Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Monday 01.16.2012

Gold lower ahead of 3-day
Martin Luther King Jr. holiday weekend in U.S
NEW YORK (Commodity Online): Many factors have tugged Gold lower ahead of the three-day Martin Luther King Jr. holiday weekend in the U.S., said RBC Capital Markets Global Futures.
Martin Luther King, Jr. Day is a United States federal holiday marking the birthday of Rev. Dr. Martin Luther King, Jr. It is observed on the third Monday of January each year, which is around the time of King's birthday, January 15.

Gold: Current bull market
is a carbon copy of the 1970's bull market
By Hubert Moolman
Below, is a Gold alert sent to my premium subscribers, on 5 January 2012. The patterns indicated, suggest that we will have a massive rally in gold over the coming months.
Below, is a graphic that compares the gold chart from 1998 to present, to that of 1975 to 1979. [see charts]
The current pattern is much larger than the 70s pattern and also more complex. I have marked both patterns (1 to 7) to illustrate how the patterns could be similar. If my comparison is justified then we will have a massive rally over the next months.

Six reasons why still to buy gold bullion or gold
By Mike Neon - CommodityOnline.com
When you see across the world, you will notice bad times giving you reasons to put your money in Gold bullion . Having gold at any point of time is a secure choice to try since it works when everything fails.
Six reasons why to buy gold bullion or gold:
--Fights with a troubled economy: We see the US and the world economy fluctuating where we see effects shaky about the dollar and euro and even other currencies of the world sinking to a great extent. At such juncture when currencies are losing value, buying gold bullion or gold somewhere in the past will help him survive the bad economy.

Gold 2012: Goldman maintains 12-month target of $1,940/oz
LONDON (Commodity Online): Goldman Sachs is maintaining its 12-month target of $1,940 an ounce for gold. The metal fell in December in a scramble for U.S. dollar liquidity by European banks, which led them to lease Gold for U.S. dollars, in turn driving gold lease rates lower.
While gold has retraced more than half of December’s decline, Goldman says the downward pressure from European bank funding issues has left gold prices at a steep discount to levels suggested by 10-year yields of Treasury Inflation-Protected Securities.

Chris Waltzek interviews GERALD CELENTE
on his early forecast for 2012

Silver: A unique buy signal from the CEF
By Adam Brochert - CommodityOnline.com
I stumbled onto this little gem about a year ago and I think it is about to work its magic again. I am speaking of the ratio of the Central Fund of Canada (CEF) to the price of Gold.
This CEF:Gold ratio barely triggered a buy signal for Silver on December 27, 2011. Of course, a "barely triggered" signal may be all we are able to achieve if silver is getting ready to rocket higher after a brutal but fairly typical (for silver) correction from the the spring, 2011 highs. Here's a chart of this ratio through today's close to show the buy signal for silver (the top plot is the price of silver, while the lower plot is the CEF:$GOLD ratio):

Silver: If you buy anything in 2012, buy Silver
NEW YORK (Commodity Online): Silver is the commodity to buy in 2012, believes Smith McKenna LLC adding that silver will dominate the markets in 2012.
Stephen M. Smith, managing member Smith McKenna, has 20 plus years of experience in commodity-market analysis and advises that silver will emerge as king.
"It's the only place to be," says Smith. "Silver will dominate the commodity market in 2012."

The evolution of American debt
Over the last century, over-borrowing has gone from shameful to commonly accepted. An expert explains what changed
BY HANNAH TEPPER - Salon.com
In the US today, debt is ubiquitous. Whether it’s paying back thousands of dollars in student loans, using your Visa card for a pack of gum when you’re out of cash, or taking out a mortgage on a first home, it’s been woven into our financial system so tightly, that even when we suffer the sometimes cruel and unusual detriments of borrowing, we have little to no realistic impetus to stop. But it wasn’t always this way. In fact before the 20th century, debt was a taboo, feared, shameful, and kept in the shadows. So what events and institutions brought debt from its meager beginnings to its central role in American life?

Money Printing: The Ugly Truth Behind the "Good News"
By Bill Bonner - DailyReckoning.com
01/13/12 Johannesburg, South Africa – Yesterday’s trading revealed nothing of importance. Small moves in stocks and gold. And oil dipped below $100.
But the news has been generally "good" ever since the European Central Bank made it clear that it will print money rather than see major banks or minor nations get what is coming to them. Like its US counterpart, the ECB will not permit a major bank or sovereign debtor to go bust.
"ECB sees signs of let-up in debt crisis," is today’s headline in The Financial Times.

Reading between the lines:
Who's paying for the payroll tax cut extension?
BY G. STEVEN BRAY - Austin.CultureMap.com
...if you're buying or refinancing a home, there's a good chance you are.
On Dec. 23rd, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011 with great fanfare. The law extends the payroll tax holiday that we enjoyed in 2011 for two months (or through Feb. 29).
In order to pay for the extension, the law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac by no less than 10 basis points (one-tenth of a percent), effective immediately. Lenders pay the guarantee fee when they sell a mortgage to Fannie or Freddie primarily to cover the risk that the loan might default. (It's kind of like insurance.)

Treasury Yields Drop
to Yearly Low as European Debt Crisis Intensifies
By Susanne Walker and Cordell Eddings - Bloomberg.com
Treasuries rose, pushing yields to the lowest levels this year, asFrance was stripped of its top credit rating and talks to restructure Greek’s debt stalled, boosting demand for the safety of U.S. government debt.
The yield on the benchmark 10-year note touched the lowest level since Dec. 20 yesterday and the Treasury drew record demand at three- and 10-year note auctions this week. A model created by economists at the Federal Reserve that includes expectations forinterest rates, growth and inflation indicates 10-year notes are the most overvalued on record.

Peter Schiff: U.S. is In Worse Shape Than Europe

U.S. Trade Deficit Widens
More Than Economists Forecast as Exports Decline
By Alex Kowalski - Bloomberg.com
The U.S. trade deficit widened more than forecast in November as American exports declined and companies stepped up imports of crude oil and automobiles.
The gap expanded 10.4 percent to $47.8 billion, the widest since June, from a $43.3 billion shortfall in October, Commerce Department figures showed today in Washington. The deficit was larger than any of the estimates in a Bloomberg News survey of 75 economists.

The Year Of The Central Bank
by Doug Noland - PrudentBear.com
The start of a new market year is, undoubtedly, analytically intriguing. One wouldn’t think that the calendar should have such impact. Yet January arrives with a clean performance slate and an opportunity for new, perhaps not as unsullied, market dynamics. What’s the new game? The previous year’s underperformers can rather abruptly be transformed into darlings of the New Year (especially if those stocks have large short positions). The general market also tends to benefit from strong seasonal inflows. And if stocks can charge out of the blocks briskly, a plethora of bullish news and analysis is sure to follow.

Euro Falls After S&P Strips France of AAA Rating
By Candice Zachariahs and Robert Burgess - Bloomberg.com
The euro weakened for a second day, reaching an 11-year low versus the yen, after Standard & Poor’s stripped France of its top credit ratingand cut eight other euro-zone nations.
The shared currency extended a six-week-long slide against the greenback before France sells as much as 8.7 billion euros ($11 billion) in bills today, amid concern Europe’s financial turmoil will intensify. Greece may resume talks with creditor banks this week after failing last week to agree on terms of a debt-swap deal. The Australian and New Zealand dollars fell as a drop by U.S. stocks damped demand for higher-yielding assets.

Euro shaky after mass ratings downgrade, outlook poor
By Ian Chua
(Reuters) - The euro eased in early Asian trade on Monday and looked set to stay under pressure after Standard & Poor's mass downgrade of euro zone countries late last week, including France, dealt the region another setback.
News of the downgrade came as negotiations between Greece and private creditors on a debt swap deal broke down, raising the risk of a messy Greek default. Markets are also worried the euro zone's bailout fund, EFSF, might lose its AAA rating with S&P as well.

Marc Faber - 2012 European Crisis!

Nine Euro Nations’ Ratings Cut, Seven Affirmed
By Simon Kennedy, Patrick Donahue
and Mark Deen - Bloomberg.com
France and Austria lost their top credit ratings in a string of downgrades that left Germany with the euro area’s only stable AAA grade as Standard & Poor’s warned that crisis-fighting efforts are still falling short.
France and Austria were cut one level to AA+ from AAA and face the risk of further reductions, the rating company said in Frankfurt late yesterday. While Finland, the Netherlands and Luxembourg kept their AAA ratings, they were put on negative watch. Spain and Italy were also among the nine nations downgraded.

Merkel Says S&P Downgrades
Show Euro-Region Leaders Must Redouble Efforts
By Brian Parkin and Patrick Donahue - Bloomberg.com
Chancellor Angela Merkel said euro- area downgrades by Standard & Poor’s reinforce Germany’s stance that European leaders must redouble their efforts to resolve the debt crisis as governments prepare to sell more debt this week.
"The decision confirms my conviction that we have a long way ahead of us before investor confidence returns," Merkel told reporters yesterday in Kiel. Resolving the crisis is a "longer process" that will take more than a few months, Merkel said in comments broadcast today by Deutschlandfunk radio.

Scrubbed MF Global Filing Resurfaces at the SEC,
But More Questions About Suspicious Filing Practices Surface
By Bob English at EconomicPolicyJournal.com
On December 24, 2011, we reported that the most recent financial audit filing of the MF Global Inc. broker unit had disappeared ten days earlier from the Securities and Exchange Commission's public EDGAR database. It was this key filing that provided material details about the European debt trades that helped sink the firm--more details than the 10-K and 10-Q's of its public holding company disclosed. For instance, we revealed on November 9, days after the bankruptcy filing, that the repo-to-maturity trades were conducted with an affiliate, which retained 80% of the profits from the up-front booked sale, and which left the US broker unit holding 100% of the risk.

Keiser Report: Wall Street Gangsta! (E236)

What CEOs and Hedge Funds
Don't Want the 99% to Understand
By Roger Martin - HuffingtonPost.com
Zuccotti Park may be emptied and the Wall Street no longer occupied, but the anger of the 99% hasn't abated one iota as they watched CEOs cash in on the recovery and hedge funds make money hand over fist whether the market is going up or down. This shouldn't be a surprise. The fact is, because of the structure of their compensation, CEOs are rewarded for share price volatility not share price performance. And hedge funds make big money on the volatility that CEOs are incented to produce. So while the volatility of the past five years has devastated the lives, savings and pensions of vast numbers of the 99%, it has served CEOs and hedge fund managers very well indeed.

Fed Officials Debate Impact
of Revealing Their Interest-Rate Forecasts
By Vivien Lou Chen and Caroline Salas Gage - Bloomberg.com
Federal Reserve Bank of St. Louis President James Bullard pointed out pitfalls in a Fed plan to forecast interest rates, highlighting a debate among officials on whether the move will provide clarity about policy.
Bullard told reporters on a conference call yesterday that "there is some risk" the projections for the benchmark interest rate will be mistaken as a commitment to certain rate levels in the future. He later said that while the move should "be a little bit helpful," it’s "no panacea."

Fed officials say not time to buy bonds now
By Mark Felsenthal
(Reuters) - Two top Federal Reserve officials, including a policy centrist, said on Friday the central bank should hold off buying more bonds to boost growth given a strengthening in the economy.
"The data has been stronger in recent weeks and months, and so I think there's probably a good case to stand pat for now," St. Louis Federal Reserve Bank President James Bullard told reporters after a speech here.

NY Fed seeking bidders for mortgage bonds
By Carrick Mollenkamp
(Reuters) - The Federal Reserve Bank of New York will test a new strategy for getting the best price for beaten-down mortgage bonds after being approached by a potential buyer for the bonds.
Prompted by interest from the buyer, identified as Goldman Sachs Group Inc (GS.N), the New York Fed over the next week is expected to attempt to sell about $7 billion worth of securities that were acquired as part of the 2008 bailout of American International Group Inc (AIG.N).

More aggressive Fed could benefit economy: Evans
By Jonathan Spicer
(Reuters) - The economy could improve one to two years earlier than it otherwise would if the Federal Reserve behaves "very aggressively," including possibly making additional asset purchases, a top Fed official said on Friday.
The central bank should make the purchases if the labor market does not make sufficient progress quickly enough, Chicago Federal Reserve President Charles Evans told reporters, adding that mortgage-related securities would be a "perfectly fine" option.

Fed’s Lacker Says
There's No 'Compelling Case' for More Monetary Stimulus
By Craig Torres - Bloomberg.com
Federal Reserve Bank of Richmond President Jeffrey Lacker said he still doesn’t see the need for additional monetary stimulus and the central bank should avoid targeting specific markets such as mortgage debt with its policies.
"I am still where I was a month or two ago when I said I didn’t see a compelling case for further stimulus," Lacker told reporters after a speech to the Risk Management Association in Richmond, Virginia. "The record of the last year and a half is that stimulus raised inflation and didn’t do much for growth on a sustained basis. And I think if we did it again, that is what would happen."

If we don't listen to Ron Paul...
the FED is going to destroy our Monetary System

Obama Pitches One Federal Department for Business
Are companies or entrepreneurs well-served with multiple federal agencies that deal with business issues? President Obama doesn't think so, and he's proposed consolidating the SBA and five other agencies in a pitch to streamline things and to save taxpayers money.
by Kent Hoover - Portfolio.com
President Barack Obama asked Congress today for the authority to consolidate six departments and agencies that serve business—including the Small Business Administration—into one agency.
This would make it easier for businesses to get the assistance they need and save taxpayers’ money, Obama said.

Wrong-Way Friedman
By Doug Casey - DailyReckoning.com
Interview with Doug Casey,
by Louis James, Editor, International Speculator
L: Hola, Doug — what’s on your mind?
Doug: Well, you know I try not to read much in the popular press. It’s mentally unsanitary. But occasionally, a few things catch my notice. For example, I’ve got an article I tore out of the September 3 Wall Street Journal — it’s been in a stack of papers for a couple of months, and I just uncovered it. I couldn’t decide, when I first tore it out, whether it was simply beneath contempt or worth commenting on. It’s an absolutely shocking indictment of the depth to which the moral and intellectual character of what was once America has descended. The title is How to Turn in Your Neighbor to the IRS. The author’s theme is that the IRS is offering big rewards to people who turn in tax cheats — but there are catches. As though the depravity of denouncing your neighbors to a ruthless, brutal, and predatory government bureaucracy were a good thing, as long as one is careful in going about it.

City Bankruptcies Will Increase, Dimon Warns
The Huffington Post - by William Alden
As cities across the nation face increasing budget strains, the vocal group of experts warning about municipal defaults has gained a powerful member: Jamie Dimon.
The JPMorgan CEO said he expects to see more U.S. municipalities declare bankruptcy, Bloomberg News reports. His concerns echo those of Meredith Whitney, the analyst who has said the next major financial crisis will come from a wave of local government defaults, and those of famed investorWarren Buffett, who has called the municipal debt situation a "terrible problem."

Troubled RI city in receivership loses democracy
By ERIKA NIEDOWSKI - AP - News.Yahoo.com
CENTRAL FALLS, R.I. (AP) — When the state stepped in to take over financially struggling Central Falls in 2010, Rhode Island's smallest city lost something fundamental: its democratic government.
Mayor Charles Moreau would be forced to give back his key to City Hall, and the City Council was relegated to advisory status — unsure for months whether it was even allowed to convene.

5% of Americans Made Up 50% of U.S. Health Care Spending
And the top 1%? They made up one fifth of medical expenditures.
By Jordan Weissmann - TheAtlantic.com
When it comes to America's spiraling health care costs, the country's problems begin with the 5%. In 2008 and 2009, 5% of Americans were responsible for nearly half of the country's medical spending.
Of course, health care has its own 1% crisis. In 2009, the top 1% of patients accounted for 21.8% of expenditures.

Eleven states, D.C. back Obama on health law
By Paige Winfield Cunningham-The Washington Times
Eleven states and the District of Columbia are siding with the Obama administration in the legal battle over the constitutionality of the new health care law, as more than half the states prepare to challenge the law before the Supreme Court.
Attorneys general in California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maryland, New Mexico, New York, Oregon, Vermont, the District of Columbia and the Virgin Islands filed an amicus brief with the Supreme Court on Friday supporting Congress‘ authority to pass the sweeping legislation, arguing that health care is a national concern because the industry constitutes nearly one-fifth of the U.S. economy.

Attacks on Social Security,
Medicare borrow a strategy from Lenin
For three decades, conservatives' proposals for dramatic changes to the programs have reflected a divide-and-conquer strategy inspired by the Leninist movement.
By Michael Hiltzik - LATimes.com
About the last thing you'd ever expect is for conservatives to draw procedural lessons from the founder of the Soviet state. So it's fascinating to ponder the persistence of an attack on Social Security that was explicitly billed as a "Leninist" strategy three decades ago by analysts at the Heritage Foundation and is still in use today.
This is the notion, which is part of pretty much every proposal today to "fix" Social Security andMedicare, that benefits for the retired and near-retired should be guaranteed, while those for everyone else must be cut.

Evans Says Jobless Rate May Rise as Progress 'Transitory'
By Joshua Zumbrun - Bloomberg.com
Federal Reserve Bank of Chicago President Charles Evans said the drop in the unemployment rate to 8.5 percent may be partially reversed in coming months.
"I’m a little concerned that the most recent improvement is going to be transitory and it might move up above 8.5 percent," Evans said in response to audience questions after a speech today in Carmel,Indiana.
Evans said he forecasts that "at the end of the year, we’re not going to be very different from 8.5 percent unemployment."

Peter Schiff -
Infowars Nightly News for Friday, January 13, 2012

How the Wall Street Journal Misleads About Federal Jobs
By Jeffrey Sachs - HuffingtonPost.com
The editorial board of Rupert Murdoch's Wall Street Journal has a simple game. They want to cut taxes for the rich and government services for the rest, and end regulations of banks and the environment. They support taxpayer-financed bailouts of Wall Street when needed. They will twist any facts in the service of these goals.

Housing and Oil: Dark Inventory Rules
By Ilargi: TheAutomaticEarth.com
I'd like to try a little intellectual exercise. There were two pieces in my mailbox this week that concerned posts at Naked Capitalism. Though their topics have at first glance little to do with one another, there is a term that is pivotal to both. Inventory.
When it comes to real estate, it's popularly called "shadow inventory". With regards to commodities, the term "dark inventory" has been coined. While there are plenty of differences in the way the terms are applied, I'm for now intrigued more by - potential - similarities between them.

Dropbox inventor
determined to build the next Apple or Google
Drew Houston's wildly popular service allows people to access the latest version of all their digital stuff on any device no matter where they are. Every day 325 million files are saved on Dropbox.
By Jessica Guynn, Los Angeles Times
Reporting from San Francisco— Four years ago, Drew Houston was just another super-smart hacker with ambitions of starting his own company.
He'd strap on headphones to block out everything but the endorphin rush as he cranked code late into the night on a new service that instantly syncs all of your files on all of your devices.

Nigerian fuel strike continues, could impact U.S. oil supply
By Bashir Adigun and Jon Gambrell - AP - WashingtonTimes.com
ABUJA, Nigeria — Nigeria's government and labor unions failed to end a paralyzing nationwide strike over high gasoline costs, potentially sparking an oil production shutdown in a nation vital to U.S. oil supplies.

Beware a slow cascade of additional foreclosures in 2012
By Alan J. Heavens - Philly.com
If the numbers were the only barometer, it would appear that the U.S. foreclosure crisis had eased considerably in 2011. But taken alone, those statistics don't tell the whole story of the pressures on homeowners and how they are affecting the nation's housing market.
Over the last 12 months, the foreclosure rate and the number of filings nationwide reached their lowest point since the current spiral intensified in 2007, RealtyTrac Inc. reported last week.

Cops shoot strays
The secret lives of feral dogs
A Pennsylvania city instructs police to shoot strays, opening a sad window on animal care in the age of austerity
BY WILL DOIG - Salon.com
Want to get people riled up? Institute a new policy about shooting puppies.
The city of Harrisburg, Pa., learned this last week when an internal police department memo went public, instructing officers of the cash-strapped city to stop bringing its growing number of stray dogs to the shelter. Instead, it said, they should release them in another area, adopt them themselves — or just put a bullet in them. Now that’s the new austerity.

Has Capitalism Failed Us?
By Bill Bonner - DailyReckoning.com
01/13/12 Johannesburg, South Africa – "Americans think we are stupid," said a European diplomat at a dinner party in Washington. "But we’re not stupid. We’re just working out the problems involved in forming what you might call 'a more perfect union.'"
"Well, you can unify all you want…it won’t make your debts go away," we replied. We always try to be a cheery presence at dinner parties…especially in Washington.
"No…but it will make it easier for us to manage them, just as you do here. And by the way, the US has about the same amount of debt as Europe. The latest figures show the average of all OECD countries is about 100% of government debt to GDP. The US is right in the center…right at the average."

Bob Chapman on the best countries to run to

Auction 2012: Top 10 Reasons to Get Money Out
By Dylan Ratigan - HuffingtopnPost.com
Tomorrow night, we'll see returns from the New Hampshire primary, the second contest in the Republican Presidential nomination. Most people think of this as an election, where voters go to the polls and select their preferred candidate. But I believe, and an increasing number of viewers believe, that our political system has become an auction in which the highest bidder wins.
If something about this election feels wrong to you, you're not alone. Here are ten facts about the political process that show why we need to end the auction by getting money out of politics.

U.S., Israel postpone military exercise amid tension with Iran
By Batsheva Sobelman - LATimes.com
REPORTING FROM JERUSALEM -- The United States and Israel agreed to postpone a large joint military exercise from this spring to late in the year to avoid aggravating an already tense regional situation driven by conflicts with Iran, Israeli media reported Sunday.

Iran warns Gulf Arabs on oil
By Tarek El-Tablawy - AP - WashingtonTimes.com
CAIRO (AP) — Iran warned Gulf Arab oil producers against boosting production to offset any potential drop in Tehran’s crude exports in the event of an embargo affecting its oil sales, the latest salvo in the dispute between the West and the Islamic Republic over its nuclear program.

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