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The World Financial Report – May 14th, 2013

May 14, 2013

WORLD FINANCIAL REPORT ON RADIO MAY 14 2013

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GOLD

-CHART OF THE WEEK: Doug Pollitt of Pollitt & Company Gold Chart. The data out last week borders on the extreme. Every time sentiment has reached these levels over the course of this secular bull market, a strong bounce has ensued. Either that or the crowd could be right and we could be on the cusp of a bear market, a la 1981. But this is simply not corroborated by the underlying. The Great Reflation is in full swing, the Fed gropes the bond market as though on a bad date that won’t end and there’s nary a Paul Volcker in sight. Right now is the time when you wished you had bought. Read more here-http://bit.ly/18xse9H

-CHART OF THE WEEK: David Chapman’s Gold Chart. Below is a very long-term chart of gold adjusted for the CPI. A few things stand out on the chart. Gold prices for years were fixed. Gold only broke out of its long channel once it was set free to find its market level. Major lows in gold prices on an inflation-adjusted basis were seen during the American revolution, the War of 1812, the US civil war, WW1 and the Vietnam War. The last major low was in 1999-2001 following years of low gold prices. Overall gold has proven over time to be an excellent hedge against inflation and a long-term store of value. However, there are periods to own gold and periods not to own gold. Despite the recent setback, the reasons to hold gold have not abated. Read more here-http://bit.ly/YxGDP6

-Egon von Greyerz: Swiss Refiners Unable To Keep Up With Massive Gold Demand. While the mainstream media focuses on the paper gold price, savvy investors around the world are now buying all of the physical gold that is available. In country after country we hear about how sales of gold are absolutely booming and everyone is running out of stock. Gold dealers and jewelers can’t keep up with demand, to the point that some of them have empty shelves. People are queueing up to buy gold. Look at the Swiss refiners, they are continuing to have major delays in delivering gold.

These delays are several weeks and this is in spite of running at full capacity, 24/7. Refiners’ premiums for prompt delivery right now are around $6 to $7, and it’s been as high as $20 recently. At some point this extraordinary physical demand will result in a massive surge in the gold price. What will happen to the gold price when the world financial system comes under real pressure again, and money printing has to accelerate? There will only be physical gold available at massively high prices at that time in order to compensate for what will be a total lack of supply.

So investors must not be concerned about the correction in the gold price. It has nothing to do with reality. Gold will continue to reflect the destruction of paper money. Even with the pullback in the price of gold, over the last 12 years gold has produced a 16% compounded annual return. That gain will only accelerate in the next few years. So investors should just focus on buying physical gold and storing it outside of the banking system. Read more here-http://bit.ly/147l3Sa

-Stephen Leeb: China Moving To Dominate The World With Gold Purchases. China also imported over 200 tons of gold for the most recent month. That is an extraordinary number. At that rate that’s over 2,400 tons of gold per year on an annualized basis. This simply speeds up the point at which China will be the largest gold holder in the world. China saw gold come down and they didn’t just buy on the dip, instead they bought as much as the market would give them. And, again, you see the yuan going up so that is making the price of gold even cheaper for the Chinese.

It’s only a matter of time before the Chinese back the yuan with gold. This will push the yuan front and center as a key element in terms of being part of the world’s reserve currency basket. China gets the message. They are doing whatever it takes to establish their dominance in the world, particularly in the commodity arena. Their currency is flying and they are importing as much gold as they possibly can. All of this spells incredible upside for gold. Hang on to your gold, and buy more if it comes down in price. And especially buy silver. When gold takes off, silver will be gold on steroids. Read more here-http://bit.ly/11jO3Jr

-China’s Gold Purchases From Hong Kong Expand to Record. Gold imports by China from Hong Kong more than doubled to an all-time high in March as buyers in the biggest consumer after India boosted purchases, underscoring increased bullion demand in the world’s second-largest economy. Read more here-http://bloom.bg/10qBCW2

-China’s Gold Consumption Jumps 26% in First Quarter Before Rout. Gold consumption in China, the world’s largest user after India, jumped 26 percent in the first three months of 2013 from a year ago amid strong bullion sales and rising jewelry demand, an association said. Total consumption reached 320.54 metric tons in the first quarter, the China Gold Association said in a report. Purchases of gold bars surged 49 percent to 120.39 tons, while jewelry gained 16 percent to 178.59 tons, it said. Gold output in China, the world’s largest producer, gained 11 percent in the same period to 89.91 tons, according to the association. Read more here-http://bloom.bg/10rmUCU and http://reut.rs/18Zs1cF and http://bit.ly/13A8Rtx

-Jeff Nielson: China’s real gold reserves at 4,000 tonnes? Read more here-http://bit.ly/YH7ri8

-Lawrence Williams: Who’s smartest on gold Chinese housewives or George Soros? The huge surge of purchasing by Chinese particularly Chinese women is reported to have amounted to more than 10% of annual global mined gold output in just 2 weeks of frenzied buying. Read more here-http://bit.ly/15tNsqf

-What a ‘bear market’! India’s gold imports seen topping 100 tonnes for second month. Read more here-http://bit.ly/10GHbhL

-Gold rush in the UAE as expats take advantage of plunging prices. Jewellery and coins are much in demand in Dubai and Qatar amid rumours that gold bars have been pulled from store shelves until prices recover. Read more here-http://bit.ly/18Z98GR

-Demand for metal remains enormous; fake silver eagles discovered in Ontario. Read more here-http://bit.ly/18uoPs5

-Gold plunge was not natural market event, fund manager Marshall Auerback says. Read more here-http://bit.ly/12VF3V8

-Steve Forbes: Why Gold Plunged. Ben Bernanke has pulled off a neat trick that could well give us the worst of all worlds: a brief commodity deflation, future inflation and a stagnant economy. It will earn him a prominent place in the central bank’s Hall of Infamy. Usually central bankers earn opprobium from history the old-fashioned way, by debasing the currencies under their care. But Bernanke has added a new twist. Read more here-http://onforb.es/10vkvqK

-Jim Sinclair: Technical analysis of gold market is a waste of time. Read more here-http://bit.ly/ZJLcmU

-Jim Sinclair: Liberation of gold from the paper market is at hand. Read more here-http://bit.ly/13kVApx

-Gene Arensberg: Small traders are net short gold for first time as big traders cover. Read more here-http://bit.ly/10u02CB

-Chris Martenson: Why There May Be a Lot Less Gold than We Realize. A recent and thought-provoking study regarding gold leasing was done by Sprott Asset Management in March. After accounting for all known flows of gold into and out of the US over the past 22 years, the Sprott team arrived at a figure of nearly 4,500 tonnes of gold that cannot be accounted for. Read more here-http://bit.ly/18wdjfK

-Dan Norcini: God Help Us All Because This Sure As Hell Will Not End Well. Physical market demand for gold is extremely strong on bouts of price weakness, but that in itself is not able to overcome sentiment among many investment fund managers in the West. The general feeling out there amongst most fund managers is that the decade-long bull market in gold has come to an end. If you believe the gold bull market is over, why would you want to own shares in the companies that mine gold out of the ground? Keep in mind that this is not my view of the gold market but it is currently the prevailing view in the West at the immediate moment. Little if any thought is given to the long-term implications of this experiment in unlimited money creation. The thinking seems to be, “Things are okay for now, not great, but okay. We will worry about the other stuff later and cross that bridge when we get to it. But for now, it’s equity buying time. Read more here-http://bit.ly/10l4myu

-Dr. Paul Craig Roberts: Former US Treasury Official Gold, Silver, The Fed & Bank Runs. It’s hard to fly out of banks. You can’t escape the banks, you can only escape how much money you keep in any one bank. If you pull out (your money), what are you doing to do with it? Where do you put it? Are you going to put it in a safe in your house? Or you have to look for some other financial asset. Are you going to put it in the stock market when the stocks are at an all-time high and there is no economic activity, and profits are due to layoffs? Are you going to put it in the bond market when the real interest rates are negative and the bond market is the biggest bubble in human history?

So they’ve kind of got people trapped. So what can they do? They can put it in precious metals, gold and silver, if they can find a place to store it that’s safe. To prevent that the government and the Federal Reserve short the bullion market in order to drive the prices down, to scare people away from that alternative. So when you have this kind of rigged system it’s hard for people to protect what they have. It’s a dangerous time, and it looks like the authorities both in Western Europe and the United States are not really concerned with what happens to the wealth of the citizens, only whether or not a few giant banks can be kept afloat. Read more here-http://bit.ly/1473FwO

-John Hathaway: I Haven’t Seen This In Gold In 15 Years. Even though the paper market crushed the gold price, the physical market came alive. If you look at the numbers for the US Mint, the reports out of the Far-East, and many of the contacts we have, people are lining up to buy gold. So it’s kind of the opposite of a bubble. What came out of this to me is that people around the world don’t trust the banking system. They want some of their wealth in a secure asset and they want it outside of the banking system.

So what we are doing is preparing to launch a fund which will allow accredited investors to store their gold with us and actually source well known vaulting services like VIA MAT, a Singapore facility, or Brinks. So that’s what we are doing about it. Investors have to realize that the rationale for owning gold has never been stronger because not only do we have money printing by all of the global central banks, but at the same time the zero interest rate environment is stymieing economic growth. So these debts that have been piling up and accumulated by governments, in order to paper over the weakness of the private sector, are not going to go away. Instead they will just get bigger and bigger.

Austerity has now become a bad word, and now we’ve learned that your uninsured deposits anywhere in Europe or the US are at risk. In a banking crisis you could become a creditor of the bank and take a real haircut on your deposit just as we just saw in Cyprus. If people think it can’t happen here, I’ve got news for you, look at the derivative books of the seven or eight large US banks. They are completely opaque, incomprehensible, and they are going to be a big source of trouble at some point in the future. So I think having money in a monetary asset where there is no counterparty risk is probably the best idea since sliced bread. Read more here-http://bit.ly/10J1Lhz

-James Turk: Extraordinary Delays For Physical Gold & Silver. If the central planners want to keep the precious metals at these low prices, to meet the demand for physical metal they will need to empty more metal from central bank vaults, or borrow metal from the ETFs as some have suggested is happening. Otherwise, the central planners will have to step back and stop their intervention, thereby letting the price of gold and silver rise so that demand tapers off, bringing demand and supply of physical metal back toward some kind of balance. We’ve seen this same situation several times over the last twelve years. It is what I have been calling a “managed retreat.” Despite the current weakness, I firmly believe we have again entered a critical period where the central planners will need to retreat once again in order to let the gold and silver prices climb higher. Read more here-http://bit.ly/15PhNiX

-John Hathaway: This Is The Truth About Where The Gold Market Is. To be realistic you have to say that we are in a healing mode and it may take a period of months for the market to get its footing. That is assuming there is no major event or market-moving change of sentiment, which could happen at any time. So if you are thinking about trying to time this, I think that’s a big mistake. If you enter or add to positions in physical gold and the shares, you just have to be prepared to wait it out.

It will take some patience going forward, but the ultimate end game is as palpable and real as ever now. Ultimately I think the dam will break, and whoever is sitting on the gold price and keeping it from going higher will get out of the way and people will wonder why the price exploded higher in such a violent manner. But trying to time that is a very risky business. It’s better just to be invested, stay patient and add to positions. Read more here-http://bit.ly/10dWXFe

-GoldMoney’s Alasdair Macleod interviewed on ‘The Keiser Report.’ Watch more here-http://bit.ly/ZJLEBz

-GATA Chairman Bill Murphy interviewed by Jay Taylor. Listen to more here-http://bit.ly/18YVnrJ

-Diplomatic cables show central banks conspiring to rig gold even after demonetization. Read more here-http://bit.ly/11TwkDR

-MineWeb’s Lawrence Williams: GATA gaining credence. Read more here-http://bit.ly/12enwu0

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SILVER

Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33

Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

Gold to silver ratio at 60 to 1 with gold at $2,500 the silver price would be $41.67

Gold to silver ratio at 50 to 1 with gold at $2,500 the silver price would be $50.00

Gold to silver ratio at 40 to 1 with gold at $2,500 the silver price would be $62.50

Gold to silver ratio at 30 to 1 with gold at $2,500 the silver price would be $83.33

Gold to silver ratio at 20 to 1 with gold at $2,500 the silver price would be $125.00

Gold to silver ratio at 15 to 1 with gold at $2,500 the silver price would be $166.67

-”It’s time for the CFTC to come clean about silver and stop pretending it is investigating. It will be better for everyone (except holders of long COMEX contracts) for the CFTC to simply shut down this crooked exchange instead of letting the manipulation continue. At one time I did think the exchange could be reformed, but I no longer feel that is possible. The corruption goes too deep. It’s bad enough that an important American financial institution is corrupt beyond repair, but it is more a loss that the COMEX has dragged the CFTC down with it. In my latest article, I referred to the commissioners and other high officials of the agency as traitors to the American people. I still feel that way. Not only are none of them fit to hold their current positions, they should never hold any other public office again.” Silver analyst Ted Butler May 8 2013 via Ed Steer Casey Research-Read more here-http://bit.ly/YIt0yD

-”I now hold the opinion that the commissioners and other high officials of the CFTC are traitors. That’s a real ugly word, but Merriam-Webster defines traitor as one who betrays another’s trust or is false to an obligation or duty. It may be ugly, but the CFTC has betrayed the public trust and has been false to a sworn obligation and duty to uphold commodity law. How else to describe a phony 4.5 year investigation and never a comment on the series of unprecedented price declines in silver while the supposed investigation was in place? I don’t know how these people live with themselves by betraying the public on a daily basis. Silver analyst Ted Butler May 4 2013 via Ed Steer Casey Research-Read more here-http://bit.ly/10wABAy

-CHART OF THE WEEK: Citi analyst Tom Fitzpatrick, Silver Market Update. If you look at the move we had down in silver during the 2008/2009 time frame, in percentage terms we haven’t quite equalled that move. I think the correction is nearing the end, but could we have a bit more pressure where silver breaks to a new low? That’s definitely possible, particularly if we do have the danger of seeing the $1,260 level in the gold price. But the reality is there is strong support between the zone just below $20 on silver and just above $21 as well. That area would be consistent with the type of bottoming pattern we put in during 2008. In the event silver does trade just below $20, that should be a platform to see silver push higher and most likely advance to new all-time highs. There is, however, the danger that we may see this one more push to the downside.

Obviously triple digits (over $100) would be quite a move in silver, but it’s not inconceivable that we could see that kind of advance over time. We’re much more focused right now on the gold price and that would be a feedback loop into silver. We still follow the same view that central banks around the world are expanding their printing activities across the globe with the idea of reflating and inflating. Despite the recent pressures we have seen in both the gold and silver markets, our belief is still that this is a setup which is going to be very positive for gold, and subsequently for silver as well.

We have a long-term target on gold to get in the region of $3,400 to $3,500. We see no reason at all to change that target. We still believe over the course of the next couple of years we could see a move of that magnitude. This would obviously mean new all-time highs for silver. We will just have to wait and see if that means a silver price in the triple digits. It would mean at least $70 to $75 silver and it’s not inconceivable that silver will in fact trade in the triple digits. Read more here-http://bit.ly/11VIax4

-CHART OF THE WEEK: Hubert Moolman, Silver Bull Market Is Following The Structure Of The 70s Bull Market. If the current bull market structure continues to follow the basic structure of the 70s bull market, then price should, at least, clear $140. Read more here-http://bit.ly/17PwcZQ

-Bill Haynes: Largest Wholesaler In U.S. Sold Out Of 100 Ounce Silver Bars. The largest wholesaler in the United States is no longer taking orders for 100 ounces silver bars. They have sold out their allotment of Johnson Matthey 100 ounce (silver) bars. Their whole allotment for the month of May has been sold. They will not take orders for bullion they are not sure if they can get. The remaining wholesalers that are still selling 100 ounce silver bars, they’ve kicked their premiums up.

One ounce silver rounds, they will quote them, but there is 4 to 6 weeks for delivery. Silver (American) Eagles, Silver Maple Leafs, still 4 to 5 weeks out. 90% (coin) is still very difficult to get. This buying is continuing unabated and I think for good reason. The people are waking up. There is a world of difference between holding physical gold and silver, and holding an ETF. I think a lot of that money that went out of the ETF’s in the past 6 to 8 weeks went into the physical market. Read more here-http://bit.ly/11W4hng

-Robert Fitzwilson: The Global Run On Silver & What It Means Going Forward. The silver coin in most of human history has allowed the owner to purchase goods and services. It has also been one of the primary mechanisms for the storage of wealth. The amazing thing about the coin is that it also has tremendous utility. Silver is the best conductor of electricity, so it is essential to our technology driven world. Computers and solar panels all rely on the electrical properties of silver. Silver also is one of the best natural anti-microbial elements in Nature.

There is an ever expanding list of potential uses for the metal. At the same time, the surplus of silver that we had not too long ago has been consumed. The ore grades that we are mining continue to decline. At a time when supplies are tight and getting tighter, the demand for industrial, jewelry and monetary uses continues to grow. Returning to the coin and currency on the table, you can see that they both have been used to exchange goods and services throughout history. The currency has virtually no intrinsic value. The silver coin has a great deal of it. The supply of currency grows exponentially every day. The supply of silver will stabilize and eventually decline as mines are depleted and the other uses for the metals increase.

Common sense tells us that one will get more valuable and the other will suffer a decline. If you own the dollar, the value of it has been virtually destroyed in the last 100 years, all but 2% according to one estimate. For currency that is saved for future exchanges of goods and services in the form of bank deposits and other forms of fixed income, the interest has been taken away through the zero interest rate policy. There is now talk of completing the confiscation in the form of applying the Cyprus model to bank deposits. Whether that is an imminent prospect or not, the legal mechanisms are now in place.

In a perfect world, the amount of the unfinished transactions, the currency, would be roughly equivalent to the amount of goods and services that might be exchanged now and in the foreseeable future. As grotesque amounts of debt/currency are being created, these representations of unfinished transactions have completely overwhelmed any possibility of several generations being able to provide an equivalent amount of goods and services. We know the currency has no intrinsic value. We now know that the utility has been and will continue to be systemically destroyed, particularly if there is a new global currency or a new reserve currency such as the Chinese Yuan.

The choice between the wealth and the utility of the silver coin and the lack of wealth and diminishing utility of the currency should be an easy one. Assets denominated in currencies are being destroyed at an accelerating pace while the safety and desirability of real assets such as the silver coin grow commensurately. The recent run on silver is a sign that the general population is starting to understand the stark differences between the safety of sound money and peril of paper money. We can only hope that more and more people reach that same conclusion before it is too late. Read more here-http://bit.ly/17OYqEd

-Mike Kosares: Silver eagle sales show metal’s recognition as safe haven. Read more here-http://bit.ly/10uxbJM

-US Mint to limit purchases of “America the Beautiful” silver coins. The U.S. Mint will limit dealers’ purchases of its “America the Beautiful” five-ounce silver bullion coins when they go on sale next week because strong demand exceeds the mint’s inventory. Read more here-http://reut.rs/YxFaIz

-Ted Butler: The Worst Regulator Possible. Sticking with the theme of milestones, we’ve just crossed a few important anniversary dates that relate to silver that taken in proper perspective point to a disturbing conclusion. That conclusion is that the US commodities regulator, the CFTC, has done more public harm than good over the past few years. Simply put, the public and our markets would have been better off had the agency not been run by the commissioners in place, specifically including Chairman Gensler and Commissioner Chilton.

In fact, rarely has so much promise for genuine regulatory reform been squandered as badly as has been the case over the past few years. Four years ago tomorrow, Gary Gensler was sworn in as chairman of the CFTC, following the financial crisis that brought the system to the brink. He hit the road running and immediately began to speak publicly in terms of position limits and concentration that paralleled exactly what I had been espousing for more than 20 years. Gensler followed up his public speeches with a series of unprecedented public meetings designed to garner industry consensus for how to prevent concentration and manipulation and how to institute legitimate speculative position limits in those commodities where they did not exist, such as silver. Read more here-http://bit.ly/12k0hgK

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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: The Scariest Jobs Chart Ever. Read more here-http://read.bi/12hjgsc

-Dr. Paul Craig Roberts: Former US Treasury Official Friday’s Jobs Report A Total Farce. Read more here-http://bit.ly/10ufxFX

-Dark side to U.S. jobs report: Big drop in hours worked. Shorter work week equivalent to 500,000 jobs lost. Read more here-http://on.mktw.net/15JnnTS

-10,962,532: U.S. Disability Beneficiaries Exceed Population of Greece. The total number of people in the United States now receiving federal disability benefits hit a record 10,962,532 million in April, which exceeds the 10,815,197 people who live in the nation of Greece. Read more here-http://bit.ly/16i5F9F


chartoftheday.com

-CHART OF THE WEEK: The Worst Unemployment Crisis In Modern History Is Unfolding Right Now. At 27.2%, Spain is suffering the worst unemployment rate in modern history. Spain is tied with Greece, and is worse than the approximately 25% unemployment rate that the U.S. saw during The Great Depression. Read more here-http://read.bi/12fwXJx

-”This buying stampede in stocks is now 89 days in length, which is historic. Buying stampedes tend to last 17 to 25 sessions, with only 1 to 3 session pauses or pullbacks, before they exhaust themselves. There have been a few that have lasted 25 to 30 sessions, but it’s rare to have one go more than 30 sessions. This one has gone 89 sessions as of today. The next longest one was the 53 session buying stampede in 2010. The longest one before that was the 38 session buying stampede in 1987 that marched itself up into the August high. We all know what happened after that in October of 1987.” Jeffrey Saut

-”Well, there is obviously going to be a big blow up. We have the three biggest bubbles in human history: The stock market bubble, the bond market bubble, and the dollar bubble.” Dr. Paul Craig Roberts

-”You hear about shortages of coins. Sometimes that can be attributable to the mints not having enough equipment. Bars, the same thing. I read recently that more than half of the gold which has been ordered has been on a delayed delivery of some sort. Everything I get confirms the activity is overwhelmingly on the buy side. So this pullback has not at all disheartened people who want to own more gold. In fact they are just looking at it as if it was a ‘blue light special,’ and they are just standing in line to buy.

Sometimes you have to give the average citizen some credit in terms of common sense. They can look at what’s going on and say, ‘This doesn’t make sense. Money printing can’t be good over the longer-term.’ They don’t need CNBC or Bloomberg to tell them to go out and buy it. They are thinking for themselves. I mean if anything the media is so dead set against gold right now, the fact that the public buying remains so strong, to me, is very, very significant and if you look at the traders’ commitments, they are extremely bullish. The smart money is on the buy side, and the specs are very heavily on the short side.” John Hathaway

-”Gold and silver are their (the central planners) worst nightmare. The fact is they have to print unlimited quantities of money in every Western nation just to keep the thing from imploding. Now if the gold and silver prices were correctly reacting to this, i.e. they were rising sharply in price as they should be, then the whole scam would be revealed for what it is. Interest rates would start to rise precipitously and the thing would collapse.” John Embry

-”Fair-weather investors in gold jump at the first sign of turbulence because they do not have a clear concept of the monetary transformation that is taking place. They see other gold investors as greater fools who they must beat to the safety of US dollars when the music stops. Fortunately for those who know better, these momentary panics allow us to buy their gold at steep discounts.” Peter Schiff

-German euro founder calls for ‘catastrophic’ currency to be broken up. Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is “leading to disaster.” Read more here-http://bit.ly/ZQUAIG

-532 billion euros to rescue five countries. Cyprus is clearing the last hurdles for money to flow from the European rescue fund, ESM. Five eurozone states now have loans for half a trillion euros. Who pays what and who receives the loans? Read more here-http://bit.ly/177fMy7

-David Rosenberg: The Fed Is Trying Like Crazy, But Nothing It’s Doing Can Save The Economy. David Rosenberg, the veteran Wall Street economist and bearish strategist at Gluskin Sheff, gave an intense presentation on Friday at John Mauldin’s Strategic Investment Conference. Titled “Bernanke: The Wizard Of Potemkin,” this presentation offers a sobering look at the anemic U.S. economy, the labor market mess, and the Federal Reserve’s controversial efforts to get everything back on track. Before you can even think about getting bullish, you must consider the eye-opening charts from Rosenberg’s presentation. Read more here-http://read.bi/12gVVHk

-Paul Singer: The Fed Is Creating ‘Class Warfare’ And The Recovery Is Being Distorted. Billionaire hedge fund manager Paul Singer, who runs Elliott Management, opened the Sohn Investment Conference and his talk was pretty much a downer. Singer made the point that quantitative easing has caused a “distorted recovery.” He explained that this means people who own stocks and bonds financiers, bankers, hedge funds are doing fine.

“Most of the people in this room are doing just fine,” Singer said, adding, “The ordinary person is not experiencing the effective equivalent of Dow Jones 15,000. The average person is paying a lot of money for the necessities of life is worried about his or her job or the job of his or her family is experiencing an economy that has basically recession level employment.” This distortion is helping to fuel class warfare, he added. “I think that’s a poisonous atmosphere in which to rely upon the private sector to generate growth,” he said. Read more here-http://read.bi/YIMcfI

-Greg Hunter: Interview with Karl Denninger, Fed Money Printing Games Out of Gas. Financial analyst Karl Denninger has never bought the so-called “recovery” story. Just the opposite is happening right now. He says, “When you look at these indices in the context of the last three or four months, what you see is a deteriorating picture deteriorating employment, deteriorating final demand, deteriorating basically everything.” So, will the Fed print even more money?

It might, but Denninger says it won’t help, “We’re seeing the leading edge of a great deal of softness, and this means the Federal Reserve’s money games have run out of gas.” A weak economy will be the backdrop for Obama Care in 2014, which Denninger says basically transfers healthcare costs to the government. Denninger warns, “If you shift more of the private expense into the government, all you do is bankrupt the government faster. How does this solve a healthcare problem?” Denninger says, “We are sowing the seeds of the next crash and yes, there will be losses.” Watch more here-http://bit.ly/10rMEu2

-Jeff Gundlach: Anyone Who Says Interest Rates Will Rise Soon Is ‘Absolutely Wrong.’ Read more here-http://read.bi/11UjxRA

-Diminished Housing Wealth Effect Keeps Pressure on Fed. The wealth effect from rising house prices may not be as effective as it once was in spurring the U.S. economy. Rather than using their properties as ATM machines to boost spending, homeowners increasingly are paying down the principal and shortening the maturities of their mortgages in a move Florida banker Rob Nunziata calls “forced savings.” Cash-in refinancings in which borrowers invest more of their own money in the house outnumbered cash-outs by more than two-to- one in the fourth quarter, according to Freddie Mac. Read more here-http://bloom.bg/17NyTLq

-The Most Plugged-In Budget Analyst In America Gives A Great Crash Course On How The Government Spends Its Money. Read more here-http://read.bi/15OlDst

-Jim Jubak: Will the age wars bankrupt us? Underlying all our recent global crises is the issue of an aging population. Yet we’re refusing to fund the growth and productivity our economies need. Read more here-http://on-msn.com/YHWxsc

-Mohamed El-Erian: Unhedged Stock Market Investors Will Pay A High Price For Taking Excessive Risk. Why is it that the Pimco’s of this world are not disciplining a system that is becoming more and more artificial? Why do we allow the manipulation? In a classroom you can discipline a single a person. However, if the whole class misbehaves it is an entirely different issue. Currently the whole class is misbehaving and that is a very different paradigm than what we have seen in the past which has led to unprecedented, unproven and untried interventions that are likely to have far reaching outcomes.

Investors that are overly invested in stocks will eventually pay a very high price for taking on excessive risk. We are approaching the end of the journey for this experiment and it will either result in a return to organic growth or economic disaster. The problem is that we really don’t know which it will be. What we do know is that eventually, regardless of the outcome of these monetary experiments, the disconnect between the fundamentals and the markets will revert which will prove painful for unhedged stock investors. Read more here-http://read.bi/174LMmv

-Five million U.K. families ‘relying on loans and savings to cover their food bills.’ Five million British households are relying on loans and savings to meet grocery costs, research suggested today, as they approach financial ‘breaking point’. One in five families said that their monthly incomes would not stretch to cover their total food bill in April, consumer group Which? found. That meant they had to use a credit card, overdraft or loan, or plunder their savings instead. This would equate to five million families if the findings were projected across the UK, Which? said. Read more here-http://bit.ly/171zLy5

-Mark Mobius: Let Me Separate Myth From Reality About These So-Called ‘Ghost Cities.’ Read more here-http://read.bi/15OkH7t

-Greg Hunter: Gerald Celente Interview, Middle East Out of Control. Trends researcher Gerald Celente predicts war in the Middle East. He says, “It is out of control. What are people waiting for–an Archduke Ferdinand moment?” Celente thinks Israel bombing Syria means World War 3 is on its way. The cycle leading to war started with the crash of 2008. Celente says, “Crash, depression, currency wars trade wars and then real wars.

That’s what we’re seeing again.” Celente charges, “This is a proxy war against Iran because when Syria is choked off, then Iran is left alone surrounded by enemies. So, that’s what we’re really looking at. The end game is Iran.” What would happen if Iran and Israel went to war? Would the Strait of Hormuz close, gasoline explode to $10 a gallon, markets implode? Celente says, “All of the above.” Read more here-http://bit.ly/10lRng1

-Egypt Investment Collapsing as Citizens Turn Into Vigilantes. A growing number of Egyptians think that “you can actually achieve your goals using violence,” said Ezzedine Choukri Fishere, a political scientist at the American University in Cairo. Beneath that lies the “dashed expectation and hope of the youth,” he said. Read more here-http://bloom.bg/145mu3m

-Gates Says Wealthy Should Pay More to Help Reduce Deficit. Microsoft Corp. co-founder Bill Gates said the wealthy should pay more as the U.S. continues to grapple with how to rein in its budget deficit. Read more here-http://bloom.bg/YGMt2V

-Yankees Selling Half-Off Tickets on Groupon as Attendance Drops. The New York Yankees are selling tickets at more than a 50 percent discount on the coupon website Groupon Inc. as attendance lags behind last season, even though the team is off to a better start. Read more here-http://bloom.bg/12hj9×5

-Cezanne ‘Les Pommes’ Leads Sotheby’s $230 Million Tally. Paul Cezanne’s “Les Pommes” sold for $41.6 million at Sotheby’s in New York last night, the top price in a $230 million Impressionist and modern art sale. Read more here-http://bloom.bg/11kipvC

-Pentagon Accuses China of Cyberspying on U.S. Government. The Chinese military has targeted U.S. government computers with intrusions that seek sensitive data, according to a report in which the Pentagon for the first time directly accuses China of a cyber espionage campaign. Read more here-http://bloom.bg/11Uj1ms

-Are All Telephone Calls Recorded And Accessible To The US Government? Read more here-http://read.bi/17MhBhZ

-U.S. Weighs Wide Overhaul of Wiretap Laws. The Obama administration, resolving years of internal debate, is on the verge of backing a Federal Bureau of Investigation plan for a sweeping overhaul of surveillance laws that would make it easier to wiretap people who communicate using the Internet rather than by traditional phone services, according to officials familiar with the deliberations. Read more here-http://nyti.ms/ZIHYjl

-Gore Is Romney-Rich With $200 Million After Bush Defeat. In 1999, Al Gore, then U.S. vice president and a Democratic candidate for president, sold $6,000 worth of cows. Read more here-http://bloom.bg/10HQoXo

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-Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a 0.96 Carat Radiant Cut Fancy Vivid Pink Argyle. Harold Seigel-Watch video here-http://bit.ly/LIsp98

-”Unlike gold, diamonds are light and pack tremendous value in small portable sizes. The big money is well aware of this, and the price of gem-quality diamonds keeps advancing at around 5% a year. The early Christie’s auction this year was supposed to realize $35 million. It actually totaled $81 million. At the auction, a 34.65 carat diamond, fancy intense pink, sold for $39 million. And that was for a single stone. At Sotheby’s an early auction totaled $53 million, the highest ever total for a spring sale. The top selling lot was a 74.79 carat diamond, potentially flawless, that went for over $14 million. Obviously, big money is investing in top quality diamonds. It’s concentrated wealth which is portable just in case. Richard Russell

-Christie’s Hong Kong Jewels Sale Features 75-Ct. Briolette Diamond. Christie’s Hong Kong will hold its magnificent jewels sale on May 28, offering 290 jewels for a presale estimate total of $74 million (HKD 590 million). The top lot of the sale is diamond pendant necklace with a marquise-cut purplish pink diamond suspending a 75.36-carat, D, internally flawless, type IIa briolette diamond and a presale estimate of $8.5 million to $12.5 million. Read more here-http://bit.ly/12WRL6c

-Avi Krawitz: Big & Beautiful Diamonds. Unique diamonds are the talk of the town. While the rest of the trade struggles along, ‎dealers at this week’s Basel show reported strong demand at the very top-end of the ‎market. Therefore, as the jewelry auction scene moves from New York to Geneva in ‎mid-May, the special diamonds on display are expected to fetch strong, even record ‎prices. ‎Read more here-http://bit.ly/YGeLKH

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CURRENCY WARS

-Axel Merk: Currency Wars, Winners and Losers. Read more here-http://bit.ly/16kQSuO

-USDJPY Finally Breaks ¥100. The U.S. dollar just hit the key ¥100 psychological level against the Japanese yen. The currency pair hasn’t traded north of ¥100 since April 14, 2009. Read more here-http://read.bi/15QkrVp

-RBA Cuts Key Rate to Record-Low 2.75% to Combat Aussie. The Reserve Bank of Australia cut its benchmark interest rate to a record low, driving down a currency that has damaged manufacturing and boosted unemployment. Governor Glenn Stevens reduced the overnight cash-rate target by a quarter percentage point to 2.75 percent, saying in a statement that the Aussie’s record strength “is unusual given the decline in export prices and interest rates.” Read more here-http://bloom.bg/17N074V

-Rates Reining in Aussie Seen Beating Kiwi Peashooter. Australia’s interest-rate cuts will prove more successful than New Zealand’s intervention in foreign-exchange markets at curbing gains that made their currencies the world’s best performers since 2008. Read more here-http://bloom.bg/17NehD1

-South Korea Joins India-to-Europe Rate Cuts for Growth. The Bank of Korea cut interest rates, following the lead of policy makers in Australia, Europe and India this month, as strength in the won and weakness in the yen dim the outlook for the nation’s exports. Governor Kim Choong Soo and his board lowered the benchmark seven-day repurchase rate to 2.5 percent from 2.75 percent, the central bank said in a statement in Seoul. Read more here-http://bloom.bg/145PZlC

-Borg Joins Wheeler in Escalating Response to Currency Gains. Sweden’s government abandoned its hands-off stance on the krona and New Zealand announced it sold the kiwi, joining a growing band of countries to escalate their response to strengthening currencies. The New Zealand dollar fell to a five-week low after Reserve Bank Governor Graeme Wheeler said the central bank sold the kiwi and can do so again to protect growth. In Sweden, Finance Minister Anders Borg said the krona’s appreciation warrants central-bank consideration. Read more here-http://bloom.bg/10rpxQi

-Bank of England keeps interest rates and QE unchanged. The Bank of England has kept its stimulus programme of quantitative easing (QE) unchanged and also held interest rates at 0.5%. Read more here-http://bbc.in/18wfzDY

-Draghi Says ECB Ready to Cut Interest Rates Again If Needed. European Central Bank President Mario Draghi said policy makers are ready to cut interest rates again if needed after reducing them to a record low last week. “We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again,” Draghi said in a speech in Rome. “Monetary policy will remain accommodative.” Read more here-http://bloom.bg/16isWIq

-Yahoo Records $273 Million in Gains From Hedges on Yen. Yahoo! Inc. has recorded $273 million in gains resulting from steps taken to guard against swings in the Japanese yen that can affect the value of its Asian operations. Read more here-http://bloom.bg/ZQKWG1

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CANADIAN BANKS GOT BAILOUT

-Canada Bank Bailout Cost $114 Billion At Peak, CCPA Says. Canada’s banks were bailed out by U.S. and Canadian institutions to the tune of $114 billion, says a new report from the Canadian Centre for Policy Alternatives. The report puts a large dent into the perception that Canada’s banks survived the financial collapse of 2008 without the need for the sorts of government bailouts seen in the U.S. and Europe.

According to the report, titled The Big Banks’ Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis, Canada’s biggest banks relied heavily on support from the Bank of Canada, the Canada Mortgage and Housing Corp. and the U.S. Federal Reserve between October, 2008 and July, 2010. By the CCPA’s estimates, that works out to $3,400 for every man, woman and child in the country. On a per capita basis, that’s more than what U.S. banks needed. The most liberal estimates for the U.S.’s Troubled Asset Relief Program (TARP) place the cost at around $3,000 per person.

“At some point during the crisis, three of Canada’s banks CIBC, BMO, and Scotiabank were completely under water, with government support exceeding the market value of the company,” CCPA Senior Economist David Macdonald said in a press statement Monday. “Without government supports to fall back on, Canadian banks would have been in serious trouble.” Over the same period, the CCPA notes, Canada’s big banks recorded a combined total of $27 billion in profits and the banks’ CEOs received an average pay raise of 19 per cent. “For instance, Edmund Clark of TD Bank saw his overall compensation jump from $11.1 million in 2008 to $15.2 million in 2009,” the report states. Read more here-http://huff.to/11TIBrZ

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© 2013, Worldwide Precious Metals Canada Ltd.
www.wwpmc.com

The World Financial Report – May 14th, 2013
Posted by Worldwide Precious Metals on Tuesday, May 14, 2013


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