Sunday 29 January 2012

The Gold Tree

Wednesday 18 January 2012

Dr M: Value currencies against gold instead of US dollar

KUALA LUMPUR: Go back to gold, former prime minister Tun Dr Mahathir Mohamad tells economies entangled in a financial crisis.

The world should re-look at valuing their currencies against the precious commodity instead of the US dollar, Dr Mahathir said at the International Conference on Global Movement of Moderates dinner yesterday.

He added that the price of gold had been rising while the US dollar suffered a devaluation.

If the world needed a new financial blueprint, said Dr Mahathir, reviewing the Bretton Woods system would be the best thing to do.

“You don’t really have to exchange gold but to value your currency against it.
“Then you can have a business based not on speculation or manipulation, but on real value,” the senior statesman told an audience of about 500 at a hotel here.

The Bretton Woods Agreement is an international trade agreement signed after World War II, which benchmarked the currencies of its signatory countries against gold and the US dollar.

Earlier in his speech, Dr Mahathir blamed the global financial crisis on manipulation and abuses by certain players in the financial market.

He said there were people who made huge sums of money at the expense of the world.
“Malaysia became poor because of the abuses in the financial market during the 1997-1998 crisis.

“Paper currency has little value. But an ounce of gold at one point was worth US$35. Its current price for the same weight is US$1,700.

“If we want to have a new financial architecture, the best way is to get back to the beginning,” said Dr Mahathir.

http://thestar.com.my/news/story.asp?file=/2012/1/18/nation/10283636&sec=nation

Friday 13 January 2012

Silver Price Ready to Explode

by Dr. Alex Cowie on 10 January 2012

In the last eight years the silver price has increased close to five-fold, from US$6 / ounce to US$29 / ounce.

It hasn’t been an easy ride for investors.
The price crashes intermittently when the trade gets overcrowded. With just $50 billion of silver bullion above ground, it is a very small market and gets crowded easily. The Silver price has had four major crashes in the last ten years but has still increased five-fold.


Source: Goldprice

In the first half of 2004 it fell by 36%.
Then during the first half of 2006 the silver price fell 38%.
In 2008 it fell for most of the year with the peak to trough fall a colossal 61%.
Then in 2011, from its April peak to its low point in late December, silver lost 48% in price.

But between these savage dips, silver has surged.
The net result is, if you invested US$10,000 in silver at the start of 2004, it would now be worth US$48,309.

Last year left a bad taste in the mouth for many silver investors. The 48% correction was brutal. And now there’s a lot of negative sentiment around silver.

But – believe it or not – when negative sentiment builds to this point it is often the best time to invest. As Warren Buffet says, “be greedy when others are fearful and fearful when others are greedy.”

There are also some clear signs this latest correction is now finished.
The main sign comes from the silver futures market.

It is now cheaper to buy a silver futures contract than real, physical silver. Silver rallied more than 60% the last time we saw this happen towards the end of 2010. As I write this, physical silver is US$28.98 / ounce. A silver futures contract is $28.93 / ounce.

This 5-cent difference may sound like small bickies but it is very important. Futures contracts are usually higher than the price of the commodity. Not so much as a price predictor but more to reflect the cost of storing the commodity and the opportunity cost of the capital.

When the futures price dips below the commodity price like this, even by just 0.2%, it is a clear signal to expect higher prices. The market calls this ‘backwardation’.

The silver market went into backwardation a few weeks ago on 28 December 2011. The next day, silver started a three-day bounce that increased the silver price by 12%.

This included silver’s biggest one-day move in over three years – a 6.6% jump.
Backwardation tends to happen when there is a shortage of a commodity. The result is a much higher commodity price, which encourages people to sell. Backwardation was in play during the last silver rally that drove the price from $25 / ounce to its peak of $49.50 / ounce.

This is a very exciting development for silver investors. It’s also good to put the silver market in some historical context to see what the next few months could bring.

Like gold, silver tends to set its low point for the year in the first six weeks of the year.

In six of the last 10 years, the low price for the year was set by 8 February.
With a significant correction behind us, and backwardation now in play, it’s easy to imagine we may see the 2012 low point for the silver price very soon. That’s if we haven’t seen it already.

Compared to its recent precedents, the 48% correction in 2011 was bigger than those in 2004 and 2006 and was only smaller than the 61% fall we saw in the GFC of 2008.
What would happen if silver fell further and matched the drop we saw in the GFC?

We would see it down at $19.50/ounce. It’s hard to imagine given the current set up, but anything can happen with silver. I’m a buyer of silver at current prices.

But if silver fell this far I would buy even more! The silver price has more than tripled since its GFC drop.

Since 2008′s correction, the silver price has more than tripled


Click here to enlarge
Source: Slipstream Trader

Something I’ve written about in Diggers and Drillers for a while is that you should watch for the cost of buying silver through a bullion dealer to break away from the spot price. The tangible, physical stuff should command a premium. Buying physical silver is very different to buying ‘paper silver’ through a commodities exchange.

There is a lot of doubt that silver bought this way is backed by the real stuff.

Since the collapse of MF Global, investors have woken up to this.
One way to measure what premium physical silver should be trading at is to watch the price of the Sprott Physical Silver Trust (PSLV) against the spot price of silver. The market believes that Sprott’s fund carries the silver it claims and isn’t a bad proxy for the real value of silver.

So it’s interesting to see Sprott’s silver trust surge in value against the silver price recently. The chart below shows just that. I’ve divided the value of a unit of the Sprott Physical Silver Trust by the silver spot price; my ‘Sprott-to-spot’ index. Since the start of December, the relative value has increased by more than 20%.

‘Sprott-to-spot index’ shows physical silver is commanding a growing premium


Source: Stockcharts, D&D edits

What does this actually tell you? Investors struggle to buy large amounts of silver, and are prepared to pay above the market price for physical if they trust you have it.

For the average investor, we may find that buying bullion from dealers may start coming with extra costs, which reflects its true value above the spot price.
2012 also brings the likelihood of more money printing from the Fed, and possibly the ECB. This is not something you can bank on. But either would be bullish for precious metals prices. As the money supply of the major currencies of the world increases, the price of hard assets, such as gold and silver, rise to reflect their value.

So the stars seem to be aligning for a big year. Silver normally bottoms out at this time of year, the correction looks finished, the metal has gone into backwardation, and physical metal is now priced at a premium.

I expected big things from silver last year based on the fundamentals. All those fundamentals are still in place, and now we have everything you have just read about today on top of that as well.

With a painful correction now out of the way – and the price knocked back down – the silver market looks ready to explode again.

http://www.moneymorning.com.au/20120110/silver-price-ready-to-explode.html#more-7160

Tuesday 10 January 2012

Ohh! Bina Bangunan 30 Tingkat Dalam Masa 15 Hari !

Semuanya boleh di China. Anda ada berani masuk dan

duduk didalam bangunan hotel ini?



Thirty storeys in 15 days

This hotel has an unlikely 'storey' — as all its 30 floors were built in just 15 days.

Not a single worker was injured in construction of the Ark Hotel in the inland city of Changsha, China.

Despite being built so quickly, the 183,000 square foot monster can withstand a magnitude 9 earthquake, according to construction firm Broad Group.

The whole effort was filmed for a time-lapse video. - www.thesun.co.uk

Saturday 7 January 2012

Updated: LBMA Survey: Analysts Look For Gold To Average $1,766/Oz In 2012

(Update includes chart of analysts and their gold-silver predictions for 2012)
06 January, 11:51 a.m.
By Allen Sykora
Of Kitco News
http://www.kitco.com/

(Kitco News) - Analysts participating in the London Bullion Market Association’s annual price survey collectively look for gold to average $1,766 an ounce in 2012, the organization said Friday.

The average forecasts for the other precious metals included silver, $33.98; platinum, $1,624; and palladium, $735.52. Twenty-six analysts took part in the survey, offering their estimates for the high, low and average price in 2012.

The LBMA said the average gold forecast of $1,766 would be an increase of 10.2% compared to the price in the first week of January 2012. “Analysts are even more bullish about the prospects of the other precious metals, predicting a 17.3% increase in the price of silver and 15% and 12.3% rise in the prices of platinum and palladium, respectively,” the LBMA said.

However, the LBMA said, the survey overall showed less bullishness for the precious complex when comparing the average forecasts for 2012 with the actual average prices in 2011.
In the case of gold, the 2012 average forecast represents a 12.3% rise from the average of $1,572 last year. But in silver, the 2012 average forecast of $33.98 would mean a 3.2% decline from the actual average of $35.11 last year.

The 2012 average forecast of $735.52 in palladium is up 0.3% from the actual average of $733.63 last year. However, the forecast average of $1,624 for platinum was 5.6% below the average price of $1,720 for 2011.

For gold, the average high forecast for 2012 was $2,055, while the average forecast low was $1,443. In silver, the average forecast high for 2012 was $44.49, while the average low was $24.06.

Platinum's average high forecast for 2012 was $1,875, while the average forecast low was $1,313. For palladium, the average high forecast for 2012 was $879.38, while the average forecast low was $549.17.

Looking back on the 2011 survey, the LBMA said, analysts as a whole correctly forecast that gold and silver would trade higher. However, the actual average prices last year were $115 and $5 higher per ounce, respectively, than the average forecast in the LBMA survey.

Analysts had predicted strength in both platinum and palladium in 2011, but instead, both metals fell compared to the average prices in the first week of 2011. Actual platinum prices were 5.4% lower than forecast and palladium was 11% lower than forecast.

Gold
  Name Company City High Low Average
1 Adams, William Fastmarkets Salisbury 2,230 1,500 1,785
2 Brebner, Daniel Deutsche Bank London 2,100 1,545 1,825
3 Cooper, Suki Barclays Capital New York 2,200 1,400 1,875
4 Dincer, Bayram LGT Capital Management Ltd Pfäffikon 1,950 1,450 1,770
5 Fertig, Peter QCR Quantitative Commodity Research Ltd Hainburg 2,150 1,390 1,730
6 Firman, Carl VM Group London 2,012 1,410 1,689
7 Hochreiter, René Allan Hochreiter (Pty) Ltd Johannesburg 2,000 1,450 1,650
8 Jansen, Michael JPMorgan Securities London 2,150 1,450 1,869
9 Jollie, David Mitsui & Co Precious Metals Inc London 2,075 1,480 1,770
10 Kendall, Tom Credit Suisse Securities (Europe) Ltd London 1,960 1,475 1,755
11 Klapwijk, Philip Thomson Reuters GFMS London 2,005 1,530 1,760
12 Murenbeeld, Martin Dundee Economics Victoria 2,125 1,450 1,835
13 Nagao, Eddie Sumitomo Corporation Tokyo 1,800 1,300 1,525
14 Norman, Ross Sharps Pixley Ltd London 2,100 1,590 1,765
15 Panizzutti, Frederic MKS Finance S.A. Geneva 2,120 1,550 1,808
16 Proettel, Thorsten LBBW Stuttgart 1,950 1,220 1,640
17 Rhodes, Jeffrey INTL Commodities Dubai 1,975 1,465 1,727
18 Savant, Rohit CPM Group New York 1,800 1,200 1,612
19 Smith, Dan Standard Chartered Bank London 2,075 1,525 1,875
20 Steel, James HSBC New York 2,050 1,450 1,850
21 Tremblay, Anne-Laure BNP Paribas London 2,100 1,500 1,775
22 Tully, Edel UBS London 2,500 1,400 2,050
23 Turner, Matthew Mitsubishi Corporation International (Europe) Plc London 2,100 1,425 1,782
24 Vaidya, Bhargava BN Vaidya & Associates Mumbai 1,900 1,440 1,600
25 Widmer, Michael BAML London 2,000 1,500 1,850
26 Wrzesniok-Rossbach, Wolfgang Degussa Goldhandel GmbH Frankfurt 2,010 1,425 1,750
  AVERAGES:     $2,055 $1,443 $1,766


Silver
  Name Company City High Low Average
1 Adams, William Fastmarkets Salisbury 53.00 24.00 32.15
2 Brebner, Daniel Deutsche Bank London 45.00 26.00 37.00
3 Cooper, Suki Barclays Capital New York 45.00 22.00 32.50
4 Dincer, Bayram LGT Capital Management Ltd Pfäffikon 50.00 25.00 42.00
5 Fertig, Peter QCR Quantitative Commodity Research Ltd Hainburg 45.00 25.00 33.90
6 Firman, Carl VM Group London 42.50 24.10 31.40
7 Hochreiter, René Allan Hochreiter (Pty) Ltd Johannesburg 48.00 28.00 38.00
8 Jansen, Michael JPMorgan Securities London 36.00 26.00 34.00
9 Jollie, David Mitsui & Co Precious Metals Inc London 44.60 19.20 30.95
10 Kendall, Tom Credit Suisse Securities (Europe) Ltd London 42.60 24.20 32.80
11 Klapwijk, Philip Thomson Reuters GFMS London 45.05 26.85 34.20
12 Nagao, Eddie Sumitomo Corporation Tokyo 33.00 23.50 28.00
13 Norman, Ross Sharps Pixley Ltd London 50.00 20.00 37.35
14 Panizzutti, Frederic MKS Finance S.A. Geneva 50.00 27.00 36.00
15 Proettel, Thorsten LBBW Stuttgart 37.00 22.00 31.00
16 Rhodes, Jeffrey INTL Commodities Dubai 50.25 22.25 36.25
17 Savant, Rohit CPM Group New York 35.00 20.00 27.00
18 Smith, Dan Standard Chartered Bank London 48.00 26.00 39.20
19 Steel, James HSBC New York 38.00 27.00 34.00
20 Tremblay, Anne-Laure BNP Paribas London 47.00 24.00 35.75
21 Tully, Edel UBS London 50.00 24.00 35.00
22 Turner, Matthew Mitsubishi Corporation International (Europe) Plc London 45.10 24.15 32.95
23 Vaidya, Bhargava BN Vaidya & Associates Mumbai 48.10 21.25 29.20
24 Widmer, Michael BAML London 40.00 25.00 34.00
25 Wrzesniok-Rossbach, Wolfgang Degussa Goldhandel GmbH Frankfurt 44.00 25.00 35.00
  AVERAGES:     $44.49 $24.06 $33.98


By Allen Sykora of Kitco News; asykora@kitco.com

http://www.kitco.com/reports/KitcoNews20120106ASKN_lbma.html

Thursday 5 January 2012

10 Things That Will Be More Expensive in 2012

Posted by Mike Tirone - Wednesday, January 4th, 2012

Last Saturday we took a cup of kindness and we sang “Auld Lang Syne” to joyfully say 'buh-bye' to 2011 and welcome a new year.

We set resolutions and now we pray and hope that the new year will be better than the last. Every one of us could go for a better year when referring to the ol' Greenback. So let us welcome you to 2012, and guide your wallet in the right direction with Wealth Wire's two part series, Consumer Guidance: What's More Expensive & Cheaper in 2012. We'll give you reason to avoid certain products and guide you towards the ones that you may get more bang for your buck.
Price adjustments come with the territory of a new year and some are almost customary, such as gas-prices, but according to DealNews.com, there are new items to this year's list. Take a look for yourself.

10 Things That Will Be More Expensive in 2012:

New Digital Camera Models


Due to smartphones and their ability to take excellent photographs comparable to point-and-shoot cameras, manufactures and retailers are focusing more on higher-end digital SLRs. Consumers will be struggling to find newly-released digital cameras at cheap prices since the market is moving rapidly into feature-rich products.

Water


Hikes in water prices will be a common occurrence throughout the U.S., even in places that are rich with H20. Cities like Denver and the Greater Chicago area will be seeing water rates increase due to cities needing to increase revenue to balance their budgets. Which leads us to...

City-Enforced Fees


Things like dog licenses to vehicle registration or even parking rates are all going up in 2012. Portland is bumping their parking fines up by 18% this year as they look to make up for a $16 million transportation budget deficit, while Hoboken continues to give out up to $5,000 fines during it's famously drunken, annual, St. Patrick's Day parade.

Hard Drives and Desktop Computers


Hard drives supply has dropped significantly due to the massive floods in Thailand in 2011 and the shortages are expected to continue into 2012, therefore prices will keep going up as the demand grows. Expect average selling prices for desktop computers to increase around 30% on new ones.

Food for Home Preparation


Most retailers have reported that food prices are rising and those increases are being passed along to shoppers. Food costs rose 6% last year and plan to rise at least 2% more this year. “Increases are likely to affect food eaten at home, rather than restaurants where those costs are easier to absorb when combined with sales of liquor, says Harry Balzer, Chief Industry Analyst for the NPD Group.”

Mobile Device Data Plans


No surprise here, as iPads and more 4G services are flooding the market, data plans looks to be one of the largest growers on our list. Carriers are expanding their 4G services and unfortuantely, look to move away from unlimited plans, which means data is set to become even more expensive this year.

Shipping


The world may be getting smaller because of the shipping industry but that doesn't mean the price is going to be as well. Due to the instability with the U.S. Postal Service and their $9 billion deficit in 2011, rates will be rising (and some say significantly). But according to experts the average hike will be 4.6% in 2012, while UPS and FedEx are raising small package rates by nearly 5%. Online shoppers will not enjoy these hikes while personal shippers it looks like their rates will continue to rise as well.

Gas


Like we mentioned, this was almost certain that fuel prices would keep their pre-holiday trends upward. 2012 is looking no different than last year, when tears were shed and wallets were emptied at the gas pumps. This year expect $4 per gallon or higher.

Gold


When you go ten consecutive years growing, the likelihood of an 11th year of growth is high, especially with how weak the fiat currencies of the world are today. Yes, gold prices were up-and-down in the second half of 2011, but conservative analysts expect an average of 12% rise this year, that is not to say that it won't be crushing that number in 2012.
We understand this isn't the kind of list you were hoping for to start out the year, but remember with every rise in prices comes a drop in other items. Let Wealth Wire wipe those financial tears away with our 10 Things That Will Be Cheaper in 2012 list being published tomorrow...

http://www.wealthwire.com/news/economy/2461?r=1

Wednesday 4 January 2012

Negativity In Gold Reaches Epic Levels

by Jim Sinclair

Dear Extended Family,

The incoming negativity on gold last week reached epic levels. Friends of mine and gold for more than 40 years were looking for a towel to throw into the gold ring. When fear overtakes your intellect and you call, it is like molten magma spewing out of the phone or email.

If I dared to remind the caller that nothing has changed except the algorithms and then only for the short period of time I made the caller angry. I will admit anger is better than total depression but there is no necessity for either.

The advent of splinter parties to challenge the staid old Democrats and Republicans has put Washington into a total freeze frame. There is no mandate for anything, but don't rock the boat. All that can get done there is nothing whatsoever.

All the "can kicking" hopes for a strong economic recovery to heal the can bouncing damage have not and will not materialize. The Fed will not let the euro fail. Already the US Fed has provided the swap lines (loan mechanisms) to the ECB (a beard) to loan the Euro banks the liquidity they lost when the Greek bonds were cut 50% (declared not a default by the Board of Appointed Wizards on CDSs from the banks who wrote the useless bond insurance who are the official shot callers on the default word).

You will never hear any of the "D" words, be that default or deflation. You will hear "rescheduling" which is a default whereby the credit default swap does not have to function so the worthless insurance is camouflaged.

Arab spring is turning out to be the disaster we knew it was. Remember all the cheering on financial TV as Egypt imploded? Spontaneous outbreaks of democracy were simply a really dumb reaction.

Some people can only be ruled by strongmen. It was good the strongmen were all on the payroll of the West. The West fired the strongmen into holes in the ground with candy bars, and flood pipes with unused gold .45cal pistols. Now the true believers are taking over. Arab Spring will be seen as the rise of the Muslim Brotherhood as the most influential replacement.

Energy is in as much trouble from the Arab Spring as the Strait of Hormuz is from Iran. Yes, the Wunderkinds took advantage of the gold fear circumstances, but in terms of gold related items have overstated their accomplishments.

When you bully something to go your way you must not assume you are a genius and called the direction. You made it happen, and it will gobble you up the minute you are out of aces. Those gold shares and gold bullion holders that maintained reason over emotion are committed people that no squirt is going to force out of their positions to benefit worthless puts and large new very low priced shorts. At times old fashioned retail can have more staying power than hedge funds.

Please make note:

Gold will bounce off $2100 and react. Try to keep an even course as Alf is right. Gold has a better chance of seeing $4500 than $1400.

Throw away your razor blade kits provided by famous but mercurial gold commentators who have no mindset whatsoever other than to sell subscriptions or seminars.

Sincerely,
Jim

http://www.jsmineset.com/

Tuesday 3 January 2012

Keep Your Eye On The Ball Of Gold Fundamentals

by Jim Sinclair

My Dear Friends,

On this first business day of the 2012 New Year, let us keep our eye on the ball of gold fundamentals.

Nothing yet has occurred that would reverse the Formula given to you years ago. Government spending, call it monetary stimulation or entitlements, continues to grow.

Business struggles to perform as people drop off the jobless count, still without jobs. Governments have gambled all on business improvements to offset the loss of revenue versus spending. They have lost.

Nothing has changed and nothing is changing. The best economic figures are bottom bouncing or provided by the problem itself, large lending to those with weak credit, such as in autos.

The din of gold voices is at best confused. The hedge funds have won a battle, but will surely lose the war.

Stay focused, hunker down and stay the course. This is hardcore stuff.

Just like Conrad Colman, the 28 year old sailor who raced around the world in sailboats since he was 16, won his around the world leg into port in his home country of New Zealand, persistence when you have the right stuff brings home first place. We will persist through the mindless algorithms and evil plans of the winderkun master of the universe, the hedgies.

Alf is right. Gold will make new highs.

Each 1,000,000 ounces a gold company has will be worth not millions, but rather billions. The fact that gold is honest money will overcome all the MOPE fiat manufacturers can produce. Conrad Colman never took his eye off the ball regardless of multiple challenges along his life course.

Forty days of battle without seeing land and just skirting the icy dangers of the South Oceans, the youngest crew in the race were always challenged by professional boatmen and wild seas. They never gave in to self doubt and won.

So will we.

Respectfully,
Jim

http://www.jsmineset.com/