Saturday, November 5, 2011

Markets mustn't learn about our gold transactions, Bank of England says

Dear Friend of GATA and Gold:

Denying a recent freedom-of-information request from a citizen of the United Kingdom, the Bank of England has insisted on secrecy for its swapping and leasing of gold from the national reserves.

Replying on October 24 to GATA supporter James Bern, who sought a more precise accounting of the British gold reserves, Bank of England spokeswoman Jackie Keating wrote that the gold swap and leasing information is "market sensitive" and its disclosure "would allow enquirers to find out what gold transactions have been taking place." This, the bank's spokesman wrote, would impair the interests of both the British government and the bank's "private customers," to whom the bank "owes a duty of confidentiality."

The statement thus confirms that the Bank of England is surreptitiously active in the gold market on behalf of both the British government and the bank's "private customers" and that the interest of British citizens in knowing how their government is meddling in supposedly free markets is quite secondary.

Thanks to our friend Bern, it thus has been demonstrated again that there is plenty of financial journalism to be done simply by pressing central banks with questions about their surreptitious activity in the gold market. Who will be the first mainstream financial journalist to attempt this and to have enough resentment about being shut out of the public's business that he publishes a news story about it? Is there such a mainstream financial journalist willing to risk his invitation to a few very nice Christmas parties and his access to highly placed official sources?

The Bank of England's reply to Bern has been posted at GATA's Internet site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Gigantic Bank Run Coming, Says Noble Prize Winner

In his Nov. 1 post, the economist every one enjoys making fun of believes the endgame for the euro lies in the breadbasket of the European sovereign debt market, Italy, leading to one of two lynchpin countries, France, to collapse next. Then, it's bedlam.

“The question I’m trying to answer right now is how the final act will be played,” Krugman writes. “At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira. Next stop, France.”

Krugman states the obvious, of course, but he offers no recommendation for Europeans to protect themselves from the all-but-certain currency devaluations as a result of a broken euro—not that he is expected to do so. But it's times like these, one would think that this quack of economics had a suggestion for Europeans to protect themselves from a currency collapse. Or maybe the collapse of euro is how Treasury will be able to fund its upcoming $628 billion offering in the coming five months without going to war in another part of the world, as he had once suggested. But in a previous post of Sept. 6, Krugman attempted to formulate a response to the “Glenn Beck” gold crowd—a response that Ben Bernanke could have used in response to Rep. Ron Paul's queries regarding gold.

Krugman wrote, “ . . . [The] 'real' story about gold, in which the price has risen because expected returns on other investments have fallen; it is not, repeat not, a story about inflation expectations. Not only are surging gold prices not a sign of severe inflation just around the corner, they’re actually the result of a persistently depressed economy stuck in a liquidity trap — an economy that basically faces the threat of Japanese-style deflation, not Weimar-style inflation. So people who bought gold because they believed that inflation was around the corner were right for the wrong reasons.”

Nice try. Krugman doesn't get it, or doesn't want to get it. Investors buy gold because of the almost-predictable response to a “Japanese-style deflation” —that is, the political response—devalue the currency. A government that wants to prolong the eventual failure of a system Krugman has worked for so long defending won't stand idle along with its printing press. Hasn't Krugman noticed the course of action by the Fed to those ends so far?

Hyper-inflation, or just plain ol' very high inflation is the result of a series of political events and decisions, not economic or market ones. If he had read When Money Dies: The Nightmare of the Weimar Collapse by Adam Fergusson, he would be able to solve the 'puzzle' of a continued rise in the price of gold.

How, then, can we explain this man's elevation to a Noble Prize winner? Ask Obama; he may shed some light on the criteria used to award prizes these days. But a better explanation is attempted by Dr. Andrew Lobaczewski's, author of Ponerology: A Science on the Nature of Evil. In his book, Lobaczewski makes the comparison between the US and Germany during the rise of Adolf Hitler. He writes:

“A highly talented individual in the USA finds it ever more difficult to fight his way through to self-realization and a socially creative position. Universities, politics, and businesses ever more frequently demonstrate a united front of relatively untalented persons and even incompetent persons. The word 'overeducated' is heard more and more often. Such 'overqualified' individuals finally hide out in some foundation laboratory where they are allowed to earn the Nobel prize as long as they don’t do anything really useful. In the meantime, the country as whole suffers due to a deficit in the inspirational role of highly gifted individuals. As a result, America is stifling progress in all areas of life, from culture to technology and economics, not excluding political incompetence.”

Krugman can serve a purpose, however, outside of his sideshow opinions, much akin to what comes out of the mouth of the Pope; he can serve as a constant reminder that the US has devolved into a 'a truth is a lie, and a lie is a truth' type of society, just as Germany devolved during the 1920's and 30s.

Jim Rogers: Greek Bailout May be Prelude to EU zone Collapse, plus News and Views

Nov. 4 – Jim Rogers tells Reuters the Greek bailout plan merely pushes the debt crisis into the future, and could cause spark an end to the euro zone in five years.

News and Views

U.S. employment climbed in October at the slowest pace in four months, illustrating the “frustratingly slow” progress cited by Federal Reserve Chairman Ben S. Bernanke this week.

The 80,000 increase in payrolls was less than forecast and followed gains in the prior two months that were revised up by 102,000, Labor Department figures showed today in Washington. The unemployment rate fell to a six-month low of 9 percent from 9.1 percent even as the labor force expanded.

World leaders expressed impatience and irritation with Europe’s inability to defeat its two-year financial crisis as they urged swift resolution for the sake of the global economy.

With Greece’s debt-ridden government at risk of collapsing as soon as today, Group of 20 chiefs meeting in Cannes, France, yesterday pushed European authorities to flesh out and enact a week-old rescue plan that has already shown signs of unraveling.

“We are grappling with a lack of confidence in markets that leaders will act,” Australian Prime Minister Julia Gillard said in the French seaside resort. “It is therefore very important for leaders to act.”

Such calls — echoed by the U.S., Britain, China and Russia — highlight international disappointment that Europe missed the G-20’s deadline of this week to deliver a fix for its fiscal woes. German Chancellor Angela Merkel and French President Nicolas Sarkozy sought to regain the initiative by keeping aid for Greece on ice and demanding Italy accelerate austerity.

Greece has dropped its plans to hold a controversial referendum on the country’s euro zone membership, which had threatened to plunge the bloc into a crisis, the country’s finance ministry said on Friday.

Finance Minister Evangelos Venizelos made the pledge in telephone calls made to Eurogroup Chairman Jean-Claude Juncker, European Commission’s Economy and Monetary Affairs chief Olli Rehn and German Finance Minister Wolfgang Schaeuble, the Greek finance ministry said in a statement.

“Venizelos informed his interlocutors about the decision to not hold a referendum,” the statement said.


European stocks pared their gains after Germany’s September manufacturing orders unexpectedly fell, sparking concern that the region’s economic growth is faltering.

The Stoxx Europe 600 Index rose 0.2 percent to 242.61 at 11:14 a.m. in London, after earlier rising as much as 0.6 percent on Greece’s cancellation of a referendum on euro-area’s bailout package. The gauge has retreated 2.6 percent so far this week as the referendum call stunned investors. The MSCI Asia Pacific Index jumped 2.5 percent. Standard & Poor’s 500 Index futures dropped 0.2 percent before a U.S. jobs report.

German factory orders unexpectedly plunged in September as demand from the euro region slumped, adding to signs the region’s debt crisis is damping growth in Europe’s largest economy.

Asian stocks rose for the first time in five days as Greece scrapped a plan to hold a referendum on a bailout package and the European Central Bank cut interest rates, reducing concern the debt crisis will spur a credit crunch.

HSBC Holdings Plc (HSBA), Europe’s No.1 lender by market value, climbed 3.2 percent in Hong Kong. Komatsu Ltd. (6301), Asia’s largest maker of construction equipment by market value, surged 6.9 percent after a report showed orders at American factories increased in September. China Petroleum & Chemical Corp, China’s biggest oil refining company by sales, led the nation’s energy companies higher on speculation the government may allow the mainland’s fuel producers to adjust prices on their own.


Japan’s slide back toward deflation means bond investors are getting some of the highest returns among developed nations even with the world’s lowest yields.

Annual inflation slowed to zero in September, meaning investors in the nation’s benchmark 10-year securities receive the full 0.99 percent yield. That’s the highest so-called real yield for any Group of Seven nation except Italy’s 2.79 percent.

The Bank of Japan cut its inflation forecast last week and said it would buy more government bonds to underpin an economic recovery being threatened by the yen’s surge to a postwar record. The government intervened on Oct. 31 to weaken the currency for the third time this year. With the Federal Reserve discussing more steps to spur its economy and Treasuries yielding less than U.S. inflation, Japan’s efforts may not curb the yen’s strength.

Canada’s dollar dropped for the first time in three days after a government report showed the jobless rate unexpectedly increased in October as the nation’s employers eliminated positions.

The Canadian currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, extended its weekly decline on increased speculation that the Bank of Canada will lower borrowing costs.

“It’s a miss in a very meaningful way,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto, in a telephone interview. “This is likely to contribute to some Canada lagging.”


Wheat is heading for the biggest slump in three years as the second-largest harvest on record swells stockpiles, easing shortages that drove global food costs to an all-time high.

Prices that plunged 20 percent to $6.375 a bushel this year in Chicago will probably drop as low as $5.90 before the end of December, according to the median estimate of nine analysts and traders surveyed by Bloomberg. Supply in the 12 months ending June 30 will expand 5 percent to 684 million metric tons, boosting inventories to the highest in a decade, the London- based International Grains Council estimates.

Production is expanding after last year’s 47 percent price rise led farmers to plant more grain, while Russia and Ukraine recovered from drought that ruined crops. Cheaper wheat will reduce strains caused by rising corn and rice prices and add to pressure on United Nations-monitored food costs that have declined 9 percent from a record in February.

Gold prices in euros will rise to a record as Europe’s sovereign-debt crisis erodes the appeal of the 17-nation currency and boosts demand for the precious metal as an alternative asset, according to economist Dennis Gartman.

Gold has had an inverse relationship to the euro during the past week, as the metal jumped 3.8 percent and the currency slid 2.6 percent. The euro, which has declined in three of the last four months, may fall below $1.30 from about $1.38 yesterday, Gartman said.

“The driving force in the gold market is the problems in the euro,” Gartman said in a telephone interview from Suffolk, Virginia, where he publishes his Gartman Letter. “Central banks in Europe and individuals will want to lower their euro holdings and buy gold since no one knows what is happening to the euro. The euro is heading towards parity once again.”

Italian Bond Yields and Spreads at Euro-Record High; Massive and Growing 2-10 Inversion a Sign of Pending Portuguese Implosion

Following Threats of Troika Surveillance and Inspectors Headed to Italy to Verify the Italian Books it should be no surprise to find Italian bond spreads and yields surging to new highs.

Italy 10-Year Government Bond Yield

Italy 2-Year Government Bond Yield

Germany 10-Year Government Bond Yield

Germany 2-Year Government Bond Yield

European Sovereign Debt Spread Table 10-Year Bonds

Country10-Yr YieldSpread vs. Germany

European Sovereign Debt Spread Table 2-Year Bonds

Country2-Yr YieldSpread vs. Germany

Inquiring minds might be interested in what European spreads look like over time. Chris Puplava at Financial Sense graciously put together a few charts at my suggestion that shows this action. Thanks Chris!

10-Year Spreads vs. Germany Over Time

click on chart for sharper image

Recent Record Highs: Italy, Belgium, France

1-Year Spreads vs. Germany Over Time

click on chart for sharper image

Recent Highs: Portugal, Italy, France, Belgium, Spain

Note: Portugal does not have 1-year bonds. 2-year bond yield substituted

10-Year Minus 2-Year Yields, by Country

click on chart for sharper image

That massive inversion in Portuguese bonds with the 10-Year bond yield at 11.88% and the 2-year bond yield at 20.14% is a sign Portugal may blow sky high any time. Ireland recovered from a similar setup, Portugal failed to do so.

Mike "Mish" Shedlock

Six steps to take today to protect yourself from out-of-control gov't

While I haven't made a scientific study of the topic, I suspect the leading genre for popular entertainment – and for popular delusions of crowds, for that matter – revolves around magical worlds. As illustration, the Harry Potter series will serve.

The problem is that there is no such thing as magic, at least not in the mystical sense (versus sleight-of-hand variety). Rather, the physical world, and even the metaphysical world constructed by humans in their ancient and long-running quest for protection from the physical world, operates within the boundaries of certain irrefutable truths.

In the first instance, the laws of physics are only rarely found wanting; in the second, basic principles of economies are inviolate, or should be if you actually want an economy to succeed for any length of time.

This unblinking faith in an all-caring, omnipotent "Godvernment" is terrifyingly misplaced: it not only runs contrary to many of those truths but runs contrary to nearly every important lesson history has to teach. Look no further than the debts and deficits of Godvernments around the world to see the consequences of trying to keep this myth alive.

That this faith is on the increase, versus the opposite, should be very concerning… both to those who believe in the rights of individuals and to those trying to build and maintain a reasonable standard of living in this age of deep uncertainty.

Especially in that most, if not all, of that uncertainty, as well as active threats to the general well-being, emanates from the very Godvernments people look to for salvation and sustenance. The graphic shown here demonstrates this point vis à vis US security policies soberingly well.

Now, I am sure that some of you view these remarks as just another libertarian tirade, and I guess to some degree, they are.

Yet, I think there is an important underlying point that requires serious reflection. Namely, with people the world over trapped in a delusional and self-destructive cycle of believing that the Godvernments can solve all that ails – even though almost all that ails is caused or made worse by those very same institutions – then things can only get worse from here.

It's like all but the tiniest minority of the world's population have been brainwashed into joining a dangerous cult. A cult whose leaders are unscrupulous about stripping their followers of their wealth, their dignity (see cartoon above) and their sense of individuality, while rewarding their most ardent supporters with pensions, tax breaks, a leg up over competitors and, if push comes to shove, hard cash in the form of bailouts.

Viewed through this lens, the thinking individual – you, for instance – should see the need to take certain self-protective measures. And since few things are as useful as a high net worth when it comes to protecting your independence, there are opportunities to chase down as well.

Some suggestions, a number of which you may have heard before. (more)

The US National Debt Burden per Capita

In 1831, the National Debt Burden per Capita, or rather the ratio of the United States' national debt per capita and GDP, multiplied by 1 billion), dropped below a value of 3 for the first time in its history [1]. In 2011, the US National Debt Burden per Capita has risen above that level.

Let's look at what happened to the US National Debt Burden per Capita in between, shall we?

Wars and depressions largely characterize the periods of time where there have been significant run-ups in the level of the US National Debt Burden per Capita, with the debt taken on to support the costs of the US Civil War and World War II being the most significant.

In looking at today's level of the National Debt Burden per Capita, we see that it is perhaps most comparable to the Great Depression.

Throughout all this time, we'll note that the National Debt Burden per Capita has only fallen when the United States government curtailed its elevated level of spending. Typically, that has been solely the result of spending cuts following periods of conflict, rather than tax increases [2].

Political Calculations' The US Economy at Your Fingertips tool puts all this data, and more, at your fingertips, covering the period from 1791 through 2010 (at this writing)!


[1] Prior to 1831, the national debt burden per capita was considerably higher, thanks largely to the debt taken on by the new nation to pay for the costs of the Revolutionary War and the War of 1812.

[2] Before 1913, there was no income tax in the United States, yet the federal government in those days succeeded in lowering the National Debt Burden per Capita primarily by shrinking government spending after running up debt and instead encouraging economic and population growth. That may be a lesson that today's politicians can well afford to learn.

Finally, let's see what's in store for the future, if the US continues on its current path:

(c) Craig Eyermann

Gold Miners Are Growth Stocks Now: BAX, ELD, K, RGO, YRI

Earnings season has, so far, been a mixed bag for most industries. But for gold and silver miners this is one for the record books.

One of the selling points of precious metals miners is that they’re “leveraged to the gold/silver price”, which means a small move in the price of the underlying metal produces a big change in a miner’s profitability. This is bad when the metals are going down but potentially great when they’re going up. And right now the math is highly favorable: Gold and silver are up from a year ago, so miners that produce similar amounts of metal at a similar per-ounce cost are generating big earnings increases. Some excerpts from recent quarterly reports:

Barrick Gold Earnings Jump 45%
Higher gold and copper prices pushed Barrick Gold Corp.’s third-quarter earnings up 45% to a record level, beating analyst expectations.

Barrick, which late Wednesday boosted its quarterly dividend by 25%, posted net income of $1.37 billion, or $1.36 a share, up from $942 million, or 94 cents a share, a year earlier. Adjusted earnings jumped more than 50% to $1.39 billion, or $1.39 a share, it said, beating the Thomson Reuters mean estimate of $1.35 a share.

Revenue increased 44% to $4.01 billion, ahead of the $3.88 billion analysts were expecting, as Barrick’s realized gold price rose 41% to $1,743 an ounce.

Eldorado Gold posts 48% Q3 profit growth on record gold production
Eldorado Gold (TSE:ELD) (NYSE:EGO) (ASX:EAU) saw its third quarter results meet or exceed Street estimates on Thursday after it reported record gold production, higher selling prices, and lower operating costs. For the three months ending September 30, the gold miner posted profits of $110.7 million, or $0.19 per share, up 48 percent from $74.8 million, or $0.13 per share, a year ago.

Revenues rose 71 percent to $326.1 million, from $190.3 million in the same period last year. Analysts polled by Bloomberg Businessweek had expected 19-cents per share in earnings, on $311 million in sales.

The company produced a quarterly record total of 179,195 ounces of gold – 18 percent more than it did a year ago. Total cash operating costs fell three percent to $397 per ounce, while selling prices rose 38 percent to $1,700 per ounce during the third quarter.

Kinross Reports Rise In 3Q Adjusted Earnings, Record Quarterly Revenue
Kinross Gold Corp. (TSX: K, NYSE: KGC) posted adjusted net earnings of $273.4 million, or 24 cents a share, for the third quarter, the company said late Wednesday. This was up by 134% from $116.8 million, or 15 cents a share, in the year-ago period.

The company listed record quarterly revenue of $1.069 billion, a 45% increase over $735.5 million in the third quarter of 2010. The increase was the result of more ounces produced and an average realized gold price of $1,646 an ounce in the third quarter, compared to $1,190 in the third quarter of 2010.

Royal Gold Revenue Grows Again by Double-Digits
Net income for Royal Gold, Inc. rose to $17.2 million (40 cents per share) vs. $11.8 million (21 cents per share) in the same quarter a year earlier. This marks a rise of 45.3% from the year earlier quarter.

Revenue: Rose 42.2% to $64.5 million from the year earlier quarter.

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 56.4%, with the biggest boost coming in the first quarter of the last fiscal year when revenue rose 73.6% from the year earlier quarter.

Yamana Gold Announces Third Quarter 2011 Results
Production of 279,274 gold equivalent ounces (GEO) at cash costs of $94 per GEO. Gold production of 230,986 ounces. Silver production of 2.4 million ounces. Production increased 4% to 279,274 GEO. Revenue increased 22% to $555 million. Record adjusted earnings increased 63% to $190 million, $0.26 per share. Cash flow generated from operations increased 57% to $330 million, $0.44 per share. Generated cash margin of $1,603 per ounce, an increase of 36%. Cash and cash equivalents at September 30, 2011 were $570 million, a 73% increase from the beginning of the year. Cash flow generated from operations increased 66% to over $945 million, $1.27 per share, as at September 30, 2011. Dividend increased for the second time this year to $0.20 per share annually

Some thoughts
Comparisons will stay favorable for another couple of quarters and then get harder, as next year’s gold/silver price is compared with August’s parabolic spike. The sense that these growth rates are unsustainable might be one of the things holding back mining stocks in the face of great current earnings.

But if gold and silver just hold their current levels, the cash flow being generated by the strongest miners will allow them to 1) pay off debt and strengthen their balance sheets and 2) institute or increase dividends.

It’s possible that a year from now the precious metals miners will appeal to both growth and income oriented investors. That’s a lot of potential cash flowing into what is still a tiny sector.

Bart Chilton: There is Manipulation in the Silver Market

from King World News:

With many lawsuits having been filed against JP Morgan for alleged manipulation of the silver market, today King World News interviewed CFTC Commissioner Bart Chilton. Commissioner Chilton was incredibly candid throughout the entire interview. As an example, when asked if there is nefarious activity (manipulation) going on or that has gone on in the silver market, Chilton responded, “I think there has been, Eric. I talked last year about this, I urged the agency to say something. I just think it’s fair that after so long, on an investigation that you’ve publicly announced, that you give some sort of update.”

Bart Chilton continues: Read More @

The True Value Of Money (Literally)

As a follow up bonus from the Artemis presentation earlier, we present this chart which answers the age old question: what is the true value of money? It does so in quite a literal fashion, and explains why Kyle Bass is such a fan of nickels...

As a reminder, from Michael Lewis' book on Kyle Bass:

On nickels:

He still owned stacks of gold and platinum bars that had
roughly doubled in value, but he remained on the lookout for hard
stores of wealth as a hedge against what he assumed was the coming
debasement of fiat currency. Nickels, for instance.

“The value of the metal in a nickel is worth six point eight cents,” he said. “Did you know that?”

I didn’t.

“I just bought a million dollars’ worth of them,” he said, and then,
perhaps sensing I couldn’t do the math: “twenty million nickels.”

“You bought twenty million nickels?”


“How do you buy twenty million nickels?”

“Actually, it’s very difficult,” he said, and then explained that he
had to call his bank and talk them into ordering him twenty million
nickels. The bank had finally done it, but the Federal Reserve had its
own questions. “The Fed apparently called my guy at the bank,” he says.
“They asked him, ‘Why do you want all these nickels?’ So he called me
and asked, ‘Why do you want all these nickels?’ And I said, ‘I just
like nickels.’”

He pulled out a photograph of his nickels and handed it to me. There
they were, piled up on giant wooden pallets in a Brink’s vault in
downtown Dallas.

“I’m telling you, in the next two years they’ll change the content
of the nickel,” he said. “You really ought to call your bank and buy
some now.”

Lindsey Williams Interview - Patriot Trading Group - 02 Nov 2011

The Elite Illuminati Gangsters want to create massive debt before stock market crash The elite want to create debt like in not only America but every country of the world, comparable to the debt that Greece has. Greece will get bailed out in everyway imagined until the very end The elite are buying the bonds of Greece so they will own the country when they default The elite are allowing California and other states to get in the most horrible state, so when they default, they will own and control them All the bailouts are done intentionally to force a default where then the elite will fully controls them “By the end of 2012 private fortunes will be lost if they are secured with paper” Syria is the next country they will attack Elite are 3 months behind schedule because they couldn’t get Muammar Gaddafi fast enough The US Mint sold 737,000 Silver Eagles sold on the first day of October. Only buy silver coins minted by the US Mint. Never done before in history. It’s 42% of all the sells in the whole month of December, 2010 Gold to go to $3,000 almost overnight and Silver to $75.00-$100.00 The Elite plan to keep the price of gold and silver down for a few more weeks (maybe a few months) This is because they are buying all the gold and silver up for themselves at cheap prices Welfare, Food Stamps and Social Security will not be cut off until the US Defaults in a few years Elite don’t want riots. They don’t like the wallstreet riots. They will default on paying social security, welfare, and food stamps when the US Defaults They want you in massive debt. You need to have enough money in gold and silver to pay your taxes for 3-5 years. Goldman Sachs won’t lose a penny. Fear is what the elite what. They create it to make you shutdown your brain and not see whaty they are doing America will be like Greece in 3 years The current debt in America is $14,837,000,000,000 for the new year coming in 2012. Major discord between the elite of the world. They hate each other, but have to work together. Major arguements among the elite. Elite have think tanks they use to predict the future. One of the think tanks says that something very unually is going to happen in 2012. This is in the spiritual realm. There will be some “Divine Manistafactions” in 2012 The Elite have a “Devil’s Messiah ” program scheduled for 2012

The Economist - 05 November 2011

The Economist - 05 November 2011
English | PDF | 116 pages | 47.4 Mb

The Economist is a global weekly magazine written for those who share an uncommon interest in being well and broadly informed. Each issue explores domestic and international issues, business, finance, current affairs, science, technology and the arts. Your paid subscription to The Economist also includes unlimited access to and our searchable archive. THE ECONOMIST is a global weekly magazine written for those who share an uncommon interest in being well and broadly informed. Each issue explores the close links between domestic and international issues, business, politics, finance, current affairs, science, technology and the arts. In addition to regular weekly content, Special Reports are published approximately 20 times a year, spotlighting a specific country, industry, or hot-button topic. The Technology Quarterly, published 4 times a year, highlights and analyzes new technologies that will change the world we live in.

download it here

Gold Traders More Bullish as Debt Crisis, U.S. Economy Spur Bets on Gains

Gold traders are the most bullish in three weeks after hedge funds boosted their wagers on higher prices amid speculation Europe’s debt crisis and slow U.S. growth will spur demand for the metal as a protection of wealth.

Twenty-eight of 32 people surveyed by Bloomberg expect bullion to rise on the Comex in New York next week, the most since Oct. 14 and the second increase in a row. Money managers boosted their combined net-long position in New York gold by 8.7 percent in the week to Oct. 25, U.S. government data show. Traders expect lower copper and raw-sugar prices next week, and gains in corn and soybeans, separate surveys showed.

Gold climbed above $1,760 an ounce this week for the first time in six weeks and investors increased their holdings in gold-backed exchange-traded products to a two-month high. Federal Reserve Chairman Ben S. Bernanke signaled more monetary stimulus may be needed to cut unemployment, while the European Central Bank yesterday unexpectedly lowered interest rates.

“The conditions are perfect” for gold, said Mark O’Byrne, the Dublin-based executive director of GoldCore Ltd., a brokerage that offers investors quarter-ounce British Sovereigns up to 400-ounce gold bars. “We have unprecedented levels of risk in markets. We still have ultra-loose monetary policy and the debasing of currencies. That’s obviously bullish for gold.” (more)