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EDITORIALS
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Beware! ?Retirement USA? Program Would Be First Step Towards Government Confiscation of Retirement Dollars munknee
2010-09-03 06:36:09.0
The Obama administration is 'taking the first steps to confiscate retirement dollars,' according to Dr.
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These Two High Yield S&P 500 Dividend Stocks are Sound Investments munknee
2010-09-03 05:28:55.0
It would seem these days that, with bonds, CDs and money market funds paying less than the rate of inflation, serious consideration should be given to S&P 500 stocks that high dividend yields.
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Silver About To Break Out Big! David Morgan
2010-09-02 21:17:13.0
Silver is one asset class I do not cover very often, but have been largely bullish on since $6 an ounce many years ago.
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SOLD BRD $1.27 BUY CGC $3.34 TSItrader
2010-09-02 20:51:19.0
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Silver about to Breakout Big David Banister
2010-09-02 19:20:39.0
(Excerpted from August 31st forecast to our Paying subscribers, who were alerted at $18.
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Zeal Speculator 9.2.2010 zealllc
2010-09-02 17:36:41.0
Weekly subscription newsletter.
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In The News Today Jim Sinclair
2010-09-02 16:12:31.0
Dear CIGAs,If it happens three times then we should examine put option activity and ex drug trade submersibles.
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Jim's Mailbox Jim Sinclair
2010-09-02 16:12:31.0
African Barrick CIGA EricABG's trend energy, REV(E), already exceeds the highs set in May and June.
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Is the Dollar Rolling Over? The Golden Truth
2010-09-02 16:04:13.0
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Is Silver Ready to Explode? Expected Returns
2010-09-02 15:55:49.0
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Gold-Silver Ratio Update Gary Tanashian
2010-09-02 15:55:49.0
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And that's all it takes folks'.(Pediment Gold) Gary Tanashian
2010-09-02 15:47:31.0
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Hourly Action In Gold From Trader Dan Dan Norcini
2010-09-02 14:48:08.0
Dear CIGAs,Click chart to enlarge today's hourly action in Gold in PDF format with commentary from Trader Dan Norcini
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More Bad Advice from the Mainstream Jordan Roy-Byrne, CMT
2010-09-02 14:32:36.0
Sadly, after failing to keep mainstream investors from losing their shirt not once but twice, I found a front-page story from Forbes (c/o of Yahoo Finance) that, if followed, will prove costly to both one's wealth and portfolio.
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Bernanke ?Not Straightforward' on Lehman TwoCentsEditor
2010-09-02 13:45:28.0
Federal Reserve Chairman
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In The News Today Jim Sinclair
2010-09-02 13:14:32.0
Dear CIGAs,If it happens three times then we should examine put option activity and ex drug trade submersibles.
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In The News Today Jim Sinclair
2010-09-02 11:49:00.0
Jim Sinclair's CommentaryOf course the ECB will remain in crisis mode.
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How Hyperinflationary Hell ? and Commodity Heaven ? Will Happen (Before the End of 2011!) munknee
2010-09-02 11:48:58.0
The Fed is terrified of the U.
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Jim's Mailbox Jim Sinclair
2010-09-02 11:38:30.0
Dear Eric,Your price objective is somewhat stout, but quite possible if the price of gold meets Armstrong and Alf's targets.
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Marc Faber : Silver could go over $20 an ounce but Gold is better for investors MarcFaberBlog
2010-09-02 11:02:25.0
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LATEST NEWS
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Taiwan in a rice wine stew
Fri, 03 Sep 2010 02:33:47 -0700
TAIPEI - Taiwan found recently that World Trade Organization (WTO) membership can be a pain in the proverbial when it announced a drastic tax cut on locally brewed rice wine.
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Bad Year Looms for Bulgarian Wine Producers
Thu, 02 Sep 2010 22:25:56 -0700
Bulgarian grape growers and wine makers expect prices to go down, even lower than last season, the TV channel bTV reports.
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Wine of the week: 2008 Moulin de Gassac Vin
Thu, 02 Sep 2010 21:05:21 -0700
The wines from the Guibert family's Mas de Daumas Gassac were among the first to show what great wines could be made in the Languedoc region of France when that area began to come back into favor in the 1980s.
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Gold prices for Friday announced
Thu, 02 Sep 2010 20:56:44 -0700
The Gold Traders Association this morning announced the buying price at 18.085.88 baht per baht-weight for gold ornaments and 18,350 baht per baht-weight for gold bar.
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Gold Poised for Fifth Straight Weekly Gain on Economic Growth Concerns
Thu, 02 Sep 2010 20:27:33 -0700
Gold, little changed, may climb for the fifth straight week on speculation that an economic slowdown will increase demand for the precious metal as a store of value.
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Free And Reduced Price Meals
Thu, 02 Sep 2010 20:08:10 -0700
Garden City Union Free School District today announced a free and reduced price meal (Free Milk) policy for Garden City UFSD school children. Local school officials have adopted the following family eligibility criteria to assist them in determining eligibility: More ...
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Gold May Rise as Slowdown Spurs Investor Demand, Survey Indicates
Thu, 02 Sep 2010 16:51:15 -0700
Gold may advance on speculation the U.S.???s economic slowdown will spur demand for the precious metal as a haven from declines in other assets.
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Price finally agrees to new deal with Canadiens
Thu, 02 Sep 2010 13:54:48 -0700
Carey Price, who became the Montreal Canadiens??? No. 1 goalie following the off-season trade of Jaroslav Halak, signed a two-year contract with the team on Thursday.
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Envy, thy price tag is $910: Mississippi man wins one-of-a-kind trouser auction
Thu, 02 Sep 2010 13:42:27 -0700
In the end it wasn't a Silver Lake hipster or someone headed to Burning Man that submitted the winning bid for Betabrand's golden, glittery, one-of-a-kind Envy Pants we told you about late last month. It was a network administrator from...
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Gold and Silver's Daily Review
Thu, 02 Sep 2010 13:15:00 -0700
While the gold price was knocked back to $1,245 yesterday [in line with the London Fix of yesterday] today it climbed first in London , to be Fixed at $1,247.50] then early in New York . It was Fixed in London ???s afternoon at $1,248.50. Again it is attacking resistance at $1,250 to $1,265. We expect quite a good volume of gold is changing hands at the Fixes in London , just what central banks ...
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Xbox Live Gold subscribers face price increase
Thu, 02 Sep 2010 09:15:54 -0700
Gold members of Microsoft's Xbox Live premium online service should expect a $10 price hike in yearly memberships beginning November 1. Originally posted at Crave
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On Silver Lake's 'Walking Man'
Thu, 02 Sep 2010 08:57:31 -0700
Perhaps it's the idea that you could be an oddball and a respected professional at the same time that caused so many people to feel an affinity for him when he was alive and a sense of loss when he died. Until July 21, when he was found dead in his home hot tub, Dr. Marc Abrams walked roughly 20 miles a day throughout the Los Angeles neighborhood of Silver Lake. Just about anyone who spent any ...
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Steal this bottle of wine -- for $10
Thu, 02 Sep 2010 08:41:02 -0700
What are you drinking this weekend? How about a 2008 Moulin de Gassac Vin de Pays de l'H??rault "Guilhem" Blanc? Our wine reviewer and restaurant critics, S. Irene Virbila, says it can't be beat, especially for the $10 price tag:...
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Gold Ignored & Dismissed by US Media as Good Harvest Points to Strong Indian Demand
Thu, 02 Sep 2010 06:29:51 -0700
THE PRICE OF GOLD rose back above $1250 an ounce for the second time this week ??? and the sixth time since May ??? on Thursday morning in London , as government bonds ticked lower together with energy prices.
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BUY OR SELL-Time to buy silver, a safe-haven Cinderella
Thu, 02 Sep 2010 05:57:57 -0700
* Silver offers good short-term buy
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Scotland announces minimum price for alcohol
Thu, 02 Sep 2010 05:56:22 -0700
Scotland's government announced on Thursday that its planned minimum price for alcohol would be set at 45 pence per unit, meaning a bottle of wine would cost at least 4.23 pounds ($6.52) and a bottle of whisky 12.60 pounds.
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LATEST FROM BLOG
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Past the Point of No Return
Thu, 26 Aug 2010 21:33:07 GMT
People often say that the US dollar is no longer backed because it is no longer backed by gold or silver. The truth is that the US dollar is a promissory note backed by the ability and willingness of American taxpayers to pay the value of the dollar.
The currency value of the US dollar is the perceived value of the US government???s ability to collect taxes and repay its debts. This being the case, let???s review the fundamentals of the US economy and dollar.| GOVERNMENT DEBT: | | DEBT TYPE | DEBT AMOUNT | | Federal Government Sector debt - a record high in 2010. | $13.4 Trillion | | State & Local Government Sector debt - a record high. | $3.1 Trillion | | Un-funded Social Security contingent liabilities estimated looking forward | $17.5 Trillion | | Un-funded Medicare/Medicaid contingent liabilities | $89.3 Trillion | | Total Government Liabilities | $123.3 Trillion |
Source: http://www.ncpa.org/pub/ba662
The above summary calculates the current unfunded federal, state and local government liabilities to be 123.3 Trillion. I have seen several other estimates running as high as 200 Trillion; however this article will continue to use that figure. If we take that $123 trillion in government liabilities and divide it by the 111 million households in the US we find that the average household liability to the government for its promises is $1,108,108. In other words the average household would need to pay $1 million each in additional taxes in order to pay for the unfunded liabilities. Government budgets are not currently balanced and are unlikely to become balanced as tax revenue declines during the recession. However, assuming government budgets were balanced let???s consider the following chart:
| Average Household Government Liabilities: | $1,108,108 | | Average Household Income Before Taxes: | $67,163 | | Average Household Federal Tax: | $22,929 | | Average Household State and Local Tax: | $6,783 | | Average Household Income After Taxes: | $37,451 | | Income As a Percentage of Government Liabilities: | 3.4% |
Sources: US Census Bureau, The Heritage Foundation, CNN Money
Total household income in the US is roughly 3.4% of total government liabilities already in place without future unbalanced budgets. In other words, if everyone living in the US spent their entire income after taxes - without food, clothing, or shelter - they could pay the interest only on that obligation as long as the interest rate was less than 3.4%. This is a good argument for keeping interest rates low indefinitely. Since people generally need food, shelter and clothing, let???s look at household budgets to see how much more they can afford to pay the government:
Given that the US savings rate of disposable income is hovering around 0%, it is clear that the average household already spends everything it earns buy its food, clothing, and shelter. One problem is that while the government has indebted itself beyond the brink of physics, another problem is the average American household has done the same. According to the Grandfather Economic Reports, the household sector has an additional $12.8 trillion in its own debt - and the interest rate on that debt is much higher than the government???s treasury interest rates.
It is often argued that the government can raise tax rates and increase its revenue. Sounds like a great idea, but it once again defies physics. Even assuming that households pay 100% of their income in taxes without any loss in GDP, the unfunded liabilities couldn???t be paid. In addition, the higher tax rates go, the lower tax revenues go and vice versa. If the government reality wanted to increase its revenue it would have to lower tax rates. As tax rates increase, taxpayers increasing turn to Fight, Flight or Fraud to avoid paying more taxes. This trend can be seen clearly below:
In the past, debts were manageable and households saved so the US dollar had perceived value. Some of this perceived value still exists. However, today it is clear that the US government will be unable to fulfill its obligations. While people may perceive or believe in the US dollar and government, the truth is that both are insolvent. It is only a matter of time before perception catches up to reality. If the government diluted $123 trillion in obligations against the current M3 monetary supply of roughly $14 trillion in an orderly fashion, the dollar would fall in value to about 11 cents in today???s dollars.
While the US is insolvent, it is not bankrupt. Bankruptcy is the realization of insolvency. As long as investors are willing and able to purchase and hold government bonds the liabilities can be refinanced. It is only when these promises can???t be delivered upon that participants will be forced to realize default and it may be possible to push this off for years.
The US is not the only country with unsustainable unfunded liabilities. Both the US and Greece have unfunded liabilities exceeding 800% of GDP, The European Union???s unfunded liabilities are 432% of GDP.
Source: Jagadeesh Gokhale, "Measuring the Unfunded Obligations of European Countries," National Center for Policy Analysis, Study No. 319, January 22, 2009 and Eurostat
The US along with most other industrialized nations are undeniably past the point of no return on the path towards a historical renaissance. There is no way out, but to go forward. While many free market proponents are pushing for smaller government, balanced budgets, increased savings, and criticize the Federal Reserve for its inflationary policies, it makes much more sense to support the nation???s current trajectory because it is much easier to go forward than back and it is too late to change inevitable outcomes. The more intervention and liabilities taken on by the government, the faster the realization will become. Despite fairy tale stories by the media and politicians, the laws of mathematics dictate that the dollar and the US economy will default either through the default of obligations or default of the currency itself through inflation.
For more investing information, up to date news, articles, analysis and charts visit Tradeplacer.com
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$1 Million From 5 Months in Gold
Mon, 09 Aug 2010 19:28:00 GMT
In April 2008, legendary gold investor Jim Sinclair made a $1 million bet that gold would exceed $1650 by January 14th 2011. At the time, Sinclair had stated that he believed his bet was conservative and that gold would probably be much higher. However, with gold hovering near $1200 the market is betting against him and there are only 5 months remaining. Intrade, a predictive betting market, currently has the odds of gold exceeding 1550 by the end of 2010 at 5 percent. This implies that anyone willing to take Sinclair's bet today from the long side is unlikely to win - but also that the payoff would be enormous if payouts were based on the perceived odds using call options.
A $450 increase in gold would be an increase of 37.5 percent, a rate of $90/month or roughly $4 per trading day for 5 months. On an annual basis, this would be near a 100 percent return. Perhaps there is something that Sinclair knows and others don't.
Projecting an exponential moving average, gold would be around $1300 by January. However, gold tends to have larger seasonal moves during the August to January timeframe. Comparing the change from August lows to January highs over the last 10 years, gold rose by an average of 20 percent. Using this average, gold would be roughly $1440 by January. This isn't enough to win the bet, but few investors would be disappointed with such a move. Once in the last 10 years, the 37.5 percent increase was exceeded. From August 2007 to January 2008, gold rose by 40 percent from $657 to $924. The second largest move was between August 2005 and January 2006 when gold rose by 32 percent from $431 to $569.
Given the above data, the odds of gold topping $1650 by January still seem low - perhaps near 20-25 percent. However, Sinclair may be factoring in the likely hood of an event that could launch gold higher. If any of the events below occur, gold could easily top $1650:
War/and or Oil Crisis - Increased tensions in various strategic locations throughout the world could cut off the supply of oil to the US. Potential locations include Iran, Iraq, Pakistan, Venezuela, and Russia.
Major Currency Devaluation - This could be either the US dollar, Euro, or Yen. It could happen over night or over a weekend. Gold would likely gap much higher on such news, just as when it was revalued in 1933 from $20 to $35 an ounce overnight.
Quantitative Easing 2.0 - The Federal Reserve could initiate another round of financial asset purchases. This would not have the same effect as the first round. Equity markets would likely see little gain; however precious metals would be given a stronger dose of buying.
While it is difficult to estimate the odds of these events, they are more likely than most perceive. Perhaps Sinclair will win his $1 million after all. However, if he proves to be wrong on his bet then investors should be grateful that they have more time to buy gold on dips.
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Silver Spikes and Power Struggles
Fri, 06 Aug 2010 17:11:00 GMT
Silver has a history of undergoing massive spikes that look more like a heart rate chart than a stock or commodity chart. Due to silver's conductive and reflective properties, it has been considered a strategic metal for industrial uses since the introduction of electronics. It is the only commodity that has a users association lobbying for the organizations that consume it. Industrial use of silver has been relatively stable; however it is important to note that industrial use of silver has been greater than or near equal to production - which has thinned the market probably more than any other commodity. The reason for this is that both mining supply and industrial production have been near equal and stable. What is left at the margin are investors and speculators which are setting the price - not based upon 600-800 million ounce in global production or consumption but 50-100 million that is the remaining marginal amount that buyers and sellers can get their hands on. When investors aren't buying, the silver market is calm as a pool of stagnate water. However, when investors seek protection from inflation investors line up in a very thin market to produce shock waves.
1980
During the inflation panic of the 1970's the Hunt Brother accumulated a position of around 100 million ounces of silver. They started by taking physical delivery, however they continued buying futures contracts until the price of silver spiked to $50 in January of 1980. The COMEX, then changed the exchanges rules to only accept liquidation orders, and the price of silver subsequently collapsed to the $4 area. Gold trader Jim Sinclair was involved in the liquidation for the Hunt Brothers and still seems fearful of what he witnessed.
1983
Global central banks eased the money supply and credit in reaction to a recession in the US. This led to a return of inflation fears, and silver spiked from $5 to $14.72 in 1983. In the aftermath it fell back to the $4 area.
1987
A decrease in global silver supply, along with economic concerns led to another spike from $5 to $11. It once again fell to the $4 area.
1995
According to reports by Martin Armstrong, and an anonymous trader on ZeroHedge, PhiBro, a trading arm of Solomon Smith began to accumulate futures, and exercise out of the money call options to take delivery through Republic Bank. The CFTC approached PhiBro, and demanded to know the buyer. PhiBro never revealed the buyer, but was quickly forced to reverse the trade. The net effect was a small blip of the silver price in the $5 area. Although it wasn't revealed, there are reports that the buyer was Warren Buffett.
1997-1998
In a similar replay to 1995, Phibro began entering large call option orders through Republic Bank, except this time the buyer takes delivery in London, out of the jurisdiction of the COMEX. In both 1995 and 1998 out of the money calls were purchased and later exercised. The word was leaked that the buyer is Warren Buffett and other traders begin to accumulate positions. Armstrong claims that Republic Bank tried to make it look like he was the buyer; however US regulators tracked the positions to London and discovered it was indeed Warren Buffett who had taken delivery of 87 million ounces with intent to take nearly another 42 million ounces. Buffett publicly announced the investment stating ???In recent years, widely-published reports have shown that bullion inventories have fallen very materially, because of an excess of user-demand over mine production and reclamation.??? Silver spiked from $4 to 7 and fell back to $4 again.
Buffett never spoke of silver again until 2006 when he admitted he sold it shortly after buying it in when he was quoted as saying ???I bought it very early, I sold it very early. Other than that it was perfect???. It is believed that regulators strong armed Buffett into selling the silver back with the threat of being targeted as a manipulator. It is not believed that Buffett had the intent to flip silver for a small profit, nor that he was attempting to manipulate the price.
2000-2008
Given the fundamentals of a long term supply deficit and depletion, in conjunction with negative interest rates, silver could no longer be held at $4 an ounce when it cost $6-$8 to produce it as pointed out in a previous article. An inflationary boom launched all commodities into a bull market. This time though, buyers were not a billionaire or large hedge funds. Instead small investors and smart money bought silver based solely on its fundamental value. Price spikes were mitigated such that both gold and silver rose in a measured slope.
In early 2008, the financial markets began to collapse with the dollar. Speculators were beginning to attack the world's reserve currency and silver hit a peak of 21. It remained at high level until the summer of 2008 when a large amount of silver was shorted. Numerous reports indicate that these trades were being made through JP Morgan, which is also the custodian of the SLV silver ETF. Gold was also shorted in conjunction with a swap of Euros for dollars. The effect was an immediate reversal of a large dollar short trade, collapse in precious metals and the subsequent crash of 2008. Silver fell to the $8 level.
-present
Inflationary policies quickly pushed gold to new all time highs, and silver back up to the $19 level. The structure of the precious metals markets have changed substantially from small value buyers and smart money to larger and more influential institutions and hedge fund managers such as John Paulson and George Soros. This is the classic description of the second phase of the bull market. However, the focus of these funds remains gold.
The word is out amongst large investors on the street to avoid buying silver or be made an example of. There is one thing common amongst billionaires - they all have a lot to lose and must maintain a co-existence with governments and bankers.
As Armstrong has pointed out, no one has survived a run on silver. The Hunts were bankrupted, and Buffett only escaped by immediately closing out his positions. Buffett won't speak of it again, and two of the best known gold traders ??? Jim Sinclair and Martin Armstrong not only avoid trading it, but even discussing it.It is unlikely that another billionaire will attempt to take delivery of 50 or 100 million ounces of silver again. However, the recent bull market has clearly been base building, similar to what was seen in the 1970's prior to the 1980 silver spike. The larger the base, the larger the spike - and the 1970's silver base pales in comparison to the 2000 base. When the next silver spike does occur there may only be one short seller, but there will be thousands of marginal physical buyers that have simply lost confidence. There will be no Hunt Brother or Warren Buffett to call up and threaten or strong arm, and there will be no one to reverse the trades on. It will be the public, or small retail investor acting in panic.
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