Thursday, January 31, 2013

Prepare for the Double Dip Recession

Art Cashin is a Wall Street legend. I had the privilege of starting my own investment career at Paine Webber (PaineWebber was bought by UBS) where Cashin worked providing daily market commentary from the trading floor. Today Cashin had this to say:

The year-over-year change in real GDP was 1.5 percent. There has never been a time since measurement commenced in 1948 when the annual pace of real GDP has fallen that low without the economy ultimately slipping into recession. Sub-2.0 percent readings are historically the warning signal.

Of course, Art Cashin is referring to "official numbers". Readers of this blog know we have been in a recession/ depression since 2008.

Wednesday, January 30, 2013

Negative GDP wasn't "Unexpected"

While the stock pumpers on CNBC were "surprised" and "stunned" by today's announcement that GDP for the fourth quarter of 2012 printed a negative 0.1%, readers of this blog were perhaps not surprised at all.

Tuesday, January 29, 2013

Record January Sales of America Silver Eagles

From Zerohedge:

A massive 7.4 million Silver Eagles were purchased from the U.S. Mint in January, considerably higher than the previous record from early 2011. After halting Silver coin production/sales for over a week, the Mint re-opened yesterday and demand once again surged. Having almost doubled from the first week in January, there remains two more days before the book is closed on January's sales. At 140,000 ounces, the Mint has also sold the most ounces of gold in January in almost three years, suggesting the rising 'currency wars' are stoking people's ongoing rotation from paper-to-physical assets as their 'wealth' slowing loses its value.

Wednesday, January 23, 2013

"We are Going to Kill the Dollar"

Ever wished you could pick the brain of a top hedge fund manager? One that not only saw the housing crisis coming but made billions off identifying the problems of the sub-prime market? One that speaks to top Obama economic advisers? Kyle Bass is that person. I don't want to even imagine how much his speaker fees are, but here, via Youtube we get to watch for free! Though its about one year old, 90% of it is relevant today (much even more so!).

Yes, China Will Back their Currency with Gold

When I came to the conclusion three years ago that China was acquiring massive amounts of gold to back their currency, I was but a lone voice. What was once a fringe idea is now becoming mainstream thought. Today, none other than the World Gold Council, has come to the conclusion that China is preparing to become a world reserve currency, and that demand for gold will continue to rise as China continues to acquire it as an asset with no counter party risk.

Sunday, January 20, 2013

End of the Road: How Money Became Worthless

Many of my readers have likely either already seen this documentary or have heard of it. Its about one hour long and is a fantastic summary of much of what has been posted on this blog over the past year.

Thursday, January 17, 2013

Silver: Bifurcating Between Paper and Physical? (Updated)

Gold and Silver Eagles sales by the US Mint have been climbing as noted by Zerohedge:

Tonight, Zerohedge reports the US Mint has already run out of  2013 coins:

Authorized Purchasers,

The United States Mint has temporarily sold out of 2013 American Eagle Silver Bullion coins.  As a result, sales are suspended until we can build up an inventory of these coins.  Sales will resume on or about the week of January 28, 2013, via the allocation process.

Please feel free to call us if you have any questions.


Jack A. Szczerban
Branch Chief, Precious Metals Group
Department of the Treasury
United States Mint
Amazing. Don't these people realize they can just buy a silver ETF? Or maybe they just want to buy the real thing rather than a paper asset. Looking at APMEX, it would seem a nearly $6 premium over spot is the new market price for an American Eagle Silver coin.

As of Friday, December 18th. APMEX is selling older Eagles at a $7 premium over spot!

Guy Adami's Take on German Gold Repatriation

You can watch the video her:

Guy Adami is a trader on the CNBC show Fast Money. He's one of the few people besides Santelli who seems to "get it" and understands the world is changing.

because you have to ask yourself, why would germany decide to do this? what do they see that the rest of us don't see that requires them to physically move this gold out of lower manhattan and obviously in paris, as well, back to their borders? and i think that's really the question you have to ask. and the answer is, it can't be anything good. and if you think this is the first time, it's not. because the wacko down in venezuela did it a couple of years ago because people dismissed it -- because he's a wacko. right. if germany is going to be the last, they're not. people will line up and do this. you talk about runs on banks? this could be exactly that.

Wednesday, January 16, 2013

Germany Wants its Gold Back

On Monday The German paper Handelsblatt reported that the German central bank would repatriate its gold holdings from Britain, France and the US. When I originally read this story on Zerohedge I was shocked. The ramifications and questions this raises are many. But first, some may wonder why the nation with the world's second largest gold reserves has been keeping their hoard of gold abroad.

Monday, January 14, 2013

Visualizing our National Debt

One Trillion dollars in $100 dollar bills.

Current US Debt ceiling of $16.394 Trillion in 2013.

Thursday, January 10, 2013

The Government is Catching on (That You are Catching on)

Today, Rick Santelli of CNBC discusses SB 3341 in the state of Illinois. What is it?

From the bill (found here)
...Provides that a person who is in the business of purchasing precious metal shall obtain a proof of ownership, create a record of the sale, and verify the identity of the seller. Provides that a person who is in the business of purchasing precious metal shall not pay for the precious metal in cash and shall record the method of payment.

Requires the purchaser to keep a record of the sale for one year or, if the purchase amount is over $500, for 5 years.

Watch the video here

Sunday, January 6, 2013

Why Interest Rates Can Never Rise Again

Last week the Fed released its most recent minutes which surprised markets by "exposing a rift" as to when to quit buying Treasuries as part of their ongoing stimulus. The US Federal Reserve Bank buys US Treasuries, issued by the US treasury to keep demand high for Treasuries which keeps interest rates low (The price of bonds is inversely related to interest rates). As I wrote in December, the Fed may soon go from buying 70% of all new Treasury issuance to 90% as part of its QE4ever program.

Why must they do this? Because interest rates can never be allowed to go up again. EVER!

ZeroHedge illustrates why:

Friday, January 4, 2013

Andrew Maguire, Silver Bifurcation & 2013

Happy New Year! Welcome to the new year, same as the old year. Because so much has happened and nothing has changed. The Fiscal Cliff was not resolved, it was merely pushed off for a few more months. In that regard, we are looking more and more like Greece and the EU. Each day there are new meetings and proposals followed by new proclamations but never a solution! Though debt in the US is piling up as fast as ever, gold, which is highly correlated with the US debt, has essentially traded sideways in 2012 after peaking in mid 2011. So what's going on?