The World Financial Report

World Financial Report – January 13th, 2012

Radio Show Newsletter


-CHART OF THE WEEK: This 15-Year Stock Market Cycle Signals 4 More Years Of Pain. Floyd Norris has discovered a freakish cycle in S&P 500 real returns over the past 70 years that makes the rest of this decade look rather gloomy.

Calculating overall gains after inflation, he found that since 1980 stocks have moved in a nearly identical,15-years-up/15-years-down pattern to their performance between 1943 and 1980. Says Norris: In June 1964, the real return over the previous 15 years averaged 15.6 percent a year, the highest that figure had ever been.

The stock market did not begin to fall then, but it could no longer maintain the torrid pace, and the 15-year return figures began to decline. Sounds familiar. While between 1984 and 1999 total compound annual return was more than 15 percent, since 1996, overall returns are just 3 percent. If the 15/15 cycle holds, then we have at least four more years of negative overall returns. Whatever gains stocks make in the short-term will be short-lived. Read more here-

-CHART OF THE WEEK: The Scariest Jobs Chart Ever. Once again, we must bring you this jobs chart from Calculated Risk which nicely puts this jobs “recovery” into context. It shows the percent job losses in post-WWII recessions and recoveries, and nicely shows how slow this current recovery has been compared to every single other one. We’ve dubbed it the scariest jobs chart ever. Read more here-

-CHART OF THE WEEK: U.S. Jobs. The Labor Department reported that nonfarm payrolls (jobs) increased by 200,000 in December. For some perspective, today’s chart illustrates the percent increase in the number of jobs for every decade since the 1940s (the data goes back to 1939).

Today’s chart illustrates that up until this millennium, the number of jobs at the end of a decade has always been at least 20% greater than 10 years prior. During the last decade (2000s), not only was that 20% plus growth not achieved, the decade actually ended with less jobs than when it began. This negative job growth is particularly noteworthy due to the fact that the US population had increased by 10% during the same time frame.

Two years into the current decade (see gray column), today’s chart illustrates that job growth is positive. If job growth during the current decade were to increase at the same pace as what occurred during the first two years, the decade would end with a 10% gain in jobs (see gray dot). This is certainly better than the decade just passed, however, it is well off the 20% plus pace of decades past. Read more here-

-CHART OF THE WEEK: It’s Pretty Obvious What’s Driving Unemployment. The connection seems pretty unmistakable. If you want to improve unemployment, convince companies that more sales are on the way. Read more here-

-CHART OF THE WEEK: Feeling gloomy, More bad news for Europe’s troubled economies. Read more here-

-“That men do not learn very much from the lessons of history is the most important of all the lessons of history.” Aldous Huxley

-“The power of accurate observation is commonly called cynicism by those who have not got it.” George Bernard Shaw

-“There’s plenty of money out there. They print more and more of it every day. But that ticket? There are only five of them, and that’s all there’s ever going to be. Only a dummy would give this up for something as common as money. Are you a dummy?” Charlie and the Chocolate Factory-Grandpa George convincing Charlie not to sell the golden ticket

-“I am constantly reminded by events to keep the big picture in mind. We must avoid being gripped by the laughably short sighted emotions of the moment.” Monty Guild

-“The ultimate crime in investing is not being wrong it’s staying wrong!” Peter Grandich

-“The United States only remains solvent because the Congress in Washington keeps raising the debt ceiling.” Der Spiegel

-The 75 trillion dollar unfunded liability budget deficit is future debt that must be paid. It is a debt bomb in the early stages of detonation. Debts must be paid, but how must they be paid? Wall Street and Washington believe the electronic printing press can replace your constitution. They are wrong, but they are in control.

National debt numbers are exploding upwards; debt is up about 50% in four short years. The debt rating agencies are warning of future downgrades. America was the greatest creditor in the history of the world. Now we are the greatest debtor in the history of the world. The American dream has become a worldwide nightmare. Morris Hubbartt

-“The financial industry in my view is going to shrink by about 150,000 people over the next 12 to 18 months.” Dick Bove

-“Quite frankly, 2012 is going to be annus horribilis (year of horrors) for those with a conventional view on economics and finance. There is a degree of complacency, right now, that I find eery. There is no reason for this complacency. It’s a testament to the power of the mainstream media, hoodwinking the public and the government chipping in with their bogus statistics. At this point people have no real appreciation of how bad things are going to get and I think it’s going to hit big-time this year.” John Embry

-U.S. Economy’s Challenges Greater This Year Than Last, Gluskin Sheff Says. David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., said the U.S. economy faces more challenges in 2012 than last year, while he backed away from his prediction the nation was facing a near- certain recession.

“Certainly, we’re not in a recession right now,” Rosenberg said in an interview on Bloomberg. Nonetheless, he said, “I still believe the economy is still fragile and this recovery is still quite spotty.” The effects of the European recession and a slowdown in China will weigh on U.S. exports and industrial production this year, he said.

Even last week’s stronger-than-forecast jobs growth number of 200,000 for December may end up being revised down to about 140,000, when holiday hiring at delivery companies and other seasonal factors are taken into account, he said.

“As challenging as the year was in 2011, I expect 2012 is going to be even more challenging,” Rosenberg said in the interview from Toronto. “When you consider all the headwinds coming from overseas: Europe is in a recession now, it was not in a recession a year ago; we’re now talking about hard-landing risks in China, we weren’t talking about that a year ago.” Read more here- and

-Goldman sees massive upside risk in oil prices. Oil, gold and base metals are Goldman Sachs’ top commodity picks this year, with big upside risk in oil due to tight fundamentals and a potential Iranian conflict, the investment bank said Read more here-

-Forget inflation: Is deflation the real threat? Ask most investors what they worry about, and they’ll tell you it’s inflation specifically, a period of soaring prices that destroys the value of the dollar. But a growing number of economists and money managers are starting to worry about the opposite of inflation: deflation, a period of falling prices and declining incomes.

Sure, the government’s consumer price index has gained 3.5% the past 12 months. Even stripping out food and energy, the CPI is up 2.1%, the Bureau of Labor Statistics says. And anyone who lives in the real world knows you can’t live without food and energy.

But other prices have been moving relentlessly downward, from refrigerators to stocks to houses and salaries. Economist Gary Shilling argues that many of the factors for deflation are already in place, and that people overlook falling prices because they are so focused on the items they use the most. Read more here-

Iran Bazaar Sees Rush to Dump Rials. The rush for hard currency shows those tensions spreading among Iranians, even before the latest sanctions are fully implemented. The U.S. and European Union are moving toward an embargo on oil purchases from the world’s third-biggest exporter and restricting dealings with its central bank. Read more here-

-Rail Traffic Surge Shows Canada Economy May Beat Growth Forecasts: Freight. A boom in traffic at Canadian National Railways Co. and Canadian Pacific Railway Ltd., the country’s two largest rail companies, may mean Canada’s recovery will be buoyant even after economists and the Bank of Canada pared their outlook for growth this year. Read more here-

-U.S. Jobless Claims Rise More Than Forecast. More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls. Jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed in Washington. Read more here-

-Retail Sales in U.S. Rose Less Than Forecast. Sales at U.S. retailers in December rose less than forecast, restrained by cheaper fuel prices and holiday discounting that helped hold down the value of goods sold. The 0.1 percent gain followed a 0.4 percent advance in November that was more than initially reported, Commerce Department figures showed. Read more here-

-William D. Cohan: How Wall Street Turned a Crisis Into a Cartel. Almost 65 years ago, in 1947, the U.S. government sued 17 leading Wall Street investment banks, charging them with effectively colluding in violation of antitrust laws. Read more here-

-Cohan: Did Psychopaths Take Over Wall Street Asylum? It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along: The “corporate psychopaths” at the helm of our financial institutions are to blame. Read more here-

-Dylan Ratigan: Encouraging the Right Kind of Greed Among Banks. The financial markets need regulation the way a nuclear-power plant needs a cooling agent for its radioactive fuel rods. If safety rules are enforced and the heat of the rods is properly controlled, the result can be clean, abundant energy. But if that cooling process is neglected, there could be a meltdown. Read more here-

-Theft, RICO lawsuit targets MF Global, CME Group, MorganChase. Read more here-

-CFTC acts to protect trader collateral, endorses ‘Volcker rule.’ Read more here-

-U.S. Inquiry of MF Global Gains Speed. The investigation into MF Global is intensifying as federal authorities unearth new details and confront potential obstacles in their hunt for roughly $1.2 billion in customer money that disappeared from the brokerage firm. Read more here-

-The Neverending MF Global Story: Regulators Block The Truth. Instead of looking out for MF Global investors and customers who are still waiting for their money it looks like regulators and the bankruptcy trustees are busy suppressing information. Instead of full transparency, regulators and the trustees are holding onto crucial details that might tell us all who was asleep at the wheel when the broker/dealer and futures commission merchant (FCM) headed over the cliff. Read more here-

Corzine Sued by Montana Farmers Over MF Global Futures Account Money. Jon Corzine, former chief executive officer of collapsed commodity brokerage MF Global Holdings Ltd., was sued for fraud by Montana farmers who claim he oversaw the misappropriation of their commodity trading account funds. Read more here-

-Apple said Chief Executive Officer Timothy Cook received $378 million in 2011 compensation, including $376.2 million in stock awards. Reuters

-Buffett Offers GOP Donation Challenge. Billionaire Warren Buffett will match voluntary contributions by congressional Republicans to the U.S. government, he told Time magazine. Buffett, who has said the tax system favors the rich, made his offer after Republicans, including U.S. Representative Michelle Bachmann, suggested he donate his fortune to the government. Read more here-

Orange juice futures rose the most in five years on speculation that citrus groves in Florida suffered more frost damage than expected last week, with some forecasters predicting more cold weather. Bloomberg

-Twinkie-Maker Hostess Files for Bankruptcy. Hostess Brands Inc. the maker of Twinkies snack cakes and Wonder bread, fell back into bankruptcy about three years after completing an earlier restructuring. Read more here-

-Bankrupt Solyndra seeking to pay bonuses. Now seems an unlikely time for handing out bonuses at bankrupt Solyndra, but that’s the plan of company attorneys intending to dole out up to a half-million dollars to persuade key employees to stay put. Read more here-

-White-Collar Workers Join Crowd Straining Food Banks. “We’re seeing many faces from the middle class who had been donors who now need support from our food bank,” said Terry Shannon, president and chief executive officer of the Phoenix, Arizona-based St. Mary’s Food Bank Alliance. Read more here-

-Sept. 11 Bracelets Come From China. For last year’s 10th anniversary of the Sept. 11 terror attacks, U.S. Transportation Security Administration officials wanted their workers to remember the thousands who died. So the agency bought 70,000 commemorative bracelets made in China. Read more here-

-Greek Crisis Has Pharmacists Pleading for Aspirin. For patients and pharmacists in financially stricken Greece, even finding aspirin has turned into a headache. Read more here-

-Bordeaux Prices To Dip on Weak Demand. Prices of top Bordeaux such as Chateau Lafite-Rothschild and Chateau Petrus may drop further at Hong Kong sales this month as demand declines on concern about economic weakness and financial-market volatility. Read more here-

-Old Penny Sells For $1.38 Million. As Benjamin Franklin once wrote ‘A penny saved is a penny earned.’ In Orlando on Saturday an old penny saved was sold for $1.38 million. The one-cent copper coin was made at the Mint in Philadelphia in 1793, the first year that the U.S. made its own coins. James Halperin of Texas-based Heritage Auctions said the sale was “the most a United States copper coin has ever sold for at auction.” Read more here-

-Millionaires in China Like LV Gifts Best: Hurun. Read more here-

-A Look Inside The World’s Most Expensive Building. Constructed from 1999 to 2004 at a cost of $1.8 billion, Taipei 101 is the most expensive skyscraper ever built. Read more here-

-The Most Expensive Buildings In The World. Read more here-

-This Unassuming California Junkyard Contains A Hidden Collection Of Incredible Cars. Read more here-

-12 Infected With New Swine Flu Strain. The days of medical masks at airports and widespread panic may be coming back—that’s because at least 12 humans are believed to have been infected with a new strain of swine flu that’s not covered by this season’s vaccine. Read more here-

-Next ice age not likely before 1,500 years: study. Read more here-

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-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-

-“Fancy is a term in the diamond business for a well-highlighted colored stone.”

-“The name diamond derives from the ancient Greek adamas Impossible to tame.” Featured Diamond of the Week. This week’s Diamond is a 0.30 carat round brilliant cut fancy intense pink Diamond. Pink color in a Diamond is thought to have been caused by them absorbing light in an unusual way when they were formed deep inside the earth over millions of years. Pink Diamonds are nature’s art, add this masterpiece to your portfolio/collection today. Harold Seigel-See video of the Diamond here-

-Jeweler: Expect Significant Price Increases For Diamonds. Intense sparkle may not be the only thing that deserves a double take when it comes to diamonds. Take a look at the price-tag. Jewelers say you can expect to see price increases ranging from 10 percent to 20 percent depending on the quality of the diamond. Read more here-

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-“European sovereign-debt risk and the geopolitical risk of the Iranian situation escalating should support gold. Gold’s safe-haven attributes will continue to be in demand.” Mark O’Byrne-GoldCore

-“A number of people have approached me recently and said they wished they had listened five years ago. They feel they have missed the boat, that it’s too late to buy gold. For those who feel that way, let me close with a Chinese proverb I discovered last year: The best time to plant a tree is 20 years ago. The second best time is today.” Nick Barisheff

-“Too many people talk about the price of gold or the price of silver and what we really need to be focused on is not the price, but the value. Assets can be overvalued or undervalued and over the past ten years gold has been undervalued and it remains undervalued, even though the price is rising.

It remains undervalued because central bank actions are continuing to debase national currencies around the world. At some point in time, in the future, when you get a mania and your next door neighbor is telling you to buy gold and silver, that’s when the market will be peaking out. But that’s still way, way down the road. It’s a long time in the future.” James Turk

-For those who feel precious metals are in a bubble now, they ain’t seen nothing yet. At the moment prices are merely adjusting to where they should have been all along. For years gold languished in obscurity as investors instead placed their faith in the wisdom, independence, and integrity of central bankers. That misplaced confidence will soon shatter and investors will once again embrace gold, as they discover nothing more than politicians with printing presses lurking behind the curtains. Peter Schiff

-Aubie Baltin: Riding The “Golden” Bull. Traders vs. Investors. Should you be a trader or a long term Investor? Good question. How many of you that got into the gold market made a ton of money trading it from its $35 low in 1973 to its 1976 high of $200 had any profit left over when it suddenly dropped back to$100 in 1977?

I’m willing to bet that not one of you got back in when gold soared passed $200 or passed $300 in 1978 and then just kept on climbing past $500 by the fall of 1979? But then after watching most of that Bull Market roll by most everyone began jumping in as gold gapped up as much as $30 a day into its ultimate high of $850+ into January 1980. Instead of reaping fortunes most traders ended up in the hole while those few slow dumb and not nearly so greedy investors who just grabbed on to that Golden Bull and hung on became very rich. Read more here-

-Precious metals analysts expect gold prices to rise for a 12th year in a row and to reach a record high in 2012. The LBMA’s survey of 26 contributors showed all but 3 participants expected gold to hit an all-time high in 2012, with a majority of 19 of them forecasting gold to reach a high above $2,000 an ounce. They also forecast gold to average $1,766.00 an ounce this year, compared with an average of $1,572.00 in 2011, the survey showed. The gold price rose to a record $1,920.30 an ounce in September and gained 10 percent in price in an 11th consecutive year of gains in 2011. Read more here- and

Gold Is Investors’ Favorite Asset in 2012: Poll. Gold is investors’ favorite asset for 2012 according to a poll carried out by Japanese investment bank Nomura. Read more here-

-Gold Could Hit $1,940 an Ounce in ’12: Goldman. Gold futures traded on the Comex in New York may climb to $1,940 an ounce in 12 months as U.S. interest rates and inflation are expected to remain low, Jeffrey Currie, head of commodities research, said at the company’s Strategy Conference 2012 in London, repeating the bank’s December forecast. Gold has dropped 16 percent from a record in September. Read more here-

McEwen: Gold to hit $2,000 & Accelerate, Silver $150-$300. Read more here-

Nick Barisheff: Why Rising Debt Will Lead to $10,000 Gold. Read more here-

-Alf Fields: Gold Correction Is Over. Read more here-

James Turk: There is a War Going on in the Gold Market. “There is a war going on with regard to gold and people are lined up on both sides. The central planners want gold to disappear, but gold is not going to disappear because it’s been money for 5,000 years. What the central planners and the manipulators and government agents and everybody else are doing is they are putting out a lot of anti-gold propaganda.”

“Eventually that erodes people’s emotions and causes them to turn negative. In the early 1980s I worked with one of the top commodity traders in the world. The things that Jesse Livermore talked about, this guy used to put together. It was just holding those positions for the long-term bull market and that’s how you make the really big money. The reason so few people make the big money, when it comes to the markets, is they let the emotion and the noise, that comes from day to day, interfere with their long-term focus.

The main thing is the problems that have been plaguing the international monetary system for the past several years, they haven’t gone away. They haven’t been solved. In fact, they are not even being properly addressed with solutions to solve these problems. So we have to assume we are going to continue down this same road we’ve been on, which ultimately means currency debasement and consequently higher metals prices.

As I’m fond of saying, We always have to be focusing on the big picture. Particularly now when emotions run wild six months after a correction in both of the precious metals prices. We cannot lose sight of the big picture. The reasons for owning gold and silver now are probably just as good as they were when gold and silver were half the price they are today. They are still very undervalued and we still have a long way to go in this bull market.

This is exactly what you see during these deep corrections in bull markets. Apple had 5 deep corrections and it shook out a lot of people and then the market moved up without them getting back in. Once you are out, it’s very difficult to jump back in on the buy side. Read more here-

-Louise Yamada: Gold & Silver Bulls to Continue Stampede. Read more here-

Jim Sinclair: Hathaway Correct, Gold Shorts to get Squeezed. Read more here-

-Jim Sinclair: How to Get Past Emotion and Make a Smart Investment Decision. Listen here-

-Hathaway: Short Squeeze in Gold to Crush Naked Shorts. Read more here-

-Hathaway: Huge Rally in Gold & Silver, 2012 Outlook. Read more here-

-Rick Rule: Gold Now Set for Dramatic 1970s Style Up-Moves. Read more here-

-John Embry Gold and Silver Commentary: Over the past 11 years, both metals have not only shot up in price, but have dramatically outperformed every fiat currency on earth. In sizing up gold and silver, ignore naysayers. Read more here-

Richard Russell: Gold Scaring Weak Hands. Read more here-

-Paul Brodsky: Gold, Silver, Lost Confidence & Systemic Failure. Read more here-

-Nigel Farage: Gold to See Its Biggest Spike in 2012. Read more here-

-Clive Maund: Gold Market Update. Read more here-

-Jeff Clark: Gold Will Make a New High on This Date. Some investors are frustrated and a few are worried that gold seems stuck in a rut. This stall in price has happened before, of course, but since 2001 it’s always eventually powered to a new high. Unless one thinks the gold bull market is over, it’s natural to wonder how long might we have to wait before seeing another new high. Read more here-

-Infographic: Everything You Wanted to Know About Gold. Read more here-

-U.S. Mint Eagle Gold Coins May Pace Silver Sales, Dealer Says. The U.S. Mint’s sales of American Eagle gold coins may keep pace with silver coins later this year, according to Dillon Gage Metals, one of 11 dealers authorized to purchase silver coins in the U.S. directly from the mint. Read more here-

-China Gold Imports From Hong Kong Hit Record. China’s gold imports from Hong Kong, a proxy for overseas buying, set a record in November for the fifth consecutive month as demand from the world’s largest gold consumer continued to defy expectations. China’s gold imports have soared in recent months, as Chinese investors pour their savings into popular gold bars and consumers start to buy gold gifts for Chinese New Year. Read more here-

-Dutch central bank admits 90% of its gold is abroad. Read more here-

-Fund manager Ned Naylor-Leyland on gold price. Read more and listen here-

Gold Bear Market at $1,300 Signaled by Moving Averages: Technical Analysis. Gold prices, down 16 percent from a record in September, are headed into a bear market at $1,300 an ounce this year, according to technical analysis by Lance Roberts at Streettalk Advisors. Read more here-

-GATA board member Ed Steer interviewed by Dave Janda. Read more here-

-Dave Janda interviews GATA Chairman Murphy. Read more here-

-Alasdair Macleod: Financial repression, what does it mean? Read more here- and

-The buzz builds: Reuters columnist rationalizes ‘financial repression.’ Read more here-

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Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

Gold to silver ratio at 50 to 1 with gold at $2,500 the silver price would be $50.00

Gold to silver ratio at 40 to 1 with gold at $2,500 the silver price would be $62.50

Gold to silver ratio at 30 to 1 with gold at $2,500 the silver price would be $83.33

Gold to silver ratio at 20 to 1 with gold at $2,500 the silver price would be $125.00

Gold to silver ratio at 15 to 1 with gold at $2,500 the silver price would be $166.67

-LBMA’s Silver Survey. Read more here-

-John Embry: Silver to Break $100 in 12 to 24 Months. “I think silver is a rocket ride here and it is priced way below where it should be. It’s been put there by the paper criminals and this will correct itself violently because there is no physical silver available, of any magnitude.

All it will take is some significant buying in the physical silver market to unleash this beast and when it gets going people will look on in astonishment. I don’t have any problem with silver blowing through its all-time high this year and heading towards $100. Once it clears $50 there is no overhead resistance and then things will really get interesting.

I believe silver will hit $100 in 12 to 24 months. As you know I have been a great proponent of a falling gold/silver ratio, which is currently in the range of 55/1. It will hit 10/1 or 15/1 before this bull market is over. Silver will rise two to three times faster than gold, and as you know I am extremely optimistic about where the gold price is headed long-term.” Read more here-

-Rob McEwen: Silver Update. When asked about silver specifically, McEwen stated, “Well, I was just thinking about silver. It does have an industrial component to it, but there is a growing demand. It’s just easier to get into, there’s a lower price point. That’s why I see silver being an exciting area to have exposure. It (silver) could (eventually) be from $150 to $300.” Read more here-

-Rick Rule: Silver Update. When asked about silver specifically, Rule stated, “I certainly believe in the set of circumstances that Eric Sprott describes, which is 100 times more silver being traded than is available for delivery. If there is a failure to deliver in the futures markets and silver goes to a cash basis, you can pick a price to the upside.

It would certainly be a price that would make silver producers ecstatic. Further to that, Eric Sprott has urged silver producers to hold some of their cash in physical silver. We think withholding silver from the market increases the probability for a failure to deliver in the futures markets, which, of course, we think would be a very interesting event for silver speculators.” Read more here-

-KWN: Silver Eagle Sales Are Exploding, “Demand is Shocking.” Bill Haynes, President and owner of CMI Gold & Silver had this to say about the situation: “Silver eagle sales by the US Mint are absolutely exploding in January. I think that’s an indication of more widespread recognition of the financial problems the world is facing and that’s an easy, convenient coin for investors to buy. This could turn out to be another record year for silver eagle sales by the US Mint, maybe in the neighborhood of 40 million ounces.”

“I’m shocked by the demand for eagles. As an example we just had a buyer who picked up $1.5 million of one ounce silver eagles and that’s all he wanted the eagles. The significant thing I’m seeing here, Eric, is there is next to no selling by retail customers. It would appear the gold and silver, held by the public, is in extremely strong hands.

People who are buying these metals are buying and they are holding on. To me this is an indication we are still in the very early stages of a precious metals bull market. This is especially the case for buyers of silver eagles, they buy and they hold. They simply do not come back into the market to sell. Read more here-

-On any further “risk on” general asset price weakness, silver is my asset of choice. I bought physical silver a week ago at a spot price of about $27 and have orders with my dealer to buy more around $22.50. To be an owner of silver one must be prepared to leave some purchasing cash on the table. You should have a plan to keep buying the metal in the case of an unforeseen market decline. I see silver hitting new highs in 12-18 months.

These quick and hard declines have often occurred with little or no warning, and I expect them to continue happening for a long time. MACD looks very good here, but RSI can still drop a little lower. I would not be surprised to see silver move sideways or even decline for 2 to 3 more weeks, but I think the next big move will be up, rather than down! Morris Hubbartt

-Gene Arensberg: Silver, you ain’t seen nothin’ yet. Arensberg gets out his charts and sees an explosion building for silver. Read more here-

-Clive Maund: Silver Market Update. Read more here-

-Keiser Report: Interviews David Morgan on Silver and Debt. Watch more here-

-Keith Weiner: March Silver in Backwardation. March silver has been flirting with backwardation since the end of 2011, and today it has moved more firmly into backwardated territory. This is extremely bullish for silver, and let me explain why. Read more here-

-Przemyslaw Radomski: Silver Confirms the Bullish Outlook for Precious Metals. Read more here-

-Jeff Nielson: Gold-Silver Price Ratio Getting Silly Again. Read more here-

-Dr. Jeff Lewis and Grant Williams: Outlook for 2012 and Keeping Your Emotions Away From Your Silver. Read more here-

-Hubert Moolman: Why Silver For A Monetary Collapse? Part 2. Read more here-

Ted Butler: Three Elements of Manipulation. Read more here-

-Haynes, Norcini review precious metals week for KWN. Listen here-

-Michael Snyder: How To Prepare For An Economic Collapse. How should people prepare for the difficult years that are coming? I get asked about that a lot. Once people really examine the facts, it is not too hard to convince them that an economic collapse is coming. But once they accept that reality, most of them want to know what they can do to prepare themselves and their families for the hard times that are ahead. Read more here-

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Total assets on the Fed’s balance sheet stood at a near-record $2.92 trillion on Jan. 4. The central bank expanded its portfolio by purchasing $2.3 trillion in U.S. Treasury debt, mortgage-backed securities and housing agency debt to push down longer-term interest rates once its benchmark lending rate hit zero in December 2008. The Fed expanded its portfolio in two rounds of asset purchases, known as quantitative easing. Bloomberg

-Central Banks ‘Printing Money Like Gangbusters’: Gross. The world’s central banks are “printing money like gangbusters,” which could revive the threat of inflation, Pimco founder Bill Gross told CNBC. By putting “hundreds of billions” in currency in circulation, the central banks “can produce reflation that’s why we’re seeing the pop in oil, gold” and other commodities, he said. At the same time, “there’s the potential for deflation if the private credit markets can’t produce some sort of confidence and solvency going forward,” Gross said. “So we’re at great risk here, not only in the U.S. but on a global basis.” Read more here-

-Bernanke Doubles Down on Fed Mortgage Bet. Ben S. Bernanke is signaling his willingness to double down on a three-year bet that’s failed to revive housing, showing the extent of the Federal Reserve chairman’s effort to wrest a recovery from the deepest recession.

Since the Fed started buying $1.25 trillion of mortgage bonds in January 2009, the value of U.S. housing has fallen 4.1 percent, and is down 32 percent from its 2006 peak, according to an S&P/Case-Shiller index.

The central bank is poised to buy about $200 billion this year, or more than 20 percent of new loans, as it reinvests debt that’s being paid off. Some Fed officials have said they may support additional purchases that Barclays Capital estimates could total as much as $750 billion. Read more here-

-Fed Officials Say Housing Market Needs More Aid to Boost Growth. Three Federal Reserve policy makers said the U.S. government should try new ways to spur the housing market without agreeing about how much more the central bank needs to do to bring down interest rates. Read more here-

-Fed Officials Present Contrasting Views of Bank’s Policy of Accommodation. Two Federal Reserve officials laid out contrasting views of Fed attempts to bolster the economy, with one seeing a need for more asset purchases and another warning that current accommodation risks provoking instability. Read more here-

-Evans Says ‘Only Modest’ Pickup in Economy Warrants Federal Reserve Action. Federal Reserve Bank of Chicago President Charles Evans said signs of improvement in the economy are modest and the central bank should push forward with “substantial” monetary stimulus. Read more here-

Fed’s Lockhart Avoids a ‘Rigid Position’ on Further Easing. Federal Reserve Bank of Atlanta President Dennis Lockhart said that while the economy should improve this year, he’s not taking a firm stance on whether the central bank should try to lower interest rates again. Read more here-

-Fed officials signal more action may be needed. Federal Reserve officials signaled more help for the U.S. economy may be necessary. Read more here-

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Worst ahead for euro zone, but it will survive: Reuters poll. The worst is yet to come in the euro zone’s debt crisis but the currency union will survive 2012 intact, according to a Reuters poll of economists who say France will probably lose its top-notch credit rating. Read more here-

Greece should quit euro unless “massive” funding given: Czech. Greece should leave the euro zone and devalue its new currency unless Europe is willing to provide “massive” funding for the indebted country, Czech central bank Governor Miroslav Singer said in an interview. Read more here-

-Greek Euro Exit Weighed By German Lawmakers. Lawmakers from Chancellor Angela Merkel’s party are stepping up pressure on Greece as it struggles to meet the terms of its second bailout, saying that a Greek exit from the euro region would be manageable. Read more here-

-ECB must do more to avert euro collapse: Fitch. The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a “cataclysmic” collapse of the euro, David Riley, the head of sovereign ratings for Fitch, said.

Speaking to investors as part of a European roadshow, Riley said a collapse of the euro would be disastrous for the global economy, and while it is not Fitch’s baseline scenario, it could happen if Italy did not find a way out of its debt problems. “The end of the euro would be cataclysmic. The euro is a reserve currency,” Riley said.

“What would that do in terms of financial and political stability?” “It is hard to believe the euro will survive if Italy does not make it through,” he said, adding that while many saw Italy as too politically and economically important to be allowed to fail, “one might also argue that it is too big to rescue.” Read more here-

-Soros says EU break-up would be catastrophic: report. A collapse of the euro and break-up of the European Union would have catastrophic consequences for the global financial system, billionaire investor George Soros was quoted as saying. Read more here-

-Soros Says Europe’s Debt Woes ‘More Serious’ Than 2008 Crisis. Billionaire investor George Soros said Europe’s sovereign-debt woes are “more serious” than the financial crisis of 2008 and that the world faces the prospect of a “vicious circle” of deflation. Read more here-

Germany Is Now Officially Getting Paid To Borrow Money. This is how desperate European investors are for a safe-haven: They’re paying Germany to “borrow” money. Germany just held a 3.9 billion EUR auction of 6 month bills. The interest rate: -0.0122%. Read more here-

-Ponzi Planet, The Danger Debt Poses to the Western World. Countries around the world, particularly in the West, are hopelessly in the red, with debt rising every day. Even worse, politicians seem paralyzed, unable or unwilling to do anything about it. It is a global disaster that threatens the immediate future. Read more here-

-Europe Banks Resist Draghi Bid to Lend. Banks are hoarding the European Central Bank’s record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region. Almost all of the money loaned to 523 euro-area lenders last month wound up back on deposit at the Frankfurt-based central bank instead of pouring into the financial system, ECB data show. Banks will use most of the three-year loans to meet their refinancing needs for this year and next, analysts at Morgan Stanley and Royal Bank of Scotland Group Plc estimate. Read more here-

-Mafia now “Italy’s No.1 bank” as crisis bites: report. Organized crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country’s biggest “bank” and squeezing the life out of thousands of small firms, according to a report. Extortionate lending by criminal groups had become a “national emergency,” said the report by anti-crime group SOS Impresa. Read more here-

-Borrowers turn lenders as banks tap firms for cash. Blue-chip names like Johnson & Johnson, Pfizer and Peugeot are among firms bailing out Europe’s ailing banks in a reversal of the established roles of clients and lenders. Read more here-

Swiss central bank chairmanquits over wife’s currency trade. Read more here-

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-Obama formally requests debt limit increase. President Barack Obama on Thursday issued a formal request to the U.S. Congress for the next increase in the national debt ceiling. Obama, in a letter to House of Representatives Speaker John Boehner, said “further borrowing is required to meet existing commitments.”

Congress is unlikely to block the expected $1.2 trillion increase request, which is meant to ensure the debt limit will not be reached again until after November’s presidential election. It was allowed for in an August deal between Obama’s Democrats and Republican lawmakers. Read more here-

-U.S. Budget Deficit Widened 10% to $86 Billion in December. The U.S. government’s budget deficit widened 10 percent in December as spending rose more quickly than tax revenue. The gap expanded to $86 billion, from a $78.1 billion shortfall in December 2010, according to Treasury Department data released in Washington. Read more here-

-34 Facts About The National Debt That Should Set America On Fire With Rage. Read more here-

1) During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars.

2) When Ronald Reagan took office, the U.S. national debt was less than 1 trillion dollars. Today, the U.S. national debt is over 15.2 trillion dollars.

3) During 2011, U.S. debt surpassed 100 percent of GDP for the first time ever.

4) According to Wikipedia, the monetary base “consists of coins, paper money (both as bank vault cash and as currency circulating in the public), and commercial banks’ reserves with the central bank.” Currently the U.S. monetary base is sitting somewhere around 2.7 trillion dollars. So if you went out and gathered all of that money up it would only make a small dent in our national debt. But afterwards there would be no currency for anyone to use.

5) The U.S. government spent over 454 billion dollars just on interest on the national debt during fiscal 2011.

6) The U.S. government has total assets of 2.7 trillion dollars and has total liabilities of 17.5 trillion dollars. The liabilities do not even count 4.7 trillion dollars of intragovernmental debt that is currently outstanding.

7) During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

8) It is being projected that the U.S. national debt will surpass 23 trillion dollars in 2015.

9) According to the GAO, the U.S. government is facing 34 trillion dollars in unfunded liabilities for social insurance programs such as Social Security and Medicare. These are obligations that we have already committed ourselves to but that we do not have any money for.

10) Others estimate that the unfunded liabilities of the U.S. government now total over 117 trillion dollars.

-Size of U.S. debt is now the same as its entire economy: $15.23 Trillion. Read more here-

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-Europe’s $39 Trillion Pension Threat Grows as Regional Economies Sputter. Even before the euro crisis, people were worried about Europe’s pension bomb. State-funded pension obligations in 19 of the European Union nations were about five times higher than their combined gross debt, according to a study commissioned by the European Central Bank.

The countries in the report compiled by the Research Center for Generational Contracts at Freiburg University in 2009 had almost 30 trillion euros ($39.3 trillion) of projected obligations to their existing populations. Germany accounted for 7.6 trillion euros and France 6.7 trillion euros of the liabilities, authors Christoph Mueller, Bernd Raffelhueschen and Olaf Weddige said in the report.

“This is a totally unsustainable situation that quite clearly has to be reversed,” Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington, said in a telephone interview. A recession threatening the world’s second-biggest economic bloc, along with efforts to reduce debt across Europe, is exacerbating the financial risks.

Stable or falling birthrates, plus rising life expectancies, are adding to pressures, with the proportion of economic output devoted to spending on retirement benefits projected to rise by a quarter to 14 percent by 2060, according to the ECB report. Read more here-

-There’s A 82% Chance That California’s Public Pension System Will Run Out Of Money. New study finds California’s big government worker retirement funds short $498 billion. California is on a destructive path of grossly expanding debt to finance public worker pensions, much like many European nations. Unless dramatic steps are taken soon, the Golden State will suffer its own version of Greek tragedy.

The state’s public worker pension problem has worsened since last year when the Stanford Institute for Economic Policy Research reported obligations far outstripped the state’s ability to pay benefits owed for the three major retirement systems the California Public Employees’ Retirement System (CalPERS), California State Teacher Retirement System (CalSTRS) and the University of California Retirement Plan (UCRP).

The three systems collectively have promised $498 billion in payments they can’t fully pay, the Stanford study concluded. That’s a 17 percent increase in two years. Putting off a solution adds about $3.4 million to the tab for each day of delay. Read more here-

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-Government Set to Sell Foreclosures in Bulk. The Obama administration, in conjunction with federal regulators and led by the overseer of Fannie Mae and Freddie Mac, is very close to announcing a pilot program to sell government owned foreclosures in bulk to investors as rentals, according to administration officials. Read more here-

-Home prices fall in November for 4th month: CoreLogic. Home prices fell for a fourth straight month in November as distressed sales continued to weigh on prices, data analysis firm CoreLogic said. CoreLogic’s home price index fell 1.4 percent in November from the previous month. Compared with November of last year, prices were down 4.3 percent, steeper than the 3.7 percent year-over-year decline seen in October. Read more here-

-Home Seizures May Jump 25% as U.S. Foreclosures Resume, RealtyTrac Says. Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc. said. Read more here-

-U.S. says housing market still “fragile.” Another 26,877 Homeowners won permanent reductions in their mortgages in November under the Obama administration’s main foreclosure prevention program but the housing market remains fragile, a report said. Read more here-

-As home prices fall, more borrowers walk away. A survey last year by two Chicago-area finance professors, Paola Sapienza at Northwestern University and Luigi Zingales at the University of Chicago, found that roughly three out of 10 mortgage defaults in 2010 were by homeowners who could afford to make their payments, up from 22 percent in 2009. Read more here-

-Foreclosures Worsen in New York, New Jersey as Arizona Improves. The number of homes in the foreclosure pipeline is increasing in states including New York, New Jersey and Connecticut, where the process is slowed by courts, as Arizona, California and Nevada digest their backlog.

Home loans that were delinquent or in foreclosure fell in three states hit hard by the housing market collapse, dropping 19 percent in Nevada, 21 percent in California and 25 percent in Arizona in the year through Nov. 30, Lender Processing Services Inc. reported today. At the same time, they rose 7.4 percent in New Jersey, 5.2 percent in Connecticut and 2 percent in New York, as mandatory judicial procedures delayed seizures. Read more here-

-Foreigners Seek Haven in London Luxury Homes. Luxury-home prices in central London gained for a 14th consecutive month in December as overseas buyers sought safer investments and competed for a smaller number of properties for sale, Knight Frank LLP said. Read more here-

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-Kelley: Nuclear Arms Charge Against Iran Is No Slam Dunk. Read more here-

-Magnetic bomb kills nuclear scientist in Iran; Israel accused. Two assailants on a motorcycle attached a magnetic bomb to the car of an Iranian university professor working at a key nuclear facility, killing him and wounding two people. Read more here-

-Obama Ready to Use Military Force to Stop Nuclear Iran, Ex-Adviser Says. No one should doubt that President Barack Obama is prepared to use military force to prevent Iran from acquiring a nuclear weapon if sanctions and diplomacy fail, the president’s former special assistant on Iran said. Read more here-

-China says war over Iran will bring disaster. A top Chinese diplomat said war over the Iranian nuclear issue would bring disaster to the world economy and urged all nations involved to exercise restraint and prevent hostilities. Read more here-

-EU Considering Moving Iran Embargo Discussion to Jan. 23, Diplomat Says. The European Union is considering bringing forward a meeting of foreign ministers to Jan. 23, from Jan. 30, that will discuss a possible embargo on imports of Iranian oil, an EU diplomat said. Read more here-

-Iran Able to Block Strait of Hormuz, General Dempsey Says on CBS. Iran has the ability to block the Strait of Hormuz “for a period of time,” and the U.S. would take action to reopen it, Joint Chiefs of Staff chairman General Martin Dempsey said. Read more here-

-West readies oil plan in case of Iran crisis. Western powers this week readied a contingency plan to tap a record volume from emergency stockpiles to replace nearly all the Gulf oil that would be lost if Iran blocks the Strait of Hormuz. Read more here-

Hormuz Bypass Oil Pipeline Is Delayed Amid Iran Tensions. A pipeline that would allow crude oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties, two people with knowledge of the matter said. Read more here-

-Israel preparing for nuclear Iran: report. Israel is preparing for Iran to become a nuclear power and has accepted it may happen within a year, the London Times reported citing an Israeli security report. Read more here-

-Iran Sentences American to Death Amid Tensions Over Hormuz. An Iranian court sentenced a former U.S. soldier of Iranian descent to death for spying amid rising tensions over concern the Persian Gulf nation may try to close the Strait of Hormuz if Western sanctions are imposed. The revolutionary court found Amir Mirzaei Hekmati guilty of collaborating “with a hostile country and spying for the Central Intelligence Agency,” Iran’s state-controlled Fars news agency said. Read more here-

-Iran and Russia drop dollar for their own currencies in bilateral trade. Read more here-

-China warns U.S. to be “careful” in military refocus. China’s Ministry of Defence warned the United States to be “careful in its words and actions” after announcing a defence rethink that stresses responding to China’s rise by shoring up U.S. alliances and bases across Asia. Read more here-

-Al-Qaeda Members Gripe Over Cash Crunch as U.S. Targets Funding. Few people noticed Saudi Arabia’s three-day conference in September on disrupting terrorism financing. For a team at the U.S. Treasury Department, though, it was a long-sought victory in the fight against al-Qaeda. Read more here-

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Investing In Fancy Colored Diamonds

Investing in rare colored diamonds is a long-term investment. The economic cycles of the past 15 years have seen colored diamonds reach new heights in value as price records were broken.

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The Investor Learning Center was created to provide investors with the tools to make the right decision when it comes to investing in Rare Colored Diamonds.
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1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1980
  • Total Price: $50,000
  • Price per Carat: $50,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1990
  • Total Price: $150,000
  • Price per Carat: $150,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2000
  • Total Price: $500,000
  • Price per Carat: $500,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2008
  • Total Price: $1,000,000
  • Price per Carat: $1,000,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2009
  • Total Price: $1,090,500
  • Price per Carat: $1,090,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2020
  • Total Price: $2,828,187*
  • Price per Carat: $2,828,187*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2025
  • Total Price: $4,361,506*
  • Price per Carat: $4,361,506*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1980
  • Total Price: $1,000
  • Price per Carat: $1,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1990
  • Total Price: $3,000
  • Price per Carat: $3,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2000
  • Total Price: $9,000
  • Price per Carat: $9,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2008
  • Total Price: $23,500
  • Price per Carat: $23,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2009
  • Total Price: $26,300
  • Price per Carat: $26,300
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2012
  • Total Price: $32,000
  • Price per Carat: $32,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2020
  • Total Price: $53,993*
  • Price per Carat: $53,993*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2025
  • Total Price: $74,873*
  • Price per Carat: $74,873*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1980
  • Total Price: $60,000
  • Price per Carat: $60,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1990
  • Total Price: $200,000
  • Price per Carat: $200,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2000
  • Total Price: $600,000
  • Price per Carat: $600,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2008
  • Total Price: $1,350,000
  • Price per Carat: $1,350,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2009
  • Total Price: $1,494,000
  • Price per Carat: $1,494,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2020
  • Total Price: $4,555,497*
  • Price per Carat: $4,555,497*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2025
  • Total Price: $7,561,708*
  • Price per Carat: $7,561,708*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Red

  • Year: 1950
  • Total Price: $13,800
  • Price per Carat: $13,800
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 1987
  • Total Price: $927,000
  • Price per Carat: $927,000
  • Source: Auction

1 Carat Radiant Cut Fancy Red

  • Year: 2008
  • Total Price: $2,000,000
  • Price per Carat: $2,000,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2009
  • Total Price: $2,074,600
  • Price per Carat: $2,074,600
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2020
  • Total Price: $3,103,720*
  • Price per Carat: $3,103,720*

*Estimated value based on current market trend