"Having said this, I can assure you that, personally, I remain a big fan of gold. I consider it the number one asset out there. It remains head-to-shoulder above anything else.
"Gold has not been trading that well recently. Measured in the world’s number one paper money the precious metal reached an all-time high of slightly more than $1,900 per ounce in September of last year but then retreated and has mainly been trading sideways in a wide range since. Considering the ongoing tensions in European debt and banking markets and considering that the global financial system seems forever dependent on super-low policy rates, one could have reasonably expected gold to do better.
"The reasons for the somewhat disappointing ‘price action’ of late are not quite clear but could be manifold. Maybe it is a bit of rally fatigue. Don’t forget, gold traded below $300 ten years ago and had just been through a decade-long, unprecedented bull run. In one of gold’s biggest markets – India – the government recently introduced new taxes and regulations to discourage investment in gold (surprise, surprise), and international central banks are not believed to match their healthy buying of recent years..."
"Finding the Culprits...Derivatives expert Janet Tavakoli takes a hard look at what — and who — caused the financial crisis."
By Jane Wollman Rusoff
April 25, 2012
"…Now Tavakoli sees another huge financial crisis looming.
"The University of Chicago MBA has traded, structured and sold derivatives at firms including Merrill Lynch, PaineWebber and Westdeutsche Landesbank; and she had earlier stints at Bear Stearns and Goldman Sachs. Research recently talked with her about red flags and preventive solutions.
"You write that, in the past three years nothing has been fixed but that we must hold Wall Street responsible for the fraud that resulted in the financial crisis. What should be done?
"We need to have investigations. But with the pushback and all the lobbying, what they’ve been counting on is that the statute of limitations for some of these frauds is expiring. So if you don’t file complaints, you may not be able to.
"Members of Congress are enabling the lack of punishment and covering up great misdeeds in our financial system — and they’re doing it with no fear of consequences — i.e., being voted out of office, in which case they could find themselves the subject of investigation.
"What do you mean: “covering up”?
"Many people are covering up for cronies who have a lot of money sloshing around. We threw money into the financial system with no accountability and thus made the problem worse. Our system has been completely infiltrated and bought off. Things aren’t changing because Big Money doesn’t want it to change..."
"If you enjoy watching financial doom, then you are quite likely to really enjoy the rest of 2012. Right now, red flags are popping up all over the place. Corporate insiders are selling off stock like there is no tomorrow, major economies all over Europe continue to implode, the IMF is warning that the eurozone could actually break up and there are signs of trouble at major banks all over the planet. Unfortunately, it looks like the period of relative stability that global financial markets have been enjoying is about to come to an end. A whole host of problems that have been festering just below the surface are starting to manifest, and we are beginning to see the ingredients for a "perfect storm" start to come together. The greatest global debt bubble in human history is showing signs that it is getting ready to burst, and when that happens the consequences are going to be absolutely horrific. Hopefully we still have at least a little bit more time before the global financial system implodes, but at this point it doesn't look like anything is going to be able to stop the chaos that is on the horizon."
"While the IMF talks of increased firepower, Germany and the Netherlands are seeking for ways to shrink theirs. The DUTCH GOVERNMENT fell on a no-confidence budget that was pursuing austerity as Prime Minister Mark Rutte was looking to bring the budget deficit to under the ordained 3%. The Freedom Party wants more austerity to protect Holland’s credit rating while labor and the socialists are opposed to austerity budgets that are on the backs of the already squeezed. Again, the battle is between growth and austerity for one PILL MAKES YOU LARGER AND ONE MAKES YOU SMALL.Certainly the IMF medicine will do nothing at all as the POTION OF DEVALUING THE CURRENCY IS NOT AVAILABLE. Usually the IMF promotes budget cutting, tax increases and currency depreciation for that has been the medicine for any nation desiring IMF bailouts. In a Bloomberg article on Lagarde’s victory of enhanced IMF FUNDS, it cites the IMF‘s advice for Europe to be lower interest rates, austerity measures to improve growth, injecting rescue funds into weak banks and selling EURO DEBT to deepen fiscal integration...." ...
"Peak Housing reflects not just a credit bubble but Peak Fraud and Peak Suburbia.
"Once again pundits are claiming that housing is "finally recovering." But they're overlooking three peaks: Peak Housing, Peak Financial Fraud, and Peak Suburbia, all of which suggest years of stagnation and decline, not "recovery."
"Here is the latest Case-Shiller index, which has traced out a nearly textbook bubble and a return to the mean that has been artificially restrained by trillions of dollars of Federal subsidies and backstopping of the housing market:.."
$1.6 billion in missing MF Global funds traced By James O'Toole April 24, 2012: 6:49 PM ET
NEW YORK (CNNMoney) -- Investigators probing the collapse of bankrupt brokerage MF Global said Tuesday that they have located the $1.6 billion in customer money that had gone missing from the firm.
But just how much of those funds can be returned to the firm's clients, and who will be held responsible for their misappropriation, remains to be seen. James Giddens, the trustee overseeing the liquidation of MF Global Inc, told the Senate Banking Committee on Tuesday that his team's analysis of how the money went missing "is substantially concluded."
"We can trace where the cash and securities in the firm went, and that we've done," Giddens said.
MF Global failed last year after its disclosure of billions of dollars worth of bets on risky European debt sparked a panic among investors. About $105 billion in cash left the firm in its last week, Giddens said, as clients withdrew their funds and trading partners called for increased margin payments, leaving the firm scrambling to make good on its obligations.
Economist Alasdair Macleod today elaborates on recent observations that gold is working its way back into the international financial system, as both bank collateral and as a trade currency. Macleod writes: "The fly in the ointment is politics. Ever since the Nixon shock in 1971, the U.S. government has tried to convince the world that gold has no monetary role. It would require the U.S. Treasury to accept that gold might be superior to the paper dollar after all. No doubt that U-turn can be performed, but the concern would be that gold being officially recognized as a form of money would disadvantage the dollar and hand substantial power to the Chinese, who have been accumulating gold from their own mines."
"A recent survey of central-bank reserve managers predicted that the most significant change in their official reserve holdings over the next 10 years will be their intentional accumulation of gold.
"In fact, central-bank reserve managers are already moving in this direction, expanding their reported bullion reserves by 439.7 tons last year - the biggest annual increase in almost five decades . . . and this doesn't count significant purchases that remain unreported.
"Central banks, taking advantage of depressed market prices, were again big buyers of gold this past March according to statistics just issued by the International Monetary Fund. Reported official gold holdings increased by 49.8 metric tons last month and 55.1 tons during the first quarter.
"However, it is quite likely that actual central bank gold reserves rose considerably more as some countries, led by China, choose not to report or otherwise publicize their gold market activities...."
"Gold is currently in a protracted period of consolidation and expecting a break-out. Technically it is unclear which way the market could go - but fundamentally it looks likely that a sharp move to the upside is a distinctly possibility based upon rising economic tensions in Europe.
"From a technical perspective, the long term gold charts seem to be saying something big is going to happen, but unable to say clearly which way. The short term patterns have been quite negative, prompting some long liquidations (what you might call a "fake-out") but there is a larger and more important chart shape emerging. The strongly bearish scenario is formed by a remarkably steady trend line back to 2008 which, if $1613 and $1600 were to be breached, would suggest an important shift in market behaviour. Furthermore, gold has a descending triangle which technical analyst Peter Brandt suggests would be 'resolved' by a move downwards to $1525... a game changer. The bullish argument is that gold could be forming a massive "reverse head & shoulders pattern". The symmetry of this pattern, coupled with falling open interest, suggests a likely continuation considerably higher. A breach of $1700 would then be confirmed by a close above $1800 with a target to breach $1920 (the previous all time high) topping out at $2080...."
"I keep asking this question: What happens to home prices when interest rates rise back to more normal levels? If rates were just 7% for a 30-year mortgage, you would see at least another 20% decline. (Currently, rates for a 30-year mortgage are around 4 %.) Another boat anchor to housing prices is the millions of foreclosures coming down the pipeline in the next few years. There is no way we hit bottom in the foreseeable future. I don’t think we have seen the end of the real estate crash, and I don’t see prices going anywhere but down until 2016. Even then, it will be a very long climb back up for real home value appreciation. Bottom line: don’t be in a hurry to buy a house."
"The farewell to U.S. factories despite a well-established, obvious trend continues to surprise the public. The transition from manufacturing, goods-producing to service-service producing economy has been an on-going process since 1953 (see chart 1). While hamburger flipping and hospitality jobs appear to an amiable employment solution for the US, it simply cannot generate the tax revenues necessary to support big government..."
"The precious metal world is changing at an alarming rate. One benefit of founding a site like the one you’re reading is the ability to see a worldwide stage, not just my neck of the woods. My goal is to provide clear concise PM (precious metals) information and then justify its worthiness backed up by today’s current events.
"In my opinion, never before has silver and gold been so significant..."
"Evidence that gold is no longer in the bargain basement is provided by the following long-term monthly chart of the gold/commodity ratio. Relative to commodities in general, gold hit a 50-year high late last year. In fact, last December’s peak in the gold/commodity ratio could have been an all-time high. This tells us that the gold market has fully discounted the bad policies of the past several years. As an aside, it also tells us that the fabled gold market manipulators are doing a lousy job and should be fired (gold’s excellent performance over any reasonable investment timeframe is no doubt why promoters of gold-suppression theories tend to focus on timeframes that could only be of interest to daytraders)...."
"Gold is becoming the Device of Financial Self-Determination, since it is free from debt and counter-party risk. The value and role of Gold has become well recognized in the last few years, especially since the financial crisis broke wide open in the summer 2007. It seems strangely obvious that Gold is money and the USDollar is not. As money flees for safety in Europe, England, and the United States, the story not told is that the monetary system is crumbling. The process has been underway since Greece broke down in December 2009, following the Dubai World debt bust. For two years, the Hat Trick Letter has been warning that Greece was simply the much smaller opening act. The real climax events in Europe would be Italy and Spain, whose government bonds are also captive wards of the Euro Central Bank state. The EuroCB acts more and more like an elite independent state, even with occasional defiance to the Germans and their Bundesbank stellar central bank, chock full of integrity, expertise, and tradition. Unfortunately, the Bundesbank signed on with the European Monetary Union as the Clydesdale horse without a side horse partner of equal strength and durability to pull the Euro stagecoach. Therefore, the ill-designed team in front steered left into the ravine. Next comes the abyss without the horse of Teutonic breed at all...."
"Only on Wall Street can you bankrupt a company; misplace $1.6 billion of customers’ money; lose 75 percent of shareholders’ money in two weeks; speed dial a high priced criminal attorney and get a court to authorize the payment of your multi-million dollar legal tab from the failed company’s insurance policies; have regulators waive your requirements to take licensing exams required to work in the securities and commodities industry; have your Board of Directors waive your loyalty to the firm; run a bucket shop out of the UK; and still have the word “Honorable” affixed to your name in a Congressional investigations hearing..."
Here's a snippet from a great piece from Moses Kim:
"We are headed towards a crisis of monumental proportions and the public is still asleep. Financial panics come in all different flavors. You have the dot.com bubble that pops and business as usual resumes in about 3 months. A standard real estate correction is a little worse because the equity in a home is perceived as savings, so spending declines and you see a contraction in leverage, which leads to an economic slowdown. But we recover from a real estate contraction soon enough and all is back to normal.
"But a debt crisis? Now this is a different beast.
"You see rising taxation at a time when the economy can least handle it. You see a flood of bonds hit the market, which drives up interest rates at a time when our debt load is at its greatest. You see a run on the currency, which is viewed as a close cousin of bonds. And when Federal debt is at obscene levels and government needs to contract while almost half our population are government workers? Watch out. Calling for austerity now is like mandating by official decree for unemployment to rise! True stupidity..."
After 3½ years, the Troubled Asset Relief Program (“TARP”) continues to be an active and significant part of the Government’s response to the financial crisis. It is a widely held misconception that TARP will make a profit. The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost)."
With continued volatility in gold and silver, today King World News interviewed 25 year veteran Caesar Bryan. Gabelli & Company has over $31 billion under management and Caesar Bryan has managed the gold fund since its inception in 1994. Caesar told KWN that we are about to see massive QE from Asia. He also said investors should expect the rest of the central banks around the world to follow suit because none of them wants a strong currency. Here is what Caesar had to say about the situation: “Well, the actual gold price is holding up quite well. The backdrop for gold is solid. As an example, in Japan they have a meeting on Friday, the Bank of Japan does, and it seems they are setting themselves up for a stunning, major, new accommodative move.”
"As suspected from the price action and the inability of the paper shorts to break through this support, we learned that several foreign Central Banks have been very active buyers of the metals on these breaks in price. I see nothing on the horizon that would lead me to believe that anything has changed in regards to these Central Banks and their desire to acquire gold during these periodic bouts of weakness. I repeat for the sake of emphasis - Central Banks do not CHASE GOLD PRICES HIGHER - they buy when prices drop and only when prices are moving lower. It is only the brain dead hedge fund managers who are servants to their gods, the computer algorithm, who sell gold as it moves lower hoping to profit from momentum based moves..."
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