Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Monday 01.23.2012

Gold: higher prices are coming
CommodityOnline.com
While it is early to determine if the ongoing breakout is finally in anticipation of upcoming episodes of direct and indirect monetization by the Fed, ECB, or any of the many other pathological currency diluters in circulation, it is obvious that precious metals have found a new bid in recent days. Is this then, the beginning of the next surge in Gold and Silver to record highs? It remains to be seen, but one entity, the Duet Commodities Fund which was one of last year's best performers, has already made up its mind. 'Our central forecast in gold remains constructive as our long term view targets $2,500 in 2012. Our core view is that gold will head higher to the $2,500 range driven by consequential USD weakness once the EU crisis dissipates and the US steps into the limelight.

Is new gold standard a realistic option?
By Ross Norman - CommodityOnline.com
There was a time when politicians kissed babies to show they had the common touch and a real connection with ordinary folk. With the outcome of the US elections finely poised, Goldand a return to a gold standard is seen as a potential vote-winner - today they are embracing gold, not babies.
In South Carolina 33% of voters are gold standard supporters, with 18% warm to the idea while only 11% are against and 6% cool on the proposal. Gold is a clear 3-1 vote winner.

Gold Outlook 2012
BY NICK BARISHEFF - FinancialSense.com
Good afternoon, it’s a pleasure to speak about gold at this Outlook for 2012.
Today, I’d like to focus on one important idea: the direct relationship between the rising price of gold and the rising levels of government debt that result in currency debasement. Since we measure investment performance in currencies a clear understanding of the outlook for currencies is critical.
In order to understand gold’s relationship, it’s important to understand that gold is money. It is not simply an industrial commodity like copper, or zinc. It trades on the currency desks of most major banks—not on their commodities desks. The turnover at the London Bullion Market Association is over $37 billion per day, and volume is estimated at 5-7 times that amount – clearly, this is not jewelry demand.

Why Wall Street wants $2000 gold this year
By Q Brown - CommodityOnline.com
There is always a certain level of speculation involved when trying to predict whether Gold prices will rise or fall in any given calendar year. Historical charts for the last few years wouldLead you to believe that gold prices will continue to increase. But there are a host of factors outside the traditional "supply and demand". Market factors play a greater role in price fluctuations than in years past.

Can the government confiscate your gold and silver?
By Doyle Shuler - CommodityOnline.com
Even if you can get a good price of precious metals, are you concerned that our government can confiscate your Goldsome day? After all, gold Silver prices are one thing, but if you build up your gold and silver holdings, what's the use if the government is just going to come in and take it from you anyway?
Currently there are thousands of new gold and silver buyers coming into the market every week. Unfortunately many of them are non sophisticated buyers and can easily get sold a bill of goods if they are not really careful, and educated, before buying precious metals.

Gold Confiscation, a Reality? Part III
By: Julian D. W. Phillips - GoldSeek.com
The issues facing the developed world’s financial systems are ones of liquidity and solvency, among others. The assumptions of liquidity levels proved horribly incorrect! The request of the IMF to lift their resources from $380 billion to $980 billion and the currency swaps between the U.S. and Eurozone confirm that (these may still prove inadequate). Many markets, which reserve managers had considered to be deep and liquid, proved to be the exact opposite with assets-selling only at a large discount. This was even true of some AAA-rated assets, showing that credit ratings offered no effective guide to liquidity. Many central banks had to rely on bi-lateral currency agreements with other central banks, principally the US Federal Reserve.

Gold may remain bullish, but don't rule out silver in 2012
NEW YORK (Commodity Online): Gold may remain bullish in 2012, but don't rule out Silver and keep an eye on stocks for good value investments, says David Skarica, editor of The Gold Stock Adviser.
According to David Skarica, the United States will likely roll out more extraordinarily loose monetary policies such as quantitative easing, not solely due to necessity, but also to keep the dollar competitive with a weaker euro.

Regulators shut down small banks in Georgia, Florida, Pennsylvania; first failures of 2012
AP - WashingtonPost.com
WASHINGTON — Regulators have closed small banks in Georgia, Florida and Pennsylvania, the first failures of 2012 following 92 closures last year.
The number of closures in 2011 marked a sharp decline from the two previous years, as banks worked their way through the bad debt accumulated in the recession. And by this time last year, regulators had shuttered seven banks.

Topping Dollar Likely Catalyst for Gold Breakout
BY CHRIS PUPLAVA - FinancialSense.com
There are many moving parts to the gold story, all displaying varying degrees of influence over time given the ever-changing nature of correlations. What appears to have had the strongest affect on the price of gold over the last six months has been the USD and open interest in gold futures, while negative real interest rates have had no correlation. Although trends in speculative interest for gold (open interest) are difficult to forecast, it is far easier to predict trend changes in the USD. With that in mind, the dollar appears to be forming an intermediate-term top, which would have bullish implications for the price of gold ahead.

Inflation: The Only Tool Left
By: Jim Willie CB - GoldSeek.com
Any perusal around the world these days features Southern Europe crippled, preparing for the inevitable Greek Govt Bond default. It features a crippled US housing market, a mockery of statistical accounting in the US Gross Domestic Product, the plight of the COMEX with established veterans clearing out desks (not trading), the extreme physical demand reported by the London Trader, and the indictment of the SLV iTrust Silver Fund tool used by the cartel. The survey does not look favorable toward stability. The banking, economic, and political leaders have not pursued reform and remedy in any remote sense. Their only tool left is hyper inflation. The central banks of the Western nations have coordinated Global Quantitative Easing, as the USFed concealed its own QE3. Operation Twist was an enormous ruse, to cover the grand disposal sale (dump) by USGovt creditors and maintain a semblance of stability in the USTreasury market. The global financial crisis continues for a simple reason. No financial reform or remedy has been attempted, only bank-owned bond redemption and colossal aid to the financial sector that controls government ministries and law enforcement.

Davos elites to seek reforms of 'outdated' capitalism
AFP - Breitbart.com
Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as "outdated and crumbling."
"We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations," said Klaus Schwab, host and founder of the annual World Economic Forum.

The Global Elite Are Hiding 18 Trillion Dollars In Offshore Banks
TheEconomicCollapseBlog.com
In recent days, the fact that Mitt Romney has millions of dollars parked down in the Cayman Islands has made headlines all over the world. But when it comes to offshore banking, what Mitt Romney is doing is small potatoes. The truth is that the global elite are hiding an almost unbelievable amount of money in offshore banks. According to shocking research done by the IMF, the global elite are holding a total of18 trillion dollars in offshore banks. And that figure does not even count any money being held in Switzerland. That is a staggering amount of money. Keep in mind that U.S. GDP in 2010 was only 14.58 trillion dollars. So why do the global elite go to such trouble to hide their money in offshore banks? Well, there are two main reasons. One is privacy and the other is low taxation. Privacy is a big issue for those that are involved in illegal enterprises such as drug running, but the biggest reason why people move money into offshore banks is in order to avoid taxes. Some set up bank accounts in foreign nations because they want to legally minimize their taxes and others set up bank accounts in foreign nations because they want to illegally avoid taxes. You would be absolutely amazed at what some large corporations and wealthy individuals do to get out of paying taxes. Unfortunately, the vast majority of the rest of us don't have the resources or the knowledge to play these games, so we get taxed into oblivion.

WEF calls for action to stem crisis ahead of Davos
The World Economic Forum has called for short term action to restore confidence in financial institutions and stem financial contagion ahead of its annual conference in Davos.
By Richard Fletcher - Telegraph.co.uk
Warning that the "world face significant and urgent challenges that weigh heavily on prospects for future growth and on the cohesion of societies", the WEF's global issues group calls on world leaders to deliver "concrete actions".
Leaders should build on the "solid foundation" of the action plan for growth agreed at last November's G20 and develop a more comprehensive plan that could be agreed and implemented at June's G20 summit in Mexico.

Eurozone burns money
while the banks fiddle their balance sheets
'Nothing is safe that does not show it can bear discussion and publicity."
By Liam Halligan - Telegraph.co.uk
These words, among the many pearls uttered by the celebrated 19th century historian Lord Acton, have often come to me in recent years as the sub-prime crisis has unfolded. They've been particularly on my mind over the past week or so as I've watched events in the eurozone.
Investor sentiment in Western Europe appears to have improved over the past few days. In the aftermath of last weekend's French sovereign downgrade, financial markets have staged a counter-intuitive rally, with European equities reaching a five-month high on Thursday.

The IMF is no longer serving its purpose
To save the eurozone, the International Monetary Fund needs to dispense tough love, not endless bail-outs.
By Jeremy Warner - Telgraph.co.uk
If the International Monetary Fund did not exist, it would surely have to be invented. Its medicine is often harsh and frequently criticised, but as lender of last resort to countries that temporarily find themselves shut out of financial markets, its purpose is noble and necessary.
In no other field has international co-operation worked as successfully in addressing global problems as it has through the offices of the IMF. The world would undoubtedly be a more chaotic place without it. Just lately, however, its credibility has been endangered as rarely before. Something has gone very badly wrong, and the international consensus on which the organisation is based is fracturing.

Greek debt talks stall over interest rate on bonds
Crucial talks between Greece and private creditors on debt restructuring stalled over the weekend, with a dispute over the interest rate to be paid on new bonds.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Negotiators from the International Institute for Finance representing banks and other creditors left Athens after a marathon session ended in the small hours of Saturday without a breakthrough, though talks continued by telephone.
Sources close to the dispute said there is little danger that the IIF will walk out and precipitate the first sovereign default in western Europe since the Second World War.

Greek Debt-Swap Deal 'Coming Into Place' IIF’s Dallara Says
Marcus Bensasson, Natalie Weeks and Maria Petrakis - Washpost.Bloomberg.com
Jan. 22 (Bloomberg) -- Greece and its private creditors said they had made progress during talks in Athens on a debt- swap accord needed to lower the country’s borrowings and clear the way for a second round of international aid.
"The elements of an unprecedented voluntary private-sector involvement are coming into place," according to an e-mailed statement early yesterday from Charles Dallara, managing director of the Institute of International Finance, a Washington-based lobby group representing creditors negotiating with the government.

European Banks May Deepen
Their Dependence on Unlimited Central Bank Loans
By Liam Vaughan and Gavin Finch - Bloomberg.com
European banks, shunned by investors and each other, may borrow as much next month from the European Central Bank as they did in a record offering in December as they seek refuge from frozen funding markets.
The ECB last month lent banks an unprecedented 489 billion euros ($630 billion) for three years. Analysts said they expect demand to be just as high at a second auction on Feb. 29 because the stigma associated with using the facility is dissipating and the list of what assets can be used as collateral in exchange for the loans will be extended. ECB PresidentMario Draghi said last week he expects demand for loans next month to be "still very high," though "probably lower than in December."

Italy and Spain call for eurozone rescue fund booster
Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Italy's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to €1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel.
The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone.

Croatians vote in favor of E.U. membership
By Michael Birnbaum - Telegraph.co.uk
BERLIN — Croatians voted Sunday to join the European Union, after a heated campaign that reflected how the economic turmoil of the past several years has damaged the prestige of membership.
Not long ago, becoming a member of the E.U. club was seen as a quick ticket to economic success, as borrowing costs dropped and investors swarmed some of the former Eastern Bloc countries that joined eight years ago. Now, the union is notable mainly for the financial upheaval that has threatened to spread across the Atlantic and affect growth in the United States as well as in Europe.

America overcomes the debt crisis
as Britain sinks deeper into the swamp
Britain has sunk deeper into debt. Three years after bubble burst, the UK has barely begun to tackle the crushing burden left by Gordon Brown. The contrast with the United States is frankly shocking.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The latest report on "Debt and Deleveraging" by the McKinsey Global Institute shows that total public and private debt in the UK is still hovering at an all-time high. It has risen from 487pc to 507pc of GDP since the crisis began.
As the chart above shows, as recently as 1990 Britain’s debts were still just 220pc of GDP. Has a rich country ever been debauched so fast in peace time?

Keiser Report: Scam On Epic Scale (E238)

Bernanke near inflation target prize, but jobs a concern
By Mark Felsenthal
(Reuters) - The Federal Reserve could take the historic step this week of announcing an explicit target for inflation, a move that would fulfill a multi-year quest of the central bank's chairman, Ben Bernanke.
An inflation target would be the capstone of Bernanke's crusade to improve the Fed's communications, an initiative aimed at making the central bank more effective at controlling growth and inflation. It would, at long last, bring the Fed into line with a policy framework used by most other major central banks.

Why it's time to break up the 'too big to fail' banks
Customers would benefit, the U.S. government would benefit, and - believe it or not - the big banks themselves would do better.
By Sheila Bair, contributor - Forbes.com
FORTUNE -- America is downsizing. Whether it's the food we eat, the cars we drive, or the houses we live in, Americans are concluding that smaller is better. Even U.S. corporations are starting to see the benefit of more Lilliputian institutions; the impending --and widely hailed -- breakups of McGraw-Hill (MHP) and Kraft (KFT) are two examples.

Steve Forbes: Bernanke out.
Ron Paul for chairman of the Federal Reserve

FOMC Meeting Preview
by CalculatedRisk
There will be a two day meeting of the Federal Open Market Committee (FOMC) this coming Tuesday and Wednesday. I expect no changes to the Fed Funds rate, or to the program to "extend the average maturity of its holdings of securities" (scheduled to end in June 2012), or to the program to "reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities". I don't expect further accommodation (aka "QE3") to be announced at this meeting.

Housing Recovery?
BY CARL SWENLIN - FinancialSense.com
The market rally on Wednesday was driven in part by a surge in housing stocks, which was triggered by a favorable housing report. Since the fundamentals of the housing market are not too thrilling, regardless of short-term gains, my curiosity was piqued and I pulled up some charts.
The daily chart of the Dow Jones US Home Construction Index, which is one of a set of 100 Dow Jones US sector indexes we track, shows that Wednesday's rally was a small extension of a +78% up move that began after the Index hit rock bottom in October 2011. This is good but how does this rally present in a larger perspective?

Keiser Report: Sinking Ship In Credit Sea (E239)

Mortgage Principal Cuts Don’t Help Homeowners,
says Credit Suisse
By Jody Shenn - Bloomberg.com
Reducing mortgage balances is a risky idea that hasn’t been shown to keep borrowers who owe more than their property’s worth in their homes, according to Credit Suisse Group AG. (CSGN)
Of the 11 million of "underwater" homeowners, about 6.5 million have never missed a payment and 2 million more are making on-time payments after a delinquency, said Dale Westhoff, the bank’s global head of structured products research. Widespread principal reductions may drive defaults "much, much higher" as borrowers seek the aid, he said.

Something to Argue About
By George Will - PatriotPost.us
WASHINGTON -- The Supreme Court can pack large portents in small details. When in late March it considers the constitutionality of Obamacare, there will be five and a half hours of oral argument -- the most in almost half a century. This is because the individual mandate (Does Congress' power to regulate interstate commerce extend to punishing the inactivity of not buying insurance?) is just one of the law's constitutionally dubious features.
An hour of argument will be devoted to whether Obamacare's enormous expansion of Medicaid is so coercive of states that it is incompatible with federalism -- the Constitution's architecture of dual sovereignty. The court's previous rulings about compulsion point toward disallowing this expansion.

17 Facts About The Decline Of The U.S. Auto Industry
That Are Almost Too Crazy To Believe
TheEconomicCollapseBlog.com
Very few things illustrate how dramatically America has been deindustrialized than the stunning decline of the U.S. auto industry. Once upon a time, the United States literally taught the rest of the world how to make cars. We were the ones that invented the assembly line. We were the ones that showed the rest of the world what mass production could do for an economy. For decades, we produced more cars than anyone else and we sold more cars than anyone else. Detroit was known as "the Motor City" and our manufacturing prowess dominated the planet. But now all of that has changed. Japan makes far more vehicles than we do today. So does Germany. As you read this, state of the art production facilities are going up all over China. Meanwhile, the U.S. auto industry continues to rot and thousands upon thousands of good automotive jobs continue to leave our shores. The rest of the world is making cars better than we are, they are making them cheaper than we are and they really don't care that many of our formerly great manufacturing cities are turning into rotting, stinking hellholes. The U.S. auto industry was once a symbol of American dominance, but now it is just a symbol of American decline. If we want to remain a great nation, then we need to start becoming great at making things once again.

US financial & economic collapse-
On the Edge with Max Keiser-01-20-2012

US workers spend $1000 a year on coffee,
$2000 a year on lunch
CommodityOnline.com
You know that, for the sake of your budget, you should kick the ever-more-expensive Coffee habit. And, for that matter, that you should make yourself a brown-bagged BLT to bring to work rather than getting Chipotle for the third time this week. But mornings are tough! And how much harm could a few cups of coffee, and a few burritos, do?
According to a recent survey of 1000 American workers by Accounting Principals, quite a bit. The firm's data show that half of American workers regularly buy coffee during the week. This half spent an average of $1092 a year; that's over $5 a day. An even larger proportion of workers -- a full two-thirds -- buy lunch at work. These folks spend even more than the coffee drinkers. On average, the midday meal costs lunchers $1924 a year. That's even more than commuting, which accounts for about $1500 a year.

PayPal Will Expand In-Store Payments
By Danielle Kucera - Bloomberg.com
EBay Inc. (EBAY)’s PayPal e-commerce payment business plans to let shoppers pay with its service in more than 2,000 Home Depot Inc. stores by March, part of an effort to win away customers from credit-card companies.
The company began a trial with shoppers this week in 51 of Home Depot’s home-improvement stores, primarily in the San Francisco area, said Anuj Nayar, a spokesman for PayPal. It intends to extend the offer to all national locations, or about 2,200, he said.

Subculture of Americans prepares for civilization's collapse
By Jim Forsyth
(Reuters) - When Patty Tegeler looks out the window of her home overlooking the Appalachian Mountains in southwestern Virginia, she sees trouble on the horizon.
"In an instant, anything can happen," she told Reuters. "And I firmly believe that you have to be prepared."
Tegeler is among a growing subculture of Americans who refer to themselves informally as "preppers." Some are driven by a fear of imminent societal collapse, others are worried about terrorism, and many have a vague concern that an escalating series of natural disasters is leading to some type of environmental cataclysm.

Gerald Celente - Michael Harris CFRA - 19 January 2012

There Are 1.4 MILLION Gang Members In The United States And More Pour Into The Country Every Single Day
EndOfTheAmericanDream.com
A vast army of heavily armed criminals has embedded itself in every major city in the United States. In fact, nearly every community in America is now affected by these thugs. Drugs, theft and brutal violence are all part of the every day lifestyle of the members of this army. They aggressively recruit our young people and floods of illegal immigrants are joining their ranks. Once civil unrest erupts in America, they will go on a crime spree that will be absolutely unprecedented and they will burn large areas of some U.S. cities to the ground. So who am I talking about? I am talking about the rapidly growing gangs that are terrorizing cities all over the nation. The FBI tells us that there are now 1.4 million gang members involved in the 33,000 different gangs that are active inside the United States.

China gets jump on U.S. for Brazil’s oil
Two export pacts a coup for Beijing
By Kelly Hearn - Special to The Washington Times
BUENOS AIRES — Off the coast of Rio de Janeiro — below a mile of water and two miles of shifting rock, sand and salt — is an ultradeep sea of oil that could turn Brazil into the world’s fourth-largest oil producer, behind Russia, Saudi Arabia and the United States.
The country’s state-controlled oil company, Petrobras, expects to pump 4.9 million barrels a day from the country’s oil fields by 2020, with 40 percent of that coming from the seabed. One and a half million barrels will be bound for export markets.

Islamic flag over the White House
Radical Muslims want America ruled by Shariah
Oct 3, 2012 Editorial by The Washington Times
Islamists say the Koran is destined to rule America. In fact, the Muslim takeover of the White House is not just an unfolding action plan but a directive from Muhammad himself.
In an interview Sunday on ABC’s "This Week," British radical Muslim activist Anjem Choudarymade clear what he and his Islamist brothers have planned for the West. "We do believe, as Muslims, the East and the West will one day be governed by the Shariah," he said. "Indeed, we believe that one day, the flag of Islam will fly over the White House." He then quoted a hadith, or saying of Muhammad, as related by 10th-century Muslim scholar Al-Tabarani, that "the final hour will not come until Muslims conquer the White House." Another version of the saying goes, "A small portion of Muslims will rise and conquer the White House."

U.S. aircraft carrier enters Gulf without incident
By David Alexander
(Reuters) - A U.S. aircraft carrier sailed through the Strait of Hormuz and into the Gulf without incident on Sunday, a day after Iran backed away from an earlier threat to take action if an American carrier returned to the strategic waterway.
The carrier USS Abraham Lincoln completed a "regular and routine" passage through the strait, a critical gateway for the region's oil exports, "as previously scheduled and without incident," said Lieutenant Rebecca Rebarich, a spokeswoman for the U.S. Fifth Fleet.

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