The World Financial Report

World Financial Report – January 20th, 2012

Radio Show Newsletter

CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Asset performance in 2012. Reuters

-CHART OF THE WEEK: S&P 500 Profit Season Has Worst Start in Years. U.S. companies that beat analysts’ earnings estimates are an exception, rather than the rule, for the fourth-quarter reporting season getting under way.

Only 47.1 percent of companies in the Standard & Poor’s 500 Index that posted quarterly results between Dec. 1 and yesterday exceeded the average projection, according to data compiled by Bloomberg. Citigroup Inc. and JPMorgan Chase & Co. are among those that trailed estimates.

As the chart illustrates, so-called positive surprises have surpassed 50 percent at a comparable point in every other quarterly reporting period for the past four years. The previous low was 51.5 percent in the third quarter of 2008, when a global financial crisis was taking hold. Read more here-http://tinyurl.com/7nv6qvo

-CHART OF THE WEEK: China Rivals Global Leaders for Oil Shipments. China expanded its share of global crude oil shipments in 2011, with government-owned trader China International United Petroleum & Chemical Corp. rivaling Royal Dutch Shell Plc, currently the world’s largest charterer. Read more here-http://tinyurl.com/6sqps5u

-CHART OF THE WEEK: This Worrying Demographic Trend Is Bad News For Consumer Spending. Doug Short pointed us to this worrying trend. The alarm is being sound by Harry Dent, who notes that the demographic of those in their peak spending years (age 46 to 50) has been on the decline since 2009. Based on Census data, this trend should continue until 2022.

This is bad news when you consider the fact that personal consumption expenditures account for around 70% of GDP. According to Doug Short, Bloomberg’s recent interview with Harry Dent teased with “S&P 500 to Fall 30-50% in 2012.” Dent argues that investors should get out of all risk assets and move into Treasury bills. Read more here-http://tinyurl.com/797fhvu

-CHART OF THE WEEK: Super Bowl Chicken Wings Flying to Record High. Chicken wings, a staple food of Super Bowl parties in the U.S., will be the most expensive ever during this year’s National Football League championship game as demand rises and processors cut output to trim losses. Read more here-http://tinyurl.com/6olxag7

-“We are already moving into a police state (evidenced most recently by the Senate’s Nov. 2 vote allowing the military to indefinitely incarcerate anyone they accuse of terrorism). But at least it’s a police state with a fairly high standard of living, one with Walmarts, McDonalds, and SUVs at least for the time being.” Doug Casey

-Fed’s Latest Easing Could Cost $1 Trillion: Economists. The Federal Reserve is likely to step in with $1 trillion worth of easing that could be announced as soon as this month, according to a growing consensus of economists who see the recent uptick in economic growth as unsustainable.

With the Fed’s Open Market Committee set to meet next week, expectations are rising that the languishing housing market will drive the central bank to buy up mortgage-backed securities. The goal of the purchases will be to drive down interest rates even further from current record-low levels, and, less obviously, to spur confidence that more monetary tools remain to stimulate the economy.

Of course, the announcement also could push stock prices higher, as did the Fed’s last balance sheet expansion begun in November 2010. Just a few months ago, market observers speculated that another round of quantitative easing QE3, in this case would be politically infeasible and probably unnecessary given hopes for better growth in 2012. But with housing stuck in neutral and a European recession on the horizon, economists believe QE3 is all but certain. Read more here-http://tinyurl.com/7l42uf5

-The pool of Americans relying on government benefits rose to record highs last year as an increasing share of families tapped aid in a weak economy. Some 48.6% of the population lived in a household receiving some type of government benefit in the second quarter of 2010, up a notch from 48.5% in the first quarter, according to Census data. Read more here-http://tinyurl.com/7x3xt76

-The Nation’s Long-Term Unemployed. Nationally, as of December, nearly 3.9 million people had been without work for at least a year and were still looking. See what percentage of the unemployed have been out of work for more than 27 or 52 weeks in the largest metro areas around the country. Read more here-http://tinyurl.com/6om4mjj

-Few U.S. Cities Recoup Jobs in Recovery. More than 90 percent of U.S. metropolitan areas have failed to recoup the jobs lost during the recession that ended in 2009, a report found, underscoring the slow pace of recovery by urban economies.

Only 26 of 363 U.S. metropolitan areas have seen employment rebound to pre-recession peaks, according to the report, prepared by forecaster IHS Global Insight and released by the U.S. Conference of Mayors today. Nearly 80 areas aren’t expected to see such a recovery for more than five years.

“It’s very clear that there is a great deal of economic malaise throughout the country,” Los Angeles Mayor Antonio Villaraigosa, a Democrat who is president of the mayors’ group, told reporters in Washington. “Most of our cities will be struggling with their economies for another five years.”

The spotty pace of recovery has left many cities still struggling two-and-a-half years after the end of the recession, which reduced tax collections and forced mayors to fire workers, scuttle public-works projects and raise fees to eliminate deficits. Even with revenue rebounding, local governments have eliminated 533,000 workers since their payrolls peaked in 2008, Labor Department data show. Read more here-http://tinyurl.com/86k26gq

-Evans Says Jobless Rate May Rise as Progress ‘Transitory.’ 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 he forecasts that “at the end of the year, we’re not going to be very different from 8.5 percent unemployment.” Read more here-http://tinyurl.com/7u6nf3g

-24 Stats To Crush Anyone Who Thinks America Has A Bright Economic Future. Read more here-http://tinyurl.com/7wmaatm

-Apocalypse How? Dire 2012 Forecasts. Read more here-http://tinyurl.com/6meexee

Eric Sprott: The Financial System is a Farce Part Three. Read more here-http://tinyurl.com/7l425dw

-Kodak Files for Bankruptcy Protection. Eastman Kodak Co., the photography pioneer that introduced its $1 Brownie Camera more than a century ago, filed for bankruptcy protection from creditors after consumers worldwide moved from film to digital technology. The Rochester, New York-based company, which traces its roots to 1880, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents filed in U.S. Bankruptcy Court in Manhattan. Read more here-http://tinyurl.com/7s9eqfh

-Swiss Franc The Most Overvalued Currency In The World According To Big Mac Index. Read more here-http://tinyurl.com/7mrmldk

-Rob Kirby: U.S. rigs bond market with derivatives. Read more here-http://www.gata.org/node/10880

-Canada Retains Benchmark Rate at 1% Amid ‘More Modest’ Economic Recovery. The Bank of Canada kept its main interest rate unchanged for an 11th consecutive meeting and said economic growth will be “more modest” amid a weaker outlook for the U.S. and Europe. The central bank left the target for overnight loans between commercial banks at 1 percent, where it has been since September 2010. Read more here-http://tinyurl.com/7xnb8bo

-MF Global Commodity Customers Must Be Paid First, CFTC Says. Read more here-http://tinyurl.com/82tgctk

-In MF Global, JPMorgan again at center of a financial failure. In late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help. Read more here-http://tinyurl.com/78an57o

-Bloomberg Suffers, Too, in Collapse of MF Global. The collapse of MF Global has wreaked havoc on farmers, ranchers and other investors who were clients of the brokerage firm, prompting a loud outcry over the disappearance of $1.2 billion in customer cash. But they are not the only ones to suffer.

The financial information giant Bloomberg lost about 600 subscriptions to its computer terminals which translates to nearly $1 million in monthly revenue after MF Global filed for bankruptcy on Oct. 31. The sudden loss of business caused Bloomberg employees to miss their target sales by 12 percent in 2011. Read more here-http://tinyurl.com/7ovgzd7

-Recovery at risk as Americans raid savings. More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery. Read more here-http://tinyurl.com/868wakx

-Disapproval of Congress hits new high: poll. A record 84 percent of Americans say they disapprove of the way the Congress is doing its job compared with just 13 percent who approve of how things are going, according to a Washington Post/ABC News public opinion poll. Read more here-http://tinyurl.com/85a9dof

-‘Impressed’ and ‘Delighted’ Warren Buffett Matches GOP Rep’s Deficit Donations. Warren Buffett will be writing a check made out to the United States Treasury for just over $49,000 to help pay down the national debt. He’s matching voluntary contributions made this year and last year by Rep. Scott Rigell, a Republican representing Virginia.

In a letter to Rep. Rigell released by Berkshire Hathaway, Buffett writes he’s “particularly impressed that you took this action before my challenge.” In his challenge, issued in a Time Magazine interview last week, Buffett promises to match voluntary contributions aimed at reducing the deficit by “all Republican members of Congress, and I’ll even go three for one with (Senate Minority Leader Mitch) McConnell.”

McConnell, and other critics of Buffett’s call for higher tax rates on the super-rich, have been suggesting that if Buffett thinks he’s not taxed enough then he should “send in a check” to the Treasury. Read more here-http://tinyurl.com/7pwetjm

-Hackers Assault Tel Aviv Stock Exchange, El Al Websites, Causing Slowdown. Read more here-http://tinyurl.com/6opgyhr

-Coca-Cola Retains Title as World’s Most Valuable Brand. Read more here-http://tinyurl.com/7tvh6ll

-How Ireland’s Richest Man Went From $6 Billion To -$3.5 Billion. Read more here-http://tinyurl.com/83ond49

-Check Out The Apartment IKEA Just Built In The Middle Of A Paris Metro Station. Read more here-http://tinyurl.com/83mzawn

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RARECOLOREDDIAMONDS.COM>

-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-http://tinyurl.com/6l4thaf

Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s diamond is a 3.18 carat pear cut fancy yellow internally flawless Diamond. Last year the world’s largest fancy vivid yellow sold at auction. The 110.3 carat pear-shaped diamond called Sun Drop sold for $10.9m at Sotheby’s. Harold Seigel-See video of the Diamond here-http://tinyurl.com/6rvqk6x

-Rio Tinto’s Diamond Production -7% in 4Q. Rio Tinto’s diamond production fell 7 percent year on year to 2.967 million carats in the fourth quarter of 2011. The decline was mainly due to slow output at the company’s flagship Argyle mine, which incurred various maintenance shutdowns in the processing plant during the period. Production at Argyle dropped 14 percent to 1.918 million carats. Read more here-http://tinyurl.com/7smdpnu

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GOLD

-“Gold has demonstrated time and time again its ability to hold purchasing power. It looks expensive and people talk about bubbles, but it’s not.” Ross Norman CEO of Sharps Pixley Ltd

-“We are seeing steady demand, even as gold was turning down at the end of the year. Now, in January, we are seeing demand keeping up, extremely strong. So, there seems to be a totally different attitude to gold now and I expect for there to be incredible demand for 2012. We are just seeing the very beginning of it.” Egon von Greyerz

-CHART OF THE WEEK: With gold more than $250 off its August 2011 peak, today’s chart provides some long-term perspective in regards to the gold market. Today’s chart provides an illustration of the bull market in gold that began back in 2001. As today’s chart illustrates, the pace of the nearly 11-year bull market has increased over time.

However, over the past four and a half months the price of an ounce of the shiny metal has declined more than at any point since 2008. This latest pullback has brought gold down to support (green line) of its three-year accelerated trend channel. So while the upward trend in gold is still intact, the accelerated trend is currently being tested. Read more here-http://tinyurl.com/6vyyhq2


www.chartoftheday.com

-London Trader: Staggering Gold Demand Creating Shortages. If we get a pit close above $1,650 you could see a lot of scared shorts begin to cover. This could create a very quick move higher in the gold price. Also, if we get a pit close above $1,650, we are going to see a very large tranche of unfilled wholesale orders moving a lot higher with their bids, and that will become a base.

There are massive orders for sovereign entities under the market here. The Chinese are long-term thinkers and they really don’t care whether they are paying $1,600 or $1,700 for gold. What they do is get the best price they can. When the new floor eventually becomes $1,700, they will buy everything available at that price.

When it becomes $1,800 they will buy at that price. They are just looking to accumulate gold and they are never sellers, never. There are two things here. Yes, China wants a cheap gold price and they’ve been enjoying the fact the gold market was taken down.

They have recently taken another roughly 150 tons away from the Western central banks. The Western central banks essentially donated that gold in an attempt to prop up their paper currencies. Yet again these traitorous Western central bankers have given away more power.

I see gold as power and once again they have given it away to the Eastern Hemisphere. The Chinese continue to laugh. As much as the Chinese would like to have a cheap gold price and have this manipulation keep going, they also want to bring the renminbi to the center stage.

To them, it’s more important the Chinese currency becomes the world’s currency. The dollar, despite the latest rally, is dying, we all know it’s dying. So, the Chinese are moving to become the international currency of the world and the best way to do that is through gold. It’s a very clever tactic. Every time more gold arrives in China, the more their currency is backed, the closer they move technically to becoming the world’s reserve currency.” Read more here-http://tinyurl.com/7lga8ly

-John Embry: Gold to Rapidly Triple in Price on This Move. Read more here-http://tinyurl.com/6qnpulh

Jim Sinclair: There Will Be a Run on Gold Stored in the US. Read more here-http://tinyurl.com/75cujwb

-Keith Barron: Physical Gold & Silver to Crush Paper Markets. Here is what Barron said about a coming mania: “Oh yes, that’s coming. I met with a gentleman last week, I’m not going to mention his name because a lot of listeners would know who he is and he was saying to me, ‘Look, we haven’t even got to first base yet.’

He thinks gold is going to between $3,500 to $5,000. You get all of this talk in the media, especially on CNBC, saying that gold is in a bubble. Every time it goes up a couple hundred dollars it’s in a bubble again. It’s not in a bubble because the average Joe is not buying.”

“I remember when gold really did hit a bubble kind of market and was moving up $50 a day, that was a lot of money back then. They were lined up all the way outside the Bank of Nova Scotia, where a lot of gold sales were made, all the way out from the basement of the bank, where the vault was, up the stairs, out the main door and two times around the building. That’s around the whole block.

People were buying and selling places in line so they could get in the bank sooner and buy. We’re a long, long way from a mania like that, but we will see it. The American government, as we know, is cooking the books as far as the inflation numbers go. Anyone who buys groceries or gasoline certainly knows it’s getting more expensive every day.

“That’s just going to continue on. We are going to see it in Europe as well. The only way these various governments can create jobs and spend largesse is too print money. That’s very inflationary and that will take gold and silver much, much higher.

I’m extremely bullish on gold and we have seen some chop, but what I would be doing is just buying (physical gold) and holding. Then sit back and wait for the next crisis to unfold. That’s what is going to take it back up. I could see $2,000 to $2,500 later this year.

The catalysts are going to be international events and fear of inflation. You can see right now (President) Obama asked the debt ceiling to be raised in the US, the Greek debt crisis is exploding again and France is being downgraded. The whole (financial and economic) situation is looking really sick. The only way to bail these various countries out of the messes they are in is to print more money.” Read more here-http://tinyurl.com/7zr7usf

-Egon Von Greyerz: Silver Shortages & Gold to Accelerate Higher. When asked about the recent action in gold, von Greyerz said, “We like the action and it’s exactly what we’ve been predicting. My view is that we have bottomed and we are on the way to much higher levels. We are seeing a bit of sideways action here, but it’s sideways to upward and I think that will continue.

I like the pace, the fact that it’s not going up too fast, but I think we will see an acceleration to the upside in short order.” Central bankers don’t even understand gold. Most of them don’t even understand why they have it. If you listen to (Fed Chairman) Bernanke, he doesn’t have a clue as to why the US has it. As a matter of fact, as you know, he probably doesn’t have it anyway.

The US simply doesn’t have the 8,100 tons of gold they say they possess. “So the West doesn’t understand gold. The West has sold most of their gold holdings. There is only one game for Western central planners and that is staying in power and therefore printing more money. That’s the only game they know and gold doesn’t really play a role in that game.

Gold will play a role in the future when they realize the paper money is worthless, but, at that point, we will not see these present governments in power. The East understands gold, China understands gold, India understands gold, but the West doesn’t and sadly that trend will continue.

Individuals will become more and more aware of the fact that gold is the only way to protect them from what is going to happen. But at this point, of course, it’s only a very, very small minority that understands that. That will change as we go further along in this cycle. Read more here-http://tinyurl.com/846yw3u

-Yamada: Gold Strong, Bear Market in Stocks to Last Until 2022. Gold had a 96% advance from the breakout of the 2008/2009 period. That was an impressive rise and we had a subsequent, roughly, 20% decline. Amazingly, the uptrend from the 2008 low is still intact. So, I would say as long as gold holds above $1,600 or the slight breach that it made down to $1,560, that could be the initiation of a new consolidation.

Gold’s strength has been quite impressive, but it’s hard to go up 96%, come down (about) 22% and say you are going to race right off to a new high. I think it needs some time to go sideways at the very least. What we might have seen is gold was an easy profit center and toward the end of the year you saw some losses offset with gold. But I will say the 2008 decline took about 5 to 7 months, so we don’t want to get too ahead of the game here in saying it’s ready to turn up.” Read more here-http://tinyurl.com/6o49f82

-Adam Hamilton: The bottom line is the recent gold correction was amplified and accelerated by a couple major surges in the US dollar. This helped simultaneously drive gold to very-oversold levels and the dollar to very-overbought levels. But neither the excessive bearishness in gold nor the excessive bullishness in the dollar is sustainable.

The necessary reversals of both extremes are super-bullish for gold in the coming months. While an overbought dollar selling off and helping to catapult gold higher is very old-school, the resulting buying opportunities are as awesome today as they were back in the early 2000s.

As gold gains steam, more and more capital will flock back to it. And the universally-hated gold stocks, many hammered to ridiculous levels last year, are likely to stage a massive rally as the dollar once again launches gold. Read more here-http://tinyurl.com/7zcaek3

-Rick Rule: $100 Floor in Oil Now, Gold Strong, Juniors to Soar. When asked about gold, Rule responded, “You know, from a physical point of view, that is holding physical gold and silver bullion, I need to tell you I am a lot more comfortable owning gold, than not owning it. Volatility does not even move the needle for me (emotionally), what I am concerned about, personally and for my customers, is that we stay liquid. We want to have large amounts of liquidity and I consider bullion to be the ultimate form of liquidity. Read more here-http://tinyurl.com/6sfpvrg

-Chris Whalen: We Have Panic Right Now & Flight Into Gold. Read more here-http://tinyurl.com/8a8xpcl

-James Turk: 2012 to See Much Deeper Banking & Currency Collapse. Read more here-http://tinyurl.com/7nhr85t

-Jim Rickards: Currency Wars, Gold & Inflation Worse than 1970s. Read more here-http://tinyurl.com/84myt5f

-Jim Rickards: War With Iran has Begun, Gold to Break $2,000. Read more here-http://tinyurl.com/7xdt7gs

Pento: US to Default, Crushing Dollar & Creating Gold Explosion. U.S. debt and deficits are running over $1 trillion per annum and amount to over 700% of Federal revenue. And just last week, we learned that the monthly budget deficit climbed to $85.97 billion in December, from $78.13 billion in the same month a year earlier.

The only relief from such debt will be a default on the part of the United States. A sovereign U.S. default would be pernicious for the dollar and massively bullish for gold. The simple truth is the U.S. dollar is under increased assault from negative real interest rates, increased counterfeiting from the Fed and a national debt the government is attempting to inflate away.

That truth isn’t made less painful just because a European vacation is getting cheaper. Since the intrinsic value of the dollar continues to deteriorate, investors would do well to ignore the dollar’s temporary and beneficial measurement against the Euro and focus on its true fundamentals, which are forcing investors towards gold.” Read more here-http://tinyurl.com/7m73yaz

-China’s banks urge man on the street to invest in gold. With gold consumption in China expected to overtake that of India in the next few years, some of the country’s leading banks are already reaping the benefits as customers flock to new gold products. Read more here-http://tinyurl.com/7jsrlug

-Did China just overtake India as the world’s largest gold consumer? Read more here-http://www.gata.org/node/10881

-David Levenstein: Chinese demand, macroeconomic tensions to drive gold prices. Tensions between Iran and USA, the Eurozone Crisis, and Robust Demand from China will Push the Price of Gold to New All-time Highs. Read more here-http://tinyurl.com/7ppevex

-Clive Maund: Gold Market Update. Read more here-http://tinyurl.com/7nsgmnt

-Frank Holmes: Makes the Investment Case for Gold on CNBC. Watch more here-http://tinyurl.com/7cggtfl

-Frank Holmes: What the Next Decade Holds for Commodities. Read more here-http://tinyurl.com/6s4kojf

-Hubert Moolman: Fractal Analysis Suggests Massive Gold Rally Is Coming. Read more here-http://tinyurl.com/7qnrrv7

-John Browne: Fed Plays PR Games. It is widely known that the Fed uses its policy tools and public proclamations in order to influence the U.S. Treasury market. It is far less understood how its moves are equally directed at the stock market. From my perspective, it appears that the Fed have unstated policy directives to keep the Dow Jones index above 10,000.

At the same time it seems it has striven mightily to keep the price of gold from rising too fast. The markets are not free, but the Fed talks as if they were. The Fed’s negative interest rate policy forces yield-starved investors into the equity market. Not content with offering negative real interest rates as a means of forcing people to accept greater risks against their better judgment, it appears that the Fed intends now to use its economic forecasts as added inducement.

It is hard to see this as a legitimate activity for a central bank, least of all the world’s most powerful. Prudent investors are becoming wary. Already, many have lost faith in home ownership as a store of wealth and prefer to rent. Evidence indicates a growing distrust of equity markets as a source of capital enhancement.

If inflation becomes undeniably virulent, as some forecast it will be later this or next year, the Fed’s carefully constructed models will be completely discredited. Investors’ holdings of U.S. Treasuries or U.S. stocks, who had been convinced of the Fed’s forecasts, stand to be crushed. Precious metals offer one way out. However, the Government, the Fed and mainline media do all in their power to distort and discredit such investments. Read more here-http://tinyurl.com/729qh8f

-Morris Hubbartt: Many investors are convinced that the bottom is falling out of gold, and the gold bull market is finished. The weight of the technical and fundamental evidence suggests they are probably quite premature in making these statements. I would argue that gold is undervalued just based on the amount of fiat currency that has been printed over the past few years.

Much more money printing is likely to come. Technically, gold is exhibiting a textbook-style double bottom, which is very bullish. Look at the volume patterns on this chart, and the long-tailed candles that mark each bottom. Gold has also recaptured the 200 day moving average, which is another bullish event.

This chart shows no evidence of a top in gold. Quite the opposite is the case; gold is likely putting in a substantial bottom, and is poised to rise dramatically from this large double bottom formation. I have two scenarios for gold bullion prices. The first is a run straight to $2300 area by mid-year, with very little correction in the price.

The second scenario has gold also rising to $2300, but in December of this year. In the short term, it seems likely that gold will trade up to about $1700 on this move. At that point I expect a pullback accompanied by substantial commercial buying, as we have seen on every pullback over the last several months. Read more here-http://tinyurl.com/7vgc7sf

-Gold May Hit $2,000 an Ounce, Consultancy Says. Gold may reach a record high above $2,000 an ounce in late 2012 or early 2013, but the precious metal is nearing the end of a decade-long run that has lifted prices by more than 600 percent, metals consultancy GFMS said on Tuesday.

Gold has been a top-performing asset since 2001 as portfolio diversification, concerns over sovereign risk and rock-bottom interest rates have helped lift prices from a low near $250 an ounce in 2001 to a peak above $1,920 in September 2011. It is likely to surpass that level in the final quarter of 2012 or the first three months of next year, GFMS said, potentially breaking through the $2,000 an ounce level. Read more here-http://tinyurl.com/767y7xo

-Miners see gold peaking around $2,000/oz in 2012. Gold miners expect the price of the metal to continue climbing in 2012, with most respondents expecting a peak around $2,000 an ounce, according to a survey of gold companies by consultants PwC. Read more here-http://tinyurl.com/7bhxxvz

-Is Bullion Back? ‘Gold Is Still In a Super Bull Market.’ Read more here-http://tinyurl.com/6ot3ncj

-One Huge Chart That Has Everything You Need To Know About Gold. Morgan Stanley has made it no secret that they’re bearish on stocks and the economy. However, in this backdrop, they’ve also made it very clear that they favor gold. Read more here-http://tinyurl.com/6s682s6

-King World News: Bill Haynes of CMI Gold and Silver and futures market analyst Dan Norcini provide the weekly precious metals review. Listen here-http://www.gata.org/node/10885

-Gingrich Goes for Gold. The call by Newt Gingrich for the creation of a commission on gold to examine how America can return to a system of hard money is a step forward for him and the Republican Party. The former speaker issued his call at Columbia, South Carolina, at a policy forum on American global leadership. He used the phrase “hard money” to speak of a gold standard of the kind the Founders of America had in mind. It would mean, he said, “you can’t just hide from your problems. You’ve got to solve them.” Read more here-http://www.gata.org/node/10896

-Fox Business interviews Grandich about $2 million gold price bet. Watch more here-http://www.gata.org/node/10894

-J.S. Kim: Last year’s price suppression to fuel this year’s explosion. Read more here-http://www.gata.org/node/10890

-More traders notice gold’s regularly counterintuitive behavior. Read more here-http://www.gata.org/node/10883

-At last Financial Times notices that central banks do shady things with gold. Read more here-http://www.gata.org/node/10893

-New York Sun: Secrets of the Fed. Read more here-http://tinyurl.com/74a4um7

-With luck this soon will be an important estate-planning question. Leaving your gold fillings to your heirs. Read more here-http://www.gata.org/node/10877

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SILVER

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

-CHART OF THE WEEK: Silver Coin Sales May Signal Bear-Market End. The surge in the U.S. Mint’s sales of American Eagle silver coins in January may signal an end to the bear market in the metal. The chart shows the Mint sold 4.26 million ounces of the coins to authorized purchasers Jan. 3 through Jan. 10. At this pace, full-month deliveries may reach 14.2 million ounces, more than twice the record 6.422 million ounces sold in January 2011. Read more here-http://tinyurl.com/83pc2ld

-Morris Hubbartt: Silver is my asset of choice. The price has just appreciated by about 10%. You could wait for further light weakness to add to positions, but I want you to think about the enormous upside implications of this flag pattern. The MACD is positioned to drive the silver price up and out of the flag pattern. The slow “stokes” (Stochastics) look good, and the commercial buying and short-covering into the lows is incredibly bullish. Read more here-http://tinyurl.com/7vgc7sf

-“The total dollar value of the world’s three billion ounces of gold bullion has reached ridiculous levels relative to the dollar value of the world’s one billion ounces of silver bullion. At current prices, the dollar value of gold is 165 times greater than the value of the world’s silver. That’s way too much for two items so closely similar. Here’s another way of looking at it. Last week’s $23 rise in the gold price increased the value of the world’s gold bullion by almost $70 billion.

That’s more than twice as much as the total value of what all of the world’s silver bullion is worth. I’m talking about the change for one week in gold being twice the total value of all the silver in the world. That’s crazy and is due to silver being artificially manipulated in price.” Ted Butler via Ed Steer-Casey Research-Read more here-http://tinyurl.com/79ta8lx

-“The important takeaway is that a decent size chunk of physical silver will be taken off the market. It’s an open speculation as to what impact this will have on the price of silver, both short and long term. My guess is that while it certainly can’t be considered negative in any way, there are obvious forces that would prefer to make it look like it has no effect.

These forces will do what they can to mute the impact of a fairly large physical purchase. Unfortunately, these commercial crooks may have built up some physical reserves over the past six months or so and may be able to accommodate Sprott’s physical purchase without too much difficulty. A couple or a few more similar-sized purchases would have a big price impact, in my opinion.”

“I hope I’m wrong, but my sense is that Sprott is likely to get fairly quick delivery of whatever silver it purchases so as to avoid a repeat of the delivery delays that occurred the last time they purchased a chunk of silver. Eric Sprott has become an outspoken advocate of silver and antagonist against the silver manipulation and I doubt the suppliers will risk delivery delays to his fund and give him the opportunity to point to tightness. I think that tightness is there, just that the sellers will be able to hide it a bit longer.” Read more here-http://tinyurl.com/6r83h2l

-Keith Barron: Silver Update. When asked about silver specifically, Barron replied, “I really do think it’s possible to see $50 silver again this year. There have been various things in the press about potential oversupply of silver right now. I don’t see that in the numbers. My sources tell me that physical silver buying is very much intact.

The US Mint is selling silver American eagles like there is no tomorrow. The only thing that might be holding silver back are the games that are played in the paper market. I certainly see, in the future, a breaking away of the gold and silver, physical markets, away from the paper market. All it takes is for a big order to take delivery and the silver and the gold is not there in the vaults and this whole thing gets exploded wide open.” Read more here-http://tinyurl.com/7zr7usf

-Louise Yamada: Silver Market Update. When asked about silver specifically, Yamada remarked, “I think silver looks very similar to gold in the sense that it needs to consolidate a little bit more. It’s a smaller market so it was affected to an even greater degree. It went up 70% and it came down 46%. When you have come down to that degree you need a longer period of consolidation. A consolidation that stays above $25 would be nice. Read more here-http://tinyurl.com/6o49f82

-Egon von Greyerz: Silver update. When asked about silver specifically, von Greyerz stated, “There are shortages of silver. It’s more difficult to get hold of silver. We can see the intervention (manipulation), every day, in the silver market. It trades down in Europe and then up in the East. In spite of that the trend is clearly up. I can see silver exploding in the next few months. It should double in price in the next three to six months.” Read more here-http://tinyurl.com/846yw3u

-Andrey Dashkov: When Will Silver Make a New High? If there’s anything that sticks out from this bird’s-eye view of the past ten years of data, it’s that corrections are normal. And just as obvious is the fact that corrections end. As with gold, the silver bull market is far from over, regardless of any weakness we may see in the near term.

Don’t be the impatient investor who gives up too early. And trying to time the market for a short-term profit shouldn’t be the strategy in the midst of a long-term bull market. Instead, keep silver’s fundamentals in mind: its industrial uses are growing and, like gold, silver is money.

That said, we believe that the window for buying silver at $30 won’t be open for too long. The profit you someday realize from silver will be made buying now, when the price is low. Read more here-http://tinyurl.com/829yhhu

-Stephen Leeb: Why Gold & Silver are About to Soar. Leeb brought up the fact that we are seeing shortages in silver and, importantly, that gold production is declining. “What people don’t realize about silver is how illiquid silver is, and how little physical silver that is available in the market.

Now you have the Canadian, (Eric) Sprott, who has really been spot on for more than a decade, Sprott has just raised money and needs to take delivery of another 10 million ounces of silver. My question is, from whom? That’s the question.”

“Who is he going to buy it from? The Chinese, who need it for solar? It’s not around. 10 million ounces doesn’t sound like such a big number, but when you have such illiquid markets, it is a big number. In reality, it’s a very big number, especially when you already have shortages. People are already hoarding silver. The Chinese are also hoarding silver.

When you have a situation like that, you haven’t seen anything yet in the way of a bull market in silver. There’s no way of saying how high silver is going to go, but this is going to become an exceptionally scarce commodity.

I’m going to tell you right here that I think gold will end the year close to $3,000. Silver will end the year at all-time highs. My guess is the price of silver will end 2012 at $60, $70 or $80, and that will surprise a lot of people.” Read more here-http://tinyurl.com/7tmaqtp

-David Morgan: The Great Silver Market Myth! Watch more here-http://tinyurl.com/7su2smv

-Clive Maund: Silver Market Update. Read more here-http://tinyurl.com/o4j7

-Hubert Moolman: Fractal Analysis Suggests Higher Silver Prices Are Coming. Read more here-http://tinyurl.com/7ddqm6t

-Przemyslaw Radomski: A Short-lived Pause in the Silver Rally is More Than Likely. The next major targets for tops in silver $75 and $120. Read more here-http://tinyurl.com/7atts2b

-Steve St. Angelo: Silver coin production in U.S., Canada exceeds mine output. Read more here-http://www.gata.org/node/10882

-Silver Institute: Silver Newsletter for Dec 2011. Read more here-http://tinyurl.com/77ngwq5

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SOVEREIGN DEBT

-Fitch Says Greece to Default, Believes Will Be Orderly. Rating agency Fitch said on Tuesday that Greece would default on its debt, although it said that such a default was likely to take place in an orderly manner. “It is going to happen. Greece is insolvent so it will default,” Edward Parker, Managing Director for Fitch’s Sovereign and Supranational Group in Europe, the Middle East and Africa told Reuters on the sidelines of a conference in the Swedish capital.

“So in that sense it shouldn’t be a surprise to anyone.” The Fitch comments come after Moritz Kraemer, head of Standard & Poor’s rating agency’s European sovereign ratings unit, said on Monday Greece would default shortly on its debt obligations. Parker said that Fitch believed that even a voluntary agreement by private investors to take a haircut on Greek debt would constitute a default. Read more here-http://tinyurl.com/79s79ox

-Greece euro exit worse than catastrophic. A Greek exit from the euro zone would be worse than catastrophic and could provoke greater social unrest, Zimbabwe-style inflation and a military coup, said London-based hedge fund firm Toscafund. Read more here-http://tinyurl.com/886efcl

-Pimco’s Gross Says Greece to Default Following Downgrades. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Greece is heading for default. Read more here-http://tinyurl.com/7a3omnr

-World Bank fears Europe’s crisis could set off deeper global slump than Lehman collapse. The World Bank has slashed its global growth forecast and told developing nations to prepare for the worst, warning that Europe’s debt crisis could trigger an even deeper slump than the post-Lehman collapse three years ago. Read more here-http://tinyurl.com/86j6dq6

-S&P Cuts Credit Ratings for Nine Euro Zone Nations. Standard & Poor’s downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their coveted triple-A status but not EU paymaster Germany, in a Black Friday 13th for the troubled single currency area. Read more here-http://tinyurl.com/79rhsvd

-Stiglitz says European austerity plans are a ‘suicide pact.’ European governments have signed a “suicide pact” by imposing fiscal austerity plans that will collapse their economies, Joseph Stiglitz, the liberal economist, has warned. Read more here-http://tinyurl.com/88retp5

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U.S. DEBT-DEFICIT

Doug Casey: The US Government Is Bankrupt. Everyone knows that the US government is bankrupt and has been for many years. But I thought it might be instructive to see what its current cash-flow situation actually is. At least insofar as it’s possible to get a clear picture.

But rest assured that if the situation evolves the way I expect, the standard of living will drop steeply, financial markets are going to become chaotic and the US will become a quite repressive place for some time at least as long as the War on Terror lasts. I will bet you money on this. In fact, I am betting money on it.

So what can you do about it? Well, actually, there is nothing you can do about it. At least as far as changing the course of history is concerned. The best you can do is to speculate intelligently on further, new distortions that will be cranked into the system, as well as others that are inevitably going to be liquidated.

It seems to me that this is a trend that can no longer be turned around. The US government’s budget is, in fact, the biggest thing in the world; it won’t be turned around, because it is like a gigantic snowball rolling down a hill. It will only stop when it smashes into the village at the bottom of the valley. The best thing you can do is capitalize on it as well as you can and get out of its way while you do. Read more here-http://tinyurl.com/72fdz5o

-Treasury dips into pension funds to avoid debt. The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills. Read more here-http://tinyurl.com/7o5aj6d

-Illinois’ Unpaid Bill Crisis Just Keeps Getting Worse. Illinois keeps falling farther behind on its debt, officially the state has a backlog of more than $4.25 billion in unpaid bills. Illinois State Comptroller Judy Baar Topinka says when one factors in other bills, the figure is closer to around $8.5 billion. Those other outstanding bills include tax refunds, employee health insurance, and bills that have not yet reached her desk. Read more here-http://tinyurl.com/7s44pgx

-Congress’s Benefits Add to $674B Pension Gap. Almost 15,000 federal retirees, including former leaders of Congress, a university president and a banker, are receiving six-figure pensions from a system that faces a $674.2 billion shortfall. About one of every 125 retired federal civilian workers collects more than $100,000 in benefits annually. They include physicians, postal workers and presidential candidate Newt Gingrich, according to data obtained by Bloomberg News under the federal Freedom of Information Act. Read more here-http://tinyurl.com/7dfvt5g

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REAL ESTATE

-U.S. Housing Starts Drop 4.1%, Worse Than Forecast. Builders began work on fewer houses than forecast in December, capping the worst year on record for single-family home construction and signaling recovery in the industry will take time. Read more here-http://tinyurl.com/7xfdmbg

-The 10 States That Are Still Getting Crushed By Foreclosures. Read more here-http://tinyurl.com/7rboyge

-Fed blew the housing bubble, then sought to pop it, transcripts show. Read more here-http://www.gata.org/node/10876

-Canada Bubble Seen as IMF Risk With Record Low Rates: Mortgages. Read more here-http://tinyurl.com/7j4gg5h

-Phoenix Housing Rises as Canadian Buyers Seek 55% Discount in the Desert. Read more here-http://tinyurl.com/7t9qrvj

-China Developers Ease Home Sales. China’s biggest developers slowed home sales toward the end of 2011, bracing for the worst property market in three years as the government vows to keep real-estate curbs. Read more here-http://tinyurl.com/6ub7bul

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GEOPOLITICAL

-Russia says strike on Iran would be ‘catastrophe.’ Read more here-http://tinyurl.com/6sed5wz

-Iran Threatens U.S., Persian Gulf Cities with Missile Attacks. Read more here-http://tinyurl.com/7p2yaqd

-Iran’s UN Envoy Says Closing Strait of Hormuz Is an Option If Threatened. Iran’s ambassador to the United Nations said closing the Strait of Hormuz, the passageway for about a fifth of the world’s oil trade, is an option if his country’s security is endangered. “There is no decision to block and close the Strait of Hormuz unless Iran is threatened seriously and somebody wants to tighten the noose,” Ambassador Mohammad Khazaee said on the Charlie Rose show, according to a transcript of the interview. “All the options are or would be on the table.” Read more here-http://tinyurl.com/7zv6f7w

-Wen: Chinacompletely rejects” Iran developing nuclear weapons and supports the so-called five-plus one talks to find a solution to the issue, Chinese Premier Wen Jiabao said at a press conference in Doha, Qatar. The nation is implementing United Nations resolutions on Iran, and opposes any “extreme” actions in the Strait of Hormuz that would damage world interests, Wen said.

Still, China’s oil trade with Iran is “normal” and doesn’t worry him, Wen said. China, which counts Iran as one of its top petroleum suppliers, last week snubbed U.S. efforts to tighten restrictions on Iran, with a vice foreign minister saying his nation “opposes imposing pressure and sanctions.” Read more here-http://tinyurl.com/7r77uhl

Iran Threatens U.S., U.K., Israel After Assassination of Nuclear Scientist. Iran’s intelligence minister warned of a “firm response” to the killing of an Iranian nuclear scientist and a senior military adviser said “every means” will be used to defend “national interests” as the country faces growing pressure to curtail its nuclear program. Read more here-http://tinyurl.com/6o6q4q8

-Iranian currency and economy collapsing under tighter U.S. trade sanctions. Read more here-http://www.gata.org/node/10887

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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