Robert Fitzwilson tells Eric King of King World News:
"... Since the financial meltdown occurred in 2008, nothing has been done to solve the structural issues. They just keep driving the monetary car down the road on the patched tires. How many miles can we go before the tires explode is impossible to know, but there is a limit to be sure.
"Another example of patching the tires was yesterday’s announcement of a change in the way pension funds calculate the future liabilities. The funds can now use a 25-year rolling average of corporate bond rates instead of the current 2-year rule that is in place. A higher rate will make the liabilities smaller. However, it does not change the actual outlook for the return on their portfolios, given the interest rates currently available.
"What the provision does suggest is that much higher inflation and interest rates lie ahead. If we are to escape this mess, interest rates must be allowed to rise. Nominal, global GDP must begin to close the gap with nominal liabilities. At the same time, fiscal balance must be restored. ..."
From Ed Steer's Daily, which is a must stop...er.. daily ;-)
"... But the story of the day yesterday was that CNBC panel discussion where all parties acknowledged that the silver market is rigged seven ways to heaven will, in my opinion, turn out to be a key moment in the history of the price management scheme in silver. There's no doubt it my mind that this video clip probably got a fair amount of playing time with the JPMorgan et al crowd, the CFTC, the CME Group...and beyond. I would bet that there are forces now in play that can't be stopped.
"How big a hammer blow this is may not show up in the silver price immediately, but it indicates to me that the silver fuse is definitely lit...and the end is getting closer with each passing day.
"As I mentioned in my Saturday column, the Friday COT report showed that the eight largest Commercial 'traders' in the silver futures market were short 3.27 times the net short position of 60 million ounces...a monstrous concentration held by a small handful of traders, dominated by JPMorgan. This is what silver analyst Ted Butler had to say about it in his Weekly Review on Saturday...
"It’s hard to express the true meaning in the proper words, but the 'big 4' now hold a short position that is 2.5 times greater than the total commercial [net] short position, an extreme level never witnessed in my memory. In many ways, even though the total amount of commercial shorts in COMEX silver has never been lower, it has also never been more concentrated than it is now. The true measure of manipulation is the level of concentration because concentration determines market control. ..."
"... Eric, the sad history of money is that the politicians print it until it’s worthless. They are hoping (in the US) that somehow they will stimulate this economy. In Europe you have two concepts going. You have the austerity concept or you have the so-called growth philosophy.
"Now the growth philosophy is a euphemism for printing more money, and they will print the money until it’s worthless ... It’s going to be a destruction of the dollar and the euro. It’s going to someday be a destruction of the yen and the other currencies.
"The establishment has been so successful at selling people on Keynesianism, that it’s a given that all you have to do is print more money and it will stimulate the economy. Paul Krugman told us the only thing we didn’t do is we didn’t print enough. He said we needed $8 to $10 trillion, initially.
"So now Krugman is standing there crowing and saying, ‘See how right I was. You didn’t print enough. All you needed to do was print more.’ Eric, it will be inflation and a destruction of paper currencies. ..."
"... Gold is money. There’s no Central Bank printing it like it’s going out of style. There’s no government(s) borrowed up to their eyeballs in it. Where you find real growing wealth in the world you find those people acquiring it are using gold as a storer of their wealth. ..."
click over for his full thoughts on the mining sector.
"... Unless the o/i report is wrong, sometimes it is and they make adjustments reflected two days later, yesterday's gold o/i went up 912 contracts. To me this increase isn't the cartel shorting into momentum- buying by black box funds, it's dip buyers making fundamental buys. The computer hedge funds do not buy on days like yesterday. That's bullish. Second, yesterdays silver smash was all about the liquidation of the July contract ahead of 1st notice today. Silver o/i in July dropped 6268 down to 3952. Interestingly 6704 bought/rolled into Sept silver. My bet is that buying occurred late in the day after the SPX rallied back huge. This too is bullish. Furthermore, and I'm sure July o/i wall fall a bit today, but as of yesterday there were still 19.7 million ounces of silver which are funded for potential delivery. Those contracts can still be sold, but it's a lot of silver standing for delivery. I wouldn't read much into yet, but it's definitely something to keep an eye on. Finally, today's action shows what happens when cartel manipulation wakes up the physical buying world in the eastern hemisphere. Indian import ex-duty premiums were as high as $15 last night which means India was buying physical gold on the sell-off driven by the paper Comex very aggressively. China and Japan were also active buyers last night. When these buyers buy, the physical supply disappears. ..."
you should click over for the rest and grab Dave's RSS feed while there.
"... I remind the reader that 'Obamacare' with its private sector 'mandate' is in reality a long-standing Republican proposal, originally conceived in the conservative Heritage Foundation think tank, to use the private sector to try to manage healthcare costs, rather than the 'single payer' option. Prior to Obama the largest implmentation of this approach was achieved and lauded in Massachusetts by guess who. ..."
You can almost always count on the Supreme Court to do the wrong thing. In fact, just about every major decision by the U.S.
"... The following are 15 reasons why the Obamacare decision is a mind blowing disaster for America....
#1 According to the U.S. Supreme Court, the federal government has the power to force you to buy private goods and services. Now that this door has been opened, what else will we be forced to buy in the future?
#2 Obamacare is another step away from individual liberty and another step toward a "nanny state" where the government dominates our lives from the cradle to the grave.
#3 The IRS is now going to be given the task of hunting down and penalizing millions of Americans that do not have any health insurance. In fact, the Obama administration has given the IRS 500 million extra dollars "outside the normal appropriations process" to help them enforce the provisions of Obamacare that they are in charge of overseeing. ..."
"... The new short interest numbers for both SLV and GLD were posted over at the shortsqueeze.com website earlier this week. The short position in SLV declined by 3.80% to 13,476,900 shares/ounces. In GLD there was a smallish increase of 1.48%...and the short position there stands at 18,962,600 shares, or 1.90 million ounces. None of these shares have any physical metal backing them at all. ..."
“... There’s no business. There’s no IPO business, there is no merger and acquisition business. In fact, I would suggest as much as we knew the 99% was having a problem, I can guarantee you the 1% is having a big problem today, particularly over in Europe.
"It (the big money over in Europe) should be frightened. We have bank runs going on over there. If anybody took the time to look at the balance sheet of a bank or a country in Europe, there’s no other conclusion to make other than they won’t be able to meet their obligations. Those are easy conclusions to come to.
"Just as it was easy for me, back in 2007, to say the following companies are broke, GM, Fannie Mae, Freddie Mac, Citigroup, you just take a look at the balance sheet. You can’t make it. You’re beyond a Minsky moment, and most countries are in that situation today. They (central planners) just keep printing more money all the time. ..."
"... The European Central Bank (ECB) could be leading on the monetary front, with wide expectations for rates to hit a record low later this week. The run of poor data has boosted the case for U.S. policy stimulus further out.
"Gold typically gets support in a low interest rate environment as that cuts the opportunity cost of holding metal, with holders relying on rises in its outright value for returns.
"Over the last few weeks U.S. numbers have worsened a lot and this has brought about the probability of QE3 - which is probably the most important reason for the market to believe in gold," Commerzbank analyst Eugen Weinberg sa i d. ..."
"... The precious metal markets feel just like the summer of 2010. In fact, this weekend I spent some time going through the KWN archives and listening to my interviews from that time period (2010). It was eery, because just about everything I was saying back then also applies to our present situation, particularly sentiment being at rock bottom.
"We had big rallies in both gold and silver starting in the summer of 2010. These are the rallies that took gold over $1900 and silver to $50. Last week's big move should mean that massive rallies are starting again, and because the banking and economic situation is so much worse today, on this new rally, gold and silver are going to break their old highs.
"The world is on a knife’s edge, Eric. The geopolitical situation is worrying. Economic activity around the world is rapidly deteriorating, and this is having the effect of putting more and more people out of work. ..."
"... Six times in the recent weeks there has been a defined program to break the price of gold and it has failed each time. The manipulators constantly run into major primary buyers in the physical market, more than likely governments with a bullish gold outlook. ..."
"... is the gold bull market over? In my opinion, it is not over. I believe the gold bull market is still intact. If gold cannot make a new high in the year 2012, be prepared to hear the anti-gold element scream to high heaven that the gold bull market is over. They will be wrong. We still have not seen the third speculative phase of the gold bull market, but that phase lies ahead. ..."
"The global economy is now addicted to debt. Once debt stops expanding, the economy shrivels. But expanding debt forever is unsustainable. Welcome to the endgame.
"Regardless of whether you call it debt saturation or diminishing return on new debt, the notion that taking on more debt will magically enable us to "grow our way out of debt" is not supported by data. Correspondent David P. recently shared this chart of Total Credit Market Debt Owed and GDP and this explanation: ..."
"Inflation is a natural consequence of loose government monetary policy. If those policies get too loose, hyperinflation can occur. As gold investors, we'd like to know if the precious metals would keep pace in this extreme scenario.
"Hyperinflation is an extremely rapid period of inflation, but when does inflation (which can be manageable) cross the line and become out-of-control hyperinflation? Philip Cagan, one of the very first researchers of this phenomenon, defines hyperinflation as "an inflation rate of 50% or more in a single month," something largely inconceivable to the average investor.
"While there can be multiple reasons for inflation, hyperinflation historically has one root cause: excessive money supply. Debts and deficits reach unsustainable levels, and politicians resort to diluting the currency to cover their expenses. A tipping point is reached, and investors lose confidence in the currency.
"Confidence" is the key word here. Fiat money holds its purchasing power largely on the belief that it is stable and will preserve that power over time. Once this trust is broken, a flight from the currency ensues. In such scenarios, citizens spend the money as quickly as possible, typically buying tangible items in a desperate attempt to get rid of currency units before they lose value. This process increases the velocity of money, setting off a vicious cycle that destroys purchasing power faster and faster. ..."
"... Resistance [for gold prices] is at the top of the past week's range in the $1587-88 area," says technical analysts at bullion bank Scotia Mocatta, who add that further resistance is seen at $1625.
"News of an agreement among European leaders on the use of bailout funds ""has been positive for the Euro and positive for confidence in general," adds Scotia's head of precious metals Simon Weeks.
"[This] means that equities and commodities, including gold for the time being, have all received a shot in the arm."
"European leaders meeting in Brussels have asked the European Council to consider proposals for the creation of a single Eurozone banking supervisor "as a matter of urgency by the end of 2012", an summit statement issued early on Friday said. ..."
... When asked about the Supreme Court decision on the health care bill, Schiff responded, “Well, it’s a horrible decision. The minority (dissenting view) was 100% correct. The whole thing should have been thrown out.
"In the end, they basically said it was a tax. There wasn’t even an enforcement mechanism in there. There was a tax, but if you didn’t pay it, the government couldn’t come after you for the money.
"They essentially said that even though the intent may have been to punish people for not buying insurance, the effect is that they don’t get punished because it’s really just a tax. They basically said it’s constitutional because it’s not going to work.
"But it’s not a tax because a tax is there to raise revenue. This is not there to raise revenue, it’s there to punish you. It’s there to make you buy health insurance. So even though the Supreme Court said it’s not going to work, it doesn’t mean it’s constitutional just because it’s not going to work. ..."
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