Wednesday 6 July 2011

TOTALINVESTOR: Why There's A 97% Chance Of A Big Market Rally

TOTALINVESTOR: CHART OF THE DAY: Why There's A 97% Chance Of A Bi...: "Despite last week's rally, investors remain in deep panic. That's the message from Citi strategist Tobias Levkovitch, who has updated his pr..."

chart of the day, panic/euphoria model, july 2011


All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Eric Sprott - Paper Markets Are A Joke: Prepare for Bullion Prices to Go Supernova - Blogs at Chris Martenson

Eric Sprott - Paper Markets Are A Joke: Prepare for Bullion Prices to Go Supernova - Blogs at Chris Martenson


http://www.chrismartenson.com/blog/eric-sprott-paper-markets-are-joke-prepare-bullion-prices-go-supernova/60155?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ChrisMartensonBlogs+%28Chris+Martenson+Blogs%29

should click the play button below to listen to Chris' interview with Eric Sprott (runtime 38m:01s):

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Or start reading the transcript below:

Chris Martenson: Welcome Eric, it's a real pleasure to have you today.

Eric Sprott: Chris, good to be here and thank you for all the work you are doing in apprising your investors of what's really going on in the world.

Chris Martenson: Oh thank you. We’ve been at it many years and unfortunately much of what I think both you and I saw coming - though unfortunately not enough others along the way - is really coming to pass. If I could, let’s start with your views. You have been advocating and creating investment vehicles for people to own gold and silver for a long time. How did you get to that position and what are your views on owning gold and silver at this point?

Eric Sprott: Sure. Well it all started, Chris, with our studies back in 2001 where we were entering into a secular bear market and wondering how you deal with that. And a typical response would be to own gold and silver, which is what we decided to do. I think the one thing that really tipped us into it was an analysis of the physical supply and demand for gold and some work by Frank Veneroso that suggested things would have to change dramatically in the physical gold market because the central banks were selling four to five hundred tons a year. And as you know, here we are eleven years later and now they are buying four hundred tons a year on balance, and this is in a market where the mines supply only twenty-six hundred tons a year. So that is a huge change that had to take place that Frank identified back then. He also identified that the gold companies would stop hedging. We’ve had the ETF’s come along. So we have had a lot of dramatic changes in the physical balance between supply and demand in gold. And that is really what took us there in 2000; to get actively involved in that particular market.

Chris Martenson: And looking at it today, has anything changed in that analysis? You mentioned a secular bear market, are we still in one and also has anything changed in the fundamental supply/demand equation that has actually tipped it one way or the other, further or less, since the initial analysis you looked at?

Eric Sprott: Sure. Well I do think we are still in the secular bear market and basically what people describe with the phrase “extend and pretend”. And we had the zero interest rate policy, the housing boom, the lending boom, TARP and TALF and all those things which try to delay what naturally should happen. When I look at the headwinds for gold and silver, I really believe that we have been aided and abetted by a lot of these policies, particularly QE1 and QE2 and the various printing mechanisms of the ECB and the Japanese government and almost all governments in the world. So as much as I would not have anticipated those types of developments happening, they have happened and they provide an even stronger headwind for people realizing that currencies are not going to survive and to maintain your purchasing power you have to own precious metals.

Chris Martenson: You know, I too have been surprised by how long all of this has stretched out. If you had told me five years ago - Eric if you had said “Chris, the Federal Government in the U.S. is going to be running a $1.6 trillion dollar deficit and the Federal Reserve is going to monetizing 75% of that and the bond markets will be relatively tame and the dollar will still be roughly where it is at”; I would have said you’re nuts. But here we are. And my view on this is that what we are kicking the can down the road. We have bought some time, - which I am thankful for personally - however the risks are now increasing. And the risk that I have identified that concerns me a lot is that, sooner or later, much is happening in Greece right now where suddenly the world wakes up and says “Hey, wait a minute. They can’t possibly pay that back. And at 22% interest rates on 2-year paper, they really can’t pay that back.” So suddenly the illusion is lifted. We have collectively suddenly gone, “Greece is not solvent. Oh, that’s terrible.” And now we are grappling with that. But that same dynamic can be extended to, I think, any of the governments that you just mentioned. It varies across Europe somewhat, but in Japan and the U.S. there certainly are fundamental mismatches between current productive economic output and the levels of indebtedness. We are printing our way to that. Is there a way that you can see that this could actually be turned around where it all sort of pencils out? Is there a solution to this that does not have to pass through a fiscal crisis and possibly a currency crisis?

Eric Sprott: Well Chris, it is very hard to imagine that happening. And then I look at really what has happened over the last eleven years since we hit the high in that, we basically created a problem in the world of banking business and I always think of banks as being levered 20 to 1. And when your paper assets start to decline, of course it does not take much of a decline to get rid of all the capital. And we have seen that in so many instances whether it is Iceland or Ireland or now the Greek banks. And all the moves that have happened so far, really have been in response to the problems in the banking system. That is why you have TARP and TALF and all those things because the banks basically were losing deposits and somebody had to come in and support them. That is what happened in the UK, it happened in Iceland, it happened in Ireland, it’s happening in Greece as is transpiring right now. And I think the big fear is that you cannot let one banking system go down without an impact on all the other banking systems. So collectively everyone is trying to support the banking system and I think people see through the ruse. And the natural reaction is “Well, why have your money in a bank when you earn nothing, why not have it in something that might at least maintain it’s purchasing power?”

Click here to read the rest of the transcript.

Note: listeners interested in the conclusions expressed within this interview will also want to read Chris' recent report on The Screaming Fundamentals For Owning Gold And Silver, which takes a deep dive into the data behind the supply and demand imbalances in the bullion markets.

http://www.chrismartenson.com/blog/eric-sprott-paper-markets-are-joke-prepare-bullion-prices-go-supernova/60155?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ChrisMartensonBlogs+%28Chris+Martenson+Blogs%29

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Gold ends with a gain of more than $30 - marketwatch.com


July 5, 2011, 2:28 p.m. EDT

http://www.marketwatch.com/story/gold-futures-rise-above-1500-an-ounce-2011-07-05-743360?dist=countdown

Gold ends with a gain of more than $30 an ounce

Investors seek a safe haven amid China, Greece worries




Gold for August delivery GC1Q +0.19%  rose $30.10, or 2%, to close at $1,512.70 an ounce on the Comex division of the New York Mercantile Exchange. That was the biggest one-day dollar and percentage gain for gold futures since Nov. 4, 2010, as well as the highest closing level since June 23.
The contract had lost $27.80 over the previous two regular trading sessions. Monday was a holiday.

http://www.marketwatch.com/story/gold-futures-rise-above-1500-an-ounce-2011-07-05-743360?dist=countdown

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Eric Sprott: Prepare for Bullion Prices to Go Supernova

Read more: http://www.businessinsider.com/eric-sprott-prepare-for-bullion-prices-to-go-supernova-2011-7#ixzz1RIORXfBq

Eric Sprott: Prepare for Bullion Prices to Go Supernova

"I think that the prices will continue higher. I mean the amount of money printing is unbelievable. I just think you have to take that initial stand in terms of buying it. I use the James Turk analogy: just keep dollar averaging. We have gone up eleven years in a row, this year it looks like it will be no exception; I would certainly think next year will be no exception. If we ever have QE3 announced, I think gold and silver will just go absolutely bonkers here. And so I just think you have got to step in there and own it; we’ve had these fears all the way along. You know, $400, and $500 and $700 and $800 dollar gold, everyone was afraid it was a one-time thing. I don’t think it is a one-time thing, I think it is a secular thing. It’s going to carry on for quite a while here until we find some resolution of these problems. And the resolution probably will be some form of default where people just have to expunge debts that cannot be repaid. So, you have got to be in some asset which will not be affected by that."

So predicts Eric Sprott, founder of Sprott Asset Management and famed investor. In this wide-ranging interview, he shares his insights on the precious metals markets - specifically what investors need to be aware of in terms of the way the markets are currently managed (manipulated), the macro outlook for the economy (grim) and the true value of gold and silver (very underpriced; particularly silver).


Eric Sprott is Chief Executive Officer, Chief Investment Officer and Senior Portfolio Manager at Sprott Asset Management, LP. He manages Sprott Hedge Fund L.P., Sprott Hedge Fund L.P. II, Sprott Bull/Bear RSP Fund, Sprott Offshore Funds, Sprott Canadian Equity Fund, Sprott Energy Fund and Sprott Managed Accounts. He also is the Chairman of One Earth Farms Corp and a Member of the Executive Committee of Central Gold-Trust. Eric's predictions on the state of North American financial markets have been captured throughout the last several years in a monthly investment strategy article he authors titled “Markets At A Glance”. Mr. Sprott holds a Chartered Accountant designation.



http://media.chrismartenson.com/audio/eric-sprott-2011-07-05.mp3


Read more: http://www.businessinsider.com/eric-sprott-prepare-for-bullion-prices-to-go-supernova-2011-7#ixzz1RIOK5LaJ


All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Dollar Is Key to Metals and Markets Moves - investorplace.com


http://www.investorplace.com/48257/us-dollar-sp-500-index-gold-silver-gld-slv-uso-spx-uup/

Dollar Is Key to Metals and Markets Moves

A rally in the dollar will send the S&P 500, gold and silver down



Volatility increased this week as we watched the Greek default situation, the end of the second quarter and the customary window dressing by institutional money managers.
For the past week or so I have been sitting in cash, watching the price action and waiting for setups that have defined risk and solid rewards. With the heightened volatility I did not want to get involved because a trade in the wrong direction would wreak havoc with my portfolio. As this week evolved, the validity of those concerns was unquestionable.
Commodity investors have faced some tough price action recently as gold, silver, and oil have traded significantly lower. Now that we have witnessed some heavy selling pressure, particularly in the silver and oil markets, investors want to know where price is heading in the short term.
Conclusion
In closing, my analysis reveals that the U.S. Dollar is poised to push higher, particularly if current support holds. If the Dollar can push above key resistance levels overhead, I expect the resulting price action in gold, silver, oil, & the S&P 500 to be dismal for the bulls.
I will be watching the Dollar closely looking for clues about price action. If I’m wrong and the Dollar breaks to new lows I would expect a massive rally in precious metals, energy, and domestic equities. With the recent price action that we have seen in the U.S. Dollar, I find it much more likely that the U.S. Dollar extends higher in coming weeks. As usual, time will tell.
If you would like to be informed several times per week on SP 500, Volatility Index, Gold, and Silver intermediate direction and option trade alerts … Take a look atwww.OptionsTradingSignals.com/specials/index.php today for a 24 hour 66% off coupon, and/or sign up for my occasional free updates.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Financial marts likely to get more volatile, says UBS economist

Financial marts likely to get more volatile, says UBS economist

KUALA LUMPUR: Financial markets are likely to get more volatile amid rising political risk in major economies, says Paul Donovan, managing director of global economics at UBS Investment Bank.


Problems brought about by the recent recession, such as high unemployment, still exist in major markets like the US and Europe and this means that politicians will continue to run economies, he noted.

This will be seen by way of tighter banking regulations, restriction on capital controls and trade protectionism, for example.

“We are seeing rising political risk coming in, and markets don’t price political risk very well. So we’ll see more volatility as we see these surprise moves coming in,” he said at a roundtable session with reporters here yesterday.

Donovan, who is London-based, said investors are increasingly nervous about where to put their money amid this scenario.



Read more: Financial marts likely to get more volatile, says UBS economist http://www.btimes.com.my/Current_News/BTIMES/articles/20110705234517/Article/#ixzz1RIJHK5zc

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.