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relax, big is coming, accumulation is happening now, along with day traders
predictor, hopefully they r shorting , but probably flipping
The Retarded Recovery
By Bill Bonner
Dakar, Senegal
Nothing is quite as disagreeable as a neighbor who has made a lot of money by not following your advice. After 9 months of 'recovery' they are all around us. They think they have perfected the art of bubble riding.
Here on the back page, we alert investors. We wag our fingers and shake our heads. Little good it does. We might as well warn surfers about an approaching storm. They don't head for cover; they rush to the beach, hoping it's not too late to catch a big one.
As of this week, investors are still making money. Almost everything has outperformed cash over the last 9 months. Stocks, commodities, gold - you name it. This wouldn't be happening were it not for the government. The feds are making waves from Malibu to Manila. 'Don't worry about the depression,' they tell us; 'we're on the case.' That, of course, is what we're worried about.
Instead of allowing things to settle down, the feds are doing all they can to keep them stirred up. Amid the foam and splash, nobody knows what is really going on. For example, they've driven the yield on cash down to near zero. What's a borrower to think? Why are interest rates so low? Are there so many trillions in idle savings that he can have them for nothing?
Investors don't know whether they are coming or going either. They're buying S&P stocks at more than 80 times earnings, while people who know what they are doing - the insiders - dump 82 shares for every one they purchase.
And in the economy, last Friday, came a puzzling report from America. According to the feds, unemployment dropped by 0.2% last month. That leaves only 15 million without work. Another report tells us that each job created by US government stimulus costs $246,000. What were they hiring, bankers?
While the feds muddy the waters, the de-leveraging of the American consumer continues. Consumer credit fell in the US in October, for the 9th month in a row. As long as consumers are cutting back there is no way a real recovery can begin.
What to make of it all? We turn to a ghost for an explanation. Friedrich Hayek described a similar situation 76 years ago:
"There can...be little doubt that ...a deflation process is going on...Central Banks, particularly in the United States, have been making earlier and are more far-reaching efforts than have ever been undertaken before to combat the depression by a policy of credit expansion - with the result that the depression has lasted longer and has become more severe than any preceding one.
"...all conceivable means have been used to prevent the readjustment from taking place; and one of those means , which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about..."
He could have been describing Japan's 20-year depression, too. So far, we have no evidence that the authorities can improve a depression. All we know is that they can stretch it out.
A real recovery is a process of discovery: it begins in misery and ends in prosperity. Investors figure out what their boom-era investments are really worth. Businessmen figure out how to turn a profit in a new environment. Households learn how to match their incomes against their expenses in a world where credit is less forthcoming and jobs are harder to find. Needless to say, the faster these discoveries are made, the better.
But the first thing people realize is that they have been idiots. Then, they call for the government to prove it isn't so. In Britain, the government has spent about $8,000 per family to bail out the banking sector. As a result, we don't get to discover what the bankers would do if they were forced to seek honest employment. Nor do we discover what the poor taxpayers would have done with that $8,000 if it hadn't been forcibly transferred to the City.
Likewise, what we want to know about an insurance company is how well it holds up under pressure. But when the feds rushed in to save AIG they corrupted the facts. Then, in the US alone, there were Bear Stearns, Citigroup, Washington Mutual, General Motors, Chrysler, Fannie Mae and Freddie Mac, not to mention the small fry. Our curiosity remains unsatisfied; what kind of world would it be if they had gotten what they deserved?
Alas, the feds have created a world of darkness and depression. No one knows anything. And what they think they see clearly is often a mirage. Employers don't know whether to hire or fire. Consumers are blind too; they don't know whether things are getting better or worse. Finally, government even pokes its own eyes out. Relying on 'funny money' to cover its deficits, it has no idea how far it can go before it falls off a cliff.
Regards,
Bill Bonner,
for The Daily Reckoning
Joel's Note: Want a free hardcover copy of Bill and Addison's bestselling book, Financial Reckoning Day: Fallout, sent right to your front door? Well, it just so happens that Addison is giving 500 books away to dedicated readers as part of his latest project. He's got all the details for you here.
PEREZ SAYS THE SAME THING AS ME, when its ready, its ready, when its finished its finished, and when news is released, its released. Everyone thinks these thing are cut and dried, theres a lot more than most know that has to be done
Im feeling really good here, things should get going here soon, lots of paperwork and filings to get done, dont i know
WHY THE SEASONED INVESTOR ISN'T CONCERNED ABOUT GOLD
Yesterday, we took the "long view" on gold. We saw how gold could decline all the way down to $850 an ounce and remain within the confines of a big bull market.
Today, we offer another common-sense view as an antidote to the ridiculous mainstream commentators asking, "Does the recent decline in gold mean the bull market is dead?" We take a look at the old "50% rule."
The 50% rule is an old Wall Street maxim that bull-market moves often give back 50% of their gains before making a new push higher. These declines serve to shake off the latecomers and frustrate as many people as possible.
Starting in September, gold made an enormous run from $955 an ounce to its December high of $1,218 – a $263 jump. Using the 50% rule, we see it would be perfectly normal for gold to decline down to $1,086. Common-sense perspectives like the "long view" and the "50% rule" leave the seasoned investor unconcerned with the recent decline in gold.
Precious Metal Trader John Perez Bullish on Junior Mining Stocks
Submitted by Baruti M. Kamau on Wed, 12/09/2009 - 11:54
Las Vegas, Nevada - With gold recently trading in excess of $1200 per ounce on the spot market many executives of junior mining companies are positioning their entities to function as recepticles for the new money that is finding its way into the industry. According to an article entitled "Money flocks to junior gold explorers with big resource" by Marc Davis of BNWnews.ca and distributed by MineWeb.com on 12/07/2009: "...multi-billion dollar hedge funds are beginning to diversify into gold exploration companies - at least the ones that have especially large in-development gold assets. This is because these gold stocks are increasingly assuming a newly-found collective role as a powerful inverse proxy to the weakening US dollar. In this regard, they are proving as attractive as gold bullion, itself. And though they are far riskier investments when compared to owning physical gold, they have been offering much greater returns as of the past few months."
USA Uranium Corp. (Pink Sheets: USAU) a junior mining company with 2 in-development properties and additional properties coming into their possession believes they are next in line as one of the junior mining companies to receive sizeable investments from international hedge funds and other financiers. According to telephone interview conducted by this writer with John Perez, Director of Communications for USA Uranium Corp. great news concerning financing and additional gold properties are pending. To paraphrase Mr. Perez: "Instead of using our money to buy the services of stock promoters, we used our money to buy assets...It's hard building a company but that is where our loyalty is. We have a great team at hand and are confident we will deliver value to our shareholders." The Jack Creek of Nevada and the La Dama De Oro of California are the two properties of USA Uranium Corp. that has been verified to hold a minimum of 2 million ounces of gold combined. At the time of this writing, those properties enjoy a combined value of $2,283,400,000 on the spot market.
Leveraging the stock of junior mining companies is the new trend sought by financiers as a result of the nine year decline in the production of gold. In effect there is a supply and demand factor that is fueling the bull market in gold. There is a lack of pure gold at hand in any given market; so the next logical move is to build a huge position in undervalued junior mining companies that own properties with a history of production. Leverage will result from the speculation that such properties will continue to produce. More leverage will ensue when the properties actually produces ore. And of course there is additional leverage on top from the profits acquired through the physical sell of newly produced gold to the marketplace. The downside to such logic and or speculation in the current bull market in gold is a strong US dollar.
For long-term shareholders, Mr. Perez contends that USAU is undervalued and should have a current open market value of 23 cents per share. With optimism and belief that the future bodes well for USA Uranium's shareholders, Mr. Perez portends USAU can trade as high as $2.50 sooner than we think. He says his 10 year track record as a precious metal trader gives him a better perspective on creative ways to capitalize off the 21st century gold rush. And he is confident that pending press releases will support such claims.
If USA Uranium Corp. successfully acquire financing for its new projects, in the near term, it is highly probable - metaphorically speaking - the company may deliver "little gold bars" to shareholders for Christmas. Trading around 2 cents per share, wise investors may want to consider purchasing the shares of this unknown but promising juinior mining company.
Finally, this writer was successful in verifying with USA Uranium Corp. officials that a listing on the Amex will be sought when their stock price stabilizes at $2.50 per share.
Disclaimer: The Barutiwa Daily Times and its writers are not investment professionals. Investing in penny stocks is risky. Do your own research. Never invest what you can't afford to lose.
Editor's Note: The article was originally distributed via The Barutiwa Daily Times news wire on December 9, 2009 @ 12:36 P.M. No photos or logos were associated with this content. Text only document.
JIM SINCLAIR ON $1650 GOLD
Dear Comrades In Golden Arms,
In my opinion there are two reasons why gold will, without any reservation, trade at $1650 after which it will seek both Alf and Martin's price objectives.
For those with ears to hear it was outlined this morning in an interview with the top man of Starwood Real Estate on, of all places, F-TV.
The first reason is that we do in fact we have a 90s type Resolution Trust, but it carries another name. This time the Resolution Trust is the Federal Deposit Insurance Corporation. When you examine the mode of operation and consider what they will be required to do over the next two years and on into the future at an increasing rate, there is no question this is correct.
The second fact is that the ENTIRE plan for financial recovery is to "PRETEND and EXTEND."
Federal and State bank examiners are being extremely lenient in allowing real estate loans of all categories, from commercial to residential, to be carried on the books of the institutions at full value even if they are behind on payments and indebtedness to the institution is greater in size than the asset's worth is in liquidation.
This is crystal clear when you examine the numbers that are public as the FDIC takes over the bankrupt institutions.
This defines the word "PRETEND."
The word "EXTEND" refers to all the rescue programs that wholly depend on stimulus to work. The financial industry is worse than the walking wounded. It is the walking dead. Therefore applying the name "Zombies" to major corporations and financial institutions is appropriate.
We also know that the economy of the USA is bouncing along a bottom, but far from what would have been anticipated in light of the degree of stimulation initiated. There are definitive reasons for the lack of expected results but they are not germane to this review.
In conclusion you must know that whatever the cost in terms of continued and increased stimulation, all that is required to infinity will be provided. There will be no serious attempts to drain any liquidity. Interest rates will be held at practically zero for as long as it takes or even if the economic recovery fails.
That strength in the US dollar is at best transitory as it is totally contra-indicated for business recovery in the US.
Fundamentally, PRETEND and EXTEND will create an ever increasing supply of dollars and demand for borrowing, both of which stand as the last pillar in the erection of gold as a permanent building.
So to those that understand what gold is (insurance) these wild gyrations mean nothing whatsoever to the upward trend of the entity.
The outrageous moves about to occur are simply what gold is multiplied in orders of magnitude by the total madness of the hedge funds and their automated trading systems pushing hundreds of billions of dollars into and out of markets, churning them incessantly without any regard in the case of gold. Gold cannot handle funds that size.
If you cannot stand gold's heat then you must leave the arena now. If you choose to leave the arena please do not come back because it is only going to get harder.
Truly Main Street is in the hands of a casino.
In a sense hold my hand as we go through these outrageous machinations, as the price that gold is going to is much higher than I have anticipated.
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i dont think a pr will be timed with a turnaround in gold prices. Gold could stay flat for a month or so, so that wouldnt really make sense. The PR will be put out when things get done, thats the best timing
is it selling? is it day traders getting it up the rear? is it an accumulation ploy? I say it is the last one
sometimes quiet is good, then when something comes there is mass panic buying, hehehehehehe
Our Annual Predictions for 2010. Good News and Bad News.
Will 2010 be a 1930 or, comparable to 1937? Is it different this time? When one nation state of a formerly high productive stature destroys itself with inflation, the untouched others can soften the blow and in time bail out the fallen one. This was Germany’s fate in the 1920’s. In our current instance, most all of the world’s economies are on their knees with some hurting worse than others. Who can help with recovery this time? There is no one. It will not be China as some suppose as China shall suffer the same systemic collapse as the U.S, and all of Europe, Russia, and South America. China’s neighbors Japan, Taiwan, Korea, India, Indonesia and others will join the fallen.
The interwoven complexities of international trade and finance have caught them in all in a spider’s web of systemic collapse. Those who can shall attempt a massive inflationary rescue. While it might appear to work for a few months, eventually all implodes. Please note the following from John Pugsley’s “Common Sense Viewpoint” as printed in “Golden Insights” by James U. Blanchard III 1997.
“Inflation will destroy debt. The end answer to all argument (inflation versus deflation) rests in the Federal Reserve and government. Both are absolutely committed to preventing a financial collapse or deflation. As long as they are willing to print dollars to support any failing creditors, the cycle will go on. What most deflationists fail to consider is that inflation destroys debt.”
“Creditors win through inflation and lenders lose. The deflationists do not see that if inflation of the money supply continues, which it will, there needs to be a deflation. All the debt in the world can be wiped out just by creating purchasing power…and that’s exactly what is happening…the debt problems will be resolved, but they will not be resolved by debt liquidation through bankruptcy and collapse. They will be resolved through debt liquidation via the creation of money. We are in for the greatest wave of inflation in the history of the world. You had better not be on the wrong side of the dollar.” -John Pugsley “Common Sense Viewpoint.”
We agree with Mr. Pugsley but, this was written years ago. We would suggest that this time with most formerly productive nations becoming victims of both inflation-hyperinflation and systemic collapse; the ending could be much worse than supposed. We forecast inflation first then hyper-inflation some time down the road.
What happens between here and there? While in our view, our forecast episodic adventure takes at least 2-3 years but, no one knows for certain. We forecast 2010 to be one of the very worst years of Greater Depression II; the year 2010being the second cycle of several depressionary phases. The fall of Lehman and a surrounding crash was only Phase One. Before Phase Two terrorizes global markets, we suggest a short recovery arrives first.
Debts both public and private have not been paid down to any great extent. To make matters worse, new debts continue to plague central banks, nation’s banks, consumers and commerce. In order to find a basing bottom and enable a recovery, these debts must be paid, repudiated or inflated away. For now all of these solutions are in play but as fast as old problems are resolved even more continue to pile-on aggravating the troubles.
While global governments are busy attempting to inflate away debts through monetization; i.e., printing piles of un-backed dollars, notes and bonds, the load is simply unsustainable on the math. Manipulators have gone past the point of no return. There will be no recovery until after a smashing correction arrives. This smash is the quick and dirty answer to final de-leveraging of all those debts. We think it comes in phases and in fits and spurts.
Japan is in the worst shape with public debt versus GDP now standing at 270%. With an aging population and not nearly enough young workers entering their workplace, deflation arrived again and the Nikkei Stock Market is taking big hits. The U.S. and Europe except for the U.K have 125% of debt versus GDP with the U.K’s at 105%. (Source for percentages Societe Generale).
The U. S. Dollar plays a very important role in these problems. With the Dollar being 85% of the entire world’s reserve currency; as the dollar goes, so goes the global system. Unfortunately, the dollar has much further to fall and for this month of December, 2009, the dollar can sink to an index low of 70.00-72.50 from today’s prices. Look for the dollar’s final support as a minimum low sometime during the next three years ranging from 40-46.
Stocks are peaky and will shorter term correct. We think the nearby correction will be mild and new buying can return in January, 2010 continuing through spring, 2010. The Dow could easily find an 8850 base and then return to a new rally. The S&P’s might base at 950. Meanwhile, we could experience an 11-12% Dow and S&P haircut.
The blow-off top for primary stock markets could be later May through July, 2010. On this cycle, five extremely negative events hit world economies and markets simultaneously.
These are:
(1) $40-$50 billion in U.S. credit card failures are reported;
(2) Housing sales both new and used for the first half of 2010 fail so badly, this market is literally in free-fall. There will be 7-10 million new mortgage defaults with most of those in the prime paying (not sub-prime) category caused by job losses;
(3) First half auto sales are reported. They will be so poor more car-makers file bankruptcy;
(4) Commercial real estate loans bankrupt many developers and their projects among those existing, under construction, and planned.
(5) Insurance companies are holding so much failing commercial real estate paper, they are in danger of defaulting with some running for government bailouts in TARP II. At one time years ago, the 20 top insurance companies could literally control the United States economy. They are huge asset holders of property and cash investments.
Housing valuations will fall on the average, nationwide in the U.S., another -30%. We figured about one year ago that 1980’s prices would be the bottom. Now we potentially see a bottom at 1970’s prices. More homes were foreclosed in the last 12 months than in an entire decade in the first Great Depression of the 1930’s.
On the Monday morning of 11-23-09, news reported used housing sales were up 10.1%. This is nothing but giveaways prodded by seller financing, government freebie down payment credits, and crash and burn pricing taken by bottom feeders. Housing remains in international collapse. The last great creditor, FHA is hurting badly.
Inflation is now an unreported at 7% and rising. By May, 2010, it begins to bite very hard first on the lower 1/3rd of U.S. wage earners and the jobless. Most of their income is spent on food and energy. They top the inflation pain lists.
Consumers with newer bought and leased autos will do “jingle mail.” They will return newer unexpired leased cars and trucks back to dealers’ lots, give them the keys and quit paying. We saw this with houses over the past 1-2 years. Auto lots will overflow with new-used cars and trucks. Values will plummet. Many of these “returns” will be from the “Cash for Clunkers” program by those who got stuck with unaffordable car and truck payments.
Auto-maker GM projected total U.S. industry sales for 2010 of 11mm with a new recovery. There will be no recovery and sales could skid for the whole industry group down to 7mm or less in 2010. In 2011 it gets even worse.
Auto layoffs will escalate and unions will scream for help to president Obama. He will financially band-aid a dying industry. Consumers have no buying power, credit or cash to make any difference. Those with cash will save it and hunker down and wait out the troubles. Auto union membership declines rapidly. Most vehicle lending dries-up to a trickle.
The crude oil and energy sector has fundamentals pulling in both directions. Today we see oil price resistance at $80 with a trading range slightly lower in the $70’s. Fundamentals show an over-supply on recession-depression lower demands. On the other hand, inflation of prices is rising on a weaker dollar and will escalate. Look for crude oil to visit the $50’s and then turn-around on inflation rising to $100. Gasoline will follow as some refineries are closing on operating losses and no new ones are being built. Inflation ultimately wins on price escalation. Eventually, scarcity of product returns.
Depressions normally and historically last ten years. It could take consumers that long to pay down all of their debts before a return to normal conditions. Savings rates are up but with so much debt and few or zero salary raises in the face of new and rabid inflation, consumers will be economically slaughtered.
Credit and banks go through the wringer again. There are few bank ideas left to earn lender income except for trading. While Goldman Sachs makes millions weekly doing this, most banks are not set-up for it and there are only so many good traders available for the work. Since Obama’s compensation guy is rankling big traders with income limits this makes things worse as these people leave for unrestricted pay in overseas trading positions.
The bond market is so huge it takes time for it to roll over and slide off a cliff. Asia and the U.S Federal Reserve have been our larger paper buyers. While they still buy some to keep markets glued together they are: (1) exiting the longer term paper for shorter terms and, (2) buying less of it turning to other ideas in the commodity markets.
With the higher Yen, Japan is increasingly engaged in hard asset shopping trips as is South Korea. They are both looking for grain, gold, oil, natural gas and other commodities they lack internally.
Junk bonds could lose 1/3rd of today’s value just next year. Treasury bond and note buying continues until “full faith and credit” is repudiated on distrust. Eventually they crash but in slow-motion over years due to the magnitude of these markets. We think no bond is a safe bond. Municipal bonds are viewed as some of the safest. What happens when cities, towns, counties and states are so broke they cannot pay the interest? Their tax revenue is going off a cliff. Some are safer than others for awhile but for how long? Who can finger a top? It can’t be done as it’s too political.
Various states within the United States have or, will be failing financially. Someone reported 1/3rd of the TARP money spent so far was used to bail-out bankrupt states. This will escalate as federal TARP money cannot help them fast enough and in large enough amounts to keep it all glued together. Watch for fire and police employment to get as thin as too be very dangerous in various communities. Ten states are going financially critical and 47 are on the watch lists.
New York, New Jersey, Connecticut, Michigan, Ohio, Florida, Arizona, Nevada and California are among the financially worst, hurting from falling tax revenue on broken businesses and consumers. Watch California as they could go out of control first within this group. They continue to contrive new taxes and not work on spending reduction. When some states face total collapse it will get very ugly very quickly. Michigan is among the worst of the worst. Most all of the states are spending themselves into the ground. They refuse to cut back as its political suicide. They will spend until there is nothing left to spend and then scream for help to the Federal Government.
China is in very serious trouble as the U.S. consumers have stopped buying their stuff. Their TARP for early this year exceeded that of the United States in both amount and rapidity of spending. It is estimated they spent in four months from January, 2009 to May, roughly $600 Billion with most of it going into projects now at over-capacity. The U.S.’ lack of buying cut China’s entire year of exports by -25%. Also, note the Chinese economy is 1/4th the size of the United States’ economy.
There are hundreds of idle Chinese factories and millions of laid-off workers with no new factory employment and not much work of any kind. Further, millions sold subsistence farms to work in the city. Now that work is gone and so are the farms that would have fed them. Watch for a slow motion or, faster collapse of China with a descent into riots and other social problems in 2010. China need 24mm new jobs each year just to stay even and are remain far behind that job generation power curve; never mind new job growth gains.
If the worry of China not buying our treasury paper suddenly became real, the U.S. government could stop most all Chinese exports into the U.S with crushing tariffs. China would then have skyrocketing joblessness, goods piled-up with no sales and be stuck with a trillion dollars in crappy U. S. bond and currency paper having little or no value and no way to sell it. They would take a $1 U.S. Trillion paper hit and be stuck with mountains of un-saleable merchandise. The social fallout would be catastrophic. China shall continue to buy U.S. Bonds to keep exports moving; albeit at a reduced level.
Should Chinese imports cease, American workers might find some lower paying employment in re-opened U.S. factories with the return of manufacturing to the states from Asia. After all, where would Wal-mart get all their goods to sell in U. S. stores?
We hope for the best and would prefer China keep it all glued together and endure only a mild recession. With global financials and markets so fragile and wrecked we give them a one in five of pulling it off. Rather, in a Chinese communist command economy, forthcoming dislocations could be legendary.
Ambrose-Evan Pritchard, the esteemed writer for The London Telegraph says, “The world economy is still skating on thin ice. The west is sated with debt, the East with (too much) plant. The crisis has been contained (masked) by zero rates and a fiscal (credit) blast, trashing sovereign balance sheets. But the core problem remains. The Anglo-sphere and Club Med are tightening belts, yet Asia is not adding enough (internal) demand to compensate. It is adding supply.” (Editor: organic Chinese demand is barely beginning).
“My view is that the markets are still in denial about structural wreckage of the credit bubble. There are two more boils to lance. China’s investment bubble; and Europe’s banking cover-up. I fear that only then can we clear the rubble and, very slowly, start a fresh cycle.”
We agree with Mr. Pritchard but contend China has other bubbles in autos, real estate, their stock market and major water shortages and pollution as well. If these bubbles pop one at a time, it goes easier. But, we might see multiple bubble-popping instead. In that instance, China might take-down the entire global system. Note the effects of the recent scare from Dubai on their $80mm default.
Education, particularly among colleges and universities, has hit the money wall as students now debate if a $40,000 to $80,000 expenditure is worth it in this economy. Newly graduated kids with good degrees but no experience go to the end of the line for jobs.
Experienced people get what few jobs remain as employers have a wider range of choices and can be super picky. Further, employers have no time or money for training. Many kids are schooling on the internet and with on-the-job training while taking menial work for any kind of a pay check.
Public school teachers with longer years of experience, working in grades K-12 are being thinned out for some cheaper new grads. Foreign language teachers along with those in math and science are still preferred over the others. Watch for an increase in home schooling as laid-off teachers with their own children work at home and take in other peoples’ kids for instruction-pay. The big public school systems are in trouble. They can no longer be afforded. Since the U.S. Government layered on piles of bureaurat red tape some years ago, fully 1/3rd of public school budgets must be devoted to stupid, expensive politically correct type work. It’s all a big waste as students and teachers must suffer for it.
Watch for more traffic accidents due to postponed road work and repairs. Bridges can fall and broken paving causes more wrecks. Higher tax communities will be abandoned especially by seniors with educated kids out of the house. New York City has lost over $6 Billion in income taxes from those fleeing the city and the state.
This trend goes even faster. We see retired folks selling out as local real estate taxes are unaffordable. They are migrating to lower tax states and smaller communities offering fewer services. Much of the big city service stuff is not required and consumers cannot pay for it. Think of Detroit’s city wasteland on steroids.
Gold And Silver Trading Is The Place To Be
Fund managers and traders are not married to markets and move to ideas that produce. Gold and silver shares can top and correct in the near term but then take-off in new 2010 rallies. Bigger funds have invested in long-only commodities baskets including gold, silver, grain, copper, platinum and others. They regularly buy the whole cycle from Labor Day to May, endure the dips and trade on 50 and 200 day averages. With a falling dollar these managers forecast stronger gains in these markets. December gold futures were trading near $1,200 this morning of December 1. We see a near-term mild correction followed by more buying.
Administration’s Politics Mostly Fail
The Obama left wing liberal agenda designed to transfer wealth is not working. The president’s popularity is sinking along with his agenda. The primary problem is the administrations inability to claw out of the employment depression. Instead, they will continue to keep digging while installing the wrong ideas, creating more and deeper messes. This advances the desirability of precious metals, and other hard assets of all kinds. Joblessness is the primary economic problem.
Dollar is the key to several markets. For December, dollar sinks lower.
Never mind the angled line support. Look at the lower box momentum.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. –Traderrog.
*****
Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and longer term traditional stock shares, futures and commodities trading with specifics for individual trades. See webeatthestreet.com for more information.
Gold is firme to up over night, may bode well for USAU,gogogo
you may just get your answer to that, cause I say days like that are coming
HOW TO VIEW THE FALLING GOLD PRICE
It's amazing what a $50-per-ounce drop in the price of gold does nowadays.
The decline is front and center in the financial papers. CNBC hosts are grilling every analyst they can find with drivel like, "What a drop! Is the gold rally now dead?"
Our advice to the nervous gold owner: Sit back and take the "long view" of gold. Remember, no bull market rises in a straight line to the sky. And gold regularly experiences wild swings in price.
Gold is the "odd man out" among financial assets. It's not like a rental property, where you can say, "I'll pay eight times annual rent for this." Or a blue-chip stock, where you can say, "I'll pay 10 times annual cash flow for this." Gold represents real wealth and crisis protection. Folks go through periods where they'll dump this protection... or buy it with both hands. This leads to lots of volatility, like we've seen in the past few days.
It could even lead to a bigger drop in gold. But as you can see from today's five-year chart of gold, the yellow metal could drop all the way down to $850 an ounce and still remain in the confines of a big bull market. This sort of drop is unlikely, but anything can happen in the gold market... so be prepared.
BY BRIAN HUNT, www.dailywealth.com
GOLD DOWN, USAU UP, bucking the trend here. Wait till gold returns to its run. NEWS is imminent, lots of news in the pipeline. for thee big bucks this is at least a one year play people, ride it
GOLD has come back around the mountain, GOLD will climb back up that mountain, and USAU will follow, but with much greater percentage gains
i think over the next 30-60 days you will see a lot more than 2 prs, mark my words. regarding BESE, we shall see
ARE YOU READY????????
Phony Data Won’t Weigh on Gold for Long
Let’s see if we’ve got this right: Traders pummeled gold on Friday, sending it down $66 an ounce, because unemployment reportedly downticked to 10 percent, implying the U.S. economy is strengthening, which would be bullish for the U.S. dollar, which would be bearish for gold. That’s the theory of it, anyway – and never mind the fact that no one in America outside of newsrooms even remotely believes whatever unemployment statistic the Labor Department concocts from one month to the next; and even less do they believe it when said statistic purports to show that the economy is improving. Wall Street pros pretended to believe it, though — for just long enough to short-squeeze bears at the opening bell. But look at what happened next: After only 30 minutes on the rack, the bears went limp, suddenly becoming unavailable to help unwittingly foster the bizarre illusion that no investor can afford to delay buying stocks at these “bargain” levels.
But what has changed, really? Answer: nothing. If you were bullish on gold Thursday before it swan-dived, then you should still be bullish now. Gold still enjoys enormous support from sovereign buyers around the world who are rightfully concerned about the soundness of the dollar. And it still represents the best hedge against an all-out global effort by the central banks to avoid deflation at any cost.
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There is a lot of quality news coming, for sure. Im thinking gold gets back to 1200 and USAU hits a new 52 week high in the next few days and then its onward and upward
remmao, dont use my real name,lol
usau was holding back news, hmmmmmm, they may have been delayed for reasons beyond their control, but i dont belive they were holding back. Sometimes you need a signature here and a signature there, something rewritten. Dont sound like you are in a hurry to sell, relax, stick around and retire
ZOOM ZOOM, sorry, am not a paid member here. But you could say edminnema says, USAU will ZOOMZOOMZOOM to the MOON, mark my words and have a great Christmas
molee, I DO AGREE, but am not sure in what respect the tie in is exactly, sorry i cant be of more help, but i am sure we will know sooner or later
imho gold will bounce to 1300 by year end. The job numbers are such a falacy, and come Jan. job numbers will once again go up because of the end of the holiday season, Gold 1600 by end of first quarter, USAU 50 cents or better
Dear Comrades In Golden Arms,
The dollar has rallied today and accordingly gold is soft.
1. The temporary high of this rally was $1224.00 to $1224.10 in the cash market 3 times.
2. Remember the day that unemployment figures went from 9.5% to 9.4%? It was heralded as the end of the continuous increase in that figure.
3. Gold at these price levels will axiomatically become extremely violent.
4. The magnet underlying gold is at $1156 and below that at $1089.
5. Regarding articles that claim gold has topped, the Chinese will be buyers on the decline if they can make that purchase and save face.
6. This is a boon to the Chairman of the Federal Reserve as his supporters can claim that changing leadership when things are turning is a greater risk than maintaining the present leadership at the Fed.
7. If Bernanke is confirmed, which is reasonable to assume, you can be sure that the pressures for policy will be generated via the Treasury.
8. Clearly this economy is bouncing along a bottom and has decelerated its decline, but is doing so poorly in light of the over the top liquidity placed into the world economy. This is how all figures, market related, react in a trend. That is all.
9. Respectfully, this is gold so if you cannot stand the heat in the kitchen then you had better leave. Buying dollars here has no real fundamental basis other than a few days at best.
The MOPE ( Management of Perspective Economics) accelerated two trading days ago is now rising to spiritual levels. The exception to this is at the US Labor Department. They suffered a major loss of standing when they went wild over the drop from 9.5% to 9.4% as the end of increasing unemployment.
I am interested in following the analysis of this number by paying attention to www.shadowstats.com.
Gold weakness and dollar firmness is again temporary.
Act with your head, not with your gut center of emotions.
Sincerely,
Jim
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great, anything under a nickel is dirt cheap, now just sit tight for a few months and I think you will be pleasantly surprised, happy investing, and more happy making money, have a great weekend
all you need to do is buy some of this, and et your followers to but some, and then wait and watch, simple stuff
HOPE you are all buying your Christmas gift that was on sale the last few weeks. Dont be in 2 much of a hurry to sell, even though i know most of you will. Thats fine, as you can see we have many who want this stock, and many more will. Well, HO HO HO, AND AWAY WE GO. Get back to me in 6 months, will ya
i spoke with Mr. Perez at length today over coffee, all is good, all will be great, and 13 cents is nothing in my opinion
lets see what transpires this week, hopefully we get some news and the filings go in, that will make it so interesting
i think we will start to see some rumblingw next week, and if u r going long, i think you will at least make 25x your money, jmho
i havent seen a new PR anywhere. I do know that BESE finally got their 10q filed, lets move on from here
things look like they will be finally heating up on USAU, stay tuned
The Simplest Reason Gold Will Soar
By Dr. Steve Sjuggerud
When the bank pays you nothing in interest, gold goes up. And right now, the bank is paying you nothing in interest.
Why does gold go up when interest rates are low? It's simple...
The knock against owning gold has always been that, unlike cash, it pays no interest... Compound interest is almost irresistible. If you can earn 7% a year on a $10,000 deposit, in 10 years time, it will be worth $20,000. Gold will just sit there like a bump on a log.
But every so often, like right now, paper money pays you no interest... and the scales tip in favor of gold.
That's the simple version. Let's add one little tiny wrinkle to it, so you can see why gold has become irresistible now...
The forecast for inflation in 2010 is around 2%. Yet the Fed is keeping interest rates near zero. So instead of earning nothing in interest at the bank, you're actually LOSING 2% a year to inflation. That's what's REALLY happening – the REAL interest rate at the bank (minus inflation) is NEGATIVE 2%.
My longtime friend Porter Stansberry asked me to do a study of what happens when real interest rates are less than zero. The results were astonishing...
In short, when real rates are negative, gold soars and stocks stink. And when real rates are positive, gold stinks and stocks soar.
Here are the actual results. (Note: These are COMPOUND ANNUAL GAINS.)
1973 through 1980
The median real interest rate was -1.15%.
Gold returned +32% per year.
The real return on the S&P 500 was -7% per year (not including dividends).
1981 through 2001
The median real interest rate was +2.7%.
Gold returned -3.5% per year.
The real return on the S&P 500 was +7% per year (not including dividends).
2002 to today
The median real interest rate was -0.4%.
Gold returned +18.5% per year.
The real return on the S&P 500 was -3% per year (not including dividends).
Well, there it is, plain as day. And you can see, these trends persist.
The Best Simple Gold Indicator Around
The Best Three Gold Coins to Buy Right Now
In 2010, real rates will be negative. (Bernanke will keep nominal rates near zero... so subtracting inflation will give you a negative real interest rate.) There is essentially no chance for a POSITIVE real interest rate in 2010. Said another way, you WILL lose money in the bank in 2010. Whatever interest you earn won't keep up with inflation.
History shows, under that environment, stocks don't do well... and gold soars. There's nothing in sight to end that trend. Trade accordingly.
Good investing,
Steve
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THIS IS SILVER'S YEAR
When they close the books on 2009, they'll chalk up a big win for silver vs. gold.
One of the big questions facing the precious-metals buyer is "Should I buy gold or silver?" As we profiled in September, since the bull market in precious metals began in 2001, the answer is, "There isn't much difference in the returns... but silver is much more volatile."
Since the 2001 "kickoff," gold and silver are both up a little over 300%. But as you can see from today's comparison chart, when a solid metals rally gets going, the returns in silver can get extraordinary. Our chart plots the percentage gains in gold (black line) versus silver (blue line). Silver is up nearly 65% this year, while gold is up 30%. The blue line, however, has much bigger peaks and valleys.
Moral of the story: You can make a heck of a lot of money in silver... just be willing to stomach a lot of volatility on the road to riches.
YUP, a lot of fools over there for sure. So u r looking for only 3 cents, ahhhhhhhhh, u will never become a millionaire
newmillionaire, your tune changes so quickly. If you wish to flip, you may lose, if you want to make your new million, you have patience, you may just make it. People buy, people sell, for whatever reasons, they dont wish to wait, they tried to flip, they have to cover something else, regardless, hold and you shall be happy, sell 2 quick and you'll give your azz a quick kick. Nothing negative but time
Gold will stay above $1,000 an ounce forever, says Swiss Dr. Doom
Dan Burrows
Nov 13th 2009 at 6:30AM
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Leaveitto Switzerland's version of Dr. Doom to make the latestapocalypticpronouncement on the future of the U.S. dollar -- and theoutlook forgold prices.
Marc Faber, investment advisor and fundmanager to the uber-wealthy,says gold will forever stay above $1,000 anounce. If you're unfamiliarwith Faber's pitch-black outlook for thefuture of the Westerneconomies and the developed world in general,well, he's probably bestknown as the author of the Gloom, Boom & Doom report.
Enough said.
"We will not see less than the $1,000 level again," Faber said at a conference in London, Bloomberg reportedThursday."Central banks are all the same. They are printers. Gold ismaybecheaper today than in 2001, given the interest rates. You have toownphysical gold."
Alsobolstering gold prices will be the Beast of the East, accordingtoFaber. "China's demand for commodities [including gold] will go upandup and up," Faber said, Bloomberg reported.
Withthe yellow metal now trading at nominal record highs of more than$1,100an ounce, gold bugs have been laughing all the way to Fort Knox.Gold isup about 27% on the year and about 50% in the last 52-weeks.
(Theductile metal would still need to more than double to reach atrueall-time high because of a little thing called, ahem, inflation.Why wetalk about an inflation hedge without adjusting for inflation isamystery.)
It's All About the Benjamins
Sowhy has gold been such a sterling investment? (Silver has doneevenbetter, by the way.) Because gold is the classic hedge againstglobalinflation (central banks are printing gazillions of dollars aspart oftheir stimulus programs, making fears of future inflation runrampant).More important, gold is denominated in dollars. Any timesomething isdenominated in greenbacks -- like gold or oil -- its pricegoes up asthe buck falls.
Now in case you haven't noticed, the buck is not just falling, it's burning. The U.S. Dollar Index,whichmeasures the greenback against a basket of major currencies, isat a15-month low and looks to have nowhere to go but down.
As we've written again -- and again--as long as the Federal Reserve continues to print money throughazero-interest-rate policy, the U.S. continues to run a bigtradedeficit and other nations move their foreign exchange reserves outofdollars, the buck will remain feeble. After all, if you're aforeigncentral bank, pension fund, mutual fund or hedge fund, why wouldyouhold onto a massive stash of rapidly depreciating dollars?
If you're India, well, you wouldn't. The nation's central bank purchased almost $7 billion worth of gold from the International Monetary Fund last week, helping to propel prices to their current levels.
What Goes Up . . .
MaybeFaber is right and gold-floor $1,000 is here to stay -- but it'sapretty bold statement. At some point the Fed will have to raiserates.(Let's hope so, anyway, if only because it would mean theeconomy isgrowing and unemployment is shrinking.)
Then there's the problemthat the weak dollar is traumatic for ourtrading partners, since a weakdollar makes it harder for them to sellus their stuff. Fed chairman BenBernanke apparently doesn't get paidto worry about what governmentselsewhere think, and so thosegovernments have begun to take mattersinto their own hands. Thailand,South Korea, Russia and the Philippineshave been sucking up dollars tostop its nauseating slide, The Wall Street Journal reported Thursday.
And if China gets into the act? The call on gold-floor $1,000 could look very foolish, indeed.
Lestwe forget, gold is like everything else in the history ofcommerce: Itis worth only what you can get someone else to pay for it.
Gold prices have been known to go down, too, you know.
Gold hits record above $1,126 as dollar sags
Sun Nov 15, 2009 8:06pm EST
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FACTBOX: Revisions to precious metals price forecasts
11 Nov 2009TOKYO (Reuters) - Spot gold punched to a record high above $1,126 an ounce on Monday as investors sought out bullion as a hedge against a weak dollar, while the precious metal's gains helped send platinum to its highest since September 2008.
News that commodities funds manager Blackrock Investment (BLK.N) expected central banks to be net gold buyers in 2009 also contributed to gold's rise.
Spot gold was at $1,123.75 an ounce at 0026 GMT, up 0.5 percent from New York's notional close of $1,118.50. It earlier touched an all-time high of $1,126.30.
The previous record was $1,122.85 marked on Thursday.
The dollar drifted lower in Asia on Monday, extending falls from late last week and heading into a week that is likely to see increased rhetoric on currencies from both China and visiting U.S. President Barack Obama. <USD/>
The greenback fell broadly on Friday after data showed a wider U.S. trade deficit and weaker consumer sentiment.
U.S. gold futures for December delivery stood at $1,124.20 an ounce, up 0.7 percent from Friday's settlement. The contract also earlier rose to a new record high, of $1,127.90.
The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its bullion holdings rose 30.56 metric tons, or 0.3 percent, from the previous business day to a record 8,954.08 metric tons as of November 13.
Spot platinum stood at $1,386.50 an ounce after hitting a 14-month high of $1,394.00.
On Friday platinum broke through above $1,390 for the first time since September 2008 after news that Impala Platinum Holdings (IMPJ.J) forecast output from Rustenburg, its main mining area, would fall by 100,000 ounces this financial year to 850,000 ounces, due to closures over safety and a two-week strike.
Impala Platinum is the world's No. 2 producer of the metal used to clean vehicle exhaust fumes and make jeweler.
But interest from long-term investors in gold-backed securities was relatively low.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,113.833 metric tons as of November 13, down 0.61 metric ton from the previous business day. <GOL/SPDR>
It was the first fall since November 5.
Precious metals prices at 0023 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1123.10 4.60 +0.41 27.60
Spot Silver 17.57 0.16 +0.92 55.21
Spot Platinum 1386.00 -4.00 -0.29 48.71
Spot Palladium 355.50 2.00 +0.57 92.68
TOCOM Gold 3245.00 23.00 +0.71 26.12 23748
TOCOM Platinum 4014.00 66.00 +1.67 51.36 4819
TOCOM Silver 507.00 4.80 +0.96 58.78 102
TOCOM Palladium 1036.00 20.00 +1.97 88.36 96
Euro/Dollar 1.4954
Dollar/Yen 89.50
TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Risa Maeda; Editing by Chris Gallagher)