Gerald Celente Announces He’s Buying Silver

from King World News:

With gold down over $100 and silver down $5, today the man that many consider to be the top trends forecaster in the world, Gerald Celente, told King World News, “I’m now buying physical silver for the first time. One of my reasons is I am very concerned that when gold prices begin their upward ascent again, I believe the central banks and the governments are going to blame the gold people for the financial problems.” Celente previously announced on KWN that he sold the Swiss franc, which turned out to be right at the top of the market before a 25% plunge in the currency.

Gerald Celente continues: Read More @ KingWorldNews.com

Is Market Replaying Decade of the 1930s?

Commentary: March 2009 low might be analogous to July 1932's

Playing a script from the 1930s?

If we only could be so lucky ...

Some in the investment arena have been drawing analogies to the 1930s for several years now, of course. While such speculation died down somewhat when the market was behaving well in 2010 and early this year, it has returned with a gusto in recent weeks, owing to the stock market's extraordinary weakness — including another 3.5% decline on Thursday of this week alone for the Dow Jones Industrial Average (^DJI - News).

But drawing analogies is more of an art than a science, especially when you are picking and choosing from a decade like the 1930s. Contrary to the popular imagination, which regards that decade as one unremitting horror show, the 1930s actually contained one of U.S. history's most powerful bull markets.

So, depending on how you draw an analogy between today's market and the 1930s, you can paint either a very bullish or an extremely bearish picture.

Let's take a close look at the bull market that began on March 9, 2009. Through the market's high this past spring, the Dow had gained close to 100% in a little more than two years' time.

Is there any rally during the 1930s that comes close to being analogous? Some have suggested the one that began in November 1929, which basically was little more than a dead-cat bounce following the stock market crash in September and October of that year. But that rally lasted just five months, during which the Dow rose just 48%.

I admit that I'm not an expert in the analogy-drawing department, but that rally that began in late 1929 does not appear to be very analogous.

Another rally that is perhaps more comparable is the one that began in July 1932. It lasted nearly five years, and during it the Dow more than quadrupled.

The accompanying chart superimposes on that mid-1930s rally the Dow's progress from the March 9, 2009, low until now. Within the acceptable tolerances of analogy-drawing, I'd say the market over the last two and one-half years is not that far off.

And, if this is the script the market is indeed playing out, a huge rally is in store over the next couple of years.

Is this analogy-drawing little more than shameless data mining? Probably not. I engage in it for this column simply to counter those who, equally shamelessly, try drawing their own analogies to the 1930s in order to reach bearish conclusions.

From a contrarian perspective, however, the analogies to that decade that the bears love to draw do have significance. It indicates just how robust is the wall of worry that advisers choose to draw an analogy to the very worst of the 1930s — when they just as easily could do so in another way and reach a quite bullish conclusion.

And, as we all know, bull markets like to climb a wall of worry.

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.

Nigel Farage: Financial Cataclysm & Gold Unimaginably Higher

[Ed. Note: Click Here for the audio of this interview.]

With world markets in turmoil and gold and silver tremendously volatile, today King World News interviewed former LBMA commodities broker and trader and current MEP Nigel Farage to get his take on the situation. When asked what is happening with the Eurozone crisis, Farage responded, “Paralysis, I think that’s the only way one can describe it. They put together a currency, an economic and monetary union of countries that were entirely unsuited to each other. The idea that Greece and Germany could coexist under the same monetary framework was always a joke as far as I was concerned.”

Nigel Farage continues: Read More @ KingWorldNews.com

Bullish Dollar Sentiment Surges By Most In Years, As CFTC-Based Rumors Of Euro Demise Are Not Exaggerated

For once the speculators got it right. In the week ended September 20, net USD futures and options exposure surged by the most in years, with net non-commercial contracts soaring by a whopping 22,577 contracts to the highest since April of 2010. The flip trade is a collapse in EUR sentiment, which saw net exposure plunge by 25,001 from -54,459 to -79,460, the most bearish sentiment in the European currency has been since June 2010. Net net: the euro is now massively oversold explaining why even the smallest of rumors initiates a furious short covering squeeze. And yes, the next bubble is now not in silver, not in gold, but in the dollar. The first sign of moderation of European stress, or a Hilsenrath piece on the next round of QE by the Chairsatan, and watch the DXY and the various USD pair collapse (and gold surge).

Source: CFTC COT

5 Tips for Long-Term Investing As Markets Shudder

With shock waves roiling financial markets worldwide, investors are seeking new ways to protect their portfolios from the next upheaval.

But they may be ignoring the best weapons in their arsenal: straightforward strategies for managing money that, over time, boost returns.

"We're on this incredible volatility roller-coaster ride," said Andrew Lo, professor of finance at Massachusetts Institute of Technology and chief investment strategist at AlphaSimplex Group, a mutual-fund firm.

"For the next couple of years," he added, "my guess is we're going to have to spend more time thinking about managing losses than generating really attractive returns."

This week is a painful case in point. On Wednesday and Thursday combined, the Dow Jones Industrial Average (^DJI - News) fell 675 points or almost 6%, the largest two-day point drop since Nov. 20, 2008, and largest two-day percentage drop since Dec. 1, 2008.

Markets will go up again, Lo said, but there's "so much macro instability, you're going to get investors rushing to the left side of the moat together and then to the right side of the moat together. When you've got this coordinated herd mentality, you can get some wild swings in any investment."

Key strategies to eke out a profit include minimizing costs and getting as much diversification "as you're comfortable with," Lo said.

Plus, he noted, you need an investment plan that will keep you focused, so you don't panic "when markets start to dislocate, which they will."

Here are some building blocks for your portfolio's foundation:

1. Minimize taxes

High-tax-bracket investors lost an average of 2.4% of the value of their domestic equity mutual funds each year from 1981 through 2001, according to the Schwab Center for Financial Research.

That was before President George W. Bush's tax cuts slashed rates on qualified dividends and long-term capital gains, but also before the current dismal outlook for market returns made it even more important to seek tax efficiency.

Tax-loss harvesting and using tax-advantaged and taxable accounts to their best advantage are the two main ways to manage the tax hit.

Typically, put taxable bonds, which yield ordinary income, in a tax-deferred account such as a 401(k) or IRA, while stocks go in a taxable account since long-term capital gains and dividends currently are taxed at a maximum of 15%. (more)

Marc Faber: You Dont Need the Fed to Tell You Something is Wrong

Silver traders: Stop Cryin' and Start Buyin'!

As another financial crisis comes to a head, another silver crash ensues. Oh, the tears of sorrow!

Background:

Though there still exists economists, portfolio strategists and corporate CEOs out there who still don't see or admit to seeing a double-dip coming to America [did you watch CNBC yesterday?], everyone's favorite sleaze, George Soros, on Sept. 21, told—that very same 24-hour propaganda doubly-sleaze outfit—CNBC, that the US is in “a double dip already.”

Sometimes, Soros, too, tells the truth, as long as it alines well with his fascist global-community agenda.

But if you've been listening to John Williams of shadowstats.com, you'd already know the fake recovery was just that, fake, and that the worse days for the US are yet to come.

“As activity begins to turn down again, you are going to see things get even worse, and the continued economic trouble is going to be very long and very deep,” Williams told KWN on July 11. “That puts the Fed in a circumstance where you virtually are assured of a quantitative easing three. That in turn will weaken the US dollar further.”

But as we all know, Bernanke, instead of giving the market what it perceived it needed on Wednesday, crushed the dollar slide, instead. No QE3! Not today, anyway. But Williams will most assuredly be proved correct after the fight from Republicans on Capitol Hill turns Captain Queeg 'yellow stain' as it did during Speaker Newt Gingrich's 1995 noble fight to turn the money spigots off by shutting down the Treasury-Fed cabal.

At some point, the mob will beg for QE3! Ask Gingrich, who went from Time's Man of the Year to the bum who authored the 'Contract ON America” —which leads us to today's Fed puzzle.

“The markets apparently were hoping for a large, magic pill for an anemic economy that feels like it's catching the flu,” Barton Biggs told Bloomberg News. He's now been quoted by the Washington Post as saying we may be “on the eve” of a financial crisis. (more)

The Economist Canada - 24th September-30th September 2011

The Economist Canada - 24th September-30th September 2011

English | 144 pages | HQ PDF | 114.00 Mb

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click here to read

Is Gold No Longer A Safe Haven? Not According To Capital Economics: "Gold Will Surge When Euro Crisis Escalates"

With gold dropping $200 in the past several weeks on ongoing much anticipated liquidations to cover margin calls, there are those who have wondered if the precious metals have lost their safe haven luster? Well, no. All they have lost is some value against the dollar even as all other global currencies have fallen faster than even gold as was pointed out yesterday by Mike Krieger. In other words all that is happening is a relative devaluation of the DM currencies relative to the one absolute, and to the dollar as well. However, as the Swiss National Bank so aptly demonstrated, all it takes for a central bank to intervene drastically is for its currency to appreciate beyond reasonable parameters. Which is what is happening to the dollar, not due to some intrinsic value in the currency, because it is just a matter of months if not weeks before Bernanke is forced to print all over again. The only reason the USD is soaring is due to to a multi-trillion dollar funding shortage around the world but mostly in Europe, which the Fed hopes to satisfy with a massive expansion in FX swap lines which become activated on October 12 but not before. Either way, some of the more timid elements may be explainably rushing for cover to paraphrase Norville Barnes. Which is why we present the following report from Capital Economics which explains why "Gold still deserves "safe haven" status."

From Capital Economics

Gold still deserves “safe haven” status

• The recent sharp falls in the dollar price of gold have led some to question its status as a refuge from problems elsewhere, especially now that the US currency is strengthening across the board. However, if (or when) there is a further escalation in the crisis in the euro-zone, gold prices are still likely to surge against the dollar too.

• The price of an ounce of gold has now fallen by more than $200 from the record nominal highs above $1,900 seen earlier in the month. Since Tuesday alone, gold is down more than $100. As the price of traditionally riskier assets such as equities and industrial commodities have also fallen sharply over this period, it is tempting to conclude that gold has become another casualty of the “risk-off” trade.

• Despite this, we continue to expect gold to rise above $2,000 this year and to at least $2,500 no later than 2013. The fundamentals that support gold’s status as a safe haven have not of course changed in the last few days. Above all, its value does not depend on the creditworthiness of any government or financial institution, and that may yet prove very significant in the weeks and months ahead.

• What’s more, with gold prices now at previously unprecedented levels, the absolute size of daily moves are likely to be larger – both up and down. Despite the recent falls, the gold price is still nearly $100 higher than at the start of August.

• Finally, the recent fall in the dollar price of gold primarily reflects a return of a degree of confidence in the US currency, which may not be sustained. The price in euro terms, for example, has held up a little better, which is what matters more for European investors seeking protection from the crisis in the euro-zone. (See Chart 1.) Other things being equal, a stronger dollar does imply a lower gold price when measured in dollars. This is partly because of the simple pricing effect which applies to any commodity, whereby purchasers in other currencies can afford to pay a higher price in dollars when the dollar is weak. But gold is also seen as a close substitute for the dollar as a store of value, so if there are doubts about the prospects for the US currency, gold tends to benefit disproportionately.

• The reverse appears to have happened recently. Crucially, the markets have moved on from the dispute over the US debt ceiling and the loss of the AAA rating (with S&P). The Fed’s reluctance to adopt further quantitative easing has also allowed the dollar to regain some of its own safe haven status.

• Nonetheless, in the event of a disorderly Greek default, and particularly if fears of a break-up of the euro-zone really take hold, gold is still likely to benefit more than any other currency even if the dollar proves to be the best of the rest. In part this is because the upside for gold is not constrained by broader economic and policy considerations, whereas the value of the dollar (and of other national currencies such as the yen and sterling) clearly is. Confidence in the dollar is also likely to be undermined again by the fall-out from fresh euro-zone shocks on the US economy and banks. Indeed, since the global crisis began there have been several periods when the dollar has generally been strengthening and yet the price of gold in dollar terms has risen further, such as the second quarter of 2010 when concerns about Greece took off. (See Chart 2.) Although gold prices are now much higher, there is no good reason to rule out a repeat out-performance if the crisis in the euro-zone takes an even more sinister turn.

10 million more mortgages set to default, expert says

Roughly 10.4 million mortgages, or one in five outstanding home loans in the U.S., will likely default if Congress refuses to implement new policy changes to prevent and sell more foreclosures, according to analyst Laurie Goodman from Amherst Securities Group.

At the end of the second quarter, more than 2.7 million long-delinquent loans, others in foreclosure and REO properties sat in the shadow inventory, more than double what it was in the first quarter of 2010 (Click to expand the chart below). With the market averaging roughly 90,000 loan liquidations per month, it would take 32 months, nearly three years, to move through the overhang.

And that number is contingent on no other loans going into default.

"Many analysts looking at the housing problem mistakenly assume it is limited to loans that are currently non-performing (or 60-plus days past due). Such borrowers have a high probability of eventually losing their homes. However, the problem also includes loans with a compromised pay history; these are re-defaulting at a rapid rate," Goodman told a Senate subcommittee Tuesday.

Under a reasonable estimate, which is calculated with more conservative market conditions than what is currently being experienced, Goodman found nearly 2 million re-performing mortgages would default again and another 3.6 million already troubled loans to default as well.

The rest of the 10.4 million estimate is made of always-performing loans at various stages of negative equity. Of the 2.5 million always-performing mortgages with loan-to-value ratios above 120%, nearly half will default. Even 5% of the always-performing mortgages that have some equity left will default, as well, Goodman said.

In August, the Obama administration asked the housing industry for ideas on how to more efficiently sell or unload this overhang, and the Senate heard testimony from various housing players Tuesday. Each, including Goodman, said the government should target private investors.

Robert Nielsen, chairman of the National Association of Homebuilders, said government programs should be revamped to assist small and local businesses in rehabbing and unloading these properties.

Nielsen said Fannie, Freddie and the FHA should avoid bulk sales to large investors that have no stake in the neighborhoods in which these properties are located.

"Local and small businesses that have a stake in the future of the affected communities should be the driving force behind the disposition of the REO inventory. This will result in the creation of jobs and the stabilization of neighborhoods," Nielsen said.

NAHB also urged Congress to extend the current conforming loan limits for Fannie Mae, Freddie Mac and the FHA, which are due to be lowered on Oct. 1.

Stan Humphries, chief economist for Zillow, said the rental market is currently booming and would be able to handle a mass conversion of foreclosures into rentals by investors, but the government, he said, would be wrong in upsetting this dynamic.

"Investors smell a distinct opportunity in this situation: The chance to buy an asset cheaply and rent it out dearly. In fact, close to one-third of the purchases of existing homes this year have gone to all-cash buyers, the bulk of whom are real estate investors," Humphries said. "Any plan that may upset this balance – such as Fannie and Freddie getting into the rental market and creating competition – will have a chilling effect on private investment in the one segment of the housing market that is performing well."

But with a Congress currently gridlocked on nearly every issue, none of the panelists so clearly described the looming housing problem and the consequences of continued inaction like Goodman.

"To solve the housing crisis you must create 4.1 million to 6.2 million units of housing demand over the next six years," she said.

Bob Chapman on Coast to Coast AM

Editor and publisher of The International Forecaster, Bob Chapman, talks about the economy and stock market fluctuations, during the first of hour of Coast to Coast AM with George Noory.