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I can foresee one coming also. I sincerely hope it won't happen, but have stopped putting some of the spare cash into silver and started stocking a lot of ammunition. Just better to be prepared to defend yourself than wishing you had. The aftermath of Katrina in NO should have been a wake up call to everyone.
.....al
Gold's best friend:
By JEFF ZELENY
Published: January 6, 2009
WASHINGTON — President-elect Barack Obama on Tuesday braced Americans for the unparalleled prospect of “trillion-dollar deficits for years to come,” a stark assessment of the economic condition facing the country that he said would force his administration to impose tighter fiscal discipline on the government.
Mr. Obama sought to draw a distinction between the need to run what would likely be record deficits by any measure for the next several years and the necessity to begin bringing them down substantially in following years. Even as he prepares a stimulus package that is likely to total in the range of $800 billion in new spending and tax cuts over the next two years, he said he would seek to make sure that money is used wisely and that he would work with Congress to implement spending controls and efficiency measures throughout the federal budget.
“I’m going to be willing to make some very difficult choices in how we get a handle on his deficit,” Mr. Obama said, speaking about the dire fiscal outlook as he met with his top economic advisers for a second straight day. “That’s what the American people are looking for and, you know, what we intended to do this year.”
Mr. Obama sought to reassure lawmakers, as well as the financial markets, that he is aware of the long-term dangers of running huge deficits. Big deficits force the government to borrow more money, saddling future generations with large financial burdens. The problem is especially acute now because credit markets, which at times in recent months have been all but frozen as the financial system has been buffeted, could be further strained by the need to finance the huge deficit.
The Congressional Budget Office will release its latest budget estimates on Wednesday, which will provide the first official predictions of the built-in shortfalls tied to the economic slowdown and the collapsing financial markets. Mr. Obama’s team of economic and budget advisers have spent nearly two months scouring the budget, preparing to submit their first budget.
“When the American people spoke last November, they were demanding change — change in policies that helped deliver the worst economic crisis that we’ve see since the Great Depression,” Mr. Obama said, speaking to reporters on Tuesday. He added, “They were demanding that we restore a sense of responsibility and prudence to how we run our government.”
Behind Mr. Obama’s reassuring message about fiscal discipline is the government’s need to borrow a staggering amount of money over the next two years without driving up interest rates in the process. Analysts predict that the federal deficit will hit a new record of at least $1 trillion this year, which would be not only be more than double the previous record in 2005, but would also overtake the previous record for deficit as a share of the gross domestic product.
Diane Rogers, chief economist at the Concord Coalition, a non-partisan organization that supports fiscal discipline, estimated that the deficit this year would hit 7 percent of GDP.
That deficit, which could easily be duplicated in 2010, will occur just as the government will have to grapple with the much bigger and more intractable long-term budget problems tied to soaring costs of Medicare, Social Security for retiring baby-boomers.
Most economists agree that Mr. Obama and the Congress have no choice except to ignore short-term deficits and place top priority on fighting the country’s worst economic downturn in at least a half-century. But the short-term budget short-falls are big enough to pose serious headaches in themselves, especially if bond investors start demanding higher interest rates.
In just the first three months of the 2009 fiscal year, which began on Oct. 1, the government spent $408 billion more than it took in. About one-third of that short-fall stemmed from the Treasury Department’s rescue program of injecting capital into banks, which the government will book as an “investment’“ rather than “spending.”
The recession itself will add hundreds of billions of dollars to the deficit. Even before Congress adds any new stimulus measures, higher outlays will climb for existing unemployment benefits, food stamps and other social programs. Tax revenues will fall because of rising unemployment, falling corporate profits and huge investment losses in the stock and bond markets. Mr. Obama’s stimulus program could add another $400 billion in each of the next two years.
As the latest budget estimates are released on Wednesday, the good news, at least for the moment, is that the Treasury’s borrowing costs are as almost as low as they have ever been. Short-term Treasury rates are hovering just above zero, but the rates on 10-year Treasury bonds are below 2 percent.
To some extent, the government can lock in those low rates by selling long-term securities. But it will still have to refinance hundreds of billions of dollars a year. As a result, its annual debt-service costs could be hit with a double-whammy: a big increase in total debt and an eventual increase in interest rates as they recover from their current rock-bottom lows.
Goldman Sachs recently estimated that government debt will balloon by $1.75 trillion in 2009. But Goldman analysts were optimistic that borrowing costs will remain low, partly because they predicted that the United States saving rate is likely to soar as both consumers and businesses hold back on spending.
Last summer I posted the 4 pillars of success for Eternal Image. We are now awaiting the impending uplisting to the otcbb. We have had an extremely successful convention. We have the national distributor officially on board. And Heppie is still with us. The foundation is in place. Altho I really don't think it is happenning, we must not allow our team to rest on these laurels. We now need the blocks to continue building this oh so promising company. An NFL, nascar or harley davidson license would be a great addition. I don't think for one minute that the hierarchies of these organizations have missed all those news articles in many major publications about MLB caskets and urns and the popularity that has been generated. I think it's very possible a little patience may just pay off with a nice surprise in the licensing department. In the meantime we'll just depend on the Ks and Qs to start adding the blocks to that foundation. Last thought- has anyone contacted any of those organizations with one of those MLB articles attached and suggested how nice it might be to be buried in a nascar, harley davidson, or Oakland raiders casket?
.........al
Butler's latest;
A Specific Issue
By: Theodore Butler
-- Posted 6 January, 2009 | Digg This ArticleDigg It! | Discuss This Article - Comments: 1
The swirl of controversy continues to surround the alleged Madoff fraud and the failure of the SEC to uncover and deal with the scam years earlier. Media coverage has been non-stop and congressional hearings have commenced. Perhaps one of the most comprehensive articles, tying the Madoff/SEC connection in with the general state of the financial world appeared in the Op-Ed section of this Sunday’s NY Times. The article, titled "The End Of The Financial World As We Know It" was co-authored by Michael Lewis and David Einhorn, two highly-regarded observers of the financial scene.
(http://www.nytimes.com/2009/01/04/opinion/04lewiseinhorn.html?_r=2&hp) The best thing about the article was that it was two-part, with the second part titled. "How To Repair A Broken Financial World." It’s one thing to describe a problem and quite another to offer specific remedies. For this, the authors must be congratulated.
There were some striking similarities in the article between Madoff and the SEC and the allegation of a silver manipulation and the CFTC. Substitute silver for Madoff, and CFTC for SEC, and I think you can visualize the silver manipulation with clarity. The long-term nature of the frauds, the amount of money involved, previous outside warnings, and the obviousness in each, if one would only look with clear eyes. While I urge you to read it in full, I would like to highlight one aspect of the article, namely, the structural inability of either the SEC or CFTC to move against large financial institutions engaged in active criminal activity.
The authors explained that this inability may be due to many things, including a staff inexperienced in complex financial dealings. The article was also among the first to mention the inherent conflict of interest between the career stepping stone that exists for SEC (and CFTC) personnel moving to the private sector. Who wants to move aggressively against a potential employer or establish a reputation that alienates many potential employers? The article cited the move of the former chief of the Enforcement Division of the SEC to general counsel of JP Morgan. In addition to many similar moves by former personnel in the CFTC to private industry, what could be more conflicted than a former Chairman of the CFTFC moving to become CEO of the NYMEX/COMEX? The authors did propose restrictions on such moves as one of their solutions. I would agree.
I believe there are many other obstacles working against the CFTC conducting a fair and impartial investigation of the silver manipulation. For one thing, the CFTC has never busted up a manipulative crime in progress, they only appear on the scene after the damage has been done. I don’t think they are capable of stopping a crime in progress, no matter how egregious the manipulation. Making matters worse is their past consistent denial that anything is wrong in silver. How embarrassing will it be for them to now admit they were wrong after so many years? Even when they "announced" the onset of the current investigation back in September (via a leak to the Wall Street Journal), they indicated that they were still skeptical that anything was amiss in silver. Then why waste taxpayer money to investigate at all? I’ll tell you why. - because the allegations are based upon specific evidence.
Because the CFTC has backed itself into a corner with their past findings in silver, the only thing that could possibly force them to alter their stance is credible and specific evidence of manipulation. That evidence is the level of concentration on the short side of COMEX silver. It is credible because it is the Commission’s own data. It is specific because it shows the positions held by just a few traders. Smaller concentrated positions have served as the basis for all past charges of manipulation by the CFTC, so the silver concentration can’t be easily brushed aside. Even now, months into the latest investigation, no one (inside or outside the CFTC) has stepped up to explain how one or two U.S. banks holding 25% of the world production of any commodity could not be manipulative.
I know many suggest that I harp on this issue of concentration repetitively. That is true, it’s intentional. The key is specificity. Engage the CFTC in some broad debate on whether silver is manipulated and they will have your head spinning. If you don’t believe me, just reread their official responses in May of both 2004 and 2008. Look, I know silver has been and is manipulated in price, as do many of you. So what? The trick is to have it confirmed by the CFTC or by market action. One of the two is coming, maybe both. And all because of the issue of concentration.
To that end, let me introduce some new and specific evidence of a manipulation in silver, via concentration. Once again, the evidence is from the CFTC itself, in the form of their weekly Commitment of Traders Reports. In spite of the ongoing investigation and a higher level of awareness of the issue of concentration, the last two COT reports have indicated a level of concentration more extreme than in almost six years. The four largest short traders in COMEX silver futures now hold a net short position of more than 47% of the entire market. You have to go back to March 2003 to find a higher level of concentration.
And this number greatly understates the true level of concentration by these four large traders because the CFTC doesn’t subtract spreads from their calculations. Once all spreads (the listed non-commercial and imputed commercial) are removed, as they should be, the true concentrated position of the 4 largest shorts rises to more than 65%. I’d like to see anyone contend that a few traders holding 65% of any market does not dominate or control that market.
I started writing publicly about the concentrated short position in COMEX silver in early 2000, before Investment Rarities began underwriting my research. It has always been the central proof of manipulation in silver. The fact that the unique concentration on the short side of silver is still in place and has grown more extreme is proof of the manipulation and the only explanation for the low price. It is the issue that matters. That’s because the minute this short concentration ends, the manipulation ends. Someday the concentration and, therefore, the manipulation will no longer exist. Then the price of silver will be free, not manipulated. The free price will bear no resemblance to the manipulated price. I think that day is close at hand, primarily because so many are becoming aware of this issue.
I totally agree, NH, about just numbers now, but what will the future hold when those numbers become greenbacks? Here's one opinion and I recco all to read. It's eye opening.
http://seekingalpha.com/article/113169-profiting-from-bernanke-s-super-fed-and-obama-s-newer-deal
I still remember Y2K and the panic. I think you and I were the only ones that were remaining calm thruout. My stepbrother was one of the key players in the electric industry working on the power grid at the time. He told me not to worry so I didn't. I think some peoples are still trying to sell all those generators.LOL.
Great PR today. The national distributor we have been waiting for. It shows the company wasn't sitting on their duffs while the SEC was fiddling. And yes they still have a long way to go. Increasing sales and revenues reported on the Q each quarter. That's what will make or break the company. It won't happen overnite but I'm willing to wait. Been waiting over 2 years now so a little longer won't hurt. I knew when I first bought in that this was a long termer. I just have a liking for those niche markets, especially when everyone is a potential customer at some point in time. No exceptions.
......al
Great article, should be mandatory reading for all.
........al
LOL, NH you are right. But it ain't me. It's my army brat.
I bought those additional shares on a whim. In the past when I have bought I usually went for several million, pre split, and at least a half mill post split. Still have my beliefs in where this company will go, but haven't backed it with additional share purchases in a long time. Been too busy gobbling up silver and with the nupitals upcoming there goes even that part. There are always a lot of jokers in the investment deck and the key to having a winning hand is the elimination of as many of them as you can. While I feel I have done that with ETNL, there is also a wild card in the deck that will affect all domestic companies. It's the one no one can really figure out- the economy. We can certainly speculate and point fingers at the many causes of the current mess but what will ultimately happen to all US based companies if the dollar really crashes and the economy really breaks down? I believe the latest figures from Bloomberg are over $9 trillion ($9,000,000,000,000) pumped into the economy and banking system so far with I'm sure more to come. Right now it all just digits on a balance sheet. What happens when it all becomes monetized? Just something more to think about and get more grey hairs or in my case lose more of them, LOL.
........al
By Edmund Conway
The Telegraph, London
Monday, January 5, 2009
http://www.telegraph.co.uk/finance/4125947/Willem-Buiter-warns-of-massiv...
Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.
The long-held assumption that US assets -- particularly government bonds -- are a safe haven will soon be overturned as investors lose their patience with the world's biggest economy, according to Willem Buiter.
Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.
The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency's prospects, as well as sparking fears about the sustainability of President-elect Barack Obama's mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.
Writing on his blog, Prof Buiter said: "There will before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place."
He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" -- an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.
"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally," he said. "Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed."
He said investors would, rightly, suspect that the US would have to generate major inflation to whittle away its debt and this dollar collapse means that the US has less leeway for major spending plans than politicians realise.
I hope some of the more knowledgable posters on the junior mining sector step in here. I'm not that familiar with them. I used to swing trade PAAS and SSRI but haven't touched either since the summer.
.....al
EBAYaim- I'm sure there are many opinions on the metals market out here and they may vary in strategy and include charts and fundamentals and a lot of history and current events. Personally I believe we are in a long multi year bull market in gold and silver. I'd say at least 5 years possibly closer to 15-20. It may take that long for all this money being printed the world over to work it's way into the system resulting in some really heavy inflation. Inflation is gold's best friend. My perspective is from a buy and hold physical metals for the longer term, no margin. Short term flucuations don't bother me. I am not currently accumulating gold. I did that back at the $350 area and am well stocked at this point. I am buying as much silver as I can afford, mostly in old US 90% coinage. To me silver is more volatile and percentage wise will gain a lot more than gold- that is only my opinion and some will disagree. At current spot prices gold will have to hit $1700 for a double and silver $22. I am not planning on selling either at those prices just showing some math. There are also some knowledgable people throughout the metals world that are saying there is more above ground gold available for investors than there is silver. I can't confirm it, but I do know much silver is consumed in many different applications, while almost all gold is held with miniscule amounts being used industrially. Many marginally profitable mines have closed this year leaving supply shortages in both metals, but mostly in silver. I won't even go into the various conspiracy theories that abound on price fixing in the spot markets. I post Ted Butler's comments on this board when he comes out with a new article. The US dollar is toast and all that realize it are seeking the safety of gold and silver. This recession that the gov't finally admitted we're in has a long way to go with much more economic pain to come. Gold and silver will go a long way towards easing that pain. Best of luck to you and stop back to the board often as there are some very knowledgable posters here well worth the reading of their thoughts.
........al
had some spare change last week and picked up 30000 more. It's not my usual share buying range, but wedding in Tampa coming up and is eating up powder like you wouldn't believe.
........al
The SEC Makes Wall Street More Fraudulent
Daily Article by Robert P. Murphy | Posted on 1/5/2009
The mainstream reaction to the Bernard Madoff scandal was inevitable. Whenever a government regulatory agency proves itself to be incredibly incompetent or corrupt, the respectable media swoop in to declare that the "free market" has failed and the agency in question obviously needs more money and power.
Whether it's the Department of Education's failure to produce kids who can read, the FBI's accusations against innocent people in high-profile cases, or the FDA cracking down on tomatoes, the answer is always the same: proponents of bigger government argue that yes, mistakes were made, but the solution of course is to shovel more taxpayer money into the agencies in question.
In the private sector, when a firm fails, it ceases operations. The opposite happens in government. There is literally nothing a government agency could do that would make the talking heads on the Sunday shows ask, "Should we just abolish this agency? Is it doing more harm than good?" It's not just Fannie Mae and Freddie Mac: throughout history, virtually every agency created by the federal government has been deemed too important to fail. (I vaguely remember some Republicans in the mid-1990s holding a press conference and declaring that the Department of Commerce was done, and that voters could "stick a fork in it." I guess they found it was still pink inside.)
Madoff's Ponzi Scheme
The pattern plays out perfectly with the SEC and the Madoff bombshell. Suppose a few years ago, I told a group of MBAs to imagine the worst screwup that the SEC could possibly perform, something so monumentally incompetent that members of Congress might openly question whether the agency should continue. I think that at least half of the class would have come up with something far less outrageous than what has happened in fact.
Everyone who reads the headlines knows that Bernard Madoff is accused of running a massive Ponzi scheme that, for over a decade, has ripped off investors to the tune of $50 billion. But those who dig a bit deeper learn that Harry Markopolos, who used to work for a Madoff rival, has been writing the SEC since at least May 1999, urging them to put a stop to Madoff's Ponzi scheme. (Markopolos examined the options markets that Madoff told investors he used to hedge his positions and yield his steady stream of dividends, and Markopolos concluded that Madoff's results were impossible.) Incredibly, the SEC apparently had evidence in front of its face sixteen years ago (in relation to another case) that Madoff was a crook.
Yet it gets worse. As the Wall Street Journal and others dig into the story, they find that Madoff's family had close ties to the SEC. His sons, brother, and niece, for example, worked with or advised financial regulators on certain matters—no doubt telling them the best way to protect investors from fraud.
But the pièce de résistance is that Madoff wasn't caught; his own sons turned him in after he came to them and admitted what he'd done. (Let's assume they are telling the truth and didn't realize what their father was up to all along.) And even Madoff's confession was not because of a visit from the ghost of Christmas future. No, Madoff's scheme simply ran out of gas, because of large redemption claims that his clients filed, due to the collapse of the financial markets. Had it not been for the bursting of the credit bubble, Madoff would likely still be bilking new investors — and advising the SEC.
Laissez-Faire Ideology to Blame?
Even though George Bush has presided over the most interventionist government since FDR's New Deal, he somehow has a reputation for being a free marketeer. (It's funny that his political opponents take him at his word when it comes to economic rhetoric, yet they don't universally refer to Bush as a lover of world democracy and peace.) Naturally, the Madoff Ponzi scheme is blamed on the Bush administration's failure to adequately fund and staff the beleaguered SEC. "Bush thinks markets are self-regulating, and look what happened!"
This is complete balderdash. The SEC under George Bush has the biggest budget and the most personnel in its history. The charts below show the annual budgets and "full-time-equivalent" staff for the SEC by fiscal year. These numbers were obtained from the annual SEC reports archived here. (Note that there might be a slight discontinuity in the budget series in the year 2003, when the report format changed.)
It's even more interesting to break down the growth rates in budget and staff by presidential administration. For the following table, I have assumed that an incoming president doesn't really influence the SEC's operations for that (partial) fiscal year. For example, Ronald Reagan won the election in November 1980, and was sworn in the following January 1981. To gauge how much he increased the SEC budget and staff, I look at the annualized growth from FY 1981 (which ran through September 1981) to FY 1989. However, I also ran the numbers going from FY 1980 through FY 1988 etc., and it doesn't really affect the results.
Administration Annualized SEC
Budget Growth
(not inflation-adjusted) Annualized SEC
Full-Time Staff Growth
Jimmy Carter 9.3% -1.2%
Ronald Reagan 7.5% 1.4%
George H.W. Bush 15.3% 6.7%
Bill Clinton 6.8% 1.4%
George W. Bush 11.3% 1.0%
As the table shows, clearly the person who hated the free-wheeling market most was the first President Bush, followed up by his son. And especially when we consider the high inflation rate, it's obvious that Jimmy Carter was a laissez-faire ideologue. Bill Clinton, in contrast, had the same attitude towards speculators as Ronald Reagan.
Naturally we can quibble with these conclusions. Maybe Bill Clinton's numbers would have been a lot higher had Newt Gingrich remained a history professor. Maybe George W. Bush used the Enron scandal to beef up the SEC's budget, while he gave orders behind the scenes to use the cash for pizza and beer rather than enforcement.
But whatever the excuse, it just proves my point: it is foolish to give the task of ensuring financial integrity to DC politicians. The SEC was supposedly retooled after the Enron fiasco in order to do its job. And it failed miserably. Some heads may roll and budgets balloon, but if history is any guide, there will be another huge financial fraud within another decade.
Conclusion
The SEC clearly botched its alleged job in the case of the Madoff Ponzi scheme. Taxpayers are certainly entitled to ask, "What exactly are we getting for our (now) $900 million per year?"
It is not simply that the SEC failed to help. On the contrary, the SEC is actively harmful. For one thing, its implicit blessing of Madoff probably reassured some investors; surely the SEC would have shut him down if his returns were bogus! Beyond that, the SEC has been horrible during the financial crisis. In the summer it engaged in a phony ban on "naked" short selling that was already illegal, and then a few months later it banned short selling outright on hundreds of financial stocks, a move that paralyzed that particular sector even more. And lately, they've decided to launch a witch hunt on Mark Cuban—those 3,000+ employees have to do something.
Democrats should not take away from the Madoff scandal the lesson that Republicans cannot be trusted to regulate financial markets. Even if it were true that Democrats would run it more honorably and competently, eventually another Republican will win the White House.
Rather than pitting each party against the other, it is wiser to conclude that Washington politicians and bureaucrats will never put the average taxpayer or investor's interests above those of billionaire financiers. The SEC should be abolished, and investors should rely on private-sector watchdog groups to spot swindlers.
Turmoil throughout the world is certainly not off topic as far as gold goes. Look back in history. Whether the turmoil was economic, political, or military gold has been the harbinger of security for those that held it. No matter the outcome of the crisis gold always came through unscathed. Current world dilemas are no different. With the worldwide financial integration of markets any large blip in peace and order definately has an impact on all precious metals, gold in particular.
........al
Alex is no longer CEO. He has been kept on as a consultant. Also, Lisa Pahl has been kept on in a different capacity. I noticed that Colby doesn't do PRs anymore. I will call the TA this week for a share count update. For shareholders, the most recent counts may be considered encouraging. New management has their work cut out for them. Personally I think the mountain of accumulated deficits is too heavy to weather. Bankruptcy could be an option. They will need money to operate with little revenue coming in. Looks like more shares will be sold. Also keeping Alex on even as a consultant will hurt the company. He carries a lot of bad baggage and a bad reputation with shareholders as uncaring. It comes with using a company as a personal ATM. I have received dozens of emails from former shareholders applauding the indictment of Alex even though it wasn't from what he did to them as former shareholders in this company. I have heard recently from others that were never invested but knew of what was going on in this company over the years. All happy to see justice finally done. I think keeping Alex on in any capacity will continue to hurt this company. The new management may not have a choice as I haven't read anywhere that Alex has divested his preferred stock with the super voting rights. I can only assume he is still in control of the board which means he still controls the company. It's definately something to keep in mind if considering investing in the "new" management.
.......al
I always liked to try and be ahead of the curve. This is the letter I sent to my US senator on July 28, 2008. Needless to say I have yet to receive a response. And always remember it's not what you know, but who you know and how much money you have.
....al
Senator Casey-
It seems that many of our tax dollars are now being used to bail out
mismanaged public corporations and foreign investments in these same
corporations. I have stocks in my portfolio that are now worthless due
to the same type of mismanagement. I will send for the certificates.
Would you kindly send me the address to forward them to. I'm not asking
for hundreds of billions of dollars, just maybe $20,000. I have received
no bonuses from these companies or any other compensation. I am just a
small investor that used some poor judgement in the past and would like
to turn some of this worthless paper into our Federal Reserve in
exchange for cash. I understand it is now the trendy thing to do. Please
send this information as soon as possible before Fannie, Freddie, and
Wall Street take it all and there is none left.
Thank you
King- no problem. I gave you WTVN, now WTVI, a while ago for the hall of shame. To update, Alex Kanakaris the former CEO of WIFT has been indicted by the SEC for securities fraud. I say former because soon after the indictment he quietly left the company even though the indictment wasn't about WIFT. It was about another company where he was a principle and 80% owner called Swedish Vegas. He used WIFT as a personal ATM for many years duping new investors with name and symbol changes after the many reverse splits. It is a name evryone should keep on file and if it ever comes up in anyone's DD about a company they should run away as fast as possible.
.......al
Excellent advice. Should be mandatory reading for anyone that plays the market. Ibox material?
......al
Thanx for the names. I keep a file on them along with the companies they get involved with. When I look at possible plays, if a name pops upthat I have run into before, it's time to run away. I leave a warning on a board like this but no one listens.
I sold the day before the R/S took my loss and won't look back. But I've got a long memory for crooks like these.
.......al
Legitimate questions. When no verifiable info is available you get into the real risk/reward gambling mode. Odds are better playing red or black, but if it hits, the payout is far more substantial. The odds against hitting are also substantial. Hence the market in pinkie stocks. Bottom line is if you can't afford to lose it, don't play penny stocks. You will have far more losers than winners. If you do play, cut losses quickly and let the winners ride as long as your gut can take it. Remember parabolas crash just as fast as they rise. In this arena you are up against some people that are very good at what they do, which is separating you from your cash. They include crooked CEOs, market makers, and the pump and dump crowd. And I don't know which is worse.
Have a happy healthy 2009 to all here.
..........al
I sincerely hope you are right. I just don't think big money would let the constitution stand in the way of their agenda.
Best of luck for a happy healthy 2009 ahead.
.....al
RB- I've never been much of a chartist. I probably only know enough to get me in trouble. I go with fundamentals more than anything. Over the years, I've seen too many chart says this and chart is bullish only to see a stock tank. I've played them and lost more than I've gained. If I'm trading I have done far better playing momentum. However for strictly investing and by that I mean longer term stuff not day trading or swing trading, I have rarely been burned by studying the fundamentals. That's why I am currently holding more than half of my investments in gold and silver. I've been shifting steadily since 2001 and will continue to accumulate. Fundamentals are getting stronger with every extra dollar, euro, pound and all other currencies printed to inflate our way out of the current situation. I'm sure that the charts are showing something similar long term.
........al
If it is indeed soccor, then Europe is the place to be. If anyone thinks Philadelphia sports fans are rabid, they've never seen a German or British futbol game.
......al
The idea of expanding operations and sales into South America on the surface sounds like a logical extension of North America. When one thinks soccor, Europe and South America come to mind internationally. My fears would be the unstable political situation in many Central and South American countries. The influence of Chavez and growing anti American rhetoric has to be closely scrutinized before committing any kind of investment into south of the border. Political instability leads to economic turmoil and is not a safe place for capital expenditures. The micro economics of a venture may seem sound and logical, but the macro situation is very murky. Sorry, this may not be what anyone wants to hear, but those are my thoughts.
............al
repost of the South America mention. He said "hoping", nothing concrete.
Let me take a moment to wish everyone a happy, healthy, and prosperous 2009 ahead.
........al
Crain's Dtetroit Business article: 2009 sales projections
http://www.crainsdetroit.com/article/20081223/FREE/812239981/-1
3:23 p.m., Dec. 23, 2008
Eternal Image moving from Pink Sheets to OTC Bulletin Board
By Nancy Kaffer
Farmington Hills-based Eternal Image Inc. is moving up in Wall Street’s world.
The Securities and Exchange Commission has approved the Farmington Hills-based maker of licensed brand image funerary products’ application to move from the Pink Sheets to the Over the Counter Bulletin Board exchange.
Companies listed on the OTCBB are required to file financial statements with the SEC, or a banking or insurance regulator. There are no such requirements for a Pink Sheets listing. The OTCBB is offered by the National Association of Securities Dealers, but companies listed on the bulletin board aren’t part of the Nasdaq.
CEO Clint Mytych said he hopes the move will increase Eternal Image’s legitimacy in the eyes of consumers, investors and funeral homes.
Eternal Image will end the year with about $1 million in revenue, Mytych said, but is projected to finish 2009 with $4 million to $6 million in sales.
The company launched a line of caskets this month, he said, which retail at a higher price point than the urns it has made.
Eternal Image also expanded its distribution network this year, growing from less than 20 distributors to roughly 300.
The company offers funerary products with licensed images from well-known brands like Major League Baseball; iconic television show “Star Trek;” Precious Moments, best known for its ceramic figurines; and the Vatican.
Eternal Image also makes pet monuments licensed by the American Kennel Club and the Cat Fanciers Association.
Mytych said the company is hoping to expand its South American distribution in 2009.
Jim- nothing wrong with contrarian points of view. Reading only what you agree with and not the other points of view can be hazardous. I've always maintained that the time to sell was when all the weekly periodicals started putting gold bars on the front page and were screaming "BUY GOLD". My view on the gold bull is long term. Altho at 60 years old now I don't know how long term I can afford to be, LOL. I also only hold physical so short term market fluctuations really are not much of a concern. Depressed prices are a buying op.
.........al
Israel is now using "disproportionate force"
If a horsefly lands on you and bites you, do you just shoo him away so he can do it again or do you swat it with intent to keep it from biting again? I think these bleeding heart governments could learn a lot from some good old fashioned rural American analogies.
.......al
It looks as though history will paint the Bush administration just below the Grant administration in the failed presidency category. The people that worked for Grant were pikers compared to the Bush people when it comes to corruption and being totally inept. At least Grant didn't try to destroy the constitution. But after all it's only a "piece of paper".
......al
Gold and Silver in 2009
By: James Turk, Founder & Chairman of GoldMoney.com
-- Posted Monday, 29 December 2008
From the December 22, 2008 edition of James Turk’s Freemarket Gold & Money Report:
This letter is the last one for this year, so it’s time to look ahead to 2009. It’s shaping up to be an ugly year for financial institutions and the economy, but a good one I expect for the precious metals. Here are my 2009 targets:
1) Gold will climb into 4-digits in the first quarter and this time will remain in 4-digits for the rest of the year. The potential high is $1800 per ounce ($57.87 per goldgram). I expect the low to be $850, which will be reached early in the first quarter. In short, 2009 is shaping up to be the key "break-out year" for gold. It will become a "break-out year" because the average investor will start becoming aware of gold and begin buying. Despite its remarkable performance throughout this decade, few people own physical gold. That will begin to change in 2009 as the financial disruptions will worsen and people seek a safe haven for their money.
2) Will silver finally outperform gold in 2009? Having been burned two years in a row, I am asking this forecast as a question rather than offering it as a statement. The underlying fundamentals for silver continue to improve, and we saw a spark of silver’s potential early this past year when it climbed above $20. I expect silver will again break above $20 this year, and I repeat my $30 forecast from last year.
Silver is dirt cheap. It’s only a matter of time before it climbs above $30, but if you choose to buy silver, be prepared for the volatility, which is reflected in the gold/silver ratio. I think the ratio will not break above over-head resistance in the low 80s. The downside potential for the ratio is 45 or so, which is the bottom of its multi-year trading range. If I am right that gold reaches $1800 sometime during the course of 2009, and if the low in the gold/silver ratio is 45 at that same moment in time, then mathematically, silver would be $40. If the ratio only moves to 60, then silver will be $30. In any case, I expect the gold/silver ratio to fall in 2009. Thus, regardless of the prices they eventually achieve, I expect that silver will outperform gold in 2009.
3) The XAU Index [which bottomed at 65 in October] will bounce back strongly in 2009, beginning in the year’s first quarter. Widening profit margins due to lower energy and other input costs will bring investors back into the gold mining sector. The mining stocks are unbelievably cheap. It is reasonable to expect them to return to more normal levels of valuation, which would imply that the price of the XAU Index in terms of gold would be 6 goldgrams and perhaps as much as 8 goldgrams. Therefore, if gold does indeed reach $57.87/gg (which is $1800/oz), then 6gg to buy the XAU would mean this mining index would be 347. The XAU Index would be 463 if it cost 8 goldgrams and if the price of gold actually rises to $57.87/gg. These numbers seem outrageous, but they are not unreasonable when viewed within their historic context. The big question of course is whether gold will reach my upside target.
In an environment in which people are increasingly fearful about the downturn in the economy, the safety of banks, and the outlook for the dollar, anything is possible for gold. And if 2009 turns out to be the year when the biggest bubble of them all pops (i.e., the dollar becomes suspect), the sky is the limit for gold.
Remember there is a reason that intellectually inferior people are the only ones offered up for elected office. Anyone with any degree of higher intelligence would be a danger to those really in power pulling all the strings. They had the perfect dummy inside the white house for the past 8 years. I have a feeling Mr "change" may be a bit harder to control but will have to relinquish many ideals and principles if he wants to get anything done. The stealth attack on our constitution will continue. The constitution is a danger to control because it gives too much empowerment to the people. It may not happen in our lifetimes but in the future I can foresee a compliant congress and executive branches disbanding the supreme court and replacing our "old" constitution, naturally in the name of national security, with a newer version. It will be rewritten giving far more dictatorial powers to the centalized federal gov't and far fewer rights to the individual. Did we really win the "cold war" or was it a head fake as our capitalistic society was merely absorbed by communistic philosophies?
..........al
If you hear it, especially on an internet posting, have serious doubts until you can verify it. If you can't verify it continue to doubt the posting. If it can only be verified through the company IR people or paid 3rd parties, still have doubts about what you have read. The only true verifications are SEC filings and independant disinterested 3rd party verifications of any info you deem suspect- and that should be all info unless you can verify it. I've been called a lot of things over the years pointing out suspicions and unverified "facts" by other posters looking to hype the stock. Funny thing is those people disappear when the stock price tanks as they have sold out to the ones believing their hype. And they usually don't work alone. They gang up on and label negative postings as bashing and accuse the poster of shorting(virtually impossible on penny stocks) or being a "paid basher". They even refer you to web sites that list the itinerary of the "paid bashers". Truth be told I've heard a lot of hype about the paid basher but have yet to meet one anywhere. I hear a lot of references but have never seen any hard evidence that they exist nor has anyone that "knows" they exist been able to verify the "fact." If you stay in this penny stock arena long enough you realize that the handle "thief" is not restricted to robbers and muggers breaking criminal laws. Anyone reading this post feel free to copy and paste it into one of your own personal files. Before you buy a penny stock based on an internet posting, go back and reread it. It could save you a heck of a lot of money.
.......al
Altho I sold out the day before the R/S and usually don't look back, I dropped by and read your post. The internet and internet stock trading has opened a whole new world of investing. Years ago penny stocks and microcaps were almost untraded and untradable for ordinary investors as the commissions of full service brokers were too exorbatant to make it worthwhile. Then came the internet and the deep discount brokers. Penny stocks gained a whole new following as many saw that a 1¢ stock going to 5¢ was far more likely with less capital expediture than a $10 going to $50. The boom was on. Yet along with that boom came the scammers hiding behind these microcaps operating way under the radar. Their main source of revenues was selling shares and pocketing most of the proceeds. Yet the same internet that made this operation possible has also the same means to spread the word on these scammers; bulletin boards like this one and many others. It takes only a few minutes to spell out to potential investors one's experience getting screwed by a company and the people running it. I don't blame anyone for getting their "revenge" in this manner. Myself, I've seen it too often. I keep a file on my desktop. In it are the names and symbols of these companies and all the principle people's names that were involved with it. It has become part of my DD when checking out a new company that I may want to speculate with a few $$$. If a name in that company shows up that I have on file from another operation the red flags go up immediately. I'm sure many others have similar systems in place to help themselves. Bottom line here is someone has used this comapny to sell shares to raise money for whatever reason and left the shareholders in a ditch with a reverse split after taking their money. If they want to come back and take multiple pounds of flesh using the internet to destroy the company I don't blame them at all. It's almost like shooting a rabid dog before it bites someone else. JMHO and Happy New Year to all here.
.......al
The funny(sad) thing is about this whole mess, it was all caused by bad subprime mortgages. Our gov't has already put over $8 trillion into this according to Bloomberg. Yet from another source(I forget which) I read that the sum total of these bad mortgages is only a little over $2 trillion. Why didn't the FED just buy up those mortgages for face value and let the derivatives fall where they may? Now we're on the hook for 4X the amount of the original bad martgages. The US treasury is for all purposes bankrupt. I would venture to say the only thing supporting our dollar now is US military might, but how long will that last? When(not if) the dollar collapses will we experience extreme social disorder(think of New Orleans after Katrina) when all we have is useless dollars to spend and no one wants them? I have only 2 words, nouns really, as an answer: gold and silver. Buy it and hold it in your own posession where it can't be taxed, liened by a court, held up in bankruptcy, or confiscated by our own gov't. Last year talk of confiscation started and I pooh poohed it as ridiculous. Now with events unfolding I'm not so sure anymore. Just a heads up. Hope all here had a merry christmas and best wishes for a healthy new year ahead.
........al
If you have ever read Rise and Fall of the Roman Empire, reread it and substitute USA for Roman Empire. Amazing how history repeats.
.........al
Merry Christmas all. Here's a gold bull if I ever read one.
..........al
link for charts:
http://www.gold-eagle.com/editorials_08/hommelberg122308.html
GOLDDRIVERS 2009 -
Extraordinary bullish outlook for gold
* Dollar topping out
* Physical demand skyrocketing
* Supply chain shutting down
* COMEX Gold Manipulation exposed
* Gold shares on the move again
Eric Hommelberg
December 23, 2008
It sure has been a brutal year for gold and its shares and many may wonder if the $1030 top clocked in March 2008 marked the top for the gold bull market that started in April 2001. Despite the fact that many analysts want you to believe that gold has failed to act as a true safe haven this year and that gold will find itself in another bear market for years to come gold's critical drivers have never been stronger than as they are today. Let's face it, physical demand for gold broke record highs in Q2 this year followed by an explosion towards new record highs in Q3 with dollar demand for gold exploding by 45% compared to Q2.
Against this explosion of physical demand we're witnessing a dramatic decline of new gold discoveries which will force the mine output down for years to come. The junior gold exploration sector is bleeding to death due to its inability to secure the financings necessary in order to advance their exploration projects. Please remember that the supply chain for gold starts with the junior gold exploration sector, 75% of all discoveries are made by juniors. Simple 101 economics teaches us that falling supply against skyrocketing demand will force prices higher.
OK you'll say, physical demand is strong indeed, physical inventories for retail sales have dried up completely which resulted in huge premiums for those who want to get hold on this physical stuff (E-bay is showing off premiums up to 25%), then how the heck it's possible to see gold prices tumbling down to lows not seen since 2006?
The answer is quite simple. Gold prices are determined by the paper gold market, not the physical gold market. It's not difficult to understand why since the paper gold market is about 40 times as large as the physical gold market. Since gold futures are trading more or less like an inverted dollar they will drop down upon (temporary) dollar strength. And exactly here lies the heart of the problem. Government can easily create the illusion of a strong dollar and low inflation expectations by suppressing the price of gold. Market interventions became the tune of the day. When the dollar was on the verge of total collapse in March this year (and gold reaching all time highs to $1035) joint intervention was seriously considered in order to rescue the crashing dollar:
U.S., Europe, Japan Planned March Dollar Rescue: Nikkei
Gertrude Chavez-Dreyfuss
Reutersvia The Guardian, London
Wednesday, August 27, 2008
NEW YORK -- The United States, Europe, and Japan had planned to intervene and rescue a weak U.S. dollar in March, business newspaper Nikkei reported on Wednesday.
Officials from the U.S. Treasury Department, Japan's Finance Ministry, and the European Central Bank reportedly drew up a currency contingency plan to be undertaken over the March 15-16 weekend, Nikkei reported, citing sources familiar with the situation.
The monetary officials also agreed on a framework for coordinating dollar-buying intervention, the report said.
The officials did not specify an exchange rate for initiating the dollar rescue plan, but in the event of a free-fall, they all agreed to aggressively buy the greenback and sell yen and euros, according to Nikkei.
END.
Obviously the planned intervention never took place in March since the dollar started to recover on its own after the Bear Stearns rescue. But 4 months later (mid July) the dollar started blasting off like a rocket leaving analysts clueless for the reason why. The thing is that no fundamental news for the dollar could explain such a dramatic move so what did move the dollar so fast? Was it intervention this time? Let's first take a peek at the dollar chart and see what happened since mid July:
What we see here is a rocket launch of the dollar indeed. This rocket launch started as a result of the biggest intervention of all time explained in detail by Bank of Montreal's Don Coxe in his weekly web cast of September 06.
He explains how the Fed and Treasury in conjunction with the CFTC and SEC "RIGGED" the collapse in commodities and bounce in financials to purposely screw people who were making commodity bets and shorting financials. He states that this was categorically the most massive government intervention into the capital markets since the 1930's when Roosevelt closed the banks.
Jim Sinclair (JSMineset.com) at that time said more or less the same:
A Level Of Market Intervention Never Before Seen
Jim Sinclair, September 09, 2008
* You are all being run by the largest intervention in the shortest time frame any market on the planet has ever seen
* Nothing has changed at all. In fact, it has become fundamentally and significantly WORSE
* Intervention has nothing to do with the markets. Only the precious few know it is about to happen. For the rest it comes out of nowhere
END.
By rigging the commodities markets down government created an artificial demand for the once almighty dollar (commodity deleveraging equals dollar buying). So the commodities went south, the dollar up followed by a short squeeze of epic proportions. Despite the fact that even a chimpanzee could see this dollar rally would be a temporary one many analysts came out swinging declaring that the dollar had replaced gold as the one and only true safe haven.
So far government succeeded in creating a false picture of a sound dollar, the last thing they want is to see a total dollar collapse in the midst of world's biggest financial crisis ever. As mentioned above part of a 'strong dollar' policy is to burry gold prices. And this strategy is exactly what became evident when two US banks increased their gold short positions an astonishing 11 fold this summer which resulted (sure enough) in a devastating crash of the gold price! Please digest this carefully, two US banks betting on a huge decline in the price of gold, you really think they had no inside information of what the US Treasury was up to?
So two big US banks coming into action bombing gold almost on a daily basis for three months and only the people from LeMetropoleCafe and JSMineset are screaming manipulation, most other analysts remain clueless and stick to the more convenient 'deleveraging' theme...
Sure, gold was subject to some serious deleveraging but analysts refusing to deal with the real issue of a cartel crashing gold prices fail miserably in order to explain the gold bombings during the COMEX gold trading sessions. Deleveraging? Please don't make me laugh. Why on earth would traders who want to deleverage only want to do so at exactly 9 AM or 10 AM EST? Gold crashing by $30 or more at 9 or 10 AM EST in just a few nano seconds has nothing to do with deleveraging but with the two US banks at work as mentioned above. This has happened over and over again over the last few months. Please take a peek at some snapshots below and judge yourself whether or not these price movements have the look of free markets at work or just blatant market intervention. Needless to say I prefer the latter.
Please remember that more than 90% of all COMEX sessions end up down, no statistician on earth will tell you that free markets could operate that way. The build up of 9 hours Asian/Europe trading being 'neutralized' in just a few seconds at COMEX is not a blueprint of free and fair markets at work but of blatant intervention.
So COMEX gold prices down last couple of months vs a monster rally in the dollar. Again, many analysts want you to believe that gold has lost its status of safe haven but nothing could be further from the truth. Our mass consciousness is telling us that gold remains the ultimate safe haven hence the record high demand for physical gold in Q2, Q3 this year. Let's face it, you can't get your hands on gold coins these days without paying premiums of up to 25%! people are rushing into physical gold in a way never witnessed before, still the gold price on COMEX doesn't reflect that. Now a funny thing is happening since COMEX doesn't respect real gold prices more and more traders are taking delivery of COMEX gold and resell it in the retail market thereby making handsome profits. Now this is exactly what the short sellers on COMEX don't want to happen since it makes it harder for them to continue their gold price fixing scheme. It's simple, as long as the short sellers can come up with the physical gold being demanded for delivery they can continue their scam. But once they fail to deliver then gold prices will explode to unimaginable new highs since fundamentals dictate gold prices exceeding $2000 these days (see also 'Gold - Fundamentals still pointing towards $2000')
Mr. Jim Sinclair (who is considered the biggest gold trader of all time) is getting furious about the ongoing price capping at COMEX and is encouraging his readers to take delivery of COMEX gold in order to end the price fixing scheme in short order:
Stop the COMEX Manipulators - Level the Playing Field
Jim Sinclair, December 11, 2008
Dear CIGAs,
There is a great shift in the gold market that is being consistently leaned against by the Gold Banks. You can be sure they will be back to rip us all off. Please do me and yourselves a great favour: No matter where you are on this planet if you can afford a 100 ounce bar buy the nearby month gold on the Comex, take delivery then remove the delivered gold from the warehouse.
END.
Another gold veteran who is pounding the table hard against the illegal COMEX manipulators is GATA's Bill Murphy. There's no doubt in my mind that future history books will point to Bill Murphy as the one who exposed the gold manipulation scheme (strong dollar policy).. He's done so for a decade now and his (GATA) views are becoming more excepted day by day. A good example concerns a recent debate (September 09) between Bill Murphy and Tim Wood at the Las Vegas Hard Assets Investment Conference in which Murphy argued that the gold market is manipulated by central banks and their affiliated investment houses and Wood argued that it is not. The audience there overwhelmingly voted Bill Murphy the winner of this debate.
GATA's credibilty got another boost last week. The CFTC wanted to sit down with GATA and listen what GATA has to say. On Thursday 18 December GATA chairman Bill Murphy met with CFTC commsioner Bart Chilton in Washington. Bill Murphy reported from Washington:
My meeting with Chilton went on as scheduled and lasted about 50 minutes. The surprise was that three others from the CFTC staff attended, including the deputy general counsel. One of the other staffers had already viewed the video of GATA's Gold Rush 21 conference.
Chilton listened intently, took notes, as did one of the others, and asked many questions. I laid out GATA's presentation. I am not going to get into all the details, as we will see what takes place in the months to come. But I chuckled when telling them that if they really wanted to comprehend what the gold price suppression scheme is all about, all they have to do is go to their new chairman -- at the right time. No one knows what is going on better than he does.
I did not hold back. I said the main culprit of the Gold Cartel was our own government, which has been in league with bullion banks like JPMorganChase.
Naturally, I drew parallels to the Madoff scandal and how the Securities and Exchange Commission ignored nine years' worth of probable cause to suspect a Ponzi scheme. I also laid out how and why what is occurring in gold and silver could lead to a much bigger scandal if the price suppression scheme is not stopped -- and that is because the Gold Cartel is running out of the gold needed to meet the growing annual deficit between supply and demand.
I was very impressed with Chilton, and he said my trip to Washington would not be in vain.
END.
So what we've been witnessing on COMEX is a false picture painted by blatant intervention pushing gold to artificial lows. Thank goodness our mass conciseness told us that COMEX prices weren't for real so despite discouraging people to get their hands on physical gold the COMEX crowd achieved exactly the opposite which is a record high demand for physical gold not ever seen in history before. Readers who still have their doubts on gold's physical off-take please read on:
World Gold Council confirms record high gold demand:
* Dollar demand for gold in Q3 was a record US$32 billion, 45% higher than the previous record, set in 2Q2008.
* Identifiable investment demand, which incorporates demand for gold through exchange-traded funds (ETFs), bars and coins, rose to $10.7 billion (12.3 million ounces), double year-earlier levels.
* Retail investment demand rose 121% to 7.5 million ounces, with strong bar and coin buying in the Swiss, German, and U.S. markets. Europe as a whole saw an all-time record 1.64 million ounces of bar and coin buying. France became a net investor in gold for the first time since the early 1980s.
* Gold ETFs posted a record quarterly inflow of 4.8 million ounces in Q3. After the collapse of Lehman Brothers in late September, ETF inflows shot higher by an unprecedented 3.6 million ounces in only five days.
* Demand for gold jewelry hit a record $18 billion. Leading the way was India, which witnessed a rise of 65% in dollar value (1.3 million ounces) compared with 3Q2007. The Middle East, Indonesia, and China all experienced increases of more than 40% in value or 10% in weight, year over year.
END.
Trend of gold as store of wealth 'may start to snowball'-ScotiaMocatta
Deep-rooted global financial problems will escalate the demand for gold as a safe haven.
Author: Dorothy Kosich
Wednesday , 10 Dec 2008
In its December Metals Matters report, ScotiaMocatta suggests that global financial problems "seem so deep rooted that demand for gold as a safe haven is expected to escalate."
Gold demand has in fact exploded, and not just here and there. Everywhere. Around the world, customers have been queuing up to strip coin shops' shelves bare. Mints have been running 24/7 and still have been forced to ration coin shipments to their dealers. ETF vaults are bulging.
END.
Fear triggers gold shortage, drives US treasury yields below zero
Ambrose Evans-Pritchard
Last Updated: 9:26AM GMT 11 Dec 2008
The investor search for a safe places to store wealth as the financial crisis shakes faith in the system has caused extraordinary moves in global markets over recent days, driving the yield on 3-month US Treasuries below zero and causing a rush for physical holdings of gold.
END.
Swiss gold refineries pushed to the limit by demand
Gerhard Lob
SwissInfo, Bern, Switzerland
Sunday, December 14, 2008
Gold refineries in Switzerland are working at their limit to cope with demand for the precious metal from investors seeking ways to shield their wealth.
"I've never experienced anything like this in my whole career," Erhard Oberle, chief executive of the firm for the past 20 years, told SwissInfo. He said the demand was so heavy that it could hardly be satisfied.The reason for the gold -- and silver -- rush is that at a time of financial crisis many investors want real assets.
The general rule of the market is that gold is always attractive when everything else is unattractive….
END.
The list goes on and on but gold's appeal reaches further than the average retail investor, it seems that gold is regaining its monetary shine as well:
Saudi Arabia buys 3.5 billion dollars worth of gold
There has been an unprecedented surge in Saudi gold purchases in the past two weeks with over $3.5 billion being spent on the yellow metal, reported Gulf News citing local industry sources.
Gold market expert Sami Al Mohna told the leading regional newspaper that this buying had substantially increased the gold reserves of the country: 'Many Saudi investors see this as the right time for making investments in gold as the price is the most reasonable one at present'.
He said gold was seen as a traditional safe haven at a time of global financial turmoil. Gulf regional stock markets have fallen very sharply since early October, leading to an exodus of cash which needs to find a safe haven.
Gold is currently trading at prices similar to a year ago, and 30 per cent off its March peak. Saudi investors clearly think this is the right time to buy and are piling into gold.
News about the Saudi gold rush is bound to fuel speculation about the alleged large physical gold transactions that have been taking place at prices will above the spot price set in the futures market. It is very unlikely that such a large hoard of physical gold could have been bought for the depressed current price.
END.
China PBOC Mulls Raising Gold Reserve By 4,000 Tons - Report
China PBOC Mulls Raising Gold Reserve By 4,000 Tons - Report
BEIJING (Dow Jones)--China's central bank is considering raising its gold reserve by 4,000 metric tons from 600 tons to diversify risks brought by the country's huge foreign exchange reserves, the Guangzhou Daily reported, citing unnamed industry people in Hong Kong.
The Guangzhou-based newspaper didn't elaborate on the plan.
China's forex reserves, at US$1.9056 trillion at the end of September, is the world's largest. U.S. dollar-denominated assets, including U.S. treasury bonds and mortgage agency bonds, account for a big proportion of the forex reserves.
END.
So what we've been witnessing lately is the dollar competing against gold as the most desired safe haven but needless to say gold remains the ultimate form payment and therefore the ultimate safe haven. JP morgan seems to admit:
JPMorgan Gold report
http://www.gata.org/node/6938
Gold has been competing with the dollar as a relatively safe haven for investors as stock markets have fallen. Initially, gold and the dollar performed well, but it's wrong to compare dollar strength with the performance of the dollar-denominated gold price since, as the dollar rises, it slows the upward movement of dollar gold. In the less volatile Swiss franc, gold achieved a new all-time high about one month ago. Until the fear-driven flows into the dollar slow, the dollar could continue to rise, but gold's improved visibility may be preparing gold for strength into the year end. We would like to see gold perform in absolute terms, but we are very happy with gold's outperformance of the S&P 500. ...
END.
Many analysts have argued over the past few months that the dollar would continue its appreciation due to safe haven demand. Well, as mentioned above the dollar rally was a fake one, just an ordinary short over rally fuelled by extensive deleveraging of the commodity sector. At least the Chinese figured out in time this dollar rally would be a temporary one:
China wealth fund sees dollar strength as temporary
BEIJING, Dec 8 (Reuters) - One of the top managers of China Investment Corp, the country's $200 billion sovereign wealth fund, reckons current dollar strength is temporary and he would like to bet that the U.S. currency is headed lower.
CIC President Gao Xiqing was speaking in an interview with monthly U.S. magazine The Atlantic two weeks before the Nov. 4 U.S. election. The euro was trading at that time between $1.30 and $1.35. On Monday it stood around $1.2765.
"Everyone is saying, 'Oh, look, the dollar is getting stronger!' I say, that's really temporary. It's simply because a lot of people need to cash in, they need U.S. dollars in order to pay back their creditors. But after a short while, the dollar may be going down again. I'd like to bet on that!" he said.
END.
Needless to say the Chinese had it right! When the FED slashed its interest rate to zero last week, the dollar went south big time. (Point of interest is that the chinese sovereign wealth fund wanted to know what GATA knows (they held a tele conference call with GATA earlier this year) which of course is another tremendous credibility boost for GATA's outstanding work over the last 10 years)
Regarding last week's dollar plunge JSMineset contributor Dan Norcini comments:
The fact is that the US Dollar's horrendous fundamentals have caught up with it. The bear market rally caught a tremendous amount of speculative longs on the wrong side as the bottom fell out of it. We have remarked in the past that the rally in the dollar had NOTHING to do with fundamentals or safe haven buying as the talking heads in the press would have you believe but was rather the effects of a short-lived but massive repatriation of investment funds from abroad by US based hedge funds looking to deleverage, cut losses and meet margin calls and redemptions.
END.
Indeed, please don't look for any fundamental reasons for a strong dollar because you won't find any. Please think about it! The US government has pledged already more than $8 trillion in order to bail out Wall Street. But where is the money coming from? Well, the answer is simple, the U.S. government doesn't have the money so they have to flood the market with a wave of Treasuries the likes of which the world has never seen. Don't think that foreign bond holders are going to sit idle by watching the US government trashing its own currency through reckless printing. To put things in perspective, in over 200 years the U.S. has racked up almost $10.7 trillion in public debt. Now during the last few months our government has pledged an amount equal to three-fourths of its total public debt to bail out Wall Street. Again, this is money the US government doesn't have so they have to print it! The inevitable result will be much higher inflation. I don't buy the argument that the FED can manipulate long-term rates down by buying up long-term debt. Since no government is bigger than the world bond and currency market any attempt to manipulate long-term rates down will be short lived.
John Williams of shadowstats.com continues to warn his readers for the excessive surge in money supplies and the inevitable outcome. In his Alert of December 20 he wrote:
John Williams Shadowstats.com
December 20, 2008
Monetary Base and Reserves Continue to Explode. The St. Louis Fed's Adjusted Monetary Base in the two weeks ended December 17th was up 97.5% from the year before, versus a 74.9% annual increase in the prior two-week period. Those numbers were up from less than 3% annual growth in August, before the Fed began its latest panicked operations. When cutting the targeted fed funds to a range of 0.00% to 0.25%, Fed Chairman Bernanke and the FOMC continued to indicate they would do whatever it took to stimulate systemic liquidity - broad money supply.
The Fed always can drive the economy into recession and deflation by contracting broad money growth. The reverse, however, is not true. Excessive money growth does not assure economic growth, although it always will assure higher inflation.
END.
So excessive money growth on the back of slashing interest rates to near zero, what does that mean for the dollar? Well, not any good it seems:
Dollar No Longer Haven After Fed Moves Rate Near Zero
By Kim-Mai Cutler and Bo Nielsen
Dec. 17 (Bloomberg) -- The world's biggest currency-trading firms say the dollar's appeal as a haven amid the financial crisis all but evaporated.
The U.S. currency slid to a 13-year low against the yen today and had its biggest one-day decline versus the euro after the Federal Reserve reduced its target interest rate yesterday to a range of zero to 0.25 percent, the lowest among the world's biggest economies. CMC Markets said today the currency's prospects appear "ominous." State Street Global markets said the dollar's outlook has been "undermined."
END.
So with the dollar no longer functioning as a safe haven and inflation to be heating up coming years what do to next? It seems that HSBC figured it out already:
HSBC Fund Returns to Buying Gold to Hedge Against Inflation
Dec. 3 (Bloomberg) -- HSBC Investment Management's $2.6 billion Absolute Return Service started buying gold again on expectations that inflation will accelerate and may start adding coffee, sugar and grains next year.
Gold now accounts for 3 percent of the portfolio, fund manager Charlie Morris said by phone from London yesterday. Morris had sold the metal in July when prices were about $900 an ounce. Gold has declined 15 percent since the end of July.
"Gold is the best supported of all commodities," said Morris, whose fund has lost 14 percent this year. "People are buying in anticipation" of inflation, he said…
END.
Not only HSBC seems to get it:
Citigroup says gold could rise above $2,000 next year as world unravels
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.
The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.
END.
I realize that the inflation/hyperinflation tune being played by Jim Rogers, John Williams, Jim Sinclair etc..is not supported by many other experts who take the other side and warn for the worst deflationary spiral the world has ever seen.
History books will be the judge of who were right and who where wrong but for me an economic halt is no guarantee for low inflation/deflation as many experts want you to believe. All we have to do is to take a peek at Zimbabwe where it's hard to find any economic activity at all, yet needless to say Zimbabwe does have some inflation worries...(only 200+ million percent).
Hyper inflation like the one we're witnessing in Zimbabwe is the result of a currency collapse, not because of an overheated economy! A currency collapse is the result of a confidence collapse. A confidence collapse is the result of a government living way beyond its means and paying for its bills through the printing press. The bottom line is no government can print its way out of bankruptcy without paying the consequences (hyper inflation) later.
There is a growing consensus that the only way to get out of this debt nightmare is to revalue the dollar against gold. There are many ways to calculate a hypothetical gold price which would counter balance most of world's debt. In the 70's for example Jim Sinclair predicted that gold would seek a price high enough to offset the public debt held in foreign hands. He proved out to be right. A similar approach these days would require gold prices exceeding the $10.000 mark.
Now $10.000 gold seems a lot but from an historical perspective it seems a reasonable target. When the gold price peaked at $850 in January 1980 the DOW was trading in that range as well. The DOW/GOLD ratio bottomed out at one. When the markets peaked in March 2000 the DOW/GOLD ratio peaked at 44 and has been in decline ever since. In order to hit a DOW/GOLD ratio again of 'one' gold should appreciate above the $10.000 mark indeed with current DOW levels. I don't see the DOW plunging much further from here. Compare it with the 1968 -1982 period were the DOW hovered around the 1000 mark for 14 years. same is happening now, the DOW peaked in March 2000 (inflation adjusted) and it could take very well another couple of years before the DOW manages to leave the 10.000 mark for good. I mean, there's no economic justification now for the DOW to rise much further while a surge in inflation will cushion the DOW to the down-side. A DOW struggling around the 10.000 mark from 2000 to 2012-2015 is not unthinkable and neither is $10.000 gold somewhere in 2012-2015.
Now if you are a true believer in gold's future you might be interested in owning some gold shares the years ahead as well. The burning question however remains whether or not it is a good time to enter the gold share market.
The good news is that the worst is behind us indeed (for the senior gold shares), they bottomed out in October. As we all know, the gold shares took out all support levels to the down side like a knife through butter and many analysts called for the end of the gold bull market.
When all support levels fail then ultimately you have to go back to the long-term monthly charts in order to find the next (last) level of support. On October 22 we send out a chart update with worst case down-side projections based on the long-term HUI monthly chart. Support was to be found at HUI 150, see chart below:
Now luck shot indeed since the HUI bounced off exactly at this HUI 150 level and has shot up afterwards by a stellar 100% in just 6 weeks time. This becomes clearly visible when we zoom into the HUI weekly chart:
Now with the HUI bouncing off its lows with force upon a $100+ rise in the price of gold, what would happen to the gold shares you think when gold reaches CITI's forecast of $2000 gold next year? Yes, the HUI would be reaching new highs which translates itself in another 100%+ appreciation from here on.
So a good moment to get in gold stocks now?
According to Frank Veneroso, a well known gold market strategist, yes, he recently said:
I think gold might have a very explosive upside in the current environment. Gold stocks are now extremely cheap relative to the price of gold with the commodity bust, gold mining costs are falling. I think money managers should now be buying gold stocks.
END.
Well dear reader, whatever the year of 2009 has in mind for us, one thing is for certain, financial history will be written. Future history students will be amazed reading about the intense debates among the hyper inflation/deflation advocates these days. In a time when most probably the most important chapter of financial history is written all we can do is to stay tuned and listen to what the markets are telling us.
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Last but not least I wish you all a Merry Christmas and a prosperous/healthy 2009!
Comments are welcome at:
ehommelberg@golddrivers.com
Best Regards,
Eric Hommelberg
The Gold Drivers Report
www.golddrivers.com
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I really don't think they will do a R/S at any time. The current share structure is manageable for this company and after all the flack and hate mail they got from the previous R/S, I don't think that option is even being considered right now. I don't care how good the product may be, but another reverse split would just stink of incompetent management to any potential investor. Let's not even go into what kind of damage many former investors might do on these message boards. It ain't pretty when there is no one left to defend the company. JMHO
............al
Crain's Dtetroit Business article: 2009 sales projections
http://www.crainsdetroit.com/article/20081223/FREE/812239981/-1
3:23 p.m., Dec. 23, 2008
Eternal Image moving from Pink Sheets to OTC Bulletin Board
By Nancy Kaffer
Farmington Hills-based Eternal Image Inc. is moving up in Wall Street’s world.
The Securities and Exchange Commission has approved the Farmington Hills-based maker of licensed brand image funerary products’ application to move from the Pink Sheets to the Over the Counter Bulletin Board exchange.
Companies listed on the OTCBB are required to file financial statements with the SEC, or a banking or insurance regulator. There are no such requirements for a Pink Sheets listing. The OTCBB is offered by the National Association of Securities Dealers, but companies listed on the bulletin board aren’t part of the Nasdaq.
CEO Clint Mytych said he hopes the move will increase Eternal Image’s legitimacy in the eyes of consumers, investors and funeral homes.
Eternal Image will end the year with about $1 million in revenue, Mytych said, but is projected to finish 2009 with $4 million to $6 million in sales.
The company launched a line of caskets this month, he said, which retail at a higher price point than the urns it has made.
Eternal Image also expanded its distribution network this year, growing from less than 20 distributors to roughly 300.
The company offers funerary products with licensed images from well-known brands like Major League Baseball; iconic television show “Star Trek;” Precious Moments, best known for its ceramic figurines; and the Vatican.
Eternal Image also makes pet monuments licensed by the American Kennel Club and the Cat Fanciers Association.
Mytych said the company is hoping to expand its South American distribution in 2009.
It's a rebuttal with some good sound advice, IMHO
..........al
Good bye and merry christmas all. R/S coming tomorrow and I'm out with a write off.99% of reverse splits not shareholder friendly. GL2 all
...........al
I think the other Weiss you have heard of is his father. He was in this years ago. I don't know his status as of now. I've read a lot from Weiss over the past few years and he usually has a good handle on things. On this particular piece he was the interviewer. I couldn't really say if he totally agreed with the opinions presented. I know I didn't. But neither do I discount opinions in disagreement with my own. I think we are in a period of deflation right now. I also don't think it will last long. Real estate has a long way to go before hitting bottom, but that won't affect prices of consumer goods. Governments fear deflation far more than inflation and will print however much it takes to avoid it. I (always) am keeping my eye close to gold. So far it hasn't been affected much by what is happening. I don't think an extreme deflationary period will affect the POG too much either. Too many peoples worldwide would jump all over gold at much lower prices. There is just not much trust left in the financial systems that are imploding all over. Investors may be going into dollar denominated bonds right now at almost 0% interest as a safe haven. How fast do you think they will be exiting those positions when in addition to no interest earnings, the purchasing power is steadily eroding. Short term prospects for the dollar may seem appealing to some. Long term I see nothing but bad news.
...........al
I can't see gold doing any major decline either. Money is looking for safety and there is nothing safer. It's another scenario and altho we may not agree with it, don't discount it either.
.......al