecuting. “More than two years ago, the agency began an investigation into silver markets,” Chilton said at a commission hearing last October. “I have been urging the agency to say something on the matter for months … I believe violations to the Commodity Exchange Act have taken place in silver markets and that any such violation of the law in this regard should be prosecuted.”
What’s more, Chilton said in an interview last week, that “one participant” in the silver market still controlled 35 percent of the silver market as recently as a few months ago, “enough to move prices,” he said, and well above the 10 percent “position limits” the commission has proposed to comply with Dodd-Frank financial reform law. Since that law’s passage last summer, the commodities exchanges have issued waivers permitting the ownership of silver positions above the limits the C.F.T.C. has proposed, and which were supposed to be in place by January of this year. Yet the waivers remain in place, and the big traders have not been penalized, much to Chilton’s frustration And the mystery deepens: last Thursday, the price of silver fell $1.50 per ounce in less than an hour before recovering. “This was robbery at its most obvious and most vindictive,” wrote Richard Guthrie, a London-based trader, in an e-mail to Chilton. “How many investors lost money and positions to the financial benefit of an elite few?”
It’s getting harder and harder to continue to brush off Andrew Maguire’s claims as the rantings of a rogue trader with a nutty online following. The Commodities Futures Trading Commission should immediately release the files from its investigation into the supposed manipulation of the silver market so the public can determine whether JPMorganChase and HSBC did anything illegal, with or without the help of the Fed. In addition, the commission should start enforcing the 10 percent threshold on silver positions it has proposed to comply with Dodd-Frank law. Basically, the other commissioners must join with Bart Chilton to do the job they are required to do: Protecting the sanctity of the markets and preventing the sorts of manipulation we’ve seen all too often.
Wednesday, March 2, 2011
Gold Reaches New Record High - News Barely Reported by Mainstream Media
http://www.goldcore.com/goldcore_blog/gold-reaches-new-record-high-news-barely-reported-mainstream-media
Gold’s all time record nominal high yesterday was barely reported in most of the mainstream business and financial press today - slightly more online but there was little or no coverage in print.
This is an indication that gold and silver remain far from the “bubbles” that some have suggested. Speculative manias and bubbles are characterised by mass participation and widespread enthusiasm and “irrational exuberance” by all sectors of society including the media and particularly the retail investor and the “man in the street”.
As seen today, this is clearly not the case at the moment as there continues to be little or no reporting (let alone analysis) about gold and silver – even when they reach record nominal highs.
While the specialist financial press such as Bloomberg, Reuters. Dow Jones, the Wall Street Journal and the Financial Times did report the record highs; it was unreported in the mainstream press in most western countries.
The media’s continuing non-coverage of gold and silver is a clear indication of the lack of animal spirits in the sector. It is proof, if any were needed, that the mainstream media and the man on the street remains far from bullish on gold and silver.
Indeed, recent years and recent months have seen many so called “experts” warning about the dangers of the gold “bubble”. They have been proven badly wrong and it would be interesting to read a story about how wrong they got it.
The majority of investors and savers in the western world do not know what gold bullion is and could not tell you the price of an ounce of gold or silver in dollars – let alone in pounds, euros or other local currencies.
The majority are unaware of the huge developments in the gold markets (only reported by specialist financial press) such as China’s emergence as one of the largest buyers of gold in the world (see news and our video below) and the fact that central banks and astute hedge funds are some of the largest buyers of gold in the world today.
A bubble only takes place when entire societies , including many - if not the majority - of journalists and media become convinced that you “cannot go wrong” with a certain speculation or investment and it is a risk free way of making returns.
This leads to gushing reportage and commentary about the “sure thing” that is a certain stock, bond, commodity or property market. It is characterised by widespread commentary and a belief not just in the financial press but in the mainstream media (day time radio and television etc) that one must speculate or “invest” by buying a certain security or asset class – whether that be tulip bulbs, Nasdaq, Apple or property in London.
Greed and buying motivated to make a profit or quick buck becomes widespread. This has not happened in the bullion markets as the majority of bullion buying has been safe haven buying for wealth preservation purposes rather than accumulation.
Concerns about a bubble in gold may be justified when it reaches its inflation adjusted high of $2,300/oz. Similarly with silver, concerns about a bubble may be justified when it reaches its inflation adjusted high of $130/oz.
Concerns about a bubble in gold will be justified when gold is covered in a regular manner in not just the specialist press but also in the mainstream. When vested interests selling gold regularly appear in mainstream media advising people to but all their money into gold because it is a sure thing, it will be time to become very cautious about the sector.
Near the top of the gold market (when the price is likely trading at thousands of dollars, euros and pounds per ounce) we are likely to see front pages in the business press (such as Fortune, Business Week etc) devoted to gold and snappy front page positive headlines about how “Gold is King”, “Why Gold is a Must” etc.
When that happens it will be time to be wary of the gold bubble and reduce allocations to gold and silver.
The lackluster, negligent media coverage of gold’s record highs yesterday suggests that we are a long way from there yet.
Federal Reserve: QE2 boosts the economy
Video on how quantitative easing works, at least theoretically. Only problem is that it doesn't work, as bond yields have risen in reaction to inflation fears, which is reflected in food riots worldwide.
http://hosted.ap.org/specials/interactives/_business/federal-reserve/index.html
http://hosted.ap.org/specials/interactives/_business/federal-reserve/index.html
American Eagle Silver Uncirculated Coin
This is becoming a common occurrence: the US Mint is out of silver.
http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10001&storeId=10001&categoryId=13738&langId=-1&parent_category_rn=10191&top_category=10191
http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10001&storeId=10001&categoryId=13738&langId=-1&parent_category_rn=10191&top_category=10191
Production of United States Mint American Eagle Silver Uncirculated Coins continues to be temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Until recently, all available silver bullion blanks were being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”
Although the demand for precious metal coins remains high, the increase in supply of planchets—coupled with a lower demand for bullion orders in August and September—allowed the United States Mint to meet public demand and shift some capacity to produce numismatic versions of the American Eagle One Ounce Silver Proof Coin.
However, because of the continued demand for American Eagle Silver Bullion Coins, 2010-dated American Eagle Silver Uncirculated Coins will not be produced.
The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.
Central Planning Pavlovian Reaction: Chairsatan Speaks -> Dollar Plunges
Every time Fed Chairman Bernanke testifies before Congress, the USDollar plunges.
When financial distress or geopolitical events erupted in the past, save haven assets included the USDollar, US Treasury bills, and gold. Guess which one is the go-to asset today?
http://www.zerohedge.com/article/central-planning-pavlovian-reaction-chairsatan-speaks-dollar-plunges
When financial distress or geopolitical events erupted in the past, save haven assets included the USDollar, US Treasury bills, and gold. Guess which one is the go-to asset today?
http://www.zerohedge.com/article/central-planning-pavlovian-reaction-chairsatan-speaks-dollar-plunges
How Did Gaddafi Bypass US Anti-Money Laundering Rules To Bank With Goldman And JPMorgan?
The SEC will go after gold bugs, but somehow guys like Bernie Madoff and Gaddafi can accumulate billions of dollars for decades under the SEC's watch.
http://www.zerohedge.com/article/how-did-gaddafi-bypass-us-anti-money-laundering-rules-bank-goldman-and-jpmorgan
http://www.zerohedge.com/article/how-did-gaddafi-bypass-us-anti-money-laundering-rules-bank-goldman-and-jpmorgan
Tuesday, March 1, 2011
Doug Kass's 20 Surprises for 2010
CNBC's Doug Kass predicted $900 gold for 2010. Ooops.
http://seekingalpha.com/article/179198-doug-kass-s-20-surprises-for-2010
http://seekingalpha.com/article/179198-doug-kass-s-20-surprises-for-2010
The price of gold topples. Gold's price plummets to $900 an ounce by the beginning of second quarter 2010. Unhedged, publicly held gold companies report large losses, and the gold sector lies at the bottom of all major sector performers. Hedge fund manager John Paulson abandons his plan to bring a new dedicated gold hedge fund to market.
Italian Banks Pushing For Mark-To-Market To Benefit From Surging Price Of... Gold
I've been proposing this for a while. It'll never happen, not if Bernanke tand he rest of the central banking cartel can help it.
http://www.zerohedge.com/article/italian-banks-pushing-mark-market-benefit-surging-price-gold
http://www.zerohedge.com/article/italian-banks-pushing-mark-market-benefit-surging-price-gold
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