Tuesday, January 31, 2012

Its Over Folks!

Red Alert: Credit Default Swaps Explained
Posted by Ann Barnhardt - January 31, AD 2012 11:41 AM MST
News out of Brussels last night was that a package is being put together that would haircut Greek bonds by 70%, thus only paying back 30 cents on the dollar to anyone holding Greek paper. This will set a precedent that will eventually be played out all over Europe. Full AP story HERE.
This is extremely bad, and will spell the end of the big U.S. banks and the financial system in total. But EVERYONE needs to understand credit default swaps (CDS) first. CDS are insurance policies that investors have traded – very similar to OPTIONS for my old clients and cattle people out there. Buying a CDS is essentially like buying a put. The buyer pays a premium, or fee, to the writer, or seller of the CDS that says that the seller will guarantee and make whole the buyer’s position in a specific bond IF the entity behind the bond (such as Greece) defaults. In exchange for paying the premium and being made whole after a default, the buyer of the CDS surrenders the bond position to the seller of the CDS, and the seller gets to keep both the premium paid plus gets to keep any salvage value of the defaulted bond.
So the CDS buyer pays a premium or fee, and the seller guarantees against a default but gets to take ownership of the bonds and keep any salvage value if a default does happen.
Here is what I STRONGLY suspect is going to happen with this 70% haircut plan. The bondholders are going to take the full brunt of the 70% haircut, BUT the body that actually dictates whether or not a default has happened – the International Swaps and Derivatives Association (ISDA) – will declare that this credit event is NOT a default, and thus all of the banks and entities that THOUGHT that their European debt positions were hedged with CDS will find out that they have no protection at all. And then the excrement hits the fan. Big time.
The argument that the ISDA will make is that a 70% haircut isn’t a default. This is, of course, abject horse manure. Try paying only 30% of your mortgage and see how quickly the word “default” is used. They are using the 70% figure because a 30% payout is just enough to make the legalistic argument that a FULL default hasn’t occurred - which makes NO SENSE because salvage value is one of the core concepts in CDS contracts. The SELLER GET THE RIGHTS TO THE SALVAGE VALUE, which by definition implies that the default need not be 100% in order to execute the CDS. ARRGGHH!!!!
The obvious question is, WHO IS IT THAT HAS WRITTEN ALL OF THESE CREDIT DEFAULT SWAPS, because they are going to make off like bandits. They are going to have received all of the premium, the default event will have happened, and they won’t have to pay out. Like the old Dire Straits song says, “Money for nothin’ and chicks for free.” Fish in a barrel. Lambs to the slaughter. Candy from a baby.
I will venture a guess as to who two of the largest writers of Eurotrash CDS might be. How about . . . oh, I dunno, Goldman Sachs and J.P. Morgan? Guys, what MF Global was doing with customer funds – “hypothecating” and leveraging the customer money into European bond positions “hedged” with credit default swaps – THEY’RE ALL DOING IT. All of the brokerage houses. All of the investment firms. All of the retirement account custodians. ALL OF THE BANKS. I can almost promise you that Goldman Sachs and J.P. Morgan have been sitting on a net short position in Europe, quietly betting against European paper, all the while pimping and selling long European positions (It will be fine! The bailouts will come!) AND happily selling TRILLIONS of dollars worth of CDS to their customers to “guarantee” the customers’ long-Europe positions against default, knowing full well that Europe WOULD collapse. (Duh. Anyone who can do 2nd grade math knows that.) When the collapse happened they knew from the beginning they WOULD NEVER HAVE TO PAY OUT ON THE CREDIT DEFAULT SWAPS THAT THEY WROTE because the ISDA was populated BY THEIR OWN PEOPLE, and the ISDA would therefore never declare a default. They would therefore pocket the premium received, but most importantly would then swoop in and BUY UP ALL OF THE BANKS AND BROKERAGES DESTROYED BY THEIR UNHEDGED NET LONG-EUROPE POSITIONS.
Think about it. Why would a Goldman or a J.P. Morgan write trillions of dollars of CDS on Europe in the first place? CDS aren’t like regular options. CDS are binary in their outcome. Either there is no default, or there is, and the payout required would be massive. There is no middle ground. There is no “moderate” payout on a CDS. It is either all-or-nothing. Why would Goldman and J.P. Morgan write these CDS contracts knowing full well that Europe was mathematically impossible to save and thus guaranteed to default, and that the inevitable European default would then lead to demands for payout that were – again – mathematically impossible? We are talking tens if not hundreds of trillions of dollars. We are talking multiples of the size of the entire economy of the U.S. - and that is just the exposure of ONE BANK (i.e. JPM @ $78TTT). There is no possible way to payout on that. It seems to me that these CDS writers knew from the start that they would never have to payout. They knew that their people in the ISDA would never declare a default, but would always leave some trifling payout to “legally” skirt default. If it ever got to the point that there was a full default, World War 3 would be the result and thus the entire point would be moot. The bankster oligarchs would at that point be moving fully to declare a new totalitarian world government and abolish and seize all private property. Game over.

Breaking News Ellis Martin Report with Jim Sinclair

Monday, January 30, 2012

Why does the military seem to be preparing for urban warfare in the United States?

Recently, I published an article covering the January 22-26 multi-agency exercises being conducted in the Los Angeles area.

As I outlined in the article, this is in fact part of a broader trend of joint military-police drills (which often include other agencies, hence the “multi-agency” label) that have been occurring across the United States.

It seems hard to ignore the fact that the armed forces of the United States are training for urban warfare, not urban warfare in the Middle East, but instead here in our own nation.

This is becoming painfully clear due to the fact that the military trains for what they think they’re going to do.

If they are planning to fight in the desert, they would train in the desert and obviously if they are going to be fighting in a metropolitan setting in the United States, they would train in an American city.

Unfortunately, this is exactly what we are witnessing: increasing amount of training in urban American environments.

The Los Angeles drill is just a microcosmic example of this, and one of the more disturbing developments is the announcement of a “mock city roughly the size of downtown San Diego” which has been erected recently at the Twenty nine Palms military base.



This is located northeast of San Diego and cost the taxpayer $170 million with the intention of training American military forces to wage urban warfare.

According to the Marine Corps, the facility boasts a staggering 1,560 buildings.

State of Denial in Coming War Catastrophe

The world economy is in the tank, and the Federal Reserve’s decision to extend its zero interest rate policy to, at least, the end of 2014 proves it.  What will happen if the fragile world economy also has to deal with a war with Iran?  That should have been the big headline coming out of the World Economic Forum in Davos, Switzerland, but what was reported was concern over slow or no growth in the world.  All the signs are that the West is careening towards war with Iran, and there is not a peep about it from world leaders.  Are they in a state of denial in a coming war catastrophe?  I say yes.
One of the first shots fired by the EU was in the form of increased sanctions to boycott Iranian oil in about five months.  The second shot looks like it will be fired by the Iranians who won’t wait for sanctions to kick in and will move to cut off oil exports of around 600,000 barrels a day to the Eurozone.  (Click here for more on this story.)  The Iranians have not yet cut off the oil.   MSNBC reported yesterday, “The Islamic Republic declared itself optimistic about a visit by U.N. nuclear experts that began on Sunday but also warned the inspectors to be “professional” or see Tehran reducing cooperation with the world body on atomic matters.  The International Atomic Energy Agency (IAEA) inspection delegation will seek to advance efforts to resolve a row about nuclear work which Iran says is for making electricity but the West suspects is aimed at seeking a nuclear weapon.”  (Click here to read the latest CNBC story.)

Friday, January 27, 2012

John Williams - Accelerating Great Collapse & Hyperinflation


Consistent with the precedent set in 2008, the Fed, and likely the Treasury, also will remain in place to do whatever is needed, at whatever cost, to prevent systemic collapse in the United States.  All of these actions, though, have costs in terms of higher domestic inflation and intensified dollar debasement. 

The U.S. dollar remains highly vulnerable to massive, panicked selling, at any time, with little or no warning.  The next round of Federal Reserve or U.S. government easing or stimulus could be the proximal trigger for such a currency panic and/or for strong efforts to strip the U.S. currency of its global reserve currency status. 

As the advance squalls from this great financial tempest come ashore, the government could be expected to launch a variety of efforts at forestalling the hyperinflation‘s landfall, but such efforts will buy little time and ultimately will fail in preventing the dollar‘s collapse.  The timing of the early days—the onset—of full-blown hyperinflation likely will be coincident with a broad global rejection of the U.S. dollar, which, again, could happen at any time.

With no viable or politically-practical way of balancing U.S. fiscal conditions and avoiding this financial economic Armageddon, the best action that individuals can take at this point remains to protect themselves, both as to meeting short-range survival needs as well as to preserving current wealth and assets over the longer term.  Efforts there, respectively, would encompass building a store of key consumables, such as food and water, and moving assets into physical precious metals and outside of the U.S. dollar.”

The above was just a small portion of a 75 page special report from John Williams titled, “Hyperinflation 2012.”

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Eric King

Do as I say, not as I do…

There is a delicious irony in the world of economic policy at the moment.
Back in 1997 and 1998 I had a ringside seat to the Asian financial crisis from my trading desk in Seoul. When everything collapsed, the policy prescriptions from the World Bank and IMF for Asia’s sick economies was to:
1. HIKE interest rates,
2. CUT government spending,
3. Further deregulate, liberalize, and open their economies to foreign investment to attract capital;
4.  And let their zombie banks FAIL.
Though, they experienced brutal recessions after swallowing this tough medicine, the two countries which carried out these policies to the fullest extent:  South Korea, and Indonesia, are today among the most successful and dynamic economies in Asia, and the WORLD.
More at heading above...

Thursday, January 26, 2012

Mainstream Entities Will Now Enter Gold Market

My Dear Friends,
Today’s developments are watershed events that are discussed in the following interview with Eric King of www.KingWorldNews.com.
If you have the time please listen to what has happened, and what will occur.
Respectfully,
Jim
Click here to listen to the full audio interview on www.KingWorldNews.com…
Jim Sinclair – Mainstream Entities Will Now Enter Gold Market
With gold and silver exploding to the upside on the Fed announcement, today King World News interviewed legendary Jim Sinclair, to get his take on where things are headed.  Sinclair told KWN he now expects mainstream entities to enter the gold market.  Here is what Sinclair had to say:  “Today is an important day.  There are many days we talk but this is a mile-marker.  What the Fed did today is they turned on the light of what will be QE to infinity.  Today the light went on with regards to the intentions of the Fed.  They did that for very specific reasons, we have troubles people can’t see and this is one of the ways out.”
Jim Sinclair continues:
The announcement itself is a game-changer because of the way this game is going to change, Eric.  I think you are going to see a very significant change amongst investors, corporations and companies with extra capital and people of the mainstream.  You’re going to find gold being accepted as a hedge against what’s going on by entities, that up to now, you would think would be the last ones to be buying gold.  How about someone like General Electric?
I used GE as an example because the principal of GE is a major advisor to the government.  That would be the most unlikely thing (for GE to buy gold).  But don’t count it out.  You are going to see a lot of things this year you thought at one time impossible, becoming reality.
Click here to view the full text of the interview…

Wednesday, January 25, 2012

Eric Sprott - Aggressive Chinese Buying Will Spike Gold Price

Today billionaire Eric Sprott told King World News the Chinese cannot continue to buy gold as aggressively as they have been without there being a dramatic increase in the price. Eric Sprott, Chairman of Sprott Asset Management, had this to say about Chinese purchases of gold and the recent announcement that Iranian oil will be acquired using gold: “There are two things I think are important about that. One, it’s a statement that gold is a currency. That is by far the most important thing. I think the other thing is, if it actually transpires that way, what does it mean for the demand for gold? Because now it’s considered currency, it’s, in essence, your working capital. You have to have it. It’s like a store, you have to have money in the till.”

Eric Sprott continues:


“So it’s obviously going to increase the demand for gold and we have seen some data that China has been a rather large buyer of gold. People will consider it a currency and it has to necessitate more buying. You know, Eric, I think one of the really interesting things that happened was the imports of gold into China, from Hong Kong, which always were less than 20 tons a month, all of the sudden, beginning about 5 months ago, went 20 (tons), 30, 40, 80 and in November 102 tons. 102 tons is a staggering number.


The world mines, excluding China, less than 200 tons a month. China cannot continue to buy 102 tons and not have the price escalate dramatically.”

Tuesday, January 24, 2012

Why You Should BUY Silver Now

Fukushima Operator Admits 20% Increase In Radiation

JiJi Press – one of Japan’s largest news sources – reports:
Tokyo Electric Power Co. on Monday reported an increase in radioactive materials leaking from damaged nuclear reactors at the Fukushima … plant.
The total amount of radioactive cesium that leaked from the containment vessels of the No. 1 to No. 3 reactors reached 70 million becquerels per hour, up 12 million becquerels from the December level, the power firm said.
It seems that radioactive dusts were stirred up because plant workers went inside reactor buildings and removed rubble, TEPCO officials said.
While it is possible that the increased radiation is simply due to dust being stirred up, there is some evidence that the increase in radiation corresponds with recent earthquakes.
Or it could be due to the possible escape of nuclear fuel from the nuclear container vessels.
Indeed, a Fukushima whistleblower allegedly claims that radioactive fuel is coming out from beneath the containment building:

6218 Tepco Admits that Radiation Levels from Fukushima Are RISING
***
These [highly-radioactive] yellow concrete slags come out from under the building one after one. It means that the container vessel is melting like honeycomb at least – doesn’t it? Otherwise why would metal uranium comes out of there ?

Monday, January 23, 2012

Portuguese Government Bond Market Halts Amid Uncertainty In Greece

Portuguese Government Bond Market Halts Amid Uncertainty In Greece

-- Trading in Portuguese government bonds dries up

-- ECB buying, liquidity injection for banks acts as only driver

-- Uncertainty over Greek restructuring package poses questions for Portugal

-- Portugal's CDS keep climbing to fresh records

By Nick Cawley and Art Patnaude Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Trading in Portuguese government bonds has virtually ground to a halt in recent days, as market participants await clarity on the Greek debt-restructuring deal for how it may effect Portugal's future funding costs.

Sunday, January 22, 2012

This Is America Today, Part II

These facts are from the CIA—and they are undisputed:

• Infant mortality rate in the United States: 6.06 per 1,000 live births.

• Infant mortality rate in France: 3.29 per 1,000 live births.

• Average life expectancy in the United States: 78.37 years (75.92 for men, 80.93 for women).

• Average life expectancy in France: 81.19 years (78.20 for men, 84.54 for women).

• Total expenditure on health care in the United States: 16.2% of GDP (2009).

• Total expenditure on health care in France: 3.5% of GDP (2009).

• Expenditure on health care in the United States per capita: $7,517 per year (2009).

• Expenditure on health care in France per capita: $1,148 per year (2009).

So . . . to make it clear: France has a Socialist-Commie health care system, while the United States has “the best health care system in the world”—

—and yet the French live longer, have an infant mortality rate roughly half the United States’, and yet still manage to spend less than Americans on health care.

Wednesday, January 18, 2012

Treasury dips into pension funds to avoid debt

WASHINGTON (Reuters) - The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.

"I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress.

The House of Representatives is expected to vote on Wednesday on the Obama administration's request to raise the country's legal debt limit to $16.394 trillion.

However, unless the lower chamber and the Senate are able to shore up enough votes to block the White House request, the debt limit will be increased by $1.2 trillion next Friday and a repeat of last year's debt ceiling debacle will be averted.

Tuesday, January 17, 2012

What If The Government Takes Over Wikipedia?

What If The Government Takes Over Wikipedia?
A quick post.

As most people know, Wikipedia will go offline on Wednesday—in protest over the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA). The Financial Times has a brief but fairly comprehensive overview of what’s going on here.

A lot of people online—myself included—are against both SOPA and PIPA. And for one, I fully support what Wikipedia is trying to do: Shut itself down—the sixth most visited website on the planet—and thereby get those 234 million daily users to read its statement opposing SOPA and PIPA.

Knowing the editorial judiciousness of Jimmy Wales and the Wikipedia team, I have no doubt that, one, their opposition has been carefully thought through; and two, this unprecedented step of shutting down the site is extraordinarily serious—and thus emphasizes how seriously Wales and his team take the measures in SOPA and PIPA.

Monday, January 16, 2012

S&P Says Greek Default Imminent

Time for the dominos to fall where they may: head of sovereign ratings at S&P Kraemer spoke on Bloomberg TV, and said the following:

KRAEMER: GREECE, CREDITORS `RUNNING OUT OF TIME' IN DEBT TALKS -BBG
KRAEMER: EURO LEADERS HAVEN'T TACKLED CORE UNDERLYING PROBLEMS -BBG
KRAEMER SAYS EUROPE MUST DEAL WITH IMBALANCES, COMPETITIVENESS -BBG

And the punchline:

KRAEMER SAYS HE BELIEVES GREECE WILL DEFAULT SHORTLY - RTRS

The only thing he did not add is that the default will be Coercive. What happens next is anyone's guess, but whatever it is it is certainly priced in. Also, let's not forget that the inability of the market to react to any news ever again is most certainly priced in.

Wednesday, January 11, 2012

Why 308,127,404 Americans are going to get hosed



January 11, 2012
Santiago, Chile

Last week, the US government’s Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department, published its 2011 annual report. There are a few numbers that are pretty startling.

We’ve discussed before that FinCEN is the executive agency tasked with ensuring that every US banker is an unpaid government spy through Suspicious Activity Reports.

A Suspicious Activity Report, or SAR, includes details of any transaction that may be deemed ‘suspicious’. Naturally, there’s no clear guidance on what is/is not considered suspicious. Banks, brokerages, money service businesses, precious metals dealers… even casinos are required by law to fill them out.

If you withdraw an unusual amount of cash from your bank account, that could be deemed suspicious. If you set up a new payee in your billpay service, that could be deemed suspicious. Anything and everything is fair game.

Banks and other businesses who do not fill out SARs face hefty penalties, including imprisonment. If they disclose to a customer that s/he is the subject of a SAR, they have hefty penalties, including imprisonment.

Monday, January 9, 2012

US Debt Is Now Equal to Economy

The soaring national debt has reached a symbolic tipping point: It's now as big as the entire U.S. economy.
Getty Images

The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion.
That's roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month.
"The 100% mark means that your entire debt is as big as everything you're producing in your country," says Steve Bell of the Bipartisan Policy Center, which has proposed cutting nearly $6 trillion in red ink over 10 years. "Clearly, that can't continue."
Long-term projections suggest the debt will continue to grow faster than the economy, which would have to expand by at least 6% a year to keep pace.
President Obama's 2012 budget shows the debt soaring past $26 trillion a decade from now. Last summer's deficit reduction deal could reduce that to $24 trillion.

Thursday, January 5, 2012

34 Shocking Facts About U.S. Debt That Should Set America On Fire With Anger

The following are 34 shocking facts about U.S. debt that should set America on fire with anger....
#1 During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars.
#2 When Ronald Reagan took office, the U.S. national debt was less than 1 trillion dollars.  Today, the U.S. national debt is over 15.2 trillion dollars.
#3 During 2011, U.S. debt surpassed 100 percent of GDP for the first time ever.
#4 According to Wikipedia, the monetary base "consists of coins, paper money (both as bank vault cash and as currency circulating in the public), and commercial banks' reserves with the central bank."  Currently the U.S. monetary base is sitting somewhere around 2.7 trillion dollars.  So if you went out and gathered all of that money up it would only make a small dent in our national debt.  But afterwards there would be no currency for anyone to use.
#5 The U.S. government spent over 454 billion dollars just on interest on the national debt during fiscal 2011.
#6 The U.S. government has total assets of 2.7 trillion dollars and has total liabilities of 17.5 trillion dollars.  The liabilities do not even count 4.7 trillion dollars of intragovernmental debt that is currently outstanding.
#7 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
#8 It is being projected that the U.S. national debt will surpass 23 trillion dollarsin 2015.
#9 According to the GAO, the U.S. government is facing 34 trillion dollars in unfunded liabilities for social insurance programs such as Social Security and Medicare.  These are obligations that we have already committed ourselves to but that we do not have any money for.
#10 Others estimate that the unfunded liabilities of the U.S. government now total over 117 trillion dollars.
#11 According to the GAO, the ratio of debt held by the public to GDP is projected to reach 287 percent of GDP by 2086.
#12 Others are much less optimistic.  A recently revised IMF policy paper entitled “An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?” projects that U.S. government debt will rise to about 400 percent of GDP by the year 2050.
#13 The United States government is responsible for more than a third of all the government debt in the entire world.
#14 If you divide up the national debt equally among all U.S. taxpayers, each taxpayer would owe approximately $134,685.
#15 Mandatory federal spending surpassed total federal revenue for the first time ever in fiscal 2011.  That was not supposed to happen until 50 years from now.
#16 Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.
#17 During Barack Obama's first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.
#18 When you add up all spending by the federal government, state governments and local governments, it comes to 46.6% of GDP.
#19 Our nation is more addicted to government checks than ever before.  In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for 18.4% of all income.
#20 U.S. households are now actually receiving more money directly from the U.S. government than they are paying to the government in taxes.
#21 A staggering 48.5% of all Americans live in a household that receives some form of government benefits.  Back in 1983, that number was below 30 percent.
#22 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today,one out of every 6 Americans is on Medicaid.
#23 In 1950, each retiree's Social Security benefit was paid for by 16U.S. workers.  According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States.
#24 The U.S. government now says that the Medicare trust fund will run out five years faster than they were projecting just last year.
#25 Right now, spending by the federal government accounts for about 24 percent of GDP.  Back in 2001, it accounted for just 18 percent.
#26 If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion each and every year.
#27 If you were alive when Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.  But this year alone the U.S. government is going to add more than a trillion dollars to the national debt.
#28 If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
#29 A trillion $10 bills, if they were taped end to end, would wrap around the globe more than 380 times.  That amount of money would still not be enough to pay off the U.S. national debt.
#30 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 470,000 years to pay off the national debt.
#31 If Bill Gates gave every penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.
#32 According to Professor Laurence J. Kotlikoff, the U.S. is facing a "fiscal gap" of over 200 trillion dollars in the future.  The following is a brief excerpt from a recent article that he did for CNN....
The government's total indebtedness -- its fiscal gap -- now stands at $211 trillion, by my arithmetic. The fiscal gap is the difference, measured in present value, between all projected future spending obligations -- including our huge defense expenditures and massive entitlement programs, as well as making interest and principal payments on the official debt -- and all projected future taxes.
#33 If you add up all forms of debt in the United States (government, business and consumer), it comes to more than 56 trillion dollars.  That is more than$683,000 per family.  Unfortunately, the average amount of savings per family in the U.S. is only about $4,735.
#34 The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was created back in 1913.

Wednesday, January 4, 2012

Silver Sales Up As Supply Slips

For the first time in history, Silver Eagle & Maple Leaf sales will surpass domestic silver production in the U.S. and Canada in 2011
The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years.  2011 will be the first year in which official coin sales will surpass domestic silver production in both countries.
Even though each country has seen declines in their domestic silver production over the past decade, U.S. silver production declined a whopping 30% yoy (year over year) in October.  According to the USGS in their most recent Silver Mineral Industry Survey, silver production fell to 81,400 kilograms in October— compared to 117,000 kilograms the same time last year.
 
As of October this year, the United States has produced 923,000 kilograms or 923 metric tonnes of silver.  This number will change as revisions are made, but currently U.S. silver production is down 15% compared to the first ten months of 2010.  At this rate, the U.S. will produce an estimated 35 million ounces of silver this year.  This is significant, as production will yield less than the approximate 40 million ounces of American Silver Eagle sales for 2011.

Tuesday, January 3, 2012

Poll: YOUR VOTE FOR REPUBLICAN PRESIDENTIAL CANDIDATE

Poll: YOUR VOTE FOR REPUBLICAN PRESIDENTIAL CANDIDATE

World’s Biggest Economies Face $7.6 Trillion Bond Tab as Rally Seen Fading

Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.

Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.

Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show. The International Monetary Fund cut its forecast for growth this year to 4 percent from a prior estimate of 4.5 percent as Europe’s debt crisis spreads, the U.S. struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.

“The weight of supply may be a concern,” Stuart Thomson, a money manager in Glasgow at Ignis Asset Management Ltd., which oversees $121 billion, said in a Dec. 28 telephone interview. “Rather than the start of the year being the problem, it’s the middle part of the year that becomes the problem. That’s when we see the slowdown in the global economy having its biggest impact.”
Competition for Buyers

The amount needing to be refinanced rises to more than $8 trillion when interest payments are included. Coming after a year in which Standard & Poor’s cut the U.S.’s rating to AA+ from AAA and put 15 European nations on notice for possible downgrades, the competition to find buyers is heating up.

“It is a big number and obviously because many governments are still in a deficit situation the debt continues to accumulate and that’s one of the biggest problems,” Elwin de Groot, an economist at Rabobank Nederland in Utrecht, Netherlands, part of the world’s biggest agricultural lender, said in an interview on Dec. 27.