Thursday, December 30, 2010

Everthing Gold is New Again

By: Shayne McGuire December 29, 2010

In stormy times, investors look for something solid to hang onto—something like gold. The World Bank president himself, Robert Zoellick, suggested in November that the world’s economies could use the old reliable metal to help stabilize their currencies. For these and many other reasons, professional gold-fund manager Shayne McGuire argues that gold has nowhere to go but up. The following essay is adapted from McGuire’s latest book, Hard Money: Taking Gold to a Higher Investment Level.  LINK...
Shayne McGuire is not your average "Gold Bug," predicting a financial collapse. He's head of global research for one of America's largest pension funds managing over $115 Billion in assets. He says most pension funds have only 0.3% of their assets allocated to Gold and many fund managers are being forced to take a more serious look at Gold because of its outstanding performance (+280%) in the past decade. During the end of the last Gold bull market in the 70's, global asset allocation to Gold was about 26% , compared to just 0.8% today (see chart below provided by the Erste Group Research). Shayne says, "a rise to $10,000 an ounce is not out of the question." He says that Gold rose by a multiple of 23 during the end of the 70's. We think that compared to this decade low of $250, it should take us to at least $5,750 an ounce($250 X 23)? We assume that no one really knows what the new high for Gold will be, but we're convinced that Gold has much higher to go before this bull market is over. When looking at the chart below, think about the time period in history before these highs occurred; the World Wars, Depressions and Inflation? There's no doubt in our minds that global assets in Gold will reach historical levels, our concern is-- at what cost to society?   BK

Wednesday, December 29, 2010

Richard Russell Signals Warren Buffet to Take Notes From His Father

From: 321Gold

Richard Russell
Dow Theory News Letters
Dec 28, 2010

Some call him the Godfather of investment newsletter writers, Richard Russell has been in the markets for 50+ years and is highly sought after by professionals and retail investors for his investment wisdom. In the article above he says that Warren Buffet's father, Howard Buffet understood Gold, but not Warren. Mr. Russell says that he has studied and experienced many bull markets and they never end in a whimper, rather an explosion to the upside. He feels that Gold will end this way and we are not even close to that end. BK

Monday, December 27, 2010

World Bank reaffirms gold as "reference point" to monetary system reform

08:14, December 23, 2010
Source: Xinhua

World Bank President Robert Zoellick reaffirmed his proposal to use gold as a "reference point" to reform the current international monetary system on Wednesday in Paris.   LINK...
We agree and see no other alternative. History is repeating itself and Gold will become the stabilizing force for ALL currencies. Gold is the axiom to currency stability and economic reform. It has been this way for thousands of years and will continue to be. Those in finance who ignore the facts of history will be doomed to repeat it.  BK

China Central Bank absorbing substantial amounts of gold without disrupting market

Author: Lawrence Williams

Posted: Thursday , 23 Dec 2010

China can build its reserves without overtly appearing to do so, by buying in its own gold production, which not only includes mine production, but also output from custom refining, either of gold directly, but also from byproduct gold from its vast base metals refining sector.  LINK...
China has been called the next Great Nation of the world by many well respected and successful financial guru's. China has not only absorbed much of our manufacturing sector in their own country, but they have also been acquiring commodity based companies around the world. They see the "writing on the wall" and diversifying out of the USD is key to their strategy. Buying gold to protect their USD reserves has been actively pursued by China for a long time now. Although China may keep their gold strategy a secret, global central banks have publicly revealed their intention to increase their gold reserves. We see no reason why every citizen who has investments should not have gold bullion as part of their portfolio. What is the old saying? Don't do as they say, do as they do!   BK

Commodities: Gold's Year-End Review

From: SFO Magazine

By Mike Daly

As a long-time gold bug, all I can say is wow! This has been a year filled with global economic ups and downs, causing savvier investors to turn to alternative, safe haven investments to protect their wealth. Since gold and silver historically retain their value better than most other commodities, these precious metals have benefited from the poor economic climate.  LINK...
To receive updates from Mike Daly, please join our e-mail list.  BK

Gold to Rise in 2011

Country 95.9FM CJWF
December 27th, 2010 . mvlasveld

A Windsor expert on the value of gold believes it’s value will continue to climb in 2011.

Bosko Kacarevic at Gold Coins Canada says gold climbs in value when people are worried about the economy and want to stabilize their wealth. It’s worth about $2,000 an ounce now. He believes there are two reasons why gold will continue to gain value. Kacarevic says the US government just introduced what they call a new “quantitative easing,” which basically means they’ve been printing money, and there’s not much sign of quick job recovery. He also says it may gain ground as governments around the world reintroduce it into the value of their currency. Kacarevic also believes silver may gain value in 2011.  LINK...

Thursday, December 23, 2010

A Show Stopper

The story behind the Silver manipulation.  BK

By: Theodore Butler

Commissioner Bart Chilton, much to his credit, made a number of recent statements that gave me great encouragement. He has confirmed that a single entity controlled 35% to 40% of the short side of COMEX silver earlier this year. (He didn’t identify JPMorgan as the entity, because he is precluded by law from doing so.) Chilton also indicated that he thought a 1500 contract limit for silver to be reasonable.

But it was something that Chilton said in a speech two days before the meeting that rocked me. In essence, Chilton proposed that any time a trader hits the proposed position limit and is holding a hedge exemption from position limits the agency would closely review the details of the underlying swaps that allowed the exemption. Importantly, Chairman Gensler ratified Chilton’s approach at the hearing and directed the staff to initiate this approach immediately. The chairman’s exact words were, “Make it so.”

Why was I rocked? Because I thought the agency was already doing this. Then it dawned on me that verifying whether the OTC swaps position that allowed JPMorgan to hold the obscenely concentrated COMEX short position was handled by the CME as part of their role as a SRO (self-regulatory organization). The CFTC never got to examine the details of what swaps justified JPMorgan’s concentrated silver short position, just the CME. In an instant, I knew how the silver scam was allowed to continue this long. The exchange decided what OTC swaps were legitimate, not the CFTC. But with Chilton’s Position Points approach, it would now be the agency doing the verification. Talk about a game changer.  LINK...
Dear readers,

This breakthrough in exposing the Silver manipulation is a long time coming and Ted Butler, one of the most respected authorities on the Silver market explains why the price of Silver has been lagging so much compared to the other metals in its class. As we have shown in our post from Dec 16th, Silver should be the shining star in the metals market in 2011. We expect high volatility and much higher prices in both Gold and Silver in 2011.  BK

Disclaimer:  Trading and investing in precious metals is highly volatile and risky. Past performance is not indicative of future results. Please consult with a registered financial advisor or tax professional before investing in precious metals.

Wednesday, December 22, 2010

Raymond James Raises Silver Price Estimates

Financial Post: Eric Lam December 21, 2010 – 1:10 pm

If the past year has been a good one for gold, then it’s been a great one for silver.

Since August alone, silver prices have jumped more than 60%, crossing the $30 an ounce threshold. Year to date, the price of silver has averaged $19.86/oz, a 35% increase on the 2009 average.

“With the drivers for precious metals remaining firmly in place, we are increasing our long-term price assumptions for silver bullion to $17/oz from $14/oz,” the Canada research team from Raymond James said in a note. “The current key drivers behind the rise in silver are similar to that for gold, including quantitative easing I, II, likely III and possibly IV, paper currency debasement, sovereign debt issues, concerns over future inflation and strong investment demand, particularly from emerging markets.”   LINK...

Thursday, December 16, 2010

The Case For Silver: A Simple Approach

By: Bosko Kacarevic

Like Rodney Dangerfield, Silver
"Gets NO Respect."

Over the past few years we have seen multi-decade highs in practically all commodities especially metals.

We have heard all the arguments about Gold; is it money or an ancient relic, Platinum; is it a precious metal or an industrial metal and of course Copper; the ultimate industrial metal. All three have significantly broken their 1980 high. So why does Silver "Get No Respect?"

(Prices are rough estimates)

Whether considered a monetary precious metal or an industrial metal, Silver is still lagging by 104%. Where does this number come from? The average percentage gain in Gold, Platinum and Copper since 1980. Whether or not this is an accurate way to measure the price of Silver, the fact remains that compared to its peers, Silver is lagging BIG TIME! Where will it go? We have heard estimates of $500/oz, but just to catch up to the performance of the other three metals we think it could easily reach $80/oz (104% of its 1980 high of $40) very quickly. When will this happen? No one really knows exactly, but you can be sure that Silver WILL "GET RESPECT" sooner rather than later. BK

Wednesday, December 15, 2010

China’s Golden Surprise: A Glittering Opportunity?

December 13, 2010
Jim Trippon

This is the kind of thing that the Chinese usually keep a secret. No one knows why Beijing broke with tradition. But perhaps the news was too big to contain behind the usual wall of silence.

If you hadn’t already heard, China’s gold imports are up – way, way up. In the first ten months of the year, China’s gold imports jumped fivefold. With two months to go in the year, China had quintupled its intake of gold compared to the full year of 2009.

This is big! Remember, China is already the world’s largest producer. Yet its gold imports rose to 209 tonnes in the first ten months – up dramatically from just 45 tonnes the year before.

(2011 is the year of the rabbit in China, a year in which some say "money can be made without too much labour.")   LINK...

Monday, December 13, 2010

John Williams and the Hyper-Inflation Argument

John Williams and his services are sought after by many professionals.

Of course his solution for protection is to own physical Gold and Silver.

Friday, December 10, 2010

Join the Silver Bulls in the Stampede to Higher Prices 

Thursday, December 9, 2010

Priced in Gold, the So Called S&P 500 Rally is a Dud!

Dear readers,

Chart provided by and Jesse's Café Américain

For those who continue to ignore the fact that Gold is "money," not an investment, here is a chart of the S&P 500 index priced in Gold. As you can see the "rally" is not very impressive when priced in Gold.  The big illusion is that the "price" of Gold is going up. As we have been saying for some time now, Gold doesn't change. An ounce of Gold today is the same ounce of Gold a thousand years ago, the difference is the quantity of dollars it takes to buy that ounce of Gold. So it's not about Gold it's about the dollar losing value against Gold and other commodities. There are many who misunderstand Gold, it is not supposed to have a cash flow, P/E ratio, dividends or pay interest because it is money! Does the Canadian dollar pay dividends or interest? NO! Gold is a form of cash and people go to Gold when "confidence" in government and markets is lost. It is the last resort currency to protect ones wealth. Throughout history governments around the world have used Gold as a backing to their currency, and there's a reason for it. Which is a whole different topic all together.
Basically Gold is a barometer of fear in the market and those who choose to ignore the fact that the financial system is broken will suffer the consequences because I assure you that the powers that be or the "internationalists" know what's happening and they own Gold, and the physical bullion not paper substitutes. Just listen to Peter Munk's comments in the Charlie Rose interview below, he says that his billionaire friends have concerns about the markets and they're going to Gold. Even in Davos 2009 Mr. Munk was telling us the same thing. We agree that a high Gold price is not a good sign for the economy and the markets but we cannot ignore the facts, Gold has been the best performing asset class in the past ten years and all the fundamental signs are pointing to a much higher price. Just ask yourself what will be the result of all the bailouts, stimulus and Quantitative Easing (QE) that the FED is creating? It surely hasn't returned any jobs to America and Chairman Ben Bernanke even admits it in his recent 60 Minutes interview.
There is a big difference between being optimistic and realistic, we choose the latter and hope that we're wrong, because when you plan for the worst and hope for the best, and the worst happens, then it's not good for anyone, but at least you would have protected your wealth with Gold.   BK

Tuesday, December 7, 2010

All about Gold with John Hathaway, Peter Munk, & James Grant

A GREAT VIDEO!!!      
by: Charlie Rose

Charlie Rose sits down with three very successful market gurus from the investment industry and discusses GOLD! Folks, you can't get any better than this, these guys cover ALL the bases. The big take away from it all... Look to Gold as "money" not an investment. Gold is a measure of wealth a barometer of the global economic condition. The trick is to calculate the performance of your investment portfolio in terms of Gold. As we have been saying all along "the rise in Gold is not about the rise in Gold, it's about the loss of CONFIDENCE in the U.S. dollar as the world's reserve currency."   BK

Sunday, December 5, 2010

Ben Bernanke on 60 Minutes

Friday, December 3, 2010

Gold is Poised to Explode

Compliments of King World News KWN
A discussion with legendary Jim Sinclair
When will we see the first $100 move in a single day in gold?

“Before this year is out. That is one of the things which I’ve predicated my $1,650 by January of 2011 call on, and we are about to find out.
Look at Harry (Schultz) dean of the whole bunch, he believes that when confidence falls, it falls instantaneously. It may be ebbing and flowing, ebbing and flowing, and than all of the sudden wham, it’s gone! And that will be both the dollar market and the gold market, and it will be in synch.”  LINK...

Paper Gold Owners Should be Concerned, Please Review Your Prospectus

Compliments of Jim Sinclair's JSMineset

Subject: FW: $$: Lots of fake gold shows up in Hong Kong

HK gold market hit by sophisticated scam

By Robert Cookson in Hong Kong
Published: December 2 2010 03:59
Last updated: December 2 2010 03:59

Hong Kong goldsmiths have been sold hundreds of ounces of fake gold this year in one of the most sophisticated scams to hit the Chinese territory’s gold market in decades.
Industry executives say the scam – while not massive and hitting only the retail sector – uncloaks the increasingly elaborate gold swindles perpetrated by criminals in Asia as bullion prices soar to record highs of $1,400 a troy ounce.  LINK...

Thursday, December 2, 2010

China, The Next Global Super Power is Buying Gold, Hand-Over-Fist

Gold Imports by China Soar Almost Fivefold as Inflation Spurs Investment

By Bloomberg News - Dec 2, 2010 4:55 AM ET

Gold demand in China gained in the first half as government measures to cool the property market and falling equities spurred investment, the gold exchange said July 7. About 70 percent to 80 percent of the imports in the first 10 months were made into mini-gold bars, which Chinese investors like to hold, the exchange’s Shen said.  LINK...

Here's an interesting view on why China is urging its citizens to buy gold. VIDEO

I must say that it does make good sense considering the condition of the U.S. economy and the weakness in the USD.  BK