ROSENBERG: A Crucial Economic Indicator Just Sank To A Level That Coincides With Recession 100% Of The Time

"Economists often note that durable goods orders is one of the more volatile economic indicators that we get every month.

However, there wasn't much sugar-coating anyone could do to the Thursday's report that showed durable goods orders plunged 13 percent in August. Economists were looking for a 5.0 percent decline.
In his latest Breakfast with Dave note, David Rosenberg points to one sub-component of the durable goods report that sent a particularly scary signal.
The three-month moving average of core capex orders (i.e. nondefense capital goods excluding aircraft) was -4.1 percent in August.
"History shows when the trend weakened to the level we see today, the economy was in recession 100% of the time," wrote Rosenberg. "So stick that in you pipe and smoke it!"
This is also bad news for jobs. According to Rosenberg's data, this measure has an 83 percent correlation with private employment.

Rosenberg also notes that durable goods orders has an 86% correlation to the stock market."

at http://www.businessinsider.com/rosenberg-core-capex-orders-recession-2012-9#ixzz27yx3iJck

Greyerz - High Net Worth Investors Pouring Money Into Gold

"Today Egon von Greyerz spoke with King World News about high net worth investors who are continuing to invest in gold and move their existing gold outside of the banking system. Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also said the correction in the metals is over.

Here is what Greyerz had to say: “Gold is at a weekly highly for 2012. In my view we have probably seen the correction. The action in gold and silver is very bullish. They go up to higher levels, they consolidate at the higher levels, with a very small pullback, and then they move higher. I see the next big move as being up.”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/28_Greyerz_-_High_Net_Worth_Investors_Pouring_Money_Into_Gold.html

Continued Destruction Of Money & Its Impact On Key Markets

"On the heels of Spain announcing plans to borrow $266.5 billion next year, today Michael Pento writes about how the massive money printing is impacting key markets, and what to expect going forward. Pento has been incredibly accurate regarding his predictions of central bank moves. He now warns, “... investors should never fight a central bank that has pledged to do everything in their power to prop up asset prices.”

Michael Pento writes exclusively for King World News to let readers know what to expect from central planners, and how it will impact the economy and key markets. Here is Pento’s piece: “Stock markets around the world continue to levitate, despite the fact that the fundamentals behind the global economy continue to deteriorate.”

 

Michael Pento continues:

“U.S. second quarter GDP was revised significantly downward last week, from the previously reported 1.7%, to just 1.3%. The paltry 1.3% reading on GDP followed a first quarter print that was already an anemic 2%. Also reported last week was the worsening state of consumer’s income.

Their take home pay (after taxes) dropped 0.3% in August, as their savings rate fell to just 3.7%, from 4.1% during the prior month. Another worrisome report showed that in the month of September, manufacturing activity in the Chicago region contracted for the first time in three years according to the MNI Chicago Report (released on Friday).

But that weak and worsening economic data didn’t stop investors from sending stocks higher. The Dow Jones Industrial Average climbed 4.3% and the S&P advanced 5.7% in the third quarter...."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/29_Continued_Destruction_Of_Money_%26_Its_Impact_On_Key_Markets.html

Fitch Warns UK Likelihood It Loses AAA Rating Has Increased

"One-by-one, the highest quality collateral in the world (according to ratings that is) is disappearing. To wit, Fitch warns that a downgrade of the UK's AAA rating is increasingly likely: "weaker than expected growth and fiscal outturns in 2012 have increased pressure on the UK's 'AAA' rating, which has been on Negative Outlook since March 2012." The Negative Outlook on the UK rating reflects the very limited fiscal space, at the 'AAA' level, to absorb further adverse economic shocks in light of the UK's elevated debt levels and uncertain growth outlook. Global economic headwinds, including those emanating from the on-going eurozone crisis, have compounded the drag on UK growth from private sector deleveraging and fiscal consolidation as well as from depressed business and consumer confidence, weak investment, and constrained credit growth. But no mention of unlimited QE?..."

at http://www.zerohedge.com/news/2012-09-28/fitch-warns-uk-likelihood-it-loses-aaa-rating-has-increased

Tom Cloud: Silver is the Hot Thing Now

"...
DC: Has the attitude of your customers changed since the announcement of QE3?
TC: The phone’s been ringing off the hook. People get it; they know that the money supply will keep growing and that with a bank account yielding 1%, you’ve got a guaranteed annual loss of 6% – 10% on your purchasing power. Eventually, people will stop worrying about recession/depression and start worrying about getting rid of worthless paper, and the velocity of money will pick up. That’s when precious metals will soar.
DC: How can buyers avoid those tungsten-filled bars that are showing up?
TC: It started with the 400 ounce bars the Chinese and Germans found last year with tungsten in them. No one trades those bars except governments. You’ll notice that right after that the Chinese started a massive sell-off of US treasury bonds. Then everything got real quiet and we haven’t seen any more of those bars..."

Mainland China Treasury Holdings ($ billion)

at http://dollarcollapse.com/precious-metals/tom-cloud-silver-is-the-hot-thing-now/

CrossTalk: BiBi's Bomb

"Sep 28, 2012 by RussiaToday

Is there a fog of war? After years of threat, will Israel attack Iran? And is Iran really a danger to Israel? What role will the US play in this? Is Netanyahu terrified of Obama? And how will the US-Israeli relations evolve? CrossTalking with Miko Peled and Gideon Levy..."

at http://ausbullion.blogspot.com/2012/09/crosstalk-bibis-bomb.html

Bryan (at Gabelli) - Gold Could Easily Double From These Levels

"Today 25 year veteran Caesar Bryan surprised King World News when he spoke about gold moving up another $1,900. He said, “Gold could easily double from here.” Bryan, from Gabelli & Company, also stated, “... there is no question that gold is undervalued today.” 

Here is what Caesar had to say: “The balance sheets of the major central banks, over the last several years, have gone from just over $2 trillion, to almost $10 trillion. We’re talking here about the Fed, ECB, BoE, and the BOJ.”

Caesar Bryan continues:

“Most of that increase has been in the last few years, since the financial crisis. We are clearly not at the end of this, and you could argue that the rate of increase is actually accelerating. I don’t believe that has been properly reflected in the gold market yet.

The gold market breached $1,000 in the beginning of 2008, fell toward the $700 level after the Lehman crisis, and then went back over $1,000 in 2009. Since that time we have had a dramatic increase, a more than doubling of the balance sheets of just those four central banks....

“The underlying price of gold hasn’t even kept up with the increase in the balance sheets of the central banks. So there is no question that gold is undervalued today. As these central banks continue to expand their balance sheets, the upside for gold is very significant.

It’s not as if investors are overweight in gold. On the contrary, central banks and private investors have a very tiny exposure to gold. So should there be a discussion about changes to the financial architecture, with a role for gold being part of that new architecture, then gold would go much higher. Gold could easily double from here..."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/28_Bryan_%28at_Gabelli%29_-_Gold_Could_Easily_Double_From_These_Levels.html

'Perception Is Reality' As Mystical Rally 'Shows' Spanish Budget A 'Success'

"As the words were spewing from the mouths of Saenz, Montoro, and Guindos - with little to no substance at all, so EURUSD started to push higher - in a hurry. In today's quiet market, the correlated-monkeys took over and US equities - thanks to weakness in the USD - and Gold and Oil spurted higher. AAPL - as the high beta proxy for all things market - surged 2% (we assume as the Spaniards will need to buy more AAPL stock to fund the shortfalls in their pension funds). The bottom-line is we have fallen for a few days and so a bounce is not unlikely but the timing and size smells very fishy and the front-running of quarter-end front-running wind-dressing front-runners remains a quagmire of circular logic to us. The bottom-line is that the media can now say the words "the market seemed to 'like' what Spain was saying - is the bottom in?" despite there being no news at all..."

at http://www.zerohedge.com/news/2012-09-27/perception-reality-mystical-rally-shows-spanish-budget-success

Spain: a Bank Run Combined with a Sovereign Debt Crisis

"Regarding the recent coordinated central bank moves, the key take-away point is that the ECB and US Federal Reserve attempted “shock and awe” tactics with their latest announcements by throwing out words such as “unlimited” and “open-ended.”

The implication here was that the Central Banks would do everything they could to prop up the financial markets. However, as has been the case with every Central Bank intervention, there are unintended consequences.

The first unintended consequence concerns the fact that both programs are essentially a form of “intervention to infinite.” The problem with this is that the primary driver of stock prices over the last three years has been the anticipation of more monetary stimulus from Central Banks.

Indeed, the New York Fed itself has openly admitted that were it to remove the market moves that occurred around Fed FOMC meetings (the times when the Fed announced new programs or hinted at doing so), the S&P 500 would be at 600 today.

So, by announcing programs that will be on going in nature, both the ECB and the Fed have removed the anticipation of future Central Bank intervention from investors’ psychologies. This could become highly problematic, especially if these latest announcements turn out to be duds.

Speaking of which…

Spain’s ten-year bond yield has broken back above 6%. To see Spain’s sovereign bond yields rising like this after the ECB announced it would essentially provide “unlimited” buying as support is simply stunning. Why would Spain be imploding like this when the ECB announced it would do everything possible to keep Spanish bond yields low?..."

at http://www.zerohedge.com/contributed/2012-09-27/spain-bank-run-combined-sovereign-debt-crisis

Stimulus Money Does not Flow into Economic Activity it Flows into Asset Prices

"Marc Faber : there is not much global growth at the present time that's the problem , because money does not flow into economic activity it flows into asset prices , into speculation and yes we have diverging move between equities and other asset prices and economic activity with economic activity worldwide being depressed..."

at  http://marcfaberchannel.blogspot.com/2012/09/stimulus-money-does-not-flow-into.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28Marc+Faber+Blog%29

The 'World-Straddling Engine of Theft, Degradation, Manipulation and Social Control We Call the Welfare State'

"John Kay is tired of hearing the same old same rants about the unaffordable welfare state that he's been hearing for decades:

The economy depends on the welfare state, by John Kay: It is more than 30 years since I first attended a conference on the global welfare crisis. Rarely have a few months passed without an invitation to another. Last week, Tom Palmer, the American libertarian, came to London to denounce the “world-straddling engine of theft, degradation, manipulation and social control we call the welfare state”..."
 

at  http://economistsview.typepad.com/economistsview/2012/09/the-world-straddling-engine-of-theft-degradation-manipulation-and-social-control-we-call-the-welfare.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View%29

Quantitative Easing Did Not Work For The Weimar Republic Either

"Did printing vast quantities of money work for the Weimar Republic? Nope. And it won't work for us either. If printing money was the secret to economic success, we could just print up a trillion dollars for every American and be done with it. The truth is that making everyone in America a trillionaire would not mean that we would all suddenly be wealthy. There would be the same amount of "real wealth" in our economy as before. But what it would do is render our currency meaningless and totally destroy faith in our financial system. Sadly, we have not learned the lessons that history has tried to teach us. Back in April 1919, it took 12 German marks to get 1 U.S. dollar. By December 1923, it took approximately 4 trillion German marks to get 1 U.S. dollar. So was the Weimar Republic better off after all of the "quantitative easing" that they did or worse off? Of course they were worse off. They destroyed their currency and wrecked all confidence in their financial system. There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic that thieves would take the wheelbarrow and they would leave the money behind. Will things eventually get that bad in the United States someday?
Of course we are not going to see hyperinflation in the U.S. this week or this month.

But don't think that it will never happen.

The people of Germany never thought that it would happen to them, but it did..."

at http://theeconomiccollapseblog.com/archives/quantitative-easing-did-not-work-for-the-weimar-republic-either

It’s in Your Own Best Interest to Learn Just How Bad America’s Debt Problem Is – So Read On!

"Mathematically, the debt problem of the U.S. can not be solved, regardless of economic policies. That, unfortunately, is written. For it to be serviceable would be to violate the laws of mathematics and that cannot happen. [As such, America is quickly approaching a catastrophic economic collapse. As repelling as that sounds, it’s in your own best interest to learn just how bad the situation is..."

at http://www.munknee.com/2012/09/its-in-your-own-best-interest-to-learn-just-how-bad-americas-debt-problem-is-so-read-on/

Gold is a Currency

"We have long been told that gold is a commodity–that it is no different than a bushel of corn or a barrel of oil. In many newspapers, it is listed under the commodity section. With the advent of the Federal Reserve’s recent announcement of “unlimited” Quantitative Easing (QE) or money printing, that has changed. The view of gold as a commodity has circled back to what banker JP Morgan proclaimed to Congress in 1913, “Gold is money and nothing else.” Many folks in the blogosphere have long agreed with the original JP Morgan. It was the rest of the fiat world that wanted us all to believe the enormous lie that gold was only a commodity and not money. Never mind that every central bank on the planet holds gold (and have been buying gold hand over fist for the past few years).
Now, a modern day version of JP Morgan is telling the world, “Gold is a currency.” That’s what $120 billion hedge fund manager Ray Dalio said recently about the yellow metal. Dalio, founder of Bridgewater Associates, doesn’t give many interviews. So, I find it very telling that when he does speak, he says, “It’s not sensible not to own gold.” When asked if he owned gold, he quickly replies, “Oh yeah, I do,” and said people should have “10%” in their portfolios. (Click here to see the complete Ray Dalio interview.) This is what Mr. Dalio said the day before the Fed announced its now infamous “unlimited” QE.
Just last week, Dalio was riding the gold band wagon again and told CNBC the yellow metal “should be a part of everybody’s portfolio to some degree, because it diversifies the portfolio. It is the alternative money.” (Click here for the complete CNBC story.) I find it interesting the man Time Magazine included in its 2012 “100 most influential people in the world” is sounding this warning. I can only speculate, but I wonder what he sees. Is it a banking holiday? Is it a Treasury bond bust as holders of U.S. debt sell in a panic? Does he see inflation or hyperinflation down the road? I wonder if he is anticipating a new currency, or a global derivatives meltdown that leads to a worldwide depression. Maybe it’s all of the above. I don’t really know what he sees, but he sees something, and gold is his choice to counter a black horizon..."

at  http://usawatchdog.com/gold-is-a-currency/

Jim Rickards on Currency Wars

"James Rickards, “Currency Wars” author, on the Fed’s monetary policy and why he believes we are in a currency war today. Jim discusses the strong Australian Dollar and that those holding Aussie Dollars should be buying gold whilst the AUD remains strong. Video link..."

at http://ausbullion.blogspot.com/2012/09/jim-rickards-on-currency-wars.html

Audacious Oligarchy: The Double Flash Crash In Gold - Sept 13, 2012

"The 'Dr. Evil' strategy in two pictures.

From Nanex Research:

Trading was so furious in Gold, that the CME circuit breakers triggered and halted the futures contract for 5 seconds. First on the downside, then on the upside. This is the same circuit breaker that triggered only once in the eMini during market hours: that time was at the bottom of the flash crash on May 6, 2010.

The first halt in the December 2012 Gold Futures contract (GC.Z12) was at 12:14:44: you can see the gap in volume in the lower panel of Chart 1. One second before the halt, 2,000 contracts traded the price down $10, from $1,730 to $1,720. The CME halt logic triggers a 5 second market pause whenever orders appear that would remove all available liquidity and move the price by a certain amount.

For this event, this basically means that if this order represented a true intent to sell, then we should expect additional selling (from the balance of the order that triggered the halt) when trading resumes.

However, in this case, the additional selling did not materialize, which leads us to believe the large sell order was meant to disturb any market based on the price of gold. And disturb the markets, it did.

1. December Gold Futures (GC.Z12) ~ 1 second interval trades with depth of book color coded by how much size is at each level.

Note the gap showing the halt after the drop. The depth of book shows orders continue to be added/removed from the book during the halt."

 

at http://jessescrossroadscafe.blogspot.com/2012/09/the-double-flash-crash-in-gold-sept-13.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29

Misinformation & Manufactured Myths

"Your Sunday deep dive:

“The widespread prevalence and persistence of misinformation in contemporary societies, such as the false belief that there is a link between childhood vaccinations and autism, is a matter of public concern. For example, the myths surrounding vaccinations, which prompted some parents to withhold immunization from their children, have led to a marked increase in vaccine-preventable disease, as well as unnecessary public expenditure on research and public-information campaigns aimed at rectifying the situation”

Never underestimate those who have a vested interest in hiding the Truth from the public . . ."

Source:
Misinformation and Its Correction, Continued Influence and Successful Debiasing
Stephan Lewandowsky, Ullrich K. H. Ecker, Colleen M. Seifert, Norbert Schwarz and John Cook
http://psi.sagepub.com/content/13/3/106.full

at http://www.ritholtz.com/blog/2012/09/misinformation-manufactured-myths/

Head Of Iran's Revolutionary Guards: "A War With Israel Will Occur"

"Even as the popular ADHD affliction is preoccupied with who paid what taxes, and whether this poll shows that guy on top or this one, until tomorrow when they flip providing even more meaningless chitchat opportunities, everyone appears to have once again lost sight of the big picture, which is that two US ships continue full steam ahead toward Iran, namely the CVN-74 Stennis aircraft carrier which has crossed the Pacific ocean and is now a week away from its target, and the LHA 5 Peleliu big deck amphibious warfare ship, where they will join two other aircraft carriers and the LHD 7 Iwo Jima as summarized by the graphic below. Why is US naval presence in the Gulf soaring to a concentration not seen since the last Gulf war? The head of the Iran revolutionary guard may have an idea. From Reuters: Israel will eventually go beyond threats and will attack Iran, the commander of Iran's Revolutionary Guards was quoted as saying on Saturday.

As speculation mounts that Israel could launch air strikes on Iran before U.S. elections in November, Mohammad Ali Jafari told a news conference that the Jewish state would be destroyed if it took such a step. "Their threats only prove that their enmity with Islam and the revolution is serious, and eventually this enmity will lead to physical conflict," Jafari said when asked about Israeli threats to strike Iran's nuclear facilities, the Iranian Students' News Agency (ISNA) reported.

"We are making all efforts to increase our defensive capabilities so that if there is an attack ... we could defend ourselves and other countries that need our help with high defensive capabilities."

And just to be clear:

"A war will occur, but it's not clear where or when it will be," Jafari was quoted as saying on Saturday. "Israel seeks war with us, but it's not clear when the war will occur."
"Right now they see war as the only method of confrontation," he said.

And when a war does break out, the only question is what China, Russia and India will do. Iran's stance is clear: "If they (Israel) start something, they will be destroyed and it will be the end of the story for them," Jafari said, according to ISNA.

One thing is guarranteed: in one-two weeks US naval presence in the 5th Fleet will be unprecedented, consisting of at least 3 US aircraft carriers, and 2 amphibious warfare groups, excluding any other naval support the rest of the developed world will throw in..."

at  http://www.zerohedge.com/news/2012-09-22/head-irans-revolutionary-guards-war-israel-will-occur

"What's Next?": Simon Johnson Explains The Doomsday Cycle

"Via Simon Johnson and Peter Boone - Originally posted at VoxEU, (Via CentrePiece magazine)

There is a common problem underlying the economic troubles of Europe, Japan, and the US: the symbiotic relationship between politicians who heed narrow interests and the growth of a financial sector that has become increasingly opaque (Igan and Mishra 2011). Bailouts have encouraged reckless behaviour in the financial sector, which builds up further risks – and will lead to another round of shocks, collapses, and bailouts.

This is what we have called the ‘doomsday cycle’ (Boone and Johnson 2010). The cycle turned in 2007-8 and was most dramatically manifest in the weeks and months that followed the fall of Lehman Brothers, the collapse of Iceland’s banks and the botched ‘rescue’ of the big three Irish financial institutions.





The consequences have included sovereign debt restructuring by Greece, as well as continuing problems – and lending programmes by the IMF and the EU – for Greece, Ireland, and Portugal. Italy, Spain and other parts of the Eurozone remain under intense pressure.

Yet in some circles, there is a sense that the countries of the Eurozone have put the worst of their problems behind them. Following a string of summits, it is argued, Europe is now more decisively on the path to a unified financial system backed by what will become the substance of a fiscal union.

The doomsday cycle is indeed turning – and problems are undoubtedly heading towards Japan and the US: the current level of complacency among policymakers in those countries is alarming. But the next turn of the global cycle looks likely to hit Europe again and probably harder than before.
The continental European financial system is in big trouble: budgets are unsustainable and growth is nowhere on the horizon. The costs of bailouts are rising – and the coming scale of the problem is likely to undermine political support for the Eurozone itself.

The structure of the doomsday cycle

In the 1980s and 1990s, deep economic crises occurred primarily in middle- and low-income countries that were too small to have direct global effects. The crises we should fear today are in relatively rich countries that are big enough to reduce growth around the world.

The problem is that the modern financial infrastructure makes it possible to borrow a great deal relative to the size of an economy – and far more than is sustainable relative to growth prospects. The expectation of bailouts has become built into the system, in terms of government and central bank support. But this expectation is also faulty because, at times, the claims on the system are more than can ultimately be paid.

• For politicians, this is a great opportunity.

It enables them to buy favour and win re-election. The problems will become apparent, they calculate, on someone else’s watch. So repeated bailouts have become the expectation not the exception.

• For bankers and financiers of all kinds, this is easy money and great fortune – literally.

The complexity and scale of modern finance make it easy to hide what is going on. The regulated financial sector has little interest in speaking truth to authority; that would just undercut their business. Banks that are ‘too big to fail’ benefit from giant, hidden and very dangerous government subsidies. Yet despite repeated failures, many top officials pretend that ‘the market’ or ‘smart regulators’ can take care of this problem.

• For the broader public, none of this is clear – until it is too late.

The issues are abstract and lack the personal drama that grabs headlines. The policy community does not understand the issues or becomes complicit in the schemes of politicians and big banks. The true costs of bailouts are disguised and not broadly understood. Millions of jobs are lost, lives ruined, fiscal balance sheets damaged – and for what, exactly?

Over the past four centuries, financial development has strongly supported economic development. The market-based creation of new institutions and products encouraged savings by a broad cross-section of society, allowing capital to flow into more productive uses. But in recent decades, parts of our financial development have gone badly off-track – becoming much more a ‘rent-seeking’ mechanism that draws support from politicians because it facilitates irresponsible public policy.

• The question is: Who will be hurt next by this structure?

There are three prominent candidates: Japan, the US, and the Eurozone..."

at http://www.zerohedge.com/news/2012-09-22/whats-next-simon-johnson-explains-doomsday-cycle

China Officially Warns Japan Not To Infringe Its Territorial Sovereignty; Japan Reciprocates

"If yesterday it was the Middle East's turn to escalate, today it is the Far East, aka Pacific Rim, where China and Japan both remind the world nothing has been fixed in the diplomatic snafu between the two countries over a barren rock in the East China Sea.

First, it was China, which on the front page of the biggest daily Xinhua, over the weekend, demanded that Japan immediately stop infringing upon its "territorial sovereignty. To wit: "China asked Japan to immediately stop all acts that harm China's territorial sovereignty, Foreign Ministry spokesman Hong Lei said late Saturday, after some Japanese landed on the Diaoyu Islands. Hong said the Japanese landed on the Diaoyu Islands Friday evening with the excuse of preventing Taiwanese activists from landing on the islets. "It is a severe infringement upon China's territorial sovereignty, and the Chinese government has lodged solemn representations and strong protests to the Japanese side," Hong said in a statement."

Other concurrent headlines make it quite clear that it is in China's interest to stir populist anger at Japan instead of seeking an amicable resolution. Observe: "Japan urged to "repent" over Diaoyu Islands", "Japan's Noda needs to reset his China policy", "China announces names of geographic entities on Diaoyu Islands", "Safeguarding Diaoyu Islands sovereignty a long-term struggle: official" and the funniest one: "Reception to mark 40th anniversary of normalization of China-Japan ties adjusted".

Which brings us to the second - Japan - which, not known for backing down once it has staked its geopolitical ambitions, has likewise warned China to tone down its response to what, at least so far, has been a clearly provocative move by Japan..."

at http://www.zerohedge.com/news/2012-09-23/china-officially-warns-japan-not-infringe-its-territorial-sovereignty-japan-reciproc

Gold Counterfeiting Goes Viral: 10 Tungsten-Filled Gold Bars Are Discovered In Manhattan

"A few days ago, our report on the discovery of a single 10 oz Tungsten-filled gold bar in Manhattan's jewelry district promptly went viral, as it meant that a tungsten-based, gold-counterfeiting operation, previously isolated solely to the UK and Europe, had crossed the Atlantic. The good news was that the counterfeiting case was isolated to just one 10 oz bar. This morning, the NYPost reports that as had been expected, in the aftermath of the realization that the sanctity of the gold inventory on 47th Street just off Fifth Avenue has been polluted, and dealers promptly check the purity of their gold, at least ten more fake 10-ounce "gold bars" filled with Tungsten has been discovered.

The Post has learned as many as 10 fake gold bars — made up mostly of relatively worthless tungsten — were sold recently to unsuspecting dealers in Manhattan’s Midtown Diamond District.

The 10-oz. gold bars are hugely popular with Main Street investors, and it is not known how many of the fake gold bars were sold to dealers — or if any fake bars were purchased by the public.

As is to be expected, the Post story is weak on details: after all, any dealer who admits to having allowed Tungsten to enter his or her inventory can kiss their retail business goodbye, as customers will avoid said Tungsten outlet like the plague, for the simple reason that suddenly counterparty risk has migrated from Wall Street to the Diamond District. The one named dealer is the same one who already made an appearance in the previous story on Tungsten in gold's clothing..."

at http://www.zerohedge.com/news/2012-09-23/gold-counterfeiting-goes-viral-10-tungsten-filled-gold-bars-are-discovered-manhattan

Gold To Advance Another $700 - $1,200 Within Months

"Today 25 year veteran Caesar Bryan surprised King World News when he talked about gold advancing $700 to $1,200 in a matter of months. Bryan stated, “Just looking at gold relative to the supply of money, gold may advance to $2,500 to $3,000 in the first few months of next year.” Bryan, from Gabelli & Company, also discussed the nature of the current gold advance, silver, and what to expect going forward..."

at   http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/21_Gold_To_Advance_Another_$700_-_$1,200_Within_Months.html

Here's What QE Does To The Price Of Gold

"Gold price surged on the back of QE-Infinity (and the hope of it before the launch).
The myth that the Fed is somehow more reckless than everyone else in printing money has been cited again and again as a reason to buy gold. No doubt about that, as the Fed starts QE-Infinity, these talks are back. Of course, we showed that the scale of Fed’s balance sheet expansion is nothing compared with some of the Fed’s peers. Still, there has been a large expansion of the Fed’s balance sheet. So exactly what does central banks’ balance sheet expansion do to gold prices?
The chart below shows the year-on-year change of Gold priced in US$ and the year-on-year change of Fed’s balance sheet.

Also Sprach Analyst

The chart below shows the year-on-year change of Gold priced in US$ and the year-on-year change of People’s Bank of China’s balance sheet in Chinese Yuan.

Also Sprach Analyst

The chart below shows the year-on-year change of Gold priced in US$ and the year-on-year change of People’s Bank of China’s balance sheet, converted into US dollar.

Also Sprach Analyst

at http://feedproxy.google.com/~r/AlsosprachAnalyst/full/~3/k2aGM5hJicY/gold-price-and-central-banks-balance-sheet-expansion.html#ixzz278B4jpSc

Ray Dalio on Gold - Buffett Is Making A Big Mistake

at http://ausbullion.blogspot.com/2012/09/ray-dalio-re-gold-buffett-is-making-big.html

The Central Planners Are Going To Need A Bigger Boat

"Today 40 year veteran, Robert Fitzwilson, wrote the following piece exclusively for King World News. Fitzwilson, who is founder of The Portola Group, warned, “It is particularly important to have a substantial allocation to the precious metals for the day when control is lost and chaos emerges.” 

at  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/21_The_Central_Planners_Are_Going_To_Need_A_Bigger_Boat.html

A Super Detailed Graphic Laying Out All The Biggest Tech Acquirers

"Here's the latest chart from investment bankers Luma Partners. This one details the biggest strategic buyers in the digital world. Click on it to see a larger version. Below the chart is a full explanation of what you see here.

Luma Partners

The chart is designed to show all the companies in the digital media world that are potential acquirers.
The closer a company is to the center circle, the more likely the company is to be a buyer. This is based on past activity.
As for the colors, Luma says, "The coloration indicates a buyer’s capacity to make sizable acquisitions based roughly on trading multiples. Green is higher than yellow which is higher than red."

at http://www.businessinsider.com/luma-partners-strategic-buyers-2012-9#ixzz272ZeFpRv

The Narrative Structure of Global Weakening

"Recent indications of a weakening global economy have led many people to wonder how pervasive poor economic performance will be in the coming years. Are we facing a long global slump, or possibly even a depression?

A fundamental problem in forecasting nowadays is that the ultimate causes of the slowdown are really psychological and sociological, and relate to fluctuating confidence and changing “animal spirits,” about which George Akerlof and I have written. We argue that such shifts reflect changing stories, epidemics of new narratives, and associated views of the world, which are difficult to quantify.

CommentsView/Create comment on this paragraphIn fact, most professional economists do not seem overly glum about the global economy’s prospects. For example, on September 6, the OECD issued an interim assessment on the near-term global outlook, written by Pier Carlo Padoan, that blandly reports “significant risks” on the horizon – the language of uncertainty itself.

CommentsView/Create comment on this paragraphThe problem is that the statistical models that comprise economists’ toolkit are best applied in normal times, so economists naturally like to describe the situation as normal. If the current slowdown is typical of other slowdowns in recent decades, then we can predict the same kind of recovery..."

 

at http://www.project-syndicate.org/commentary/the-narrative-structure-of-global-weakening-by-robert-j--shiller

DEUTSCHE BANK: Western Economies Are Screwed, And Investors Face A 'Disturbing Paradox'

"In a new report entitled Gold: Adjusting For Zero, Deutsche Bank analysts Daniel Brebner and Xiao Fu paint an incredibly dark picture of the bind the global economy is in right now.

Brebner and Xiao are pretty frank about how levered up the financial system is at the moment, and they warn that the next shock will be totally involuntary and unexpected.
Here is what the analysts have to say about how upside down the world is right now and the risks looming on the horizon:

We believe the balance of 2012 could remain challenging for investors, given the many negative indicators and warning signs. Certainly extremes in leverage in the Western economies and questions regarding growth in China present investors with a worrying post-2012 future. However, in our view there are nearly zero real choices available to global policy makers. The world needs growth and it is willing to go to extraordinary lengths to get it. This is creating distortions where old rules don’t seem to apply and where investors face a disturbing paradox:

1. Those who are right are likely to be wrong
2. Those who lose, often win
3. Those who are imprudent can be rewarded
4. Dumb money can win

In the first instance, we believe investors are right to worry; the imbalances in the global economy are extreme and need to be urgently addressed, proactively. This is unlikely however, making a necessary future adjustment likely to be involuntary and therefore unexpected. Those who are right are likely to be wrong for a considerable period of time.

In the second instance, as has been witnessed over the past several years; those who risk and lose, often don’t in fact lose. Loss-makers are compensated by a system that is unable to tolerate the consequences of failure. Moral hazard continues to be encouraged.

In the third and fourth instance we point out that those that have borrowed too much, those who have been negligent in managing their own personal finances are not likely to suffer the bitter consequences of such folly. The financial system in fact remains oriented to encourage further leverage and risk-taking. It is better to be a debtor than a creditor.

It seems that the 'smart' money needs to adjust for the irrational or emotional characteristics (and therefore poor predictability) of the current economic environment. This makes investment simpler in the sense that one only needs look to what is ‘easiest’ rather than what is ‘right’.

Those are pretty pointed words, and they don't inspire much confidence – but the message is crystal clear."

at http://www.businessinsider.com/deutsche-bank-issues-a-terrible-warning-on-the-health-of-the-global-financial-system-2012-9#ixzz272HnySIX

GARY SHILLING: Here's Why There's No Housing Recovery And Prices Will Collapse Another 20%

"Everyone thinks the housing market in the U.S. looks like it's starting to bottom.

Famed economist Gary Shilling is not one of them—you could call him notably bearish on housing.
In fact, he expects prices to drop another 20 percent from here and doesn't think we will see a bottom in the market for another several years.
The main reasons Shilling is so pessimistic: There is a huge supply of excess inventory not being accounted for, and prices still have not fallen to anywhere near long-term historical averages.
In his monthly INSIGHT client newsletter, Shilling outlined his bearish housing thesis and used several charts to illustrate why he thinks there is no bottom in sight for the U.S. housing market, and more pain is ahead for American homeowners..."

at http://www.businessinsider.com/gary-shilling-no-housing-bottom-in-sight-2012-9?op=1#ixzz26wRogkkc

Why Gold Is Heading Higher & Governments Can’t Stop It

"Today legendary value investor Jean-Marie Eveillard, who oversees $60 billion, told King World News, “As long as the monetary policies continue to be mindless, the upside (for gold) continues.” He also said, “If governments try to make ownership of gold difficult or impossible, it will be much more difficult to do so than it was in the time of Roosevelt in the 1930s.”

Here is what Eveillard had to say: “Well, it seems that almost everybody is ‘all in.’ Mario Draghi is all in, Bernanke is all in, in the sense that both of them have announced ‘unlimited’ purchases of various assets. The Japanese, who believe they yen is too strong, they may be tempted to adopt a very easy monetary policy.”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/19_Why_Gold_Is_Heading_Higher_%26_Governments_Cant_Stop_It.html

BOB JANJUAH: September 2012 Will Be Remembered As The Moment The West Lost Its Status As A Global Economic Superpower

"Everyone agrees that the Federal Reserve's unlimited QE and the ECB's OMT plans are historic. Both plans involve buying tremendous amounts of debt on the markets in efforts to suppress borrowing costs and ultimately stimulate economies.
Nomura contributing strategist Bob Janjuah, however, thinks that history won't remember these actions very kindly. From his latest note to clients:

"We can now clearly see that the only solutions that are offered by the Fed and the ECB are the extension of the same failed policies that got us into our financial and economic despair in the first place. Namely MORE debt, MORE bubbles and MORE monetary debasement. When future historians look back for the day that the West lost its status as global economic superpower, and for the day that the West lost its aspirational leadership in terms of sound economic and prudent financial system management, I feel that September 2012 may be seen as a significant pivot point."

at http://www.businessinsider.com/bob-janjuah-mercy-of-the-next-4-days-2012-9#ixzz26qqkMr7b

FINANCE EXPERT ASWATH DAMODARAN: The Fed's Latest Plan To Save The Economy Looks Like A Step Toward Insanity

"Last week, the Federal Reserve made history when it embarked on unlimited quantitative easing. In other words, it plans to buy bonds and keep interest rates as low as possible for as long as possible until unemployment comes down and the economy starts growing at a healthy clip.

However, legendary NYU finance professor Aswath Damodaran isn't convinced this plan will work.
"I am sure that I am missing some significant piece of the puzzle, but as I watch the news coverage and market reaction, I am reminded of one of my favorite movies, 'Groundhog Day,' he writes in a new blog post.
"I was a skeptic on the efficacy of QE2 and Operation Twist and I remain unpersuaded on QE3. If the definition of insanity is that you keep trying to do the same thing over and over, expecting a different outcome, then we seem to be fast approaching that point with the Fed."
Damodaran runs through some of the risks and implications of the the Fed's latest plan. Read about it at the his blog, Musings on Markets."

at http://www.businessinsider.com/aswath-damodaran-qe3-insanity-2012-9#ixzz26qpDEyJT

Infinite QE; Central Bank Balance Sheets as Percent of Nominal GDP; Euro Demand Deposits; Break-Even Inflation Trends

"Here are a few very interesting charts from Steen Jakobsen, chief economist at Saxo Bank in Denmark.

click on any chart for sharper image

Central Bank Balance Sheets



Demand Deposits



Capital flight from Spain, at least in terms of demand deposits, has stabilized even if other types of deposits or transfers have not.

Infinite QE

Steen writes ...

The following chart shows my main theme since "QE Infinite": Inflation expectations continue to rise. Note the 10-Year break-evens rates from Germany and the US. However some of this is of course the result of Draghi's put..."

at http://globaleconomicanalysis.blogspot.com/2012/09/infinite-qe-central-bank-balance-sheet.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29#oQlCLwvT3lbx0aZv.99

Gold & Silver Will Smash Through All-Time Highs

"Today Tom Fitzpatrick spoke with King World News about the recent move in both gold and silver. Fitzpatrick expects the price of gold and silver to smash through their all-time highs as gold surges to $3,400, and silver heads to $100.

Here is what top Citi analyst Fitzpatrick had to say, along with some powerful charts: “You can still have corrections and track sideways occasionally, but to us the trend is solid. The pattern is quite clear, and we still believe this $1,791 area is really quite critical in terms of the next leg higher for gold, as well as the $37.48 level on silver.

When we get a weekly close through both of those critical levels, we anticipate that will give us an acceleration which will take us up toward the targets on gold to the $2,055 area (see chart below), and silver back to the old highs near $50. However, on a longer-term basis we believe we have a setup here which suggests that gold could continue to go higher for some time to come.

Fitzpatrick continues: “We’ve always been of the view, and are still of the view that gold is first and foremost a hard currency more so than it is a commodity. So the building blocks are there for gold to continue to go higher, not just against the dollar but against all of the other paper currencies as well..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/18_Gold_%26_Silver_Will_Smash_Through_All-Time_Highs.html

Top EIA Analyst: 'These Numbers Do Not Tell Me That We Are In A Recovery'

"...Demand for jet fuel has also fallen dramatically from 2007/08 (it had also fallen dramatically after the 9/11 attacks, never fully recovering to the levels seen from 1999 - 2001). At 1.437 million barrels per day during the period from April - June, KJet demand continues to be at levels we have not seen since 1994/95. The 2012 level is the second lowest for this three-month period since 1995. Although KJet demand is up 1.2% from the 2009 low for the period, it is down 2.4% from last year.

These numbers do not tell me that we are in a recovery. Despite increases in distillate and KJet demand in 2010 and 2011, and in gasoline in 2009 and 2010, these were well short of recovering from the decline in 2008/09. The decline year-over-year in these three core transportation indicators suggest a slowing in the economy if not a recession."
at http://globaleconomicanalysis.blogspot.com/2012/09/email-from-lead-analyst-weekly.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29&utm_content=Google+Reader#ixzz26knSSotE

Podcast: Geopolitical Risk on the Rise

"Those who question whether the world is set to become more unstable than it is now might want to consider this chart I recently created --

and this 2011 Technology Review article, The Cause Of Riots And The Price of Food":
If we don't reverse the current trend in food prices, we've got until August 2013 before social unrest sweeps the planet, say complexity theorists

What causes riots? That's not a question you would expect to have a simple answer.
But today, Marco Lagi and buddies at the New England Complex Systems Institute in Cambridge, say they've found a single factor that seems to trigger riots around the world.
This single factor is the price of food. Lagi and co say that when it rises above a certain threshold, social unrest sweeps the planet.
The evidence comes from two sources. The first is data gathered by the United Nations that plots the price of food against time, the so-called food price index of the Food and Agriculture Organisation of the UN. The second is the date of riots around the world, whatever their cause. Both these sources are plotted on the same graph above.
This clearly seems to show that when the food price index rises above a certain threshold, the result is trouble around the world."
 

at  http://www.financialarmageddon.com/2012/09/loading.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+financialarmageddon+%28Financial+Armageddon%29

Is QE3 Yet Another Stealth Bank Bailout?

"It’s difficult to puzzle out what Bernanke thinks he is accomplishing with QE3. The level of bond buying, as various commentators have pointed out, is much lower than in the earlier QE programs. And pulling out bigger guns in the past was not terribly productive. As we wrote in April 2011 in a post titled “Mirabile Dictu! Economists Agree All the Fed Has Done is Goose Financial Markets!“:..."

at http://www.nakedcapitalism.com/2012/09/is-qe3-yet-another-stealth-bank-bailout.html#15u3dCW8cCxervbO.99

Europhoria Officially Over: Spanish 10Y Breaks 6% The Wrong Way

"We warned that the shine was coming off Draghi's rally late last week but since mid-morning on Friday, Spain's 10Y spread has risen a very notable 36bps and the 10Y yield has just broken back above 6% for the first time in over two weeks. However, the seemingly impregnable short-dated market has started to crack. Spain's 2Y has also broken back above 3% - up over 50bps in the last 3 days! It seems the reality of the cash position, as we described in detail last night, is perhaps starting to outweigh the unlimited-but-capped open-ended-but-conditional support that the ECB supposedly has. 

10Y Spain breaks back above 6%...





while 2Y Spain is quickly giving back its Draghi-induced gains...



at http://www.zerohedge.com/news/europhoria-officially-over-spanish-10y-breaks-6-wrong-way

How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of Us

"The mainstream media is hailing QE3 as a great victory for the U.S. economy. On nearly every news broadcast, the "talking heads" are declaring that Ben Bernanke's decision to pump 40 billion dollars a month into our financial system is definitely going to help solve our economic problems. The money for QE3 is being created out of thin air and this round of quantitative easing is going to be "open-ended" which means that the Federal Reserve is going to keep doing it for as long as they feel like it. But is this really good for the average American on the street? No way. Despite two previous rounds of quantitative easing, median household income has still fallen for four years in a row, the employment rate has not bounced back since the end of the last recession, and new home sales have remained near record lows. So what have the previous rounds of quantitative easing accomplished? Well, they have driven up the prices of financial assets. Those that own stocks have done very well the past couple of years. So who owns stocks? The wealthy do. In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans. Those that have invested in commodities have also done very nicely in recent years. We have seen gold, silver, oil and agricultural commodities all do very well. But that also means that average Americans are paying more for basic necessities such as food and gasoline. So the first two rounds of quantitative easing made the wealthy even wealthier while causing living standards to fall for all the rest of us. Is there any reason to believe that QE3 will be any different?
Of course not..."

at http://theeconomiccollapseblog.com/archives/how-qe3-will-make-the-wealthy-even-wealthier-while-causing-living-standards-to-fall-for-all-the-rest-of-us

The Long Wave Versus the Printing Press: Central Banks Go All-In

"The short version of the Long Wave story is that we’re emotional creatures with limited memories. For as long as there have been markets we’ve been passing through the same sequence of mental states, beginning with anxious conservatism in the aftermath of hard times, followed by cautious optimism and finally –as the original “depression-era” generation is replaced by their clueless grandkids — let-it-all-hang-out financial excess. A horrendous debt-driven crash then resets the cycle.
There are several variations of Long Wave theory, but the most famous is based on the work of Nicolai Kondratieff, a Russian economist who gave the various stages seasonal names, with summer and autumn denoting the peak of financial speculation and winter the aftermath of the resulting crash.
The most recent cycle began after World War II and lasted until the tech stock crash of 2000, which means according to this theory we’ve already spent a decade in Kondratieff Winter. But the headline statistics published by the US and other major governments tell a different story, in which we have an anemic economy but not a depression.

What happened? This time around the world’s central banks have a new set of tools. In past cycles money was mostly gold and silver, which is to say it was real and in limited supply. Credit might have been flexible because of fractional reserve banking, but the money at the base of the financial system couldn’t be created out of thin air. Today, in contrast, it can. Since the US broke the final link between national currencies and gold in 1971, everyone has been running fiat currencies that can be created in infinite quantities and depend for their value on the trust we place in the competence and honesty of our leaders.
The fact that trust dies only slowly (at first) has given the world’s governments an effectively unlimited credit card that they can max out to keep the debt implosion at bay. And that’s what they’ve done since 2000, with ever-lower interest rates and ever-more-creative asset purchase plans. The result is a global economy that continues to grow — when measured by the same governments that are printing the money — and an electorate that still hopes for a solution in the run-up to each election.
But the debt is still out there, and is in fact growing as unfunded liabilities and derivatives and other exotica continue to pile up. So the Long Wave’s pressure on the global financial system is getting stronger. The past year proves that if taken off of central bank life support, the European, American and Japanese economies will implode.
Over the past couple of weeks the European and US central banks have accepted this reality and announced open-ended asset purchase plans, implying that zero interest rates and unrestrained money printing will go on for as long as the markets keep accepting fiat currency.
Does this mean the contest is over and the printing press has won? No, but it means that the analytical framework has to shift from linear to non-linear systems. Jim Rickards devotes a chapter in his book Currency Wars to the idea that a financial market is more like a weather front than a car engine, in that the various parts of the former communicate with each other and change in response to that communication. This gives a complex system some unique characteristics, the most notable of which is that as its size and complexity increases, its propensity for catastrophic failure grows exponentially. Double the size of a financial system and its chance of coming undone rises by ten times or more.
By going all-in, the major central banks are committing to a progressive increase in the complexity of global financial markets. As more individuals and pension funds abandon cash and safe-but-low-yielding paper for higher-yielding but more-volatile stocks and junk bonds, the system grows ever-more fragile, making a crash both likely and more destructive.
Another trait of complex systems is that the timing of their catastrophic failure is unpredictable. Once the conditions are in place the system can collapse immediately or continue on for a long time. Rickards’ analogy is a mountainside where snow accumulates until a single snowflake sets off an avalanche. But there’s no way to know which snowflake will be the one, or when it will fall.
So here we are. The conditions for a global catastrophic failure are in place. Snow (in the form of trillions of new dollars and euros) is falling. There’s no way to know which dollar (or which external event) will start the avalanche, but without doubt something will.
The nature of the avalanche is still to be determined, though. Will it be a wholesale loss of confidence in the dollar, euro and yen which manifests as hyperinflation, followed by a crash? Or will the bond markets at long last figure out they’re being conned and push interest rates up in a spasm that’s too fast and wide-spread for central banks to counter, sending us back to the 1930s in matter of weeks? We can’t know the answer, any more than we can know whether the next tropical depression will turn into a Cat 5 hurricane. We can only watch it happen and prepare for the most obvious risks."

at http://dollarcollapse.com/long-wave/the-long-wave-versus-the-printing-press-central-banks-go-all-in/

Jim Rogers : Protect your Portfolio with Silver & Rice

"Jim Rogers : “The bull market in commodities will end some day – but some day is a long way away,”
“Commodities have been correcting for a while. Now everybody knows they’re throwing money into the market, and history tells you that when they do this the way to protect yourself is to own real assets whether it’s silver or rice. If the world economy gets better, I own commodities because there’s shortages developing. If it doesn’t they’re (central banks) all going to print money. It’s the wrong thing to do, but it’s all they know to do.” - in CNBC"

at http://jimrogers1.blogspot.com/2012/09/jim-rogers-protect-your-portfolio-with.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FWOHK+%28Jim+Rogers+Blog%29

Gold Will Soar As The World Sinks Further Into The Abyss

"Today Michael Pento upgraded his bullish stance on gold by telling King World News, “I now predict that Chairman Bernanke’s actions will send gold to an all-time high.” Pento has been deadly accurate in his predictions regarding moves by the central planners. He now believes gold will hit new all-time highs, “... both in nominal and real terms.”

Michael Pento writes exclusively for King World News to let readers know what to expect from central planners going forward, and how it will impact the economy and key markets such as gold.

Here is Pento’s piece: “Last week, Fed Chairman Ben Bernanke announced that the central bank would launch an unprecedented form of quantitative easing. This ‘new and improved’ iteration of money printing will be without limit and duration. The Fed Head launched QE III ($40 billion of MBS purchases every month) on September 13th and stated that it will remain in effect until the labor market ‘improves substantially.’”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/16_Gold_Will_Soar_As_The_World_Sinks_Further_Into_The_Abyss.html

FELIX ZULAUF: Stocks Will Collapse, Gold Will Surge, And The 30-Year Bond Bull Market Is Over

"Felix Zulauf, a Swiss hedge fund manager, is out with another bearish forecast for stocks, bonds and currencies.

Speaking to King World News, Zulauf says the 30-year bull cycle in Treasury bonds has ended, and that gold prices will soon surge again.

I think we first see, over the next couple of years, the transfer of government debt from private balance sheets to central bank balance sheets. I do believe the 30 year bull market in government bonds is over. I mentioned in the media (Barron’s) Roundtable that one should be selling half of what he owns, and should sell the other half in September at the latest.

I think the whole game is over. Bonds are very overvalued. The real return is negative. Normally bonds yield at least as much as nominal GDP growth. Nominal GDP growth at the present time is about 3% or 4% in the US. I’m not suggesting we go right there tomorrow (in terms of yield), but bonds are very overvalued.

... from now on buying the dips [in the price of gold] is the right strategy because I think we have actually entered the next cyclical bull market within the secular bull run that we are still in..."

at http://www.businessinsider.com/felix-zulauf-the-30-year-bull-market-in-government-bonds-is-over-2012-9#ixzz26TTJE3iu

Guest Post: Get Ready For An Epic Fiat Currency Avalanche

"What is it that makes Keynesians so insanely self destructive? Is it their mindless blind faith in the power of government? Their unfortunate ignorance of the mechanics of monetary stimulus? Their pompous self-righteousness derived from years of intellectual idiocy? Actually, I suspect all of these factors play a role. Needless to say, many of them truly believe that the strategy of fiat injection is viable, even though years of application have proven absolutely fruitless. Anyone with any sense would begin to question what kind of madness it takes to pursue or champion the mindset of the private Federal Reserve bank…

Quantitative easing has shown itself to be impotent in the improvement of America’s economic situation. Despite four years of free reign in central banking, employment remains dismal in the U.S., the housing market continues its freefall, and, our national debt swirls like a vortex at the heart of the Bermuda Triangle. Despite this abject failure of Keynesian theory, the Federal Reserve is attempting once again to convince you, the happy-go-lucky American citizen, that somehow, this time around, everything will be “different”.

Sadly, as I discussed in August of this year, not only has the Fed announced a new and UNLIMITED round of stimulus measures, but the European Central Bank has also devised its own bond buying free for all:

http://www.alt-market.com/articles/954-has-the-perfect-moment-to-kill-the-dollar-arrived

I predicted simultaneous QE programs by the two central banks because it made perfect sense, at least, for those with diabolical intentions. With engineered currency devaluation in full swing in the EU and the U.S., the implosion of both currencies, especially the dollar, will be masked. That is to say, the dollar index is measured in large part by comparison to the relative strength of the Euro. If the Euro falls through overt printing, the dollar will appear stronger than it really is, duping the general public and giving bankers more time to inflate..."

at  http://www.zerohedge.com/news/guest-post-get-ready-epic-fiat-currency-avalanche
 

Norcini - A Violent Wave Of Short Covering In Gold & Silver

"Today acclaimed trader Dan Norcini told King World News that in both the gold and silver markets, “... we were seeing a violent wave of short covering.” This started taking place immediately after the Fed signaled the additional QE.

Just six days ago Norcini correctly predicted that gold and silver would continue this surge. The acclaimed commodity trader had this to say about what is now taking place: “Once the QE announcement came from the Fed, gold and silver immediately soared, but so did the rest of the commodity complex. Anything that was a hard asset was moving higher, along with the stocks that produce those hard assets.”

 

Dan Norcini continues:

“The stock market hit four and a half year highs, gold is knocking on the door of $1,800, and silver is pushing up toward $35.50. There was a flood of hot money that had been on the sidelines which came roaring back into the market. While hard assets were flying high, the US dollar continued to break down.

 

Of course anybody that was positioned on the short side of the metals was simply run over when the news hit the wire. Those shorts were panicking out of their positions and more buying poured in the throughout the day...."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/14_Norcini_-_A_Violent_Wave_Of_Short_Covering_In_Gold_%26_Silver.html

Embry - We Are Seeing Mounting Shortages Of Gold & Silver

"With gold on the move once again, today John Embry told King World News, “I’m still of the mind that we will be in record territory before year end.” Embry also said, “We did our bit by buying another $392 million worth of gold for the Sprott Physical Gold Trust.” Embry spoke about silver, “I’m wildly bullish on silver. I don’t think the physical market has ever been this tight.” 

Here is what Embry, who is Chief Investment Strategist at Sprott Asset Management, had to say: “I think the action is positive, but at the same time I’m infuriated by the continued interference with the markets by the powers that be. There is tremendous manipulation going on in both gold and silver right now. Two days before the QE announcement they dropped the price of silver about $1.50 in a nanosecond.”

 

John Embry continues:

“It’s the same games being played by the same people, and it’s going to end horribly because all the manipulation is doing is creating wonderful buying opportunities for the Chinese, the Russians, and the rest of the central banks that know full well what’s going on.

In the fullness of time, this group of manipulators will be seen to have eclipsed the blunders and the folly of the original London Gold Pool...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/14_Embry_-_We_Are_Seeing_Mounting_Shortages_Of_Gold_%26_Silver.html

Global Economic Plunge, Money Creation & Soaring Gold

"Today Mish warned King World News that investors should prepare, “... for a big plunge in economic growth worldwide.” Mish also said that despite the plunge in the global economy, “I expect to see gold breakout to the upside and I think we are starting to see that right now. The same thing is true for silver.”

But first, here is what Mish, who runs the Global Economic Analysis site, had to say regarding the plunge in economic activity: “We are seeing a decline in the global economy. China has slowed down dramatically, so any commodity exporters which export to China are slowing down as well. We’re already seeing this happen in countries like Australia. We are also starting to see the Australian housing market begin to crash.”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/13_Global_Economic_Plunge,_Money_Creation_%26_Soaring_Gold.html

Felix Zulauf - Gold, Systemic Collapse & The End Of Fiat Money

"Today world renowned money manager Felix Zulauf warned King World News, “... the fiat currency, paper currency standard, is in the final stage of the super cycle.” Zulauf, who founded Zulauf Asset Management, also declared, “I do believe the 30 year bull market in government bonds is over.”

Zulauf, a 20+ year Barron’s Roundtable panelist, was bullish on gold: “... from now on buying the dips is the right strategy because I think we have actually entered the next cyclical bull market within the secular bull run that we are still in.”

Zulauf also said stocks would plunge, but first, here is what Felix had to say about systemic collapse: “The global banking system, particularly in the industrialized world, is still highly undercapitalized. That’s the big problem. So if anything goes wrong, bank balance sheets are highly leveraged and you have a problem. The central banks were running behind the curve.”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/13_Felix_Zulauf_-_Gold,_Systemic_Collapse_%26_The_End_Of_Fiat_Money.html

This Japanese Statement On Cyber Security Has Chilling Implications

"It kind of went underneath the radar, but last Friday (Sept. 7) a Japanese military panel ruled to define cyberspace as "a 'territory' where various activities such as information gathering, attack, and defence occur, on the same way as land, sea, air and space."

Jay Alabaster with CIO reported:

While careful to state that online attacks should be considered on a case-by-case basis, the panel made clear Japan's right to respond to hostile attacks against its infrastructure. It called for a new cyber-military group that would exist separately from the country's existing ground, sea and air forces.

Alabaster also said it's important to note that Japan's constitution forbids it from using force to settle international problems.
Nonetheless, the implications here are astounding. Though it should be recognized that these are far from policy level orders, the statements are not binding, they're simply recommendations of a Ministry of Defense panel. Still, in light of American and Israeli cyber attacks on infrastructure, these statements do two important things:
- Cast Americans and Israeli digital attacks on Iran as acts of war.
- Maybe more ominously, set the stage for international criminals, hackers, to find safe haven within the United States—putting the U.S. in a position to receive extradition requests at an alarming rate.
As it is, so would China, the United Kingdom, and Russia: sophisticated hacks require sophisticated technology..."

at http://www.businessinsider.com/this-japanese-statement-on-cyber-security-has-chilling-implications-2012-9#ixzz26HjCK3la

Ex-President Carter: US Political System Is Corrupted By Big Money

"Financial reform and political reform go hand in hand.

The current system is an artifice of soft bribery and political corruption that isolates the representatives from the people in meaningful ways, encourages "mass persuasion," which is a euphemism for propaganda, and substitutes spectacle and demagoguery for compromise and effective governance.

Bernie Sanders has some insights into the problem in this interview published below here.

The media may show pictures of politicians eating hot dogs, shaking hands, and even getting hugs with the common people, but in the back rooms the real players are handing over suitcases full of money. And when you have someone who loves money and power by the wallet, their heart will follow.

The problem is that the big media loves the ad dollars and access, the politicians love huge slush funds that allow them to become overnight multimillionaires and power brokers, academics love important appointments and funding, and the corporations love the ability to buy influence that circumvents the political process for their own ends. Freedom and truth have few powerful friends in a society consumed by the unashamed worship of greed, where honor and integrity are looked upon as quaint relics from the past.

"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that."

John Dalberg Lord Acton

This is going to end. Badly..."

at http://jessescrossroadscafe.blogspot.com/2012/09/ex-president-carter-us-political-system.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29

Metals Bear Raid - Sprott Raises $392 Million To Buy Gold for PHYS

"On the bright side, the Sprott Physical Gold Trust (PHYS) completed its secondary offering and the underwriters allotment, raising $392 million to buy additional gold bullion to be held in the trust.

The report does not indicate if they have secured title to the gold yet. Even after they have secured title, it often takes weeks and even months to achieve actual delivery to their vaults. The recent lag times in their Silver Trust expansion, and the types of bars they received, suggested a tight market for the real thing.

As you may recall, I think that it will be in the high quality bullion bar bulk market where the initial signs of failure to deliver will occur. The peripheral and coin markets will stay relatively healthy until the dawning comes, and then dry up overnight. The retail crowd are always the last to know. So lets keep an eye on this..."

at http://jessescrossroadscafe.blogspot.com/2012/09/pre-fomc-metals-bear-raid-sprott-raises.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29