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been a long time with no news...
hence the dwindling stock price. Need a detailed status update with some drill results and an announcement of when actual production will begin. Anyone reached out to the company lately?
Would be a great time for some News.
stock went from .10 t .70...
in last 52 weeks and sits at around .60 - up around 600% - and pulled back to sit near, and above, it's 50 day moving average - very normal and still in an uptrend.
you picked near it's 52 week high...
to compare current price to - and TRGD was going up for the last few months while gold and silver waivered.
Just normal pullback after run up and some consolidation IMO.
But - never know.
The Fed's Last Hurrah...
By: Peter Schiff, Euro Pacific Capital, Inc.
During the 1990s, inflationary Federal Reserve policy fueled a tech stock bubble. When that bubble burst, the Fed inflated a larger one in real estate. Now that the real estate bubble has burst, the Fed is inflating the biggest bubble of them all - a bubble in government. While the earlier booms at least provided the illusion of prosperity and some fun while they lasted, the government bubble will cripple the economy and deliver widespread misery to the vast majority of Americans.
Of course, there will be winners in the government bubble, at least for a while. As was the case with the stock and real estate bubbles, plenty of money will be made by the well-connected and parasitic classes. Government employees will continue to enjoy pay raises at our expense, as will anyone benefiting from the new wave of subsidies, such as Wall Street investment bankers, financial speculators, and those working in health care or education.
These gains will come at the expense of the taxpayers who foot the bill and the consumers who face higher prices. As government grows, it deprives the private sector of the resources it needs to survive and grow. The result is a lower overall standard of living. Not only are government jobs less productive than private sector jobs, but bureaucratic interference actually makes the remaining private sector jobs less efficient as well.
Our economy is being transformed from a mostly capitalistic one to a mostly socialistic one. More decisions are being made by politicians and lawyers in Washington and fewer by entrepreneurs. The motivation behind this shift is the mistaken belief that the financial crisis of 2008 was caused by too much capitalism and a lack of proper government oversight. This conclusion is self-serving for those in power, and couldn't be more economically misguided. Through corruption or just plain ignorance, Congress and this Administration have embraced an ideology that has failed every time it has been tried.
Take the recent student loan reforms that were slipped into the health care bill. Obama wants to reduce the cost of providing student loans by taking the profits out of the industry. According to Obama, student loans are too expensive because banks profit from making them. If the government nationalizes the function, we would apparently bring down costs by eliminating those pesky profits.
This is a Marxist argument, pure and simple. If true, it would apply to all industries, not just banking. States like Cuba and North Korea would be the envy of the world, as they prohibit profits across the board. The truth is that profits, earned from free-market competition, keep cost down. By taking the profits out and putting the bureaucrats in, any incentive to provide better service or lower costs is eliminated. It's not hard to predict that student loan costs will now rise faster than ever.
That is clearly not the result we want. To solve the problem, people must understand that college tuitions are so expensive specifically because the government has guaranteed student loans (see my video blog on this topic for a detailed explanation). Guaranteed loans don't mean more access to education, but rather that universities are free to charge more per pupil than if their customers were paying out-of-pocket.
Obama's plan only serves to remove more market forces and creates an even bigger moral hazard. Under the new rules, students will be required to repay a much smaller portion of what they borrow. As a result, students will be willing to borrow even greater amounts of cash to pay inflated tuitions, making it that much easier for colleges and universities to raise them.
Also, since the government will actually be loaning the money directly, rather than simply guaranteeing private-sector loans, the Treasury will actually have to borrow the money itself before it can re-lend it to students. I suppose the irony of going into debt to loan money never registers in Washington. Further, as this bill will cause tuitions to rise even faster, it will necessitate even larger loans that will produce even greater taxpayer losses when the loans end in default or forbearance.
Whether it is in education, housing, health care, automobiles, insurance, or banking, greater government involvement in the economy means higher prices, lower productivity, more bailouts, bigger deficits, increased taxes, diminished industrial capacity, fewer private sector jobs, less freedom, and a falling standard of living.
In the end, when runaway inflation and skyrocketing interest rates burst the government bubble, there will be no more bubbles to replace it - just one hell of a hangover.
For in-depth analysis of this and other investment topics, subscribe to The Global Investor, Peter Schiff's free newsletter. Click here for more information.
-- Posted Thursday, 1 April 2010 | Digg This Article | Source: GoldSeek.com
- Peter Schiff C.E.O. and Chief Global Strategist
Euro Pacific Capital, Inc.
10 Corbin Drive, Suite B
Darien, Ct. 06840
800-727-7922
www.europac.net
been following the story...
thanks for the link. Very intriguing.
buying more physical silver - anyone know of good...
deals? Bought from several places before (APMEX, etc.) - looking for some bargains.
TIA
put in some orders below bid on some silver...
stocks today - good for a few weeks - hope they fill.
classic must see video by Schiff...
about the dollar and Paul Krugman: http://www.youtube.com/schiffreport
I guess just a rumor for now...
was waiting a few days to see what all was said. Chinese are stealth buyers of gold IMO - so was a little suspicious of an annoucement from them like this.
IGLD went from 5 to 25...
over the last year - not bad - too bad I sold during a period of intense fear of losing all my money.
But all OK now as gold and silver stocks have allowed me to keep a smile on my face.
good chance it's not a rumor and is true...
if so - it's big and gold moves much higher IMO. If false - gold stays in it's recent trading range.
Pravda is Russia's largest news org. Just because the U.S. didn't scoop it does not mean it is not true.
so looked at the original announcement...
by the IMF:
IMF to Begin On-Market Sales of Gold
Press Release No. 10/44
February 17, 2010
The International Monetary Fund (IMF) today announced that it will shortly initiate the on-market phase of its gold sales program. This is the second phase of the total sale of 403.3 metric tons approved by the Executive Board in September 2009 (see Press Release No. 09/310). The first phase was set aside exclusively for off-market sales to official holders. A total of 212 metric tons was sold during this phase, comprising sales to the Reserve Bank of India see Press Release No. 09/381), the Bank of Mauritius (see Press Release No. 09/413), and the Central Bank of Sri Lanka (see Press Release No. 09/431).
The total amount remaining to be sold is 191.3 metric tons. In accordance with the priority of avoiding disruption of the gold market, the on-market sales will be conducted in a phased manner over time. This follows the approach adopted successfully by the central banks participating in the Central Bank Gold Agreement. Participants in the agreement have noted that the Fund’s sales can be accommodated under the agreed ceilings of 400 tons annually and 2,000 tons in total during the five years starting on September 27, 2009. The initiation of on-market sales does not preclude further off-market gold sales directly to interested central banks or other official holders. <\b>Such sales would reduce the amount of gold to be sold on the market.
The IMF will continue to provide regular updates on progress with the gold sales through its normal reporting channels.
IMF Declines Comment on China IMF Gold Purchase Rumor – Kitco
News
The International Monetary Fund (IMF) said it had no comment on a rumor that China is the buyer of the remaining 191.3 tons of gold the IMF is selling.
Alistair Thomson of the IMF's Press Office told Kitco.com that the agency does not comment on speculative stories, calling this a "sensitive area" of discussion.
The unconfirmed rumor was based on Russian news reports and some sources said it boosted gold futures prices.
In his daily commentary, Jon Nadler, Senior Analyst for Kitco Metals Inc. wrote, “According to the Russian FinMarket news Agency, Chinese officials have confirmed the intention for China to buy the remaining 191.3 tones of IMF gold that are still for sale. The rumors have however not yet been confirmed. “
The IMF announced the sale of its remaining 191.3 tons to the open market in mid-February. Reportedly the IMF couldn't sell its gold to central banks like China and India, traditional big buyers, so it had to resort to the open market.
In September 2009, the IMF announced an intention to sell 403.3 tons of gold; India, Mauritius and Sri Lanka purchased close to 212 tons by the end of the year.
CHINA and the GOLD PRICE - POINT OF INFLECTION?!?!
By Andy Hoffman
Today’s announcement by the Chinese government that they plan to buy the remaining 191 tonnes of IMF gold (if it even exists) is possibly the most important event in the ten-year gold bull market, and perhaps could turn out to be the inflection point from when the public believes the propaganda about gold and starts to disbelieve, yielding the commencement of the latter stages of the PM bull and the early stages of American economic, political, and social chaos.
China is the only entity on earth with the financial backing to take on the U.S.-government led gold Cartel, with the ability at literally any moment to take them out and cause the price to soar to unimaginable levels. Until now, they have been very coy about their statements about gold, as given their huge hoard of roughly $2.5 trillion dollars (largely held in U.S. Treasuries), they are very concerned about a dollar (and frankly all fiat currency) crash. In fact, they were complicit in creating the dollar bubble by pegging the yuan to the dollar and thus creating massive, artificial U.S. consumer demand for Chinese products via the creation of massive U.S.-based debts to purchase Chinese manufactured goods. Thus, no one is more aware of the precarious state of their dollar holdings, and what is likely to occur to them in the coming years.
Given this sensitivity, China has NEVER made public statements about its intentions in the gold market, until about six months ago when it announced (no surprise to us “goldbugs”) that they had acquired 450 tonnes of gold over the past five years, bringing their total holdings to 1,054 tonnes (only about $40 billion worth). That statement spoke volumes about Chinese intentions, particularly when they shortly afterward starting making PSA’s to the Chinese population encouraging (no, URGING) them to buy physical gold and silver. The Chinese are quite aware that “REAL MONEY” was getting ready to break away from the U.S. government-led rigging that has suppressed them for years (and thus propped up the dollar), and you can be sure they do not want their population stuck in fiat dollars (not to mention pounds, Euros, etc.) when “REAL MONEY” retakes over its historic role.
When the IMF announced that it would sell 403 tonnes of gold in December (only a measly $12 billlion worth), it was widely believed the Chinese would swoop in and take it all, as the last remaining “large chunk” of gold available for sale anywhere. Whether the IMF actually owned any gold (I still believe it is not real), or whether they really intended to use the proceeds to help poor countries (Bu—s—t, the goal was to try and scare the gold price lower) didn’t matter. The key point is that it probably is the “last remaining large chunk” of available gold, real or imaginary. Gold supply worldwide has been declining for a decade thanks to a combination of capital starvation (care of the Gold Cartel suppression) and supply challenges (care of Peak Gold), and now that the Washington Agreement signatories (France, Italy, Germany, etc.) are no longer sellers, there is simply no way of buying that kind of size without pushing the market significantly higher and causing an avalanche of fear about the future of fiat currencies. Trust me, if the Chinese put in a market order to buy 200 tonnes of physical gold today, the price would be $1,500+ by tonight.
Thus, when the Indian government outflanked them and bought 200 of the 403 IMF tonnes (at an average price of $1,049/oz), that must have really ticked them off, and likely shows that they were too conservative in their bidding given the rising amount of competition for that gold coming into the market (India, Russia, Middle East, etc.). So when an article surfaced yesterday stating that the Indians would be happy to buy the other 191 tonnes (Sri Lanka and Mauritius already bought 12 tonnes), you can bet the Chinese government had an emergency meeting and decided it was time to be more aggressive, for the first time ever. With their $2.5 trillion horde, there is simply no way they will let themselves get outbid for the last chunk.
As the great Jim Sinclair notes, IMF gold sales were major catalysts of the final gold move from $100 to nearly $900 in 1980, and once again, contrary to what was intended, this dopey announced IMF sale (made solely to knock the gold price down before the February COMEX options expired) could be what once and for all puts gold “in play” among retail investors, corporate investors, and central banks alike. Do you think George Soros, who announced last week that he now owns $600 million of gold, is going to lose out on this trade, after fighting and eventually beating the U.K. government 20 years ago on his short pound trade? I think not.
Ladies and Gentlemen, the fabric of the U.S. is collapsing rapidly, economically, politically, and socially. The only thing that has kept it from turning REALLY UGLY has been the U.S. government’s fraudulent activities centered around manipulating the stock, bond, currency, and commodity (read: gold and silver) markets to maintain the PERCEPTION that things are manageable.
But they are most certainly not, and all you need to do is read the paper to see. Just this week, it was announced that foreclosures hit an all-time high, consumer confidence a multi-year low, new home sales an all-time low, and the PPI (inflation) a near record monthly high. Not to mention an additional $1.9 trillion increase in the Federal “debt limit” to $14 trillion, which will likely be surpassed by year-end.
Please PROTECT YOURSELF, and do it AS SOON AS POSSIBLE. The situation is becoming more dire each day. Paper currency is going down in value (gold at an all-time high against nearly all currencies), and REAL GOODS and REAL MONEY are going up in value.
NOW!
Andy
China To Purchase Half of IMF's Gold
25.02.2010 Source: Pravda.Ru
China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.
World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.
The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.
China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.
“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports.
Most of Chinese citizens believe that investing in gold jewelry is a good way to avoid inflation, Rough & Polished agency said.
The IMF has received the profit of $7.2 billion from gold sales. A part of the funds is to be used for crediting poor countries.
http://english.pravda.ru/business/finance/25-02-2010/112369-china_gold-0
perhaps the biggest day ever in gold...
as far as news - follow the posts.
China To Purchase Half of IMF's Gold...
2/25/10
China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.
World central banks started to increase their gold reserves
after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.
The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.
China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.
“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports.
Most of Chinese citizens believe that investing in gold jewelry is a good way to avoid inflation, Rough & Polished agency said.
The IMF has received the profit of $7.2 billion from gold sales. A part of the funds is to be used for crediting poor countries.
http://english.pravda.ru/business/finance/25-02-2010/112369-china_gold-0
no - that won't happen...
it would indicate they don't know what they're doing - and even though that may be true - it's even more important that people don't think that is the case.
it just makes sense to me...
Jim Sinclair:
The final Pillar in the gold bull market is a bear market in US Treasuries.
The increase in the discount rate to 0.75% is driven by market realities and a desire to be able to sell US Treasuries as foreign demand falls off.
The bull market in gold moved from $400 to $887.50 in the 1970s as interest rates rose from 3% to 14 7.8% on Ten Year money.
Once again the knee jerk reaction is to sell gold and buy the dollar. Be assured this must happen.
Because the final Pillar is falling while Gold is over $1000, you can look at Armstrong’s $5000 prediction as a realistic possibility.
Stay the course.
Respectfully,
Jim
http://jsmineset.com/
still hanging in there waiting for...
gold and silver to break to new highs - should happen this year and when it does - I am loaded up on the stocks that will benefit.
thanks - good luck to you...
also - and I will continue to keep the board updated. I use it almost every day as a one stop shop to go to some of the sites I have linked.
I have also been gathering KLSVF shares...
and plan to hold for the forseeable future - so good luck to both of us. Believe this correction in gold and silver turns around soon - but no hurry as don't plan to do much buying or selling over the coming days. Thanks for the input.
As Good As Gold...
By: John Browne
Senior Market Strategist, Euro Pacific Capital, Inc.
Thursday, 17 December 2009
As the price of gold has pulled back from its recent run up to $1,200, many investors are left to ponder what exactly drives the movement of such an important and financially sensitive commodity.
Most people are aware that gold prices respond to inflation expectations and that central banks, as the largest holders of gold, are big players in the market. But there is a very murky understanding as to why and how these players affect prices, and what their ultimate goal may be.
Although I profess no great insight into how central bankers from Bombay, Berlin and Beijing are looking to manage the global gold market, a better understanding of how our current system came to be provides some clue about gold's recent behavior.
The First World War was not only catastrophic to an entire generation of Europeans, but it also left the international financial system in tatters. After the war, the great powers met in Rome to re-establish a workable international financial system. The British pound sterling, which had always been fully convertible into gold, was selected as the official 'reserve currency.' Then, during the Great Crash of the 1930's, the collapse of Austrian and German banks triggered a run on sterling for conversion into gold. Unable to withstand the assault, sterling was replaced as the reserve by the U.S. dollar. Although the dollar was also convertible into gold, the Roosevelt administration had limited the risk to the U.S. Treasury by restricting redemption to central banks.
In 1944, the newly established International Monetary Fund (IMF) selected the U.S dollar as its 'international reserve asset', which enshrined a quasi-gold standard to undergird global financial transactions. However, the inflationary policies of most governments caused the market gold price to rise above the official price of $35 an ounce.
In 1961, as the price of gold drifted higher relative to the dollar, the major central banks formed the London Gold Pool, a 'gentleman's club' to coordinate gold sales in order to stabilize gold prices. But by 1971, the dollar's devaluation had overwhelmed their coordinated interventions. Ultimately, President Nixon was compelled to break the dollar's last links to gold by closing the 'gold window' to other central banks. For the first time in human history, the world monetary system 'floated'.
Since then, major central banks have continued to debase their currencies at pace with the U.S. dollar. In 1978, via the IMF, they moved to demonetize gold, which stood to expose the true inflation rate.
This was first carried out by massive central bank sales of gold in exchange for Special Drawing Rights (SDR's) from the IMF. When this failed, the U.S. gained support, in 1999, for the Central Bank Gold Agreement (CBGA) to coordinate the release of central bank gold onto the market.
Officially, at least, this was meant to prevent central banks from dumping gold. However, it is highly suspicious that these nominally independent central banks would take coordinated action to support the gold price. This is especially true given that they've spent the last forty years trying to do the opposite. In my opinion, it is much more likely that the CBGA was designed to covertly time purchases and sales to magnify gold's price volatility, in order to dissuade investors from holding it over the long term.
I believe this intervention is the biggest factor currently distorting the gold market. But the precious metals investor should understand that central banks can only pressure the market, not dictate it. Gold will move up as the following dynamics unravel.
First, the dollar has benefited from its reserve status, which creates demand for dollars to complete various transactions. However, the conditions that put the dollar on the world monetary throne have already changed, and it's just a matter of time before it is forced to abdicate. Just as French endured as the international diplomatic language long after France waned as a world power, so too is the dollar coasting upon its former glory. When the dollar loses its reserve status, demand for the greenback will evaporate.
Second, many holders of surplus currency have diversified massively into the euro. But the euro is a tower built on unlevel ground. Already it is showing cracks as Greece, Ireland, Spain, and Portugal exhibit signs of economic failure. What's more, the EU is about to assume responsibility for basket-case Iceland. If the solvent states of the union succumb to pressure to bail out their weaker neighbors, the euro will lose all of its newfound credibility with investors.
Third, the U.S government has been successful in distorting the official inflation figures downward, reducing evidence of current inflation. Fortunately for the feds, people tend to think in 'nominal' rather than 'real' value terms. For example, investors still feel good buying stocks and bonds of American companies in U.S. dollars. They don't realize that when measured in terms of gold, or real money, the S&P has lost some 20 percent over the past ten years. Over the same period, the U.S. dollar has lost over 280 percent!
Fourth (and perhaps least understood), the massive inflation already created by the Fed remains hidden within the banking system. As long as banks are able to lend directly to the Fed and Treasury at no risk, they have no incentive to circulate their new dollars. Only when the banks leverage up and lend to industry, or are forced to do so, will the prices for consumer goods skyrocket.
Finally, by changing accounting standards for the banks' toxic assets and making self-congratulatory pronouncements, the government has created the impression that crisis has been averted and faith restored in paper currencies. This feeling of relief is flawed fundamentally. It will not be long before investors are brought to the devastating realization that true recovery from a credit boom requires tightening and recession - that Washington did not avert catastrophe, but ensured it.
As these dynamics unravel, the full consequences of U.S. profligacy will be felt around the world. The central bankers could sign any agreement they wish but it won't stem the meteoric rise of gold. By then, investors will understand that those left holding dollars will be left holding the bill.
As Good As Gold...
By: John Browne
Senior Market Strategist, Euro Pacific Capital, Inc.
Thursday, 17 December 2009
As the price of gold has pulled back from its recent run up to $1,200, many investors are left to ponder what exactly drives the movement of such an important and financially sensitive commodity.
Most people are aware that gold prices respond to inflation expectations and that central banks, as the largest holders of gold, are big players in the market. But there is a very murky understanding as to why and how these players affect prices, and what their ultimate goal may be.
Although I profess no great insight into how central bankers from Bombay, Berlin and Beijing are looking to manage the global gold market, a better understanding of how our current system came to be provides some clue about gold's recent behavior.
The First World War was not only catastrophic to an entire generation of Europeans, but it also left the international financial system in tatters. After the war, the great powers met in Rome to re-establish a workable international financial system. The British pound sterling, which had always been fully convertible into gold, was selected as the official 'reserve currency.' Then, during the Great Crash of the 1930's, the collapse of Austrian and German banks triggered a run on sterling for conversion into gold. Unable to withstand the assault, sterling was replaced as the reserve by the U.S. dollar. Although the dollar was also convertible into gold, the Roosevelt administration had limited the risk to the U.S. Treasury by restricting redemption to central banks.
In 1944, the newly established International Monetary Fund (IMF) selected the U.S dollar as its 'international reserve asset', which enshrined a quasi-gold standard to undergird global financial transactions. However, the inflationary policies of most governments caused the market gold price to rise above the official price of $35 an ounce.
In 1961, as the price of gold drifted higher relative to the dollar, the major central banks formed the London Gold Pool, a 'gentleman's club' to coordinate gold sales in order to stabilize gold prices. But by 1971, the dollar's devaluation had overwhelmed their coordinated interventions. Ultimately, President Nixon was compelled to break the dollar's last links to gold by closing the 'gold window' to other central banks. For the first time in human history, the world monetary system 'floated'.
Since then, major central banks have continued to debase their currencies at pace with the U.S. dollar. In 1978, via the IMF, they moved to demonetize gold, which stood to expose the true inflation rate.
This was first carried out by massive central bank sales of gold in exchange for Special Drawing Rights (SDR's) from the IMF. When this failed, the U.S. gained support, in 1999, for the Central Bank Gold Agreement (CBGA) to coordinate the release of central bank gold onto the market.
Officially, at least, this was meant to prevent central banks from dumping gold. However, it is highly suspicious that these nominally independent central banks would take coordinated action to support the gold price. This is especially true given that they've spent the last forty years trying to do the opposite. In my opinion, it is much more likely that the CBGA was designed to covertly time purchases and sales to magnify gold's price volatility, in order to dissuade investors from holding it over the long term.
I believe this intervention is the biggest factor currently distorting the gold market. But the precious metals investor should understand that central banks can only pressure the market, not dictate it. Gold will move up as the following dynamics unravel.
First, the dollar has benefited from its reserve status, which creates demand for dollars to complete various transactions. However, the conditions that put the dollar on the world monetary throne have already changed, and it's just a matter of time before it is forced to abdicate. Just as French endured as the international diplomatic language long after France waned as a world power, so too is the dollar coasting upon its former glory. When the dollar loses its reserve status, demand for the greenback will evaporate.
Second, many holders of surplus currency have diversified massively into the euro. But the euro is a tower built on unlevel ground. Already it is showing cracks as Greece, Ireland, Spain, and Portugal exhibit signs of economic failure. What's more, the EU is about to assume responsibility for basket-case Iceland. If the solvent states of the union succumb to pressure to bail out their weaker neighbors, the euro will lose all of its newfound credibility with investors.
Third, the U.S government has been successful in distorting the official inflation figures downward, reducing evidence of current inflation. Fortunately for the feds, people tend to think in 'nominal' rather than 'real' value terms. For example, investors still feel good buying stocks and bonds of American companies in U.S. dollars. They don't realize that when measured in terms of gold, or real money, the S&P has lost some 20 percent over the past ten years. Over the same period, the U.S. dollar has lost over 280 percent!
Fourth (and perhaps least understood), the massive inflation already created by the Fed remains hidden within the banking system. As long as banks are able to lend directly to the Fed and Treasury at no risk, they have no incentive to circulate their new dollars. Only when the banks leverage up and lend to industry, or are forced to do so, will the prices for consumer goods skyrocket.
Finally, by changing accounting standards for the banks' toxic assets and making self-congratulatory pronouncements, the government has created the impression that crisis has been averted and faith restored in paper currencies. This feeling of relief is flawed fundamentally. It will not be long before investors are brought to the devastating realization that true recovery from a credit boom requires tightening and recession - that Washington did not avert catastrophe, but ensured it.
As these dynamics unravel, the full consequences of U.S. profligacy will be felt around the world. The central bankers could sign any agreement they wish but it won't stem the meteoric rise of gold. By then, investors will understand that those left holding dollars will be left holding the bill.
buying silver - anyone of good deals...
want to buy some silver coins or bars for X-mas presents - plan to order over next couple of days and looking for best deal from reputable dealer. TIA.
this says it well on central banks...
The Gold Window Has Reopened
Friday, 4 December 2009
Source: GoldSeek.com
The gold standard that was in place until 1971 prevented unchecked federal deficit spending, and excessive borrowing to consume foreign goods. With the gold standard in place, if the US were to accumulate large foreign debts, foreigners could exchange their Dollars for the United States’ gold, gold reserves would diminish, the Dollar would fall in value, and interest rates would rise until the US could attract capital. Higher interest rates and diminished purchasing power would force the US to save more and spend less, which would rebalance the economy. Today, even though the US is no longer on the gold standard, foreign central banks have created a new gold window by using their Dollar reserves to buy gold on the open market.
President Nixon closed the gold window because the United States’ creditors were rapidly exchanging their Dollars for gold. The ending of the gold standard resulted in a loss of confidence in the Dollar, which led to the very high inflation of the 1970s. Although confidence in the Dollar should have continued to decline in the 1980s and 1990s as the Dollar remained unconvertible to gold and the US current account deficit increased exponentially, it instead rose sharply. Strong confidence in the Dollar was demonstrated by the willingness of the United States’ creditors, such as China, to accumulate Dollars even as the growing trade deficit meant that creditors were accumulating more Dollars than they could ever sell.
For years, the United States’ foreign creditors accumulated Dollars in exchange for their manufacturing production and natural resources. This relationship allowed the Dollar to remain the world’s reserve currency. However, this relationship is changing because our creditors are converting their Dollars to gold. China, India, Sri Lanka, and Russia, as well as other countries, have increased or plan to increase their gold holdings. Historically, currency crises ensued when foreigners no longer wanted to hold a currency and instead demanded gold. Perhaps, investors remain complacent because they see no ramifications from the falling Dollar since US gold reserves will not be depleted. Yet, in effect, central banks have replicated the gold window by selling their Dollars on the open market. If this trend continues, a currency crisis will lead to rising long-term interest rates and falling assets prices.
In addition to the “reopening” of the gold window, the buying of gold by developing countries demonstrates that a historic transfer of wealth is underway. For years the developed world has borrowed money from the developing world to enable its consumption of the developing world’s production and natural resources. While the developed world accumulated debt, the developing world accumulated foreign exchange reserves (savings). As foreigners sell their Dollars to buy assets and natural resources, the transfer of wealth from the developed world to the developing world will accelerate. Accordingly, Americans will suffer from higher costs and a lower standard of living; the rest of the world’s standard of living will improve.
Investors and central banks accumulated US Treasury bonds and Dollars at an increasing rate since the 1980s despite reckless US monetary and fiscal policy and the Dollar no longer being backed by gold. Even though it should have been clear that Dollars were being irrationally hoarded, the Dollar remained overvalued and over owned. The period of misplaced confidence in the Dollar has come to an end. Central banks are now using their Dollars to buy gold and will continue to use the open market as an alternative to the gold window. The days of the Dollar as a reserve currency are over and a currency crisis is already underway.
Daniel Aaronson - daaronson@continentalca.com
Lee Markowitz - lmarkowitz@continentalca.com
Continental Capital Advisors, LLC
Continental Capital Advisors, LLC was formed to offset the destruction of wealth caused by the global devaluation of currencies by central banks. The name Continental Capital symbolizes the 1775 US Currency, "the Continental", which was backed by nothing and quickly became devalued.
KLSVF - has 5 mines and a 100 tpd mill...
in place with experienced operators and quality management. Hoping that production will ramp up shortly and news on more silver reserves. Hughes Group is high quality IMO and has made big discoveries and brought them to production - with huge payoff for stockholders in the past. Love the track record of CEO and truly believe it is set move up big.
For producers - a low level one that I've been buying into lately is USSIF.
Also own large amounts of HL, SVM and SLW - but all of these have had signficant moves from where I bought.
KLSVF - Canadian silver stock yet to move...
Klondike Silver trades on the Canadian venture exchange under the symbol KS.v - trades on the US pink sheets under the symbol KLSVF.pk
Lots more info: http://investorshub.advfn.com/boards/board.aspx?board_id=9974
Huge potential to move big IMO.
and I picked up a little more USSIF...
today - to go along with a new 52 week high in silver as we close in on new all-time high for silver.
picked up more today...
sooner or later - it's going to get recognized
IMO.
gold may be saying...
I'm the safe haven - not the dollar! Strong recovery underway.
Central Banks buying Gold - updated:
India: Reserve Bank of India - On November 2, the IMF announced that it sold 200 tonnes of gold to India's central bank for $6.7 billion. India has indicated they are interested in additional gold purchases from the IMF.
Mauritius: Bought 2 metric tons of gold from IMF in November. The $71.7 million sale to the Bank of Mauritius was based on market prices on Nov. 11, the IMF said in an e-mailed statement.
Sri Lanka: The central bank governor stated in September that his bank had been buying gold for the past five or six months. November, 25, 2009: Sri Lanka buys 10 tonnes of IMF gold. The International Monetary Fund said Wednesday it had sold 10 tonnes of gold to Sri Lanka's central bank for $375 million, as part of a restructuring of IMF financial resources.
Vietnam: will import 6 tons of gold in Novemeber, state after the central bank last week lifted a ban on imports to stabilize an overheating market. So far, 1.5 tons had been imported, 500 kg each by Sacombank, ACB and Eximbank.
Taiwan: studying whether to raise the amount of gold in its forex reserves
China: Encouraged citizens to buy gold and silver - stated they are studying whether to raise the amount of gold in its forex reserves. China, the biggest gold producer, has increased reserves 76 percent to 1,054 tons since 2003 and has the fifth-biggest holdings by country, Hu Xiaolian, head of the State Administration of Foreign Exchange, said in April. The world’s most populous nation may buy some of the gold now being offered by the IMF, Market News International said in September, citing two unidentified government officials.
South Korea: studying whether to raise the amount of gold in its forex reserves.
Russia: Russian Central Bank will purchase around 30 tonnes of gold from the country’s state repository Gokhran following the increased international assets held by the country's top bank, which grew 5.1% in October to $434 billion. Russia announced that it bought 15.5 metric tonnes of gold in October, bringing its total to 19.5 metric tonnes for October alone. Russia has been adding to its reserves of gold over the course of the past two years, having purchased 69 tonnes of gold in ’08 and 90 tonnes so far in 2009. Further, the Central Bank said that “It would be appropriate to hold 10 per cent of reserves in gold.” If so, that would mean that the Central Bank intends to bring its gold holdings eventually to 12-13 thousand tonnes, or twice what it presently holds.
Notes on IMF gold sales:
The IMF executive board approved in September the sale of 403.3 tonnes of gold. The fund, which currently holds roughly 3,000 tonnes of gold, is the third largest official holder of the precious metal after the United States and Germany.
The IMF said it would sell gold directly to central banks and other official holders for an initial period before selling the remaining amount on the open markets "in a phased manner over time."
From Jim Sinclair (know the meaning of this and you realize just how high gold can go):
-COT loses when it takes on governments.
-COT loses badly when it takes on persistent governments.
-COT gets creamed when the US dollar trades below .7400 and persistent government are persistent.
-COT expires when delivery problems occur on any futures exchange, the dollar trades under .7400 and persistent government persist.
-COT does the death rattle when COT takes on persistent governments that do persist, the dollar trades under .7400, delivery problems occur on any futures exchange and there is a run on the bank of ETFs who "own" more gold than anyone could have bought in the physical market, straining ones imagination enough to read the prospectus.
Junior precious metals shares and junior producers do their 1980 thing when the run on ETFs takes place.
Central Banks buying Gold - updated:
India: Reserve Bank of India - On November 2, the IMF sold 200 tonnes of gold to India's central bank for $6.7 billion. India has indicated they are interested in additional gold purchases from the IMF.
Mauritius: Bought 2 metric tons of gold from IMF in November.
The $71.7 million sale to the Bank of Mauritius was based on market prices on Nov. 11, the IMF said in an e-mailed statement.
Sri Lanka: The central bank governor stated in September that his bank had been buying gold for the past five or six months. November, 25, 2009: Sri Lanka buys 10 tonnes of IMF gold. The International Monetary Fund said Wednesday it had sold 10 tonnes of gold to Sri Lanka's central bank for $375 million, as part of a restructuring of IMF financial resources.
Vietnam: will import 6 tons of gold in Novemeber, state after the central bank last week lifted a ban on imports to stabilize an overheating market. So far, 1.5 tons had been imported, 500 kg each by Sacombank, ACB and Eximbank.
Taiwan: studying whether to raise the amount of gold in its forex reserves
China: Encouraged citizens to buy gold and silver - stated they are studying whether to raise the amount of gold in its forex reserves. China, the biggest gold producer, has increased reserves 76 percent to 1,054 tons since 2003 and has the fifth-biggest holdings by country, Hu Xiaolian, head of the State Administration of Foreign Exchange, said in April. The world’s most populous nation may buy some of the gold now being offered by the IMF, Market News International said in September, citing two unidentified government officials.
South Korea: studying whether to raise the amount of gold in its forex reserves.
Russia: Russian Central Bank will purchase around 30 tonnes of gold from the country’s state repository Gokhran following the increased international assets held by the country's top bank, which grew 5.1% in October to $434 billion. Russia announced that it bought 15.5 metric tonnes of gold in October, bringing its total to 19.5 metric tonnes for October alone. Russia has been adding to its reserves of gold over the course of the past two years, having purchased 69 tonnes of gold in ’08 and 90 tonnes so far in 2009. Further, the Central Bank said that “It would be appropriate to hold 10 per cent of reserves in gold.” If so, that would mean that the Central Bank intends to bring its gold holdings eventually to 12-13 thousand tonnes, or twice what it presently holds.
Notes on IMF gold sales:
The IMF executive board approved in September the sale of 403.3 tonnes of gold. The fund, which currently holds roughly 3,000 tonnes of gold, is the third largest official holder of the precious metal after the United States and Germany.
The IMF said it would sell gold directly to central banks and other official holders for an initial period before selling the remaining amount on the open markets "in a phased manner over time."
From Jim Sinclair (know the meaning of this and you realize just how high gold can go):
-COT loses when it takes on governments.
-COT loses badly when it takes on persistent governments.
-COT gets creamed when the US dollar trades below .7400 and persistent government are persistent.
-COT expires when delivery problems occur on any futures exchange, the dollar trades under .7400 and persistent government persist.
-COT does the death rattle when COT takes on persistent governments that do persist, the dollar trades under .7400, delivery problems occur on any futures exchange and there is a run on the bank of ETFs who "own" more gold than anyone could have bought in the physical market, straining ones imagination enough to read the prospectus.
Junior precious metals shares and junior producers do their 1980 thing when the run on ETFs takes place.
KLSVF - silver miner @ 0.07...
the more you dd the more you seen the potential: http://www.klondikesilver.com/s/Home.asp
more gold for Sri Lanka central bank...
Sri Lanka buys 10 tonnes of IMF gold
From Agence France-Presse
via Yahoo News
Wednesday, November 25, 2009
WASHINGTON -- The International Monetary Fund said Wednesday it had sold 10 tonnes of gold to Sri Lanka's central bank for $375 million, as part of a restructuring of IMF financial resources.
It was the third IMF sale of gold in a month as the Washington-based institution, the world's third-largest official holder of the precious metal, seeks to reduce its dependence on lending revenue and bolster its finances amid the global economic crisis.
The IMF said the sale to the Central Bank of Sri Lanka was based on the market prices prevailing Monday.
On November 2, the IMF sold 200 tonnes of gold to India's central bank for $6.7 billion, then sold two tonnes of gold to Mauritius on November 16 for $71.7 million.
The IMF executive board approved in September the sale of 403.3 tonnes of gold. The fund, which currently holds roughly 3,000 tonnes of gold, is the third largest official holder of the precious metal after the United States and Germany.
The IMF said it would sell gold directly to central banks and other official holders for an initial period before selling the remaining amount on the open markets "in a phased manner over time."
bought some shares...
like the future here.
Not a major position yet - but hope to build upon steadily.
silver on its way to record highs...
sooner or later - KLSVF will respond.
India plans to buy more gold from IMF
By Mandakini Raina Nov 24 2009 , New Delhi
India is open to buying more gold from the International Monetary Fund
A government official said that the additional purchase would depend on the “successful pitching by RBI”. “RBI is an independent body, and the government does not interfere in its affairs. It will get the gold if its bid is successful and at the price it has offered,” said the official.
RBI did not respond to Financial Chronicle questions if it was bidding for the remaining IMF gold. The purchase of the first lot of 200 tonnes, RBI had said at the time, was a part of its foreign exchange reserves management operations.
Responding to query from FC, an IMF spokesperson said the gold sale process was still under way and “there is no fixed timetable for completing the sale”. Its spokesperson further said that “the fund does not wish to comment on discussions with individual members.”
RBI has good reasons to further enrich its gold reserves. In just three weeks it has been able to benefit by as much as $800 million on the investment of $6.7 billion it made in buying 200 tonnes from IMF.
Since 1999 RBI has been periodically valuing its gold reserves at “prices close to the market”. It has not done so since it purchased the gold from IMF.
RBI bought the 200 tonnes at $1,045 an ounce. The transaction, from IMF to RBI, involved daily sales that were staggered over a two-week period, October 19-30, with each daily sale conducted at a price set on the basis of that day’s market price.
On Tuesday, gold prices stood at $1,168, an increase of 12 per cent over the price RBI paid. The market value of the gold, as of Tuesday, thus stood at $7.5 billion – indicating a cool gain of $800 million for RBI.
RBI holds its forex reserves in a basket of currencies expressed in dollar terms. It is able to earn only a nominal return on the dollar reserves.
In an article in FC on November 4, Guild Investment Management CEO Monty Guild listed the merits of buying of gold. “It helps China and India more because their responsibility for financing IMF grows as they become powerful financially. It is a method to get IMF to self-finance in the short run and save China and India money,” he wrote. Guild said that since most of the gold bought would be out of reach for the retail market, “gold prices will not get hammered”.
Prime minister Manmohan Singh on Sunday said there wasn’t a substitute for the dollar yet. “My own feeling is that we have not entered an era of irreversible shift in the economic strength of the US,” he said ahead of his visit to Washington.
On November 3, the day RBI bought IMF gold, finance minister Pranab Mukherjee told the economic editors’ conference that the government wasn’t preferential in its treatment to either the dollar or gold. The buying of gold had a sentimental significance, as the government had to pledge gold with the Bank of England in 1991 to borrow money to maintain imports.
The IMF executive board had on September 18 approved the sale of 403.3 tonnes of gold -- one-eighth of the fund’s total gold holdings -- half of which was eventually sold to India. Bank of Mauritius bought 2 tonnes, leaving 201.3 tonnes still with IMF. The limited sales are part of IMF’s efforts to put its finances on a firm footing and raise money to lend to low-income countries.
Central Banks buying gold...
added more on Russia -
India: Reserve Bank of India - September - 200 metric tons of gold from the International Monetary Fund. The Reserve Bank of India paid $6.7 billion for 200 tons from the IMF, according to a Nov. 2 statement.
Mauritius: Bought 2 metric tons of gold from IMF in November.
The $71.7 million sale to the Bank of Mauritius was based on market prices on Nov. 11, the IMF said in an e-mailed statement.
Sri Lanka: The central bank governor stated in September that his bank had been buying gold for the past five or six months.
Vietnam: will import 6 tons of gold in Novemeber, state after the central bank last week lifted a ban on imports to stabilize an overheating market. So far, 1.5 tons had been imported, 500 kg each by Sacombank, ACB and Eximbank.
Taiwan: studying whether to raise the amount of gold in its forex reserves
China: Encouraged citizens to buy gold and silver - stated they are studying whether to raise the amount of gold in its forex reserves. China, the biggest gold producer, has increased reserves 76 percent to 1,054 tons since 2003 and has the fifth-biggest holdings by country, Hu Xiaolian, head of the State Administration of Foreign Exchange, said in April. The world’s most populous nation may buy some of the gold now being offered by the IMF, Market News International said in September, citing two unidentified government officials.
South Korea: studying whether to raise the amount of gold in its forex reserves.
Russia: Russian Central Bank will purchase around 30 tonnes of gold from the country’s state repository Gokhran following the increased international assets held by the country's top bank, which grew 5.1% in October to $434 billion.
Russia announced that it bought 15.5 metric tonnes of gold in October, bringing its total to 19.5 metric tonnes for October alone. Russia has been adding to its reserves of gold over the course of the past two years, having purchased 69 tonnes of gold in ’08 and 90 tonnes so far this year and is now the 8th largest holder of gold in the world amongst the central banks, ranking just above the Netherlands and just behind the Central Bank of Japan. Including the recent purchases, the Central Bank holds 658 tonnes of gold in reserve."
Further, the Central Bank said that “It would be appropriate to hold 10 per cent of reserves in gold.” If so, that would mean that the Central Bank intends to bring its gold holdings eventually to 12-13 thousand tonnes, or twice what it presently holds.
the lesson from the chart...
is to hold onto your gold stocks about 1 year after the gold price peaks in order to eek out maximum gains.