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Gold and What Moves it.
Tracking all things that relate to and affect the price of gold.
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Economic Signs of the Times: Monday roundup (06-11-12)

"Spanish debt crisis: 'fear of a bank freeze is palpable’: Savers in Spain can find their banks refusing to hand over their money, even if it is held in an instant-access account, thanks to changes to terms and conditions introduced by the government (The Telegraph) Three Ways To Stop A Bank Run [AUDIO] (National Public Radio)"

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Is The Fed Getting Ready to Juice Once Again? - The Dollar Vigilante Blog -

Is The Fed Getting Ready to Juice Once Again? - The Dollar Vigilante Blog - | Gold and What Moves it. | Scoop.it

by Tampa Bay TDV Correspondent, Brett Heath

 

"...Without the largest buyers in the treasury market to soak up the ever-increasing supply, we know the Fed must inevitably intervene and fill that gap again. This brings us to the Fed’s bond buying programs, each more cleverly named than the last.

 

"Let’s step back and see how the markets have reacted or anticipated this type of easy monetary policy. The following chart of the S&P 500 was generated in 2008 during the announcement of QE1. The market anticipated the announcement and reversed on big volume the day before. The result was a 21.6% move in five trading days. ..."

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The Benefit of QE Remains in Doubt | Guy Lerner | Safehaven.com

The Benefit of QE Remains in Doubt | Guy Lerner | Safehaven.com | Gold and What Moves it. | Scoop.it

by Guy Lerner:

 

"The old adage of what is good for Wall Street is not good for Main Street can easily be applied to the policy of quantitative easing (QE). As the markets approach another QE moment, the debate rages on about the benefits (or lack there of) of implementing a policy that has shown little long term benefit. After 2 QE's and an Operation Twist, the economy is still struggling to gain traction, and in many respects, looks ready to rollover. Of course, Wall Street doesn't care about Main Street, and in some ways, the worse off Main Street is, the better for Wall Street as it is easier to make the case for some more monetary morphine (QE). ..."

 

[I really like his calling QE "monetary morphine." Of course it has been benefiting Gold.]

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More Stimulus from ECB by October: BofA Merrill Lynch Global Fund Manager Poll

More Stimulus from ECB by October: BofA Merrill Lynch Global Fund Manager Poll | Gold and What Moves it. | Scoop.it

by Shane Croucher:

 

"Almost three quarters of global fund managers expect more quantitative easing in the eurozone from the European Central Bank (ECB) within four months, according to a leading survey, as growth expectations fall sharply.

 

"Eurozone leaders are still struggling to keep a lid on borrowing costs as political instability in Greece and a €100bn Spanish bank bailout - which may not be enough to save the financial institutions - weigh heavily on the global economy.

 

"Support for policy stimulus has grown. The majority of the panel now believes that global monetary policy is 'too restrictive'," according to the BofA Merrill Lynch Survey of Fund Managers for June.

 

"The outlook for European economic growth fell alongside global growth expectations in June, as 45 percent of those surveyed expect a weaker EU than they did previously, compared to 31 percent taking a more negative outlook in May.

 

"It is the lowest reading since January. ..."

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The Golden Truth: More On Greece And More QE

The Golden Truth: More On Greece And More QE | Gold and What Moves it. | Scoop.it

by Dave in Denver:

 

"... Now take the Greece scenario and multiply it out by roughly 4-5 multiples for the potential Spain problem, and so on for Italy and France. And make no mistake about it, Germany/Merkel understands this, as Deutsche Bank is probably the largest credit default swap underwriter after JP Morgan. This is why Merkel and has been backing down from her "no more bailouts" stance is starting to issue statements of support for some kind of structured bailout for Spain.

 

"The liquidity in the entire western financial system is starting to dry up and it will require a lot more printing in order to avoid a massive banking system collapse. We are starting to see all of the Fed officials - even the liquidity hawks - make statements in recent speeches with allude to "all options are still on the table" with regard to more QE. See speeches yesterday from Lockhart and Evans, for example. And just yesterday one of the chief policymakers for the Bank of England made the statement that Bank of England should consider buying more than just Government debt to facilitate QE ..."

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Most MF Global Execs Are Off The Hook For That Missing $1.6 Billion

Most MF Global Execs Are Off The Hook For That Missing $1.6 Billion | Gold and What Moves it. | Scoop.it

by Alexander Eichler:

 

"When $1.6 billion of customer money goes missing, you'd think it would be easier to punish someone for it.

 

"Not so at MF Global, the brokerage firm that misplaced the impressive 10-figure sum around the same time that it declared bankruptcy in October. The missing money has since been found, but identifying the parties responsible for the episode has proved more difficult.

 

"As The Wall Street Journal reports this week, many senior executives at MF Global -- including finance chief Henri Steenkamp, treasurer Vinay Mahajan and assistant treasurer Edith O'Brien -- aren't even registered with regulators, meaning they can't be formally charged with a failure to supervise in the missing-money case.

 

"Regulators had been looking especially closely at Steenkamp lately, asking why he claimed at one point to know little about the missing funds when company e-mails show that he was in the same loop as everyone else. ..."

 

[Hold Corzine responsible.]

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Trader Dan's Market Views: Gold Market Continues to Reflect Currency Turmoil

Trader Dan's Market Views: Gold Market Continues to Reflect Currency Turmoil | Gold and What Moves it. | Scoop.it

Trader Dan:

 

"Simply put - as the situation in Europe further deteriorates (yesterday the market YAWNED at the $125 billion Spain bailout), Italy is now coming into focus. Strangely enough, the US equity markets somehow think all of this is inconsequential as the bulls there continue to be giddy with delight.

 

"Their attitude is best described by an old Steve Wariner song, "Some Fools Never Learn". You play with the fire, you're gonna get burned". ..."

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Embry - Despite Rally, Global Financial Crisis II Is Imminent

Embry - Despite Rally, Global Financial Crisis II Is Imminent | Gold and What Moves it. | Scoop.it

Today John Embry told King World News that, despite the rally, investors should brace for “global financial crisis II.” Embry also said this crisis will be “more unpleasant than the first one.” Embry, who is Chief Investment Strategist of the $10 billion strong Sprott Asset Management, also told KWN that gold and silver will reign supreme during the upcoming turmoil. But first, Embry had to say about the Egon von Greyerz prediction of a massive global bailout: “I believe that’s very realistic. They will go down the path of trying to continually bail this system out to prevent a collapse. Nobody wants to be at the helm when the ship goes down, so they will try to move heaven and earth to prevent that.

 

"The only way they can do that is with exactly what Egon (von Greyerz) suggested, and that is with a massive, global bailout. I think it’s absolutely essential that the listeners be aware of the depth of the problem, and not listen to the mainstream media which glosses over everything and tells you to be in the conventional assets and that everything is going to work out fine. I don’t believe that’s going to be the case. ..."

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US Silver announces merger - Shoshone News Press

US Silver announces merger - Shoshone News Press | Gold and What Moves it. | Scoop.it
US Silver announces merger Shoshone News Press US Silver Corporation, who owns and operates the Galena mine and Coeur re-development project, is merging with RX Gold & Silver Inc. to create US Silver & Gold.
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Fed: Americans’ wealth dropped 40 percent

Fed: Americans’ wealth dropped 40 percent | Gold and What Moves it. | Scoop.it
The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stake in their homes.

 

By Ylan Q. Mui"

 

"The Great Recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday, with middle-class families bearing the brunt of the decline.

 

"The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.

 

"The biggest drops occurred among middle-income Americans, whose wealth was inextricably linked to the housing market boom and bust. Meanwhile, the wealthiest families actually saw their median income rise slightly. ..."

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History of the Gold Standard in the 20th Century - James Rickards

http://bit.ly/RecoveryRealityCheck For the complete audio set from the conference, available in CD and MP3 format. At the latest Casey Research Conference, "...

 

via: http://twitter.com/roohaaneealou/status/212280605839327232

 

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Stay The Course As Gold Continues Its Progressive March « Jim Sinclair's Mineset

Snippet from a message from Jim Sinclair on today's actions:

 

"... Gold went from plus $17 to minus $10 as it caught the notice of latent central bank physical buyers. Gold then gained $13 so far from the low.

 

"The war is between US manipulative interests and central banks. The fiat paper system is broken to the point that depositors will not get back their funds without delay and potential discounting.

 

"The banking system, thanks to OTC derivatives, is broken. Austerity politicians are going to be swept out of Euroland and elsewhere. ..."

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Goldbggr: Germany wants Gold to be the 'effective' currency of the Eurzone

Goldbggr: Germany wants Gold to be the 'effective' currency of the Eurzone | Gold and What Moves it. | Scoop.it

"Here we go. The chatter will turn now to using gold to 'manage' the debt. Watch and learn. The masters of our world have never been watched in such detail. ..."

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Silver Prices Look to Rise on Potential Stimulus Measures — Silvercorp Metals …

Silver Prices Look to Rise on Potential Stimulus Measures — Silvercorp Metals … | Gold and What Moves it. | Scoop.it

“... [T]he tendency to ease, lend more, rotate debt, bail out banks, and in extreme cases, print more Euros, are all options that policy makers will likely consider in the weeks ahead,” stated INTL FCStone’s Edward Meir. “Once the gold market picks up this scent, we suspect prices will likely move much higher. Silver will push up as well, riding on gold’s coattails,” he wrote in a client note.

 

"Federal Reserve Chairman Ben Bernanke last week stated that they were prepared to take action if Europe’s problems threatened the U.S. economy, but gave no hint of any immediate action. After performing a stress test on Spain’s financial sector the International Monetary Fund estimates Spanish banks will require at least $50 billion in aid. ..."

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oftwominds-Charles Hugh Smith: By Incentivizing Debt, We've Guaranteed Debt-Serfdom and Stagnation

oftwominds-Charles Hugh Smith: By Incentivizing Debt, We've Guaranteed Debt-Serfdom and Stagnation | Gold and What Moves it. | Scoop.it

by Charles Hugh Smith:

 

"Incentivize debt and you create multiple overlapping death spirals.

 

"The incentives to take on debt are so ubiquitous that we underestimate their pernicious power to trigger self-destructive behavior. Want to go to college? Just borrow the money now, with no payments until you graduate. Need some consumerist-retail therapy to lift your sagging spirits? Just use plastic, and pay for the splurge later. Want to buy a house? Hey, the interest on that 30-year mortgage is all tax deductible. It's crazy to pay taxes when there's a big fat deduction for mortgage interest.

 

"This same set of incentives works on a national and global scale, too. Put yourself in the shoes of the typical spineless, campaign-donation-dependent politico whose primary obsession in life is clinging to power via winning the next election. Every heavy-weight constituency is protesting any tiny reduction in their share of the Federal swag, so drastic cuts are out of the question. What's the only painless option? Borrow $1.5 trillion every year to make sure the swag is fully funded and the restive constituencies are quieted for another election cycle.

 

"But debt has a consequence called interest that feeds a destructive self-reinforcing cycle. ..."

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Gold Price Regains $1,600 Level Despite Firmer Dollar | GoldAlert

Gold Price Regains $1,600 Level Despite Firmer Dollar | GoldAlert | Gold and What Moves it. | Scoop.it

by GoldAlert:

 

"... Looking ahead, the euro crisis is likely to remain a primary catalyst for the broader markets as well as the price of gold. In addition, the U.S. economic calendar picks up over the next three days, prior to next week’s Federal Reserve meeting. Retail sales for May will be reported tomorrow morning, along with the Producer Price Index (PPI). On Thursday, weekly jobless claims will be released, as well as the Consumer Price Index (CPI). The week then concludes on Friday with the Empire Manufacturing Index and University of Michigan Consumer Sentiment.

 

"Commenting on the outlook for the gold price, Natixis analyst Nic Brown wrote in a note to clients that the yellow metal is “sitting waiting for something to happen, but I would argue it is waiting for something to happen in the United States, rather than Europe.”


“More clarity in the United States (is needed) over whether the economic data is going to improve again… or whether the weakening data is a sign of slower economic growth, and that therefore the Fed will have to do something,” Brown added. “For me, the focus is definitely on the U.S. side of the Atlantic. In the meantime, gold is going up, down or sideways dependent on what is going on in the euro/dollar rate, and there isn’t a great deal else that is moving it around. ...”

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Russia Sending Attack Helicopters to Syria, Claims Hillary Clinton

Russia Sending Attack Helicopters to Syria, Claims Hillary Clinton | Gold and What Moves it. | Scoop.it
US warns that helicopters will escalate conflict dramatically on day of mortar deaths and Annan's fresh plea for support...

 

[so this is looking like where the next war front will be as the global currency war plays out. I feel so sorry for the people of the world.]

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42 years of LBMA gold data - Ed Steer's Gold & Silver Daily

42 years of LBMA gold data - Ed Steer's Gold & Silver Daily | Gold and What Moves it. | Scoop.it

Ed Steer: "... If you go back through 42 years of LBMA gold data, you find that in only five of those years did the gold price ever finish in positive territory year-over-year. And since the 1999 Washington Accord, London has had a negative close in gold every year in what is the biggest gold bull market in history. The odds of that being a random free-market event must be millions to one...if not more. In actual fact, it's just not possible in a free market. ..."

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Platinum industry investigation already underway - Shabangu - PLATINUM GROUP METALS - Mineweb.com Mineweb

Platinum industry investigation already underway - Shabangu - PLATINUM GROUP METALS - Mineweb.com Mineweb | Gold and What Moves it. | Scoop.it

"According to South Africa's Minster of Mineral Resources, Susan Shabangu, a report on the plight of the platinum sector and potential solutions to it has been completed and waits on her desk. ..."

 

It is interesting that platinum continues to trade below gold. I wonder if that isn't, in part, the reason for this announcement?

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The CBO Sees the Economic Cliff Ahead

from the Official web site for Representative Ron Paul (TX-14).

 

"Last week the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year-- the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.

 

"While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.

 

"As Paul Roderick Gregory explained in a recent Forbes column (http://tinyurl.com/cf746dl), CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits - no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy. Neither is true, of course.

 

"CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years.

 

"Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government. If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much.

 

"If we simply allowed markets to work free of governmental or Federal Reserve interference, bad debt would be liquidated relatively quickly and malinvestment would be curtailed. Scaled-back regulations would encourage businesses to expand. Lower taxes would jump start investment and spur job creation.

 

"This is not rocket science, it is Economics 101. All it would take is for government to get out of the way. There would be some short term pain, of course, but only by allowing the bubble to burst and bad debt to liquidate can we ever hope to begin building a real economy again.

 

"The CBO report was alarming to most simply because they know neither party will take the steps necessary to avoid eventual fiscal calamity. Instead, despite their rhetoric, both parties want to maintain the fantasy that “deficits don’t matter.” But the CBO report, combined with what is happening in Greece and the European Union, should finally make the undeniable case that economic realities apply even to industrialized first world economies. We must take concrete steps today to avoid having America become the next Greece."

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An Interesting Bailout in the Offing | ZeroHedge

An Interesting Bailout in the Offing | ZeroHedge | Gold and What Moves it. | Scoop.it
.There is a sideshow going on in Europe this week. All eyes are on the Spanish bank bailout, but there is another bailout in the works – Cyprus. I believe that a Cyprus deal will be agreed to within days.
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World Chaos Erupting as Governments & Institutions Collapse

World Chaos Erupting as Governments & Institutions Collapse | Gold and What Moves it. | Scoop.it

Robert Fitzwilson tells King World News:

 

"The paradigms of wealth creation, saving and capital are under attack. Fiscal prudence has now become imprudent. It is no wonder that the financial markets are also exhibiting chaotic behavior.

 

"Most people have been conditioned to move assets to cash and fixed income in the event of great uncertainty. We have seen that once again evidenced in today’s action. It will eventually be recognized as a massive trap. Currencies, as a group, are being debased on a daily basis with the printing of money. Interest rates are near zero, so even historically modest increases in rates will cause severe losses for holders of fixed income. ..."

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European Crisis Explained

A breakdown of the European debt situation, starting with Greece and consuming the entire continent.
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Turk - Capital Controls, Bank Bailouts & Escalating Fear

Turk - Capital Controls, Bank Bailouts & Escalating Fear | Gold and What Moves it. | Scoop.it

With continued volatility in major markets, as well as gold and silver, today King World News interviewed James Turk out of Europe. Turk discussed the capital controls being proposed in Europe, bank bailouts and escalating fear, but first, here is what Turk had to say about the recent action: “It has now been 16 trading days since the May low, Eric, which means that the base being formed in the precious metals is getting stronger with each passing day. Importantly, prices have been moving away from the May low, with both gold and silver up more than 4% since then.

 

“These are exceptional gains for such a short period of time, but sentiment remains at rock bottom. One reason for the miserable sentiment is that the gold price has fallen half of the trading days since the May low. The same for silver, and some of the daily price declines have been huge, which really affects sentiment negatively.

 

"But these low sentiment readings are bullish. It is a sign that a market is sold-out and a rally is due, even if it is just a relief rally......."

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Eric De Groot: Spain's bank rescue won't solve all Europe's problems

by Eric De Groot:

 

"The message of the market, particularly the action in the US bond market, told us this much early into the trading session. QE to infinity accompanied by stagflation and localized economic contractions maintains social order longer than an interconnected and highly-correlated, worldwide depression. ..."

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