Seven reasons gold rally will continue: Jeff Nichols

From International Business Times

A few months ago most analysts were skeptical about $1500 an ounce for gold by end of 2010, however, the recent rally in gold coupled with economic uncertainties have forced those who earlier disputed the bullish forecasts to jump on the bandwagon, according to Jeffrey Nichols, Senior Economic Advisor to Rosland Capital and Managing Director of American Precious Metals Advisors.

US inflationary policies: The US monetary and fiscal policies are inflation. Official federal debt, now around $12.8 trillion is only a small part of Washington's actual obligations.  Off-budget and unfunded future liabilities are another $108 trillion, Jeff Nicols said. So the end result would be higher inflation, currency depreciation and higher gold prices.

European crisis: Europe's sovereign debt crisis will continue to favour gold. The European Central Bank's loss of anti-inflationary credibility and the questionable future of the euro has diminished the European common currency's appeal as a reserve asset and dollar-substitute in the world economic order.

Central Banks and gold buying: Central banks have become net buyers since 2009 after several years of selling an average 400 tons per year. And official sector will continue to be net buyer of gold for years to come, Jeff Nichols said. Last year, the People's Bank of China (PBOC) announced it had been buying gold regularly from domestic mine production for several years - but did not report these purchases in its official reserve accounts.

Rising investment demand: Rising private-sector investment demand for gold from across the old industrialized world: Private investors in the United States and Europe, both individuals and institutions, are buying more gold reflecting the same concerns and fears that are driving central banks to accumulate the metal.  Substantial physical investment demand is seen across Germany, Switzerland, France, the UK and other countries, Jeff Nichols said.

India, China investment demand: Moderate growth in disposable personal incomes could result in rising gold purchases in China and India where gold is a preferred medium of investment and savings for households.

Rise of ETFs: The growth of gold exchange-traded funds allow investors to purchase gold via an equity-like vehicle and there are more than 18 such funds traded on many stock exchanges around the world- and a new gold ETF is just now being launched in Japan. Jeff Nichols said these new products and distribution channels will result in far more gold investment offtake in the years ahead, so much so that the potential future price is far greater than most analysts and investors today think reasonable.

Declining world gold-mine production: Global gold-mine production has been in a downtrend for decades. Despite a small uptick last year and possibly again this year, the fall in world mine output will continue for at least for the next five years or more.

The ebb in mine production reflects many factors, including the depletion of existing deposits, the continuing drop in ore grades, the decline in operating depths at many mines, the rise in energy and labor costs, the expense and time required to meet increasingly restrictive environmental regulations, unfriendly government attitudes toward foreign investment in some gold-producing countries, and the lack of financing available to many gold-mining exploration and development, Jeff Nichols concluded.

ORIGINAL SOURCE


This material is for informational purposes only. Although it is obtained from sources believed to be reliable, Leland National Gold does not guarantee its accuracy, or being all-inclusive. Past performance is no guarantee of future results. There are risks in buying and selling physical metals. The potential for loss as well as gain increases by leveraging physical precious metals transactions. Never trade with more money than you can afford to lose, and always be sure to read the Risk Disclosure provided in your account documents

40 signs the USA is at the brink of economic collapse

 chaospreppers.com

How in tune are you to what's going on in America? Do you realize just how close to complete ruin the whole Western world is financially?

Because you're probably busy making ends meet, spending time with your family, and enjoying life, we’re going to make things easy and provide you with a simple, scannable list to get you up-to-date on the real news you might not have heard about the real economic turmoil.

Here’s a compilation of economic depictions that indicate the proverbial apocalypse is indeed upon the West.

The following are 40 things that every American should know related to the collapse of the economy:

#1 Right now we are watching what could potentially be the worst Mississippi River flood ever recorded play out right in front of our eyes.  One agricultural economist at Mississippi State University believes that this disaster could do 2 billion dollars of damage just to farms alone.

#2 The "tornadoes of 2011" that we just saw in the southeast United States are being called the worst natural disaster that the U.S. has seen since Hurricane Katrina.  It has been estimated that up to 25 percent of all of the poultry houses in Alabama were either significantly damaged or destroyed.  It is also believed that millions of birds were killed.

#3 According to the Wall Street Journal, 5.5 million Americans are currently unemployed and yet are not receiving unemployment benefits.

#4 The number of "low income jobs" in the U.S. has risen steadily over the past 30 years and they now account for 41 percent of all jobs in the United States.

#5 All over America, state and local governments are selling off buildings just to pay the bills.  Investors can now buy up government-owned power plants, prisons and municipal buildings from coast to coast.  For example, the mayor of Newark, New Jersey recently sold off 16 government buildings (including the police and fire headquarters) just to pay some bills.

#6 One out of every seven Americans has at least 10 credit cards.

#7 Most Americans don't realize how much the U.S. dollar has been devalued over the years.  An item that cost $20.00 in 1970 would cost you $115.93 today.  An item that cost $20.00 in 1913 would cost you $454.36 today.

#8 Those that were alive in the 1970’s will remember how much was made of the "Misery Index" during the presidency of Jimmy Carter (1976-1980).  At that time, the "Misery Index" was constantly making headlines in newspapers all across the country.  Well, according to John Williams of Shadow Government Statistics, if we calculated unemployment and inflation the same way that we did back during the Carter administration, then the Misery Index today would actually be higher than at any point during the presidency of Jimmy Carter.

#9 When Americans think of "government debt", most of them only think of the federal government, but it is not just the federal government that has a massive debt problem.  State and local government debt has reached an all-time high of 22 percent of U.S. GDP.

#10 According to the U.S. Bureau of Labor Statistics, an average of about 5 million Americans were being hired every single month during 2006.  Today, an average of about 3.5 million Americans are being hired every single month.

#11 The economic effects of the BP oil spill just seem to go on and on and on.  The number of very sick fish in the Gulf of Mexico is really starting to alarm scientists.  The following is how one local newspaper recently described the situation....

Scientists are alarmed by the discovery of unusual numbers of fish in the Gulf of Mexico and inland waterways with skin lesions, fin rot, spots, liver blood clots and other health problems.

#12 All over America, hospitals that care for the poor and needy are so overwhelmed and are so broke that they are being forced to shut down.  Recently, a local newspaper in Florida ran an article about two prominent charity hospitals in Illinois that have served the poor for more than 100 years but are now asking for permission to shut down....

Two charity hospitals in Illinois are facing a life-or-death decision. There's not much left of either of them - one in Chicago's south suburbs, the other in impoverished East St. Louis - aside from emergency rooms crowded with patients seeking free care. Now they would like the state's permission to shut down.

#13 The U.S. dollar is in such bad shape that now even Steve Forbes is predicting that the U.S. is "likely" to go back to a gold standard within the next five years.

#14 The U.S. government now says that the Medicare trust fund will run out five years faster than they were projecting just last year.

#15 Over the past 12 months the average price of gasoline in the United States has gone up by about 30%.

#16 It is being projected that for the first time ever, the OPEC nations are going to bring in over a trillion dollars from exporting oil this year.  Their biggest customer is the United States.

#17 According to the Pentagon, there are minerals worth over a trillion dollars under the ground in Afghanistan.  Now, J.P. Morgan is starting to tap those riches with the help of the U.S. military.

#18 Speaking of J.P. Morgan, most Americans don't realize that they are actually the largest processor of food stamp benefits in the United States.  In fact, the more Americans that go on food stamps the more money that J.P. Morgan makes.

#19 When 2007 began, there were about 26 million Americans on food stamps.  Today, there are over 44 million on food stamps, and one out of every four American children is on food stamps.

#20 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid.

#21 Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

#22 The financial system is more vulnerable today than it was back in 2008 before the financial panic. Today, the world financial system has been turned into a giant financial casino where bets are made on just about anything you can possibly imagine, and the major Wall Street banks make a ton of money from this betting system.  The system is largely unregulated (the new "Wall Street reform" law has only changed this slightly) and it is totally dominated by the big international banks. The danger from derivatives is so great that Warren Buffet once called them "financial weapons of mass destruction". It is estimated that the "derivatives bubble" is somewhere in the neighborhood of a quadrillion dollars, and once it pops there isn't going to be enough money in the entire world to bail everyone out.

#23 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001, and the U.S. trade deficit with China is now 27 times larger than it was back in 1990.

#24 In 2010, the number one U.S. export to China was "scrap and trash".

#25 All over the United States, many of our once great manufacturing cities are being transformed into hellholes.  In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.

#26 During the first three months of this year, less new homes were sold in the U.S. than in any three month period ever recorded.

#27 New home sales in the United States are now down 80% from the peak in July 2005.

#28 The European debt crisis could cause a global financial collapse like the one that we saw in 2008 at any time.  The world economy is incredibly interconnected today, and the United States would not be immune.  A recent IMF report stated the following about the growing sovereign debt crisis in Europe....

Strong policy responses have successfully contained the sovereign debt and financial-sector troubles in the euro area periphery so far. But contagion to the core euro area and then onward to emerging Europe remains a tangible risk.

#29 According to one study, the 50 U.S. state governments are collectively 3.2 trillion dollars short of what they need to meet their pension obligations.

#30 A different study has shown that individual Americans are $6.6 trillion short of what they need to retire comfortably.

#31 The cost of college tuition in the United States has gone up by over 900 percent since 1978.

#32 The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011.  Thanks to our politicians, U.S. taxpayers are standing behind that debt.

#33 The U.S. government is over 14 trillion dollars in debt and the budget deficit for this year is projected to be about 1.5 trillion dollars.  However, if the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion each and every year.

#34 Most Americans don't understand that the Federal Reserve and the debt-based monetary system that it runs are at the very heart of our economic problems.  All of this debt is absolutely crushing us.  The U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010, and it is being projected that the U.S. government will be shelling out 900 billion dollars just in interest on the national debt by the year 2019. This figure will be nearly equal to the entire amount taken in by the IRS for the year in the form of tax payments.

#35 Standard & Poor’s has altered its outlook on U.S. government debt from "stable" to "negative" and is warning that the U.S. could soon lose its AAA rating.

#36 U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

#37 59 percent of all Americans now receive money from the federal government in one form or another.

#38 The wealthiest 1% of all Americans now own more than a third of all the wealth in the United States.

#39 The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States.

#40 The percentage of millionaires in Congress is more than 50 times higher than the percentage of millionaires in the general population.

 Original Source


This material is for informational purposes only. Although it is obtained from sources believed to be reliable, Leland National Gold does not guarantee its accuracy, or being all-inclusive. Past performance is no guarantee of future results. There are risks in buying and selling physical metals. The potential for loss as well as gain increases by leveraging physical precious metals transactions. Never trade with more money than you can afford to lose, and always be sure to read the Risk Disclosure provided in your account documents.

Is there demand for Silver? How close are we to a bubble?

In an article from Business Insider, Stacy Herbert explains common misconceptions in the Silver market:

There are some that since 2001 have doubted the bull market in precious metals.  In these past six weeks, however, everyone from former silver bulls to those who sell freeze dried chicken **** for a living are out shrieking the bears on the shriek factor. Do a google search and you will find hundreds upon hundreds of references to Hunt brother days. Bubble. Hunt Brothers. Suckers. Bubble. 1980. Bubble. Lose money. Bubble.
What the heck is going on???? Is the sky falling? Should we retreat?
Well, note that during every long, steady march up of a bull market, there are violent corrections down. And during every single one of these violent corrections, most of the media and many of the analysts will begin shrieking with fear or gloating with vengeance that the bull market is over. Read this editorial by Peter Schiff dated 2006 when silver corrected by 35% in 6 weeks. As you see, people were obviously shrieking that silver was in a bubble and now it was plummeting, popping and tumbling from I think it was $12 down to $9. No doubt Schiff will have received loads of hate mail from people who had ‘lost’ money by selling their silver after buying ‘at the bubble high’ on his recommendation. But without losers, there can be no winners in markets. It is because there are so many losers during a bull market that some can win. Their shrieks shake out even more losers, so the winners can win even more. Their loss is your gain.
To some, the losing is worth it. I have a friend who bought silver at the 2008 ‘bubble high’ of $22. Yes, again, in 2008, the silver bubble burst! This friend sold at $9 where silver once again fell. He ‘lost’ money by being ‘suckered’ into a bubble. Of course, $9 was obviously a support level for the next ride up on the bull. He doesn’t regret his losses as he says he just couldn’t deal with the emotional swings of the bull market ride.
Anyway, once again, for the third time in three years, the silver ‘bubble’ has burst. The fall is not as great as the 60% fall of 2008, but there are far more precious metals website owners and analysts mocking and ridiculing the ‘losers’ who bought at the top of the bubble. Some are suggesting silver is one of the biggest, craziest bubbles in history.
CPM Group has just released their 2010 silver supply and demand data, so I’ve gone through it to look for signs of a bubble that has collapsed. I’m not a mathematician, so I welcome any corrections on my maths and invite any additional observations that can be added to my own.

• CPM Group: Silver, Supply, Demand Grew in 2010; Trend to Continue

So if we’re in a bubble, of course, we must see the classic signs of mania. Buyers must be stampeding to the doors to buy at the high. Silver inventories should be bursting at the seams as all the crazies load up at mania highs. So let’s look for signs of that . . . you’ll find me in italics.
=====
CPM: The value of investor silver holdings was estimated at $14.7 billion at the end of 2010, the highest level on a nominal basis since 1988, with the record at $42.2 billion – nominally – in 1980. The value of silver holdings is the product of the price of silver and the cumulative silver bullion inventories.
Stacy – So on a nominal basis, the last time investor silver holdings were valued at $14.7 billion – nominally – was already 7 years into a 20 year bear market? On an inflation adjusted basis to 1988 dollars, the nominal value of last year’s $14.7 billion of investor silver holdings out to be $72.7 billion.
And at the peak of the last silver bull market – a time to which many are now comparing the current silver market – when it entered true parabolic stage, the total nominal value of investor holdings were $42.2 billion. $42,200,000,000 1980 dollars = 272,467,430,863.75 dollars in 2010. So on an inflation adjusted basis the size of the holdings in 1980 were roughly about 19 times bigger at a time when the global population was 50% smaller (1980 global population – 4.4 billion). And in 1980, half of that 4.4 billion global population was behind the iron curtain and when China was a micro economy of peasants far removed from the global economy.
So, essentially, this current ‘biggest bubble in history’ is actually at least 19 times smaller than the ‘Hunt brothers bubble’ and with 2.3 billion more potential investors on earth? Either many millions of ounces more of silver have to be owned by investors or the prices have to go much, much higher to get anywhere near the 1980 levels to which so many are comparing today.
Let’s return to the nominal numbers that CPM presents:
2010 nominal value silver holdings = $14.7 billion. 1980 nominal value of silver holdings = $42.2 billion
SH: Now compare that to:
2010 nominal US national debt = $14 trillion. 1980 nominal US national debt = $900 billion
Stacy: In other words, compared to 1980, nominal holdings of silver were 4 times smaller in 2010 but U.S. national debt was more than 14 times higher on a nominal basis compared to 1980? And silver is in the bubble?
CPM: On a global basis, however, the value of these [silver] assets represents 0.007% of total global financial assets, up from 0.003% in 2004. It was 0.34% in 1980.
Stacy: You do the maths on that, I get that silver assets represented 48 more times the percentage of total global financial assets in 1980. Of course, we all know that debt and derivatives have exploded since the 1980′s and that will account for the collapse in silver as a percentage of total global financial assets and it is also one of the reasons that many believe silver will go higher.
Back to investor demand . . .

Read more: http://maxkeiser.com/2011/05/19/stacy-blog-show-me-the-silver-bubble/#ixzz1Mou4tnj2


This material is for informational purposes only. Although it is obtained from sources believed to be reliable, Leland National Gold does not guarantee its accuracy, or being all-inclusive. Past performance is no guarantee of future results. There are risks in buying and selling physical metals. The potential for loss as well as gain increases by leveraging physical precious metals transactions. Never trade with more money than you can afford to lose, and always be sure to read the Risk Disclosure provided in your account documents.

Investments in gold, silver a safe bet in the long-term: Analysts

From Economic Times

Precious metals have gained popularity as investment options over the last few years, as they have yielded attractive returns. Global commodities in general are going through profit booking since the last few weeks. The prices of gold and silver have also come down from their peaks. Silver has been through a deeper correction as it had gone up quite sharply.
Analysts believe prices in the commodity markets had gone into the over-brought zone and a correction was long due. The prices had gone way above their justified fundamentals. The short-term outlook for precious metals is uncertain, but analysts believe the long-term outlook is bullish due to several factors that influence the prices of precious metals in the international markets.

The original article can be found here


This material is for informational purposes only. Although it is obtained from sources believed to be reliable, Leland National Gold does not guarantee its accuracy, or being all-inclusive. Past performance is no guarantee of future results. There are risks in buying and selling physical metals. The potential for loss as well as gain increases by leveraging physical precious metals transactions. Never trade with more money than you can afford to lose, and always be sure to read the Risk Disclosure provided in your account documents.