King World News
Friday, February 24, 2012Click here and then the MP3 button for the KWN exclusive
Friday, February 24, 2012Click here and then the MP3 button for the KWN exclusive
King World News
February 22, 2012
With gold, silver and oil on the move, today King World News interviewed 40 year veteran, Robert Fitzwilson. Fitzwilson is founder of The Portola Group, one of the premier boutique firms in the Unites States. He told King World News that there are many areas where investors can make money. One of those places to make money is oil, which he believes is headed into the stratosphere. But first, here is what Fitzwilson had to say about the move in gold: “I think it’s just a continuation away from paper assets into real assets. There are a lot of players in these markets. There are governments, hedge funds and individuals. So it is hard to know what will happen day to day, but there is no question that the direction in gold is higher.”
If you have been job hunting and have had no positive results, it could be because your targeted employers are not hiring when you applied. Unbeknownst to most job applicants, some companies limit their hiring process to certain times of the year. Some companies hire during seasons when they experience high volumes of customer contact, and others schedule their hiring process to coincide with company timelines, such as at the end or beginning of their fiscal year. If you are in the market for a job, consider the following.
Most retailers actively hire seasonal employees during major holidays so that they are adequately staffed to service shoppers. For example, department stores may need additional staff during Christmas, Easter and other holidays during which the shopping volumes are high. If you are looking for a full-time job, these may not seem appealing to you. However, if you impress your supervisors, they could lead to full-time positions. When applying for these jobs, do so well in advance of the season, as these companies usually staff in advance to allow time for training.
Hiring by Profession
Some companies hire new employees in order to meet customer demands for professional services. For example, income tax firms may hire new employees at the end of the calendar year in order to be prepared for the tax season. Financial institutions may hire during the third quarter of the year to ensure staff are fully trained to handle calls about transactions that must be done by the end of the year.
In some cases, companies hire based on market demands. For example, if the housing industry is booming, building contractors, architectural firms and bank loan departments may need to hire new staff to handle increased demand from consumers.
Government Contracts and Unusual Events
Check your local newspaper for announcements about large government contracts for projects in your area, as this will likely mean new jobs. You should also pay attention to unusual events, such as if oil is discovered in your area. For example, a recent CNN article discussed a large increase in jobs in North Dakota, which is the result of an oil boom.
Low Volume Season May Work for You
The summer seems to be the period when most job applications are inactive, and some companies put their hiring processes on hold. While this may seem like the least favorable time to apply for a job, it could work in your favor as not all employers put their hiring process on hold. During the high-volume seasons, employers have a large number of applications to review, which makes it hard for your application to stand out. But, if you submit your application during the low-volume season, you are more likely to stand out if your application is done properly.
The Bottom Line
While these are good suggestions for when you should ramp up your job search, the best time to look for a job is anytime. Companies are always hiring for different reasons, including the need to fill vacancies left by employees who change jobs. Therefore, you always have a chance of being hired even during the off season.
The best approach is to submit your applications all year round if you can, and to as many companies as you can. Doing so will increase your chance of being hired.
1. [A]lthough the ECB has made a reasonable fist of complicating its subordination of the private bondholders – money out, profits redistributed, local central banks reinvesting and so forth – it remains a preferential deal done outside this so-called ‘bailout with PSI’. The IIF creditors have sort of voluntarily taken the extra 3.5% hit, but the coupon they’ve been offered is worth less than the original. In a statement issued by representatives of private bondholders, the new interest rates – 2% for the first three years, 3% for the next five, and 4.2% thereafter were described as “well below market rates”, and the creditors will lose money on them. The tone of the statement screams ‘involuntary’. In English, all these factors spell default.John Ward nails the essence of the Greek deal: There is no Greek deal—just the illusion of one. (more)
2. Nobody has actually signed up to anything yet: as usual with all things EuroZen, the bankers are alleged to be on-board, but the IIF statement made after the press conference suggests otherwise: ‘We recommend all investors carefully consider the proposed offer, in that it is broadly consistent with the October agreement’. That’s not true for one thing: but as a recommendation, it’s somewhat limp. Further, there is still a body of hardline ezone sovereigns who don’t want to do the deal – and in Germany itself, a growing rearguard campaign to stop it. (See this morning’s Spiegel for immediate evidence). And finally, most Greek citizens themselves will react violently to some of the more pernicious clauses.
3. The ‘agreement’ contains almost a full bottle of poison pills: Berlin has got its debt Gauleiters in the end, only 19 cents on the euro will go to the Greek Government itself, 325 million euros in additional spending cuts have been found, Athens has agreed to change its constitution to make debt repayment the top priority in government spending, the escrow account must have three months debt money in it at all times etc etc. The idea that Greece can now toddle off and have a liberal democratic general election without any of these being issues is Brussels space-cadet stuff at its most tragi-comic. (An opinion poll taken just before the Brussels deal showed that support for the two Greek parties backing the rescue package had fallen to an all-time low while leftist, anti-bailout parties showed gains.)
4. Several Grand National leaps lie ahead before the default is avoided. Parliaments in three countries that have been most critical of Greece’s second bailout – Germany, the Netherlands and Finland – must now approve the package. In Greece itself, further violence will test political resolve about yet more cuts in wages, pensions and jobs. Greece’s two biggest labour unions have already lined up protests in the capital tomorrow. Very significantly, Jean-Claude Juncker of Luxembourg and the IMF’s Christine Lagarde stressed at the press conference that Greece still had to live up to a series of “prior actions” by the end of the month before eurozone governments or the IMF can sign off on the new programme. If ever I saw a get-out clause, that’s it.
5. Other loose ends are left hanging everywhere. Nobody has elicitied any response so far from the Hedge Fund creditors. Entirely absent from comments was the IMF’s contribution to the €130bn bail-out. Christine Lagarde would say only that the contribution would be ‘significant’, but my information is that she’s lying through her $240,000 teeth as usual: the IMF will only contribute €13bn to the in new Greek funding. Not exactly a resounding vote of confidence for the deal. Juncker said he was optimistic that ezone members would cough up more cash at the EU summit in March, but this too simply doesn’t bear examination: Portugal is broke, Spain is technically insolvent, Italy has asked to be excused from this dance, and Germany has already shown extreme reluctance to to increase its exposure further still. Fritz Schmidt in dem Strasse isn’t too keen either. Finally, as Bruno Waterfield notes in his latest column at the London Daily Telegraph, the agreement remains ‘overshadowed by the pessimistic debt sustainability report compiled by the IMF, ECB and Commission, that warned of a “downside scenario” of Greek debt hitting 160 per cent of GDP in 2020 – far higher that the agreed 120.5 per cent target’.
6. This is where we get to what the MSM will largely dismiss as ‘conspiracy theory’….but for which the circumstantial and corroborative evidence gets increasingly compelling: whole crowd-scenes of actors off-stage (and several on it) simply do not want this deal to reach fruition: they have factored in a Greek default, and believe that the best way to avoid further debt-crisis contagion is for the money earmarked for bailouts to be invested in bank-propping and growth.
The cast of players who think this include David Cameron, Mario Monti, Mario Draghi, Wolfgang Schauble and most of the German Finance ministry, Christine Lagarde, probably Angela Markel herself, Tim Geithner, huge swathes of the German banking community, The White House – and elements in both Beijing and Tokyo.
My Dear Friends,
Today was long and enlightening for me. I made multiple meetings in New York City with significant money managers.
During these meeting the price of gold rose above the $1764 level which I have repeatedly told you is as important as $524.90 was when gold broke out of its arithmetic up trend and entered its first power up trend. I wish to remind you $1764 is the point where gold moves out of its power up trend and enters into its geometric uptrend. I have also assured you the central banks and especially the US Fed via the BIS and Exchange Stabilization Fund seek not to depress gold, but only to prevent it from running so hard on the upside as to expose the true condition of Western world finance.
There has been significant interventions in the gold price at Angel $1764 with unexpected other central bank accumulation resulting in inexplicable strength in the $1710-$1720 area.
As the strong dollar policy is clearly a policy of softening a long term decline, the interventions in gold have been to modify a desire in the market itself to go ballistic on the upside.
If there was any startling realization today it was that among true geniuses and maturity in major money managers there is a grave lack of understanding concerning the forces at work in the financial can kick of the century now about to take place.
Only one person today knows that the war with Iran starts when Iran is frozen out of the Swift system. In terms of finance, that is a nuclear attack. It was just that threat alone that made Swiss banks destroy their tradition of privacy and send their loyal clients to a mass execution, assuming that they were cheating on taxes.
Not one person I spoke to today ever asked themselves who determines if credit event is a default and what that means to the mountain of credit default swaps that US banks have vended via their non US subsidiaries. By this method the count of these OTC derivatives by the US Controller of the Currency is way short of the true amount of debt insurance banks have sold.
Only one man understood what a commodity currency was and had studied where currency induced cost push inflation had produced severe price inflation during periods of awful economic conditions brought on by all types of debt failure.
I am speaking with leaders in finance who control immense sums of money. If these people do not understand the forces at work what makes you think politicians or their college professor appointees to central banks have a better understanding? The answer is simple – they do not!
Let me share with you the conclusion I took away from today’s luncheon.
1. What is going to happen is going to take place in March somewhere between the 14th and 20th in all probability.
2. What will determine the fate of markets is what action China does or does not take in providing funds to IMF bailout funds.
3. I believe China can and will extract significant trade and other benefits for their presence.
4. I believe China will want the same immunity that the IMF just took for themselves on sovereign debt in liquidation.
5. Greek gold will be held hostage to their debt.
6. That will accelerate the modest trend of repatriation of gold for the cellar of the New York Fed to nations like Germany that are certainly able to store their own wealth.
7. There will be an acceleration in the trend of utilization of other currencies than the dollar for contracting internationally regarding goods, service, oil and minerals.
8. I do not agree that we are at the doorstep now of major changes in the international monetary system. That comes in June of 2015.
9. I am certain that we are on the immediate threshold of the monster kick of the financial can down the road that is a dead end.
10. I believe China and the US Fed will assist in that great last can kick that backfires.
11. I am certain that I am in the right business and that business is the identification and accumulation of gold as gold is the ultimate survivor of what is about to happen.
12. I am certain the gold industry is mad as a Danbury hatter in selling their product the moment they produce it.
13. I am certain the gold and silver industry is in a transition back to the dividend producers they once were.
14. I am certain that the volatility in gold, silver and equities we have already seen is nothing compared to what is about to happen.
15. The last man standing among asset categories as the new monetary system is introduced sometime post June of 2015 will be gold and gold alone.
Therefore the soundest investment now is what I, and others (McEwen) are doing in building companies whose inventories of goods to be sold are mineable ounces of gold and other precious metals in the ground moving towards production.
The immense shorts in this industry group are whacked out noobies without a clue.
New mines need never pollute. Old mines can never be cleaned up. Open pit and surface enrichment is the type of gold that will be least effected by rising costs.
I think too many investors are underestimating the power of the central banks. While I agree they are running out of options, it seems that their ability to kick the can down the road has yet to expire. Given that the United States is heading into election season and President Obama is in full campaign mode, I expect the administration to pull out all stops in order to continue the illusion of economic prosperity a while longer. Every economic fire of consequence is being extinguished with fresh liquidity, more funny money or new legislation. In case you missed it, QE3 has been in full force for quite some time, albeit executed in a somewhat stealth manner.
The implications for silver (and gold to a lesser degree) are going to be incredibly bullish. Absent a deflationary sovereign default that spirals out of control and takes down major banks with it, stocks will continue to creep higher in volatile trade throughout the year. Once fear begins to subside, look for precious metals to come roaring back to new highs by mid-year. Whenever the next financial crisis finally hits, we are likely to witness a new injection of quantitative easing that is even stronger than what transpired in 2008.
Will a major debt default pull down gold, silver and mining stocks with it? Absolutely.
Will it last? Not likely.
Investors are a predictable bunch. They always overshoot on emotions in one direction or another. A rush for liquidity and the perceived “safety” of government bonds or U.S. dollars will be incredibly short-lived and viewed in retrospect as immensely short-sighted. Everyone that rushed for the door by dumping real assets will soon regret their folly. When the fear subsides and some semblance of rational thought returns, the realization of the worthlessness of government paper will be widespread and cause a mass exodus of fiat money.
So while it is prudent to hold a decent amount of cash in the short term, hoping to buy the irrational dip, the medium to long-term investor might consider buying silver aggressively at this juncture. In my view, commodity prices are either going to continue grinding higher throughout the remainder of the year, or there will be a short and steep dip, following by a resumption to new highs.
Either way, the silver price has a long way to go before reaching previous inflation-adjusted highs. It would need to climb to $150 to reach its 1980 high using officially-suppressed inflation statistics and closer to $300 using honest inflation statistics. Seeing as you can buy silver at around $33 today, the upside potential remains absolutely huge. Let’s take a look at the long-term chart to determine price targets for 2012 and 2013.
Charting back to the start of the silver bull market, we can see that silver remains firmly in its multi-year uptrend. Contrary to negative sentiment expressed by some analysts, there has been no significant chart damage or other action to suggest that the bull market has run its course. Silver recently bounced off the bottom line of its trend channel, which also corresponds roughly with the 100-day moving average. This line has provided support during every one of silver’s corrections over the past decade, with the exception of the 2008 financial crisis. I expect it to continue to provide support during the current correction/consolidation.
While we could see one more quick dip below $30, I think any talk of a decline to $25 or lower is now firmly off the table. Silver is currently facing resistance at the critical level of $35. If it breaks to the upside through this level, I believe silver will quickly climb to challenge the $50 mark once again and reach a high between $55 and $65 by year end. To the downside, I think the lowest silver will close out the year is around $31, in the event that short-term deflationary forces take hold. But as mentioned earlier, I think the central banks stand ready to do whatever is necessary in order to prevent such an outcome.
These projections are relatively conservative and based on the long-term trend trajectory. Any number of events could send silver parabolic in the blink of an eye. The silver market is tiny in relationship to the paper money market and if even a small percentage of those dollars decide to buy silver, demand will overwhelm supply and send prices into triple digits. I ultimately believe silver could reach $500, but the more important consideration is the value/purchasing power increase of silver. One thousand ounces of silver used to be able to buy a median-priced home in the United States and I believe one thousand ounces will once again achieve this same feat in the near future.
Some view silver as an inflation hedge or way to preserve purchasing power. I see it as a way to vastly increase purchasing power over the next several years, with the worse case scenario being wealth preservation. I’ll take that risk/reward scenario any day.
The fundamentals are very strong for silver at this juncture. The Obama administration just put forth a budget that will result in another annual deficit of over $1 Trillion, despite promising to cut the deficit to $650 billion. The ECB is bathing Euro banks in liquidity and the US Fed has literally guaranteed an inflationary environment until late 2014. These policies create ripe conditions for commodities overall and precious metals in particular to make new all-time highs.
With less above-ground investment-grade silver available than gold, the supply/demand situation can not persist much longer at such depressed prices. Physical silver demand is growing and confirming our bullish view, as Silver Eagle sales for January posted the second strongest month ever at 6.1 million ounces!
Lastly, silver is the best form of money to own in the event of a collapse in fiat currencies. It will be difficult to use a gold eagle for small purchases, but silver eagles and junk silver will be ideal to use in purchasing food and other goods when the U.S. dollar is no longer accepted. This makes silver attractive not only for the strong returns and ability to increase an investor’s purchasing power, but also as a valuable insurance policy should the current monetary system break down.
So don’t miss the train again this time around. While silver is currently in consolidation mode, this is not likely to last long. When the silver price finally takes off once again, there will be little notice or opportunity to jump aboard the speeding train. Silver remains severely undervalued in my estimation and I expect the price to skyrocket in the near future as it approaches new highs.
You need only have the courage to take the path less chosen, buy when others aren’t interested and sell when the herd is clamoring to buy silver at any premium. While the next financial crisis may begin with panic selling of precious metals, I believe it will quickly flip to panic buying at very high premiums to spot price. I want to be well-positioned before this occurs and also have some funds on the sidelines to relieve panic sellers of their gold and silver at discount prices. A sensible approach that I advocate is to purchase in tranches, building a position now and adding to it every month or two. This will help to ensure that you don’t go “all in” at a short-term top and have funds available to take advantage of any major dip. Attempting to time the absolute bottom is nearly impossible, so I view this a opportune moments to establish or increase positions in silver.
I am currently adding to my positions, both in physical silver and undervalued silver mining stocks. The equities underperformed significantly last year, but against the backdrop of unlimited central bank easing and liquidity, I think we are likely to see a return to the leverage offered during the early stages of this bull market. Junior mining stocks in particular appear very undervalued at this juncture and could offer staggering gains if my analysis is correct. If you would like to receive the GSB Contrarian Report, download my guide to buying and storing physical precious metals and view all of the stocks that we hold in the Gold Stock Bull portfolio, click here to become a Premium Member.
By Jason Hamlin
Recently released World Gold Council numbers show that global gold demand exceeded more than $200 billion last year for the first time -- but it is the WGC's claim that China could possibly replace India as the world's largest gold market in 2012 that seemed to grab the attention of many market watchers.
At the moment, India continues to boast the world's biggest gold market, with demand of 933.4 tonnes in 2011, of which more than half was for gold jewelry, according to the latest data from the World Gold Council.
But in the second half of last year, the WGC notes that the rise and fall of the rupee and domestic swings in the gold price had an impact on both India's jewelry and investment demand, which fell 33%.
And according to a Bloomberg news survey of analysts, brokers, and jewelers, gold imports by India may drop by a median estimate of 7% to 900 metric tonnes this year.
As a result, China could be set to take over as the largest gold market in the world for the first time in 2012, the World Gold Council noted last week as it released gold demand trends and figures for 2011.
In 2011, China's annual demand of 769.8 tonnes represented a 20% year-on-year gain, thanks to increases in both jewelry and investment. China is already the world's top producer of gold.
"Looking particularly at Asia, there was a major boost to the overall figures from the increase in Chinese demand, which is a trend that we see continuing over the next year. It is likely that China will emerge as the largest gold market in the world for the first time in 2012," says Marcus Grubb, Managing Director, Investment at the World Gold Council.
The largest rise was in investment, where demand of 258.9 tonnes with the value of RMB84.5 billion represented a 69% increase on 2010. Jewelry demand in China increased every quarter of last year and was the largest single jewelry market worldwide for the second half of 2011.
The China Gold Association reported earlier this week that China's gold consumption climbed 33% in 2011 to 761 tonnes, of which more than half was jewelry. The country's purchase of gold bars jumped 50% last year.
Looking forward, the WGC says it is gold's role as an inflation hedge that should reinforce its appeal in countries like China, which are still affected by high inflation.
So, when is China likely to become the number one gold consumer, and what impact will this move have on the market?
Carl Firman, a metals analyst at VM Group in London says China may already be the biggest gold consumer but proving it is problematic, as a result of transparency issues.
"What we do know is that production and to some extent estimated imports of gold are vastly more than estimated end-user demand. This implies that gold is being accumulated by private and, possibly, public entities," he says.
Firman expects that China and other emerging markets are now an integral support to the gold price.
"The spending power of the growing middle classes and debased currencies does lend itself to stores of wealth, such as gold. The luxury markets – jewelry – also benefit," he says, adding that investment is likely the key driver of China's gold demand at the moment.
One analyst recently told CNBC that China's increase in gold consumption will specifically benefit the jewelry sector.
"The gold and jewelry sector is one of the few sub sectors of the Chinese retail space that has the potential to see new highs for the stocks in the next few years, as the Chinese disposable income continues to rise," Eddie Tam, CEO of Central Asset Investments told CNBC.
For other analysts, China's move towards being the top global gold consumer in 2012 may not yet be solidified.
Thorsten Proettel, an analyst with Landesbank Baden-Wurttemberg in Stuttgart noted via The London Bullion Market Association 2012 forecast that up to December 27 of last year, he would have bet that China would become the biggest gold consumer in 2012.
"But with the new order, prohibiting private gold transactions in China outside the Shanghai Exchanges, appetite for gold might dampen," he noted. At the same time, he notes, the price will not collapse, as low interest rates make it difficult to find alternatives.
The WGC also notes that although both China and India are expected to continue to generate the lion's share of consumer demand, signs of slowdown in China and the "increasing maturity" of the market may lead to a slowdown in recent growth rates. In India, the WGC points to a lower number of auspicious days in the 2012 Hindu calendar as one factor that might temper gold demand.
Whichever country ends up boasting the highest gold demand in the world in 2012, China and India were responsible for more than half of global jewelry demand last year and just under 50% of all demand, and both countries remain the "cultural heartlands of gold," says the WGC.