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The Birthers’ Are Back – And At The Supreme Court!

25 Wednesday Mar 2009

Posted by jschulmansr in 2008 Election, Barack, Barack Dunham, Barack Hussein Obama, Barack Obama, Barry Dunham, Barry Soetoro, capitalism, Chicago Tribune, Columbia University, Credit Default, Currencies, currency, Currency and Currencies, D.c. press club, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Electoral College, Electors, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, fraud, Free Speech, gold, Harvard Law School, hawaii, hyper-inflation, id theft, IMF, Indonesia, Indonesian Citizenship, inflation, Investing, investments, Joe Biden, John McCain, Latest News, legal documents, Markets, name change, natural born citizen, Oath of Allegiance of the President of the United State, obama, Occidental College, Phillip Berg, Politics, poser, Presidential Election, Sarah Palin, socialism, stagflation, Stimulus, Stocks, The Fed, Today, treason, U.S., u.s. constitution, U.S. Dollar, voter fraud, we the people foundation

≈ Comments Off on The Birthers’ Are Back – And At The Supreme Court!

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2008 Election, Barack Dunham, Barack Hussein Obama, Barack Obama, Barry Dunham, Barry Soetoro, capitalism, Chicago Tribune, Columbia University, Currency and Currencies, D.c. press club, Electoral College, Electors, Finance, fraud, Free Speech, gold, Harvard Law School, hawaii, id theft, Indonesia, Indonesian Citizenship, Investing, investments, Joe Biden, John McCain, Latest News, legal documents, Markets, name change, natural born citizen, Oath of Allegiance of the President of the United State, Occidental College, Phillip Berg, Politics, poser, Presidential Election, Sarah Palin, socialism, Stocks, Today, treason, u.s. constitution, U.S. Dollar, voter fraud, we the people foundation

I am not a “birther” unless- my asking Mr. Obama to provide his Birth Certificate for everyone to see- qualifies me as one. The idea that Mr. Obama refuses to do so borders on unbelievable! Now he is facing “criminal” charges because he hasn’t. Please don’t tell me he already has, he hasn’t. The certificate of live birth is not the same as a Birth Certificate, and even that was proven to be a forgery! Next why is he refusing to let anyone see anything about his personal past history, like school records,and anything where then he had to show some kind of identification to be registered and be enrolled. Mr. Obama, what are you hiding? Could it actually be that you really aren’t qualified and eligible to be the President? I have some real concerns and now the rest of America is starting to share those concerns! Could your meeting with the Supreme Court Justice’s was really about that very issue? Something like, hey guys I’m not actually eligible to be President, so if you ‘hear any of the “eligibility” cases’ and this is found out (not eligible to be President)- it will cause widespread rioting and destruction; along with a complete loss of trust by the American people. Is that what really transpired? Mr. Obama prove your eligibility! Another concern I have is what you are doing to this country. You say you inherited this mess from President Bush and a 1 Trillion Deficit mess. Yet your cure is to spend 10 Trillion of American money (to supposedly fix the problem), more money total, than every President from Washington to Bush Jr. combined! Our own allies are even imploring you to stop this disastrous course. China is warning you that they are going to buy less, if any at all of our new debt you are having issued, and are afraid they are going lose big time on their investments in our debt because of it. Your policies are destroying the American dollar or is that part of your plan? You continue to have your agents in the Fed and treasury illegaly try to artificially supress precious metals prices, especially Gold and Silver prices by leasing out or outright selling of America’s Gold at a negative basis. Why is their no transparency and accounting of where and how America’s gold is being used. China and Russia are calling for a new reserve currency run by the IMF and where the U.S. Dollar would only represent 40% of the value of the currency basket. One minute you are against that along with Geitner and the next you are both saying that that might be a good idea? Real time inflation. not the conjured, manipulated reports (like yesterday’s durable goods); currently the inflation rate is at 8.5% up another point in just the last month! China and Russia are aware of this and are buying up and increasing their Gold Reserves to protect themselves from Inflation and a falling Dollar. Next you are mortgaging my kids, grandchildren. and great grandchildren’s futures under an onerous, outrageous levels of debt. . So I ask based on these facts alone – Mr. Obama where is your Birth Certificate? If you don’t have anything to hide then why not, just order the State of Hawaii to provide (unseal) the Birth Certificate? What are you afraid of? Mr. Obama prove your eligibility to be the President of the United States…

==============================================

Justice, Supremes confirm getting Eligibility Challenge- World Net Faily

By: Bob Unruh of World Net Daily

© 2009 WorldNetDaily

The U.S. Supreme Court and the U.S. Justice Department today confirmed that documentation

challenging Barack Obama’s eligibility to be president has arrived and soon will be evaluated.

Confirmation came from Defend Our Freedoms, the foundation through which California attorney

Orly Taitz has been working on a number of cases that raise questions over Obama’s qualification to be president under the Constitution’s demand that the office be occupied only by a “natural born” citizen.

Taitz was informed by Karen Thornton of the Department of Justice that all of the case documents and filings have arrived and have been forwarded to the Office of Solicitor General Elena Kagan, including three dossiers and the Quo Warranto case.

“Coincidently, after Dr. Taitz called me with that update, she received another call from Officer Giaccino at the Supreme Court,” the website posting said. “Officer Giaccino stated both pleadings have been received and [are] being analyzed now.”

The report from the Supreme Court said the documents that Taitz hand-delivered to Chief Justice John Roberts at his appearance at the University of Idaho a little over a week ago also were at the Supreme Court.

WND has reported on dozens of legal challenges to Obama’s status as a “natural born citizen.” The Constitution, Article 2, Section 1, states, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 340,000 others and sign up now!

Some of the legal challenges question whether he was actually born in Hawaii, as he insists. If he was born out of the country, Obama’s American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time.

Other challenges have focused on Obama’s citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. The cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.

Further, others question his citizenship by virtue of his attendance in Indonesian schools during his childhood and question on what passport did he travel to Pakistan three decades ago.

Adding fuel to the fire is Obama’s persistent refusal to release documents that could provide answers. While his supporters cite an online version of a “Certification of Live Birth” from Hawaii, critics point out such documents actually were issued for children not born in the state.

WND reported earlier on a proposal by U.S. Rep. Bill Posey, R-Fla., and the criticism he’s taking for suggesting that the issue be avoided in the future by having presidential candidates supply their birth certificate.

“What you should do is stop embarrassing yourself and take the Reynolds Wrap off your head,” MSNBC commentator Keith Olbermann suggested to Posey.

U.S. Rep. Neil Abercrombie, D-Hawaii, has asserted Posey’s judgment is skewed.

“The citizenship of someone who has reached the point of running for president of the United States is not really an issue,” Abercrombie said.

Posey said he made the suggestion because he’s seeking the truth, and “the more and more I get called names by leftwing activists, partisan hacks and political operatives for doing it, the more and more I think I did the right thing.”

Hawaiian officials have confirmed they have a birth certificate on file for Obama, but it cannot be released without his permission, and they have not revealed the information it contains.

John Eidsmoe, an expert on the U.S. Constitution working with the Foundation on Moral Law, told WND a demand for verification of Obama’s eligibility appears to be legitimate.

Eidsmoe said it’s clear that Obama has something in the documentation of his history, including his birth certificate, college records and other documents that “he does not want the public to know.”

Officials for the Obama campaign repeatedly have refused to comment on the questions, relenting only once to call the concerns “garbage.”

Other members of Congress have been reading from what appears to be a prepared script in response to queries about Obama’s eligibility:

Among the statements from members of Congress:

  • Sen. Jon Kyl, R-Ariz.: “Thank you for your recent e-mail. Senator Obama meets the constitutional requirements for presidential office. Rumors pertaining to his citizenship status have been circulating on the Internet, and this information has been debunked by Snopes.com, which investigates the truth behind Internet rumors.”
  • Sen. Mel Martinez, R-Fla.: “Presidential candidates are vetted by voters at least twice – first in the primary elections and again in the general election. President-Elect Obama won the Democratic Party’s nomination after one of the most fiercely contested presidential primaries in American history. And, he has now been duly elected by the majority of voters in the United States. Throughout both the primary and general election, concerns about Mr. Obama’s birthplace were raised. The voters have made clear their view that Mr. Obama meets the qualifications to hold the office of president.”
  • Sen. Sherrod Brown, D-Ohio: “President Obama has provided several news organizations with a copy of his birth certificate, showing he was born in Honolulu, Hawaii on August 4, 1961. Hawaii became a state in 1959, and all individuals born in Hawaii after its admission are considered natural-born United States citizens. In addition, the Hawaii State Health Department recently issued a public statement verifying the authenticity of President Obama’s birth certificate.”
  • U.S. Rep. Rush Holt, D-N.J.: “The claim that President Obama was born outside of the United States, thus rendering him ineligible for the presidency, is part of a larger number of pernicious and factually baseless claims that were circulated about then-Senator Obama during his presidential campaign. President Obama was born in Hawaii.” The response provided no documentation.

Taitz had approached Justice Antonin Scalia during his appearance in Los Angeles before meeting with Roberts at his Idaho appearance. She’s suggested that there was misbehavior at the Supreme Court because some of her earlier papers were not filed properly, nor were they returned to her.

Hers was just one of the issues reportedly presented to the Supreme Court justices in conference for an evaluation on whether a hearing should be held. No hearing ever has been held at that level on the evidence involved. Her Quo Warranto case is pending at the Justice Department. It essentially raises a demand for proof by what authority Obama has assumed the powers of president.

Here is a partial listing and status update for some of the cases over Obama’s eligibility:

  • New Jersey attorney Mario Apuzzo has filed a case on behalf of Charles Kerchner and others alleging Congress didn’t properly ascertain that Obama is qualified to hold the office of president.
  • Pennsylvania Democrat Philip Berg has three cases pending, including Berg vs. Obama in the 3rd U.S. Circuit Court of Appeals, a separate Berg vs. Obama which is under seal at the U.S. District Court level and Hollister vs. Soetoro a/k/a Obama, (now dismissed) brought on behalf of a retired military member who could be facing recall to active duty by Obama.
  • Leo Donofrio of New Jersey filed a lawsuit claiming Obama’s dual citizenship disqualified him from serving as president. His case was considered in conference by the U.S. Supreme Court but denied a full hearing.
  • Cort Wrotnowski filed suit against Connecticut’s secretary of state, making a similar argument to Donofrio. His case was considered in conference by the U.S. Supreme Court, but was denied a full hearing.
  • Former presidential candidate Alan Keyes headlines a list of people filing a suit in California, in a case handled by the United States Justice Foundation, that asks the secretary of state to refuse to allow the state’s 55 Electoral College votes to be cast in the 2008 presidential election until Obama verifies his eligibility to hold the office. The case is pending, and lawyers are seeking the public’s support.
  • Chicago attorney Andy Martin sought legal action requiring Hawaii Gov. Linda Lingle to release Obama’s vital statistics record. The case was dismissed by Hawaii Circuit Court Judge Bert Ayabe.
  • Lt. Col. Donald Sullivan sought a temporary restraining order to stop the Electoral College vote in North Carolina until Barack Obama’s eligibility could be confirmed, alleging doubt about Obama’s citizenship. His case was denied.
  • In Ohio, David M. Neal sued to force the secretary of state to request documents from the Federal Elections Commission, the Democratic National Committee, the Ohio Democratic Party and Obama to show the presidential candidate was born in Hawaii. The case was denied.
  • Also in Ohio, there was the Greenberg v. Brunner case which ended when the judge threatened to assess all case costs against the plaintiff.
  • In Washington state, Steven Marquis sued the secretary of state seeking a determination on Obama’s citizenship. The case was denied.
  • In Georgia, Rev. Tom Terry asked the state Supreme Court to authenticate Obama’s birth certificate. His request for an injunction against Georgia’s secretary of state was denied by Georgia Superior Court Judge Jerry W. Baxter.
  • California attorney Orly Taitz has brought a case, Lightfoot vs. Bowen, on behalf of Gail Lightfoot, the vice presidential candidate on the ballot with Ron Paul, four electors and two registered voters.

In addition, other cases cited on the RightSideofLife blog as raising questions about Obama’s eligibility include:

  • In Texas, Darrel Hunter vs. Obama later was dismissed.
  • In Ohio, Gordon Stamper vs. U.S. later was dismissed.
  • In Texas, Brockhausen vs. Andrade.
  • In Washington, L. Charles Cohen vs. Obama.
  • In Hawaii, Keyes vs. Lingle, dismissed.

=============================================

Federal Criminal Complaint contends Obama Ineligible – WND

By Bob Unruh
© 2009 WorldNetDaily

An ex-military officer has raised the stakes in the ongoing dispute over Barack Obama’s eligibility to be president, filing a criminal complaint against the “imposter” with the U.S. attorney’s office for the Eastern District of Tennessee.

Retired U.S. Navy officer Walter Francis Fitzpatrick III, who has run a campaign for two decades to uncover and try to correct what he believes are criminal activities within the military, accused the president of “treason.”

In his complaint addressed to Obama via U.S Attorney Russell Dedrick and Assistant U.S. Attorney Edward Schmutzer, Eastern District, Tennessee, Fitzpatrick wrote: “I have observed and extensively recorded invidious attacks by military-political aristocrats against the Constitution for twenty years.

“Now you have broken in and entered the White House by force of contrivance, concealment, conceit, dissembling, and deceit. Posing as an impostor president and commander in chief you have stripped civilian command and control over the military establishment.”

He cited the deployment of “U.S. Army active duty combat troops into the small civilian community of Samson, Ala.,” and said, “We come now to this reckoning. I accuse you and your military-political criminal assistants of TREASON. I name you and your military criminal associates as traitors. Your criminal ascension manifests a clear and present danger. You fundamentally changed our form of government. The Constitution no longer works.

“I identify you as a foreign born domestic enemy,” he wrote.

The 1975 graduate of the U.S. Naval Academy in Annapolis told WND that a short time after his complaint was filed he was visited by two U.S. Secret Service agents, but they left after telling him they perceived no threat to the president in the document.

Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join some 350,000 others and sign up now!

Officials with the Knoxville office of the Secret Service told WND the only person who could release information to the media was on vacation and they would not comment on the issue.

Likewise, officials with the U.S. attorney’s office declined to respond to a WND request for a comment.

Fitzpatrick told WND the U.S. Justice Department needs to look into the issue.

WND reported this week that officials at the Justice Department, along with those at the Supreme Court, confirmed that documentation in a case challenging Obama’s eligibility had arrived and was scheduled for an evaluation.

That case is being handled by California attorney Orly Taitz, who is working through her Defend Our Freedoms Foundation to handle several cases raising questions over Obama’s qualification to be president under the Constitution’s demand that the office be occupied only by a “natural born” citizen.

Taitz was informed by Karen Thornton of the Department of Justice that all of the case documents and filings have arrived and have been forwarded to the Office of Solicitor General Elena Kagan, including three dossiers.

Fitzpatrick said he has devoted his career fulltime to investigating issues in military justice and defending wrongly accused soldiers, sailors and Marines. His own career was torpedoed by a court-martial more than 20 years ago over his authorization of the use of a ship’s fund to sent an officer to the funeral for his brother, who had been killed by terrorists.

Fitzpatrick’s situation has been described not only on his own website but forum pages on other websites that deal with military issues.

He alleges his case was fabricated and even his signature was forged by officials connected to his case. He points to the fact that he ultimately retired and was awarded a military pension as support for his allegations.

But he says the new complaint against Obama should define the issue of the president’s eligibility.

“They either have to come and get me or get Mr. Obama’s eligibility proved. He has an officer in his military saying he is guilty of trespass on the Constitution,” Fitzpatrick told WND.

“They can recall me against my will to active duty,” he said. “I would refuse. It’s an illegal order by a man who is not by commander in chief.”

WND has reported on dozens of civil case legal challenges to Obama’s status as a “natural born citizen.” The Constitution, Article 2, Section 1, states, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

Some of the legal challenges question whether he was actually born in Hawaii, as he insists. If he was born out of the country, Obama’s American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time.

Other challenges have focused on Obama’s citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. The cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.

Further, others question his citizenship by virtue of his attendance in Indonesian schools during his childhood and question on what passport did he travel to Pakistan three decades ago.

Adding fuel to the fire is Obama’s persistent refusal to release documents that could provide answers. While his supporters cite an online version of a “Certification of Live Birth” from Hawaii, critics point out such documents actually were issued for children not born in the state.

Hawaiian officials have confirmed they have a birth certificate on file for Obama, but it cannot be released without his permission, and they have not revealed the information it contains.

John Eidsmoe, an expert on the U.S. Constitution working with the Foundation on Moral Law, has told WND a demand for verification of Obama’s eligibility appears to be legitimate.

Eidsmoe said it’s clear that Obama has something in the documentation of his history, including his birth certificate, college records and other documents that “he does not want the public to know.”

Officials for the Obama campaign repeatedly have refused to comment on the questions, relenting only once to call the concerns “garbage.”

==================================================

My Note: Mr Obama, show us you are eligible, where is your birth certificate? – jschulmansr

Follow Me on Twitter and be notified whenever I make a new post!

==================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr

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It’s Still Not Over- Part 2 Obama Where Is Your Birth Certificate?

03 Tuesday Mar 2009

Posted by jschulmansr in 2008 Election, Barack, Barack Dunham, Barack Hussein Obama, Barack Obama, Barry Dunham, Barry Soetoro, capitalism, Chicago Tribune, Columbia University, Currency and Currencies, D.c. press club, Electoral College, Electors, Finance, fraud, Free Speech, gold, Harvard Law School, hawaii, id theft, Indonesia, Indonesian Citizenship, Investing, investments, Joe Biden, John McCain, Latest News, legal documents, Markets, name change, natural born citizen, Oath of Allegiance of the President of the United State, obama, Occidental College, Phillip Berg, Politics, poser, Presidential Election, Sarah Palin, socialism, Stocks, Today, treason, u.s. constitution, U.S. Dollar, voter fraud, we the people foundation

≈ Comments Off on It’s Still Not Over- Part 2 Obama Where Is Your Birth Certificate?

Tags

2008 Election, Barack, Barack Dunham, Barack Hussein Obama, Barack Obama, Barry Dunham, Barry Soetoro, capitalism, Chicago Tribune, Columbia University, Currency and Currencies, D.c. press club, Electoral College, Electors, Finance, fraud, Free Speech, gold, Harvard Law School, hawaii, id theft, Indonesia, Indonesian Citizenship, Investing, investments, Joe Biden, John McCain, Latest News, legal documents, Markets, name change, natural born citizen, Oath of Allegiance of the President of the United State, obama, Occidental College, Phillip Berg, Politics, poser, Presidential Election, Sarah Palin, socialism, Stocks, Today, treason, u.s. constitution, U.S. Dollar, voter fraud, we the people foundation

Wow! What a firestorm I raised when I posted Part 1 yesterday! I was called various names, accused of being an Indnesian secret agent, and more. Everyone went back and pointed out that the “Certificate of Live Birth” posted was the the proof and how stupid was I to keep bringing this up, or that I had “sour grapes”. So let me answer…This “proof” was proven by forensic experts to be a forgery with an edge border around the certificate from a different year than then year when Barak Obama was born.

Yet no one could post an answer to my next statement if I go to get my passport they U.S. Government will not accept that certificate as proof of citizenship; I must go get and provide my actual long form original certified copy of my Birth Certificate. They also could not provide an answer as to why Barak Obama will not produce his. Is he magically somehow above the rest of us as citizens? According to the constitution he is not!  

So I am still very concerned about Barak Obama’s eligibility to be my President. If he is really a legal citizen of the United States then why can’t he just provide his Birth Certificate?  Why is he hiring so may lawyers and legal defense teams to prevent people from seeing his information and keeping it sealed up? What does that information contain that he is afraid of? What does he have to hide?

Could the reason we have this problem is because Howard Dean and the Democrats never vetted their candidate? Just like Obama has not properly vetted his cabinet appointments. This is basic. If they can’t even do that right, how would you expect them to manage your health care? This is the reason we are now faced with this Constitutional dilemma. It is a major issue for anyone who must follow orders from the ‘Commander-in-Chief’, especially all our men in uniform. It can’t be that hard to find out if Obama is really a natural born American. This issue must be resolved, there is no question about it. Let’s get with it folks.    

This all seems surreal. Nothing like this fraud has ever been attempted before in the history of this Country. Who else knows what information are in those sealed documents and aided and abetted Obama in this fraud? Who were the people who was suppose to have vetted Obama? 

Here is this Man is taking up residence in the White House and being in control of everything including our nuclear weapons and no one has seen any documented proof of who this person really is or where he came from. He has also embarked on the largest spending program ever seen in this country which most financial experts agree will provide very little actual stimulus to you or me, the average American citizen. 

I don’t believe that the Attorney General will appoint a special Prosecutor to investigate these charges.

What is the next legal step?

The Supreme Court refuses to hear any of the cases that have been brought against Obama. It seems that may be why Obama had that closed meeting with the Court. He probably told the Justices something along the lines of “I’m not eligible, but if you take a case and rule against me there will be rioting in the streets. At which time I will be forced to call for Martial Law and that will probably lead to Revolution. If you leave well enough alone, they will eventually give up or I will have them shut up”. Either one of these scenarios will surely destroy us, So what happens now?

I will re-iterate this, I hope he can and will just show us bona-fide proof that he is an American citizen. Because as I just stated we will have either revolution or at least rioting in every major city of this country. If he does prove his eligibility I will be one of the first to shout this out from the rooftops! I will immediately publish both an apology and retraction of any and all articles which I have published doubting his American Citizenship. But at the rate Barak is trying to hide his personal information, the amount of money he is spending to keep it hidden is enough to cause ANY sane and prudent man to question what he is doing.

=============================

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================================

More Military Officers Demand Eligibility Proof — World Net Daily

By Bob Unruh of World Net Daily

Plaintiff: ‘In the worst case … it’s going to be revolution in the streets’

Military officers from the U.S. Army, Navy, Air Force and Marines are working with California attorney Orly Taitz and her Defend Our Freedoms Foundation, citing a legal right established in British common law nearly 800 years ago and recognized by the U.S. Founding Fathers to demand documentation that may prove – or disprove – Barack Obama’s eligibility to be president.

Taitz told WND today she has mailed to U.S. Attorney General Eric Holder a request that he “relate Quo Warranto on Barack Hussein Obama II to test his title to president before the Supreme Court.”

The lengthy legal phrase essentially means an explanation is being demanded for what authority Obama is using to act as president. An online constitutional resource says Quo Warranto “affords the only judicial remedy for violations of the Constitution by public officials and agents.”

Requesting the action are Maj. Gen. Carroll Childers; Lt. Col. Dr. David Earl-Graef; police officer Clinton Grimes, formerly of the U.S. Navy; Lt. Scott Easterling, now serving on active duty in Iraq; New Hampshire State Rep. Timothy Comerford; Tennessee State Rep. Frank Nicely and others.  

“As president-elect, Respondent Obama failed to submit prima facie evidence of his qualifications before January 20, 2009. Election officers failed to challenge, validate or evaluate his qualifications. Relators submit that as president elect, Respondent Obama failed [tO] qualify per U.S. CONST. Amend. XX [paragraph] 3,” the document said.

John Eidsmoe, an expert on the U.S. Constitution now working with the Foundation on Moral Law, an organization founded by former Alabama Supreme Court Chief Justice Roy Moore after he was removed from office for formally recognizing the Ten Commandments’ influence in the U.S., said the demand is a legitimate course of action.

“She basically is asking, ‘By what authority’ is Obama president,” he told WND. “In other words, ‘I want you to tell me by what authority. I don’t really think you should hold the office.’

“She probably has some very good arguments to make,” Eidsmoe said.

The letter, dispatched to Holder today, is the latest development in the quest by a multitude of lawyers and plaintiffs nationwide for documentation that Obama qualifies to be president under the requirements of the U.S. Constitution.

WND has reported on dozens of legal challenges to Obama’s status as a “natural born citizen.” The Constitution, Article 2, Section 1, states, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

Some of the lawsuits question whether he was actually born in Hawaii, as he insists. If he was born out of the country, Obama’s American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time.

Other challenges have focused on Obama’s citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. The cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.

Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 300,000 others and sign up now!

Several of the cases have involved emergency appeals to the U.S. Supreme Court in which justices have declined even to hear arguments. Among the cases turned down without a hearing at the high court have been petitions by Philip Berg, Cort Wrotnowski, Leo Donofrio and Taitz.

Taitz’ plaintiffs, some of whom potentially face life-or-death situations in defense of the U.S. Constitution on a daily basis, note that information on Quo Warranto against a federal officer normally is related to the attorney general. But since Holder is an Obama friend and appointee, they are asking for the appointment of a special prosecutor to help in presenting documentation to the Supreme Court.

“This information on Quo Warranto includes action between the United States ex rel. and the State of Hawaii over original birth records of Barack H. Obama II being withheld per Hawaii’s privacy laws. Hawaii’s action obstructs the constitutional duties of election officers to validate or evaluate President Elect Obama qualifications to become President under U.S. CONST. art. II § 1, and amend. XX § 3,” the document said.

Eidsmoe said it’s clear that Obama has something in the documentation of his history, including his birth certificate, college records and other documents, “he does not want the public to know.

” What else could be the reason for his hiring law firms across the nation to fight any request for information as basic as his Occidental College records from the early 1980s, he asked. A separate lawsuit has sought the documents to find out whether they indicate Obama, possibly under the name Barry Soetero, attended the college on aid for foreign students.

Obama’s critics warn of the impending constitutional crisis should it be discovered Obama is ineligible and the resulting chaos of trying to figure out what, if any, of his executive branch orders, should be valid.

According to the online Constitution.org resource: “The common law writ of quo warranto has been suppressed at the federal level in the United States, and deprecated at the state level, but remains a right under the Ninth Amendment which was understood and presumed by the Founders, and which affords the only judicial remedy for violations of the Constitution by public officials and agents.”

Taitz told WND the “relators” include members of the Army, Air Force, Marines and Army and feature recipients of some of the highest honors the nation awards, including the Purple Heart.

One is Harry Riley, a veteran military officer who spent part of his career in the Pentagon. Riley said the issue is basically over whether Americans will allow “the trashing” of their Constitution.

“Myself, along with hundreds of thousands of other warriors, have fought for the U.S. Constitution. The whole issue is one of constitutional crisis, in my judgment. How can an individual become the commander-in-chief, or the president of the U.S., with questions regarding his constitutional qualifications?” he asked.

“The whole idea is that America cannot allow an individual to serve as president who isn’t qualified. It destroys our Constitution. It’s the bedrock of our nation,” he said.

“In the worst case, in the long run, if he continues [to fight revealing his documentation,] it’s going to be revolution in the streets,” he warned.

“It’s simply a matter of producing a $12 birth certificate,” Riley said.

“It’s just mindboggling to think an individual who’s been sworn in as the president of the United States would be so small and be such a hypocrite who would be unwilling to simply show a birth certificate,” Riley said.

Taitz told WND she has assembled a list of about 100 names of people – so far – who are willing to be plaintiffs in such a demand.

Childers told WND he’d be perfectly happy if Obama is legitimate, but the truth still matters.

“I personally admire many things about him,” he said. “But if he’s not legitimate, if he’s allowed to violate the Constitution, what else are they going to violate? Take my guns, and my television, telephone? What’s the limit?”

Taitz told WND she’s asking for the appointment of a special prosecutor, such as the role Archibald Cox played in investigating Watergate.

According to author Chester Antieau in his “The Practice of Extraordinary Remedies,” Quo Warranto is one of the oldest rights in common law.

“The earliest case on record appears in the 9th year of Richard I, 1198,” he wrote. “The statute of 9 Anne c. 20 in 1710 authorized a proper officer of a court, with leave of the court, to exhibit an information in the nature of quo warranto, at the ‘relation’ of any person desiring to prosecute the same – to be called the relator. Early American statutes were modeled after the Statute of Anne and, indeed, the statute has often been ruled to be part of the common law we inherited from England.”

Antieau noted the Pennsylvania Supreme Court has ruled, “Quo warranto is addressed to preventing a continued exercise of authority unlawfully asserted, rather than to correct what has already been done. …”

ts first recognize purpose, he said, is “to determine the title of persons claiming possession of public offices and to oust them if they are found to be usurpers.”

Among those who are subject to its demands, under court precedent, are chief executives in other U.S. governmental positions, including governors and sheriffs.

 As WND has reported on several occasions, none of the so-called “evidence” of Obama’s constitutional eligibility produced thus far is beyond reasonable doubt nor as iron-clad as simply producing an authentic birth certificate, something Americans are required to do regularly but the president still refuses to do.

As Jerome Corsi, WND senior staff writer, explained, “The main reason doubts persist regarding Obama’s birth certificate is this question: If an original Hawaii-doctor-generated and Hawaii-hospital-released Obama birth certificate exists, why wouldn’t the senator and his campaign simply order the document released and end the controversy?

“That Obama has not ordered Hawaii officials to release the document,” Corsi writes, “leaves doubts as to whether an authentic Hawaii birth certificate exists for Obama.”

Although Obama officials have told WND all such allegations are “garbage,” here is a partial listing and status update for some of the cases over Obama’s eligibility:

  • New Jersey attorney Mario Apuzzo has filed a case on behalf of Charles Kerchner and others alleging Congress didn’t properly ascertain that Obama is qualified to hold the office of president.
  • Pennsylvania Democrat Philip Berg has three cases pending, including Berg vs. Obama in the 3rd U.S. Circuit Court of Appeals, a separate Berg vs. Obama which is under seal at the U.S. District Court level and Hollister vs. Soetoro a/k/a Obama, brought on behalf of a retired military member who could be facing recall to active duty by Obama.
  • Leo Donofrio of New Jersey filed a lawsuit claiming Obama’s dual citizenship disqualified him from serving as president. His case was considered in conference by the U.S. Supreme Court but denied a full hearing.
  • Cort Wrotnowski filed suit against Connecticut’s secretary of state, making a similar argument to Donofrio. His case was considered in conference by the U.S. Supreme Court, but was denied a full hearing.
  • Former presidential candidate Alan Keyes headlines a list of people filing a suit in California, in a case handled by the United States Justice Foundation, that asks the secretary of state to refuse to allow the state’s 55 Electoral College votes to be cast in the 2008 presidential election until Obama verifies his eligibility to hold the office. The case is pending, and lawyers are seeking the public’s support.
  • Chicago Attorney Andy Martin sought legal action requiring Hawaii Gov. Linda Lingle to release Obama’s vital statistics record. The case was dismissed by Hawaii Circuit Court Judge Bert Ayabe.
  • Lt. Col. Donald Sullivan sought a temporary restraining order to stop the Electoral College vote in North Carolina until Barack Obama’s eligibility could be confirmed, alleging doubt about Obama’s citizenship. His case was denied.
  • In Ohio, David M. Neal sued to force the secretary of state to request documents from the Federal Elections Commission, the Democratic National Committee, the Ohio Democratic Party and Obama to show the presidential candidate was born in Hawaii. The case was denied.
  • Also in Ohio, there was the Greenberg v. Brunner case which ended when the judge threatened to assess all case costs against the plaintiff.
  • In Washington state, Steven Marquis sued the secretary of state seeking a determination on Obama’s citizenship. The case was denied.
  • In Georgia, Rev. Tom Terry asked the state Supreme Court to authenticate Obama’s birth certificate. His request for an injunction against Georgia’s secretary of state was denied by Georgia Superior Court Judge Jerry W. Baxter.
  • California attorney Orly Taitz has brought a case, Lightfoot vs. Bowen, on behalf of Gail Lightfoot, the vice presidential candidate on the ballot with Ron Paul, four electors and two registered voters.

In addition, other cases cited on the RightSideofLife blog as raising questions about Obama’s eligibility include:

  • In Texas, Darrel Hunter vs. Obama later was dismissed.
  • In Ohio, Gordon Stamper vs. U.S. later was dismissed.
  • In Texas, Brockhausen vs. Andrade.
  • In Washington, L. Charles Cohen vs. Obama.
  • In Hawaii, Keyes vs. Lingle, dismissed.

Corsi had gone to both Kenya and Hawaii prior to the election to investigate issues surrounding Obama’s birth. But his research and discoveries only raised more questions, the biggest being why, if there exists documentation of Obama’s eligibility, hasn’t it been released to quell the rumors.

Instead, a series of law firms have been hired on Obama’s behalf around the nation to prevent any public access to his birth certificate, passport records, college records and other documents.

=============================
My Note: Mr. Obama, “Why Can’t You Just Provide Us With Your Birth Certificate?” – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account– just click here and then again on the Gold Bar!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

 

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================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

 

 

 
 
 
 

 

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It’s Not Over Yet!- Obama Where Is Your Birth Certificate?

02 Monday Mar 2009

Posted by jschulmansr in 2008 Election, Bailout News, banking crisis, banks, Barack Obama, China, communism, Conservative, Conservative Resistance, Contrarian, depression, Economic Recovery, economic trends, economy, Electoral College, financial, follow the news, Free Speech, Fundamental Analysis, gold, Gold Bullion, Gold Investments, id theft, Joe Biden, Jschulmansr, Latest News, manipulation, market crash, Markets, physical gold, precious metals, Presidential Election, price, price manipulation, Saudi Arabia, silver, socialism, stagflation, Stimulus, The Fed, Today, U.S., u.s. constitution, U.S. Dollar

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It’s not over yet. Obama where is your birth certificate. I mostly blog about Precious Metals Investing, yet even I have some questions for Mr. Obama. No, while I am a conservative I am not a “radical fringe looney conservative” or even a “sore” loser. I have some legitimate concerns. First we have a new President who has never established eligibility to hold his office, this same man is now embarking on the largest spending spree this country has ever seen!

This is supposed to rescue our economy and set things straight with the American Economy. I have several concerns over this such as how now  Obama is ignoring the “earmarks” in the latest bill, this after a campaign promise “no more earmarks”. Next the way we are going to finance this is thru higher taxes, less tax breaks, and a whole lot more debt which America can sorely afford. Are we not selling off our future to the Chinese and Middle Eastern buyers of our governmental debt? I could go a lot more into these economic matters which we have all heard “ad nauseum” over how bad this is for us and especially for the future generations coming up behind us. One fact remains it is under the direction and orders of Mr. Obama.

My next real concern is the fact that almost unannounced and certainly without the press fanfare or opposition, even the vilification the Mr. Bush for his war in Iraq, notably from even Mr. Obama himself! Mr. Obama is sending even more troops into Afghanistan. Oh I forgot, he is going to announce the timetable of withdrawal from Iraq, so at least we will only be fighting on one front; but is this “withdrawal” actually going to turn into a reassignment for the American troops. Also, these troops will be even more cut off from lines of supply than in Iraq. So realistically how much more will this war cost us? Also, do we even have a plan on how we are going to win? Are we going to take over part of Pakistan too? Don’t get me wrong, I want to see Bin Laden and Al Queda destroyed, but all of this is happening under the command of the Commander in Chief, our President Mr. Obama who has yet to even prove eligibility by providing his Birth Certificate. What is up with That?

I f I have to show my Birth Certificate, I gladly do so, not to mention I am legally bound to do so. Why isn’t our president required as the leader and example of our country. If you or I do not show our Birth Certificates when asked face heavy potential liabilities and punishments. How does Mr. Obama get away with this?

FInally, as a Pecious metals analyst, this is great for the long term prospects of Gold and for my investments. Yet I would rather lose all or have losses with my investments than have my country destroyed by a man who can’t even prove he is a bona fide U.S. citizen!

I will have an update later today on Precious metals, if fact Gold retested support early today and then came back to close about $2.50 down to $940 (April Contact). Below in todays articles: It’s not over yet! Good Investing! -jschulmansr

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account– just click here and then again on the Gold Bar!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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 The Birther’s Obama Conspiracy Theory – AOL News

Source: AOL NEWS

‘The Birthers’ Continue to Hound Obama

AOL
posted: 14 HOURS 18 MINUTES AGO
comments: 11534
filed under: Political News, The Obama Presidency
(March 1) – Ever since Barack Obama became a prominent political fixture in the country, he has encountered a large number of rumors and smears concerning him and his family.
There was the one rumor about him being a secret Muslim (he is a practicing Christian). And there was the one allegation his wife, Michelle, was caught on videotape using the word “whitey” (no such clip has ever surfaced).
Most of the charges were, for the most part, put to rest by vigorous responses from the Obama team during the campaign.
But one conspiracy theory lives on — despite overwhelming evidence debunking it.
Politico.com reports that the Birthers — a persistent group of conservatives who believe Obama is ineligible to be president because of alleged questions surrounding his birth status — continue to operate and thrive on the fringe.
“Some individuals and groups who are opposed to Obama’s presidency want an ‘acceptable’ reason to cite to convince other individuals and groups who might be on the fence to join in their way of thinking,” said Patricia Turner, who studies rumors at the University of California, Davis.
For the record, officials in Hawaii declared last October that there was no doubt Obama was born in the state. Officials verified that the health department holds the commander in chief’s original birth certificate.
But others are still undeterred.
A lawsuit filed in California by a group called the United States Justice Foundation seeks records from Occidental College, where Obama attended school for a period, in order to verify his nationality — and thus his presidential eligibility, WorldNetDaily reports.
Get the full story about the Birthers at Politico.com to find out about the group’s possible impact on the White House and weigh in, below, on the controversy.
Go to this site to add your vote in the polls about Obama’s Eligibility
==============================
Obama Eligiblility tops AOL NEWS – World Net Dailey

By Drew Zahn
© 2009 WorldNetDaily

 

Internet giant America Online headlined its daily news coverage today with a story and polls covering the “Birthers,” a group of people it describes as “fringe conservatives convinced that Barack Obama is ineligible to be president because of supposed questions surrounding his birth status.” 

 

The AOL coverage quotes an extensive Politico article and cites WorldNetDaily as the source for news on the United States Justice Foundation’s most recent attempt to demand Obama give legal evidence of his constitutional eligibility to serve as president.
 

Politico’s coverage of the questions that still linger over Obama’s birth, however, is far from kind. 

 

 

“Viewed as irrelevant by the White House , and as embarrassing by much of the Republican Party,” writes Politico blogger Ben Smith, “the subculture still thrives from the conservative website WorldNetDaily, which claims that some 300,000 people have signed a petition demanding more information on Obama’s birth.” 

 

Smith then states unequivocally that there is no basis for questioning Obama’s eligibility, that Obama “was in fact born in Honolulu in 1961” and that “long-settled law” resolves his dual citizenship at birth, another fount of legal questions surrounding the sitting president’s eligibility to serve in the Oval Office. Smith cites Hawaii officials who have testified that there do exist records – though unreleased to the public or the courts – verifying Obama’s American birth.

To add fuel to his argument, Smith then quotes from several sources, including radio host Michael Medved, to compile a list of descriptions for those he brands as conspiracy theorists, including the following: embarrassing, destructive, crazy, nutburger, demagogue, money-hungry, exploitative, irresponsible, filthy conservative imposters, the worst enemy of the conservative movement, weird, demented, sick, troubled and not suitable for civilized company.

Politico quotes David Emery, an urban legends writer for About.com, who suggests those that want to see proof of Obama’s eligibility are fueled by revulsion and rage.

“Thanks to the relentless agitation of the conspiracy theorists and the sheer quantity of hypothetical scenarios and legal arguments floating around,” Emery states, “they’ve clearly succeeded in planting unreasonable doubts in reasonable people’s minds.”

As WND has reported on several occasions, however, none of the so-called “evidence” of Obama’s constitutional eligibility produced thus far is beyond reasonable doubt nor as iron-clad as simply producing an authentic birth certificate, something everyday Americans are required to do regularly, but the president still refuses to do.

As Jerome Corsi, WND senior staff writer, explained, “The main reason doubts persist regarding Obama’s birth certificate is this question: If an original Hawaii-doctor-generated and Hawaii-hospital-released Obama birth certificate exists, why wouldn’t the senator and his campaign simply order the document released and end the controversy?

“That Obama has not ordered Hawaii officials to release the document,” Corsi writes, “leaves doubts as to whether an authentic Hawaii birth certificate exists for Obama.”

In its poll, AOL is asking readers: “Do you have any doubt about Obama’s eligibility to be president because of his birth status?”

With more than 250,000 responses, results were nearly split with 47 percent saying yes, and 53 percent saying no.

Readers were also asked, “How damaging is this conspiracy theory to Obama?”

With more than 178,00 responses, 52 percent said “Not at all,” 28 percent said “Somewhat,” and 20 percent said “Very.”

WND has reported on dozens of legal challenges to Obama’s status as a “natural born citizen.” The Constitution, Article 2, Section 1, states, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

Some of the lawsuits question whether he was actually born in Hawaii, as he insists. If he was born out of the country, Obama’s American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time.

Other challenges have focused on Obama’s citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. The cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.

Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 300,000 others and sign up now!

Several of the cases have involved emergency appeals to the U.S. Supreme Court in which justices have declined even to hear arguments. Among the cases turned down without a hearing at the high court have been petitions by Philip Berg, Cort Wrotnowski, Leo Donofrio and Orly Taitz.

The USJF case mentioned in the AOL article was filed on behalf of presidential candidate Ambassador Alan Keyes and others.

As part of the case, a subpoena was served on Occidental College for its records. School officials immediately contacted lawyers for Obama and said the demand would have to be answered unless they intervened.

Obama’s lawyers then submitted a demand to the court arguing the case was moot because the election was over and the correct place to resolve such concerns was in Congress. The lawyers also alleged a variety of procedural errors.

In his response, Kreep pointed out that Obama’s lawyers failed for 27 days to notify the USJF of alleged procedural errors. He said the housing and academic records are of prime importance.

“From those records, statements as to whether MR. OBAMA is, indeed, a ‘natural born citizen’ may be found,” he said.

At the end of February, at least two active-duty soldiers serving in Iraq as well as a retired major general offered to be plaintiffs in a lawsuit challenging Obama’s eligibility.

WND reported earlier when 1st Lt. Scott Easterling confirmed to Orly Taitz that he wanted to be a plaintiff in the legal action she is preparing on behalf of members of the U.S. military, both active and retired. A second soldier who asked that his name be withheld for now became part of the action a day later.

Then retired Maj. Gen. Carroll D. Childers submitted a statement to Taitz and her DefendOurFreedoms.us website, agreeing to be a plaintiff in her pending action.

Taitz explained the issue isn’t resolved as many Obama supporters claim.

The “Certification of Live Birth” posted on the Internet actually doesn’t confirm a birth location, she said.

“[Hawaii] statute 138 allows foreign born children of HI residents to get HI [Certificates of Live Birth] and get them based on a statement of one relative only,” she said.

She also said Hawaiian officials, while they confirmed a birth certificate exists, did not exclude the possibility it was “one obtained for a foreign born child.”

She also cited Obama’s immigration to Indonesia at age 5, when he was considered an Indonesian citizen.

Although Obama officials have told WND all such allegations are “garbage,” here is a partial listing and status update for some of the cases over Obama’s eligibility:

  • New Jersey attorney Mario Apuzzo has filed a case on behalf of Charles Kerchner and others alleging Congress didn’t properly ascertain that Obama is qualified to hold the office of president.
  • Pennsylvania Democrat Philip Berg has three cases pending, including Berg vs. Obama in the 3rd U.S. Circuit Court of Appeals, a separate Berg vs. Obama which is under seal at the U.S. District Court level and Hollister vs. Soetoro a/k/a Obama, brought on behalf of a retired military member who could be facing recall to active duty by Obama.
  • Leo Donofrio of New Jersey filed a lawsuit claiming Obama’s dual citizenship disqualified him from serving as president. His case was considered in conference by the U.S. Supreme Court but denied a full hearing.
  • Cort Wrotnowski filed suit against Connecticut’s secretary of state, making a similar argument to Donofrio. His case was considered in conference by the U.S. Supreme Court, but was denied a full hearing.
  • Former presidential candidate Alan Keyes headlines a list of people filing a suit in California, in a case handled by the United States Justice Foundation, that asks the secretary of state to refuse to allow the state’s 55 Electoral College votes to be cast in the 2008 presidential election until Obama verifies his eligibility to hold the office. The case is pending, and lawyers are seeking the public’s support.
  • Chicago attorney Andy Martin sought legal action requiring Hawaii Gov. Linda Lingle to release Obama’s vital statistics record. The case was dismissed by Hawaii Circuit Court Judge Bert Ayabe.
  • Lt. Col. Donald Sullivan sought a temporary restraining order to stop the Electoral College vote in North Carolina until Barack Obama’s eligibility could be confirmed, alleging doubt about Obama’s citizenship. His case was denied.
  • In Ohio, David M. Neal sued to force the secretary of state to request documents from the Federal Elections Commission, the Democratic National Committee, the Ohio Democratic Party and Obama to show the presidential candidate was born in Hawaii. The case was denied.
  • In Washington state, Steven Marquis sued the secretary of state seeking a determination on Obama’s citizenship. The case was denied.
  • In Georgia, Rev. Tom Terry asked the state Supreme Court to authenticate Obama’s birth certificate. His request for an injunction against Georgia’s secretary of state was denied by Georgia Superior Court Judge Jerry W. Baxter.
  • California attorney Orly Taitz has brought a case, Lightfoot vs. Bowen, on behalf of Gail Lightfoot, the vice presidential candidate on the ballot with Ron Paul, four electors and two registered voters.

In addition, other cases cited on the RightSideofLife blog as raising questions about Obama’s eligibility include:

  • In Texas, Darrel Hunter vs. Obama later was dismissed.
  • In Ohio, Gordon Stamper vs. U.S. later was dismissed.
  • In Texas, Brockhausen vs. Andrade.
  • In Washington, L. Charles Cohen vs. Obama.
  • In Hawaii, Keyes vs. Lingle, dismissed.

WND senior reporter Jerome Corsi had gone to both Kenya and Hawaii prior to the election to investigate issues surrounding Obama’s birth. But his research and discoveries only raised more questions, the biggest being why, if there exists documentation of Obama’s eligibility, hasn’t it been released to quell the rumors.

Instead, a series of law firms have been hired on Obama’s behalf around the nation to prevent any public access to his birth certificate, passport records, college records and other documents.

If you’d like to sound off on this issue, please take part in the WorldNetDaily poll.

Sign the petition

==============================

Watch for Post later today after Markets are closed- My One Question is simply Mr. Obama why won’t you show us your Birth Certificate?- Good Investing! – jschulmansrHere is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account– just click here and then again on the Gold Bar!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

Follow Me on Twitter and be notified whenever I make a new post!

==================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

 

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Are you Secure? and Latest Gold Investing News

04 Wednesday Feb 2009

Posted by jschulmansr in Bailout News, banking crisis, banks, Comex, commodities, computer security, Computers and Computing, Credit Default, Currencies, currency, Currency and Currencies, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, federal reserve, Finance, financial, Forex, gold, Gold Bullion, Gold Investments, gold miners, How To Invest, How To Make Money, hyper-inflation, inflation, Investing, investments, Jay Taylor, Junior Gold Miners, Latest News, Make Money Investing, market crash, Markets, mining companies, mining stocks, palladium, Peter Grandich, physical gold, platinum, platinum miners, precious, precious metals, prices, producers, production, security, Security Suites, SEO, silver, silver miners, small caps, spot, spot price, stagflation, Stocks, Technical Analysis, U.S. Dollar

≈ 2 Comments

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agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Jay Taylor, Keith Fitz-Gerald, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Brimelow, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

Are you secure? If not, you need to be!  It’s a dangerous world out there! An unprotected computer is like leaving your keys in the ignition and walking away! Today’s articles include the latest reviews of Security Suites for your computer and latest Gold news.  Gold yesterday tested the lower end of support at the $885 oz to $895 oz levels. Today Gold has come roaring back up $16 oz to $908.50. I think we are about to retest the $930 level and if we break that then $950. If we clear those hurdles then the next stop will be $1000 + oz. I am buying on any dips and you should be too! – Good Investing! – jschulmansr

==============================

Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

=================================

The Best Security Suites for 2009 – PC Magazine

by Neil J. Rubenking of PC Magazine

Which suite will be best for keeping you safe and not slowing you down this year? We’ve tested them all, and the answer might surprise you!

The list of available 2009-model security suites is now essentially complete. A running theme in this year’s suites is the promise that these new versions will do more for your security while tying up fewer system resources. It’s about time: Users have had it with suites that offer security but bog down the computer. Several vendors have introduced new “in the cloud” technologies to keep up with the accelerating growth of new malware. And many have redesigned their user interfaces to be more attractive and look lighter and faster. Some are new, innovative, and speedy. Others haven’t kept pace. Which are which? I put them all through grueling tests to find out.

Performance Testing

Starting with the 2009 crop of suites, I added an entire day of performance testing per suite to my already lengthy set of evaluations. I wrote and gathered a collection of batch files, scripts, and freeware components to measure how long a number of common activities take on the computer. I ran the scripts many times on a system with no suite installed and then on that same system with each suite installed. Averaging the results let me see just how much each suite affected system performance.

I get a lot of complaints about how long PCs take to boot up in the morning, and many users blame their security suites for lengthening the process. The first part of my test script, therefore, calculates the time it takes from the start of the boot process (as reported internally by Windows) to the time when the system is completely ready to use. “Ready” is a fluid concept—I defined it as meaning that 10 seconds have passed with CPU usage under 5 percent. I ran this test 50 to 100 times and averaged the results; the test system with no suite installed takes almost exactly 60 seconds to boot. Norton Internet Security 2009 and Kaspersky Internet Security 2009 added only about 15 seconds to the boot time. That’s not bad!

Some of the other suites added significantly to boot time. F-Secure Internet Security 2009 and McAfee Total Protection 2009 nearly doubled it, and BitDefender Total Security 2009 more than doubled it. The timings for Webroot Internet Security Essentials (WISE) averaged even higher—almost 2.5 times the baseline. However, the data set included a number of unexplained instances when booting up took 5 or even 10 minutes. Eliminating those quirky outliers brought the average boot time for WISE (the smallest suite) a bit below that of McAfee (the largest suite)—still not impressive.

Real-time malware scanners can kick in on any kind of file access and can slow ordinary file operations, especially if they redundantly scan the same file more than once during the operation. I set up a series of file move and copy actions using a variety of file types and timed how long it took with and without a security suite. Kaspersky added just 2 percent to the time required for this test, and Trend Micro Internet Security Pro added 6 percent. Norton and Panda Global Protection 2009 came in between those two. On the slow side, the system running ZoneAlarm Internet Security Suite 2009 took half again as long to perform the test.

Another of my new tests zips and unzips large groups of files, and my testing showed that this activity takes more of a performance hit from most security suites than moving and copying do. Panda had the lightest touch here, adding just 8 percent to the baseline time. Norton, Kaspersky, Trend Pro, and Webroot all added in the neighborhood of 25 percent to the time. Under ZoneAlarm the zip test took twice as long, and under BitDefender it took 2.5 times as long. That’s dreadful!

Your suite has to keep careful track of software installations so it can prevent malware from installing. I measured the time required for repeated automatic installation and uninstallation of several large Windows Installer packages. Most of the suites added from 20 to 30 percent to this test’s time. Panda excelled again, adding just 6 percent. ZoneAlarm and WISE caused the most drag, adding 63 percent and 71 percent, respectively.

Acting on some reports of problems with media files, I included a test that times some elaborate media file format conversions. None of the suites slowed this test significantly. Their effects ranged from a negligible 1 percent increase by WISE, Panda, and Norton to a still minor 8 percent hit from ZoneAlarm.

Modern suites look at your browsing activity in a number of different ways. They block drive-by downloads, check for fraud, and perhaps block inappropriate content for your kids. To see whether this analysis slows down the browsing experience, I used an ActiveX control that measures when a page has completely loaded, along with a script that launches dozens of URLs with lots of content.

Norton had the least impact on surfing speed, adding 13 percent to the time required for this test. WISE doesn’t do any page analysis beyond checking a blacklist, but it still added 25 percent. Kaspersky and Panda, which did well on most of my other performance tests, slowed browsing by 64 percent and 92 percent, respectively. But McAfee had the worst impact, more than doubling the time required for the surfing test. Given the amount of time the average person spends surfing the Web, this is a bad test to fail.

Check our security suite performance test chart to get full details on each product’s individual scores. Note, though, that in addition to these tests, I considered various other factors. Does the product make a good impression with a speedy and undemanding install process? Is the scan for malware especially fast or slow? Does the spam filter appreciably slow down the process of downloading mail? Are there special features that demonstrably work to minimize performance impact? All these factors go into the final score. In next year’s round of testing I hope to add even more performance tests. In the meanwhile, I’m very interested in getting your feedback on this year’s tests. —next: Security in the Cloud >

Featured in this Roundup:

BitDefender Internet Security 2009 BitDefender Internet Security 2009

$69.95 direct; 3-pack, $79.95
BitDefender has added a ton of new features—online backup and remote configuration, for example. It includes all the expected security elements, with decent performance from most of them. It’s a reasonable choice if you’re excited by those extra features.

F-Secure Internet Security 2009 F-Secure Internet Security 2009

$75.90 direct; 3-pack, $79.90
F-Secure Internet Security 2009 is easy to use, without complicated settings and extras. But installing it was a nightmare, and it took too long deleting inactive malware. The firewall is old-fashioned, and the antispam and parental-control apps are ineffective. The suite hasn’t kept up with the times.

Kaspersky Internet Security 2009 Kaspersky Internet Security 2009

3-pack, $79.95 direct
Kaspersky Internet Security’s new user interface hides messy security details but leaves them accessible to power users. The new application-filtering feature renders the suite smart enough to make its own decisions without hassling the user. As long as you don’t plan to rely on it for spam filtering or parental control, Kasperksy’s suite is a good choice.

McAfee Total Protection 2009 McAfee Total Protection 2009

3-pack, $79.99 direct
McAfee’s latest suite has improved malware detection, and its spam filter is also much better. But its overabundance of features hasn’t changed at all; its UI is sluggish; and it saps system performance.

Norton Internet Security 2009 Norton Internet Security 2009

3-pack, $69.99 direct
This is definitely the slimmest, most unobtrusive Norton ever. Its protection is top-notch where it counts, though antispam and parental controls are still weak. As the best all-around security suite to date (I’ll be installing it myself), it’s our new Editors’ Choice.

Panda Global Protection 2009 Panda Global Protection 2009

$69.95 direct; 3-pack, $89.95
Except for the new main screen, Panda’s 2009 suite doesn’t look much different. Its collective intelligence promises better protection, but its action is spotty: Spam filtering got much better; spyware protection got worse. And it’s expensive! Wait for next year’s version if you’re thinking of switching to Panda.

Trend Micro Internet Security Pro 2009 Trend Micro Internet Security Pro 2009

3-pack, $69.95 direct
Trend Micro Internet Security Pro v2 is a big improvement over last year’s edition. It’s an effective anti-malware tool, and it’s loaded with Pro features that are truly useful. If you’ve sworn a lifelong grudge against Norton (our Editors’ Choice suite), give Trend Pro a try.

Webroot Internet Security Essentials (2009) Webroot Internet Security Essentials

3-pack, $59.95 direct
WISE omits features that other suites include yet still slows down system performance. Its malware protection is excellent, and it delivers 2GB of online backup, but its firewall component doesn’t do the job. Spend $10 more and get Norton or Trend Pro!

Scheduled Scanning ZoneAlarm Internet Security Suite 2009

$49.95 direct; 3-pack, $69.95
ZoneAlarm is strong on defense. It has a tough firewall and keeps malware totally out of a clean system, but it’s less effective in cleaning up entrenched malware, and some of its features are antiquated. ZoneAlarm is still a fine choice, but I had hoped for a makeover that would be more than skin deep.

CA Internet Security Suite Plus 2009CA logo

5-pack, $79.99 direct
There’s little to love in this Frankenstein’s monster of a suite. Patched together from many separate mediocre tools, it put the biggest drag on system performance of any suite tested. Save ten bucks and get Norton’s suite (or Trend Micro’s) instead.

Comodo Internet Security 3.5Comodo

Free
For free security Comodo’s firewall is still a sound choice, but the antivirus and antispyware parts of this suite just don’t do the job. If you need free security, get the firewall alone and add avast! or AVG for free virus/spyware protection.

Security In The Cloud

The number of different malware threats and variants released every day is increasing exponentially, and with it the size of the signature files needed by security software to detect these threats. Security vendors have handled this problem in part by using heuristic techniques that allow one signature to match multiple threats. This year several vendors have introduced new technology that moves the signature database at least partially off your local computer and into the cloud. All of these technologies require an Internet connection to function, of course.

Panda calls its new cloud security technology collective intelligence. The suite retains a local malware database of the most common threats and threats that can propagate without an Internet connection. For files not identified by the local list, Panda Global Protection 2009 sends a tiny checksum to the online database to see if it matches the checksum for a known bad program. It’s a good idea and may work eventually, but I didn’t see evidence of improved malware detection when testing Panda.

The Artemis technology in McAfee Total Protection 2009 aims to eliminate the gap between detection of a new threat and protection against that threat. When the local McAfee installation detects slightly suspicious behavior in a file that’s not in its local database of threats, it shoots a checksum off to the Artemis database of known good and known bad files. It’s similar to Panda’s system, but, unlike Panda, McAfee showed a marked improvement in its malware detection.

Symantec’s Norton Insight takes a rather different approach. It leverages data collected from over 25 million Norton users to create a database of known programs and uses proprietary statistical analysis to assign a trust level to each. Skipping known trusted programs markedly speeds up scanning. Symantec researchers believe that statistical methods may in time completely replace familiar signature-based malware detection. It’s certainly effective in combination with regular signature-based detection: Norton scored better than any other suite or standalone antispyware utility on the current round of tests. —

next: Makeovers, Shallow and Deep >

Security suite vendors have finally caught on to the fact that most of their users aren’t security geeks. Users want the product to work; they want it to show that it’s working; but they don’t want any interruptions or confusing queries. Judging from what the vendors have done this year, they also want it to look nice. Many of the suites discussed here have significantly changed their main windows since last year. Click on our security suites interface slideshow to see how the suites have changed.

F-Secure and McAfee bucked the makeover trend. Other than a minor change in color palette, F-Secure looks exactly the same, and only the sharpest eye could detect any difference in McAfee’s 2009 edition. The biggest change for Trend Pro is a new My Home Network tab on the main screen; other changes are relatively minor.

Kaspersky moved things around and smoothed out the overall visual effect, but it’s not too different. BitDefender—the quick-change artist of the group—has undergone some big changes. The 2008 edition swapped 2007’s blocky, utilitarian look and red and silver color scheme for a super-simplified big-button view reminiscent of Microsoft’s OneCare, and the 2009 edition of BitDefender is another complete makeover.

ZoneAlarm has changed the most of all. For years, it has used an awkward dual-tab system, which left some users confused about where to find features, and a hodgepodge of bright-colored icons. ZoneAlarm 2009’s interface is much more coherent, both in function and appearance. Norton has made some big changes, too, getting rid of the confusing separate “Norton Protection” tab. Check the slideshow for before and after pictures.

So, do these radical changes in appearance represent big improvements in functionality? In most cases, no. The biggest exception is Norton: In addition to merely cosmetic changes, it has also streamlined its protection and added visuals for performance-related features such as Norton Insight and the handling of security tasks in idle time.

In the past I’ve given each security suite separate ratings for Firewall, Antivirus, Antispyware, Antispam, and Privacy/Parental Control. With this round of suite reviews I’ve added a Performance category and separated Privacy and Parental Control. Of course, some components are more important than others. I give much more weight to the firewall, antivirus, and antispyware components, as well as to the new Performance index. The attached chart pulls together the individual component ratings for the 2009 suites, so you can focus on choosing one that’s strong in the areas you need most.

Norton Internet Security 2009 excelled in the most important areas—firewall, antivirus, and antispyware—and it did so with little affect on performance. Its antispam and parental-control elements are dismal, but many users don’t need those. Norton remains our Editors’ Choice for 2009. Those who’ve sworn off Norton’s suite for life (there are some who can’t get beyond its past performance problems) should consider Trend Micro Internet Security Pro 2009. Its scores are impressive, if not quite as high as Norton’s, and it does well in all areas, including those where Norton falls down. Click the links below for full reviews.

Suites Keep Coming

The number of players in many industries keeps shrinking as small vendors fail or get eaten by bigger ones, especially in the current financial climate. Not so with the makers of consumer-side security suites! Some vendors take a single-focus product, such as an antivirus or a software firewall, and parlay it up into a suite. Others modify their Enterprise-level products hoping to generate a separate revenue stream on the consumer side. These new suites haven’t necessarily settled into the “fall model year” schedule adopted by their existing competitors. In fact several have popped up since my roundup of 2009 suites. The current top suites don’t have to worry about the competition yet-all three of these newcomers need work-but the category as a whole is clearly healthy.

TrustPort is well-known for its Enterprise and gateway products but hasn’t been a force in the consumer market. Recently the company quietly released a consumer version of its TrustPort PC Security 2009. The product has some features not usually found in consumer products-one, an antivirus/antispyware solution runs multiple detection engines, another provides a feature for managing Public Key Infrastructure encryption. But the PKI features really need Enterprise-level support, the virus/spyware protection isn’t top-notch, and the firewall manages to be both obtrusive and ineffective. Not only that, the suite seriously slows system boot time and Web browsing. Consumers want a suite that does the job quietly and without generating problems-this isn’t it.

Comodo added virus and spyware protection to its existing Comodo Firewall Pro-thus was born Comodo Internet Security 3.5, a minimalist suite that doesn’t include antispam, privacy protection or parental control components. It does have the virtue of being free, though. But while the firewall module is admirable, the added virus/spyware protection just doesn’t do the job. The product scored dismally in my malware-removal test, did a poor job of keeping malware out of a clean system, and popped up multiple alerts for many perfectly valid programs. And it had more impact on system performance than I expected for such a lightweight suite. If you need free security, use the Comodo firewall and get your virus and spyware protection elsewhere.

CA (formerly Computer Associates) isn’t new to the security-suite market, but its latest version is significantly changed. Unfortunately, the changes in CA Internet Security Suite Plus 2009 went in the wrong direction. The software is weak in almost every area. Its completely separate virus and spyware scanners scored poorly both at malware removal and at keeping rogue software out of a clean system-only Comodo scored lower. The firewall resists malware attacks but bothers the user with many queries; with its Safeguard features enabled it seriously interferes with many valid programs. This pieced-together collection of security elements offers so-so protection while putting more of a drag on system performance than any other suite I’ve tested

Click here to compare the security suites featured in this roundup

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My Note: Well there you have it. This year at least I don’t have to run out and buy new Security Software, I use Trend Micro which is ranked second. -jschulmansr

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Gold and Oil Top Peter Grandich’s Shopping List – Seeking Alpha

Source: The Gold Report

Peter Grandich, creator and producer of The Grandich Letter for a quarter century, allied himself with AGORACOM in October, bringing his well-known and oft-quoted commentaries to a far wider audience than his subscriber base and financial media such as The Wall Street Journal, MarketWatch, CNN, GlobeInvestor, Financial Post and BNN. Breaking away briefly from his recent blogging, the veteran Wall Street watcher and investment advisor tells The Gold Report readers what he likes looking forward—gold (up to $1,000) and oil (between $35 and $40). Also high on his list: uranium (for the nuclear renaissance), junior miners (a select few), and Canadian banks (pretty much all of them). 

The Gold Report: Judging from opinions you’ve expressed in recent newsletters and blogs, you clearly believe we will be testing the November lows during the first quarter this year. What is some of the logic behind why you think that will happen?

Peter Grandich: My belief has been that if and when the U.S. stock market bottoms, along with the economy, it will be an L-shaped bottom, not the V that so many on Wall Street keep talking about. The problems that brought us here persist. In fact, they’ve gotten worse over time, which gives me even more reason to believe that we’re going to bottom eventually but not go far off that bottom once we do. The logical viewpoint for us to take at this point is to look for a market to make at least a double bottom, if you don’t believe it’s a V bottom. Obviously, if it’s a V, you only have one time you’re at that low.

The November lows are, I suspect—as I’ve said recently—are not a question of “if” but “when.” A strong bounce is likely to come off that because the remaining bulls who aren’t totally bloodied would look and hope for that to be an opportunity to get more long if they’re not already 100% long.

The view we’ll have to take after that is watch the bounce, see what type of volume and breadth it has. The problem with rallies we’ve had all through this decline is that neither their volume nor breadth has been half as strong as in the declines; that is always an earmark that the bear market is continuing and that rally is a countertrend. So that’s another thing to look for when and if we catch those lows.

TGR: You mentioned that maybe we should be looking for a double bottom. If we go back and re-test the November lows, is that our double bottom? Or would you expect to go through the November low?

PG: I still suspect we’re going to go through it, but we have to be able to change our views as the markets change. The only way bouncing off that bottom and then turning up past 9000 on the Dow—that would be the only technical factor that would suggest to me that the bear market was over. My feeling is that even if we do hold that November low, we are going to have a very long trading range on the Dow of somewhere between 7500 and the 9000 that we rallied to twice the last year but have failed to go through.

Rather than trying to catch a falling sword and usually getting their hands sliced by it, quite frankly I think what’s best for investors would be to be certain or fairly certain that a bottom is put in and miss the first 10% or 20% to the upside. I think if and when we do break out above those numbers, we’ll also be hearing things on the economic side getting better.

Now, that’s not my bet right now, but I think you always have to have a plan to possibly change your view and be set for it if certain things happen. My most likely scenario continues to be that this economy will be very weak throughout 2009, and not just the first half that the bulls keep talking about. And we don’t have any real hope of a sustained equity bull market at least until 2010 at the earliest.

TGR: Your writing is bullish on oil, though.

PG: Yes. We suggest that people contain any oil purchases between $35 and $40—not above $40 at this point. Oil longer term is far more likely to be higher than that level than equities looking out the same timeframe. If people are still willing to look out three to five years versus three to five days, I think oil is a better risk-reward at this point than the U.S. equity market.

TGR: Are you talking about buying oil as a commodity or purchasing oil equities?

PG: Both. What I do like especially about Exchange Traded Funds now is the ability to have a bunch of oil stocks within them. No-load funds are still a good way to go with equities for those who are very long-term oriented. But ETFs are a better vehicle for investors because you can buy and sell as many times as you want during the day, not just get the end-of-the-day price when you sell your mutual fund. Both are useful. But either way, I think you need to track the actual commodity as well as oil stocks.

TGR: Your blogging suggests that you think precious metals sector also will do well, even in 2009?

PG: Yes, I continue to believe that; in fact, I believe the best investment right now is gold. Not because I think the world’s coming to an end; quite frankly it won’t matter if you have gold if there’s truly an end-of-the-world scenario. And I am not a gold bug; I’ve been bearish on it at times.

Nevertheless, thanks to the credit crisis, which is taking place in all four corners of the world, I do believe people around the globe are realizing that paper money may not be the best safe-haven investment. And although gold did not go up in 2008, it did serve its purpose by being an insurance hedge. Whether they’re professionals or just individual investors, no one I know would mind having been even for 2008 versus the heavy losses they took. So, gold did its job; those who put money in gold didn’t see the losses that everybody else suffered.

But I believe now that we’re going to see capital gains opportunities in gold for 2009 and into the foreseeable future. The market has all the fundamentals that one would want right now. There’s a declining supply, which will decline even further because those who normally look for gold, the junior resource stocks, have been so hammered that we’re not going to see a lot of new exploration for some time.

The few companies that will be going into production will be a premium. The excess supply that used to come into the market, particularly from central banks, has dried up. We’re also seeing tremendous physical demand; in fact, throughout 2008, it was very difficult for people to acquire physical gold. Coins and bars that used to be readily available were in such demand that there became a shortage. In fact, if you wanted to purchase physical bullion, you were paying 10% or more above the spot price.

People say that should have caused a dramatic rise in the gold price. The paper market is still driven by the COMEX, where the futures trade. Unfortunately, some people claim, that market has been manipulated. I can simply say that the paper market has not mirrored the physical market. I believe the physical demand eventually will overrun what is not happening in the paper market. Once that occurs and once we’re above a $1,000 and stay there for more than a week or a month, I think we’re going to see a lot more money pour into gold. I don’t know about $2,000 an ounce for gold, but once that money starts to pour in I still think $1,200 gold and $1,400 gold— even $1,500—is a very variable, useful and likely target.

TGR: For 2009?

PG: More likely in 2010. The only way I see it happening in 2009 is if we really see worse economic conditions and financial Armageddon. Right now thanks to this historical presidential election in the U.S., there is a mild—if misplaced—hopefulness that somehow the new administration can magically do something in a week or a month or a couple of months that the group before couldn’t do in several months, if not years. Once this hopefulness wears off and people realize they face the same difficulties in fixing a horrendous problem, we could see even more pressure in the credit market and in the equity market. If that’s the case, money has to go somewhere.

What’s been most interesting, a couple of weeks back, the Treasury market—where most people ran to in the last downturn—actually started selling off, especially on the longer end. I think part of that money is going to find the gold market.

TGR: Are you looking at gold as a precious metals purchase as in physical gold or ETFs? Or in this case do you see plays to be made in equity shares?

PG: There are equity plays to be made. I think first you want to have some physical bullion. One of the things I learned as a hard lesson—and as many other people did in 2008—sometimes mining shares, particularly the juniors, don’t track gold. During a large-scale liquidity crisis, people sell everything they own, including juniors. Even so, I think we’ve seen the industry destroyed as much as it possibly can be. The companies that have managed to stay around, particularly those that are going into production soon or are already in production, will have a big bounce back. Unfortunately, many of the pure exploration companies that haven’t come close to identifying a mine may not survive—but those failures actually enhance the prospects of the survivors. Money will flow into them long before it flows into the small exploration companies.

TGR: Do you have any favorites as you’re looking at these near-producing or producing companies?

PG: Sure. In fact, we’ve just been engaged by Hawthorne Gold Corp. [TSX.V:HGC] to help with corporate development services. I have to point out that I have a prejudice there simply because I’ve been aware of the management team for years. When I was a fund manager and a hedge fund manager, I purchased and did very well with the companies they were involved with. I am speaking of El Dorado Gold Corporation (EGO) and Bema Gold. Both principals at Hawthorne Gold were founders of those previous companies and helped develop mines. Hawthorne Gold has made a series of acquisitions and is going into production, apparently in 2009. As I said earlier, those are the types of companies that I think are going to be attractive first and are likely to see a big rebound, even though they have suffered in seeing their share price decline.

And Hawthorne has the management team, has the finances, and is mining in an area of the world where they don’t have to worry about political problems. British Columbia, most of Canada, and even the U.S. are probably the safest places to explore and mine right now. And, of course, that’s where they’re concentrated on. So they seem to have all the ducks in order and have the ability to prosper at the expense of some others who are not in the position that they are.

TGR: A big focus now for people who are investing now in equities are the balance sheets, specifically cash in the bank and how long a company can survive without going to the capital markets. Can you speak a bit about that regarding these companies?

PG: There’s no question that financing has all dried up in every sector, and the junior market is no different. The good news is that El Dorado has been able to raise enough capital to see themselves through production. Once production starts, obviously cash flow becomes important. I believe we’ll see a lessening of that tightness in those companies that are looking particularly for gold or precious metals as their main focus because of the expectation that the gold price is going to rise and attract people’s eyes while everything else is seemingly not moving in the world.

So, I think if we look into the second half of 2009 and 2010 when companies like Hawthorne may need to come back to the market, I think the market will be more conducive to raising money than it has been or is now.

TGR: How was El Dorado able to raise money to go through production?

PG: Both Mike Beley and Richard Barclay were senior managers and directors at El Dorado in its early days. (Both Beley and Barclay are Hawthorne Directors; Beley is also Chairman, while Barclay is also President and CEO.) They helped raise a lot of money and bring mines into production. They also were able to do the same thing with Bema, which Kinross Gold Corporation (KGC) eventually bought for something like $3 billion.

When financiers look at companies, they’ve learned that the real important thing in juniors is management. Metals mining has a few different ways to go at it and all, but it’s not very exotic. So the likelihood of seeing their monies do well is really going to fall on the management team’s shoulders. It stands out when you have a management team that has demonstrated at least once—and these gentlemen have done it twice—the ability to develop a company and bring it into production. And let’s not forget that for every little junior that looks for metals and goes into production, 95 or so don’t go the whole nine yards. That stands out. That is always what impressed me about these gentlemen, why I used to be involved, and put money in El Dorado and Bema, and why I would want to associate with their company now. They are clearly standouts as managers in an industry where failure is the norm.

TGR: What do you think about Bravo Venture Group [TSX.V:BVG]?

PG: There is another company that’s made just outstanding discoveries and demonstrated an understanding of the deposits. They continue to put out great drill results—excellent results of deposits that are developing very nicely. And also, it’s a company with the ability to demonstrate that they have enough support out there despite terrible financing conditions. They’ve been able to complete a financing recently that is going to move them forward. And they’re in a very good area of the world; as I said earlier, Canada and America are the safest places to look right now. So Bravo Ventures, too, I believe is one of the companies that will move forward to production. I suspect that they may not want to run the production, though, so there may be a sale or some type of a joint venture.

TGR: How about Bravo’s management team?

PG: Really what got me interested is somebody I worked with in the past and offered me an opportunity to do so again. As I said, I make my bets on management, and even some great management teams still don’t go all nine yards. But just like the quarterback is the most important position on a football team, management is in juniors. I go a long way back with Robert Swenarchuk, who’s head of Bravo’s Corporate Development and a member of Board of Directors. He is the one who made me interested in this and showed me why this deposit could develop. He was right. I’m a people better, and especially in the junior markets, and there again is another reason—because I have such faith in somebody who has an active role in the company.

TGR: You also follow ATW Gold Corp. [TSX.V:ATW].

PG: Just like you find out who your real friends are during tough times, you learn which people really know what they’re doing during tough times. It was easy when everything was flying; even the pigs were flying. ATW was able to secure a very advanced-stage mine that its previous owners had to liquidate because they had financial problems, and then brought in a very top-line management team that had experience in that area. On top of that, several months ago they switched their currency from Australian dollars to Canadian dollars. So they used the currency situation to make a gain of almost $1.5 million and at the same time avoid having to go the market and advance their project.

Here, too, is management. I’ve known Graham Harris, one of ATW’s Directors, for almost 20 years. He’s always been a straight shooter, particularly when he was in the financial arena, and finding a straight shooter in the financial arena is like finding a needle in a haystack. So I’ve always had confidence in his honesty. He was very excited about this project. He brought me in about a year ago; it just keeps being advanced. We should be in production there in short order. If you notice, I’m trying to concentrate on companies that are either close to going into production or are in production now.

And there again, in my opinion, they are going to be a survivor of the juniors’ dismay and then be there when the market eventually rebounds and comes into a bull market again. They will be among the leaders in the juniors segment.

TGR: Do you have any other companies under that umbrella?

PG: My favorite, favorite company—and it is my largest personal holding so I speak from a biased standpoint—is Northern Dynasty Minerals Ltd. (NAK). It has the largest undeveloped copper-gold deposit in the world. It’s in Alaska. The numbers are crazy—94 million ounces of gold, 72 billion pounds of copper. It is currently in a venture with Anglo Gold (AU) where Anglo can purchase 50% of the project by spending up to $1.4 billion. They’ve already spent a couple hundred million in further developing the project and advancing it to a pre-feasibility study.

It also has a 19.9% ownership by Rio Tinto (RTP). It had a 10% ownership by Mitsubishi, but Mitsubishi has been buying shares continuously in the open market lately. I suspect they’re heading to 19.9% ownership too.

If and when the market returns to people interested in precious metals or even base metals, there’s no question that at least one of those companies will want to own at least half, if not the whole deposit. Northern Dynasty’s stock came down a lot because all stocks came down. It is ridiculously priced at few dollars a share, but I believe when this eventually is done it will sell for multiples of where it is now.

TGR: Why wouldn’t Anglo buy it now while the price is depressed?

PG: Like everybody else, they don’t think time is against them. They realize this is a bear market. They also realize that they’re going to need current management’s support. Current management has about 20% of the stock; and as I said, their opposition—which are competitors—Rio has almost 20%. So unless they made a very favorably valued price, they’re not going to be able to buy it at current prices or anything close to that.

Hunter Dickinson, which manages this Northern Dynasty, is one of the biggest players in the junior- to-mid-size producers and exploration companies. They know they have to work with all these potential bidders; so they have not really played one against another—but sooner or later it will be one against another. So no one is rushing to drive the price up, but if Mitsubishi is able to acquire 20%, and Rio and management have 20% each, if and when a bidding war starts, there’s only about a 40% float out there. That will be when we really prosper as a shareholder. You need to sit back and accumulate a stock like this now and go on that expectation of what I said turns out be true.

TGR: So, how close is Northern Dynasty to production?

PG: It’s approaching pre-feasibility. We won’t see production for a few more years at least, but it’s so large. It’s 25% of the copper needs for the United States, and it’s on the top of every major producer’s list. We could still see someone else come out from left field that currently doesn’t have a position, but the ones I’ve mentioned certainly have the lead in potentially acquiring the additional stake. The problem for all three of them is that they know they can’t make a low-ball bid, but when they do make a bid for it, they want a bid that’s not going to cause a battle. Since nothing is moving now, they’re just waiting until someone else makes the first move. That’s the difficult part, but you have to speculate that eventually someone will. And when they do you’re going to get a multiple return on what you’re paying for it now.

TGR: In a worldwide recession, given the price of copper, wouldn’t the copper component discount the gold?

PG: The beauty of having so many million ounces of gold is that you can sell the copper for whatever you get, and you get the gold for almost nothing. It’s such a huge deposit; it’s been described that they still will not find the whole deposit by the time our grandchildren are adults. That’s how huge it is. We’re all living on the expectation that someday things will get better than they are now. If and when they do, the demand for the metal will come back again.

There’s an interesting thing about the base metals and even copper. Despite a tremendous slowdown in the world, copper has managed to still be about twice the price it was at the lows of the last big recessions in the ’80s and ’90s. One of the reasons I think that has happened is that most of the major, highly valued deposits had been discovered and drilled off. So one of the reasons copper is not dropping so much is because the operational costs to develop copper is higher than it was several years ago. We’re probably within 10% or 15% of that absolute bottom. It doesn’t mean you start buying now, because it may be a while before it can raise its head. But we’re closer to the end of the decline in copper than we are in the U.S. stock market.

And I must make the point that even if and when I become bullish on equities again, someone is going to have to be over-weighted in foreign stocks. One of the first things I’m looking to do once I believe markets have bottomed is to buy Canadian banks.

TGR: What is it you like about the Canadian banks?

PG: Of all the banking systems around the world, the Canadian banks (outside of Toronto Dominion (TD)) is the only group of banks that didn’t get heavily involved in all the CDS markets and all these derivatives. So the Canadian banking system is one of the places I think will be fairly safe to enter once the equity market has bottomed. They’re on my shopping list right now to eventually look at, but I think they will continue to decline somewhat until the markets themselves bottom.

TGR: One of your blogs suggests that uranium has bottomed out and we’re going to see it up in triple digits in 24 to 36 months. What about this year?

PG: I don’t know so much about the price in 2009. Uranium has seen its worst days in my view. I do believe we’ve seen the bottom and I believe it can tick up. The real factor will be how much the new U.S. administration is truly going to look at alternative energy. It’s one thing to say it during a campaign, but how much will Obama turn to alternative energy? When oil was hitting $140 and $150 and Congress was hauling in the principals of oil companies at $150, they can’t haul them in any more at $40. So I don’t know if they’re going to do what so many other administrations have done—and that is to kick the can down the road and let somebody else worry about energy concerns.

That said, it seems to be a serious concern of the current administration, and I think people will realize when all is said and done that the most efficient and effective and perhaps fastest way to increase abilities of getting energy outside of fossil fuels is nuclear energy. And it’s certainly happening around the world. Therefore, I think the uranium price will work its way higher, and I also think it’s only a question of when we’re going to see more nuclear plants built in the United States. Not so long ago, people thought we’d never see that.

A Bronx native, Peter Grandich hit Wall Street 25 years ago after starting an investors’ club while working as a warehouse manager and launching his now-famous publication, The Grandich Letter, which grew to become a leading newsletter analyzing the metals and mining sectors within global stock and bond markets. After only three years on Wall Street, Peter was Vice President of Investment Strategy for Philips, Appel and Walden, a top New York Stock Exchange member firm. He was dubbed “the Wall Street Whiz Kid” after he forecast the 1987 stock market crash weeks before it happened. He then predicted that the market would reach a new all-time high within two years. It did. He said that 2000 would see the end of great mega bull market of the ’80s and ’90s. It was. As long ago as 2001, he thought U.S. banks had gone “overboard in making loans that required near-perfect economic conditions in order to avoid substantial bankruptcies” and expressed concern that some of them “seem to have hidden their problems from the average investor.” In October 2007, he warned investors to “man your battle stations” and prepare for the “unprecedented economic tsunami” that would hit America beginning in 2008. Jay Taylor (Gold, Energy & Technology Stocks newsletter publisher) considers Peter “most remarkable for a successful Wall Street pro…unashamedly independent and outspoken about his views, which frequently are anything but politically correct.”

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Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

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Nothing in today’s post should be considered as an offer to buy or sell or as a recommendation for  any securities or other investments, it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

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Can You Sense It? The Calm Before The Storm

03 Tuesday Feb 2009

Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, Bailout News, banking crisis, banks, bear market, capitalism, China, Comex, Credit Default, Currencies, Currency and Currencies, deflation, depression, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, Gold Bullion, Gold Investments, gold miners, hard assets, How To Invest, How To Make Money, hyper-inflation, India, inflation, Investing, investments, Junior Gold Miners, Latest News, Make Money Investing, market crash, Markets, mining companies, mining stocks, oil, palladium, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, run on banks, Saudi Arabia, Short Bonds, silver, silver miners, small caps, spot, spot price, stagflation, Stimulus, Stocks, TARP, The Fed, Today, U.S. Dollar, Uncategorized

≈ 2 Comments

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agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Brimelow, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

Can you sense it? There seems to be an eerie calm in all of the markets. Could this be the calm before the coming financial storm round 2? Since Gold is considered a safe haven investment in times of financial uncertainty, it would seem to tell us something is about to break wide open. As I enter this post Gold is up $5 oz to $912.50. We saw some retracement yesterday but support levels at $900 oz held. It appears that prices are taking a breather. This comes after an approximate $95 dollar an oz rise in just the past 14 days! As I mentioned in my post from a few days ago It’s Official Gold is in a new Bull Market. 

Quick sample of some recent headlines:

  • The Associated Press writes, “Gold Prices Soar as Investors Flee Wall Street.”

  • The Bullion Vault claims, “Gold Prices Poised to Move Higher.”

  • Forbes observes, “Gold Prices Resume Long-Term Uptrend

  • So What’s next? Read on…-Good Investing! -jschulmansr 

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    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ======================================

    Gold Prices Could Hit $1500, fears Merrill Lynch CIO- Business 24/7

    By: Shashank Shekhar of Business 24/7

     

    Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday.

    Dugan termed his apprehensions of gold striking such a high as a “fear” that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors.

    With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of “the most trusted currency”, Dugan said. “We have never seen such a rush to buy gold. It’s bringing in security and it’s still affordable.”

    Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. “While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems,” Dugan said.

    With reports of declining returns from other investment options, “cash” – keeping money safe in banks and investing in government bonds – is the option in front of investors, Dugan said.

    “Fear” and eventual decline of the greenback are the two factors that will drive gold prices, he said. While commodity markets could also bounce back in the first half of the year, a rebound is likely to be short-lived in the absence of strong US consumer demand.

    Precious metals, led by gold, could enjoy a more sustained rally with gold benefiting from a weakening of the dollar in the second half of the year, Dugan said.

    Dugan said the greenback, which has been strengthening for the past few months, will decline in value by the middle of this year. “That’s when people will begin to realise that President Obama’s policies are not having the desired impact,” he said.

    Investors could also look to private equity, which produced strong returns during the downturns in 1991 and 2001, on an opportunistic basis. Some hedge fund strategies may be worth following but hedge funds should be treated with caution, Dugan said.

    Returns from private equity should remain in single digits in 2009 and a return of beyond 10 per cent should be treated as “fair value”, he said. “Investors should remain cautious. They need to be prepared to take profits. We think any such rally would run out of steam by the second half of the year.”

    Low risk assets could offer private investors the best prospects of attractive returns in 2009 as the world’s leading industrialised nations face recession, Dugan said. With governments around the world striving to tackle the economic crisis, private investors could find value in a cautious approach towards asset allocation. Options include high-grade corporate bonds and high-quality, high-yielding equities in defensive industries.

    “Investors will look to long-term US government bonds as an important barometer of the progress of global recovery,” said Dugan. “Sharply rising bond yields will show that the governments have overspent.”

    While earnings downgrades are likely to dominate the first quarter of 2009, a rally in global equity markets could be on the cards for the first half of the year with consumer and cyclical stocks among the potential beneficiaries, Dugan said.

    Broad equities indices could also offer trading opportunities to private investors. “Equities could outperform as an asset class in 2009 unless there is a serious deflation risk. Our view is that deflation will be avoided,” he added.

    Selective investment in high-grade corporate bonds could also provide attractive returns, Dugan said.

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    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ==================================

    Is a New Cyclical Bull Market on It’s Way? – Seeking Alpha

    By: Simit Patel of Informed Trades.com

     Puru Saxena of Money Matters recently wrote an article entitled ‘Birth of a New Cyclical Bull?‘ in which he offers arguments for why we may see 2009 be a bullish year for equities. His basic points:

     Inflationary actions by the Fed and a declining TED Spread have proven effective in fighting falling asset prices and reducing risk

    • Treasury bonds need to have higher yields or money will go into equities
    • Equities have “overshot” to the downside, thus resulting in excessively low valuations

    I agree with Saxena’s basic premise that the Fed’s actions will be successful in creating inflation in the aggregate; it is only a matter of which asset class will reap the benefits of that inflation, and who will pay for it. The chart below compares various asset classes against one another for the month of January.

    click to enlarge

    A key question we may wish to begin asking and examining is just how much inflation the Fed has really created for us, something that will become more apparent as lending resumes and money that is “on the sidelines” returns to the game. I’m of the viewpoint that the global economy is currently improperly structured, and needs a complete restructuring, one that will likely require abandonment of the US dollar as world reserve currency, a corresponding decline in US consumption, and a significant restructuring of the FIRE (finance, insurance, real estate) economy in the United States.

    From that perspective, an equities rally will be unsustainable, unless there is currency debasement to the extent that all markets rise nominally. If that is the case, though, the inflation will result in significant dollar devaluation.

    Trading Implications: The fall in Treasuries was the story for January, and will be of importance so long as it continues. If money comes out of Treasuries and into equities and commodities, it increases the likelihood of seeing consumer price inflation. As I’ve stated before, though, I expect commodities to outperform equities once money comes out of Treasuries and dollar devaluation resumes. And as all currencies around the world are having trouble, gold will rise as fiat currencies continue to struggle.

    Disclosure: Long gold.

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     Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ===============================

    U.S. Debt Default, Dollar Collapse Altogether Likely – Seeking Alpha

    By: James West of Midas Letter

    The prospect of the United States defaulting on its debt is not just likely. It’s inevitable, and imminent.

     

    The regulatory black holes into which sanity and reason disappear on a daily basis are soon to collapse under the mass of their sheer size. The circle jerk going on among G7 governments has to end – the steady advance of gold, even in the face of a managed price, exposes the real value of the U.S. dollar, as opposed to its apparent value expressed in the dollar index.

    Is 2009 the year that the United States formally defaults? And with that, will the dollar collapse be rolled back ten for one or more?

    There are a lot of reasons to support that theory. To Wall Street economists, such an event is heresy and therefore unthinkable. Yet Wall Street is the very La-la-land that bred the idea of a perpetually indebted nation in the first place.

    Number one among the indicators favoring this scenario is what is happening in the U.S. Treasuries auction market.

    Last Thursday, an $30 billion auction in five-year notes failed to stir the interest of traditional primary dealers. The auction itself was saved by an anonymous “indirect” bid.

    Buyers are discouraged by the prospect of what is expected to amount to $2 trillion total issuance for the full year of 2009. The further out the maturities on notes, the more bearish the sentiment towards them. The only way to entice buyers is through the increase in yields.

    But with yields at 1.82 per cent, five-year notes were met with a demand for 1.98 times the amount offered – the lowest bid-to-cover ratio since September. A sell-off in treasuries began in earnest upon the conclusion of that auction.

    The U.S. Federal Reserve suggested last week that it was going to step up its treasury-buying activity, and the mainstream media interprets this as a form of market support. What it actually is evidence of growing anxiety and desperation on the part of the Fed as the realization dawns that demand for treasuries is progressively evaporating.

    The increased demand for gold as an investment witnessed throughout the last two weeks that has pushed gold to a 4 month high is further evidence that investors across the board are gravitating more towards gold and away from U.S. debt.

    So what is the catalyzing event that will precipitate outright capitulation?

    I think the spin-controlled version of events will make the collapse of the derivatives market the red herring that facilitates the aw-shucks-we-have-no-choice shoe-gazing moment possible, and that’s exactly the parachute the government needs to retain a veneer of credibility – at least in its own delusional mirror.

    The announcement that the CFTC was about to become the target of a regulatory overhaul supports this theory. Consistent with his unfortunate proclivity to hiring foxes to guard chickens, Barack Obama’s choice for CFTC commissioner Gary Gensler was the undersecretary of the U.S. Treasury when the Commodity Futures Modernization Act of 2000 was passed, and is one of its architects. This was the piece of legislation that was put forth to appease the opposition to “dark market” trading in certain OTC derivatives first noisily derided by CFTC commissioner Brooksley Born in 1998.

    Ignoring Born’s admonishments with this act, it exempted credit default swaps (CDO’s) from regulation, resulting in the somewhere between 58 and 300 trillion dollars in value presently under threat if the positions were to be unwound. Because of their unregulated status, counterparties in the largest transactions can simply “roll forward” contracts, instead of the losing party in the transaction covering their loss with a transfer of money. It is this massive “nominal” value that could be the Achilles heel of what’s left of the U.S. banking system, and by extension, the U.S. dollar.

    I don’t arrive at this conclusion because I like making catastrophic outlandish predictions. Its merely the result of following certain logical paths to their most likely outcome based on what has happened in the past.

    In discussions on this topic with editors of top tier financial publications, such speculation is dismissed out of hand, and the argument to refute the likelihood of such outcomes is never brought forward.

    Gold exchange traded funds (ETFs) are now the largest holders of physical gold, and as a proxy for investors who don’t want to be encumbered with taking delivery of the physical, provide a simple way to participate in the gold market.

    United States citizens should bear in mind, however, that should the banking system be brought down completely by the collapse of the futures market, proxies for gold such as ETF’s and bullion funds could theoretically be targeted by a government desperate for possession of value. The risk from security in holding physical bullion is matched by the risk of confiscation by government in these volatile times. Don’t forget, the government confiscated and outlawed private ownership of gold in 1933 in support of an ill-conceived gold standard, which to some extent, was that era’s spin to halt the flight of gold (and real value) from U.S. soil.

    Don’t think for a minute such drastic events are outside the realm of possibility. If somebody had told you in 1998 that a bunch of angry crazy pseudo-Muslims were going to fly jetliners into the World Trade Center, what would you have said?

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    My note: Very Scarey, 10-1 Trade In on Dollars? Gold Confiscated? This is one of the reasons why I use Bullion Vault, check them out for the details…jschulmansr

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    Good Investing! – Jschulmansr

    =======================================


    Nothing in today’s post should be considered as an offer to buy or sell or as a recommendation for  any securities or other investments, it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

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    Gold Taking a Breather but Fundamentals are Stronger!

    02 Monday Feb 2009

    Posted by jschulmansr in 10 year Treasuries, 20 yr Treasuries, banking crisis, banks, bear market, bull market, capitalism, central banks, China, commodities, Copper, Currencies, currency, Currency and Currencies, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Fed Fund Rate, Federal Deficit, federal reserve, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, Gold Bullion, Gold Investments, gold miners, hard assets, How To Invest, How To Make Money, India, inflation, Investing, investments, Junior Gold Miners, Latest News, Long Bonds, Make Money Investing, market crash, Markets, mining companies, mining stocks, Moving Averages, palladium, physical gold, platinum, platinum miners, precious, precious metals, price, price manipulation, prices, producers, production, SEO, Short Bonds, silver, silver miners, spot, spot price, stagflation, Stimilus, Stimulus, Stocks, TARP, The Fed, U.S. Dollar, Uncategorized

    ≈ Comments Off on Gold Taking a Breather but Fundamentals are Stronger!

    Tags

    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Brimelow, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Currently Gold is down $14-$15 dollars per oz. around the $914 level. As I wrote in my last post if we hold this level then $950 will be our next target. If it fails here then we may have a test back to $885 – $890. Either way I’m taking the opportunity to buy on dips since long term inflation is certainly due to happen and Gold is where you want to be when that happens.  Personally, I think $900 to $925 is the new base and we have avery real possibility of $1000+ Gold price before the summer truly begins.- Good Investing – Jschulmansr

    ==============================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ==================================

    Update on the Gold Trade – Seeking Alpha

    By: Trader Mark of My Mutual Fund

    Last Friday we said gold might finally have it’s real breakout here [Jan 23: Could be the Real Breakout in Gold] I wrote:

    Things to like:
    1) a series of higher lows
    2) the trendline of lower highs has been penetrated

    Things to see for confirmation:
    1) any pullback is bought
    2) price prints over October 2008’s highs, signaling the end of “lower highs”

    This was what the chart looked like at the time:

    Now?

    Without benefit of the orange line – you can see condition #1 has been fulfilled – we “backfilled”, tested the area we broke out of and people were eager to buy. On that, an aggressive trader would be buying. A reader mentioned this outcome last week.

    For someone more conservative in orientation, you want to see #2 “a price point over October 2008’s highs” – then we end our half year of lower highs. We are withing spitting distance here with GLD at $91.40 and the October intraday high at $92.

    It’s hard to get behind gold fully because there is no “earnings” behind it; it’s all about sentiment. But the theory is that as all the world’s troubled countries race to devalue their currencies (print, print,print) to “save the system,” a hard asset should retain its value. Silver is likewise breakout out, although silver has a lot of industrial uses as well.

    I hate to chase a move, but from a technical set up, a lot of institutional money could be set to finally jump in here….

    Now the question of what instrument to use – keep it simple or go with a miner? etc.

    Disclosure: No position

    =================================

    My Note- Great call by Trader Makr but I have to ask, why no position Trader Mark? – jschulmansr

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    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =================================

    Fed Monetizes Debt Leading Investors to Embrac Gold – Seeking Alpha

    By: Boris Sobolev of Resource StockGuide.com

    In January gold rose significantly against all major world currencies. In most currencies except in the US dollar and the Japanese yen, gold actually made an all-time-high.

    January Performance

    GOLD / USD 5.3%

    GOLD / EUR 16.7%

    GOLD / AUD 16.5%

    GOLD / JPY 4.4%

    GOLD / GBP 5.8%

    GOLD / CHF 16.3%

    10-Yr Yield 13.0%

    click to enlarge

    At the same time, most capital markets have been falling.

    January performance

    DOW -11.5%

    S&P -11.4%

    NASDAQ -9.0%

    FTSE -6.4%

    DAX -9.8%

    Nikkei -9.8%

    Shanghai -9.3%

    The governments around the world are trying to take initiative while private capital is sitting on the sidelines, preferring the safety of government bonds and precious metals.

    Investors typically do not trust the governments to implement any effective economic solutions. Moreover, this lack of faith in central planning continues to grow since the US government has no other plan of action than to save the old, compromised and untrustworthy financial system.

    What the Federal Reserve together with the Department of Treasury has shown is that they will inject a vast amount of newly created money into a hugely ineffective financial system.

    While in the fall of last year, in fear of devastating deflation, analysts were competing in downward projections for the price of gold, now the competition is to estimate the amount of losses incurred by the financial institutions around the world. The maximum assessment is now at $4 trillion, with Nouriel Roubini coming in close second at $3.6 trillion.

    But the main problem is not so much in the amount of credit losses or the amount needed for recapitalization efforts but in that the new government is committed to continue to transfer huge capital into the hands of the same group of people who were largely responsible for the world financial crash in the first place. Wall Street, though transformed, will remain in control.

    The lack of trust in the ability of insolvent financial institutions to run the modern financial system is moving investors into gold.

    An even more important gold catalyst was the Federal Reserve. In comparing the two latest Fed statements, two things stand out. Here is the evolution in wording:

    December Statement: “In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.”

    January Statement: “In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable economic slack, the Committee expects that inflation pressures will remain subdued in coming quarters. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.”

    December Statement: “The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities.”

    January Statement: “The Committee also is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets.”

    First, the FOMC sees a threat of deflation and second it is prepared to counter this threat by purchasing longer-term treasuries.

    Purchases of long term bonds is the most inflationary move that a central bank can undertake because it represents direct monetization of the government debt and hence an unconcealed debasement of national currency. (This is happening at the same time as the new Secretary of Treasury is chastising China – the main US creditor – for currency manipulation.)

    Why did the Fed make such a determined statement, with one member even voting to begin long term treasury purchases immediately? First and foremost, the real estate market is not showing any signs of life. House prices are falling, time required to sell new homes is rising and most importantly, after a steep fall in December, average mortgage rates began to rise again, reaching 5.34% as of last Friday.

    Since mortgage rates are closely tied to the 10-year treasury yield, the Fed stands ready to buy government debt and help make housing more affordable via low mortgage rates. The hope is that such action would help put an end to a decline in asset prices and stop the deflationary spiral.

    In fact, the latest Fed balance sheet showed that long term treasury purchases have already started, with around $1 billion in notes (5-10-year maturity) purchased for the week ended January 21st. This is a modest amount, but it is a statement that the Fed is ready to do more than just talk. Traders have indeed sensed this development and Treasury Inflation-Protected Securities (TIPS) (TIP) are also beginning to reflect greater inflation expectations.

    Gold investors are also sniffing out the coming price reflation as they piled into the SPDR Gold Shares (GLD) at an increasing rate.

    For the month of January, GLD gold holdings rose 8.2% or close to a record setting 63 tonnes. At this rate, GLD will soon surpass Switzerland in its gold holdings, thus becoming the world’s sixth largest gold owner after the US, Germany, the IMF, France and Italy.

    If the Fed continues to purchase long term treasuries, it is clear that there is only one way for gold and gold stocks and it is up.

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    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ================================

    Gold as Part of a Portfolio – Seeking Alpha

    By: San Olesky of Olesky Capital Management

    Many investors have been thinking about gold recently. Some have considered it because it has been a relatively strong performer with the iShares COMEX Gold Trust (IAU) closing up 5.4% in 2008. It’s up 2% year-to-date as of Wednesday’s close. The iShares S&P 500 Index ETF (IVV) was down 36.94% in 2008 and is down 6.17% year-to-date as of Wednesday’s close. Other investors or traders have bought or considered gold as a classic safe haven.

    My inclination is to refute the efficacy of buying or holding gold for security either in the form of an ETF or, more so, in the case of gold bullion bars or gold coins. However, as the financial crisis became more severe last year, a couple of clients approached me about adding gold to their portfolios. Rather than diplomatically rejecting the proposal, I told them that I would investigate the historic effects of holding gold in a portfolio. Long story short, I found that adding a small, reasonable allocation to gold reduced portfolio volatility substantially and increased return slightly.

    A simple diversified portfolio consisting of 1/3 S&P 500, 1/3 Real Estate Investment Trusts (REITs), and 1/3 10 year U.S. Treasuries would have produced a compound annual growth rate (CAGR) of 8.47% with 11.15% volatility (standard deviation – SD) from 1993 to 2008. For comparison, the S&P 500 produced a 6.67% CAGR with a 20.16% SD. Although few investors would implement this 1/3 – 1/3 – 1/3 allocation, diversification is proving its strengths here. All of these statistics incorporate rebalancing annually.

    Let’s take the same 1/3 – 1/3 – 1/3 portfolio and alter it to include a relatively small allocation to gold. That allocation will be 30% S&P 500, 30% REITs, 30% Treasuries, and 10% gold. Over the same timeframe the portfolio with gold produced an 8.49% CAGR with a 9.86% SD. The portfolio with gold produced a slightly better CAGR with volatility that was 11.6% lower than the 1/3 – 1/3 – 1/3 portfolio. The diversified portfolio with gold produced a CAGR that was 27.3% higher than the S&P 500 and 51.1% less volatile than the S&P 500. The S&P 500 had 4 losing years with the worst being a loss of 37% last year. The 1/3 – 1/3 – 1/3 portfolio had 3 losing years with the worst being a loss of 18.15% last year. The portfolio with gold had only 2 losing years with the worst being 15.74% last year.

    In constructing sound and productive portfolios we would like to include assets that have high returns, low volatility, and low correlation to the other assets in the portfolio. Looking at gold’s average annual returns, relative volatility, and relevant correlations, one should expect that gold would be a constructive addition to many portfolio allocations. In fact, gold even has a relatively low correlation with commodities in general (S&P Goldman Sachs Commodity Index). However, we should learn from the past but not expect it to repeat itself exactly. There is much to be learned from historic returns, volatilities, and correlations of asset classes. With all due respect to history and math, we must use reason when constructing portfolios. I view gold as a very narrow and idiosyncratic asset. So, I do not feel that it is wise to strategically allocate as much as 10% to the asset although the historic, mathematically optimal amount would be higher in the context of some portfolios.

    What did I do? Based on my tests and observations, I bought a little gold last year for some of my clients. I have incorporated a small allocation to gold into their continuing strategic allocations.

    ====================================

    My Note: This is great news even the Non Gold Bugs are become cautiously bullish!-jschulmansr

    ====================================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ====================================

    Finally and extremely interesting article you want to read! Be sure to click on the chart links too…- jschulmansr

    Economy Watch: What if Stocks Were Priced in Gold?- Seeking Alpha

    By: Paco Ahlgren of Ahlgren Multiverse

    “Everything has its limit — iron ore cannot be educated into gold.”

    — Mark Twain

    Several charts have been floating around the Internet for some time, showing the historical Dow Jones Industrial Average, priced in terms of gold. The simplest explanation entails thinking of the Dow divided by one ounce of gold; if the Dow is at 5000, and gold is at 500, then Dow-to-gold is 10. But it’s important to remember as you’re considering this ratio that the Dow is calculated in terms of dollars. So essentially, when we determine the Dow-to-gold ratio, it’s not just a simple ratio of gold to shares in the Dow, but rather it is a three-part ratio — Dow, expressed in dollars, to an ounce of gold.

    Wouldn’t it just be easier to express gold in terms of dollars, or the Dow in terms of dollars? Well, those are certainly useful ratios — and we use them all the time — but what we’re really going after when we look at a historical Dow-to-gold chart is how well the Dow has performed, relative to the dollar, and relative to gold. What have inflationary pressures done to the Dow, in terms of gold and the dollar, over the past century? How have the three components moved in the various historical boom-bust scenarios? The results are interesting.

    Let’s shift gears for a moment. Just off the top of your head, what would you expect stocks to do in periods of inflation? The dollar loses value rapidly, right? And that means prices of goods and services move higher, presumably with wages. So wouldn’t it stand to reason, intuitively, if corporations were making more money as prices increased, profits would increase too? And if profits increase, shouldn’t share prices go higher in response?

    It turns out that inflationary price increases are bad for the stock market, and no period in history establishes this more concretely than the late 1970s and the early 1980s. Interest rates and prices soared, along with the price of gold, but stocks were flat. I want you to think about what I’m saying here: prices in general were going up, and yet the stock market was not. What this means is while stocks, in nominal terms, looked to be relatively stagnant, in real terms they were getting crushed. This is why the Dow-to-gold ratio is so significant as an indicator of relative value.

    There is an elegant, simple truism that comprises every single transaction between buyers and sellers, and yet most people don’t even think about it: whenever you buy something, you are selling something else. When you buy corn, you are selling dollars. When you buy a Ford, you are selling dollars. If you are in Mexico and you buy a chicken, you are selling pesos. Of course, if you came from the U.S., you first sold dollars, bought pesos, and then sold pesos to buy the chicken. I know most of you already understand this concept, but I’m trying to emphasize that even when currency is used, every transaction is merely a trade; that is to say, the transaction is nothing more than negotiation that results in the exchange of two things — whether goods, services, or currency.

    With that in mind, consider this: when prices rise because of inflation (printing of money), it isn’t so much that goods and services are getting more valuable — rather it’s much more accurate to say the currency is simply getting less valuable relative to everything else. If the dollar collapses, for instance, and the cost of a loaf of bread goes from $1 to $20 at the same time a share of Microsoft (MSFT) goes from $20 to $30, then Microsoft is severely under-performing — in inflation-adjusted dollars. A loaf of bread will cost you 20 times what it used to — not because it is more valuable, but because the dollar is less valuable. Meanwhile Microsoft is worth only 50% more. Relative to the dollar, shares of Microsoft are actually losing money — in a big way.

    If you look at a chart of inflation from 1978 to 1982, you’ll notice a huge spike. If you look at a chart of the Dow Jones Industrial average during the same period, you’ll see that stocks traded sideways in a fairly well-defined range over the same period. But that doesn’t tell the whole story; if you adjust for the meteoric rise in prices during that five-year period, the stock market actually performed much worse than the nominal dollar fluctuations presented in the historical chart. In other words, the price of just about everything was going up dramatically, but stocks were not. So if you adjust prices back to “normal” levels, and adjust stocks accordingly, the picture for equities would have been horrible.

    Now for the pièce de résistance…

    Here is a series of charts of historical nominal gold prices (not adjusted for inflation), in several different currencies — the first of which is U.S. dollars. Take a look at the spike in the price of gold from 1977 to 1981. Now, if we go back to our original chart above, showing the Dow Jones Industrial Average, in direct relation to an ounce of gold (Dow-to-gold), you can see that the ratio went roughly 1:1 in 1980 — at the peak of the inflationary price surges. To clarify, the Dow was at about 750, as was gold.

    But didn’t we say that, relative to rising prices, the Dow actually underperformed dramatically? So if you bought gold in the mid-1970s, not only was your investment skyrocketing, but the stock market — which was flat in nominal dollars — was actually doing very poorly relative to rising prices. Bear in mind that both the Dow and gold were priced in terms of nominal dollars at the time; they essentially “cancel out” — that is to say, relative to rising prices, gold also failed to perform as well as the nominal dollar-price. Still, it did offer an excellent hedge against rising prices, and even outperformed during the period.

    What does all this mean? Well, for starters the average Dow-to-gold ratio over the last century has been about 9.5, and we are currently at about 8.5. So you’re probably thinking we’re oversold and due for a correction. In other words, the Dow-to-gold ratio is probably going higher, right? Well that was my first conclusion too, but actually on closer examination it turns out that’s probably not right at all.

    For much of the last century the dollar was tied to gold, and while the relationship was never perfect — and the U.S. government betrayed the union many times, in many different ways — there was at least some relationship, which helped pull the ratio down. Eventually, excessive inflationary printing caught up with the government in the 1960s, and it became clear it wouldn’t be able to honor redemptions against the dollar at the price it had fixed. Nixon essentially defaulted on the U.S. promise to redeem dollars for gold by taking the U.S. off the standard in the 1970s — and this, more than anything else, allowed inflationary pressure to drive general prices into the stratosphere. This was the moment the Dow-to-gold ratio approached 1:1. To fight rising prices, Paul Volcker, the Fed Chairman at the time, pushed the Fed’s target interest rate past 20% and barely saved the U.S. economy from collapse.

    For most of the next 20 years, gold fell and stock prices rose. Meanwhile, the U.S. government capitalized on the lie it had created and printed more and more money. Who really cared? Everyone was making money in the stock market, and prices remained relatively stable. In fact, every time prices failed to act “correctly,” the Fed simply changed the rate at which it would lend to banks. But the illusion of the monetary policy game couldn’t last forever; people used easy money printed by the government to buy assets they couldn’t afford throughout the economy — especially houses. Finally the pressure was just too much, and everything started unraveling in 2007. But the gold market seemed to understand the game couldn’t last, and around 2000 it started a slow, steady rise.

    Relative to everything, the number of dollars in the system in early 2009 is almost incomprehensible. Once de-leveraging reaches its nadir — and it’s coming soon — those dollars are going to hit the economy and drive prices much higher.

    What have we learned about stocks in such periods of rising prices? Not only do they fail to perform, but adjusted for inflationary price pressures, they actually under perform. General prices and unemployment will continue to rise. The consumer will continue to be unable to consume. Corporate earnings and dividends will continue to collapse as a result. Stocks are going lower — probably much lower.

    And what about the price of gold? It will almost certainly continue to increase — not only because people will flock to its long historical stability and consistency, but also because there are simply so many more dollars (and yen, and rubles, and euros) in the world. Remember, the U.S. isn’t the only country printing innumerable sheets of currency. And in that context, remember also that inflationary price increases have almost nothing to do with increased demand, but rather they are the result of currency devaluation and destruction — through printing.

    I just want to share two more charts with you. The first should give you a little perspective — it is a historical chart of gold, in both nominal and real dollars. Notice the real price of gold in 1980 (in 2007 dollars) was $2272 per ounce. If I’m correct about inflation and the fate of the dollar — and I’m confident I am — then we are nowhere near the historical high in gold. But I don’t think we’re merely going to re-test that high — I think we’re going to blow through it as the dollar loses value.

    In the 1930s, as corporate earnings and dividends disintegrated, the Dow lost nearly 90% of its value from peak to trough. The U.S. was a creditor nation with a huge manufacturing base. The dollar was tied closely to gold. Since its peak in October 2007, the Dow has lost less than 50% of its value. The U.S. is a debtor nation with a relatively small manufacturing base. I can’t say it enough: we borrow profusely, we manufacture very little, and we consume gluttonously. Nonetheless, the consumer has now lost almost all his purchasing power, and corporate earnings and dividends are going to suffer massively as a result.

    In 2007, the Dow peaked at about 14,150. To give you some perspective, an 85% drop in the Dow from peak to trough would put it at about 2100.

    I know it’s easy to imagine the Fed has magical powers. I’ve fantasized about such things myself at times of extreme weakness — that maybe the Fed will “somehow” figure out a way to fight and defeat the unprecedented evil specter of inflation it is foisting on its unsuspecting children. Sometimes I do believe that our Lord and Savior Barack Obama will wave his charmed “unicorn horn of change” and all will be well again. Likewise, at times I feel like I could let Uncle Ben Bernanke take me just about anywhere in his helicopter of prosperity. My faith in the reverend John Maynard Keynes runs deep, as I hope, and hope, and hope. I find myself gleefully clicking my heels together and repeating, “the dollar is almighty, and the Stars and Stripes will prevail.” And when I am in this wonderful place, I have confidence that someday soon, we’ll all be buying houses with no money down, and with no jobs. Our driveways and backyards will once again overflow with boats, motorcycles, and sports cars.

    Then I think about the 1930s. And suddenly I am wide-awake.

    Let me ask you a simple question, and I want you to actually think about it. Do you really think we can’t get to the 1930s again? Do you really think that we’re going to return to the exuberant excess of the past few decades? If so, let me disabuse you of the notion: the United States was in much better shape, economically, going into the Great Depression than it is now. Prosperity is not coming back to the U.S. as we know it. We are in a lot of trouble.

    Is a Dow-to-gold ratio of 1:1 so incomprehensible? Again, it has happened before — several times. But I’ll even take it a step further: what about a Dow-to-gold ratio of .5? Or less? I promise you, if the Fed fails to soak up all the dollars it’s putting in the system, that’s exactly where we’re going. And what, you may ask, does the Fed use to “soak up dollars?”

    I’ll be glad to tell you that too. When the Fed needs to take dollars out of the system, it sells Treasuries (which means it buys dollars). The problem is, the U.S. debt-load is astronomical. Who, exactly, is going to buy that debt from the Fed? And at what interest rate? Remember, if the Fed is desperately trying to take dollars out of the system, there can be only one reason: it is scared of rising prices caused by inflation. But if the Fed floods the market with Treasuries, it will achieve exactly the opposite effect it’s looking for — it will cause rates to rise, probably dramatically. Do you really think the Chinese and the Japanese are going to buy Treasuries at a 2% yield if the Fed is panicking and trying to buy dollars to stop an inflationary price explosion? If so, you’re delusional. Chinese and Japanese people are smart. They’re not going to fund an inflationary dollar at 2%. Ever.

    In the past it might have worked. Of course, in the past, the U.S. money supply was much smaller, and our ability to borrow was much stronger. But those days are gone.

    As if I haven’t terrified you enough, the last thing I’m going to leave you with is really scary. It is a link to an excellent article by Mark J. Lundeen, whose insight into this economic catastrophe has been stupefying since long before all of this even started. Embedded in the article is a chart that shows historical dollars-in-circulation, relative to U.S. gold.

    With that, I think I’ll let you do the rest of the math. Sleep well.

    Disclosures: Paco is long gold.

    Copyright 2009, Paco Ahlgren. All Rights Reserved.

    ==================================

    If you have done the math…

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =================================

    That’ it for now – Good Investing – Jschulmansr


    Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments, it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

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    It’s Official- The New Gold Rally Has Begun!

    30 Friday Jan 2009

    Posted by jschulmansr in Austrian school, Bailout News, banking crisis, banks, bear market, capitalism, central banks, China, Comex, Copper, Currencies, currency, Currency and Currencies, deflation, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, Finance, financial, Forex, futures, futures markets, gold, Gold Bullion, Gold Investments, gold miners, How To Invest, How To Make Money, India, inflation, Investing, investments, Junior Gold Miners, Latest News, Make Money Investing, market crash, Markets, mining companies, mining stocks, palladium, physical gold, platinum, platinum miners, precious metals, price manipulation, prices, producers, production, Prophecy, resistance, Siliver, silver, silver miners, spot, spot price, stagflation, Stocks, TARP, Today, U.S. Dollar

    ≈ Comments Off on It’s Official- The New Gold Rally Has Begun!

    Tags

    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Brimelow, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    As it write this Gold is up $22.50 oz to $929.00! It absolutely smashed thru the $920 resistance! If we hold here $950 -$975 is the next level.  Barrick Gold CEO Munk says China to be a big buyer of gold as confidence is lost in the U.S. Dollar. The treasuries bubble is starting to burst and money is pouring into gold!- Good Investing! – jschulmansr

    ====================================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =========================================

    Source: MineWeb.Com

     WORLD ECONOMIC FORUM

    Munk forecasts currency, economy fears will send gold to new record highs

    Whether it’s the currency effect or a reaction to a feeling of uncertainty, Barrick Gold Chairman Peter Munk says gold is more likely to go up than down.

    Author: Barbara Lewis
    Posted:  Friday , 30 Jan 2009

    DAVOS, Switzerland (Reuters) – 

    Gold is likely to hit new record highs, spurred by serious concern about the U.S. currency and doubt about the state of the world economy, the chairman of Barrick Gold Corp. said on Thursday.

    There was even a possibility, although not a probability, central banks, including China’s, might start to switch from dollar holdings to gold, which could cause the metal’s price to treble or more.

    From a gold producers’ perspective, one negative is that the cost of bringing on production has remained high, even as other raw materials, including base metals and energy, have slumped.

    “Gold is at record levels in every currency except dollars. Even within dollar terms it is within a few percentage points of an all-time high at a time when all the other major commodities are falling,” Peter Munk told Reuters at the World Economic Forum meeting in Davos.

    “Whether it’s the currency effect or a reaction to a feeling of uncertainty, gold in my opinion is more likely to go up than down,” the chairman and founder of the world’s largest gold mining company said.

    Spot gold was at $902.80/904.80 at 1817 GMT. It hit a record high of $1,030.80 an ounce in March last year.

    Munk stressed he was merely weighing the odds.

    “It would be stupid to assume commodities prices can only go one way,” he said, adding physical demand for gold jewellery was not high during the economic downturn.

    Gold has been one of the best-performing assets of late, rising in value by nearly 17 percent since late October.

    Investors have bought heavily into physical bullion in the form of coins and bars and physically-backed assets such as exchange-traded funds as a safe store of value at a time of increased volatility in other asset prices.

    Munk said downward pressure on the dollar, partly because of massive U.S. spending to stimulate the economy, would increase gold’s attractions as an investment further.

    Gold usually moves in the opposite direction to the dollar, as it is often bought as a hedge against weakness in the U.S. currency.

    “My personal feeling is that with the rescue packages calling for trillions, not billions… the value of the (U.S.) currency has to go down,” said Munk.

    DUMB TO HEDGE

    His company did not hedge its output for now — meaning it does not use derivatives to insure against a fall in price — and relied instead on the price climbing. In the past its successful hedging allowed it to make the acquisitions that helped to make it the world’s biggest gold miner.

    “It would be dumb to hedge,” Munk said of the current climate.

    His bullishness was underscored by the possibility central banks, including that of major dollar asset-holder China, might start buying gold.

    “If they decide to diversify, we assume into gold, then we start to talk about a trebling or quadrupling of the gold price. It could be followed by Russia or Kuwait.

    “I don’t think it’s likely, but it’s more likely. I would not have said it two years ago …I’m not a gold bug …but it’s more likely than it was two years ago.”

    A strong price climate has meant ongoing investment in bringing on new gold, Munk said.

    “In every other mining area, people are cancelling mines.”

    But declines in other commodities have yet to have a major impact on cost.

    “Marginally yes, but substantially no. For some reason cash costs are tending to continue to increase,” he said, when asked whether investment costs were falling.

    “Energy costs have gone down. It does help, but labour costs are consistently increasing.”

    The one way to reduce production costs is to invest in efficient new mines, Munk said, citing two major new projects in Nevada and the Dominican Republic and a smaller one in Tanzania.

    (Reporting by Barbara Lewis, additional reporting by Jan Harvey in London; editing by Anthony Barker)

    © Thomson Reuters 2009 All rights reserved

    =============================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =============================

    Hedge Fund to Measure Returns in Gold Rather Than Currency – Seeking Alpha

    By: Todd Sullivan of Value Plays

    This is a pretty stunning move. What is even more alarming is the reasoning given.
    From the FT:

    A hedge fund has begun offering investors the chance to have their investment denominated in gold, as worries grow over governments debasing their currencies by printing money.

    Osmium Capital Management, a $178m hedge fund manager based in Bermuda, is launching a new share class allowing investors to hold shares measured as troy ounces of the fund, rather than U.S. dollars, sterling or euros.

    The move follows a surge in investor demand for small gold (GLD) bars and coins held by individuals and gold-backed exchange-traded funds that are holding a record amount of bullion.

    Chris Kuchanny, Osmium chief executive and a former London ABN Amro trader, said he was putting almost all his personal wealth into the new share class: “Investors have voiced concerns that they’re overly exposed to the major fiat [paper] currencies in an environment where the fundamentals of those currencies are clearly deteriorating with governments assuming more debt and having lower revenue and more expenditure.

    This shows a stunning lack of confidence in currencies. It also says that the fund is anticipating inflation to rear its ugly head in a scary way. When it does, the value of the currencies will plummet and gold will rise.

    What is to watch now is whether or not other funds begin to follow. If this becomes a movement rather than an individual act, the crash in currencies could be expedited in a nasty way. Stay tuned…

    Disclosure: No position in gold… yet.

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    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ====================================

    My Disclosure: Long Gold , Gold Etf’s, Gold Miners/Producers, Long Silver, Silver Miners/Producers, Platinum and Paladium Miners/Producers- jschulmansr

    More to follow later today…

    Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments, it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

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    Are You Ready For This? – It’s Back and Ready To Rally!

    29 Thursday Jan 2009

    Posted by jschulmansr in Bailout News, banking crisis, banks, bear market, bull market, capitalism, central banks, China, Comex, commodities, Copper, Currencies, currency, Currency and Currencies, deflation, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, Gold Bullion, Gold Investments, gold miners, How To Invest, How To Make Money, India, inflation, Investing, investments, Jim Rogers, Jim Sinclair, Latest News, Make Money Investing, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, mining stocks, palladium, Peter Brimelow, physical gold, platinum, platinum miners, precious, precious metals, price, price manipulation, prices, producers, production, protection, run on banks, safety, Saudi Arabia, security, silver, silver miners, spot, spot price, stagflation, Stimulus, Stocks, TARP, Technical Analysis, Today, U.S. Dollar

    ≈ Comments Off on Are You Ready For This? – It’s Back and Ready To Rally!

    Tags

    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, Mark Hulbert, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Brimelow, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Are You Ready For This! You are asking yourself “am I ready for what?””What’s ready to Rally?” Gold my friend is the answer! As I write Gold is consolidating right around the $900 level. If you had listened to me you would be sitting on profits of $50- $100 oz. already! Well don’t worry Gold still has plenty of room to move as you will see in today’s post. – Good Investing! – jschulmansr

    ======================================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =====================================

    Gold Price Could Double – World Gold Council

    Source: World Gold Council

    The value of gold could soar due to increased demand following the global financial crisis, it has been suggested.

    According to Citigroup, the price of gold could double by the summer, the Daily Mail reports.

    “We continue to remain unequivocally bullish on the medium to long-term view on gold and still believe that we can ultimately see levels in excess of $2,000 (?1,398),” the firm told the paper.

    Such levels would mean the price of gold would more than double its current value.

    The paper notes that since September, the value of the precious metal has already risen by $122.

    Citigroup added that price rises will either come via inflation following liquidity injections by governments around the world, or by continuing investment from those who view gold as a safe haven.

    In related news, a recent poll conducted by Bloomberg showed that 28 of 31 traders, investors and analysts questioned said now is a good time to purchase gold.
    =================================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =================================

    $850B Stimulus Plan Signals Gold Take-Off – Seking Alpha

    By: Peter Cooper of Arabian Money.net

    Last night the US passed its much anticipated $850 billion Obama stimulus package, representing another huge monetary expansion. Countries all around the world have been at it, and the volume of money in circulation is increasing at a record level.

    Meantime, gold prices have been perky and past $900 earlier this week. Now gold has fallen back a little. The gold chart has completed an almost perfect inverse head-and-shoulders pattern which should mark the reversal of the falling trend that started at $1,050 an ounce last March.

    Gold technicals

    Aside from the technicals of the gold chart, let us also get back to fundamentals: the supply of gold and silver is pretty much fixed. Money supply is undergoing huge and unprecedented expansion.

    At present, governments are printing money like fury and little is happening to their economies because banks, companies and individuals are hoarding cash. But eventually pulling on this string will work, and money will flood into the economy in an uncontrollable way.

    It is at this point that gold prices will go ballistic. That should not be more than nine months to a year away based on past precedent.

    However, before that golden age occurs there will be increasing speculation about the future of the gold (and silver) price. More and more investors will read articles like this one and be impressed by the argument – which is far sounder than trying to come up with a new bull market for equities, bonds or real estate.

    Bond crash

    Sometime soon the bond markets of the world are also going to weaken much further, and that will give precious metals another reason to rise in value as an alternative safe haven class.

    For investors in precious metals then it is just a matter of holding on and taking advantage of price dips to stock up with bullion and shares, although it is surely arguable that the best buying opportunities are behind us now as the price trend is about to head back up.

    Trying to time the market exactly or using borrowed money is not a clever approach in volatile markets, but a diversified precious metals portfolio is going to be a winner over the next two years.

    ===============================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ==============================

    Gold $2200: What’s in a number? – Seeking Alpha

    By: Adrian Ash of Bullion Vault

    Gold must hit $2,200 an ounce to match its real peak of Jan. 1980. Or so everyone thinks…

    WHAT’S IN A NUMBER…? Ignoring the day-to-day noise, more than a handful of gold dealers and analysts reckon gold will hit $2,200 an ounce before this bull market is done.

    Why? Because that’s the peak of 1980 revisited and re-priced in today’s US dollars.

    Which sounds simple enough. Too simple by half.

    First, betwixt spreadsheet and napkin, there’s often a slip. Several targets you’ll find out here on the net put the old 1980 top nearer $2,000 in today’s money. Another Gold Coin dealer puts the figure way up at $2,400 an ounce.

    Maybe they got the jump on this month’s Consumer Price data. Maybe $200 to $400 an ounce just won’t matter when the next big gold top arrives. But maybe, we guess here at BullionVault, an extra 20% gain (or 20% of missed profits) will always feel crucial when you’re looking to buy, sell or hold. Perhaps that’s the problem.

    Either way, having crunched (and re-crunched) the numbers just now, even we can’t help but knock out a target…

    To match its inflation-adjusted peak of $850 an ounce – as recorded by the London PM Gold Fix of 21st Jan. 1980 – the price of gold should now stand nearer $2,615.

    Second, therefore, the lag between current Gold Prices and that old nominal high scarcely looks a good reason to start piling into gold today. “Ask the investor who rushed out to Buy Gold precisely 29 years ago, at $845 an ounce, about gold as an inflation hedge,” as Jon Nadler – senior analyst at Kitco Inc. of Montreal, the Canadian dealers and smelters – said on the 29th anniversary of gold’s infamous peak last week.

    “They could sell it for about $845 today…[but] they would need to sell it for something near $2,200 just to break even, when adjusted for inflation.”

    This lag, of course, can be turned any-which-way you like. For several big-name Gold Investment gurus, including Jim Rogers and Marc Faber, it mean gold has got plenty of room left to soar, compared at least with the last time investors began swapping paper for metal in a bid to defend their savings and wealth.

    But for the much bigger anti-gold-buggery camp – that consensual mob of mainstream analysts, op-ed columnists, news-wire hacks and financial advisors – gold’s inflation-adjusted “big top” just as easily stands as a great reason not to Buy Gold. Ever.

    “An investor in gold [buying at the end of 1980] experienced a reduction in purchasing power of 2.4% per annum,” notes Larry Swedroe, a financial services director at BAM Services in Missouri, writing at IndexUniverse.com and recommending Treasury inflation-protected TIPs instead.

    “[That was] a cumulative loss of purchasing power of about 55%…Even worse, that does not consider the costs of investing in gold…[and] while gold has provided a slightly positive real return over the very long term, the price movement is far too volatile for gold to act as an effective hedge against inflation.”

    Volatility in Gold can’t be denied. Indeed, it’s the only thing we ever promise to users of BullionVault. (They can judge our security, cost-efficiency and convenience for themselves.) Traditionally twice as volatile as the US stock market, the price of gold has become five times as wild since the financial crisis kicked off. But price volatility has also leapt everywhere else, not least in the S&P 500 index – now 8 times wilder from the start of 2008. The Euro/Dollar exchange rate is more than four times as volatile as it was back in Aug. ’07, when the banking meltdown began. Even Treasury bonds have gone crazy, making daily moves in their yield more vicious still than even the Gold Price or forex!

    So putting sleepless nights to one side (you may need to ask your pharmacist), the key point at issue remains “long term” inflation.

    This chart shows the value of Gold Bullion – measured in terms of purchasing power, as dictated by the official US consumer price index – since the data series begins, back in 1913. (Hat-tip to Fred at the St.Louis Fed; the current CPI calculations and headline rate might bear little resemblance to personal experience of retail inflation, but for long-run data where else can we go?)

    Starting at 100, our little index of gold’s real long-term value has then averaged 97.8 over the following 96 years…pretty much right where it began. As you can see, however, that long-term stability includes wild swings and spikes. And whether gold is tied to official government currency (as it was pre-1971) or allowed to float freely on the world’s bullion market, volatility looks the only sure thing.

    The starting-point, 1913, just happens to be when the Federal Reserve was first founded. It was given the easy-as-pie challenge of furnishing the United States with an “elastic currency”.

    Okay, so it ain’t quite made of rubber just yet. But the Dollar’s own value in gold – by which it used to be backed, pre-1971 – just keeps brickling and bouncing around like it’s being used to play squash.

    What the chart above offers, however, is a picture of gold’s real long-run value outside of Dollar-price fluctuations.

    “With the right confluence of economic and geopolitical developments we should see gold break through $1,500 and then $2,000 and then possibly still higher round numbers in the next few years,” said Jeffrey Nichols, M.D. of American Precious Metals Advisors, at the 3rd Annual China Gold & Precious Metals Summit in Shanghai last month – “particularly if we get the type of buying frenzy or mania that often occurs late in the price cycles of financial and commodity markets.”

    “This is hardly an audacious forecast when looked at relative to the upward march in consumer prices over the past 28 years. After all, the previous high of $875 an ounce in January 1980, when adjusted for inflation since then, is today equivalent to more than $2,200.”

    Audacious or not, as Nichols points out, the thing to watch for would be a “buying frenzy” – a true “mania” amongst people now Ready to Buy Gold that sent not only its price but also its purchasing power shooting very much higher.

    Because for gold to reach $2,200 an ounce in today’s money (if not $2,615…) would mean something truly remarkable in terms of its real long-run value.

    • Inflation-adjusted, that peak gold price of 21 Jan. 1980 saw the metal worth more than 5 times its purchasing power of 1913;
    • In March 2008, just as Bear Stearns collapsed and gold touched a new all-time peak of $1,032 in the spot market, the metal stood at its best level – in terms of US consumer purchasing power – since December 1982;
    • Touching $2,200 an ounce (without sharply higher inflation undermining that peak), gold would be worth almost 6 times as much as it was before the Federal Reserve was established in real terms of domestic US purchasing power.

    “I own some gold,” said Jim Rogers, for instance, in an interview recently, “and if gold goes down I’ll buy some more…and if gold goes up I’ll buy some more.

    “Gold during the course of the bull market, which has several more years to go, will go much higher.”

    But “much higher” in nominal Dollar terms is not the same as “much higher” in terms of real purchasing power, however. More to the point, that previous peak of $850 an ounce – as recorded at the London PM Gold Fix on 21 Jan. 1980 – lasted hardly two hours.

    Defending yourself with gold is one thing, in short. Assuming gold is the perfect inflation hedge is quite another. And taking peak profits in gold – as with any investable asset – is surely impossible for everyone but the single seller to mark that very top price.

    That doesn’t diminish gold’s real long-term value to private investors however, as we’ll see in Part II – to follow.

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ==============================

    Is Gold Really Pausing? – MarketWatch

    By: Peter Brimelow of MarketWatch.com

     Will Mark Hulbert’s recent column, pointing out that the Hulbert Gold Newsletter Sentiment Index (HGNSI) was over-extended, signal an important top? Or just a ripple? See Hulbert’s Jan. 27 column.

    Either way, there will be a group of angry readers. Of the 220 comments about the column, as I write, the furious bulls outnumber the fanatical bears about 3 to 1.
    But both sides are pretty riled up. This is only money, people!
    Early Monday in New York, gold cleared $915. But Wednesday evening, it was down $30-plus from its high. And the US$ 5×3 point and figure chart kindly supplied by Australia’s The Privateer service has turned down. See chart.
    There is a possibility that the action around the weekend was a false breakout.
    If it turns out to be a bull trap, GoldMoney’s James Turk will turn out to have been wise in his latest Freemarket Gold & Money Report. Turk accepts the radical thesis that the price of gold is manipulated by an alliance of private and public sector actors.
    He writes: “Gold must still contend with the gold cartel and its ongoing efforts to cap the gold price. It may try to ‘circle the wagons’ above $900, which would seem a logical point for them to make another stand now that $850 has been exceeded. If the gold cartel is successful in stopping gold for any length of time, new longs may get discouraged by the lack of progress and take profits. That selling, along with new shorts by the gold cartel, could begin a cycle of selling that gains momentum and drives gold back to its last level of support, which is $850.” See GoldMoney Web site.
    Will gold stumble? In favor of the bears, oddly enough, is the section of Bill Murphy’s radical goldbug LeMetropoleCafe Web site that follows India. The Indians are definitely out of the world gold market, it appears. On downswings, their support is usually crucial. See LeMetropoleCafe Web site.
    But the radical gold bugs think strange things are happening. Murphy’s site noted Tuesday that the extraordinary premiums being paid in the West for gold items did not go away on this month’s rise. And the Comex gyrations, closely examined, continue to suggest the presence of large, determined buyers.
    For perspective on Mark Hulbert’s HGNSI, look at MarketVane’s Bullish Consensus for gold. This surveys futures traders. It peaked at 74% on Monday, and came in tonight at 72%.
    Sometimes gold peaks do occur with this reading in the 70s. That happened at the turn of the year, and again last September.
    But the normal behavior, especially before a big sell-off, is for the upper 80s at least to be reached. Last February/March, as gold attempted $1,000, the Bullish Consensus spent no less than four weeks in the 90s. See MarketVane Web site.
    So the radical gold bugs conclude that gold may pause. But it’s not seen a major blow-off yet. End of Story
    ===============================
    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ===============================

    Gold headed south for the short term?- MarketWatch

    By: Mark Hulbert of MarketWatch.com

    ANNANDALE, Va. (MarketWatch) — Gold certainly deserved a rest Wednesday.
    After all, it had mounted an impressive rally over the previous two weeks, gaining some $100 per ounce. So we can definitely excuse gold bullion  for forfeiting $9 in Wednesday trading.
    The more crucial question, however, is whether the decline was merely the pause that refreshes, or the beginning of a more serious drop.
    Unfortunately for those hoping gold’s recent rally to continue, the conclusion of contrarian analysis is that the metal’s short-term trend is more likely to be down.
    Consider the latest readings of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold-market exposure among a subset of short-term gold-timing newsletters tracked by the Hulbert Financial Digest. As of Tuesday night, the HGNSI stood at 60.9%.
    This is identical to where the HGNSI stood at the end of December, when I last devoted a column to gold sentiment. ( Read my Dec. 29 column.)
    Over the two weeks following that column, of course, bullion dropped by around $70 an ounce.
    Contrarian concern about gold’s short-term trend isn’t just based on this one data point, however. I have more than 25 years of daily data for the HGNSI, and rigorous econometric tests show that the inverse correlation between HGNSI levels and the gold market’s subsequent short-term direction is statistically significant at the 95% confidence level.
    This is why the HGNSI’s current level is so ominous.
    To put it in context, consider that this sentiment gauge’s average reading over the last five years has been 32.6%, only slightly more than half where it stands now. Over the last five years, furthermore, the HGNSI has been higher than where it is now just 13% of the time.
    This does not mean gold can’t go higher from here. But it does suggest that the odds are against it doing so.
    Lest I incur undeserved gold-bug wrath by writing that, let me hasten to add that this bearish conclusion applies to just the next several weeks. Sentiment affects the short-term trend of the market, not the long term.
    So my conclusion is entirely consistent with gold being in a major, long-term bull market.
    But even if it is, the implication of my contrarian analysis is that gold is not ready, at this very moment, to commence on that march upward. End of Story
    Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
    =============================
    My Note- While feeling that Gold price make take a breather here consolidate and maybe even drop a little, both Mark Hulbert and Peter Brimlow agree; Gold is in a long term Bull Market! Any dips in price should be taken as an opportunity to buy more gold!…

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    That’s all for now, hit the subscribe button to keep up with all the latest Gold, Market News and more…Enjoy! – jschulmansr
    Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments, it is presented for informational purposes only. As a good investor, consult your Investment Advisor, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investments. –  jschulmansr

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    Is this the Move? Gold is Breaking Out!

    26 Monday Jan 2009

    Posted by jschulmansr in agricultural commodities, banking crisis, banks, bear market, bible, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, Copper, Currencies, currency, Currency and Currencies, deflation, Dennis Gartman, depression, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, gold miners, hard assets, How To Invest, How To Make Money, id theft, India, inflation, Investing, investments, Latest News, Make Money Investing, market crash, Markets, mining companies, mining stocks, natural gas, oil, palladium, physical gold, platinum, platinum miners, precious, precious metals, price, price manipulation, prices, producers, production, silver, silver miners, small caps, spot, spot price, stagflation, Stimilus, Stimulus, Stocks, TARP, Technical Analysis, timber, Today, U.S. Dollar, Uncategorized, uranium, volatility

    ≈ Comments Off on Is this the Move? Gold is Breaking Out!

    Tags

    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, Dennis Gartman, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    As I write Gold currently is up another $9.30 oz today! Even more importantly it is well above the psychologically important price level of $900 oz. A new high will confirm the breakout and BANG! we’re off to the races. Todays past has some good articles detailing why could could be breaking out here. Enjoy and Good Investing!- jschulmansr

    ============================================

    Here is a safe way for even a small investor to get in on the Gold Rush! You can buy quantities as little as 1 gram to 1000’s of oz. I personally use Bullion Vault for my physical metal purchases.

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    ============================================

    Could There Be a Real Breakout In Gold?— Seeking Alpha

    By: Trader Mark of Fund My Mutual Fund

    After a series of head fakes much of the past half year, the most watched move in the market might finally be “real” this time. With all the world’s printing presses going on overdrive, and currencies being mocked – gold “should” have been rocketing. Many theories persist on why it hasn’t, but really it does not matter. The price action is all that matters and this type of movement will get the technicians very interested.

    Things to like
    1) a series of higher lows
    2) the trendline of lower highs has been penetrated

    Things to see for confirmation
    1) any pullback is bought
    2) price prints over October 2008’s highs, signaling the end of “lower highs”

    When last we looked about 6 weeks ago [Dec 11: Dollar v Gold – Can we Trust this Change?] , it was just another headfake – this formation on the chart does look more promising.

    These are 2 names; one in gold and one in silver we’ve had our eyes on.

    Or just play it simple and go double long gold

     

    ==================================================

    Happy Days For Gold? —Seeking Alpha

    By: Jeff Pierce of Zen Trader

    Gold was in the spotlight on Friday in a big way, nearly moving $39. Is this a hat tip to the big move that many goldbugs have been anticipating? Is all the money printing that the Federal Reserve finally catching up with the US Dollar? Should you have bought gold on Friday because it’s a straight line up from here? Let me preface my answers by saying that I’m a short term trader that will sometimes allow a trade to turn into a longer term trade but that doesn’t happen very often. I’m currently flat precious metals but will be looking for a good risk/reward, but for anybody reading this know that this analysis is from a momentum based perspective.

    So the answers to the previous questions I believe are yes, yes, and no.

    gld

    I’m a big fan of gold for a number of reasons (fundamental, technical, historical) but I know from experience that it trades much different from a momentum point of view. It tends to sell off once it goes outside it’s upper bollinger band as seen by the arrows above. Just when it looks like gold is going to bust out and move to blue skies it seems to run out of buyers and reverses. As you can see GLD and many individual gold miners moved outside this indicator on Friday and I expect a small pullback before it begins a new wave up.

    Judging by the negative divergence on the RSI you can easily see that momentum is waning. As the stock has been making higher highs, the RSI has not been confirming the move. We could possibly move up to the 92 level before profit taking hits, but I just don’t see a good entry at this point if you’re not already invested in these stocks. It would be more prudent to wait for a slight low volume pullback before entering. The only problem with this way of thinking is there could possibly be many with this outlook and that could actually propel gold to higher levels, but I’m willing to risk that because if it does move up even more, then that will confirm the strength and I’ll buy even more on the eventual dip.

    If you are long from lower levels I would consider taking some profits off the table now to prevent yourself from giving up any of your gains.

    “I made all my money selling to soon.” ~ JP Morgan

    slv

    I like silver’s chart a tad better from a technical aspect as the base that it’s been building since last September seems a little more stable. The RSI trendline has been steadily moving higher as the price has been trending higher which is very bullish. I think we’re a tad overbought here and will be looking to get long stocks such as PAAS, SLW, and SSRI when we pullback or move sideways for a week or two.

    =================================================

    Now- Some Commentary by Dennis Gartman

    Dennis Gartman on Gold, Oil, Government and the Economy- Seeking Alpha

    Source: The Gold Report

    With a real roller-coaster year behind us, how would you characterize your macro overview of major economic trends for 2009?

    Dennis Gartman: It’s abundantly clear that we have been in recession; we’re in a recession; and we’re likely to remain in a recession through the greatest portion of 2009. The monetary authorities around the world have done all the things they’re supposed to do, which is during a period of economic weakness throw liquidity in the system as abundantly, as swiftly, as manifestly as possible and expect the liquidity eventually to wend its way through the economy and strengthen economic circumstances. That may be sometime late in 2009. In the meantime, we’ll see continued bad economic data and continued increases in unemployment. It’s going to seem like things are really, really, really bad.

    But let’s remember that things are always their worst at the bottom. By definition, recessions begin at the peak of economic activity when all economic data looks its best. So while things will start to look very bad through the rest of 2009, I bet that by late this year and early 2010 we will start to see economic strength coming at us because of the liquidity injections going on everywhere.

    TGR: What will be the first signs that we’ve reached the bottom in terms of the recession and are starting to turn around?

    DG: The signs of a turnaround will be that everybody believes that there are no signs of a turnaround. We’ll see Newsweek writing a series of cover stories talking about the end of Western civilization. The Financial Times of London headlines will read, “The Recession Seems Endless” and “Depression Is Upon Us.” Every day’s Wall Street Journal articles will be just manifestly bleak in nature. That’s what the signs will be.

    And then all of a sudden, things shall begin to turn around. But the signs are always their worst at the bottom. That’s how things function.

    TGR: So the popular press is in essence on a delay mode.

    DG: Oh, it always is.

    TGR: By three months, by six months, by a year?

    DG: It’s probably a little less slow to react than it used to be, but let’s say three months.

    TGR: So you like the fact that the monetary authorities have put liquidity into the system?

    DG: Absolutely.

    TGR: And it sounds as if you think it just takes time to work through the system.

    DG: Always has; always will. That’s how these things go about. You have recessions because you had an economic advance where, in Greenspan’s terms, “irrational exuberance took over.” You have to dash that irrational exuberance and make it into irrational depression. Irrational, manifestly bleak, black philosophies have to make their way to the public. That’s just how these things happen; it’s happened time and time again.

    The recession that I recall the most clearly is that of ’72-’74. We have to remember that unemployment was high up in double digits. We saw plenty of articles in the press about the new depression. If you go back and read articles from July through September of 1974, you will be convinced that we will never have an economic rebound in our lives again. Well, clearly, that’s just not the case.

    TGR: What about the bearish people who say we’ve never seen worldwide conditions like this and that we’re in the “new era”?

    DG: We probably haven’t seen the world going into recession at one time such as we are now. But I think that’s simply indicative of the fact that today’s communications are so much better. People in the United States or Canada or Europe really never would have known much about a recession in India 20 years ago, because the news media would not have covered it. Nothing told you about economic circumstances abroad. Now, with the Internet, information comes at you absolutely one-on-one.

    All correlations have gone to one in this present environment. When stocks go down in the United States, they go down in India. When they go down in India, they go down in Vietnam. When they go down in Vietnam, they go down in Australia. That wasn’t the case 20 years ago; you didn’t have the small world united through communications that we have now. And now the correlations of emerging markets and large markets have all come together.

    TGR: If that’s true, and worldwide financial markets are all tied together, could any given country “emerge” as a growth country while the rest remain in recession?

    DG: Oh, it’s possible, but I don’t think we’ll call them “emerging markets” anymore. You’ll just find that one country pursued better economic policies, probably by cutting taxes or increasing government spending or doing away with some onerous legal circumstance that might have previously inhibited economic activity. The Chinese are doing any number of good things at this point, and that country may just have been more enlightened and it may come out of the recession faster than the others do. But now they won’t do it on their own, and anybody who does do it will be watched and understood much more swiftly than in the past. For example, did you ever know what was going on in Iceland 10 years ago? Of course not; but now you do.

    TGR: Right. The only emerging markets we heard about were China and India. No one ever discussed South America.

    DG: And now they’ve emerged. But now we understand. We hear news from Venezuela every day. Now we hear news from Sri Lanka every day if we want it; we can get it very easily. We couldn’t do that 10 years ago; 20 years ago clearly we couldn’t. That’s been the big change. Information travels so much more rapidly. That’s why all the correlations have gone to one. We are now one large economic machine that maybe one of the component parts does a little bit better, but it won’t shock anybody, and there won’t be anything “emerging.”

    TGR: Back to the bear people. You referenced the ’72-’74 economy, but this time, many are pointing to the debt situation that the U.S. and probably a bunch of the world economies are in and the fact that we’re committing to billions—and in the U.S., trillions—of dollars more. Won’t that influx of new money have some kind of significant bear impact going forward?

    DG: No, it will have a bullish impact. Unless all the rules of economics have been rescinded, money pushed into a system will push economic activity higher.

    TGR: But it will also push inflation higher.

    DG: Oh, that’s very likely to happen. The question is whether it will be inflation of 1%, 2%, 5%, or will it be a Zimbabwean-like inflation? The latter isn’t going to happen, and 1% isn’t likely going to happen. But 2% to 5% inflation? Yes, that’s likely to happen several years down the line.

    TGR: Gold bugs are saying, “Buy gold now.” What would be your advice under these circumstances?

    DG: I happen to be modestly bullish on the gold market, but not because of inflationary concerns. It’s more that I think gold has quietly moved up the ladder of reservable assets, a reservable asset being one that central banks are willing to keep on their balance sheets, all things being equal. Dollars are still the world’s dominant reservable asset. The Euro is next and gold is probably the third.

    The Fed has thrown off a lot of other assets and taken on securities, debt instruments, mortgages and the like, but I think they’re doing exactly the right thing. Some central banks with a lot of U.S. government securities on the balance sheet may decide that going forward, they may buy more gold rather than more U.S. government securities if they’re running an imbalance of trade surplus. For instance, if I’m the Bank of China and I hold a minuscule sum of gold, maybe I should own a slightly larger minuscule sum.

    TGR: That’s really diversifying your monetary assets.

    DG: I think that’s all that will drive the gold prices quietly higher. I am not a gold bug; I don’t think the world’s coming to an end. I think the history of man is to progress. And yes, we have relatively large amounts of debt, but you can go back to the recession of 1974; you can go back to 1980-81; you can go back to the recession of 1907, and you will see the same arguments—that the world is too debt-laden. And the same arguments, the same language, the same verbiage was always written in exactly the same circumstances. Guess what? We moved on. This time might be different, but I’ll bet that it won’t be.

    TGR: What would your recommendation for investors to do in gold? If they want to do any type of holding assets in monetary value, should they be looking at holding physical gold or buying ETFs or buying into the equity?

    DG: For the past several years, I’ve told people that if they’re going to make the implied bet on gold, bet on gold. The gold bugs tell you that you have to own bullion. I say, no, you should really own the GLD, the ETF. It trades tick-for-tick with gold. If some truly untoward chaotic circumstance ran through the world’s banking system I guess maybe GLD and bullion would diverge at some point, but we’d have other problems long before that would occur. So if you’re going to make the implied bet on gold, bet on gold. Do the GLD.

    TGR: But not physical gold?

    DG: I do own some physical gold. But do I own a lot of it? No. And quite honestly, I hope I lose money on the physical gold I have. It’s an insurance policy. Nothing more than that.

    TGR:: Are you looking at physical gold as the insurance policy or any investment in gold as an insurance policy?

    DG: There’s the old saying, “Those aren’t eatin’ sardines; them is trading sardines.” Some gold I consider to be tradable, and that’s ETF-type stuff, and I have a small amount in the lockbox in the form of gold coins. That’s my insurance policy.

    TGR: That would be what the typical investment broker might advise, 5% to 10% in gold.

    DG: That’s it. Exactly, that’s it. Don’t get overwhelmed by it.

    TGR: How about mining stocks?

    DG: If you’re going to bet on gold, there’s nothing worse than being bullish on gold and owning some mine—especially in some junior fly-by-night—and walking in one morning and finding out that the mine you thought you had got flooded or all of your workers were unionized and walked off or management was somewhat derelict. You may have been right on the direction of gold, but your stock went down. So I’ve told people to stay away from the juniors; that’s a terrible bet on gold. If you’re going to bet on gold, bet on gold.

    Maybe you’ll want to start punting on Barrick Gold Corporation (NYSE: ABX) or Newmont Mining Corp. (NYSE: NEM) or the real large names, rather than the juniors. There’s just too much risk in the juniors. Yes, everybody says, “I bought this junior at a nickel and now it’s at 15 cents.” Well, jolly for you, but you probably bought 15 others at a nickel, and they’re all bankrupt. If you’re going to bet on gold, bet on gold.

    TGR: So you’re saying with that advice that if you want to bet on gold equity, bet on blue-chip gold equity stocks that have just been hammered down through the market.

    DG: That’s correct, Agnico-Eagle Mines (TSX: AEM), ASA Ltd. (NYSE: ASA), the Newmonts, the Barricks, that sort of thing.

    TGR: If we take that logic and look across the broad array of sectors, would you also recommend looking at other blue chips that have just been battered? Or do you think that some sectors will recover faster than others? Such as the financial sector, the energy sector, the housing sector, the precious metals sector?

    DG: I’m really quite bullish on infrastructure—the movers and the makers of the things that if you drop them on your foot, it will hurt. I think I want to own steel and copper and railroads and tractors because I think we’re going to be building roads and bridges. That’s probably one of the things that probably will bring us out of the economic morass. Along those lines, I wouldn’t mind owning a little bit of gold at the same time.

    TGR: Unlike gold that you can buy and own, if you look at steel and copper, are there specific companies and equities that are appealing to you?

    DG: Again, as in gold, if I am going to buy gold equities, I’m going to buy the biggest names. If I’m going to buy steel, I’m going to buy the biggest names. U.S. Steel comes to mind. That’s the easiest; that’s the best; that’s where liquidity lives. It has been bashed down from the highs made last July; it’s down—what?—75% from its high. Recently it stopped going down and is in fact starting to go up now on bad news. So if you’re going to buy steel, buy the most obvious ones—U.S. Steel or buy Newcorp.

    TGR: You talked about the energy market being weak in one of your recent newsletters. Do you see this weakness continuing or do you see a turnaround happening in ’09?

    DG: The one thing that we can rest assured in the rest of the world is that OPEC chiefs cheat on each other—they always have and they always will. So when OPEC says that it’s cut production, that’s a lovely thing. No, they haven’t, and they don’t. Because the problem OPEC has is they’ve all raised their standards of living and the expectations of their people, and they all have cash flow requirements. You have to sell three times as much $50 crude oils as you sold $150 crude oil to meet the demands of your populace that you have increased. So the lovely thing from a North American perspective is that Chavez finds himself in a very uncomfortable position and needs to produce a lot more crude oil to keep his public happy. It’s rather comical, isn’t it, that Chavez was giving crude oil away to the Kennedy family to be distributed to people in the Northeastern United States until two weeks ago when he had to stop. He had to stop because he needs the crude oil on his own to sell, not to give away, to meet cash flow demands.

    Iran is in exactly the same position. Isn’t it lovely to see that Putin, who was really feeling his military oats six months ago with $150 oil, has to pick fights with Ukraine and smaller countries now with crude at $45 a barrel? Where is crude going to go? I wouldn’t be surprised if we make new lows.

    TGR: Will there be new lows for ’09? Are you buying into this whole peak oil argument that production eventually will be unable to meet demand?

    DG: Do I believe that we’re going to run out of crude oil in the next 100 years? Not on your life. Sometime in the next 10,000 years we probably will run out of crude oil. In that instance, I am a peak oil believer. It’s not going to happen soon though. I remember they told me when I was in undergraduate school back in the late ’60s that we would be out of crude oil by 1984.

    TGR: Do you mean out of oil? Or at a point where demand exceeds production?

    DG: We would be out! Gone, done! There would be no more. Isn’t it interesting? We’ve pumped crude oil for 28 more years. This is an interesting statistic: We have either seven or eight times more proven reserves now than we had in 1969. And I think we have used a bit of crude oil between now and 1969.

    TGR: Just a wee bit.

    DG: A wee bit, and yet we have seven or eight times more proven reserves. Every year we have more proven reserves. So, yes, I’m a peak oil believer. Sometime in the next 10,000 years we will run out of crude.

    TGR: With Obama now in office and talking about getting off our reliance on foreign oil, what’s your view of the future on all the alternative energies that are being so pushed by many people in the U.S. government?

    DG: I think it’s wonderful job-creation programs, none of which will prove to be of much merit at all. All of the Birkenstock-wearing greens will feel very good about having their rooftops covered by solar panels, but is that going to resolve any energy problems we have? No. No. Nuclear power will do that. Maybe using the oceans will do that, but wind power, probably not. Solar power, probably not. It makes everybody feel good, but are we going to power our cars in the next 40 years with solar power? I doubt it. Do I expect some sort of material technological breakthrough in the next 100 years that will change what we use as energy? Oh, absolutely. Do I have any idea what it will be? Of course not.

    TGR: If the price of oil if it remains low, is there a role for nuclear in the next 50 years?

    DG: Oh, absolutely.

    TGR: What will drive that?

    DG: It’s absurd that we don’t use nuclear energy. Even the French derive 80% of their electricity from nuclear energy, cleanly, efficiently, without any problems whatsoever. Why we don’t do the same in the United States other than the left and the eco-radicals keeping us from doing it is really quite beyond me.

    TGR: So, given that we still have eco-radicals and a big push toward alternative energies, do you see anything happening in the U.S. in nuclear in the near future?

    DG: Yes, actually. It’s interesting. There are a lot of new nuclear facilities on the drawing boards, and they’re probably going to be approved. If there’s going to be one surprise by the Obama Administration, it will be that you don’t get nuclear energy advances under a right-wing government; you always get them under a left-wing government. Obama will be smart enough to understand that that’s the only way—that’s the best and cleanest methodology to use. And the left won’t argue with a fellow leftist pushing for nuclear energy. Only Nixon could go to China; only Obama can push nuclear energy.

    TGR: And you think that he will?

    DG: Oh, yeah, he’s smart enough to understand that.

    TGR: Going back to your investment strategy, which big blue chip players in oil and nuclear would you point out as good investments?

    DG: In oil, I’d want to take a look at companies such as ConocoPhillips (NYSE: COP), which dropped 70% from its highs. How can you go wrong with the Conocos and the Marathons and the large oil companies whose price-to-earnings multiples are down to at single digits and their dividend streams are 5%, 6%, and 7%? Why would you not want to own those? That’s the best investment.

    And at the same time, the volatility indices on the stock market are so high that, gee, you can buy Conoco, get the dividend, and sell out of the money calls at very high premiums and ramp your dividend yield up. It’s like a gift; it’s like manna.

    TGR: Well, what about in terms of the nuclear sector and uranium?

    DG: I really don’t understand uranium. I don’t know where to go, and I don’t how to buy it yet. So I’ll just say there’s a future for it, but I don’t know what to do with it.

    TGR: What other sectors should be looking at for 2009?

    DG: Banks, banks.

    TGR: They’re making a comeback. Do you think there will be more consolidations?

    DG: There will be more consolidations; there has to be. But look at the yield curve—what a year to be a bank! The overnight Fed funds rate, the rate banks are going to pay depositors for their demand deposits or checking accounts is zero. And you’re going to be able to lend that out to hungry borrowers at 7%, 8%, 9%, 10% and 12%. The next three years will be the greatest three years banks have ever seen. Banks will just make money hand over bloody fist in the next three years.

    TGR: Are you talking about the big boys?

    DG: No, I’m talking about the regionals. The big boys have problems in toxic assets. I am not even sure there is a Peoples Bank & Trust in Rocky Mount, North Carolina, but a bank like that—or the First National Bank of Keokuk, Iowa or the First National, or the Peoples Bank & Trust of Park City, Utah—those are the banks that are going to make lots of money.

    TGR: Do you see an explosion in regional banks? Will move of them come into the marketplace?

    DG: I think we’ve probably got all we need. It’s just that they’re very cheap.

    TGR: What will the role of the international banks be?

    DG: Mopping up the disasters that they’ve created for themselves for the past decade, trying to survive, being envious of the decent regional banks that are going to be earning enormous yields on this positively sloped yield curve and wishing they were they.

    TGR: Do you see a role long term for international banks?

    DG: Oh, sure, of course. How could there not be? It’s a smaller world; it’s an international world; it’s a global world. International banks will be back in full force a decade from now. They’ve got some wound-licking to do, and they’ll do it.

    TGR: In addition to regional banks as being a great play to look at for ’09, ’10, any other interesting plays to bring up?

    DG: You want to own food and grains again.

    TGR: Are you talking about grains or food producers like Nabisco?

    DG: No, I think you want to own grains. If you’re going to make a speculation, I think you want to own on the grain markets again.

    TGR: Grain for human consumption or grain for livestock consumption?

    DG: Yes and yes.

    TGR: Are you looking at buying that on the commodities market?

    DG: You can actually buy that on ETFs now. The wonderful world of ETFs is just extraordinary. You can actually buy a grain ETF now. DBA (DB Agriculture Fund) is one; JJG (iPath Grains) is another. Those are basically long positions in the grain market. Wonderful things to use.

    TGR: You like ETFs; but the naysayers will say that ETFs could be encumbered and there’s actually no guarantee that they hold any assets.

    DG: That’s true; that’s correct.

    TGR: But you’re comfortable that people should go into an ETF for grains?

    DG: I didn’t say that. What I said is if you wish to trade in grain, there are ETFs that will do that. Do I know for sure that they will all perform perfectly and that if the world were to come to a chaotic banking circumstance that there wouldn’t be problems? I don’t know that. Does that bother me? No. It doesn’t bother me even slightly.

    Should you worry about [not trading] an ETF just because there might be some problem under an untoward economic environment? No, it’s illogical. And shame on those people who say those sorts of things or who tell you not to use them because they ETF may not function properly if there is some total breakdown in the banking system. Well, if that happens, we have other problems.

    TGR: And what’s your projection for the overall investment market? We’ve been hearing speculation that it will rise through April, bottom out even deeper than it is today, and then a slow climb in 2010.

    DG: Gee, I have no idea. I just think that stock prices will be higher six months from now than they are now, much higher 12 months than they will be six months from now, and higher still in 24 months than they will be 12 months from now. But where will they be in April? Golly, I don’t know. I think the worst is far behind us and better circumstances lie ahead. And that’s the first time in a loooonnnng while that I’ve said that.

    TGR: Yeah, now if the media will just catch up with you, we can enjoy watching it again.

    DG: It won’t. Watch the news; it will just get bleaker and bleaker as the year goes on. And watch the unemployment rate; it’s going to be a lot higher.

    TGR: Other than Barack Obama saying we’re going to start building infrastructure, do you anticipate any dramatic changes in the U.S.? Right now we’re a services country, and we need to move back to being a manufacturing country.

    DG: We’ll never move back to being a manufacturing country. Won’t happen. Here’s an interesting bit of data. Do you know what year that we had the absolute high number—not just as a percentage of population—but the absolute high number of manufacturing jobs was in the United States?

    TGR: Somewhere around the World War II era.

    DG: Very good, 1943. We have lost manufacturing jobs since 1943. I think that’s a fairly well-established trend.

    TGR: Is there a future for the services sector, though? That’s the key.

    DG: It will be larger. And so what? It’s like saying we need more farmers. No. We need fewer farmers. We have one-hundredth as many farmers as we had at the turn of the 20th century. We now 500 times more grain? Seems to me every time we lose a small farmer, we get better. So, we need fewer farmers. And we need fewer manufacturing jobs.

    TGR: But doesn’t that put the onus on the United States as the economic world leader? Considering the fact that, as you mentioned, information now is instantly available everywhere, just in terms of worldwide confidence; it seems like every time we hiccup, the planet hears it?

    DG: There is probably some truth to that fact. But it is probably not us that will lead; it’s probably Australia or New Zealand or the Baltic States or some smaller country that actually changes policies and frees up markets and cuts taxes, and all of a sudden their economy starts to turn around. Then people elsewhere will say, “Oh, look! That’s the right thing to do. Let’s us go do that.”

    TGR: Really? Economic recovery worldwide will not come from the United States?

    DG: Well, if we don’t recover, the rest of the world won’t, but we won’t be the first. What I am saying is that some smaller country will do the right things faster than we do.

    TGR: Isn’t what Australia does irrelevant to what the U.S. needs to do?

    DG: No, it’s dramatically relevant. If Australia starts to do things properly—if Australia were to suddenly come out and slash taxes and go to a flat tax and cut paperwork by 50% and it’s economy starts to turn higher, wouldn’t that be a good incentive for us to do the same thing?

    TGR: But that implies that every country should use the same economic strategy; that we’re all basically at the same state in our economic development. That what will work for Zimbabwe or China will work for the U.S.

    DG: I think anywhere in the world that you have smaller government, lesser taxes—every time you do that, that economy, no matter where it is, does better. It does better. And anywhere you put higher taxes and more government, that economy usually does worse. It does; it just does.

    TGR: You’re looking at it from a macro point of view.

    DG: I’m looking at it just from an economic point of view, whether macro or micro. Look at Ireland, for example. Why was Ireland for many years the “Celtic Tiger” of Europe? Their tax regime was lower than the rest of Continental Europe. The Germans and the French, who are statists, who are collectivists, instead of emulating the Irish, kept trying to drag Ireland down to their level. Now, that was stupid, wasn’t it? That didn’t work.

    My favorite example is New Zealand back in the 1980s. Every year from the 1970s through the 1980s, New Zealand ran a budget deficit and a trade deficit. Every year the IMF said, “You must raise your taxes and cut the value of your currency to try to balance your budget and run a trade surplus.” So New Zealand would do that, and every year the deficit got worse and their trade imbalance grew larger. They did this for five or six years and it got worse every time they did it—every time they followed the IMF tactic of raising taxes and cutting the value of the currency.

    Finally New Zealand Treasury Secretary Graham Scott (Secretary from 1986–93) told the IMF, “Don’t ever come back here. Everything you’ve told us to do has proven to be utterly worthless. We’re going the other way. We’re slashing taxes.” From I think a 75% marginal tax rate, over the course of five years, they cut it to like 18%. And every year they took in more money—more money—every time they cut taxes they took in more money. And when they strengthened their currency, their exports picked up; as their currency got stronger, they exported more stuff. Isn’t it fascinating?

    TGR: That’s the paradox.

    DG: It got to be so interesting—it wasn’t Gordon Campbell—I’m trying to remember; I just went blank for his name. But he passed the baton on to a woman by the name of Ruth Richardson, who was a little more leftwing than her predecessor—the tax rate was down to a flat 18%. They asked her if she was going to cut it again, and she said, “You know, I don’t think I can cut it any more; I can’t spend the revenue I am taking in now.” It’s a classic line. So, what does she do? They actually started raising the tax rates again, and what happened? Tax revenues fell.

    But New Zealand had taught a lot of people that cutting taxes and strengthening your currency is the best thing you can do. And as they were cutting taxes, they kept cutting prohibitions and regulations; they kept chopping them back. They were the real precursors of the Free Market Movement that developed in the early ’90s and the early ’00s.

    TGR: Let’s hope the United States learns from that. Obama announced his tax cuts; we’ll see what comes of that.

    DG: He said entitlements are even on the table. Can you imagine a Republican ever making that statement? They would boo him. But here’s a leftist who puts it on the table. He can say that.

    Irreverent, outspoken, entertaining, sardonic and—in his own words, a “glib S-O-B,” Dennis Gartman has been producing The Gartman Letter for more than 20 years. His daily commentary on global capital markets as well as short- and long-term perspectives on political, economic and technical circumstances goes to leading banks, brokerage firms, hedge funds, mutual funds, energy companies and grain traders around the world.

    A 1972 graduate of the University of Akron (Ohio), he undertook graduate studies at North Carolina State University in Raleigh (where he remains involved as a member of the Investment Committee.

    Before devoting himself full-time to The Gartman Letter, Dennis analyzed cotton supply and demand in the U.S. textile industry as an economist for Cotton, Inc.; traded foreign exchange and money market instruments at North Carolina National Bank, went to Chicago to serve as A.G. Becker & Company’s Chief Financial Futures Analyst and then become an independent member of the Chicago Board of Trade, dealing in treasury bonds and notes and GNMA futures contracts; and moved to Virginia to run Virginia National Bank’s futures brokerage operation.

    In addition to publishing The Gartman Letter, Dennis delivers speeches to audiences around the world (including central banks, finance ministries, and trade groups), teaches classes on derivatives for the Federal Reserve Bank’s School for Bank Examiners, and makes frequent guest appearances on CNBC, ROB-TV and Bloomberg television.

    ==============================================

    Finally for the Technical Analysis Junkies (like me!) here is an awesome article!

    ===============================================

    Market Leaders Hesitate on Stimulus Plan— Seeking Alpha

    By: Chris Ciovacco of Ciovacco Capital Management

    Proposed Economic Stimulus Plan May Not Stimulate Much

    The new administration is proposing an $825 billion “stimulus” plan. Most of the package is geared toward helping existing or expanded programs such as unemployment assistance, law enforcement, food stamps, etc. Much of this spending will “save” existing jobs or keep existing programs already in place. This may help prevent things from getting worse, but it will offer little in the way of providing new stimulation for the economy. Another large portion of the stimulus plan is in the form of tax cuts. While depreciation incentives may spur some new business spending, credits to individuals may offer little incentive to spend given the state of their balance sheets and concerns about employment. After all the hype about infrastructure spending, only about 25% of the package is geared toward this area.

    Tug of War Between Liquidity and Economic Weakness

    The chart below was created on the website of the Federal Reserve Bank of St. Louis. It shows the eye-popping expansion of the money supply as financial institutions have swapped securities and other “assets” for cash via borrowing from the Federal Reserve. Borrowing prior to this crisis is barely visible on the graph. Recent borrowing is an extreme example of the term “spike” on a graph. Despite the never before seen tapping of the Fed, financial assets show little evidence of reflation taking place.

    Borrowing From FEDU.S. Stocks: Downtrend Remains In Place

    If you compare the long S&P 500 ETF (SPY) to the short S&P 500 ETF (SH), it is clear the short side of the market is in better shape. There is little in the way of fundamentals, except hope of government bailouts, to expect any change to these trends.

    S&P 500 ETF - SPY - LongRecent weakness in the S&P 500 Index leaves open the possibility that we will revisit the November 2008 lows around 740 (intraday). If those lows do not hold, a move back toward 600 becomes quite possible. On Friday (1/23/09) the S&P 500 closed at 832. A drop back to 740 is a loss of 11%. A move back to 600 would be a drop of 28%. These figures along with the current downtrend highlight the importance of principal protection and hedging strategies. SH, the short S&P 500 ETF, can be used to protect long positions or to play the short side of the market.

    2009 Investing Deflation Inflation Outlook StrategyGold & Gold Stocks Still Face Hurdles

    Friday’s big moves in gold (GLD) and gold mining stocks (GDX) have some calling a new uptrend. While recent moves have been impressive some hurdles remain.

    Gold At Important LevelsGold stocks (GDX) look a little stronger than gold, but any entry in the market should be modest in size. If $38.88 can be exceeded, our confidence would increase and possibly our exposure.

    2009 Investing Deflation Inflation Outlook StrategyRun In Treasuries Is Long In The Tooth

    Investments with the highest probability of success are those with positive fundamentals and positive technicals. Conversely, the least attractive investments have poor fundamentals and poor technicals. With the U.S. government issuing new bonds at an alarming rate, a continued deterioration in the technicals could signal the end of the Treasury bubble.

    2009 Investing Deflation Inflation Outlook StrategyTBT offers a way to possibly profit from the negative forces aligning against U.S. Treasury bonds.

    2009 Investing Deflation Inflation Outlook StrategyStrength In Bonds Shows Little Fear of Price Inflation

    The government’s policies are attempting to stem the tide of falling asset prices. They hope to reinflate economic activity along with asset prices. The charts here show:

    •  
      • A weak stock market (see SPY above), and
      • An improvement in many fixed income investments (below: LQD, AGG, BMT, PHK, and AWF).

    Weak stocks and stronger bonds tell us the government’s reflation efforts are thus far not working. If concerns about deflation remain more prevalent than concerns about inflation, fixed income assets may offer us an apportunity. With money markets, CDs, and Treasuries paying next to nothing, we may be able to find improved yields in the following:

    •  
      • LQD – Investment Grade Corporate Bonds
      • AGG – Investment Grade Bonds – Diversified
      • BMT – Insured Municipal Bonds
      • PHK – High Yield Bonds
      • AWF – Emerging Market Government Bonds

    With the economy in a weakened and fragile state, we need to tread carefully in these markets. Some key levels which may improve the odds of success are shown in the charts below. Erring on the side of not taking positions is still prudent. The markets remain in a “prove it to me” mode where we would like to see the markets move through key levels before putting capital at risk.

    2009 Investing Deflation Inflation Outlook Strategy 2009 Investing Deflation Inflation Outlook Strategy 2009 Investing Deflation Inflation Outlook Strategy 2009 Investing Deflation Inflation Outlook Strategy 2009 Investing Deflation Inflation Outlook StrategyU.S. Dollar Remains Firm

    From a technical perspective, the dollar continues to look strong. Its strength supports the continuation of concerns about deflation, rather than inflation.

    2009 Investing Deflation Inflation Outlook StrategyDisclosure: Ciovacco Capital Management (CCM) and their clients hold positions in SH, GLD, and PHK. CCM may take long positions in GDX, TBT, LQD, AGG, BMT, and AWF.

    =============================================

    Catch the New Bull! – Buy Gold Online – Safely, quickly, and at low prices, guaranteed! Bullion Vault.com

    =============================================

    Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments, it is presented for informational purposes only. As a good investor, consult you Investment Advisor,  Do Your Due Diligence, Read All Prospectus/s and related information before you make any investments. – jschulmansr

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    Latest Obama Eligibility News and More…

    25 Sunday Jan 2009

    Posted by jschulmansr in 2008 Election, Achievement, Barack Obama, bible, communism, Electoral College, id theft, John McCain, Presidential Election, socialism, Today, u.s. constitution, U.S. Dollar, Uncategorized

    ≈ 2 Comments

    Tags

    2008 Election, Barack Dunham, Barack Hussein Obama, Barack Obama, Barry Dunham, Barry Soetoro, capitalism, Chicago Tribune, Columbia University, Currency and Currencies, D.c. press club, Electoral College, Electors, Finance, fraud, Free Speech, gold, Harvard Law School, hawaii, id theft, Indonesia, Indonesian Citizenship, Investing, investments, Joe Biden, John McCain, Latest News, legal documents, Markets, name change, natural born citizen, Oath of Allegiance of the President of the United State, Occidental College, Phillip Berg, Politics, poser, Presidential Election, Sarah Palin, socialism, Stocks, Today, treason, u.s. constitution, U.S. Dollar, Uncategorized, voter fraud, we the people foundation

    Well here we are, Obama’s 1st act was to flub his oath of office, there are still cases on Obama eligibility filtering up. One thing we should be aware of, when has it become legal for a person to consult with the judges who are going to hear and potentially try his case? Once again total dis-regard and disdain for the Constitution. Yes, I know it was a “courtesy” trip, however, timed conveniently before the judges are set to see if the latest eligibility case has merit? And was there a secret session? Watch the 1st Video First! ***Eye Opening-***jschulmansr

    ==================================================

    Where Is Your Birth Certificate? Mr Open President?

    ==================================================

    Religious Leader On Obama’s Birth Certificate

    Dr. James David Manning, PhD (ATLAH Church) is angered by Barack Obama’s failure to present his Birth Certificate.


    ================================================

    Why The Oath Was Retaken

    By: Joseph Farah World Net Daily

    When Supreme Court Chief Justice John Roberts and President-elect Barack Obama flubbed the oath of office on inauguration day, WND was pilloried for prominently noting the problem.

    “Oh, come on,” wrote one emailer. “This is just being nitpicky. Your antipathy for Obama is showing in your willingness to jump on him for everything.”

    Yet, one day later, Roberts and Obama agreed to repeat the oath of office – this time in a more private setting and following the specific requirements of the U.S. Constitution.

    Maybe paying strict attention to the Constitution isn’t nitpicky after all?

    Article II, Section 1 of the Constitution stipulates the exact 35 words of a proper oath of office: “I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”

    Since some of those words were transposed and left out of the original oath on the day of inauguration, Roberts feared the matter could become a point of contention. Twice before in American history presidents Chester A. Arthur and Calvin Coolidge needed to repeat their oaths because of similar mistakes.

    I’m glad someone still takes at least part of the Constitution seriously. Unfortunately, another part of Article II, Section 1 was completely trampled upon during the 2008 election process and right up through the swearing in ceremony. That is the issue of whether Obama is indeed, as the Constitution requires, a “natural born citizen.” Perhaps he is, perhaps he isn’t. Perhaps we’ll never know, because no controlling legal authority has ever required proof and publicly affirmed its validity.

    Again, when such issues were raised, many have suggested it’s simply nitpicking.

    But the Constitution either means precisely what it says or it doesn’t. If we’re going to fudge on such simple, straightforward matters as eligibility requirements for the president and oaths of office, where does the fudging end?

    And, conversely, if it is so critically important to recite the specific and exact 35 words of the oath of office as delineated in the Constitution, why was it not important to establish Obama’s eligibility beyond any shadow of a doubt?

    Should this matter now be dropped?

    Or should it be relentlessly pursued?

    What would happen now if it were determined that Obama was not, in fact, constitutionally eligible to become president? It’s certainly not a simple matter like restating the oath.

    On the other hand, because of the enormous potential for raising a constitutional crisis, should the American people just sweep the matter under the rug

    ?

    These are the tough questions we have been left with by Obama and all those in authority who allowed this question of eligibility to fester for so long.

    Once again, they provide us with some practical arguments for taking the Constitution seriously and literally in all matters. The Constitution is the bedrock of our system

    of governance. It is the tie that binds our nation together. It is the foundation for the rule of law in America.

    There is nothing frivolous about its requirements.

    There is nothing nitpicky about adhering to them.

    So, I’ll ask the pointed question one more time: “Where’s the birth certificate?”

    Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 200,000 others and sign the petition demanding proof of eligibility now!

    Maybe we need a national movement of people asking the same question in venue after venue – anywhere and everywhere the new president appears. Maybe we need rallies on the National Mall where ordinary Americans bring copies of their birth certificates and display them proudly with accompanying signs that say: “I’ll show you mine if you show me yours.”

    Do we need a national uprising of the American people simply to get the Constitution observed and taken seriously and literally?

    It seems like a lot to ask.

    Yet, on the other hand, is there a more important national cause?

    ===============================================

    Okay this part of the constitution is important but proving eligibility to be the President under the constitution is not? I am confused!

    ===============================================

    President’s meeting with Judges questioned

    Lawyer challenging eligibility raises issue of secret conference

    Source: World Net Daily

    A lawyer working on a case before the U.S. Supreme Court that challenges the eligibility of President Obama is raising concerns over a meeting between the defendant in the case and the judges who are expected to review it.

    The case is one of many brought before U.S. courts that allege Obama doesn’t meet the “natural born” requirement of the U.S. Constitution for the president. It’s one of about half a dozen that have reached the U.S. Supreme Court, which already has declined to grant hearings to several cases.

    Orly Taitz, whose case is scheduled to be heard tomorrow in a conference among justices – a private meeting at which they review cases and decide whether they should hold a hearing – confirmed on her website today that a supplemental brief in her arguments had been distributed.

    But the website also reported she “had to explain … many of us citizens are also concerned about the eight out of nine justices meeting privately with Mr. Obama (while the cases are pending).”

    The blog continued, “No reporters were allowed. No attorneys were invited on behalf of the plaintiffs. This causes many of us citizens to question the rules of judicial ethics and causes us to question the impartiality on behalf of the justices.”

    The report said “quite a number of people” have raised their questions with their U.S. representatives over the issues.

    According to a CBS report, Obama visited the Supreme Court before his inauguration at the invitation of Chief Justice John Roberts. The report described it as a protocol visit.

    According to a separate published report, Obama and then-Vice President-elect Joe Biden met in a court conference room with Roberts and seven other justices for about 45 minutes.

    The report said the only absent justice was Samuel Alito.

    Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 215,000 others and sign the petition demanding proof of eligibility now!

    The supplemental documents in the Taitz case cite an executive order concerning qualifications issued by President Bush Jan. 16.

    “This action is seeking the mandate for the U.S. State Department, the FBI and the Director of the Personnel Department to seek the documents for verifying Obama’s legitimacy as president and also his citizenship of the United States,” the blog reported.

    The Supreme Court document reveals that the Taitz case is scheduled for conference tomorrow, and her supplemental briefs have been distributed to the justices.

    Taitz said her arguments rest on precedents from both the California Supreme Court, which years ago removed a candidate for president from the ballot because he was only 34, and the U.S. Supreme Court’s affirmation of the ruling. The Constitution requires a president to be 35. Her case raises the issue of Obama’s birthplace and citizenship status, which also are specified in the Constitution.

    The lawsuits allege in various ways that Obama does not meet the “natural born citizen” clause of the U.S. Constitution, Article 2, Section 1, which reads, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

    Some allege his birth took place in Kenya, and his mother was a minor at the time of his birth – too young to confer American citizenship. They argue Obama’s father, Barack Obama Sr., was a Kenyan citizen subject to the jurisdiction of the United Kingdom at the time and would have handed down British citizenship.

    There also are questions raised about Obama’s move to Indonesia when he was a child and his attendance at school there when only Indonesian citizens were allowed and his travel to Pakistan in the ’80s when such travel was forbidden to American citizens.

    One case, handled by Gary Kreep of the United States Justice Foundation, is seeking Obama’s school records from Occidental College, which could reveal if Obama attended class on aid intended for foreign students.

    Another lawyer working on similar allegations, Philip J. Berg, has written to Congress seeking an investigation, while Taitz’s filings have been before the U.S. Supreme Court.

    Berg, whose information is on his ObamaCrimes.com website, said the issue isn’t going to disappear.

    Others agreed.

    “Should Senator Obama be discovered, after he takes office, to be ineligible for the Office of President of the United States of America and, thereby, his election declared void,” argues a California case brought on behalf of Ambassador Alan Keyes, also a presidential candidate. “Americans will suffer irreparable harm in that (a) usurper will be sitting as the President of the United States, and none of the treaties, laws, or executive orders signed by him will be valid or legal.”

    WND twice has organized opportunities for readers to send FedEx letters to the Supreme Court, asking for consideration of the issue on its merits.

    The most recent campaign generated 12,096 messages, following the earlier effort that resulted in 60,128 letters.

    Obama has claimed in his autobiography and elsewhere that he was born in Hawaii in 1961 to parents Barack Hussein Obama Sr., a Kenyan national, and Stanley Ann Dunham, a minor. But details about which hospital handled the birth and other details provided on the complete birth certificate have been withheld by Obama despite lawsuits and public demands for release.

    Meanwhile, a separate report has emerged in the Buffalo, N.Y., News about a woman who said she recalled being told about Obama’s birth in Hawaii. Barbara Nelson reported she was having a dinner with Dr. Rodney T. West, an obstetrician, when he discussed the birth of a baby boy to Stanley Ann Dunham, Obama’s mother.

    She said she later taught Obama as a high school student in Hawaii.

    WND senior reporter Jerome Corsi went to both Kenya and Hawaii prior to the election to investigate issues surrounding Obama’s birth. But his research and discoveries only raised more questions.

    The biggest question was why, if a Hawaii birth certificate exists as his campaign has stated, Obama hasn’t simply ordered it made available to settle the rumors.

    The governor’s office in Hawaii said there is a valid certificate but rejected requests for access and left ambiguous its origin: Does the certificate on file with the Department of Health indicate a Hawaii birth or was it generated after the Obama family registered a Kenyan birth in Hawaii?

    =================================================

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    Scary, they’re actually Going to Pass This?

    24 Saturday Jan 2009

    Posted by jschulmansr in Austrian school, Bailout News, banking crisis, banks, Barack Obama, bear market, capitalism, central banks, Comex, commodities, Copper, Currencies, currency, Currency and Currencies, dollar denominated, dollar denominated investments, economic, Economic Recovery, economic trends, economy, Federal Deficit, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, gold miners, hard assets, How To Invest, How To Make Money, inflation, Investing, investments, Latest News, Make Money Investing, market crash, Markets, mining companies, mining stocks, platinum, platinum miners, precious, price, price manipulation, prices, producers, production, recession, risk, run on banks, safety, silver, silver miners, small caps, sovereign, spot, spot price, stagflation, Stimilus, Stimulus, Stocks, TARP, Technical Analysis, U.S. Dollar, volatility

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    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, bullion, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, Economic Recovery, Economic Stimulus, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold bars, gold coins, gold miners, goldbugs, hard assets, heating oil, hyper-inflation, India, inflation, Investing In Gold, investments, Keith Fitz-Gerald, Marc Faber, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, Precious Metals Investments, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Stimulus, TARP, Technical Analysis, timber, U.S. Dollar, volatility, volatility index, warrants, Water

    Curious?… to find out what I am talking about? Read On… Congress shouldn’t be allowed to do this! Not only am going to include the TIME magazine article, I am including the actual link to the bill itself, the press release version. The coming runaway Inflation Train and what to do to protect yourself! Read Below…Good Investing! – jschulmansr

    *********************************************************************

    First Here are the links…

    The American Recovery and Reinvestment Bill of 2009

    The American Recovery and Reinvestment Bill of 2009 Press Summary

    *********************************************************************

    A Guide to Reading the America Recover and Reinvestment Bill- TIME MAGAZINE

    Source: Time Magazine

    Brendan McDermid / Reuters

    Brendan McDermid / Reuters

    “Madness is to think of too many things in succession too fast, or of one thing too exclusively” — Voltaire

    The American Recovery and Reinvestment Bill of 2009 should be required reading for every citizen from billionaires to the average person. It was issued by The Committee On Appropriations and is the road map for the $825 billion that the Congress and Administration intend to put into the U.S. economy to jumpstart the economy out of the recession.

    The most important part of the document may be the description of how the country was dragged into the worst economic period in its history. ( See pictures of the Top 10 scared traders.)

    At the beginning of the bill, the authors write: “Since 2001, as worker productivity went up, 96% of the income growth in this country went to the wealthiest 10% of society. While they were benefiting from record high worker productivity, the remaining 90% of Americans were struggling to sustain their standard of living. They sustained it by borrowing … and borrowing … and borrowing, and when they couldn’t borrow anymore, the bottom fell out.”

    If that analysis is true, then two other things must be accurate. The first is that the cause of the recession was Americans becoming overextended in their use of credit. The other one, which is a consequence of the first, is that if the government can facilitate future consumer borrowing, the economy will be righted again in short order. That would mean that more complex methods of solving the problems of the recession, such as spending money on infrastructure, would be unnecessary. It would be simpler to take $825 billion and make it available for home equity loans, enlarge credit card lines, and auto loans.

    But, the authors of the bill are not willing to follow their own logic, so they have crafted another plan. The first assumption of what the program will do, and among the most important of its goals, is only mentioned in passing. “This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs.” This is a little twist on what is being said in public.

    The general assumption about job creation under the program is that it will add 3 to 4 million jobs. But in the introduction to the bill the assumptions about job loss are laid out quite clearly: “Credit is frozen, consumer purchasing power is in decline, in the last four months the country has lost 2 million jobs and we are expected to lose another 3 to 5 million in the next year.”

    The mathematics of the two sets of employment analysis taken together would show then that no new jobs would be created. The three million or so jobs which will be lost in 2009 will simply be replaced by three million new ones. The jobs lost late in 2008 will not be replaced in this program, leaving a two million job deficit Joblessness will stay at about 7.2%

    Other than those details, the money will be well spent.

    The states need help, and the federal government means to provide it: A sum of $79 billion in state fiscal relief will be provided to prevent cutbacks to key services

    After the plans to help the states, cut taxes, and provide new infrastructure for the nation, the programs get a little off track.

    The bill means to spend $44 million to repair the U.S. Department of Agriculture’s headquarters. About $400 million will go to repairing national monuments in Washington, which are somehow considered essential to national infrastructure.

    Additionally, Congress plans to pay out $200 million to provide financial incentives for teachers and principals to do their jobs better. Another $100 million will be used to establish a set of grants to provide $100 to local governments and nonprofit organizations to remove lead-based paint hazards in low-income housing.

    Perhaps the best investment in the bill is for $80 million to ensure that worker protection laws are enforced as recovery infrastructure investments are carried out. In other words, there will be a police system set up to make sure that no one with a new job working on national infrastructure with money provided by the government will have his or her rights violated.

    The bill calls for over one hundred programs which Congress plans to enact. These include addressing problems as diverse as community block grants, upgrading the forestry service, bridge removal, and NASA research funding. The remarkable thing about the legislation is that almost every program is ill-defined and subject to broad interpretation and a wide variation as to how it might be enacted.

    In a sentence, The American Recovery and Reinvestment Bill of 2009 will have to build a bureaucracy larger than any ever created by the US government in order to manage its many parts.

    The first sentence of the bill reads “The economy is in a crisis not seen since the Great Depression.” If it requires all of these plans to get America back on the road to recovery, the process will take a decade.

    — Douglas A. McIntyre

    See pictures of the global financial crisis.

    For constant business updates, go to 24/7wallst.com.

    =========================================================

    *** My Cure for the coming runaway inflation train? Read below…

    =========================================================

    Gold Will Shine Again in 2009 – Seeking Alpha  Part 1

    By: Sean Hyman of mywealth.com

    I think this one may be a shocker to many…that gold is going to be much higher at the end of 2009 than it is right now. I think it will take out its highs just above $1,000 an ounce and will head for at least $1,250 an ounce. (Gold is presently trading around $853 an ounce.)

    When I was a stock broker, I hated gold. To me it was the dumbest investment on the planet. Of course I worked as a broker when gold was in a multi-year bear market.

    But the more that volatile booms and busts have caused the need for more government intervention, the more of a believer I’ve become in gold.

    Let’s look at several of the dynamics that have helped to form my view for gold in 2009.

    South Africa is home to some of the biggest gold mines in the world. In 2008, their gold output shrank as exploding input costs caused them to close some of their most expensive mines. (Produce less of the metal and the speed of the supply shrinks which helps to support the price.)

    This has been one dynamic that has helped to support prices in 2008 and that has kept gold in an 8 year bull market. Even in 2005 and 2008 when the dollar rallied, gold still held its ground. This shows a lot of strength for the metal since the dollar and gold largely trade somewhat opposite of each other (being that gold is denominated in dollars and when the dollar is rising, it tends to calm the fears for the currency which typically dulls the demand for the precious metal).

    In fact, had it not been for tons of hedge fund failures and liquidations, I think gold would actually be much higher than it is right now.

    Helicopter Ben & Obama will do their part to help gold out!

    With the credit crisis in full swing, the Fed has responded by turning on the printing presses at full speed. This enormous increase in the money supply (which is temporarily clogged up in the banks) will eventually be unleashed on the economy. Once this happens, you will quickly see deflation erased and we may actually move into a period of hyper-inflation.

    Why would I go so far as to think that? Heck, the Obama administration may print as much as a few trillion dollars to help out the banks according to former central banker Volcker.

    We’ve also got another stimulus package coming within weeks according to the Obama administration.

    Another reason why I feel that a huge bout of inflation will return is because of interest rates. If you’ll remember, Congress got pretty harsh with Alan Greenspan for taking rates down to 1%. They even went so far as to accuse him of causing the recent bubbles in the economy, which he denies.

    Well, if the “1% cheap money” inflated things into the stratosphere, what do you think will happen with Ben Bernanke’s interest rate range of 0% to 0.25%? Could you say it would have any less of an effect? No, it will have an even greater “bubble effect” in time as the cheap money actually is released out into the economy.

    Tomorrow, I’ll continue with “Part 2” of this “gold story”… So stay tuned!

    Gold Will Shine Again in 2009 Part 2

    by Sean Hyman

    Get ready for the “economic pipes” to be unclogged and for a tidal wave of inflation to head our way!

    I assure you that Obama’s economic advisors will be the “drain-o” that gets the pipes unclogged. When this happens, the Fed knows that it will have to “mop up” this excessive liquidity in the financial system.

    However, here’s what I predict will happen: The Fed, while it wants to be a forecaster of the economy really just ends up becoming a “responder” after the fact to what’s going on in the economy. Therefore, between the time that the Fed starts to see the inflationary signs in the economy and starts the process of draining the excess liquidity from the economy, it will be too late. The hyper inflationary effects will already be in play. They will be “late to the ball game” yet again.

    When all of this starts to happen (and possibly a bit beforehand), savvy gold investors will sense it coming and will buy up gold ahead of time…positioning themselves like a surfer that gets out ahead of the coming wave that will propel him forward.

    The Fed will do its best at that point to drain the money supply and hike rates, but there are delays from when they start to act and when it actually starts to effect the economy. This “lag time” will cause a huge return of inflation in a big way that will propel gold ever higher and will eventually dilute the dollar as well.

    You see, when there’s more of something in existence, it begins to hold less value. So as the money supply is quickly increasing, the dollar will eventually feel the effects of it. Remember, there’s that delayed “lagging” period which is why it hasn’t already been felt even now.

    However, as sure as the sun is coming up tomorrow…it’s coming. So get prepared ahead of time. For, the key to successful investing is to buy just ahead of the massive move. This requires an investor to “think ahead”. You can’t just see what’s happening at present and prosper like you should in your investing. It requires one to be “forward looking” and thus “forward thinking”.

    When all of this unfolds, investors will buy gold (which is essentially exchanging their dollars for gold) as they seek safety, liquidity and an “insurance policy” against runaway inflation.

    Gold production will continue to shrink and Central Banks will hold onto their gold in 2009!

    So with the economy deeply damaged, unemployment claims hitting almost 600k as of this writing, there’s not going to be a huge incentive for investors to sell gold. That’s why gold has only come off of its top by 17.9% and stocks have been 40+% off of their highs on average. You can see its underlying strength just in that fact alone.

    Also, remember that gold supplies will continue to tighten in 2009 just as they did in 2008. Why? Africa’s production of gold sank 14% which was the lowest levels since 1899. That’s serious! But it’s not just a South Africa story. U.S. gold production fell 2% last year. While China (which has now become the world’s biggest producer of gold) had their production rise 3% last year, the “net” result collectively among all countries is a net slowdown in gold production.

    Central bank selling in gold was down a full 42% last year. And you’d be an idiot of a central banker to sell a bunch of gold in 2009 with the U.S. and global economy still hobbling along. Therefore, you can count on these guys not adding to the selling.

    Therefore, get ready to buy gold, sell dollars and buy foreign currencies like the euro and especially the Aussie dollar which is greatly helped by rising gold and other commodity prices.

    Most of the increase in gold and selling of dollars may come more in the 2nd half of the year than the 1st half due to the delayed effect of Fed policy and as the Obama administration starts to get its feet wet in tackling the economic woes.

    But be aware and watch for the change just in case it happens even a bit sooner than I think.

    Gold consolidates its multi-year gains as it catches its breath and prepares to run “ever higher” in 2009!

    =========================================================

    2009 Gold Outlook

    2009 Gold Outlook

    How To Invest in Gold in 2009

    By Luke Burgess
    Monday, January 5th, 2009

    The investment markets are yielding to the fact that the global economy will remain weak for the better part of 2009.

    As a result, investors will continue to seek safe havens.

    Under normal conditions, these safe haven investments would include land and real estate. These assets have intrinsic value; or in other words, their value will never fall to zero. But with falling prices, investing in real estate is out of the question for most people right now. And there’s little doubt that investors will look elsewhere for safety against financial crisis.

    The best safe haven asset in the world right now is still gold because it is never considered to be a liability.

    And we believe that safe haven investment demand will drive gold prices during 2009. With this in mind, we would like to present a broad overview of Gold World‘s 2009 gold outlook. But before we get into that, let’s review what happened to gold prices in 2008.

    Gold Was One of the Best Investments of 2008

    In March 2008, gold prices hit a record high of $1,033 an ounce as the gold bull market entered its seventh year of life. This was followed by a normal 18% correction, which drove gold prices back down to $850 an ounce.

    Gold prices subsequently rebounded and were once again closing in on the $1,000 level in mid-July. At the same time, however, the fundamental and psychological effects of the slowing housing and credit markets were just beginning to devalue significantly the investment markets across the board.

    As a result, many long gold positions had to be sold in order to cover losses from investments in other markets. Over the next several months, this forced selling pressure pushed gold prices down.

    Gold prices were also held down during the second half of 2008 as the U.S. dollar enjoyed a +20% rally. Foreign governments, institutions, and banks began buying the U.S. dollar, which despite a legion of problems continues to be the world’s most important reserve currency, as a hedge against domestic economic turmoil.

    20090105_2009_gold_outlook.png

    These factors contributed to a significant drop in the price of gold, which officially bottomed out for the year at an intraday low of $683 an ounce in October 2008.

    Gold prices have subsequently bounced off of the $700 level as major selling has dried up, and fresh buying has come into the market.

    Despite three 20% corrections and serious deflation in the market, gold exited 2008 with a positive 5.4% gain for the year. Although subtle, this gain outperformed every major equity index and commodity in the world. Here are just a few examples…

    Index/Commodity
    Percent Change During 2008
    Dow Jones
    -34%
    NASDAQ
    -41%
    S&P 500
    -39%
    TSX -35%
    TSX Venture -74%
    Oil
    -55%
    Silver
    -23%
    Copper
    -54%
    Gold
    +5%

    This made gold one of the best investments of 2008.

    And the 2009 gold outlook looks just as strong.

    Despite a bit of downside in the immediate future, we expect gold to have a stellar year.

    Global economic turmoil and deflation will undoubtedly continue to influence gold prices in the near-term. A short-term pullback in gold prices from current levels to $800—maybe even a bit lower—before a recovery is not out of the question. However, we expect gold prices to break new records during 2009.

    For our current perspective, we expect gold prices to reach as high as $1,300 during 2009, which would be a profit of over 50% from current levels.

    Gold prices in 2009 will be supported more heavily by supply/demand fundamentals than in the previous years of this gold bull market.

    As we’ve previously discussed, during the third quarter of 2008, world gold demand outstripped supply by 10.5 million ounces. This deficit was worth $8.5 billion and was the largest supply/demand deficit since the gold bull market of the 1970s.

    Official 4Q 2008 world gold supply/demand figures will be calculated and reported later this month. Gold World will report them to you when the data is released.

    In the meantime, though, all estimates suggest that there will be another very large deficit in world gold supplies from the fourth-quarter, with investment demand continuing to drive the market.

    We expect that a continuing surge in investment demand could push gold prices as high as $1,300 at one point during 2009.

    There will likely be a bit more volatility in the gold market in 2009 as more and more speculators come into the market. It is likely that the gold market will experience three or four price peaks (selling points) during 2009.

    How to Invest in Gold for 2009

    As we expect a near-term drop in gold prices as a result of continuing deflation, we are advising our readers to hold off on any physical gold buying for the immediate future. As previously mentioned, gold prices could dip back down to $800 before recovering again.

    Nevertheless, we expect 2009 to be another great year for gold investors.

    Good Investing,

    Luke Burgess and the Gold World Research Team
    www.GoldWorld.com

    ==========================================================

    Tomorrow we’ll check on what’s the latest on the Obama eligibility issue.

    Be Blessed and Remember: Dare Something Today Too!


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    Are You Invested In Gold Miners?

    23 Friday Jan 2009

    Posted by jschulmansr in bull market, Comex, commodities, Copper, Currency and Currencies, economic trends, economy, Fundamental Analysis, futures, futures markets, gold, gold miners, hard assets, How To Invest, How To Make Money, inflation, Investing, investments, Latest News, Make Money Investing, Markets, mining companies, mining stocks, palladium, physical gold, platinum, platinum miners, precious, precious metals, price, price manipulation, prices, producers, production, rare earth metals, silver, silver miners, small caps, spot, spot price, stagflation, Stocks, Technical Analysis, Today, U.S. Dollar

    ≈ Comments Off on Are You Invested In Gold Miners?

    Tags

    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Good Morning, As I am writing this post Gold is up another $17 to $876/ oz. It would appear barring sudden dollar strength, we have succesfully broken the upper resistance level of $860 to $870; if we hold here $900+ will be the next level. Are You Invested In Gold Miners? If so, today’s post is a must read. – Good Investing!- Remember to Dare Something Worthy Today Too! – jschulmansr

    ETF vs. Mutual Fund: Two Ways to Invest in Gold Miners – Seeking Alpha

    By: Don Dion of Fidelity Independent Advisor

    Whether saddled to mutual funds like Fidelity Select Gold (FSAGX) or ETFs like Van Eck’s Gold Miners Index (GDX), gold investors have experienced a wild ride over the last year. While the recent volatility in gold prices is certainly enough to give investors pause, a good argument exists for the presence of a gold ETF or mutual fund in a well-diversified portfolio. Both FSAGX and GDX help investors mitigate the pitfalls of falling currencies and economic slowdowns. Since gold is a physical asset, it tends to maintain its value over time, giving wary investors an added measure of security as time-tested institutions vanish in the face of economic crisis.

    FSAGX and GDX both invest assets in companies that are primarily engaged in the exploration, mining, processing and dealing of gold. As of FSAGX’s semiannual report in November 2008, the fund held seven out of ten of the same top ten holdings. While GDX tracks the NYSE Arca Gold Miners Index, comprising 32 small, medium and large companies incorporated in any gold index, FSAGX is managed by Joe Wickwire and is composed of 69 holdings. The similarities between the two funds are striking, but some investors prefer having a human, rather than an index, at the helm. The larger number of holdings in FSAGX also means a smaller concentration of assets in top holdings, reducing the exposure that investors have to any one portfolio component.

    The top component for both FSAGX and GDX is Barrick Gold Corp. (ABX), constituting 13.77% of GDX’s portfolio as of January 13 and 9.5% of FSAGX’s portfolio as of late November 2008. The Toronto-based exploration company holds interests in a variety of gold resources in South America, Africa and Australia. At the end of 2007, ABX had 124.6 million ounces of proven and probable gold reserves, 1.03 billion ounces of contained silver within gold reserves, and 6.2 billion pounds of copper.

    Goldcorp (GG), the second-largest holding for both GDX and FSAGX, saw shares battered with a series of downgrades and target price reductions in early January, after releasing lower guidance for 2009. Some analysts, however, have dismissed the tarnish to Goldcorp’s shares as an overstatement of the reality of an industry-wide slowdown. In GG’s latest report, the adjusted forecast calls for 50% growth in production through 2013—only 5% lower than analysts’ estimates. In 2008, GG produced a hefty 2.3 million ounces of gold, achieving low margins on a scale larger than those of other competitors such as Yamana Gold (AUY) and Agnico-Eagle Mines (AEM).

    While the most obvious difference in deciding between an ETF and mutual fund is the fees associated with the two different investments, investors should consider several factors when choosing FSAGX or GDX. Even though the expense ratios of both funds are well below the category average—FSAGX is 0.86% while the ratio for GDX is 0.59%—many investors have gravitated to the ETF fund in recent years for the additional edge.

    Investors who own FSAGX will have to hold shares of the fund for longer than 30 days in order to avoid a 0.75% redemption fee—a nerve-racking setback for nervous investors who prefer the option of getting in and out of investments quickly. As opposed to the once-a-day pricing method of mutual funds, ETFs like GDX trade continuously throughout the trading day, but this flexibility also brings an increased measure of volatility. ETFs tend to be more affected by changing news events than mutual funds are, causing surges and dips in price avoided by comparatively steadier mutual funds.

    The differences between GDX and FSAGX are more apparent when comparing fund performance in recent months. GDX dropped more than 63% from July 14, 2008, to October 28, 2008, but it has since recovered 35%. FSAGX, however, fell only 60% from July 14 to October 28 and has recovered 36% in the period since. While their price movement is relatively similar, investors fearing intraday volatility may feel more comfortable with FSAGX than GDX, especially given its longer track record.

    While putting assets into gold could prove to be a profitable move for many investors, it is important for prospective GDX and FSAGX buyers to keep the role of this commodity in perspective. With the ultimate success of gold investments weighing heavily on continuing inflation concerns, placing a bet on gold—or any narrow sector—could whipsaw investors as the inflation battle takes shape under the new administration. For those investors seeking the added security that gold could add to their portfolios in 2009, both GDX and FSAGX, with their solid track records and investor interest, are good places to start.

    ==============================================

    My Note: Mutual Funds (and there are many in addition to the above), are a good way to get a nice spread (basket) of different Gold Miners. In addition, I personally like to have holdings in Individual Companies too! I have 2 different Mutual Funds, in addition to holdings in many of the above mentioned companies. I also like a lot of the mid tier and junior Gold Miners too. I generally try to invest in companies that have production (or about to produce), with a lot of cash on hand (due to financing difficulties for comapnies). The whole sector has been beaten down in prices and if you look carefully, you can find many companies right now that are selling at or for less than actual book value. Personally, I am loading up! As always, do your due diligence and read all the prospectuses; and/or consult your investment advisor.

    ==================================================

    Kinross Raises More Capital; Gold Miners Look Strong – Seeking Alpha

    By: Marc Courtenay of Check The Markets.com

    Kinross Gold (NYSE:KGC), one of the world’s best performing gold stocks, announced a public equity offering of 20.9 million common shares at $17.25 per share, with gross proceeds of about $360.5 million, to enhance the company’s capital position following the funding of recent acquisitions.

    In 2008, the gold and silver miner bought Aurelian Resources for around $809 million. Since that time, the shares of stock have had average daily volume of over 11 million shares on the NYSE and traded in a 52-week range of $6.85-$27.40.

    The Canada-based company has also granted the group of underwriters, led by UBS Securities Canada Inc., an overallotment option to purchase up to an additional 3.135 million common shares at the offering price. This option is available for 30 days after the offering closes. If this option is excercised in full, it will bump up the total proceeds to about $414.6 million.

    The offering is scheduled to close on or around February 5, 2009. The company has 665 million shares outstanding.

    Kinross ranks as number one global gold pick among a number of analysts and investors. Production for the group is anticipated to grow around 30% this year to around 2.45 million ounces.

    The new money now being raised is targeted for general corporate purposes after recent acquisitions depleted around $180 million of Kinross’s existing cash. Just two months ago, Kinross shelled out $250 million on a 6 million ounce gold deposit in Chile.

    The last quarter’s earnings growth was up an impressive 64% year-over-year, the balance sheet looks better than average with a total debt-to-equity ratio of just .017 and total cash of over $720 million.

    The Kinross acquisition may have upped the tone for other gold miners. Harmony Gold (NYSE:HMY), the world’s fifth biggest gold miner by ounces produced, on December 22 announced the raising of R979 million before costs, by placing 10.5 million shares at an average price of R93.20 each between November 25 and December 19 2008.

    The fresh capital is earmarked mainly to further pay down Harmony’s debt, which is targeted, on a net basis, to be around zero by mid-2009.

    Among other capital raisings, during November, Agnico-Eagle Mines (NYSE:AEM), a leading Tier II gold digger, raised $252 million in a seemingly effortless offering.

    Overall, when it comes to healthy, proactive and well-managed gold mining companies, the offerings are “in response to strong investor demand.”

    Although right now I have both a long and a short position with KGC, I won’t be buying any more until the price per share corrects at least 20% below present levels. But I’m impressed with both the fundamentals of Kinross and the way the investment community views them so favorably.

    KGC, along with Goldcorp (NYSE:GG), Barrick Gold (NYSE:ABX), Yamana Gold (NYSE:AUY) and IAM Gold (NYSE:IAG) are shares I want to be accumulating for the year ahead.

    The market volatility should help us to buy at lower prices, but the whiff of future inflation and the popularity of gold as a monetary alternative may keep share prices from falling as low as I would like. Patience though, is usually rewarded.

    Disclosure: Author holds both a long and short position in KGC

    ==================================================

    Next – Do we have a potential Takeover or Meger Forming? – Read this next article… 

    Flush Kinross Likely Looking for a Deal with Yamana-Credit Suisse- Seeking Alpha

    Source: Financial Post Trading Desk

    If Kinross Gold Corp. (KGC) had $705-million in cash at the end of the third quarter, why did it decide to raise another $360-million in a bought deal offering of 20.9 million common shares at $17.25 each?

    The company said it will use the money to bolster its capital position and for general corporate purposes, but investors are surely wondering if any acquisitions are in the making.

    An over-allotment option of 3.14 million shares would bring total proceeds from the offering to $415-million. Credit Suisse analyst Anita Soni also noted that Kinross is expected to have another $541-million in operating cash flow in 2009 (based on $700 per ounce gold), while it has $700-million in obligations this year (including capex of $460M).

    “Kinross is well funded with its current cash and cash flow position and does not require additional funds for its current pipeline of growth,” she told clients, adding that the company is strengthening its coffers to capitalize on acquisition opportunities to shore up its growth profile.

    Ms. Soni said “tack on” acquisitions like the Lobo Marte gold project deal with Teck Cominco Ltd. (TCK) for about $250-million, plus a royalty, in November, are possible. However, she also said a larger transaction in the senior or mid-tier space could surface, with Yamana Gold Inc. (AUY) and Teck’s Pogo mine as likely candidates.

    Ms. Soni said:

    Yamana has a good project pipeline but it does not have the near-term capital to fund that growth. An acquisition of Yamana would deliver a project pipeline and growth from 2009-2011 even using our conservative forecasts for Yamana. It is also likely that Kinross would be able to realize additional ounces beyond what we forecast for Yamana given Kinross’s ability to fund growth.

    Yamana’s current multiple based on metal and share prices is around 1.2x, while Kinross is at 1.5x.

    The analyst added that Agnico-Eagle Mines Ltd. (AEM) is too expensive, while Goldcorp Inc. (GG) and Barrick Gold Corp. (ABX) are too big in terms of market capitalization.

    ==================================================

    That’s it for today, Gold now up $19 at $878/oz! – Good Investing- jschulmansr

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    Are We Getting Ripped Off? Latest Bailout and Gold News

    21 Wednesday Jan 2009

    Posted by jschulmansr in agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, Barack Obama, bear market, bull market, capitalism, central banks, Comex, commodities, communism, Copper, Currencies, Currency and Currencies, deflation, depression, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, gold miners, How To Invest, How To Make Money, inflation, Investing, investments, Latest News, Make Money Investing, Markets, mining companies, mining stocks, Moving Averages, oil, palladium, physical gold, platinum, platinum miners, Politics, precious, precious metals, price, price manipulation, prices, producers, production, rare earth metals, recession, Religion, silver, silver miners, spot price, stagflation, Stocks, Technical Analysis, Today, U.S. Dollar, volatility, warrants

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    agricultural commodities, alternate energy, Austrian school, Bailout News, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Federal Deficit, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Are We Getting Ripped Off? Read Today’s Post dealing with the Bailout, Gold Price Manipulation and more. I’m back, we have a new President, what does this mean for your investments… Read On and Good Investing! – jschulmansr

    Preventing The Greates Heist In History- Seeking Alpha

    By: Whitney Tilson of Value Investing

    There’s currently an idea to fix the financial system that’s getting quite a bit of traction: an RTC-type program whereby the government would buy $1 trillion of troubled assets from struggling U.S. banks, with the goal of restoring them to health so they can begin lending again, leading to an economic recovery.

     

    The problem with this idea (let’s call it “New RTC”) is that either the government will pay market prices for the toxic assets – in which case, it will simply accelerate the collapse of our financial system – or pay above-market prices, in which case taxpayers will likely suffer big losses.

     

     

    De-Leveraging Is Not Deflation-Seeking Alpha

    By: Paco Ahigren of Ahigren Multiverse

    “Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation’ to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages.”

    — Ludwig von Mises

    It’s true that just about every asset class is coming down in price right now. This, however, is not deflation — as I have said so many times recently, much to many readers’ unqualified chagrin. To the contrary, these declines are the products of de-leveraging — not deflation — and the distinction is nearly incalculably important, although the subtlety seems to elude even the most astute these days.

    If the previous premise is true (which it is), any removal of money from the economy would eventually result in an increase in the value of our currency, relative to everything else. And that, in turn, would eventually translate into lower prices in dollars. But that’s clearly not what is happening. No, the Fed is printing money, sending the amount in the economy higher than ever seen in U.S. history. That’s not deflationary. That’s inflationary.

    Just so you’ll know, here’s the definition of inflation I’m using. And before you pooh-pooh it with too much eagerness, remember that one of its authors, F.A. Hayek, won the Nobel Prize in economics in 1974.

    Look, the thing we should be worried about is relative value, not “inflation,” per se. It’s not about the growth of M0, or M1, or M2 (or even M3, if you keep up with shadowstats.com), so much as it is about what the money supply is doing relative to everything else that is happening. I know assets are falling in price — believe me, I get no shortage of reminders every single day. But the amount of money in the system — not just M0 — is increasing at a tremendous rate. I won’t argue that the relative value of things like real estate and equities are going to continue to drop — maybe even dramatically, and for a long time — in terms of demand (or lack thereof). No, what I’m most concerned about is that demand will stay extremely low, and yet prices will rise anyway because of the increase in the amount of money in the system.

    But it’s not just money; it’s also Treasuries. The Fed has specifically stated that its objective is to stimulate “inflation” (by its definition). It wants prices to rise, and it’s going to do everything it can to find success. But the amount of money in the system is unprecedented. When the Treasury bubble starts to collapse, yields are going to explode. Yes, the Fed will probably print more money to buy down the long-end of the curve, but how long will that work? Some people say years, but how? Do you really think the Chinese and the Japanese are going to keep funding that sort of behavior? Or even more importantly, do you think they’re just going to sit on their current holdings? Probably not, and if they start dumping Treasuries, yields are going much higher.

    It’s not a matter of if this is going to happen. Yields can’t stay where they are for any sustained amount of time, and once they start rising, so will prices. But will demand for, say, houses have increased? No. Cars? No. Boats? Televisions? No. Why? The American consumer is tapped out.

    Credit card companies are tightening limits prodigiously. Teaser rates are all but gone. Home equity has dried up. The consumer has driven two-thirds of our economy for at least the last few decades, and now the consumer is dead. There’s another aspect to this that I won’t go too deep into: the American consumer protects his or her credit score for one reason — to obtain future credit. But the consumer also knows that loans have dried up — not just today, but for the very distant future as well. You know these consumers have to be thinking about defaulting; if they can’t get loans anyway, why would they not default on thousands of dollars in unsecured credit card debt? I plan on writing more about this in future articles, but suffice it to say, I think credit card companies are going to give us the next blow to our collective stomach, and it’s going to hurt.

    So here we have a situation in which demand is gone, and yet prices and rates are rising — because of inflation (printing money) and the Treasury collapse. And that’s the point: it’s not going to come from just one source. It’s not just going to be inflation (printing money). It’s not just going to be the collapse in Treasuries. It’s not just going to be the nearly unfathomable costs of the stimulus packages that are coming online in the next two years. It’s going to be the confluence of all of it. And if I’m right about the continued deterioration in credit markets, things will be even worse.

    You think it’s not different this time? Add it all up, in real dollars — the staggering amount of debt, the parabolic rise of currency in the system, the annihilation of real-estate investment, and the demise of the consumer. $8.5 trillion committed to bailouts and stimulus packages. Oh, yes it is different this time. It’s very different.

    Credit cards didn’t even exist in 1930, and the dollar was backed by gold. Credit cards barely existed in 1973. Nixon had just taken us off the gold standard, and look what happened? Volcker was immensely lucky to have stopped hyperinflation, and look at the extreme measures he had to employ to do it.

    Of course, every time I bring all of this up — which is a lot lately — somebody starts talking about the velocity of money. And pretty soon after that, somebody starts talking about the multiplier effect.

    Yes, the U.S. employs a fractional reserve system, and while that system certainly lends to rising prices and yields, the amplifier effect is not inflation. Like the printing of money, the fractional reserve system is only one ingredient in the poison that lends to the ultimate catastrophe inspired by central banks: rising prices and increased costs of borrowing.

    And then there’s velocity…

    While I am eternally grateful to my critics for forcing me to defend the theories I hold dear, I sometimes fatigue of the incessant snapping at my heels by people who want me to know that the velocity of money has slowed down. I know the velocity of money has slowed. It doesn’t matter. It’s not going to stay this low for long, and when it starts speeding up, it’s not going to be a “good thing.” Treasuries are going to break, rates and prices are going to rise, and all that money pressing against the dam is going to find a crack. Why? It has to. People will flee from dollars that are losing value. They will extract all the dollars sloshing around the system, and they will buy commodities and durables in order to preserve the value of their wealth.

    Remember, just because the dollar is losing value does not mean that the concomitant subsequent rise in certain asset classes necessarily means that demand for all assets has increased dramatically — as it did during previous eras of easy money. Demand for assets economy-wide can continue to wane even as people spend dollars as fast as they can get them in the midst of rising prices. And this is a very important distinction: prices can rise because of demand, but prices can also rise because of excessive increases in the amount of money in the system. If prices are rising without a simultaneous increase in demand, well, I can’t think of a more dangerous economic environment to be in.

    You don’t believe it can happen? You think there’s a huge demand for houses, cars, and boats in Zimbabwe? Prices there are rising exponentially, but there is very little demand for assets — other than staples, of course. What do you think their velocity of money is?

    The other day I wrote that Treasuries and the dollar are not “safer” than gold, and for my efforts I was heckled by several readers. Ultimately, however, flight-to-quality will seek the true risk-free rate of return, and this is yet another factor that will contribute to the imminent ferocity of the move that’s coming. Once Treasuries unwind, people and institutions will scramble to find a place to put the money they had once placed in the “safety” of U.S. government debt. And unless you know of a medium whose historical consistency and safety surpasses gold’s, that will be the place investors find haven.

    Just for future reference: when I say the dollar’s going to fail (which it is), and you’re hovering over your keyboard, poised like some bird-of-prey, ready to strike me with all the ire of God-upon-Sodom, will you try to remember that I acknowledge velocity is, at least for the time-being, near zero. Will you also try to remember that I don’t believe the massive increase in currency alone will not be responsible for imminent rising rates and prices? In fact, I think Treasuries are going to play a greater role in the beginning.

    Also, I agree with many of you that my timing may be a bit premature, and I exited my TBT after the last run-up. Unfortunately, today the stock market and Treasuries are getting crushed as gold rallies. I wouldn’t want to declare myself “right” based just on the behavior of these markets in recent days. That would be stupid. And yet I sit here and watch TBT move higher, wondering if getting out was even more stupid.

    To add to my trepidation, some sort of manager in the South Korean finance ministry came out over the weekend and announced that the time has come to sell U.S. Treasuries. How do you think that made my stomach feel? Of course, Bernanke keeps promising to do battle with the long end of the curve, so maybe he’ll make good on his threat and I can find a point to get back in comfortably.

    Of course, if I miss the move because I listened to some of you cynics. Well, at least I still own gold.

    Disclosures: Paco is no longer short U.S. Treasuries (although he hopes to be again soon). He is long physical gold, and the Proshares Ultra long gold ETF (ticker: UGL).

    Copyright 2009, Paco Ahlgren. All Rights Reserved.

    ================================================

    On Gold Price and Market Manipulation 

    Questions Begging Answers- GoldSeek.Com

    By: Rob Kirby of Kirby Analytics

    To say that markets have been behaving “strangely” recently is an understatement.  In recent weeks and months we’ve been witness to historic lows in sovereign interest rates in-the-face-of record amounts of debt being issued by governments?  We’ve seen the price of gold behave counter intuitively by “not rising” in-the-face-of unprecedented systemic global economic malaise?  Last, but not least, we’ve witnessed a “complete flip-flop” in the traditional pricing of Brent Crude Oil [IPE-London] versus West Texas Intermediate [NYMEX-N.Y.]?  

     

    So we have the price of gold, the price of crude oil and interest rates – three items vital to the integrity of the U.S. Dollar – ALL trading in total disregard for their underlying fundamentals?

     

    The following is a thought provoking analysis with commentary:

     

    The Situation In Gold

     

    First and foremost it is imperative that everyone realize and understand that Gold “is” Money.  We know that gold is money because every Central Bank in the world carries gold on their balance sheets as ‘an official reserve asset’.

     

    With that in mind, folks would do well to read one of James Turk’s latest articles titled, The Fed’s blueprint for market intervention .  In this article, Turk offers commentary on a recently unearthed 1961 document from the archives of the late, long-time former Chairman of the Federal Reserve, William McChesney Martin Jr. which details in the Fed’s own pen; their plans to intervene surreptitiously in the currency and gold markets to support the dollar and to conceal, obscure, and falsify U.S. government records so that the intervention would not be discovered.  In Turk’s words,

     

    “In short, [the newly unearthed document] lays out what the Treasury and Federal Reserve needed to do in order to begin intervening in the foreign exchange markets, but there is even more. This document plainly shows what happens when government operates behind closed doors. It also makes clear the motivations of the operators of dollar policy long described by the Gold Anti-Trust Action Committee and its supporters — namely, that the government would pursue intervention rather than a policy of free markets unfettered by government activity. The run to redeem dollars for gold had put the government at a crossroads, forcing it to make a decision about the future course of dollar policy. This paper describes what the government would need to do by choosing the interventionist alternative.

    This document provides primary, original source supporting evidence that GATA has been right all along.” 

     

    In Feb. 2007 here’s what the Royal Bank of Canada’s Chairman, Tony Fell had to say, confirming unequivocally that gold is money,

     

     

    “At Royal Bank of Canada, we trade gold bullion off our foreign exchange desks rather than our commodity desks,” says Anthony S. Fell, chairman of RBC Capital Markets, “because that’s what it is – a global currency, the only one that is freely tradable and unencumbered by vast quantities of sovereign debt and prior obligations.
    “It is also the one investment and long-term store of value that cannot be adversely impacted by corrupt corporate management or incompetent politicians,” he adds – “each of which is in ample supply on a global basis.”

     

    In short, says Fell, “don’t measure the Dollar against the Euro, or the Euro against the Yen, but measure all paper currencies against gold, because that’s the ultimate test.”

     

     

     

     

     

    Fell’s admission coupled with the recently unearthed account of the Fed’s game plan shows that gold “is” and always has been feared as competition for the U.S. Dollar and a game plan has long been in place to thwart it.  This explains why economic data has been falsified and the price of gold has been surrepticiously managed and interfered with by the United States Treasury and the Federal Reserve.

     

    The mounting evidence is this regard is so compelling that from this point forward any ‘economist’ attempting to explain our current situation without prefacing their explanation with an EXPLICIT ACKNOWLEDGEMENT that our capital markets are not free and are in fact RIGGED by officialdom – their analysis is not worth the time to read it.  In this regard, perhaps never have more prescient words been uttered than GATA’s Chris Powell in Washington in April, 2008 – when he opined, There are no markets anymore, just interventions.

     

    The recent decoupling in price of gold as measured by the spread between the futures price and the cost to obtain physical ounces is a stark reminder that smart money is beginning to repudiate fiat money by seeking tangible ownership of goods perceived to posses value instead of derivative ‘promises’ to deliver the same.

     

    The Oil Picture

     

    Back in June, 2007, Market Watch reported,

     

    Normally, Brent crude costs $1-$2 less than WTI crude, according to James Williams, an economist at WTRG Economics. At its peak, the price spread between the two topped $5, according to his data.

     

    The article went on to explain,

     

    WTI usually trades at a premium to Brent “because of the slightly higher quality, and the extra journey” oil tankers have to take to get the oil to the U.S., according to Amanda Lee, a strategist at Deutsche Bank. So “WTI minus dated Brent should be roughly equal to the freight rate,” she said. Indeed, “crude-oil prices usually depend on two things: quality and location,” said Williams. “The greater the distance from the major exporters, the greater the price.”

     

    But here’s what’s happened recently in the global crude oil market:

     

     

     

     

     

     

    Brent Crude trading at a 7 Dollar premium to West Texas Intermediate is like the SUN rising in the west and setting in the east – and no-one asking any questions why?

     

    Thanks to the unearthing of the Fed’s Playbook Document, referenced above, along with cumulative knowledge of the existence of the President’s Working Group On Financial Markets [aka the Plunge Protection Team]; we know that interference in strategic markets with national security implications is now practiced commonly by the Government and the Fed working together.  No other explanation for this distortion is plausible other than NYMEX regulators like the Commodities Futures Trading Corp. [CFTC – Plunge Protection Team members] are more brazen and actively complicit in market rigging of strategic commodities than their London counterparts. This manipulation is all being done in desperation; to preserve U.S. Dollar hegemony by perpetuating the illusion that inflation is being held at bay.  Ample anecdotal evidence exists in a host of articles – particularly relating to derelict CFTC oversight of COMEX gold and silver futures – archived at kirbyanalytics.com to support this position.

     

    Spiking VLCC Rates Reflect “The Movement to Tangibles”

     

    The “unusual” premium for Brent Crude is even more perplexing given that crude oil shipping rates [unlike their dry goods shipping counterparts, as depicted by the Baltic Dry Index] for VLCCs [very large crude carriers] have, as recently as Dec. 2008, been enjoying robust and improving charter rates,

     

     

    Last week the spot rate for Suezmax tankers was in the low $40k per day range. Yesterday, I check the rates and they have popped to over $90k this week! VLCC (very large crude carriers, i.e. supertankers) rates have not jumped as much but appear to be following the trend. So what is the deal here? Oil prices are falling and so is the apparent global demand for oil. Are not oil tankers just sitting around idle like the dry bulk carriers?
    The answer is somewhat counter intuitive. The spike in spot tanker rates is actually the result of the low oil prices. Many tankers are being leased on the spot market as storage tanks. Oil producers, for whatever reason, do not want to significantly slow their oil production, but at the same time do not want to sell it for $45 a barrel. So they are leasing tankers to store oil in the hope or belief that oil prices will recover shortly. Two names in news articles that I have read doing this are Royal Dutch Shell and Iran. The majority of the planet’s oil production is owned by national oil companies that have policy and employment as well as financial reasons to keep the oil flowing. So at least in the short term, the current low oil prices are a boon for tanker owners.

     

    Oil tanker companies, like their dry cargo brethren, can sign their ships to either long term, multi-year leases or charter them on the spot market where they are leased for a single voyage at the current spot rate.

     

     

     

     

     

    The fact that “smart money” is now paying elevated prices to lease very large crude carriers [to store physical crude for later sale] is further evidence that faith in fiat money is waning simply because – you can do the same “trade” on paper – utilizing futures – without the bother and nuisance of leasing ships and handling the physical.  Ask yourself why smart money has recently become engaged in buying ‘relatively illiquid’ physical crude oil, in a world allegedly awash in the stuff, for resale at a later date – instead of playing futures, accepting promises and holding cash?

     

    Smart money is in the process of losing confidence in cash.

     

    Interest Rates

     

    It is vital that everyone understand that the function of interest rates in a system of usury is to solemnly act as the efficient arbiter of capital – rising to restrict money / credit growth when the economy overheats and falling to create the opposite when the economy cools.

     

    Interest rates no longer serve this function.

     

    As deceitfully disastrous as the surreptitious interventions in the crude oil and gold markets has been – they pale in comparison to the travesty which has been perpetrated through the premeditated hobbling of usury. 

     

             

     

    The roots of this most wicked experiment are traceable to the appointment of Alan Greenspan as Chairman of the Federal Reserve and then to academia – Harvard – where Robert Barsky and Lawrence Summers co-authored an academic research paper in the 1980s titled, Gibson’s Paradox and the Gold Standard.  The “elevator speech” of what the paper examined was the co-relation between bond prices, inflation and the price of gold and, by extension, theorized that interest rates could be driven down [or kept low] – without sacrificing the currency – in the face of and despite profligate monetary policy so long as gold prices declined or did not rise.

     

      

     

    After a stint as Chief Economist at the World Bank, Mr. Summers brought this “theory” to Washington mid-way through the first Clinton Administration [late1993] as Under Secretary of Treasury to Robert Rubin where he began laying the groundwork – with co-conspirators Greenspan, Rubin and Clinton – for the implementation of his “theoretical research”:

     

     

     

    Gold price suppression began in earnest concurrently with changes in how the Office of the Comptroller of the Currency [OCC] begins records the mushrooming growth of derivatives [mostly interest rate swaps which – absent end user demand – only create artificial demand for government bonds]:

     

     

     

    The Federal Reserve acting in cahoots with the U.S. Treasury utilizing the futures pits in N.Y. [COMEX] and the obscenity that has become J.P. Morgan’s Derivatives Book – the Fed / Treasury combo seized control of both the gold price and interest rates.  The mechanics of how interest rate swaps were utilized to suppress interest rates is chronicled and explained in detail at Kirbyanalytics.com in a paper titled, The Elephant in the Room.

     

    Subscribers are reading about the logical implications, and what comes next, as a result of the market manipulations outlined above as well as actionable suggestions to help insulate your investment portfolio from the inevitable fallout.

    ====================================================

    Gata’s Tenth Anniversary: Gold Manipulation Evidence Mounts-Gold Seek.Com

    By: Bill Murphy of LeMetropole Cafe 

    “Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.” … John Kenneth Galbraith

    “An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it.” … Mahatma Gandhi

     

     

     

    GO 

     

     

    GATA!
     

     

     

     

    This week marks GATA’s tenth anniversary of our efforts to expose the manipulation of the gold market. In another few weeks we will mark the tenth anniversary of my appearance on CNBC (interviewed by Ron Insana) … the first and last GATA appearance on the US TV media to date … for once they heard what GATA had to say, we have been blackballed ever since. It also marks a shameful period for the US financial market press, which is now clamoring for answers as to how we ever got in the financial market/banking mess we are presently facing. For that answer they ought to first look at themselves and their dismal way of kowtowing to the rich and powerful, and banning those who are willing to challenge the Orwellian grip on what Americans are allowed to hear and know.

    America is facing quite a dichotomy at the moment. We are on the Inaugural Eve of our first black President, with all the hopes and dreams he is envisioning for our country. At the same time we are enduring the most horrific financial crisis since the Great Depression.

    President-elect Obama, a superb orator, is calling for Americans to pull together to effect the CHANGE he called for in his campaign, and for all of us to contribute individually to make that change happen. He has wisely warned of the tough times ahead while going all-out to ready policies ASAP which he believes are the correct way to remedy the growing economic problems of the day.

    He has also assembled an economic team of advisors which are acclaimed and generally very highly regarded … including Robert Rubin, Lawrence Summers, Timothy Geithner and Paul Volker. Unfortunately for the GATA camp, they are the ALL-PROS of the gold price suppression scheme. It is almost like our worst nightmare. On paper it represents anything but change as far as US gold policy is concerned, and has the potential to make our investment lives miserable for years to come. After all…

    *Robert Rubin coined the phrase “US Strong Dollar Policy,” and flaunted the phrase. Rigging the price of gold was that policy’s lynchpin. What else was there? Steve Forbes was on Fox News Saturday talking about how important he believes it is for America to MAKE the dollar strong again. He talked sheepishly about gold in vague terms and referred to Rubin.

    Robert Rubin hatched the gold price suppression scheme while running Goldman Sachs’ operations in London. This was many years ago, when interest rates were very high (say from 6 to 12% in the US). Rubin had Goldman Sachs borrowed gold from the central banks at about a 1% interest rate. Then he sold the gold into the physical market, using the proceeds to fund their basic operations. This was like FREE money, as long as the price of gold did not rise to any sustained degree for any length of time.

    He continued his innovative money ploy as CEO of Goldman Sachs in New York and then put his Strong Dollar Policy ploy on steroids as Treasury Secretary under President Clinton.*Lawrence Summers followed Rubin as Clinton’s Treasury Secretary, and who could be more qualified to continue Rubin’s gold price suppression scheme than him? After all, while at Harvard he co-authored a paper, “Gibson’s Paradox and The Gold Standard.” The bottom line of Summers’ analysis is that “gold prices in a free market should move inversely to real interest rates.” Control gold and it will help to control interest rates.

    Obama has designated Mr. Summers to be the Director of the U.S. National Economic Council.

    *Which brings us to Timothy Geithner, who is President-elect Obama’s nominee to be U. S. Treasury Secretary. Geithner was named president and chief executive officer of the Federal Reserve Bank of New York on November 17, 2003. In that capacity, he serves as the Vice Chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation’s monetary policy.

    Mr. Geithner joined the Department of Treasury in 1988 and worked in three administrations for five Secretaries of the Treasury in a variety of positions. He served as Under Secretary of the Treasury for International Affairs from 1999 to 2001 under Secretaries Robert Rubin and Lawrence Summers.

    Geithner is also happens to be a member of the Bank for International Settlements and since 2005 has been Chairman of the Committee on Payment and Settlement Systems. You might want to see what The CPSS undertakes “at their own discretion” as listed here:

    http://www.bis.org/cpss/index.htmLike outgoing Treasury Secretary Hank Paulson, Tim Geithner is a graduate of Dartmouth College. Talk about knowledge of the gold price suppression scheme!

    *And then there is the venerable Paul Volcker, who so effectively brought down runaway inflation in the US, starting in 1980. His one regret:

    “Joint intervention in gold sales to prevent a steep rise in the price of gold (in the 1970s), however, was not undertaken. That was a mistake.” … Former Federal Reserve Chairman Paul Volcker (writing in his memoirs).

    All-Pros? All-World is more like it when it comes to devotees of suppressing the price of gold. Outside of Volcker, the other three are those most responsible for making it happen in the first place.

    So what’s the point? To get us all depressed over what lies ahead? NO, just the opposite.

    On December 18th, on GATA’s behalf, I met with Bart Chilton, a CFTC commissioner who showed interest in hearing what we had to say. There were three others from the CFTC in attendance, including Elizabeth L. Ritter, Deputy General Counsel of that organization.

    From my MIDAS commentary later in that afternoon…

    Bart listened intently and took notes, as did one of the others, and asked numerous questions. Basically, I laid out our GATA presentation as I explained in the Sunday Midas. I am not going to get into all the details of what they said, as we will see what takes place in the months to come … except to say that I chuckled when saying to them if they really wanted to comprehend what the real gold price suppression scheme is all about, all they have to do is go to their new proposed Chairman … at the right time. No one knows what is going on better than he does.

    (Insert- Gary Gensler was nominated that day to be the new chairman of the CFTC. Gensler was Undersecretary of the Treasury (1999-2001) and Assistant Secretary of the Treasury (1997-1999).

    Gensler spent 18 years at Goldman Sachs, one of the ringleaders of The Gold Cartel, making partner when he was 30, becoming head of the company’s fixed income and currency operations in Tokyo by the mid-90’s.

    As the Treasury Department’s undersecretary for domestic finance in the last two years of the Clinton administration, Gensler found himself in the position of overseeing policies in the areas of U.S. financial markets, debt management, financial services, and community development. Gensler advocated the passage of the Commodity Futures Modernization Act of 2000, which exempted credit default swaps and other derivatives from regulation.

    Could The Gold Cartel have recruited a better ALL-PRO/ALL-WORLD man for their team? It is also important to keep in mind that chairman of the CFTC is one of the four members of the President’s Working Group on Financial Markets. Now why does a bureaucrat need to participate with the President and US Treasury Secretary on the markets? I thought the CFTC was supposed to regulate them, not be a part of policy.)

    I did not hold back and said the main culprit of The Gold Cartel was our own government (their own boss), who has been in league with bullion banks like JP Morgan Chase, and others, to suit their own hidden agenda….

    I was very impressed with Bart Chilton (very sharp guy) and he mentioned that my trip to D.C. would not be in vain.

    ***

    What I stressed most at the meeting was that the gold price suppression scheme would not survive another four years, over the length of Obama’s elected term … and presented lengthy documentation to prove my point … meaning The Gold Cartel would run out of enough available central bank gold to meet a growing annual supply/demand deficit over the next four years. The bottom line was that Obama could stop the gold price manipulation scheme now and allow the price of gold to trade freely, thereby letting the Bush Administration be the fall guy; or he could let his economic team persuade him to carry on the status quo, in which case the price of gold will blow sky high in the years ahead, and he would have to take the blame for the resulting ramifications … especially when the gold scandal becomes a huge public ordeal.

    What better way for Obama himself to understand the true gold situation than to ask his top economic advisors what the real deal is. If GATA is correct, and we have been on target for years, the U.S. has a BIG problem when it comes to its gold reserves (how much of it has been encumbered and is therefore GONE?) That is an essay unto itself, with many variables to be discussed, and for another time. All Obama has to do is get the five above-mentioned gentlemen in a room and get right to the nitty-gritty. They can start with the extensive package I handed to Bart Chilton, who is a member of the Obama transition team, and someone who once worked for Tom Daschle, formerly the Democratic leader in the Senate for ten years, and is now Obama’s Secretary of Health and Human Services nominee.

    What Bart Chilton does with what I gave to him is his business, but since he told me my visit would not be in vain, I assume GATA’s extensive presentation did not go into the dumpster.

    Meanwhile, in GATA’s tenth anniversary year, we are making our own call for CHANGE, and are pressing on. Obama has stated over and over again he wants THE PEOPLE to be represented and asked us to give him input. Who has more pertinent input go get to him than our camp? Therefore, we are asking everyone interested in a free gold market to make a renewed effort to further disseminate our decade’s worth of evidence of gold market manipulation into the public domain by contacting the financial market media and to others in the Obama transition team (if you have any contacts).

    I know how frustrating it has been to get the jaded financial market media to listen to, and then acknowledge, what we have to say, but that was yesterday and perhaps times have changed due to the growing financial market crisis, and yearning to understand how we got here. After all President-elect Obama is urging for “government accountability” and “transparency.”

    This call to arms has been instigated by the dramatic and sudden discovery of an important document buried in the Federal Reserve’s archives by writer and researcher Elaine Supkis. This document is posted on her blog at:

    http://emsnews2.wordpress.com/2009/01/15/1961-top-
    secret-fed-reserve-gold-exchange-report/

    The document, which is marked “Confidential,” is from the papers of William McChesney Martin, Jr., and this collection is held by the Missouri Historical Society. A scanned image of the original document is posted by the Federal Reserve Bank of St. Louis at the following link:

    http://fraser.stlouisfed.org/docs/histor ical/martin/23_06_19610405.pdf

    Most importantly, GATA consultant James Turk has brilliantly dissected this document in an essay titled, “The Federal Reserve’s Blueprint for Market Intervention,” which has been served at The Matisse Table and at www.GATA.org…

    http://www.gata.org/node/7095The title of this confidential report is:

    Confidential – – (F.R.)
    U.S. Foreign Exchange Operations: Needs and Methods

     

     

     

     

    James Turk notes:

    In short, it lays out what the Treasury and Federal Reserve needed to do in order to begin intervening in the foreign exchange markets, but there is even more. This document plainly shows what happens when government operates behind closed doors. It also makes clear the motivations of the operators of dollar policy long described by the Gold Anti-Trust Action Committee and its supporters — namely, that the government would pursue intervention rather than a policy of free markets unfettered by government activity. The run to redeem dollars for gold had put the government at a crossroads, forcing it to make a decision about the future course of dollar policy. This paper describes what the government would need to do by choosing the interventionist alternative.

    This document provides primary, original source supporting evidence that GATA has been right all along.

    I have long hoped that a “confidential” document like this one would eventually emerge. There are no doubt countless more like it, as evidenced by the Federal Reserve’s and the Treasury’s refusal to provide all the documents requested by GATA under its recent Freedom of Information Act request. Maybe those documents will eventually see the light of day too.

    ***

    James makes a key point regarding one of the assertions of this report…

    “The basic purpose of such operations would be to maintain confidence in the dollar.”
     

     

     

     

    James T notes…

    “This statement confirms one of the basic planks of much of the work by me and others that has been published by GATA over the years. The efforts to cap the gold price have one aim. It is to make the dollar look worthy of being the world’s reserve currency when in fact it is not.”

    ***

    This significant report was written some 48 years ago, yet could have been written at any time in the past 10 years during which GATA has discovered blatant manipulation of the prices of gold and silver … as well as noted ludicrous counterintuitive dollar market action, which has been most noticeable in recent days, as our hysterical financial crisis in the US intensifies.

    James Turk’s title says it all: it is a blueprint for the gold price and financial market manipulation so prevalent now. Ironically, there is a common misconception out there that the US is in the financial market mess it is in today because of too much deregulation. To some extent that is very true, as the likes of Secretary Paulson and Gary Gensler urged Congress to allow the US investment banks to increase the allowable debt/credit on their books from 12:1 to 40:1.

    Yet, just as big a problem was the secretive interference in the US financial markets which allowed credit and risk issues to go completely out of control in America … meaning too much secretive market manipulation … and in a hidden way, too much regulation. Had the gold market not been artificially suppressed and allowed to trade freely, the price would have soared these past years, interest rates would have risen dramatically, and there would have not been the reckless investment bank shenanigans that have put our financial system in such peril. Simplistically, it is generally acknowledged that if gold had been allowed to keep up with inflation for the past 28 years, the price would be over $2,000+ per ounce. The GATA camp knows why it is not there RIGHT NOW!

    Had the Plunge Protection Team (Working Group on Financial Markets) not stepped up their constant Hail Mary play activity after 9/11 to drive the DOW mysteriously higher in the last hour of trading on the New York Stock Exchange, the market probably would have broken down much earlier than it did and given the investing public more of a clue that something was wrong, instead of the misleading Stepford Wives drill that “Everything is fine.”

    What is profoundly disturbing about the discovery of this confidential document is it fits in with much grander conspiracy theories than where GATA is coming from. Since this document, based on what has happened, really is a blueprint for market manipulation since 1961, it feeds into the worst fears of those who are constantly on the case about the Bilderbergers, Council on Foreign Relations, Trilateral Commission, and so on. This document to William McChesney Martin, Jr. is EXACTLY what I have been seeing and reporting over the past decade … not that much different than those who pointed out the Madoff Ponzi scheme during the same period of time. To learn that this market deception and manipulation was conceived when I was a freshman in high school is almost beyond comprehension, especially since the Wall Street crowd hasn’t permitted a serious discussion about it ALL THIS TIME! Nor has our government allowed a true independent audit of US gold reserves since the Eisenhower Administration in 1955.

    It also feeds right into the scary notion revealed in a famed President Clinton comment that goes something like … “I didn’t realize I wouldn’t be in control here when I became President.” … meaning there were far more powerful background forces pulling the strings and on how he must operate.

    GATA doesn’t want to go there, but based on this new discovery, it certainly opens up further comments for fair game, even for some of GATA’s Board of Directors. Adrian Douglas (an oil industry consultant who is presently off to Angola) sent the following email to James Turk:

    James,
    Congratulations. This was an excellent analysis. What a stunning document! Real dynamite.

    It got me thinking as to whether the heist they have pulled is bigger than we think. The BIS as we know, and as mentioned in this memo, is the organization that allows for cooperation behind the scenes of the Central banks. We know they went private to prevent any need for public disclosure seeding the opportunity for Reg Howe’s lawsuit. We have plenty of evidence that Central Bank gold holdings have been depleted. We keep saying that the gold is “gone”. But what do we mean by “the gold is gone”? Gold is not like crude oil, expensive wine, even silver… it does not get consumed. It has not “gone”; it has changed ownership. The Central Banks leased out gold to the bullion banks. Now who did the the bullion banks sell the gold to? We know that the bullion banks can’t get the gold back. If the central banks ask for the gold back the bullion banks can declare bankruptcy or settle in cash. How convenient! The Central bank gold has gone into someone else’s hands that are unknown and the loss will eventually be written off. We know that Central Banks are owned or controlled by some of the richest families and/or entities in the world. Is it possible that these “bankers” can benefit from a fiat Ponzi scheme while it can be maintained AND still end up with the gold in which case they can benefit from a return to a gold standard and when the gold standard eventually gets abused and abandoned in the future they will play the whole fiat game over again? It would certainly require cooperation between central banks to pull off such a heist.

    It would be great to have the whole world sitting in a room and ask those who own more than 10 million ozs of gold to raise their hands!

    The crime may be more than manipulating the price of gold to “defend the US dollar” and concealing the evidence from the public. The Cartel may well have aided and abetted embezzlement of the citizens’ gold of the Western world. And who ever has it, they bought it perfectly legally from the bullion banks with fiat currency.

    This seems to make sense because Central bankers and the “elitists” (Rockefellers, Rothchilds, Morgans, Mellons, Carnegies, Vanderbilts etc etc) are not stupid. They must know gold is real money. They can study monetary history too. The fiat money game in this context is a decoy for the theft of sovereign gold.

    It is not without precedent, the great inflationist, John Law, was arrested escaping with a coach loaded with gold and silver!

    Is this a bridge too far in conspiracy theory?
    Cheers
    Adrian

    Which provoked this reply from another GATA Board member, Catherine Austin Fitts (Assistant Secretary of Housing/Federal Housing Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration)…

    Adrian:
    My hypothesis since 2001 is that the NWO is shifting assets out of sovereign governments and shifting liabilities back in. The goal is to reengineer global governance into the hands of private banks and corporations in a manner that dramatically centralizes control. This is why the creation of a genetically controlled seed and food supply, etc.
    To achieve such centralization requires the centralization of the gold and silver stores. Whoever has the gold has the most powerful financial asset. So if you want a new centralized currency, you need a monopoly on gold and silver. I think part of the end game is to shift back to something involving some kind of gold standard.

     

    If you use fiat currency to acquire ownership and control of all the real assets on the planet, then you need a gold standard to make sure you keep them.

     

     

    So, it would not surprise me to see G8 and GATA start to move into alignment, strange as it may sound.
    Catherine

     

    Neither opinions are official GATA viewpoints, but they are intriguing, eye-opening and worth pondering.

    When I met with Bart Chilton I said GATA’s high command is just a bunch of proud Americans who have stumbled across a profoundly disturbing situation. I showed the four CFTC individuals in attendance GATA’s full-page color ad in the Wall Street Journal on January 31, 2008. It was titled, “Anybody Seen Our Gold?” …

    http://www.gata.org/node/wallstreetjournalSome of you are very familiar with this copy in the ad…

    “The objective of this manipulation is to conceal the mismanagement of the US dollar so that it might retain its function as the world’s reserve currency. But to suppress the price of gold is to disable the barometer of the international financial system so that all markets may be more easily manipulated. This manipulation has been a primary cause of the catastrophic excesses in the markets that now threaten the whole world.”

    … and then…

    “Surreptitious market manipulation by government is leading the world to disaster.”

    The DOW was a little below 13,000 at the time. I mean how right could we have been? Yet the US financial market press completely ignored this very visible ad. There was not even a query of what we were talking about and why we would spend $264,400 to make such a warning.

    So now we are fast forwarding virtually a year later and the US financial markets and economy ARE in chaos. If soon to be President Obama really wants CHANGE and TRUTH, we will give him critical input on one way he can effect what he says he is looking to do.

    To increase the likelihood that what GATA has discovered actually reaches him, GATA is asking all who read this, and agree with GATA, to make some small effort to get this commentary to the financial market media in the world, especially the US financial market press.

    That means contacting writers and media outlets such as the Wall Street Journal, Washington Post, Washington Times, New York Times, Forbes, Fortune, CNBC, CNN, Reuters, Bloomberg, the AP, Fox News, Newsweek, Time, etc. In addition, sending this Tenth Anniversary GATA commentary to widely-followed internet bloggers would also be helpful; perhaps stirring up so many out there who are searching for the reasons behind what has happened financially and economically in the US and why.

    In such troubling times, Obama’s coming Presidency has given optimism and hope to many. For that to occur there must be true change, the desires for which have swept him into office. President-elect had some army. And GATA has its army.

    Please take a little time and make just a small effort to help Obama help himself, even if our issue is the last one he is thinking about at the moment. Funnily enough, it ought to be one of the first, as it is one of the most prominent ones which got us into the financial market/economic nightmare we are in today. After all, it is many of the same bullion banks/investment houses our government is bailing out that were so instrumental in the gold price suppression scheme. Our mission is to let him know, via all sources possible, what the heck has happened and continues to go on.

    Bill Murphy
    Chairman
    Gold Anti-Trust Action Committee

    Copyright (c) 1999 – 2009

    Le Metropole Cafe, Inc

    ================================================

    John Doody: A Winning Situation For Gold Stocks- Seeking Alpha

    Source: The Gold Report

    By: John Doody of The Gold Stock Analyst

    Heralded as “the best of today’s best,” John Doody, author and publisher of the highly regarded Gold Stock Analyst newsletter, brings a unique perspective to gold stock analysis. In this exclusive interview with The Gold Report, Doody ponders the efficacy of the Keynesian approach, makes a case for gold equities and explains how the GSA Top 10 Stocks portfolio has outperformed every other gold investment vehicle since 1994.

    The Gold Report: John, you’ve stated in your newsletter, Gold Stock Analyst: “It’s clear the U.S. is going down a Keynesian approach to get out of this recession/depression.” I am curious on your viewpoint. Will the Keynesian approach actually work, or will they need to eventually move over to the Chicago School of Free Markets?

    John Doody: A free market approach of letting the crisis resolve itself would work, but would cause too much damage; we’d probably lose our auto industry, and it would take too much time. As Keynes said: “In the long run we’re all dead,” so the government is trying to get a faster resolution. The Treasury is pursuing his fiscal policy idea of deficit spending. They’re borrowing the money to bail out the banks. When Obama’s plan is implemented, which could be another $700 billion in stimulus, it will be funded with more borrowings.

    Bernanke and the Fed are pursuing a loose monetary policy with a now 0% interest rate. There’s actually no way we can not end up with inflation. This is much bigger than ‘The New Deal’ under Roosevelt. And I think that the market disarray over the last several months has confused investors; but when the markets settle down, it’s clear to me that it will be up for gold and gold stocks.

    TGR: Is there any economic scenario that you wouldn’t see gold going up in?

    JD: Basically, we’re pumping money into the system, but it’s just sitting there. It’s not being put to work, so there are those who think that we are going to enter a deflationary era. But I can’t see that. Some don’t like Bernanke, but I think there’s probably nobody better prepared to be in his role.

    Bernanke is a student of the Great Depression and knows the mistakes the Fed made then, such as forcing banks to upgrade the quality of loans on their balance sheets. His approach is to buy the banks’ low quality loans, enabling them to make new loans. They haven’t done much of the latter yet, which is probably a fault of the Fed not requiring the funds received for the junk to be redeployed, but they ultimately will lend more as that’s how banks make money.

    He knows in the early 1930s we went into a deflationary period of falling prices. For three or four years prices were down about 10% annually. He fully understands the risks of that, one of which is the increased burden of existing debt payments on falling incomes. The debt burden is lighter in an inflationary environment and that’s his target. Long term, he knows he can cure inflation; Volker showed us how with high interest rates in the 1980s. But there’s no sure way to cure deflation, and so Bernanke’s doing everything possible to avoid a falling price level. And I think that, because this is a service-driven economy, companies won’t lower prices to sell more goods—they will just lay off more workers, as we’re seeing now. I don’t think we’ll get the price deflation of the ’30s, and I’m sure Bernanke is going to do everything to prevent it.

    TGR: But aren’t we already in a deflationary period?

    JD: Well, we may be to an extent; you can get a better buy on a car. But, to put it in the simplest terms, has your yard guy lowered his price, or your pool guy, or even your webmaster?

    TGR: Yes, but people opt to do things themselves versus paying other people to do it.

    JD: Maybe, but if they do, it won’t show up in prices—it will show up in the unemployment statistics. So if the yard guy, pool guy or webmaster don’t lower prices and their clients become do-it-yourselfers, the effect will show up in unemployment, not inflation data.

    TGR: So if every major country in the world is increasing their monetary supply, we would expect inflation. Will there be any currency that comes out of this to be considered the new base currency, sort of like the U.S. dollar is now?

    JD: Well, that’s the $64,000 question. We don’t really know and, because there’s no totally obvious currency, that is why the dollar is doing well of late. But the dollar is in a long-term downtrend, in part because interest rates in Europe remain higher than here. Higher interest rates, as you know, act like a magnet in attracting investment money, which first has to be converted to the higher interest currency and that bids up its value versus the dollar.

    The Euro represents an economy about the size of the U.S., so there may be some safety there. You could argue for the Swiss Franc maybe, but you know the Swiss banks (Credit Suisse, for example) have had some problems, so we’re not quite sure how that’s going.

    So, to me, the only clear money that’s going to survive all this and go up, because everything else is going to go down, is gold.

    TGR: What’s your view of holding physical gold versus gold equities?

    JD: I only hold gold equities. They’re more readily tradable; when gold goes up, the equities tend to go up by a factor of two or three times. Of course, that works to the reverse, as we know. As gold went down, the equities went down more. But because you hold them in a government-guaranteed SIPC account, it provides ease of trading—you don’t have the worries of physical gold. . .insurance, storage or whatever. You may want to hold a few coins, but that would be about it in my opinion.

    TGR: On your website, your approach to investing in gold equities is to choose a portfolio of 10 companies that have the opportunity to double in an 18- to 24-month period with the current gold price.

    JD: Yes. We don’t really look forward more than 18 or 24 months; but within that timeframe, say a year from now, we could reassess and raise our targets so that, in the following 18 to 24 months, the stocks, while having gone up, could go up more still. There are lots of opportunities to stay in the same stocks as long as they continue to perform well. We’re not a trading newsletter, and as you probably know, the way we define an undervalued stock is based on two metrics.

    One is market cap per ounce. The market capitalization of a company is the number of shares times its price. You divide that by its ounces of production and its ounces of proven and probable reserves, and you see how the company’s data compares to the industry’s weighted averages.

    Second, we look at operating cash flow multiples. Take the difference between the gold price and the cash cost to produce an ounce, multiply that by the company’s production per year, and you get operating cash flow. Divide that into its market capitalization and you get its operating cash flow multiple. We look at that this much the same as one looks at earnings per share multiples in other industries.

    For reference, we last calculated the industry averages on December 29, 2008 for the 50+ gold miners we follow, which is everyone of significance. At that time, the average market cap for an ounce of production was $3,634, an ounce of proven and probable reserves was $194, and the average operating cash flow multiple on forecast 2009 production, assuming $900/oz gold, was 7.4X.

    We focus companies that are below the averages and try to figure out why. An ounce of gold is an ounce of gold, it doesn’t matter who mined it. If you’re going to buy an ounce of gold from a coin dealer, you want to get the cheapest price. Well, if you’re going to buy an ounce of gold in the stock market, you should want to get those at the cheapest price, too. It’s oversimplified, as there are other factors to be considered, but this is a primary screening tool to determine which stocks merit further study. The method works, as the GSA Top 10 Stocks portfolio has outperformed every other gold investment vehicle since we began in 1994.

    TGR: Are all the companies in your coverage producers or have 43-101’s??

    JD: Yes, all are producing or near-producing. They may be in the money-raising stage to build a mine, but they’ve got an independently determined reserve. And that part of the market has done better than the explorers because it has more data to underpin the stocks’ prices.

    TGR: And you focus in on having 10 just because, as you point out in your materials, it allows you to maximum upside at minimum risk (i.e., if one of the 10 goes down 50%, you will only lose 5% of your money). Is your portfolio always at 10 or does it ever expand more than that?

    JD: No, earlier in 2008 we were 40% cash, so it was six stocks. For a couple of months later in 2008 it was 11 stocks. But 90% of the time it’s at 10.

    TGR: What prompted you to be 40% in cash?

    JD: That was when Bear Stearns was rescued in March and gold went to $1000; we were just uncomfortable with that whole scenario. And actually we put the 40% in the gold ETF; so it wasn’t true cash.

    TGR: Okay. And as you’re looking at these undervalued companies, are you finding that there are certain qualifications? Are they typically in a certain area, certain size?

    JD: While we follow Barrick Gold Corporation (NYSE:ABX) and Newmont Mining Corp. (NYSE:NEM) and they’ve both been Top 10 in the past, neither is now. We’re currently looking further down the food chain. There’s one with over two million ounces growing to four million a year. Another has a million growing to two million. So, some are still pretty good sized. And then there are others further down that are either developing mines or are very cheap on a market cap per ounce basis.

    Earlier, one of the Top 10 was selling at its “cash in the bank” price. We’ve had a nice little rally since October and this stock has doubled, but it’s still cheap. It has 9 million ounces of reserves at three mine sites in European Community nations, and it’s not Gabriel in Romania. It has no major troubles with permitting its mines and it was selling at its cash/share. Then the chairman of the board bought 5 million more shares. It was already top 10, but I pointed this out to subscribers as great buy signal. It’s doubled since and will double again, in our opinion.

    TGR: Can you share with us some of the ones that are in your top 10?

    JD: Well, the astute investor would probably recognize Goldcorp (NYSE:GG) as the one at two million ounces growing to four million ounces. Their tremendous new mine in Mexico, Penasquito, which I have been to and written about, is going to average half a million ounces of gold and 30 million ounces of silver a year. It’s going to be the biggest producing silver mine in the world, momentarily anyway, and will produce huge quantities of lead and zinc. At current prices, it’s going to be a billion-dollar-a-year revenues mine, which is enormous. And because of by-products, and even at current prices, the 500,000 ounces of gold per year will be produced at a negative cash cost per ounce.

    TGR: Wow. Because of the credits?

    JD: Because of the by-product credits. Another one would be Yamana Gold Inc. (NYSE:AUY), which is growing from a million ounces to two million ounces. Both Yamana and Goldcorp are in politically safe areas—no Bolivia, no Ecuador, no Romania—none of the places where you have to take political risk. I think we’ve learned enough from the Crystallex International Corp. (KRY) and Gold Reserve Inc. (NYSE:GRZ) situation in Venezuela, where they’re both on portions of the same huge deposit that is probably 25 million ounces or more. It looks to me that the government is going to take it away from them. So, I would just as soon not be involved in that kind of political risk scenario. There’s enough risk in gold just from the mining aspects of it that you don’t have to take chances on the politics too, as in some nations that’s impossible to assess.

    TGR: Yes, another one that is really doing quite well is Royal Gold Inc. (Nasdaq:RGLD). Can you speak about that company?

    JD: Yes. Royal Gold has been GSA Top 10 for 18 months now. We put it on in part because of the Penasquito deposit that I mentioned earlier. Royal has a 2% royalty on that, and 2% of a billion dollars is $20 million a year. Royal is unique in that they haven’t prostituted themselves by selling shares on a continuous basis. They only have 34 million shares outstanding and they will have royalty income this year of about $100 million. Penasquito is just coming on line, so its $20 million per year won’t be fully seen until late 2010.

    Plus Royal pays a dividend. I think it could pay $1.00/share ($0.32 now). Dividend-paying gold stocks typically trade at a 1% yield. A $1.00/share dividend would make Royal a potential $100 stock. That’s my crystal ball down-the-road target.

    Royal is a great play on gold price because they don’t have the aggravation of mining. They have a portfolio of mine royalties, plus a small corporate office. Royal employs 16 people, has $150 million in the bank and over $100 million a year income, which is about $3.00 per share pre-tax. Their biggest cost is taxes.

    TGR: I see also that Franco Nevada Corp. (FNV.TO) has had quite a rise, though they have been kind of tumultuous between November and December.

    JD: Franco is also a stock we like. About half of its royalties are from oil, so that’s why it’s suffered. The original Franco Nevada, as you know, was merged into Newmont for five years, and then they came public again in December ’07. I think it’s a good way to play gold and oil, and I think everybody agrees that oil is not going to stay in the $40 range for long.

    TGR: John, can you give us a few more?

    JD: A couple of smaller ones we like are Northgate Minerals Corp. (AMEX:NXG) and Golden Star Resources Ltd. [TSX:GSC]. Northgate is a misunderstood producer. Everybody thinks it’s going out of business when the Kemess Mine closes after 2011, but it’s actually not. It has 200,000 ounces a year from two mines in Australia and has a potential new mine in Ontario where they’ve just announced a 43-101 with over three million ounces. That’s potentially another 200,000 ounces a year, so we think they’ll remain at 400,000 ounces a year from Canada and Australia, both of which are countries we like. Cheap on our market cap per ounce of production and reserves metrics, it’s trading at an operating cash flow multiple under 2.0X.

    Golden Star has several nearby mines in Ghana with production targeted at about 500,000 ounces in 2009. They’ve been ramping up to this rate for the past year and cash costs have run much higher than plan. If costs can be controlled and production goals met, it’s a takeover candidate for someone already in the country, such as Newmont or Gold Fields Ltd. (NYSE:GFI).

    One thing I think readers should bear in mind is that gold mining will be one of the few industries doing well in 2009. Their key cost is oil, which is about 25% of the cost of running a mine. Oil’s price, as we know, is down about 75% in the $147/barrel high last July. At the average $400 cash cost per ounce mine, that’s a cut of about $75/oz off their costs. That result alone is going to give them an uptick in future earnings versus what they showed for third quarter 2008.

    Something else people may not recognize is that currencies are also falling; many are down 20% to 40% versus the U.S. dollar. All the commodity nation currencies—the Canadian dollar, the Australian dollar, the South African Rand, the Brazilian Real, the Mexican Peso—they’re all down 20% to 40%. When your mining costs in those countries are translated back into U.S. dollars, they’ll be 20% to 40% lower.

    So, the miners are going to have falling cash costs and even if the gold price remains exactly where it is now profits are going to soar. This will be unique in 2009. I can’t think of any other industry in which people are going to be able to point to and say, “These guys are making a lot more money.” I think the increasing profits will get the gold mining industry recognition that it isn’t getting now. Of course I’m a bull on gold because of the macroeconomic picture. When you put falling costs of production together with a rising gold price, you’ve got a winning combination for the stocks in 2009.

    TGR: I was wondering if you could give us something on Silver Wheaton Corp. (NYSE:SLW).

    JD: Well, Silver Wheaton is another royalty company; it’s not a producer. It gets its profit royalties by paying a cash sum up front and $4/ounce on an ongoing basis. It captures the difference between the silver price and $4 an ounce; if silver is $10 and it pays $4, it makes a $6 an ounce profit; at $20 silver, its profit would be $16. Aside from no pure silver miner actually producing ounces as low as $4.00, there’s a lot of leverage to silver price. I am not a silver bull, but because I’m a gold bull I think silver will follow gold higher.

    Silver Wheaton is one of those companies that doesn’t have the issues of actually doing the mining. It has a portfolio of mines that it gets production from, and it owns 25% of the production from Goldcorp’s Penasquito mine that it buys at $4 an ounce, and will average about 8 million ounces a year. It’s just starting up now, but it will really get going in 2010. Silver Wheaton’s share of the total mineralization at Penasquito is 1 billion ounces. There’s 4 billion total ounces of silver there and it bought 25%. So, for a long time—the mine life of Penasquito is over 30 years—it’s going to be a big producing mine for Silver Wheaton.

    TGR: Isn’t there a twin sister to Silver Wheaton in the gold area?

    JD: Well, there’s Gold Wheaton Gold Corp. [TSX.V:GLW]. It’s based on the premise that some companies have a gold by-product. With their primary production in some other kind of metal, some might like to lay off the gold for a $400 an ounce on-going payment and an up-front purchase amount. Yes, some of the same guys are involved. I’m not convinced it’s going to do as well because it’s already got a lot of shares outstanding, and I just don’t like the capital structure as much. I wouldn’t bet against these guys but I’m not a believer.

    TGR: And you said you’re not a silver bull. Why is that?

    JD: We do cover about 15 silver miners, but reason number one for not being a bull is that it’s a by-product. Few mines are built to get just silver; 70% to 80% of silver comes as a by-product to copper, zinc, gold or some other metal. If you’re producing copper, you’re more interested in the copper price than you are in the silver price and you tend to just dump the silver onto the market.

    And second, it’s not a monetary commodity. It is poor man’s gold—but it doesn’t have the universal monetary acceptance that gold does. It has a growing list of industrial uses, but it’s not growing at any rate that’s going to offset the falling use in photography. So, the overall demand for silver is not growing at any great rate. It’s not going to go from 800 million ounces a year to 1.6 billion ounces a year; it may get there in 20 years or 30 years, but that’s not our investment time horizon.

    I think silver just follows gold along; but, in fact, it hasn’t been following gold along because right now silver is trading at a discount to gold. The ratio of gold to silver price, which normally runs around 50–55, is now around 80, so silver might have a little bit of a pop-up if the discount closes. But there are a lot of new silver mines coming on line and maybe that’s why the discount exists. Penasquito is one and Silver Standard Resources Inc. (Nasdaq:SSRI) has a big one starting in 2009. Coeur d’Alene Mines Corp. (NYSE:CDE) has now one ramping up and Apex Silver Mines Ltd. (AMEX:SIL) San Cristobal is now on line at 20+ million ounces per year as a zinc by-product. There’s potentially more silver coming to market than the world really needs. We do recommend Silver Wheaton, but that’s our single play.

    TGR: Can you give us any comments on Minefinders Corporation (AMEX:MFN)?

    JD: Well, you know, it’s in the uncertainty phase as to whether or not the new Delores mine in Mexico is going to work. Now built, it’s just starting up. We like the stock as we think it’s going to work. The question is: will it? Two mines in the area—Mulatos, owned by Alamos Gold Inc. [TSX:AGI], and Ocampo owned by Gammon Gold Inc. (GRS) did not start up smoothly. The market is betting against Delores starting smoothly, but this is the last of the three mines to come on line, and the first two mines—Alamos’ and Gammon’s—did get fixed and are now running okay. So, I think Minefinders has probably learned from the experience of the others, and the mine should start up all right. But, you know, the proof will be in the pudding. If you take its market cap per ounce on the forecast 185,000 ounces of production in 2009, or its almost 5 million ounces of reserves, and compare it to the industry averages we calculate, it’s potentially a double or triple from here.

    TGR: So, the start-up issues of the other two mines, were they politically related?

    JD: No, it was metal related. Processing facilities aren’t like televisions; you don’t just turn them on. It’s more like buying a new fancy computer system that needs to be twiddled and tweaked and loaded with the right programs. And you know, all geology is different, so things seldom start up properly; and, given the long teething problems at the other two mines, that’s sort of been a curse. If Minefinders can beat it and start up on plan, it’s an easy winner in 2009.

    TGR: So, John do you have a prediction on where you think gold will go in ‘09?

    JD: People talk about $2,000 or $5,000—it’s all pie in the sky, you know. Gold might get there; but the bigger question is: what’s the timeframe? Will I be around when gold is $5,000? I doubt it. Will it get there? Probably.

    But we look for undervalued situations no matter what the gold price. And in the ‘90s—you know we’ve been writing Gold Stock Analyst since 1994—in the mid-90s gold did nothing for three years, it traded between $350 and $400. With our methods of selecting undervalued stocks, we had a couple of years of the Top 10 portfolio up 60% and 70% but gold was flat. Until mid-2008 the GSA Top 10 was up almost 800% in the current gold bull market. When gold does go up, the stocks go up more; but, in general, even if gold does nothing, we can still find good buys. Royal Gold is an example of finding winners in a tough market. Made a Top 10 stock at $23 in mid-2007, it gained 60% in 2008 and has doubled over the past 18 months.

    We don’t follow the explorers, in part because there is no data to analyze beyond drill hole results, which are a long way from showing a mine can be built and operated at a profit. For us, the pure explorers are too much like lottery tickets. The producers do exploration and you can get your discovery upside from them. Bema Gold (acquired by Kinross Gold in February 2007) was a Top 10 stock with 100,000 ounces per year of production when it found Cerro Casale and it did very nicely on the back of that find. So, with the smaller producers you can get plenty of exploration upside. You don’t need to focus on the greenfield explorers because it’s just too hard to tell who’s going to win and who’s going to lose.

     

    John Doody brings a unique perspective to gold stock analysis. With a BA in Economics from Columbia and an MBA in Finance from Boston University, where he also did his Ph.D.-Economics course work, Doody has no formal “rock” studies beyond “Introductory Geology” at Columbia University’s School of Mines.

    An Economics Professor for almost two decades, Doody became interested in gold due to an innate distrust of politicians. In order to serve those that elected them, politicians always try to get nine slices out of an eight slice pizza. How do they do this? They debase the currency via inflationary economic policies.

    Success with his method of finding undervalued gold mining stocks led Doody to leave teaching and start the Gold Stock Analyst newsletter late in 1994. The newsletter covers only producers or near-producers that have an independent feasibility study validating their their reserves are economical to produce.

    ==============================================

    ***All Posts are  not  to be considered Investment Advice, the articles/posts are presented for Informational Purposes. Consult Your Own Investment Advisors and Carefully Research and Read the Prospectus’s before making any Investment.*** jschulmannsr

    As Always Bringing You The Must Have Information for Today’s Gold Markets and Hard Assets Investing- Dare Something Worthy Today Too!  Brought To You By:- jschulmansr

     

     

     There is another option, however, which involves debt holders taking a share of the losses. If steps are not taken to ensure that this happens, the greatest heist in history will have occurred: at least $1 trillion will be transferred from taxpayers to debt holders of failed financial institutions. This must not be allowed to happen.

     Mark-to-Market vs. Real Losses

    To understand the government’s dilemma, one must realize that the great majority of the not-yet-recognized losses in our financial system are not short-term, mark-to-market losses that will someday be reversed, but permanent losses. This is a huge misunderstanding that many people, especially those in Washington, seem to be suffering from.

     To understand why the losses are real, consider this simple example: imagine a bank that lent someone $750,000 via an Option ARM mortgage to buy a McMansion in California at the peak of the bubble less than two years ago. Virtually all homeowners with this type of loan will default, thanks to declining home prices, the structure of the loan, and the fact that 70-80% of Option ARMs were liar’s loans. If we assume the house is only worth $400,000 today, then there’s been an actual loss of $350,000. That money will never be recovered. If one considers the millions of toxic loans made during the bubble – subprime, Alt-A, Option ARM and second mortgages, home equity lines of credit, commercial real estate, leveraged loans, credit cards, etc. – it easily adds up to at least $1 trillion in additional, unrecognized very real losses.

     Imagine that New RTC buys this loan for $400,000. In this case, it might not lose money, but then the bank (or the structured finance pool) holding the loan has to immediately realize the loss of $350,000 – and it is certain that the U.S. (and world) financial system has not even come close to marking these assets to what they’re really worth, which explains why they won’t lend, even when given new money. Thus, if New RTC buys these assets at fair value, then the financial institutions suffer the losses – but this would bankrupt many of them. Yet if New RTC pays the inflated prices they’re marked at today, then it (and taxpayers) will suffer huge losses.

    Who Should Bear the Losses?

    To save our financial system, somebody’s going to have bear these losses – the only question is, who? Some fraction of this will certainly have to be taxpayer money, but all of it needn’t be if the government would stop bailing out all of the debt holders.

     Government policy has been all over the map. Among the large financial institutions that have run into trouble (in chronological order, Bear Stearns, IndyMac, Fannie & Freddie, Lehman, AIG, WaMu, Citigroup and Bank of America), in some cases the equity was somewhat protected, while in others was wiped out, and likewise with the debt. Most likely due to the chaos that ensued after Lehman filed for bankruptcy, the current policy, as reflected in the most recent cases of Citi and BofA, is to at least partially protect the shareholders and, incredibly, 100% protect all debt holders, even junior/unsecured/subordinated debt holders.

     The result is at least a $1 trillion transfer of wealth from taxpayers to debt holders. This makes no sense from a financial, fairness or moral hazard perspective. While there’s an argument that the government should protect senior debt holders to preserve confidence in the system (even though they knowingly took risk – after all, they could have bought Treasuries), the junior debt holders got paid even higher interest in exchange for knowingly taking even more risk by being subordinate in the capital structure (of course, equity and preferred equity holders are the most junior). These investors made bad decisions, buying junior positions in highly leveraged companies that made bad decisions, so why should they be protected?

     Moreover, the reckless behavior of debt investors was a major contributor to the bubble. It was low-cost debt with virtually no strings attached that allowed borrowers, especially the world’s major financial institutions, to become massively overleveraged, fueling the greatest asset bubble in history. This was not an equity bubble – unlike the internet bubble, for example, stock market valuations never got crazy – it was a debt bubble, so it would be particularly perverse and ironic if government bailouts allowed equity holders to take a beating, yet fully protected debt holders.

     Case Study: Bank of America

    Let’s look at Bank of America (BAC), which effectively went bankrupt last week (disclosure: we are short the stock). The cost to taxpayers of avoiding this outcome wasn’t the headline $20 billion, but far more – the government is going to take a bath on the $120 billion that it guaranteed – and it’s likely that this is just the beginning of the losses.

     Consider this: as of the end of 2008, BofA had $1.82 trillion in assets ($1.72 trillion excluding goodwill and intangibles), supported by a mere $86.6 billion in tangible equity – 5.0% of tangible assets or 20:1 leverage – and $48.9 billion of tangible common equity – 2.8% of tangible assets or 35:1 leverage (common equity excludes the TARP injection of capital in the form of preferred stock, which has characteristics of both debt and equity). (All data from BofA’s earnings release on 1/16/09; note that these figures include Countrywide, but not Merrill Lynch)

     At such leverage levels, it only takes tiny losses to plunge a company into insolvency. It’s impossible to know with precision what BofA’s ultimate losses will be, but among the company’s loans are many in areas of great stress including $342.8 billion of commercial loans ($6.5 billion of which is nonperforming, up from $2.2 billion a year earlier), $253.5 billion of residential mortgages ($7.0 billion of which is nonperforming, up from $2.0 billion a year earlier), $152.5 billion of home equity loans (HELOCs; about $33 billion of which were Countrywide’s), and $18.2 billion of Option ARMs (on top of the $253.5 billion of residential mortgages; all of which were from Countrywide, which reported that as of June 30, 2008, 72% were negatively amortizing and 83% had been underwritten with low or no doc).

     BofA is acknowledging a significant increase in losses, but its reserving has actually become more aggressive over the past year. From the end of 2007 to the end of 2008, nonperforming assets more than tripled from $5.9 billion to $18.2 billion, yet the allowance for credit losses didn’t even double, from $12.1 billion to $23.5 billion. As a result, the allowance for loan and lease losses as a percentage of total nonperforming loans and leases declined from 207% to 141%.

     So BofA had big problems on its own and then made two very ill-advised acquisitions, the result of which effectively wiped out the company, causing the government to come in and bail it out, at a huge cost to taxpayers. So what price is being paid? NONE! The architect of this debacle, Ken Lewis, is still in place, as is the board that approved everything he did. Ditto with Citi. These banks are just getting do-overs, with the management, boards and debt holders not being touched – the only losers are the common shareholders (to some extent) and taxpayers (to a huge extent).

     Since big losses from Merrill Lynch triggered last week’s bailout of BofA, why are all of its debt holders ($5.3 billion of junior subordinated notes, $31.2 billion of short-term debt and $206.6 billion of long-term debt) being protected 100%, while taxpayers are taking a bath eating Merrill’s losses from its reckless, greedy behavior?! This is madness.

    A Better Solution

    So what’s a better solution? I’m not arguing that BofA (or Citi or WaMu or Fannie or Freddie or AIG or Bear) should have been allowed to go bankrupt – we all saw the chaos that ensued when Lehman went bankrupt. Rather, if a company blows up (and can’t find a buyer), the following things should happen:

    1) The government seizes it and puts it into conservatorship (as Fannie, Freddie, IndyMac and AIG effectively were, to one degree or another);

    2) Equity is wiped out (again, as with Fannie, Freddie, IndyMac and AIG);

    3) However, unlike Fannie, Freddie, IndyMac and AIG (and certainly Citi and BofA), everything in the capital structure except maybe the senior debt is at risk and absorbs losses as they are realized; the government would only provide a backstop above a certain level. This is what happened in the RTC bailout;

    4) Over time, in conservatorship, while the businesses continue to operate (no mass layoffs, distressed sales, etc.), the government disposes of the companies in a variety of ways (just as the RTC did via runoff, selling the entire company or piece-by-piece, etc.), depending on the circumstances (as it’s doing with AIG and IndyMac, for example – these are good examples, except that the debt holders were protected).

    Counter-Arguments

    One counter-argument to my proposal is that we don’t want the government to nationalize banks. I don’t like it either, but the alternative – inject hundreds of billions of dollars of taxpayer money and not take control – is even less palatable. There should certainly be urgency in disposing of the companies, but also the recognition that it could take years, as with the RTC.

     Another counter-argument is Lehman: nobody wants a repeat of the chaos that ensued when the company went under and debt holders were wiped out. But the mistake here wasn’t the failure to protect the debt, but rather allowing the company to go bankrupt, which not only impacted Lehman’s equity and debt holders, but also stiffed Lehman’s countless clients and counterparties. It’s the latter that caused the true chaos. Lehman should have been seized and put into conservatorship, so that all of Lehman’s clients and counterparties could have relied on Lehman (as was done with AIG) – but debt holders would have taken losses as they were realized (which is not being done with AIG).

    A final argument for protecting the debt is the fear of contagion effects: for example, other financial institutions who own the debt might become insolvent (this was probably why Fannie and Freddie subdebt was saved). Also, debt markets might freeze up such that even currently healthy banks might not be able to access debt and collapse.

     Regarding the former, the debt is owned by a wide range of institutions all over the world: sovereign wealth funds, pension funds, endowments, insurance companies and, to be sure, other banks. Some of them would no doubt be hurt if they take losses on the debt they hold in troubled financial institutions – but that’s no reason to protect all of them 100% with taxpayer money.

     As for the latter concern that debt markets might freeze up, causing even healthy banks to collapse, it’s important to understand that right now there is no junior debt available to any financial institution with even a hint of weakness – there’s very high cost equity and government-guaranteed debt. Neither of these will be affected if legacy debt holders are forced to bear some of the cost of the failure of certain institutions.

     Conclusion

    The new Obama administration needs to understand that the greatest heist in history is underway – at least $1 trillion is being transferred from taxpayers to debt holders of failed financial institutions – and take steps to stop it before taxpayers suffer further unnecessary losses.

    =================================================

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    Latest Obama News and The Ad “They” Don’t Want You To See!

    10 Saturday Jan 2009

    Posted by jschulmansr in 2008 Election, Barack Obama, communism, Conservative, Conservative Resistance, Currencies, currency, Currency and Currencies, dollar denominated, dollar denominated investments, economic, economic trends, economy, Electoral College, Finance, financial, Free Speech, Fundamental Analysis, futures, futures markets, id theft, inflation, Investing, investments, Latest News, market crash, Markets, Presidential Election, resistance, socialism, Today, u.s. constitution, U.S. Dollar, Uncategorized

    ≈ 2 Comments

    Tags

    2008 Election, Barack Dunham, Barack Hussein Obama, Barack Obama, Barry Dunham, Barry Soetoro, capitalism, Chicago Tribune, Columbia University, Currency and Currencies, D.c. press club, Electoral College, Electors, Finance, fraud, Free Speech, gold, Harvard Law School, hawaii, id theft, Indonesia, Indonesian Citizenship, Investing, investments, Joe Biden, John McCain, Latest News, legal documents, Markets, name change, natural born citizen, Oath of Allegiance of the President of the United State, Occidental College, Phillip Berg, Politics, poser, Presidential Election, Sarah Palin, socialism, Stocks, Today, treason, u.s. constitution, U.S. Dollar, Uncategorized, voter fraud, we the people foundation

    Why are the major news networks refusing to allow the Obama ad below? Yes, even Fox News has refused to sell airtime to run the ad- Why? The cases and lawsuits keep trickling their way to the Supreme Court, so his “eligibility” issues will continue even after he is inaugurated. Obama- “Please just show us the Birth Certificate as any patriotic citizen would do when asked.” Why are you hiring teams at last count (3) different legal teams to prevent your birth certificate from being produced? What is Obama hiding? Could it truly be he is not eligible to be the President of The United States? Fellow citizens is our Constitution no longer important or relevant? You decide- read below…- jschulmansr

    Eligibility Issue to Follow Obama into the Oval Office – World Net Daily

    By Bob Unruh
    © 2009 WorldNetDaily

    A legal challenge that alleges Barack Obama isn’t a “natural born” citizen and therefore constitutionally ineligible to be president of the United States will follow the Democrat into the Oval Office, with a U.S. Supreme Court conference on the dispute set after the Jan. 20 inauguration.

    The court’s website today announced that a fourth case on the issue will be reviewed by justices Jan. 23.

    The court previously heard two cases in conference – private meetings at which justices consider which cases to accept – and denied both Cort Wrotnowski and Leo Donofrio full hearings.

    The court now has a conference scheduled Friday on a case raised by attorney Philip Berg, with another conference on a matter related to the same Berg case on Jan. 16. Then today the court website revealed the case Gail Lightfoot et al v. Debra Bowen, California Secretary of State, will be heard in conference Jan. 23.

    The case initially appeared at the Supreme Court Dec. 12 but was rejected. It then was submitted to Chief Justice John Roberts, and today’s notice confirmed it was distributed for the Jan. 23 conference.

    Orly Taitz, the California attorney handling the case, said, “The timing of this decision by the chief justice of the Supreme Court, John Roberts, is absolutely remarkable. On January 7, one day before the January 8 vote by Congress and Senate whether to approve or object to the electoral vote of Barack Hussein Obama, aka Barry Soetoro, as president of the United States, Chief Justice Roberts is sending a message to them: ‘Hold on, not so fast, there is value in this case, read it.'”

    She noted the available procedure during congressional review for a member of Congress to object to the Electoral College results and demand documentation regarding Obama’s citizenship.

    Join the campaign to urge the Supreme Court to take the eligibility question seriously by FedExing the justices.

    “Each and every member of the U.S. Congress and Senate owes it to 320 million American citizens to do his due diligence and demand all necessary records,” she said.

    Members of Congress, she said, “can spend a day or two of their time defending this Constitution, reviewing necessary documents, in order to see if Barack Hussein Obama is a natural born citizen…

    “This is the message that the chief justice of the Supreme Court is sending to them. … (The) truth will come out, no matter how many millions Obama is spending to hide it,” she said.

    The plaintiffs in the case include a vice presidential candidate on the California election ballot, four electors and two others.

    She said her case was rejected by the California Supreme Court with a single-word decision, “Denied.” And she said her arguments rest on precedents from both the California Supreme Court, which years ago removed a candidate for president from the ballot because he was only 34, while the Constitution requires candidates to be 35, and the U.S. Supreme Court’s affirmation of that ruling.

    “We’ll see what happens,” she told WND. “This is not going to go away.”

    WND has reported extensively on questions raised about Obama’s eligibility, and the resulting lawsuits. The Taitz case is the fourth to earn a hearing at a Supreme Court conference.

    Twice before the justices have heard the questions, in cases brought by Wrotnowski and Donofrio, and twice before they’ve decided to ignore them.

    The result is that the questions remain unanswered and cloud the impending presidency of a man whose relatives have reported he was born in Kenya and who has decided, for whatever reason, not to release a bona fide copy of his original birth certificate in its complete form.

    The lawsuits allege Obama does not meet the “natural born citizen” clause of the U.S. Constitution, Article 2, Section 1, which reads, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

    Some allege his birth took place in Kenya and his mother was a minor at the time of his birth – too young to confer American citizenship. They report Obama’s father, Barack Obama Sr., was a Kenyan citizen subject to the jurisdiction of the United Kingdom at the time, and would have handed down British citizenship.

    Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 200,000 others and sign the petition demanding proof of eligibility now!

    There also are questions raised about Obama’s move to Indonesia when he was a child and his attendance at school there when only Indonesian citizens were allowed in that nation’s schools and his travel to Pakistan in the ’80s when such travel was forbidden to American citizens.

    On Friday the justices will consider Philip J. Berg’s Petition for Writ of Certiorari.

    “This is a historic occasion that will impact the office of the president of the United States as never before. No one has ever brought an action against a president-elect candidate challenging his eligibility to serve based on the ‘natural born’ citizen requirement provided in the United States Constitution, Article II Section 1,” said a statement on Berg’s ObamaCrimes.com website.

    Berg suggested if Obama “is allowed to be sworn in as president of the United States, there will be substantial and irrevocable harm to the stability of the United States of America and to its citizens.”

    “Because Barack Obama is not a ‘natural born’ citizen as required by the United States Constitution, then all of his actions as president would be null and void,” Berg said.

    Last month, WND reported similar concerns raised in a separate lawsuit filed in California.

    “Should Senator Obama be discovered, after he takes office, to be ineligible for the Office of President of the United States of America and, thereby, his election declared void,” argues a case brought on behalf of Ambassador Alan Keyes, also a presidential candidate. “Americans will suffer irreparable harm in that (a) usurper will be sitting as the President of the United States, and none of the treaties, laws, or executive orders signed by him will be valid or legal.”

    Because of the high stakes, WND earlier launched a letter campaign to contact Electoral College members and urge them to review the controversy.

    That followed a campaign that sent more than 60,000 letters by overnight delivery to the U.S. Supreme Court when one case contesting Obama’s eligibility for the Oval Office was pending.

    A separate petition, already signed by more than 200,000 also is ongoing asking authorities in the election to seek proof Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution.

    WND senior reporter Jerome Corsi went to both Kenya and Hawaii prior to the election to investigate issues surrounding Obama’s birth. But his research and discoveries only raised more questions.

    The biggest question was why, if a Hawaii birth certificate exists as his campaign has stated, Obama hasn’t simply ordered it made available to settle the rumors.

    The governor’s office in Hawaii said there is a valid certificate but rejected requests for access and left ambiguous its origin: Does the certificate on file with the Department of Health indicate a Hawaii birth or was it generated after the Obama family registered a Kenyan birth in Hawaii?

    Join the campaign to urge the Supreme Court to take the eligibility question seriously by FedExing the justices.

    ===============================================

    Watch The Obama commercial they don’t want you to see- FOX, CNN, MSNBC questioning Barak’s Eligibility refuse ads

    Source: World Net Daily

    Barack Obama’s campaign officials and transition office repeatedly have rejected reporters’ requests for comment on questions raised over his lack of documentation regarding his birth and the resulting concerns over his eligibility to be president. Now a number of media organizations apparently don’t want questions raised either.

    WND columnist Janet Porter told WND she found that out when her organization, Faith2Action.org, tried to purchase airtime to publicize information about the eligibility concerns.

    She told WND that national networks that refused to sell her time for a 60-second commercial included CNBC, MSNBC, Headline News, CNN and Fox. Washington, D.C., outlets for the same organizations did the same.

    “With the date for congressional approval (of the Electoral College today), we wanted them to have access to the facts,” she told WND. “Congress is sworn to uphold the Constitution.”

    She said the donors who contributed the funding that was to be used for the ads were being contacted to find out whether they wanted to reach another direction in the media.

    The ad to be broadcast already is available on YouTube, and also is embedded here:

    “Heard rumors about Barack Obama’s citizenship? These are the facts,” the ad states.

    It cites a statement from the president-elect’s paternal grandmother that she was present at his birth in Kenya, his refusal to release his original birth certificate, his attendance at school in Indonesia “as Barry Soetoro when only Indonesia citizens were permitted to attend,” and Obama’s travel to Pakistan in 1981 “when it was illegal to enter as a U.S. citizen.”

    Join the campaign to urge the Supreme Court to take the eligibility question seriously by FedExing the justices.

    It concludes, “Our Constitution still matters.”

    “As requested, we backed up every sentence of this ad, and still it was rejected,” Porter said. “What does that say about freedom of speech when we not only cannot count on the media to cover the story, but we can’t even buy time to publicize what may be the biggest story of the century.”

    She raised several questions about the issue in her recent column.

    “What if an impostor from another country ran for the presidency and won?” she asks. “What if the media blocked any news of his birthplace and citizenship? What if the media censorship even blocked paid advertising which tried to expose it?

    “What if no one had the courage to challenge or verify it? What if he was inaugurated illegally? What if the military had to answer to a commander in chief who was illegitimate? What if every law he signed was invalid?”

    And, she wonders, “What if it all happened on our watch?”

    WND reported the U.S. Supreme Court has scheduled Friday a conference – a private meeting at which justices consider whether to take individual cases – on a lawsuit challenging Obama’s eligibility.

    Twice before the justices have heard the questions, and twice before they’ve decided to ignore them.

    The lingering questions continue to leave a cloud over the impending presidency of a man whose relatives have reported he was born in Kenya and who has decided, for whatever reason, not to release a bona fide copy of his original birth certificate in its complete form.

    Multiple lawsuits have been filed around the nation alleging Obama does not meet the “natural born citizen” clause of the U.S. Constitution, Article 2, Section 1, which reads, “No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

    Some of the legal challenges have alleged Obama was not born in Hawaii, as he insists, but in Kenya. The woman identified by Obama as his American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time – especially if it took place in a foreign country and the man identified as his father, Barack Obama Sr., was a Kenyan citizen.

    Where’s the proof Barack Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution? If you still want to see it, join more than 200,000 others and sign the petition demanding proof of eligibility now!

    Other challenges also have focused on Obama’s citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. Such cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.

    Several details of Obama’s past have added twists to the question of his eligibility and citizenship, including his family’s move to Indonesia when he was a child, his travel to Pakistan in the ’80s when such travel was forbidden to American citizens and conflicting reports from Obama’s family about his place of birth.

    On Friday the justices will consider Philip J. Berg’s Petition for Writ of Certiorari.

    “This is a historic occasion that will impact the office of the president of the United States as never before. No one has ever brought an action against a president-elect candidate challenging his eligibility to serve based on the ‘natural born’ citizen requirement provided in the United States Constitution, Article II Section 1,” said a statement on Berg’s ObamaCrimes.com website.

    Berg suggested if Obama “is allowed to be sworn in as president of the United States, there will be substantial and irrevocable harm to the stability of the United States of America and to its citizens.”

    “Because Barack Obama is not a ‘natural born’ citizen as required by the United States Constitution, then all of his actions as president would be null and void,” Berg said.

    Last month, WND reported similar concerns raised in a lawsuit filed in California.

    “Should Senator Obama be discovered, after he takes office, to be ineligible for the Office of President of the United States of America and, thereby, his election declared void,” argues a case brought on behalf of Ambassador Alan Keyes, also a presidential candidate. “Americans will suffer irreparable harm in that (a) usurper will be sitting as the President of the United States, and none of the treaties, laws, or executive orders signed by him will be valid or legal.”

    Berg, who has another case on the issue pending on behalf of a retired military officer, earlier stated, “I am determined, on behalf of the 320 million citizens in the United States, to see that ‘our U.S. Constitution’ is followed. Specifically, in the case of Soetoro a/k/a Obama, does he meet the constitutional qualifications for president?

    “I am appalled that the mainstream media continue to ignore this issue as we are headed to a ‘constitutional crisis.’ There is nothing more important than our U.S. Constitution and it must be enforced,” he said.

    The Supreme Court also has another hearing on an issue raised by Berg for Jan. 16, and the Supreme Court just confirmed today yet another conference is scheduled Jan. 23 on a separate case, this one handled by California attorney Orly Taitz, challenging Obama’s eligibility.

    Because of the high stakes, WND earlier launched a letter campaign to contact Electoral College members and urge them to review the controversy.

    That followed a campaign that sent more than 60,000 letters by overnight delivery to the U.S. Supreme Court when one case contesting Obama’s eligibility for the Oval Office was pending.

    A separate petition, already signed by more than 200,000 also is ongoing asking authorities in the election to seek proof Obama was born in the U.S. or that he fulfills the “natural-born American” clause in the Constitution.

    WND senior reporter Jerome Corsi went to both Kenya and Hawaii prior to the election to investigate issues surrounding Obama’s birth. But his research and discoveries only raised more questions.

    The biggest question was why, if a Hawaii birth certificate exists as his campaign has stated, Obama hasn’t simply ordered it made available to settle the rumors

    The governor’s office in Hawaii said there is a valid certificate but rejected requests for access and left ambiguous its origin: Does the certificate on file with the Department of Health indicate a Hawaii birth or was it generated after the Obama family registered a Kenyan birth in Hawaii?

    ====================================================

    Join The Resistance

    This group is not intended to encourage animosity or malice toward President Obama or to bolster personal, ad hominem attacks so often used in political discourse.

    On the contrary, it is imperative that conservatives maintain a love for country and respect for our institutions as we defend this nation against the threats posed by the Obama Administration. Our disagreements with President Obama must be based on ideology and public policy, not personal attacks. From this firm foundation, we can mount a patriotic, resilient, conservative resistances to Obama’s agenda.

    Specifically we resist:
    • Wealth distribution and higher taxes
    • Government takeover of more and more of our lives
    • Open borders, amnesty and undermining of our uniquely American culture
    • Taxpayer-funded abortions and a radical anti-life agenda
    • The weakening of our military and retreat in the War on Terror
    • Socialized health care
    • The end of marriage and the exaltation of LGBT rights
    • International taxation and submitting our nation to the ideals of “global citizenship”
    • The Courts stacked with leftist judges who betray our Constitution
    • Weakening of the 2nd Amendment through unconstitutional gun laws that take away our firearms and our ability to defend our family, property, and ourselves

    Sign The Petition and Find Out More


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    The Obama Ad Nobody Wants You To See? – Why?

    09 Friday Jan 2009

    Posted by jschulmansr in 2008 Election, Barack Obama, communism, economy, Electoral College, Free Speech, Fundamental Analysis, id theft, Latest News, Presidential Election, socialism, Stocks, u.s. constitution, U.S. Dollar, Uncategorized

    ≈ Comments Off on The Obama Ad Nobody Wants You To See? – Why?

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    2008 Election, Barack Dunham, Barack Hussein Obama, Barack Obama, Barry Dunham, Barry Soetoro, capitalism, Chicago Tribune, Columbia University, Currency and Currencies, D.c. press club, Electoral College, Electors, Finance, fraud, Free Speech, gold, Harvard Law School, hawaii, id theft, Indonesia, Indonesian Citizenship, Investing, investments, Joe Biden, John McCain, Latest News, legal documents, Markets, name change, natural born citizen, Oath of Allegiance of the President of the United State, Occidental College, Phillip Berg, Politics, poser, Presidential Election, Sarah Palin, socialism, Stocks, Today, treason, u.s. constitution, U.S. Dollar, Uncategorized, voter fraud, we the people foundation

    Why is Obama still refusing to come up with his Birth certificate and just end all of this? Again I ask “Obama what are you hiding?”. Check Out this video on the ad “They” don’t want you to see! – jschulmansr

     

    Come On Obama- Give It Up! (the Birth Certificate)

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    Has World War III Started?

    09 Friday Jan 2009

    Posted by jschulmansr in agricultural commodities, alternate energy, Austrian school, banking crisis, banks, Barack Obama, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, Currency and Currencies, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, Finance, financial, Forex, Fundamental Analysis, futures, futures markets, gold, gold miners, hard assets, heating oil, How To Invest, How To Make Money, India, inflation, Investing, investments, Keith Fitz-Gerald, Latest News, Make Money Investing, Marc Faber, market crash, Markets, mining companies, mining stocks, Moving Averages, natural gas, Nuclear Weapons, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, Siliver, silver, silver miners, small caps, socialism, sovereign, spot, spot price, stagflation, Stocks, Technical Analysis, timber, Today, U.S. Dollar, uranium, volatility, warrants, Water

    ≈ Comments Off on Has World War III Started?

    Tags

    agricultural commodities, alternate energy, Austrian school, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, Marc Faber, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Has World War III already started? According to Marc Faber it has! Check out his interview. Next do you think the government can lose? According to this pundit not only will it lose it is going to lose big! Finally, for years now China has been coming to the rescue by buying Treasuries and US Debt, what will happen when they and other countries stop? Continuation of series from yesterday’s post. Just In! Peter Schiff Interviwed on Russian TV- Get Prepared!  adjust your portfolios and if you own Precious Metals hang on for the ride of your life!- Good Investing!- jschulmansr

    Marc Faber on the Economy, Gold, WWIII – Seeking alpha

    By: Tim Iacono of Iacono Research

    Another good interview with Dr. Marc Faber, this one over at Bloomberg where he’s been a regular for many years (recent appearances at the likes of CNBC are somewhat unusual as he tends to go against conventional wisdom, something that abounds at CNBC).
    IMAGE

    Click to play in a new window

    There’s lots of good stuff in this one – the outlook for the global economy, oil, gold, base metals, natural resource stocks, World War III having already started…

    On the subject of alternatives to the government solutions for the current problems, he was asked how he expected the populace to stand for the government doing nothing?

    That’s the problem of society. If people can not accept the downside to capitalism, then they should become socialists and then they have a planned economy. They should go to eastern Europe twenty years ago and to Russia and China for the last 70 years.

    How do you tell that to somebody in Detroit who’s losing his home today?

     

     

     

    Why is he losing his home? Because of government intervention. The government – the Federal Reserve – kept interest rates artificially low and created the biggest housing bubble, not just in the U.S. but worldwide. That is what I’d explain to the worker in Detroit.

    ============================================

    How the Federal Government will Lose in 2009 – Seeking Alpha

    By: Rob Viglione of The Freedom Factory

    Through a combination of incompetence and greed, the federal government has placed itself in a position of checkmate. There is no way to finance its budget deficits without devaluing the dollar or causing interest rates to rise. With $10.6 trillion in debt, $8.5 trillion in new money created or given away in 2008, and multiple years of trillion dollar deficits planned by Obama, government has no way to fund its extravagances without either printing a lot more money or borrowing unprecedented sums.

    This means that either Treasury bonds will crash, or the dollar will suffer significant devaluation relative to foreign exchange or precious metals, especially gold.

    TV Does Great Interview With Peter Schiff (Russian TV, That Is)

    =====================================================

    Remember Dare Something Worthy Today Too!

     

    Market forces are telling the world to shed unproductive assets and shrink capacity, yet central banks and governments around the world, in particular the U.S., are refusing to listen. Rather than allow markets to snap back to sustainable equilibrium from previously artificial highs, the federal government clings to the notion that forcibly shuffling resources, propping up asset prices, and diluting the money supply will magically save the day.

    There are consequences to everything. The consequences of shuffling resources (taxing productive ventures and doling out those resources to failing ones, i.e. bailouts) are stunted growth for good businesses and propagation of bad ones. Artificially propping up asset prices means that those who are generally less competent remain the custodians of society’s capital, and diluting the money supply inflates aways everyone’s wealth over time, particularly harming the poor and middle class.

    For decades the federal government has gotten away with this reshuffle and inflate game, but the pawns are drowning, the rooks helpless, and the knights ready to turn on the King. Perhaps this is overly dramatic. Clearly, I doubt the capability of the Federal Reserve, Congress, and Obama to “fix” the economy; rather, I strongly believe they are destroying it by forcing us all to drink this Keynesian Kool-Aid. However, whether or not the economy recovers amidst this historic central government action, there are two phenomena we can exploit to our advantage:

    • Short the US dollar
    • Short US Treasuries

    In “When will the great Treasury unwinding begin?” I show how government debt has been bid to unsustainable levels and will likely fall. The one concern I see stated all too often is that the Federal Reserve will keep buying Treasuries to artificially depress interest rates. This will, it is claimed, keep bond prices inflated. The one undeniable counter to this is that government must somehow fund its $1.2 trillion estimated 2009 deficit. It cannot do this by issuing and then buying the same bonds. It can only raise revenue by selling bonds to other parties, or by diluting the money supply by cranking up the printing presses. There are no other options. There you have it – we have the government in checkmate!

    The likely outcome is that they will try to do both. That is why I am heavily shorting both 30-Year Treasury bonds and the dollar. Both assets will likely lose as the government becomes increasingly desperate and the world’s biggest buyers realize there are better alternatives available. Make your bets now before it becomes treasonous to bet against Big Brother!

    Disclosure: Long UDN, short TLT, long GLD.

    ==============================================

    Five New Forces to Drive Gold Higher – Seeking Alpha

    By: James West of The Midas Letter

    Gold naysayers habitually point to the relatively weak performance of gold relative to the broader market over the last 5 years. Given the market today, that argument is increasingly wrong, and the naysayers are soon to either admit their mistake, or pretend that they were never naysayers at all. That’s because during the last 3 months, five major new forces have emerged to compound the previous strong drivers of the gold price up to now.

    These new forces are as follows:

    1. China has stopped buying U.S. debt.
      An interesting piece in the New York Times today signals that China, up until now the biggest buyer of U.S. Treasuries and bonds issued by Fannie and Freddie, is moving towards an end to that policy. China holds over US$1 trillion of such paper, and as interest rates collapse, there is less and less incentive for them to buy American.China has made several adjustments to programs that used to give banks and other financial institutions within the country incentive to buy U.S. assets, which means essentially that these same customers for assets will now be looking for Chinese products.The effect this will have on gold is two-fold. In the first place, reduced demand for U.S. debt will hamper Obama’s plans to keep printing money, because the one limiting factor that still seems to be respected in terms of how much paper can be printed, is the idea that there must be a counterparty to every issuance of T-Bills to warrant continued printing. Theoretically, less demand for T-Bills will force a rise in interest rates to attract investors. But that does not appear forthcoming, which will make the U.S. dollar weak relative to other currencies – especially gold.The second effect is that by eliminating incentives for Chinese banks to acquire U.S. denominated assets, investors there will divert more funds to holding gold as a hedge against their current U.S. dollar holdings, which will be diminishing in value.
    2. Future discoveries of gold deposits will diminish dramatically.
      The biggest source of gold ounce inventory for major gold producers is the discoveries made by the several thousand juniors who scour the earth in search of favorable geology. With the collapse in base metals prices, many of these juniors are under increasing pressure to consolidate and downsize, and many more will disappear altogether.That means less money going into gold exploration, and that means the number of new discoveries that can be acquired by majors is going to go down sharply in the coming years. In theory, as gold continues to outperform all other asset classes, there will be a rush back into junior gold exploration, but that won’t happen until gold is taken much higher and investment demand for it soars.
    3. Existing by-product gold production will fall sharply
      In copper, zinc and other base metals mines around the world, gold occurs in metallic deposits as a by-product of some other dominant mineral. In the United States, 15 percent of gold production is derived from mining copper, lead and zinc ores.With the collapse in prices for these metals, the by-product production of gold is most often insufficient to justify the continued operation of the mine profitably, and it is likely that a significant amount of this by-product gold production will cease along with the shutdown of these operations. The result will be less gold production from existing operations, contributing to the now even faster growing gap between supply and demand.
    4. Gold is becoming mainstream
      One of the biggest contributors to gold’s unpopularity as a main street investment is that it has been mercilessly derided and ridiculed by mainstream investment media and institutions. There is very little opportunity for an investment advisor to insinuate himself into a gold purchase transaction, since most anybody who wants to hold the metal can visit their local bullion exchange or mint and buy as much as they’d like. Because the massive investment institutions that dominate the investment advisory business can’t make a fee out of advising you to buy gold, they try to convince you to purchase other asset classes which their firm has either originated or is a participant in a syndication of investment banks selling such products.Thanks to the widespread coverage of the questionable integrity of these complex securities, and since many main street investors have been burned by their investment advisors (they feel), there is increasing main street advice being doled out to buy gold. One need only search Google news on any given day to discover that headlines critical of gold are now replaced with headlines singing its praises.
    5. Gold is the best performing asset class of the decade
      Now that the global financial meltdown has got up a head of steam, investors are hard pressed to find any investment that has performed well over the last ten years as consistently as gold. The chart below outlines this performance and appears here courtesy of James Turk’s GoldMoney.com.
    Gold Performance: 2001-2008 (click to enlarge)
    Gold Performance 2001 - 2008

    As you can see, any investment still returning an average of 10 – 17 percent is a winner, compared to everything else you can generate a chart for. As this intelligence permeates the none-too-quick popular investment imagination, and, combined with the other 4 factors, gold is going to be where the world’s next crop of millionaires is minted.

    ===========================================

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    The U.S. Dollar and Deficit-Gold Relationships

    08 Thursday Jan 2009

    Posted by jschulmansr in Bollinger Bands, capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, Fundamental Analysis, gold, hard assets, How To Invest, How To Make Money, Investing, investments, Latest News, Make Money Investing, Markets, mining companies, mining stocks, Moving Averages, oil, platinum, precious metals, silver, small caps, Stocks, Technical Analysis, Today, U.S. Dollar, Uncategorized

    ≈ Comments Off on The U.S. Dollar and Deficit-Gold Relationships

    Tags

    agricultural commodities, alternate energy, Austrian school, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, Sean Rakhimov, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    My Note- Gold came roaring back today and being beaten down yesterday, currently Gold is up $15 at $856+ and holding above the $850 level. Today’s articles explore the relationship of the U.S. Dollar, the Deficit and National Debt; and their relationship to Gold prices. If you are not alarmed by the current deficit you should be! Now with Obama predicting a yearly deficit of over 1 Trillion dollars what does this mean for the Economy, the Dollar and the price of Gold? Read On and Find Out… Good Investing – jschulmansr

    Things We Don’t Talk About (But Should); National Debt and the $2 Trillion Deficits- Seeking Alpha

    By: Jonathan O’Shaughnessy of Emerginvest Blog & Emerginvest 

    It has been around for decades, and has been ignored by many for just as long. However, the US national debt stands to finally be thrown into the forefront of political discussion as the record for a single-year deficit looks to be beaten – by threefold.

    According to the government-run TreasuryDirect.gov, US national debt is the largest it has been in history at $10.6 trillion, or $10,638,425,746,293.80. This is at a time when the US is facing the worst economic crisis since the Great Depression, which requires record-shattering government spending to stabilize the faltering economy. In addition, global demand for US national debt is waning as countries world-wide are implementing their own financial stimulus packages. Yet economists are virtually unanimously advocating for radical government spending to stabilize the economy, which leaves future generations of Americans holding extremely large amounts of national debt.

    The problem for the average American is twofold: national debt doesn’t seemingly affect their daily lives and $10.6 trillion is a hard number to conceptualize. After a certain point, the human brain stops comprehending the magnitude of a given number, and simply categorizes it as “extremely large.” Subsequently, there is little public outrage or discussion when the US has run up a few hundred billion dollar deficit in years past. It doesn’t seem to affect their lives, no government projects are cut, and adding $0.2T onto $10.6T seems relatively insignificant.

    However, when viewed in another light, the enormity of the national debt is astonishing. According to the 2007 United States budget, and TreasuryDirect.gov, the interest alone on national debt is approximately $460 billion. It accounts for the second-highest expenditure on the US budget and if the US could forgo paying that interest on national debt for one year, the United States government could:

    1) Pay for the entire education budget of the United States six times over

    2) Reduce federal taxes by 33% for all Americans, or

    3) Write a check to every man, woman, and child in the United States for $1,500.

    Yet, that $460 billion in annual interest looks to grow substantially with looming deficits in the years to come.

    A New York Times article entitled “Obama Warns of Prospect for Trillion-Dollar Deficits,” stated: “President-elect Barack Obama on Tuesday braced Americans for the unparalleled prospect of ‘trillion-dollar deficits for years to come.’” President-elect Obama did not give details about the size of the deficit, but projections place the proposed deficit at close to $1.2 trillion for 2009, shattering the record from President Bush last year at $455B.

    That is not counting the proposed $800B 2-year stimulus package which could easily raise the deficit into the $1.7 trillion range – bringing the national debt to roughly $12.3 trillion by the end of 2009. Assuming deficits run at approximately $1 trillion per year for the next two years, which may or may not be conservative, the US could see its national debt as high as $15 trillion in three years.

    Subsequently, Obama added emphasis on tighter government regulation, quoted in the NYTimes article as saying: “’ We’re not going to be able to expect the American people to support this critical effort unless we take extraordinary steps to ensure that the investments are made wisely and managed well.’” In correlation, he created a new position, chief performance officer, in charge of eradicating government inefficiencies.

    This comes at a time however, when global demand for US debt is falling sharply. A prime example is China, one of the largest creditors to the US, which has heavily curtailed its purchases of US debt in light of the recent financial crisis. Another NYTimes article entitled: “China Losing Taste for Debt from U.S.,” states that: “China’s foreign reserves will increase by $177 billion this year — a large number, but down sharply from an estimated $415 billion last year.” The Chinese government is dealing with their own economic woes – a stock market which has shed two thirds of its value in the last year – and is attempting to implement their own economic stimulus package. Furthermore, the sharp outflow of foreign direct investment in China has further complicated the issue. The situation is similar across the world, as the Emerginvest heat map shows the damage from the past quarter (click to enlarge):

    The lack of global demand for US national debt could put severe pressure on US interest rates in the years to come if demand continues to shrink drastically. However, there is a political buffer, as the article stated that: “China’s leadership is likely to avoid any complete halt to purchases of Treasuries for fear of appearing to be torpedoing American chances for an economic recovery at a vulnerable time, said Paul Tang, the chief economist at the Bank of East Asia. ‘This is a political decision,’ he said. ‘This is not purely an investment decision.’”

    Yet even in the face of significant strain on government debt and sagging global demand, economists are virtually unanimous in calling for exorbitant amounts of government spending to stabilize the economy. Yet another NYTimes article entitled: “A Crisis Trumps Constraint,” states that: “To a degree that would have been unimaginable two years ago, economists and politicians from across the political spectrum have put aside calls for fiscal restraint and decided that Congress should spend whatever it takes to rescue the economy,” in addition to: “’It pains me to say that because I am a fiscal conservative who dislikes budget deficits and increases in government spending,’ Mr. Feldstein told the lawmakers. But he said, ‘Reviving the economy requires major fiscal stimulus from tax cuts and increased government spending.’”

    Therefore, it looks as if the U.S. is inexorably tied to unparalleled government spending in the short term, nearly guaranteeing a national debt of over $14 trillion within a few years. The Obama administration has hinted at overhauling Medicare and Social Security as ways of dampening the gargantuan deficits, but the method, and certainly the net effect of such an undertaking remains ambiguous until the budget is revealed. It seems as if, in the interest of short term self-preservation, future generations of Americans will be inevitably saddled with incomparable amounts of national debt which will heavily shape future American fiscal policy for decades.

    Disclosure: Emerginvest is an international finance portal, providing analysis and data on 120+ world markets to help individuals find investments from around the world. Emerginvest provides impartial information about world stock markets, and does not have any holdings in foreign equities.

    ===============================================

    Government Panic Could Herald Dollar Panic – Seeking Alpha

    Source: John Browne of Euro Pacific Capital

    One of the few things more troubling for an economy than government intervention is government intervention driven by panic. Time and again, history has shown that when governments rush to engineer solutions to pressing problems, unintended difficulties arise.

    In the current crisis, there is growing evidence that Washington is in a state of increasing panic. Despite its massive cash injections, market manipulations and ‘rescue’ plans, the recession is clearly deepening and spreading. With little to show thus far, politicians don’t know if they should redouble past efforts, break ground on new initiatives, or both. However all agree, unfortunately, that the consequences of doing too little far outweigh the consequences of doing too much.

    Although there are many parallels between the current crisis and the Crash of 1929, one key difference is the global profile of the U.S. dollar. In 1929, the dollar was on the rise, and would soon eclipse the British Pound Sterling as the world’s ‘reserve’ currency. Furthermore, the American economy was fundamentally so strong that in 1934 America was the only major nation able to maintain a currency tied to gold.

    Ever since, the U.S. dollar’s privileged ‘reserve’ status has been a principal factor in America’s continued prosperity. The dollar’s unassailable position has enabled successive American governments to disguise the vast depletion of America’s wealth and to successfully increase U.S. Treasury debt to where the published debt now accounts for some 100 percent of GDP. The total of U.S. government debt, including IOU’s and unfunded programs, now stands at a staggering $50 trillion, or five times GDP! If the dollar were just another currency, this never would have been possible.

    In today’s crisis however, the dollar is likely making its last star turn as the leading man in the global financial drama. Other stronger, less burdened currencies are waiting in the wings for the old gent to take his final bows.

    The dollar’s demise is being catalyzed by the neglect of the Federal government. Instead of enacting policies that would restructure the U.S. economy, and restore productive, non-inflationary wealth creation, Congress is simply financing the old crumbling edifice.

    Faced with the growing realization that America is not doing the work necessary to right its economic ship, it will not be long before America’s primary creditors begin to seriously question the nation’s ability to service, let alone repay, its debts.

    There is now the prospect (inconceivable until recently), that America could lose its prestigious ‘triple-A’ credit rating. In today’s risk adverse market, this could cost the Treasury one percent in interest on long bonds. Each additional percentage point of interest would cost America some $10 billion a year on each trillion dollars of new debt, or some $300 billion over the life of a 30-year bond.

    Many of the foreign governments who hold huge amounts of U.S. dollar Treasury debt, such as China and Japan, have announced plans to spend money on their own ailing economies. Should these foreign central banks divert to domestic initiatives some of the funds used to buy U.S. Treasuries, serious upward pressure on U.S. interest rates will result. Should they actually sell parts or all of their holdings they will likely put serious downward pressure on the U.S. dollar. Last week, a Chinese official claimed the U.S. dollar should be phased out as the world’s ‘reserve’ currency.

    In the short term, as dollar ‘carry-trades’ continue to be unwound and questions of political will and falling interest rates haunt the Euro and some other currencies, the U.S. dollar may be the recipient of some upward appreciation. But with the American government appearing increasingly to be in panic mode, a run on the U.S. dollar could develop rapidly into cascading devaluation. Even if no such panic run materializes the long-term outlook for the U.S. dollar is one of high risk and low return. This beckons major upward pressure on precious metals.

    ========================================

    What is Going On With Gold? – Seeking Alpha

    Source: The Pragmatic Capitalist

    Gold (ETF:GLD) is one of the most fascinating and talked about assets on the planet. There are more conspiracy theories and story lines behind gold than just about anything on earth. Heck, the followers of the asset even have their own club: the goldbugs. You can’t go a day without seeing a commercial about gold. If you google “buy gold” you get almost as many results as if you search “buy real estate” (15.4MM vs 16MM).

    But gold has been acting funny lately. The conspiracy theories have been running even crazier than usual (from government conspiracy to backwardation) and the goldbugs are angry. As the world economy deteriorates and the U.S. prints money like it’s going out of style, gold has not appreciated. If you had told me in December of 2007 that the global stock market would fall 40% in 2008 I would have told you to buy gold and nothing else because of its safehaven characteristics. But a funny thing happened on the way to the demise of the global economy: Gold fell.

    After rallying into the second quarter of 2008, gold went on a gut wrenching 6 month decline of over 30% – all in the midst of one of the greatest financial collapses ever. It was, if nothing else, quite a paradox. Even crazier, the US dollar stabilized and then rallied into the end of 2008. Why did this happen? How could gold fall in such an environment?

    Gold remains an anti-dollar investment. It’s as simple as that. When you buy gold you’re essentially buying a hard asset currency with the hope that one day it will become the world’s choice of currency again. If the dollar (UUP) weakens or one day fails the likelihood of a gold based currency increases. In essence, buying gold is a way of betting against the greenback and U.S. economic dominance. You can argue the extent of my argument, but you can’t really argue with the inverse correlation in the two assets:

    Click to enlarge

    The correlation is clear. If you’re betting on a rise in gold you’re betting on a falling dollar. I’ve been banking on a higher dollar for over 6 months for one reason: it’s the best currency in a bad lot. Jim Cramer should change his area of expertise to currencies, because while there isn’t always a bull market in stocks and commodities, there is always a bull market somewhere in the currency market. Trades are paired in Forex and unfortunately, it’s hard at this time to make an argument in favor of other currencies over the greenback. And as long as the greenback remains strong it’s unlikely that gold will make any sustainable run.

    So why is the dollar the best of the worst? It’s quite simple in my mind. Two major currencies on the planet now effectively bear zero interest: the dollar and the Yen. Of the two, the U.S. is the far superior economy. In essence, neither country can really devalue their currency all that much more unless they decide to print money to the point of insanity and although I believe the U.S. is printing wildly I am not incredibly alarmed as of yet simply because the destructive deflationary forces at work are so much greater than the inflationary response by the Fed. Inflation is certain to rear its ugly head in the coming years, but I suspect it will be relatively mild as the economic rebound is slow and the overall monetary destruction of this deflationary phase proves to be incredible.

    So, getting back to the greenback – the U.S. was first to enter a recession and it now looks like the world is catching pneumonia from our cold. Unfortunately Europe and Asia still have relatively high interest rates (read: room for currency devaluation) and simply don’t carry the same status as the U.S. – we are the reserve currency and the only true AAA nation. Yes, you can certainly make the argument that the U.S. is no longer a AAA rated country, but if we’re AA then what does that make Japan (the world’s second largest economy) or Germany? Much worse, in my opinion.

    So what we’re seeing is essentially a flight to quality in a time of financial distress? Yes, that’s right, the U.S. dollar is a higher quality asset right now than just about any currency on the planet. And if you’re a U.S. citizen you should be thanking your lucky stars it’s THE reserve currency because this crisis would likely be even worse if that wasn’t the case.

    So, before you go placing bets on gold it might be better to research the greenback first.

    ==================================================

    Not Time To Exit Commodity Positions – Seeking Alpha

    By: J.D. Steinhilber of Agile Investing

    Diversified commodities have suffered approximately the same one-year decline as stocks, but the descent has been more violent since broad commodity indexes peaked in the middle of 2008, whereas most stock indexes peaked in October 2007. Just as it is not the time to abandon stock market commitments, this is certainly not the time to exit commodity positions in the context of a diversified multi-asset portfolio.

    Cyclical commodities are not a valuable hedge to a stock portfolio in a deflationary bust and a liquidity crisis such as we have seen, but those conditions are not likely to persist over any investment horizon measured in years rather than months. Massive government reflation and stimulus efforts will support hard assets in 2009. Infrastructure spending is bullish for commodity prices, and tighter credit conditions, along with lower prices, puts pressure on the supply of commodities as suppliers curtail production.

    Gold finished the year on a very strong note and managed to produce another year of positive returns in 2008. Gold has the most attractive three and five year annualized returns of all the asset classes we track. Gold will continue to be whip-sawed by the volatility in the currency markets.

    We hold Gold (GLD) in our portfolios as an insurance policy against financial crisis and paper currency devaluation. The opportunity cost of holding gold, which produces no dividend or interest income, is now very low given that the Federal Reserve has cut the official U.S. overnight lending rate to zero to 0.25%, and has stated that “weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.”

    [click to enlarge]

     

     

     

     

     

     

     

     

     

     

    ===================================================

    How Will Obama’s “Trillion Dollar Deficits” Affect the Markets? – Seeking Alpha

    By: Simit Patel of Informed Trades.com

    The New York Times has an article this week reporting on US President-elect Barack Obama’s warning that there will be ‘trillion-dollar deficits for years to come.” What does that mean for the markets?

    The first line of recourse will be the issuance of Treasury bonds; in other words, the US government will look to borrow money, offering to pay it back with interest. The key question, though, is to what extent buyers of Treasuries will be easily found. As we have discussed previously, the very low yield on bonds coupled with the fact that the economic pains are being felt all around the world suggest one of two possibilities: bond rates will have to go up or the Federal Reserve will have to “monetize the debt” — meaning it will simply have to print more money.

    I have stated and continue to believe that the result of increased deficit spending, due largely to government bailouts, in this environment will be debt monetization (even if there is a rate hike, that will only increase the future debt, and thus will only delay and exacerbate debt monetization). I believe this will prove to be inflationary, that it will devalue the US dollar, and that this is the real way the bailouts will be paid for; not via a direct tax, but rather a tax through inflation. Economist Mike Shedlock, however, offers a counter viewpoint:

    The Fed at some point will resort to out and out monetization, and that will have the inflationists screaming at the top of their lungs. However, banks will still be reluctant to lend, and consumers and businesses will be reluctant to borrow. In addition, I expect the velocity of money printed to be close to zero and for the savings rate to rise. In aggregate, these are not hyperinflationary things. Heck, they are not even inflationary things.

    Admittedly, I am one of those inflationists who will be screaming at the top of my lungs.

    There are two reasons I believe debt monetization will be inflationary:

    1. I disagree with the notion that banks won’t lend and consumers won’t borrow. As I recently noted, we are seeing a declining TED spread as well as an increase in many money supply metrics (M1, M2, MZM). And even in this environment, we have seen companies like Verizon be able to secure a massive $17 billion loan.
    2. Even if lending is reduced due to the economic climate, debt monetization increases the likelihood that foreigners will not only stop buying Treasuries, but that they will sell the ones they have, and will dump US dollar holdings out of a concern of dollar devaluation by the part of the Federal Reserve. This suggests there will be a “run on the currency,” similar to what was seen in Argentina. See our previous article on the similiarities between the US economic crisis and the Argentinian crisis of 2001 for more on this subject.

    How to Trade This Scenario

    Timing is the key issue for trading this; we are currently seeing a rally in the market, though I expect that at some point in the second half of 2009 we will see the concerns about the Treasury market begin to manifest. As a trend-following trader I look for momentum that corresponds to my fundamental viewpoint, with the exception of precious metals, which I treat as buy and hold type investments.

    With that in mind, here are the conclusions I am making based on the trillion dollar deficit scenario:

    1. US dollar will fall in value. For stock market traders, UDN is an ETF to watch.
    2. Dollar hedges like gold and silver will rise. GLD and SLV are corresponding ETFs.
    3. Both monetization of debt as well as a hike in interest rates will send bond prices falling, as a rate hike devalues all bonds previously issued at a lower rate while monetization of debt introduces inflation concerns and the possiblity of the bond being paid back with a currency that is worth less.
    4. A rate hike, which I think is increasingly unlikely given the Fed’s behavior though still possible, will be bearish for US stocks. DOG and SH are inverse ETFs worth considering in such a scenario.

    Disclosure: Long gold and silver; currently short US dollar against Australian dollar.

    ==============================================

    My Note: Whether as “Portfolio Insurance”, or as a Speculative Investment, I think now is the time to buy and Invest in  Gold and Precious Metals in any form. I am calling for $1000 to $1250 Gold later this year and even higher if the Middle East Situation disintergrates and gets worse. Other factors are mentioned in detail above, don’t kick yourself later, buy Precious Metals and Miners at these ridiculously low levels NOW!

    My- Disclosure: I am long Physical Precious Metals, Etf’s, and Mining/Producer Stocks. I.e. my money is where my mouth is! Remember to do your own Due Diligence and read all Prospectus’s before making any investment. -jschulmansr

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    Gold-History Repeating Itself?

    06 Tuesday Jan 2009

    Posted by jschulmansr in Bollinger Bands, capitalism, commodities, Copper, Currency and Currencies, Finance, Fundamental Analysis, gold, hard assets, How To Invest, How To Make Money, inflation, Investing, investments, Jschulmansr, Latest News, Make Money Investing, Markets, mining stocks, Moving Averages, oil, precious metals, silver, small caps, Stocks, Technical Analysis, Today, U.S. Dollar, Uncategorized

    ≈ Comments Off on Gold-History Repeating Itself?

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    agricultural commodities, alternate energy, Austrian school, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    Today’s action: Gold opened down by a few dollars and now has reversed itself and is cusrrently up $7-10 oz. Based off of chart formations it would appear that  Gold is breaking out to the upside and getting ready to challenge the $900 level, If it can break that then we are set up for a test of the $950-$975 level. If it fails here, a pullback to the $800 level (support base) will probably occur. Today’s articles include one about a new 2yr gold price cycle that appears to be forming. Next some questions answered about the markets for 2009. Finally a special report from Gold World about Gold Backed Banking. Enjoy and good investing! – jschulmansr

    Gold’s 2-year cycle – MineWeb

    A Mineweb reader has noticed a recent two-year cycle for gold price behaviour which, if it continues will likely give some guidance to price movements this year and next.

    By: Joseph Cafariello

    EDMONTON, CANADA –

    There seems to be a two-year cycle in the gold price which has been repeating itself since about 2004.  The even years follow one pattern, while the odd years follow another pattern.  The even years tend to reach exaggerated extremes to the upside and to the downside on a percentage basis, while the odd years tend to be a little calmer with less volatility.

    For example, 2008 went very much like 2006, with exaggerated highs reached in the spring of each year, and a late start to the traditional autumn-winter-spring upswing, which began around October/November of 06 and 08.  On the odd-number side, 2007 went much like 2005, with moderate highs reached in May of each year, and an early start to the traditional autumn-winter-spring upswing, which began around August/September of 05 and 07.

    If this is indeed a reliable cycle, we can expect 2009 to be much like 2005 and 2007 all throughout the year.  The first half of 2009 should see gold follow the same pattern as the first halves of 2005 and 2007.  In the springs of 05 and 07, gold kept hitting its head against the previous year’s high all throughout the spring.  More than once during the spring of 2007, gold topped out at about $690, coming to within about 5% of the 2006 high of $735.  Similarly, the spring of 09 should see gold hitting its head against 2008’s high of $1,035, coming to within 5% of it, or up to about $985.  That will be the high for the first half of 2009 at around the beginning of May, though this will not be the high for 2009 as a whole.

    Given the odd-number year pattern, we might also expect the back half of 2009 to be much like the back halves of 2005 and 2007.  In both 2005 and 2007, the summertime pull-backs were modest, and the autumn-winter-spring upswings started early, at around August/September of 05 and 07.  The latter half of 2009, then, should see a modest summer-time pull-back of about 5% to 7% of its spring 09 high, taking gold down from $985 in May 09 to about $925 by August 09.  However, the low for 2009 will still be the upcoming January low of $800, which is now only about a week or two away.  The lows of January 2005 and January 2007 were also “the” or “close to the” annual lows for those years.  So the low of 2009 will be at around $800 in January.

    The high for 2009 will come in December.  The traditional autumn-winter-spring upswing in 2009-10 will be much as it was in 2005-06 and 2007-08, with an early start.  The year-end run for 09 will begin around August or the beginning of September, jumping from about $925 in Aug/Sep 09 and rising steadily until the end of December 09.  The annual highs for 2005 and 2007 were hit in or near December of each year, and each high was about 20% higher than the average of their first halves.  Thus, the annual high of 2009 will be hit in or near December, and will be 20% higher than the average of its first half, putting the 2009 high at about $1,150 in December.

    The traditional autumn-winter-spring upswing, however, will certainly not end in 2009, but will spill over into the spring of 2010 much as it did in the springs of 2006 and 2008.  The high in the spring of 2008 was about 40% higher than high in the spring of 2006.  Hence, the high in the spring of 2010 will be about 40% higher than 2008’s high of $1,035, putting gold at about $1,450 in the spring of 2010.  Then, the summertime pull back of 2010 will be just as stark as were the summertime pullbacks of 2006 and 2008.

    And so the two-year cycle will continue, where even-number years follow a pattern of extremes, while the odd-number years are calmer, but with a nice upward kick at the end.  This two-year cycle with even-number years on the extreme side and odd-number years on the moderate side will continue until the commodity boom is over (say around the year 2030, when the populations of China and India finally achieve a 75% middle-class), and until the US dollar recovers at around the same year (2030), when the rest of the world will be looking to the US as a nice place to shop given its then-to-be dirt-cheap dollar.

    The above comment was contributed by Mineweb reader Joseph Cafariello who describes himself as “A raving gold bug and proud of it”

    ==========================================

    2009 Market Q&A: Four Questions Answered – Seeking Alpha

    Source: Eric Roseman of The Sovereign Society

    By Eric Roseman

    Over the last several weeks I’ve received numerous questions from Sovereign Society subscribers, including individuals who frequent our daily blog.

    As we start 2009, I thought this would be an ideal forum to collect some of these important questions and attempt to give you my best conclusions. I can’t reprint all of these inquiries; but I’ve compiled several excellent questions from our members.

    Overall, I don’t like forecasting. I generally believe it’s a total waste of time and most consensus estimates ahead of 2008 ended in the basement with the majority of analysts dead wrong about the economy, the market and just about everything else.

    I have to admit that I never expected the markets to crash, the banking system to go bust or the dollar to skyrocket in the midst of the worst financial crisis in 75 years. To be fair, I think most pros failed to make accurate predictions.

    Question: I’m a retired investor living on income. Prior to the big rally in Treasury bonds, I held most of my savings in short-term Treasury’s and bank term deposits. But with short-term rates under 1% and government bonds yielding a pittance, I’m nervous. What should I do to supplement my income?

    Comment: This is perhaps the most challenging environment for retirees in more than a generation. With money-market funds yielding almost nothing, Treasury bonds yielding around 2% and bank CDs paying under 1%, retirees must supplement their income.

    My advice is to take a small portion of your savings, say 20%, and scatter that sum across a dozen or more investment grade corporate bonds. I emphasize “investment grade” and not junk debt. Investment grade debt includes anything rated BBB or better in my book and, to make it easier, I would stick to issues rated A- or higher.

    The Dow Jones Corporate Bond Index now yields 6.90% – down from its post-crash high yield of 8.87% in early $100 bill imageOctober. Still, investors can tap into non-financial bonds like IBM, Johnson & Johnson (JNJ), Wal-Mart (WMT) and Kraft Foods (KFT) – all paying 5.5% or more. Or, look at corporate bonds issued by America’s largest banks, including JPMorgan Chase (JPM), Goldman Sachs (GS), Wells Fargo (WFC) and US Bancorp (USB). These banks won’t default.

    A good strategy to keep things simple is to buy a laddered portfolio of corporate bonds ranging from two years all the way to seven years. This should at least give your nest egg a boost and if you feel comfortable with this formula, then increase your position to say 35% of your portfolio. But remember, don’t go whole-hog; at some point over the next 12 months, perhaps later, Treasury bond prices will get smashed and long-term rates will head higher as the government expands credit to the moon. Keep your powder dry.

    Question: Do you think we’ll avoid another Great Depression? Despite all the money thrown at the markets since late 2007 we’re still in the midst of a severe credit contraction and the global economy has literally fallen off a cliff since October.

    Comment: I think we’ll avoid another Great Depression but only because government will nationalize or partially nationalize key industries. Without government intervention, the free market would have resulted in massive failures and a total collapse of the banking system and the broader global economy. There’s no doubt in my mind that the government made a big mistake not rescuing Lehman Brothers last September. Once you’re bailing out major banks, then do it right. But in all honesty, we don’t know what transpires behind the Fed’s walls or the Treasury’s. There’s some crazy buddy system in progress with special interests influencing government policy. The government doesn’t give a damn about you or me. What they care about is protecting their interests. That’s why we must protect our assets and, in the end, I believe gold will triumph above all paper money, especially against the dollar.

    I don’t advocate government intervention; but these are not normal times and the consequences might have resulted in the death of capitalism and perhaps the emergence of a new social order, similar to what occurred in post-Weimar Germany in the 1920s. Harsh economic times usually result in a new socio-economic regime. If the Fed and Treasury fail to rescue the credit system, then we might face similar consequences. The world as we know it will come to an end.

    It’s hard to know exactly what goes on behind the Federal Reserve’s closed doors and at the Treasury’s. Thus far, government efforts have been bold since the October crash, including major central banks worldwide. Major credit indicators have indeed improved since November but the housing market – the crux of the crisis – is still in a freefall. Housing must stabilize before this severe recession ends.

    In my eyes, it seems that bailouts and backstops are not addressing the real problem; most TARP money is ending up in bank coffers again and, in most cases, these institutions aren’t lending. The core of this credit crisis lies with the consumer and with housing. If you’re going to fork out several trillion dollars to fix or remedy this crisis then give the money to the consumer – not the banks. The consumer is in a severe bear market with personal assets plummeting over the last 18 months, including real estate, stocks, most bonds and now, possibly his or her job might be next on the chopping block.

    Give consumer households $50,000 or more and allow them to clean-up their busted balance sheets, keep their homes (service mortgages) and pay off installment debt. You might not agree with me and, in all fairness, it’s against the tenets of the Sovereign Individual; but what good will all this money do if it’s basically squandered by government and ending up in the pockets of reckless bankers again? I have serious doubts about how the government is dealing with this crisis and I don’t think Obama’s spending package will help much at all despite perhaps growing the economy for a few quarters.

    Question: What about the banks? With governments now standing behind their biggest financial institutions, is the worst over?

    Comment: The global banking system, for all intents and purposes, is effectively bust or bankrupt. This is especially the case in the United States, Europe and, to a lesser extent, in Japan. More than a dozen emerging market banks are totally bust, including Iceland, the Baltics, Hungary, Romania, Bolivia, Ukraine, Ecuador, Argentina, etc. Not a pretty picture.

    I think we’re more than 75% through the worst at this juncture. Governments now stand behind the largest banks in each country and, in some cases, even guarantee entire deposits until 2010 (e.g. European Union). I wouldn’t worry about the largest banks failing at this point. The worst is now behind us.

    Question: I know you’re a big gold bug, but isn’t the euro a strong currency and do you think it’s a better hedge against the dollar than gold? Is it too late to purchase gold coins and, if not, where would you suggest I buy coins?

    Comment: I have absolutely zero faith in the U.S. dollar and other currencies, including the euro or yen. In the end, all currencies will decline vis-à-vis gold and, in fact, since 2005 the world’s currencies have been losing their relative value to gold bullion. Despite big moves by the yen and euro over the last several years, they pale against gold.

    Increasingly, the average man in the street will realize that paper money is not protecting his purchasing power and will revolt against fiat money. At The Sovereign Society, we’ve driven home this message since our first year of publication in 1997. Gold is the only asset in this world that isn’t someone else’s liability; with U.S. interest rates effectively at 0%, paper money now competes with gold, which also pays 0% interest. In a zero percent world, which asset would you rather own? I think the answer is obvious.

    The government’s enormous spending plans to rescue the financial system and bailout almost every ailing industry Gold Coin Imageassures dollar destruction because the Fed is now on course to print money like never before to quash deflation. We all better hope and prey that the Fed can drain excess bank liquidity very quickly when this credit crisis ends. If not, we’ll have some serious inflation – much worse than what we saw prior to July 2008.

    I think every investor should hold at least 10% of his assets in physical gold. This means coins, wafers or bars. Getting gold coins today is difficult because the U.S. Mint has stopped selling Eagles since last summer while other dealers are complaining about tight supplies amid booming investor demand. I suggest KITCO or First Federal Coin Corporation.

    Also, I would not hold or store all of my physical gold at my home domicile. I strongly suggest parking some of your gold in Switzerland, too. Remember, you must report assets outside of the United States and Canada.

    I’m convinced we’ll see some sort of government confiscation of gold again just like we did in the 1930s. Back then, FDR did allow Americans to hold a maximum of 100 ounces. I’m not so sure the next confiscation will be so generous.

    I hope you found this helpful.

    ===============================================

    2009 Gold Outlook – Gold World

    How To Invest in Gold in 2009

    By Luke Burgess

    The investment markets are yielding to the fact that the global economy will remain weak for the better part of 2009.

    As a result, investors will continue to seek safe havens.

    Under normal conditions, these safe haven investments would include land and real estate. These assets have intrinsic value; or in other words, their value will never fall to zero. But with falling prices, investing in real estate is out of the question for most people right now. And there’s little doubt that investors will look elsewhere for safety against financial crisis.

    The best safe haven asset in the world right now is still gold because it is never considered to be a liability.

    And we believe that safe haven investment demand will drive gold prices during 2009. With this in mind, we would like to present a broad overview of Gold World‘s 2009 gold outlook. But before we get into that, let’s review what happened to gold prices in 2008.

    Gold Was One of the Best Investments of 2008

    In March 2008, gold prices hit a record high of $1,033 an ounce as the gold bull market entered its seventh year of life. This was followed by a normal 18% correction, which drove gold prices back down to $850 an ounce.

    Gold prices subsequently rebounded and were once again closing in on the $1,000 level in mid-July. At the same time, however, the fundamental and psychological effects of the slowing housing and credit markets were just beginning to devalue significantly the investment markets across the board.

    As a result, many long gold positions had to be sold in order to cover losses from investments in other markets. Over the next several months, this forced selling pressure pushed gold prices down.

    Gold prices were also held down during the second half of 2008 as the U.S. dollar enjoyed a +20% rally. Foreign governments, institutions, and banks began buying the U.S. dollar, which despite a legion of problems continues to be the world’s most important reserve currency, as a hedge against domestic economic turmoil.

    20090105_2009_gold_outlook.png

    These factors contributed to a significant drop in the price of gold, which officially bottomed out for the year at an intraday low of $683 an ounce in October 2008.

    Gold prices have subsequently bounced off of the $700 level as major selling has dried up, and fresh buying has come into the market.

    Despite three 20% corrections and serious deflation in the market, gold exited 2008 with a positive 5.4% gain for the year. Although subtle, this gain outperformed every major equity index and commodity in the world. Here are just a few examples…

    Index/Commodity
    Percent Change During 2008
    Dow Jones
    -34%
    NASDAQ
    -41%
    S&P 500
    -39%
    TSX -35%
    TSX Venture -74%
    Oil
    -55%
    Silver
    -23%
    Copper
    -54%
    Gold
    +5%

    This made gold one of the best investments of 2008.

    And the 2009 gold outlook looks just as strong.

    Gold’s 2009 Outlook

    Despite a bit of downside in the immediate future, we expect gold to have a stellar year.

    Global economic turmoil and deflation will undoubtedly continue to influence gold prices in the near-term. A short-term pullback in gold prices from current levels to $800—maybe even a bit lower—is not out of the question. However, we expect gold prices to break new records during 2009.

    For our current perspective, we expect gold prices to reach as high as $1,300 during 2009, which would be a profit of over 50% from current levels.

    Gold prices in 2009 will be supported more heavily by supply/demand fundamentals than in the previous years of this gold bull market.

    As we’ve previously discussed, during the third quarter of 2008, world gold demand outstripped supply by 10.5 million ounces. This deficit was worth $8.5 billion and was the largest supply/demand deficit since the gold bull market of the 1970s.

    Official 4Q 2008 world gold supply/demand figures will be calculated and reported later this month. Gold World will report them to you when the data is released.

    In the meantime, though, all estimates suggest that there will be another very large deficit in world gold supplies from the fourth-quarter, with investment demand continuing to drive the market.

    We expect that a continuing surge in investment demand could push gold prices as high as $1,300 at one point during 2009.

    There will likely be a bit more volatility in the gold market in 2009 as more and more speculators come into the market. It is likely that the gold market will experience three or four price peaks (selling points) during 2009.

    How to Invest in Gold for 2009

    As we expect a near-term drop in gold prices as a result of continuing deflation, we are advising our readers to hold off on any physical gold buying for the immediate future. As previously mentioned, gold prices could dip back down to $800 before recovering again.

    Nevertheless, we expect 2009 to be another great year for gold investors.

    Good Investing,

    Luke Burgess and the Gold World Research Team
    www.GoldWorld.com

    =================================================

    Gold World Special Report – Gold Backed Banking

    Special Report – Here’s How To Get Your Own Copy – Simply Subscribe

    January, 2009

    Gold Backed Banking

    It’s a wonder Americans aren’t rioting in the streets.

    Not including the $700 billion blank check issued to the banks and signed by the US taxpayer, the sum of liabilities assumed by the US government from the finance industry in the past 6 months alone exceeds 50% of the GDP.

    Despite this unprecedented government intervention, the solvency of other every commercial and investment bank is still at stake!

    Recognize this all-but-forgotten quote?

    “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.”
    — Thomas Jefferson, Founding Father, Third President of the United States, and the principal author of the US Declaration of Independence

    How bout a drink from the cup of truth…

    The Bush administration’s $700 billion bailout plan may keep some banks afloat for the time being. But fundamental problems are still deeply rooted within the financial markets that threaten to bring down the whole system.

    The hard truth is that there is no 100% safe place to keep your money.

    Physical cash and gold are the safest places to hold your wealth right now. Anyone who tells you otherwise has either a motive or no clue.

    Those with the means to do so should be holding at least some physical cash and gold.

    Of course, people will debate why you should hold these assets…

    Gold is the ultimate in hedging against financial turmoil. But as it stands today, it’s quite rare to find someone willing to trade a product or service for gold. In other words, it’s difficult to spend gold like money, which has been a criticism of owning physical gold for decades.

    Today’s digital age allows consumers to move electronic fiat money around at speeds exponentially faster than ever before. This morning I paid my cable bill with my check card. The entire transaction was completed within 5 minutes. Had I paid by mailing a check, it could have taken up 1-2 days to reach the cable company and 3-5 days to clear my account.

    So what if there was a way gold could be used as easily as electronic money?

    The World’s Only “100% Backed-by-Gold Bank”

    You might have a hard time believing this, but you can actually put yourself on a personal gold standard with a new kind of currency, and it’s rapidly growing among gold bugs.

    Understand first, this new currency is not legal tender issued by any government. That means there’s no debt, inflation, geopolitical turmoil, or any other considerations normally associated with government-issued currency.

    The currency comes in electronic form, but can be used like any other currency in the world today to pay for goods and services, and even settle debt. But there’s one major difference that sets this currency apart from every other in the world:

    It’s 100% backed by gold.

    In fact, in most cases you can instantly exchange this currency for physical gold at any time… a feature taken away from the US dollar decades ago.

    This currency has a new system fully established, making it as easy to use as the current banking industry’s electronic money. Right now, in fact, there are already over 3,000 outfits—and climbing—in which you can pay online using this currency.

    How the “Gold Bank” Works

    Customers transfer funds from traditional bank accounts into these unique gold-backed bank accounts, and earn interest on their funds prior to placing an order.

    Meanwhile, for customers already holding gold and silver in secured (and insured) vaults, their metals are insured and held in specialized bullion vaults. Their metals assets go through an annual audit, and are fully reported to customers.

    Once customers’ funds are in the database, customers’ orders are made through its secure online system. Database servers record all transactions and store currency and metal balances.

    The Advantages of Using this Currency?

    Being backed by gold, the purchasing power of this currency fluctuates in relation to the price of gold.

    This means that as the price of gold increases, the purchasing power of the account increases. On the flip side, however, if the price of gold falls, so does the value of the account. Nonetheless, the risk of significant price fluctuation in gold is small compared to the risk of value fluctuations among fiat currencies, especially the US dollar.

    And despite a short-term correction, the price of gold has increased significantly over the past five years. So this factor has worked out to the advantage of anyone holding this currency over that period. And with +$2,000 gold on the horizon, holders of this currency should do quite well in the future.

    Now you should know that I’m in no way affiliated with this service, nor do I receive any compensation from it. That said…

    I Recently Put the Final Touches on my New Research Report…

    This report shares all the details about the new gold-backed electronic currency, and it’s yours free after you take a risk-free trial of the Mining Speculator service.

    It’s your chance to get in on the biggest and best buying opportunity in junior gold and silver stocks… ever.

    That’s right. The junior gold market is about to blast off, after a brutal beat-down sparked by the financial crisis. Truth is, it’s pushed many gold and silver stocks to new lows…

    … Which is why you don’t want to wait a minute longer to position yourself in the Mining Speculator’s mining and precious metals portfolio. Our team of analysts scour the earth for opportunities in gold, as protection against the financial uncertainties engulfing the U.S. and world markets.

    It’s the ultimate opportunity in a period of great crisis.

    You see, as our government continues to lose control of its ability to manage and prop up markets, gold and silver will undoubtedly make meteoric moves that will stun the populace.

    And just in case you still harbor doubts about gold, consider this… reported last week in the Financial Times…

    “… Investors in gold are demanding ‘unprecedented’ amounts of bullion bars and coins and moving them into their own vaults as fears about the health of the global financial system deepen.”

    And since gold bullion is getting harder and harder to come by, more investors are looking for the next best alternative, and that’s…

    Precious Metals Mining Stocks

    Bottom line: Junior mining stocks will begin to make major moves to the upside, rewarding those who got in early and held on… and those who get in now at what are, frankly, bargain share prices.

    You see, nothing can keep gold from doubling up and hitting $2,000 an ounce… causing shares in our mining exploration companies to skyrocket.

    I’m talking about junior mining stocks with the potential to double, triple—even quadruple!

    Of course, many people have trouble accepting gold as an investment—even now that they’ve witnessed a financial upheaval that’s shaken our country by the shoulders.

    But I also know that those who have heard me out-and followed through with my research and recommendations-have made extraordinary, life-altering returns.

    Which is why I maintain…

    There’s never been a better time-a more crucial time-to protect your portfolio with gold and precious metals.

    And for a brief time, we’re making it easy to do just that… for as little as $25.

    To get immediate inside access to the junior mining companies poised for major run-ups – the ones I’ve visited firsthand and carefully selected after exhaustive research and quality controls – simply take a trial of my Mining Speculator advisory.

    When you sign up for Mining Speculator, I will immediately send you the free report on the new gold-backed currency mentioned in this editorial.

    So, for only $25 you’ll begin to receive my Mining Speculator junior stock advisory… one that held an average 212% gain over five years… plus you’ll get our new special report on “The World’s Only 100% Backed-by-Gold Bank.”

    All you have to do is click here to get started.

    Good investing,

    Greg McCoach, Investment Director, Mining Speculator
    Luke Burgess, Editor, Gold World

    ====================================================

    My Note: I do not receive any renumeration or commissions for recommending either the Gold backed banking or the Mining Speculator. As Always be sure to do your own due diligence and read the prospectus before making any investments or deposits into financial institutions.-jschulmansr

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    A Lesson In Geo-Political Energy + Gold News

    05 Monday Jan 2009

    Posted by jschulmansr in Bollinger Bands, capitalism, commodities, Copper, Currency and Currencies, deflation, diamonds, Finance, Fundamental Analysis, gold, hard assets, How To Invest, How To Make Money, inflation, Investing, investments, Latest News, Make Money Investing, Markets, mining stocks, Moving Averages, oil, Politics, precious metals, silver, small caps, Stocks, Technical Analysis, Today, U.S. Dollar

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    agricultural commodities, alternate energy, Austrian school, banking crisis, banks, bear market, Bollinger Bands, bull market, capitalism, central banks, China, Comex, commodities, communism, Copper, Currencies, currency, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, financial, Forex, futures, futures markets, gold, gold miners, hard assets, heating oil, India, inflation, investments, Keith Fitz-Gerald, market crash, Markets, mining companies, Moving Averages, natural gas, oil, palladium, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, rare earth metals, recession, risk, run on banks, safety, Saudi Arabia, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, Technical Analysis, timber, U.S. Dollar, volatility, warrants, Water

    My Note- Today I present an interesting article about the Geo-Political ramifications of the Battle for the Caspian Seas, plus some of the latest Gold News. Gold today is making a much needed correction in prices, if Gold can hold here and/or we have any increase in tensions of the Middle East; I think the next leg will take prices into the $900-$950 range.- jschulmansr

    Geopolitical Energy Centered on the Caspian Sea – Seeking Alpha

    By: Michael Fitzsimmons of Musings From the Fitzman

    I’ve just finished reading a fascinating book authored by Lutz Kleveman entitled The New Great Game. The book is about Kleveman’s visits to all countries surrounding the Caspian Sea and to the countries involved in actual and proposed oil and gas pipeline routes required to bring Caspian Sea energy assets to the world market. He interviews an amazing cast of intriguing characters along the way.

    The investigative journalist delves deeply into the geopolitical implications of world powers struggling to control Caspian Sea energy reserves – some of the largest remaining oil and gas fields in the world. It is fitting the game of chess was invented by the Persians. It is worth purchasing The New Great Game just to gaze at the maps on the inside and backside covers…each central Asian country being ruled by a government or dictator who one minute moves diagonally like a bishop, only years later to morph into a rook and move horizontally and vertically like a knight, and every once in awhile going hay-wire and imitating the unorthodox movement of a knight. Who will win the great game? What will OPEC’s response be to non-OPEC oil production in the Caspian Sea region? How will China and Russia respond to American military might in the region? Only time will tell.

    The map below shows the countries surrounding the Caspian Sea which are Russia, Kazakhstan, Turkmenistan, Iran, and Azerbaijan.

    Most people are fairly familiar with the oil history of Baku, Azerbaijan dating back to Russian oil discovery and production in the early 1870s. Kleveman relates an interesting story of Swede Robert Nobel who was the older brother of factory owners Ludwig and Alfred Nobel who had become very wealthy producing arms and dynamite. Robert had been sent to Baku with 25,000 rubles to purchase Russian walnut to make rifle butts. Instead, he caught Baku oil fever and bought a small refinery. After only a few years, the Nobel Brothers Petroleum Producing Company vaulted over Rockefeller’s Standard Oil as the largest oil producer in the world. Later, the Nobel’s invented the first oil tanker in a story well told in Daniel Yergin’s The Prize, for which, ironically, Yergin won the Nobel Prize for non-fiction literature in 1992. And yes, the prize is named after the same Nobel family as those men seeking walnut wood for rifle butts in Azerbaijan.

    Fast forward to today: Baku Azeri oil is being shipped to the Mediterranean Sea and world markets via the so-called BTC (Baku-Tbilisi-Ceyhan) pipeline. The picture below shows the pipeline’s route from Baku, Azerbaijan through Tbilisi Georgia, and finally to the Mediterranean Turkish port of Ceyhan.

    This pipeline was hailed as the “Contract of the Century” by Azeri officials very much interested in getting their oil to market independent of Iranian and Russian involvement. Of course, the US was more than mildly interested in this solution as well. The pipeline is owned by a consortium of energy companies, among them:

    • British Petroleum (BP): 30.1%
    • State Oil Company of Azerbaijan (SOCAR): 25%
    • Chevron (CVX): 8.9%
    • StatOil (STO): 8.71%
    • ConocoPhillips (COP): 2.5%

    BP is the BTC pipeline operator.

    The big question in today’s energy riddle is how to route the large energy assets of the Caspian Sea to the world market and thereby offer America an alternative to OPEC supplies. Take the giant Tengiz oil field, discovered of the coast of Kazakhstan, as an example. Estimated at up to 24 billion barrels of oil Tengiz is the sixth largest oil field in the world. It is one of the largest oil discoveries in recent history. The Tengizchevroil (TCO) joint venture has developed the field since the early 1990’s. The partners are:

    • Chevron: 50%
    • ExxonMobil (XOM): 25%
    • KazMunayGas (Kazakhstan): 20%
    • LukArco (Russia): 5%

    Chevron has predicted that Tengiz could potentially produce up to 700,000 barrels of oil per day by 2010. The field also contains large reserves of natural gas. On the downside, the oil is very high in sulfur content, once reason western technology was so desperately required. Currently the oil from the Tengiz field is piped from Kazakhstan through Russia to the Russian Black Sea port of Novorossiysk via the CPC (Caspian Pipeline Consortium). The BTC pipeline is a competing option, preferred by the US to bypass Russia, but is expensive: the oil must first be tanked across the Caspian Sea from Tengiz to Baku, and then offloaded into the BTC pipeline infrastructure. French energy giant Total is interested in developing a common sense alternative pipeline through Iran which everyone knows is obviously the most economically viable solution, withstanding the geopolitical climate in Iran. Of course the US does not favor this route at all.

    The US’s long favored route for Caspian Sea energy was first suggested and studied by Unocal (now part of Chevron). This countries involved in this route are highlighted in color in the picture below.

    This so-called Central Asian pipeline was to begin with a natural gas pipeline from huge Turkmenistan gas fields through western Afghanistan to the Pakistani deep water port of Gwadar on the Gulf of Oman (Indian Ocean). The natural gas pipeline was to be followed by an oil pipeline along the same route, serving not only the energy starved countries of Pakistan and India, but the world energy markets as well. The US believes this route, bypassing Russia and Iran, as well as the congested Straits of Hormuz, is in the strategic interest of the US as a secure non-OPEC source of oil.

    But the key word in the last sentence was “secure”. Unilateral policy decisions by the US in Iraq and elsewhere have instigated a tide of central Asian anti-American resentment. The Taliban, once supported and funded by the US, are now in control of the pipeline’s route. The pipeline project has been delayed until “control” and “security” has been established. Anti-American opposition in Pakistan is also a problem, regardless of that countries dire need for the energy and potential income the pipeline could deliver.

    The US’s oil centric foreign policy agenda is apparently to irritate the two major powers in the Caspian Sea region: Russia and Iran. With the USSR’s disintegration in 1991, all the former Soviet states in the region were being eyed for their energy reserves. At the same time, Russia still considers these former states as within their “sphere of influence”.

    Instead of joining with the Russians in mutually beneficial energy projects, technology transfers, and contracts, the US instead decided to take the opposite approach: it first propped up a government in Georgia irritating the Russians. Then the US supported NATO membership for former USSR countries Ukraine and Georgia. The US also proposed missile defense systems on Russia’s western borders, further infuriating the Russians. Russia finally had enough and acted in Georgia as George Bush was attending the Olympics in China. Russian actions put exclamation points on the obvious – it can take out the BTC pipeline any time it wants, and is resentful of American military meddling in its backyard.

    The prior secret agreements between Putin and Bush to fight the mutual “terrorists” foes appear to be in the distant past. Recent activities involving Russian natural gas transports through Ukraine underscore the vulnerability of Europe’s energy supplies. Europe currently imports some 40% of its natural gas from Russia, and this amount is bound to increase in the future. This further complicates the puzzle by placing US actions at odds with supposed allies in Europe.

    With respect to Iran, the US has military forces in Iraq, Afghanistan, Uzbekistan, Kyrgyzstan and elsewhere in the region – completely surrounding Iran. The US has further tried to isolate Iran (to the dismay of the Europeans who vitally need Iranian energy) by imposing economic sanctions on the country. Iran was one of three countries with distinguished membership in George Bush’s “Axis of Evil”. These US actions have left the Iranians no choice but to develop nuclear weapons in order to protect themselves against the same kind of American aggression they have witnessed elsewhere in the region.

    Meantime, flawed US/Israeli policy, combined with Israel’s recent activities in the Gaza strip and the powerful Jewish lobbying efforts in the US for military action in Iran, seem to increase the odds for more conflict in the region.

    Have US foreign policy moves in Central Asia been successful? Yes and no.

    One bright spot is Iraq. Iraq was always the priority in “the war on terror”, not because the terrorists were there (they are now…) but because Iraq holds the world’s second largest oil reserves after Saudi Arabia. Many of Iraq’s oil fields also have the important advantages of being sweet crude (high quality), are shallow, and are under pressure, making Iraqi production costs very low – in the neighborhood of $10/barrel. For those who actually believe the US government’s marketing job of WMDs, “freedom”, etc. as a pretext for invading Iraq, please note the recent announced that Iraq’s oil resources are now “open for business” and up for bidding. Western oil companies such as BP, ExxonMobil, Chevron, and Royal Dutch Shell (RDS.A) stand to benefit handsomely in Iraq while at the same time boosting the country’s oil production by some 2-3 million barrels over the new few year. So, Iraq can be considered a US success story assuming security is maintained and the oil can reach the market. A big if, but time will tell.

    The BTC can also be considered a success. It has operated fairly reliably, and has shown to be a fairly secure source of Caspian Sea oil. This was a huge project, and many people in the oil business doubted its success and completion. But it’s up and running today and survived Russia’s recent invasion of Georgia. That said, the BTC’s continued success is extremely dependent on maintaining security in the area.

    Now it’s time to head to Afghanistan and take care of business over there. Boy-oh-boy is that going to be one tough nut to crack. The Afghan/Pakistani issue is so deep I can’t even begin to cover it in enough detail to do the subject justice. Those who believe the US motives in Afghanistan are simply “terrorism” or “freedom” should take note that the US fully supported and funded the Taliban when it was decided they were the best option with respect to getting the Central Asian pipeline built. Unocal sponsored the Taliban on trips to Houston to stay at 5-star hotels and visits to NASA. It was only later when the Taliban wouldn’t “play ball” that the US stopped their support and labeled the Taliban terrorists. Even the US installed Afghani President Hamid Karzai worked as an advisor and consultant to Unocal during the initial Central Asian pipeline feasibility studies.

    So, US policies have had some successes in the region as far as oil is concerned. From a humanitarian aspect, well, I’ll leave that up to the reader to figure out on his or her own. From an economic standpoint, one would have to make a detailed analysis of military spending versus the economic benefits in order to come to any conclusions. Perhaps I will write an article on this some day, but for now, I’ll sidestep that question as well.

    For the US, I am not such an idealist to think for one minute the symbiotic “Pentagon-Petroleum” relationship will change anytime soon. Further, as a realist, I also understand how important the game being played in Central Asia is. I am aware of the actions the US and other world powers are taking in Central Asia in order to acquire the energy reserves they need to power their economies. My eyes are wide open.

    What I continue to struggle with is why the US directs so many resources and dollars toward these overseas strategies while at the same time almost completely ignoring what steps could be taken to reduce our foreign oil requirements by adopting some fairly simple and obvious policy changes. It, quite simply baffles me. Even a cock-sure trader hedges his bets now and again. The most amateur investor knows some diversification is prudent. So, why does the US continue oil centric policies which are certain to lead to more conflict, more debt, more trade deficits, and a weaker economy and currency?

    Most readers are very familiar with my proposed energy policy, but I will add the link yet again in the hopes that someday, someone out there with a bit of power and influence will read it and make it happen.

    So what does all this have to do with investing you ask? In a word: everything. Where can US investors put their money these days? Financials? Consumer cyclicals? Auto makers? I think not. Despite current low oil prices, the recent strength in the US dollar, and the subject matter of this article, I continue to believe the best opportunity for US investors is to participate in energy companies and to buy gold. Now, I know that some of you who read my articles earlier in the year and went out and bought my recommended stocks got a hurt, and hurt bad, right along with me and everyone else. I’m truly sorry, and feel bad if my advice caused you any pain (at least realize I felt the pain as well!). That said, let’s look at the 2008 returns for some of my picks:

    • British Petroleum (BP): -36.1%
    • Chevron (CVX): -20.7%
    • ConocoPhillips (COP): -41.3%
    • ExxonMobil (XOM): -14.8%
    • Schlumberger (SLB): -57%

    Not awfully bad, considering these returns (from this weekend’s WSJ) do not include the nice dividends some of these companies’ payout and the S&P500 was down 38.5% in 2008, its worst year since 1931. At the same time gold held up rather well, gaining 7% in the course of the year.

    The bad news was some of my theme picks didn’t do well at all. Energy services, which at one point in 2008 were my “number one investment pick”, simply got hammered. Likewise, my advice to get into strategic metals via Vanguard Precious Metals (VGPMX) was a disaster as the stocks in this fund were sold off big time during the great leverage unwinding.

    Making matters worse was the huge distribution VGPMX made at the end of the year which just infuriated me. I actually called Vanguard and asked them how a fund which lost over 60% for the year could possibly justify making a year end taxable distribution that equaled roughly 12% of the fund’s entire NAV?! I mean, if you sold enough to make such huge gains, why the hell is the fund down 60%? If you didn’t sell, and watched the stocks go down, why not sell the losers so that the losers and gainers cancel each other out so that no taxable distribution takes place? I was told I simply “didn’t understand”. They were right, I don’t! Seems to me even a moron could manage a fund better than that. The loss in the fund’s NAV I can understand. The huge year end distribution is simply inexcusable.

    What I learned during the year is this: if a person wants to invest in precious metals, buy gold, take personal delivery of it, and bury it in the backyard and forget about it. Sure, people flock to the US dollar in times of crisis, but did anyone see the action in US treasuries last Thursday and Friday, as well as the headline in Barron’s this weekend? The financial mismanagement by the US government, Treasury, and Federal Reserve combined with the lack of a strategic long-term comprehensive energy policy must lead to a long-term weakening of the US currency. So, buy oil, buy gold. When inflation comes back, it will come back very quickly and these hard assets will once again take off like a rocket. I mean, how can the economy not re-inflate with the Federal Reserve printing US dollars as fast as the presses will print them?

    My picks for 2009 are as follows: XOM, BP, CVX, COP, SLB and gold bullion, in particular American Eagles and Canadian Maple Leafs.

    Goodbye 2008! Indeed, very soon we will be saying goodbye to George W. Bush as well. Let’s all hope that 2009 will be better than 2008. It won’t take much! Let’s also hope that the new administration hedges its foreign policies bets with a bet on the American people and what we can do at home by enacting a strategic long-term comprehensive energy policy. In the meantime, buy Kleveman’s book The New Great Game, enjoy, and learn. The last paragraph of the book sums up my feelings perfectly.

    ========================================

    Get The Book: The New Great Game – by: Lutz Kleveman

    ========================================

    Gold Due for a Pullback; Silver Approaching Resistance- Seeking Alpha

    By: Jeff Pierce of Zen Trader

    I like gold here as an investment going forward- I just liked it a whole lot better a few weeks ago. I think we at the top of this wedge formation and due for a pullback and the RSI could come back to the previous high around 50. That would be very constructive and bullish allowing this metal to bust through 900 on its next run. While I don’t have a specific price target for where I think it will correct to, the 20-day moving average seems like a reasonable guess.

    Obviously if tensions heat up in the Middle East this could fuel another rise in gold and all bets are off. However I’ve learned in the past not to underestimate gold’s ability to correct quickly so I took my profits on Friday and will enter on a pullback. I wanted to be flat going into next week as anything can happen when all the fund managers get back from vacation.

    gold

    Silver has been up 6 straight days and is fast approaching resistance. I would rather it pause here and gather some strength to possibly break through the 11.75 area instead of shooting straight up using up all it’s firepower. Use any further strength to unload positions and wait for a pullback to add or establish new positions.

    slv

    =============================================

    Profiting From Bernanke’s Super-Fed and Obama’s Newer Deal – Seeking Alpha

    By: Naufal Sanaullah of The Gotham Fund and Dorm Room Derivatives

    The historic wealth destruction of 2008 was obviously deflationary. Defaults strip away wealth. Institutions respond by selling assets to raise capital. Widespread deleveraging leads to supply expansion in assets and contraction in money and credit (i.e. deflation).

    Nevertheless, the response has been unprecedented in its own merit. Government debt held by the public was $5.51 trillion when September began; by the end of 2008, it had risen to $6.37 trillion. The more than $1 trillion expansion in Treasury borrowing surely partially serves to offset the $438 billion budget deficit. But what about the additional half a trillion dollars?

    On September 17, the Treasury announced the creation of the the “Supplementary Financing Account” in the Federal Reserve. This is a capital reserve in Fed financed by the Treasury selling new debt and it greatly expands the Federal Reserve’s balance sheet, albeit stealthily. The excess capital is trapped in this Fed account and does not reach currency in circulation. As of January 2, $259 billion is in this Treasury-financed cash pool and counting the Treasury’s “General Account” with the Fed, there is a total of $365 billion sitting at the Fed. The capital itself is money borrowed by the public, so its immediate net effect is deflationary.

    On top of that, the Fed in an unprecedented gesture has started incentivizing excess bank reserve deposits by issuing interest on these holdings. Rather than being lent out, liquidity provided to banks by the Fed is thus trapped as it earns interest deposited at the Fed. The Fed is essentially issuing debt, and banks are engaging in what amounts to be a dollar-based Fed vs. interbank carry trade. Banks borrow money from the Fed, deposit them back into the Fed (use borrowed dollars to purchase Fed debt), and profit from the differential between the fed funds and overnight rates (profit off of the difference between the interest rates offered by Federal Reserve and other banks).

    Less than $40 billion a year ago, the excess reserve deposits held by the Federal Reserve has ballooned to $860 billion. The banks can also deposit printed money into a Fed category called “Deposits with Federal Reserve Banks, other than reserve balances,” which is what the Supplementary Financing and General Accounts also fall under.

    The “Other” subsection of these deposit accounts, which can be construed to represent bank deposits, has increased from $281 million in September to $15 billion today. Both the reserve and non-reserve deposits comprise another huge pool of excess liquidity on the Fed’s balance sheet that doesn’t immediately affect circulated currency.

    Another Fed-induced cash trap has been in the form of increased reverse repurchase agreements, which are up to $88 billion. Reverse repurchase agreements are the offering of collateral in exchange for a cash loan. The Fed has utilized reverse repurchase agreements in its liquification of banks. It buys off toxic defaulting assets in exchange for cash and immediately reclaims the cash by selling the banks T-bills. The Fed printed money to pay for these T-bills, so there is excess liquidity that is trapped in time-sensitive debt. But why would the Fed be taking liquidity away from the system?

    The Fed’s balance sheet suggests it has been cranking the printing presses like mad. Fed liabilities have expanded to $2.26 trillion, up over 140% since September. However, currency in circulation is up only 7% in that same time period. Where is this “trapped” $1.37 trillion? The answer is the Fed has confined it into temporary cash pools, whether in the Supplementary Financing Account or excess reserve deposits or in time-sensitive T-bills. The Federal Reserve seems to be sequestering all of this cash to buy time for the Treasury to finish its funding activities. What is scary is this wave of future bailout funding is probably not even close to what will be needed for Obama’s infrastructure and stimulus spending, which will be comparable only to FDR’s and will be liquidity injected directly into the economy.

    But who is going to keep funding this expansion Treasury debt issuance? The American public is broke and cannot offer its capital in return for terrible yields. Foreign nations don’t have the means or will to continue financing our debt. Commodity prices have collapsed, cutting deeply into foreigners’ export revenues. Oil is down from highs around $150/barrel this past summer to around $40/barrel now.

    According to the CIA World Factbook, China has a $6 billion budget surplus. However, it announced a $585 billion economic stimulus package in early November to be invested by the end of 2010. The Chinese government agreed to provide only $170 billion of the the funds, in an effort to prevent an unreconcilable deficit. How will China raise the other $415 billion for continuous use until the end of 2010? Surely, local governments and private banks and businesses can’t finance such a large package in the midst of a historic recession.

    The only reserve China can tap into to finance its stimulus package is its $1.9 trillion foreign exchange reserves, $585 billion of which is in US Treasury securities. Also, according to the Guangzhou Daily, in mid November, the People’s Bank of China began an effort to increase its gold reserves from 600 tons to 4500 tons to diversify risk held by its huge dollar debt reserves. Financing its stimulus package and gold purchases would require selling Treasury securities, but becoming a net seller of US debt could have disastrous economic, political, and even militaristic consequences for China, so it will be interesting to see how events unfold. What seems for certain, however, is that China can no longer purchase more American debt to finance the US Treasury (and consequently the Fed).

    This is a problem echoed by the rest of the big creditor nations. After China, the biggest holders of American debt securities are Japan, the UK, Caribbean banking centers, and OPEC nations. Japan is facing enormous headwinds as its quality-focused exports are suffering massive demand destruction as its consumers abroad lose wealth at epic proportions in the economic crisis. Japan was a net seller of US Treasuries in 2008 and with the current wealth destruction, it is highly unlikely it will switch to a net buyer of American debt. The British demand for American debt represented Middle Eastern oil-financed investment, but with oil prices collapsing, it will be next to impossible for this proxy demand from the UK to rise and finance additional debt.

    The demand for US debt by Caribbean banking centers is because of their tax laws and because of the dollar’s status as the international reserve currency. As the credit crunch leads to liquidity destruction in Caribbean banks and the dollar slowly loses its reserve status, these tax haven banking centers will no longer be able to buy additional US debt. OPEC nations’ US debt demand, similar to the UK’s, is tied to Middle Eastern oil revenues financing American consumption (of their oil exports). As oil prices tank, as will OPEC nations’ economies and they too will have no wealth to buy up more American debt.

    Bernie Madoff is well-recognized as the biggest Ponzi scheme in history, at $50 billion. I beg to differ with that claim. The United States has financed debt with debt since the late 80s, when its external debt/GDP broke the 0 mark. Since then, it has risen to over 100% of its GDP (which in itself is quite artificially inflated because of manipulated hedonics-adjusted inflation figures), and now stands at $13 trillion. That is what’s called a debt bubble. Bernie who?

    But the debt bubble appears ready to collapse. The literal pyramid scheme is finally running out of investors, and many Treasury ETFs (like SHY, TLT, IEF, and IEI) are showing classic parabolic topping patterns and the next few weeks should confirm or deny my suspicions. Interest rates are at an obvious floor at zero, so there is nowhere to go but up. That means bond prices have nowhere to go but down, and the way bubbles burst, the falling prices will cascade into more selling until the debt bubble deflates and all the spending is financed by quantitative easing. The minute the Treasury finishes its current funding activity, the debt bubble will begin its collapse. Judging by gold backwardation (discussed later) and the bearish charts on the bubbly debt ETFs, I think the debt monetization and dollar devaluation will begin within the next six weeks.

    With an insolvent public and no foreign demand for Treasuries, the Federal Reserve will monetize debt to finance its continued bailouts and economic stimulus. This is purely created capital pumped right into the system. This is not anything new for the Fed– for the past two decades, it has kept interest rates artificially low and created massive artificial wealth in the form of malinvestment and debt-financing. In the past, the Fed has been able to funnel the inflationary effects of its expansionary monetary policy into equity values with its low rates, which discourage saving, causing bubble after bubble, in the form of techs, real estate, and commodities. The excess liquidity (the artificial capital lent and spent because of low interest rates and debt financing) was soaked up by the stock market, which gave the appearance of economic growth and production. With inflation being funneled into equity and real estate over the last two decades, illusionary wealth was created and the public remained oblivious to the inflationary risk and the much lower real returns than nominal.

    Now that the “artificial wealth bubble” being inflated for the past two decades is finally collapsing, one of two scenarios can occur: capital destruction or purchasing power destruction. Capital destruction occurs when the monetary supply decreases as individuals and institutions sell assets to pay off debts and defaults and savings starts growing at the expense of consumption. This is deflation and the public immediately sees and feels its effect, as checking accounts, equity funds, and wages start declining. Deflation serves no benefit to the Federal Reserve, as declining prices spur positive-feedback panic selling and bank runs, and debt repayments in nominal terms under deflation cause real losses.

    Purchasing power destruction is much more desirable by the Fed. Its effects are “hidden” to a certain extent, as the public doesn’t see any nominal losses and only feels wealth destruction in unmanageable price inflation. It breeds perceptions of illusionary strength rather than deflation’s exaggerated weakness. The typical taxpayer will panic when his or her mutual fund goes down 20% but will probably not react to an expansion of monetary supply unless it reaches 1970s price inflationary levels. In addition, the government can pay back its public debt with devalued nominal dollars, which transfers wealth from the taxpayers to the government to pay its debt. Inflation is essentially a regressive consumption tax, which the government wants and the Fed attempts to “hide”. Not only is the Treasury’s debt burden reduced, but the government’s tax revenues inherently increase.

    The Fed, in an effort to minimize inflationary perception, has for the last two decades supported naked COMEX gold shorts to keep gold prices artificially low. The Fed, as well as European central banks, unconditionally supported these naked shorts to deflate prices and stave off inflationary perception, as gold prices stay artificially low. This caused gold