Thoughts on Markets

Wednesday, October 05, 2011

Gold & Silver are Down a Bit, I imagine the banks have more shorts to cover - Miners Generally Up - General Markets are up a bit were down earlier - Social Security a Mess - Hunger Hoax


John Embry - Silver is Completely Flushed out to the Downside 
With stocks continuing to struggle and the gold holding near the $1,620 area, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management.  When asked about the action in gold and stocks, Embry responded, I think a lot of it relates to what’s happening in the stock market.  Despite the best efforts of the Plunge Protection Team, the stock market had two brutal days.  On Friday, the last day of September, they couldn’t hold the Dow above 11,000.  Once again, yesterday, despite their best efforts it plunged again.”  HERE.
</frame&gtJohn Embry continues:“But the fact is when this is going on they can’t have gold look good and so consequently they throw everything they can at the gold market.  We were $1,680 overseas and once the COMEX gets going they drop the price $50 like it’s nothing.  It’s all just paper shenanigans and I guess they are able to access from the various central banks and ETF’s, enough gold to facilitate this activity.  The longer-term sustainability of this is zero and the price is going to go up to levels that nobody is going to be able to comprehend.  One technical service that I look at suggests that the window is closing to the downside and this week and today might be the bottom.

Thomas Sowell 
The Hunger Hoax
Thomas Sowell
Twenty years ago, hysteria swept through the media over "hunger in America."
Dan Rather opened a CBS Evening News broadcast in 1991 declaring, "one in eight American children is going hungry tonight." Newsweek, the Associated Press and the Boston Globe repeated this statistic, and many others joined the media chorus, with or without that unsubstantiated statistic.
When the Centers for Disease Control and the Department of Agriculture examined people from a variety of income levels, however, they found no evidence of malnutrition among those in the lowest income brackets. Nor was there any significant difference in the intake of vitamins, minerals and other nutrients from one income level to another. HERE.

Walter E. Williams

Walter E. Williams
Social Security Disaster
Politicians who are principled enough to point out the fraud of Social Security, referring to it as a lie and Ponzi scheme, are under siege. Acknowledgment of Social Security's problems is not the same as calling for the abandonment of its recipients. Instead, it's a call to take actions now, while there's time to avert a disaster. Let's look at it.
The term was derived from the scheme created during the 1920s by Charles Ponzi, a poor but enterprising Italian immigrant. Here's how it works. You persuade some people to give you their money to invest. After a while, you pay them a nice return, but the return doesn't come from investments. What you pay them with comes from the money of other people whom you've persuaded to "invest" in your scheme. The scheme works so long as you can persuade greater and greater numbers of people to "invest" so that you can pay off earlier "investors." After a while, Ponzi couldn't find enough new investors, and his scheme collapsed. He was convicted of fraud and sent to prison. HERE.


Gold extends previous session's losses; investors wary of buying
Spot gold was down 1.3 percent at $1,599.70/oz on Wednesday, extending the hefty losses made in the previous session as investors remain cautious of the yellow metal because of its recent declining trend. HERE.

Goldman Sachs reckons gold to trend higher on low real US interest rates
Goldman analysts reckon that there is a strong correlation between the gold price and low or negative real interest rates and that current U.S. rates should support a gold price of between $1800 and $1900. HERE.

Gold miners net hedgers for second consecutive quarter
The second quarter saw gold miners add 0.19 million ounces to the global hedge book, the first consecutive quarterly net hedging in 10 years, according to Thomson Reuters GFMS and France's Societe Generale. HERE.

Emerging markets to push commodity prices 20% high over the next 12 months - Goldman
The investment bank reiterated its "overweight" recommendation on commodities for the next 12 months on expectations that EM growth will offset the slowdown in the west. HERE.


The Gold Price Conspiracy Uncle Sam Doesn't Want You to Know About
Is it really so preposterous to believe the United States and Europe would conspire to keep pole position in the global financial system?

I don't think so - and neither does China.

That much was revealed in a diplomatic cable recently uncovered by Wikileaks.

According to the 2009 cable from the U.S. embassy, China believes the United States and Europe have, as a matter of policy, suppressed the price of gold to discourage its use as a reserve currency.

And there's a pretty compelling case to be made for a gold price conspiracy. HERE.


The Greatest Bubble in History Is at Our Doorstep

By Jeff Clark, BIG GOLD

It may not feel like it after a 12% correction in the past 30 days, but Mike Maloney – founder of – is convinced that we’re in a gold bull market that will be life changing for those who participate. I interviewed him for our current edition of BIG GOLD and am sharing some of what we talked about here. You may be shocked at what you read, because he’s devoted a larger allocation to gold and silver than we have. See why he’s convinced a bubble is ahead for precious metals, how high prices will go, and why he stores some gold overseas. HERE.

Miners from Scottrade: Note that even though the metals are down, most of the miners are up this morning.
Currencies from KitCo:
Some Prices: DOW up 24.98 to 10833.61 ( Opened Down); S&P up 3.69 to 1127.64; NASDAQ up 11 to 2415.76; Gold down 15.10 to 1609.10; Silver down0.79 to 29.44.

Best to each, Doug


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