Monday, January 17, 2011

Hu Highlights Need for U.S.-China Cooperation, Questions Dollar

From the

BEIJING—Chinese President Hu Jintao emphasized the need for cooperation with the U.S. in areas from new energy to space ahead of his visit to Washington this week, but he called the present U.S. dollar-dominated currency system a "product of the past" and highlighted moves to turn the yuan into a global on

Anger as JP Morgan bankers get $10bn pay and bonus pot

From The Guardian:

Anti-poverty campaigners renewed their call for new taxes on the financial sector after JP Morgan Chase set aside almost $10bn for basic pay and bonuses in its investment banking division.

The Robin Hood Tax campaign said it was "outrageous" that JP Morgan's investment bankers are to receive an average payout of $369,651 (£233,000) for 2010. The group, which supports a global tax on banks' financial transactions, said the size of the payments was "a slap in the face to ordinary people".

David Hillman, spokesman for the campaign, said: "If banks can afford to pay billions in bonuses, they can clearly afford to be taxed a great deal more. A £20bn Robin Hood tax in the UK would help avoid the worst of the cuts and show we are all in this together. While bankers wallow in cash, the general public are suffering unemployment and cuts to public services." on

Bill Fleckenstein interviewed by King World News

Bill Fleckenstein, President of Fleckenstein Capital discusses the Bond market, US money printing, inflation and Gold with Eric King of King World News.....listen here

Europe fears motives of Chinese super-creditor

From the UK Telegraph

Herman Van Rompuy, Europe's president, said during a visit to Downing Street that the Chinese may have "political" thoughts in the back of their minds for coming to Europe's help, and gave a strong hint that they are also engaging in currency manipulation.

"When they buy euros, the euro becomes stronger and their currency a little bit weaker. That is not neutral in regard to their competitive position. But I go no further in this topic. It could be too delicate," he said.

Mr Van Rompuy nevertheless welcomed the latest purchases of bonds from the eurozone periphery as a valuable gesture of support. "They invested even in some weak countries, so they are very confident in the solvency of some countries," he said.

China has emerged as the transforming force in the eurozone debt crisis over recent days, pledging to use part of its €2.87 trillion (£1.82 trillion) reserves to safeguard global stability. The question is whether the Communist regime is hoping to extract strategic concessions in on

Oliver Silverstein
13 January 2011
On December 26, 2009, just a few short days ago, the Wall Street Journal ran a story titled "Price of Silver Soaring."

The title of the story gave no indication that it was just another in an ongoing series of attempts to scare investors away from tangible investments that have intrinsic value, and keep them securely in the realm of the paper Ponzi, also known as the "mainstream U.S. financial markets."

The story starts right off by ignorantly proclaiming, "An unexpected surge in investor demand". Are they kidding? Does everyone who writes for the Wall Street Journal live under a rock? Or maybe the writers have spent the last ten years living in a Brazilian jungle without any contact with civilization?

Who says the demand was unexpected? The writers certainly don't read the pages of this website (but they certainly should and they'd be much, much better informed.)

The bull market in precious metals is now in its tenth year. The Ben Bernanke is debasing the U.S. Dollar with reckless disregard. A retiring CFTC judge admits that they covered up market manipulation. The U.S. Mint is continually setting records for sales of Silver Eagles. And a current CFTC commissioner is making very public statements about silver market manipulation (implied to be by big players such as JPM selling naked silver contracts and artificially keeping the price too low).

If these aren't reasons enough to want to rush out and close your 401k and transfer every cent into silver bullion, I don't know what is. Never mind that Eric Sprott is reporting that silver bullion in quantity is virtually unavailable. Never mind that the COMEX is running out of silver. Never mind that the financial crisis that started in 2008 has not been resolved and that precious metals have a multi-thousand year history as the worlds ultimate safe haven asset.

Unexpected? How can they even claim as much? Investor demand in light of the above factors (and many more) is very much the exact opposite of "unexpected."

As I continued to read this laughable attempt at "financial journalism," I was very thankful that I was doing so very early in the morning, before breakfast. Had I already consumed my morning meal, it most certainly would have come back up when I read the words, "prices are rising despite oversupply."


Come to find out, not only had the authors of this story spent the previous ten years living in a Brazilian jungle without any contact with civilization, but that's where they were actually born. Thus, they are only ten years old, and would have the mindset of a second-grader, had there been schools in the jungle. But there were no schools, so to claim these authors have the mindset of second graders is an insult to second graders everywhere.

Yes, there are rumors coming out of Canada that Ed Steer had to buy a bigger vault to hold his shiny silver bars and coins, since he keeps accumulating them and his original vault could not accommodate any more of this additional supply. But just because Ed's not-so-small vault may not be able to accommodate his personal "oversupply," does not in any way whatsoever mean that there is a worldwide "oversupply" of silver.

When I drive around the country, I see entire neighborhoods of empty homes with for sale signs in front of them, but I have yet to see one single pile of silver with a sign next to it that says "For Sale - Price Reduced."

Besides the esteemed Mr. Steer's vault, where is this oversupply? I dare you to put an ad on Craigslist that says "Wanted: 4 bedroom home. Have cash, will pay full market price immediately." You'll hear from throngs of eager sellers who are desperate to sell the oversupply of homes they currently have in their possession.

Where are these throngs of silver sellers who would jump at the chance to unload their personal "oversupply" of silver? Why aren't they beating down the doors of Eric Sprott in order to dump their "oversupply" on him?

Do readers of the Wall Street Journal actually believe this nonsense? I'd laugh, if it wasn't so darn sad that people fall for this BS.

Ted Butler will eagerly tell you of the declining above-ground supply of silver. He'll confidently point out to you that there is far less silver bullion in the world today that gold bullion.

But who is Ted Butler compared to the idolized Wall Street Journal? After all, the Wall Street Journal relies on well-respected "institutional data," which comes from the likes of the ratings agencies such as Moody's and Standard and Poor's (who did such a fantastic job of giving bundled liar loans "AAA" ratings and absolutely refused to warn investors about the toxic mortgage disaster) not the ramblings of a lone voice in the wilderness (who happens to have been correct all along about silver, and could put the entire team of WSJ writers to shame in ANY debate about the inner workings of the precious metals markets, and probably any other market for that matter.)

So, because the Wall Street Journal would never stoop so low as to rely on any information that has not been spewed by "institutional" origination, I will not point to any statistics that could be provided by Mr. Butler. My sincere apologies to Mr. Butler. (Ted, I'll buy you lunch to make up for it?)

Instead I will simply point to one of the cesspools of "institutional" data that the Wall Street Journal is more than happy to rely on. The (notice the word "institution" is almost fully included in its name, therefore it must be reliable), itself an institutional supplier of investor data (much in the same vein as Moodys: completely willing to keep investors totally in the dark about the true nature of the investments it reports on) lists supply and demand figures for 2009 on its very institutional-approved website.

Total fabrication demand for 2009 is listed as 729,800,000 ounces. And total worldwide mine production of silver for 2009 was 709,600,000 ounces. Obviously, these Wall Street Journal writers are pretty sharp cookies and no longer belong in the Brazilian jungle, because when you take 2009 total worldwide fabrication demand and subtract it from 2009 total worldwide mine supply you are left with an unbearable "oversupply" of negative 20,200,000 million ounces.

At this point in time I had finished my morning cup of coffee and was getting a little hungry. I had to choose between continuing to read this purported "news story" on silver, or eat my morning sustenance.

I skimmed the remainder of the story and found multiple more references from institutional investment banking firms. You know, those bastions of investing savvy, financial transparency, and ethical integrity. The "elite" financial firms that have collectively been given hundreds of billions, no, trillions of dollars of public money just to keep them from failure. The firms that were so darned genius that they'd be out of business if it weren't for the Fed handing them trillions of our dollars.

Obviously, these guys know their stuff, and being relied on by the Wall Street Journal to provide commentary for publication, and being handed trillions of dollars from the Fed is further proof of that fact. After all, when it comes to honest money, there is nobody more revered or worshipped than these guys. If there were such a thing as high priests of honesty, that's what they'd certainly be. They're doing God's work, you know.

Then, in contrast, I thought of guys like Butler and Steer. Guys who just don't have the "institutional" credibility to be given trillions of dollars from the Fed, or to run their personal firms to the point of failure and in need of a bailout.

Who would I trust? Should I keep reading the government-approved, institutional-esteemed silver news story in the Wall Street Journal, and upchuck my breakfast as a result? Or should I close the tab and enjoy my early morning meal in quiet serenity?

The choice I made was of the organic variety, but it wasn't the manure being shoveled by the Wall Street Journal, it was the bacon and eggs.

Oliver Silverstein

Copper Market 2011 Deficit May Be as Much as 600,000 Tons

Interesting twist to this story, copper mine supply growth being wiped out has also affected silver mine supply, as a significant % of the world's silver is mined as a by-product of primary copper mines.

From Bloomberg:

The world refined copper market is expected to have a 500,000-metric-ton to 600,000-ton deficit in 2011, even with a significantly weaker demand scenario, according to JPMorgan Securities Ltd.

Disruptions last year seemed to have wiped out most of mine supply growth, metals strategist Michael Jansen told a conference in Shanghai. “As demand further recovers into 2011, supply-side issues will become more influential,” he said.

Copper for delivery in three months in London advanced to a record of $9,754 a metric ton on Jan. 4 after rising 30 percent last year as the improving global economy and rising investment demand for commodities prompted buying. The International Copper Study Group is expecting a 435,000-ton global deficit in the refined metal this year.

While current prices are sufficient to encourage brownfield and greenfield developments, longstanding issues, including capital availability, relative merit of projects, resource nationalism, and geotechnical issues, remain key impediments for supply increase, said Jansen.

“Copper is also increasingly being seen as scarce and is in many ways adopting some store of value attributes normally associated with precious metals,” he said in his on

Silver Remains One Of The Best Performing Assets Of The Decade

David Levenstein
13 January 2011
Silver had a truly spectacular year, in 2010. The price increased from $15 an ounce to just over $31 an ounce, an increase of a whopping 106% in US dollars. And, no matter what currency you look at the price of silver increased anywhere from 60% to as much as 266% (Venezuela Bolivas). Since the bull market in silver began in 2003, the price has increased by as much as 775%. If we use the same example I used to illustrate the gains in gold, then an investment of $100,000 in silver would now be worth around $700,000! By comparison, over a ten year period, an investment of $100,000 in gold would now be worth $560,000 and an investment in bonds yielding say 8% per annum over a ten year period would be worth approximately $216,000.You don't have to be rocket scientist to see which investment has been the best performer.

Even though I have continually urged investors to allocate some of their funds to silver since the price was trading just above $6 an ounce in 2004, many of these individuals, have preferred to remain in equities, funds, money market and bonds. But, when the price of silver broke above $30 an ounce, many of these same individuals asked if it is now too late to enter the market. While I cannot explain the psychological imprint of these investors, I have seen this behavior many times over the last 30 years or so. These types of investors invariably seem to need the validation of their bankers, stock brokers, accountants etc., before making a decision. Yet, their advisers usually have no knowledge about these markets and are therefore not really qualified to render any advice on their potential or lack thereof. Then, by the time these investors realize that they have missed out on some major gains, and decide to enter the market, they deliberate waiting for a pull-back that never seems to come. And then, out of pure frustration, they finally enter the market, but only when it is close to peaking. My point is very simple. Don't make this mistake regarding silver. Despite the massive gains we have seen in the last ten years, this market is still far from peaking and still offers investors huge potential.

As I have already mentioned many investors, who have already missed out on some stellar returns, are now asking if they should enter the market at the current levels. And, as I have alluded to many times in the past, it depends on whether you are a trader who takes a short-term view or an investor who has a long-term time horizon. If you are a trader, I cannot predict the short-term moves, but if you are an investor I believe that the current pull-back in prices will not last very long and offers a wonderful opportunity to buy some silver. In the long run if you buy now and even if the market pulls back say another $3 an ounce, this is not going to have a major impact on your investment if the price goes to as high as $125 an ounce in a few years' time.

I believe that we will see the price of silver trade at $45 an ounce before the end of the year. On this basis, if you are able to buy at current levels of say around $29 an ounce and my analysis is correct, a return of 55% in 12 months' time is nothing to be laughed at. But, over the next coming years, I sincerely believe that we are going to see prices trade at several multiples of the current price.


As the price of silver pulls back towards the medium-term 50 day MA, I believe that we will see prices supported at this level. That being the case, these dips offer more buying opportunities.

David Levenstein is a leading expert on investing in precious metals .He brings over 29 years experience in futures, equities, forex and bullion. And, although he began trading silver through the LME in 1980, when it comes to gold, he has traded gold bullion, gold coins, gold shares, gold ETF, gold funds and gold futures for his personal account as well as for clients. Over the years, David has been published in dozens of publications and has appeared on CNBC and Summit TV (South Africa), and is a regular guest on JSE Direct, a premier radio business channel in Johannesburg, South Africa. He He is also a regular commentator on and David has lived and worked in Johannesburg, Los Angeles, London, Hong Kong, Bangkok, and Bali.

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Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice.