Bank of England will use 'all powers' to stave off any future crisis

From the UK Telegraph: In a major position paper, Charles Bean (Deputy Governor) said that the Bank had been powerless to prevent what he called the "Great Contraction" of 2008 because control of interest rates was not, in itself, a powerful enough tool.
He also hinted that the days of quantitative easing may not be over: "The deleveraging process is incomplete, the recovery remains fragile and a considerable margin of spare capacity is yet to be worked off," he said. "Further policy action may yet be necessary to keep the recovery on track."

He was speaking at the Jackson Hole Economic Policy Symposium in America the day after the Federal Reserve chairman, Ben Bernanke, buoyed the markets with an upbeat assessment of the US's growth prospects.

Mr Bernanke also hinted that he was prepared to employ more asset purchases if necessary.....read on

Printed paper does not equal wealth

By Peter Souleles, Sydney:

"Now a man can work a whole year and earn $40,000 (£25,000) and work hard for that. And now the government can in a millisecond print the same amount of money and that's what they do. So clearly paper money has now lost its function as a store of value."

- Egon von Greyerz

The intellectually bankrupt Tokyo Roses of the gold world would have us believe that some form of gold (and silver) standard is not possible because there is supposedly not enough to go around. So why hasn't the unlimited supply of paper money solved our problems? Why was mankind able to function for centuries with such "limited" quantities of precious metals? Maybe because the less debt there is and the less asset inflation there is, the less need for money there is.

As Egon von Greyerz says, they can print in a millisecond what takes others a year to earn. The reality is that they can print the whole GDP of the world in a millisecond. Once people fully comprehend this reality the fat lady will have well and truly sung. Unfortunately the paid mercenaries of the fiat machine are outdone by us greater fools who are willing to part with our goods and services in return for their counterfeit paper.....read on

Bullion buying in China and India

By Jeff Nielson: Starting with Mao, China's citizens were prohibited from purchasing bullion. It wasn't until 2002, that this total ban was partially lifted. However, small purchases of bullion were still not allowed. When you combine the (previously) small incomes of China's population with an official ban on small transactions, the effect of this decree was that gold was still totally out of reach for well over 90% of China's 1+ billion inhabitants.

It was only at the beginning of 2009 that all restrictions on bullion-buying by individuals in China were ended. From that time, it only took about one year for China's gold-buying to surge to a level where (depending on whose numbers you look at), China is either tied with India as the world's largest gold-consumer - or has already vaulted into top-spot.

Clearly, the single most-important driver for this demand was the lifting of prohibitions on bullion-buying, and yet that dominant factor has been almost completely overlooked by the precious metals community. Why do I continue to harp on this point?

Unlike the other drivers of demand mentioned (which are based upon current factors), the roughly 50-year ban on bullion-buying in China obviously created vast amounts of pent-up demand. Arguably, this pent-up demand must be satisfied first (since it predates those other drivers), before the Chinese market even begins to be driven by the other factors listed. However, even if you reject this "chronological" interpretation of Chinese demand, it clearly represents a major incremental addition to all the other demand-drivers.....read in full

Gold Demand Trends

The World Gold Council released its Gold Demand Trends publication for the second quarter of 2010 and highlighted the massive growth in investment demand, including a 414% jump in gold ETFs. Listen to the analysis of this report at mineweb.com ---> here

China's Insatiable Demand for Resources

China is being built from the ground up and consuming massive amounts of commodities on the way, but where is it all going?
Author: Charles Avery (The Beijing Axis)
Posted: Sunday , 29 Aug 2010

Beijing -

Bringing a populous and fast growing China up to the material living standards of the developed world has required the intake of mineral resources on a massive scale. Yet what exactly does China do with the millions of tons of natural resources such as coal, steel and copper?

China's citizens, at a fifth of the world's population, are rapidly progressing toward the material living standards enjoyed by developed nations and are consuming massive amounts of resources in doing so. China now intakes around half of all cement produced, as well as over 40% of the world's coal and tin and a comparable proportion of all aluminium and steel. Nearly 30% of all copper finds its way to the People's Republic, and it is the second largest oil consumer. These resources-increasingly imported from abroad-are destined for use in China's roads, railways, and power facilities for a rising urban population, and as inputs for manufacturing. The path of China's development-before each new residence is built, television manufactured, or shopping mall opened-begins with the most basic inputs: mineral resources.

Into larger cities, roads and rails

The movement of people from the countryside to the cities has been one of the most dramatic changes taking place within China. The country has 89 cities with a population greater than one million, despite the fact that only 46% live in urban areas. As many as 260 million citizens are expected to move to the cities if China is to emulate the same two-thirds plus urban-rural levels of most developed nations. Larger cities now even have considerable ‘floating populations', with that of Beijing estimated to be 7.6 million in 2009.....read on

US$30 Silver this year?

Gold & Silver Guru James Turk talks to Eric King of King World News about the recent price rises in Silver and the potential for upside of US$30 this year....listen here

Market Crash Imminent?

Max Keiser and his guest Dr. Berninger discuss the possibility of a stock market crash:

The Truth is no Defense!

Yet again we see that the truth is no defense when dealing with American corporate culture.

From the UK Telegraph: American colonel sacked after Afghan rant. A senior American staff officer has been sacked after publishing a rant against the bureaucracy and endless PowerPoint briefings at Nato's Kabul headquarters.....read on

Ben Bernanke calls for help to revive the stuttering US economy

From the UK Gaurdian: What did the chairman of the Federal Reserve say in Jackson Hole? According to much of the reaction, Ben Bernanke said the "Fed stands by to boost US growth" (FT), or that the "Fed is ready to prop up economy" (NYT) or even that the "Fed stands ready to support recovery" (WSJ).

In other news, a man was bitten by a dog. And by that I mean: the reverse would actually be news.

Yes, Bernanke said the Fed would act if the economic outlook deteriorated further, or if there were signs of deflation. He doesn't appear to think that either of those events are likely to occur, especially the deflation, but if they do, the Fed will do stuff. Which is exactly what you'd expect a modern central bank governor to say....read on

What will happen to Gold in a Double-Dip Recession?

From gold-eagle.com: Nearly all the commentary we have heard on this question says the same. "Yes, the prospects of a Double-Dip recession have increased but it remains unlikely that it will happen". We feel that there may be just a hint of self-interest in these answers. The shockwaves that will reverberate should some say it is going to happen, or if the news confirmed that it had started would rattle the markets hugely. Despite the ability to disseminate news instantly, we have to wait a month before reliable figures are published to confirm one way or the other that this is or is not the case. On the other hand a recession or depression has become a state of mind too. If consumers believe it is coming, it will come and at the moment that is the mood out there among the consumer. He is saving because he could become a victim if he hasn't cut debt and save. No doubt the sight of a neighbor being evicted stimulates thrifty habits. And that's what is coming from consumers now. They aren't spending. It's becoming a financial winter out there and we believe consumers minds are bringing on the recession again. Surely that's bad for gold?....read on