Tim Johnson, Senate Banking Committee Chairman, will be “inviting” Jamie Dimon to testify before Congress as a result of the recently announced massive losses at JP Morgan. Initially JP Morgan announced it had suffered at least $2 billion in losses, and that estimation has now escalated to $3 billion and looks as if it will climb even higher as hedge funds that are on the winning side of JP Morgan’s risky bet turn the screws to squeeze more profit out of them. According to the Financial Times (FT), more than a dozen “senior traders and credit experts” have told the FT that the Chief Investment Office, the unit responsible for the bad trade at JP Morgan, also has as much as an additional $100 billion in the very same risky bonds that crippled the financial system in 2008.

Initial claims for unemployment were at 370,000 last week, which the media spun as “holding steady” since the previous week’s figures were revised upward. The Philadelphia Federal Reserve’s index on business activity went negative in April, an indication that manufacturing in the region has gone from growth to contraction, which does not bode well.

Moody’s downgraded the credit rating of 16 Spanish banks this week, citing that “banks will continue to face highly adverse operating and market funding conditions that pose a threat to their creditworthiness.” Moody’s also stated “the Spanish economy has fallen back into recession in first-quarter 2012″ and that it does not expect conditions in Spain to improve this year.

World stocks, according to the MSCI Index, have given back all of their gains for the year. The ongoing financial crisis in Europe, particularly the escalating banking crisis in Spain seem to be key in the decline. Bad loans among Spanish banks reportedly hit their highest levels in 18 years this week according to the Bank of Spain. These figures were released only hours after Moody’s downgrade, adding additional pressure on Spain’s government to find a way to salvage the banking industry of Europe’s fourth largest economy.

US home mortgage rates are once again setting record lows, but no one seems to be buying. Tighter credit conditions continue to plague potential home buyers and a continuing decline in home prices has made those who do qualify for credit leery to get back into the market for fear that the bottom is not in yet.

In Asia, China’s home prices fell for the second month in a row as the government continues to try to rein in speculation in the property market in an effort to prevent a similar real estate bubble to that which struck the US as the financial crisis exploded across the globe.

The spiraling crisis in Europe seems to have definitively pulled the $100 floor out from under crude oil, and appears to now be threatening to push prices below $90 a barrel.

According to the European Union’s trade commissioner Karel De Gucht, continency plans are in the works in case Greece has to exit the Eurozone. This even as we hear constant, nearly daily reassurances by European policymakers that Greece will remain in the Eurozone. A German spokeswoman for the finance ministry, when asked about plans for a Greek Eurozone exit, said “The German government naturally has the responsibility to its citizens to be prepared for any eventuality.”

The euro continued its dramatic downward slide against the US dollar this week. The Japanese yen was dropping against the dollar for much of the week, but reversed course and ended the week higher against the dollar.

Friday to Friday Close

Previous year Comparisons

* Current at time of writing

Here are your Short Term Support and Resistance Levels for the upcoming week.

Volatility should be expected to continue and perhaps increase further. As we said at the start of this memo, JP Morgan has opened the proverbial “Pandora’s Box” this time. Their previous $2 billion trading loss has ballooned to $3 billion in just 4 trading days, and looks set to continue to escalate as hedge funds on the other side of the trade smell blood in the water and step up efforts to keep JP Morgan from unwinding their massive and failed trade. On top of the already staggering losses already admitted to by Mr. Jamie Dimon himself, reports are surfacing that there may be another $100 billion in risky bond bets still sitting in the wings! Aside from JP Morgan’s woes, Joseph E. Floren, a lawyer at Morgan Lewis, the firm which has been defending Goldman Sachs against a litigation filed by Overstock.com, apparently filed something to which he attached a non redacted copy of one of the very documents that the law firm was trying to keep under court seal. The motion can be found here: Morgan Lewis Motion and you should take a good close look at pages 14-19. DeepCapture has the story, with links to stories at Bloomberg and the Economist here: DeepCapture Floren Story. It looks like the game may finally be up for “Da Boyz” and their market manipulation tactics. JP Morgan has finally hung themselves out to dry and the cries are already calling for Jamie Dimon to lose his job over the fiasco. The media outlets are all trying to play it off, coming to Mr. Dimon’s defense and saying “since when is it a crime to lose your own money?” in reference to JP Morgan using its own money for its failed trade. But the damage is becoming too large for it not to take down Jamie Dimon’s “Golden Boy” image. It is also becoming apparent that JP Morgan has been unloading its short positions in silver as they scramble to contain the damage. JP Morgan faces an angered Department of Justice and an even more enraged US Congress over their actions regarding this loss, and this may be the event, combined with the exposures in the Goldman Sachs suit, that finally puts a stop to the ability of these banks to manipulate markets, be they Stock Markets or the Precious Metals Market. “Da Boyz” appear to be losing their grip on the precious metals market, and Wednesday’s low tick of $26.58 in silver might be looked back on as a “gift” from them to the private investors they’ve apparently had no remorse over “taking to the cleaners” time and again. Europe’s woes appear to be approaching the meltdown stage. Greece is reporting massive withdrawals from its banks; Spain’s borrowing costs are escalating again, and Moody’s downgrade of 16 Spanish banks may trigger an exodus of cash from Spanish banks just as is happening in Greece. The distraction of facebook’s IPO is now past, though we are certain that it will be weeks before all the major media outlets get back to reporting on the world events that appear to be verging on triggering another major financial crisis. Watch the news and look for additional buying opportunities in the coming weeks as the EU struggles to come up with a solution to its massive debt woes. In the end, the answer to their woes may simply be to “print more money” and the US probably won’t be far behind in firing up the printing presses. In the current global environment, as Jim Rogers said in his CNBC piece on Thursday, it is best to “own real assets [such as gold and silver] because if the world economy gets better I’ll make money because of shortages and if things get worse they’ll print more money, which will drive up the value of hard assets.” Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.

Trading Department – Precious Metals International, Ltd.

Over the past several years we have watched as the Metals Markets have been manipulated through the over concentration of Short Selling by a group of trading companies and Banks. Evidence amassed over these years shows that this group has been acting together in a concerted effort to suppress prices, an effort that appears to have been spearheaded by J.P. Morgan. Although this Activity is Against the Law, and would normally subject the perpetrators to Criminal Prosecution, this has all been done with the apparent blessing of the CFTC, as shown by their unwillingness to put a stop to it when presented with the evidence (including a detailed account of a manipulation event, both before and while that event was occurring).  IT LOOKS AS IF ALL OF THAT IS ABOUT TO COME TO AN END!!!!

The writing is on the wall, and the latest Commitment of Traders Reports (COT), as of last Friday, tells it all.  J.P. Morgan has been caught in the London Credit Default Swaps Market doing the exact same thing they have been doing in the Metals Markets. J.P. Morgan is now under serious regulatory examination by both the United States and British Authorities for these illegal activities which, according to Friday’s comments by Mr. Jamie Dimon, have already caused a trading loss of potentially $3 Billion, which is most likely just the tip of their iceberg. Two class action lawsuits have already been filed in New York in relation to the soured deal. The CFTC must surely come to the decision shortly, that they can no longer afford to sit idle, now that other governments and investors are taking action against J.P. Morgan. Of the $29 Billion of tax payer money, given to J.P. Morgan by the Federal Government in the Bear Sterns Takeover Deal, they have just thrown away $3 Billion Plus, Plus, Plus.

What we are witnessing now, as evidenced by Friday’s COT Report, is that J.P. Morgan and their co-conspirators appear to be aggressively exiting their illegal Market Manipulation Short Sell Positions in the Metals Market, and will likely never again be found to be in that position. What does this mean for all of us Long Term Precious Metals Owners? We have weathered the storm. Our rewards are just around the corner as the exodus of J.P. Morgan and their coconspirators from our Markets will bring us into an era of truly Free Markets, where prices are based on fundamentals, NOT SYNTHETIC PAPER MARKETS CONTROLLED BY A SELECT FEW, and WOW!!! The Fundamentals for our Precious Metals Products couldn’t be better.

So Ladies and Gentlemen, expect resurgence of true pricing and in a direction upwards over the next decade that should make the past decade appear to be minute. For those who did not follow our counsel of “Long Term Buy and Hold” and bailed out—We are sorry you chose not to “Stay the Course”, but come back if you can. For those who have hung in throughout this madness— Congratulations!!! You should soon reap the Rewards! For those who are thinking about adding to your Portfolio or starting your portfolio, it would appear that— NOW IS THE TIME, NOW IS THE TIME, NOW IS THE TIME!!!!!!  

Trading Department – Precious Metals International, Ltd.

This is not a solicitation to purchase or sell.

© 2012, Precious Metals International, Ltd.

GOLD

-”You have to normalize gold against something. It’s complexion has changed over time and it is trading less as a commodity and more as a currency. The peak in gold will peak at $3,000 per ounce before the cycle is out or until the time I change my name from Rosenberg to Goldberg. The biggest determining factor of gold prices is short-term interest rates.” David Rosenberg

-”There is only one way to protect wealth at this moment in time and that is to accumulate real assets which are not subject to the whims and foibles of politicians and central bankers. These are hard assets such as gold, silver, real estate, etc. I would also include mining shares because they are so incredibly undervalued.” Robert Fitzwilson

-”I expect gold will rise to $2100, followed by further spike to $2400. My technical analysis indicates there is an outside chance that gold reaches $2800 by March of 2013.” Morris Hubbartt

-Goldman Stands By Gold-Rally Forecast Even as Price Drops. Goldman Sachs Group Inc. stood by its forecast for a rally in gold this year, saying that the precious metal will advance to $1,840 an ounce over six months as the U.S. central bank embarks on a third round of stimulus in June. Gold remains the “currency of last resort,” according to analysts led by Jeffrey Currie. Read more here-http://tinyurl.com/cwvto42

-Richard Russell: Warren Buffett, Gold & My Secret Barometer. “It’s difficult to make people believe that there’s a difference between an investment for a possible profit and a store of wealth. But rich people know the difference. When a man has made as much money as he can, he starts worrying about losing that money. That’s the time when he wants to own “eternal stores of wealth.”

Recently ‘The Scream’, a painting by Munch, sold at auction for a record $119 million. I doubt if the buyer cares whether that painting will be worth $100 million, $50 million or $200 million ten years from now. The buyer knows that he owns a priceless work of art, something that will double in value in case of wild inflation or something that will be worth $60 million during the worst deflation.

Even if the dollar becomes worthless as a unit of exchange, the Munch painting will still be worth a fortune in whatever unit of money is in favor ten or fifty years from now. All of which tells us something about gold. For over five thousand years, gold has represented purchasing power. No matter what form of money was in existence at the time, gold possessed purchasing power, which is why many wise men own gold.

If I asked you to leave something for your great grandkids in a package to be opened one hundred years from now, would you leave them a wad of hundred dollar bills or one hundred gold coins? If you had any brains you would pick the gold coins. I’d venture that Warren Buffett would also pick the coins. Why? Because we know that one hundred years from now the gold coins would represent value and purchasing power and the dollar might not exist. End of story. Read more here-http://tinyurl.com/7wnxujn

-China’s gold imports jump as country may become biggest user. Mainland China’s gold imports from Hong Kong surged more than sixfold in the first quarter, adding to signs that the country may displace India as the world’s largest consumer of the precious metal on an annual basis. Read more here-http://www.gata.org/node/11336

-China Quietly Building Gold Reserves As Gold Imports From HK Soar By 587% In First Quarter. Read more here-http://tinyurl.com/7lw2qsz

-India removes excise tax on gold jewelry. Read more here-http://www.gata.org/node/11333

-Indian central bank challenged in court to repatriate country’s gold. Read more here-http://www.gata.org/node/11348

-John Embry: There Is a War Going on Because Fiat Money Is Dying. I was particularly offended by Charlie Munger’s statement suggesting the only people that bought gold were the Jewish people in pre-war Vienna, to sew it in their garments, and that no civilized person would buy gold. That was one of the most disgusting statements I’ve ever heard in my life, on any subject.

I mean he denigrated the brave, oppressed Jewish people of pre-war Europe. At the same time, he disrespected anybody who was doing the right thing, which is buying gold in an attempt to protect themselves from a failing fiat currency system. That’s hardly uncivilized, it’s highly intelligent.

“There is a lot of discouragement, and justifiably so, just by the price action in the shares. I was thinking about this last night. When I was managing a dedicated gold and silver equity fund for fifteen years, between 1994 and 2009, there were three or four occasions in that period when my fund was up over 100% in less than twelve months.

If I still had a fund, I know this would be near the beginning of one of those 100%+ up-years. As I look at what’s going on here today, I think this is the greatest opportunity I have ever seen. It’s just a matter of when it activates. I believe it begins when gold and silver make a very dramatic turn higher, and that’s probably more imminent than most people realize on a day like this. My only advice is don’t lose the faith now.” Read more here-http://tinyurl.com/888k95c

-John Hathaway calls gold market bottom in Casey Research interview. Watch more here-http://tinyurl.com/83r6cc2

-John Hathaway: Complete Flush in Gold & Savers to Get Screwed. “I just think we’ve had a complete flush. You know they’ve been hitting stops for the last couple of days. I feel like the worst is past. People are shunning this area and this is going to be the place to be going forward.” Read more here-http://tinyurl.com/8×828rh

-Caesar Bryan: The Federal Reserve Is Under The Gun & Gold. “There is a difference between the underlying fundamentals on gold and current sentiment. The fundamentals for gold are still very solid. We are going to move from an austerity program in Europe to more of a political program in Europe.”

“So, we are going to see a move away from these austerity programs when the new politicians take power. This will put more pressure on Germany. Meanwhile, here in the United States, the economy is growing, but very slowly. So the Federal Reserve is under the gun to step in when further data warrants it.

With all of that as the backdrop, gold looks very attractive. People also have to remember that sentiment is extremely negative. “We may be coming to a point where gold, which has been pretty quiet in terms of volatility, begins to move. I’m not sure what the catalyst will be, but there will be something.” Read more here-http://tinyurl.com/88mjxa3

-James Dines: Paper Money Addicts, Major Uptrends & Anarchy. I ponder about gold having risen for eleven straight years and what kind of clue that might be? These fanatics (central planners) have perpetrated QE1, QE2, they are now considering QE3.

These paper money addicts, who remain trapped in the fallacies of Keynesianism, are revealed as a vast intellectual Sahara. Won’t somebody inform them that overprinting caused this mess. More overprinting is obviously the wrong remedy. If a little arsenic is bad for you, then maybe a lot more is not good either.

Meanwhile, gold and silver are in long-term ‘Super Major Uptrends.’ That’s one way to protect yourself, and that’s for survival purposes, not for capital gains. Whatever happens next, sooner or later the world must return to wealth in the ground. So, I think that mining stocks deserve a place in all farsighted portfolios.” Read more here-http://tinyurl.com/bwk42ej

-Leeb: We Will Now See a Gold Standard Imposed in Europe. “Gold is reacting to what’s going on in Europe. It’s the last resort of liquidity for a lot of people. It’s been the best performing major asset over the last 12 years. You have a lot of chaos in Europe and no one knows what’s happening, so there has been a lot of reflex selling of gold.”

Once this correction ends, you are going to have a barnburner to the upside. Gold will just vault. I don’t think investors will even remember these frustrating days. I had been warning we could see this drop in gold because of the problems in Europe, but investors should take advantage of it.

Look at what China is doing. China is buying gold hand over fist right now. They are going to move the yuan forward as the world’s reserve currency and it’s going to be partially backed by gold. The world can also expect to see a gold standard imposed on Europe in the next 12 to 18 months.

“Prospects for QE3 are rising. I think the stock market will make some sort of eventual top and just be range bound. This is what happens when you have inflation taking hold. We saw this in the 70s when stocks went nowhere for that entire decade, but gold and silver had massive gains.

The only place to be is going to be hard assets and commodities. Incidentally, both Glencore and Mitsubishi, two of the largest commodity companies in the world, have come out in the last day or so and stated that “commodity markets are tight.” Once this is liquidation is over, commodities will go crazy.” Read more here-http://tinyurl.com/87rgqsm

-Pierre Lassonde: Here is What I’m Doing With My Own Money. “In terms of gold, the two largest buyers continue to be China and India. For the gold market, what matters most are these two countries. Are they growing? If they do, then the uptake in the gold market will continue, and that’s what’s happening.”

When asked about Swiss gold refiners working ‘round the clock’ because of massive demand, Lassonde responded, “That is correct. They are probably about 90 days booked for kilo bars. The minute they are done (the gold bars), they are shipped out and they go to China or whatever. So, yes, they are running at full capacity.” Read more here-http://tinyurl.com/6n8xh3d

-James Turk: Gold & Silver Bottoming as Euro Troubles Re-emerge. “Remember, back in the beginning of the year, the first week of January, the sentiment was very similar to what it is at the moment. I stuck my neck out and said the low for gold and silver were being made right then and there. The fact that sentiment feels like we are at the same level again, it may not turn this week, it may be next week, but we’re very, very close to a bottom. I still believe the lows for both gold and silver were made earlier in the year.” Read more here-http://tinyurl.com/6stajph

-Egon von Greyerz: Investors Need To Be Positioned For More Chaos. The 2008 correction lasted about the same amount of time, seven or eight months, but that correction was 30%. Stepping back and looking at this minor correction, in this massive uptrend, where gold has risen twelve consecutive years, this reaction barely registers on the longer-term chart. If investors have cash, they should buy physical gold and silver because they will be a lot higher in the next few years. Read more here-http://tinyurl.com/6m663fc

-Citibank: Stocks to Crater 27%, Bonds to Rally & Gold to Remain Firm. Read more here-http://tinyurl.com/7oee7u6

-Louise Yamada: Gold & Silver at Critical Points in This Cycle. Read more here-http://tinyurl.com/8xeqkt5

-Mark Motive: Gold and Financial Preparedness. Read more here-http://tinyurl.com/6mrjfb2

-Frank Holmes: Gold Takes It On the China, What’s Next? Read more here-http://tinyurl.com/bmz5ml3

-Nigel Farage: There Will Be an Attempt to Install a Dictatorship. Read more here-http://tinyurl.com/77an3b9

-Michael Pento: Economic Storm Intensifies. Read more here-http://tinyurl.com/7qy96nu

-Mark Hulbert: The gold market’s steep wall of worry. Read more here-http://www.gata.org/node/11322

-David Einhorn Explains Why Only Gold Is An Antidote To The Fed’s Destructive “Jelly Donut Policy.” Read more here-http://tinyurl.com/7roeur5

-Paul Mladjenovic: Warren Buffet vs. Gold and Silver and the Winner is. Yes there will come a day when I am not bullish on gold and silver. However, given that politicians, government bureaucrats and central bankers have not stopped their massive financial and economic mismanagement, that day is still very far away. Read more here-http://tinyurl.com/cprdg8y

1) Berkshire Hathaway class A stock started at $54,800.00/share and closed on April 30, 2012 at $120,800.00 for a total percentage gain of 120.44%.

2) Berkshire Hathaway class B stock started at $35.40/share and closed on April 30, 2012 at $80.45 for a total percentage gain of 127.90%.

3) Gold started January 2000 at $282.05 (Kitco.com closing price 1/4/2000) and closed on April 30, 2012 at $1,651.25 for a total percentage gain of 485%.

4) Silver started January 2000 at $5.30 (Kitco.com closing price 1/4/2000) and closed on April 30, 2012 at $31.20 for a total percentage gain of 488%.

-Warren Who? Gold bugs still think they have right idea. Read more here-http://www.gata.org/node/11335

-Bill Fleckenstein: Stock Market to Tank, Buffett’s Ego & Gold. Why they (Buffett and Munger) act like you have to be a moron to own gold, I don’t know. He could just say, ‘It’s not my cup of tea, I prefer businesses that spit out cash,’ instead of talking about it as though as it was something only a fool would have.

“Is Munger trying to imply that only Jewish people in Vienna, before World War II, it was only suitable for them? Does that mean if he was Jewish, he wouldn’t have seen the problems coming and he wouldn’t have owned any? It’s just idiotic. But then so is Buffett’s stance on tax policy. Maybe guys get to the point where they have so much money, their ego gets the best of them and they just like to hear themselves talk. I don’t know.” Read more here-http://tinyurl.com/7z7xm79

-New York Sun: The Munger Games. One would think that a man as wealthy, as smart, and as old as Charles Munger would have known better than to suggest that people who buy gold are uncivilized. “Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939,” Mr. Munger told Rebecca Quick of CNBC, “but I think civilized people don’t buy gold, they invest in productive businesses.”

The fact is that people who bought gold a decade ago were far better positioned than those who put their money in Mr. Munger’s company, Berkshire Hathaway. For the value of a share of Berkshire Hathaway has collapsed over the past decade to barely more than 74 ounces of gold from the 238 ounces it was worth a decade ago. Read more here-http://www.gata.org/node/11332

-Charlie Munger: ‘Gold Is A Great Thing To Sew In To Your Garments If You’re A Jewish Family In Vienna In 1939′. Read and watch more here-http://tinyurl.com/7ts2d3k

-’Civilized People Don’t Buy Gold‘: Berkshire’s Charlie Munger. Read and watch more here-http://tinyurl.com/73c6unl

-George F. Smith: Ben Bernanke vs. Gold. Watch more here-http://tinyurl.com/bo2zbzz

-Gold is limited government, which is more ‘civilized’ than the alternative. Read more here-http://www.gata.org/node/11330

-Mike Kosares: Extraordinary popular delusions and the madness of machines. Read more here-http://www.gata.org/node/11340

-CNBC Interviews Eric Sprott about gold and metals manipulation. Watch more here-http://tinyurl.com/czbhoum

-GATA: Gold has changed overnight, and likely will again. Read more here-http://www.gata.org/node/11339

Back to Top

SILVER

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 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

-”Remarkably, at least to me, the frantic turnover in metal coming into and out from the COMEX silver warehouses continued this week. In fact, it was one of the most active weeks in memory, even though total inventories remained largely unchanged at 142 million ounces. I can’t help but be fascinated by the continued high movements of COMEX silver inventories over the past year.

I keep searching for a more plausible explanation than it means tight wholesale physical conditions, but I have been unable to find that explanation. Increasingly, I have the suspicion that some large entity or entities may be acquiring silver in a determined fashion. I can’t prove it, but the movements suggest it. Yesterday’s 1.5 million oz deposit in the big silver ETF, SLV, leaves it ahead almost a million ounces net deposited for the week.

This is very much in contrast to expectations of net withdrawals for the week, given the weak price action and adds to my suspicions of major accumulation.” “The big surprise in[the Commitment of Traders for silver] was the composition of the change among two of the commercial categories. Whereas the big 4 (read JPMorgan) reduced their net short position as much or more than anticipated, the raptors (the smaller commercials apart from the big 4 and the big 5 thru 8 ) sold 4,700 contracts from their net long position, reducing that net long position to 13,600 contracts.

I don’t recall the raptors ever selling like this into a notable price decline. It could be that there was some type of reporting error, but an analyst has to take the data as it comes. If there is some type of adjustment in the next COT, I’ll deal with it then; for now, I’ll consider the numbers as being accurate as reported.”

“The big 4 (read JPMorgan) reduced its net short position by 3,500 contracts, one of the largest weekly reductions ever. As a result, the listed percentage of total open interest held net short by the big 4 was, at 26.3%, the lowest in many years, even lower than the extreme lows seen this past December.

In terms of the number of contracts held net short by the big 4, while not the lowest number ever, at 29,157 contracts, it is one of the three smallest short positions on record. In simple but accurate terms, the recent takedowns in the price of silver were designed and executed to get this concentrated short position reduced.” Ted Butler via Ed Steer Casey Research-Read more here-http://tinyurl.com/7aamlq6

-”You want shocking change? This US turndown in business will bring on QE to infinity sooner that anyone anticipates. Consider the Golden Dawn political party in Greece originally expected to draw about 3% of the vote. It now appears to have gone above 8%. Austerity runs politicians out of office in the election following the austerity initiative, and can bring in some strange replacements as did the Weimar situation. This US downturn in business will bring on QE to infinity, which is debt monetization on steroids.” JimSinclair-Jsmineset.com

-”Silver is my second largest holding. The value of this metal is extraordinary at these levels from a long term perspective. From a trading perspective, I see the strongest performance unfolding during the fall season this year. The silver short is almost technically perfect, in my opinion. There’s a large flag pattern, and the volume pattern confirms the price action.

Commercial traders went to 63,000 long positions according to the latest COT report, and they may have accumulated even more longs this week. I believe that 63,000 longs is a record, but the main point is that is very bullish for silver prices. The Fibonacci 50% retracement line sits at about $29.28, and we are very close to that support level now. The “Fib 50” support area is exciting because large rallies can begin from this level!” Morris Hubbartt

-Nik Kalsi: Silver, the greatest investment of this decade. Read more here-http://tinyurl.com/c48agos

-Michael Kilbach: The Silver Bull Market Is Over? In our opinion the bull market in precious metals is far from over, Why do we want to hear others talk about the bull market being over? We know that the best buying opportunities come when investors feel negative and very pessimistic, because if investors are pessimistic they are not investing, and if they are not investing the market is cheap.

When everyone is excited and jumping in with both feet, wet think a wise investor should be cautious and take money out of the market. It is our expectation that a great buying opportunity in precious metals is marked with commentary about the end of a bull market. In our view it is positive news to read stories about the end of the precious metals bull market. Read more here-http://tinyurl.com/883×2nq

-Silver Forecasters Bullish as Funds Retreat From Slump. At a time when hedge funds are reducing bullish silver bets by the most in two years, analysts predict a rally as manufacturing expands from China to the U.S., boosting demand for the precious metal most used in industry.

Options traders are more bullish, with the three biggest contracts conferring the right to buy metal at prices higher than now, Comex data show. The most widely held gives owners the right to purchase silver at $40 by the end of June.

“The long-term bull market is still very strong,” said Charles Morris, who oversees about $2.5 billion at HSBC Global Asset Management in London. “Silver spends more time going nowhere than it does going up, but when it goes up it tends to do it very quickly.” Read more here-http://tinyurl.com/bls2wog

-Shanghai Futures Exchange starts a silver futures trade. Read more here-http://www.gata.org/node/11331

-All the gold and silver roads now leading to China. With the opening of silver futures trading in Shanghai, China could rapidly become a major player in silver trading given its position as now almost certainly being the world’s largest silver consumer. Read more here-http://tinyurl.com/bofum3t

-David Morgan: Silver Market Update. Listen here-http://tinyurl.com/bsupc6m

-Smelting the Family Silver. Watch more here-http://tinyurl.com/cl3whhx

-Ted Butler: Silver Update, Knowing the game. Read more here-http://www.gata.org/node/11344

-Experts see demise of dollar as world currency. Read more here-http://www.gata.org/node/11327

-Iran accepts Chinese renminbi for crude oil. Read more here-http://www.gata.org/node/11337

-James Turk: From government to ‘robberment.’ Read more here-http://www.gata.org/node/11328

-Alasdair Macleod: Keynesian vs. Austrian debate heating up. Read more here-http://www.gata.org/node/11326

-Lessons from the Paul vs. Paul Debate. Read more here-http://tinyurl.com/cjqyzqx

-At KWN, weekly metals review. Listen here-http://www.gata.org/node/11329

-Jim Grant tells Bloomberg that Fed now manipulates everything. Watch more here-http://www.gata.org/node/11321

-So much for Australia’s constitution. A Queensland driver has tried in vain to argue it is “impossible” for him to pay a speeding fine because the Australian constitution states the government can accept only coins made of gold or silver as payment for debts. Read more here-http://www.gata.org/node/11343

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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Poll, Americans Now Think Gold Is The World’s Safest Investment. For the second straight year, an annual Gallup poll has found that a plurality of Americans believe gold is the single safest long term investment option. Safer than savings accounts. Safer than real estate. Safer than stocks. Read more here-http://tinyurl.com/7ay6wew

-18 U.S. veterans commit suicide every day; 29 percent of veterans are unemployed; 20 percent of the homeless in New York City are veterans. Bloomberg

-“We could have a bigger selloff. There’s a lot of reasons for the market to go down. QE3 is coming, so I think that ultimately puts a floor under the market. I wouldn’t be surprised to see stocks selloff from current levels, but I don’t think the market is going to crash. You have a lot of people saying the Fed is on hold, that they are done easing.

There is no way they are done easing. They should be tightening, but they won’t do it. They understand this is all that is keeping this phony recovery going is the cheap money, and they are going to supply as much as they need to. The Fed will continue to do that, the market just hasn’t figured that out yet.” Peter Schiff

-”My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains.” David Stockman, Former Congressman and director of the U.S. Office of Management and Budget

-Inevitable Inflation. Few investors may be worried about inflation now, but ultimately it’s inevitable. So says, John Brynjolfsson, managing director of the global hedge fund Armored Wolf. Brynjolfsson knows a thing or two about inflation, he also spent 19 years at PIMCO directing their inflation-protected assets. Although Brynjolfsson concedes in the near-term the environment is deflationary, he thinks it’s just a matter of time before inflation rears its ugly head.

That’s because in an effort to drive the global economy out of its malaise, “The Fed, the ECB, the Bank Of Japan and other central banks are injecting as much money in the system as possible,” he says. Although they’re trying to drive wages, stock prices and housing prices to stimulate growth, at the end of the day they’re driving inflation. Read more here-http://tinyurl.com/dxjfnbl

-Global Economy Faces a ‘Perfect Storm’ in 2013: Roubini. A “global perfect storm” looms for 2013 in which the U.S. economy could fall back into recession and the euro zone will begin to break up, according to the latest gloomy forecast from economist Nouriel Roubini.

Four primary factors will come together, according to the famed “Dr. Doom,” to create worldwide turbulence: In addition to the troubles in the U.S. and Europe, Roubini sees military conflict in Iran and a slowdown in emerging markets, particularly China, as the added elements to create the storm. “You put it together the euro zone troubles with the US slowdown, China you could have a train wreck next year,” Roubini said.

In particularly, Roubini sees nothing but problems ahead for Europe, where peripheral nations are struggling with inability to pay their debts. Fears are growing that the fiscal problems in Greece, Portugal, Spain and elsewhere will spread to the global economy. “Greece is going to be the first country that’s going to restructure and exit,” he said. “Others will leave also.” Read more here-http://tinyurl.com/cja7uxo

-Marc Faber Sees Crash Like in 1987 If U.S. Stocks Climb Higher. U.S. stocks may plunge in the second half of the year “like in 1987” if the Standard & Poor’s 500 Index climbs without further stimulus from the Federal Reserve, said Marc Faber, the publisher of the Gloom, Boom & Doom report.

“I think the market will have difficulties to move up strongly unless we have a massive QE3,” Faber told Bloomberg, referring to a third round of large-scale asset purchases by the Federal Reserve. “If it moves and makes a high above 1,422, the second half of the year could witness a crash, like in 1987. The Dow Jones Industrial Average plunged 23 percent on Oct. 19, 1987 in the biggest crash since 1914, triggering sharp losses in stock-market values around the world.

The Standard & Poor’s 500 Index plummeted 20 percent. “If the market makes a new high, it will be a new high with very few stocks pushing up and the majority of stocks having already rolled over,” Faber said. “The earnings outlook is not particularly good because most economies in the world are slowing down.” Read more here-http://tinyurl.com/bv7t2rr

-Ross Says Looming ‘Freak Show’ May Threaten U.S. Economy. The U.S. economy is at risk of slipping back into recession in 2013 because of likely impasses in Washington over taxes and mandatory spending cuts, said Wilbur Ross, the billionaire investor. “That’s too big a hit for the economy to take,” Ross said in New York.

“We’re going to have another freak show at the end of the year.” Ross said he’s worried that President Barack Obama and Congress won’t be able to agree on extending tax cuts passed under former President George W. Bush that expire at the end of 2012, or on mandatory spending cuts tied to the extension of the country’s debt-ceiling agreement. Read more here-http://tinyurl.com/cuvtjhs

-Fed Worries ‘Fiscal Cliff’ Is as Big a Threat as Europe. Federal Reserve officials are increasingly concerned about the coming “fiscal cliff,” putting it on par with the European financial crisis and the housing market as among the biggest potential threats for the U.S. economy. Read more here-http://tinyurl.com/c2jyx8s

-Don Luskin: One Element Of The ‘Fiscal Cliff’ Should Cause Stocks To Plummet 30%. It’s all about how dividends are taxed and the reality that we are facing the biggest single hike in dividend tax rates in history. The market sets the price of a dividend-paying stock so that it will pay the after-tax yield required to attract capital. When the tax rate on dividends goes up, the after-tax yield necessarily goes down to restore the after-tax yield to its required level, the stock price has to fall. Read more here-http://tinyurl.com/bswjle9

-We Just Witnessed The Slowest April For Retail Sales In 3 Years. Not since 2009 have retail sales in April been as slow as they were last month. Nine of the 20 retailers tracked by Thomson Reuters missed their sales estimates, and their same-store sales index rose just 0.8 percent compared to 1.5 percent estimates. Read more here-http://tinyurl.com/cbaa3m2

-Japan Will Follow Europe With a Debt Crisis: Kyle Bass. Read more here-http://tinyurl.com/cvgbcc8

-Malawi devalues kwacha by 33%, leading to panic-buying. Shoppers in Malawi have been scrambling to buy basic goods, fearing huge price rises after the currency was devalued by 33%. Read more here-http://tinyurl.com/6m33hpq

-Australia Heading for ‘Mother of All Hard Landings’: Pros. Australia is headed for the “mother of all hard landings,” according to Société Générale strategist Albert Edwards, who says the country’s “credit bubble” could burst if China’s economy suffers a sharp slowdown. Read more here-http://tinyurl.com/72fkbpm

-Jeff Gundlach’s Big Presentation On Debt, Deficits, And The Economy. Read more here-http://tinyurl.com/d47k9kt

-Fed clears China’s first US bank takeover. The United States on Wednesday opened its banking market to ICBC, China’s biggest bank, for the first time clearing a takeover of a US bank by a Chinese state-controlled company. It will buy up to 80 percent of the US unit of the Hong Kong-based Bank of East Asia, which operates 13 branches in New York and California. Read more here-http://tinyurl.com/cyayxa4

-JPMorgan Loses $2 Billion in Chief Investment Office. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the firm lost about $2 billion on synthetic credit securities after an “egregious’” failure in its chief investment office, which the bank says focuses on hedging. “This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed,” the New York-based company said. Read more here-http://tinyurl.com/7ozdeqw

-Bernanke Gets 75% Approval From Investors in Global Poll. Global investors give Federal Reserve Chairman Ben S. Bernanke his highest approval rating since 2009 and expect him to take further action this year to accelerate a revival in the U.S. economy and financial markets. Read more here-http://tinyurl.com/bp6mq39

-Canada Is World’s Biggest Oil Loser With Price Spread. Canada buys high and sells low when it comes to crude oil, costing the world’s 10th largest economy billions in lost revenue as it expands production from one of the world’s largest energy deposits. The gap between Alberta’s exported Western Canada Select and Brent oil imported into Ontario and Quebec was about $30.50 a barrel and that difference is creating a drag on growth according to Bank of Canada Governor Mark Carney. Read more here-http://tinyurl.com/carod2e

-Falling Natural Gas Prices Have Saved Consumers Billions. Read more here-http://tinyurl.com/cufljw5

-UN Sees Risk of Unrest From Food Costs Above 10-Year Average. Food prices may stabilize at high levels and keep government import bills near a record, increasing the risk of social unrest in the world’s least developed countries, the United Nations said. Read more here-http://tinyurl.com/7gtgkpl

-49% of Americans saving zilch for retirement. America has a serious problem saving for retirement. About 49% of Americans say they aren’t contributing to any retirement plan, according to a new survey conducted by LIMRA, a trade association for the financial services industry. Read more here-http://tinyurl.com/ch3vnjt

-Elderly at Record Spurs Japan Stores Chase $1.4 Trillion. Read more here-http://tinyurl.com/d39ahvj

-Lehman E-Mails Show Wall Street Arrogance Led to the Fall. Read more here-http://tinyurl.com/crtftmw

-Madoff Sons’ Wives Sued by Trustee for $57.5 Million. The trustee liquidating Bernard L. Madoff Investment Securities Inc. revised a lawsuit to add the spouses of Bernard Madoff’s two sons as defendants on $57.5 million in claims. The new claims, filed May 4, are part of Irving Picard’s existing $255 million complaint against the Madoff family seeking to recoup money taken out of the Ponzi scheme. Read more here-http://tinyurl.com/cxxu7j2

-Canada Stops Making Cents as Flaherty Lets Penny Drop. Canada minted its final penny today as Finance Minister Jim Flaherty said the coin was too expensive to produce and no longer needed for business. Read more here-http://tinyurl.com/7cmys2u

-’Three topless women and the Twin Towers’: Canadians baffled by picture of WWI memorial on their new $20 dollar bill. Read more here-http://tinyurl.com/84z64r3

-Ferrari Joy Rider Burns Rubber on 600-Year-Old Wall. A Ferrari SpA dealership employee took a spin on Nanjing’s 600-year-old city wall, leaving tire marks on the Chinese relic and prompting an apology from the automaker. Read more here-http://tinyurl.com/7asrhqj

-Earliest Known Mayan Calendar Found in Guatemalan House. A 1,000-year-old house in Guatemala, its interior adorned with paintings of people, numbers and astronomical symbols, has yielded the earliest known Mayan calendar ever found, archaeologists said. The mural, covering three walls and a ceiling, is also the first Mayan art discovered in a building thought to be a house, according to the report, published in the journal Science. Read more here-http://tinyurl.com/crpvofx

-The 11 Most Expensive Watches Ever Sold. Read more here-http://tinyurl.com/c7mo3fj

-Rothko, Richter Set Records in $389 Million Auction. Mark Rothko’s fiery “Orange, Red, Yellow” sold for a record $86.9 million at Christie’s in New York last night in the biggest-ever postwar and contemporary art auction. Artist records were also set for Jackson Pollock, Gerhard Richter, Barnett Newman, Alexander Calder and Yves Klein, among others, in last night’s $388.5 million, 59-lot sale. It exceeded Christie’s $384.7 million tally in May 2007, the previous contemporary auction champ, as well as the high $330 million presale estimate. “Billionaires have gone global,” New York dealer Jack Tilton said upon exiting the midtown salesroom. “It’s very healthy for the market, obviously.” Read more here-http://tinyurl.com/c3owpgm

-Space weather expert has ominous forecast. Mike Hapgood, who studies solar events, says the world isn’t prepared for a truly damaging storm. And one could happen soon. Read more here-http://tinyurl.com/84l6eyg

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RARECOLOREDDIAMONDS.COM

-Rarecoloreddiamonds.com Featured Diamond of the Week. This Week’s Diamond is a 1.34 Round Brilliant Cut D Flawless White Internally Flawless Diamond. Harold Seigel-See video of the Featured Diamond here-http://tinyurl.com/6g37q2r

-”Martian Pink” Diamond May Fetch over $8 million at Auction. The largest pink diamond ever auctioned is expected to fetch over $8 million U.S. dollars at Christie’s Hong Kong spring auction May 29th. Christie’s jewellery specialist May Lim talks about the history of the 12.04-carat brilliant cut pink diamond.

“It’s the largest pink diamond, round pink diamond, ever to appear in auction history. So why is this pink diamond so out of the ordinary? Because in 1976 the collector that actually bought the diamond, bought it from Harry Winston and that was the same year the United States launched the Martian Exhibition and to commemorate this event, Harry Winston decided to name this diamond the Martian Pink.”

“Colored diamonds are very rare, and especially pink diamonds, they don’t usually appear, and in order for a pink diamond to be this intense in color is extremely out of the ordinary. And it for it to be this saturated, for it to become a round brilliant diamond is exceptional, you rarely find it in the market at all.”

The “Martian Pink” diamond is one of two famous pink diamonds in the world. The other is the 23.60-carat Williamson Pink diamond that belongs to Britain’s Queen Elizabeth II. It was given to her as a wedding gift in 1947. Read and watch more here-http://tinyurl.com/d4u4rk4

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HSFINEAUCTIONS.COM

-Next Auction is May 22 2012, 8pm Eastern-6pm Mountain. See more here-http://tinyurl.com/cdf4tl8

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QE

-Gross Says QE3 Getting Closer as Goldman Sees Easing. Pacific Investment Management Co.’s Bill Gross and Jan Hatzius at Goldman Sachs Group Inc. say investors should prepare for additional bond purchases by the Federal Reserve to combat a slowing U.S. economy. A decision to buy more debt is “getting closer,” Gross, who runs Pimco’s Total Return Fund, the world’s largest mutual fund, wrote on Twitter. Hatzius, the chief economist at New York-based Goldman Sachs, predicted in a report that the Fed will announce additional monetary easing when it meets in June. Read more here-http://tinyurl.com/c992kjv

-Citi’s Buiter: Time for Helicopter Money Drops. Read more here-http://tinyurl.com/76ewhec

- Bruce Krasting: The Fed Will Hold Off On Another Round Of QE Until At Least December. A friend sends me the following chart to support his conclusion that another round of QE is coming from the Fed sometime in June. The chart tracks the ten-year bond and the performance of the S&P since 2009. Read more here-http://tinyurl.com/7j94qlg

-BOE Halts Stimulus as Inflation Threat Outweighs Slump. Bank of England officials halted stimulus expansion after seven months of bond purchases as the threat of inflation trumped concerns about an economy that’s succumbed to a double-dip recession. Read more here-http://tinyurl.com/8yrt7ak

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SOVEREIGN DEBT

-This Is What You Need To Know About The Crisis In Greece. Read more here-http://tinyurl.com/bte67le

-Euro Global Poll Shows More Than 50% Predicting an Exit. The 17-nation euro area is on the verge of losing one of its members, with more than 50 percent of investors predicting an exit this year as Greece’s election impasse threatens to push the debt crisis to new depths, according to the Bloomberg Global Poll. Read more here-http://tinyurl.com/cwjeqdz

-Greece Euro-Exit Debate Goes Public. From the monetary fortress of the European Central Bank to the pro-European duchy of Luxembourg, policy makers are beginning to air their doubts that Greece can stay in the euro. Post-election tumult in Athens has put the once-taboo subject of an exit from the 17-country currency union on the agenda, lifting the veil on possible scenario planning afoot behind the scenes. Read more here-http://tinyurl.com/7exsxsp

-Greece Likely to Exit Euro This Year, FX Concept’s Taylor Says. Greece will probably leave the euro as soon as next month as the government runs out of cash and European institutions fail to lend more to the nation, according to John Taylor of hedge fund FX Concepts. “This summer I think is very likely.” “The Europeans aren’t going to give them the money, the International Monetary Fund’s not going to give them an OK. They will be out of money in June.” Read more here-http://tinyurl.com/c544boa

-EFSF Confirms Release of 5.2 Billion Euros for Greece. The European Financial Stability Facility’s Board of Directors confirmed the release of 5.2 billion euros ($6.7 billion) from a first installment of 39.4 billion euros by the end of June, the EFSF said in a statement. An amount of 4.2 billion euros will be disbursed May 10 and the remaining 1 billion euros aren’t needed before June and will be disbursed depending on Greece’s financing needs. The 4.2 billion euros will be transferred into a segregated account to be used for debt service payments. Read more here-http://tinyurl.com/d9uq4mu

-Greeks May Hold $510 Billion Trump Card in Renegotiation. Greece’s next government may hold a trump card worth more than $510 billion if it heeds voters’ demands to renegotiate its bailout with the European Union. The nation owes about 400 billion euros ($517 billion) to private bondholders, public bodies such as the International Monetary Fund and European Central Bank and other creditors, according to data compiled by Bloomberg. About 252 billion euros of that’s due to official organizations that used their status to avoid the losses suffered by ordinary bondholders when Greece restructured its debt two months ago. Read more here-http://tinyurl.com/d9rl5xr

-Lagarde Urges Gradual Deficit Cut as Austerity Rejected. International Monetary Fund Managing Director Christine Lagarde called on developed nations to push through “gradual” fiscal cuts as voters in France and Greece rejected austerity as the sole fix to Europe’s debt crisis. “Austerity versus growth is very much the debate of the hour,” Lagarde said in a speech. “I would argue it is not ‘either/or.’ We can design a strategy that is good for today and good for tomorrow.” Read more here-http://tinyurl.com/cvo7j27

-Merkozy End Means Franco-German Gulf; Greek Voters Rebel. Voters in Greece and France challenged austerity as Europe’s sole prescription for the financial crisis, adding pressure on German Chancellor Angela Merkel to broaden her focus from debt reduction to save the euro region. Greek elections left the two biggest parties short of the clear majority to keep bailout efforts there on track. In France, Socialist Francois Hollande defeated President Nicolas Sarkozy, Merkel’s preferred partner for enforcing fiscal rigor. Read more here-http://tinyurl.com/d8bat8n

-Merkel Rejects Stimulus in Challenge to Hollande’s Growth Plans. German Chancellor Angela Merkel rejected government stimulus as the way to spur economic growth in Europe, setting up a clash with French President-elect Francois Hollande before he’s even taken office. Read more here-http://tinyurl.com/cefbn9z

-China Stops Buying Europe Government Debt on Crisis Concern. China Investment Corp. has stopped buying European government debt because of an economic crisis on the continent, though it continues to look for new investments there, said CIC President Gao Xiqing.

“What is happening in Europe right now is of course of concern,” Gao said in an interview in Addis Ababa, Ethiopia, during the World Economic Forum on Africa. “We still have our people looking at opportunities in Europe, even though we don’t want to buy any government bonds.” Read more here-http://tinyurl.com/ckbadgk

-Norway Dumps Ireland, Portugal Bonds on Euro Crisis Concern. Norway’s sovereign wealth fund sold all its Irish and Portuguese government bonds after rejecting the Greek debt swap and warned that Europe faces considerable challenges. Read more here-http://tinyurl.com/76cn5po

-Spain takes over Bankia to fight crisis. Spain took over Bankia, the country’s fourth biggest lender, on Wednesday, trying to dispel concerns over the government’s ability to clean up the financial sector four years after the banks were hit by a property market crash. In a deal that will give the state a 45 percent indirect stake in Bankia, the government will take control of its parent company BFA by converting into equity a 4.5 billion euro loan it had given the financial group previously, the central bank said.

The economy ministry pledged to do all it takes to clean up Bankia, which has more than 30 billion euros of exposure to troubled loans to property developers and repossessed land and buildings. The government is expected to lend or give Bankia up to 10 billion euros in additional aid, though some bank analysts say it will need more. Read more here-http://tinyurl.com/d93mo7o

-Spain Underplaying Bank Losses Faces Ireland Fate. Spain is underestimating potential losses by its banks, ignoring the cost of souring residential mortgages, as it seeks to avoid an international rescue like the one Ireland needed to shore up its financial system. Read more here-http://tinyurl.com/d9db6ku

-Italian Banks’ ECB Borrowings Increase to Record High in April. Italian banks’ borrowings from the European Central Bank reached a record high in April, as the country’s lenders took up almost one-fourth of the funds offered to lenders amid revived concerns about Europe’s debt crisis. Total borrowing by Italian banks rose to 271 billion euros ($353 billion) from 270 billion euros in March, the Bank of Italy said on its website. Read more here-http://tinyurl.com/bu6hskm

-Dutch With Food Aid Shows New Economic Reality Engulfing Europe. It’s just after lunchtime on a drizzly day in the Amsterdam suburb of Bos en Lommer and the line of people waiting to fill their bags with free rice, juice, potatoes and bread is lengthening. The market is one of 135 food banks in the Netherlands bailing out people trying to survive on less than 180 euros ($234) a month, the threshold to qualify for the aid. Organizers say demand for the service rose 20 percent in the first quarter. Read more here-http://tinyurl.com/ceg8tvo

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U.S. DEBT-DEFICIT

-U.S. Posted Budget Surplus of $59.1 Billion in April. The U.S. government posted a budget surplus in April, the first in more than three years, as tax revenue climbed and spending dropped. Receipts topped outlays by $59.1 billion compared with a deficit of $40.4 billion in April 2011, the Treasury Department said. It was the first surplus since September 2008 and the biggest since April 2008. “The total federal budget deficit is slowly shrinking,” said Steven Wood, president of Insight Economics in Danville, California. “However, this improvement has been halting, due largely to erratic economic and employment growth.”Read more here-http://tinyurl.com/cxf2pks and http://tinyurl.com/cloz5wm

-Trade Gap in U.S. Widens More Than Forecast as Imports Jump. The trade deficit widened more than forecast in March as American demand for crude oil, computers, automobiles and televisions propelled imports to a record. The gap grew 14 percent to $51.8 billion, the Commerce Department reported. Read more here-http://tinyurl.com/8×4wggq

-U.S. Postal Service Loses $3.2 Billion as Cash Runs Low. The U.S. Postal Service said it lost $3.2 billion in the quarter ended March 31 and will temporarily run out of cash in October, adding urgency to its pleas for Congress to let it make changes including ending Saturday delivery. The services forecast a $9.1 billion loss for the 12 months ending Sept. 30, not counting a required $5.5 billion payment for future retirees’ health benefits, Chief Financial Officer Joe Corbett said. Read more here-http://tinyurl.com/bp4lt84

-Too broke to go bankrupt. This year, hundreds of thousands of Americans are expected to be too broke to file for bankruptcy. The average cost to file for Chapter 7 bankruptcy protection, the most common form of consumer bankruptcy, is more than $1,500, according to recent research submitted to the National Bureau of Economic Research. As a result, anywhere between 200,000 and one million consumers are estimated to be unable to afford that steep cost this year. Read more here-http://tinyurl.com/c2xclym

-Cash-Strapped NY Town Cancels July 4 Fireworks. A cash-strapped New York town has had to cancel Fourth of July fireworks and is appealing for donations to save its celebration of America’s birthday. New Rochelle town officials say the Independence Day display costs $75,000, and was eliminated from the city’s 2012 budget, along with the Memorial Day parade and Thanksgiving parade, which both cost $30,000 to put on. Read more here-http://tinyurl.com/7l5jmk8

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JOBS

-CHART OF THE WEEK: The Scariest Jobs Chart Ever. As always, the infamous chart from Calculated Risk. It compares the pace of this jobs recovery vs. every other one since WWII by looking at the trajectory of jobs lost and gained since the recession began. Read more here-http://tinyurl.com/7ptzw9e

-CHART OF THE WEEK: Labor Force Participation Falls To Lowest Level In Over Three Decades. The U.S. unemployment rate fell to 8.1 percent in April, but investors are quick to point out that much of this decline could be generated by a drop in labor force participation, not true jobs growth. In fact, labor force participation hit 63.6 percent in April, down from 63.8 percent in March. That’s the lowest rate since 1981. From expert Reuters chartist Scott Barber, this is what’s happened to labor force participation over the years. Read more here-http://tinyurl.com/d679e2j

www.chartoftheday.com

-CHART OF THE WEEK: A Surprising Statistic About The Long-Term Unemployed. Pew is out with a new study about the long-term unemployed in America. The long-term unemployed are people who have been unemployed at least a year, and as you can see (and as you should know by now), the scale of the problem these days is way bigger than it has been during any other period over the last half a century. Read more here-http://tinyurl.com/7y7z38q

-CHART OF THE WEEK: Labor Force Shrinks As Jobless Swell Disability Ranks. The civilian labor force shrank in April by 342,000 workers and remains below where it stood when the economic recovery started 34 months ago, according to data released Friday by the Bureau of Labor Statistics. Had the labor force not declined, unemployment would have been 8.3% in April, instead of the 8.1% reported. That same month, more than 225,000 workers applied for Social Security disability benefits, and nearly 90,000 were enrolled, according to new data from the Social Security Administration. Read more here-http://tinyurl.com/btms6fn

-Employers in U.S. Added Fewer Jobs Than Forecast in April. American employers added fewer workers than forecast in April and the jobless rate unexpectedly fell as people left the labor force, adding to concern the economic expansion is cooling. Payrolls climbed 115,000, the smallest increase in six months, the jobless rate fell to a three-year low of 8.1 percent, and earnings stagnated. Read more here-http://tinyurl.com/bp3264j

-Unemployment Drops, but Fewer Americans Are Working. By one measure, last Friday’s jobs report is particularly disappointing: It marks the second month in a row that the employed share of the U.S. population has fallen. The Labor Department reported that as of April, 58.4 percent of the U.S. population was gainfully employed.

That’s down from 58.6 percent in February, and exactly where the employment-to-population ratio stood a year ago. The decline reflects the fact that job gains aren’t keeping up with population growth. It also demonstrates the illusory nature of April’s reduction in the unemployment rate, to 8.1 percent from 8.2 percent in March.

The Labor Department, in its monthly household survey, counts people as unemployed only if they’re in the labor force, meaning they’re actively looking for work. In April, the estimated number of people in the labor force fell by 342,000. So the unemployment rate fell, too, even though the survey counted 169,000 fewer people with jobs. Read more here-http://tinyurl.com/bunpxyc

-324,000 Women Dropped Out of Labor Force in Last Two Months As Number of Women Not in Labor Force Hits Historic High. 324,000 women dropped out of the nation’s civilian labor force in March and April as the number of women not in the labor force hit an all-time historical high of 53,321,000, according to the Bureau of Labor Statistics. Read more here-http://tinyurl.com/co9cmcb

-Gross Says U.S. Economy Suffering From ’Structural’ Unemployment. Bill Gross, manager of the world’s largest mutual fund, said U.S. unemployment is now a structural, and not cyclical, problem stemming from technology advances and the lack of retraining. “Jobs are being structurally destroyed,” Gross said in an interview. Read more here-http://tinyurl.com/d9wbrdt

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STOCK MARKET

-CHART OF THE WEEK: Doug Short, Stocks For The Long Run? Yes, If Your Definition of “Long” Is really “Long.” Read more here-http://tinyurl.com/7wd96r8

-Mark Buchanan: Two years after the frightening spring day when the Dow Jones Industrial Average lost and regained about 600 points in a matter of minutes, we still don’t really know why. This is a problem, because it means something similar or worse could happen again. The Flash Crash of May 6, 2010, was more than a mere technical glitch. Read more here-http://tinyurl.com/bv2j5ao

-Berkshire Profit Doubles on Insurance Results, Derivatives. BerkshireHathaway Inc. said first quarter profitdoubled as insurance units and Chairman Warren Buffett’s derivative bets posted better results. Read more here-http://tinyurl.com/c8tyjje

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REAL ESTATE

-Home Prices Rise in Half of U.S. Cities as Markets Stabilize. Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized. The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains. The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group. Read more here-http://tinyurl.com/8652nbf

-Ranieri Says Housing Market in U.S. Is Reaching Bottom. The U.S. housing market is reaching a bottom, according to Lewis Ranieri, the mortgage-bond pioneer. While “broad” concern that home prices have further to fall is restraining sales, “many, myself included, think we are at a bottom,” Ranieri said. Read more here-http://tinyurl.com/bptpg3p

-Pimco Housing Bear Kiesel Says It’s Time to Start Buying. Mark Kiesel, the Pacific Investment Management Co. managing director who sold his home in 2006 when he deemed the market a bubble, says it’s time to buy. “I was one of the most negative on housing,” Kiesel said in a interview. “I finally came to the conclusion housing is looking pretty decent.”

Kiesel said he bought a house in Newport Beach, California, where Pimco is based. He published a credit market note titled “Back In” on the firm’s website in which he writes, “I’m not sure U.S. housing prices have bottomed only time will tell but there are many more positives today than there were six years ago when I sold my house.”

Home prices that have fallen 35 percent from their mid-2006 peak and mortgage rates of less than 4 percent are helping make it a good time to buy, said Kiesel, who is global head of the corporate bond portfolio management group at Pimco. Other signs the housing market is turning around include foreclosure filings dropping to levels last seen in 2007 and sales of new and existing homes that have begun to increase as rising rents boost the relative affordability of purchasing, he said. Read more here-http://tinyurl.com/86vc4av

-Why American house prices have corrected more than those in Europe. Read more here-http://tinyurl.com/d424762

-Look Who’s Pushing Homeowners Off the Foreclosure Cliff. One of the more confounding aspects of the U.S. housing crisis has been the reluctance of lenders to do more to assist troubled borrowers. After all, when homes go into foreclosure, banks lose money. Now it turns out some lenders haven’t merely been unhelpful; their actions have pushed some borrowers over the foreclosure cliff. Lenders have been imposing exorbitant insurance policies on homeowners whose regular coverage lapses or is deemed insufficient. The policies, standard homeowner’s insurance or extra coverage for wind damage, say, for Florida residents, typically cost five to 10 times what owners were previously paying, tipping many into foreclosure. Read more here-http://tinyurl.com/6lrcah9

-Canada Housing Bubble Talk Dismissed. The head of Canada’s biggest bank and one of the country’s leading developers said the housing market is not in a bubble, even as one economist said Toronto is caught in a “condo craze.” Read more here-http://tinyurl.com/7mo754y

-France faces 40 percent house price slump. France faces a property slump of Anglo-Saxon proportions as the frothiest boom in French history finally tips over, threatening the country with an economic shock just as austerity hits. Read more here-http://tinyurl.com/c7lerc9

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Initial claims for unemployment in the US slipped marginally lower last week, falling only a net of 1,000 to 367,000 once the previous week’s figure was revised upward. The number was better than expected, but weak enough that it still signals a sluggish and floundering jobs market in the US.

Election results are in across Europe. In France, Socialist Francois Hollande emerged victorious and is widely expected to try to renegotiate the terms of the fiscal pact signed by the majority of the member countries of the European Union. In Greece, the elections were a fiasco. Alexis Tsipras, leader of Greece’s Radical Left Coalition party, which came in second during the weekend election, was unable to form a coalition government and there will likely be a repeat vote. Tsipras caused a massive panic earlier this week by declaring that Greece’s existing bailout agreement was “null and void”. Tsipras in Greece, and Hollande in France both oppose the austerity measures that have gone into place in so much of the Eurozone, with Tsipras even describing them as “barbaric”.

The Bank of England voted not to continue its Quantitative Easing program on Thursday over concerns that inflation was beginning to outweigh the possibility of a prolonged recession. Inflation in the UK rose to 3.5 percent in March, far outpacing the BoE’s target. The UK’s economy also officially went back into recession after shrinking 0.2 percent during the first three months of this year.

In Spain, on Wednesday, the government announced it was taking a 45% controlling stake in Bankia, the country’s third largest bank and the largest real estate lender. Bond yields were spiking again in the beleaguered country as confidence in the banking sector was shaken yet again.

The US housing market continues to struggle with tightened credit conditions that are preventing buyers with otherwise good credit scores from acquiring a mortgage. New rules regarding risk retention in the mortgage lending business may well drive the fees and overall cost of obtaining a mortgage ever higher, even as interest rates continue to hit record lows.

The debate over the “fiscal cliff” is beginning to heat up with multiple Fed Presidents remarking on the subject at the Milken Institute Global Conference in Los Angeles, California last week. Chicago Fed President Charles Evans said “The cliff at the end of this year is just that writ large. Whether or not calmer heads will prevail and avoid this or do something useful, you know that’s about as big an uncertainty as I can imagine anybody facing.” Ben Bernanke, at his press conference two weeks ago, said the “fiscal cliff” is so large that “I think [there is] absolutely no chance that the Federal Reserve could or would have any ability whatsoever to offset that effect on the economy. So as I have said many times before, it’s imperative for Congress to give us a fiscal policy.”

China released trade data on Thursday that showed a marked, and drastic, slowdown in both imports and exports. Recessions across the Eurozone and a recovery in the US that just simply refuses to gain momentum are putting a serious dent in China’s exports. China is poised to experience its slowest year of economic growth in close to ten years.

Despite a decline in gasoline and distillate stockpiles, oil remained below $100 a barrel again this week. The crisis in Europe and the slowdown in China appear to have been the main contributing factors to the downward pressure there.

The euro plummeted against the US dollar this week, driven dramatically lower apparently mainly due to the continuing turmoil in Greece. The Japanese yen continued its climb higher against the US dollar.

Friday to Friday Close

Previous year Comparisons

* Current at time of writing

Here are your Short Term Support and Resistance Levels for the upcoming week.

Volatility should be expected to continue and perhaps increase further. The fundamental reasons for owning precious metals continue to remain strong. Egon von Greyerz, founder and managing partner of Matterhorn Asset Management in Switzerland, told King World News this week “I don’t think people are focusing enough on the long-term consequences. The masses are just living day-to-day and hoping the current problems will go away, but they won’t. The same people who did not see the problem in 2007/2008 are now saying, ‘It’s over.’ Nothing is over.” Mr. von Greyerz continued, saying “The first consequence of the enormous deficits and massive credit bubbles is going to be hyperinflation. The hyperinflation will come as a result of governments printing unlimited amounts of money. During this hyperinflationary depression, people will see currencies falling in value against real money, gold. In a hyperinflation, nobody benefits from the money creation except the ones standing nearest to the printing press.” Mr. von Greyerz ended with “This is the first time in history that we will see hyperinflation occurring simultaneously in many countries. Previously, this type of event has been isolated to one country at any one time. Gold will be an extremely important means of survival and payment during this hyperinflationary period.” King World News also interviewed James Turk out of Europe this week. Mr. Turk had this to say regarding the state of things in the EU: “Have you seen the growing demonstrations here in Europe, Eric? So far, the protests have mainly been non-violent. They’re protesting in the streets for good reason. Eleven of the seventeen countries in the EU are in a recession. With unemployment growing to record levels in some countries, certain key European nations are definitely in a depression.” Mr. Turk continued in his interview: “Then there is the banking problem, particularly in Italy and Spain, where the banks loaded up with debt from their own government, which shows how their interests are aligned. It looks like these banks and their governments will go down together. The same applies to Japan, the UK, the US, and many other countries with zombie banks and over-leveraged governments. All of these factors make me recognize that holding physical gold is the right thing to do. Gold and silver are the only safe currencies in the world today.” Mr. Turk then closed the interview out in dramatic fashion, saying “So every month I continue to do what I have been recommending to KWN readers for years. Every month I buy some precious metals, and will continue to accumulate them as long as they remain undervalued. Of late I’ve been buying silver. It’s the better value. Note how gold has been holding support at $1650, but silver keeps slipping further below $32. The shorts and central planners are throwing everything they have at the precious metals, Eric, but they are having a hard time trying to beat up gold. Even their so-called ‘fat finger’ trade of 7500 contracts they put in on Monday didn’t break gold.” Poor economic data out of the US and fears over what shakeups the many European elections being held this weekend may result in helped push markets lower today. This may be presenting an excellent buying opportunity to pick up additional precious metals for your portfolio just as Mr. Turk has stated he continues to do. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.

Trading Department – Precious Metals International, Ltd.

GOLD

-CHART OF THE WEEK: Gold Bull’s Long Term Trendline, The Indispensable Chart. Although they cannot resist its inevitable climb because of the changes in the global monetary system and the ongoing currency wars, the Western central banks wish the increase in the price of gold to remain ‘orderly.’ Read more here-http://tinyurl.com/74ds4th

-Gold Still Americans’ Top Pick Among Long-Term Investments. Investing in gold has gained in popularity in recent years as low interest rates have made traditional savings instruments less attractive, and instability in the stock and real estate markets has undermined the mass appeal of those options.

Meanwhile, the rising trajectory of the price of gold over the past several years apparently offers more of the returns and stability investors seek. Although gold prices dipped in the last quarter of 2011 after hitting an all-time high of $1,924 per ounce in September, and have yet to fully recover, more Americans continue to consider gold the best long-term investment among the major options available to consumers. Read more here-http://tinyurl.com/7eolnrz

-”Gold and silver are the only safe currencies in the world today.” James Turk

-“Ultra-loose monetary policies of recent years don’t look like they’re going to end any time soon.” “The problems in the euro zone don’t look like they’re going to end any time soon. We’ve had a dip, and our advice to clients is always to buy the gold and silver dip.” Mark O’Byrne-GoldCore

-”The hyperinflation will come as a result of governments printing unlimited amounts of money. During this hyperinflationary depression, people will see currencies falling in value against real money, gold. In a hyperinflation, nobody benefits from the money creation except the ones standing nearest to the printing press.

This is the first time in history that we will see hyperinflation occurring simultaneously in many countries. Previously, this type of event has been isolated to one country at any one time. Gold will be an extremely important means of survival and payment during this hyperinflationary period.” Egon von Greyerz

-Elliott Wave Gold Update: In the article “What Happened to Gold” dated 1 March 2012, the “other possibilities” mentioned in the event of gold dropping below $1650 related firstly to the 61.8% retracement of the prior rise. The prior rise was from $1523 to $1792, so the 61.8% retracement was $1626. There was a further possibility of the retracement being 2/3 of the prior rise, also a Fibonacci relationship.

That produced a figure of $1612. The first number $1626 did provide some support to the market but the absolute low was $1612.8 on 4 April 2012. This low came at the culmination of a double zig-zag correction, which adds to the validity of that low. The odds now suggest that the gold correction bottomed at $1612.8 on 4 April 2012 and that the gold market is in the early stages of a sharp upward move. Alf Field-April 28 2012

-The crisis in Europe, which seems destined to come to a head soon, will bring this arrangement with the US Fed into focus. This is the time when the precious metals may make a dramatic upward move. Warren Buffett may not understand it, but this is why people buy gold and other precious metals, as an insurance to protect their savings and wealth in times when the threat of financial or economic catastrophe appears to be inevitable. Alf Field

-Gold may touch $7,000 per ounce before end of uptrend. While gold’s latest price gyrations may seem excessive to some investors, Bank of America analyst MacNeil Curry said the volatility was nowhere near extreme enough to convince him the precious metal’s long-term uptrend was nearing the end.

In fact, at last week’s Market Technicians Association symposium he said of gold’s secular bull trend, “From an Elliott Wave perspective, we have seen a nice, solid, orderly advance.” Curry said any long-term commodity advance tends to end with, “a massive speculative blow-off.”

“They don’t end quietly,” the technician told conferees. He projects gold will ascend to levels somewhere between $3,000 to $5,000 and potentially $7,000 per ounce before the rally, now in its 11th year, comes to a close. Read more here-http://tinyurl.com/c5ktpgr

-Citibank Analyst Extraordinarily Bullish Gold, Oil & US Dollar. Tom Fitzpatrick is a 28 year veteran and top analyst at Citibank, which has $1.3 trillion in assets. “We are very much biased to believe that what we are in at the moment is a consolidation in gold, a platform before it moves higher again.

In particular we’ve looked back at this whole bull market in gold, since 2001/2002.” “With the exception of 2008, when everything obviously came down together in a mass washout in financial markets, gold has never been able to really move down much below its 55 week moving average. In every period it has done that, it’s been the platform for the next move higher.

We’ve done that again here, and the present pattern we look at is setup similarly to that of 2006. In 2006 we had a similar type of consolidation and sideways moving pattern, which eventually gave way to a significant push to the topside. We believe the same thing is happening again here.

We’ve already iterated a target in the more medium to long-term of $3,400, and over the next twelve months as high as $2,400. We believe gold is now set up, with a bullish weekly reversal last week, to make its next move higher. It might not explode in the near-term. “It might be, initially, more gradual, but we are very biased to think gold is going significantly higher from here.” Read more here-http://tinyurl.com/7apbkm7

-Egon von Greyerz: Swiss Refiners Say “Demand for Gold is Massive.” “The gold market may appear quiet right now, but underneath the quiet there is a great deal of action in the physical market. Swiss refiners are telling me they are working ‘round the clock’ because demand for gold is so massive.”

At the same time, we are reading that a number of central banks are buying gold. So the nonsense coming from the mainstream media that people are not interested in gold is completely false. We are seeing massive accumulation of physical gold. This decline today is clearly only in the paper market.

Once people wake up to the fact that the paper market is not even a real market, meaning it’s a false market that can never deliver the real goods, once investors realize this, that is when people will really panic. The paper market will then be either non-existent or we will see a massive premium between physical and paper. I think those days are not far away. Read more here-http://tinyurl.com/836c2dq

-Aden Sisters: Gold Volatile Within A Bull Market. Gold’s Bullish Factors. As Q2 gets underway, stocks declined. With tensions in the Eurozone resurfacing, uncertainty is coming back. This is helping to build a good foundation. In Europe, for instance, Spain is becoming a real worry and it’s much larger than Greece.

Concerns the Eurozone may be unable to handle the brewing potential problem as easily as it did in Greece is weighing on stocks and pushing up gold. At the same time, demand is also an ongoing factor that is keeping a solid floor under the gold price.

Central banks have been steady buyers as they grow weary of the Fed’s monetary actions and build their gold reserves, and China remains at the forefront. Not only is China the world’s biggest gold producer, it’s also the world’s biggest gold buyer.

Like the central banks, big successful investors have also been buying all along. This too is a sign that gold is likely near a bottom. Plus, don’t forget that inflation is brewing due to the Fed’s policies while real interest rates are below zero. Both are very bullish signs for gold. These are the main reasons why we believe gold’s bull market will continue on its upward path.

Gold’s Calm For 7 Months Creates More Bears. After a steady consistent rise in gold for 11 years, we can understand why some feel the bull market is over. But don’t be fooled, a trend is in motion until it’s over. This is a simple yet powerful phrase, and it tells us to stay invested until the move is over.

It’s amazing to think that gold has risen 660% since 2001, or even better, it rose 170% from the 2008 low to last September’s record high near $1900, without much of a decline along the way. Yet the decline from its September peak has so far been less than 20%.

And even if gold were to decline below $1600 to last December’s low near $1540, it would still be a mild decline compared to the rise. This is where you want to keep your focus during these sluggish times because they could last a bit longer. Read more here-http://tinyurl.com/d9nbl9g

-Jeff Clark recently caught up with Charles Oliver, the senior portfolio manager of the Sprott Gold and Precious Minerals Fund.

Jeff: Gold has been stuck in a trading range since last September. In your view, what’s kept the price from advancing?

Charles: I think one issue is that in December the Europeans embarked upon their version of QE. They called it the “long-term refinancing operation,” where they effectively put 500 billion euros into the hands of the banks of Europe and just like quantitative easing, it had a big effect on the markets and all assets rose, including gold. Then on February 29, the Europeans did their second round of the LTRO, and the early expectations were that we’d see between half a trillion and a trillion dollars, but they announced at the low end of expectations, 530 billion euros. We saw a big selloff in the markets, along with the gold price. So although we’ve seen a major amount of printing over a trillion euros in the last few months the market was somewhat disappointed.

That money is getting into the economy, but it’s a bit slower than expected and the market wants to see more. They’re already asking the Europeans for more actions in terms of printing or other methods of stimulating the economy.

Jeff: It sounds like you’re saying the gold bull market might be over if governments don’t resume printing some in the mainstream make this claim. Is that the primary driver for gold now, or are there other factors that will push the price higher?

Charles: I keep hearing the gold bull market is dead, year after year. Certainly one of the biggest themes for gold over the last decade has been the debasement of currencies, so this has been one of the most important factors. And I do think they’re going to print again, because there’s been no solution to the debt conundrum. It’s my belief that it’s only a matter of time until they embark upon their next binge of money printing.

That said, if you go back to long-term fundamentals, you’ll see that countries around the world continue to run large budget deficits, and this is very bullish for gold, too. You also have to look at supply and demand. There was an uptick in mine production last year, but supply has been fairly flat over the last decade. The more compelling data has been with demand increasing investment demand and burgeoning demand out of China.

Remember that individuals in China were not allowed to own physical gold as recent as a decade ago, and now they just imported about 760 tons, roughly a quarter of mine production. So they’ve gone from zero to 25% of worldwide demand in a very short period of time. And they’re still only a fraction of US GDP, with a population that’s more than four times bigger.

They have north of $3 trillion of reserves, about two-thirds of which is in US dollars, and they’ve been saying they don’t like the way the US is debasing their currency and are looking to diversify into hard assets. Add it all up and they could very easily add 10,000 tons of gold to their reserves, an amount that represents about four years of the total global mine production. So I’m expecting this trend into gold to continue for many, many years.

Jeff: You mentioned that gold hits $2,000 this year.

Charles: Yes, I believe that’s going to happen. One of the things I’ve been watching for the last four years is the trend line that started during the financial crisis of 2008 we’re near the bottom of that trend line now and $2,000 is squarely in the middle of it. So if we stay within the trend, which I think we will, we’ll hit $2,000 by year end. Read more here-http://tinyurl.com/cpwtlc3

-John Embry: This is What I’m Doing with My Own Money Right Now. “Today I took delivery of more physical gold because I think this is a great time to be adding to your position. Eight months ago it was over $1,900 and today it’s $1,650. Savvy investors will buy these dips in bull markets and that’s what I’m doing personally. Once gold exits this range that it’s been in now for a considerable period of time, it will exit violently to the upside. I keep saying it, but the physical market is gradually overcoming the paper market, and the paper market, in a word, is preposterous.” Read more here-http://tinyurl.com/74kdauz

-Eveillard: This Fed Manipulation is Incredibly Dangerous. “Even though I’m positive towards commodities, I don’t look at gold as a commodity. At the current level, I look at gold as a substitute currency. What matters is whether there is investment demand or investment supply. In other words, there has been good investment demand over the last ten years.

Today, the central banks and a number of individuals like me, who are worried about the future, have been buyers. So, gold, I don’t look at it at all as a commodity. I’m saying that I continue to hold gold and possibly buy more because I think that the policies that are being followed will have negative unintended consequences that will appear at some point.” Read more here-http://tinyurl.com/cqbf3u5

-Leeb: We Will See Unbelievable Chaos Going Forward. But what I’m saying is the Western world is going to need even more easing, more money. All of this is incredibly bullish for gold longer-term. I do think you have to navigate the end of the euro before the next massive move in gold, but that’s coming.

It’s possible that gold may get hit initially as the euro fails, but you have to buy it if it does. In the end, the only way this is going to work out is with massive liquidity and inflation. This inflation is already much more prevalent than any of the numbers suggest. But once the public realizes inflation is heating up, you will see a mad dash for gold.” Read more here-http://tinyurl.com/7g8xxat

-Leeb: Spain Flirts With Disaster As Europe Ready To Blow Apart. “Gold may get hit if Europe does fall. There might be selling of gold for liquidity. If gold does get hit, it will be one of the greatest buying opportunities people will see in their lifetimes, but it may not happen.

My point is if you are fully invested in gold, stay there. In a few years you will find you are very wealthy. If you are 50% invested, buy the dip if one materializes. China is buying gold because they know what is happening. This is a recipe for the Chinese yuan becoming the new reserve currency because they are accumulating a lot of gold that will probably be used to back the yuan.

What is that going to mean for the dollar and inflation in the West? It’s going to go to levels that we’ve never seen before. This is a when, not if event. And the when is, when is gold and silver going to soar to the sky? I don’t even have a target for gold anymore. Investors need to be careful with anything that is denominated in dollars and paper. You have to be in hard assets in order to survive this cycle.” Read more here-http://tinyurl.com/86z3xnc

-Richard Russell: A Chapter of the World Has Come to an End. Read more here-http://tinyurl.com/6s2egdn

-Billionaire Hugo Salinas Price: Elites Plan to Control the World. The problems we are seeing in the West are not going to be resolved in any positive way. What we have had in the West, in recent decades, has been the welfare state. The welfare state is, in my view, what I would call, ‘socialism light.’ We’ve had ‘socialism light’ and now we’re going to transition to full-blown socialism.” Read more here-http://tinyurl.com/85lb5c8

-Hugo Salinas Price: The gold price the reds against the blues. Read more here-http://www.gata.org/node/11319

-Michael Pento: Love Affair With Inflationary Policies To End in Disaster. If Krugman and Bernanke were correct in believing inflation has a positive influence on the workforce, Zimbabwe and Argentina would both be paragons of how to achieve full employment. The truth is that a high unemployment rate is the simply the result of a weak economy. And an economy can suffer through a recession while experiencing either inflation or deflation.

But when an economy experiences a rising rate of inflation, it always ends up with an unemployment rate that goes along for the ride. We can only hope that central bankers in the developed world assent to that principle very soon. However, the ECB, BOJ and Fed continue to believe a positive rate of inflation must be maintained at all costs. If they persist with this misguided policy, this will end in disaster.

This careless and irrational thought process, on the part of the Fed and other central planners, is one of the primary reasons why investors must maintain gold in their portfolios. Gold has proven to offer protection against reckless monetary policy for centuries and will continue to do so in the future.” Read more here-http://tinyurl.com/83eqk4r

-Robert Fitzwilson: There Is No Solution, Only Catastrophic Outcomes. Nobody is in favor of an economic collapse. We have now transitioned into an economic ‘no-man’s land,’ the magnitude of which has never been seen. There is no solution, only outcomes that have to be managed.

We must now print to infinity and hope that unexpected events will provide a positive path out of this morass. So, what should investors be doing with their money? For portfolios, history and common sense tell us that real assets should be the predominant allocation. One should also include high growth companies taking advantage of pockets of global demand. Solid, high yielding global companies should also be considered as well as a foundation allocation to energy, gold and silver.” Read more here-http://tinyurl.com/7qq5tre

-Eric Sprott and David Baker: When fundamentals no longer apply, review the fundamentals. Read more here-http://www.gata.org/node/11300

-Eric Sprott: Global Shocks Coming, Investors Need to Prepare. Read more here-http://tinyurl.com/6wn3sxa

-Futures magazine interviews gold advocate Jim Sinclair. Read more here-http://www.gata.org/node/11295

-Keith Barron: The World Will See More QE, Inflation & Revolution. I think you are going to see the European Central Bank throwing money at the various crises, in Europe, that are continuing to unfold. I do think QE3 is coming before the US elections. I think there is continued bad news coming both in GDP output and in employment figures for the US, and they are going to throw money at this.

So this is all very inflationary and it is very bullish for gold. I would not at all be surprised to see another huge bounce in the gold price, like we saw last August. Traditionally and typically these things don’t happen in the summer, but certainly we had a huge surge in price last August.

Maybe we are going to get that again this year because the cycle is moving further and further ahead in the year. So, perhaps we are going to get that big bounce in the gold price in August, rather than in September. Read more here-http://tinyurl.com/828a4y5

-Big commercials don’t see metals going lower, Arensberg reports. Read more here-http://www.gata.org/node/11299

-Schiff: Possible Rally Tomorrow & Investors To Be Blindsided. “At some point you’re going to see some kind of a breakout in gold. We’ll see tomorrow (Friday May 4) if we get a much weaker than expected jobs number, and we get strong talk of QE, that could cause gold to rally.” Read more here-http://tinyurl.com/6v8zma7

-’Fat finger,’ Wall Street Journal? No, government’s heavy hand on gold. Gold futures ended nearly unchanged Monday, after a large early-morning sell order roiled traders and slashed prices by almost $15. The CME Group Inc.’s Comex division recorded an unusually large transaction of 7,500 gold futures during one minute of trading at 8:31 a.m. EDT. The sale took out blocks of bids as large as 84 contracts in one fell swoop and cut prices down to $1,648.80 a troy ounce. The overall transaction was worth more than $1.24 billion. Read more here-http://www.gata.org/node/11306

-Dan Norcini: Traders Are Literally on the Edge. Norcini had this warning about the move in gold, “The so-called ‘fat finger’ trade in the gold market the other day, I don’t think it was a ‘fat finger’ trade at all. I think it was yet another takedown attempt. Look at what that trade did. It wiped out the bids and took the gold market down $15 in one minute.

If someone had $1,000,000 in their futures account, and they were long 300 gold contracts, that move cost them $450,000 in just 60 seconds. This is reality of how these markets operate for the traders that choose to use extremely heavy leverage.” Read more here-http://tinyurl.com/7cg68g5

-Norwegians take big broker’s trading algos for an expensive ride. Read more here-http://www.gata.org/node/11316

-MineWeb’s Williams says U.S. uses gold to control dollar’s devaluation. Read more here-http://www.gata.org/node/11312

-Amity Shlaes: Nutty would be not considering return to a gold standard. Read more here-http://www.gata.org/node/11317

-Dutch central banker’s memoirs confirm gold price suppression. Read more here-http://www.gata.org/node/11304

-The Moneychanger interviews GATA secretary about gold and silver suppression. Read more here-http://www.gata.org/node/11303

-Russia Today’s ‘Capital Account’ interviews GATA’s Bill Murphy. Watch more here-http://www.gata.org/node/11307

-Mining CEO McEwen cites GATA’s work on Bloomberg. Watch more here-http://www.gata.org/node/11301

-If U.S. had ‘Yamashita’s gold,’ they’d put it in Cracker Jack boxes. Read more here-http://www.gata.org/node/11309

-Nike Is Releasing Five Pairs Of Sneakers That Are Dipped In Real 24 Karat Gold. Read more here-http://tinyurl.com/73g26nd

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SILVER

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 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

-”The price of silver began to climb in earnest in the late summer of 2010 from about the $18 level to roughly the $31 level by the end of the year as physical silver began to grow tighter. My basis for the physical tightness explanation is that there was no net speculative buying in futures contracts on the COMEX for that period. In fact, the net speculative long/commercial short position declined by almost 25% from the mid-September through year end 2010.

Almost 99 times out of 100, it is COMEX positioning that drives the price of silver. So if it wasn’t speculative buying on the COMEX that was driving the price, by process of elimination, it had to be something else. That something else was demand for physical, as evidenced in the collective 100 million oz growth in various silver ETFs (like SLV, PSLV, SIVR, etc) over that time period.” “After correcting to $27 in late January 2011, the price of silver surged to $49 in three months to the end of April.

Once again, after some gyrations in the COT structure, the total net commercial short position was lower by the end of April, proving that it wasn’t buying by speculators on the COMEX that drove prices to historic highs; it was continued physical buying in ETFs and elsewhere and commercial short covering into the highs. The changes in the COT structure prove that the COMEX commercials on the short side were in a bind and were clearly panicking into the end of April.

It was not a speculative bubble in any true sense of the word. I do admit that a good chunk of the buying in the silver ETFs was obviously momentum buying on rising prices and that was the metal that was subsequently liquidated on the May 2011 price smash. But it would be a stretch to call that a bubble. In retrospect, it was a shortage of silver, more than anything else that drove prices to the highs.” “Had the big COMEX commercials not collusively banded together [starting on the evening of May 1st and continuing to this day] to manipulatively rig prices lower, we would be looking down at $50 silver, instead of looking up to that price now.

There’s no real way of telling how high we may have gone had the physical silver shortage into April 2011 jumped the fire break and spread to the world’s industrial users. Such a development would have created a situation where the fire would need to burn itself out by prices moving irrationally higher. I don’t know if the commercials knew on May 1st that they would be able to trip off the metal liquidation in SLV and the subsequent liquidation in COMEX contracts, but I am inclined to think that their backs were up against the wall and it could have gone the other way.

Let’s face it if the commercials were in such total control, they never would have let silver have gotten to such extremes with them so close to being overrun to the upside. The commercials miscalculated from $18 on up and only got lucky on their desperate last-gasp sell-off a year ago.” Ted Butler via Ed Steer Casey Research-Read more here-http://tinyurl.com/72alvq5

-Jeff Clark recently caught up with Charles Oliver, the senior portfolio manager of the Sprott Gold and Precious Minerals Fund.

Jeff: What’s your long-term outlook for the silver price?

Charles: We’re incredibly bullish on silver. One argument we’re making is that the gold-to-silver ratio [gold price divided by the silver price] should be closer to 20:1 rather than its current 50:1. If you look at the last 2,000 years, the long-term gold-to-silver ratio has been 16:1 about 90% of the time. At 16:1 and gold at $1,600, you’d expect the silver price to be closer to $100, which would be roughly a triple from the current level.

Look at history, too: the Roman exchange rates of the time were 16:1. And the United States mandated in the Coinage Act of 1834 that when somebody asked for a dollar’s worth of gold or silver for their $1 paper currency, the government would given them metal in the ratio of 16:1. Why 16:1? The reason is because that’s the ratio in the earth’s crust: for every one ounce of gold there exists about 17.5 ounces of silver.

So if you’re a miner, it should cost you roughly the same amount of money to extract an ounce of gold as 17.5 ounces of silver. So if the production costs are about the same, they should have roughly the same price. That’s why for most of the last 2,000 years that ratio has been in place. What changed was when the US decided about 130 years ago to leave the silver standard, and in that process they sold down their inventories. Then the European banks sold down their inventories, then the Chinese, and in this process the gold-to-silver ratio went up to the level of 50:1 where it is today.

Jeff: It sounds like you see some explosive potential with silver.

Charles: Absolutely. I would also point out that if you go back to 1980, the silver price briefly touched $50 and gold hit about $850, so for a small period of time we did get close to that 16:1 ratio. Read more here-http://tinyurl.com/cpwtlc3

-Stephen Leeb: Silver Market Update. “Once gold gets going, people will be amazed at how fast the silver price moves. You are going to see three digit silver in the next couple of years. Going forward, there simply isn’t enough silver available to satisfy both the industrial demand and investor demand. We will start to see strains in the physical market in silver at some point in the future. When that happens, silver will be off to the races.” Read more here-http://tinyurl.com/7g8xxat

-James Turk: Banks & Governments Will Collapse Together. I have been speaking with a lot of people about precious metals lately, and one common theme emerges. Just about everyone is describing this correction as ‘brutal, painful, vicious’ or words to that effect. I can understand that negative sentiment, but I describe this correction differently. To me the best word to describe it is ‘long.’

Because it has been ‘long,’ this correction has been extremely frustrating. But we shouldn’t let any of that negative sentiment cause us to take our eye off the ball, particularly at times like these. As investors, we need to think rationally, and avoid emotion. To do that, we need to focus on fundamentals and these remain very positive.

So every month I continue to do what I have been recommending to KWN readers for years. Every month I buy some precious metals, and will continue to accumulate them as long as they remain undervalued. Of late I’ve been buying silver. It’s the better value. Read more here-http://tinyurl.com/6rlbjsm

-Steve St. Angelo: Critical Factors that will Impact Silver. Read more here-http://tinyurl.com/bo3lkz5

-Silver Institute: April 2012 Newsletter. Read more here-http://tinyurl.com/6mwl984

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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: John Williams, The “Recovery” Faked By Phony Gov. Numbers. John Williams, of Shadowstats, stated in his latest commentary, “The recovery is an illusion.” There are two graphs in this piece from Williams, which show highly manipulated and phony government GDP reporting versus the inflation corrected real GDP. The difference between the two graphs is a shocking revelation of government propaganda at its best. Read more here-http://tinyurl.com/726cgz9

-CHART OF THE WEEK: Check Out How Much Less Money Americans Are Making Than Before The Crash. This chart from Bill McBride at Calculated Risk shows one reason why the economy is still sputtering along: Because Americans are still making much less money than they were before the recession. Read more here-http://tinyurl.com/75tr2n9

-CHART OF THE WEEK: How Many Minutes A McDonald’s Employee Has To Work In Order To Afford A Big Mac. Read more here-http://tinyurl.com/845b28x

-The U.S. faces numerous “cliffs” at the end of 2012 when the George W. Bush tax cuts expire: More than $1.1 trillion will be cut from the budget, about half of which will come from defense because of the infamous “sequester” of last year; the payroll tax cut will expire, as will the “patch” in the alternate minimum tax. “If you add all those up,” “it’s probably $7 trillion worth of economic events that are going to occur in December. And there’s been little to no planning for that.” Erskine Bowles Co-chairman of President Barack Obama’s budget-deficit commission

-US Economy Faces Risk of ‘Fiscal Cliff’: Fed Officials. Two Federal Reserve officials warned that the U.S. could be heading for a “fiscal cliff” at year’s end if mandated tax increases and spending cuts are implemented. Charles Evans of the Chicago Fed called the cliff a “big uncertainty” while Atlanta Fed President Dennis Lockhart said there could be a “financial shock” if markets begin to anticipate that Congress and the White House do little to address this situation. The expected tax increases and spending cuts were triggered when a congressional “super committee” failed to come up with a way of closing the federal budget deficit. Read more here-http://tinyurl.com/cxgbweh

-US Treasurys Are ‘Junk,’ Dollar Headed for Collapse: Peter Schiff. The greenback and the U.S. bond market are headed for a collapse as the U.S. Federal Reserve loses the ability to service the nation’s debt with “artificially low” interest rates, Peter Schiff, CEO of Euro Pacific Capital told CNBC. “Unfortunately, we are going to get more QE than Rocky movies, because the only thing keeping this phony economy going is this QE,” he said. “And the minute you take it away, it’s going to collapse.” Read more here-http://tinyurl.com/79u36js

-We Are in Age of ‘Late Great Depression’: Robert Shiller. The world is in a state of “late Great Depression,” and is in a “new age of austerity,” well-known economist and author Shiller told CNBC. Read more here-http://tinyurl.com/bqnfbxg

-‘Ocean’ of Credit Will Boost Growth, but Carries Risks: Bill Gross. Central bank policies will induce growth in developed countries this year but will create inflationary risks down the road, Gross, founder and co-chief investment officer of PIMCO, said in his regular monthly letter to investors. He reiterated that investors should target bonds “in the five-year range” and stocks that pay dividends around three to four percent. He also recommends real assets and commodities. Read more here-http://tinyurl.com/c27cdox

-Jim Rogers: The Next Economic Slowdown Is Coming And It’s Going To Be Much Worse. Read and watch more here-http://tinyurl.com/796czku

-Hugh Hendry: My Greatest Fear Is That Europe Will Confiscate My Assets. Read more here-http://tinyurl.com/792guy5

-Bill Black: Our System is So Flawed That Fraud is Mathematically Guaranteed. Read and listen to more here-http://tinyurl.com/6ofqgsj

-Marin Katusa: The Media Won’t Touch This Story About The End Of The US Dollar. There’s a major shift under way, one the US mainstream media has left largely untouched even though it will send the United States into an economic maelstrom and dramatically reduce the country’s importance in the world: the demise of the US dollar as the world’s reserve currency. Read more here-http://tinyurl.com/89twrfe

-Falling Government Spending. Government’s contribution to gross domestic product is slipping. Government consumption expenditures and investment fell by $51.7 billion to an annualized $2.462 trillion, the fifth consecutive quarter of year-on-year declines. A fall in government spending, which was driven by defense cuts, was a big reason for the slower pace of gross domestic product growth in the first quarter. Read more here-http://tinyurl.com/c8y2y95

-Greg Hunter: The Illusion of an Economic Recovery. Read more here-http://tinyurl.com/cag5dyd

-Economy Face Off: Ron Paul vs. Paul Krugman. Watch more here-http://tinyurl.com/7e4zxah

-Krugman Says Fed ‘Reckless’ to Allow High Jobless Rate. Nobel Prize-winning economist Paul Krugman suggested Federal Reserve policy makers led by Ben S. Bernanke are “reckless” for refusing to pursue higher inflation, which he said could lower U.S. unemployment. Read more here-http://tinyurl.com/c3vltzk

-The 86 million invisible unemployed. Last year, 86 million Americans were not counted in the labor force because they didn’t keep up a regular job search. Most of them were either under age 25 or over age 65. Read more here-http://tinyurl.com/76cux2d

-Payroll Survey Signals U.S. Jobs Slowing as Orders Drop. Private employment increased by 119,000, the smallest gain in seven months, after rising by 201,000 in March, Roseland, New Jersey-based ADP Employer Services said. Read more here-http://tinyurl.com/78wb48w

-U.S. Firms Add Jobs, but Mostly Overseas. Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis. Read more here-http://tinyurl.com/82tavmw

-No End in Sight to Global Jobs Crisis: UN Agency. Fiscal austerity and tough labor reforms have failed to create jobs, leading to an “alarming” situation in the global employment market that shows no sign of recovering, the International Labour Organization. In advanced countries, especially in Europe, employment is not expected to return to pre-crisis levels of 2008 until the end of 2016 two years later than it previously predicted in line with a slowdown in production.

An estimated 196 million people were unemployed worldwide at the end of last year, forecast to rise to 202 million in 2012 for a rate of 6.1 percent, according to the United Nations agency’s annual flagship report, “World of Work Report 2012″. Read more here-http://tinyurl.com/bnky825

-The No Retirement Plan: More And More Americans Plan To Work Forever. Read more here-http://tinyurl.com/6nwrva5

-Obama Fails to Stem Middle-Class Slide He Blamed on Bush. Barack Obama campaigned four years ago assailing President George W. Bush for wage losses suffered by the middle class. More than three years into Obama’s own presidency, those declines have only deepened.

The rebound from the worst recession since the 1930s has generated relatively few of the moderately skilled jobs that once supported the middle class, tightening the financial squeeze on many Americans, even those who are employed. Read more here-http://tinyurl.com/88a4srh

-Banking regulators shutter five banks across U.S. Federal and state banking regulators shut down five banks across the country on Friday, bringing the total number of bank failures this year to 22, the Federal Deposit Insurance Corporation said. Two of the failed banks were in Maryland. The others were located in Minnesota, South Carolina, and California. Read more here-http://tinyurl.com/c5hlabq

-Canadians Dominate World’s 10 Strongest Banks. Banks from Citigroup Inc. in the U.S. to BNP Paribas SA in France are racing to shed assets and raise money ahead of new global capital rules that start taking effect in 2015. For Canadian lenders, these moves have created the opportunity to go on a shopping spree. Read more here-http://tinyurl.com/76aoj5v

-This Meal Will Cost You $200,000 By Retirement. Read more here-http://tinyurl.com/7zfhzcf

-Inflation Gone Wild: Look How Much Cheaper Everything Used To Be. The dollar has lost 90 percent of its value since the early 1900s. This dramatic devaluation has crushed anyone who kept money in cash, and it has hurt workers when wages failed to keep up with inflation. There’s also a psychological impact for Americans who can remember when a bottle of Coke cost only 5 cents. It’s not surprising people are obsessed with gold these days. Read more here-http://tinyurl.com/6qfuy5j

-Indonesia’s Inflation Accelerates to Seven-Month High of 4.5%. Indonesia’s inflation accelerated to a seven-month high in April, rising above 4 percent and putting pressure on the central bank to hold off on further cuts in interest rates. Consumer prices rose 4.5 percent last month from a year earlier, the Central Bureau of Statistics said in Jakarta. That compares with a 3.97 percent increase reported in March. Read more here-http://tinyurl.com/85×6sh6

-Simon Black: The Combination Of Austerity And Liquidity Can Lead To Only One Thing. But there is one outcome from the 1970s that is genuinely to be feared the risk of which seems to be rising every day, if it has not indeed already arrived: Stagflation.

Stagflation the utterly painful combination of stagnating growth and steep inflation that marked the 1970s and will be the natural side effect of extended central bank quantitative easing during a period of widespread deleveraging. In other words, stagflation is the consequence of printing money that nobody wants.

Moreover, an outbreak of serious stagflation will decimate conventionally managed debt and equity portfolios. And given that most people invest with the crowd, with conventional investments or conventionally managed portfolios, stagflation will wipe the savings and livelihoods from untold masses. Read more here-http://tinyurl.com/bsub9a3

-ECB leaves rates steady but hints at future cut. European Central Bank officials voted Thursday to hold interest rates steady, even as the euro area economy slides towards recession. But ECB president Mario Draghi appeared to hint that there could be rate cuts in the future. In a widely expected move, the ECB left its main overnight lending rate at 1%, a level the bank has maintained since late last year. Read more here-http://tinyurl.com/cswv2l8

-Australia Unexpectedly Cuts Key Rate by Half Point. The Reserve Bank of Australia cut its benchmark interest rate by half a percentage point as inflation pressures abate, delivering a bigger-than-forecast reduction that sent the local dollar and bond yields tumbling. Governor Glenn Stevens and his board slashed the overnight cash rate target to a two-year low of 3.75 percent from 4.25 percent, the deepest reduction in three years. Read more here-http://tinyurl.com/bog4kha

-Bolivia Seizes Unit of Spanish Power Company Red Electrica. Bolivia is nationalizing the local assets of Spain’s Red Electrica Corp., giving the government control of the Andean nation’s power grid two weeks after neighboring Argentina seized its biggest oil company. Read more here-http://tinyurl.com/buxltlm

-Drivers Pay Secret Road Tax in $15 Billion for Car Repair. The U.S. Highway Trust Fund, which helps pay for road and transit projects in Washington and all 50 states, has been bailed out by Congress three times since 2008 for a total of $34.5 billion.

The gasoline tax that supports the fund hasn’t been raised in 19 years, and with the cost of materials such as steel and asphalt on the rise, the fund is expected to have a deficit of about $10 billion this year. Car owners already are shelling out far more than that to repair damage done to their vehicles by America’s ruined streets and highways, industry and academic researchers say.

Motorists pay $67 billion annually for increased fuel consumption, body dents, worn tires and premature wear wrought by pitted roads, according to The Road Information Program, a Washington-based research group. That works out to $324 per licensed driver, says Frank Moretti, TRIP’s director of policy and research. Read more here-http://tinyurl.com/cxb6lg4

-Russia threatens to strike NATO missile defense sites. Russia’s most senior military officer said Thursday that Moscow would pre-emptively strike and destroy U.S.-led NATO missile defense sites in Eastern Europe if talks with Washington about the developing system continue to stall.

“A decision to use destructive force pre-emptively will be taken if the situation worsens,” Russian Chief of General Staff Nikolai Makarov said at an international missile defense conference in Moscow attended by senior U.S. and NATO officials. Read more here-http://tinyurl.com/6utf64c

-Roubini: Iran is the greatest looming threat. Nouriel Roubini gives an audience no shortage of scenarios to keep them up at night, but his number one worry right now is the looming threat of Iran building nuclear weapons. Specifically, it’s the risk of a confrontation between Israel and Iran, or the United States and Iran, Roubini told Michael Milken in front of hundreds of onlookers at the Milken Institute Global Conference in Los Angeles. Read more here-http://tinyurl.com/c87ro6z

-Bin Laden worried he wasn’t in control, documents show. Read more here-http://tinyurl.com/7xqr6s8

-Documents reveal al Qaeda’s plans for seizing cruise ships, carnage in Europe. Read more here-http://tinyurl.com/6lup7wd

-Madoff Costs Surpass Victim Payouts as Strategy Fails. Irving Picard, who said last year he hoped to pay investors in Bernard Madoff’s defunct firm as much as $65 billion, has only put his hands on about $2.6 billion to actually give back to customers. Read more here-http://tinyurl.com/c34mryy

-One in seven thinks end of world is coming: poll. Nearly 15 percent of people worldwide believe the world will end during their lifetime and 10 percent think the Mayan calendar could signify it will happen in 2012, according to a new poll. The end of the Mayan calendar, which spans about 5,125 years, on December 21, 2012 has sparked interpretations and suggestions that it marks the end of the world. Read more here-http://tinyurl.com/c6b8b4z

-Report warns of weather satellites’ ‘rapid decline.’ Predicting the weather is tricky enough. Now a new government-sponsored report warns that the USA’s ability to track tornadoes, forecast hurricanes and study climate change is about to diminish. The number and capability of weather satellites circling the planet “is beginning a rapid decline” and tight budgets have significantly delayed or eliminated missions to replace them, says a National Research Council analysis out Wednesday. Read more here-http://tinyurl.com/6rov356

-Class of 2012: Not so different from mom and dad. Most in the class of 2012 were born in 1990 a year when automakers struggled and gas prices climbed to almost $2 a gallon. They grew up with Harry Potter but without rotary phones and spent more time texting and less time talking. Read more here-http://tinyurl.com/bmbpevk

-Here’s What Apple Could Buy With Its Huge 110 Billion Cash Pile. Read more here-http://tinyurl.com/7o98adv

-“The Scream” sells for record $120 million at auction. Edvard Munch’s painting “The Scream” sold for a record $120 million at auction on Wednesday at Sotheby’s, far exceeding pre-sales estimates of about $80 million. Read more here-http://tinyurl.com/dxlg749

-The 10 Most Expensive Works Of Art Ever Sold. Read more here-http://tinyurl.com/7pnoe45

-Titanic II Planned by Billionaire Palmer in Chinese Yard. Australian mining billionaire Clive Palmer plans to build a 21st-century replica of the Titanic and sail it from England to New York accompanied by the Chinese navy by the end of 2016. Read more here-http://tinyurl.com/boct4g6

-The World’s Tenth Richest Man Explains Why He Has To Become The World’s Richest Man. Read more here-http://tinyurl.com/dxpx74l

-Richest Ukrainian Makes $3 Billion on State Asset Sales. Rinat Akhmetov, Ukraine’s richest man, added $3 billion to his net worth in the past six months by buying state-owned energy assets sold by his hometown political ally, President Viktor Yanukovych. Read more here-http://tinyurl.com/6mhf56v

-Wealthy Americans Queue to Give Up Their Passports. Rich Americans renouncing U.S. citizenship rose sevenfold since UBS AG whistle-blower Bradley Birkenfeld triggered a crackdown on tax evasion four years ago. Read more here-http://tinyurl.com/735ol55

-The 10 Most Outrageous Purchases People Made In April. Read more here-http://tinyurl.com/c5blfpd

-Noma Keeps World’s Best Restaurant Title, Fat Duck Sinks. Noma, a waterside establishment in Copenhagen where chef Rene Redzepi serves Nordic dishes such as poached sea urchin and powdered cucumber, was named the World’s Best Restaurant for the third straight year. Read more here-http://tinyurl.com/d3uyj5v

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RARECOLOREDDIAMONDS.COM

-Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Featured Diamond is a 1.51 Carat Oval Cut Fancy Light Yellow Internally Flawless Diamond. The Tiffany Yellow Diamond is one of the largest yellow diamonds ever discovered; it weighed 287.42 carats in the rough when discovered in 1878 in the Kimberley mine in South Africa, and was cut into a cushion shape of 128.54 carats with 90 facets, 32 more than a traditional round brilliant to maximize its brilliance.

The diamond is known to have been worn by only two women during its lifetime. It was worn by Mrs. Sheldon Whitehouse at the 1957 Tiffany Ball held in Newport, Rhode Island, mounted for the occasion in a necklace of white diamonds. It was subsequently worn by Audrey Hepburn in 1961 publicity photographs for Breakfast at Tiffany’s. Harold Seigel-See video of the Featured Diamond here-http://tinyurl.com/6g37q2r

-”The really huge money is paying record prices for rare works of art and one-of-a-kind gems. And I mean the prices are in the multi-millions. It is thought that many of these buyers are Russian or Asian billionaires. The number of billionaires on earth is now counted in the thousands.” Richard Russell

-Diamonds Are a Great Way to Diversify. Diamonds are an attractive option for investors looking to diversify portfolios because they don’t move in relation with other assets such as commodities and stocks, according to David Riedel, President of equity research firm Riedel Research Group.

“Over the past decade cross-asset correlations have nearly doubled, (but) diamonds have exhibited very low correlations to other assets making them an attractive source of diversification. They have almost no correlation to anything else commodities, gold, equity markets,” Riedel told CNBC.

In 2011, the RapNet Diamond Index for one carat polished diamonds rose 19 percent outpacing gold, which rose 10 percent. And supply constraints are expected to take diamond prices even higher in the coming years, says Riedel.

He estimates demand for diamonds will grow 50 percent between now and 2015, driven by consumption in the United States, China and India, while production will rise by just 24 percent. Sotheby’s annual spring sale of “Magnificent Jewels” in Hong Kong this week highlighted Asia’s booming interest in diamonds.

The highlight of the auction was the sale of an 8.01-carat blue diamond ring for $12.7 million the second highest price per carat for a blue diamond at an auction. When choosing between buying a diamond ring and loose diamonds as investment, Riedel says they both “work” and retain value. Read more here-http://tinyurl.com/6lmap8u

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SOVEREIGN DEBT

-CHART OF THE WEEK: European Youth Unemployment. Spanish youth unemployment climbed to 51.1 percent in March, from 50.9 percent the previous month. This number was 6.2 percentage points higher than the 44.9 percent youth unemployment rate a year ago. Read more here-http://tinyurl.com/ceztfnn

www.chartoftheday.com

-Eurozone unemployment hits record 10.9%. Unemployment in the eurozone rose to 10.9% in March, another sign of the broad economic weakness and possible recession across the continent.

The unemployment rate across the broader 27-nation European Union remained at 10.2% in March, according to a organization report Wednesday.

But the 17-nation eurozone unemployment edged up from 10.8% in February. The EU and eurozone rates are the highest since the creation of the common euro currency in 1999.There are now 13 nations in Europe struggling with double-digit percentage unemployment, led by a 24.1% rate in Spain, which was a record high, and 21.7% in Greece. Read more here-http://tinyurl.com/d2l9e92

-Spain Slips Back Into Recession in First Quarter. Spain’s economy contracted in the first quarter, putting the euro region’s fourth-largest economy into its second recession since 2009. Gross domestic product fell 0.3 percent, the same as in the previous three months, the Madrid-based National Statistics Institute said. Read more here-http://tinyurl.com/794uc7y

-Spain Default Could Hit US Market 10%-20%: Economist. Spain’s newly announced recession won’t be ending any time soon and it could force the U.S. stock market to fall anywhere between 10 percent and 20 percent, economist Harry Dent told CNBC. “Spain is going to default. The markets are in total denial on this,” Dent, author of “The Great Crash Ahead,” told CNBC. “It’s a question of whether it’s going to happen sooner or later.”

Spain’s problems are far worse than what happened in Greece, he added. “Spain has higher unemployment than Greece, higher total public and private debt than Greece,” as well as a bigger housing bubble, a higher percentage of subprime mortgages, and the country has “one of the highest percentages of debt owed to foreigners,” Dent said. He called Spain one of those nations that are “too big to fail, too big to bail.” Read more here-http://tinyurl.com/7yvosnk

-S&P Downgrades 16 Spanish Banks; Country in Recession. Read more here-http://tinyurl.com/bn9qygg

-Hugh Hendry On Europe “You Can’t Make Up How Bad It Is.” Read and watch more here-http://tinyurl.com/cn4275h

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U.S. DEBT-DEFICIT

-CHART OF THE WEEK: You’ll Be Afraid Of Older Generations After You See These Charts. In a long analysis of the effects of an aging generation of Baby Boomers, Credit Suisse analysts led by Neal Soss conclude that the U.S. faces steep challenges in paying for a massive generation of retirees who have saved poorly.

Concerns about entitlements have formed the center of debates on the sustainability of U.S. public debt. and this charts show just why. First dependence on transfer payments or the money people receive as part of redistributive government programs has more than quadrupled in the last fifty years, while the share of income generated by wages has sunk 20 percent not to mention the rising costs of social security. Read more here-http://tinyurl.com/brpsoor

-U.S. Perfecting Formula for Budget Failure, Says Bowles. Erskine Bowles co-chairman of President Barack Obama’s budget-deficit commission, came to New York City to talk sense about the nation’s perilous fiscal condition. “I think today we face the most predictable economic crisis in history,” he told an audience on April 24 at the Council on Foreign Relations.

“Fortunately, I think it’s also the most avoidable. I think it’s clear, if you do simple arithmetic, that the fiscal path that the nation is on is simply not sustainable.” Bowles, a Democrat, then laid on the crowd some pretty simple, but devastating, arithmetic. He explained that 100 percent of the tax revenue that entered the Treasury in 2011 went out the door to pay for mandatory spending such as Medicare, Medicaid and Social Security and to pay the interest on our staggering $15.6 trillion national debt.

That means that every single dollar we spent on everything else, including two wars, national defense, homeland security, education, infrastructure, high-value-added research and the like, was borrowed. “And,” he warned, “half of it was borrowed from foreign countries. And that is a formula for failure in anybody’s book.”

He said the U.S. is now paying $250 billion a year in interest on the debt, and that is only because, mercifully, interest rates are at historic lows. That’s chiefly because investors are more worried about the risk of default by European nations, and because the Fed is doing everything in its power to keep interest rates low. “It’s because we’re the best-looking horse in the glue factory,” he said.

If interest rates were normalized, Bowles said, the annual bill would be $600 billion a year. “We’ll be spending over $1 trillion on interest alone before you know it,” he said. He offered the example of the country’s obligation, by treaty, to defend Taiwan in the event that China decides to invade the island. “There’s only one problem with that,” he said. “We’ll have to borrow the money from China to do it.” Read more here-http://tinyurl.com/7zdjj2o

-California Tax Revenue Is Coming Up Wildly Short Of Expectations. Since April 1 this year, the State has collected a net total of $6.735 billion in personal income taxes. The Governor’s latest budget estimate projects income taxes will total $9.132 billion by the end of the month. Read more here-http://tinyurl.com/bsg4pms

-Providence Eying Bankruptcy Cuts Pensions in Rhode Island. Providence, Rhode Island’s biggest city, will halt cost-of-living increases for retirees among steps to overhaul a $422.8 million pension system and avoid becoming the state’s second municipal bankruptcy. Read more here-http://tinyurl.com/budmcom

-States Scaling Back Worker Pensions to Save Money. Read more here-http://tinyurl.com/76tapn2

-Judge Andrew P. Napolitano: Social Security is a Ponzi scheme. Read more here-http://tinyurl.com/c28xm6k

-107 People Charged With $452 Million in Medicare Fraud. Federal authorities charged 107 people with Medicare fraud in a multistate operation, alleging schemes involving about $452 million in false billing, officials in Washington announced. Read more here-http://tinyurl.com/7fvkrx2

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REAL ESTATE

-CHART OF THE WEEK: U.S. Homeownership Hits Decade Low. The 62% of Americans who say they own their own home marks a new low since Gallup began tracking self-reported homeownership in 2001. The current level of homeownership marks a decline from 68% in 2011. For most of the prior decade, roughly seven in 10 Americans reported owning their own home.

While the recession and financial crisis took place in 2008-2009, homeownership rates didn’t begin to reflect the bursting of the housing bubble until 2010, when 65% of Americans reported owning their own home the lowest level recorded before this year.

Record-Low 53% of Americans Say Their Home’s Value Has Increased. Fifty-three percent of Americans believe their house is worth more today than when they bought it, down significantly from 80% in 2008 and 92% in 2006. It confirms that many Americans are underwater in terms of the value of the home they currently own. Read more here-http://tinyurl.com/6r9swt3

-CHART OF THE WEEK: The #1 Reason The Housing Recovery Is So Slow. David Zervos and a team of economists repeatedly blame one thing for continuing sluggishness in the U.S. housing market: tight lending standards. Read more here-http://tinyurl.com/cr7hv7y

www.chartoftheday.com

-U.S. Home Ownership Rate Slides to 15-Year Low. The share of privately owned U.S. homes fell to a 15-year low in the first quarter, government data showed on Monday, suggesting that falling house prices are discouraging Americans from being homeowners.

The home ownership rate slipped to 65.4 percent, the lowest since the first quarter of 1997, the Commerce Department said. The rate was at 66.0 percent in the fourth quarter. Homeownership was lowest in the West, while higher rates were reported in the Midwest. House prices have dropped about 32 percent from their peak at the end of 2005, leaving millions of Americans with houses worth far less than their mortgages and pushing many into renting.

In the first quarter, the median asking sales price for vacant homes on the market was $133,700, the lowest since the first quarter of 2005, the Commerce Department said. That compared with $133,800 in the fourth quarter. The data showed the residential rental vacancy rate dropped to 8.8 percent in the first three months of this year from 9.4 percent in the fourth quarter. Read more here-http://tinyurl.com/culd5vm

-Brooklyn Shelters Homeowners With Longest Foreclosures. New York’s Kings County, also known as Brooklyn, wears the crown as the U.S. community where it takes longest to foreclose on a delinquent homeowner. Lenders took an average of 1,187 days more than three years to repossess a home in Kings County during the last three months of 2011, according to data compiled by Bloomberg. The 10 U.S. counties with the longest foreclosure timelines were all in New York and New Jersey.

While delays give some struggling homeowners time to renegotiate loan terms and limit supply on the market, they eventually depress housing values by postponing the inevitable for borrowers who can’t pay their mortgages or maintain their properties, said Jonathan Miller, president of New York appraiser Miller Samuel Inc. “You aren’t doing anybody any favors in the long run,” he said in a telephone interview. “In markets where it takes longer for the foreclosure process, it takes longer to recover.” Read more here-http://tinyurl.com/cuezcsk

-Falling home prices drag new buyers under water. More than 1 million Americans who have taken out mortgages in the past two years now owe more on their loans than their homes are worth, and Federal Housing Administration loans that require only a tiny down payment are partly to blame.

That figure, provided to Reuters by tracking firm CoreLogic, represents about one out of 10 home loans made during that period. It is a sobering indication the U.S. housing market remains deeply troubled, with home values still falling in many parts of the country, and raises the question of whether low-down payment loans backed by the FHA are putting another generation of buyers at risk.

As of December 2011, the latest figures available, 31 percent of the U.S. home loans that were in negative equity – in which the outstanding loan balance exceeds the value of the home – were FHA-insured mortgages, according to CoreLogic. Read more here-http://tinyurl.com/7c4vx3d

-Toronto, Vancouver Housing Vulnerable, Economists Warn. Toronto’s condominium market is showing signs of overbuilding, says an economist at the city’s largest university, while Royal Bank of Canada says Vancouver housing is vulnerable to a “marked correction.” Read more here-http://tinyurl.com/cpt947g

-Australian House Prices Fall for Fifth Straight Quarter. Australian house prices declined in the three months through March in the longest losing streak in at least a decade as the central bank maintained the highest borrowing costs among major developed nations. An index measuring prices for established houses in eight major cities dropped 1.1 percent last quarter from the previous three months, when it fell a revised 0.7 percent, the Australian Bureau of Statistics said in Sydney. House and apartment prices slumped 4.5 percent in the eight cities in April from a year earlier, according to real estate researchers RP Data and Rismark International. Read more here-http://tinyurl.com/d3e6al3

-Madness in Spain Lingers as Ireland Chase Recovery. In the stages of death of a real estate boom, Spain is still in denial. In Ireland, they’re moving toward acceptance. The first auction of one of 2,000 unfinished housing estates takes place at the Shelbourne Hotel in central Dublin, with sales expected to fetch cents on the euro, showing the Irish may be closer to the end than the beginning. Read more here-http://tinyurl.com/873u7gv

-Hong Kong Sells Land Below Estimates on Rising Supply. Hong Kong’s government sold land in one of the city’s most exclusive areas for less than analysts estimated, underscoring developers’ concerns that increased housing supply and slowing global growth may stall home prices. Read more here-http://tinyurl.com/72qgp5l

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STOCK MARKET

-CHART OF THE WEEK: Earnings Growth Fails to Sway S&P 500 Outlook. U.S. companies are poised to repeat their first-quarter success in exceeding analysts’ earnings estimates, according to Jonathan Golub, chief U.S. market strategist at UBS AG. Read more here-http://tinyurl.com/77×2m5r

-CHART OF THE WEEK: Sell in May? U.S. Financial-Stock Gains Say No. Financial companies are sending a signal that U.S. stock investors may be better off without a “sell in May” strategy this year, according to Ari H. Wald, a Brown Brothers Harriman & Co. analyst. Read more here-http://tinyurl.com/85ka8sn

-Equity Fund Redemptions in April Are Largest in 17 Years. Global investors this month pulled the most money from stock funds in any April in at least 17 years amid escalating concerns that Europe’s economy is faltering. Equity funds had net redemptions of $18.6 billion through April 25, according to data from EPFR Global, a research firm based in Cambridge, Massachusetts. The April withdrawals were the largest since at least 1996, the first year for which comparable data is available. Read more here-http://tinyurl.com/8xsqtgr

-NBER’s Martin Feldstein Bashes The Deplorable US Economy, Says Bernanke Has Engineered Another Stock Bubble. Read and watch more here-http://tinyurl.com/7v2p67o

-Greenspan Says U.S. Stocks ‘Very Cheap,’ Likely to Rise. Former Federal Reserve Chairman Alan Greenspan said U.S. stocks offer good value and are likely to rise as corporate earnings increase over time. “Stocks are very cheap,” Greenspan said at a summit, citing “a very low price-earnings ratio.” Read more here-http://tinyurl.com/d38xefh

-John Hussman: This Is One Of The Worst Times To Buy Stocks In History. Read more here-http://tinyurl.com/8×66sz4

-Buffett Trails S&P 500 for Third Straight Year. Berkshire Hathaway Inc. shareholders missed out on better returns from the Standard & Poor’s 500 Index by sticking with Chairman Warren Buffett after each of his last three annual meetings. Berkshire fell 2.4 percent from the firm’s April 30, 2011, meeting through yesterday, compared with the 2.8 percent advance in the S&P 500. This year’s gathering, planned for May 5 in Omaha, Nebraska, concludes three years in which Berkshire climbed about 32 percent, trailing the S&P 500’s gain of around 60 percent. Read more here-http://tinyurl.com/cruhnaf

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OIL-NAT GAS

-CHART OF THE WEEK: Crude April Trading Range Tightest Since 1995. Oil’s April trading range is the tightest for any month in 17 years as concern eased that supplies would be disrupted and reports showed slower U.S. economic growth. Read more here-http://tinyurl.com/c9emvth

-CHART OF THE WEEK: Natural Gas Forecasts Never Been So Wrong. U.S. natural gas price forecasters are having their worst year on record as producers boosted output amid the mildest winter in 12 years. Read more here-http://tinyurl.com/cnklgwa

-Wien Bearish on Oil for First Time as Production Swells. Byron Wien, the 79 year-old chairman of Blackstone Group’s advisory services unit, is forecasting an annual drop in oil prices for the first time in his career as swelling production pushes global inventories higher. Wien, said the U.S. will extract more crude by fracking rocks and expects the furor over a potential conflict with Iran to dissipate. Brent crude lost 2.8 percent last month after surging 14 percent in the first quarter on concern Iran may disrupt Middle East exports in retaliation for a European oil embargo. Read more here-http://tinyurl.com/6u5taac

-T. Boone Pickens: Natural gas has bottomed. Natural gasprices may have finally bottomed out, after hovering around 10-year lows for weeks, said energy magnate T. Boone Pickens. Prices have slowly started creeping above the $2 mark after settling below that level just a couple of weeks ago. “The price for natural gas has smoothed out pretty good,” Pickens told reporters on the sidelines of the Milken Institute Global Conference in Los Angeles. “I think it’s bottomed.” Pickens said he wouldn’t be surprised to see natural gas prices at $3 in a year’s time.

Pickens also thinks oil prices will continue to rise. “I think you’re going to find oil will get pretty tight this summer,” he said. “The Saudis don’t have as much oil as they say they do.” Pickens says that anything Saudi Arabia produces above 10 million barrels a day will come from storage and not new production. And it could come just as demand heats up. Pickens forecasted prices for Brent crude Europe’s benchmark to hit $150 a barrel by this summer. Read more here-http://tinyurl.com/ckesy9z

-T. Boone Pickens: Of Course We Should Build The Keystone Pipeline. “Of course you should do it. The Saudis claim they have 250 billion barrels of oil. They don’t. Probably 150, 175. But there’s 250 billion barrels in Alberta, and that’s the pipeline. That’s Keystone.” Read more here-http://tinyurl.com/cmm6×44

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The April jobs report in the US came in worse than the March report did, with the economy adding only 115,000 jobs. The unemployment rate in the US was lowered to 8.1%, which was, of course, what the media outlets all began praising. Looking deeper at the numbers gives some cause for concern despite the decline in the unemployment rate. The labor participation rate fell to its lowest level since 1981 as many of the unemployed simply gave up trying to find a job and were therefore excluded from the calculations.

A slew of elections in Europe this weekend in Greece, France, Italy and Germany could have lasting impacts on the sovereign debt crisis that continues to plague the Eurozone. In France it appears that Francois Hollande is the front runner in the election with many already predicting he will be the victor. Mr. Hollande’s views on the effectiveness of the massive austerity measures taking place across the Eurozone may mean that the cooperation between France and Germany on economic policies for the Eurozone will be coming to an end. Elections in Greece this weekend may lead to similar attempts to renegotiate the terms of its bailout agreement, throwing additional bailout disbursements into question.

“Fiscal Cliff” is the new media buzzword being bandied about and its use can be expected to increase as US elections approach. The term is being used to describe when tax cuts and spending boosts, worth approximately half a trillion dollars, will expire at the end of the year. Many are describing the event as “Taxmageddon” and describe a scenario in which the failure to extend these programs pushes the US economy right back into official recession. It would not be surprising if, in what has become typical fashion, the US Congress takes the decision right down to the wire and comes up with a last minute plan to extend at least some of these programs.

The US housing market continues to struggle as many homeowners, burned by the housing crash when their home prices plummeted, are choosing to rent homes instead of purchasing again. Despite record low mortgage rates and rock-bottom home prices, individual home buyers appear to have become a rare creature indeed. The housing industry now seems to be pinning its recovery hopes on investors flocking in to buy distressed homes in the hopes of turning them into rental properties.

In Asia, Australia is swinging into the crosshairs for the next country to suffer economic turmoil. Albert Edwards, a strategist at Societe Generale, said “[In Australia] We see a credit bubble built on a commodity bull market based on a much bigger Chinese credit bubble. Of all the bubbles I have seen over the last 30 years in this industry, this one is even more obvious.” China is Australia’s largest export partner and a dramatic slowdown, or “hard landing” in China could drag Australia’s economy down along with it.

Crude oil dropped below $100 a barrel this week, driven down by indications that OPEC may raise production output in an attempt to bring prices down. Weak economic data out of the US also helped push prices lower.

The euro dropped sharply against the dollar again this week. The Japanese Yen moved higher against the dollar early in the week before leveling off as the week came to a close.

Friday to Friday Close

Previous year Comparisons

* Current at time of writing

Here are your Short Term Support and Resistance Levels for the upcoming week.

Volatility should be expected to continue and perhaps increase further. The fundamental reasons for owning precious metals continue to remain strong. Egon von Greyerz, founder and managing partner of Matterhorn Asset Management in Switzerland, told King World News this week “I don’t think people are focusing enough on the long-term consequences. The masses are just living day-to-day and hoping the current problems will go away, but they won’t. The same people who did not see the problem in 2007/2008 are now saying, ‘It’s over.’ Nothing is over.” Mr. von Greyerz continued, saying “The first consequence of the enormous deficits and massive credit bubbles is going to be hyperinflation. The hyperinflation will come as a result of governments printing unlimited amounts of money. During this hyperinflationary depression, people will see currencies falling in value against real money, gold. In a hyperinflation, nobody benefits from the money creation except the ones standing nearest to the printing press.” Mr. von Greyerz ended with “This is the first time in history that we will see hyperinflation occurring simultaneously in many countries. Previously, this type of event has been isolated to one country at any one time. Gold will be an extremely important means of survival and payment during this hyperinflationary period.” King World News also interviewed James Turk out of Europe this week. Mr. Turk had this to say regarding the state of things in the EU: “Have you seen the growing demonstrations here in Europe, Eric? So far, the protests have mainly been non-violent. They’re protesting in the streets for good reason. Eleven of the seventeen countries in the EU are in a recession. With unemployment growing to record levels in some countries, certain key European nations are definitely in a depression.” Mr. Turk continued in his interview: “Then there is the banking problem, particularly in Italy and Spain, where the banks loaded up with debt from their own government, which shows how their interests are aligned. It looks like these banks and their governments will go down together. The same applies to Japan, the UK, the US, and many other countries with zombie banks and over-leveraged governments. All of these factors make me recognize that holding physical gold is the right thing to do. Gold and silver are the only safe currencies in the world today.” Mr. Turk then closed the interview out in dramatic fashion, saying “So every month I continue to do what I have been recommending to KWN readers for years. Every month I buy some precious metals, and will continue to accumulate them as long as they remain undervalued. Of late I’ve been buying silver. It’s the better value. Note how gold has been holding support at $1650, but silver keeps slipping further below $32. The shorts and central planners are throwing everything they have at the precious metals, Eric, but they are having a hard time trying to beat up gold. Even their so-called ‘fat finger’ trade of 7500 contracts they put in on Monday didn’t break gold.” Poor economic data out of the US and fears over what shakeups the many European elections being held this weekend may result in helped push markets lower today. This may be presenting an excellent buying opportunity to pick up additional precious metals for your portfolio just as Mr. Turk has stated he continues to do. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.

Trading Department – Precious Metals International, Ltd.

GOLD

-”The mood is very negative. Keep the faith. My work forecasts gold will rise to $2100 and $2300, with both targets acquired during 2012. From there, I see $2800 being acquired by March of 2013.” Morris Hubbartt

-Gordon Chang: China will buy gold to pay for Iranian oil. Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices. Read more here-http://www.gata.org/node/11277

-Jim Sinclair: The implications of China paying in gold. Read more here-http://www.gata.org/node/11282

-Jim Sinclair: Western economic sanctions inadvertently remonetize gold. Read more here-http://www.gata.org/node/11281

-Jim Sinclair: New European treaty guarantees QE to infinity. Read more here-http://www.gata.org/node/11284

-Jim Sinclair: Shorts Now Trapped & Gold Could Gap Up to $3,000. Read more here-http://tinyurl.com/7×6fe3d

-Are markets arranging a de-facto return to the gold standard? Read more here-http://www.gata.org/node/11280

-Reuters, Russia Today interview gold standard prophet John Butler. John Butler says a return to the gold standard is “inevitable” possibly as soon as within the year and $10,000/oz gold is on the cards. Jamie McGeever interviews Butler about his opinions in his new book, ‘The Golden Revolution : How to Prepare for the Coming Gold Standard.’

Butler has 18 years’ experience in the global financial industry, having worked for European and US investment banks in London, New York and Germany. The book says that the era of paper currency is coming to an end and a return to a gold backed dollar is basically inevitable. McGeever starts the interview by saying that far from gold being expensive at $2,000/oz, gold may be “the bargain of a life time” especially “if the world returns to some form of gold standard.”

Butler says that this “could happen as early as next year” due to BRIC nations dissatisfaction with the dollar reserve standard, “they will start to move formally back to gold.” There are many ways that this can happen according to Butler including one country becoming a first mover, surprising the world and the United States, by pegging its currency to gold. He points out that Russia may be the country who could do precisely that.

This could lead to a run on the US dollar and financial assets and could see the dollar lose 20% in 24 hours as investors pour into real assets such as oil and gold. This could lead to a depression in the U.S. There could be a Bretton Woods style “crisis meeting” where the U.S. decides it must reinstate the gold standard or else the dollar “may lose its reserve status entirely.” Gold at $5,000/oz should happen and possibly over $10,000/oz in that scenario as gold will be a “de facto monetary asset in cross border balance of payments transactions.” Read and watch more here-http://www.gata.org/node/11294

-Mexico Raised Gold Reserves in March, IMF Data Shows. Mexico added 16.8 metric tons of gold valued at about $906.4 million to its reserves in March as nations including Turkey, Russia and Kazakhstan increased their holdings of the metal, International Monetary Fund data show.

Mexico raised its reserves to 122.6 tons last month when gold averaged $1,676.67 an ounce, data on the IMF’s website showed. Turkey added 11.5 tons, Kazakhstan 4.3 tons, Ukraine 1.2 tons, Tajikistan 0.4 ton, and Belarus 0.1 ton, according to the IMF. The data shows Russia boosted gold reserves by about 16.5 tons after its central bank said on April 20 they were higher. The Czech Republic reduced bullion reserves by 0.1 ton. Read more here-http://tinyurl.com/cstufrd

-Argentina ignored record-high gold to boost reserves. Argentina added to its gold reserves for the first time in nearly six years in September 2011 as the price hit record highs, mirroring the trend among emerging central banks to diversify further from paper currencies such as the U.S. dollar. Read more here-http://tinyurl.com/797cy5t

-Are Taxi Drivers Buying Gold or Apple? CNBC recently aired a segment that asked people walking along the Santa Monica Boulevard boardwalk in California which item they would rather have: $600 in cash, one share of Apple stock, an iPad 2 or one-third of an ounce of gold. While it is not a perfect example of the taxi driver indicator, it showed insight to how some, if not most Americans think.

All items available to choose from were valued around $600, but the respondents had different views on the best pick. Despite being called a bubble numerous times in the past few years, very few respondents picked the gold coin. In fact, only one man chose the gold coin and when asked why, he responded, “because gold’s going to $3,000.”

The one share of Apple or the iPad 2 was the more popular choice. This simple yet eye-opening segment portrays the typical investment mindset in America. After an 11-year bull market run, the average Joe is still unaware of the benefits that gold offers. To call gold a bubble is not only short-sided, but wrong. Read more here-http://tinyurl.com/7pt446r

-Hathaway: Fed to Print More Money & Gold to Hit New Highs. So, I think investors need to understand why they have exposure to gold. We are in an environment where central banks are trying to debase currency. Ultimately that has to be reflected in the gold price and the performance of gold stocks.” Read more here-http://tinyurl.com/6twbre3

-Clive Maund: Gold Market Update. Read more here-http://tinyurl.com/8a6qwkw

-Jeffrey Nichols: As investors lose faith in dollar gold will win out. Gold is currently treading water but Nichols believes that the chances of a breakout to the upside are significantly greater than the probability of a breakdown with the gold bull having five to ten years of life ahead. Read more here-http://tinyurl.com/84u9v8c

-Lawrence Williams: Fact, opinion and fiction in the rising gold price scenario. There are almost as many opinions in gold price forecasting as there are analysts out there but the investor needs to be wary of some of these opinions which may be expressed as facts and are nothing of the sort. Read more here-http://tinyurl.com/7kbk95u

-Greyerz: Bankrupt Nations Desperate to Save Financial System. “Gold has been under pressure for the last week or so and we’ve gone sideways for almost eight months. But we have to remember we are going sideways at a very high level. Depending on your currency, gold is only down 10% to 13% from the peak.

So, I think gold is behaving extremely well. If you look at the physical gold market, all of the sovereign banks are increasing their holdings. None of our investors are selling physical gold. They know what’s coming. All of the pressure is in the paper market and that market is going to disappear in the next few years because people are not going to trust the paper market.

Technically it looks as though gold has made a bottom. I said we had made and bottom in January and now gold made a higher low yesterday. We have seen the end of this correction and I think a major move is coming. It (gold) is like a coiled spring. There is massive energy in the gold and silver market now, and that energy is going to release very soon now in my view.” Read more here-http://tinyurl.com/c3g6q8v

-John Hathaway: 8 Key Charts, Gold, Fed & The Big Picture. Read more here-http://tinyurl.com/6plampd

-James Turk: The Most Important & Extraordinary Chart for 2012. Read more here-http://tinyurl.com/7pkjc34

-Robert Fitzwilson: Sleight-of-Hand Won’t Save Global Financial System. In the mid 1970s, a product was introduced into the United States called the ‘Roach Motel.’ It was designed to lure roaches into a compartment that included a sticky substance, effectively trapping the roaches inside. The tag line for the advertisements was ‘Roaches check in, but they don’t check out!’

As more and more debt is created by the central banks, more fiat money is being created. Rather than fostering economic growth, it is being trapped into the figurative monetary Roach Motel. It is just a matter of time and simple arithmetic before this magical scheme and the sleight-of-hand are relegated to the dustbin of history. Time is running out for those who wish to protect their savings through the purchase of real assets such as energy, gold and silver.” Read more here-http://tinyurl.com/chvxgrj

-Norcini: If History is Any Guide, This is Going to End Badly. When people ask themselves, ‘What can I do to protect myself and my family?,’ the answer is no different than what is was many centuries ago, as Rome was collapsing. Get your hands on honest forms of money. Back then it was physical gold and silver, and it remains the same today.” Read more here-http://tinyurl.com/7snk3gp

-Eric Parnell: Gold The Fate That Awaits Once Fed Stimulus Ends. Read more here-http://tinyurl.com/7uwn9h4

-John LaForge: Indicators Predict Gold Trend to Continue. Read more here-http://tinyurl.com/825v3sp

-Rick Rule: Why I’m Excited About This Gold Market. Read more here-http://tinyurl.com/75ulpyd

-Rick Rule: Scary Math & The Dow Fall Off a Cliff Here. Read more here-http://tinyurl.com/7l79uuz

-TrimTabs: Talking Gold with Eric Sprott. Watch more here-http://tinyurl.com/82lvkpr

-Infographic: Everything You Need To Know About Investing In Gold. See more here-http://tinyurl.com/87ej5gy

-Central banks rig gold market to ensure orderly rise, Jim Rickards says. Rickards calling for $7,000 gold. Read and listen to more here-http://www.gata.org/node/11271

-Future Money Trends interviews GATA Chairman Bill Murphy. Read and listen to more here-http://www.gata.org/node/11276

-Harvey Organ tells Chris Martenson about gold and silver futures market rigging. Read and listen to more here-http://www.gata.org/node/11278

-Embry: Market Manipulation More Blatant & There’s More of It. “I would dare say that the manipulation (of gold) today is perhaps more blatant and there is more of it than I’ve ever seen. They (the manipulators) don’t care anymore. You see these 3 o’clock in the morning precipitous drops. You see drops when the COMEX opens and when the London PM fix is in.

There are always these times they attack, and no market that wasn’t being manipulated would trade with that regularity. I am of the mind that the paper guys have overplayed their hand and they have pushed the price too low. The people in the East, in particular, the Russians, the Chinese, etc., know perfectly well the situation.

They are using this as a wonderful opportunity to take on more and more physical at what I would consider to be bargain prices. I was fascinated by what Jim (Sinclair) had to say, that he thought there could be an air pocket in gold to the upside. That would really be something, but it wouldn’t shock me.” Read more here-http://tinyurl.com/7xldxp4

-Holders of treasuries and paper gold may have their own tungsten to worry about. Italian financial police have seized U.S. securities with face values of about $1.5 billion and gold certificates worth more than 3 billion euros as part of an investigation into a possible international financial scam. Read more here-http://www.gata.org/node/11272

-Which gold price are new trade transactions using? Read more here-http://www.gata.org/node/11290

-Alasdair Macleod: A plea for sanity. Read more here-http://www.gata.org/node/11291

-Haynes, Norcini review gold and silver for the week at KWN. Listen to more here-http://www.gata.org/node/11273

-’Real’ trading in U.S. markets is down to 16 percent; the rest is machines. Read more here-http://www.gata.org/node/11288

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SILVER

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 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

-”Most silver investors should focus on owning physical metal because its price is so volatile. That has been, and will continue to be, the best way to make money in this mighty metal.” Morris Hubbartt

-Silver Below $32 May Attract ‘Bargain Hunters,’ Commerzbank Says. Silver prices below $32 an ounce should attract “bargain hunters,” Commerzbank AG said in a report. “The hybrid character of silver store of value and participating in an economic upswing due to its mainly industrial use should mean that silver remains attractive and in demand,” the bank said. Bloomberg

-Clive Maund: Silver Market Update. Read more here-http://tinyurl.com/7nbs8g9

-Stephan Bogner: The Silver Megathrust. Read more here-http://tinyurl.com/dype854

-Peter Cooper: How long until silver breaks out of its consolidation phase and heads higher? Read more here-http://tinyurl.com/74wyos6

-Paul Mladjenovic: The Silver Reverse Bubble of 2012. Read more here-http://tinyurl.com/772bjz6

-Przemyslaw Radomski: Will Silver and Platinum Outperform Gold in the Near Future? Read more here-http://tinyurl.com/7js9ynf

-India Silver demand may double to 6000 tons by 2017. Read more here-http://tinyurl.com/8xxjx65

-Mining Companies in Global Talent War. “There are just simply not the people there, and I think it’s going to be the Achilles heel of the industry,” said Bruno Rizzuto, managing partner at Cadre Staffing Inc. “A lot of these projects will not be able to get off the ground because they will not have either the management capacity to do so or the operational workforce.” Read more here-http://tinyurl.com/7o7fgz3

-Tech billionaires bankroll gold rush to mine asteroids. Google Inc executives Larry Page and Eric Schmidt and filmmaker James Cameron are among those bankrolling a venture to survey and eventually extract precious metals and rare minerals from asteroids that orbit near Earth. Read more here-http://tinyurl.com/7ky7k6t

-Surprised it lasted this long. Soviet-era palladium stockpiles said to be depleted. Read more here-http://tinyurl.com/7j2dr7r

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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Apple Needs More Exceptional Profit Than Usual. Apple Inc. needs to surpass earnings estimates by a wider margin than most of its peers in the Standard & Poor’s 500 Index to satisfy investors, if history is any guide. Read more here-http://tinyurl.com/7luulsh

-Apple Profit Rises 94% on Growing Global IPhone Demand. Apple Inc. profit almost doubled last quarter, reflecting robust demand for the iPhone in China and purchases of a new version of the iPad, allaying the growth concerns that sliced shares 12 percent in two weeks. Net income in the fiscal second quarter climbed 94 percent to $11.6 billion, or $12.30 a share, as sales rose 59 percent to $39.2 billion, Cupertino, California-based Apple said in a statement. Read more here-http://tinyurl.com/bllpt87

-Apple’s iPhone Is Now The Most Profitable Business In The World. Apple is the most profitable company in the world. The company should generate $45-$50 billion of profit this year. That’s way more than the next-most-profitable company in the world, ExxonMobil, which generated about $30 billion of profit last year. Read more here-http://tinyurl.com/c9f6tvw

-CHART OF THE WEEK: Carney Cements Canada 2012 Rate Increase View. Investors have increased bets that the Bank of Canada will move this year to raise interest rates after Governor Mark Carney said on April 17 that removing stimulus “may become appropriate” in light of stronger growth and inflation. Read more here-http://tinyurl.com/6qxk2×4

-CHART OF THE WEEK: Cheaper Milk Signals Taming of U.S. Inflation. Lower milk prices are signaling that inflation will be less of an issue for U.S. consumers, according to Nicholas Colas, chief market strategist at ConvergEx Group. Read more here-http://tinyurl.com/bulkpah

-”If our stock market & economy is so dominated by one stock (Apple) & its daily fluctuations, be careful.” Bill Gross-Pimco

-”Financial markets floating on an ocean of credit. Central banks must continue to write checks or the ship will sink.” Bill Gross-Pimco

-Steve Kroft: Do you believe the balance sheets of big Wall Street firms if you read them now? Matthew Lee: These numbers are so big and the financial instruments are so complex that, you know, nobody stands a chance, really, of understanding. I’d have more fun investing in crap tables in Las Vegas than Wall Street firms. 60 Minutes feature on The case against Lehman Brothers

-”Money printing is the only tool available to keep the US titanic economy boat afloat. If printing stops, the iceberg is revealed and the ship sinks. This tool may keep the “economy” afloat, if you call frequent transactions with a deteriorating dollar an “economy.” Morris Hubbartt

-”The nation is hurtling toward what has been called “taxmageddon,” the enormous tax increases and spending cuts scheduled for the beginning of 2013. At around the same time, we will also be spending some more quality time with our old friend: the debt limit. No one can yet see a plausible way through the coming storm. But even though they are not particularly inspiring, paths away from catastrophe do exist.” Peter Orszag

-Jim Rogers: Something Is Wrong In The Stock Market And You Better Be Worried. Commodities guru Jim Rogers was on Fox Business News predicting disaster for 2013. “First of all, we have tax increases January 1,” warned Rogers. “Secondly, we’ve had recession every four to six years. Next year, it’s four to six years.” In addition to that awful economic back drop, Rogers is concerned about a contradiction in that markets.

“Now I’ve been investing for a long time and I have noticed when good news comes out and stocks go down, something’s wrong. So you better be worried,” warned Rogers. “I don’t know what’s wrong. But I know we’ve had a great first quarter. One of the best first quarters in history. And now good news is coming out and stocks are going down.” Rogers is short stocks and long commodities. Read and watch more here-http://tinyurl.com/cnvkxa6

-Michael Pento: Decoupling Is An Illusion And Europe’s Demise Will Crush Global Markets this summer. The global slowdown will put further pressure on the U.S. economy and the earnings of multi-national corporations. Downward pressure on the U.S. economy is already becoming apparent.

Data on home sales, industrial production, jobless claims and regional manufacturing surveys have all recently disappointed. U.S. productivity has fallen from 4% during 2010, to just 0.4% during all of 2011. S&P500 earnings growth has already plummeted from 14% during 2011, to just a 3% annualized rate in Q1 2012.

The fact is that we have a global economy that is intricately intertwined. And at this juncture there is no such thing as decoupling. Because of this, it is my view that equity markets will fall significantly this summer, as earnings fall and PE ratios contract. That will be the primary catalyst that brings global central banks back into play.

The Fed, ECB and BOJ will most likely launch further quantitative easing later this year in an effort to combat falling stock prices. If that is the case, precious metals and equities will be the primary beneficiary.” Read more here-http://tinyurl.com/6rrnv62

-Gary Shilling: Here’s Why The US Is About To Plunge Into A New Recession. The U.S. economy is overdue for a recession. I believe that it entered the down phase of the long cycle in 2000, and the five to seven years that remain in the age of deleveraging are part of this period of weak economic growth and more frequent recessions. History reveals an average business cycle length of 3.7 years in the down phase. The economy peaked in the fourth quarter of 2007, meaning the present cycle is long in the tooth. Read more here-http://tinyurl.com/clfrs6p

-Richard Russell: After the Calm Comes the Storm. Read more here-http://tinyurl.com/7xdcufd

-Richard Yamarone: We Are Literally Witnessing a Collapse. “I’m fortunate enough to travel and speak to chambers of commerce with 300 to 500 people in the audience. They all tell me, ‘Hey, listen, I am letting go of workers. I’m hiring them back at a fraction of what I used to pay them.’ You hear from the other side, ‘Hey, I finally got a job after two years of being unemployed.

I used to make $100,000 (each year), now I’m making $45,000 or now I’m working part time.’ You look at the last two recessions, in ’90/’91 and the 2001 recession, they were jobless recoveries. We don’t respond to monetary policy the same way because we are no longer that manufacturing behemoth.

So the Fed cuts rates at the first sign of trouble and it takes, during those recessions, forty months for us to get back all of the jobs we would lose. In this current recession, we are not even close (to getting the jobs back) and that’s 50 months and counting.” Read more here-http://tinyurl.com/6tpxo4e

-60 Minutes: The case against Lehman Brothers. Steve Kroft talks to the bank examiner whose investigation reveals the how and why of the spectacular financial collapse of Lehman Brothers, the bankruptcy that triggered the world financial crisis. Watch more here-http://tinyurl.com/6woxp3x

-Parsons Blames Glass-Steagall Repeal for Crisis. Richard Parsons, speaking two days after ending his 16-year tenure on the board of Citigroup Inc. and a predecessor, said the financial crisis was partly caused by a regulatory change that permitted the company’s creation. The 1999 repeal of the Glass-Steagall law that separated banks from investment banks and insurers made the business more complicated, Parsons said at a Rockefeller Foundation event in Washington.

“To some extent what we saw in the 2007, 2008 crash was the result of the throwing off of Glass-Steagall,” Parsons, 64, said during a question-and-answer session. “Have we gotten our arms around it yet? I don’t think so because the financial- services sector moves so fast.” Read more here-http://tinyurl.com/c7lsrjk

-These Were The Best Moments From Frontline’s Incredible Financial Crisis Documentary Last Night. Read more here-http://tinyurl.com/bvu75yh

-Bank of America Corp.’s backlog of pending demands for refunds on soured loans reached a record $16.1 billion as a dispute deepened between the second-largest U.S. lender and Fannie Mae. Outstanding claims rose 28 percent in the first quarter from $12.6 billion in the last three months of 2011, the Charlotte, North Carolina-based bank told investors.

At the same time, the company set aside less than $300 million to cover repurchases for a third straight quarter, helping the mortgage unit post a narrower first-quarter loss. “You’ll see those numbers pile up, and they won’t reserve for them,” said Paul Miller, an analyst at FBR Capital Markets. “Ultimately, my guess is that Fannie Mae takes Bank of America to court. If they lose that lawsuit, where does that leave them on reserves?” Read more here-http://tinyurl.com/cs844lp

-Infographic: How 9 Banks Are Exposed To $200 Trillion Worth Of Derivatives. See more here-http://tinyurl.com/8xreddf

-Don’t Like Austerity? Try ‘Financial Repression.’ Indebted governments will have to find ways of “rigging the financial system to suit themselves,” because there is no decent economic growth in the West, and there aren’t coherent fiscal consolidation plans to help governments bring down budget deficits, according to HSBC Chief Economist Stephen King. “Financial repression results from policies which allow governments to fund their borrowing through imposing costs on others,” King wrote in a market note. Read more here-http://tinyurl.com/cp4q6e3

-Geithner Says Economy Faces Risk From Europe Crisis, Iran. Treasury Secretary Timothy F. Geithner said the U.S. faces risks from the crisis in Europe while the confrontation with Iran has helped drive up oil prices. “We still face some risks ahead,” Geithner said to the Portland City Club today. “We still live in a dangerous and uncertain world, with Europe confronting a severe and protracted crisis. The world is engaged in a critical struggle with Iran, which has added to upward pressure on oil prices.” Read more here-http://tinyurl.com/8552q7h

-Global food price rise on costlier oil: World Bank. Global food prices rose in the first four months of 2012, pushed higher by volatile world oil prices, strong demand for food imports from Asia and adverse weather conditions in parts of Europe, South America and United States, the World Bank said. Read more here-http://tinyurl.com/ccr2jyh

-Infographic: Why Gas Prices Are Too Damn High. See more here-http://tinyurl.com/ctoh497

-Michael Kinsley: Too Old to Get Hired, Too Young to Retire. Read more here-http://tinyurl.com/ccqrjpd

-Cooling U.S. Labor Market Takes a Toll on Confidence. More Americans than forecast filed applications for unemployment benefits last week and consumer confidence declined by the most in a year, signaling that a cooling labor market may restrain household spending. Read more here-http://tinyurl.com/6vyc2qo

-For first time since Depression, more Mexicans leave U.S. than enter. Read more here-http://tinyurl.com/7agkjms

-Jack Cafferty: What does it mean when one in seven people in the U.S. gets food stamps? Forty-five million people that’s one in seven living in the United States received food stamps last year. That’s a 70% increase from 2007, according to a shocking new report by the Congressional Budget Office.

It shows that in 2010, about three out of four food stamp households included a child, a person older than 60 or someone who is disabled. Most households getting food stamps were very low income, only about $8,800 per year. The average food stamp benefit per household was about $290 a month, which comes out to $4.30 per person per day. The worst part is food stamp use is only expected to grow. Read more here-http://tinyurl.com/d8mjma8

-Food Stamp Rolls to Grow Through 2014, CBO Says. The Congressional Budget Office said Thursday that 45 million people in 2011 received Supplemental Nutrition Assistance Program benefits, a 70% increase from 2007. It said the number of people receiving the benefits, commonly known as food stamps, would continue growing until 2014. Read more here-http://tinyurl.com/7czvoff

-Zimbabwe’s New Currency Problem Is The Opposite Of Hyperinflation. Read more here-http://tinyurl.com/cjx62p6

-El Nino May Cool U.S. This Summer, Cutting Electric Need. The possibility of an El Nino, a warming of the mid-Pacific Ocean, has forecasters predicting lower temperatures across the U.S. this summer, which may mean less electricity will be needed to run air conditioners. May will probably be warmer than normal, and then “we are expecting a much different type of pattern” than last year, said Todd Crawford, chief meteorologist at Weather Services International in Andover, Massachusetts. Read more here-http://tinyurl.com/7a6c2z3

-Feds And Utilities Face Off Over The Electromagnetic Pulse Threat Coming In 2014. As scientists warn of an impending solar storm between now and 2014 that could collapse the national power grid, thrusting millions into darkness instantly, a debate has flared up between utilities and the federal government on the severity of such an event. Read more here-http://tinyurl.com/6rxbjbg

-Tiger Moms Craving SUVs Drive Next Wave of Chinese Demand. Zhou Na, a 37-year-old Beijing mother, says she knows why sport-utility vehicles are the fastest-growing segment in the world’s biggest automobile market: kids. Read more here-http://tinyurl.com/cden87d

-Google Chairman Schmidt Received $101 Million Last Year. Google Inc. Chairman Eric Schmidt was paid $101 million last year, including stock awards and options that vest over a four-year period, as he turned over control of the company to co-founder Larry Page. Read more here-http://tinyurl.com/7urxxhl

-60 Minutes: Even in tough times, contemporary art sells. Morley Safer is back on the art beat, and although he doesn’t like much of what he sees at Miami’s Art Basel, there’s no denying that sales are strong. Watch more here-http://tinyurl.com/bvf3gqw

-60 Minutes: The trouble with treasure. An amateur diver says he’s discovered tens of thousands of raw emeralds at the bottom of the ocean but it may be years before he can profit. Watch more here-http://tinyurl.com/7g8zwd8

-CHART OF THE WEEK: Television’s Highest Paid Celebrity Judges. Read more here-http://tinyurl.com/cd9kqvn

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RARECOLOREDDIAMONDS.COM

-Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a 0.37 Carat Radiant Cut Fancy Intense Purplish Pink Argyle Diamond. Buying a pink diamond today is like buying a Picasso painting while he was still alive. More than 90 per cent of the world’s pink diamonds come from the Argyle mine in the East Kimberley region in the far northeast area of Western Australia. Large pink diamonds tend to go to museums, are gifted to royalty or end up at auction houses such as Christie’s. Christie’s has auctioned only 18 polished pink diamonds over 10 carats in its 244 year history. Harold Seigel-Watch video of the Featured Diamond here-http://tinyurl.com/cjkhn76

-Legendary 400-year-old Beau Sancy diamond expected to fetch up to £2.5million at auction. It has been coveted by royalty and the fabulously rich for more than 400 years. Now the ‘Beau Sancy’ one of the world’s oldest, most famous and sought after diamonds in private hands is about to go up for sale. Weighing in at 34.98 carats, the sparkling gem with a rare pear cut is expected to fetch up to £2.5million when auctioned at Sotheby’s Geneva on May 14. Read more here-http://tinyurl.com/7tcl75l

-This Guy Just Bought $18.2 Million Worth Of Diamonds. Read more here-http://tinyurl.com/c8xwl3q

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FED-QE

-Fed Says Economy Will ‘Pick Up Gradually’; Policy Unchanged. Federal Reserve policy makers said they expect growth to gradually accelerate, while refraining from new actions to lower borrowing costs. “The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually,” the Federal Open Market Committee said in a statement at the conclusion of a two-day meeting today in Washington.

“Despite some signs of improvement, the housing sector remains depressed,” the panel said. Policy makers led by Chairman Ben S. Bernanke are holding off on additional steps to boost the economy amid signs the more than two-year expansion is gaining strength. Still, the jobless rate isn’t declining fast enough to satisfy central bankers, who repeated their view today that borrowing costs are likely to remain “exceptionally low” at least through late 2014.

Today’s statement said that “strains in global financial markets continue to pose significant downside risks to the economic outlook.” The Fed has cited the risk from “strains in global financial markets” in its previous five meetings. In March it said those strains had “eased.” Read more here-http://tinyurl.com/bqg6jyn

-Bernanke Says Fed ‘Prepared to Do More’ After Policy Unchanged. Federal Reserve Chairman Ben S. Bernanke said the central bank is ready to take additional action if needed to boost the economy, after leaving its policy unchanged. “We remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target,” he said at a press conference following a meeting of the Federal Open Market Committee in Washington. Read more here-http://tinyurl.com/bqg6jyn

-Bernanke Rejects Criticism He Ignores His Own Policy Advice. Federal Reserve Chairman Ben S. Bernanke said pushing up inflation to cut joblessness would be “reckless,” and he rejected criticism that he isn’t following his own advice to the Bank of Japan more than a decade ago on how to avert economic stagnation.

“The question is, does it make sense to actively seek a higher inflation rate in order to achieve” a slightly faster reduction in the unemployment rate, Bernanke said to reporters after a Federal Open Market Committee meeting. “The view of the committee is that that would be very reckless.” Read more here-http://tinyurl.com/7dbyx5y

-Jeff Gundlach: Raising Rates Would Be Like ‘Shooting Yourself In The Head.’ Gundlach has long expressed concerns over the government’s mountain of debt. But one thing that’s kept the debt problem from crushing the economy is low rates. As such, Gundlach doesn’t expect the Red to raise rates anytime soon. “With all of this debt building up, one thing that’s been saving us is the interest rate on the debt has been collapsing,” Gundlach said. Raising rates would be “like shooting yourself in the head,” Gundlach said. Read more here-http://tinyurl.com/c9rsddw

-Fleckenstein: Fed Idiots Wrong, Big Problems in Europe & US. We know what they are going to do. They are going to ease. The economy is not that strong, the Fed is wrong. What a shock, they’re wrong. Do you remember when Ben (Bernanke) thought the subprime crisis was contained?

They don’t know anything. They’re idiots. They are the cause of the problem. So why do we want to know what the idiots think about the current state of the economy? Given the amount of easing and the size of the fiscal stimulus, we should be having a boom. We can barely get a blip because the economy is broken and they broke it.” Read more here-http://tinyurl.com/7vytnet

-Caesar Bryan: Asia To Deploy Stunning & Massive QE. Read more here-http://tinyurl.com/7k6dban

-Bill Gross: I Don’t See QE Happening At This Point. Read more here-http://tinyurl.com/bsmrgdh

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SOVEREIGN DEBT

-”The implications of the present situation in Spain could be more far reaching than is currently anticipated and the contagion it represents could lead to a fundamental change in the world’s monetary order.” John Browne-Euro Pacific Capital

-U.K. Succumbs to First Double-Dip Recession Since 1970s. The U.K. economy shrank in the first quarter as Britain slid into its first double-dip recession since the 1970s, forcing Prime Minister David Cameron to defend his spending cuts in Parliament. Gross domestic product fell 0.2 percent from the fourth quarter of 2011, when it declined 0.3 percent, the Office for National Statistics said in London. Read more here-http://tinyurl.com/d8zep39

-Spain’s economy plunges into recession: central bank. Just two years after emerging from the last downturn, Spain slid into recession again with two consecutive quarters of economic contraction, the central bank said in a report. Gross domestic product fell an estimated 0.4-percent in the first quarter of 2012 after a 0.3-percent decline in the last three months of 2011, the bank said.

Spain, whose unemployment rate at the end of 2011 was already the highest in the industrialised world at 22.85 percent overall and nearly 50 percent for the young, suffered a further jobs slump. Read more here-http://tinyurl.com/c75zx9j

-Spain’s Ratings Cut by S&P on Deficit, Bank Bailout Concern. Spain’s sovereign credit rating was cut to BBB+ from A by Standard & Poor’s on concern the nation will have to provide further fiscal support to the banking sector as the economy contracts. Read more here-http://tinyurl.com/8xylf5k

-Cost of Spain’s Housing Bust Could Force a Bailout. As Spain endures its second recession in three years and unemployment nears 25 percent, an increasing number of debt-heavy Spaniards can no longer meet monthly payments on the mortgages that their banks were all too eager to give.

With a rising portion of Spain’s 663 billion euros, or $876 billion, in home mortgages at risk of default, many economists say it is only a matter of time before some of Spain’s biggest banks will need a bailout. And the Spanish government, staggering under its own debt and budget deficit burdens, may not have the money to come to the rescue. Read more here-http://tinyurl.com/bwba9uv

-Spain Won’t Create ‘Bad Bank’ for Real Estate: De Guindos. Spanish Economy Minister Luis de Guindos rejected the creation of a state-sponsored “bad bank” to unload real-estate assets from the nation’s cash-strapped lenders. Instead, de Guindos said lenders should move real estate assets into separate “entities” or create “securitized assets” for which they have already set aside provisions so that distressed properties can be more easily valued and sold.

“The government won’t create anything, neither a good bank nor a bad bank and there won’t even be the smallest bit of public money available,” de Guindos told reporters in Washington. “What we have is a process of adjustment in the valuation of the assets, and that in turn should help their sale.” Read more here-http://tinyurl.com/cb6y5q9

-More grief for Greece as recession seen deeper. Greece’s economy will contract a deeper than expected 5 percent this year, the country’s central bank chief said, piling more pressure on to a citizenry already battered by crippling austerity and record joblessness. The projection topped a previous forecast the central bank made in March, when it projected the 215 billion euro economy would contract 4.5 percent after a 6.9 percent slump in 2011. Twice bailed-out Greece is in its fifth consecutive year of recession. Read more here-http://tinyurl.com/bmx8juw

-Greek Banks Post $37 Billion Losses on Debt Restructuring. Greece’s four biggest banks reported a combined loss of 27.9 billion euros ($36.9 billion) for last year after participating in the country’s debt exchange, the largest sovereign restructuring in history. Read more here-http://tinyurl.com/cb6sem9

-Art Cashin: A Eurozone Breakup Would Be Cataclysmic. Read more here-http://tinyurl.com/7v2mvdg

-Soros: Europe’s Social, Economic, And Moral Crisis Could Result In A Soviet-Union Like Collapse. “Europe is similar to the Soviet Union in the way that the euro crisis has the potential of destroying, undermining the European Union,” he said in a debate on public policy education Tuesday. “With the profound social, economic and moral crisis that Europe is in, we can see a similar process of disintegration.” Read more here-http://tinyurl.com/cm28npa

-Investors Face ‘Bumpy Journey’ as Euro Crisis Grows: El-Erian. A diverse set of economic circumstances around the globe are forcing investors to take an equally diverse approach to investing, Pimco’s Mohamed El-Erian said. Read more here-http://tinyurl.com/7gramd7

-David Rosenberg: This is What The European Endgame Looks Like. Read and watch more here-http://tinyurl.com/br3yjva

-Merkel Backs Draghi’s Call for Growth to Combat Debt Crisis. Chancellor Angela Merkel backed European Central Bank President Mario Draghi’s call to focus on spurring economic growth, as German officials rejected charges they are fixated on budget austerity to fight the debt crisis. Read more here-http://tinyurl.com/czmzskg

-Merkel Pushes Back Against Hollande Call to End Austerity Drive. German Chancellor Angela Merkel said balanced budgets are the best answer to the debt crisis, rebuffing French Socialist presidential candidate Francois Hollande’s campaign pledge to reverse Europe’s austerity drive.

As Europe’s two largest economies head toward potential conflict over quashing the crisis, Merkel and her ruling party stood firm on German-led remedies, including the debt-cutting fiscal pact signed last month by all 17 euro-area leaders. Read more here-http://tinyurl.com/btkycf2

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U.S. DEBT-DEFICIT

-CHART OF THE WEEK: U.S. Debt Greater Than Eurozone and U.K. Combined. This visual says it all. With America’s debt currently at $15.1 trillion and rising, it’s not a pretty picture.

The worst part is that the Eurozone and the U.K combined when taking more than six nations into consideration is still in debt by 2.4 trillion less than the United States is. If we don’t clean up our act and make immediate changes, we may face Greece’s fate sooner than we think. Read more here-http://tinyurl.com/bpsccx2

-Social Security Fund to Run Out in 2035, Trustees Say. The budget outlook for Social Security is getting dimmer, the U.S. government said, with its primary trust fund now projected to run dry three years sooner than anticipated. The fund that helps finance benefits for 44 million senior citizens and survivors of deceased workers will be exhausted by 2035, the program’s trustees said in an annual report.

Aid would have to be cut at that point if Congress doesn’t intervene. Social Security’s disability program, which helps support 11 million Americans, will run through its trust fund in 2016, two years earlier than predicted. The report attributed the fiscal stress in part to the weak economy.

The main trust fund that supports the Medicare health-care program for the elderly will run out of money in 2024, the report said. The giant retirement programs are straining the U.S. government’s finances, and what to do about them is a central issue in the election-year debate between Democrats and Republicans as President Barack Obama seeks a second term. Read more here-http://tinyurl.com/6na4kat

-In an apparent first, a public pension plan files for bankruptcy. Northern Mariana Islands plan in deep trench, with $268M in assets, $911M in liabilities. In what’s believed to be a first by a public pension plan, the Northern Mariana Islands Retirement Fund filed for Chapter 11 bankruptcy protection.

The public defined-benefit plan is in a big hole. At the moment, it’s only 38.8% funded, thanks to low investment returns and a benefit structure that’s been increased without raises in funding, according to the bankruptcy filing in the U.S. District Court for the Northern Mariana Islands, a U.S. commonwealth consisting of three major islands in the Western Pacific.

Currently, the fund holds $268.4 million in assets, yet faces a staggering $911 million in liabilities. Last year alone, it paid $76 million in retirement benefits, health and life insurance claims and lump-sum death payments. Read more here-http://tinyurl.com/bw8gan2

-5.4 Million Join Disability Rolls Under Obama. A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program. This is straining already-stretched government finances while posing a long-term economic threat by creating an ever-growing pool of permanently dependent working-age Americans. Read more here-http://tinyurl.com/88gfua3

-U.S. Lost AAA on Danger of Liquidity Crisis, S&P’s Kraemer Says. The U.S. lost its top credit grade in August because of the imminent danger of a “real liquidity crisis,” and Standard & Poor’s made no errors in its analysis, said Moritz Kraemer, managing director of sovereign ratings.

“Last summer, the U.S. government got extremely close to a real liquidity crisis because the Washington establishment could not agree on the way forward that would have been required to raise the debt ceiling,” Kraemer told lawmakers on the U.K. Parliament’s Treasury Committee in London. Read more here-http://tinyurl.com/ch5kn2n

-Illinois ‘Treads Water’ as Unpaid Bills Top $9 Billion. Illinois’s backlog of unpaid bills has risen to more than $9 billion because of pension costs and falling federal aid, leaving the state “essentially treading water,” Comptroller Judy Baar Topinka said. While revenue grew from higher personal and corporate taxes, “Illinois’ financial position has not improved,” Topinka said in a report. The combination of unpaid bills to vendors and Medicaid obligations, estimated at $8.5 billion in January, means payment delays will persist, according to the report. Read more here-http://tinyurl.com/blh72t3

-Chicago Gets Negative Outlook From Moody’s on Pension Gaps. Chicago’s “outsized pension pressures,” unemployment and foreclosure backlog prompted Moody’s Investors Service to assign a negative outlook to the third-largest U.S. city’s general-obligation debt. Read more here-http://tinyurl.com/cj7eq4k

-Detroit fire boss: Let some vacant buildings burn. Detroit fire boss looks for cost savings, suggests allowing some vacant buildings to burn down. Detroit Fire Department Executive Fire Commissioner Donald Austin said he’s proposing the city allow vacant buildings and homes to burn themselves out but under conditions. “We are in no way looking to ‘let the city’ burn, this is about saving lives and money,” Austin said. “My department is strapped, the budget is strapped, and it’s time to look at a new way of doing things.” Read more here-http://tinyurl.com/6qpny45

-Student Loans: The Next Bailout? Here’s what we do know about student loan debt: it’s roughly $1 trillion in size, greater than either auto or credit-card debt and second only to mortgage debt in the U.S. Read more here-http://tinyurl.com/6t7gkjp

-Geithner’s Full of Crap: The Bank Bailout Wasn’t “Profitable” It Will Cost Taxpayers $120 Billion. Read more here-http://tinyurl.com/cpgh9bc

-Slump Taught Profligate Americans Value of Saving. Americans are likely to keep rebuilding their savings for years to come as the specter of job losses and the meltdown in stocks triggered by the recession lingers, economists say. Households are putting money away at a pace more than double that leading up to the economic slump. The saving rate has averaged 4.8 percent since June 2009, when the 18-month contraction ended, compared with 2.2 percent in the three years leading up the downturn. Read more here-http://tinyurl.com/ctbyfnb

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-CHART OF THE WEEK: Home Prices Down To Late 2002 Levels. From the just released Case-Shiller housing report, a grim reminder of how much time we’ve lost. The 20 city composite is now down to late 2002 levels. Read more here-http://tinyurl.com/d5y7vve

www.chartoftheday.com

-CHART OF THE WEEK: Jobs Beat Foreclosures as Housing-Market Guide. Employment levels may affect local U.S. housing markets more than the number of foreclosed homes, according to Shawn Snyder, a Citigroup Inc. economist. Read more here-http://tinyurl.com/d2gtbo7

-Home Prices in U.S. Cities Fell at Slower Pace in February. Home prices in 20 U.S. cities dropped at a slower pace in the year ended February, pointing to stabilization in the real-estate market.

The S&P/Case-Shiller index of property values fell 3.5 percent from a year earlier, the smallest 12-month drop since February 2011, a report from the group showed in New York. Read more here-http://tinyurl.com/crup7s5

-Sales of New U.S. Homes Exceeded Estimates in March. Demand for new U.S. homes was stronger than projected in March, showing more jobs and cheaper borrowing costs are helping stabilize the market. Houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data issued in Washington. Read more here-http://tinyurl.com/bm6yy98

-Pending Sales of U.S. Existing Homes Increased 4.1% in March. Signed contracts to buy U.S. homes rose more than forecast in March as low interest rates drew buyers back into the market. The index of pending home purchases rose 4.1 percent to 101.4, the highest level since April 2010, after a 0.4 percent gain in February that was revised from a previously estimated 0.5 percent drop, the National Association of Realtors reported in Washington. Read more here-http://tinyurl.com/7zhrntd

-Foreclosure Activity Returns in Majority of US Markets. Read more here-http://tinyurl.com/d2fu4fn

-Foreclosures squeezing US home prices and sales. Rising foreclosures are weighing on the U.S. housing market, reducing prices and keeping new-home sales weak. Read more here-http://tinyurl.com/cpchugm

-Housing Declared Bottoming in U.S. After Six-Year Slump. The U.S. housing market is showing more signs of stabilization as price declines ease and home demand improves, spurring several economists to call a bottom to the worst real estate collapse since the 1930s. “The crash is over,” Mark Zandi, chief economist for Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a interview. “Home sales both new and existing and housing starts are now off the bottom.” Read more here-http://tinyurl.com/7m6gzot

-Why the housing recovery remains a long way off. Read more here-http://tinyurl.com/7×79bl3

-Robert Shiller: We Might Not See A Turnaround In Housing In Our Lifetimes. In an interview with Reuters he said a weak labor market, higher gas prices, and lack of consumer confidence would likely see home prices continue to stay low: “I worry that we might not see a really major turnaround in our lifetimes.” Read more here-http://tinyurl.com/7nbs2c7

-Why French Housing May Be Next Bubble to Burst. The French housing market would be the next bubble to pop if the European Central Bank increases interest rates, or if markets begin to perceive the same fundamental weaknesses in France as they currently do in Spain, analysts at Danske Bank wrote in a market note. Read more here-http://tinyurl.com/7rdzka7

-Chinese, Southeast Asians Purchase Half of New London Homes. Investors from China and Southeast Asia bought one in every two new homes in central London last year as the number of wealthy individuals in the region swells, Jones Lang LaSalle Inc. said. Buyers from China, Hong Kong, Malaysia and Singapore accounted for 51 percent of new-property purchases in central London neighborhoods that the broker handled, up from 47 percent in 2010, Jones Lang said in a report today. Hong Kong buyers led Asia with 17 percent of the purchases, the Chicago-based broker said. Read more here-http://tinyurl.com/c8m5pka

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GEOPOLITICAL

-Iran Considers Halting Nuclear Expansion to Avert EU Oil Ban. Iran is considering a Russian proposal to halt the expansion of its nuclear program in order to avert new sanctions, the country’s envoy in Moscow said. Read more here-http://tinyurl.com/bn3qj8x

-This Is How The Swiss Are Making The Oil Embargo ‘No Big Deal’ For Iran. Read more here-http://tinyurl.com/cor687z

-Iran Prepares Its Submarine Fleet For Blockade Of The Strait Of Hormuz. We reported a couple weeks ago that Iran was demanding all U.S. ships entering the Strait of Hormuz stop and check in with the Revolutionary Guard. Now, they’re saying that move has blockaded the Strait of Hormuz. FARS News Agency, Tehran’s state run media outlet, announced Tehran is continuing a full blockade on all ships entering the Strait, with each undergoing inspection. Read more here-http://tinyurl.com/cb7z53e

-Report: Iran unplugs oil facilities from Internet. The Iranian oil ministry’s computer network came under attack from hackers and a computer virus, prompting the Islamic Republic to disconnect the country’s main oil export terminal from the Internet as a preventative measure, a semi-official news agency reported. Read more here-http://tinyurl.com/735xhus

-Iran readying hacker attacks on U.S. infrastructure, specialists say. Iran is recruiting a hacker army to target the U.S. power grid, water systems and other vital infrastructure for cyber-attack in a future confrontation with the United States, security specialists will warn Congress. Read more here-http://tinyurl.com/7wkgyh9

-North Korea Poised to Rattle Region With Nuclear Blast. Political pressure, a high-stakes bargaining strategy and technical challenges may push North Korea’s new leader to order the country’s third nuclear test any time now. North Korea has been escalating its threats against South Korea and the U.S. in the past month as new leader Kim Jong Un celebrates the centennial of the birth of the country’s founder, his late grandfather Kim Il Sung. Read more here-http://tinyurl.com/6qzw3op

-China Says The US Is Bringing War To The South China Sea. The Obama administration has turned U.S. military attention on China’s neck of the woods by placing more troops in the Philippines since World War II, stationing Marines in Australia, and promoting a list of initiatives that have done nothing so much as anger the CCP. Read more here-http://tinyurl.com/7woav2g

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Initial claims for state unemployment once again did not live up to economists’ expectations last week. The Labor Department revised the previous week’s figures upward which led to a net decline in applications of only 1,000, well below economists forecast for a decline of 11,000. The four week moving average of new unemployment claims, considered a better gauge than the weekly reports, rose to its highest level since early January.

In France, Francois Hollande appears to be in the lead over Nicolas Sarkozy for the French Presidency after last weekend’s first round of voting. Mr. Hollande announced on Wednesday that if he was elected he would seek to renegotiate the fiscal treaty agreed to last month between 25 of the Eurozone member countries. German Chancellor Angela Merkel said on Friday “The fiscal pact has been negotiated; it was signed by 25 government heads and is already ratified by Portugal and Greece. Parliaments all over Europe are about to adopt it. Ireland has a referendum on it at the end of May. It is not renegotiable.” Further pressuring Mr. Sarkozy’s chance for re-election is the fact that France’s unemployment rate jumped to its highest level since the late 1990’s.

Late on Thursday, Standard & Poor’s downgraded, for the second time this year, Spanish sovereign debt by two notches and put the country on negative outlook. On Friday S&P denied that it had not taken the recent reforms announced by Spain into account prior to announcing the downgrade with Moritz Kraemer, Managing Director for European Sovereign Ratings, saying “The downturn will be longer and deeper than previously assumed. We think that there is considerable risk in the banking system in Spain, that it might need additional resources. Given that it is quite difficult for Spanish banks to fund themselves in the interbank market, you might wonder where those resources will come from and whether private investors…would be willing to provide additional capital.” Spain’s long term debt was downgraded to BBB+ and its short term rating was lowered to A-2.

In a double blow to Spain, the overall unemployment rate hit 24 percent in the first quarter, one of the worst jobless levels on the planet, and the highest for the troubled country since early in the 1990’s. Unemployment among Spanish youth is edging up on 50%. Foreign Minister Jose Manuel Garcia-Margallo said, in a radio interview, “The figures are terrible for everyone and terrible for the government…Spain is in a crisis of huge proportions.”

According to the US Commerce Department, the US Gross Domestic Product grew at only a 2.2% annual rate during the 1st quarter of 2012, down from the 4th quarter 2011 rate of 3 percent and below analyst’s expectations of 2.5%.

Governments throughout Europe seem to be toppling right and left. In the Netherlands, the Dutch Prime Minister resigned; in Romania, the EU’s second poorest member, the fledgling 2 month old government lost a confidence vote on Friday and must now be replaced causing the IMF to halt a review of Romania’s 5 billion euro aid package; France is just a week away from its second round of voting and it appears that Nicolas Sarkozy is trailing his opponent.

Crude oil continued to hold its ground in the mid-$100 a barrel range this week despite a larger than expected increase in crude inventories.

Oddly, the euro pushed higher for most of the week against the dollar, but looks to be reversing that trend on news of the Spanish downgrade and rising Italian bond yields. The yen pushed higher against the dollar this week as well, with an announcement of further easing by the Bank of Japan on Friday seemingly having no weakening effect.

Friday to Friday Close

Previous year Comparisons

* Current at time of writing

Here are your Short Term Support and Resistance Levels for the upcoming week.

Volatility should be expected to continue and perhaps increase further. The manipulation attempts against gold and silver have become so blatantly obvious that it borders on ridiculous. As John Embry said in an interview with King World News on Wednesday, “I would dare say that the manipulation [of gold] today is perhaps more blatant and there is more of it than I’ve ever seen. They [the manipulators] don’t care anymore. You see these 3 o’clock in the morning precipitous drops. You see drops when the COMEX opens and when the London PM fix is in. There are always these times they attack, and no market that wasn’t being manipulated would trade with that regularity. I am of the mind that the paper guys have overplayed their hand and they have pushed the price too low. The people in the East, in particular, the Russians, the Chinese, etc., know perfectly well the situation. They are using this as a wonderful opportunity to take on more and more physical at what I would consider to be bargain prices.” Mexico added 16.8 metric tons of gold to its reserves, Russia: 16.5 tons, Turkey: 11.5 tons, Kazakhstan: 4.3 tons, Ukraine: 1.2 tons, Tajikistan: 0.4 ton and Belarus: 0.1 ton in March according to date from the IMF. Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, said “We expect that the recent trend of the official sector being a net buyer will continue in the medium and long term. Gold will continue to be a preferred central bank reserve asset. It is currency protection and stabilization.” Once again gold and silver were manipulated downward at the release of the Federal Open Market Committee minutes, and this time apparently wise investors were ready to take advantage of the buying opportunity. Even before Ben Bernanke began speaking at his press conference, both metals had already overcome the manipulative pressure and begun moving higher. The FOMC minutes were a virtual duplicate of the previous ones, and Bernanke made a point to reiterate at his press conference following the release of the minutes that further easing measures continue to remain on the table as tools to use in the event that the US economic recovery stumbles. On Thursday the unemployment data was worse than expected; on Friday the US GDP figures came in worse than expected; foreclosure activity is on the rise once again now that the “robo-signing” scandal is over and done with. All of these sound like stumbling blocks to us. The situation, not only in Spain, but apparently throughout the entire Eurozone, is rapidly deteriorating and the bickering between the different member countries appears to be escalating. It is becoming apparent that the austerity measures the debt laden member countries are being forced to implement are doing more harm than good, crippling their economies and sending them deeper into recession rather than doing anything to alleviate their budget deficits. Analysts such as James Turk, John Embry, Ted Butler and more continue to compare the current state of the precious metals market to a coiled spring that is reaching its release point. Their expectations are that when that coiled spring does turn loose; it will do so suddenly, violently, and in the upward direction. Wise investors appear to be following Russia and China’s example, adding physical precious metals to their portfolio as each buying opportunity is presented. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.

Trading Department – Precious Metals International, Ltd.

GOLD

-CHART OF THE WEEK: What is the value of an Olympic gold medal? Read more here-http://tinyurl.com/6p6ff2l

-”The hate gold mongering continues as an onslaught of bearish forecasts and media articles continue unabated. But somehow gold holds key support around $1,635 and silver actually wants to go considerably higher. As noted previously, it’s best to wait until gold has two consecutive closes above $1,700 before going from defense to offense and worst case scenario is to hold some buying power if we breakdown and head to ultimate support in the $1,550 area. But please don’t hold your breath waiting for such an occurrence.” Peter Grandich

-”Buffett’s Berkshire Hathaway stock when priced not in dollars but in ounces of gold has declined in value by about 75 percent since 2000 from 280 ounces per share to 70 ounces per share. Put differently, someone who bought gold rather than Berkshire in 2000 could today buy four times as much Berkshire stock using the same gold.” Jim Rickards

-Broker tips US$5,000/oz gold price by 2016. In a very bullish prediction, Sydney-based Martin Place Securities this week tipped a gold price of US$5,000 an ounce by 2016, compared to around US$1,650/oz now. Addressing the first day in Perth of the Paydirt 2012 Australian Gold Conference, Martin’s managing director, Barry Dawes, said he expected a price of at least $2,000 this year with that high to be reached “quite rapidly.” “We are bullish on gold and if you examine the historic price trends for gold, and we have to look long-term, a parabolic curve emerges that comfortably pushes the price to $5,000 in four years time,” Dawes said. Read more here-http://tinyurl.com/7dscnta

-Jim Sinclair: Expect Another $17 Trillion of QE & War in Gold. When asked how he knew there would be ‘QE to infinity,’ before anyone else, Sinclair responded, “How does anyone know an answer to a question? By being told. By having sources. I’m half a century in the business. I’ve constantly kept up my contacts in a very unique and focused way. Quantitative easing was made clear to me, prior to Bernanke’s speech to the Washington group, prior to quantitative easing.” Read more here-http://tinyurl.com/85o5hal

-Leeb: QE3 Is Now 80%-90% & I’m Going All-In Gold If It Dips. I certainly don’t see any reason not to be in gold at this point. Long-term the case is so powerful. Gold and some of these junior gold miners, in a few years you’re not going to believe what a gift you have here. I’m going to stay with my gold. If there is another break (in price), most everything I have will go into gold and perhaps some of those junior gold miners where you are really going to get a big, big boost.” Read more here-http://tinyurl.com/6mcxvjx

-NY bureau chief for The Economist says gold is a better currency. Matthew Bishop, New York bureau chief for The Economist magazine, has just given a video interview to The Wall Street Journal advocating gold ownership as a defense against currency devaluation. Bishop has even written a book favorable to gold, “In Gold We Trust? The Future of Money in an Age of Uncertainty.” Watch more here-http://www.gata.org/node/11259

-Gold May Advance to $1,800 in 12 Months, Gurdgiev Says. Gold probably will advance to $1,800 an ounce in 12 months on a negative outlook for the European economy and China’s real estate sector, according to Constantin Gurdgiev, an economist at Trinity College in Dublin. The global economy by 2014 may have started a cycle of growth accompanied by inflation, increasing demand for gold as a means of protecting wealth, pushing the price to more than $2,200 an ounce, Gurdgiev said. Read more here-http://tinyurl.com/bwp6oae

-Gold investment demand to remain strong in 2012. GFMS’s Philip Klapwijk maintains that gold investment demand will stay healthy through the course of 2012 on the back of continued loose monetary policy and worries about the US and Europe. Read more here-http://tinyurl.com/cnkxec9

-Hubert Moolman: Gold/Platinum Ratio suggests much higher gold prices are coming. Read more here-http://tinyurl.com/cpb8nrg

-Fund Manager to Lose Hair After Betting on $2,000 Bullion. Charles Oliver, a Sprott Asset Management Inc. portfolio manager in Toronto, will have his head shaved after losing a bet on the gold price. Oliver joined Sprott in January 2008 and told clients at a meeting four months later he was so convinced bullion would reach $2,000 an ounce by April 16, 2012, he was willing to stake his hair on it. Gold was at $945 an ounce at the time.

“We got to $1,923 last September, I thought it was all good and easy straight from there on in,” Oliver, who co- manages the C$500 million ($501 million) Sprott Gold and Precious Metals Fund, said in an interview. “The markets can sometimes tease you.” Oliver, who’s been letting his hair grow out for about two years, said he still expects gold will reach $2,000 and that there’s a “very strong chance” it will get there this year.

Gold prices will rise as countries increase money supplies, he said. Investor demand for gold has surged as the Federal Reserve’s accommodative monetary policy spurred declines in the dollar, boosting the appeal of precious metals as an alternative asset. Gold surged 70 percent from December 2008 to June 2011 as the central bank set interest rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. “Governments are going to continue to run large deficits and to fund it they are going to print,” he said. “That’s great for gold.” Read more here-http://tinyurl.com/cae7wc3

-Adam Hamilton: Bullish Gold Technicals. The bottom line is gold’s technicals are very bullish today despite all the bearish sentiment out there. Irrational lack-of-QE3 fears have driven gold down to its uptrend’s support line which has launched major rallies for several years running now. And relative to its baseline 200dma, gold was recently as oversold as it has been since the stock panic. These technicals reveal awesome near-term upside potential.

And contrary to the bears’ theses throughout gold’s recent selloff, gold’s fundamentals remain strong. Investment demand continues to grow even in this post-QE world, while mined supply remains tightly constrained. And despite gold’s long and strong secular bull, investors remain heavily under-invested in this critical portfolio component. Odds are a major gold rally is imminent, and may have already begun. Read more here-http://tinyurl.com/bommzpw

-Egon Von Greyerz: Bank Failures, Disorder, Massive Panic & Gold. Read more here-http://tinyurl.com/6nexcs7

-Eveillard: We Are Looking At Catastrophe Going Forward. Investors should look for protection from this global storm by owning physical gold or even gold mining stocks for that matter because they are so undervalued vis-a-vis bullion. I have no appetite for bonds or cash because every central bank is debasing their own currency and cash yields nothing.

My contention is that the inflationary policies are already in place. As long as they are in place, the upside for gold remains intact. I mean every now and then there will be a correction. Some individuals argue that gold must go much lower before we turn around and make new highs.

All I know is that I do not want to lose my position in gold. If you look at the central planners, there idea right now is ‘let’s create more money out of thin air.’ That’s simply wrong. It will have very negative unintended consequences at some point. When? I have no idea. But it will. It will indeed, it always has.” Read more here-http://tinyurl.com/brbkyxk

-Peter Schiff: Gold Bears to Get Pummeled, No Crash in Stocks. “The bottom line here is gold is headed much higher and the next big move in gold will be up. People who speculate are betting on a huge drop in gold. That’s what the gold stocks are forecasting. They are forecasting a precipitous decline.

So, do you want to believe the speculators or do you want to stick with the long-term trend? I think a lot of the professional money managers, professional speculators, they’ve been betting against this gold bull market for the the last ten years. Betting against gold has been the wrong trade.

Over time, gold keeps making new highs. The same could be said for gold stocks, albeit at a slower rate. The gold shares reflect the fact that you’ve got a lot of skepticism. This is the antithesis of a bubble. Instead of there being euphoria and people speculating on a gold rally, they are all betting against it. Meanwhile, gold continues to climb a wall of worry.

The gold bears don’t understand the fundamentals. These were the same people that didn’t see the housing bubble or the financial crisis. This is why you will see the few people that bet right on subprime, are also the ones that are betting on gold. These savvy players have a better understanding of the macro-economic fundamentals.

The gold bears, they actually think the US economy is sustainable. They don’t understand the structural problems. They don’t understand the government solutions are actually worsening the problems. These people even buy the government PR campaign that there is no inflation.

Those of us who understand what is going on see the inflation. We don’t buy the government propaganda effort, we look at reality. The government tried to convince us there was no housing bubble, but I trusted what I could see with my own eyes, not what the government was trying to spoon-feed me.

The gold bears think that gold was only going up because of fear or Armageddon, and now they think it has been averted. Now they think gold is going to crash. They just don’t understand the gold market or what’s driving it. I like the fact that so many people are on the wrong side of the trade. The bears will continue to get pummeled.” Read more here-http://tinyurl.com/7gfr2rs

-Rick Rule: I’m Too Old To Wish For Chaos, But It’s Coming. For investors who are frustrated, past is probably prologue. They need to have a sense of what happened in the 1970s market. If you go back to that bull market, you will remember there were numerous occasions, probably 25 or 30 in that decade, where the precious metals prices fell 10% or 15%. The equities associated with gold and silver fell even further.

The grandaddy of all of those declines was in 1975. Now, what’s instructive to know is that nothing changed with regards to the fundamentals for gold and silver. What changed was the official sector’s interest rates and people’s perceptions of the value of gold and silver.

If you were in the market and had the cash and the courage to stay in the market from peak to trough, that is from the bottom of 1975 decline, five years later you were up eight-fold. It’s tragic that some people had the idea behind the bull market, but didn’t have the cash or the courage to stay the trade. Can you imagine getting shaken out of a trade where you were right, and then missing five years of an eight-fold advance?

So, for people who are frustrated with the volatility in this market, especially the downside volatility, simply remember that what is changing are people’s attitudes, not the fundamentals. The market doesn’t care if you are frustrated. The market doesn’t care about your time frame.

The market doesn’t care about anything. The market is merely a facility for buying and selling assets. If you have the courage of your convictions, if you believe, as an example, that gold is a better store of wealth than fiat currencies, then stay the trade.” Read more here-http://tinyurl.com/7lmvtft

-John Embry: What’s Happening in China is Wildly Bullish for Gold. “The gold and silver situation is under control of the paper manipulators at this time. I think they have an agenda to keep the gold and silver space as quiet as possible, in order to keep people away from it.”

“They have a vested interest in making sure people are buying stocks and bonds. In the fullness of time this will be overcome, but in the meantime we have to put up with this. To me, gold is the antithesis of the financial system as we know it. It’s real money.

The problem with the financial system is that it’s built on an unsustainable mountain of debt. The idea that we are going to be able to cure the current problem by creating more debt isn’t going to work. We can’t support the existing debt.

“As this sinks in with a lot of people, and it will as time goes on, gold is going to be seen as a major alternative, if not the major alternative. It won’t take much of that money that’s currently tied up in paper, moving into the gold space, to have an outsized impact on the price.

The Chinese, over the weekend, stated their intention they wanted to make the yuan a much more internationally traded currency. Up to now it’s been so restricted that you couldn’t really deal in it. If this is their intent, and I believe it is, this is a huge step.

This is spectacularly bullish for gold because I think the Chinese will ultimately want to back their money with gold. The Chinese are huge players in the gold market. That’s their agenda, to be seen as a major play in the international currency market.

What the US dollar doesn’t need these days is serious competition in terms of being the reserve currency. If the US dollar starts to move off center stage as time goes on, this will be wildly bullish for gold. One of the things that would destabilize the whole financial system is if people figured out how vulnerable the US dollar is.” Read more here-http://tinyurl.com/6roo3lh

-GoldSeek Radio interviews Eric Sprott on Gold. Listen here-http://www.gata.org/node/11264

-Eric Sprott & David Baker: The [Recovery] Has No Clothes. The equity market rally that began in late December appears to be generated more by excess government-induced liquidity than it does by any raw fundamentals. We continue to scour the data for signs of a true recovery and we are simply not seeing it. Until those signs come through, we would be very wary of participating in the equity markets without a strong defensive stance.

We would also expect the precious metals complex to enjoy renewed strength as the year continues. One bad month does not change a long-term trend that has been building over 10 years. Gold and silver will both have an important role to play as the central bank-induced printing continues, and we expect more on that front in short order. Read more here-http://tinyurl.com/c33ybft

-Caesar Bryan: Suspicious $1.5 Billion Gold Dump & Bank Runs. Read more here-http://tinyurl.com/6tfn5jp

-Nigel Farage: There Are Going to Be Serious Banking Collapses. “It was interesting to see massive bullion movements last month, out of Italian banks and into Swiss banks. So, people who have purchased gold for protection and have kept the gold in Italian bank vaults, now their trust in Italian banks is so bad they have physically moved the bullion to Switzerland. I’m still a believer, buy gold on dips.” Read more here-http://tinyurl.com/br5aak7

-Pento: Inflationary Death Spiral & The Global Credit Card. The sad truth is that Europe, Japan and the U.S. have such an onerous amount of debt outstanding that the hope of continued solvency rests completely on the perpetual condition of interest rates that are kept ridiculously low. It isn’t so much a mystery as to why the Fed, ECB and BOJ are working overtime to keep interest rates from rising.

If rates were allowed to rise to a level that could bring in the support of the free market, the vastly increased borrowing costs would cause the economy to falter and deficits to skyrocket. This would eventually lead to an explicit default on the debt.

But the key point here is that continuous and massive money printing by any central bank eventually causes hyperinflation, which mandates yields to rise much higher anyway. It is at that point where the country enters into an inflationary death spiral.

The more money they print, the higher rates go to compensate for the runaway inflation. The higher rates go, the worse economic growth and the debt to GDP ratio becomes. That puts further pressure on rates to rise and the central bank to then increase the amount of debt monetization and so the deadly cycle repeats and intensifies.

The bottom line is that Europe, Japan and the U.S. will eventually undergo a massive debt restructuring the likes of which has never before been witnessed in history. Such a default will either take the form of outright principal reduction or intractable inflation. History illustrates that ownership of gold will provide a safe harbor for your wealth when paper currencies are being inflated into oblivion.” Read more here-http://tinyurl.com/78fwuwu

-As sanctions bite, Syria said to be selling gold reserves at 15% discount. Read more here-http://www.gata.org/node/11261

-GoldSeek Radio interviews GATA Chairman Murphy. Listen here-http://www.gata.org/node/11266

-April edition of the Gold Standard Institute’s journal. Read more here-http://www.gata.org/node/11252

-Doug Casey asks for and James Turk delivers the evidence of gold market manipulation. Read more here-http://www.gata.org/node/11251

-Patrick Heller: Gold and silver price suppression is now a weekly event. Read more here-http://www.gata.org/node/11265

-BIS trader removes gold ‘interventions’ from his biography. Read more here-http://www.gata.org/node/11257

-GATA tells the past well enough, but we’re not in charge of the future. Read more here-http://www.gata.org/node/11258

-Another attack tries to knock King World News off the Internet. Read more here-http://www.gata.org/node/11247

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SILVER

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 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

-”Silver is my second largest holding, just behind gold. I am projecting that silver rises to about $100 per ounce over the next 18 months.” Morris Hubbartt

-Robert Fitzwilson: We Are Witnessing The Largest Financial Bubble In History. The biggest bubble in human history is in sovereign debt, the obligations of governments around the world. The classic signs of a bubble are present. Despite the fact that virtually all governments are insolvent (the Reality), there exists an almost universal belief that sovereign debt is safe (the Perception). There is a massive gap between reality and perception.

What we hear is that gold, silver and oil are in bubble mania. Nothing could be further from the truth. The perception is so far below the reality that we effectively have a negative bubble. Buyers of these three assets are speculating fools according to the mainstream media. The only thing that is foolish is not holding onto positions and not adding as nominal prices periodically come down.

The bubble is in paper assets, particularly sovereign debt. Historic lows in interest rates mean that prices are at historic highs as rates and prices move inversely. Take into account the solvency factor, and the conclusion is inescapable that such paper assets are in the biggest bubble in history.

Sadly, the vast majority of people will not understand this until it is too late and their savings have been destroyed. The current pricing for gold, silver and energy assets is a gift to those with the ability to look at the facts as presented and take a longer-term view.” Read more here-http://tinyurl.com/d34g4uk

-Bob Moriarty: Sprott Will Signal Silver Bottom. Read more here-http://tinyurl.com/7kyfy3b

-Comex silver stock piles at highest in at least a decade. Stockpiles of silver in comex-monitored warehouses rose to their highest level in 10 years as despite a 13% price rise so far in 2012. Read more here-http://tinyurl.com/c5853ts

-Silver Survey: Investment Key To Silver-Price Action In 2011; Mine Supply Hits Record High. Read more here-http://tinyurl.com/cssrdqk

-Thomson Reuters GFMS forecasts ‘just above’ $40/oz high for silver. Read more here-http://tinyurl.com/c9sw7nb

-Thomson Reuters GFMS: Silver Volatility Likely; Prices To Gain Traction Later In 2012. Read more here-http://tinyurl.com/c8wlzn8

-Silver’s 2011 Annual Average Price Posts All-Time Record at $35.12. Read more here-http://tinyurl.com/ccz8cfd

-Silver: The harsh realities behind diminishing supplies. Gaia Vince discovers firsthand the conditions people at a Bolivian mine are still enduring to mine rapidly dwindling supplies of the precious metal. Read more here-http://tinyurl.com/c5a6jzk

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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-”It is not worth an intelligent man’s time to be in the majority. By definition, there are already enough people to do that.” G. H. Hardy

-”Don’t judge each day by the harvest you reap but by the seeds that you plant.” Robert Louis Stevenson

-“Often the difference between a successful person and a failure is not one has better abilities or ideas, but the courage that one has to bet on one’s ideas, to take a calculated risk and to act.” Andre Malraux

-CHART OF THE WEEK: Financial-Stress Index Sends ‘Risk-Off’ Signal. Concern about the global financial system’s stability has grown so much during the past two weeks that investors ought to take less risk, according to Bank of America Corp.’s Merrill Lynch unit. Read more here-http://tinyurl.com/7op4aso

-CHART OF THE WEEK: This Is Why They Call It Taxmageddon. This weekend, NYT’s David Leonhardt coined the term ‘Taxmageddon’ to describe the huge tax hikes that are coming at the end of 2012 if Congress does nothing. Read more here-http://tinyurl.com/7576jdy

www.chartoftheday.com

-CHART OF THE WEEK: This Is The Critical Chart For 2013. If there are no changes to current law, 2013 promises to bring a big wave of fiscal tightening. This is due to the fact that spending cuts are kicking in at the same time that the Bush tax cuts are due to expire. According to a chart from Nomura, it’s theoretically possible that fiscal contraction could knock 5% off of GDP. Read more here-http://tinyurl.com/7olrr5b

www.chartoftheday.com

-Morgan Stanley: This Is What Happened The Last Time The US Economy Faced A ‘Fiscal Cliff.’ Everyone is freaking about 2013 because of the giant “fiscal cliff” that the economy faces. Morgan Stanley’s economics team led by David Greenlaw summarizes:

Under current law, the US economy will experience a fiscal tightening of unprecedented magnitude at the end of this year. The main drivers include the scheduled expiration of the Bush era tax cuts, expiration of the 2010-11 payroll tax cut, expiration of emergency unemployment benefits, a budget sequester tied to the outcome of the failed Super Committee deliberations, other reductions in non-defense discretionary spending attributable to previously enacted budget appropriations legislation, defense spending reductions tied to a scaling back of activities in Iraq/Afghanistan, and the imposition of some new taxes on individuals imposed by the Affordable Care Act that was passed in 2010.

While the total impact to GDP has been subject to debate, most agree that inaction by Congress will shave at least 3 percentage points off of GDP in 2013. All in, Greenlaw’s team estimates this will shave 5 percentage points off of GDP. Bottom line: fiscal cliffs are bad news for the economy, and the current one threatens to send us right back into recession. Read more here-http://tinyurl.com/89tsgt3

-Banks Seen Dangerous Defying Obama’s Too-Big-to-Fail Move. Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the nation’s credit markets seized up and required unprecedented bailouts by the government.

Five banks JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and Goldman Sachs Group Inc. held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to central bankers at the Federal Reserve. Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output.

The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did in 2008 with the Fed-assisted rescue of Bear Stearns Cos. by

JPMorgan and with Citigroup and Bank of America after the Lehman Brothers bankruptcy, the largest in U.S. history. “Market participants believe that nothing has changed, that too-big-to-fail is fully intact,” said Gary Stern, former president of the Federal Reserve Bank of Minneapolis. Read more here-http://tinyurl.com/6lwtjjs

-Fed Confirms Banks Must Conform to Volcker Rule by July 2014. Wall Street banks will have two years to implement the so-called Volcker rule so long as they make a “good faith” effort to comply with the ban on proprietary trading, U.S. regulators said. Read more here-http://tinyurl.com/dyr7hst

-Joe Stiglitz’s Presentation On Why The Entire Global Economic System Is Doomed To Fail. The basic idea is: A few powerhouses like China, Germany, and Japan, plus some commodity based economies, have thrived in a system where they do all the exporting, and a few countries like the US run massive trade deficits.

But that system is coming to an end, as countries realize that their trade deficits are unsustainable, and seek to become trade surplus countries at the same time. Of course, not everyone can run surpluses, so this becomes a game of hot potato, with everyone pushing the deficit to someone else, via currency devaluation and other aggressive trade moves. In this presentation, Stiglitz explains why the system is heading towards collapse. Read more here-http://tinyurl.com/cusf87m

-Gerald Celente: It’s Absolutely Terrifying Where Society Is Headed. Read more here-http://tinyurl.com/7t9fkqg

-Canada Keeps 1% Rate, Says Increases May Be Appropriate. The Bank of Canada said today higher borrowing costs “may become appropriate,” leading investors to increase bets that policy makers will raise their benchmark rate from 1 percent later this year. Read more here-http://tinyurl.com/cwxvmh8

-CPI Conspiracy Theories Persist Even With Broad Checks. One such critic is John Williams, the author of Shadow Government Statistics, a newsletter that he has run since 2004. Williams says the federal government understates the level of inflation to keep increases in Social Security payments and other costs down.

Williams’s alternate measure of inflation was 10.3 percent for the 12 months through March, compared with 2.7 percent for the Consumer Price Index. He calculates unemployment at more than 20 percent rather than the official 8.2 percent in March. His assessment of gross domestic product has clocked negative economic performance in every quarter since 2005.

The Department of Commerce’s measure turned negative in 2008 and 2009, recording the worst recession since the Great Depression. The economy is nearing “hyperinflationary Great Depression,” he says on his web site. Read more here-http://tinyurl.com/7sts2gc

-Postage prices to rise 30% as inflation wrecks UK living standards. Read more here-http://www.gata.org/node/11250

-Call for 25% devaluation in Britain. Britain’s exchange rate is “crippling” the economic recovery, and devaluing the pound by as much as 25 percent could push growth back to an annual 4 percent, research group Civitas said. Read more here-http://www.gata.org/node/11256

-25 Signs That Middle Class Families Are Being Wiped Out. Read more here-http://tinyurl.com/bv52mxj

-Thiel Says Market Returns May Sour Young Investors on Stocks. Poor market returns over the past decade may sour younger clients on equities, said Bank of America Corp. John Thiel. “We’re at risk of losing an entire generation as investors,” said Thiel, who heads U.S. wealth management and the private banking and investment group at Bank of America’s Merrill Lynch unit. “They’ve been through 10 years of not-so- sterling results.” The Standard & Poor’s 500 Index declined about 5 percent from the beginning of 2001 through the end of 2010. Read more here-http://tinyurl.com/7n3bet3

-Infographic: The Real Price Of Counterfeit Money. Read more here-http://tinyurl.com/7bjjs5y

-Generation Lost? Millennials come of age. Annabel Adams has seen a lot in her life: 9-11, the dot-com bust, the housing collapse, the financial crisis, the Great Recession. That may sound like a lifetime of experience, but she is just 28 years old. Read more here-http://tinyurl.com/bwwejxe

-Vladimir Putin Could Secretly Be The Richest Person In The World. Read more here-http://tinyurl.com/75cop6b

-Buffett Has Stage 1 Prostate Cancer, Not Life Threatening. Berkshire Hathaway Inc. Chairman Warren Buffett has been diagnosed with stage 1 prostate cancer that is “not remotely life threatening,” the billionaire investor said in a letter to investors. Read more here-http://tinyurl.com/7×5frme

-Electric Cars Cost $1,200 a Year Less to Run, Study Says. Drivers of electric vehicles such as General Motors Co. Chevrolet Volt and Nissan Motor Co.’s Leaf may save as much as $1,200 a year on fuel compared with a new gasoline-powered compact, a scientists’ group found. Read more here-http://tinyurl.com/6moqslr

-Battery-powered autos proving a tough sell. Electric vehicle sales have been slow out of the box, despite marketing hype, government incentives and the hopes of green car advocates. Total sales last year were 17,425, which is less than 0.1 percent of the U.S. car and light truck market. Read more here-http://tinyurl.com/7vc6nhq

-U.S. wine prices headed higher for consumers. U.S. consumers are going to be faced with a choice this year: pay more for a bottle of domestic wine, settle for lower quality, or buy cheaper imports, the Silicon Valley Bank forecast. Read more here-http://tinyurl.com/cf2saxn

-Titanium $329,000 Phone Seeks Watch-Loving Deep Pockets. Thomas Pruvot’s frequent requests for the time while his mobile phone was switched off on a long- haul flight to Hong Kong in 2005 led the then 25-year-old Frenchman on a quest for the ultimate accessory. Read more here-http://tinyurl.com/6mzrzn8

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RARECOLOREDDIAMONDS.COM

-Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a 2.56 Radiant Cut Fancy Yellow Internally Flawless Diamond. Harold Seigel-Watch video of the Featured Diamond here-http://tinyurl.com/72na943

-”Natural colored diamonds make up only 1 percent of global production, which gives them unquestionable value. There is a tremendous demand for yellow diamonds, but also blue and pink. There are not enough diamonds to satisfy one-tenth of the new billionaires that every month are created in China.” Bruno Scarselli

-”Reluctant heiress” jewels sell for $21 million at auction. Jewels belonging to Huguette Clark, who was dubbed the “reluctant heiress” after choosing to spend her final years living in hospitals instead of her lavish homes, sold for $21 million at auction. A rare 9-carat pink diamond ring that fetched more than $15 million, nearly twice its high pre-sale estimate, was the top item in the sale at Christie’s on Tuesday which had been expected to total about $10 million.

Known as “The Clark Pink,” the ring set a new auction record for the most valuable pink diamond sold in the United States. The buyer was U.S. diamond, gem and jewelry special Brett Stettner of Stettner Investment Diamonds, according to Christie’s. Read more here-http://tinyurl.com/crm9xwk

-9-Carat Pink Diamond Sells for Record $15.7 Million. The applause was heartfelt on the crowded auction floor at Christie’s New York headquarters Tuesday as a 9-carat pink diamond from the estate of Huguette M. Clark, sold for more than $15.7 million, after intense, competitive bidding.

It is the most valuable pink diamond ever sold in the United States at auction, according to Christie’s. The Belle Epoque cushion-cut, fancy vivid purplish pink diamond ring was the prized item in an auction that had 305 lots that included signature jewels, items from several estates and serious diamonds.

The diamond, known as “The Clark Pink,” was estimated to fetch $6 to $8 million so much for estimates. Clark, one of the last heiresses of America’s Gilded Age, died in May, 2011, at the age of 104. Her collection of 12 lots drew intense intentional attention because she lived a reclusive life in her later years and her jewels were believed to have been kept in a vault unseen since the 1940s. Read more here-http://tinyurl.com/d6yt8yx

-Colored Diamond Auction Results: Christie’s New York Magnificent Jewels Sale, New York City, April 17 2012. More auction Results here-http://tinyurl.com/c42otsn

-Lot 304: A Belle Époque Exceptional Colored Diamond Ring, By Dreicer & Co. Set with a modified cushion-cut fancy vivid purplish pink diamond, weighing approximately 9.00 carats, to the single-cut diamond prongs, gallery and shoulders, mounted in platinum, circa 1910. Estimate $6,000,000-$8,000,000. Price Realized $15,762,500. See more here-http://tinyurl.com/78ddyks

-Lot 281: A Pair of Diamond and Colored Diamond Ear Pendants. Each suspending a rectangular-cut diamond, weighing approximately 3.00 carats, from a cut-cornered modified rectangular-cut fancy intense yellow diamond, weighing approximately 1.38 and 1.37 carats, to the circular-cut diamond French wire, mounted in platinum and 18k gold. Estimate $130,000-$180,000. Price Realized $170,500. See more here-http://tinyurl.com/cjteu99

-Lot 267: A Diamond and Colored Diamond Double-Clip Brooch. Each detachable clip set with a bezel-set old European-cut brown diamond, within a shield-shaped single and circular-cut diamond surround, joined by a bezel-set cushion-cut diamond, mounted in platinum and gold. Estimate $100,000-$150,000. Price Realized $362,500. See more here-http://tinyurl.com/cq2uc7y

-Lot 258: A Pair of Colored Diamond Ear Clips. Each set with either a marquise-cut fancy intense blue diamond, weighing approximately 1.81 carats, or a marquise-cut fancy grayish blue diamond, weighing approximately 1.85 carats, each within a marquise and baguette-cut diamond scrolling surround, mounted in platinum. Estimate $350,000-$500,000. Price Realized $866,500. See more here-http://tinyurl.com/ccf6kh8

-Lot 252: A Colored Diamond Ring. Set with a circular-cut fancy deep brownish greenish yellow diamond, weighing approximately 10.22 carats, mounted in platinum. Estimate $40,000-$60,000. Price Realized $122,500. See more here-http://tinyurl.com/cdkej2a

-Lot 242: A Colored Diamond Ring, By Graff. Set with a modified cushion-cut fancy intense yellow diamond, weighing approximately 43.49 carats, flanked on either side by a trillion-cut diamond, mounted in gold and platinum. Estimate $1,000,000-$1,500,000. Price Realized $1,874,500. Read more here-http://tinyurl.com/cozaju9

-Lot 223: An Unmounted Colored Diamond. The pear-shaped fancy gray-yellowish green diamond, weighing approximately 9.23 carats. Estimate $50,000-$70,000. Price Realized $242,500. See more here-http://tinyurl.com/bm92824

-Lot 216: A Colored Diamond Ring. Set with a circular-cut fancy light yellow diamond, weighing approximately 21.37 carats, extending a spray of pear and marquise-cut diamonds, mounted in platinum. Estimate $250,000-$350,000. Price Realized $638,500. Read more here-http://tinyurl.com/ctzk38x

-Lot 171: A Colored Diamond Ring. Set with a rectangular-cut fancy intense yellow diamond, weighing approximately 4.27 carats, flanked on either side by trillion-cut diamond, mounted in 18k gold and platinum. Estimate $20,000-$30,000. Price Realized $104,500. See more here-http://tinyurl.com/blc4ojv

-Lot 102: A Pair of Colored Diamond Ear Clips. Each set with a cut-cornered modified rectangular-cut fancy intense yellow diamond, weighing approximately 3.02 and 3.00 carats, within a circular-cut diamond surround, mounted in platinum and gold. Estimate $45,000-$65,000. Price Realized $86,500. See more here-http://tinyurl.com/cvhf4et

-Colored Diamond Auction Results: Sotheby’s Magnificent Jewels Sale, New York City, April 18 2012. More auction results here-http://tinyurl.com/c2myupu

-Richard Russell: Wealthy Continue to Panic Into Hard Assets. (Another) group is attempting to form a diamond ETF. They will buy gem quality certified diamonds up to six 6 carats in size. Russell Comment: Gem quality diamonds are scarcer than gold, but if the fund is established, it should push up the price of gem-quality diamonds, which are growing more expensive by the month. The fund, if it is successful, will also increase the liquidity of diamonds, as well as educating the public as to the intricacies and science of diamonds. Read more here-http://tinyurl.com/6wn9j5s

-Colored diamonds becoming investors’ best friend. Yellow, pink and blue diamonds are catching the eye of investors around the world, according to dealers and industry insiders. Read more here-http://tinyurl.com/bq8h48g

-Rock-Hard Assets. The world’s super-rich are turning to rare colored diamonds and other gemstones as a store of wealth and a source of growth. Growing numbers of the world’s ultra wealthy are investing in high-end, colored diamonds and gemstones as a hedge against global economic uncertainty and an opportunity for appreciation.

The market for these tangible assets is being driven by nervous high-net-worth Westerners and newly affluent Asians, especially in India and China, where colored stones have long been seen as status symbols and good-luck charms.

“Diamonds offer a very attractive alternative to traditional asset classes. They are highly uncorrelated to equities and exhibit extremely low volatility, while at the same time offering very good potential for positive returns,” says Alan Landau, CEO of Novel Asset Management. Colored diamonds are some of the priciest and rarest gems in the world.

Experts say only one carat of colored diamond is found for every 10,000 carats of colorless or white diamonds mined. Colored diamonds come in a range of hues, including red, purple, green, pink, blue, orange and yellow, as well as a variety of mixed hues. Like other precious colored gemstones, the purer, more intense colors are more rare and thus more valuable. Read more here-http://tinyurl.com/c9ve6rn

-Gem Diamonds expects rise in rough price to continue. Gem Diamonds said rough diamond prices would continue increasing going into the second quarter, with prices both in the polished wholesale market and high-end branded auctions expected to improve. Read more here-http://tinyurl.com/cj7ayy8

-Diamond prices tipped to sparkle. An expert has tipped the price of diamonds to rise by more than 30 per cent over the next two years because of expected consolidation in the industry and increasing investor interest in the sector. Gemologist Garry Holloway’s tip of a price rise comes as the market speculates about private equity firm KKR looking to buy BHP Billiton and Rio Tinto’s diamond units, which include the Western Australian Argyle mine, to merge the operations.

Such a merger would create the world’s third-largest producer behind De Beers, the South African giant controlled by Anglo American, and Alrosa, which is based in Russia. Mr. Holloway said consolidation of the world’s diamond mines, which he said looked likely given the speculation around KKR, would irrevocably increase the price of diamonds, potentially forever.

He said he believed the big resource companies tended to act in concert, so further consolidation in the industry would equal higher diamond prices at the mine gate. “I estimate the cost of polished diamonds to rise in price by more than 30 per cent in Australian dollar terms over the next two years,” Mr Holloway said. “Diamonds will make an even more attractive value proposition for those looking to invest in an asset class that is both beautiful and lasts forever.” Read more here-http://tinyurl.com/7wd3eky

-Diamonds as a Commodity. Could diamonds be the new gold? A small number of investment professionals around the world are competing behind the scenes to turn the gem into a commodity that would be available to investors in the way that gold has been traded through funds on exchanges. Read more here-http://tinyurl.com/csrucfu

-Are diamonds the new gold for individual investors? “Only 31% of Chinese brides wear rings versus about 80% for brides in the US and Japan.” Read more here-http://tinyurl.com/cx5o2rk Watch more here-http://tinyurl.com/d63xck4

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QE3

-Gross to Gundlach Lead Bond Investors Seeing QE3 From Fed. Bill Gross, Jeffrey Gundlach and Dan Fuss, whose firms collectively oversee about $1.5 trillion, expect the Federal Reserve to conduct a third round of bond purchases as signs of strength in the U.S. economy fade and Europe’s sovereign-debt crisis returns.

Fed Chairman Ben S. Bernanke, Vice Chairman Janet Yellen and New York Fed President William C. Dudley signaled further easing may be needed if growth lags behind projections, with headwinds ranging from the end of tax breaks to $1 trillion of mandatory federal budget cuts to $100-a-barrel oil eating into consumer spending.

The Standard & Poor’s 500 has fallen as much as 4.8 percent from an almost four-year high on April 2. “Should the stock market keep going down, it will be a portent of weaker economic data,” said Gundlach. “It will happen and when it does you will start to hear about more support programs.” Read more here-http://tinyurl.com/c63lhyu

-Jeff Gundlach’s Epic Presentation: “To QE3 Or Not To QE3, That Is The Question.” Read more here-http://tinyurl.com/6pw345f

-Neel Kashkari: Don’t Worry, The Fed’s Morphine Drip Will Continue To Drip Drip Drip Into 2014. In an interview with CNBC, Kashkari tells everyone to calm down because the Fed won’t be tightening anytime soon.

“Every time the Fed tries to back away from their massive, easing policy, the risk markets react. We saw that last week with the FOMC minutes. This is like a morphine drip. You give morphine to the patient, it makes the patient feel better, it doesn’t cure the underlying disease. The moment you try to take the morphine away the patient wakes up horrified in a lot of pain.

And so I think risk markets are getting addicted to this easy money policy, and I think as the Fed tries to back away risk markets are going to respond, that’s going to put more pressure on the Fed to act. So our central forecast is the Fed will stay easing, maybe even QE3 through the end of 2014 as they forecast, could be even longer.” Read more here-http://tinyurl.com/cx4rgal

-Europe Central Banks May Be Forced to Print More Money. Central banks in Europe are increasingly reluctant to pump more money into markets after already massive liquidity injections intended to kick-start economic growth but, according to analysts, they may have no choice. Read more here-http://tinyurl.com/6lmavyv

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SOVEREIGN DEBT

-”The bottom line is that Europe, Japan and the U.S. will eventually undergo a massive debt restructuring the likes of which history has never before witnessed. Such a default will either take the form of outright principal reduction or the central bank to set a course for intractable inflation. History illustrates that the inflation route is always tried first.” Michael Pento

-IMF Gets $320 Billion in New Pledges to Raise Resources. International Monetary Fund Managing Director Christine Lagarde said she expects more contributions after landing pledges of about $320 billion in her campaign for bigger reserves to combat threats to global growth. “I look at this pot of money as an umbrella,” Lagarde said today, “There are clouds on the horizon.” Read more here-http://tinyurl.com/d6nvost

-IMF Says ECB Should Cut Rates, Keep Tools to Bolster Growth. The European Central Bank should cut interest rates and keep its crisis measures in place to help euro-region growth and support the banking system, according to the International Monetary Fund. Read more here-http://tinyurl.com/d55occj

-Worst Yet to Come as Crisis Rescue Cash Ebbs, Deutsche Bank Says. The worst may be yet to come in the global financial crisis as the central bank spending that kept defaults low runs out, according to Deutsche Bank AG. Credit-default swap prices imply that four or more European nations may suffer so-called credit events such as having to restructure their debt, strategists led by Jim Reid and Nick Burns said in a note. Read more here-http://tinyurl.com/724gov6

-Soros warns euro crisis could destroy the EU. Billionaire George Soros warned that the euro crisis is growing deeper, tearing at the fabric of European Union cohesion, because policymakers are prescribing the wrong remedies. “I’m afraid that the euro crisis is getting worse. It’s not over yet, and it is going in the wrong direction,” said Soros.

“The euro is undermining the political cohesion of the European Union, and if it continues like that it could even destroy the European Union,” Soros said. “That is due to a misunderstanding of what the problem is.” Soros said the crux of the problem was that debt reduction was coming at a bad time for the European economy. “You can grow out of excessive debt, you cannot shrink out of excessive debt.” Read more here-http://tinyurl.com/choln4l

-IMF Says European Banks May Have to Sell $3.8 Trillion in Assets. European banks could be forced to sell as much as $3.8 trillion in assets through 2013 and curb lending if governments fall short of their pledges to stem the sovereign debt crisis or face a shock their firewall can’t contain, the International Monetary Fund said. Read more here-http://tinyurl.com/c25nmce

-Bundesbank Says Euro Nations Must Set Aside Growth Concerns. Germany’s Bundesbank urged troubled euro-area governments such as Spain to set aside short-term growth concerns and press ahead with budget cuts to win back investor confidence. Read more here-http://tinyurl.com/crkxojk

-”Not if, but when” for Spanish bailout, experts believe. Economic experts watching Spain don’t know how much money will be needed or precisely when, but some are near certain that Madrid will eventually seek a multi-billion euro bailout for its banks, and perhaps even for the state itself. Read more-http://tinyurl.com/cc6c96y

-This Is How Much It Could Cost To Bail out Spain. Are Europe’s current firewall resources sufficient to bail out Spain? And about how much would this bailout cost anyway? Read more here-http://tinyurl.com/broxlfo

-Rajoy Says Spain Needs Austerity for Funding as Yields Climb. Prime Minister Mariano Rajoy said Spain must slash its budget deficit in order to maintain access to financing, as bond yields rose to the highest level since his government came to power four months ago. “The fundamental objective at the moment is to reduce the deficit,” Rajoy told a conference in Madrid. “If we don’t achieve this, the rest won’t matter: we won’t be able to fund our debt, we won’t be able to meet our commitments.” Read more here-http://tinyurl.com/cqyq7oq

-Spain’s Surging Bad Loans Cast New Doubts on Bank Cleanup. Spain’s surging bad loans are spurring doubt on whether the government can persuade investors that it can clean up the country’s banks without further damaging public finances. Read more here-http://tinyurl.com/cvozhqq

-14 Jaw-Dropping Facts About The Spanish Economy. Last year was about Greece and Italy, but suddenly everyone’s talking about whether Spain will be the too big to save Eurozone economy that explodes the Global economy. Read more here-http://tinyurl.com/cxcho8h

-Italy to Miss Budget Deficit Targets, Debt to Rise: IMF. Italy will miss its budget deficit targets in 2012 and 2013 and its public debt will rise in both years despite the government’s austerity measures, the International Monetary Fund forecast said. Read more here-http://tinyurl.com/7lmavr4

-Greek town develops bartering system without euro. As Greece wonders whether its debt crisis will eventually spell its exit from the euro, one town in the centre of the country, Volos, has formed an alternative local currency. It works through a bartering system or exchange of goods. Watch more here-http://tinyurl.com/d94kcp7

-Alasdair Macleod: TARGETing problems in eurozone. Read more here-http://www.gata.org/node/11253

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U.S. DEBT-DEFICIT

-IMF tells US to sort out debt, quickly. The International Monetary Fund issued a clarion call to bickering US politicians Tuesday, urging them to solve the country’s debt problems before a still-vulnerable economy is tipped over the brink. In a hallmark semi-annual report, the Washington-based fund warned policymakers on the other side of the US capital that, while the world’s largest economy is improving, they invite trouble by not addressing a looming debt crisis. “The first priority for US authorities is to agree on and commit to a credible fiscal policy agenda that places debt on a sustainable track over the medium term,” the IMF said. Read more here-http://tinyurl.com/8xf6mpe

-The $5 Trillion Man: Debt Has Increased Under Obama by $5,027,761,476,484.56. In the 39 months since Barack Obama took the oath of office as president of the United States, the federal government’s debt has increased by $5,027,761,476,484.56. Although he has served less than a term, Obama is now the first American president to see the federal government’s debt increase by more than $5 trillion during his time in office.

During the full eight years that George W. Bush served as president, the federal government’s debt increased by $4,899,100,310,608.44. (Rising from $5,727,776,738,304.64 to 10,626,877,048,913.08.) The $5,027,761,476,484.56 that the debt has increased during Obama’s presidency equals $16,043.39 for every one of the 313,385,295 people the Census Bureau now estimates live in the United States. Read more here-http://tinyurl.com/7cpz2j7

-More U.S. cities set to enter default danger zone. America’s swelling ranks of fallen municipal borrowers have been blamed in the past year on ‘what-were-they-thinking’ causes, be it a Taj Mahal sewer system in Alabama or an overpriced trash incinerator in Pennsylvania’s capital city of Harrisburg.

But the next series of major cities and counties in danger of defaulting on their debt can hardly point to one single decision for their malaise. Whether it be Detroit, Miami or Providence, Rhode Island, their problems have a lot more to do with financial policies that put them on course to live well beyond their means. Read more here-http://tinyurl.com/6orggej

-U.S. Tax time pushes some Americans to take a hike. Read more here-http://tinyurl.com/bu725bo

-U.S. Tax refunds being used to pay for bankruptcy filings. More than 200,000 money-strapped households will use their tax refunds this year to pay for bankruptcy filing and legal fees, says a new study by the National Bureau of Economic Research. Read more here-http://tinyurl.com/7cbshc3

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OIL-NAT GAS

-CHART OF THE WEEK: Argentine Rigs Drop as Fernandez Seizes YPF. Argentine President Cristina Fernandez de Kirchner’s seizure of YPF SA will reduce investment in oil fields as energy producers flock to other Latin American countries, WTRG Economics said. Read more here-http://tinyurl.com/brssjmj

-CHART OF THE WEEK: China to Overtake U.S. as Biggest Tanker User. China will pass the U.S. in 2013 as the biggest user of tankers carrying oil at sea as Asian imports travel over longer distances and fewer cargoes go to the world’s biggest economy, according to Arctic Securities ASA. Read more here-http://tinyurl.com/78pbxy6

-CHART OF THE WEEK: Gundlach Sees Natural Gas Like 1997 Gold, Poised to Rise. Investing in natural gas today is similar to buying gold in 1997, before a surge in the precious metal’s price, according to Jeffrey Gundlach, chief executive officer of DoubleLine Capital LP. Read more here-http://tinyurl.com/ckuwycf

-Obama to Urge Congress for More Regulation of Oil Markets. President Barack Obama urged Congress to bolster federal supervision of oil markets, including bigger penalties for market manipulation and greater power for regulators to increase the amount of money traders must put up to back their energy bets. Obama asked Congress to fund a six-fold increase for surveillance and enforcement staff at the Commodity Futures Trading Commission to put “more cops on the beat” overseeing oil markets. Read more here-http://tinyurl.com/ccjwgm9

-Scapegoating Oil Speculators Won’t Ease Pain at the Pump. No one, least of all President Barack Obama, should expect oil or gasoline prices to fall because of the five-point plan he unveiled at the White House. Read more here-http://tinyurl.com/7q4nv3s

-Argentina Seizes Oil Producer YPF, as Repsol Gets Ousted. Argentine President Cristina Fernandez de Kirchner seized control of YPF SA, the nation’s largest crude producer, ousting Spanish owner Repsol YPF SA after a dispute over slumping oil output and investments.

Argentina took over management of YPF with immediate effect, replacing Chief Executive Officer Sebastian Eskenazi with Planning Minister Julio De Vido, Fernandez said in a speech in Buenos Aires. The government will also send a bill to Congress to take a 51 percent stake in YPF, she said. Read more here-http://tinyurl.com/7lcusow

-Obama Issues Pollution Rules for Gas Wells, Offers Phase-In. The U.S. Environmental Protection Agency issued the first rules to combat air pollution from natural-gas drilling, while giving companies until 2015 to meet the most stringent requirements opposed by the energy industry. Read more here-http://tinyurl.com/bu2tvwj

-Hurricanes to Provide Little Gas Support. A below-average Atlantic storm season in 2012 probably will provide little support for energy prices as natural gas trades at 10-year lows. Read more here-http://tinyurl.com/cetftda

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REAL ESTATE

-CHART OF THE WEEK: ‘Explosion in Student Debt’ Drags Down Housing. As the cost of attending U.S. colleges and universities surges, student-loan debt is turning into “a significant drag on the housing market,” according to Pierre Lapointe, a Brockhouse & Cooper Inc. strategist. Read more here-http://tinyurl.com/cuycq9x

-U.S. Previously Owned Home Sales Unexpectedly Fell in March. Sales of previously owned U.S. homes in March unexpectedly fell for the third time in the last four months, showing an uneven recovery in the housing market. Purchases dropped 2.6 percent to a 4.48 million annual rate from 4.6 million in February, the National Association of Realtors reported today in Washington. The median forecast of economists in a Bloomberg News survey called for an increase to 4.61 million. In January, sales at a 4.63 million rate were the strongest since May 2010. Read more here-http://tinyurl.com/c7o5swe

-Short Sales Surpass Foreclosures as Banks Agree to Deals. The number of U.S. home short sales surpassed foreclosure deals for the first time as banks became more agreeable to selling houses for less than the amount owed on their mortgages, according to Lender Processing Services Inc. Read more here-http://tinyurl.com/7mt7f82

-Zerohedge.com: No Housing Recovery Until 2020 In 5 Simple Charts. Read more here-http://tinyurl.com/7oebvpa

-U.S. Homebuilder Confidence Fell in April to Three-Month Low. Confidence among U.S. homebuilders fell in April to a three-month low, a sign the industry is still trying to gain its footing. The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 25 this month from 28 in March, the Washington-based group said. Read more here-http://tinyurl.com/bsuv4qo

-U.S. Housing Starts Unexpectedly Drop to Five-Month Low. Builders began work on fewer homes than forecast in March, signaling a sustained industry recovery will take time to get underway.

Housing starts dropped 5.8 percent to a 654,000 annual rate and the least since October, Commerce Department figures showed in Washington. The slump was led by the volatile multifamily category, which at the same time showed a jump in permits, a proxy for future construction. Read more here-http://tinyurl.com/cys2u4d

-China Home Prices Fall in More Than Half Cities Tracked. China’s home prices fell in a record 37 of 70 cities tracked by the government in March as officials pledged to keep restrictions on property purchases that have sapped buyer demand. Read more here-http://tinyurl.com/c5smsbg

-Spain Has Enough Excess Land for 4 Million New Homes, Acuna Says. Spain has enough land approved for development to build 4 million homes and an existing supply of residences that will take about 10 years to sell, according to R.R. de Acuna & Asociados. There are currently 2 million unsold homes in Spain, the Madrid-based property adviser said in a report published today. In a typical year, there is demand for 200,000 to 250,000 properties, the company estimates. Read more here-http://tinyurl.com/77tjteh

-U.K. Commercial Property Values Fall for Fifth Straight Month. U.K. commercial real estate values fell for the fifth straight month in March as the country’s economic woes crimped returns, Investment Property Databank Ltd. said. Read more here-http://tinyurl.com/7za89hl

-The 21 Most Expensive Homes For Sale In New York City. Read more here-http://tinyurl.com/c85e4ey

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GEOPOLITICAL

-Art Cashin: Veteran Traders Can’t Figure Out Why Markets Are Ignoring The Huge Geopolitical Risks. Veteran traders have wondered for weeks about the markets whistling past a variety of geo-political challenges. Yes! Yes! I know about Spain and Italy but they are potential financial crises not truly political ones. A good example is the deteriorating situation in Egypt.

The Muslin Brotherhood went back on it initial promise and backed a candidate for president. That raised the likelihood of a religious government and possible rule by Sharia law. The ruling generals appeared to counter by encouraging a second Sharia candidate to possibly split that vote. Then they entered a law and order secular candidate to block a shift to religious government. The courts (thought to be influenced by the generals) ruled several candidates eligible (to enable that strategy).

Meanwhile, an election commission threw a wrench in the whole thing by disqualifying ten candidates. As the political outlook disintegrates, the country is running short of both food stuffs and currency reserves. The world’s most populous Arab nation (and Israel’s next door neighbor) looks less stable each day. And then there’s Iran. Read more here-http://tinyurl.com/brhwo56

-Pentagon chief: ‘We’re within an inch of war almost every day.’ Defense Secretary Leon Panetta offered a blunt assessment of the threats facing the United States on Wednesday, saying the potential for another war breaking out remains high in places like North Korea.

“We’re within an inch of war almost every day in that part of the world,” Panetta said in an interview, in response to a question about the threats in the Korean Peninsula. “And we just have to be very careful about what we say and what we do.” Read more here-http://tinyurl.com/788mfhd

-Israeli TV report shows air force gearing up for Iran attack, says moment of truth is near. Read more here-http://tinyurl.com/d9arly9 and http://tinyurl.com/6urf723

-India Test-Fires Longest-Range Missile to Counter Neighbor China. India test-fired its longest-range missile for the first time, a weapon with the potential to target parts of northern China. Read more here-http://tinyurl.com/c24rjag

-North Korea Breaks Off Nuclear Accord as Food Aid Halted. North Korea broke off an agreement to halt testing of nuclear devices and long-range missiles after the U.S. canceled food assistance to the totalitarian regime in response to its botched rocket launch last week. Read more here-http://tinyurl.com/cse43p4

-North Korea’s Kim Says His Regime Can’t Be Blackmailed. North Korea won’t be bullied by its nuclear-armed enemies, third-generation dictator Kim Jong Un said in his first public address at a military parade as South Korea warned that his regime may conduct an atomic test. Read more here-http://tinyurl.com/7949d4c

-Chinese Espionage Campaign Targets U.S. Space Technology. China is stealing U.S. military and civilian space technology in an effort to disrupt U.S. access to intelligence, navigation and communications satellites, according to a report from the State and Defense Departments. Read more here-http://tinyurl.com/cfx4f75

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After a week of hearing “this week’s jobs data should prove that last week’s number was an anomaly” from the media’s usual talking heads, Thursday’s release proved both economists and the media pundits wrong. The prior week’s reading of initial claims for state unemployment was revised upward by 8,000. The upward revision made for a net decline in initial claims of just 2,000, far below economist’s expectations. The four week moving average of new claims, which many view as a better gauge of the state of the jobs market, rose this week sparking fears that a recovery in the jobs market may be running into some serious headwinds.

In France, there is growing concern that Nicolas Sarkozy may lose to his Socialist challenger when the voting process, which begins this Sunday, finally comes to a conclusion in May. The stance of Francois Hollande, Sarkozy’s primary challenger, may put serious strain on the relationships Sarkozy has cultivated with Germany, Britain and the US if he should be elected in May.

Spain continues to be the latest major concern in the Eurozone. The yield on 10 year Spanish bonds was up to 6.03 percent as fears continued that Spain would not be able to reign in its spiraling debt. Luis de Guindos, Spain’s economy minister, said on Friday “We will need no money from the rescue funds to refinance the banks”, a tune that we’ve all heard before from other debt laden Eurozone countries as they were quietly getting in line for their bailouts.

In Greece, the top three banks in the country posted massive and record setting losses as a result of last month’s debt swap. The losses severely impacted the “Tier 1″ core capital ratios for all the banks, raising concerns that the Tier 1 ratio target of 9 % agreed to as part of the bailout conditions for Greece may be unattainable by September when it is due to be in place. In Athens, a framework for recapitalizing banks was supposed to have been announced on Friday, but it appears that details are still being ironed out with EU and IMF officials.

On Thursday, Christine Lagarde, managing director of the International Monetary Fund, speaking at the start of G20 meetings in the US which will likely focus primarily on the ongoing debt crisis across the Eurozone, said there was a “light recovery blowing in a spring wind with dark clouds on the horizon.”, perhaps a veiled reference to Spain.

On Friday, the G20 announced that “There are firm commitments to increase resources made available to the IMF by over $430 billion.” The move appears to be an attempt to keep the IMF from becoming overwhelmed in the event of an “incident” involving Italy or Spain, whose borrowing costs may soon become totally unaffordable.

There is growing concern that a slowdown in the US economic recovery is underway. Many economists have forecast that the unusually warm winter may have brought economic activity that traditionally isn’t seen until spring, forward into January and February, artificially inflating the numbers. Evidence of this is beginning to appear in the beleaguered US housing industry. Spring, which is traditionally the busiest period for the housing industry, is off to a slow start.

Crude oil stubbornly held above $100 a barrel this week, climbing back into the mid-$100 range on Friday. Fears are that the sanctions imposed against Iran may be leading other countries to purchase extra oil to stockpile in the event that the sanctions trigger a supply shortage.

The euro was on a rollercoaster this week against the dollar and appears to be finishing the week out lower. The Japanese yen appeared to fall off a cliff against the dollar this week.

Friday to Friday Close

Previous year Comparisons

* Current at time of writing

Here are your Short Term Support and Resistance Levels for the upcoming week.

Volatility should be expected to continue and perhaps increase further. Recent global events are sparking comparisons to the spring of 2011 and many news items could almost be a direct cut and paste from stories published last year. Oil prices remain stubbornly high, leading to higher gasoline prices once again this year; consumers appear to be tightening their spending once again; unemployment across the planet remains stubbornly high; global stock markets are remain extremely volatile; bond yields in the Eurozone are on the rise once again, particularly in Spain and Italy; Multiple Greek banks are in need of re-capitalization; and political changes are on the wind in both Greece and France. In recent weeks, we have commented over and over that manipulation in the gold and silver market appears to be running rampant and unchecked and has now become blatantly obvious. Last Friday’s activity at the COMEX close was another perfect example of this. With virtually no news that should have triggered such a massive sell-off last Friday, 10,000 gold contracts, valued at over $1.6 billion, changed hands just before the close. This was nearly identical to events that transpired in the silver market on April 3rd when the Fed released the minutes from the latest Federal Open Market Committee meeting. The selling in silver started immediately as the minutes were released. All of this is well documented by Patrick A. Heller in an article on CoinWeek.com titled “Major Gold And Silver Price Suppression Now A Weekly Occurrence. So What?” and can be reached by clicking the following link: Patrick Heller Article. We agree with Mr. Heller, who closed his article with “I have previously warned my readers that markets will be more volatile as we get closer to the time when I expect gold and silver prices to soar. When the US government needs to work with its trading partners and allies to engineer a major price suppression once a week, we are getting a lot closer to the day when such tactics will no longer work. John Hathaway, manager of the Tocqueville Gold Fund, feels that gold is very close to the bottom here. In an interview with King World News, Mr. Hathaway said “What I think we’ve been through here is a lengthy correction from the peak of last August, when gold rose to above $1,900 an ounce. We’ve had a couple of debt ceiling increases since then. The fundamental issues continue to be what they were last August, it’s just that they are off the front pages.” Mr. Hathaway continued, saying “Now we know that on February 29th, Bernanke stated that the Fed’s work was done. But I would have to put that in the category of all other Fed forecasts. They didn’t see the 2008 credit meltdown and they didn’t see the housing collapse. So the Fed has not been all that great at making judgments about what the future holds. But the market took his statement as gospel and said quantitative easing is a thing of the past, as of June 20th. I believe the Fed will have to print more money to support the bond market. We’ll just have to wait and see.” Maintain your ability to participate in what may well turn out to be another record setting year in the precious metals markets. Look for buying opportunities to add more metals to your portfolio and do not over-extend your ability to maintain ownership of your product. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.

Trading Department – Precious Metals International, Ltd.