Saturday, September 10, 2011

Eric Sprott: From Here Silver is a 30 Bagger to $1,200

With stocks plunging and gold and silver still consolidating recent gains, today King World News interviewed billionaire Eric Sprott, Chairman of the $10 billion strong Sprott Asset Management to get his take on the action. When asked about gold Sprott replied, “I think it’s explosive. As you know James Sinclair said, ‘When it goes through $1,764 it’s going to $12,000,’ and I for one am not ruling out that kind of development here. It could be very explosive as more and more people worry about one, fiat currencies, two, sovereign debt and three, bank deposits. It would take very little to spill into gold to make a dramatic difference in where the price will be.”

When asked about the mining shares Sprott stated, “I think it’s becoming obvious to everyone that it’s the one area that you can feel safe to invest in. We are witnessing events unfolding that are suggesting to us that we are finally seeing a differentiation in the market between gold stocks and general stocks.

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Uranium Companies Poised for a Comeback

This year has brought uncertainty for the uranium sector. Since the tsunami and subsequent radiation leaks in Japan, developers and investors are questioning the best steps moving forward. In this exclusive interview with The Energy Report, Edward Sterck, an analyst with BMO Capital Markets in London, updates us on the sector's status and offers advice on the best companies to support in the coming months and years.

The Energy Report: Edward, let's quickly sum up 2011 for uranium. Spot prices for yellowcake have fallen from a high of around $74 a pound (lb.) in January to around $51/lb. now. Most of the decline can be attributed to the tsunami in Japan that caused radiation leaks at several reactors there. After the Japanese problems, chatter started about substituting thorium for uranium in nuclear reactors. Then negative long-term policy decisions started trickling in from Japan, Germany, Italy and Switzerland. Your long-term uranium price of $60/lb. makes you sound less-than-bullish on the sector. What, if anything, is going to pick up the uranium sector, dust if off and send it upward again?

Edward Sterck: The biggest driver is likely to be the uranium price. I haven't actually changed my uranium price forecast post-Fukushima because I had a conservative price estimate previously with a long-term price of around $60/lb. in real terms. But in terms of potential positive catalysts, the main thing needs to be reinforcement of positive sentiment from China once it announces that its safety review will allow it to continue to license new reactors. I would also like to see some buying picking up in the spot markets from organizations such as China Guangdong Nuclear Power Group and China National Nuclear Corporation. Those are the things that the market needs to see before belief in the uranium space returns to investors' minds.

TER: August is typically a slow month for uranium sales, but what about September and October?

We usually see volumes pick up in September and October. I think we'll see the same this year as well although a couple of things are overhanging the market at the moment, making utility fuel-procurement officers a little more cautious on the spot market.

The first is that some Department of Energy material still has to be liquidated into the market. It's not a significant quantity, but fuel-procurement officers may be waiting to see how that plays out before committing to purchases. There are also fears in the market that Germany or Japan may liquidate inventories. Obviously, that would be to fuel-procurement officers' benefit. That's one of the reasons they could be holding off as well. It's a small market and prone to sentiment. If anything, I think Germany and Japan would probably look for bigger buyers rather than just selling piecemeal into the open market, potentially through block sales to countries such as China.

TER: You talked about whether China will license new reactors and move forward with its nuclear program. The country wants to boost power output by 45 gigawatts by 2015. Is there any path to that other than nuclear? (more)

Gerald Celente : The Whole Ponzi Scheme is Collapsing

Gerald Celente : People have to realize that even when you have all this turmoil life goes on , things go bad for a lot of people but there a lot of people out there , so it is not that the whole system collapses , this is going back to the panic of 08 it never ended , now even 'the experts' now understand that all the Bush's talks all the Obama's stimulus all of the Federal Reserve's QE2s the only thing that saved were the too big to fails and put the nation deeper into debt , it is basically the same thing over in Europe , they came up with these things called austerity measures and other schemes , buying bonds that the ECB said they will never buy other countries sovereign debt , so The Whole Ponzi Scheme is essentially Collapsing and they come up with BS excuses on how to fix it ....

Low U.S. Mortgage Rates a Sucker-Trap

The U.S. media couldn’t wait to trumpet the news: “U.S. Mortgage Rates Fall To Lowest On Record”. Just don’t read the fine print. What “fine print”, you ask?

Let’s start with the fact that there tens of millions of U.S. residential properties which have been contaminated with various forms of fraud, courtesy of the “MERS” registry-of-shame and the complete (and willful) abandonment of established legal procedure, courtesy of the Wall Street fraud factories. Thus just because someone buys a property in the U.S. doesn’t mean they “own” that property.

In the current negotiations taking place on this massive mortgage fraud, we have (on the one hand) the Wall Street bankers on their knees begging to have this systemic fraud simply swept under the carpet, and (on the other hand) the vast majority of U.S. politicians at both the state and federal level only too happy to hand these bankers brooms. If not for a few “hold-out states” the spineless politicians would have already completely caved-in to banker pressure.

What neither the bankers nor their political lackeys (nor the talking heads in the media) are telling Americans is that sweeping all this fraud “under the carpet” fixes nothing, other than reducing/eliminating the legal liability of the banksters (retroactively) after their crime-spree has been committed. All this fraud will still be sitting in the various land title registries all across the United States – legal land mines which could (and will) financially destroy the unwary.

When someone “buys” a house but then doesn’t end up “owning” that house (because a title-defect prevents the conveyance of “good title”), it is by no means automatic that the purchaser will get all of (or any of) their money back. The “seller” of the house (who in fact was incapable of delivering title) is not going to be especially interested in refunding the purchase price – since then they are the party who is “holding the short end of the stick”.

What this “deal” between the states and the bankers will do is likely prevent innocent victims from being able to sue the bank(s) which caused the original title-defect – and whose pockets are “deep enough” to make restitution for all of these additional, indirect victims of their crimes. Of course it might mean that those Wall Street banks no longer have $10’s of billions to stuff into each other’s pockets each year as “performance bonuses”. (more)

How to Make the Most of a Job You Hate

Simply having a job in this economy is something to be thankful for, but ever since the recession began in late 2007, many Americans who managed to stay employed have expressed dissatisfaction.

One recent survey from Gallup found that employee satisfaction has dropped for virtually every aspect of the job since mid-2008.

More than a third of workers are dissatisfied with the amount of work stress they have, compared with 28% three years ago. Some 17% are dissatisfied with the amount of work required of them, an increase of four percentage points from 2008, and 18% are unhappy with the amount of job security they have now compared to just 13% who were in 2008.

Much of this can be pinned to the economic downturn that has upended the labor market as we know it. Those who are employed generally work longer hours and pick up the slack of those who have been laid off, all while seeing their earnings remain essentially stagnant. Unfortunately, with unemployment stuck above 9%, many workers likely feel forced to stick with a job they hate just for the security of getting a regular paycheck.

But that doesn't mean you can't improve your skills and turn a negative experience into a positive one.

"The mistake that people might make is just saying, 'This job is awful but the economy is awful too, so I'll just wait for six months and not do anything but be unhappy,'" says Charles Purdy, a career expert with "That just ends up wasting six months."

Instead, Purdy and other career experts argue that if you are planning to stay at a job for the near future, no matter how much you may loathe the position, it's your responsibility to find ways to make the most of it both personally and professionally. Even the bad jobs often provide more perks than you might think if you know where to look.

With this in mind, here are some principles for making the most of a job you hate:

Identify what parts of the job you like and don't.
The first and most important step for making a bad job more rewarding is to determine which parts of the job you enjoy -- and which you don't.

"There must be something you like about your job, whether it's your co-workers, or the fact that you get to work in a field you find interesting or even just your short commute," says Alison Green, the writer behind the popular Ask A Manager blog. "If you're stuck in a bad situation, focusing on the good elements, no matter how small, can help keep you sane."

While identifying what you do like can keep you sane, singling out what you don't like can keep you focused on what you need to change.

"Identify the core issues that make you hate the job and set a date to fix those issues," says John Challenger, CEO of the career research firm Challenger, Gray & Christmas. "If that date passes and it's still the same, then call it quits and go somewhere else."

Ask for more responsibility
Given how many Americans feel overworked, it may seem counterproductive to ask for more work, but oftentimes the problem is as much about the kind of work that one is doing as the quantity of it. If you're dissatisfied with the tasks you've been assigned, approach your boss with a project you would like to take on in addition to your workload.

"Figure out a necessary project that's not being tackled and volunteer to spearhead the initiative," says Tory Johnson, founder of "Even though it'll mean more work for you, there's always huge satisfaction in doing something that you can own."

Displaying this kind of ambition may also impress your boss and others at the company, thereby improving your chances of getting a promotion or at least good references when applying for other jobs down the road.

Learn new skills
If your job doesn't provide you with the kind of professional experience you need for the rest of your career, there's a good chance you may be able to cultivate your desired skill set elsewhere in the company.

Purdy recommends shadowing other employees in the company who work jobs more closely related to your dream career. For example, if you work as an administrative assistant but have dreams of working in public relations, you might consider reaching out to someone in that department at your company and asking to spend an hour a week watching how they work, or getting lunch with them from time to time to pick their brain.

If there are no opportunities to do this at your company, consider looking elsewhere for ways to learn a new skill set. One of the best options, according to Purdy, is to offer to volunteer your services to a nonprofit that needs the help. This will give you valuable experience learning a craft and will look good on your resume should you choose to pursue a career in that area. Alternatively, many companies offer full or partial tuition reimbursement to employees, so you could go back to school part-time to build your skill set that way.

Pursue extracurriculars
Just because you're miserable at work doesn't mean you can't use the company to pursue something enjoyable after hours.

As Purdy points out, it's usually not difficult to set up a book club at your office to provide an incentive to brush up on a particular subject, or you could launch a Toastmasters group to work on your public speaking. For those just looking to get away from the office, you might try starting a sports team. Not only does this give you something meaningful to do during the day, but it can help you network as well.

Build strong relationships with co-workers
Strengthening relationships in the office doesn't just make work more pleasant from day to day. It's also a smart career move in the long run.

"It's more important than ever to maintain good relationships with not only your bosses but also your co-workers, since networking is becoming more and more valuable in finding jobs," Purdy says. "Your former co-workers are more likely than ever to be reached out to by potential employers, and because people change jobs more often, today's co-worker could end up being tomorrow's job manager."

For these reasons, even if you absolutely hate your job, the last thing you should do is show it. Do your best to cultivate relationships, be friendly with those you work with every day and impress your bosses. Otherwise, you could end up developing a bad reputation that makes it that much harder for you to find better jobs.

"You don't want to be the Eeyore in your office, or else three years from now your co-workers will all remember you as the complainer," Purdy says. And if you do feel the desire to complain, try to make it a productive criticism with suggestions on how to improve a certain situation, rather than just a bitter lament.

Know how to job hunt while employed

If none of this makes the job any more rewarding, it's probably time to start looking for a new job. Unfortunately, hunting for a job while employed can be a complicated affair.

As we have reported in the past, the job hunter needs to be careful about scheduling interviews during work hours and should avoid telling coworkers or posting updates about the job search on social networks, for fear of having the employer find out and look to replace you. Employees who are job searching should also make a conscious effort not to slack off while in the office for the same reason.

When you do start hunting, Purdy urges employees to keep in mind the aspects of their current job that they dislike.

"A job interview is also about you assessing a new company," Purdy says. "Identify what you don't like now so you don't end up in the same situation again later."

What to Do With a Mortgage in Retirement

Most retirement advisers will tell you to pay off your mortgage before you retire. This is a good idea because a mortgage payment is usually your biggest monthly bill. If you can eliminate your mortgage debt, retirement will be much more affordable than if you continue to carry this monthly payment into retirement.

While paying off a mortgage before retirement is advisable, over 40 percent of households ages 60 to 69 have mortgages, according to a study from Boston College's Center for Retirement Research. Many retirees are unable or unwilling to pay off the loan before retirement.

Those who wish to eliminate mortgage payments and can't afford to pay off the balance of the loan could obviously sell the house and downsize to more affordable housing. But some people want to keep their lifetime home or may be unable to sell at this time. Here are some alternatives to selling your home outright.

Refinance. Check with your lender to see if refinancing is a good option. Interest rates are low right now and it may be possible to reduce your payment by refinancing. Make sure to check the 15 and 10-year options as well. If your loan is close to being paid off, a 10-year loan generally offers a lower interest rate and can be paid off much sooner than a 30-year loan. Of course, the 30-year loan will offer a much lower payment, so you'll have to weigh your options.

Rent spare rooms. Once you lower the mortgage payment, then it's time to see if you can generate some income from your home. One option is to rent out the spare bedrooms in the house. This will help with the mortgage payment tremendously. In this economy, many renters are looking for more affordable alternatives and renting a room is much cheaper than renting an apartment. The assumption here is that you have one or two spare bedrooms as you approach retirement. This way, you can continue to live in your home and reduce your housing expense.

Rent the house. If you place a premium on your privacy and cannot bear to share living space with someone you might not know well, then perhaps renting out the whole house is a good option. You can downsize temporarily to a small condo or apartment. A two bedroom apartment on the West coast, for example, typically rents for less than half the price of a nice four bedroom home. This can be a bit risky if there are high vacancy rates in your location. But you should be able to gauge the rental market when you search for an apartment.

Renting out your home is a great way to break into the rental property business. A renter could help you to pay off the rest of the mortgage in a few years. Once the mortgage is gone, you can keep the house for extra retirement income or move back in. Maybe you will even enjoy living in a smaller space with no yard work and will decide to stay downsized.

Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.

The Economist - September 10, 2011

The Economist - September 10, 2011
HQ PDF | 128 pages | 107.98 Mb | English

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.

read it here

Ratio Of Takers To Givers Reaches A Tipping Point

Larry Elder has an editorial in today's Investor's Business Daily that starts out by quoting an Irish taxi driver who identified the No. 1 reason for the grim economic situation in Ireland as "too many takers - not enough givers." The charts above help to graphically illustrate that situation in the U.S. Read the full editorial here.

What No One Else Will Tell You About 9/11

What kind of person rushed out after 9/11 and invested their money in the stock markets of Muslim countries?

Turns out: A shrewd one.

As you may have noticed, it's the 10-year anniversary of "the day that changed everything." I thought I'd scan the performances of different investments and asset classes over the intervening years to see how they'd done.

You know about gold, and Apple stock.

But one thing stood out immediately.

Defying the conventional wisdom, let alone the gloomiest predictions: Someone who invested in the Muslim world following 9/11 has done just fine.

Indeed: Better than fine.

These markets have for the most part left Wall Street, and other Western markets, in the shade.

MSCI, the stock market performance company, has been tracking the markets of six mainly Muslim countries for all of that time. Their annual gross returns range from about 8% a year, in the case of Jordan, all the way up to a stunning 30% a year for the biggest, that of Indonesia.

Let's put that in terms of results.

If you'd invested $1,000 in the stock markets of the developed Western world 10 years ago, and just left it there, today you'd have about $1,500. (That includes dividends, but ignores taxes).

The figure for Jordan: $2,100.

In the case of Turkey and Morocco, you'd have around $4,500 each. Pakistan would have left you with more than $6,000, and Egypt around $7,600.

As for the stock market of the world's biggest Muslim country, Indonesia?

You'd have about $14,200, says MSCI. No kidding.

The figures for someone who invested in these markets right after 9/11 would be even greater. Most of these "risky" markets tanked in the aftermath of the terrorist attacks. Western markets also fell, but by far less, and they rebounded more quickly.

(I'm not surprised I haven't read this anywhere else. In today's cartoon, candy-coated culture, inconvenient facts are simply ignored, or worse.)

It's tempting to shrug this off as an anomaly. After all, these countries are emerging markets, and that's the reason they've done so well. Most emerging markets, from Latin America to Indochina, have done about as well over the same period.

And selective Western countries, such as Canada (13% a year), Australia (15%) and Norway (14%) have also done well.

But there are three lessons for investors in this, nonetheless.

The first is that the things that grab the headlines are rarely the things that actually matter to your long-term investment returns. This may be as true of 9/11 as it is, say, of the three monthly announcements out of Europe that that the European debt crisis has magically solved itself.

In September 2011 most people — most investors — assumed that the terrorist attacks and their aftermath would dominate everything for years, and decades, to come. They haven't.

The second is that the way to benefit from major events may not be obvious. What really mattered about 9/11 was our country's official response. We launched two wars without paying for them, diverted our national energies from our ailing manufacturing base and infrastructure, and watched our national political culture shredded to the point of dysfunction . The best investment at the time was to bet against the dollar. Gold (GCU11.CMX - News) was around $270 an ounce then. It's nearly $1,900 now. The Swiss franc (USDCHF - News) has boomed.

The third lesson? You can often get the best returns by investing in precisely the things that terrify you — and other investors — the most. That's because that's where you get the best deals. You don't face a lot of competing capital, driving down returns.

Consider the Aberdeen Indonesia Fund (IF - News), a closed-end fund trading on Wall Street. On Sept. 10, 2001, it sold for $2.14 a share. When the market re-opened after 9/11 it collapsed to $1.42 — a 20% discount to its underlying assets.

Imagine telling people around the water cooler that you were buying an Indonesian fund around that time. Indonesia is the world's most populous Muslim country.

They'd have called you a nut. A crazy person.

Today the fund trades at $13.90 a share. Throw in $2.50 in dividends, and the you'd invested $10,000 at the lows just after 9/11 is sitting on nearly $120,000 now.

Crazy? Like a fox.

Unemployed? Stay Home And Do Some Financial Housecleaning

Every year, millions of Americans face the bleak prospects brought on by unemployment. And while losing a job is never fun or convenient, there can be a silver financial lining for those who know how to capitalize on their time spent away from the workplace. Having no earned income for a period of time can make it much easier to accomplish certain financial tasks, especially when it comes to retirement planning and income taxes. This article outlines several financial strategies that can help take some of the bite out of not having a job.

Roth Conversions
In 2010, the income limit was lifted for those who wished to convert their traditional IRAs and qualified plans, thus allowing those with large pretax retirement balances to move them into a Roth IRA in a single year. However, this can result in a substantial tax bill for the year as well. But if the taxpayer has little or no earned income during the year, then the tax on the conversion may be a great deal less.

A corporate executive earning $100,000 with a $150,000 traditional IRA is laid off in December. The next year, he converts his IRA to a Roth IRA, but is unable to find a job. He will only have to pay tax on the Roth conversion balance, which means that he will pay tax at a lower rate on a lesser amount.

Investment Sales
Unemployment presents a golden opportunity to liquidate substantially appreciated holdings that are held in taxable accounts. Those who will realize long-term capital gains may be able to pay the lowest tax rate allowed in the code on the sale of their securities or other assets, depending upon the amount of the sale proceeds. However, low-priced securities such as penny stocks that have risen dramatically in value within a short period of time are also good candidates for liquidation, as their volatility can quickly erode any gain received, even though their sale will result in a taxable short-term capital gain.

Larry rings in the New Year without a job. But he is pleasantly surprised when a stock he purchased for about two dollars a share last January shoots up over $6.50 per share on news of the issuing company's new product. He waits until he has held the stock for a year to the day and then liquidates it at a substantial profit. Because he only owned a few thousand shares and had no other income, he will pay no capital gains tax on the sale proceeds.

But the same principle holds true for real estate and other capital assets. Landlords who lose their day jobs can use a period of unemployment to dispose of rental or rehabbed properties that have appreciated in value, particularly those that have been held for less than a year and will not be exchanged for like-kind properties under IRC Section 1031.

Tax Credits
The loss of a job will seldom prevent an unemployed worker from having to pay expenses such as college tuition for children or the costs and fees associated with adopting a child. However, having no income in a year when these expenses are incurred will prevent the taxpayer from claiming the tax credits that are available to them. Most of the tax credits in our tax code require a certain amount of taxable income in order to be claimed. Therefore it may behoove an unemployed taxpayer to generate income from investments or other assets in order to claim these credits. For example, a taxpayer over the age of 59.5 who paid $3,000 of tuition for a child could convert a portion of a pretax retirement account to a Roth and then claim the appropriate education credit against the tax bill. Of course, a straight distribution or sale of assets can accomplish the same thing. Those who do not have assets with which to employ these strategies may be wise to simply work a low-paying job for part of the year in order to claim the Earned Income Credit.

Get Your Financial and Estate Plan in Order
Smart job-seekers will use the extra time that inevitably comes with unemployment to accomplish such things as reviewing and updating their wills, trusts and other legal and estate planning documents, as well as their overall financial and retirement plans. This is an ideal time to research and tweak investment strategies, explore ways to reduce income taxes, roll over the previous employer's retirement plan into a self-directed IRA and assess investment portfolio performance. Those who are smart enough to do this now will not have to spend time dealing with it once they find a new job and aren't easily able to schedule meeting with lawyers or other professionals during the day.

Unemployment can provide valuable opportunities to accomplish a number of financial tasks that otherwise may either take much longer to complete or result in a substantially higher tax bill. These are just some of the strategies that savvy unemployed job-seekers can use to take advantage of their lack of income. For more strategies that may be effective during unemployment, consult your HR representative or financial advisor.

4 Legal Documents You Should Have In The Wake of September 11

While nobody likes to dwell on it, the possibility of something bad happening to them is always somewhere in the back of most peoples' minds. Indeed, on any given day, anyone could die in some sort of accident or other tragic event.

The 10th anniversary of the September 11 attacks is a vivid reminder of this - and of how important it is to have your financial affairs in order in case you did die suddenly. If you did and your affairs weren't in order, your surviving loved ones might be strapped financially or have a slew of legal matters to contend with on top of having to deal with the emotional pain of your loss.

But what does it mean, exactly, to "have your affairs in order"? It means you should have a will, living will, financial durable power of attorney and health care proxy. While this may sound complex and costly, you can take care of it all through a qualified estate planning attorney. And the cost generally isn't all that bad. Many people will tell you the peace of mind you get is well worth the price tag.

Here are some basics on the four legal documents virtually everyone should have to make sure their affairs are in order.

Last Will and Testament
This document relates your wishes about many important things including how to divide your belongings, who you'd like to be in charge of your estate and who you want as the guardian(s) of your minor children if you have any. People who die without a will are said to have died "intestate." When that happens, their assets are distributed according to state law. The danger with that is the state may not act according to the wishes of the deceased.

Financial Durable Power of Attorney
A durable power of attorney names an "attorney in fact," a person who can make non-medical decisions for you if you become incapacitated. The document commonly allows the attorney in fact to do things like access bank accounts and investments, pay bills, sell assets - anything the incapacitated person could normally do with their money or property. Since a durable power of attorney may put you in a vulnerable position, be sure to name an attorney in fact who you're certain will act in your best interests.

Health Care Proxy
A health care proxy is similar to a durable power of attorney except it names a "health care agent," someone to make medical decisions for you if you're incapacitated. The document gives your healthcare agent the authority to do things like have you admitted to a hospital or other healthcare facility, authorize medical or surgical treatments for you or even stop treatment if your agent believes that's what you would want. Although you can spell out what medical interventions you do and don't want in the document, be sure to discuss these wishes with your health care agent, too.

Living Will
Whereas a health care proxy addresses medical conditions that may or may not be terminal, a living will details your wishes for treatment when you're incapacitated and death is imminent or you're in a permanent vegetative state. Specifically, the document tells your loved ones and caregivers whether or not to keep you alive artificially with a mechanical ventilator or other machines. A living will may also include instructions about whether or not to resuscitate you if you stop breathing or your heart stops.

The Bottom Line
In addition to seeing an estate planning attorney about the four legal documents described here, have a qualified financial advisor review your life insurance coverage. If you're underinsured or lack coverage, make it a top priority to get life insurance as soon as possible. You'll sleep a lot better knowing your affairs are in order and your loved ones won't have to worry about money or a whole bunch of legal issues if something happened to you.