Pay no attention to that man behind the curtain

By Warren Bevan: The first week back after Labor Day wasn't what it was cracked up to be with even lower volume in the S&P500 index than was seen all summer long. It was a holiday shortened week, but still I would have thought volume would have been stronger.

I am pondering this weekend whether the low volume seen all summer and now so far into September is a result of the new financial regulations. At least one prominent investment house is selling their proprietary trading division which has represented basically free money for them in the past.

I'm sure the investment banks will come up with new clever ways to do the same lucrative thing they've always done. It's not like they'll just sell that division or close it down all together. They will find a way to recreated and likely increase those profits.

So many investors are being pushed into bonds for yield and the perceived safety they represent. This could not be further from the truth and in general bonds offer no advantages over stocks. In most cases dividend yields outpace bond yields so why bother?

In fact I hold one stock that's closer to 15%!

The bond bubble is alive and well and won't pop until the last sheeple is invested. Don't be one.....read on

Gold is Money - Jim Dines interviewed

Legendary Jim Dines of the Dines newsletter fame is interviewed by Eric King on King World News. Jim & Eric discuss rare earths, gold, silver and infinite dollar printing........listen here

Gold to head to US$1600/oz ?

From the UK Telegraph: Last week, the analyst rated the most accurate forecaster of the gold price said the precious metal would keep rising.

Jochen Hitzfeld, an analyst at UniCredit, the Italian bank, has been rated by Bloomberg, the news agency, as the most accurate gold forecaster over the past three quarters. He reckons the gold price is heading for $1,600 an ounce.

His forecast is the latest in a long line of optimistic predictions. Other gold bulls include George Soros, famous for making £1bn by betting against the Bank of England, and John Paulson, the hedge fund manager who made $20bn by calling the credit crisis correctly.

These expectations that the price of gold will continue to rise come despite the metal already enjoying a decade-long bull market, rising from $253 in 1999 to its current level of about $1,260 a whisker below its all-time high of $1,265 reached in June......read in full

Trichet calls for tougher euro rules

By Ralph Atkins and Lionel Barber in London: Eurozone members that break the region's rules on public finances should be excluded temporarily from Europe’s political decision-making, the president of the European Central Bank has proposed.

The controversial suggestion by Jean-Claude Trichet, in an interview with the Financial Times, would be part of a “quantum leap” in the governance of Europe’s 11-year old monetary union, needed to prevent a future Greece-style economic crisis.......read on

Big Autumn Gold Rally

By Adam Hamilton: Gold enjoyed a strong August after emerging out of its late-July seasonal lows. But interestingly last month's bullish action was probably just the beginning of gold's newest rally. A whole host of bullish seasonal, sentimental, and technical factors are converging that ought to catapult gold much higher in the coming months.

In seasonal terms, autumn is the strongest time of the year for the ancient metal of kings. Big surges in gold investment demand emerge out of Asia. The initial one is post-harvest buying once Asian farmers learn how much surplus income their hard work generated in the latest growing season. They invest some of these savings in physical gold. Harvest time for them is like year-end for Westerners, when we figure out how much money we've earned beyond our living expenses.

After that, Indian festival season kicks in. India is the world's largest gold consumer, and its autumn festival season is considered the most fortuitous time for young Indians to get married. Their culture believes the timing of a wedding affects a marriage's longevity, happiness, success, and luck. Families of Indian brides spend fortunes to adorn them with intricate 22-karat jewelry. These dowries provide more than beautiful adornment, gold's intrinsic value helps secure the bride's financial independence in her husband's family.....read on

Investors are Slowly Realizing the Potential In Silver

By David Levenstein: The price of silver has been extremely robust as it flirts with the $20/oz level. The price is now up more than 14% since its previous low of $17.50/oz and one important thing to note is that it has managed to hold above the former key resistance level of $18.50/oz.

As there has not been any major changes regarding the fundamentals on silver that would account for this move, I believe that investors are slowly realizing the potential in silver and that the grey metal is much undervalued and supplies are getting tighter. What was of particular interest last week was the price of silver moved higher despite the fact that the large bullion banks increased their net short position obviously in an attempt to suppress the price once again. And, on more than one occasion, when the price of gold slipped marginally, silver prices continued their upward move.

While industrial demand for silver is increasing, so is monetary demand. More and more investors are turning to silver as a way to protect the purchasing power of their savings. Like gold, silver has been proven to be an effective way of protecting your wealth. However, unlike gold, silver is hardly ever quoted in the main stream media. But, as the prices begin to move upwards, no doubt it will be noticed and more and more investors will take advantage of the current low prices.......read on

Yuan Trading Against Russian Ruble Said to Start Within Weeks in Shanghai

From Bloomberg News: China and Russia plan to start trading in each other’s currencies as the world’s second-biggest energy consumer and the largest energy supplier seek to diminish the dollar’s role in global trade.

China may start trading its currency against the ruble within weeks, three bankers with knowledge of the matter told Bloomberg, and sent out a document last week allowing lenders to apply for ruble trading licenses, one of them said. Russia’s Micex Stock Exchange is making preparations to trade the ruble against the yuan in an initiative that has the backing of the country’s central bank, Ruben Aganbegyan, the head of the bourse, told reporters at a conference in Moscow today.

“Given the risk to the dollar and U.S. assets from their fiscal position they want to reduce their dependence on the dollar as an invoicing currency,” Bhanu Baweja, global head of emerging markets fixed income, currency and credit research at UBS AG, said in a phone interview from London. “It makes sense for two large economies to exclude a third, overly dominant economy from their trading equation.”.......read on

Embrace The Coming Hyperinflation!

By John Soltez: Hyperinflation, or just a bunch of hype? That is the hot debate among economist types these days. On one side are the alarmists, sounding their warning sirens, flashing us pictures of Weimar-era Germans using wheelbarrows for wallets. On the other side are the skeptics and the pooh-poohers, such as Fortune magazine, which recently ran an article headed with the comment "irrational fears of hyperinflation won't die."

Right now, it's hard to argue with the doubters, particularly at a time when the Fed is doing all it can to fight deflation - whether it's buying up credit-card debt, or swelling up the money supply like a pregnant elephant. Unlike the Weimar folks, the thinking goes, we hold the world's reserve currency; theoretically we could inflate to kingdom come, and someone will still have to buy our debt. Hyperinflation threat? Stick it in the panic shelter along with the tuna fish and the shotgun shells.

The skeptics may be missing the point, though. Inflation, as Friedman famously remarked, is a monetary phenomenon. Hyperinflation, however, is a different animal altogether; despite common belief, it's not simply inflation on steroids. No, it stems from a different seed, one that involves politics rather than economics........read on

Deflation Never Had A Chance

By Toby Conner: Lately we've been hearing a lot of talk about Kondratieff cycles, Elliot Wave super cycle, end of the world, deflation, deflation, deflation.

What the deflationists fail to acknowledge is that in a purely fiat monetary system deflation is a choice not an inevitability. To put it in simple terms, if a government is willing to sacrifice its currency there is absolutely no way deflation can take hold in a modern monetary system.

It doesn't matter how large the debt contraction is, 10 trillion, 100 or 1000 trillion, any government with a purely fiat currency can, with the stroke of a computer key, print enough money to wipe out the debt. Granted they will destroy the currency by doing so, but at some point we are going to be faced with the choice of print or deflate. I have little doubt Bernanke will choose to throw the dollar on the sacrificial alter.....read on

Gold & Silver On Verge Of Dramatic Break Out

By Rolf Nef: Currently the silver charts are more bullish commented than gold, but gold looks as explosive as silver. The first graph shows gold since the beginning of the current bull market in August of 1999, eleven years ago, on a linear scale. Both trend lines form a wedge, in which the price swings are getting smaller and smaller and the tension is rising like a depressed spring, ready to jump. If the price would be the one of a stock, it probably would go to the downside, as it is typical for shares. For commodities and precious metals, the contrary is the most likely case.

The second graph looks pretty much the same, only that it spans a much longer period: the tops of 1869 and 1980 form the upper trendline, the bottoms of 1968 and 1999 the lower ones. The interpretation is the same as of the above shorter one.

But the graph contains more interesting information: on the one hand side the comparisons of the bulls in 1869 and in the 1970s, which multiplied by a Fibonacci figure and deliver a projection for the current bull.

A parallel line to the connection of 1968 with 1999 drawn through the top of 1934 delivers a trend channel, which shows also the overshoot of 1980. The upper trendline confirms the projection of $7,280.

There is one more important information that this chart delivers: the current bull move is part of a move that started in 1934. If it will top out between 7 and 8'000, the price drop will only be a correction, followed by an even larger move........read on