Precious metals news

Faros Trading has a new piece up on King World News anticipating an acceleration to the US dollar's decline. We have stated repeatedly we expect the US dollar's decline to […]

JP Morgan and HSBS may be compounding their problems by continuing to extend the gold and silver manipulations, but it sure is nice for us. The longer JP and friends […]

Gold and silver are both trading at the very top end of their trading ranges this morning. Gold is again attempting to clear the $1432 level, and silver is flirting […]

Bloomberg reports that Fukushima reactor 1 is experiencing uncontrolled nuclear chain reactions. As a result, the Japanese government is considering throwing in the towel and entombing the Fukushima complex in […]

As we have been saying repeatedly, the Fed will end up buying all of Japan's treasuries. China must currently be trying to figure out how they can get the Fed […]

For our readers (with established physical positions) interested in a good overview of the junior silver mining sector: From The Gold Report With industrial demand almost exclusively driving the price […]

By Michael Pento
By its very definition, fiat money is something created out of thin air: the word "fiat" is Latin for "let it be done" (as in, by decree). But the convenience that such a currency system offers central bankers is paid at the expense of savers. With nothing of real or lasting value on which to anchor, the value of fiat currencies can always blow away like ashes on a windy day.
For the past 40 years or so, every country on the planet has relied on fiat money. To a very large extent, this means that the national economies are far more exposed to the whims of their central bankers than they have been in the past. So, if central bankers go off their meds, the danger to the currency becomes profound. Unfortunately, at America's Federal Reserve, it seems the inmates are now running the asylum.
We are being led to believe that falling prices are evil, and that only an increase in inflation can save our economy. From the moment the financial crisis took hold in 2...

By Peter Schiff
Very few people have either the time or patience to sift through the data released by the Treasury Department in the wake of its bond auctions. But the numbers do provide direct evidence of the country’s current financial condition that in many ways mirror a financial shell game that typifies our entire economy.
Despite continued deterioration of America’s fiscal health, the Treasury is still attracting adequate numbers of buyers of its debt, even with the ultra low coupon rates. Market watchers take these successful auctions as proof that our current monetary and fiscal stimulus efforts are prudent. But who’s doing the buying, and what do they do with the bonds after they have been purchased?
Most people are aware that foreign central banks figure very prominently into the mix. They buy for political reasons and to suppress the value of their currencies relative to the dollar. And while we think their rationale is silly, we do not dispute that they will ...

By Peter Schiff
One of the immediate financial consequences of the catastrophic Japanese earthquake is that Japan needs to call on its huge cache of foreign exchange reserves to rebuild its shattered infrastructure. To pay for domestic projects, Japan will require yen – not dollars, euros or Swiss francs. As a result of these conversions, the yen rallied considerably after the quake struck.

A few months ago, the chorus sung by the recovery cheerleaders reached a crescendo when expanding consumer credit statistics and surging US trade deficits provided them with “evidence” of an economic rebound. In declaring victory, they overlooked the very nucleus of this past crisis: namely, the enormous debt levels and bubbling inflation that created fragile asset bubbles. If they had recognized the original problem, they would have remained silent. In reality, only a reduction in US debt levels or increase in the value of the dollar would have signaled a budding recovery; but, thanks to the Federal Reserve and Obama Administration, there is virtually no way those results will ever be seen.
Last week’s Flow of Funds report issued by the Federal Reserve clearly underlines the fact that we, as a country, haven't just avoided deleveraging, but rather continue to accumulate debt. At the end of the last fiscal year, total non-financial debt (household, business, state, local, and fe...

If we actually look at the Dow Jones in silver, a real form of money. We will see that the DJI has been downward spiraling since 2001. Our economy has been going down the gutter since 2001.

By Peter Schiff
As the world confronts one of the most critical periods of economic upheaval that it has ever seen, it is clear that our most influential economic stewards have absolutely no idea what they are doing. But, like kids with a new chemistry set, they are nevertheless unwilling to let that stand in the way of their experimental fun. As they pour an ever-growing number of volatile ingredients into their test tubes, we can either hope that they magically stumble on the secret formula to cure the world’s ills, or more pragmatically, we can try to prepare for the explosion that is likely to result.

China Gold Demand Growing at "Explosive" Pace Reuters - More detail is provided on the "explosive" growth of gold demand in China. Zhou Ming, deputy head of the precious metals division of Industrial and Commercial Bank of China, the world's largest bank by market value, explains, "As [the] Chinese get wealthy, they [are] look[ing] to diversify their investments and gold stands out as a good hedge against inflation." He also noted the "frantic" demand for non-physical gold investments. Any form of gold buying benefits the price of physical gold - but the Chinese, with a strengthening financial system, are not as concerned about counterparty risk as Americans. Overall, China became a major importer of gold in 2010, despite its still-massive mining output. This comes as the Chinese government tries to cool the property market and encourage more widespread precious metal ownership. Read Full Article>>
Barrick CFO: Central Banks May Shift More Reserves Into Gold Wall Street Jo...

By Peter Schiff
In the world of precious metals, silver spends a lot of time in the shadow of its big brother gold.
Gold, with its high price-to-weight and distinctive yellow tint, has always occupied a special place in the human psyche. To many people across many ages, gold is simply the ultimate form of money - and, as a long-term, stable store of value for one's personal wealth, I agree it's hard to beat.
However, rare circumstances are aligning today that I believe will make silver the true champion of this bull run.

The following article was written by Mary Anne and Pamela Aden for the March 2011 edition of Peter Schiff's Gold Letter.
The commodity market is on fire! Be it copper, cotton, cattle, corn, sugar, energy, or resources... most tangibles are at record highs or new highs. This is why the CRB index also recently hit a record high.
Growing global demand has been the main driving force, with a boost from other factors like natural disruptions and political scares.
Gold and silver tend to move in the same general wave as the rest of the commodity world, but the reasons why are different in many ways.

It now appears that the United States has finally succeeded in its efforts to destroy confidence in the U.S. dollar. Given the currency's reserve status, its ubiquity in financial markets, and the economic power and political position of the United States, this was no easy task. However, to get the job done Washington chose the right man: Fed Chairman Ben Bernanke. Thanks to Bernanke's herculean efforts, investors across the globe have now been fully weaned from their infantile belief that the U.S. dollar will remain the ultimate safe haven currency.
The proof of Ben's success can be seen in comparing how the foreign exchange markets reacted to the recent crisis in the Middle East with how they reacted to the financial crisis of 2008. Back then, investors looking for safety abandoned their foreign currency positions and piled into the U.S. dollar (the market for U.S. Treasury Bonds in particular). As a result of these fund flows, the U.S. dollar surged 20% from August to Novembe...

Civil revolt is currently spreading across the Arab world. What began in Tunisia has now metastasized into Bahrain, Egypt and Libya. Though two dictators have been ousted, the chances that these regimes will fundamentally transform from autocracy to a system of free markets and property rights are also up in the air. An important question is whether or not Saudi Arabia will eventually get into the mix; and, if so, whether the current struggle in Libya would morph into a proxy war between Saudi Arabia (Sunni Muslims) and Iran (Shiite Muslims). It remains to be seen whether the new regime in Egypt—whatever form it ends up taking – will allow Iran to use the Suez Canal to parade warships across the Mediterranean Sea and into Syria. If so, what would Israel’s reaction to such a perceived provocation be?
There are many unknowns, but what is known is that the turmoil has had an immediate and significant impact on the price of oil. WTI is now trading just below $100 a barrel and Brent ...

To counter the increasing demands that government reduce its micromanagement of the economy, last week the Obama Administration offered a fig leaf in the form of a white paper entitled "Reforming America's Housing Finance Market." In addition to marking the official end of the Bush era "ownership society," where increasing the level of home ownership was a national priority, the document contains a recommended regulatory overhaul of the Federal Housing Authority (FHA) as well as Fannie Mae and Freddie Mac (together known as Government Sponsored Enterprises "GSE's"), that intends to bring the share of government owned home loans from the current 95% to 40% over the next 5-7 years.
In the report, the Obama Administration makes the important admission that government interference in housing had dangerously distorted the market. And, while the goal of reducing the government's footprint in the housing market is certainly laudable, the reform plan is not only too little too late, but...

By Peter Schiff
Based on his recent public comments, Fed Chairman Bernanke seems determined to give the U.S. dollar the reputation of Egypt’s Hosni Mubarak: an unwanted relic of the past that everyone agrees must go, but stubbornly clings to a privileged position. The dollar is currently the world’s ruling currency, but, as with Mubarak, I believe that growing public discontent will spur regime change quicker than most pundits expect.

By Peter Schiff
A lot of people ride motorcycles, but there's a reason most don't try to be Evel Knievel. Sure, there's a big reward if you can land a jump over 14 school buses - but what if you don't?
A new craze among our competitors is to push gold buyers into "leveraged accounts." In one of these accounts, the dealer lends you money to buy gold, on the assumption that gold will go up faster than the rate of interest on the loan. In other words, if you call with $5K, they'll give you another $20K in credit to make a $25K total purchase of gold bullion.
The sales pitch is that since we all know gold is going up, you might as well maximize your returns by leveraging up. What they don't often mention is what happens if gold goes through a correction. You'll likely be asked to send in more cash for a "margin call." If you don't, they'll sell your gold for a substantial loss.