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WORLD FINANCIAL REPORT ON RADIO NOVEMBER 23 2012
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CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: A Huge Part Of The Fiscal Cliff Is Something That’s Barely Being Talked About. This is a very useful chart here from Deutsche Bank breaking down various components of the so-called “Fiscal Cliff,” the series of spending cuts and tax hikes that will kick in on January 1. It might come as a surprise to you that one of the largest single components of the fiscal cliff is the Payroll Tax Holiday, a stimulus measure that was passed by Obama and the Congress (Deutsche Bank has it as the largest single component of the cliff, although Goldman Sachs has slightly different math). The Bush Tax cuts and the sequester get way more play in the media, but the payroll tax cut stimulus is a huge component. Read more here-http://read.bi/TcPVur
-CHART OF THE WEEK: Americans donate $8 million to cut national debt. The debate about the national debt has already paid off: Individual Americans pitched in nearly $8 million of their own money to help reduce it in fiscal 2012. That’s more than double the total from the year before. Donations for the national debt had averaged about $3 million a year since 2009. “So this is obviously a big jump,” said Mckayla Braden, a spokeswoman for the Bureau of the Public Debt.
But even this year’s hefty total of $7.7 million is barely a drop in the bucket. That sum represents just 0.000007% of the approximately $1.1 trillion deficit the U.S. ran in the latest fiscal year. The country’s total outstanding debt is more than $16 trillion perilously close to the $16.394 trillion debt ceiling, and the Treasury Department expects to hit the legal borrowing limit by the end of this year. Read more here-http://cnnmon.ie/XCZkCf
-“Inflation is the one form of taxation that can be imposed without legislation.” Milton Friedman
-“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.” Sam Ewing
-“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” John Maynard Keynes
-“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.” Alan Greenspan
-Dollar Doomsayer Predicts Fed Won’t Stop Printing. When it was released a year ago this month, James Rickards’ “Currency Wars: The Making of the Next Global Crisis” was widely hailed and quickly adopted as a guidebook of sorts for economic conservatives, Fed critics and especially gold bugs, given Rickards’ support for a return to the gold standard. Read more here-http://bit.ly/UJArwV
-Bernanke: Fiscal Cliff Poses ‘Substantial Threat’ to Economy. He repeated a warning that running over the $600 billion “cliff” of expiring tax cuts and government spending reductions could derail the U.S. recovery, and said worries over how budget negotiations will be resolved were already damaging growth. Read more here-http://fxn.ws/RUQwSh and http://bloom.bg/SU1RjY
– Jeremy Grantham: We’re Headed For A Disaster Of Biblical Proportions. Read more here-http://read.bi/WkHjSU
-Jeremy Grantham’s US Economic Growth Forecast Through 2050 Is The Most Depressing Forecast You’ll Ever See. Read more here-http://read.bi/Wzrz3h
-Kyle Bass: There’s A New School Of Economic Thought That Will ‘Lead Sheep To The Slaughter’. In a new investor letter posted on ZeroHedge Bass takes aim at critics who think that Japan (or the US, presumably) can create money at will, and not have to worry about their burgeoning national debt loads. The fallacy of the belief that countries that print their own currency are immune to sovereign crisis will be disproven in the coming months and years.
Those that treat this belief as axiomatic will most likely be the biggest losers. A handful of investors and asset managers have recently discussed an emerging school of thought, which postulates that countries, as the sole manufacturer of their currency, can never become insolvent, and in this sense, governments are not dependent on credit markets to remain fiscally operational. It is precisely this line of thinking which will ultimately lead the sheep to slaughter. Read more here-http://read.bi/Wm3h8f
-Zerohedge.com: A Major Crisis Indicator Just Hit Its Highest Level Ever. Read more here-http://read.bi/Wza0QR
-IMF May Classify Aussie, Canada Dollar as Reserve Currencies. The International Monetary Fund said it’s considering classifying the Australian and the Canadian dollars as reserve currencies. Read more here-http://bloom.bg/T67H25
-Canada September Retail Sales Gain Less Than Forecast. Read more here-http://bloom.bg/Y6oFn9
-Pension Fund Gains Mean Worker Pain as Aramark Cuts Pay. Rick Thorne worked as a custodian in Chelmsford, Massachusetts, schools for 22 years, earning $20 an hour cleaning floors, cutting grass and setting up for assemblies in the community, about 30 miles (48 kilometers) northwest of Boston. Read more here-http://bloom.bg/Qb9Hsy
-White House Gave $1 Million To Battery Maker A123 The Day It Filed For Bankruptcy. Read more here-http://read.bi/TYI1W3
-Shadow Banking Grows to $67 Trillion Industry, Regulators Say. The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the Financial Stability Board said in a report, which utilized more data than last year’s probe into the sector. Read more here-http://bloom.bg/TYMPL3
-Purple Palace Abandoned Shows China Shadow-Banking Risk. Read more here-http://bloom.bg/TgCThz
-Billions in bearer bonds in NY vault could be lost to hurricane water damage. Read more here-http://www.gata.org/node/11943
-CME’s eurodollar futures contract was central to LIBOR rigging. Read more here-http://www.gata.org/node/11948
-Billionaire Wilbur Ross, This Will Revolutionize The World. Read more here-http://bit.ly/TesCjD
-Boomers Report No Savings at All. With fewer pensions and more debt, they face retirement challenges their parents didn’t. Read more here-http://bit.ly/10u7Ktf
-Give Thanks for Low Food Prices as They’ll Rise Next Year. Americans may want to freeze the leftovers from Thanksgiving dinner, as retail food prices are expected to rise next year, sparked by the country’s worst drought in more than half a century. Read more here-http://bloom.bg/UKQpqN
-Target Turkey Dinner Costs Less Than Wal-Mart. A Thanksgiving Day turkey dinner costs less at Target Corp. than at Wal-Mart Stores Inc., the world’s largest retailer, according to a Bloomberg Industries analysis. Read more here-http://bloom.bg/UJRfUL
-Threat of ‘Spectacular’ Cyberattack Looms. The U.S. is facing unprecedented cyber threats. And businesses and government are at risk, said Eric Rosenbach, Deputy Assistant Secretary of Defense for Cyber Policy in an interview with CNBC. Just one month ago, Secretary of Defense Leon Panetta made headlines when he warned that the U.S. is in a “pre-9/11 moment” or a “Pearl Harbor” scenario, referring to a potential chain of cyberattacks against the country. Read more here-http://bit.ly/WyrJI4
-Buried treasure! Widow found rare Queen Anne coin minted with stolen Spanish gold worth £120,000 as she cleared late husband’s chest of drawers. Read more here-http://bit.ly/QZD2Yj
–Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a 0.51 Carat Radiant Cut Fancy Intense Purplish Pink Argyle. Harold Seigel-Watch video of the Featured Diamond here-http://bit.ly/LIsp98
-Rare Colored Diamonds. Building and Protecting Wealth with Rare Colored Diamonds. In today’s complex world of modern investment there is an almost unlimited range of options for the sophisticated, high net-worth investor to consider. Stocks, bonds, futures, mutual funds, REITS, SPDRS, TIPS, precious metals, oil, gas, real estate, partnerships and business opportunities are just a few of the most common ones. Each of these have their own unique advantages and disadvantages, but there is one very special type of investment vehicle that offers a distinct set of advantages that no other form of investment can match: rare colored diamonds. Read more here-http://bit.ly/SVNvk5
-“Printing money is the only answer the central planners have for everything, but it does nothing except buying some time, at a cost of making the problem that much worse. All of this of course is very bullish for gold and silver.” James Turk
-“So eventually people are going to realize they are going to have to have assets which are not subject to devaluation by governments. That’s one of the reasons for about 10,000 years why people have tended to go to gold whenever they didn’t really trust their governments too much.” Don Coxe
-CHART OF THE WEEK: The Dow-Gold Ratio. For some perspective on the long-term performance of the stock market, today’s chart presents the Dow priced in another global currency gold (i.e. the Dow-gold ratio). For example, it currently takes less than a mere 7.5 ounces of gold to ‘buy the Dow’ which is considerably less than the 44.8 ounces it took back in 1999. Priced in gold, the Dow has been in a massive 12-year bear market. The current downtrend channel is the third of this bear market. While this latest channel is the least steep of the three, the Dow priced in gold has just failed to punch through resistance for the fourth time. Read more here-http://bit.ly/T5yY4y
–Soros Buying Gold as Record Prices Seen on Stimulus. Gold’s 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central bank stimulus spurs investors from John Paulson to George Soros to accumulate the highest combined bullion holdings ever.
The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.66 billion bet through the SPDR Gold Trust, the biggest gold-backed exchange-traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show.
Central banks from Europe to China are pledging more steps to boost growth, raising concern about inflation and currency devaluation. Investors bought 247.5 metric tons through ETPs this year, exceeding annual U.S. mine output. While both sides said talks Nov. 16 between President Barack Obama and Congress over the so-called fiscal cliff were “constructive,” the Congressional Budget Office has warned the U.S. risks a recession if spending cuts and tax rises aren’t resolved.
“We see gold as a hedge against the follies of politicians,” said Michael Mullaney, who helps manage $9.5 billion of assets as chief investment officer at Fiduciary Trust in Boston. “It’s a good time to garner some protection in portfolios by having some real asset like gold.” Read more here-http://bloom.bg/UMd3z7
-Brazil Boosts Gold Reserves to the Highest in More Than 11 Years. Brazil raised its gold reserves for a second month in October to the highest level in more than 11 years as emerging nations from Kazakhstan to Russia boosted holdings by more than 40 metric tons. Read more here-http://bloom.bg/WmBdl3
-ScotiaMocatta: ‘We would not be surprised to see gold prices reach $2,200/oz.’ “Given the concern over EU and US debt and the ongoing quantitative easing, we remain bullish for gold,” says ScotiaMocatta in its Precious Metals 2013 Forecast for gold. Read more here-http://bit.ly/TfPS3W
-Gold Seen by Merrill Lynch Rallying Above $2,000 Next Year. Gold is poised to rise above $2,000 an ounce next year, while lack of clarity on demand outlook and policies in China dim prospects for industrial metals, according to Merrill Lynch Wealth Management, which oversees more than $1.8 trillion for clients. “We are holding gold at the moment,” Bill O’Neill, chief investment officer for Europe, Middle East and Africa, told reporters in London. “We just use it as a form of diversification, a form of catastrophe insurance, but we are actually looking for a move above $2,000.” Read more here-http://bloom.bg/Y7UBYn
-Greg Hunter: Interview with Eric Sprott, Central Banks’ Gold Likely Gone. Money manager Eric Sprott says, “The central banks’ gold is likely gone with no realistic chance of getting it back.” Don’t expect this revelation to get any coverage by the mainstream media. In an interview last week, Sprott’s analysis was met with words such as “gold bug” and “conspiracy theory.” Sprott answers that sort of disrespect by saying, “We’ve had so many conspiracies, I don’t know why anyone would think this was unusual.”
To back up his point, he named “LIBOR, electricity markets in California and the Madoff” scandals. Sprott’s analysis shows a “flat supply” and at least a “2,500 ton net increase in gold demand” since 2000. “Where’s all the gold coming from?” asks Sprott. He says Western central banks “keep supplying this market with product in order to keep the price down so nobody knows how vulnerable the situation is.” Sprott, who manages nearly $10 billion in assets, boldly proclaims, “We have a shortage of gold.” Read and watch more here-http://bit.ly/UZpgGG
-Greg Hunter: Interview with Nick Barisheff, Hyperinflation and Complete Collapse. Asset manager Nick Barisheff says, “There’s never been a fiat currency in history that didn’t end in hyperinflation and complete collapse.” Barisheff thinks that Treasury Secretary Tim Geithner’s most recent call to have an “unlimited debt ceiling” for the U.S. was “just telling the truth.” That’s essentially what we have now with “open-ended” money printing by the Fed. Barisheff adds, “All it’s doing is postponing a problem it makes it bigger and eventually it blows up.”
Forget about remedies for the economy, it’s too late. Barisheff says, “We’ve passed the point of this getting fixed.” Barisheff thinks if the Fed’s gold holdings are ever audited, there will be a “gigantic short-covering rally multiple bankruptcies and a massive loss of confidence” in the dollar because much of the gold is gone or leased out. Barisheff thinks the gold price could be “easily double” right now. That’s because Barisheff believes, “What’s kept the price down is the artificial leased gold going onto the markets.” Read and watch more here-http://bit.ly/UVIfw5
-John Embry: Fed’s Move Will Only Fuel Inflation. Read more here-http://bit.ly/XHRjvU
Since the bull market in gold began in the year 2001, a new high took place at every LTD (Long-Term Delta) #4 high. All LTD #4’s were highs. Gold is now moving up to LTD #4 high due February 2014. If gold arrives on the due date and touches the upper trend line the price will be over $3,000 (the arrow in the chart below is pointing to a $3,000+ target for gold by February 2014).
-Frank Holmes: 3 Events Worth Watching. Read more here-http://bit.ly/WyjCeG
-Adam Hamilton: Bullish PM Technicals. With the US stock markets falling sharply since the elections, shell-shocked investors are scrambling for the exits. And this mass exodus is certainly rational in light of 2013’s record tax hikes looming for American investors. But with interest rates near record lows, cash yields nothing and bonds are hyper-risky. So a fantastic alternative for capital is the precious metals, which are very cheap technically.
For many contrarians, the investment potential of precious metals is blindingly obvious. Over the past decade or so, gold and silver have rocketed 638% and 1105% higher at best! But despite these stupendous gains, investment in precious metals remains low. The financial establishment has long discouraged investors from buying gold and silver, as they don’t generate all kinds of fees like stocks.
The bottom line is the precious-metals technicals are very bullish today. Gold, silver, and the HUI gold-stock index are all low relative to their 200-day moving averages following long consolidations. In the past, these very conditions have ignited major uplegs. The rotten sentiment that continues to plague this beaten-down and undervalued sector greatly amplifies this bullishness. The PMs are truly due to soar.
And the timing couldn’t be more fortuitous with the general stock markets rolling over. With much higher taxes and a continuing weak economy to look forward to, investors don’t have many appealing options. But the excessive government spending the Fed is monetizing will lead to serious inflation. So gold, silver, and their best miners’ stocks offer a fantastic refuge to grow your capital in a tough environment. Read more here-http://bit.ly/QxvTyD
-Michael Pento: Risk Assets Are Ready To Get Red Hot & Soar. So what’s the problem? There is only one; and it is something that should go away by January at the very latest. The U.S. is currently going through a perfunctory pretense that we actually care about debt and deficits. In fact, the markets now fear that there is a significant chance that the 2013 fiscal deficit would be slashed by 70-90%. If such an unlikely scenario were to occur, most of the Fed’s money printing would lay fallow.
That’s because for the broader monetary aggregates to increase they need some entity to borrow from banks. Since the private sector has been in a deleveraging mode for years, the only entity that has been borrowing with alacrity has been the Federal Government. If they were to stop borrowing money in a trenchant fashion, the economy would temporarily take a nose dive along with most asset prices.
However, both Republicans and Democrats realize that being blamed for a recession is a fast ticket out of power. Therefore, once again our government will most likely punt on taking any serious measures towards balancing the budget. After the charade in D.C. ends, look for all those bullish factors behind risk assets to flood the markets at once, and send the gold market to record nominal highs next year. Read more here-http://bit.ly/XH8SfH
-Art Cashin: Prepare For Currency Wars & Ground Wars. Read more here-http://bit.ly/UZrwOe
-Ben Davies: There Is A New Buyer Entering The Gold Market. So I really think that the market feels very quiet at the moment, but I think the complacency is very much apparent in the pricing of volatility. I maintain that we will be knocking on $2,000 by the end of the year into January time. That’s the thought process. I suspect the way the option market is priced is very conducive to an upside move. Historically when we’ve seen these levels of low implied volatility relative to historical vol., the move tends to be a trajectory higher. Read more here-http://bit.ly/TestwO
-Robert Fitzwilson: We Are Speeding Towards Economic & Social Devastation. Read more here-http://bit.ly/R2IfP6
-GATA consultants Kirby and Turk appear on ‘Keiser Report.’ Read more here-http://www.gata.org/node/11940
-Future Money Trends: The Day the World Ended. Read more here-http://www.gata.org/node/11953
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
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 60 to 1 with gold at $2,500 the silver price would be $41.67
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
-“Silver touched its 50% Fibonacci retracement level last week, and rallied strongly from there. We may be entering the eye of the debt storm, so I prefer to buy physical metal, and hold it for long term capital gains. The immediate target is $35.44, and once that is acquired I am projecting that a stronger move will carry this mighty metal to the $44 area.” Morris Hubbartt
-In silver, the headline total commercial net short position increased by a moderate 1,300 contracts, to 51,000 contracts. This was essentially the first increase in 5 weeks, the same as in gold. The real story was in the details. Somewhat surprisingly, the silver raptors actually bought an additional 1,300 contracts, increasing their net long position to 9400 contracts, their largest net long position since August 21.
The standout feature was that the big 4 (read JPMorgan) sold 2,000 additional contracts short, markedly increasing the big 4’s concentrated short position on only a modest advance in the price of silver. It would be hard not to classify this concentrated short selling as overt price capping. When one trader does most of the new short selling, price-capping is the first motivation that comes to mind, as free market sellers are more interested in getting the highest price possible, not in halting a price rally.
Seeing how the new silver short selling was due to JPMorgan, it is reasonable that JPM had the same motive in gold as it had in silver, namely, keeping the price rally from picking up a head of steam. Therefore, I would bet JPM was the big gold short seller this [past reporting] week as well. Silver analyst Ted Butler November 17 2012
-I would calculate JPMorgan’s concentrated short position in COMEX silver futures to now be 33,000 contracts, only 1,000 contracts below their recent peak. After removing spread positions from the new data, JPM’s silver position is 32.9% of the true net total market. This is so off the charts as to defy comprehension. Nothing else comes close to being the critical factor in silver. If we all live long enough to see any legitimate position limit regime in silver, JPMorgan’s current dominant position would not be allowed. That position is more than six times larger than the loose-as-a-goose limits proposed by the CFTC and more than twenty times the 1,500 contract position limit proposed by thousands of public comments. Silver Analyst Ted Butler November 17 2012
-“My reaction to the Russia Today interview with Bart Chilton is two-fold. First, I am elated that the subject of the silver manipulation has come to be so widely understood. As I need not remind you, this has been my main professional focus for more than 25 years. The main reason it obsesses me is that it is such a serious matter, as no market crime is more important than price manipulation.
Since discovering that JPMorgan was the big silver short 4 years ago due to CFTC correspondence to lawmakers, I have tried my level best to convince others of JPM’s involvement. Considering how widespread has become the awareness that it is JPMorgan at the heart of the silver manipulation, I can also state that I am elated about that as well. While I am most grateful for the financial support from subscribers and from Investment Rarities that has enabled me to delve into and make known the manipulation, my chief motivation was always to end a market crime that I found most offensive.
How could I not be ecstatic that so much has been accomplished?” “My second reaction is different. I’m appalled that the CFTC and the CME Group have not dealt with this matter in a forthright and aboveboard manner. Concentration is an incredibly specific issue and JPMorgan holds a manipulative share of the COMEX silver market, currently over 32% on the short side. The Hunt Brothers were judged guilty of manipulating the silver market for holding a 20% share in 1980.
Had there ever been a single participant that held 32% of the long side of COMEX silver since 1980, it is a certainty that the CFTC and the CME would not have rested until that position was eliminated. Yet for more than 4 years, the CFTC has only pretended to investigate while JPMorgan manipulated the silver market continuously.” Silver analyst Ted Butler November 14 2012
-Silver price to ‘increase 400pc in three years.’ The silver bull run will continue says investment specialist Ian Williams of Charteris Treasury. “Silver is about to enter a sustained bull market that will take the price from the current level of $32 an ounce to $165 an ounce and we expect this price to be hit at the end of October 2015,” he predicted. “This forecast is based entirely using technical & cyclical analysis and is in keeping with the mathematical form displayed so far in the bull run that has taken Silver from $8 an ounce in 2008 to its current price of $32 an ounce having hit $50 an ounce in 2011.” Mr. Williams said that the silver price was more volatile than gold, but that he expected silver to continue to dramatically outperform gold. The Charteris manager said that macro fundamentals were supportive for the silver price, such as the re-election of President Obama, who supports Ben Bernanke’s policy of quantitative easing. Read more here-http://bit.ly/U294lw
-Silver prices may climb as much as 38% in 2013 GFMS. Global head of metals analytics, Philip Klapwijk, says silver prices may rise as much as 38% next year from current levels as a weak global economy spurs safe-haven demand for the metal. Read more here-http://bit.ly/XJwn6z
-Greg Hunter: Interview with Chris Duane, The System Will Collapse, It Must Collapse. Duane trusts physical silver, and he thinks its 53 to 1 silver to gold ratio per ounce makes silver attractive. Duane thinks he could make a good case for “a one-to-one silver to gold ratio, especially with all the paper manipulation.” Duane says, “The system will collapse, it must collapse, and people will learn a very difficult lesson.” In the next move up, Duane see’s silver “pushing past $50 per ounce.” Watch more here-http://bit.ly/XK9Vdk
-Ron Rosen: The Roadmap For $3,000+ Gold, $100+ Silver & 1,650 HUI. Read more here-http://bit.ly/Usow8W
Silver is also moving up to LTD #4 high. Every peak in silver has either touched the upper trend line or peaked slightly above or slightly below. When silver peaks at LTD #4 high in 2014 the price should be between $100 and $115. (The arrow in the chart below is pointing to a $100 to $115 target for silver by February 2014).
-Steve St. Angelo: The Forces That Will Push Silver Over $100. Read more here-http://bit.ly/WDs4cP
-Captain Hook: A $50 Bill, Buy Silver. Read more here-http://bit.ly/Wm3AQt
-Bob Moriarty: Silver is at a major bottom. Read more here-http://bit.ly/TRYnxy
-Scott Pluschau: Silver is relatively strong in the world of risk these days. Read more here-http://bit.ly/SYQnvx
-Silver Trade Drops 30% on China Bourse as Industry Use Falls. Silver trading on the largest spot market in China, the second-largest consumer, tumbled this year as slowing growth cut industrial use, said a bourse official. Volume on the Shanghai White Platinum & Silver Exchange dropped about 30 percent from a year earlier to 1,000 metric tons, said Gao Huijie, chief executive officer. Industrial demand represents most transactions on the bourse, where about 20 percent of China’s annual demand is traded, he said.
Silver, this year’s best performing precious metal, has increased 19 percent in 2012 amid investor demand for a hedge against inflation. China’s economy, the world’s second biggest, decelerated for seven straight quarters through the end of September to 7.4 percent, the slowest pace in three years. “This year is shaping up for a slowdown as we’re still in the middle of a de-stocking process along with weakening physical demand,” Gao said. Trading on the Shanghai-based market is a gauge of physical demand because transactions result in spot delivery, he said.
About 67 percent of the country’s demand comes from industrial use in photography, solar and electrical appliances, according to Beijing Antaike Information Development Co. China’s industrial demand for silver has usually grown at an annual 5 percent to 7 percent in the past few years, Gao said. Demand declined in the first nine months before stabilizing and showing some recovery since the start of November, he said. Read more here-http://bloom.bg/Tj1mmj
-Silver Institute: Industrial silver demand to decline 6% this year. A report for the Silver Institute projects a new record high in silver industrial demand in 2014, which account for 57% of total silver fabrication in that year. Read more here-http://bit.ly/UNocPX
-Jeff Nielson: Silver’s smoking guns of price suppression. Read more here-http://www.gata.org/node/11955
-Andrew Maguire: Price suppression mechanics of GLD and SLV. Read more here-http://www.gata.org/node/11951
-CFTC to challenge court ruling on position limits. Read more here-http://www.gata.org/node/11939
-CHART OF THE WEEK: Here’s Who Gets Slammed If The US Goes Off The Fiscal Cliff. Much of the discussion about fixing the fiscal cliff has been at the abstract level: the need to cut federal spending by $2.5 trillion and raise $1.6 trillion in revenue over the next decade. But those big numbers obscure real pain that could be inflicted at the local level where federal spending in some places is a huge part of the economy and where the government is the only employer in town. Read more here-http://read.bi/Sby8Gc
-Feldstein Says U.S. Fixing Cliff May Not Avoid Recession. Harvard University economics professor Martin Feldstein said the U.S. economy may fall into a recession next year even if Congress and President Barack Obama avert the full brunt of the so-called fiscal cliff. “You are perilously close to the edge of another recession even if we don’t go over the fiscal cliff,” Feldstein said in a interview from New York. The end of payroll tax cuts will reduce gross domestic product by about 1 percentage point in 2013, and other tax increases and spending cuts may bring “over 2 percent of GDP tightening,” he said. Read more here-http://bloom.bg/10h2cDl
-Treasury Secretary Geithner: Lift Debt Limit to Infinity. Treasury Secretary Timothy Geithner said Friday that Congress should stop placing legal limits on the amount of money the government can borrow and effectively lift the debt limit to infinity. On Bloomberg TV, “Political Capital” host Al Hunt asked Geithner if he believes “we ought to just eliminate the debt ceiling.” “Oh, absolutely,” Geithner said. “You do? Will you propose that?” Hunt asked.
“Well, this is something only Congress can solve,” Geithner said. “Congress put it on itself. We’ve had 100 years of experience with it, and I think only once last summer did people decide to use it to threaten default on the American credit for the first time in history as a tool for political advantage. And that’s not a tenable strategy.” Hunt then asked: “Is now the time to eliminate it?” “It would have been time a long time ago to eliminate it,” Geithner said. “The sooner the better.” Read more here-http://bloom.bg/TgzQ9f and http://bit.ly/T58BMc
-France Loses Top Rating at Moody’s in Blow to Hollande. France lost its top credit rating at Moody’s Investors Service, which also maintained a negative outlook for Europe’s second-largest economy, citing what it called a worsening growth outlook. France was cut to Aa1 from Aaa, the rating company said. The Moody’s downgrade follows one by Standard & Poor’s in January and increases pressure on President Francois Hollande to find ways to bolster growth. “France’s fiscal outlook is uncertain as a result of its deteriorating economic prospects, both in the short term due to subdued domestic and external demand” and “structural rigidities” in the longer term, Moody’s said in a statement in Frankfurt. Read more here-http://bloom.bg/SfA8eS
-EU Spars Over Budget as Chiefs See Possible Deadlock. Divisions between rich and poor countries flared over the European Union’s next seven-year budget, leading German Chancellor Angela Merkel to rule out an accord until the new year. France defended farm subsidies, Britain clung to a rebate and Denmark demanded its own refund, while countries in eastern and southern Europe said reduced financing for public-works projects would condemn their economies to lag behind the wealthier north. Read more here-http://bloom.bg/V0nWmY
-Europe Fails to Seal Greek Debt-Cut Deal in IMF Clash. European finance ministers failed to agree on a debt-reduction package for Greece after battling with the International Monetary Fund over how to nurse the recession-wracked country back to fiscal health. With creditors led by Germany refusing to put up fresh money or offer debt relief, the finance chiefs were unable to scrape together enough funds from other sources to help alleviate Greece’s debt burden, set to hit 190 percent of gross domestic product in 2014.
Greece’s fiscal woes have defied three years of rescue efforts, rekindling doubts about Europe’s crisis-containment strategy and maintaining a cloud over the euro, postwar Europe’s signature economic accomplishment. More than 11 hours of talks broke up early today in Brussels without an agreement. That leaves the next aid payment, which has been held up since June, frozen until at least another emergency ministers’ meeting on Nov. 26. Read more here-http://bloom.bg/TegAH6
-Kyle Bass: Germany Could Exit The Euro In ‘3-4 Years’. Bass said that the E.U. is “three times more levered” than the U.S. and that the entire system is “on life support.” Read more here-http://read.bi/Sd9GEm
-RBC: Canadian homes slightly more affordable in third quarter. Royal Bank’s latest housing affordability report says home ownership became more affordable in the most recent quarter due to a modest decline in home prices and gains in household incomes. RBC’s affordability index for a detached bungalow stood at 42 per cent of income nationally in the second quarter, one percentage point lower than the third quarter of 2011. That means an owner would need to spend 42 per cent of pre-tax annual income to pay for mortgage payments, utilities and property taxes. Read more here-http://bit.ly/XGKP0j
-Sales of Existing U.S. Homes Rise Unexpectedly. Sales of previously owned U.S. homes unexpectedly climbed in October, showing record-low mortgage rates are helping spur the world’s largest economy. Purchases of existing houses increased 2.1 percent to a 4.79 million annual rate, figures from the National Association of Realtors showed in Washington. Property values rose over the past 12 months by the most in seven years as inventories dropped to the lowest level in almost a decade. Read more here-http://bloom.bg/QZwrNw
-New York City Will Demolish Hundreds of Storm-Hit Homes. New York City is moving to demolish hundreds of homes in the neighborhoods hit hardest by Hurricane Sandy, after a grim assessment of the storm-ravaged coast revealed that many structures were so damaged they pose a danger to public safety and other buildings nearby. Read more here-http://nyti.ms/TfNwlN
-Wall Street Kept Winning on Mortgages Upending Homeowners. Rebecca Black abandoned her dream house on Hazelwood Road in Memphis, Tennessee, in 2010, a year after the recession ended. As the U.S. economy grew, Black’s world shrank. Today she rents an apartment about the size of her old living room and works for the same $12 an hour she’s earned for years. Read more here-http://bloom.bg/Qb7vBA
-Lower Manhattan Renters in Limbo as Apartments Stay Shut. Shana Loomis likes living on lower Manhattan’s West Street because of her “reasonable” rent, rooftop views of the Statue of Liberty and access to Battery Park for her 75-pound black labrador. What she doesn’t like is being displaced twice in two years because of a hurricane this time, for almost a month. She’s paying 17 percent more rent on a smaller, temporary apartment uptown while her building is closed following superstorm Sandy. Read more here-http://bloom.bg/UJUQCj
-Miami Booms Like Never Before on Rental Demand. Miami’s roller coaster real estate market is booming again after its worst crash left dozens of unfinished buildings and failed condo projects. Read more here-http://bloom.bg/10vuQ2P
-London Bankers Become Landlords as Rents Hit Record. Vivek Jeswani became a landlord by accident when Deutsche Bank AG transferred him to New York two weeks after he moved into a new home in central London. Now back in the U.K., Jeswani views the apartment in Baker Street, the fictional home of Sherlock Holmes, as one of his best assets and is about to buy another home to expand his rental business. Read more here-http://bloom.bg/TcxaY0
-Spain: Residency for foreigners who buy houses. Looking for a new place to call home? Spain is hoping to give you a little bit more than a welcome basket of baked goods if you decide to move there. In an attempt to reduce the country’s bloated stock of unsold homes, the government is set to offer permanent residency to any foreigner provided they buy a house or apartment worth more than €160,000 ($200,000). Read more here-http://yhoo.it/QZsCrR
-‘Day of Reckoning’ Looms for Asia’s Priciest Property Markets. Weak economic growth, oversupply and measures to keep a lid on house prices suggest that Asia’s priciest property markets, Singapore and Hong Kong, now face a ‘day of reckoning’ after several years of robust gains, Nomura analysts warn. Read more here-http://bit.ly/TQ4qm4
-CHART OF THE WEEK: Israel’s Iron Dome. Read more here-http://bit.ly/WlYQKF
-How Israel Developed Such A Shockingly Effective Rocket Defense System. On the receiving end of Hamas’ unremitting rocket campaign, Israel has been looking for an effective defense for years. Read more here-http://read.bi/10kihrW
-Israel Wages Cyber War With Hamas as Civilians Take Up Computers. Knowledge of computer code is proving to be as important to Israel’s conflict with Hamas as the Iron Dome system intercepting rockets from the Gaza Strip. In a government building in Jerusalem, technicians in civilian clothes sit in front of a bank of screens, trying to deflect millions of attempted attacks on Israel’s government websites. A map on the wall shows sites where virtual attacks are being carried out around the world, updating every few seconds. Israel and the Palestinian territories stand out with a big red flame. Read more here-http://bloom.bg/Sd3jRv and http://bit.ly/T7nlds