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Monday 12.12.2011

Bullish outlook for silver and gold in 2012
LONDON (Commodity Online): A bullish outlook for gold next year, but nevertheless anticipates further strength in the U.S. dollar going into the New Year may be the next testfor the yellow metal. Unlike previous periods of risk aversion that occurred in 2009 and 2010, this time U.S. dollar strength is not being accompanied by strong inflows into physically backed gold ETFs, said Deutsche Bank in its final weekly commodities report of 2011.

You Can’t Print More Gold
By Frank Holmes - GoldSeek.com
What do you get when you mix negative real interest rates with stimulative money supply efforts by global central banks?
An exceptionally potent formula for higher gold prices that could send gold to the unimaginable level of $10,000 an ounce. Negative real interest rates and strong money supply growth are two key factors of what I refer to as the Fear Trade.

Gold buyers tempt Greeks facing hard times
By Eve Szeftel | AFP - Yahoo.com
Greece has seen an upsurge in small companies and shops offering to buy gold, driven by record prices and the need many people have to raise cash during hard times when jobs are uncertain and money scarce.
"Sell your gold," "We buy your jewels," the signs read in Ermou Street, a pedestrian precinct right in the heart of Athens thronged with people doing their Christmas shopping, as money changers and jewellers get in on the act too.
In recent months it has become common to have leaflets stuffed into your mailbox or handed out around the city, suggesting that Greeks might want to sell their old baptismal cross so they can afford their dream holiday.

Gold Shortages Are Real
GoldSeek.com
It was actuality a pretty quiet week all in all with no decisions on Europe, just meetings. Of course most all of Europe was put on watch by a prominent U.S. Ratings agency but in my eyes they are so far behind the curve that they nor their ratings matter and the markets largely reflected that view.
The major event was Jon Corzine testilying and as was expected he didn’t seem to know much or offer any real tidbits. He’ll likely get away with what he’s done and be allowed to continue to play dumb, but I assure you he’s anything but dumb and knew exactly what was transpiring as the company spiralled out of control and ultimately failed.

Are Central, Commercial Banks Lending or Selling Gold?
By: Julian D. W. Phillips - GoldSeek.com
The big feature of last week’s decline in the gold price has been the lending of gold into the market. Commercial banks could have been doing it, but there is evidence in the past that central banks have leased gold to cap the gold price and bring it down. The gold price declines were so rapid and extensive that some investors theorized that central banks, including the Federal Reserve, were actively selling gold. The talk is that Commercial banks were unable to get the dollar liquidity they needed, leasing gold under their wings to facilitate these loans at lower interest rates. After the massive swap arrangements made between the U.S. Fed and the E.C.B., many felt that the problems of dollar liquidity had been overcome; however, by the extensive leasing of gold, this does not appear true.

Keiser Report:
Gold-for-Bonds & Debts-for-What?! (E221)

Another Neo-Greenbacker Central Banking Scheme
By: Michael S. Rozeff - GoldSeek.com
State money is reform? Not one little bit. We will have reform only when the forms and supply of money are market-determined, not state-determined. In other words, we will have reform only when each person decides for himself what kind of money and how much of it he or she wishes to bid for or offer in a free market. There is no reform when these decisions are being made for each of us by a state, either in the present arrangement or in a greenbacker version of state money.

OECD warns of economic uphill struggle next year
Reporting by Stephen Mangan; Editing by Nick Macfie
(Reuters) - An OECD report due for release this month will say markets and governments face an uphill struggle to fund themselves next year amid extreme uncertainty over the euro zone and the global economy, the Financial Times said on Monday.
The report will say that financial stresses are likely to continue with the unpredictability of markets threatening the stability of many governments that need to refinance debt.

Banks are preparing for a Euro collapse, are you?
NEW YORK (Commodity Online): The central banks are preparing for life after the euro with countries studying printing national currencies in case the single monetary union collapses, as per reports by the Wall Street Journal. Given the real risk of a breakup of the currency as we know it today, that would seem like the logical and prudent thing to do.
Major multinational corporations are planning for the possibility of this scenario and recently British Chancellor George Osborne said his government had contingency planning in place in the event of the break-up of the euro.

Why Do Banks Fail Together In A Crisis?
By: John Carney, Senior Editor, CNBC.com
Watching Europe's banks teeter on the brink of disaster because of their exposures to sovereign debt has an eerily familiar feel to it.
It is very reminiscent of the near death experience of many of the largest US banks in 2008. Back then it was mortgage-related investments rather than government bonds that weighed down the balance sheets of the banks.

Moody's Downgrades Three French Banks
By: Reuters - CNBC.com
Ratings agency Moody's downgraded the debt of BNP Paribas, Societe Generale, and Credit Agricole on Friday, saying their creditworthiness was being hurt by the fragile operating environment for European banks.
Moody's cut its ratings on the long-term debt of BNP and Credit Agricole by one notch to Aa3, concluding reviews that began in June and were continued in September. Societe Generale's long-term debt was cut by one notch to A1.

Bill Gross — Wrong on Bonds Again?
BY CHRIS PUPLAVA - FinancialSense.com
Back in April, the world’s largest bond manager, PIMCO, made widespread news when it was announced that they were betting against US government debt (see article) by having a minus 3% of its $236B Total Return Fund in government securities. Bill Gross gave a few reasons why his bet against US government may be wrong and at the time I penned an article (Why Bill Gross is Wrong…In The Short Term) highlighting why I thought the risks to his bet were higher than they were predicting. My argument against shorting US government debt was chiefly based on the message of leading economic indicators (LEIs), which were signaling a slowdown in US growth, which would likely put pressure on equities and support for Treasury securities. Now, coming full circle, the message from the LEIs is that US growth is likely to accelerate into early 2012 which should lead to demand for stocks over Treasuries and now may be the time for Bill Gross to bet against US Debt.

Eurozone leaders deluded if they think this 'sticking plaster' treaty can solve the debt crisis
So, now we know what the latest euro-crisis summit has to offer. The fifth comprehensive effort to stabilise the eurozone in nineteen months, this latest Brussels gab-fest produced a slew of headlines and initiatives. But what did it really achieve?
By Liam Halligan - Telegraph.co.uk
The single currency remains just as incoherent as it was last weekend, just as vulnerable to systemic collapse. The region’s banks and governments are still very highly indebted.
Eurozone leaders are deluded if they think some diplomatic sticking plaster, and a lot of bluster, can hold together an inherently unstable structure.
What’s more, to use a combination of borrowed and printed money to bail-out cash-strapped governments, which are insolvent largely because they, in turn, are standing behind insolvent banks, is to treat the symptoms of the crisis, not the cause.

Euro crisis-On the Edge with Max Keiser-12-09-2011

The Swiss Government
Is Getting Ready For The Collapse Of The Euro
Sarkozy: "The Risk That Europe Will Explode"
by Wolf Richter - TestosteronePit.com
The Swiss government is preparing for a collapse of the euro, according to Swiss Finance Minister Eveline Widmer-Schlumpf. She told parliament that a work group was studying the imposition of capital controls and negative interest rates to protect Switzerland from the capital flight that a euro collapse would engender (Handelsblatt). A tidal wave of euros would drive up the Swiss franc, devastate Switzerland’s export economy, and devalue its vast wealth invested in other countries. Already in August, the Swiss National Bank instituted a currency peg and swore to defend it by acquiring "unlimited" amounts of euros, a risky strategy if the euro were to collapse (for the debacle leading up to the peg, read... Swiss Franc Wreaks Havoc In Switzerland.

Europe’s Transition From Social Democracy to Oligarchy
By Michael Hudson
The easiest way to understand Europe’s financial crisis is to look at the solutions being proposed to resolve it. They are a banker’s dream, a grab bag of giveaways that few voters would be likely to approve in a democratic referendum. Bank strategists learned not to risk submitting their plans to democratic vote after Icelanders twice refused in 2010-11 to approve their government’s capitulation to pay Britain and the Netherlands for losses run up by badly regulated Icelandic banks operating abroad. Lacking such a referendum, mass demonstrations were the only way for Greek voters to register their opposition to the €50 billion in privatization sell-offs demanded by the European Central Bank (ECB) in autumn 2011.

Future of eurozone looks bleak to some
Investors fear default, breakup
By Patrice Hill - The Washington Times
It still seems unthinkable to most Europeans, but a growing number of outside analysts and investors believe the eurozone is headed toward a breakup as fast-moving market turmoil and a looming recession threaten to overwhelm the slow-motion response of European leaders.
German Chancellor Angela Merkel and other European heads of government dismissed such dire scenarios as they headed to a much-hyped summit Thursday in Brussels that appeared likely yet again to dash market hopes for a grand solution that would stop the financial hemorrhaging on the Continent.

All Hail The United States Of Germany?
The Rest Of Europe Is Facing
Either German Domination Or Financial Collapse
EndOfTheAmericanDream.com
It has now become very clear who dominates Europe. As European officials prepare to gather for one of the most important summits in EU history, it has become apparent that either the German plan for a new EU treaty is going to be adopted or there is not going to be a deal at all. Germany wants to impose strict new fiscal restraints on all of the eurozone nations. This would include a new 3 percent budget deficit rule with automatic sanctions on any violators. The European Court of Justice would be given power to decide whether or not an individual nation was complying with the 3 percent rule or not. A highly controversial new tax on all financial transactions is also being proposed, along with a number of other repressive new regulations that are designed to more tightly integrate Europe. Germany says that if all 27 EU nations are not willing to go along with a new treaty then it is prepared to strike an agreement with just the 17 nations that make up the eurozone. But not everyone is thrilled with what Germany is trying to do. Critics are saying that the German proposals (which are also being backed by the French) would mean a massive loss of sovereignty for most of the nations that make up the eurozone, and they would essentially turn the eurozone into "the United States of Germany".

Bob Chapman:
Economic Elites Strip Away European Sovereignty 1/3

Bob Chapman:
Economic Elites Strip Away European Sovereignty 2/3

Bob Chapman:
Economic Elites Strip Away European Sovereignty 3/3

Merkel caught between upsetting her voters or Europe
By Michael Birnbaum - WashingtonPost.com
BERLIN — Chancellor Angela Merkel traveled to a landmark euro summit in Brussels last week and didn’t blink, pushing her neighbors toward Germany’s tight-fisted spending model while giving up little in return.
Few in Europe believe that the summit ended the continent’s debt crisis. The high-firepower solutions that would quickly bring down troubled countries’ borrowing costs would cost Germany more than what Merkel has so far agreed to, and they would be deeply unpopular among German voters.

A treaty to save the Euro may split Europe
German Vision Prevails as Leaders Agree on Fiscal Pact
By STEVEN ERLANGER and STEPHEN CASTLE - NYTimes.com
BRUSSELS — Europe’s worst financial crisis in generations is forging a new European Union, pushing Britain to the sidelines and creating a more integrated, fiscally disciplined core of nations under the auspices of a resurgent Germany.
Exactly 20 years to the day after European leaders signed the treaty that led to the creation of the European Union and the eurocurrency, Chancellor Angela Merkel of Germany persuaded every current member of the union except Britain to endorse a new agreement calling for tighter regional oversight of government spending.

Merkel's Teutonic summit enshrines Hooverism in EU treaty law
Angela Merkel’s summit has sealed a 1930s outcome for Europe, further entrenching Germany’s misguided and contractionary policies without offering any viable way out of the crisis at hand.
By Ambrose Evans-Pritchard - Telegraph.co.uk
You could call it Hooverism written into EU treaty law, though that traduces Hoover. The harsher truth is that it replicates the "500 deflation decrees" of Pierre Laval, later shot by a Free French firing squad.
It is happening just as Europe’s banks slash their books to meet the EU’s core Tier I capital ratios of 9pc. The Basel-based Financial Stability Board - the collective voice of the world’s monetary authorities - fears the banks could inflict a €2.4 trillion crunch over "coming months", just as Euroland crashes back into recession. It is hard to imagine a more reckless recipe for social disorder than to combine these shocks at once.

Euro zone deal overlooks a major threat: lousy growth
By Steven C. Johnson
(Reuters) - Stricter budget discipline in the 17 countries that use the euro is all well and good, but investors fear it won't provide what the euro zoneneeds most of all: More economic growth.
Money managers say that means Friday's stock market rally and euro gains could be short-lived, particularly if credit ratings agencies decide to strip any of Europe's top-rated countries of their AAA status.

EU summit may not calm investors for long
By Annika Breidthardt
(Reuters) - Last week's EU summit went a long way towards forging the closer economic ties needed to prevent future debt crises but markets are likely to judge it as too little and too late to solve the current one, and as on previous occasions the measures are unlikely to calm investors for long.
European Union (EU) leaders ended the summit with a historic agreement to draft a new treaty for deeper integration in the euro zone, but analysts and policymakers remained sceptical such long-term steps could solve the crisis that has shaken Europe for two years.

Europe summit: 'The world is watching us'
By Ben Rooney @CNNMoneyMarkets
NEW YORK (CNNMoney) -- Under pressure to deliver a decisive solution to the debt crisis, European leaders sat down Thursday evening in Brussels to begin rethinking the basic structure of the European Union.
The informal dinner kicks off the latest in a string of high-profile summits this year as EU leaders struggle to convince investors that the euro currency will not be brought down by government debts and weak banks.

All E.U. nations but U.K. open to joining new treaty
By Angela Charlton
and Gabriele Steinhauser - AP - WashingtonTimes.com
BRUSSELS (AP) — The European Union’s president said Friday that 26 of its 27 member countries are open to joining a new treaty tying their finances together to solve the euro crisis. Only Britain remains opposed, creating a deep rift in the union.
In marathon overnight talks, the 17 countries that use the euro gradually persuaded the others to consider joining the new treaty they would create. Some of those countries may face parliamentary opposition to the treaty, which would allow for unprecedented oversight of national budgets.

The day Europe lost patience with Britain
By Luke Baker and Julien Toyer
(Reuters) - It was billed as a summit to save the euro. It may be remembered as the day Europe lost patience with Britain, as most of the continent threw its lot in with EU founding members France and Germany and committed to binding their economies ever more tightly.
There was plenty of talk of history in the making in the week before the Dec 8/9 gathering of European Union leaders - the eighth this year. But it was all about the currency and whether it would survive the strains of a debt crisis that over the past two years has engulfed Greece, spread to Ireland, Portugal, Spain and Italy and now threatens France and even mighty Germany.

The Road Not Taken
By David Knox Barker - GoldSeek.com
The international political economy and global financial markets are deep in the woods. A long wave winter season is blowing cold, and getting colder. Decades of excess leverage in the banking system and sovereign states is coming to an end. Government and consumer spending are hitting a wall. A critical fork on this wintry road is coming up fast.
A transformational long wave crisis that spans the globe is under way. Tough decisions must be made to pull us out of the long wave winter crisis and into a new spring day on the other side. There are two different roads beckoning us out of this long wave wintry mess. Make no mistake; the choice leads to distinctly different destinations.

More Governmental Insights:
Insiders, Outsiders and the Question of Divinity
By Bill Bonner - DailyReckoning.com
2/09/11 Baltimore, Maryland – You’ll recall that two days ago we introduced our new theory of government. Of course, we are not entirely serious. And not entirely unserious either.
But it hardly rises to the level of a theory. It is more like an insight:
Government is the natural phenomenon wherein the “insiders” take wealth, power and status from the “outsiders.” They may provide a useful, even necessary, function — such as keeping the peace. Or they may not. They sometimes redistribute wealth among the outsiders. Sometimes not. They sometimes claim to be acting in the name of the greater good…and often do not. Sometimes they claim their privilege from God; sometimes, they don’t bother. But they always take wealth, power and status from those who are not among the insiders.

China's Hu Vows to Pursue More Balanced Trade
By: Kathrin Hille and Simon Rabinovitch in Beijing, FT.com via CNBC.com
China’s president, Hu Jintao, on Sunday pledged an "even more active" opening up of the country’s economy and a renewed commitment to free trade as he sought to respond to concerns over apparent reform fatigue in Beijing and a deteriorating global economy.
Addressing an audience of business leaders and senior trade officials in a speech to mark the 10th anniversary of China’s accession to the World Trade Organisation, Mr Hu pledged to pursue more balanced foreign trade relations and to create a fair and transparent business environment.

MF Global: The Issue Is Fraud
and the Attempt to Cover Up a Wider Circle of Involvement
JESSE'S CAFÉ AMÉRICAIN
Janet Tavakoli does her usual great job of cutting to the heart of the matter. Below is an excerpt of her Huffington Post piece on MF Global today.
I keep thinking that nothing will shock me anymore in this US financial fraud fest. But the coverup of the MF Global stealing of customer money in a cloud of legal doubletalk, supposedly the one pristine and untouchable principle on Wall Street, is almost too much.

Public Retirement Ages Come Under Greater Scrutiny
By: AP - CNBC.com
After nearly 40 years in public education, Patrick Godwin spends his retirement days running a horse farm east of Sacramento, Calif., with his daughter.
His departure from the workaday world is likely to be long and relatively free of financial concerns, after he retired last July at age 59 with a pension paying $174,308 a year for the rest of his life.
Such guaranteed pensions for relatively youthful government retirees — paid in similar fashion to millions nationwide — are contributing to nationwide friction with the public sector workers. They have access to attractive defined-benefit pensions and retiree health care coverage that most private sector workers no longer do.

Household wealth takes biggest hit since '08
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- Household wealth took its biggest hit since the height of the 2008 financial meltdown during the third quarter, weakened by a downturn in stocks, according to a report issued Thursday.
The Federal Reserve said the net worth of households fell by $2.2 trillion, or 4.1%, to end at $57.4 trillion. The decline comes to about $7,800 for every U.S. resident.
It's the biggest decline since the $5.6 trillion loss suffered in the fourth quarter of 2008.

What went wrong with foreclosure aid programs?
By Julie Schmit, USA TODAY
Steven and Lisa Maultsby lost their Mississippi home to foreclosure this year.
At the time, they thought they were being reviewed for a loan modification through the U.S. government's foreclosure-prevention program.
A Realtor knocking on their door to tell them to vacate told them otherwise.
"I'm bitter," says Steven Maultsby, 51, who works with undersea robots in the oil industry. "We did everything they told us to do."

Time to Start Preoccupying Wall Street
By Lawrence Weschler - Truthdig.com
Tyrannies all over the world — and here I include the tyranny of the market that the proponents of unfettered capitalism (which is to say, by and large, the system’s increasingly concentrated winners and all those handsomely paid-off apologists and retainers they regularly choose to hide behind) — exist in the ironclad certainty that people are nothing more than meat on sticks. Anything that their subordinates, their inferiors, their underlings are or have beyond that exists at the sheerest whim of the regime. Indeed, the notion that human beings have absolute rights simply by virtue of their humanity — the right, for instance, not to be tortured, on the one hand; or to secure lodging, decent livelihoods, adequate health care and so forth, on the other — arises initially as a wild, untethered assertion in the face of eons of stark evidence to the contrary. But it is a magical assertion.

Labor board: Boeing case dropped, but more possible
By Tim Devaney - The Washington Times
The specific dispute between Boeing and the National Labor Relations Board may be over, but the issues it raised are not.
While the NLRB agreed Friday to drop the politically-charged case over the aerospace giant building a plant in right-to-work South Carolina, theboard’s top lawyer left the door open to file similar cases and seek similar remedies in the future.
"f we were ever faced with a similar pattern, we might well issue a complaint," NLRB Acting General Counsel Lafe Solomon said in a conference call with reporters.

EPA sounds alarm on fracking in Wyoming
By James O'Toole @CNNMoney
NEW YORK (CNNMoney) -- The Environmental Protection Agency said this week that chemicals from "fracking," a controversial method of extracting natural gas from the ground, have polluted groundwater in Wyoming.
The findings represent the first time in the heated debate over fracking that the agency has drawn such a connection, which has long been claimed by environmental activists.
In a statement released on Thursday, the EPA said a study had found that groundwater in an aquifer around Pavillion, Wyoming, contained "compounds likely associated with gas production practices, including hydraulic fracturing."

Former strongman Noriega returns home a prisoner,
and to many Panamanians an irrelevant figure
By AP - WashingtonPost.com
PANAMA CITY, Panama — More than two decades after the U.S. forced him from power, Manuel Noriega returned to Panama on Sunday as a prisoner and, to many of those he once ruled with impunity, an irrelevant man.
Some Panamanians feel hatred for the former strongman and rejected American ally; a few others nostalgia. But as he returned to his native country for the first time since his ouster, it seemed like few people had any strong feelings at all.

Angry Russians aren't buying Medvedev's investigation
Russians scoff at Medvedev election inquiry
By Kathy Lally - WashingtonPost.com
MOSCOW — President Dmitry Medvedev used his Facebook page Sunday to disclose that he had ordered an investigation into reports of election fraud, a statement his audience greeted with derision.
The posting quickly went viral, and drew more than 8,000 mostly offended and even offensive comments in a little over six hours, revealing the depth of the disillusionment with Medvedev, Prime Minister Vladimir Putin and their government. Tens of thousands of Russians spoke up in demonstrations across the country Saturday, protesting the Dec. 4 parliamentary elections, and they apparently had no intention of returning to their former silence.

Russians turn to Internet for uncensored news
By Marc Bennetts, Special for USA TODAY
MOSCOW – Like most people in Russia, lawyer Tatiana Murzina knows better than to trust what she sees on television.
"Whenever I watch state-run television news, it seems to me that Vladimir Putin is really great and his policies are a success," she said. "But when I check out Internet websites and social networks and see what's really going on, it's an eye-opener — to say the least."

Iran won't return U.S. drone it claims to have
By the CNN Wire Staff
(CNN) -- Iran will not return an unmanned American stealth plane that it says it has, one of Iran's top generals said, according to the semi-official Fars news agency on Sunday.
"No nation welcomes other countries' spy drones in its territory, and no one sends back the spying equipment and its information back to the country of origin," said Gen. Hossein Salami, deputy commander of the Armed Forces.

Syrian defectors regroup in Turkey, plot Assad's end
By Ibon Villelabeitia and Ece Toksabay
(Reuters) - Ayham Kurdi refused to open fire on unarmed protesters and is now an enemy of the Syrian state.
A captain in President Bashar al-Assad's army, Kurdi, 30, a soft-spoken man with a trimmed black moustache, deserted his post in June and fled to neighboring Turkey with his family.
He is now a member of the Free Syrian Army, a loose collection of deserters who are fighting to topple Assad.

Lindsey Williams: The Devil's Messiah 1/2

Lindsey Williams: The Devil's Messiah 2/2

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