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Lars Schall Interview of John Embry, of Sprott Asset Management.
By Lars Schall
An industry expert in precious metals, his experience as a portfolio management specialist spans more than 45 years: John Embry, the chief investment strategist at Sprott Asset Management. He began his investment career as a Stock Selection Analyst and Portfolio Manager at Great West Life. Mr. Embry then became a Vice President of Pension Investments for the entire firm. After 23 years with the firm, he became a Partner at United Bond and Share, the investment counseling firm acquired by Royal Bank in 1987. Afterwards he was named Vice-President, Equities and Portfolio Manager at RBC Global Investment Management, a $33 billion organization where he oversaw $5 billion in assets, including the Royal Canadian Equity Fund and the Royal Precious Metals Fund. In March 2003 Mr. Embry joined Sprott Asset Managementwith focus on the Sprott Gold and Precious Minerals Fund and the Sprott Strategic Offshore Gold Fund Ltd. He plays an instrumental role in the corporate and investment policy of the firm.
Mr. Embry, the perhaps best report I have ever read on the gold market was “Not Free, Not Fair: The Long-Term Manipulation of the Gold Price,” written by Andrew Hepburn and you. (1) I would like to talk with you at the beginning about the findings of that report. First of all, why do you think it is relevant whether the gold price is free or not?
John Embry: Thank you for the very generous compliment. It is essential that the gold market be free. It functions as the so called “canary in the coal mine” and its price should be allowed to reflect excesses in a pure fiat monetary system. The continued suppression of the gold price was a key factor in the many financial bubbles which have essentially wrecked the monetary system as we know it.
What has the evidence been that the gold market isn’t a free market?
John Embry: Our report which was written 7 ½ years ago revealed all sorts of chicanery in the gold market and we only used evidence which could be corroborated. Considerable additional evidence has piled up subsequently but two smoking guns are the repetitive counter intuitive price action and evidence of widespread clandestine leasing of western central bank gold.
Who are the ones that don’t like a free gold market and which objectives do they have in mind by preventing a free gold market?
John Embry: The western governments, their central banks and the allied bullion banks are the culprits. They view gold as a mortal enemy of the fiat currency system. Gold has been real money for centuries and every paper money system in history has ultimately collapsed. This drives them to continuously denigrate and manipulate gold.
Through which tools is the gold price “managed“?
John Embry: The worst damage occurs in the so-called paper gold market where derivatives, naked shorting, vicious margin hikes, etc. are employed to fleece the long side who don’t have as deep pockets. In addition, the western central banks have supplied the physical gold necessary to effect the plan through their leasing.
Recently, I was told by a former chairman of the Federal Reserve, Paul A. Volcker, that to his best knowledge “the U.S. has not intervened in the gold market for more than 40 years.“ (2) Do you think Mr. Volcker has the truth on his side?
John Embry: Mr. Volcker admitted that the U.S. had made a mistake by not intervening at one point in the gold market some 40 years, so to think that nothing has happened subsequently is extremely naïve. Technically he might be correct in the sense that swaps could have been employed and the intervention using U.S. gold could have been conducted by another party. Recently retired Fed Governor Kevin Warsh acknowledged U.S. gold swaps in correspondence with GATA just last year. (3)
Furthermore, Mr. Volcker seemed to suggest that central banks have some interest in the price of gold because of its effect on the currency markets. (4)
What kind of relationship does exist between gold and the currency markets which are much bigger than the gold market?
John Embry: Very simple. Gold is a currency. Arguably it is the ultimate currency and the central bankers are acutely aware of this fact. Gold’s role as currency is once again coming to the fore and the central bankers hate that fact.
Are gold swap arrangements between central banks a) important for the “management“ of the gold price, and b) do they represent a means of intervention in the gold market?
John Embry: They are most certainly important because it allows central bankers to technically tell the truth because it is always another central bank that is utilizing the swapped gold to intervene in the market. It is a subterfuge.
Do you think the Western central banks have as much gold as they claim they have?
John Embry: I strongly suspect that they have materially less than they try to represent. The IMF permits a one line entry on their balance sheets which aggregates physical gold with gold receivables. That’s ridiculous and it is done to deceive analysts. For example, if the Americans had the 8,161 tonnes that they say they have, they would be delighted to submit to an outside audit and shut their detractors up. However, they stonewall all requests.
With its “QE to infinity“ program: would you say the Fed has exposed itself in a way as a hardcore goldbug entity?
John Embry: I believe they are fully aware of the extent to which they are debasing their money. We, the public, have to be the hardcore gold bugs to protect our wealth from their depredations.
It seems as if more and more gold is moving towards certain central banks and not away from them. Is this a solid assurance that the gold price will remain high?
John Embry: I believe so. The eastern central banks (China, Russia, et al) have accumulated a lot of dollars and realize they are at risk. Ergo, they buy gold. At the same time, I think the western central banks have run their inventories down to levels beyond which they won’t go. Thus, I think central banks collective gold buying will have a salutary impact on the price going forward.
In the event of another market meltdown, which seems rather likely, do you expect a sell-off in gold?
John Embry: There could be a minor sell-off just because there are so many algorhythyms influencing the market. It would be short lived because big money in the world now knows they need gold for protection.
Gold is in a bull market for ten years now. So an increasing number of people say it is in a bubble. Why would you say, in Gershwin’s words, “it ain’t necessarily so“?
John Embry: Gold’s price is directly related to the constant debasement of the currencies in which it is denominated. The creation of new paper money is dwarfing the amount of gold available. Gold is about the furthest thing from a bubble that I can think of.
What do you think in particular about Warren Buffett’s constant “Gold is in a bubble, I go for stocks“ talk? Does he serve here as an influential opinion maker in a specific role because he gets a lot of public attention? In other words: is he a fool or does he only act like a fool? (5)
John Embry: Warren Buffet sold out a long time ago. It’s too bad because he was a great stock picker once. Now he owns insurance companies, Wells Fargo and was a buyer of Goldman Sachs and G.E. in the global financial crisis. He is a member of the American establishment and has a lot to lose. He should have listened to his father Howard Buffett who was a U.S. Congressman and a true “hard money” advocate.
In your view, gold will gain in importance as a monetary asset in the years ahead, likely regaining an official role in the world’s financial system. Why do you think so?
John Embry: I think that the current financial system, as we know it, will be totally destroyed, probably sooner rather than later. The next system will require gold backing to have any legitimacy. This has happened many times in history.
The mining stocks both in gold and silver seem to me extremely undervalued. Do you agree?
John Embry: They are indeed, and they are being heavily manipulated by the same entities active in suppressing the gold price. In addition, many nefarious hedge funds now are active on the short side. The U.S. financial scene has become a total cesspool.
Are there key levels in the XAU and HUI that one should pay attention to as starting points of a mining stock rally?
John Embry: I tend to pay more attention to the HUI because it is the pure gold index. When the HUI takes out the 555 level with gusto, I think we are away to the races. However, this level is being aggressively defended by the bad guys. A higher gold price (through $2000 per oz.) will rectify this issue.
Why are you at Sprott Asset MGMT so very bullish related to silver?
John Embry: We think the supply-demand equation is ultimately better than even that of gold. New industrial and medical uses are exploding and because silver is “poor man’s gold,” investment demand for silver will go crazy when gold gets priced out of the average citizen’s capacity to buy. Given the small size of the market and very limited inventory, the price should go ballistic.
For your physical silver ETF you want to re-acquire physical silver in a big way. Do you think you could be pioneers (for other fund managers) in direct engagement with mines through direct and forward transactions, instead of going to the Comex? You certainly don’t want to “whoop” the silver price by your own buying, correct?
John Embry: I think that is a potential avenue particularly when the supply-demand equation gets progressively tighter in the future.
Is the silver market also subject of surreptitious interventions?
John Embry: Without question. In many ways it may be worse because it is a smaller market and J.P. Morgan Chase’s activities have been egregious. The fact that the CFTC has been investigating this for nearly four years without resolution is one of the great jokes of all time.
What is your information: to which extent the US silver ETFs are short and how many stocks of those have been used for covering future short contracts?
John Embry: I believe that they are but I can’t provide any information on the extent. When the very same organizations that have manipulated the market for years act as custodians for the ETF’s, it would be wise to be wary.
One highly interesting issue for me personally is the point in time when the Middle East countries will no longer sell their oil and natural gas for paper money. When do you think they will be paid for it with precious metals?
John Embry: I suspect this whole phenomenon could occur very quickly. When confidence in paper money is lost and I think we are rapidly approaching that moment, something like that would undoubtedly come to pass.
How do you think about the conflict around Iran viewed from a perspective of the petrodollar?
John Embry: The whole Iranian issue is very disturbing and I think the U.S ‘s motives might have more to do with the petrodollar than Iran’s nuclear ambitions.
One final question. IF the financial system goes under, one can expect massive supply shortfalls and disruptions in goods and services, particularly in the energy sector. Would you recommend to our readers to take precautions for such a scenario instead of hoping for the best outcome of the global financial crisis?
John Embry: Unfortunately yes. I am a great believer in cognitive dissonance. Most individuals don’t want to face the truth, particularly if it is very unpleasant. Those that do not suffer from this condition should take precautions because the world situation is presently very dangerous.
Thank you very much for taking your time, Mr. Embry!
SOURCES:
(1) John Embry / Andrew Hepburn: “Not Free, Not Fair: The Long-Term Manipulation of the Gold Price”, published by Sprott Asset Management in August 2004 under:
http://www.sprott.com/Docs/SpecialReports/08_2004_NotFreeNotFair.pdf.
(2) See Rob Kirby: “Manifest Destiny Derailed: Treason from Within“, published at Goldseek on January 31, 2012 under:
http://news.goldseek.com/GoldSeek/1328037291.php.
(3) Compare http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf.
The relevant passage of Mr. Warsh’s letter to GATA said:
“In connection with your appeal, I have confirmed that the information withheld under Exemption 4? — that’s Exemption 4 of the Freedom of Information Act — “consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”
(4) See Rob Kirby: “Manifest Destiny Derailed: Treason from Within,“ Footnote 2.
(5) Compare for example in this context what Marshall Auerback has said in an interview about the supression of the silver price:
“It’s in contrast to the gold suppression, which is a central-bank orchestrated scheme. You’ve got a situation now where it seems to be being done amongst the banking community, but I have no doubt that it has being done with official encouragement, explicit or implicit. To give you an example, 10 years ago Warren Buffet bought a silver position, and he liquidated it a few months later. The story I heard from one of his dealers was that he basically told them, “Boys, it’s not politically correct to speculate in silver.” Now who told him that I don’t actually know; I suspect it came from government sources. More interesting to me is that he had had a significant position, and it was liquidated with a great degree of ease with a loss at time when it wasn’t easy to do. This suggests that there was an external agency involved. I have no doubt that there is some degree of government involvement as well, but the primary agents are the investment banks, the commercial banks here.”
See: http://resourceclips.com/2011/04/05/marshall-auerback-on-silver/.
2-16-12 http://harveyorgan.blogspot.com/
John Embry: Debt saturation ensures much higher gold and silver
Submitted by cpowell on Wed, 2012-02-15
http://www.gata.org/node/10996
(special thanks to investor15)
It is once again a great pleasure to address the attendees at this conference following the GATA Workshop I participated in this morning. I'd like to thank Bill Murphy for his kind introduction. As many of you may know, Bill and I have become great friends as the result of our mutual struggles in the gold and silver markets over the past 13 years. That struggle has simultaneously represented the most exhilarating and the most frustrating experience in my nearly 49 years in the investment business.
After acknowledging my longevity in the business, I'd love to say that I started when I was 12 years old but that unfortunately is not true. I'm just getting old, which, at least so far, beats the alternative.
The main subject I want to address today is the staggering debt situation throughout the industrialized world and the impact it will have on the value of paper money and by extension, gold and silver. However, before I get to that topic, I would like to make a few comments about the price action of gold and silver in the last four months of 2011, price action that incidentally set the stage for the explosive price rises we've seen in the first six weeks of this year.
Up until Labor Day last year, gold was enjoying an excellent year, rising by comfortably over 30 percent in price in eight months. This strong advance reflected the turmoil in Europe, the U.S. debt rating downgrade, excessive money creation worldwide, and widespread economic and financial deterioration generally. Ergo, gold was acting exactly as it should in these circumstances.
However, this also represented the worst nightmare for the powers that be, essentially revealing to the public that all was not well.
Thus, in response, the Western world governments, their central banks, and their bullion bank allies sprung into action. Gold plummeted nearly $300 in a month and silver dropped by a third despite not an iota of visible improvement in the world economic and financial backdrop. It was just the same tired old criminal drill that we have seen throughout the more than decade long powerful bull market in gold and silver. These muggings took place primarily in the paper markets of the LBMA and the COMEX while the regulators, most particularly the Commodity Futures Trading Commission here in the U.S., blissfully slept on. (charts not withstanding LMFAO!)
Then, after gold subsequently re-established its equilibrium above $1,700 and silver bounced back into the mid 30s, both collapsed again in the wake of a totally failed European summit in early December. In the absence of any palatable solutions to their many intractable problems, the Europeans undoubtedly knew the scope of the quantitative easing they were going to have to unleash to hold things together. Thus, they and their American counterparts deemed it essential that gold and silver not be seen as an attractive and essential alternative to their beloved pure fiat currency system, which was failing rapidly in plain view. Gold dropped well over $200 and silver fell by 20 percent in a three-week period, with much of the damage occurring in the traditionally very quiet week between Christmas and New Year's Day.
Desperate people tend to do very stupid things and I can assure you that the powers that be are getting increasingly desperate.
Despite these offensive raids, gold still posted an 11-percent year-over-year price gain in 2011, marking the 11th consecutive year the price had been up, a feat the venerable investment letter writer Richard Russell termed unprecedented in any significant asset class.
However, in spite of this exemplary performance over the past decade the vast proportion of society remains blithely unaware of what is unfolding in the gold and silver markets. This stems from many sources, the first being the relentlessly negative press from the mainstream media on the subject. How many times does the public have to be subjected to the views of the likes of Jon Nadler of Kitco and Jeff Christian of CPM Group, to name but two? They are not true analysts but purely and simply establishment propagandists whose sole purpose, in my opinion, is to provide disinformation to keep the unsuspecting public away from precious metals.
Then the anti-gold cartel, with its insidious paper raids, creates wild volatility and totally counterintuitive price action that further discourages all but the most knowledgeable and committed believers in the only real money, gold and silver.
In reality, to date, the public hasn't had a chance. Whenever they have stuck their toe in the water, almost without exception they have been burned as yet another raid knocked them out of the box. When that happens often enough, most people just give up and go away and that is exactly what has occurred.
However, there is more than enough very large, very smart and well informed money in the world that is relentlessly soaking up the rapidly shrinking quantities of gold and silver that are available and, as a result, the prices of both have risen and will continue to inexorably rise, albeit accompanied by stomach-churning corrections. The corrections don't bother the real serious buyers in the least. They see the irrational vertiginous price drops as just providing another wonderful inexpensive buying opportunity. At the end of the day, the big smart money to which I am referring, will own virtually all the gold and silver and the rest of the population will be stuck with rapidly depreciating, soon-to-be-worthless paper money. At that point the public will wake up, but it will be too late.
However, enough of that -- let's talk about why the well-informed big money is buying.
Unfortunately the subject is really disheartening, and that is the relentless growth in debt throughout the world. In the wake of Global Financial Crisis 1 in 2008 (and I can assure you that the next one is coming very soon) there has been much talk of debt deleveraging. To be fair, in the private sector, there has been some evidence of that in the U.S. and Europe, although most of it has related to outright default rather than the old-fashioned practice of saving current income to pay down existing debt.
This minor event, however, has been totally overwhelmed by an explosion in sovereign debt as governments worldwide have been forced to step in to save their essentially insolvent banking systems and prop up their foundering economies.
I regret to say that it doesn't take more than a cursory examination of the facts to conclude that the problem is endemic throughout the industrialized world and is even affecting some of the key emerging economies. More importantly, I am afraid it will be terminal for the financial system we have known since the end of World War 2.
The poster child for this development has been the good old U.S.A., and in case you think I am anti-American, I must hasten to tell you that I was born in the U.S.A. exactly nine months before Pearl Harbor and spent the first eight years of my life in the environs of Washington, D.C. Since then I have lived in Canada, always within 100 miles of the U.S. border, and I have always viewed the country at close quarters with great fondness. Having said that, the dramatic financial deterioration that I have witnessed in this country over the past several decades has been truly astonishing and most discouraging.
There is always some arcane statistic that really makes a point and I think the one that resonates with me is that when Ronald Reagan assumed the presidency 31 years ago, the gross federal funded debt was $907 billion. This amount had been accumulated in a little less than 200 years, a period that encompassed two major world wars, a civil war, numerous other skirmishes, several financial panics, and a horrific depression in the 1930s. Now, a mere 31 years later, the U.S. is chalking up more than that amount in a six-month period.
It was just mid-summer last year that the agonizing debt limit debate was resolved and the limit initially rose by $900 billion in two tranches. Well, that has already been exhausted and now the hope is that another $1.2 trillion increase will get us through the November election. I think that is unlikely.
What I find amazing is that remarkably few people seem to find this unusual, although I must admit that I think very few people even actually think about it. However, I believe in the immutable law of mathematics and when you reach the point of no return, there is obviously, by definition, no going back. In my estimation, the U.S. debt situation is so far beyond the point of no return that you can't even catch a glimpse of it in the rear-view mirror.
The actual funded federal debt of over $15 trillion is just a small part of the problem. The state and local governments are in various states of disarray. As an example we are currently in the epicenter of dysfunctional finance, the otherwise wonderful state of California. Then there are the off-balance sheet items of the federal government such as government-sponsored entities like Fannie and Freddy which have many trillions of debt supported by very dubious assets. But the true elephant in the room is the unfunded liabilities for social security, Medicare, etc., which, using the most conservative estimates, easily exceed $50 trillion.
Thus, without even stretching, the total federal government debt liabilities in the U.S. are, at a bare minimum, more than five times the current nominal GDP. One of the few reasons that this remarkable debt edifice is still standing is the Fed's Z.I.R.P. undertaking (I love that acronym), the zero interest rate policy, which Fed Chairman Ben Bernanke recently announced, would be extended until 2014, in conjunction with massive Fed monetization of Treasury debt, has kept the interest rates on government debt ridiculously low, and thus the charade has been allowed to continue.
Mark my words, if the interest rates on U.S. government debt truly reflected both the real level of inflation in this country and the rising risk of some form of default, rates would already by sky-high and the U.S. would resemble a massive Greece.
I do believe that this whole process has a very limited shelf life at this point, which is neatly encapsulated in the economist Herbert Stein's timeless comment in 1986: "If something can't go on forever, it will stop." I think that we are very close to that unhappy moment and the implications for the U.S. dollar and economy are simply horrific.
However, lest I be accused by being unkind to the U.S., let us move on to Europe, which is constantly in the headlines today, for very good reason. The subject of Greece and its impending debt default has been old news for a while, but there is one aspect of it which has had me scratching my head from the outset. When it was determined that a country of 11 million essentially indolent and corrupt individuals had run up hundreds of billions of euros in debt, it became immediately apparent that the chances of servicing it, let alone paying it back, were zero. Thus it was decided that a writedown of said debt, which began at 50 percent and has now reached 70 percent or more, would be necessary.
The fact that following the writedown, imbedded debt levels would still be well over 100 percent of GDP is laughable, but the Europeans will peddle anything to keep up appearances. No, the baffling part of this whole exercise to me was that it would be described as a voluntary default by private-sector creditors and, accordingly, would not trigger the credit default swaps written against the debt.
My initial reaction was that I thought that was the reason CDS's were created, to protect bond investors against default, and if 50 to 70 percent defaults don't qualify, what does? The inimitable Jim Sinclair shed some light on this when he stated unequivocally that 97 percent of the CDS's on Greek debt were in the hands of five major U.S. banks. It is these very same banks that control the International Swaps and Derivatives Association (the ISDA), the organization that rules on what constitutes a default that triggers a CDS activation. Amazing stuff, eh?
Ironically, Greece despite its travails, is really a rounding error in the European scene and, as we make our way up the food chain, we encounter larger and larger entities with ever-greater quantities of questionable sovereign debt accompanied by essentially insolvent banking systems. The great fear is contagion and the supposed antidote is to build firewalls around the smaller miscreants so the risk can be contained and not topple the larger entities.
So far most of the solutions advanced are ludicrous. The idea that austerity can solve anything in countries that are as far gone as Spain, Portugal, Italy, et al., is preposterous. As an example, Spain already has 22.5 percent unemployment with a staggering rate of more than 50 percent in the critical 16-25 age bracket for males. In addition, the real estate morass is imperiling the entire smaller and mid-cap bank sector that financed their outrageous real estate bubble, and the federal government is just discovering the extent to which the local governments have run amok financially.
I find what has unfolded in Spain to be mind-boggling but generally representative of the overwhelming financial irresponsibility of the peripheral European countries once they were under the umbrella of the euro, which facilitated cheap financing.
I could go on for hours about the position that the PIIGs now find themselves in, but it may be more instructive to consider Germany which is viewed by all and sundry as the model of financial rectitude on that continent. What, in fact, is the reality? I recently read an essay by an astute German economist, bemoaning the deterioration in German government finances. He pointed out that not a single German finance minister has balanced the budget since 1970. As a result, the Germans have now accumulated sufficient government debt that it comfortably exceeds 80 percent of nominal GDP -- not in Italy or America's league, but remarkably similar to France, which is currently being targeted for a debt downgrade by the ratings agencies. In addition, like most industrialized nations today, Germany has huge commitments to retirees and future medical requirements that apparently are not well documented anywhere.
However, the real Achilles' heel of the German situation is their banking system. While the citizens and the government maintained a considerable degree of financial restraint when the global credit bubble was inflating, the German banks went hog-wild. They financed Irish real estate, the bonds of peripheral European governments, U.S. sub-prime debt via CDOs, etc., while leveraging up their balance sheets to unconscionable levels.
Thus the Germans may currently be talking tough, but I suspect, in the end they will be forced to bend in the direction of the bankrupts in Europe and that means further massive quantities of money creation. The long-term
refinancing operation we have seen to date is just the tip of the iceberg.
The European elite, who crammed the euro down the throats of their somewhat reluctant citizens, have invested far too much time and effort in their dream to quit now. That simply means creating whatever amount of paper necessary to keep the sovereign debt afloat and to allow the crippled banking systems to function.
However, this is not just a crisis for the Western industrialized world. A close examination of the Japanese situation is sobering, to put it mildly. Japan has by far the largest embedded federal debt-to-GDP ratio in the
industrialized world (more than 200 percent and rising rapidly) but has always benefited from the Japanese public's thrift and their propensity to buy the government's bonds. However, in the face of the world slowdown, the continuing deflationary issue, and the ongoing impact of last March's terrible natural disaster, the fiscal picture continues to deteriorate.
The real short-term problem, though, is the remarkable strength in the yen. This is having an extremely adverse impact on many Japanese companies and exacerbating an already difficult financial situation.
Looming over all of this is a longer-term problem that, in reality, may be much more serious. This is the rapid aging of a shrinking population. This would suggest that the relentless bond buyer of the past, the Japanese baby boomer, will be cashing in his bonds shortly to support himself in his old age. In the absence of domestic buyers and with the existing massive debt overhang, Japanese interest rates are fated to rise and this could prove catastrophic.
At this juncture, it seems obvious to me that in a world of increasing competitive currency devaluation, the Japanese will have to get in gear very shortly and, as things continue to deteriorate, I fully expect they will. Thus they will represent just another major world economic entity turning the monetary spigot wide open.
This brings me to the key economic player on the planet at this point, which is obviously China. China is easily the most controversial because its fate doesn't seem sealed like the other three main economic engines on the planet, the United States, Europe, and Japan, where stagnation and unsustainable levels of debt ensure quantitative easing as far as the eye can see if a deflationary collapse is to be averted.
There are many opinions on China, but the one where I tend to agree with the consensus is that China will be the economic powerhouse of the 21st century, just as the U.S. was in the 20st century. But people sometimes forget that, despite the U.S.'s clear leadership in the 20th century, it wasn't a smooth ride, particularly in the first half of the century, when the country had to endure two world wars and a decade-long depression.
I think it is unrealistic to think that China won't experience considerable turmoil along the way as well and we may well be approaching a large bump in the road. It must be recognized that China has dined out on the West's profligacy in the past 20 years and became the world's de-facto manufacturer by maintaining an undervalued currency while rapidly ramping up its manufacturing capacity and using very cheap labor. That labor was arriving from the rural areas by the tens of millions through the 1990s and the first decade of this century. This whole process created a remarkably unbalanced economy with well over 50 percent of GDP being generated by net exports and capital spending on plant and equipment, housing and infrastructure, all of which tend to be very cyclical.
They avoided the worst of the 2008 global financial crisis by embarking on a historic bank lending spree, which resulted in mounting inflation, a dramatically weakened banking sector, and a truly historic housing bubble. Now, as they are attempting to maneuver a listing economic ship, commentators are predicting a "soft landing" for the Chinese economy in 2012. I don't know about you, but when I hear that expression invoked following a huge debt-fueled boom, I become very uncomfortable.
The idea that the Chinese can easily morph into a consumer-driven economy to offset a sharp decline in net exports and dramatic overcapacity in many areas of the economy seems to be a bit of a stretch, given that the consumer is the same individual whose services may not be needed in the export or capital spending sectors to the same extent as previously.
Compounding this whole conundrum is the fact that the ruling Communist government has been dependent for popular support on economic growth and job creation. In its absence, the fractious population may be hard to keep under control.
Thus my suspicion is that when push comes to shove, the Chinese authorities will provide whatever amount of fiscal and monetary stimulus that is required to keep the economy moving forward at an acceptable clip. This, I firmly believe, will ultimately be hugely inflationary.
To me, it all seems crystal clear at this point. To avert a near-term economic and financial implosion the authorities throughout the developed world will have to hold their noses and stimulate to whatever degree necessary. No politician today wants to see the system collapse on his watch, so the world will risk eventual hyperinflation and a collapse of the present currency regime rather than voluntarily accept a debt deflation.
Ironically this was all foretold many years ago by Ludwig Von Mises, the founder of the Austrian School of Economics, which, incidentally, is the only economics I have discovered in my lengthy search for reason that makes eminent sense to me.
Von Mises, in his epic book "Human Action," published in 1949, stated succinctly:
"There is no means of avoiding the final collapse brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system."
Given that this credit cycle has dwarfed anything seen in the history of mankind, its resolution is going to be something to behold. Global Financial Crisis No. 1 in 2008 was merely the hors d'oeuvre and we are now awaiting the main course.
I envision something along the lines of a hyperinflationary depression accompanied by the final denouement of the latest experiment with pure fiat currency -- that is, the worst of all worlds.
In the event that I am right, I can assure you that the demand for physical gold and silver is going to overrun all possible sources of supply and even the most outrageously bullish price projections for gold and silver may be exceeded.
To conclude, I would like to quickly mention two other subjects.
The first is cognitive dissonance. When I try to convey the seriousness of this whole issue of monetary debasement and its disastrous impact on society, most people are resistant or, more often than not, seem indifferent to the whole subject.
I attribute this to a state of cognitive dissonance, which unfortunately appears to affect the vast majority of society. Basically, most individuals when confronted with an unpleasant issue that is at odds with what they choose to believe go to great pains and extreme lengths to deny it. They are hugely biased to think of their choices as correct, irrespective of any concrete contrary evidence which is provided. My younger brother, who it pains me to say is a whole lot smarter than I am, has done a fair amount of research on this subject and has concluded that there is essentially some sort of blocking mechanism in most human minds which permits people to stick their heads in the sand rather than confront a difficult issue before it is too late.
I think a fascinating example of this phenomenon appeared in Michael Lewis' latest book, "Boomerang," which I highly recommend. The hedge fund manager Kyle Bass, who is rapidly becoming legendary, had arrived some time ago at the same malign conclusions about sovereign debt that I have just described to you. He took his findings to the Harvard professor Kenneth Rogoff, who along with Carmen Reinhard, was just preparing to release a new book, "This Time It's Different," about national financial collapse. When Bass revealed his numbers on the subject to Rogoff, the professor responded, "I can hardly believe it is this bad." Bass' reaction was: If this guy is the world's foremost expert on sovereign balance sheets and he isn't prepared to deal with reality, what hope is there? Bass was astounded.
Finally, I can't make a speech about our terminal financial state without a couple of points on derivatives, which continue to proliferate. The justly reviled ex-Fed Chairman Alan Greenspan used to extol derivatives as vehicles for spreading risk and making the system more resilient while he strenuously opposed any attempts to regulate OTC derivatives. This was just one of his many damaging initiatives and history has completely refuted him. In fact, derivatives have tended to concentrate risk as a large majority of them has ended up in a few hands, creating too-big-to-fail financial entities that are imperiling the whole system.
The idea that they net out and thus it is really a zero-sum game is equally ridiculous. Since every derivative has a counterparty, to suggest that an investor is satisfactorily hedged because derivatives offset a long with a short is simply wrong. If the counterparty fails on either the long or the short, the entire notional value is at risk. Given that the notional value of all outstanding derivatives would easily exceed a quadrillion dollars had not the Bank of International Settlements changed definitions to intentionally understate the true amount, the toxicity of this garbage is obvious.
It wasn't without reason that Warren Buffett many years ago termed them "Financial Weapons of Mass Destruction." If sufficient liquidity is not continuously made available in the entire global system, a potential implosion of derivatives would be activated and rapidly annihilate the entire global banking system.
Just another reason why quantitative easing to infinity is virtually assured.
I believe that investors can't own enough gold and silver. Don't be concerned about daily fluctuations in price. Focus only on how many ounces of gold and silver you own and, above all, make sure it is in physical form or in a well-documented fully allocated paper vehicle. Avoid at all costs paper gold and silver, which isn't what it purports to be and is, in effect backed by gold and silver that has been hypothecated and rehypothecated so many times that there is almost no backing whatsoever.
Thank you very much. It has been a pleasure to speak to you.
I just got an email from CTGroup. They are selling bags of 90% silver half dollars for spot + $1, minimum order 1/4 bag ($250 face). Anyone interested I'll forward the email to you. I am not affiliated with CTGroup in any way.
.......al
but I bought significantly today as well...right into the channel. 5th wave up has started so know your exit in advance.
China to Surpass India as Biggest Gold Market This Year,
Council Predicts -
Feb 16th, 2012 09:51 by News
16-Feb (Bloomberg) — China, the world’s largest consumer of
energy and base metals, is set to displace India this year as
the biggest gold user on an annual basis as surging incomes
drive increased demand for jewelry and investments.
Demand in China jumped 20 percent to 769.8 metric tons in 2011,
while consumption in India fell 7 percent to 933.4 tons,
according to a report from the producer-funded World Gold
Council today.
“It is likely that China will emerge as the largest gold market
in the world for the first time in 2012,” said Marcus Grubb,
managing director of investment.
Gold price could top $2,000 in 2012: by AngloGold -
Feb 15th, 2012 13:10 by News
15-Feb (The Economic Times) —
World gold prices could “easily poke through $2,000.- an ounce
this year, AngloGold Ashanti chief executive Mark Cutifani said
on Wednesday.
In a conference call with reporters after the release of fourth
quarter earnings, which fell far below expectations, Cutifani
said he saw the price of bullion averaging $1,700-$1,850
throughout 2012.
CALVF Golden Cross Alert -
Caledonia Mining says it will maintain a low cost base for its
Blanket Gold Mine; Gold production -
The Ord Oracle By Tim Ord
* Wednesday, February 15, 2012
For 30 to 90 days horizons SPX: Sold SPX on 12/29/11 at 1263.02 for gain of 1.75%; long 1241.30 on 12/20/11.
Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11
Long Term Trend monitor purposes: Flat
Above is the daily chart of GLD which is the ETF for Gold. Like we said yesterday, we got over excided and bought GLD to soon, however the picture remains bullish. In late January a “Sign of Strength” (SOS) appeared through the downtrend line connecting the highs back to mid August and suggest a valid break through that trend line. The trend line comes in near 162 and should hold as support. The January rally also tested the early December high on equal volume and suggests at some point the December high will be exceeded. Notice also that GLD is not having price rejection from its previous high and another bullish sign. The pattern forming over the last couple of weeks appears to be a “Flag”. Most “Flag patterns” form at the half way point of the move and would give a target for the next high near 187, which is also near the September 2011 high and could act as resistance. The trend appears up with short term support near 162 range.
Long GDX 58.65 on 12/6/11. Long SLV at 29.48 on 10/20/11. Long GDXJ at 36.24 on 9/21/11. Long GLD at 173.59 on 9/21/11. Long BRD at 1.67 on 8/3/11. Long YNGFF .44 on 7/6/11. Long EGI at 2.16, on 6/30/11. Long GLD at 147.14 on 6/29/11; stop 170 hit = gain 15.5% . Long KBX at 1.13 on 11/9/10. Long LODE at 2.85 on 1/21/11. Long UEXCF at 2.07 on 1/5/11. We will hold as our core position in AUQ, CDE and KGC because in the longer term view these issues will head much higher. Holding CDE (average long at 27.7. Long cryxf at 1.82 on 2/5/08. KGC long at 6.07. Long AUQ average of 8.25. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.
http://www.decisionpoint.com/TAC/ORD.html
George.
Click on "In reply to", for Authors past commentaries.
Fair is Fair
Theodore Butler
February 16, 2012 10:12am
In December, I made public an article discussing the short position in the big silver ETF, SLV. At that time, the short position in SLV shares was in excess of 25 million shares and would run up to 26.6 million shares by mid-January. I hold that the shorting of shares in SLV is both fraudulent to shareholders of SLV and is manipulative to the price of silver. That’s because shorted shares of SLV do not result in physical silver being deposited into the Trust and leave the Trust, effectively, with shares not backed by metal to the extent of the short interest. (There is supposed to be one ounce of silver deposited for every share issued according to the prospectus and short selling circumvents that requirement.) Because physical silver is not bought and deposited on shorted SLV shares, the normal price impact of more demand on the physical silver market is also circumvented. That constitutes price manipulation.
http://www.silverseek.com/commentary/slv-short-position-update
As a result of many of you writing to the sponsor of SLV, BlackRock, there were a number of consequences. For one, as previously mentioned to subscribers, within days of the publication of the article, lawyers representing BlackRock demanded, in no uncertain terms, that I cease what they claimed was defamation of their client and my publication of email addresses of top officers. More importantly, another consequence may have revealed itself late last week with the release of short interest data as of Jan 31. The new report indicated that the short position in SLV plunged by more than 35%, or by more than 9.4 million shares, from 26.6 million to under 17.2 million. This is the lowest level of shares held short in SLV in almost a year. The number of shorted shares in SLV is still too high, at over 5.3% of all outstanding shares issued, but at its peak last spring, the shorted shares represented more than 12% of total shares outstanding.
http://www.shortsqueeze.com/?symbol=slv&submit=Short+Quote%99
The timeline on all this suggests that the most plausible explanation, at this point, is that BlackRock or someone in position to influence the SLV shorts to reduce their short position, did exert such influence. The sudden reduction in the short position came as prices were rising strongly, something not witnessed previously and also suggestive of an outside influence. Certainly, big future increases in the SLV short position will negate the explanation that BlackRock saw the merits of the allegations against the shorting of SLV and moved to curtail it. For now, however, it looks like the short covering in shares of SLV is as it appears, namely, as a result of the matter being brought to BlackRock’s attention and them acting on it. Thanks to all who took the time to write in.
Potentially, this could be a big deal in silver. Unlimited shorting in hard metal ETFs can have a very negative influence on the price of silver. At two previous significant tops in the silver price, in 2008 and 2011, the short position in SLV was at record high levels. I believe these record short positions in SLV were a strong influence in the price of silver breaking badly on both occasions. Eliminating and then preventing excessive short positions in SLV in the future will eliminate the incentive of large short sellers to rig prices lower and insure that SLV shares are issued in accordance with the terms of the prospectus and have real metal backing.
This is not my first initiative in attempting to influence how the SLV is run. As a silver analyst, the Trust is an important factor in the silver market since it is the world’s leading silver investment vehicle and the largest single stockpile of silver on the planet. Not to focus on it would be a mistake. Back at the end of 2007, after the SLV had been trading for a year and a half, I asked you to write to Barclays (then the sponsor of the Trust) and ask them to publish the list of serial numbers, weights and hallmarks for the bars that were held in the Trust. Up until that time, I had made a big deal about holding silver in professional storage only if you had the serial numbers and weights of every 1000 oz bar held for you. It seemed only fair that the SLV be held to the same standard.
http://www.investmentrarities.com/ted_butler_comentary/10-29-07.html
Within a couple of months, much to their credit, Barclays agreed that the full bar list would be published and updated regularly. I believe to this day that only because so many of you wrote to them and because it was a simple and constructive suggestion that aided Barclays and SLV shareholders that Barclays quickly agreed to the listing the bars.
http://www.investmentrarities.com/ted_butler_comentary/01-07-08.html
Just like was the case with Barclays, it’s only fair for a tip of the hat in BlackRock’s direction for any possible involvement by them in the reduction in the SLV short position. Let’s hope it lasts. Let’s also hope that the CFTC follows through and finishes their silver investigation soon. In the meantime, it’s important to recognize that sometimes we succeed in trying to bring about change and that bodes well for the future.
Ted Butler
http://www.silverseek.com/commentary/fair-fair
I hear ya about gold. I started buying under 300 and yes did great on the miners when a some like SSRI were under a buck. But, something happened along the way and they have not seen significant growth in quite a while. When will it change? That's a damn good question!
GDX ...60 min & Daily
from Fraily's newsletter
http://breakpointtrades.com/controls/preview.php?nl_id=978
I remember so very well when I was buying gold @278 and everyone was was spitting on it and screaming "sell that crap, gold is archaic and will never come back". I used 100 oz bar for a doorstop.
When Au hits $2500 we will readdress this miner issue.
All younger traders need to study the longer cycles here. (not saying that you are a younger trader,
Judging from the last 5 years, I'd say one just doesn't unless they are a swing trader.
So when does one start buying the miners? When everyone and their aunty is screaming "buy the miners" or when everyone is screaming "sell them"?
FDCFF Forum Uranium Corp. (.075) A Canadian-based energy Company with a focus on the acquisition, exploration and development of Rare earth projects and Uranium projects in the Athabasca Basin, Saskatchewan and the Thelon Basin, Nunavut. Forum has forged joint venture and other strategic relationships with mining notables such as Agnico-Eagle, Cameco, and Rio Tinto. Forum has interests and options on over 260,000 hectares of strategic uranium and REE exploration properties.
Website: http://www.forumuranium.com/s/Home.asp
TSX as FDC: http://tmx.quotemedia.com/quote.php?qm_symbol=FDC
Pinksheets: http://www.otcmarkets.com/stock/FDCFF/quote
IHUB: http://investorshub.advfn.com/boards/board.aspx?board_id=10014
Forum Identifies Heavy Rare Earth Potential on the Kipawa West Project
http://www.otcmarkets.com/stock/FDCFF/news
Forum Uranium Receives Encouraging Drill Results on Inuit Owned Lands Nearby the Kiggavik Deposits-North Thelon Project, Nunavut
http://finance.yahoo.com/news/Forum-Receives-Encouraging-iw-3707160815.html?x=0
img]stockcharts.com/c-sc/sc?s=fdc.v&p=d&yr=1&mn=0&dy=0&id=p20250978534[/img]
Forum Uranium Receives Encouraging Drill Results on Inuit Owned Lands Nearby the Kiggavik Deposits-North Thelon Project, Nunavut
VANCOUVER, BRITISH COLUMBIA--(Marketwire -02/14/12)- Forum Uranium Corp. (TSX-V: FDC.V; OTC: FDCFF - News) is pleased to announce drill results on Inuit-owned lands held under exploration agreement with Nunavut Tunngavik Incorporated (NTI) on Forum's district-scale North Thelon project adjoining Areva Resources Canada's Kiggavik uranium deposit. Forum drilled nine holes totaling 2,036 metres on uranium targets identified by its regional geological, geophysical and geochemical programs conducted over the past five field seasons. Encouraging drill results have been received from DDH RH-01 on Inuit-owned land parcel BL-32 under exploration agreement with NTI. This hole is located on the Andrew Lake Fault which controls Areva's End and Andrew Lake deposits and recent discoveries by Cameco.
A gravity survey on BL-32 identified four targets along the Andrew Lake Fault Drillhole RH-01 was located on the eastern anomaly and intersected extremely altered metasediments down to 284 metres, with quartz brecciation at the bottom of the hole. Anomalous geochemistry includes 13ppm uranium over 49 metres, 406ppm vanadium over 30 metres and 1186ppm boron over 250 metres, including up to 2.69% boron over 10 metres. Ken Wheatley, Vice President of Exploration stated, "I have never encountered boron values of this magnitude in the Athabasca Basin. This is a very good sign of a strong uranium mineralizing event and further drilling is strongly recommended." (bolded for emphasis)
Drilling on Forum's 100% owned Tarzan property, where NTI has a 2% Net Smelter Royalty, was also conducted to follow up encouraging results from 2008 drill-hole TZ-04, where anomalous geochemical results of 20ppm uranium over 79.5 metres, 326ppm boron over 156 metres and 53ppm lead over 131 metres was encountered. Follow-up drill-hole TZ-08 in 2011 returned extensive alteration and similar anomalous geochemistry but had to be abandoned due to drilling difficulties and did not reach its target depth. Further drilling is also recommended on this Tarzan target.
Areva has completed an initial feasibility study and submitted its Environmental Assessment Study to the Nunavut Impact Review Board for the development of an 8 million pound per year uranium mine, and Cameco has intersected uranium with grades of up to 3.52% U3O8 over 10 metres along the Andrew Lake Fault. Cameco has also announced the new Ayra showing from this summer's work, located within a kilometre of Forum's Inuit-owned land parcel BL-32 (Cameco presentations at the 2011 Nunavut Mining Symposium and the 2011 Saskatchewan Mining Open House).
About the North Thelon Project
Forum acquired a large (greater than 400,000 acres), strategic land position surrounding the Areva/Japan Canada Uranium (JCU)/Daewoo world-class Kiggavik mine development project in Nunavut starting in 2006. Forum owns 100% interests in mineral claims, subject to a 2% NSR on the Tarzan and Nutaaq claims to Nunavut Tunngavik Incorporated, acquired the rights to earn 100% interest in Inuit owned land parcels BL-21 and BL-32 from Nunavut Tunngavik Incorporated and acquired the rights to earn up to a 65% interest in claims held by Agnico-Eagle Mines Ltd. The 127 million pound Kiggavik uranium project grading 0.55% U3O8 has completed an initial feasibility study, commenced permitting and submitted an Environmental Assessment Study to the Nunavut Impact Review Board. The proposed mine anticipates production of approximately 8 million pounds of uranium per year. Cameco has been actively exploring its property to the west of Areva since 2005 and has announced three discoveries. Cameco and Areva continue to aggressively drill in this newly emerging mining camp.
To view Figure 1, click on the following link: http://media3.marketwire.com/docs/i213m.pdf
Ken Wheatley, P.Geo. (Saskatchewan and Nunavut), Forum's Vice President of Exploration and qualified person has reviewed the contents of this news release.
About Forum Uranium
Forum Uranium Corp. is a Canadian-based energy company with a focus on the acquisition, exploration and development of Canadian uranium and rare earth projects. Forum has assembled a highly experienced team of exploration professionals with a track record of mine discoveries for unconformity-style uranium deposits in Canada. The Company has a strategy to discover near surface uranium deposits nearby existing infrastructure by exploring on its 100% owned properties and through strategic partnerships and joint ventures.
Website: http://www.forumuranium.com
ON BEHALF OF THE BOARD
Richard J. Mazur,
P.Geo., President & CEO
Contact:
Forum Uranium Corp.`
Matt Terriss
Director, Corporate Affairs
604-638-3947
info@forumuranium.com
http://finance.yahoo.com/news/Forum-Receives-Encouraging-iw-3707160815.html?x=0
For those who think the miners will catch up...
9:28 (Dow Jones) Barrick Gold's (ABX) 4Q results highlight the advantages for
gold bulls to invest directly in bullion over gold miners, which are
susceptible to production shortfalls and rising costs. The world largest gold
miner's 4Q EPS fell notably short of analysts' estimates, which were
anticipating profit growth, not flat earnings. Scotia blames the shortfall on
lower revenues as gold and copper production was light, and on
higher-than-expected costs to produce the metals. ABX is down 1.5% premarket at
$46.70 and has fallen 4.6% the past year. (ben.dummett@dowjones.com)
Call us at (212) 416-2354 or email kevin.kingsbury@dowjones.com
(END) Dow Jones Newswires
February 16, 2012 09:28 ET (14:28 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.
021612 14:28 -- GMT
WGC: Global 4Q Gold Demand Dips Slightly But Full-Year Tonnage Highest Since 1997
16 February 2012, 1:00 a.m.
By Kitco News
(Kitco News) - Global gold demand fell slightly in the fourth quarter, yet for full-year 2011 it hit the highest tonnage level since 1997, said the World Gold Council Thursday in its quarterly trends report.
Global demand for gold fell 2% year-on-year in the fourth quarter to 1,017 metric tons. However, demand for the full year rose 0.4% to 4,067.1 metric tons.
Marcus Grubb, managing director for investment at the World Gold Council, said he considered the fractional increase for the full year to be “quite impressive” considering the average price of gold itself rose 28%. Strong investment demand in the fourth quarter offset weaker jewelry and flat technology demand, he said.
“Basically, the reason demand goes up for the whole year in tonnage terms is largely due to investment, not jewelry,” he said. “And it’s largely due to bar and coin investment rather than ETFs (exchange-traded funds) or OTC (over-the-counter) investments.”
In value terms, fourth-quarter demand rose by 21% year-on-year to $55.2 billion, the WGC said. For the full year, the dollar value of gold demand was estimated at $205.5 billion, the first time it has ever exceeded $200 billion and 29% higher than in 2010.
Jewelry Demand Declines With Historically High Prices
Fourth-quarter jewelry demand was 476.5 metric tons, 15% weaker year-on-year. Still, the Gold Council described this as “staunch” in the face of high prices and “difficult economic conditions” in a number of markets, particularly Western nations. The average gold price in the fourth quarter was $1,688.01 an ounce, 24% above year-earlier levels although down from the third quarter.
The fourth-quarter decline was largely the result of a decline in demand in the key consuming nation of India. “That was due to the weakness in the (Indian) rupee, which meant that in the last part of 2011, Indian consumers were sidelined by the fact that gold became very expensive in local currency terms,” Grubb said.
For the full year, global jewelry demand was 1,962.9 tons, 3% below the total from 2010. The value of jewelry demand posted new records for both the quarter and the full year, at $25.9 billion and $99.2 billion, respectively, the WGC said.
The WGC said jewelry demand was strong in the first half due to buying in the two largest markets, China and India, aided by two “opportune” price dips. However, demand fell in the second half as gold hit record prices in the third quarter. In particular, Indian jewelry demand fell 44% year-on-year to 103 tons in the fourth quarter and was down 14% year-on-year to 567.4 tons.
Meanwhile, Chinese fourth-quarter jewelry demand was slightly above year-ago levels at 131.4 tons and was up 13% annually to 510.9 tons.
Investment demand Rises For Fourth Quarter, Full Year
Investment demand grew 19% year-on-year in the fourth quarter, translating to a 5% annual growth rate. Fourth-quarter demand was 428.2 tons and full-year demand hit a record 1,640.7 tons worth $82.9 billion, also a record.
“An almost four-fold year-on-year increase in ETF (exchange-traded-fund) demand was largely responsible for the rise in fourth-quarter investment,” the WGC said. Inflows into gold ETFs were 86.8 tons in the fourth quarter, compared to a “relatively subdued” 22.3 in the year-ago period. However, for the full year, ETF inflows fell to 154 tons from 367.7 in 2010. “However, it should be pointed out that the second quarter of 2010 was exceptional--the second-highest quarter on record at 291.6 tons,” the WGC report said.
Demand for bars and coins totaling 341.3 tons was roughly flat year-on-year. However, for the full year, bar and coin demand rose 24% to 1,486.7 tons, the Gold Council said.
Like jewelry, investment demand in India fell during the fourth quarter, to the tune of 38% year-on-year to 70 metric tons. Chinese investment slipped 3% year-on-year to 59.5 tons. However, bar and coin demand in Turkey jumped 142% year-on-year to 19.3 tons and hit a full-year record high 80.4 tons, the WGC said.
European bar and coin demand was strong, “obviously to some degree stimulated by the euro-zone debt crisis,” said Grubb. In fact, for the full year, the largest bar and coin market in the world was Europe, Grubb said. “That is quite rare.”
Total investment demand in Europe rose posted its seventh consecutive annual gain to 374.8 tons, the Gold Council said. Germany and Switzerland were the main drivers of growth in the region as the eurozone remained in turmoil and the need for asset protection continued to be a priority.
Demand for gold used in the technology sector declined 3% in the fourth quarter to 112.3 tons, the lowest level since the third quarter of 2009. Annual demand was “broadly steady” at 463.5 tons, the WGC said.
Gold demand for electronics was near steady in the fourth quarter—down just 0.4% year-on-year—to 80.9 tons. On an annual basis, this climbed 1.1% to 330.4 tons.
Meanwhile, demand for gold in dental applications fell 10% year-on-year to 10.4 tons, the lowest level on record, and full-year demand fell similarly to 43.8 tons.
India Still Largest Gold Market In 2011; May Soon Be Replaced By China
India was the world’s largest gold market in 2011, although WGC officials said China may surpass the country in 2012.
India’s combined jewelry and investment demand fell by 7% to 933.4 tons last year.
In China, annual demand of 769.8 tons was up 20% year-on-year as a result of increases in both jewelry and investment, the report said.
“A lot of analysts have been speculating how quickly China might exceed India in terms of annual demand,” Grubb said. Previously, the WGC thought this was perhaps five years away. Now, however, “it’s likely that China might eclipse India in 2012 in terms of total gold demand,” Grubb said.
“That’s because we see India remaining relatively flat and we are in the camp that believes China will have a soft economic landing....Therefore, we think for jewelry and investment, you’ll see a roughly 20% growth rate in 2012 in China, and that will potentially put it No. 1.”
Still, Grubb pointed out, India will still be No. 1 in terms of the amount of gold owned by households. This is estimated at some 18,000 tons for India, with China around 9,000.
By Allen Sykora of Kitco News; asykora@kitco.com
http://www.kitco.com/reports/KitcoNews20120216AS_WGC_4Q.html
Will Gold Cleanse The World From Dirty Fiat Currencies?
Published February 16, 2012
On Wednesday, precious metal prices climbed higher as European finance officials considered delaying parts or even all of a second bailout package for Greece. Although gold and silver prices often move inversely of the U.S. dollar, all three edged higher on the news. Despite a temporary boost in the dollar this month, gold and silver continue to receive support from extremely loose global monetary policies.
Greece’s bailout package totals 130 billion euros, but not all of the finance ministers are satisfied Greece is completely committed to the deal. Euro Chairman Jean-Claude Juncker said, “I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program.” Greece needs the bailout to avoid a default on March 20, when 14.5 billion euros in debt repayments are due. The ongoing insolvency issues in Greece and other European nations have caused precious metals to be viewed more as a safe-haven.
Pau Morilla-Giner, head of equities, commodities and alternative investments at London and Capital Asset Management explained, “Below the surface … gold continues to trade about 60 to 70 percent of the time as an alternative currency, which clearly has to do with being a better store of value than nominal currencies that are being abused by excessive quantitative easing across the board.
Although the dollar has held up well in February, it benefits from being the cleanest shirt in the dirty basket of fiat currencies. In addition to a weakening euro, the dollar has risen against the Japanese yen. Earlier this week, the Bank of Japan surprised markets by adding 10 trillion yen to its quantitative easing program, bringing the total to 65 trillion yen. For the first time in history, the central bank also set a consumer inflation target of 1 percent for the time being. This came shortly after the Federal Reserve set its own inflation target. “The Federal Reserve’s decision to adopt an inflation target is clearly affecting the BOJ’s thinking. The Fed’s move has also given ruling and opposition lawmakers reason to pressure the BOJ into adopting an inflation target and easing policy further,” said Seiji Adachi, senior economist at Deutsche Securities in Tokyo.
The Bank of England also announced last week that it will extend its quantitative easing program by 50 billion pounds, bringing the total to 325 billion pounds. Furthermore, any negative news could easily prompt additional easing efforts from the central bank. Sam Hill, an analyst at RBC explained, “If there is significant downside news over the next three months then the monetary policy committee could announce further asset purchases.”
As central banks around the world continue to engage in currency devaluation policies, gold will be relied upon to cleanse the mess left behind by central banks and fiat currencies. It will also become increasingly important for investors to research and protect themselves from misconstrued perceptions about gold and silver. In 2010, George Soros called gold the “ultimate bubble.” However, gold completed its 11th year of consecutive gains in 2011. Furthermore, newly released data shows Soros increased his stake in the SPDR Gold Trust ETF to 85,450 shares in the fourth quarter of 2011. This represents an increase of 77 percent from the prior period, and suggests that Soros is not as bearish on gold as previously thought.
http://www.foxbusiness.com/markets/2012/02/16/will-gold-cleanse-world-from-dirty-fiat-currencies/
Thomson:
http://www.321gold.com/editorials/thomson_s/thomson_s_021412.html
Hubbart:
http://www.321gold.com/editorials/sfs/hubbartt021012.html
Personally, I like these guys plus Clif Droke. Droke has proprietary momentum indicators.
Waiting to hear what Clive has to say.
Haven't heard from Maund or Hulbert in a while.
LSG on 'Lake Shore Gold Corporation (TSE:LSG
I like LSG GOLD, and love the buying levels down here....
http://www.lsgold.com/Investor-Centre/Presentations/default.aspx
http://www.lsgold.com/Investor-Centre/Investor-Briefcase/default.aspx
How the GOLD REAL MONEY IS MADE -
100% different from the 666 banksters cults wothless papers
Cheers !!!
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72037277
U.S. court backs Spain over $500M sea treasure
By Al Goodman, CNN
updated 7:57 AM EST, Sat February 4, 2012
MADRID, Spain (CNN) -- Spain has won a major victory in its long court battle with a Florida-based deep-sea salvage company over rights to an estimated $500 million in silver and gold coins, officials said Wednesday.
The treasure was recovered in 2007 from a 19th century sunken ship off the Spanish coast.
The 11th U.S. Circuit Court of Appeals in Atlanta on Tuesday turned aside another motion from the U.S.-based company, Odyssey Marine Exploration, and Spanish officials said they now expect the coins -- nearly 600,000 of them -- to arrive in Spain soon.
"With the ruling by the appeals court, the process begins to recover all of the coins taken illegally" from the sunken ship, Spain's Culture Ministry said in a statement.
Spain treasure dispute nears end Odyssey, which can still appeal to the U.S. Supreme Court, said in a statement, "Currently, no final order has been issued in the case and it would be premature to comment at this time."
The battle royal began after Odyssey announced in 2007 it had found the sunken treasure. It quickly laid claim to the coins, put them in crates and said it flew them to a discreet, well-guarded location in the United States.
Spain soon filed suit in a federal court in Tampa, Florida, also claiming the treasure.
Spain says its navy warship Nuestra Senora de las Mercedes was carrying the coins. The Mercedes, a 34-gun frigate, left Peru in 1804 and crossed the Atlantic to within a day's sail from Spain when British ships attacked the Spanish fleet.
In the ensuing Battle of Cape St. Mary, south of Portugal, the Mercedes exploded after being hit in its power magazine, according to the Spanish government's filing to the Florida court.
The federal court in Tampa in 2009 ruled in favor of Spain's claim to the treasure, but Odyssey took the case to the federal appeals court in Atlanta, which ruled last September to uphold the lower court's ruling.
At the end of that 53-page ruling, the three-judge appeals panel wrote, "For the foregoing reasons, the district court did not err when it ordered Odyssey to release the recovered" items to the custody of Spain, according to a copy of the order viewed by CNN.
Since then, Odyssey has filed various motions at the appeals court to overturn or delay the ruling, said James Goold, a Washington, D.C., lawyer who is representing Spain in the case.
But on Tuesday, the appeals court denied an Odyssey motion, the court's chief deputy clerk, Amy Nerenberg, told CNN by phone from Atlanta.
Goold, who spoke to CNN by phone from Washington, said it appears that Odyssey's only possible appeal now would be to the U.S. Supreme Court. That court agrees to hear only a tiny portion of the cases presented to it.
The appeals court is expected to send the case in the coming days back to the federal court in Tampa, which would establish and supervise the procedures for sending the coins to Spain, Goold said.
Spain believes that the main part of the nearly 600,000 coins are currently in Florida, Goold said.
Spain's Culture Minister, Jose Ignaico Wert, told CNN in Madrid on Wednesday that the case was never really about the money.
"We're not going to use this money for purposes other than artistic exhibition, but this is something that enriches our material, artistic capital and it has to be appreciated as such," Wert said in an interview.
He said the coins would be exhibited in Spanish museums.
Peru has also followed this case. The silver and gold came from Latin America when Peru was a Spanish colony.
"Formally, they haven't claimed anything, but we are completely open to consider the possibility of distributing some part of the treasure also among the Latin American museums," Wert said.
The treasure includes a vast trove of coins, included fabled "pieces of eight," some minted in 1803 in Lima, Peru, Spanish officials said at a 2008 news conference.
The treasure already has crossed the Atlantic ocean twice -- by ship in 1804 and then by plane in the other direction just a few years ago. Spanish officials hope it might finally arrive now for the first time on the Spanish mainland.
http://www.cnn.com/2012/02/01/world/europe/spain-u-s--treasure-dispute/index.html
GDSM hits .004, I'll take a crack at it.
HL Hecla Mining (4.91) Produces over 7 million ounces of Silver, 50,000 ounces of Gold, 70 tons Zinc, and 40 tons Lead, per year. Largest and lowest cash cost primary silver producer in the U.S. Excellent cash position with no debt. Exploration properties and operating mines in four world-class silver mining districts in the U.S. and Mexico. The company’s common stock has been traded on the New York Stock Exchange for over 40 years.
Website: http://www.hecla-mining.com/
Pinksheets: http://www.otcmarkets.com/stock/HL/quote
IHUB: http://investorshub.advfn.com/boards/board.aspx?board_id=6097
Hecla Provides Update on Lucky Friday and Announces Hecla's 2012 Production Estimate
http://phx.corporate-ir.net/phoenix.zhtml?c=63202&p=RssLanding&cat=news&id=1641695
Hecla Reports Temporary Care and Maintenance at Lucky Friday Mine
http://phx.corporate-ir.net/phoenix.zhtml?c=63202&p=irol-newsArticle&ID=1647033&highlight=
Hecla Declares First Quarterly Silver Price-Linked Common Stock Dividend and Preferred Dividend
http://investors.hecla-mining.com/phoenix.zhtml?c=63202&p=irol-newsArticle&ID=1627568&highlight=
img]stockcharts.com/c-sc/sc?s=hl&p=d&yr=1&mn=0&dy=0&id=p90803195534[/img]
Aurcana: Near-term catalysts for share price increase
Christopher Wood
Saturday, 11 February 2012
Aurcana is my favourite silver stock right now and I own a bunch. Here are the the events that I believe will drive the share price significantly higher over the next couple years:
* Q1-2012: Resource update for La Negra; should significantly increase resource size and extend mine life... expecting to add ~1M tons of ore for as much between 25Moz and 50Moz silve
* Q1-2012: Increase La Negra from 1500 tpd to 2000 tpd; should increase AgEq production for this mine from 1.7Moz/year to 2.2Moz/year
* Q2-2012: Shafter comes online at 1500tpd; should add AgEq production from this mine of 3.8Moz/year for a company wide production number of 5.0Moz/yea
* H1-2012: TSX listing
* Q3-2012: First production numbers and cash flow from Shafter; should increase cash flow by 5x from ~$25M/year (La Negra only) to ~$100M/year (La Negra and Shafter) assuming $34/oz Ag
* H2-2012: Resource update for Shafter; should extend mine life by moving resources from inferred to measured/indicated (also upside from new discoveries)
* H1-2013: Increase La Negra from 2000tpd to 2500 tpd; should increase AgEq production for this mine from 2.2Moz/year to 2.9Moz/year for a company wide production number of 6.7Moz/year
* H2-2013: Increase Shafter from 1500tpd to 2500tpd; should increase AgEq production from this mine from 3.8Moz/year to 6.3Moz/year for a company wide production number of 9.2Moz/year
* ???: Purchase of 3rd property
In addition to all this, you get a free option on rises in the price of silver. Silver is currently ~$33/oz. The inflation adjust past peak for the price of silver is well north of $100.
Assuming Aurcana can deliver on all their objectives listed above and the market rewards them with a P/E of 8 (similar to current P/E of their peers: HL, PAA, CDM) and they don't issue any more shares (which at this time they have no plans to do), I have the following share price targets for the end of 2013:
$25/oz Ag: $1.29
$30/oz Ag: $1.94
$35/oz Ag: $2.58
$50/oz Ag: $4.52
$70/oz Ag: $7.10
For details on how I arrived at these estimates, refer here: https://docs.google.com/spreadsheet/ccc?key=0AiuriBacoDs0dEdGdi1SaWs3Nm5zR3ZLdmpOOXA0aHc
Posted by Christopher Wood at 15:42
http://investmentrevaluationcatalyst.blogspot.com/2012/02/aurcana-near-term-catalysts-for-share.html
Typo- Make that PSLV.
Looks like its gonna hit that 1690 level to me. Not that far off.
General Comments By Trader Dan
* Wednesday, February 15, 2012
Gold is holding firm in today's session but has retreated from its best overnight levels. You will notice that within the larger time frame on the chart, gold has made a nice run to stiff resistance beginning near $1760 and then retreated. Buying on the downside coming in near the support level marked (close to $1720) has been extremely consistent over the last two weeks however. The result has been a constricting triangle forming which is a consolidation pattern.
Bulls cannot take it through resistance at this point but neither can the bears break it down. I happen to believe that the reason the latter cannot accomplish their intent is the reality of gold strength across a variety of other world currencies. Bluntly - the price of gold is holding in terms of all of the major currencies as savvy investors/traders are well aware of what the monetary authorities are doing to their respective currencies in order to keep the game of musical chairs, aka - the global economy - going.
Central Bankers and monetary authorities are doing what they were born to do, namely, destroy the value of their nation's currencies to benefit the big international banks within their midst. Gold is all too well aware of that and is doing what it always has done and always will do - function as a currency of last resort and a refuge from their depradations.
What we want to watch for in gold is a breach of this triangular pattern with a close preferably above the $1750 level to kick this thing up into that heavy resistance zone noted. Obviously gold bulls would want to see dips below $1720 meet with strong buying and an almost immediate return back above that heavy red line shown.
As another quick note of reference, check out the price of Gold compared to the price of the US long bond in the following chart. Note that going back to early 2009, when QEI was still in force, gold was the asset that investors favored in relation to the US bond market. After a brief dip lower in this ratio during the middle of 2010, when investors were fearful that another round of QE was not going to be forthcoming, the ratio returned in favor of gold until it peaked just after QEII expired and the Fed had nothing really significant to replace it. From that point on, bonds have been a better investment than gold.
That might possibly be changing at this point as interest rates crawl along at abnormally low levels and investors become more fearful of currency debauchment. The downtrend line in this ratio has been broken but has a bit more work to do in order to look more convincing. A move through the heavy blue line shown would do the trick.
At some point in this now multi-year game of constant liquidity doses and other quick fixes which solve nothing, investors will begin to dump bonds and move much more strongly towards gold. That will signal the beginning of the end game as the ratio will be flashing the loss of confidence in the political and monetary authorities to deal with this massive papering-over of the problem.
http://traderdannorcini.blogspot.com/2012/02/gold-is-holding-firm-in-todays-session.html
George.
Click on "In reply to", for Authors past commentaries.
Aurcana commentary excerpted from "My Affair With Silver ... And Where It Goes From Here"
by Stanley Barton
February 14, 2012
Aurcana Corporation [AUN.V] (AUNFF.PK) - $.84
AUN operates the 92%-owned La Negra silver/copper/zinc mine in Mexico and has essentially doubled the revenue and quadrupled EBITDA in 12 months ending September 2011. In May 2012, they will put into operation their 100%-owned Shafter mine in Texas, projected to be the 16th largest mine operation in the world, and second in the US only to Hecla's Greens Creek mine. On the Vancouver Exchange and US pink sheets, AUN has been under-the-radar, but it looks like that is about to change.
La Negra produces 1.7MM ounces of silver equivalent at $10.48 per ounce cash costs, and Shafter is expected to produce 3.8MM ounces in its first year at $8.27 per ounce. At $30/ounce spot price that equates to more than $.20 cash per diluted share each year. Silver grades are improving at La Negra as exploration continues. A new resource estimate is due during Q1 2012.
Aurcana has made some bold moves, making this one of the more risky investments in my portfolio. It had been flirting with bankruptcy and, in 2008, sold 50% of its silver stream to Silver Wheaton (SLW) to buy the Shafter mine. In 2010, it bought back the silver stream. In November 2011, they received $34.4MM in a private placement, which appears to be enough to get the Shafter mine in operation. In its effort to go from a tiny operation to mid-tier status, there have been warrant and option issues, leaving the share structure diluted to 558MM shares. However, it looks like the payoff is this year with significant events in the next few months: adding 33% capacity to La Negra, publication of upwardly-revised resource assessment and opening Shafter.
As I have gotten more comfortable with silver mining operations, I have found myself moving to higher risk/reward propositions. Now with these four miners in my stable, I am excited about the prospects for capital appreciation in the next five years. I know some readers will be critical that I have not gotten comfortable enough to add any pure exploration companies (non-producers), but I do have my eye on some. In the following discussion it may become clearer why I am shy about approaching those bold companies.
MY VIEW OF THE NEXT FIVE YEARS FOR SILVER
I think before making an investment, one should have a vision about where it could go and why. I have no crystal ball, but I do want to have logical expectations for an investment and a way to monitor its progress according to my vision. I also like to keep it simple enough so I can remember exactly why I made the investment.
Since my silver stock investments are in a ROTH IRA, my perspective focuses on how I expect silver to perform for the next five years. Since I am not trading these, I am not into micro-analysis, but I am more interested in the macro factors that will come into play during that time period. My expectation is that my investments in this portfolio will double in 5 years, or about a 15% average annual increase in value.
I think that the spot price of silver should increase 15% per year, and I am assuming that the miners' share prices will at least track that increase. Since the miners are actually leveraged, I think this is a conservative assumption.
There have been a number of studies analyzing the supply and demand for silver, comparing published production numbers against industrial and investment uses for silver. I consider this analysis admirably ambitious, but like my contractor neighbor describes construction estimates…it is a wild guess to the second decimal point. My logic tells me that the higher silver price has reopened dormant mines and paid for investments in increasing production on the supply side. The same increase in price has caused increased interest in physical silver as an investment in ETFs and others. I am not convinced that industrial demand alone will justify higher silver prices. The bigger influence will be the investment demand.
One of the supply factors that I do think will support the price in the near future is that silver miners will start keeping silver inventory instead of cash. Endeavor Silver (EXK) is choosing to withhold from the market some silver with the intention of selling when the spot price is higher. Most silver miners have large capital expenditure programs so they keep large cash balances. Easily they could hold 10 - 20% of that in their own silver, and removing that from the market supply would insure better prices. EXK is a stock I like, but I can't buy them all. Of course, holding off sales of their production will falsely make the income statement look as if they are underperforming.
Silver is linked to gold at a ratio lately of about 50:1. If gold is bid up in price, silver usually follows. Gold has almost no industrial use…its price is driven by fear and greed. The fear factor is a powerful and under-appreciated influence on the price of precious metals. Politicians, news outlets and investment advisors have learned what preachers have known for centuries: terrorism sells. A buck in the collection basket is insurance against an eternity in hell. Out-of-favor politicians must convince voters that the current decision-makers will lead us to Armageddon. Some "news" organizations build the terror angle around every facet of our lives to keep people glued to their commercials. I see this trend growing, and as long as this "media terrorism" continues there will be increasing demand for gold and silver. Political ideological wrestling has become a popular spectator sport that can only help silver prices.
Some of the doom and gloom may come to pass, but we cannot really predict when or how. My personal belief is that things are neither as good nor as bad as competing sides depict. For my analysis, I am assuming that over the five-year period we will probably have one earth-shaking disaster that will temporarily cause demand to overwhelm sellers. The longer-term effect of this event will be a propensity to hoard metals, contributing to the support of a gently up-trending price for silver. I also think that inflation will account for at least a 3% annual price increase in precious metals.
We should also have a downside forecast to let us know what could happen as we evaluate our risks. I think that silver should trade above $20 per ounce during the five-year period and if the spot price drops below $25 we are in the caution zone. It is notable that when miners produce estimates for net cost of production, value of proven reserves, inventories and other financial metrics, these are based on an assumed price of silver and its by-product metals. In most of these reports that I have read lately, that number is $20 to $25 per silver ounce. If silver drops below that price for an extended period, these metrics will fall in domino fashion. It could be similar to the housing bubble, where an unexpected drop in home value caused a chain reaction in related investments. Silver could free-fall below $20 as margin calls come into play in the commodities markets. Some who thought home prices would never fall now think precious metal prices can never fall….never say "never."
In my portfolio, I am not yet including companies that have no production. I recognize that with ever-rising silver prices these "exploration" miners could be the biggest winners. However, it is good to keep in mind that the payoff for these explorers is likely to be a takeover by a producer. With high silver prices, the producers are investing in expanding milling operations and exploring their own vast land resources. A prospect has to be very good to attract any real buyer attention. If silver falls to the $20 level, the values they put on their stakes may have to be revised downward, which would probably cause panic selling in their stocks. Producers will not have the cash flow to fund their own capital improvements, much less acquisitions. With no production cash flow and no buyers, the stocks of these exploration-only miners do not just drop, they can virtually disappear. As attractive as some of those prospects seem, it is too unpredictable making a move on those that are virgins to production.
Although I intend to hold for the long term, I would have to do some serious analysis of the situation if prices fell below $25 per ounce. A spot price of $20 per ounce in silver would imply a gold price of about $1000 an ounce, which I think would be a strong technical support area. The $20 level was also the resistance from 2008 to 2010, and that tends to become the support once it is handily breached. Therefore, my five-year plan is based on silver spot prices that trend upward to $70 per ounce by 2017 with $25 an ounce being the reevaluation trigger. If my vision is conservative, that is even better.
As for my silver antique investments, as my wife says -- they are not really investments because I will never sell them ... never.
Disclosure: I am long HL, RVM, EXLLF.PK, AUNFF.PK.
http://seekingalpha.com/article/366511-my-affair-with-silver-and-where-it-goes-from-here?source=yahoo
What they are doing is using it as a regular ATM as well with the transaction fees and the fee for purchase mixed into the equation.
GGCRF Silvermex Resources Inc (.50) Core asset is the producing La Guitarra silver-gold property located in the Temascaltepec Mining District of Mexico.
Q4 2011, the La Guitarra mine produced 134,106 ounces of silver and 1,010 ounces of gold. At the current rate of 320 tpd it is expected that the La Guitarra Mine will produce approximately 800,000 oz of silver equivalent per year. The Company's other area of focus is the recently consolidated Rosario/San Marcial Mining Camp in south eastern Sinaloa, Mexico. The Rosario/San Marcial mining concession consists of two past producing mines, resources and historic reserves as well as extensive production related infrastructure already in place.
Website: http://www.silvermexresources.com/s/Home.asp
TSX as SLX: http://tmx.quotemedia.com/quote.php?qm_symbol=SLX
Pinksheets: http://www.otcmarkets.com/stock/GGCRF/quote
IHUB: http://investorshub.advfn.com/boards/board.aspx?board_id=14442
11-9-11 Silvermex's La Guitarra Mine Achieves Full Capacity of Production Ahead of Schedule
http://tmx.quotemedia.com/article.php?newsid=45984751&qm_symbol=SLX
11-21-11 Initial Surface Drill Results Intersect High Grade Mineralization at Silvermex's La Guitarra Project
2-15-12 Silvermex Resources Delivers Production Growth in Fourth Quarter 2011
http://tmx.quotemedia.com/article.php?newsid=48465902&qm_symbol=SLX
http://tmx.quotemedia.com/article.php?newsid=46280177&qm_symbol=SLX
img]stockcharts.com/c-sc/sc?s=ggcrf&p=d&yr=1&mn=0&dy=0&id=p91049231258[/img]
Silvermex Resources Delivers Production Growth in Fourth Quarter 2011
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 15, 2012) - Silvermex Resources Inc. ("Silvermex") (TSX:SLX) reports fourth quarter production results from its La Guitarra mine, located in the Temascaltepec mining district in the State of Mexico. Silver production increased from the previous quarter to 134,106 ounces and gold production to 1,010 ounces.
Fourth Quarter Highlights:
Silver production up 94% from Q4 2010.
Gold production up 101% from Q4 2010.
The mine processed 23,810 tonnes of ore averaging 331 tonnes per day ("tpd"), above the average daily rate of 320 tpd.
Recoveries to concentrate averaged 89% in silver and 78.4% in gold.
As a result of the extensive revitalization programs completed throughout 2011, production rates increased steadily, exceeding internal targets and surpassing historic rates in the fourth quarter of the year. Of note, the month of November saw total tonnes of ore processed exceed historic records dating back to the year 2000, when the La Guitarra mine was operated by Luismin S.A. de C.V.
Head grades and metallurgical recoveries were lower in the fourth quarter due to milling of lower grade ore from development in the northwest zone and from milling of low grade material from surface mining in years past. The space occupied by the low grade material was needed for expansion of surface facilities and therefore processed during the quarter.
Duane Nelson, CEO of Silvermex commented, "We are very pleased with the progress we have made in 2011. We continue to advance the La Guitarra mine on schedule and on budget. The mill performed above its designed capacity exceeding our expectations. We are also very pleased with the performance of the mine and mill staff throughout the year. Our current development programs are now advancing in ore, increasing our reserve base and life of mine for 2012 and beyond."
Capital cost information for the quarter will be provided in conjunction with the year-end financial results to be released in late March. Silvermex is currently working on finalizing development and exploration plans for 2012. These will be announced in the coming weeks along with exploration results from La Guitarra and production guidance for the year.
Company Profile
Silvermex Resources Inc. is a publicly traded mining company focused in Mexico and led by a highly qualified team of professionals from some of the most notable companies in the silver mining sector. The Company's portfolio of projects ranges from early stage exploration to production. Its core asset is the producing La Guitarra silver-gold mine located in the Temascaltepec Mining District of Mexico. Silvermex is currently working to identify future production centers through extensive exploration programs to further develop the district. Silvermex is well financed to further develop resources organically from its multiple projects as well as from the acquisition of additional assets that will drive production growth.
ON BEHALF OF THE BOARD
Duane Nelson, CEO & Director
This News Release contains forward-looking statements. Forward looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking-statements. Management has assumed that these will be our major projects going forward. Risks include that we are unable to satisfy environmental or other regulators, that we determine that our resources are not commercially viable, or that we have difficulties due to unavailability of labour or equipment.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggests herein. Except as required by applicable law the Company does not intend to update any forward-looking statements to conform these statements to actual results.
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this release.
http://tmx.quotemedia.com/article.php?newsid=48465902&qm_symbol=SLX
Back in '99 all we had to do was sit there and we made gobs of money. Bring back the blue dress PLEASE!
Silver Bull Intersects 19.9% Zinc Over 10.85 Meters and 144 g/t Silver Over 31 Meters on the "Shallow Silver Zone" at the Sierra Mojada Project, Coahuila, Mexico.
Vancouver, British Columbia CANADA, February 14, 2012 /FSC/ - Silver Bull Resources Inc. (TSX:SVB; NYSE-AMEX:SVBL), is pleased to announce more drill results from the 2011 drill campaign on the "Shallow Silver Zone".
Highlights include;
* Results from 62 diamond core drill holes into the "Shallow Silver Zone", equating to 11,024 meters of the 36,800 meter drill campaign completed in 2011.
* 80% of the drill holes intersected zones of silver oxide mineralization >30g/t Ag, including; 144g/t Ag over 31 meters, 109.3g/t over 12.55 meters and 89.4g/t Ag over 36.25 meters.
* Significant zinc intercepts including; 19.9% Zn over 10.85 meters, 4.57% Zn over 15 meters and 3.14% Zn over 57.70 meters.
Silver Bull's 2011 drill program of 183 drill holes totals 36,800 meters and focused on the "Shallow Silver Zone" and the newly discovered "Centenario. The program was designed to infill zones of mineralization defined by previous drilling as well as continue expanding the resource in north, east, and westerly directions through step out drilling. The results have confirmed the continuity and tenor of the extensive silver and zinc mineralization seen at Sierra Mojada, and mineralization remains open in all directions. Silver Bull's drill program is ongoing with 3 rigs currently onsite. Please see http://www.silverbullresources.com for more information.
A table of selected intervals from the reported 62 holes is shown
below.
--------------------------------------------------
Hole ID From(m) To(m) Interval Ag g/t Zn %
--------------------------------------------------
B11076 45.95 56.80 10.85 4.84 19.90
B11077 134.20 135.40 1.20 5.33 10.06
B11079 45.45 58.00 12.55 109.39 0.45
B11080 89.70 138.00 48.30 64.93 1.64
B11081 80.00 95.00 15.00 27.99 4.57
B11082 49.00 80.00 31.00 144.04 0.34
B11083 100.00 129.00 29.00 29.76 0.40
B11084 83.40 104.00 20.60 67.00 3.41
B11085 149.20 164.00 14.80 57.80 0.57
B11087 60.45 68.00 7.55 42.79 0.33
B11088 73.30 131.00 57.70 30.86 3.14
B11089 185.45 186.60 1.85 8.80 6.22
B11093 135.35 144.55 9.20 31.80 0.24
B11097 22.00 46.25 24.25 16.90 0.25
B11110 52.65 65.00 12.35 61.70 1.83
B11112 35.10 56.00 20.90 35.66 0.53
87.15 119.00 31.85 77.04 0.35
B11115 80.00 88.25 8.25 92.50 0.25
B11118 112.75 149.00 36.25 89.40 0.22
B11121 112.20 130.00 17.80 21.50 0.26
B11127 67 83 16 66.54 0.11
137 139 2 2.90 9.68
--------------------------------------------------
Evolving Gold's February 14th Corporate Presentation (EVG ~ EVOGF)
http://www.evolvinggold.com/assets/files/pdf/EVGptn-14Feb12.pdf
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Evolving Gold Corp. National Instrument 43-101
Technical Report on the Rattlesnake Hills Project, Natrona County, Wyoming USA
I like the idea but I don't see how they will be able to make any money... ever. A lot of debt that can only grow in future. IMO.
PMXO check it out, it is a very interesting play on gold. They are the first and only company to introduce the first Gold bullion ATM in the United States and are now working on bringing more machines online across the country. Here is the news from yesterday:
http://www.marketwatch.com/story/pmx-gold-confirms-international-patent-filing-updates-investors-regarding-return-of-8000000-shares-to-treasury-gold-atm-prototype-status-pmx-gold-exchange-launch-2012-02-14
Management has returned 8 million shares back to treasury. The company is looking to bring a top name CEO to the company in the near future. Here is the IHUB page I am running on the company:
http://investorshub.advfn.com/boards/board.aspx?board_id=19583
Also here is the new website they introduced yesterday:
http://pmxgold.com/
<<2-14-12 8:40pm all signals on sell for gold stocks. Prefer not to see GDX break $53. The $NASI is a hair away from curling over into a sell signal>> Toco.
Yea baby! I've got DUST. I'm getting hurt elsewhere.
Ed Asner is talking about US doing a "false flag attack" against Iran. You'd think war would be good for gold and for bad for the markets.
Greece is done. Europe not far off, riots. You'd think that would be good for gold and bad for the markets.
Bernanke has got all the bases covered, doesn't seem possible, but I still would like to see Fat Fingers return. I still remember I think it was March 2000 watching my screens when stocks like Sun Microsystems were trading around $120 and suddenly the bid/ask on everything literaly got halved for a few minutes.
This showed the weakness in the markets.
Years ago I had hoped gold and silver miners would gain as much popularity as the internet stocks did back in the 90s. For a variety of reasons, that hasn't happened. Gold and silver have been suppressed and the stocks have too--it's a tiny market and easily controlled.
That might change with persistent QEs and a spark of hyperinflation. We might still see some incredible runs...especially with some of the micro miners.
Prodigy Announces Increase in Bought-Deal Public Offering to $42.5 Million
Prodigy Announces Increase in Bought-Deal Public Offering to $42.5 Million
http://www.usetdas.com/PR/prodigygold10022012.htm
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72123689
On behalf of the Board of Directors
Brian J. Maher
President and Chief Executive Officer
Source: Prodigy Gold Inc. (TSX-V: PDG) http://www.www.prodigygold.com
FOR FURTHER INFORMATION, PLEASE CONTACT:
Prodigy Gold Incorporated
Email: ir@prodigygold.com
Website:
http://www.prodigygold.com
tel.: 1-604-688-9006 Fax: 1-604-688-9029
http://tmx.quotemedia.com/article.php?newsid=48215912&qm_symbol=PDG
Magino Gold Mines Property -
http://prodigygold.com/projects/gold_division/magino/
http://prodigygold.com/
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71346228
Thanks for posting the gold miners board, Montanore. I dont have that one boardmarked. My small and mid cap Janus funds have been going bezerk. Liquidity always starts at the bottom and that is what we are seeing in micro miners at the moment.
I guess I lucked out. I understand not chasing a stock. Especially a penny stock.
GDSM has been doing great. I picked up mine at .0006 and sold most too soon. But with all the losers I've had it was nice to cash in a winner. I still have some shares and will see if can go to a cent. I think it can.
I'm in many others too, and while a lot of them pulled back today, some will break out to new highs. The pinks and OTC gold miners have been doing better than the juniors and majors lately. Someone here said it has been way overdue and I agree.
People have posted a lot of promising penny miners on the penny gold miners board:
http://investorshub.advfn.com/boards/board.aspx?board_id=21858
Congrats. I don't jump in on a run like that. I found my spot on the chart (.0032. I think it turned @.0033. I was off .0001 so shoot me)that IF it went there, I would buy. Same method to buy GSS under 50 cents and HL under 2 dollars way back. Most of the time they hit my mark, but if they don't, I let 'em go especially if they run like this one. Good for you though!
I bought GDSM @ .0036 I think I even posted it here didnt I?? Still not to late with this one. I believe its yet to show just how powerful the chart set up is and what is to come.
Yup I posted it. Bought the volume burst and am doing well with this one. It will be over a penny in short order.
<<<Perhaps they should. My biggest all time gainers by far have been penny and sub-penny gold stocks.>>>
Well, they say one can't win or lose them all and hopefully, those mega gainers have more than offset your past trades in either GSS and HL.... I can't remember which. <g>
Perhaps they should. My biggest all time gainers by far have been penny and sub-penny gold stocks.
<<<How are you doing on GDSM?>>>
I never owned it, RBK..... my scans don't lQQk at sub penny plays.
It's penny stock time. Way overdue. The last craze was around 2002.
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